Colgate-Palmolive Company (CL) UBS Global Consumer and Retail Conference summary

Strategic transformation and growth mindset

• Shifted from reliance on emerging markets pricing to driving category growth through innovation and premiumization, especially since 2019.

• Focused on solidifying core brands, expanding into faster growth adjacencies, and improving presence in e-commerce and new geographies.

• Premiumization and revenue growth management strategies have restored volume and pricing power across all divisions.

• Rebuilt the P&L to support both top and bottom line growth, overcoming raw material inflation challenges in 2022-2023.

Innovation and investment in brand health

• Transitioned from line extensions to breakthrough and transformational innovation, emphasizing long-term category growth.

• Introduced new R&D leadership and compensation policies tied to incremental innovation impact.

• Advertising spend increased by 440 basis points since 2016, with a focus on effective ROI and household penetration.

• Marketing investment is measured for ROI, with a preference to continue increasing advertising-to-sales ratio while maintaining flexibility.

Market dynamics and operational flexibility

• Built a flexible operating model to adapt to volatile environments, including COVID, inflation, and shifting consumer demand.

• Recent months saw a slowdown in category growth due to decelerating pricing and cautious consumer behavior, especially in the US and Mexico.

• Inventory destocking is present but expected to be temporary, with daily-use categories supporting eventual shipment recovery.