Oral Care Is Not The Key Driver Of Colgate’s Revenue Growth- Here’s What Is!

by Trefis Team
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Colgate’s (NYSE: CL) total revenue has grown from $15.43 billion in 2017 to $15.69 billion in 2019, on the back of growing demand from emerging markets, and we expect this trend to continue. The Hill’s pet nutrition segment, which added $220 million in incremental revenue over the past 2 years, has been key to revenue growth, with Oral, Home & Personal Care adding only $40 million.
Hill’s pet nutrition will be the fastest-growing segment – adding $470 million over 2017-2020 (56% of the $840 million in incremental revenues). Oral, Personal & Home care segment will add about $370 million over 2017-2020 (44% of the $840 million in incremental revenue).
However, by 2021, we expect revenue from Oral, Home and Personal Care to grow to about $13.85 billion, and Hill’s Pet Nutrition to contribute $3.04 billion to our total revenue estimate of $16.89 billion.

In our interactive dashboard Colgate-Palmolive Revenue: How Does Colgate Make Money?, we discuss Colgate’s business model, followed by sections that review past performance and 2021 expectations for Colgate’s revenue, including comparisons with close competitors, P&G and Unilever.

A look at Colgate’s segments and their contribution to total revenue

(A) Revenue from Oral, Personal and Home Care to grow to $13.85 billion by 2021 to make up about 82% of total revenue

  • Colgate is a market leader in the toothpaste and toothbrush segment which, combined with a strong personal and home care product line, has helped keep revenue steady despite foreign currency headwinds.
  • Revenue increased marginally from $13.14 billion in 2017 to $13.18 billion in 2019.
  • With growing emerging market demand, we expect revenue from this segment to grow to $13.85 billion by 2021.

(B) Revenue from Hill’s Pet Nutrition to add $530 million by 2021, and make up the remaining 18% of total revenue

  • Hill’s Pet Nutrition is one of the leading brands in specialty pet nutrition products for dogs and cats, with products marketed in over 90 countries.
  • Revenue from this segment has grown from $2.29 billion in 2017 to $2.51 billion in 2019.
  • With Colgate continuously innovating in the pet nutrition department, we expect revenue to rise to $3.04 billion by 2021.

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