The operator welcomes listeners to the Colgate-Palmolive second quarter 2024 earnings conference call, which will be simulcast live. Chief Investor Relations Officer and Executive Vice President, M&A, John Faucher gives opening remarks and reminds listeners that the call will include forward-looking statements and a discussion of non-GAAP financial measures. Chairman, President and CEO Noel Wallace will discuss the company's strong Q2 results and their ambition to deliver consistent earnings growth through balanced organic sales growth in all divisions and categories. The call will end with a Q&A session.

The company has made changes to their innovation model and invested in marketing and new capabilities, resulting in increased brand health and household penetration. They have returned to mid single-digit volume growth and are using data and analytics tools to track their progress. They have plans in place to drive consistent top line growth and are focused on operating leverage, productivity, and cost discipline to increase earnings per share. They are also confident in their ability to generate strong cash flow and drive top tier total shareholder return.

Noel Wallace discusses the company's strategy of investing in the middle of the P&L to drive volume and household penetration, ultimately leading to category growth and market share. The company is using tools like AI and improved innovation to drive better ROI and executing the strategy more effectively than in previous years.

The speaker is discussing the long-term growth potential for Hill's, a company that produces pet food. They mention the importance of maintaining flexibility in their profits, strong gross margins, and expanding into new markets for sustained growth. The next question is about the potential for volume growth and pricing in the future. The speaker notes that they have added capacity and are under-penetrated in certain markets, which could lead to increased volume. They also mention the possibility of taking consistent pricing to recapture lost margins, but acknowledge potential challenges in the industry and market.

The company is pleased with the increase in volume and pricing for their ex-private label products, which has led to strong margins and market share growth. They attribute this success to their advertising investment and the low household awareness and brand penetration in the pet food market. They are also seeing growth potential in the wet food segment and have a strong innovation pipeline for future growth. Overall, they are satisfied with the direction of the business and continue to invest aggressively to drive household penetration.

The company is focused on increasing penetration and awareness, as well as improving advertising effectiveness and margins. They plan to expand internationally and have seen success with their Prescription Diet products. The market is currently soft, but they are hopeful for improvement with a stronger economy. They also plan to take advantage of the strength of their brand by increasing prices. Commodity pricing has flattened, which is beneficial for the company's profit and they are confident in their ability to sustain growth. A question is then asked by an analyst from Citi.

Noel Wallace, CEO of a company, responds to a question about the North America business. He explains that the organic growth was in line with expectations, with more volume and less pricing than expected. This is due to comparisons with the previous year, where there was strong pricing. However, there was an improvement in household penetration, which is a positive sign for the company.

The company's market share has remained steady in value but has increased in volume due to a targeted and thoughtful approach to promotions. Retailers have increased their use of promotional coupons, but the company is still performing well in non-Nielsen channels. In Europe, the company has seen impressive growth and is not experiencing the same deceleration as in the U.S. due to effective pricing strategies and innovation.

The speaker discusses the success of their business in Europe, citing strong growth and market share in toothpaste, home care, and personal care categories. They also mention a balanced mix of pricing and volume and anticipate sustained growth in the back half of the year. The speaker also mentions potential commodity cost increases, but does not believe it will significantly impact the business or require pricing actions.

Noel Wallace and Stan Sutula discuss their company's pricing strategy and outlook for the back half of the year. They mention potential inflation in commodity costs and foreign exchange impact, but feel confident in their ability to offset these with growth and productivity. They also mention locking in a significant proportion of Q3 and keeping an eye on foreign exchange. A question from Kaumil Gajrawala is mentioned, but it is unclear if it was answered.

The speaker, Noel Wallace, is answering a question from Bonnie Herzog about consumer behavior in key markets. He mentions that overall, consumer behavior has been positive and has led to strong volume growth and market share. The company's strategy of innovating and offering value-oriented products has been successful in meeting the needs of consumers. In the US, there has been some price value shopping, but nothing unusual. In Europe and Latin America, consumer behavior has been positive despite significant pricing.

Noel Wallace, CEO of Colgate-Palmolive, discusses the company's volume growth in Africa, Asia, and Eurasia, with a particular focus on strong growth in Asia and India. In a Q&A session, an analyst asks about the company's negative pricing in North America and the sustainability of their volume growth. Wallace explains that the volume growth is largely driven by toothpaste sales and expects it to continue in the third and fourth quarter due to favorable comparisons. He also addresses the negative pricing and attributes it to a combination of year-over-year comparisons and offensive market actions.

The speaker discusses the strong volume and price growth in Latin America, specifically in Brazil and Mexico. They mention concerns about the macroeconomic situation in those countries and the behavior of consumers. They also highlight the return on investment from increased pricing and gross profit in North America.

The speaker discusses the strong performance of their two largest businesses, LatAm and Hill's, with LatAm showing a 50% increase in EBIT and Hill's showing a 20% increase. They also mention strong organic sales growth and volume growth across all businesses except for Argentina. Brazil is highlighted as a particularly strong performer, while Mexico has slowed down. Oral care has also shown strong performance with increased market and volume shares. The speaker believes the consumer environment is good and their innovation efforts are paying off. They are encouraged by LatAm's growth potential. The next question from an analyst is about pricing.

The focus on pricing has been a top concern for investors in the industry, and while Colgate's performance is currently strong, there are concerns about the sustainability of their volume and full P&L performance if pricing continues to decrease. However, Colgate remains committed to balanced growth and will continue to use their revenue growth management capabilities to drive pricing through the P&L, even in a less inflationary environment. They are confident that they will continue to see strong revenue growth in the coming months.

The speaker discusses the company's pricing strategy and strong performance in the second quarter. They mention the need to offset inflation and the benefit of FTG. The next question comes from Bryan Spillane, who asks about the company's plans for reinvestment and potential areas for spending. The speaker also mentions the potential impact on the company's 2025 plans.

Noel Wallace and Stan Sutula discuss their strategy for advertising and investing in the company. They emphasize the importance of ROI and their intention to continue investing in areas that will drive growth. They also mention their track record of consistent EPS growth and their focus on maintaining a strong ROI. Robert Ottenstein asks a question about North America.

The speaker is discussing the company's promotional levels and how they have returned to historical or normal levels. They do not expect any significant competitive response and believe that the consumer is more willing to pay for innovation and performance, possibly due to better communication from the company. The company plans to continue being prudent and investing in advertising and innovation.

The speaker discusses the company's focus on premium innovation and strong core business innovation, citing examples such as the re-launch of Total in Latin America and the success of Max Fresh in India. They emphasize the importance of incorporating the science and superiority of their brands into their messaging and content delivery. The speaker also mentions the company's three-brand strategy in Europe and its potential applicability to other markets.

Noel Wallace discusses the success of the company's strategy to expand their portfolio and focus on the therapeutic side of the oral care category. This has been achieved through the launch of Elmex and Meridol in Brazil and their deliberate and selective approach to introducing these brands in new markets. The company has seen significant growth in Europe by balancing these brands with Colgate and targeting specific markets with strong pharmacy channels. Overall, the company is pleased with the success of this strategy.

The paragraph discusses the success of the Elmex and Meridol brands in the professional market, particularly in Brazil. The company has focused on educating professionals about the science and key differences of the brands, leading to stronger endorsement and loyalty. The company has also successfully expanded the brands in the pharmacy class of trade, with a disciplined and cautious approach. The company plans to use this strategy in new markets as well.

The speaker is responding to a question about the shift to lower priced channels in North America. They clarify that this shift has been ongoing for several quarters and is driven by a value proposition for consumers. They also discuss the growth of Prescription Diet and how it is increasing shelf space and brand awareness, but still requires a prescription to purchase. The speaker anticipates that this trend will continue.

The speaker is encouraged by the strong volume share growth in Nielsen tracked channels and sees it as a sign that their innovation and value proposition are successful. They also mention the opportunity to grow their Prescription Diet business, with only 5% of pets currently using therapeutic nutrition. The company is focused on expanding their offerings to pet specialty and veterinary professionals, and increasing the mix towards Prescription Diet. The speaker thanks the Colgate-Palmolive team for their efforts in delivering strong growth.

The speaker acknowledges the team's hard work in building capabilities for the future but reminds them that there is still a lot of work to be done in the remaining half of the year. The call has now ended.

This summary was generated with AI and may contain some inaccuracies.