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Chapter One | Overview of Financial Statement Analysis 5
Colgate’s Operating Divisions: Oral, Personal, and Home Care Exhibit 1.1
($ MILLION)
Net Operating Total
Sales Profit Assets
North America* . . . . . . . . . . . . . . . . . . . . . . . . $ 2,591 $ 550 $2,006
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . 3,020 873 2,344
Europe/South Pacific . . . . . . . . . . . . . . . . . . . . 2,952 681 2,484
Greater/South Pacific . . . . . . . . . . . . . . . . . . . . 2,006 279 1,505
Total oral, personal, home care . . . . . . . . . . . $10,569 $2,383 $8,339
†
Pet nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,669 $ 448 $ 647
Total operating divisions . . . . . . . . . . . . . . . . $12,238 $2,831 $8,986
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A ($ 670) $ 152
Total for company . . . . . . . . . . . . . . . . . . . . . . $12,238 $2,161 $9,138
*North America net sales in the United States for oral, personal, and home care were $2,211, $2,124, and $2,000 in 2006, 2005,
and 2004, respectively.
† Net sales in the United States for pet nutrition were $898, $818, and $781 in 2006, 2005, and 2004, respectively.
Colgate Stock Price Growth versus S&P Growth Exhibit 1.2
100
Colgate
80 S&P 500
Percent Growth 60
40
20
0
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
sword: while reducing sales volatility, it also fosters fierce competition for market share.
Colgate has been able to thrive in this competitive environment by following a carefully
defined business strategy that develops and increases market leadership positions in cer-
tain key product categories and markets that are consistent with the company’s core
strengths and competencies and through relentless innovation. For example, the com-
pany uses its valuable consumer insights to develop successful new products regionally,
which are then rolled out on a global basis. Colgate also focuses on areas of the world
where economic development and increasing consumer spending provides opportuni-
ties for growth. Despite these strategic overtures, Colgate’s profit margins are continu-
ously squeezed by competition. The company was thus forced to initiate a major
restructuring program in 2004 to reduce costs by trimming its workforce by 12% and
shedding several unprofitable product lines.