You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: This is John Faucher, Chief Investor Relations Officer.
Actual results could differ materially from these statements.
I will provide commentary on our Q4 and full-year performance as well as our 2021 guidance before turning it over to Noel for his thoughts on how we are planning to sustain our growth momentum into 2021.
We will then open it up for Q&A.
As usual, we request that you limit yourself to one question so that as many people as possible get to ask a question.
We finished 2020 in very strong fashion with our highest level of quarterly organic sales growth in over 10 years and our highest annual organic sales growth since the depths of the financial crisis.
Importantly, we continue to deliver balanced growth, which we think is the key to sustainable strong performance.
For both the quarter and the year, we delivered both volume and pricing growth, organic growth in all four of our categories: oral care, personal care, home care, and pet nutrition, and organic sales growth in every division with both emerging markets and developed markets performing well.
Our strategy to deliver more impactful premium innovation is still in its early stages, but we believe the results are beginning to show.
Importantly, this growth is driving our income statement.
We delivered strong gross margin expansion for both the quarter and the year, which allowed us to deliver profitable growth despite significant investments for future growth and the headwinds from foreign exchange.
Our net sales grew 7.5% in the quarter.
Organic sales growth of 8.5% was driven by 5% organic volume growth and a 3.5% increase in prices.
The impact of acquisitions added an additional 100 basis points to volume growth, while foreign exchange was a 2% headwind.
In the fourth quarter, our gross profit margin was 61.1% on both a GAAP basis where we were up 100 basis points year over year and a base business basis where we were up 90 basis points.
For the fourth quarter, pricing was 130 basis points favorable to gross margin while raw materials were a 320 basis-point headwind driven by increases in the cost of raw materials like fats and oils and the transactional impact from foreign exchange.
Productivity was a 280 basis-point benefit.
On a GAAP basis, our SG&A was up 260 basis points as a percent of sales for the fourth quarter and 100 basis points for the full year.
On the base business basis, in the fourth quarter, our SG&A was up 310 basis points on a percent of sales basis.
This was primarily driven by a 210 basis-point increase in advertising to sales as we drove strong activation on brand building, innovation, and e-commerce.
Our SG&A ratio was also impacted by increased logistics costs, primarily in the U.S., and investments behind growth and innovation.
For the full year on a base business basis, our SG&A ratio was up 150 basis points driven primarily by a 100 basis-point increase in advertising to sales and increased logistics cost.
For the fourth quarter on a GAAP basis, our operating profit was up 4% year over year, while it was up 3% on a base business basis.
Our earnings per share was flat on a GAAP basis and up 5% on a base business basis.
For the full year, our earnings per share growth was 14% on a GAAP basis and 8% on a base business basis.
We delivered 18% growth in free cash flow for the full year.
As we discussed at the beginning of 2020, we used some of the free cash flow to pay down debt primarily related to the Filorga transaction with the balance used for dividends and share repurchases.
A few comments on our divisional performance.
North America delivered 10% net sales and 8.5% organic sales growth in the quarter, driven by premium innovation and increased consumption in categories impacted by the COVID pandemic.
We also benefited from a rebound in performance by our skin health businesses in the quarter.
Our e-commerce business in North America finished the year strongly with sales in the fourth quarter more than double last year's sales.
North America saw significant increases in brand support behind the hum by Colgate Electric Brush, the Colgate Optic White Overnight Teeth Whitening pen, our toothpaste business, and Irish Spring.
Latin American net sales were down low single-digit as double-digit organic sales growth was more than offset by the negative impact of foreign exchange.
The strong organic sales growth performance was broad-based as we delivered organic sales growth in every hub for both the quarter and the year.
Oral care innovation has been a key growth driver with Colgate Tartar Control, Luminous White Charcoal, and our Natural Extracts line, all driving incremental growth.
Europe delivered double-digit net sales growth in the quarter.
Organic sales growth of 4.5% was driven by volume growth across all three segments; oral care, personal care, and home care, and in every hub.
Strong oral care volume growth on the Colgate and elmex brands was accompanied by significant brand-building investment in traditional media and digital.
We were also encouraged by a return to organic growth for Filorga where a strong China growth more than offset weakness in the travel retail channel.
We delivered 7% net sales and 5% organic sales growth in Asia Pacific led by volume growth across our biggest hubs; Greater China, India, the Philippines, and South Pacific.
In India and China, our growth strategies are driving improved toothpaste performance through Colgate Miracle Repair in China, Colgate Vedshakti in India, and our relaunched Colgate Anticavity business across the division.
Our personal care and home care businesses also benefited from COVID-related demand in the South Pacific region.
Africa/Eurasia net sales declined 1.5% due to significant foreign exchange headwinds as the division delivered organic sales growth across all three categories and in every hub.
Toothpaste organic sales growth was led by Colgate Herbal, Colgate Maxfresh, and Colgate Total.
Meridol also delivered strong growth as we look to gain share in the pharmacy channel.
Hill's finished the year with another quarter of strong net sales and organic sales growth despite continued difficult comparisons.
Organic sales growth was again led by the US with e-commerce up significantly.
But Europe also delivered double-digit growth.
Encouragingly, we are seeing a reacceleration in our Prescription Diet business as vet channel traffic continues to improve.
And now for guidance.
We expect organic sales growth to be within our 3% to 5% long-term target range.
Using current spot rates, we expect foreign exchange to be a low-single-digit benefit for the year, although we expect currencies to remain volatile.
We expect net sales to be up 4% to 7%.
We expect our gross profit margin to be up year over year in 2021 despite difficult comparisons given our performance in 2020, increases in raw materials, and the continuing uncertainty associated with COVID.
Advertising is also expected to be up on a percent of sales basis, although less so than in 2020.
Our tax rate is expected to be between 23.5% to 24.5% on both the GAAP and base business basis.
We point out that our guidance range does not account for any changes in the U.S. corporate tax rates given the recent change in administration.
On a GAAP basis, we expect earnings-per-share growth in the low-to-mid single digits.
On a base business basis, we expect earnings-per-share growth in the mid-to-high single digits.
Obviously, this is a wider range than what we normally provide, which we think is prudent given what we consider to be a heightened level of uncertainty as we plan out the year.
There are several factors that could impact where we fall within this wider range.
In the categories where consumption has risen during the pandemic, primarily liquid hand soap, dish soap, and cleaners, we are expecting lower rates of growth or even declines year over year in 2021 depending on the market.
However, we expect overall consumption in these categories to remain elevated versus 2019 levels.
Also, particularly in emerging markets, movements in foreign exchange could impact our ability to take pricing.
We are optimistic about our pricing plans for 2021 and believe they are appropriate given recent raw material trends, the competitive environment, and foreign exchange.
Raw materials, we have budgeted for increased raw material costs, but we do highlight that many raw material prices are accelerating faster than anticipated.
If this continues, it could put pressure on gross margin expansion depending on our ability to take pricing or drive additional productivity.
We've seen a further rise in logistics costs over the past few quarters, particularly in the U.S., but also related to shipping containers in Asia.
We expect these costs to remain elevated in the near term but to moderate later in the year.
Like me, I hope you and your families are safe and healthy and you share some sense of optimism that we can return to a more normal existence over the course of this year.
Stan joined us back in November, as we announced, and obviously, we're deeply excited to have him here.
He has hit the ground running already.
As I reflected on 2020, I'm so proud of the Colgate people around the world and what they've accomplished.
On our first quarter call I discussed three topics related to how we plan to manage through the crisis.
These three topics were: staying true to our values and purpose in helping us navigate a very difficult environment; adapting our strategies where necessary and executing with agility; and importantly, managing through the crisis with an eye toward the future.
On the first topic, we've implemented programs to keep our employees safe and healthy, while keeping our supply chain and our laboratories up and running and delivering record output from our facilities and our R&D organization.
Nothing is more important than the safety and health of Colgate people, and we will continue in 2021 to keep them as our first priority.
We worked with the World Health Organization this year and local hospitals to distribute free health and hygiene products to people all over the world to help stop the spread of COVID and enable people to live healthier lives, programs that Colgate people are deeply proud of.
In the second area, we continue to execute on our growth mindset strategy to drive sustainable, profitable growth through more impactful premium innovation, which you'll hear more about at CAGNY, increasing our brand building globally, and executing against our digital transformation.
And as John laid out, we did this all while delivering strong and balanced growth in organic net sales, net sales, operating profit, earnings per share, and free cash flow.
We were able to achieve those results despite many operating challenges we confronted and a sizable negative impact from foreign exchange.
But most importantly, while we've been delivering on 2020 results, we have been very focused on positioning ourselves for growth in 2021 and beyond by taking advantage of our momentum, ad that was the third topic, managing through this crisis with an eye toward the future.
So now I'll provide some thoughts on why I believe what we did last year leaves us well positioned to continue our growth journey in 2021 and beyond.
There are three reasons: the first is that as an organization, we have truly changed how we think about growth.
As a company with leading brands, we have to be focused on driving category growth, and we can drive this growth in many ways.
Of course, we can increase the number of people buying our products, we can increase the price that people are willing to pay for our products, and we can increase the frequency of how often people use our products.
So we have strengthened existing tools and, importantly, built new capabilities to drive this growth.
For example, on Hill's, we're reaching a much larger group of consumers through increased advertising to broaden our reach and improving our digital targeting so we can raise brand awareness and household penetration on what is truly a differentiated brand.
Think about this as finding the right person with the right message at the right time.
It's not just spending more, but spending smarter.
In Latin America, we have used revenue growth management tools to drive value with price/mix improvement in a very difficult operating environment.
For instance, our share of the premium segment in toothpaste in Brazil has expanded by three points in the last two years, all driven by tactful and strategic revenue growth management.
As I discussed at the Barclays Conference, we have disrupted our innovation processes to focus on breakthrough and transformational innovation, which will enable us to increase the frequency of how people use our products and purchase our products.
Superior performance, new forms, delivery systems, and innovation for new channels, all allow us to expand our availability to the consumer so they can choose our products more frequently.
And given that Colgate brand has the highest household penetration of any consumer brand in the world, we have a unique ability to leverage our presence into faster growth.
The second reason is that we're developing a balanced view of how we deliver profitable growth.
We know that in order to deliver a TSR that is in the top tier of our peer group, we can't just grow the top line.
We need to deliver profitable growth.
You can see this in our 2020 results where we delivered 8% earnings-per-share growth despite negative foreign exchange, while increasing brand building and investing in capabilities across the entire organization.
We're doing this by pulling on all the levers: premium innovation, revenue growth management, funding the growth, discipline on overheads, and laser focus on all cost elements throughout the income statement.
Looking forward, we have to do more than offset the expected increases in raw material costs and logistics and in other areas so that we can continue to invest in the transformation capabilities that we're deploying and that will rely on pairing growth and productivity more effectively.
The third reason is that we're making the necessary transformation to our culture to unleash the true potential of Colgate people.
As anyone who has come here from the outside can tell you, the desire of Colgate people to win is unmatched.
In 2020, we took several steps to accelerate the rate of change to build an organization for future growth.
To that end, we made real progress on e-commerce where we have brought in more external talent while upskilling existing talent across the enterprise, launched more online-specific innovation, like the Optic White pen, the Miracle Repair serum, and invested broadly behind enhanced digital capabilities.
And all this paid off in more than 50% online growth in the fourth quarter and we'll exit the year with e-commerce at a double-digit run rate as a percentage of total sales.
And lastly, it's building out the right team.
You need to provide the right tools to them, the right technology to digitally transform the organization.
We continue to invest in systems to enable this transformation.
Like our transition SAP S/4HANA that's giving us better system speed, far better reporting, streamlined processes, and simplified transactions.
We've developed our cloud capabilities, which is giving us far more agility, speed, and capability building our ability now to develop applications must faster and realize the value of those applications much faster; and with our partners, building support for our data and our analytics journey ahead.
We also recently rolled out a new global system with our Colgate Business Planning process.
You will remember that was called CBP that will significantly reduce the process time required by providing greater opportunity for our teams to do analytics, particularly in the commercial area and particularly around revenue growth management.
So to sum it up, when I look back at 2020 as a year where our company battled through uncertainty to deliver really strong results, I will also look back at a year where we elevated our performance and capabilities and positioned ourselves to deliver sustainable, profitable growth into the future.

user
providing financial guidance for full year 2021.
expects fy net sales to be up 4% to 7% including a low-single-digit benefit from foreign exchange.
expects 2021 organic sales to be up within its long-term targeted range of 3% to 5%.
as we enter 2021, expect volatility in raw material and logistics costs and foreign exchange.

assistant