Auteur(s) : Lorentz Justine, Saunier Debes, Bastien, Seffar, Yassir, Zaya Bambuta, Hervé
Directeur(s) : Lefebvre, Vivien
Date de création : 30-06-2020

Résumé(s) : Resulting from the merger of Colgate and Palmolive in 1928, Colgate-Palmolive Co. is a New York-based multinational which is established in more than 200 countries. The firm operates on the fast-moving consumer goods market, being one of the leaders ;Colgate-Palmolive mainly sells oral, personal and household care goods, as well as pet nutrition products. The company’s strategy principally focuses on product development, investing millions every year on R-D. With its diverse range of products and its strong distribution network, Colgate-Palmolive’s R-D is one of its major strengths, which enabled it to generate yearly profits of more than USD 2 billion. Despite its position on the market, the company must however deal with some challenges. In effect, Colgate-Palmolive stays dependent on supermarkets and must be able to seize the e-commerce trend if it wants to remain on the market. Moreover, the firm still relies considerably on the oral care activity, which represents half of its annual revenue. The latter is nevertheless evenly divided geographically, implying that Colgate-Palmolive has a strong presence on both developed and emerging economies. Developing countries are the most likely to generate growth, as there are only few growth opportunities in industrial countries, where the FMCG market is mature. Although Colgate-Palmolive’s sales were stable from 2016 to 2018, both its operating and net margins declined in 2017. The operating margin followed this tendency in 2018, while the net margin increased thanks to a reduction in income tax. With an asset turnover ratio superior to its competitors’, the firm seems to manage efficiently its production and benefits also from a negative working capital. In addition, thanks to this productivity, Colgate-Palmolive had an average return on capital employed of 10%, enabling the firm to create wealth, as it is lower than its cost of capital. In 2016, Colgate-Palmolive sold land in Mexico, incurring an increase in operating profit of nearly USD 100 million. Therefore, the firm’s indicators were more satisfactory that year compared to 2017 and 2018. Moreover, shareholders benefit from a positive leverage effect, increasing their wealth thanks to Colgate-Palmolive’s indebtedness. In addition, the firm’s stock is a defensive security. In effect, its activity is to sell staple goods, therefore its level of sales does not rely as mush on the economic health as other sectors, hence being less impacted by the global market expansion. Since the beginning of 2000, many U.S. and non U.S. large companies have significantly increased their cash holdings, Colgate-Palmolive has not been exempted from this tendency, as its holdings have tripled since, reaching USD 776 million in 2018. Although this global trend depends on various variables, current literature agrees on the fact that some organizations’ characteristics, such as their size, their industry or their geographic diversification for example, impact the level of cash they hold. With its recurring use of share buyback programs, Colgate-Palmolive Co. seems to redistribute a part of these massive holdings to its shareholders.
Discipline : Comptabilité Contrôle Finance
Mots-clés libres : Colgate-Palmolive France, Analyse financière Études de cas, Colgate-Palmolive, étude de cas, case study, analyse financière, Comptabilité Contrôle Finance, 650 Gestion et organisation de l'entreprise
Couverture : FR