Colgate-Palmolive Company reported worldwide net sales of $4,172 million in fourth quarter 2011, an increase of 5% versus fourth quarter 2010. Global unit volume grew 4%, pricing increased 3% and foreign exchange was negative 2%. Excluding divested businesses, global unit volume grew 4.5%. The Sanex acquisition contributed 1.5% to sales and volume growth. Organic sales (net sales excluding foreign exchange, acquisitions and divestments) grew 6%. Net income in fourth quarter 2011 was $634 million, an increase of 2% versus fourth quarter 2010.
For the full year 2011, worldwide net sales were $16,734 million, up 7.5% versus full year 2010. Global unit volume grew 3.5%, pricing increased 1.0% and foreign exchange was positive 3.0%. Excluding divested businesses, global unit volume grew 4.0%. The Sanex acquisition contributed 1% to full year sales and volume growth. Organic sales grew 4.0%. Net income for full year 2011 was $2,431 million, up from $2,203 million in 2010.
Ian Cook, Colgate-Palmolive’s chairman, president and CEO, commented on the results and outlook excluding the 2011 and 2010 items noted above, saying, "We are pleased to have finished the year with excellent top-line momentum and to have achieved our profit goals, despite continuing increases in material costs, an intense competitive environment and volatile macroeconomic conditions worldwide. The excellent 6% organic sales growth, which was the largest increase we have seen in six quarters, was driven by unit volume gains and higher pricing worldwide. The robust growth was led by the emerging markets where organic sales grew 12% in the quarter. This strong top-line momentum should continue into 2012, fueled by new products across all categories and in all geographies.
"Pleasingly, our continued sharp focus on cost-saving programs in all areas of the business enabled us to achieve full year gross profit margin at the high end of our forecasted range, while also lowering overheads as a percentage of sales. Colgate's global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate's share of the global toothpaste market strengthened to 44.3% year to date, up 0.3 share points versus year ago. Our global leadership in manual toothbrushes also strengthened during the quarter with Colgate's global market share in that category reaching 31.7% year to date, up 0.5 share points versus year ago.
"As we enter 2012, macroeconomic conditions and foreign exchange volatility are an increasing challenge. Despite that, we are planning to improve our worldwide market shares and volume growth with increased advertising support behind many new and existing Colgate products. We continue to be sharply focused on our aggressive funding-the-growth initiatives and anticipate that the benefits from those programs, combined with our strategic worldwide pricing initiatives, many of which have already been implemented, will help us achieve gross margin expansion in 2012 and grow diluted earnings per share for the year at a double-digit rate, on a currency neutral basis. If average exchange rates for full year 2012 were to equal current spot rates, currency translation would decrease full year diluted earnings per share growth by approximately 4%," he concluded.
The company’s North American net sales, which represent 18% of overall company sales, increased 3.5% in fourth quarter 2011. Unit volume increased 3% with 0.5% higher pricing and flat foreign exchange. Organic sales increased 3.5% during the quarter. Operating profit in North America decreased 11% in fourth quarter 2011 to $192 million, or 25.4% of net sales. In the U.S., new product launches including Colgate Optic White and Colgate Sensitive Pro-Relief toothpastes and the relaunch of Colgate Total toothpaste are strengthening Colgate's leadership in toothpaste, with its share of that market reaching 35.9% year to date, up 0.6 share points versus year ago.
Successful new products in the U.S. in other categories include Softsoap brand Pomegranate and Mango Infusions and Softsoap brand Coconut Scrub body washes and Palmolive Soft Touch with Vitamin E dish liquid. New introductions reaching store shelves now include Speed Stick Power deodorants, Irish Spring Clear & Fresh Skin body wash and Palmolive Fresh Sponge dish liquid.
In Latin America, which represents 28% of the company’s overall sales, Colgate-Palmolive’s net sales rose 6.5% during fourth quarter 2011 with unit volume increasing 3%. Excluding divested businesses, Latin America unit volume grew 6%. Volume gains were led by Brazil, Mexico and Colombia. Higher pricing added 8.5% and foreign exchange was negative 5%. Organic sales for Latin America increased 14.5% during the quarter. Colgate's strong leadership in oral care throughout Latin America continued during the quarter with toothpaste market share gains year to date led by Brazil, Venezuela, Central America, Chile, Ecuador and Peru.
Strong sales of Colgate Luminous White, Colgate Sensitive Pro-Relief Multi-Protection, Colgate Sensitive Pro-Relief Whitening and Colgate Total toothpastes contributed to growth throughout the region. In mouthwash, Colgate's market share is at a record high in the region with gains driven by the relaunch of Colgate Plax mouthwashes. Products in other categories contributing to market share gains included Palmolive Naturals Relaxing Softness Cream and Lavender and Protex Advanced Clean bar soaps, Lady Speed Stick Stainguard and Speed Stick Sensitive Power deodorants, Suavitel Magic Moments fabric conditioner and Axion with Ajax dish liquid.
For its Europe/South Pacific business, which contributed 21% of overall company sales, the company logged net sales increasing 5% during fourth quarter 2011. Unit volume increased 7.5% with 3% lower pricing and 0.5% positive foreign exchange. The Sanex acquisition added 6.5% to sales and volume growth for the region. Volume gains were led by the United Kingdom, Spain and France. Organic sales for Europe/South Pacific decreased 2%. Colgate strengthened its oral care leadership in the Europe/South Pacific region with toothpaste share gains across the region led by Italy, Spain, Denmark, Poland, Austria, Norway, Portugal, Serbia and Slovakia. Successful premium products driving share gains include Colgate Sensitive Pro-Relief Multi-Protection, elmex Intensive Cleaning and Colgate Max White One toothpastes. New introductions to the market included Colgate Total Pro Gum Health and Colgate Max White One Active toothpastes.
Recent premium innovations contributing to strength in other product categories include Sanex Dermo Repair shower gel, Palmolive "Authentic" shower gels and liquid hand soaps containing Mediterranean-inspired fragrances and ingredients, the relaunch of Palmolive Aromatherapy and Thermal Spa shower gels with multisensory features, and the Natura Verde line of home care products.
Representing 20% of company sales, the company’s greater Asia/Africa Net sales and unit volume increased 5% and 6%, respectively, during fourth quarter 2011. Volume gains in India, Russia, Malaysia and Thailand were partially offset by a volume decline in the greater China region. The Sanex acquisition added 1% to sales and volume growth for the region. Pricing increased 3.5% and foreign exchange was negative 4.5%. Organic sales for greater Asia/Africa increased 8.5%. Colgate continued its toothpaste leadership in greater Asia, driven by market share gains in Thailand, Malaysia, Taiwan, Hong Kong and Turkey. Successful new products including Colgate Sensitive Pro-Relief Whitening, Colgate Sensitive Pro-Relief Multi-Protection and Colgate Active Salt toothpastes and the relaunch of Colgate Total toothpaste contributed to growth throughout the region. Successful products contributing to growth in other categories in the region include Colgate Plax Fresh Tea and Colgate Plax Whitening mouthwashes, and Lady Speed Stick Waterproof and Speed Stick Breathe & Protect deodorants.