Colgate-Palmolive announces record profits on continued sales growth
Global sales increased by 2.0 per cent to $3.81bn (€2.92bn), a figure that was negatively impacted by currency translations by 1.5 per cent, while organic sales grew by 3.5 per cent.
Net income increased by 7 per cent during the quarter to reach a record figure of $603m, compared to $562m in the corresponding quarter last year.
Operating profit increases
The company said that operating profit also increased by 7 per cent to $948 million during the quarter, compared to $887 million in second quarter 2009. This represented an increase to 24.9 per cent from 23.7 per cent as a percentage to sales.
“Overall, we are very pleased to have delivered solid results this quarter, despite heightened competitive activity and difficult economic conditions around the world,” said Ian Cook, Colgate Palmolive CEO and president.
The company also said that its share of the global toothpaste market strengthened to 44.4 per cent in the 12 month period, a performance that was led by gains in Brazil, China, India, Russia, Venezuela, France and the United Kingdom.
Venezuela volatility impacts results
However, the company does continue to be impacted by currency devaluation in Venezuela, compounded by the fact that the country’s economy remains volatile, a situation that is likely to marginally impact share dividends for the full year.
On a regional basis, North America sales represented 20 per cent of the group revenues and rose by 4.5 per cent, driven by sales of new product launches including Colgate Triple Action, ProClinical and Max White toothpaste.
In Latin America sales represented 28 per cent of total revenues and grew by 0.5 per cent, a figure that was significantly impacted by the Venezuela market.
China, Russia and India lead the way
In the Europe and South Pacific region, sales accounted for 20 per cent of the group revenues and increased by 2.5 per cent on share gains in key markets including France, Italy, Poland and the UK.
In the Greater Asia and Africa region, sales accounted for 19 per cent of the group revenues and grew by 14.0 per cent and 11.5 per cent respectively, with Russia, China and India earmarked as particular growth drivers.
Looking ahead to the full year results, the company said that, putting aside the problems in the Venezuela market, it was expecting to achieve significant gains in gross profit margin, helping it to attain double digit earnings per share growth, year-on-year.