Colgate-Palmolive Company Barclays 19th Annual Global Consumer Conference

We're going to get started. Next up this morning, we're very happy to have Colgate-Palmolive here, and the company's chairman, president, and CEO, Noel Wallace. This year, we're going to do things a little bit differently and go right into a fireside chat, which I'm excited about, so thank you for that opportunity. 2026 is the first year of the 2030 strategy period, but it's also a year with continued macro volatility. When you step back from the quarter-to-quarter noise, maybe what's the single biggest change, or is it a few things that you're trying to drive inside Colgate this year?

Yeah. I think the fortune is we're coming off a 2025 strategic plan where we developed, in my view, a lot of momentum behind the business. Going into the 2030 plan, it's much easier to execute a strategy when you have momentum behind you versus when you're chasing that momentum. It's really now about perfecting some of the capabilities and scaling some of those capabilities that we've been developing over the last five years. We've done a lot of work in AI, we've done a lot of work in analytics, we've done a lot of work in revenue growth management. We're now really pushing ourselves very differently in the area of innovation. We feel like we're in a stage where we're not necessarily trying to play catch up, we're now scaling these capabilities across the organization.

That momentum that we built through the 2025 strat plan, we feel we can continue through the 2030 plan. The other areas, we're being much more choiceful on our investment profiles around the world. We see real opportunities, particularly in emerging markets where we've seen category growth accelerate beyond where we see in developed markets, and that's an opportunity for us.

Okay. If we assume that category growth remains muted over the next 12 months, we've seen a sort of more challenged macro backdrop. What should we be focused on to determine if Colgate's specific execution is improving? Is it household penetration? Is it market shares? What are those key metrics to keep track of to gauge progress?

Well, you've heard me talk a lot about just consistent, durable growth, and that's certainly the mantra that we profess across the organization, and we really push our organizations to develop the long-term strategy necessary to do that. I think the steps we've taken within the 2030 plan have done that. Clearly, household penetration is a key barometer for us, market shares. We want to see the category start to inflect as we put more innovation in the categories as well. So our ability to drive the key operating metrics that we set for our teams, top-line sales growth, bottom-line sales growth, cash flow, penetration, those are all very important in terms of success for us over the next couple of years.

Okay. So you've just delivered a really solid first half to the year. But the external environment is still pretty choppy, so maybe we can get grounded doing, like, a little walk around the world, talking about the business and category growth and if anything's changed since earlier this summer.

Yeah. I think the strength of the first half really speaks to the fact that we have a really broad-based business that has great geographic diversity around the world, and our ability to really tap into some of the emerging market acceleration that we've seen in some of our daily use categories has allowed us to drive that consistent growth. But if I go around the world, let me start, I guess, in Latin America, strong quarter in second quarter, up mid-single digits, high single digits in Brazil, mid-single digits in Mexico. Good market share acceleration, lapping some of the toll manufacturing that we had last year, but we're seeing those market shares come back nicely in a great innovation stream across multiple categories. We had balanced price and volume growth in the quarter, growth across all three of our categories.

So we feel the business is in very solid footing as we move into the back half of the year. Categories are more or less stable where they were the year before, so not seeing any deceleration in any of the markets. Go to Asia, good quarter there. Obviously, you've seen the strength of our India business come back nicely in the second quarter. That's largely driven by some of the initiatives that we've taken and the strategy that we're deploying in that market, particularly around the modern trade, and getting much more premium innovation in the market, which we see as an ongoing opportunity. China performed well, mid-single digits. Our Colgate China business continues to execute exceptionally well, particularly in the online world. Palmolive and Hazeline had a good quarter with some premium innovation. If you go across the rest of Asia, obviously pretty solid growth for us.

A good region for us, despite the fact that we've seen some sluggishness in the categories across Asia, particularly in China. If I go to North America, tough quarter for North America. We talked about that quite extensively in the call. We've seen some inventory come out of the trade. We've seen some market share erosion due to some heightened competitive activity. We've seen our share in the premium side not get to where it needs to. That will be a key focus for the business moving forward. We have a new team in place.

Shane is directing a strategy that's really a reset in terms of how we're thinking about the next three to five years in North America that will encompass a significantly stepped-up innovation, particularly on the premium side, that encompass a double-down on some of our AI analytics and RGM work that we've been scaling around the world, and really using the North America market as a way to drive more innovation in those capability areas, particularly around AI and innovation. I think we're confident as we move forward, we'll start to see things improve, but it's going to be a long-term turnaround to get that business where we need to. Very competitive environment. We've taken, as you know, some surgical work on getting our couponing in the right place. We've seen some of our competitors increase their couponing, and we weren't as competitive as we needed to be.

That's more of the surgical work that we're going to do in some of our key retailers to get our business back where it needs to be.

Okay. And that couponing dynamic is just in selected retailers as well?

It is just in select retailers, yeah.

Okay. There are programs that some of the retailers have been asking us for that we did not feel were right for the business long term, but we have seen the competition continue to accelerate there, so we need to make sure we are competing effectively.