Colgate-Palmolive(CL) - 2024 Q4 - Annual Results

Overall Financial Performance Full Year 2024 Performance Full year 2024 saw record net sales of $20.1 billion, 7.4% organic growth, and strong profitability and cash generation Full Year Total Company Results (Millions USD) | Full Year Total Company Results | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | GAAP | | | | | Net Sales (Millions USD) | $20,101 | $19,457 | +3.3% | | Diluted EPS (USD) | $3.51 | $2.77 | +27% | | Base Business (Non-GAAP) | | | | | Organic Sales Growth | | | +7.4% | | Base Business Diluted EPS (USD) | $3.60 | $3.23 | +11% | - Achieved a milestone by delivering over $20 billion in Net sales for the first time[5] - Net cash provided by operations for the full year was $4.11 billion, a 10% increase compared to 2023[5] - The company returned $3.4 billion in cash to shareholders through dividends and share repurchases[5] Fourth Quarter 2024 Performance Q4 2024 saw nearly flat net sales at $4.94 billion, offset by 4.3% organic growth, improved EPS, and 70 basis point gross margin expansion Fourth Quarter Total Company Results (Millions USD) | Fourth Quarter Total Company Results | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | GAAP | | | | | Net Sales (Millions USD) | $4,944 | $4,950 | -0.1% | | Diluted EPS (USD) | $0.90 | $0.87 | +3% | | Base Business (Non-GAAP) | | | | | Organic Sales Growth | | | +4.3% | | Base Business Diluted EPS (USD) | $0.91 | $0.87 | +5% | - GAAP Gross profit margin and Base Business Gross profit margin both increased by 70 basis points to 60.3%[6] - Colgate maintained global market leadership in toothpaste with a 41.4% year-to-date share and manual toothbrushes with a 32.2% year-to-date share[6][7] Management Commentary and Outlook Executive Summary The CEO highlighted consistent organic sales growth, increased advertising investment due to strong margins, and ongoing strategic investments in digital and data analytics - This marks the sixth consecutive year with organic sales growth at or above the 3% to 5% targeted range[9] - Strong margin performance enabled a 15% increase in advertising spending in 2024, following a 19% increase in 2023[10] - The company is building income statement flexibility to continue investing in scaling digital and data analytics capabilities[10] - The CEO expressed confidence in delivering consistent, compounded earnings per share growth in 2025 and beyond[11] Full Year 2025 Guidance Colgate anticipates roughly flat net sales in 2025 due to foreign exchange, with 3% to 5% organic sales growth, gross margin expansion, and low to mid-single-digit EPS growth - Net sales are expected to be roughly flat, including a mid-single-digit negative impact from foreign exchange[12] - Organic sales growth is expected to be within the long-term targeted range of 3% to 5%[12] - On a non-GAAP (Base Business) basis, the company expects gross profit margin expansion and low to mid-single-digit earnings-per-share growth[12] Divisional Performance (Q4 2024) Sales by Division Q4 2024 organic sales grew 4.3% across divisions, led by Africa/Eurasia and Latin America, despite significant foreign exchange headwinds impacting net sales Fourth Quarter Sales Growth By Division (%) | % change 4Q 2024 vs. 4Q 2023 | Net Sales (%) | Organic Sales* (%) | Volume (%) | Pricing (%) | FX (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | -1.0% | -0.7% | +1.9% | -2.7% | -0.3% | | Latin America | -7.2% | +9.2% | +0.9% | +8.3% | -16.4% | | Europe | +4.9% | +4.5% | +1.7% | +2.7% | +0.4% | | Asia Pacific | +3.7% | +3.8% | +5.8% | -2.0% | —% | | Africa/Eurasia | +2.8% | +9.4% | +11.5% | -2.1% | -6.6% | | Hill's | +2.3% | +2.9% | +0.8% | +2.0% | -0.5% | | Total Company | -0.1% | +4.3% | +2.5% | +1.8% | -4.4% | Operating Profit by Division Q4 2024 total operating profit decreased 1%, with Hill's Pet Nutrition driving 19% profit growth and 340 basis point margin expansion, while North America declined Fourth Quarter Operating Profit By Division (Millions USD) | (Millions USD) | 4Q 2024 | % Change vs 4Q 2023 (%) | % to Net Sales (%) | Change in basis points vs 4Q 2023 (basis points) | | :--- | :--- | :--- | :--- | :--- | | North America | $206 | -11% | 19.9% | -220 | | Latin America | $339 | -8% | 30.6% | -10 | | Europe | $155 | 3% | 23.3% | -40 | | Asia Pacific | $211 | 4% | 29.1% | +10 | | Africa/Eurasia | $58 | -1% | 21.5% | -80 | | Hill's | $275 | 19% | 24.1% | +340 | | Total Company, As Reported | $1,064 | -1% | 21.5% | -20 | Detailed Financial Statements Consolidated Statements of Income Full year 2024 saw net sales grow to $20.1 billion and net income to $2.9 billion, while Q4 net sales were flat at $4.9 billion with increased advertising spend Consolidated Statements of Income - Full Year (Millions USD) | For the Twelve Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net Sales (Millions USD) | $20,101 | $19,457 | | Gross Profit (Millions USD) | $12,161 | $11,326 | | Operating Profit (Millions USD) | $4,268 | $3,984 | | Net Income Attributable to Colgate-Palmolive (Millions USD) | $2,889 | $2,300 | | Diluted EPS (USD) | $3.51 | $2.77 | Consolidated Statements of Income - Fourth Quarter (Millions USD) | For the Three Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net Sales (Millions USD) | $4,944 | $4,950 | | Gross Profit (Millions USD) | $2,982 | $2,950 | | Operating Profit (Millions USD) | $1,064 | $1,072 | | Net Income Attributable to Colgate-Palmolive (Millions USD) | $739 | $718 | | Diluted EPS (USD) | $0.90 | $0.87 | Consolidated Balance Sheets As of December 31, 2024, total assets decreased to $16.05 billion, total debt was reduced to $7.95 billion, and shareholders' equity declined to $212 million Consolidated Balance Sheets (Millions USD) | As of December 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total assets | $16,046 | $16,393 | | Total debt | $7,949 | $8,549 | | Total liabilities | $15,502 | $15,436 | | Total Colgate-Palmolive Company shareholders' equity | $212 | $609 | Consolidated Statements of Cash Flows Net cash from operations increased to $4.11 billion in 2024, driving free cash flow to $3.55 billion, with significant cash returned to shareholders Consolidated Statements of Cash Flows (Millions USD) | For the Twelve Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operations | $4,107 | $3,745 | | Capital expenditures | ($561) | ($705) | | Free cash flow before dividends | $3,546 | $3,040 | | Dividends paid | ($1,789) | ($1,749) | | Purchases of treasury shares | ($1,739) | ($1,128) | | Net increase (decrease) in Cash and cash equivalents | $130 | $191 | Segment and Geographic Analysis Segment Information (Net Sales & Operating Profit) Oral, Personal and Home Care remained the largest segment, while Hill's Pet Nutrition significantly grew sales to $4.5 billion and operating profit to $965 million in 2024 Full Year Net Sales by Segment (Millions USD) | Full Year Net Sales (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $15,618 | $15,167 | | Pet Nutrition | $4,483 | $4,290 | | Total Net Sales | $20,101 | $19,457 | Full Year Operating Profit by Segment (Millions USD) | Full Year Operating Profit (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $4,088 | $3,882 | | Pet Nutrition | $965 | $806 | | Corporate | ($784) | ($704) | | Total Operating Profit | $4,268 | $3,984 | Geographic Sales Analysis Full year 2024 organic sales grew 7.4%, led by Emerging Markets, despite significant foreign exchange headwinds moderating reported net sales growth to 3.3% Full Year Geographic Sales Analysis (%) | Full Year 2024 vs 2023 | Sales Change As Reported (%) | Organic Sales Change (%) | Volume (%) | Pricing (%) | Foreign Exchange (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Company | 3.3% | 7.4% | 3.1% | 4.4% | (4.1)% | | Emerging Markets | 3.0% | 12.2% | 4.0% | 8.2% | (9.2)% | | Developed Markets | 3.5% | 3.6% | 2.3% | 1.3% | —% | Fourth Quarter Geographic Sales Analysis (%) | Q4 2024 vs 2023 | Sales Change As Reported (%) | Organic Sales Change (%) | Volume (%) | Pricing (%) | Foreign Exchange (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Company | (0.1)% | 4.3% | 2.5% | 1.8% | (4.4)% | | Emerging Markets | (2.2)% | 7.5% | 3.7% | 3.8% | (9.7)% | | Developed Markets | 1.6% | 1.7% | 1.5% | 0.3% | (0.2)% | Non-GAAP Reconciliations Q4 2024 Non-GAAP Reconciliation Q4 2024 GAAP operating profit of $1,064 million and diluted EPS of $0.90 were adjusted to higher non-GAAP figures after accounting for specific charges Fourth Quarter 2024 Non-GAAP Reconciliation (Millions USD) | Q4 2024 (Millions USD) | As Reported (GAAP) | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Profit (Millions USD) | $1,064 | $7 | $1,071 | | Net Income Attributable to Colgate (Millions USD) | $739 | $6 | $745 | | Diluted Earnings Per Share (USD) | $0.90 | $0.01 | $0.91 | Full Year 2024 Non-GAAP Reconciliation Full year 2024 GAAP operating profit of $4,268 million and diluted EPS of $3.51 were adjusted to higher non-GAAP figures after accounting for specific charges Full Year 2024 Non-GAAP Reconciliation (Millions USD) | Full Year 2024 (Millions USD) | As Reported (GAAP) | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Profit (Millions USD) | $4,268 | $85 | $4,353 | | Net Income Attributable to Colgate (Millions USD) | $2,889 | $73 | $2,962 | | Diluted Earnings Per Share (USD) | $3.51 | $0.09 | $3.60 | Supplementary Information About Colgate-Palmolive & Investor Information Colgate-Palmolive is a global consumer products company focused on Oral Care, Personal Care, Home Care, and Pet Nutrition, with upcoming investor events - The company focuses on four core business areas: Oral Care, Personal Care, Home Care, and Pet Nutrition[20] - The company will host a conference call and webcast on January 31, 2025, to discuss results, with materials available on its investor website[18][19] - The annual meeting of stockholders is scheduled for Friday, May 9, 2025[20] Important Disclosures and Definitions This section provides cautionary statements on forward-looking information and defines key non-GAAP financial measures for clearer business trend analysis - The report contains forward-looking statements based on management's current plans and assumptions, which are not guarantees of future performance; investors should refer to SEC filings for risk factors[23][24] - Organic sales growth is a non-GAAP measure excluding foreign exchange, acquisitions, and divestments to show underlying sales trends[25][27] - Base Business results are non-GAAP measures excluding non-recurring items like restructuring, litigation, and product recall costs[26][27] - Market share data relies on third-party vendors and internal estimates, subject to limitations such as the exclusion of certain retail channels like eCommerce[21][22]