Here's What Will Drive Colgate-Palmolive's Oral Care Business in 2015 - best toothbrush in the world

Colgate-
Palmoliveis is a leading consumer goods company specializing in the production of oral care products. Colgate-
Palmolive also operates in the areas of personal care, home care and pet nutrition, but oral care accounts for almost half of the company's total revenue. Colgate-
Palmolive currently has a market capitalization of $63 billion, lagging far behind rival Procter & Gambleand Univer in terms of market capitalization. Still, Colgate-
Palmolive is the leader in most oral care departments
This proves the company's dominance in the global oral care market. Colgate-
Palmolive did not provide guidance on its future financial results, so the company's expectations for its flagship business unit were not clear.
In this report, we will look at the key factors that may determine the path of Colgate
Palmolive's oral care business began in 2015.
We estimate Colgate's price to be $56.
Palmolive, which is about 20% lower than the current market price.
See our full analysis of Colgate
Palmolive hereRecap: Oral Care at 2014 Colgate-
Palmolive did not provide detailed financial information on its oral care unit separately, although it reported that the oral care unit accounted for 46% of its total revenue in 2014.
This makes Colgate
Revenue from Palmolive's oral care business is $7.
In 2014 of 9 billion, it was contracted by 0.
Compared with 2013, it was 8%.
According to our estimates, lower income led to a 1% drop in Colgate's revenue
Palmolive's market share in the global oral care market.
However, the decline in income is entirely attributable to currency headwinds, which reduced the income in the oral care, personal care and home care sectors by 6 percentage points in 2014.
Assuming that the same degree of monetary headwinds applies to the oral care sector, the organic income of the oral care sector has increased by 5. 2% in 2014.
This is still significantly lower than 6.
Average revenue growth rate of 3% Colgate
Palmolive's oral care business between 2010 and 2013.
On the other hand, the global oral care market is estimated to have expanded by 3. 2% in 2014.
That means Colgate.
Despite the significant negative effects of unfavorable foreign exchange flows and adverse macroeconomic conditions in most parts of the world, Palmolive still outpaced market growth.
Emerging markets are key to 2014 growth in the future and Latin America is Colgate's best performing market
Africa/Eurasia followed closely in terms of revenue growth.
These regions are part of emerging markets, Colgate-
Palmolive is defined as Latin America, Asia (Except Japan)
Africa/Eurasia and central Europe.
Consumer spending has not recovered in North America.
At 2008, most of Europe is experiencing a new recession due to widespread unemployment and macroeconomic problems in Greece.
On the other hand, while most emerging markets no longer grow at breakneck speeds as they did a few years ago, this is where there is the most potential.
For example, gross domestic product in developed markets is expected to grow by 2.
Growth in 2015 was 4% per cent, while growth in emerging markets was 5% per cent. Colgate-
Palmolive intends to use its unparalleled distribution channels to expand its reach in rural areas, thus improving its geographical location at a micro level.
This will be combined with broader geographic expansion in untapped countries such as Nigeria and Myanmar to drive revenue growth.
Smart Pricing strategy to protect the Edge Market
Palmolive's savvy pricing strategy is key to protecting its revenue and profits in 2014.
In developed markets, the company has adopted promotional pricing to drive sales growth.
On the other hand, the company raised prices in emerging markets where it faced adverse foreign exchange fluctuations to offset the impact of such fluctuations.
This strategy makes Colgate
Curb the possibility of falling revenue and falling profit margins.
Therefore, the EBITDA deposit of Colgate
Palmolive's oral care business remained stable at the age of 26.
In 2014, despite rising commodity costs due to currency headwinds, there were still 6%. (
READ: More volumes to help Colgate
Palmolive beat currency trouble in the fourth quarter)
At a recent group meeting of consumer analysts in New York, Colgate-
Palmolive said it will continue to take price increases in response to the currency's headwinds in 2015.
However, the company stressed that it would strike a balance between rising prices and rising sales.
Unincreased price increases may force consumers to avoid Colgate
Palmolive's products tend to be lower-priced alternatives, like P & G (
READ: The decline in transaction volume has exacerbated the problem of P & G, because the currency is against the wind to suppress the results of Q2).
Continuous innovation to maintain and expand consumer interest innovation has always been a sign of ColgatePalmolive.
The company introduces a large number of new products and variants throughout the price range every year.
Recently, Colgate
Palmolive highlights the importance of launching quality products with specific unique advantages
Peer pricing.
This strategy is in line with a recent Nielsen study that shows that demonstrating basic care benefits in a new oral hygiene product increases the probability of success for the product.
So Colgate
Palmolive has a number of new products for 2015 people designed to provide specific basic care benefits.
For example, the company is trying to build
It is called "whitening Super Brand ". " Colgate-
Palmolive claims whitening is the second largest toothpaste market in the world, second only to
Tooth toothpaste
The key point here is Colgate.
Palmolive has recognized the latest trend in consumer product innovation --
Offer specific advantages at a higher price.
As a result, the company is building a portfolio of oral hygiene products around its teeth whitening subsidiary
Market segments to retain existing customers and gain new customers.
We estimate that these factors and strategies will help Colgate.
Palmolive expanded revenue from the oral care business by nearly 5% in 2015.
The above pricing strategy, and the company-
The broad cost savings program is expected to deliver nominal increases in the margin of oral care EBITDA, which is expected to reach 26. 9% in 2015.
Global market capitalization | United StatesS.
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