Colgate-Palmolive Co. (NYSE:CL) Q3 2019 Earnings Conference Call Transcript

Nov 01, 2019 • 11:00 am ET

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Colgate-Palmolive Co. (NYSE:CL) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to today's Colgate-Palmolive Company Third Quarter 2019 Earnings Conference Call. This call is being recorded, and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I would like to turn the call over to the Senior Vice President of Investor Relations, John Faucher. Please go ahead, John.

Executive
John Faucher

Thanks, Paula. Good Morning, and welcome to our third quarter earnings release conference call. This is John Faucher, Senior Vice President for Investor Relations.

Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the earnings press release and our most recent filings with the SEC, including our 2018 Annual Report on Form 10-K and subsequent SEC filings, all available on Colgate's website for a discussion of the factors that could cause actual results to differ materially from these statements.

This conference call will also include a discussion of non-GAAP financial measures, including those identified in Tables eight and nine of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the earnings press release and is available on Colgate's website.

Joining me this morning are Noel Wallace, President and Chief Executive Officer; and Henning Jakobsen, Chief Financial Officer. I will begin with some thoughts on our performance before discussing our updated 2019 guidance. We'll then open it up for Noel's Q&A session.

The third quarter marked a further step in our plan to return to sustainable organic sales growth. Throughout 2019, we have focused on innovating around the core of our business, driving growth in adjacent segments and expanding our availability in faster growth markets and channels. Along with higher levels of consumer-facing spending, these strategies are paying off in broad-based growth across our businesses.

Q3 marked the third quarter in a row where we delivered a combination of both volume and pricing growth on an organic basis. Volume was up in every division, and pricing was positive in every division, except for one. Our revenue growth management strategies are driving pricing growth as we focus on premium innovation.

On a geographic basis, we saw our organic sales growth in five of our six divisions. Importantly, we returned to organic sales growth in Asia Pacific, including delivering organic sales growth in the Greater China region. We drove a good combination of developed market growth, plus 3.5%, and emerging market growth plus 6%. And from a category standpoint, we again delivered organic sales growth across all four of our businesses; Oral Care, Personal Care, Home Care and Pet Nutrition.

In order to drive this growth, we continue to invest behind our business. Total advertising spending was up nicely in the quarter. In particular, I would point to Hill's where a significant increase in spending over the past few years behind our purpose-driven marketing has been a key driver of the organic sales growth.

We were also pleased to close the Filorga transaction on September 19th, continuing the expansion of our Personal Care portfolio into skin