Operating profit in Europe/South Pacific increased 1% in the third quarter of 2012 to $198 million, or 22.9% of Net sales. The increase in Operating profit was due to an increase in Gross profit and a decrease in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was driven by savings from the Company’s funding-the-growth initiatives, which were partially offset by lower pricing. This decrease in Selling, general and administrative expenses was driven by lower overhead expenses, which were partially offset by higher advertising expenses.
Colgate strengthened its oral care leadership in the Europe/South Pacific region with toothpaste share gains led by Germany, Sweden, Portugal, Austria, Norway, Croatia and Slovenia. Successful premium products driving share gains include Colgate Total Pro Gum Health, Colgate Sensitive Pro-Relief Enamel Repair, elmex Erosion Protection, Colgate Max White One Fresh and Colgate Max White One Active toothpastes. In the manual toothbrush category, Colgate 360° Max White One and Colgate Total Pro Gum Health manual toothbrushes contributed to growth throughout the region.
Recent premium innovations contributing to strength in other product categories include Colgate Total Pro Gum Health and Colgate Sensitive Pro-Relief mouthwashes, Colgate 360° battery toothbrush, Sanex Zero% shower gel, Palmolive Ayurituel shower gels and liquid hand soaps inspired by ancient Indian Ayurvedic rituals and ingredients known traditionally to help restore the wellbeing of body and mind and Ajax Pure Home liquid cleaner.
Greater Asia/Africa (20% of Company Sales)Greater Asia/Africa Net sales and unit volume increased 5.0% and 7.5%, respectively, during third quarter 2012. Volume gains were led by India, the Greater China region, Russia, South Africa and Thailand. Pricing increased 4.0% and foreign exchange was negative 6.5%. Organic sales for Greater Asia/Africa increased 11.5%. Operating profit in Greater Asia/Africa increased 14% in the third quarter of 2012 to $231 million, or 25.8% of Net sales. This increase was mainly a result of an increase in Gross profit as a percentage of Net sales. This increase in Gross profit was due to higher pricing and cost savings from the Company’s funding-the-growth initiatives, partially offset by higher raw and packaging material costs.