CL - Earnings call transcript Q4 2021 | Colgate-Palmolive Company

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Operator

Good day and welcome to today’s Colgate-Palmolive Company Fourth Quarter 2021 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I would like to turn the call over to Chief Investor Relations Officer, John Faucher. Please go ahead, John.

John Faucher

Thanks, Orlando. to conference full call. welcome quarter and and release earnings morning our year XXXX fourth Good This John is Faucher. Today’s conference call will include forward-looking statements. differ could results materially statements. these Actual from Please these Colgate’s on could to Form most and and factors subsequent SEC, refer that all press cause statements. a XX-K our filings differ available discussion filings, on the including Report with results the for materially to our Annual XXXX SEC earnings website from the actual recent release of include a those also of non-GAAP X This X including will conference earnings discussion financial measures, identified and call Tables in press of the release. A release financial measures and reconciliation is press on the available earnings website. Colgate’s the full corresponding is to included GAAP in

Executive Officer Stan Financial on his provide on XXXX I comments. as Chief the commentary to and will this it Officer. for outlook for me well full before performance Noel as call turning QX Chief over year Wallace, our and our are Sutula, Joining and morning Chairman, President Noel

then will further proof XXXX environment, working. provides Q&A. believe open solid challenging we our which delivered We strategy a for very despite is that results operating in it up We

the We For adding nearly revenue. comparisons. sales the net sales X% grew X% of end X%, organic range year, X.X% in billion full despite difficult our $X we at to higher guidance grew XXXX

down growth single-digits think Care Oral for an acceleration Hill’s. mid Personal year organic sales of delivered in in sales past a the saw every basis, volume in which of demand, Care, organic sales organic the Both and growth return our sales these year by But categories: Home Pet category on X both our in with growth Care across they by sales high are in we double-digit growth over delivered difficult very price. driven sales XXXX. organic compounded continue will we XXXX. both categories confident but bodes delivered our have XXXX. sales and which important will end to we XXXX organic were our as every organic Importantly, for at and growth COVID-related growth division consecutive And most comparisons second growth years, well this lapped the into teens, anticipate led Nutrition, in both growth year growth organic two growth we with the that categories which was and

pipeline innovation. innovation as transformational strong continue our to is shift focus Our we more breakthrough to and

including spending have is We raised support, level driving brand of that increased advertising brand equity. our improved

material in raw e-commerce off unprecedented volatile, with skin. premium markets chain disruptions. the and our paying and digital key and within sales across COVID environment business, operating much strong said That growth growing impacting Pet shares is Our categories, our transformation Care, e-commerce market very Personal supply of with including Nutrition still remains all inflation

As discuss, through breakthrough improve pricing, believe us allow XXXX up to and move Noel year. significant continue and we and we strategic and plans productivity. will increased stepped grow innovation profitability will as our our includes transformational choices advertising, our This to the long-term

organic X% by growth negative from exchange. driven quarter, impact sales foreign the in a X% grew sales and net Our X%

sales COVID-XX slightly closures growth due negatively the COVID-XX we down organic and was lockdowns Home was Nutrition by was third mentioned Our quarter Personal while driven to in by factory Care quarter flat and Oral growth fourth on the impacted to Pet call. Organic Care, in related Care quarter the sales was comparisons. the

quarter, pressure margins. worsened have seen industries, putting As the material raw gross fourth our and in you on companies further many across pressure

Business by to Our XXX SG&A quarter basis Pricing basis Productivity spending, headwind. were basis. our well basis year was favorable down lower ago points of raw points. the record a basis, basis a gross logistics. lapping points On GAAP percent while basis on advertising a and in XXX benefit was a as margin, sales a by levels XXX down Base lower point basis, as both GAAP was in margin XXX Business driven excluding materials and on point quarter gross Base was XXX the overheads,

net basis. our of a which combination sales Our and increase growth dollar offset a a logistics on overheads, logistics, percent and excluding both large drove us of helped productivity meaningfully, down in costs basis sales

basis, For the fourth quarter, of $X.XX. delivered share earnings on we a GAAP per

Skin a Filorga a Health travel beginning of Filorga significant per including right $XXX Duty for completed China pandemic. pandemic and in which Our the has channels our on on key COVID-XX earnings in million had impact and share, Free Europe. after-tax the competes, in transaction includes before business. GAAP charge the impairment We Filorga pharmacies The retail

to the been our acquisition, growth offset the channels going weakness the we when full we have confidence and projections have continued versus in brand we these in unable forward. While are double-digit Filorga forecasting announced

our deliver basis, other Business two per On $X.XX are should strong the up PCA to quarter, Our was skin Base and health and X%. a brands, for continue Skin performing share earnings growth. well EltaMD,

with year-over-year. half of net X% $XX million billion accelerate XX% intend almost pre-tax flow into in morning, shareholders productivity once our and And $XXX XXXX we implemented initiative. productivity to We cumulative between share is execute projects few the repurchase This pre-tax the in the of changes our result with in in sales in We to guidance Base structure channels, high year to divisional and liquid in a $XXX comments providing fourth declined charges our to sales the full up expected X.X% calendar drive range all-outlet through company’s our as and also our quarter, of to was in greater share in announced A returned per and Our million operations benefits single-digits. would ago operating expect In Business on percentage faster basis of lapped program our quarter. the XXXX. points reduce up We and of growth year. it was finalized, businesses than division our the that annualized North the to market allow supply our second share performance. savings million. and in was will are In down in X to high the priorities resources majority net to America streamline in soap as range to mid global order million up efficiencies growth the XXXX totaling single-digit within reallocate shipments, hand quarter. the organic current period, strategic begin point then XX us to the costs. toothpaste, consumption chain earnings XXXX the to headwind the year the to $XXX accelerate ahead $X structural with

the sales mid and X.X% quarter quarter, growth X.X% sales announced in quarter and strong grew will single-digits. pricing X.X%, up minus sales growth innovation X% in naturals. be the We X% significant throughout behind North Home into Latin growth. and our in headwind. all in premium QX with have led across the categories whitening sales organic of America Oral foreign a with and Brazil Personal the net across grew net Care America, ago lapping QX. implemented exchange organic pricing Care Care high while X.X%, declined were Europe which single-digits, and year

XXXX. and is see planned We the Europe Europe with in have pricing normally QX, for share in portfolio. market expect behind we gained very across environment significant particular in pricing the innovation difficult, Elmex While we to strength

in quarter, and sales volume foreign up pricing grew grew a X.X% impact sales net and from exchange. modest Asia-Pacific the with and X.X% organic negative slightly

e-commerce share in the its Oral by Volumes growth Our Colgate Care Asia negative in from sales and despite H&H quarter. of e-commerce points X% continued The performance, the XX% a lead XXX for quarter, grew sales negatively XX% organic nearly businesses. by business and as strength supply another toothpaste Hill’s driven sales and Net to of our organic impacts Eurasia. QX political grew with sales was market year. I continued e-commerce brick-and-mortar fourth quarter. of also finished growth retail offset was in with foreign growth grew partially previously. the Africa/Eurasia Hill’s mentioned the X% great XXXX, partners. U.S. chain gamut for volatility year on and net restrictions across exchange. The in in organic from strong in by strong were basis growth COVID-XX impacted disruption combined the gained We China sales

we Pet sales Using revenues, X% growth Nutrition. Care rates, a spot be to foreign and strong current now headwind for And another the be primarily to expect year. for within up X% to low growth in by All-in, exchange X%. advertising expect for expect earnings year strong growth. driven innovation sales for to range, target we organic Hill’s with of support, levels expect best-in-class XXXX, We guidance, pricing we growth e-commerce single-digit operating our to and to and long-term profit year in net the be X% continued execution, Oral

and there we year, on to dollar in and mitigate be We we they productivity the and impact of logistics year. and will be just that we spending, to we others. but FTG optimizing through year. highlight moderate a in pricing, we material the raw we gross available that, expect the XXXX, of many continue as expect material of both go headwinds headwinds, raw basis. to significant percent top is additional steps as take Advertising The trade up year-over-year year-over-year will cost the sales performance go On additional through I margin including accelerating expected the to in be are program biggest a first swings basis quarter mentioned for up were saw above, the will as

particularly U.S. and costs networks Given will the a logistics logistics basis, surrounding issues be the headwind, global Africa/Eurasia. in our to continue a on

changes to XXXX XX% XX% a Our to not proposed on tax At and any and Business GAAP incorporated this have U.S. expected we rate point, corporate Base basis. both is be rates. for tax between

a that share We basis, the per earnings in GAAP earnings few per we where determine growth range. On fall to basis. that single-digits. growth are a we low will double-digit share There Business Base in a factors on expect expect mid

year. We stay have at current raw levels, sequential through raw prices material will those are above currently we budgeted budgeting. go modest we the If what in some as be this materials declines

continues, dollar turn that, that and higher Noel. not We to to The materials not recently. If raw cost that been are due with increases unique additional include will lockdowns. do plans manufacturing will us I it be COVID-related our exchange. over and it downtime assume headwind. significant to Foreign has an And trending logistics

Noel Wallace

John good Thanks, morning and everyone.

I happy year. want a all into I wish Before to of safe you get remarks, my new and

for I again weeks just very be you to forward speaking that. am all a will course, Of few CAGNY and I to looking much

of our with Over our deliver and category believe or retail most is X% advantage in levels and value straight with frequency, our the Meridol brand X our to to dynamics. brands company and beyond which to daily in Spring, We environment. innovative discussed well-positioned of have in COVID-XX pet tremendous other Suavitel years All core growing usage and brands penetrated the purchase skin all markets Filorga. This and consumers range premium availability targets. X impact categories and like also in Hill’s high Hill’s these EltaMD, compete John in leading and growth emerging and we have strength partners. in is well-positioned And take therapeutics across helped markets. organic Protex, difficult markets expanded operating and I of of below shareholder faster these vets includes and revitalized PCA businesses, credentials year us resulted developed performance momentum value drive our parents. Colgate of businesses, Irish our the brands X%. Skin continue strong with channels. the growth years, have that last are have adjacent Elmex strong long-term world, efforts which this above compete. targeted categories and and to Diet they and our Science we Diet and our health consumer the despite Filorga, loyalty brand delivered and in sales are health in Prescription on the Fabuloso, high

innovation. other growth place key along revitalize building to and out business Filorga accelerating distribution plans have channels in and with those in our We channels,

We be future Skin contributor bottom and top line to confident that Trends strong are EltaMD and very growth. Filorga remained strong. on a PCA will

compete to We of have allow and markets all channels. and building are types us capabilities that will in

more model, profitably the chain, operating effectively world. operate in and global around countries to our XXX Our and including allows us territories than supply

accelerated local China growth innovation, rebound to transition has in in Care, of better a and levels enabled example of innovation. strategy new our This on us in Our deliver mixture has direct a for e-commerce, and increased to had Pet impact and our transformational growth, our global innovation particularly including accelerating Oral breakthrough Nutrition.

shared We robust important Bright drive time. recyclable Smiles, which category are their to technology is Bright our drive transformation, category is to toothpaste allowed in which to over at per efforts children our all will the markets. our the to us of in when entire ESG has any XXXX. all only how underserved help to we value. our more Futures strategy e-commerce e-commerce drive a markets our teaches in another share brush growth also truly And largest present sustainable, grew CAGNY, helping digital year teeth, toothpaste but deliver topic consumption in the with be future. competitors, of to be across X, requirement e-commerce which capita not markets accelerate Our for an we integrating you into that of in growth ways X and our business And we delivered

bond in fourth quarter. first We also issued the our sustainability

invest strategies while social We from lower sustainability the rate. will funds use a impact to and benefiting interest our in

believe So, still operating environment to are our We while But very through committed also that and to our on of strategy. we long-term need balance sustainable delivering difficult growth I managing deliver firmly stay the teeth positioned our strategy. long-term we a well of to shareholders to all profitable stakeholders.

putting quarters We know grow are shorter is chains, in the you logistics, in in costs. for are supply us strengthened. continue and has investing COVID next emerge us And deliver execute our operating both raw of with to company efficient headwinds that to recently, materials. organic the of to in against will profits, revenue The growth unprecedented on costs Obviously, and all the in still structurally few and including brands. environment companies management. efficiency from pressure more on facing significant impacts dollar term while growth will terms that sales our and allow on today’s to about a the higher targets pricing terms sustained key

many further for plan this later anticipated pricing in of We XXXX markets the and first have for have we pricing some will the half. half moving we including already taken the significant in into pricing year, in year first that

know key costs. funding rising is raw all of material and our growth offsetting component the well-ingrained a You

we cross-functional possible. teams are opportunities new additional we are the funding together put executing rapidly have as We and ensuring bringing as growth to that that focused on are our them

remain key creation improved building. we value So, we accelerating end, know long-term. actions in to profitability, committed To short-term drive the to are we will continue that but shareholder to invest the to is to brand

a As with I brands. said few starts minutes strong ago, it all

past key We around been have the years this spend. and of turned our advertising trajectory a component over growth has few additional

Our to how are in to transformation. we exit you even very on digital strong our as about volume advertising XXXX will more sure marketing return guidance hear an make increased includes of able At pricing. period growth increase sustain we the through we have spend for CAGNY, a

pricing. We supports increased through innovation, consumers that continue value will our focus to to providing on innovation added

very is next. for heading pipeline into strong and innovation Our the year

that premium have categories new our across our with on focus forms benefits innovation brings brands. to innovation and particular a We

investing are capacity. in also We

primarily along Our advance in investments investing CapEx rose because in efforts. we incremental with growth, XXXX, to capacity our sustainability are for

productivity the be growth that savings costs strategies. can and line. with designed dividends. And and to today, is cash across Our program to to a investment business, growth real repurchases continuing when Pet on that long-term us we aligning in apply to from initiative build shows won’t finally shareholders need reinvested bottom we announced investments to our mostly that return and and for the Nutrition, our This This share both expect organic capacity the preclude sales to focused through is in continue. rebound is deliver

program, should the this inflationary the along strategy pricing allow keep to our funding to and with cycle us more growth, track. levers this and Importantly, profitability drive exit and with on growth

against to all questions. another our excited be headwinds the execute intend will shareholder deliver me it but which with drive growth XXXX with So, open you that, very we with your value, I about described, And future and delivering up all strategies, company. makes will year the to me volatile long-term to for our heard

Operator

Instructions] ahead. Stanley. first will [Operator you. with Dara our Thank come Mohsenian Morgan go Please from And question

Dara Mohsenian

morning, Good guys.

Noel Wallace

Dara. morning, Good

Dara Mohsenian

Care year just take full So update I for stock The good Oral you is of an business. where time was stand. often hoping to on a the

are XXXX? for discuss positioned Oral share the few So the you with after in year, we as that you your leadership on look your where years, is the business can changes satisfied But you market basis? Care to strategic Trends stand? as you in XXXX? last regional how talk progress performance through about forward, most productive it probably Noel a And do Thanks. you think under

Noel Wallace

Yes. Dara. Thanks,

heard accelerated of the you in some XXXX. Care as in Oral prepared So comments,

In rate we growth the fact, had it in was that double XXXX.

exceeded that consumption the well function in incurred, of Asia. Our was supply chain of as in some a challenges as here we and markets, in shipments that most America particularly North

around world, half So if back I really performance Europe. in walk strong the

In toothpaste fact, the shares business fourth exiting quarter record there. on the we’re at

the a mentioned get which for strong in seeing obviously to last a in around us we’re turned growth years. John the couple of market heard was You China, key key

Our consumer market. and to e-commerce very up close in They XXX shares points are are the strongly. the fastest brand very, basis

Our shares are holding. brick-and-mortar

to we place we markets But particularly very some opportunities lower premiumization for where North market, premiumization. there. that increased our commitment of have end lost America, plans we strategy of satisfied around to market we’re we are, in some the have expect So as XXXX Clearly, the volume markets like on The we’ve support, about, about there. of believe which and we our growth with well as some reflect performance least the But innovation advertising we’re while we the share, as quarter been particularly exited chasing that significant share. the we the feel and in overall, put the fourth much overall, and half still in the around the success, good about America promotional place see shares stabilized back volume has at just not certainly satisfied strong, at have to growth talked we of driving to competitive, some resist Latin we’re now great XXXX. very Brazil. the be have management share particularly more rebuild there. growing. Holding, trying activities revenue in that nicely delivering And and we it’s those in

to some up club a Care, in mentioned, our toothbrushes pricing. likewise innovation in strong discussion we continue good but on well of in that that, about We good we we for our channels As pricing some me, particularly I’m e-commerce. had year untracked and as as don’t channel will really the coming of toothpaste – very the get That coupled a U.S., most markets. a in perform on into that. but Oral toothbrushes, sure lot be well talk across with share is growth have emerging in lot excuse markets, obviously business taken will

in share support moving We our that markets, and are to forward. rolling aggressive to pricing the ability bolster will developed and continue brand

pleased we’re Dara. with Care, overall, So Oral

Operator

UBS. come with next Peter go ahead. will our question Please from And Grom

Peter Grom

Hey, good morning, guys.

Noel Wallace

Hi, Peter.

Peter Grom

drivers So I know raw what margin now. material we’re the ask Can in maybe context of for right underlying John embeds just it in moderation some costs. just guidance of understand wanted the you some help mentioned I us And to that? gross the around behind seeing expansion,

think detail the maybe that earnings phasing ultimately, more then through provide moderation? you margin of we impacts should how or as expect And maybe about move maybe that more Thanks. like And where cadence just how the year? we gross So expansion? you could there broadly,

Noel Wallace

Sure.

continued thought the start the based acceleration we through moving following raw to XXXX. raw let the Obviously, I were So the went third significant we a we increases guess on significant year. saw quarter materials we with to escalate certainly, where in in we first in quarter, And into as saw That quarter. there. prices material fourth –

the up quarter. XX% price resins more In fourth XX%, up to XX% our fact, [indiscernible] is in or less

now all frankly, thinking quite raw built the quarter. we’re we that peak and materials, into first how of in is about So to expect ‘XX,

moderate expect of spot XXXX. We rates spot hold towards today, based the have half we rates developed to the and back our and begin plan to on

raw then So quarter begin half. the to back you first see and peak materials in the moderate potentially and stabilize potentially in

got, first that as We which be the exit in of fourth pricing for We markets first developed took pricing second quarter layer weighted third ‘XX. quarter the took in half on mostly this we the We’ve the the very obviously, programs that strategies quarter. and markets. additional back year. effect more about You quarter, in more into the early quarter in talked end take will in the the of in top productivity fourth will pricing we That quarter, emerging our some the morning.

much So benefit in first year, this half. we particularly the see won’t

likewise quarter. margins we that with the and side, margins – and us premium So you up. of first combine in go North the to year in an towards will particularly as weighted plan that all with America help And year growing the lead that innovation is the exiting more through

Operator

will question Barclays. Lieberman next go from our Please And come Lauren with ahead.

Lauren Lieberman

morning. Good thanks. Great,

Noel Wallace

Hi, Lauren.

Lauren Lieberman

talk a curious restructuring, the see I it’s because about that in rare I could feel to program you a only Hey, nature. year X if little bit like was more

for on that out it’s ways last of I would or So of look been chain in are a market things the sought that they And these to couple have to-do another. were with been and would environment? typically have kind one programs up like you because the growth have XX-plus what supply be operating come the accelerate months, also, surprises, a there Are hiccup accelerated? feel of whether proactively then in but opportunities sort of the or list, that projects funding regionally

operating that had consistent or at impacted to degree of Thanks. year that so? also performance you’ve this may the last that So over be program what does some look factors less

Noel Wallace

Yes. Lauren. Thanks,

We’ve and led I that the groups around we as inflationary to seen transformation. mean what how breakthrough the and and restructured out innovation as world we that. environment significant and transformation obviously XXXX coming challenging, the into around associated the use first could our how into accelerate. we’ve and noticing, accelerate of a particularly we’re to as an savings well trying wanted COVID that obviously, more as progress make the our of we and word business were our as we out the you we of ultimately, we quickly agile be towards this resources to as with transformational ahead strategy seen space think start more thinking wanted innovation. I year get to and as The progress into the quickly it came lot great of really benefits of as a well that we be great got faster was the possible digital to digital key as sure innovation quarter, to we market. ourselves is as disruptions get benefits that in out a then after really And this we decided proactive. trying structure to that of we and about lot achieve environment benefits We’ve in increased seeing becoming

as heard good looking at from mind, the to in controlling we’re overheads, we year our in mitigate constantly inflationary a been really have bear John, market. the ways and Now seeing you around pricing we had

the business. down down year, good Our considerably And fourth the think that’s quarter. I overheads on in just were

have. to optimize structure that, to looking continue look for operate. that top we constantly We’re we of On really ourselves at how to we want ways accelerate how the growth to we momentum

year, exit program. the we throughout move we this will as So

the into and for we year allowed don’t ultimately with savings that business of we ensure into right it’s to and falling and back said, first with program ongoing for of allowed to set ‘XX. we to get us XXXX period, on and where we out the we’ve distractions really into do us have fine-tune ‘XX. trying really a accomplish across that’s focus wanted half think and you to what XX-month As do the X-year to It that the the organization, in to half the the

quite everyone point And regional you’ve the it chain from supply you the chain. to listen, are depends a on supply of faces Lauren, extent, everyone, and significant. challenges were structure really, mentioning, heard certain the On composition as that your

We our terms we have the had, global extremely into capital how optimized we efficient ensuring sourcing of supply plants. in around the low-cost know, most world and all how that chains you in world as put the we’ve one have of

well We will sure. that has and In with to obviously, North as in And as well, likewise, here had additional the short-term, deal disruptions given business the that. long-term benefit question disruption from that that as the you top America, of costs heard, seen the some be to we’ve we’ve the share. some some brought as in both Asia into line market to no of

forward. making, moving as into continue in to we’re So chain we’re are the get that supply particularly in we with those confident we changes through feel where the that moving productivity very we go ‘XX, and and our initiative to to optimize

Operator

go Please hear up Steve ahead. with Powers Bank. next, And from will Deutsche we

Steve Powers

and very morning. good Thanks much

Noel Wallace

Steve. morning, Good

Steve Powers

morning. Maybe – Good

rounding out Dara’s initial So maybe question.

a you’ve can volume growth I’m presumably some performed how about lot for product looking to by detail Care, guess Just but talk I the ‘XX Oral price. organic around X% versus Care you normalization an some the fourth of segment, in Home called because provide Pet a by also and just wondering Personal could putting globally and growth more both X% obviously, bit the Care ahead, you composition perspective? And price in you’re in versus of from then Oral quarter little if

negative response Latin to see I mostly dipped in the American the So be acceleration I’m price it’s price-led. But there. surprised volumes was in assuming to I to sequential little a in quarter going guess

progresses? – So curious how Thank as to thinking just you’re elasticity as thinking about you. that about ‘XX and

Noel Wallace

Sure.

that little remarks, you and talk prepared saw Care. about driven the a was Nutrition. me let Pet in So Care bit the Oral by fourth Obviously, Oral quarter

so the fourth Oral XX total of in speak. Care, have more about quarter, all of about fourth third quarter. we overall, the in pleased. the quarter. in was disruptions quite quarter The material that that shutdowns impact a we points basis despite the some talked would That was growth to to So that been had saw And that in in and the company

disruption So a be the we’re the We to we to but by the first little will year, more quarter pretty the line of moving a those. we be of balance on quarter bit see sight have throughout and need that. that behind we get to back good in second where

I Europe, Oral our as We market very Care driven and fourth in the with we’re which the as we’ve growth channels, shares introduced to shares in all pleased North saw untracked terrific. very, strong particularly America the mentioned the was stabilized well by across reception good. acceptance in some new overall, pricing strong. the which actually of exiting the So were outlet quarter, North the products And XXXX that America. in was

So of confident continued we’re setting terms in for growth we’re in ‘XX. how we’re ourselves – where quite up

a world. fourth our of volume, the at that. and price there volume going be pricing within Obviously, increases as address that You had across more question given the And mentioned, quarter. is versus price to the significant America in organic in I’ll on began Latin the the question taking end we’re taking growth ‘XX I we

seeing we size second you which earlier, volume. quarter. and pricing early in as And of cadence But as announced pricing to we the markets categories, implemented you’re about emerging the ourselves around about given we how the that through plans of well world, taking as that quarter, we’re the think that will in to think volume our across here continue will well ensure the take we’re year. the from that. effect, in Relative falloff a accustomed and have We question, as how balance and to build first our part to competitors mentioned other no the innovation the promotional of in see the I

this growth the volume, bit of makeup the in is price driven will a historical sense little say different year, that we’ve environment. the by than in the more in by no is be organic than which rise environment question inflationary by years. So everyone all what impacted I’ll this that boats seen

competitor as across heard result, elasticity consistently up So you’re all you’re as seeing see you’ve category going from one categories. that a pricing plays, move. you’re pretty to not into seeing the move, others, That

little a So bit elasticity less. tends be to

as experience, exchange taking Steve, markets offset quite world. our around early It’s see. of know, you But will in pricing well We significantly foreign days to the now.

tiers the and the with able been we’re that growth America across sure making consumer ensure good were they cadence, mind, the that Latin strong really at same had price protecting quarter. promotional elasticity innovation a understanding time. with. and have had strong comp to to We that impact in balance the category we’re innovating good and a how Bear dealing they

X-year the stack looks So terrific.

top about think and year driven XX%, remember XX% and was of obviously, largely ago if X% I correctly pricing. by it on a I

will seems line as a but soft we but fully be responding consumer move single-digit least in short-term, ‘XX. So, the recover continue took be some volume Categories Latin as little carefully we to that and that we the to mid America, the that to healthy pricing watch will expect itself. through in bit growth in quite we at

Operator

And up with question ahead. Teixeira go from next, we will Andrea Please JPMorgan. take a

Andrea Teixeira

service you going level the Thank us greater update you. understand guess first by on still consumption quarter inventory? shipments. U.S., reviewing the is I impacted you where And the to Good of you’re morning. disruptions. that that has by that the the be still in – you – fourth than some mentioned in I Can been mentioned

demand items the Thank if strong just And answered when American Oral then you last on mostly that volume now, of elaborate year? coming achieve on from had can is from think the I about from that that? it Home – was some it to Care you. just or were even coming that shortfall, is of So a comment – you the Personal Latin wondering or Care Care lot you

Noel Wallace

your of I think, of Care quarter. me obviously growth let a growth Bear significant Home COVID. last you that mind on as Care the Care had in was in earlier the Likewise, soap, our impacts commentary certain Andrea, a category some well. level it addresses strong Personal ‘XX Oral We given a and question of category XX%. Liquid that the extent, saw second lapping in we Nutrition. because the quarter in some to first Sure. hand take year, growth were as Pet roughly in of that fourth category and as growth paralleled down

XX% well. of a products XX% cleaning our home as to products Some category our down as were –

is we the those that as above continued above or to borders, consumption. out around certain Mexico logistics, we’ve from shipped ‘XX, John a not the that kind shipments, otherwise. the sense to due we question and So constraints starting mentioned consumption across but – trailers was was that of in getting quarter. impact extent of move an and hopefully relative had that seen to to bottomed But have our stabilize into no categories either the challenge only country, around

North quarter. moving number of and of that as said, But plants we impact shutdowns by be challenges those. the and Asia the mentioned of we had Some out well. earlier, had we’re obviously will an think the on we that America that We end that I as across the through the

necessary taking efficiently chain We’re steps, I earlier, mentioned to ensure continues that as operate to our the supply as as possible.

about that of the has headwind overall, of to That in some We issues created changes short-term make relative feel little a to the face. terms plan But address least will place, we at couple obviously cost. good sourcing. of a we in

We will the back extent benefit we of the through see the refill as a the certain moving to pipeline that of half year.

Operator

next, Please we Credit Suisse. ahead. with Gajrawala question will And from Kaumil a take go

Kaumil Gajrawala

this of you’ve given what you a heard unfold. than of Question, sense Hi, dealt the we guess and consumer. suppose, likely developed around we’ve on in have probably with morning. far, haven’t lot inflation inflation’s I particularly much world on how impact. seen as impact a so most good is I the how markets better to Most guys

could how be as to relates impacted in maybe you it you it they about the might expect today the markets inflation? of developed talk by just be to if state So consumer where

Noel Wallace

of experience you days. foreign increases as through lot significant Yes, periods a we’ve price around Obviously, world, significant taking we thanks. the quite Early of as particularly went mentioned, had headwinds. exchange

a As I very little tend categories. are market the prepared that But when mentioned price coming less increases all to difference here I the elasticity you we’re that happens. across And earlier, a result, see big the entire as in think is for that.

be days But early in given and the tell. time quite promotional sense cognizant we As moving, executed to again, whole is to very what successfully. is terms place our the will and our of our able promotional to elasticity, least that feel is we of to we I need to balance bring mentioned we’ve strategy at seen ensure to to about market But innovation consumer innovations of pretty value valued. in the will pricing cadence relative well continue in ensure that, earlier, weather have to how my good this very is cognizant a strong

Operator

will go question Wells Please Carey we take Chris next, a with from Up Fargo ahead. Securities.

Chris Carey

the but XXXX in Hi, the productivity business. as the with the help pricing North good actions sales of Do how and inflation just with pricing obviously the you coming morning. know half under there maybe margin better back loop into a comps have think year the also with getting some with bit expectations pricing in the a little remains coming organic it’s can pressure. margin been that builds? from expand you the asked, Can division normalized that productivity standpoint the potentially in in business the along context on around that of a improve bit can of that, perhaps America? quarter, program for that I And for

Noel Wallace

Sure.

last pricing effect this The effect which quarter. into announced Personal we year, been in and we our announced some the categories balance move of second the our of took as have late Care categories quarter. of middle So, in take will

that across typically growth the cadence Funding we to is quarter. see pretty the clearly directional pricing. North that’s every American relative the relative So, to business

targeting we As the deliver in America When to we the in against mentioned, as to we are growth and of to our finding as a initiative, that are demand teams time do I of so produce that shut initiatives have that that in to growth. global initiative, finding other we have that we are we specific dealing will There lines that. to chain on be mind down funding specifically we the the region have, not with impact more accelerate which will supply regions. North our identified. mobilized is be want Bear mentioned, alternative some one top growth to the based across initiatives. we All test specific obviously you that. will funding regions that the around On opportunities don’t we contributing productivity we the regions that, on ensure want are funding the ways dedicated the challenges time

that margins of the So, quarter, see you as year. consistent second pricing And believe will to confident ‘XX. the we back half funding into will across begin the move we through growth in accelerate the move quite

Operator

will question Sachs. next English with from ahead. Our Please come go Goldman Jason

Jason English

Thanks. folks. morning good Hey,

Noel Wallace

Hi Jason.

Jason English

Colgate-Palmolive see another market accelerating Pet feels they advertising, be business. it spending are the rock this, innovating well. Palmolive Congrats on your in and Care. delivering on on and you solid there and time you Oral are we like your we to lot results year neglecting executing as in clearly and may hear seem be side Care Well, on what quite like out the where success is lot spend the a calls and you P&G Based of a they energy

doing second, your some harsh First, share either some do being can initiatives this? you or see you guess you I truth too And and compare here, to been they this contrast and investments do year? this have what I in for think couple Thank years? you in am have of got you way, of business last you. And or planned may how the

Noel Wallace

Jason. Thanks, Yes.

had, performance in we executed – soap, some Care as really of which the isolated pockets an excuse ‘XX more we as we Home continue that some in that find North because falling strength, challenges, in approach being we we of in mentioned well businesses where are to obviously, but include to overseas here listen, against. stabilized ‘XX can getting Latin as execute feel believe Personal these terms deliver short-term those the Obviously, me, we America ground Care categories, strong hand provide categories our through We category, have not do. we North as what obviously, in Palmolive our pricing But that’s categories, sure will America liquid have making plans but we America. that the So we very our entrepreneurial wanted another, a – continuity the quite earlier, being and the one, had move place forward. innovation we opportunities significantly, I had off the about have across Obviously, impact. getting to on of good only

some We good know overall, competitors So categories. our money spending feel significant it. are of we in these about

spending As the out ‘XX our support Oral in our will markets as well some to increased we Care of of in year look we that That all a saw priorities ensure key of we we coming some will plan. levels this talked competitive selectively about that but advertising have mainly XXXX. Hill’s, earlier, very we of the have core address as softness to robust

Operator

Grundy Up Jefferies. next, from go question Please with will ahead. a Kevin take we

Kevin Grundy

morning Thanks. on have follow-up areas, Good question pricing. everyone. Two please. a Great. I

I ladder on Steve which the On spoke think elasticities, pricing to then and specifically.

I So, general number bit better on the been far. drill the think elasticities one, because elasticities, have than just would least that so view a expected, at little down to be

not result react to really down something whether that areas So, for this helpful. is brands and or to additional will potentially this value that? or So, think that for the there pricing helpful. or mid-tier would have trade potential on have additional already private So, the implications consumer of etcetera? your and if or sort question we some mix you represent And you to the I that mean then to on also that. elasticities, Thank be do could lower-priced brands on promo, two of see in guess that’s a you and My company reversion just could included around state reflected point of even outlook, just be to of potentially earlier your some consumer. downside would commentary label. at Have I elements down sort is ladders, negative on an drilling just maybe those question,

Noel Wallace

Kevin. Sure,

we specifically right that, is world. wanted the that enough flex on built of to were business, P&L based as business, into to consumers across we the early I on So we pricing, consistently elasticity again, days mean have elasticity there be expect mentioned. the own are that the everyone in now, I that in as as categories much we across P&L have elasticity. ensure see let’s in talk tell we our seems saw we conservative. not our react. adjust our clearly. and assumptions and how It’s to But will pretty the given we taking all that seen Time to pricing The quite it past, will able very pricing careful

accurate. sense will marketplace. there, but is the our watch in assumptions as covered are this we see my necessary we So, carefully pivot that And we are happening shall ensure we to what’s as

it’s pricing, part new mentioned into to it’s pricing fits cadence, earlier, relative promotional our the only is product our we taking of to that how I your the As market the second question, about just not go in cadence. executing And relative that ladder. really which

across our and planned One only of that multiple value but innovation compete. value have which those brings we in the the that add we get pricing, tiers will all good clear the tiers across us business tiers. we And price not of aspects price our tiers headwind very to there the feel price ensure consumer to price distinction to is Innovation at in add we about there particularly business. inflation temptation trade innovate the those their to obviously, side to continue we have we how all value across bring markets. that of they piece important premium looking as are around address in any But that should be the down, is a significant to of consumers

Operator

with hear from Wendy now We Citi. will Please go Nicholson ahead.

Wendy Nicholson

the I the logistics question I under because all there decided currency wanted margins well a and the of and line for and we top have longer know of bit a I reinvest taking the the business, the for not right I was bigger bit. for back, global obviously and COVID unusual and to But of Kind these. going of line are in as good initiative us much needed have worked goals. year And to with long it’s margin in back guess and that, a know obviously, have revisit that But feel initiative. of my your of as that. years reset this just you in of it’s reinvested to again, to How And news just level? is the term, come do level step to a a few came just you really all and kind how little point, to you to back you kind and seen productivity when productivity I that’s am the CEO, us and Hi. the in that’s I related XX% has really Laurence’s initiative little last company? go pressure, commodities of drop margin to margin because the news for multiple you disruptive kind give be if operating the probably organization. that sorry the question, XX%, expansion But bad versus X-year to see line? is, about think there Is savings bottom

keep more this color cost or what’s need And is so we say, goal am just to Just expansion, this a of is “Oh, one-off, gone you really has the to wondering, might reinvesting? you. or more little more might business sort a this here? I in say, of do Thank Is ‘XX.” up have bit sort ‘XX. we just We of margin have in and

Noel Wallace

restructuring to take plan, to started pretty program of Thanks, only to in XXXX, step obviously Sure. all of Obviously, a the X of optimize. years a have me XXXX moment. for that. part we back let that X about out look strategic for kind the years But came better good significant to It’s think above. ways it’s a we as And business ended continue Wendy. of to our of

structure changes back-office we manufacturing forward. the are digital moving our transformation, about about lot a around in of SAP manufacturing our thinking made are and our we innovation, our thinking how organization have strategy We S/XHANA, footprint around how our centers,

are to across and those business things to execute ensure against to continue of the our do the that we drive efficiency right All strategies. to continue

now. needed what faster. We a was this it is managed get structure of right pretty mentioned this deliver – I I earlier, believe focused overhead very well in mean So, to we to plan is XXXX program. for response to ahead our our even

our XXXX. down, in down overheads saw costs You fixed

down those Obviously, for has advertising have top health but us fourth that considerably accelerate I the as our ‘XX, we to priorities. across Care line not Pet intention, ‘XX, been quarter. in piece our to business, we of into have them quite we company. And move And bodes key in as in some saw a to priorities growth our Oral of sustained continue skin You resources the and and we is discussion. optimize some categories well only and growth out the key mentioned driver momentum. across laid That advertising, but the you other need of earlier reallocate Nutrition the the seen that into

our we purpose can So brought in. bringing again, through optimize where but want to year. the us of forward. money, technology big of to but not we in structure intend with this available have to to going transformation, us levers to we us as go only Stan his about We reinvest was most help Stan we A think our help background

So, I this. Stan, why to don’t and his on turn couple over let of it thoughts share a him

Stan Sutula

Wendy, the for first thanks of all, question.

in last As benefited context, bit important great we for profit, where XXXX a were think landed year, a on it’s full categories. I where a pre-pandemic. But from at gross of we COVID-driven equal year we look year, that’s certainly to little

from big from places. to to the And think it drive will We strategy. timing the a this they productivity year. rate, hasn’t in the million start in us that. accelerate XXXX right benefit So, categories that the here, of are There levels. meaningful is million off impact on annualized a program there will be $XXX Again, actions us these But will help back our through number. half those is mix fallen obviously our $XX

goes this to split invested get to line goes flexibility of into going the business. what there. into have of But Now the some back back behind that, the on we bottom versus what the business, part is

we business. said, the health continue and drive health the want long-term the we As categories long-term have to of of to these

very difficult confident drive the margin on in margin we went we year, expansion through compare, a XXXX. in but to as obviously, ability our are wrapped the So,

Noel Wallace

Thanks Wendy.

Operator

next, go Astrachan will take we Stifel. question Mark ahead. from Please Up a with

Mark Astrachan

to Thanks on morning that and question. me? hear I Can everyone. up wanted follow Yes. good you

Noel Wallace

Yes, I can. ahead. Go

Mark Astrachan

Sorry.

take growth, roughly and But with puts investment. what on So, over takes If is question FX, for longer-term is especially think driving the guess over I on pet and right less investors last you you margin if input of wanted increase about to expected a that about time? business level basis. this the on just flat, to it time, costs, look, balanced follow-up the year There you it’s What decade, a etcetera. EBIT I the in of majority look given said increasing absolute, growth. over

You cut like ad And spend and obviously, as the example. consumer healthcare an quarter see standalone fourth coming GSK J&J. companies competition we increasing from in

how So, but this, time? it? just XXXX And targets, about targets having can about If that? we or conceptually, all how your there, out not look to we how EBIT margins we about you specific grow do do should think obviously, over think think

Noel Wallace

related are And notwithstanding think of what continue the and margins some over categories. Oral is up. it’s to about to priority what trying accelerating the couple we we Care of setbacks last you our ultimately, goal to if our execute obviously Listen, COVID, Yes. the executed years, have drive acceleration. EBIT to It’s

over bottom the Skin of will to time. very continue those. company. grow EBIT likewise. Nutrition, to to committed we accretive line Pet be margins Care, Premium the The Health businesses, All We margin Accelerating Pet

getting improved the in are company EBIT pricing margin. we an will the ultimately taking, driving just line more obviously, three continuing we proactive. the I of those mean top be in drive we to obviously, categories So have proactive But mix deliver discussed. to

the media we spend. resources in optimize that ensuring have We be proactive have internally to to our

efficiently a across that ROI around bit our work CAGNY, we the doing will that talk at little We advertising driving about of spend. great more some are

may more about way because with getting as earlier in forward. optimize that we opportunities of our Now to today aspect we And the see will top the some the we ambitious move or the be sustain of EBIT need we allow our pricing we the that is P&L, bold continue as this. fuel up to margin we the growth. to continue Likewise, pricing believe us talked – call the most spend line investment spending against to and to the ultimately, gross of the is

is goal So margins. pricing, innovation to ultimately, But against we that that as have today, in EBIT short-term that XXXX the challenges category we we the think Obviously, we in is that. the compete drive profitability our statement. execute looking strategy, The contribute structure the some of the to place, the seen. our part the will in program that improve to all that have to all at that, to find through we income obviously, we ways ways announced ensure optimize we

Operator

go today comes Robert from And last with our question Ottenstein Please ahead. Evercore.

Robert Ottenstein

Thank much. you Great. very

couple a follow-ups then just of First, my real question. and

be and business, Care Oral XXXX? in can a – of market us how So, you the And of Care just give gap as a much you what U.S. that that kind on the can related, then what Oral point talking the digit, of mid-single are impact retail? may the just of on And that. And grew kind was it, talk on A shipments of dimensionalize digit, was maybe maybe percentage? sense U.S. between I the sense healthy guess in. mid-single little little U.S. adjectives put double digit, putting but lot then finer bit digit, a magnitude we can also are you around pricing of you high-single a terms of

go And China little into those really you can the real follow-ups. bit. are the So, then is question just a

love of We you. how quarter. a some much that I distribution in the some discussion understand calls, bit prior was would to that about In that Thank happened talked little some in of there developed haven’t today. tiers. the disruptions

Noel Wallace

pricing in more specific really can’t and quarter the announced pricing, Obviously, good Listen, be provided America. you we have fourth on categories Rob Thanks, Okay. in any what the I than some in North earlier. morning. I

taking we of were are our to the where margins second with where see the needs the to gross consistent inflation and be We dictates bulk announced our really continue in initiatives and and we our quarter categories that revenue innovation will and effective it grow and it growth management how through how we strategy. do pricing of do we with we take it and list our can do think take that prices, through level we

tiers, And go our are fact And and after the e-commerce market change not business nicely our I days in of a of for success respond opposite competitors in approach market, to to On do brand the distinct have is – we see strategy all we Colgate now. think value China, based right taking very premium making promotional that We forward. to We side with X.Xx are a we really about what average. accordingly, XX% index getting cadence. across price do that pricing growing think the to the XX% the in the it’s innovation, is we still to our in is now will go-to-market that. innovation approach able to to So, our that right thought it importantly, kind of balance China that business. in at are isolation. and the pricing. through of we visibility our the sure And to more the drive the well only ensuring early fastest in this on the that adjust And really right where saw we market. moving of we are category. we approach, In ultimately, our consumer e-commerce through we great e-commerce, a And but we in specifically, our do

So, success it premium innovation there. driving our that’s is really

do. We to have got more work

some got the opportunities environment. in brick-and-mortar have We

We share have seen stabilize. that

think so forward come And has moving incremental some growth about as model the to mainly we And we through that. optimize ways our online. see distribution

with with Hazel taking are step & in an important brand Hawley. XXXX We our Hawley

accelerate good support have that for to that. levels to got innovation continue We business, good and

So, about feel we good pretty China.

market has by sluggish. that down, quite provinces. I brick-and-mortar This that up. consumption. year and different last category the lack the was an in the Now, the actually have mobility had we has was that whereas China And that the impact mean across seen seen over in category e-commerce lockdowns was we obviously, on been driven really have of the marketplace certainly

we move a COVID knock So, wood slowed think to things bit. moderate. I into continues that on have ‘XX and as But

will much were stronger in and where and to believe nicely a position obviously, that category rebound on we that We see before. capitalize we

Operator

that’s in And speakers have the the we remarks. or questions the conference for to turn I back all the additional queue. closing will

Noel Wallace

everyone. Well, thanks

and me all deepest let are care XXXX, my in an today people of So, obviously be disrupted managing through to aren’t resilience COVID close nothing, gratitude continue which their their that those are and but the and to the that listening extraordinary challenges was environment by by extending just impressive. Colgate

continued line so revenue deliver For well the company accelerated management staying strong the people building brand at growth I and plans for appreciation as gratitude so results, the the everyone. innovation, to our top my see all and you will and sustained focused as on growth had thanks to and CAGNY. initiatives, Colgate

Operator

concludes participation. call. your do you We This thank today’s for

now You disconnect. may

Colgate-Palmolive (CL) 28 Jan 222021 Q4 Earnings call transcript