Analysis of Geographic Areas
Colgate-Palmolive Co. operates in 2 regions: United States and International.
Area Asset Turnover
Colgate-Palmolive Co., asset turnover by geographic area
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 2.31 | 2.73 | 2.73 | 2.43 | — |
| International | 5.43 | 5.28 | 4.82 | 4.70 | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The asset turnover ratios for the United States and International segments exhibit divergent trajectories between 2019 and 2022. While the international operations demonstrate a consistent improvement in asset productivity, the domestic market shows volatility and an overall decline in efficiency by the end of the period.
- United States Asset Turnover
- The domestic segment experienced an initial increase in efficiency, rising from 2.43 in 2019 to a peak of 2.73 in 2020, where it remained stable through 2021. However, a significant contraction occurred in 2022, with the ratio falling to 2.31, marking the lowest efficiency level within the analyzed timeframe.
- International Asset Turnover
- The international segment maintained a positive growth trend throughout the four-year period. Starting at 4.70 in 2019, the ratio climbed steadily to 4.82 in 2020, 5.28 in 2021, and reached its highest point of 5.43 in 2022, indicating a sustained increase in the ability to generate revenue from assets located outside the United States.
- Comparative Geographic Performance
- A substantial gap in asset utilization exists between the two geographic areas. The international segment consistently operates at more than double the turnover rate of the United States segment. Furthermore, the disparity between these regions widened over time as international efficiency accelerated while domestic efficiency regressed.
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Area Asset Turnover: United States
Colgate-Palmolive Co.; United States; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 5,943) | 5,409) | 5,159) | 4,607) | —) |
| Long-lived assets | 2,569) | 1,981) | 1,889) | 1,895) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.31 | 2.73 | 2.73 | 2.43 | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 5,943 ÷ 2,569 = 2.31
The analysis of the United States geographic segment reveals a period of consistent revenue growth accompanied by fluctuating asset utilization efficiency between 2019 and 2022.
- Net Sales Performance
- A steady upward trajectory in net sales is observed throughout the reporting period. Revenue increased from US$ 4,607 million in 2019 to US$ 5,943 million by December 31, 2022, reflecting consistent growth in the U.S. market.
- Long-lived Asset Trends
- Long-lived assets remained relatively stable from 2019 through 2021, hovering between US$ 1,889 million and US$ 1,981 million. A significant escalation occurred in 2022, with assets increasing to US$ 2,569 million, indicating a substantial investment in the region's long-term infrastructure or capital base.
- Area Asset Turnover Analysis
- The area asset turnover ratio demonstrated an initial improvement, rising from 2.43 in 2019 to 2.73 in 2020, and maintaining that level through 2021. This indicates a period of heightened efficiency in utilizing assets to generate revenue. However, a contraction to 2.31 was recorded in 2022. This decline is attributable to the fact that the growth in long-lived assets during 2022 outpaced the growth in net sales, thereby reducing the overall turnover efficiency.
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Area Asset Turnover: International
Colgate-Palmolive Co.; International; area asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | 12,024) | 12,012) | 11,312) | 11,086) | —) |
| Long-lived assets | 2,216) | 2,275) | 2,348) | 2,359) | —) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 5.43 | 5.28 | 4.82 | 4.70 | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= 12,024 ÷ 2,216 = 5.43
The international segment demonstrates a consistent improvement in operational efficiency between 2019 and 2022. This trend is characterized by a simultaneous increase in revenue generation and a steady reduction in the long-lived asset base, resulting in a strengthened asset turnover ratio.
- Net Sales Performance
- A positive growth trajectory is observed in international net sales, which rose from 11,086 million US dollars in 2019 to 12,024 million US dollars by the end of 2022. The most significant increase occurred between 2020 and 2021, where sales grew by approximately 6.1%.
- Long-lived Asset Trends
- There is a sustained downward trend in long-lived assets throughout the analyzed period. Assets decreased from 2,359 million US dollars in 2019 to 2,216 million US dollars in 2022. This consistent decline suggests an optimization of the asset base or a period of depreciation exceeding new capital expenditures in international markets.
- Area Asset Turnover Analysis
- The area asset turnover ratio exhibits a strong upward trend, increasing from 4.70 in 2019 to 5.43 in 2022. This improvement indicates that the international segment is generating more sales per unit of long-lived asset. The acceleration of this ratio suggests enhanced productivity and a more efficient utilization of infrastructure and equipment to drive revenue.
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Net sales
Colgate-Palmolive Co., net sales by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 5,943) | 5,409) | 5,159) | 4,607) | —) |
| International | 12,024) | 12,012) | 11,312) | 11,086) | —) |
| Total | 17,967) | 17,421) | 16,471) | 15,693) | —) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total net sales exhibited a consistent upward trajectory from 2019 to 2022, rising from 15,693 million US dollars to 17,967 million US dollars. This overall growth was supported by gains in both domestic and international segments, although the rate of expansion differed notably between the two geographic areas.
- United States Sales Trend
- The United States market demonstrated robust and steady growth throughout the period. Net sales increased from 4,607 million US dollars in 2019 to 5,943 million US dollars in 2022. This segment showed resilience and consistent acceleration, particularly between 2021 and 2022, contributing significantly to the overall increase in total revenue.
- International Sales Trend
- International operations remained the largest source of revenue, increasing from 11,086 million US dollars in 2019 to 12,024 million US dollars in 2022. While the trend remained positive, growth was more moderate than in the domestic market, with a marked deceleration observed between 2021 and 2022, during which sales remained nearly stagnant.
- Geographic Revenue Mix
- A shift in the revenue composition is observable over the analyzed period. The United States' contribution to total net sales grew from approximately 29.4% in 2019 to approximately 33.1% in 2022. Conversely, the international segment's share of total revenue declined from 70.6% to 66.9%, indicating that domestic growth outpaced international expansion during this timeframe.
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Long-lived assets
Colgate-Palmolive Co., long-lived assets by geographic area
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| United States | 2,569) | 1,981) | 1,889) | 1,895) | —) |
| International | 2,216) | 2,275) | 2,348) | 2,359) | —) |
| Total | 4,785) | 4,256) | 4,237) | 4,254) | —) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total long-lived assets remained relatively stable between 2019 and 2021 before experiencing a significant increase in 2022. The total asset value rose from 4,254 million USD in 2019 to 4,785 million USD by the end of 2022, a growth trend primarily driven by an expansion in domestic holdings.
- United States Asset Trends
- Long-lived assets within the United States exhibited a strong upward trajectory, particularly in the latter part of the period. After remaining nearly stagnant between 2019 and 2020, values increased to 1,981 million USD in 2021 and rose sharply to 2,569 million USD in 2022. This represents a substantial increase in domestic capital commitment over the four-year window.
- International Asset Trends
- A consistent downward trend is observed in international long-lived assets. From a peak of 2,359 million USD in 2019, these assets declined steadily each year, reaching 2,216 million USD by December 31, 2022. This contraction suggests a gradual reduction in the scale of international infrastructure or a higher rate of depreciation relative to new investment in these regions.
- Geographic Distribution Shift
- The balance of asset allocation shifted significantly over the analyzed period. In 2019, international assets constituted the majority of the total, exceeding domestic assets by 464 million USD. By the end of 2022, this dynamic reversed, with United States assets surpassing international assets by 353 million USD, indicating a strategic pivot toward increased domestic asset concentration.
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