Colgate-Palmolive Company (CL) Earnings Call Transcript & Summary

Good morning. Welcome to Colgate-Palmolive's 2020 Annual Meeting of Stockholders. I would now like to turn the call over to Chairman, President and Chief Executive Officer, Noel Wallace. Please go ahead, sir.

Well, good morning, everyone. On behalf of your Board of Directors, all of whom are joining us virtually today, I would like to welcome you to our 2020 Annual Stockholders Meeting. As you know, this year, we are conducting our meeting virtually to support the health and well-being of all participants in light of the COVID-19 pandemic and in accordance with national and local directives to avoid large public gatherings. We come together in an extraordinary time. This unprecedented global pandemic is unsettling for all of us, generating uncertainty about the future. But as you saw from our opening video, and as I'll explain more later, your company is rising to these challenges in ways you will be proud of. We're drawing on the strength you know well, a long history and track record of overcoming challenges, market-leading brands in Oral Care, Personal Care, Home Care and Pet Nutrition, all of which are playing an important role in meeting consumers' health and hygiene needs and values shared by Colgate people, including caring for one another and the communities we serve. Two more Colgate strengths are helping us navigate these extraordinary times: outstanding local teams, deeply knowledgeable about their local markets and the dedicated leaders on the ground who guide their efforts. In that spirit, as we start today, I'd like to recognize one extraordinary leader. Ian Cook, who served as our Executive Chairman, and before that, as our Chairman, President and CEO. Ian retired in April, and throughout his 44-year career, he inspired Colgate people with his commitment to personal leadership and business integrity. With knowledge gained over decades of global experience, Ian championed best-in-class support for winning on the ground. He had a deep commitment to Colgate's sustainability strategy, driving a decades progress and recognition and to developing the talent of Colgate people. Ian guided Colgate through the 2008 global financial crisis and the volatile world that followed, emphasizing focus and agility. His steadiness in the face of uncertainty, unfailing commitment to integrity and realistic optimism are qualities that all Colgate people aspire to. Ian has the deep gratitude of all Colgate people and our Board, and my warm and sincere thanks for his guidance and support. We wish Ian and his wife, Pat, a retirement full of good health and happiness. And Ian and Pat, if you're listening, I'm sending you a big virtual thank you and a big virtual hug from everyone at Colgate. I'm joined today on the call by 3 senior members of our leadership team: Jennifer Daniels, Chief Legal Officer and Secretary; John Faucher, Chief Investor Relations Officer; and Henning Jakobsen, our Chief Financial Officer. I will now turn the meeting over to Jennifer Daniels who will conduct the formal portion of this meeting. After we've addressed those matters, I will review the progress of our business and our company's response to the COVID-19 pandemic, after which we'll have a question-and-answer session. Jennifer, over to you.

Thank you, Noel, and good morning, everyone. First, a quick note about the question-and-answer session Noel mentioned. Questions can be submitted now through the end of the meeting using the Ask a Question text box on the virtual meeting web portal. Please note, we will attempt to answer as many questions as time allows, but only questions that are pertinent to the meeting will be addressed as detailed in our rules of conduct. Both the rules of conduct and the agenda for today's meeting are available in the meeting materials section of the web portal. I am pleased to present the formal portion of today's meeting, which I will now call to order. Each stockholder of record on March 9, 2020, the record date for this meeting, has been given proper notice of the meeting, and a quorum is present. Affidavits of mailing of this notice, the proxy materials and the annual report will be filed with the records of the meeting. Next, we will present the matters to be voted upon. There are 5 items of business on the agenda that require voting by our stockholders, and the polls are open for voting. The votes will be tallied by Mr. Peter Descovich, the independent inspector of election, who joins us virtually from Broadridge Financial Solutions. Please note, we will present all of the proposals, and then we will give stockholders an opportunity to make any comments on the proposals themselves after all proposals have been presented. The first order of business is the election of directors as nominated by the Board. The nominees are as follows: Mr. John Bilbrey, Former Chairman, President and Chief Executive Officer of The Hershey Company; Mr. John Cahill, Vice Chairman of The Kraft Heinz Company; Ms. Lisa Edwards, Executive Vice President, Strategic Business Operations, Customer and Partner Engagement of Salesforce.com, Inc.; Dr. Helene Gayle, President and Chief Executive Officer of The Chicago Community Trust; Dr. Martin Harris, Associate Vice President of the Health Enterprise and Chief Business Officer of the Dell Medical School at the University of Texas at Austin; Ms. Martina Hund-Mejean, former Chief Financial Officer of Mastercard, Inc.; Ms. Lorrie Norrington, Operating Partner of Lead Edge Capital LLC; Mr. Michael Polk, Advisory Director to Berkshire Partners and Interim Chief Executive Officer of Implus Corporation; Mr. Stephen Sadove, Founding partner of JW Levin Management Partners, LLC; Mr. Noel Wallace, Chairman, President and Chief Executive Officer of Colgate-Palmolive Company. There have been no other nominations pursuant to the company's bylaw procedures, and the Board recommends a vote for each of the nominees. The second item of business is the ratification of the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2020. The Board recommends a vote for this proposal. Representatives from PricewaterhouseCoopers are also available virtually today, and they will be available during the question-and-answer session later in the meeting to respond to appropriate questions. The third item of business is a nonbinding advisory vote to approve the compensation of the company's named executive officers as described in the proxy statement. The Board recommends a vote for this proposal. The fourth item of business is a stockholder proposal submitted by Kenneth Steiner regarding an independent Board Chairman. We will now connect with Mr. John Chevedden who is representing Mr. Steiner to hear his statement. Mr. Chevedden, out of respect for the other stockholders in attendance and to allow ample time for Q&A, we ask that you please limit your comments to a period of 3 minutes. Operator, can you please open Mr. Chevedden's line?

This is John Chevedden. Can you hear me okay?

Yes, we can, Mr. Chevedden.

Proposal 4, Independent Board Chairman. Shareholders request that our Board of Directors to adopt the policy and amend our governing documents as necessary to require that the Chairman of the Board be an independent member of the Board whenever possible. If the Board determines that a chairman who was independent when selected is no longer independent, the Board shall select a new Chairman who satisfies the requirement of this policy within a reasonable amount of time. Compliance with this policy is waived in the unlikely event that no independent director is available and willing to serve as Chairman. This proposal requests that each step be taken to accomplish the above. The performance of Colgate-Palmolive could be improved with an independent Board Chairman. Colgate-Palmolive stock has been flat for 5 years. For example, Colgate-Palmolive's stock was at $70 in 2015. This lack of stock performance was in spite of a $5 billion stock buyback plan, which is supposed to boost the price of the stock even if the performance of Colgate-Palmolive does not improve. However, stock buybacks can be a sign of short-termism for executives, sometimes boosting share price and executive pay without boosting the underlying value, profitability or ingenuity of the firm. A dollar spent on repurchasing share is a dollar that cannot be spent on research and development and acquisition or an entry into a new market. The 2019 proxy statement said that Colgate-Palmolive is great at succession planning. Now is a good time to see that succession planning in action with regard to our Lead Director, Mr. Stephen Sadove. Mr. Sadove has 13 years' tenure. Long-tenure is the opposite of independence and a director. Independence is the most important attribute in a lead director. An independent Chairman is best positioned to build up the oversight capabilities of the new directors on our Board, while the CEO addresses the challenging day-to-day issues facing the company. Please vote yes, Independent Board Chairman Proposal 4.

Mr. Chevedden, thank you for your interest in Colgate's corporate governance. The Board has recommended a vote against this proposal for the following reasons. The Board believes it would not be in the best interest of stockholders for the company's governing documents to require that an independent director serve as Chairman. The Board has committed to the highest standards of corporate governance, especially Board independence and accountability and has an independent lead director with clearly defined responsibilities to ensure proper checks and balances. Additionally, all committees of the Board are comprised entirely of independent directors including the committee chairs. Stockholders are best served if the Board retains flexibility to decide what leadership structure works best for the company based on the facts and circumstances existing from time to time. The Board believes that the current leadership structure works well for Colgate at this time. For these reasons, and as discussed more fully in the proxy statement, the Board has recommended a vote against this proposal. The fifth and final item of business is a stockholder proposal by John Chevedden regarding reducing the threshold to call special stockholder meetings. We will now connect with Mr. Chevedden to hear his statement. Mr. Chevedden, we would again ask that you please limit your comments to a period of 3 minutes. Operator, can you please open Mr. Chevedden's line?

Hello. This is John Chevedden. Can you hear me okay?

Yes, sir, we can.

Proposal 5, make shareholder right to call a special meeting more accessible. Shareholders ask our Board to take the steps necessary to amend our bylaws in each appropriate governing document to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. Special shareholder meetings allow shareholders to vote on important matters, such as electing new directors that can arise between annual meetings. This proposal topic won more than 70% support at Edwards Lifesciences and SunEdison. This proposal topic also won 78% support at a Sprint annual meeting with 1.7 billion yes votes. Nuance Communications gave 94% support to a 2018 shareholder proposal calling for 10% of shareholders to call a special meeting. This proposal topic won 47% support at the 2018 Colgate-Palmolive Annual Meeting. This 47% support represented at least 51% support from the shareholders who had access to independent proxy voting advice. Management should respect the vote of these informed shareholders. The current stock ownership threshold of 25% can mean that more than 50% of shareholders must be contacted during a short window of time to simply call a special meeting. Plus many shareholders, who are convinced that a special meeting should be called can make a small paperwork error that will disqualify them from counting towards the 25% ownership threshold that is now needed. Plus many shareholders who believe a special meeting is necessary, will not have time for the administrative burden that their participation would require. The 2018 management proxy in effect said that it's more important for Colgate-Palmolive to pinch pennies on shareholder rights than for shareholders to have a better opportunity to exercise their right to call a special meeting. Management made no acknowledgment of the administrative burden on shareholders to exercise the right to call a special meeting. Such an administrative burden on shareholders ensures that shareholders will have a serious and urgent reason to call a special meeting. This proposal improves shareholder engagement because productive shareholder engagement depends on shareholders having a Plan B if engagement falters. This proposal will give shareholders a greater Plan B. Shareholders need to engage management from a position of strength. Please vote, yes, make shareholder right to call a special meeting more accessible. Proposal 5.

Thank you, again, Mr. Chevedden, for your interest in Colgate's corporate governance. Colgate's bylaws have permitted holders of 25% of Colgate stock to call a special meeting since 2007. It is this existing right as well as other existing and meaningful rights to influence the governance of the company that led the Board to recommend a vote against this proposal. If implemented, this proposal would enable a very small number of stockholders to call a special meeting. The Board believes that it's not in the best interest of all stockholders to allow such a small minority to call a special meeting, causing the company to incur significant expense and administrative burden to advance what may be a narrow agenda, not favored by the majority of stockholders. For these reasons, and as discussed more fully in the proxy statement, the Board has recommended a vote against this proposal. That concludes the matters to be voted on as outlined in the Notice of Annual Meeting. If any stockholder would like to make a comment regarding any of the proposals, please submit your comment now through the web portal using the Ask a Question text box. At this time, any stockholder, who has not yet voted or wishes to change their vote, may do so by clicking on the Voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted by a telephone or Internet and do not want to revoke or change their vote, do not need to take any further actions. We are now going to take a short pause to allow for any stockholders who have not yet voted to do so. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls for the meeting closed. I have received the preliminary tabulation from Broadridge, and on the basis of these preliminary results, I am pleased to report that all of their director nominees have been elected, that the selection of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2020 has been ratified, and that the compensation of the company's executive officers named in the summary compensation table of the proxy statement has been approved by advisory vote. The preliminary tabulation also shows that neither the stockholder proposal on Independent Board Chairman nor the stockholder proposal on the threshold to call special stockholder meetings has received the necessary majority and therefore, neither has been approved. We share the proponent's commitment to the good corporate governance. Be assured that we continue to review the most effective means of governing the company in the stockholders' best interest. The final vote count for each item will be reported on a Form 8-K filed within 4 business days of this meeting. That concludes the formal business of today's meeting, and I now declare the formal meeting adjourned. I will now turn the call back over to Noel to review the progress of our company and to provide an update on the company's response to the COVID-19 pandemic. His remarks this morning may include forward-looking statements, and various factors might cause actual results to differ materially from those statements. You can find a discussion of these factors in our annual report on Form 10-K and subsequent SEC filings, which are available on the Colgate website. After Noel's business update, we will answer your questions. If you wish to ask a question, please submit it now using the Ask a Question text box on the web portal. As I noted earlier, we will attempt to answer as many questions as time allows, but only questions that are pertinent to the meeting will be addressed as detailed in our rules of conduct found on the web portal. And with that, I will turn it back over to Noel.

Thank you, Jennifer. Now on to an update on our business, starting with our 2019 results. 2019 was an important year, in which Colgate reestablished top line growth momentum behind increased investment in our brands. Pleasingly, our organic sales growth accelerated as we went through the year, showing that our strategies and investments are paying off. And that acceleration continued into 2020 with Q1 up 7.5% versus the same period a year ago, a strong start to the year. In 2019, we maintained our strong gross margins by driving pricing and cutting costs. And we now pay dividends continuously for 124 years with an increase for the past 57 consecutive years. And we maintained peer-leading return on invested capital. We drove the strong performance through the implementation of the successful strategies we outlined to you last year, investing to build our brands and deliver core innovation, launching premium innovation to gain share in high-growth segments and adjacencies, expanding in new channels and markets, maximizing growth online and investing to drive penetration in growing populations. As you saw in our recent earnings announcement, we delivered strong broad-based growth in the first quarter, responding well to the challenges of the COVID-19 pandemic. Let me share how we're managing this ongoing crisis. I'll start with the principle of guiding our response, the most important of which is being true to our values and purpose. Our values start with caring for one another and all those who depend on us, including the communities that need us more than ever. Next, global teamwork where we thrive as an organization and continuous improvement, which helps us quickly share best practices, learn and get better every day. We're using these values to pursue a purpose that's extremely relevant in today's world. We are Colgate, a caring, innovative growth company, reimagining a healthier future for people, their pets and our planet. These values and purpose mean that we are focused on the safety of our people, first and foremost. We have established strict safety procedures at all of our plants. We transitioned 10,000 people to work remotely, and we expanded our health and wellness programs. One of the things we're especially proud of is our support of the World Health Organization's #SafeHands initiative for producing and donating 25 million bars of soap, and each one has instructions for proper hand washing on the wrapper. The Colgate team's involved worked really fast, and the first bars are now coming off the lines in 5 of our plants around the world. Distribution in 29 countries is being organized by UNICEF, Save the Children and CARE. And here in the U.S., we'll be using our Bright Smiles, Bright Futures vans to distribute some of the stuff. We're also donating $20 million-worth of health and hygiene products to underserved communities in the U.S. and around the world including to hospitals to support frontline medical professionals. In that spirit, we made the decision to donate the contents of our shareholder meeting gift bags to those efforts. And our Hill's Pet Nutrition business is further ramping up its work with shelters, where the crisis and its economic fallout could have a lasting effect. We have a profound role to play in this fight, and we are proud to help. I know you join me in thanking Colgate people for all these efforts on our company's behalf. As we support the community, we're also adapting our strategies to be more agile in meeting the changing needs of consumers and retail customers. We had already begun to strengthen our capabilities in areas like e-commerce, digital marketing and the flexible supply chain. So we start from a position of strength. There's no better example of this in our global supply chain. As the first wave of the crisis hit and production in China was temporarily lost to local lockdowns, we mobilized other plants in our global supply chain to offset the loss. In Italy, which was severely impacted by the virus, our plant remained open to produce essential health and hygiene products. Globally, production across our supply chain was actually up over 10% in March versus 1 year ago. Amazing work all around. Our entire commercial team has shown agility. Our marketing and customer development teams worked with our retail customers to develop streamlined product offerings that allow us to produce longer runs of the products in greatest demand. We recognized early on that the impacts of COVID-19 would increase growth rates in e-commerce, and we accelerated our efforts in this important channel. By bringing focus to our product offerings and increasing our digital advertising, we increased our first quarter global e-commerce sales by over 50%, while doubling our e-commerce sales in North America division in the first quarter. Finally, while responding to the impacts of COVID-19, we are also sharply focused on the future. And one key aspect of our future focus is our commitment to sustainability. You will see this spirit in a new expression of our sustainability mission. Colgate invites 1 billion homes to create a healthy and sustainable future. We're making strong progress. The highlights of our 2019 accomplishments include a first of its kind recyclable toothpaste tube, part of our commitment to 100% recyclable, reusable or compostable packaging. We're openly sharing our breakthrough with other companies, so that in years ahead, all tubes can be recycled. We've launched a toothbrush with a handle made from sustainably grown bamboo and plastic-free packaging. We're eliminating waste. A total of 16 Colgate manufacturing facilities on 4 continents have achieved true 0 waste certification from the U.S. Green Building Council. That's more facilities in more regions than any other company, and the list grows year after year. Our leadership is being recognized. We continue to be recognized by the Dow Jones Sustainability Index and as the household industry sector leader for the first time in 2019. Now we're setting the bar even higher with new goals that include: net 0 carbon emissions in our global operations by 2040; achieving 0 waste at all of our operations around the world and eliminating 1/3 of all virgin plastics in our products and packaging. Colgate people are energized by our sustainability goals and embrace responsibility to lead. So even in these unprecedented times, you can be confident we remain true to our values and purpose by adapting our strategy and executing with agility and remain focused on our future. We will persevere and emerge stronger, we are Colgate. And now we'll begin our Q&A session.

This is John Faucher, Chief Investor Relations Officer for Colgate-Palmolive, and I will be handling the question-and-answer session today. I will read the questions to Noel, and then Noel will answer them. So Noel, the first question is, how is the coronavirus affecting the company as a whole? And how do you expect it to change the company going forward?

Thanks, John. Obviously, as we outlined in the prepared presentation that we just went through, we've spent a lot of time, obviously, on COVID-19 and ensuring a multitude of strategies get executed. So let me take you through a couple of -- how we're thinking about a couple of those aspects. There's 4 key buckets for us, really. First and foremost, as you heard me talk about, is our employee safety. And everywhere in the world, we have put in place significant processes and procedures to continue to ensure that we put safety at the forefront, whether it's in our manufacturing facilities, in our logistics, in our warehouses or in our offices. We have put everyone's safety first, and we are doing an incredible job in that regard in terms of how we're managing through some very difficult circumstances. Two is ensuring the continuity of our supply around the world. Our global supply chain has performed exceptionally well during this crisis. Obviously, given some of the challenges they confronted in different parts of the world, they've continued to maintain our production flowing, and in fact, have delivered record production runs in many of our facilities around the world. The third is meeting the heightened demand for our products. So we are in the health and hygiene business. We have a significant role to play in this fight, and our products are in high demand. And as a result, our commercial organization, together with our supply chain, have worked very, very closely with our trade partners to ensure that we continue to meet the high demand of some of our categories. And last, as you heard, we have a role to play in the communities that we serve, and we have made a significant effort to work with the World Health Organization through the #SafeHands initiative as well as through local donations everywhere in the world to ensure that we're helping, particularly those frontline workers and those in need that need the help of companies like ourselves. So a significant effort from all Colgate people around the world. And I think as you saw in my presentation, effort that you can be very, very proud of.

Great. So we've seen a number of questions again about the impact of COVID. Another topic on this is the impact on the supply chain. So is the supply chain running as efficiently as you would expect during this time? And do you expect to make adjustments along the way? And when this crisis is all over, will your supply chain run better than expected after having to adapt to this current environment?

Yes. As I mentioned, John, earlier, our supply chain is doing just an incredible job, dealing with some pretty significant challenges around the world. If you step back for a moment, we have had a long-standing practice in managing risk around the world and obviously, anticipating potential issues and challenges that we'll confront. This is a process that goes up through the leadership team of the company that we meet on quarterly to discuss. This is a process that is discussed at length with the Board of Directors to ensure that we're anticipating potential implications of things that can go wrong. Obviously, in this situation, that discipline has served us extremely well. We have had contingency plans that we've acted upon where we've moved production from different locations in the world. As you heard earlier, as the pandemic started in Asia, we moved production over to our European operations, as the virus spread and impacted some of our facilities there, we moved it to other plants and really didn't miss a beat in that process. And again, I think this is a result of the incredible discipline that our company has always had in, one, anticipating potential issues, but more importantly, taking the time to ensure that we have the proper mitigation plans and the proper contingency plans in place to move forward.

Okay. The next question is about R&D, and we've received a couple of questions about R&D. The first is, do you expect the R&D budget to increase? And then also, what about the number of patents that you receive?

Sure. Listen, the heart and soul of our company is innovation, and our R&D group does an extraordinary job working with our commercial teams and our marketing teams around the world to gather insights on what consumers are looking for and different behaviors to ensure that we're delivering innovation that they require. And as our innovation increases, so do our patents. And every year, we've continue to look for opportunities to patent our products and protect the intellectual property that we are developing. In that spirit, likewise, we've always been a very science-based company. And I think perhaps one of the reasons our products are in such high demand right now is because consumers are trusting big brands and trusting brands with strong efficacy. And rest assured that our R&D organization and the incredible science that comes behind our products is being demonstrated, not only in the demand of our products but obviously the patents that we continue to file year in and year out.

Okay. Now the next question -- a couple of questions about where we manufacture our products. So the first question is why does Colgate manufacture its toothpaste in Mexico and not the U.S? And then second, have we considered moving manufacturing from China to the U.S?

Yes. So as you heard me talk about earlier, our global supply chain is, in our view, one of our biggest competitive advantages. Certainly, throughout the crisis, we've been able to mobilize our facilities around the world to deal with circumstances that we had, whether it was in Asia, whether it was in Europe or likewise here in the U.S., and our ability to move production from one location to another has given us a distinct advantage during this crisis, and historically, has allowed us to produce our products at the lowest possible cost. We have 9 facilities here in the U.S. that we're producing. We have 2 major extremely advanced facilities that produce toothpaste here in the U.S. We do produce some toothpaste in Mexico that comes over into North America, specifically. But as a result of our global supply chain, we feel we're in a very good position to utilize our facilities depending on where they're located in the world to ensure that we continue to deliver against the needs of the consumer. Relative to China, again, as I mentioned, we have a facility there. As we encountered issues with the early stages of the pandemic, we moved that production over to Europe and partly into the U.S., and those facilities are back up and running, and we continue to assess as we look at our global supply chain the best location to produce. Rest assured with over 1,500 employees here in the U.S., we continue to produce the bulk of our production here for the U.S. in the U.S.

Okay. The next question is on share repurchase. How much are you spending on share repurchase this year?

So as we've done -- we've communicated in previous guidance, we obviously are pulling slightly back on share repurchases, as we talked about in the Q1 earnings call, associated with the recent acquisitions we have and to continue to maintain our strong debt rating, which is a AA minus. And we will continue to ensure that we're delivering a strong balance sheet moving forward, particularly in this environment. And as we said, we'll have a slight pullback on share repurchases this year.

Okay. And a related question to that is a question that we received on how safe is the dividend?

Well, it's been safe for 124 years. So that decision is made by the Board of Directors on an ongoing basis. But rest assured, we continue to prioritize our dividend repayment as we have for 124 years. And as you heard in my presentation, we've increased that for 57 consecutive years. So we will continue to manage our capital structure accordingly. But the consistency of the past, while no indication of the future, is a good barometer in terms of our focus on where we use our cash.

Okay. The next question, it's a couple of questions we're going to put together about the impact of coronavirus on Colgate employees and how they work. What percentage of employees can do most of their work at home? And has working from home impacted employee productivity?

So interesting. We had made some strategic decisions led by our IT organization about a year ago to move to really a digitized communication strategy across the company enabled by a transition to Google. And that move, in fact, has prevailed in this environment for us. We've moved 10,000 people day 1 to be able to work virtually that are working from home today. They did that without missing a beat, I think, a testament to our IT organization and the collaborative tools that we're using and partnering with Google to enable us to do the work that we do every day. And I think if you go around the company today and ask anyone who's utilizing those tools of working today, they would say it's given us an incredible advantage to address some very challenging circumstances. Likewise, with respect to our facilities around the world, obviously, our plants continue to run. So we have our workers working there. As I mentioned earlier, we have taken significant steps to ensure the safety and health of all of our plant employees, whether they're working in our manufacturing facilities or in our warehouses or in our labs. And we will continue to do so moving forward.

Okay. The next question, Noel. I'm pleased with the -- I'm obviously reading the question, I am pleased with the increases in gross margins, growth and increased dividends. Despite these accomplishments, the stock price seems to have reached to plateau over the last 5 to 6 years. What is the plan to return to the share price increases that have been historically observed?

So I think we've been quite consistent with deploying the strategy over the last 12 months. And you've seen, obviously, in my presentation, the sequential growth that we delivered in 2019 and the strong growth we delivered in the first quarter. And I think that's a function of the strategy that we're executing around the world. Our strategy on core innovation, our strategy on rapidly expanding the new channels. You heard the great success that we had in e-commerce, up over 50% in the first quarter, doubled in the U.S. behind strong growth across all categories. Our move into adjacencies -- profitable new adjacencies like skin health, as well as working very closely with our trade partners. So you've seen that strategy executed over the last 12 to 15 months, and you've seen the sequential growth that comes behind that. And in the long term, it's about getting back to strong, sustained top line growth. And that's exactly what we're focused on as an organization. And you're starting to see that in the results that we're putting up.

Okay. Noel, another question about COVID-19. How many employees have contracted COVID-19?

Yes. Thanks, John. We don't -- obviously, given the privacy of our employees, we can't give the exact numbers of confirmed cases for Colgate. However, there's been no material impact on the number of cases. Obviously, each case is extremely important to us, and we treat it very, very seriously. But I think, once again, a testament to the incredible precautions that we have taken from day 1, in fact, getting way ahead of this around the world, we've had governments actually reaching out to us in certain markets, utilizing our processes for ensuring the safety of our employees for other manufacturers in their markets. So I think that's an indication of how important this is to Colgate and how successful that has been in allowing our operations to continue to produce. That being said, we do have some cases. We treat those very, very seriously, and we'll continue to ensure that the discipline we have in place to ensure that the safety of our employees continues moving forward.

Okay. The next question is about the annual meeting. Would the company consider providing online access to future annual meetings for those stockholders who cannot attend in person? And would you have a virtual meeting in the future?

So listen, we've obviously, given the current situations are testing this out, and we'll continue to assess the pros and cons of a virtual meeting moving forward. As many shareholders have recognized, we have had the benefit of donating all of the products that normally go to our shareholders to frontline workers here in New York. And I think all of us can be deeply proud of the fact that we're giving those in need right now a chance to experience the great Colgate products that we produce that we ordinarily would have given to our shareholders. But moving forward, we'll continue to assess the situation. Historically, we've always allowed our shareholders to access our shareholder meeting via the web, and that -- it will continue to be available to those that didn't have the opportunity to see it today moving forward.

Okay. The next question is one that we get from a lot of investors. The pandemic is leading consumers towards brands that they trust and with which they have a strong emotional bond. What are you doing to deepen the bond between brands and consumers? Will the focus on health and hygiene continue post the pandemic?

Yes, good question. We're deeply fortunate to have brands that are very strong in the marketplace, built on trust. We have brands that carry strong credentials and efficacy. And those brands are in high demand right now. In fact, we've seen consistently around the world, particularly in products like liquid hand soap and dish liquid, that many consumers are reverting to big trusted brands and given the efficacy. And I think our years and history of delivering strong efficacy and strong science behind our brands is certainly paying off for us. Moving forward, as you saw in our first quarter results, we continue to invest behind building our brands. And that is a strategy that will continue, that is a strategy that is certainly delivering the strong growth that we're seeing in the business. And certainly in this environment, we want to ensure that we're communicating as much as we possibly can, the strong efficacy credentials of our brands and the fact that consumers can build further trust in credibility in how they use our products. So the answer is yes, we'll continue to invest. It's an important time for us given the demand of our products. And I think you've seen some of the great work that we're doing in the marketplace, whether it's the community work or the straight equity advertising that we're using is building strong trust for our brands moving forward.

Great. The next question is on the relaunch of Colgate Total. It has been a little over a year since the patented formulation of Total toothpaste has been changed to a formulation that is not protected by patents. Has there been a substantial difference in sales because of this change? And do you expect substantial competition going forward by competitors using essentially the same active ingredient?

So a long study underway that we put forth through our R&D organization, our commercial organization to get that relaunch ready a year ago, and rest assured that we don't put a brand as important as Colgate Total in the market without significant science and credentials behind it. And the clinical support that we have behind that product is quite extraordinary. And we're seeing that obviously play out in the marketplace. Historically, Colgate Total stood for strong antibacterial protection -- 12-hour antibacterial protection. We've delivered other benefits into that formulation that we never had before, and we're seeing that play out with strong growth, particularly in the first quarter. As I mentioned earlier, consumers returning to strong efficacy brands, particularly brands with antibacterial positioning. So Colgate Total is very well positioned. Relative to the competitive front, our focus is on making sure that our science is state of the art and that our claims are unique and differentiated in the marketplace. And the marketing teams working very closely with our R&D organization and our legal organization, continue to find very interesting ways to communicate the uniqueness of that brand to consumers, and we'll see that play out with continued brand building efforts moving forward.

Great. The next question is about the skin health acquisition that we've made. Can you speak about the new skincare brands we have purchased? And how we may leverage the technology more broadly to grow this business? Do we plan to use any of the technology with an existing Colgate skin care brands, for example?

So we really like this category. Long term, this is a very strategic growth opportunity for the company. We've been very selective in the assets that we purchased. We have 3 wonderful brands in Elta, PCA and Filorga. Each of them quite uniquely differentiated and positioned in the current category in which they compete. Filorga, obviously, a strong brand in pharmacy, is a strong brand as well as its Asia footprint and very much in the antiaging area, which obviously plays well to the demographic trends that we're seeing all over the world. Elta, the #1 sun care recommended by dermatologists here in the U.S., strong, strong science and credentials and formulations that deliver that claim. And obviously, PCA, again, a very strong brand in the esthetician arena with strong endorsement in that field. So all these brands well positioned for the future. And certainly, the science behind each of them, we're working very closely now across our personal care categories to ensure that we're not only leveraging the learning that we've garnered through those acquisitions into our other personal care brands and vice versa. So rest assured, the R&D organization is transferring great practices from one brand to the other and from one market to the other. So all bodes well right now for those businesses in the short term. Certainly, those businesses have been impacted by COVID-19 given the disruption to some of the trade channels in which they sell but long term, we continue to be very bullish on those categories and very excited about the opportunities they'll bring to the Colgate-Palmolive portfolio of products.

Okay. The next question. Is the company's use of robotics increasing?

Yes. In fact, if you go into our supply chain today, they're doing some pretty incredible things in that space in our manufacturing facilities. You've heard us talk about our very focused supply chain around the world. And over the years, we've driven significant consolidation in our manufacturing footprint around the world. And the effort behind that has allowed us to truly automate our facilities and bring in the best technology possible to produce our products. And whether those plants here in the U.S. that we talked about, whether it's in Asia, whether it's in Latin America, are absolutely state of the art, and our team is very focused on digitizing our supply chain as we're digitizing the company to ensure that we're bringing in the best technologies to drive productivity moving forward.

Great. Next question is back to the skin care businesses as well as body cleansing. With regard to our new skin care and body cleansing product lines, will we be addressing antiviral opportunities?

Yes. I mean, obviously, a lot of our brands, in fact, you take the Protex skin cleansing brand, which has historically been on an antibacterial positioning, we have gone back into the [ jaws ]. As I mentioned earlier, one of the strengths of our R&D organization is we have years of clinical work and science based on many areas in the disinfectant and antibacterial claim area, and we will continue to look at those and make sure that they're consistent with regulations in the markets and any laws that are required. But rest assured, health and hygiene continues to be a significant opportunity for both our skin cleansing business as well as our Home Care business. And we believe we're well positioned, given the positioning of our brands today and some of the science and technology that we have in the pipeline coming, to particularly go after the antibacterial and disinfectant space. Antiviral claims, we will be quite careful in terms of the types of communication we bring to our products in that area. But certainly in the antibacterial and disinfectant area, which is really the first line of defense that consumers are looking for, we will be quite active in that area.

Great. So we have another patent question here. Has Colgate experienced patent infringement?

Yes. Over the years, we have. And obviously, given the amount of time and effort and intellectual capital and science that we put into our technology, we're the first ones to go out and protect that technology. So if we see anyone infringing upon our technology -- our patent technology, rest assured that our lead organization is very prudent in their approach to protecting everything that we own.

Great. And then this is our last question, Noel. How are you handling advertising during COVID-19? Are you increasing or decreasing your advertising?

It really depends on where we are in the world. But I would say, in general, we're increasing our advertising. You saw that obviously in the first quarter results. We believe quite strongly that the increase in advertising that we've executed over the last 3 or 4 quarters is delivering that sequential top line growth that we're seeing. We're starting to see good market share performance as a result of that. We have a strong innovation pipeline coming in the back half as we adjust to some of the consumer insights and behavior change that are coming behind COVID-19. And as a result from that, we expect to continue to accelerate our advertising to strengthen our brands moving forward. So thanks, everyone. So that brings our meeting today to a close. I hope you've seen that by executing our strategy, importantly, guided by our purpose and values and really continuing to focus on our future, we're charting the right course for our company. Our brands and our people are playing a vital role, as I hope you've heard today, in this unique environment that we experience, a role that you can truly, I believe, be proud of. So thanks very much for taking part today. Until we talk again, please stay safe.

This now concludes the meeting. Thank you for joining, and have a pleasant day.