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Colgate-Palmolive Co CL
Q4 2012 Earnings Call Transcript

Transcript Call Date 01/31/2013

Operator: Good day, and welcome to today's Colgate-Palmolive Company Fourth Quarter and Fiscal Year End 2012 Earnings Conference Call. Today's call is being recorded and is being simulcast live at www.colgate.com. Just as a reminder, there may be a slight delay before the question-and-answer session begins due to the web simulcast.

At this time, for opening remarks, I would like to turn the call over to the Vice President of Investor Relations, Ms. Bina Thompson. Please go ahead.

Bina H. Thompson - SVP, IR: Thank you, Cameron. Good morning, everybody, and welcome to our fourth quarter earnings release conference call. With me this morning are Ian Cook, Chairman, President and CEO; Dennis Hickey, CFO; Victoria Dolan, Corporate Controller; and Elaine Paik, Treasurer.

This conference call will include forward-looking statements. These statements are made on the basis of our views and assumptions as of this time and are not guarantees of future performance. Actual events or results may differ materially from these statements.

For information about certain factors that could cause such differences, investors should consult our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on our website, including the information set forth under the captions, 'Risk Factors and Cautionary Statements on Forward-Looking Statements.'

This conference call will also include a discussion of non-GAAP financial measures which differ from our results prepared in accordance with GAAP. We will discuss organic sales growth, excluding foreign exchange, acquisitions, and divestitures. We will also discuss gross profit, gross profit margin, SG&A, operating profit, net income and earnings per share excluding the impact of the certain items described in the press release. And the full reconciliation with the corresponding GAAP measures is included in the press release and is posted in the For Investor section of our website at www.colgatepalmolive.com.

We're very pleased with our solid fourth quarter results. Our momentum is excellent in many areas of the world, both developed and developing, and we think we are well positioned to deliver stronger results in 2013. On a global basis, our market share is up year-to-date in toothpaste, manual toothbrushes, mouthwash, bar soaps, body wash, deodorants and fabric conditioners. As you'll hear as I review the divisions, innovation has played an important role in increasing market share and we have a very robust new product pipeline as we enter this year to help to continue to this growth.

As Ian said in the press release, we are encouraged that we achieved our objectives in 2012 in the face of currency, competitive and macroeconomic challenges around the world. For the full year, our organic sales accelerated in almost every division from full year 2011. The exception was Latin America which even so delivered another year of double-digit organic sales growth despite significant challenges in Venezuela in the fourth quarter. In particular, a labor slowdown in our factories, coupled with ongoing macroeconomic uncertainty negatively impacted organic sales and gross margin in the fourth quarter. In fact, worldwide organic sales growth in the fourth quarter would have been almost a 1.5 higher excluding the Venezuelan results, and gross margin worldwide would have been 50 basis points higher.

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