Europe sees strongest growth as Colgate-Palmolive Q3 net sales rise
Last week, Colgate-Palmolive reported net sales of €3.55bn ($4.15bn) for the third quarter (Q3) of 2020, up 5.5% on the previous year. Total net income for the quarter sat at €596m ($698m), up 27% on the previous year.
The company’s European division – which represented 17% of total company sales – saw the largest rise in net sales for Q3, up 17% with particularly strong organic growth in France, Denmark and the Netherlands. This was followed by a 6.5% net sales rise in North America and 4.5% rise in Asia Pacific. Net sales across the Africa/Eurasia region were up 2.5% for the quarter.
Elevated personal care demand and premium oral care innovation
Noel Wallace, chairman, president and CEO of Colgate-Palmolive, said these were strong results “despite the many challenges brought on by the COVID-19 pandemic”.
“It is rewarding to see the growth strategies we are implementing bear fruit. While we continue to see elevated demand in personal care and home care related to the virus, premium innovation is also driving growth across all of our product categories,” Wallace said.
Speaking to analysts on the company’s earnings call, John Faucher, chief investor relations officer at Colgate-Palmolive, said this was especially the case for oral care.
“The focus on premium innovations like hum by Colgate, Colgate Optic White Renewal toothpaste, and the Colgate Optic White overnight teeth whitening pen helped to drive strong pricing growth in oral care,” Faucher said.
Wallace agreed, responding to an analyst’s question: “We’re looking for ways to think about oral health differently than just a toothpaste line extension, and you’re starting to see that play out in some of our innovation in the quarter, particularly in North America.”
Colgate-Palmolive 2020 guidance and future trends, strategies
Along with the Q3 results, Colgate-Palmolive published its full-year 2020 guidance, stating net and organic sales would be up mid-single digits with organic sales up at “the high end of that range”.
Wallace told analysts the company would continue to deliver “sustainable, profitable growth” beyond 2020 by focusing on three key areas: revamping innovation processes, prioritising digital transformation, and focusing on alternative brand investments.
“We need to become less reliant on line extensions and by pursuing innovations that really build incremental category growth and market share gains, which is ultimately vital for us to continue to drive gross margin. And we see incredible opportunities quite frankly across the mega trends all over the world that we’re seeing on the ground,” he said – naturals and sustainability being just one example.
And Colgate-Palmolive had already started to innovate and invest in its brands differently, Wallace said. Under its Protex brand, for example, it had launched a line made using a flaxseed-based antibacterial formula which had “truly differentiated” Colgate-Palmolive in the market, he said, along with a line of face products positioned in the premium anti-acne segment which offered high growth opportunity.
“…All these efforts are paying off for us as we head into 2021 (…) and we believe that we will continue to drive the growth, particularly as we build those skill sets across the organisation for the longer term.”
Wallace took the opportunity in the company’s earnings call to announce news that Stan Sutula would become Colgate-Palmolive’s new chief financial officer, effective from November 9, following the retirement of Henning Jakobsen.
