21 April 2004 19:33
Colgate-Palmolive Co - 1st Quarter Results
Europe (24% of Company Sales) European sales and unit volume, excluding the divested detergent business, grew a very
strong 19.0% and 8.5%, respectively, during the quarter. Excellent volume gains were achieved in the United Kingdom,
Italy, France, Spain, Scandinavia, Belgium, Holland, Poland, Russia, Turkey, Adria, Ukraine and Romania. European sales
as reported, which reflect the divestment of detergents in Europe, increased 14.5%. This increase reflected 4.0% volume
growth and favorable foreign exchange of 13.5%. Dollar operating profit increased 14% even after strongly increased
commercial investment. Colgate continued to strengthen its Oral Care leadership in Western Europe during the quarter.
The recent roll-out of Colgate Total Advanced Fresh toothpaste and the continued success of Colgate Sensitive toothpaste
drove gains throughout the region with the Company's toothpaste market shares in the United Kingdom reaching an
all-time high. Other new products contributing to growth include Colgate powered toothbrushes for kids featuring LEGO
BIONICLE, Palmolive Aromatherapy, Palmolive Thermal and Palmolive Thermal Spa shower gels and Soupline Hearts fabric
conditioner tablets. Colgate Propolis and Colgate Total Advanced Fresh toothpastes, Colgate Whitening toothbrush,
Palmolive Thermal Spa shower gel and Ajax multipurpose squeeze spray cleaner contributed to growth throughout Central
Europe and Russia. Latin America (21% of Company Sales) Latin American dollar sales and unit volume grew 7.0% and 5.5%,
respectively, in first quarter 2004 continuing the strong momentum seen in this region late in 2003. Strong volume gains
were achieved in Brazil, Venezuela, Central America, Ecuador and Peru. Dollar operating profit increased 6% even after a
substantial increase in commercial investment in brand-building activities throughout the region. Colgate continues to
strengthen its Oral Care leadership in key countries throughout the region. Recent introductions contributing to gains
include Colgate Triple Action, Colgate Herbal Whitening and Sorriso Jua plus Baking Soda toothpastes and Colgate Total
Plus Whitening toothpaste, which helped drive market shares for the Colgate Total equity to record levels in Central
America. Other new products driving growth in Latin America are Colgate Massager and Colgate Extra Clean toothbrushes,
Palmolive Aromatherapy, Protex Sun Care and Palmolive Naturals Milk & Rose Petals bar soaps, Palmolive Caprice
Specialties shampoo and conditioner and Fabuloso Orange Energy liquid cleaner. Asia/Africa (19% of Company Sales)
Asia/Africa sales and unit volume, excluding the divested detergent business, grew a strong 12.5% and 7.5%,
respectively, in the first quarter, on top of a very strong performance in the year ago period and continuing the
positive momentum seen throughout 2003. China, Malaysia, Thailand, Philippines, Australia, Taiwan and South Africa each
contributed strong volume gains. Asia/Africa sales as reported rose 11.0% reflecting 6.0% volume growth and favorable
foreign exchange of 9.0%. Dollar operating profit increased 28% to an all-time record level, reflecting improved
profitability combined with strengthened local currencies. Successful new products driving growth in Oral Care are
Colgate Herbal White and Colgate Fresh Confidence Citrus Blast toothpastes, Colgate powered toothbrushes for kids
featuring LEGO BIONICLE, and Colgate Massager and Colgate Navigator Plus manual toothbrushes. In China, for example,
Colgate continues its leadership of the toothpaste market with its national ACNielsen market share at 31.4% year to
date, over 12 share points ahead of the number two competitor. In Personal Care, the success of Palmolive Naturals and
Palmolive Aromatherapy shampoos led to record high market shares in this category in the Philippines and helped expand
market share growth in the region. Hill's Pet Nutrition (13% of Company Sales) Innovative new products and
veterinary endorsements continue to drive growth at Hill's, the world leader in specialty pet food. Healthy results
both domestically and internationally contributed to 4.0% global volume growth in the first quarter. This growth is on
top of a very strong volume increase in the year ago period. Dollar sales rose 8.5% versus first quarter 2003,
reflecting this volume growth together with favorable foreign exchange of 5.0%. Dollar operating profit increased 9%
after increased commercial investment. The continued growth of Science Diet Nature's Best and Science Diet Advanced
Protection contributed to volume growth in the U.S. specialty retail channel. Prescription Diet Feline m/d, a low
carbohydrate diet clinically proven to alter a cat's metabolism for effective weight loss and to help nutritionally
manage cats with diabetes, contributed to growth in the veterinary channel. Internationally, France, the United Kingdom,
Italy, Russia, Turkey, Spain, Germany, South Africa and Australia each achieved strong volume gains. The continued
success of Science Plan Nature's Best and the recent roll-out of Prescription Diet Feline m/d throughout Europe
contributed to the strong international results. * * * About Colgate-Palmolive: Colgate-Palmolive is a leading global
consumer products company, tightly focused on Oral Care, Personal Care, Household Surface Care, Fabric Care and Pet
Nutrition. Colgate sells its products in over 200 countries and territories around the world under such internationally
recognized brand names as Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Ajax, Axion,
Soupline, Suavitel and Fab, as well as Hill's Science Diet and Hill's Prescription Diet pet foods. For more
information about Colgate's global business, visit the Company's website at www.colgate.com. LEGO and
BIONICLE(TM) are trademarks of the LEGO Group used here with special permission. (C)2004 The LEGO Group LOONEY TUNES is
a (TM) & (C) of Warner Bros. Entertainment Inc. BRATZ trademarks are owned by and used under license from MGA
Entertainment, Inc. (C)2004 Certain financial measures contained in this release, as noted, exclude results for Colgate
Simply White tooth whitening gel. Management believes this provides useful information to investors as it allows
comparisons of Colgate's other product lines and businesses without the impact of Colgate Simply White, sales of
which began in the third quarter of 2002. In addition, sales and unit volume growth both worldwide and in relevant
geographic divisions are discussed in the release both as reported and excluding divestments. Management believes this
provides useful information to investors as it allows comparisons of sales and volume growth from ongoing operations.
The Company defines free cash flow before dividends as net cash
provided by operations less capital expenditures. As management uses this measure to evaluate the Company's
ability to satisfy current and future obligations, repurchase stock, pay dividends and fund future business
opportunities, the Company believes that it provides useful information to investors. Free cash flow before dividends is
not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary
obligations such as debt service that are not deducted from the measure. Free cash flow before dividends is not a GAAP
measurement and may not be comparable to similarly titled measures reported by other companies. This press release and
the related webcast (other than historical information) may contain forward-looking statements. Actual events or results
may differ materially from those statements. Investors should consult the Company's filings with the Securities and
Exchange Commission (including the information set forth under the caption "Cautionary Statement on Forward-
Looking Statements" in the Company's Form 10-K for the year ended December 31, 2003) for information about
factors that could cause such differences. Copies of these filings may be obtained upon request from the Company's
Investor Relations Department or the Company's website at www.colgate.com. (See attached tables for first quarter
results.) Colgate-Palmolive Company Condensed Consolidated Statements of Income
For the three months ended March 31, 2004 and 2003 (Dollars in Millions Except Per Share Amounts) (Unaudited) 2004
2003 Net Sales $2,513.5 $2,348.4 Cost of Sales 1,113.9 1,050.2 Gross Profit 1,399.6 1,298.2 Gross Profit Margin 55.7%
55.3% Selling, General & Administrative Expenses 868.3 787.7 Operating Profit 531.3 510.5 Operating Profit Margin
21.1% 21.7% Net Interest Expense 28.3 34.0 Income Before Income Taxes 503.0 476.5 Provision for Income Taxes 164.5 152.5
Effective Tax Rate 32.7% 32.0% Net Income 338.5 324.0 Net Earnings Per Common Share Basic $.62 $.59 Diluted $.59
$.56
Average Common Shares Outstanding Basic 532.9 537.1 Diluted 572.5 579.7 Colgate-Palmolive Company Condensed
Consolidated Balance Sheets As of March 31, 2004, December 31, 2003 and March 31, 2003 (Dollars in Millions) (Unaudited)
March 31, December 31, March 31, 2004 2003 2003 Cash and cash equivalents $271.5 $265.3 $205.8 Accounts receivable, net
1,204.8 1,222.4 1,157.1 Inventories 788.7 718.3 737.1 Other current assets 300.0 290.5 277.1 Property, plant and
equipment, net 2,495.2 2,542.2 2,464.4 Other assets, including goodwill and intangibles 2,440.9 2,440.1 2,407.1 Total
assets $7,501.1 $7,478.8 $7,248.6 Total debt 3,115.1 3,102.9 3,596.0 Other current liabilities 2,115.0 2,027.4 1,910.3
Other non-current liabilities 1,463.6 1,461.4 1,406.1 Total shareholders' equity 807.4 887.1 336.2 Total
liabilities and shareholders' equity $7,501.1 $7,478.8 $7,248.6 Supplemental Balance Sheet Information: Debt less
cash and marketable securities* $2,820.5 $2,800.7 $3,371.9 Working capital % of sales 1.5% 1.7% 2.5% After-tax return on
capital 36.2% 38.0% 35.3% * Marketable securities of $23.1, $36.9 and $18.3 as of March 31, 2004, December 31, 2003 and
March 31, 2003, respectively, are included in Other current assets. Colgate-Palmolive Company Condensed Consolidated
Statements of Cash Flows For the three months ended March 31, 2004 and 2003 (Dollars in Millions) (Unaudited) 2004 2003
Operating Activities: Net income $338.5 $324.0 Restructuring (6.2) - Depreciation and amortization 79.9 75.7 Deferred
income taxes 8.0 7.1 Changes in: Accounts receivable 12.0 (10.2) Inventories (73.8) (60.4) Accounts payable and other
accruals (26.6) 25.4 Other non-current assets and liabilities 39.5 5.5 Net cash provided by operations 371.3 367.1
Investing Activities: Capital expenditures (43.3) (48.2) Other investing activities 9.3 (14.5) Net cash used in
investing activities (34.0) (62.7) Financing Activities: Proceeds from (payments on) debt issuances, net 2.5 (27.9)
Dividends paid (129.4) (97.4) Purchases of treasury shares (220.3) (154.0) Proceeds from exercise of stock options 21.3
11.3 Net cash used in financing activities (325.9) (268.0) Effect of exchange rate changes on cash and cash equivalents
(5.2) 1.5 Net increase in cash and cash equivalents 6.2 37.9 Cash and cash equivalents at beginning of period 265.3
167.9 Cash and cash equivalents at end of period $271.5 $205.8 Supplemental Cash Flow Information: Free cash flow before
dividends (net cash provided by operations less capital expenditures) Net cash provided by operations $371.3 $367.1
Less: Capital expenditures (43.3) (48.2) Free cash flow before dividends $328.0 $318.9 Colgate-Palmolive Company Segment
Information For the three months ended March 31, 2004 and 2003 (Dollars in Millions) (Unaudited) Three Months Ended
March 31, Net Sales 2004 2003 Oral, Personal, Household Surface and Fabric Care North America $568.5 $588.5 Latin
America 533.5 498.5 Europe 607.0 530.9 Asia/Africa 468.2 421.1 Total Oral, Personal, Household Surface and Fabric Care
2,177.2 2,039.0 Total Pet Nutrition 336.3 309.4 Total Net Sales $2,513.5 $2,348.4 Three Months Ended March 31, Operating
Profit 2004 2003 Oral, Personal, Household Surface and Fabric Care North America $135.4 $147.8 Latin America 158.3 148.7
Europe 129.7 113.9 Asia/Africa 84.1 65.9 Total Oral, Personal, Household Surface and Fabric Care 507.5 476.3 Total Pet
Nutrition 95.4 87.8 Total Corporate (71.6) (53.6) Total Operating Profit $531.3 $510.5 The Company evaluates segment
performance based on several factors, including operating profit. The Company uses operating profit as a measure of
operating segment performance because it excludes the impact of corporate-driven decisions related to interest expense
and income taxes. Corporate operations include research and development costs, unallocated overhead costs, restructuring
costs, and gains and losses on sales of non-strategic brands and assets. Colgate-Palmolive Company Geographic Sales
Analysis
Percentage Changes For the three months ended March 31, 2004 v. 2003 (Unaudited) COMPONENTS OF SALES CHANGE Pricing
1st Qtr 1st Qtr Coupons Sales Sales Consumer & Change Change Ex-Divested Trade Region As Reported Ex-Divestment
Volume Incentives Exchange Total Company 7.0 % 8.0 % 4.0 % -1.0 % 5.0 % Europe 14.5 % 19.0 % 8.5 % -3.0 % 13.5 % Latin
America 7.0 % 7.0 % 5.5 % 3.0 % -1.5 % Asia/Africa 11.0 % 12.5 % 7.5 % -4.0 % 9.0 % Total International 11.0 % 13.0 %
7.0 % -1.0 % 7.0 % North America -3.5 % -3.5 % -3.0 % -1.5 % 1.0 % Total CP Products 7.0 % 8.0 % 3.5 % -1.0 % 5.5 %
Hill's 8.5 % 8.5 % 4.0 % -0.5 % 5.0 % SOURCE Colgate-Palmolive Company -0- 04/21/2004 /CONTACT: Bina Thompson,
+1-212-310-3072, or Hope Spiller, +1-212-310-2291, both of Colgate-Palmolive Company/ /Web site: http://www.colgate.com
/ (CL)
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