Description:

UNITED STATES, July 30, 2010: Colgate-Palmolive Company announced record operating profit, net income and diluted earnings per share for the second quarter 2010.

Worldwide sales were $3,814 million, up 2.0% versus the year ago quarter and volume increased 3.0%. Worldwide advertising spending increased to $395 million, up 1% versus the year ago quarter.

Global pricing increased 0.5% while foreign exchange was negative 1.5%. Organic sales (excluding foreign exchange, acquisitions and divestments) grew 3.5%. Net income increased 7% in second quarter 2010 to $603 million and diluted earnings per share increased 9% to $1.17. Net income and diluted earnings per share in second quarter 2009 were $562 million and $1.07, respectively.

Gross profit margin was 58.8%, even with the year ago quarter record level, primarily reflecting benefits from cost savings initiatives offset by the impact of negative foreign exchange, higher trade investments and a 90 basis point reduction due to Venezuela.

Selling, general and administrative expenses decreased by 70 basis points to 33.9% of net sales in second quarter 2010 from 34.6% in second quarter 2009.

Operating profit increased 7% to $948 million in second quarter 2010 compared to $887 million in second quarter 2009, increasing to 24.9% from 23.7% as a percent to sales.

Net cash provided by operations year to date increased by 8% to $1,302 million. Working capital as a percentage of sales improved by 140 basis points versus the comparable 2009 period. These results reflect the strength of the Company overall balance sheet and key ratios as well as its tight focus on working capital.

Ian Cook, Chairman, President and Chief Executive Officer commented, Overall, we are very pleased to have delivered solid results this quarter, despite heightened competitive activity and difficult economic conditions around the world. We are delighted that Colgate global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate share of the global toothpaste market strengthened to 44.4% year to date, led by share gains in Brazil, China, India, Russia, Venezuela, France and the United Kingdom. Colgate also strengthened its global leadership in manual toothbrushes, with its global market share in that category reaching 31.6% year to date, up 1.4 share points versus year ago.

It is great that even after higher levels of commercial investment worldwide, operating profit and net income both increased during the quarter, both absolutely and as a percent to sales. Our business fundamentals are strong and we have a very full pipeline of new products planned for launch in the second half of the year with continued strong levels of commercial spending to support them.

As we look to the balance of the year, foreign exchange volatility worldwide and the economic environment in Venezuela remain challenging. We currently estimate the full year impact of the currency devaluation in Venezuela to be a net reduction in 2010 earnings of $.10 to $.15 per diluted share compared with our previous estimate of $.06 to $.10 per diluted share. Gross profit margin is expected to be up nicely for the year, and based on current exchange rates, we remain optimistic that 2010 will be another year of double-digit earnings per share growth, excluding the previously announced first quarter 2010 one time charge related to the transition to hyperinflationary accounting in Venezuela.

The following are comments about divisional performance. See attached Geographic Sales Analysis and Segment Information schedules for additional information on divisional sales and operating profit.



North America (20% of Company Sales)

North America sales grew 4.5% in the second quarter. Volume increased 5.0% with 1.5% lower pricing and 1.0% positive foreign exchange. Organic sales grew 3.5% during the quarter. North America operating profit increased 14% during the quarter due to higher sales, higher gross profit margins and cost-savings initiatives.

In the U.S., new product launches across price points are contributing to growth in oral care including Colgate Triple Action, Colgate ProClinical and Colgate Max White with Mini Bright Strips toothpastes. Colgate share of the manual toothbrush market reached a record 33.8% year to date, up 2.4 share points versus year ago, including Colgate Wisp mini-brush whose market share is at 5.2% year to date. Colgate 360deg ActiFlex and Colgate Max White manual toothbrushes also contributed to the share gains.

Successful new products contributing to growth in the U.S. in other categories include Softsoap Nutri Serums and Softsoap Vanilla Body Butter Mega Moisture body washes, Speed Stick and Lady Speed Stick Stainguard deodorants and Ajax Lime with Bleach Alternative dish liquid.

Exciting new products planned for launch in the balance of the year include Colgate Sensitive Multi Protection toothpaste, Softsoap Nutri Serums Mineral Extracts and Softsoap Black Orchid and Velvet Hibiscus body washes, and Softsoap Sea Minerals liquid hand soap.



Greater Asia/Africa (19% of Company Sales)

Greater Asia/Africa sales and volume increased 14.0% and 11.5%, respectively. Volume gains were led by India, the Greater China region, Thailand, Russia and South Africa. Pricing decreased 1.5% and foreign exchange was positive 4.0%. Organic sales for Greater Asia/Africa increased 10.0%. Operating profit for the region increased 31% during the quarter as higher sales, cost savings initiatives and lower raw and packaging material costs more than offset increased advertising.

Colgate maintained its toothpaste leadership in Greater Asia with market share gains in key countries throughout the region including India, China, Russia, Malaysia, Singapore, Ukraine and Taiwan. In India, for example, Colgate's toothpaste market share reached 51.1% year to date, up 170 basis points versus year ago. Successful new products driving the share gains throughout the region include Colgate Sensitive Pro Relief, Colgate Total Professional Sensitive and Colgate 360deg Whole Mouth Clean toothpastes.

Successful products contributing to growth in other categories in the region include Colgate 360deg ActiFlex, Colgate Max White, Colgate Massager and Colgate Zig Zag manual toothbrushes, Colgate Plax Sensitive mouthwash, and Palmolive Spa Banya and Palmolive Nutra Fruit shower gels. (online)