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.
Successful new products contributing to growth in the U.S. in other categories include Irish Spring body wash for men, Softsoap brand Nutra-Oil moisturizing body wash and Mennen Speed Stick 24/7 deodorant. Fabuloso liquid cleaner, Suavitel fabric conditioner and Irish Spring bar soap each achieved record high market shares for the year in the U.S.
New products planned for launch in first quarter 2008 include Colgate Total Advanced Whitening and Colgate Total Advanced Fresh toothpastes, Colgate 360 degree Deep Clean manual toothbrush, Colgate 360 degree Sonic Power battery toothbrush, Suavitel Aroma Sensations fabric conditioner and Mennen Speed Stick 24/7 deodorant with a new upgraded formula.
Colgate continues to build its strong leadership in oral care throughout Latin America with its regional toothpaste market share at a record high year to date driven by market share gains in nearly every country. Strong sales of premium priced offerings such as Colgate Total Professional Clean, Colgate Sensitive and Colgate Max White toothpastes drove share gains throughout the region. In Mexico, for example, Colgate's toothpaste market share reached a record high at 83.9% year to date, up 230 basis points versus year ago. Colgate's leading share of the manual toothbrush market for the region is at a record high year to date at 36.9%, up 270 basis points versus year ago. Strong sales of Colgate 360 degree and Colgate 360 degree Sensitive manual toothbrushes throughout the region contributed to this success.
Colgate increased its oral care leadership in Europe/South Pacific with its regional toothpaste market share reaching a record high for the year. These toothpaste share gains were led by Austria, Belgium, Denmark, France, Germany, Norway, Spain, the United Kingdom, Poland, Romania and Australia. Successful premium products driving these share gains include Colgate Total and Colgate Max Fresh toothpastes. Gaba's toothpaste market share also grew in many markets across the region, in both the food and pharmacy channels. In the manual toothbrush category, strong sales of Colgate 360 degree, Colgate 360 degree Sensitive and Colgate Max Fresh toothbrushes strengthened Colgate's market leadership in this category for the region.
Recent premium innovations contributing to gains in other product categories include Colgate 360 degree Sonic Power battery toothbrush, Colgate Plax Whitening mouth rinse, Palmolive Pure Cashmere and Palmolive Aromatherapy Happyful shower gels, Palmolive Soft and Gentle Eden deodorant, and Ajax Professional bucket dilutable and Ajax Professional glass cleaners.
Greater Asia/Africa sales and unit volume increased 18.5% and 6.5%, respectively. The strong volume gains were led by India, Russia and the rest of the CIS countries, Malaysia, South Africa, the Gulf States and the Greater China region, where volume increased double-digit for the third consecutive quarter. For the division as a whole, pricing increased 3.0% and foreign exchange added 9.0%. Operating profit for the region increased 30% to an all- time record level, even after a sizable increase in advertising spending during the quarter.
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