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Colgate Reports 4Q; Fiscal 2007

Posted: February 1, 2008
Colgate-Palmolive Company announced worldwide sales growth of 13.5% to $3,642.2 million and unit volume growth of 5% together with higher than expected earnings growth for the fourth quarter 2007. Global pricing increased 2% and foreign exchange added 6.5%. The top-line growth was supported by a 14% increase in worldwide advertising spending. As reported, gross profit margin increased 70 basis points to 56.1%. Excluding restructuring charges, gross profit margin increased 90 basis points to a record 57.5% despite significant increases in worldwide commodity costs. Operating profit as reported increased 7% versus fourth quarter 2006 to $675.6 million, 18.5% of sales.

"We are delighted to have ended the year so strongly on both the top and bottom lines," said Ian Cook, president and CEO, Colgate-Palmolive. "The excellent results were truly across the board with every operating division increasing both sales and operating profit in the quarter. Pleasingly, the 90 basis point improvement in gross profit margin worldwide and other savings programs allowed for strong levels of advertising investment behind our global brands while still generating higher than expected operating profit, net profit and earnings per share for the quarter.

"Consistent with our strategy to present higher value offerings to the consumer, new premium priced products are driving market share gains across categories in key countries around the world. Colgate's global market shares in toothpaste, manual toothbrushes, mouth rinse, bar soaps, shower gels and fabric conditioners all finished the year at record highs."

As reported, North American sales and unit volume grew 6.5% and 4.5%, respectively, in the fourth quarter. Excluding the divestiture of the Canadian household bleach business, sales and unit volume grew 7.5% and 5.5%, respectively. Pricing increased 0.5% and foreign exchange added 1.5%. North American operating profit increased 39% during the quarter to an all-time record level, reflecting the benefits from restructuring and other cost saving programs.

In the U.S., new product launches at the super-premium level are contributing to growth in oral care. Colgate Total Advanced Clean toothpaste, supported by an integrated marketing campaign featuring Brooke Shields and an expansive professional sampling program, helped drive market share for Colgate Total toothpaste to its highest quarterly share ever at 15.4%. Colgate Max Fresh BURST toothpaste continues to build incremental market share for the Max Fresh equity, reaching a record high of 3.9% for the year. Colgate's share of the manual toothbrush market is at a record high of 25.6% year to date, up 1.8 share points versus year ago, fueled by the continued success of Colgate 360 degree and Colgate 360 degree Sensitive manual toothbrushes.