Colgate People... EBIT Margin Aftertax Return (% to sales) On Capital

19% 24% 22.8% 17.2% 15.9% 20.4% 16 14.2% 20 18.0% 13.2% 16.0% Increasing 12.3% 13 16 15.8% 10 12

0 0 95* 96 97 98 99 95* 96 97 98 99 Profitability *Excludes restructuring

Record operating profit margin reached 17.2% in 1999, up 130 basis points. Return on capital increased by 240 basis points to 22.8%, also a new record.

The aggressive focus of Colgate people on profitable new Europe products, streamlined operations and cost reduction once again Focused achieved sharp profit margin expansion. Key profitability indicators Manufacturing reached record levels. Colgate people adhere to a powerful financial strategy of Dedicated facilities pro- increasing gross profit margins and reducing overhead. Practiced in every busi- ducing similar products for ness unit, the strategy furnishes the funding for new products and more adver- an entire region enable tising while providing a healthy growth in profits. Colgate to respond efficiently to the changing marketplace. Innovative new fabric softeners, Leveraging economies of scale is crucial. Colgate people everywhere are manufactured in Compiègne, France, are working together to reduce costs throughout the supply chain, from raw material quickly distributed purchases by suppliers to the on-shelf displays of Colgate products at retail. throughout Europe. Manufacturing consolidation, product standardization, logistics optimization Checking quality at right: Dominique and purchasing leverage are all significant profit contributors. In transport, for Gossart and example, Colgate experts negotiated a global tender to dramatically lower costs Christophe on ocean freight. In raw materials, they identified high-quality, lower cost Soudry. (continued on page 14)

Carlos de Oliveira, Team Leader

12 Lavelle Jones, Associate Director, Oral Care Materials Sourcing North America United States: Lowering Total Delivered Costs Identifying potential savings across the sup- ply chain, from the purchase of ingredients through formulation to final delivery, this multidisciplinary team from Colgate and J. M. Huber realized savings exceeding hundreds of thousands of dollars. Huber, which provides a key ingredient in Colgate toothpaste, is one of several preferred suppliers teaming with Colgate to reduce costs. Meeting at Colgate’s plant in Jeffersonville, IN are Ellice Luh of Huber, Robert Melhorn of Colgate, Rick Cates of Huber, and Peter Ren, Lavelle Jones and William Cook of Colgate.

Global Finance Compliance and Efficiency Combined Colgate’s Global Tax Department ensures compliance in all world regions. Growing efficiency is supported by teamwork and focus in the global financial function. Complex regulations, different in every country, require full knowledge and care for proper . Hector Erezuma, VP,International Taxes

13 Increasing Profitability (continued from page 12)

Soraya Benzan Oscar Alberto Diaz Julio Gaviria Rosana Valcke Ruy Ghiotto Augusto Ogando, Associate Alex Pirela Dominican Republic Argentina Mexico (back) Colombia Brazil Director, Latin America Venezuela Materials Sourcing sources in China and India. And in new product development, Colgate scientists Latin America are pooling research with preferred suppliers. Regional Purchasing Council In technology, early strategic investments continue to produce big cost Maximizes Buying Power savings. Colgate’s realized savings in North America from integrated SAP soft- Meeting three times a year, Colgate Purchasing ware, which optimizes all aspects of sales, inventory, manufacturing, distribution Councils, like this one from Latin America, leverage their insight and purchase orders. Raw and finance, have far exceeded goals. And Colgate’s largest domestic cus- materials and packaging items, such as wrap- tomers have benefited by a one-third reduction in average order-to-delivery time pers for Palmolive soap and cartons for Colgate over the past few years. Colgate-Europe and Hill’s are enjoying these same toothpaste tubes, are bought from preferred technology-driven savings. Today, nearly 75 percent of Colgate’s operations regional suppliers. Webstock for laminate toothpaste tubes and other key items are pur- are supported by SAP. Within two years, the figure is expected to increase to chased globally. Colgate Regional Councils over 90 percent. Benefits will continue to climb, to include customer relation- were instrumental in saving approximately ships, demand forecasting and e-commerce systems. For example, Colgate is $100 million in 1999. collaborating with key trade partners, such as Wal-Mart and KMart, to link in- store information to achieve better forecasting. These initiatives contributed to Colgate’s record $1.3 billion cash flow in 1999. Return on capital increased to 22.8 percent, up from 20.4 percent in 1998 and 15.8 percent just three years ago. Worldwide, approximately 60 percent of Colgate’s capital spending budget is directed to savings projects. These proj- ects, on average, have returned 40 percent aftertax annually. In 1999, they ranged from in-house manufacturing of toothpaste tube laminate in Latin America to regional consolidation of soap production for the ASEAN countries. All over the world, Colgate people are finding new and better ways to create, produce and distribute powerful global brands.

14 Colgate People... Three Values Guide Living Colgate’s Colgate People: ✓Caring ✓Global Teamwork Va lu es ✓Continuous Improvement

Colgate’s values are lived by 37,000 employees worldwide and Asia guide us toward improving people’s lives, products, profitability Philippines: Bright Smiles, and shareholder value. Our fundamental values of caring, global teamwork Bright Futures and continuous improvement go hand in hand with attracting an exceptional Colgate’s Bright Smiles, Bright Futures program workforce and represent a true advantage for Colgate. brings oral health care and education to children These are but a few examples of the dedication of Colgate people: in almost 80 countries. In the Philippines, Colgate’s ■ Around the world, 46 million children receive oral hygiene education under oral care program has become part of that coun- try’s nationwide school curriculum. Colgate’s part- Colgate’s Bright Smiles, Bright Futures initiative. nerships with local groups reach children who might not otherwise see a dental professional. The program, including dental screening and treatment referral, travels to the people, often in specially equipped Colgate vans. ✓Caring

Total Number of Children Reached Globally (millions annually)

50 46 42 40 37 30 30 21 20

10

0 95 96 97 98 99

Nenette Sadiua, Oral Care Marketing Manager (now National Trade Marketing Manager) More and more children are benefiting from Colgate’s oral health program. The number of ■ More than 16,000 employee suggestions are considered each year for the children reached has more than doubled since 1995. “Chairman’s You Can Make a Difference” program. The global winners receive Colgate stock and are honored at the annual meeting. ■ All Colgate people learn about the Company’s growth goals at biannual Inter- com meetings. Presentation materials are explained by local Colgate leaders, and best practices are shared in discussion groups. ■ Every winter, Colgate-U.S. conducts a multiproduct promotion that donates a portion of sales to the Starlight Foundation, an organization that makes dreams come true for sick children.

15 Living Colgate’s Values (continued from page 15)

North America United States: Dentists Treat “Colgate Kids” In 1999, over 600 children near the Jeffersonville, IN factory received free dental screenings, toothbrushes and toothpaste as part of Colgate’s partnership with the University of Louisville School of Dentistry. Every morning during the school year, chil- dren from area schools along the Indiana-Kentucky border are taken to the dental school’s clinic to be Demetria Montgomery Bob Blais, Director Administrative Assistant Oral Care Product treated by the school’s Supply Chain dentist-interns. ✓Caring

rwi scan Europe Ireland: Information Technology Center From its regional network hub in Dublin, Colgate’s new Information Technology Center manages all information technol- ogy services for Europe. This new hub in Europe and the same organizational model in Malaysia are both con- nected to Colgate’s global technology center located in Piscataway, NJ. The new hubs are contribut- ing to increased prof- itability and efficiency across both continents. ✓Global Teamwork

Ken Agena Jose-Maria Castro Alec de Guillenchmidt Ed Toben Director of Information Technology, Europe VP, Finance & Strategic Planning, Europe VP, Nordic Group and ECR, Europe Global Chief Information Officer

16 ■ Colgate-Turkiye employees reacted quickly to provide food, medicine, prod- ucts, temporary accommodations and special children’s programs following severe earthquakes in that country. Responding to disasters is part of how Colgate cares for the people and the communities where it does business.

Colgate’s culture of caring is supported by a commitment to global teamwork. Colgate people are taught to work as team members and apply their skills in countries with diverse needs. Furthermore, Colgate people are trained to think globally, a mind-set fostered by systematic personnel transfers from one Global Training country to another, including more than 400 such career moves in the past South Africa: Media Management two years alone. Global teamwork begins with broad, open communication. Dialogue takes At this two-day seminar in Johannesburg, place at face-to-face meetings and through the internal Colgate Intranet, the Colgate marketing people from Africa and the Middle East strengthened their media knowl- global e-mail system and videoconferencing. For example, Colgate people in edge and broadened their media horizons widely dispersed locations use Lotus Notes software to view proposed new beyond television. At front of the class: Zin packages so that they can quickly collaborate on a design that works well every- Mabaso, Marketing Brand Manager, South where. From the high-speed plant in Morristown, NJ, which supplies deodorants Africa, and Amr ✓ Latif, Marketing Continuous to 58 countries, to the global information technology network, which has consol- Manager, Egypt. Improvement idated 75 separate data processing centers worldwide, global teamwork is improving profitability. Multidisciplinary teams also work closely with Colgate’s suppliers and retail customers to speed the supply chain cycle. Continuous improvement dictates that Colgate people find new and more profitable ways of conducting business. Extensive training supports the push. In 1999, Colgate people filled 30,000 openings in more than 70 courses offered as part of Colgate’s global curriculum. Courses are taught by in-house Colgate experts and are aligned with key growth strategies. For example, courses in materials sourc-

COLGATE GLOBAL CURRICULUM ing and rapid production line changeover LEADERSHIP AND MANAGEMENT COURSES directly improve profit margins. LEADERSHIP MANAGEMENT (Cont.) Leadership Development Program Colgate’s Money Matters Goal Alignment Work Session FrontLine Leadership/Leadership 2000 Global Leadership Program** WorkSkills: Steps to your Success Team Leadership/Team Effectiveness Colgate people are effective MANAGEMENT Influence and Negotiations* Bringing Out the Leader in You* Introduction to Project Management Setting Objectives Work Session Problem Solving Tools Coaching and Feedback Competency-Based Interviewing Having Effective Performance Reviews General Instructor Training because they are empowered Developing People for Business Results (IDP) Facilitating Successful Meetings Valuing Colgate People Business Presentation Skills Valuing Colgate’s Business Integrity C-P Business Operations** by known values, growing FUNCTIONAL/TECHNICAL COURSES AND DEVELOPMENT PROGRAMS

FINANCE Supplier Certification Seminar BASICS Development Programs: knowledge and a clear vision Activity Analysis Materials Sourcing Training and Development Doing Business in High Inflation Economies Supply Chain Team Leader Global Finance Fundamentals** Plant EOHS Coordinator Plant GMP Coordinator* HUMAN RESOURCES Plant Microbiologist* of Company goals. They Building Training Excellence Workshop Plant Chemist* Building Business-Focused HR Capability Cross Border Sourcing Coordinator* Competency-Based Interviewing Trainer Certification Plant TPM/HPWS Coordinator** General Instructor Training Certification Colgate Leadership Profile Certification MARKETING know that their unique talents On-the-Job Learning System* Marketing Fundamentals** Consulting Skills Workshop** Consumer Insight Change Management** PromoPower! Data Analysis* INFORMATION TECHNOLOGY Media Management and outstanding perform- WIN Standard Applications: CP Mail 2000, Colgate ADvantage Excel, PowerPoint, Windows 97 and Word SAP User Training RESEARCH AND DEVELOPMENT Lotus Notes Product Design Communication* Information Technology Technical Training Regulatory Training (U.S.) ances will be recognized. Surfactant Chemistry SUPPLY CHAIN Product Integrity Management High Performance Work Systems Training LabNET Total Productive Maintenance (TPM) Microbiology** Knowledge Management Overview* Product Susceptibility and Adhering to Colgate’s values Labor Relations* Preservative System Design** Quality Training Cleaning and Sanitization** SALES Basic Statistical Concepts and Applications* Field Sales Leadership Statistical Process Control* Basic Sales Techniques is a vital strategy that builds Design of Experiments* ProSales Selling Skills Taguchi Methods: Quality by Design ProSales Field Coaching Environmental, Occupational Health & Safety Training Key Accountability: Continuous Flow Manufacturing (CFM) Managing the Account as a Business Audit Skills and Techniques* Business Proposals & Negotiations* shareholder value. Introduction to Logistics Trade Marketing/Category Management**

■ 2000 Operational ■ 2000 Development* ■ Future Development** Pat Weakley, Associate Director of Global Marketing Training (now Director of Corporate Websites & Intranets)

17 Colgate People: Powering Global Strategy

Board of Directors: Reuben Mark Jill K. Conway Ronald E. Ferguson Ellen M. Hancock David W. Johnson

Your Your Management Team

Reuben Mark Ellen M. Hancock Richard J. Kogan *Reuben Mark, 61 *Stephen C. Patrick, 50 Emilio Alvarez-Recio Chairman of the Board President and Chief Chairman and Chief Chairman of the Board VP, Advertising and Executive Officer, Exodus Executive Officer of and Chief Executive Joined Colgate in 1982 Charles W. Beck of Colgate-Palmolive Communications, Inc. Mrs. Schering-Plough Officer after having been a VP, Global Materials, Company. Mr. Mark joined Hancock previously was Corporation since 1998. See biographical Manager at Price Logistics and Sourcing Colgate in 1963 and held Executive Mr. Kogan joined information, left. Waterhouse. Before being *Steven R. Belasco a series of significant of Research and Schering-Plough as *William S. Shanahan, 59 named CFO in 1996, VP, Taxation and Real Estate positions in the United Development and Chief Executive Vice President, Mr. Patrick held a series President and Chief David P.Bencze States and abroad before Technology Officer at Pharmaceutical of key financial positions, Operating Officer VP, Colgate-Europe being elected CEO in 1984. Apple Inc., Operations, in 1982 and including Vice President Mr. Shanahan joined and Corporate Controller Elected director in 1983. 1996-1997, Executive Vice then became President Philip A. Berry Colgate in 1965 and held and Vice President- Age 61 President and Chief and Chief Operating VP, Colgate-Europe a series of important Finance for Colgate-Latin Operating Officer at Officer of that company in Robert E. Blanchard positions in the United America. Jill K. Conway National Semiconductor, 1986 and President and States and abroad. These VP, Global Toothbrush Visiting Scholar, Program 1995-1996, and Senior Chief Executive Officer in include Vice President- *John T. Reid, 59 Division Chief Technological Officer in Science, Technology Vice President at IBM. 1996. Elected director in for the John H. Bourne and Society at Elected director in 1988. 1996. Age 58 Western Hemisphere and Joined Colgate in 1982 as VP, Colgate-North America Group Vice President for Vice President of Strategic Massachusetts Institute of Age 56 Johannes C. Brouwer Europe/Africa, Colgate- Planning from Pfizer Technology since 1985. Howard B. Wentz, Jr. VP, Turkiye Mrs. Conway was David W. Johnson Chairman of Tambrands, U.S. and other countries. Corporation. Before being He was elected Chief named to his current posi- Nigel B. Burton President of Smith College Chairman Emeritus of Inc., 1993-1996. Mr. Wentz Operating Officer in 1989 tion in 1997, Dr. Reid had VP, United Kingdom from 1975 to 1985. Elected Campbell Soup Company. was Chairman of ESSTAR and President in 1992. also served as General & Ireland director in 1984. Age 65 Mr. Johnson was Incorporated, 1989-1995, Manager of Colgate- Chairman of Campbell and Chairman, President *Lois D. Juliber, 51 Antonio Caro Greece, Vice President VP, Worldwide Sales Ronald E. Ferguson Soup Company, 1993-1999, and Chief Executive Officer Executive Vice President, Chief of Operations, and General Manager of Chairman and Chief and was Campbell of Amstar Company, 1983- Jose-Maria Castro Developed Markets Colgate-United Kingdom Executive Officer of President and Chief 1989. Elected director in and Vice President of the VP, Colgate-Europe General Re Corporation Executive Officer, 1990- 1982. Age 70 Ms. Juliber joined Colgate South Pacific region. Peter C. Chase in 1988 from General since 1987. Mr. Ferguson 1997. From 1987 to 1990, *Andrew D. Hendry, 52 VP, Colgate-Latin America has been with General Re he served as Chairman Foods, where she was Vice President. Before Senior Vice President, James H. Clark since 1969. Elected and Chief Executive Officer being promoted to her and VP, Colgate-Africa/ director in 1987. Age 58 of Gerber Products current position in 1997, Secretary Middle East Company. Elected director she had been President Joined Colgate in 1991 *Ian M. Cook in 1991. Age 67 of the Far East/Canada from Unisys, where he President, division, Chief Tech- was Vice President and Colgate-North America John P.Kendall nological Officer and General Counsel. A grad- Michael A. Corbo Officer, Faneuil Hall President of Colgate- uate of Georgetown VP, Colgate- Associates, Inc., a private North America. University and NYU Law Central Europe & Russia investment company, *David A. Metzler, 57 School, Mr. Hendry has since 1973. Mr. Kendall is a also been a corporate Graeme D. Dalziel Executive Vice President, VP, Portugal former Chairman of The Chief of Operations, High attorney at the Battle & Kendall Company. He Growth Markets Fowler law firm in New S. Peter Dam joined that company in York City and at Reynolds President, Mr. Metzler joined Colgate Metals Company. Colgate-Asia Pacific 1956 and held a series of in 1965. Before being significant positions. named to his current Elected director position in 1997, he was in 1972. Age 71 President of Colgate- Europe and previously President of Colgate-Latin America. Earlier, he had responsibilities for opera- Audit Committee Committee on Directors John P. Kendall Ronald E. Ferguson, Chair David W. Johnson, Chair Richard J. Kogan tions in Canada, South Jill K. Conway Jill K. Conway Reuben Mark Pacific, Africa and India. Ellen M. Hancock John P. Kendall Personnel and John P. Kendall Howard B. Wentz, Jr. Organization Committee Howard B. Wentz, Jr. Finance Committee Jill K. Conway, Chair Howard B. Wentz, Jr., Chair Ronald E. Ferguson Ronald E. Ferguson David W. Johnson Ellen M. Hancock John P. Kendall *Corporate Officer

38 Congratulations...Delano E. Lewis Leaves Colgate’s Board on appoint- ment as Ambassador to South Africa Colgate congratulates former Director Delano Lewis on his significant new appointment as the U.S. Ambassador to South Africa. In this new position, Mr. Lewis by law had to resign from Colgate’s Board. We are deeply indebted for his many contributions as a Director and as Chairman of the Board’s Committee on Directors. We thank Mr. John P. Kendall Richard J. Kogan Howard B. Wentz, Jr. Lewis for over eight years of service and wish him all the best in con- tinuing his distinguished career. Delano E. Lewis

Edward C. Davis Nina D. Gillman Jules P.Kaufman Francis A. Morelli Jeff Salguero *John H. Tietjen VP, Budget and Planning VP, Legal VP, Legal VP, Global Systems VP, Advertising Production VP, Global Business Herbert L. Davis Walter H. Golembeski Robert G. Kirkpatrick Graeme B. Murray Derrick E.M. Samuel Development VP, Technology VP, Colgate-Asia Pacific VP, Media VP, Canada VP, South Asia Region Heiko Tietke Alec de Guillenchmidt Stefan S. Gorkin Betty M. Kong Robert A. Murray Raffy L. Santos VP, Personal Care VP, Nordic Group VP, Labor Relations VP, Technology VP, Corporate VP, Hawley & Hazel Taiwan Edmund D. Toben Coloman de Hegedus David R. Groener Yoshio Koshimura Communications Lim Kim Seng Chief Information Officer President, Colgate- VP, Colgate-North America VP, Hill’s-Asia Pacific James Napolitano VP, China Joseph A. Uzzolina Africa/Middle East Karen Guerra Leo Laitem VP, Hill’s Pet Nutrition *James M. Serafino VP, Household Surface Care Virginia M. Dotzauer VP, France VP, Research and Jean-Marc Navez VP, Deputy General Counsel Daniel A. Vettoretti VP, Hill’s Pet Nutrition Luis Gutierrez Development VP, Colgate-Asia Pacific James H. Shoultz VP, Poland Region Joseph A. Douglas VP, Central America Daniel B. Marsili Rosemary Nelson VP, Venezuela J. Nicholas Vinke VP, Hill’s Pet Nutrition Jack J. Haber VP, Colgate-Latin America VP, Colgate-U.S. Barry N. Simpson VP, Colgate Oral Dale A. Dvorak VP, Chief Web Officer Robert R. Martin Alan Nimmey VP, Colgate-Asia Pacific Pharmaceuticals VP, Colgate-Latin America Tarek S. Hallaba VP, Global Demand Chain VP, Technology Leonard D. Smith Anthony R. Volpe Steven E. Elliott VP, Colgate-U.S. Ronald T. Martin James Norfleet VP, Global Supply Chain VP, Research and Development VP, Thailand Suzan F. Harrison VP, Human Resources VP, Research and James W. Sparks Hector I. Erezuma VP, Colgate-U.S. Steven G. Marton Development VP, Hill’s Pet Nutrition *Robert C. Wheeler VP, International Taxes VP, Hill’s-Europe Morgan J. O’Brien Chief Executive Officer, Richard F. Hawkins *Barrie M. Spelling Hill’s Pet Nutrition James E. Farrell, Jr. President, Hill’s-International Robert F. Maruska VP, Colgate- President, Global Oral Care VP, Legal VP, Colgate-U.S. Central Europe and Russia Richard J. Wienckowski *Brian J. Heidtke Malcolm L. Stokoe VP, Hill’s Pet Nutrition Guillermo M. Fernandez VP, Finance and *Michele C. Mayes Chris E. Pedersen VP, Caricom Region VP, Mexico Corporate Treasurer VP, Deputy General Counsel VP, South Pacific Region David K. Wilcox P.Dorset Sutton VP, Technology James S. Figura Jean-Mathieu Hellich Seamus E. McBride Robert C. Pierce President, Hill’s Pet Nutrition VP, Colgate-U.S. VP, Colgate-Europe VP, Italy VP, Research and Francis M. Williamson Development *Michael J. Tangney VP, Colgate-Latin America Edward J. Filusch *Dennis J. Hickey Charles F. McGraw President, VP, Treasury VP, Corporate Controller VP, Colgate-North America Hans L. Pohlschroeder Colgate-Latin America Paul A. Witmond VP, Treasury VP, Dominican Republic Stephen J. Fogarty Sheila A. Hopkins *Peter D. McLeod *Javier G. Teruel VP, Oral Care VP, Colgate-U.S. VP, Manufacturing Roger M. Pratt President, Colgate-Europe Gregory P.Woodson VP, Brazil President, Fabric Care Chester P.W. Fong William A. Houlzet Engineering Technology Richard F. Theiler VP, Greater China VP, Argentina Donna B. McNamara Ricardo Ramos VP, Research and Douglas R. Wright VP, Human Resources VP, Greece Development VP, Environmental Affairs, Abdul Gaffar Stuart A. Hulke Occupational Health and VP, Research and VP, Technology Richard Mener Friedrich Reinshagen Bina H. Thompson VP, Germanic Countries Safety Development John J. Huston VP, Global Export/ VP, Investor Relations Middle East Grace E. Richardson Seng Aun Yeoh Robert Galan VP, Office of the Chairman Scott E. Thompson VP, Malaysia VP, Philippines Louis P.Mignone VP, Consumer Affairs VP, Legal N. Jay Jayaraman John E. Zoog Jill Garrity VP, Oral Care VP, Colgate-U.S. Jill H. Rothman Kathleen A. Thornhill VP, Human Resources VP, Human Resources VP, Colgate-Europe Scott W. Jeffrey, Jr. Franck J. Moison VP, Consumer Insights James J. Gerchow VP, Colombia President, Colgate- Reuven M. Sacher VP, Colgate-Africa/ Central Europe and Russia VP, Research and *Robert J. Joy Development Middle East VP, Global Human Resources

*Corporate Officer

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