Godrej Consumer Products Limited (GCPL) , a leading emerging
markets FMCG company, has announced its financial results for the quarter ended
December 31, 2013.
FINANCIAL
OVERVIEW
GCPL continues to outperform FMCG market and category
growth Q3 FY 2014.
Growth (%) Consolidated
India International
Net Sales 17% 13% 22%
Organic
Constant
Currency
Sales 12% 13% 11%
EBITDA 9% 15% 1%
Net Profit 14% 12%* 19
- Q3FY 2014 Third Interim Dividend of 100% (Re 1 per
share)
Commenting on the financial performance of Q3 FY 2014,
Mr. Adi Godrej, Chairman, Godrej Group, said: “We have done fairly well in a
challenging environment. We continue to deliver topline growth that is far ahead
of the growth both for the overall FMCG sector and for the home and personal
categories that we participate in. We have been consistently gaining share and
strengthening our market positions.
However, over the last couple of quarters in particular, the
FMCG industry has witnessed a significant slowdown. These trends are evident
across India and other emerging markets.
The lag effect of multiple quarters of deceleration in
GDP growth and high food inflation has negatively impacted consumer sentiment in
India. Consequently, consumption has taken a hit as consumers have been
reducing their frequency of purchase. We are confident that this is just a
cyclical phenomenon. The fundamentals still remain positive, as there is still
a lot of headroom for growth given the low penetration and consumption rates
for many FMCG categories in India. As the economic environment improves, we are
hopeful that consumer sentiment will turn positive and we will see better
growth in the industry in the quarters ahead.
In these uncertain times, our team has been very dynamic
in its approach. We have delivered net profit growth that is close to our
topline growth. We continue to make the right investments for the longer term
while managing our business more prudently in the short term. We remain
watchful, agile and prudent. We have launched several operational excellence
initiatives to further enhance our operational performance. Uncertainties however
also present opportunities to propel forward. We will continue investing judiciously
for the longer term to improve our position, create competitive advantage and
emerge stronger than ever before. I am confident that with our clear strategic focus,
our superior execution and our top notch team, we will continue to deliver industry
leading results in the future.”
BUSINESS
REVIEW – INDIA
Performance Highlights
- Q3 FY 2014 India sales (ex contract manufacturing) grew
by 14%
- Q3 FY 2014 EBITDA increased by 15% to INR 193 crore
- Q3 FY 2014 Net Profit increased by 12% to INR 148 crore (adjusting
for INR 10 cr dividend income from subsidiary in the base)
Category
Review
Household Insecticides :
Sales growth at +8%; well ahead of the category that witnessed an abnormal
seasonal slowdown. Both our key brands HIT and Good knight continue to gain share
and strengthen market leadership positions across all formats. Our latest innovation
in the category, Good knight Fast Card-a paper based mosquito repellant at a
price point of Re.1 is performing ahead
of our expectations.
Soaps :
Sales value and volume growth at +6%, well ahead of the
category growth which de-grew on both value and volume terms. Category growth is
witnessing pressure with slowdown at the mass premium end of the category. We
have also taken calibrated price hikes to counter some of the impact of the recent
increase in palm oil prices.
Hair Colours :
Strong momentum in hair colours was maintained ,
delivering sales growth at +37%. Growth rates were significantly ahead of
category growth rates. We also launched new packaging for Nupur. Ongoing initiatives
such as salon engagement programs, festival linked promotions, etc. to drive
higher consumption and penetration for the category continued to deliver
healthy results.
Liquid Detergents :
Liquid detergents grew 36%. We continue to do well aided
by a new TV campaign for Ezee.
BUSINESS
REVIEW –INTERNATIONAL
Indonesia:
Business registered healthy constant currency sales
growth of +18% (excluding the
foods distribution business), led by continued marketing
investments, new product
launches and distribution expansion. HIT and Stella continue
to strengthen their
market share positions. INR sales growth excluding foods
business was 12%.
EBITDA margin was at 16% (before payment of technical and
business support fee
and excluding impact of distribution arrangement for the
divested foods business).
Africa:
Africa delivered a strong quarter. Sales grew by 29% with
a healthy 18% EBITDA margin. Constant
currency sales growth was 21% for the quarter. Business momentum continues to
be strong in Nigeria and Kenya. However, business momentum was impacted due to
lower consumer confidence in South Africa wherein consumer spending continues
to remain muted coupled with down -trading.
Latin America:
Latin America had a good quarter with 15% sales growth in
constant currency terms and margins of 9%. INR growth was 10%.Sales growth led
by continued marketing investments and new product launches .Margins improved
on a y/y as well as q/q basis. In Chile, Illicit became value market leader in
hair colors category. Overall value and volume share in hair colors in Chile
also reached it ’s highest ever level.
Europe:
Europe’s business continued strong sales performance on
both organic and Soft &
Gentle (S&G) product portfolio. Business reported
growth of 124% and EBITDA margins of 6%. S&G range was revamped with new packaging
and enhanced imagery. Touch of Silver is now The second fastest growing brand
in the Top 22 UK shampoo brands. The figures for the current quarter
are not comparable with those of the corresponding quarter of the previous year
because of the acquisitions made since then.
ABOUT GCPL
Godrej Consumer Products Limited (GCPL) is a major player
in the Indian FMCG market, with leading Household and Personal Care Products.Our
brands, which include Good knight, Cinthol , Godrej No. 1, Expert, Nupur, aer,
Hit, Fairglow, and Ezee are household names across the country. We are one of
the largest marketers of toilet soaps in the country and are also leaders in
hair colours and household insecticides. Four of our brands (Good knight,
Cinthol, Godrej No.1 and Godrej Expert Powder Hair Colour) are ranked among the
‘100 Most Trusted Brands’ in the country by Economic Times -Brand Equity 2013. We
are driven by our mission to continuously enhance the quality of life of consumers
in high-growth markets with superior-quality and affordable home care, personal
care and hygiene products. We also have a strong emerging presence in markets
outside India. As part of increasing our global footprint, we acquired 60% rights
in Cosmetica Nacional, a Chilean hair colour company. The acquisition of the pan-African
Darling Group, and Rapidol and Kinky in South Africa have given GCPL leading
positions in the fast growing African ethnic hair care market. With acquisitions
in West Africa, the Megasari Group, a leading household care company in
Indonesia and Issue Group and Argencos, two leading hair colorant companies in Argentina,
Godrej UK, and Godrej Global Mideast FZE, we own international brands and trade
marks in Asia (excluding India), Latin America, Africa, Europe and the Middle
East.
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