Colgate-Palmolive Company

Good morning. Welcome to today's Colgate Palmolive 2023 first quarter earnings conference call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com. Now for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Senior Vice President, M&A, John Foshay.

Thanks, Allison. Good morning, and welcome to our 2023 first quarter earnings release conference call. This is John Poche. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the earnings press release and related prepared materials and our most recent filings with the SEC, including our 2022 annual report on Form 10-K and subsequent SEC filings, all available on Colgate's website, for discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in Table 6 of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the earnings press release and is available on Colgate's website. Joining me on the call this morning are Noel Wallace, Chairman, President, and Chief Executive Officer, and Stan Satula, Chief Financial Officer. Noel will provide you with some thoughts on our Q&A results and our 2023 outlook. We will then open it up for Q&A.

Noel? Thanks, John, and good morning, everyone. As you can tell from our press release and the earnings materials, we had a strong start to 2023, and the momentum on our business gives us confidence to raise our net and organic sales growth guidance and to raise the lower end of our base business earnings per share growth guidance for the year. We did this because with a quarter of the year gone, we see less risk from some of the macroeconomic and geopolitical issues that we were concerned about earlier in the year. That said, there's still notable uncertainty surrounding the balance of the year, particularly in the second half. Since the commentary focuses on the results, I want to focus my remarks on three of our priorities that Colgate people are focused on. Priority one is driving organic sales growth as we face tougher comparisons. We will utilize our enterprise-wide capabilities in innovation and revenue growth management, along with a firm commitment to marketing spending, to return to a balanced algorithm of pricing and volume growth. The pricing we have taken over the past two years helps provide us with the flexibility to fund increased brand investment to support our pricing, build brand health, and drive volume and household penetration. We know that the competitive environment is going to be difficult, but we have a brand portfolio that is built for times like these, and we look forward to driving growth and market share performance moving out. Priority two is delivering our productivity to fund the brand investment while we're also delivering on our earnings targets. We had a strong start to the year for both funding the growth and our 2022 Global Productivity Initiative, and we are laser focused on delivering against or exceeding our goals for the year. We still foresee year-over-year headwinds to earnings per share growth from raw and packaging materials, foreign exchange, and below-the-line items. So driving productivity in the middle of our P&L is vital. And finally, we are focused on improving our cash flow performance. Again, we had a strong start to the year with both operating cash flow and free cash flow up, and we know there is still opportunity for further improvement. We will utilize this cash flow to fund the growth in capital expenditures and to return cash to shareholders through dividends, and to drive earnings leverage through paying down debt and repurchasing shares. So I'm pleased with how we started the year, but I'm also well aware of the challenges and uncertainty ahead for us. Colgate-Palmolive, however, has the brands, the capabilities, and the people to deliver in this environment. So with that, I'll take your questions.