Last week, Colgate-Palmolive reported net sales of €3.57bn ($4.3bn) for the fourth quarter (Q4) of 2020, up 7.5% on the previous year. Total net income for the quarter sat at €536m ($647m), up 0.6% on the previous year. The highest net growth in Q4 was seen in Europe – a region that represented 17% of Colgate-Palmolive’s total sales – where net sales were up 14% on the previous year. Organic sales growth in the region was up 4.5%, driven by volume growth across oral, personal and home care divisions, notably in Poland, the UK, Germany and France.
For the full year of 2020, net sales at Colgate-Palmolive tallied up at €13.6bn ($16.4bn), up almost 5% on the previous year. Net income for the full year was also up at €2.2bn ($2.6bn) versus €1.9bn ($2.3bn) in 2019.
“We are very pleased to end 2020 with another quarter of strong, broad-based organic sales growth,” said Noel Wallace, chairman, president and CEO of Colgate-Palmolive.
Premium innovation – Colgate-Palmolive has ‘right strategies in place’ for 2021 growth
“Our choices to invest in innovation, digital transformation and advertising are helping to deliver growth across our portfolio. While several of our categories continue to benefit from higher consumer demand due to the COVID-19 pandemic, we believe we have the right strategies in place to deliver profitable growth over the longer term,” Wallace said.
Speaking to analysts on the company’s Q4 earnings call last week, John Faucher, chief investor relations officer at Colgate-Palmolive, added: “We finished 2020 in very strong fashion, with our highest level of quarterly organic sales growth in over 10 years and our highest annual organic sales growth since the depths of the financial crisis. Importantly, we continued to deliver balanced growth, which we think is the key to sustainable strong performance.”
Faucher said that, importantly, growth had been seen across all four business categories – oral care, personal care, home care and pet nutrition – and whilst Colgate-Palmolive’s strategy to “deliver more impactful premium innovation” was still in its early stages, results were “beginning to show”.
Wallace said Colgate’s whitening pen and its super premium Optic White Renewal toothpaste launches in North America were just two examples. “Our focus right now is on bringing real value to then categories through premium innovation and re-launching our core businesses in certain parts of the world, which drives real value to the category,” he said.
Amid ‘high levels of uncertainty’ Colgate releases 2021 guidance
Colgate-Palmolive shared its full year 2021 guidance during its 2020 earnings release, stating net sales this year would rise by 4-7%. However, Wallace made clear the company expected “high levels of uncertainty” in 2021, with pantry loading and other positive COVID-19 impacts to be offset by volatility in raw material and logistics costs and foreign exchange.
Faucher added: “There are several factors that could impact where we fall within this wider range. First, COVID-related consumption. In the categories where consumption has risen during the pandemic, primarily liquid hand soap, dish soap and cleaners, we are expecting lower rates of growth or even declines year-over-year in 2021, depending on the market. However, we expect overall consumption in these categories to remain elevated versus 2019 levels.”
On the point of volatility, he said Colgate-Palmolive had however budgeted for increased raw material and logistics costs and forecast 2021 with a “competitive environment” in mind.
Wallace said that what Colgate-Palmolive had achieved in 2020 put the company in good stead to continue growth in 2021 and beyond, largely because it had “truly changed how we think about growth” – prioritising “breakthrough and transformational” product development; funding growth and carefully considering additional costs; and upskilling its workforce and bringing in new talent.
“I look back at 2020 as a year where our company battled through uncertainty to deliver really strong results. I would also look back at a year where we elevated our performance and capabilities and positioned ourselves to deliver sustainable, profitable growth into the future,” Wallace said.