Category: Brands

Q1-2016: Godrej Consumer Products y-o-y marketing spend flat at Rs 251 crore

BENGALURU: Godrej Consumer Products Limited (GCPL) reported almost flat (0.4 per cent increment) advertisement and publicity expenses in Q1-2016 (quarter ended June 31, 2015) at Rs 251.12 crore (12 per cent of net Total Income from Operations or TIO) as compared to the Rs 250.20 crore (13.2 per cent of TIO) in Q1-2015. GCPL’s ad spends in Q1-2016 was 9.1 per cent more than the Rs 230.18 crore (11 per cent of TIO) in the immediate trailing quarter. Last quarter (Q4-2015), the company in its earnings release said that its household insecticides brand Good Knight crossed the Rs 1500 crore mark and amongst GPCL’s soap brands, Godrej No. 1 crossed the Rs 1,000 crore and Cinthol, the Rs 500 crore milestone.

Note: 100,00,000 = 100 lakhs = 10 million = 1 crore

Godrej group chairman Adi Godrej said, “We have had an encouraging start to FY-2016 and have delivered strong volume led growth coupled with robust profit growth. We continue to grow ahead of the market gaining share across our key categories and geographies. We continued to strengthen our leadership position across our core categories. In the first quarter, our India business branded net sales grew by 13 per cent. This was driven by a healthy volume growth of 13 per cent. Our international business (in organic constant currency terms) too grew by 13 per cent, despite the macro challenges and slowdown in a few of our larger markets. Our consolidated EBITDA (in organic constant currency terms) grew by 32 per cent. This was aided by lower commodity costs, the impact of our cost transformation programs and effective leveraging of our brand platforms.”

“We are seeing early signs of consumer demand picking up in India. We remain optimistic that as the economy continues to gain pace, the growth in the FMCG sector this year will be better than last year. Though the macro-economic environment in some of our international markets remains challenging, we are confident of delivering ahead ofmarket, profitable growth in these geographies. We will accelerate the pace of new launches and enhance our go to market infrastructure. We will also continue to manage our costs prudently in the near term, while investing for the future. Overall, we will strive to deliver a stronger operating performance in fiscal year 2016,” he added.

The medium and long-term growth prospects in India and our other emerging markets remain robust. We believe that there is still a lot of headroom for growth across these markets, given the low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superiorexecution and top-notch team, we will continue to deliver industry-leading results in the future,” he said.

Trends

Please refer to Fig A below. GCPL’s Q1-2016 Ad spends mentioned above was the highest in absolute rupees during the 13 quarter period starting Q1-2013 until Q1-2016. Its highest Ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 per cent (Rs 239.06 crore). During the period under consideration in this report, its lowest Ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 per cent.

During the period under consideration in this report, Ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.

GCPL reported 11.1 per cent growth in TIO in Q1-2016 at Rs 2097.66 crore as compared to the Rs 1888.51 crore in Q1-2015 and almost flat (0.3 per cent more) than the Rs 2092.02 crore in Q4-2015. During the thirteen quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.

Profit after tax (PAT) in Q1-2016 at Rs 199.23 crore (9.5 per cent of TIO) was 38.9 per cent more than the Rs 143.45 crore (7.6 per cent of TIO) in Q1-2015 but was 25 per cent less than the Rs 265.57 crore (12.7 per cent of TIO) in the immediate preceding quarter. During the thirteen quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.

Category review by GPCL

Household Insecticides

The company says that its Household Insecticides continued to deliver a strong performance, with a double-digit, volume-led sales growth of 15 per cent. This was aided by the success of new launches and deeper penetration. GPCL’s focus on innovation, backed by superior execution, resulted in market share gains across formats. The company says that it recorded its highest ever overall market share this quarter. Gross margins benefited from lower crude oil prices and have improved significantly.

Soaps

GPCL’s says that its Soaps business sustained its healthy momentum, with a double-digit volume and mix driven sales growth of 13 per cent. Cinthol’s strategy of focusing on functional benefits in the premium segment, supported by 360-degree activations, delivered encouraging results. Godrej No. 1 continued its positive momentum, led by its re-launch and new positioning as ‘India’s No.1 purest soap’. Gross margins during the quarter benefited from lower palm oil prices and have improved significantly.

Hair Colours

The company says that its Hair Colours delivered a consistent, double-digit, volume driven sales growth of 12 per cent. Godrej Expert Rich Cr?me continued to gain market share due to increased penetration.Nupur Coconut Henna Cr?me, launched this quarter, has been introduced to address the demand from herbal-based powder users and up-trade existing hair colour users.

Air Fresheners

GPCL says that Godrej aer, its air freshener brand continues its strong sales and distribution ramp up. This has been aided by innovative gel format technology and various consumer engagement initiatives. aer is now the number three player in the air care market. The company says that it continues to focus on increasing distribution and driving consumption.

Health and Wellness

The company claims that its Health and Wellness portfolio of hand washes, a hand sanitiser and anti-mosquito spray, under Godrej Protekt, continues to be well received in modern trade.

July 30, 2015
Q2-2015: Maggi ban hits Nestle for a loss of Rs 64.4 crores

BENGALURU: In what is probably a first, Nestle India Limited (Nestle) has reported a loss. A loss to the extent of Rs 64.4 crore in the quarter ended 30 June, 2015 (Q2-2015, Nestle’s financial year ends on 31 December). Hit by the Maggi Noodles controversy, exceptional items worth Rs 451.66 crore have wiped off the Rs 333.1 crore profit before exceptional items and tax that the company had earned.

The resulting loss of Rs 118.56 crore was mitigated by a tax credit of Rs 54.16 crore and the result was the above mentioned net loss of Rs 64.4 crore.

Last quarter, the company had reported a profit after tax (PAT) of Rs 320.28 crore and a PAT of Rs 287.86 crore in Q2-2014. For now the company has suspended manufacture of Maggi Noodles pending a decision of the Bombay High Court pertaining to a case it has filed regarding interpretation of the Foods Safety and Standards Act, 2011. The loss of the brand value, goodwill is difficult to calculate.

Note: 100,00,000 = 100 lakhs = 10 million = 1 crore

The company says that net sales worth Rs 288.38 crore has been reversed in the current quarter in relation to Maggi Noodles stock being withdrawn from trade partners and the market. The exceptional items amount of Rs 451.66 crore relates to estimates of loss on account of stocks withdrawn including incidental costs thereto and other costs incurred exclusively in the ordinary course of business, dealt with in with the Accounting Standard AS2 on valuation of inventories and Accounting Standard AS5 on net profit or loss for the period, prior period items and changes in accounting policies.

Let us look at the other numbers in Q2-2015 that have changed:

The company says that its net sales have been impacted by 20.1 per cent on account of Maggi Noodles. Nestle’s net domestic sales have decreased by 20.6 per cent , export sales decreased by 12.7 per cent impacted by lower coffee exports Russia, partly offset by export of milk and nutrition products to Bangla Desh. Nestle reported net Total Income from Operations (TIO) of Rs 1957.01 crore in the current quarter as compared to the Rs 2516.48 crore in the immediate trailing quarter and the Rs 2431.97 crore in the corresponding year ago quarter.

Total Expenditure (TE) in Q2-2015 declined to Rs 1634.38 crore as compared to the Rs 2000.75 crore in Q1-2015 and the Rs 2008.91 crore in Q2-2014. Nestle’s cost of materials consumed declined to Rs 718.80 crore in Q2-2015 as compared to the Rs 1110.50 crore in Q1-2015 and Rs 1123.47 crore in Q2-2014.

For the six month period ended 30 June, 2015 (6M-2015, YTD), Nestle reported a 5.9 per cent drop in TIO to Rs 4473.49 crore as compared to the Rs 4753.48 crore in 6M-2014. PAT in 6M-2015 declined to less than half (fell by 53.2 per cent) at Rs 255.88 crore as compared to the Rs 547.02 crore in the corresponding period of the previous year.

During 6M-2015, TE was lower at Rs 3635.13 crore as compared to the Rs 3913.13 crore in 6M-2014. The company’s cost of raw materials declined to Rs 1829.30 crore as compared to the Rs 2275.39 crore in 6M-2014.

Nestle’s board of directors at its meeting held on 29 July, 2015 based on the recommendation of the Nomination and Remuneration Committee, appointed Suresh Narayanan as managing director of the company effective from 1 August, 2015, subject to approvals. The company will seek consent of members by means of postal ballot on the proposal of the appointment of Narayanan as managing director. The board of directors has also appointed Abhinav Khosla, a chartered accountant, to act as the scrutinizer for conducting the postal ballot process in a fair and transparent manner.

July 30, 2015
Q1-2016: Dabur marketing spends up 15.5%

BENGALURU: Dabur India Limited (Dabur) spent 15.5 per cent more towards advertising and publicity expenses (ASP) in the quarter ended 30 June, 2015 (Q1-2016) at Rs 330.61 crore (16 per cent of Total Income from Operations or TIO) as compared to the Rs 286.27 crore (15.3 per cent of TIO) in Q1-2015 and 24.6 per cent more than the Rs 265.39 crore (13.6 per cent of TIO) in Q4-2015.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

Dabur’s products

Among the products that Dabur has include health supplements like Chyawanprash, Ratnaprash, Honey, Glucose; digestives like Hamjola – Hajmola Chuzkara and Natkhat Amrud, Pudin hara fizz; OTC and Ethicals such as Lal Tail, Honitus Syrup; Haircare products like Vatika, Vatika Brave and Beautiful digital, Anmol Jasmine marks; Toothpaste brands like Dabur Red, Babool and Meswak; skincare products like Fem natural fairness, Gold Bleach, Gulabari; Homecare brands such as Odomos, Odonil and Sanifresh; Food brands such as Real and Real Active.

“The macro-economic scenario remains challenging. In this subdued environment, we remained watchful, agile and prudent, managing our business dynamically to deliver another quarter of competitive and profitable growth. Our India FMCG business ended the first quarter of 2015-16 with an 11.6 per cent growth, led by an 8.1 per cent volume growth. Our EBITDA marked a 21.6 per cent growth during the quarter,” said Dabur India CEO Sunil Duggal said.

“Going forward, we will focus on our cost efficiencies and pursue an aggressive and profitable growth strategy. We continue to strengthen our business for the long term by driving innovation and investing behind our brands. With these initiatives, we are confident of growing ahead of the market and improving our market share,” Duggal added.

Trends

The company’s ASP in Q1-2016 at Rs 330.61 crore (16 per cent of TIO) was the highest in terms of actual rupee spends as well as in terms of percentage of TIO during the 11 quarter period starting Q3-2013 until Q1-2016. Over the 11 quarter period under consideration, Dabur’s ASP in absolute rupees and ASP in terms of percentage of TIO both show a linear increasing trend. Please refer to Fig 1 below.

Fig 1 below indicates that ASP in terms of percentage of TIO follows a linearly increasing zigzag line, with peaks in Q1 and Q3 and valleys in Q2 and Q4 of a financial year. Based on this, it is quite likely that the company’s ASP in Q2-2016 (next quarter) may be lower in terms of percentage of TIO.

Dabur TIO in Q1-2016 at Rs 2069.49 crore was 10.6 per cent more than the Rs 1868.86 crore in Q1-2015 and was 6.1 per cent more than the Rs 1949.74 crore in Q4-2015. The company’s TIO shows a linear increasing trend during the eleven quarter period under consideration in this report.

Dabur PAT for Q1-2016 at Rs 262.10 crore (12.7 per cent of TIO) was 24.3 per cent more than the Rs 210.81 crore (11.3 per cent of TIO) in Q1-2015, but was eight per cent lower than the Rs 284.86 crore (14.6 per cent of TIO) in the immediate trailing quarter. PAT in abslute rupees as well as in terms of percentage of TIO show linear increasing trends. Please refer to Fig 2 below.

Category Growths

Dabur says that its Toothpaste business, led by strong demand for Dabur Red Paste and Dabur Meswak, ended the first quarter with a near 24 per cent growth. The OTC and Ethicals business ended the first quarter with a 16.7 per cent growth, while the Foods category reported a 15.5 per cent growth during Q1. While the Hair Oil category reported a 13 per cent growth during the period, the Shampoo business ended the quarter with an 11.5 per cent growth. The Home Care business grew by nearly 12 per cent during the period.

Click here to read unaudited results

July 29, 2015
Worldwide 4K TV shipments to surpass 30 million units in 2015

MUMBAI: 4K TV shipments are expected to grow by 147 per cent in 2015, despite overall two per cent fall in TV sales, as per the worldwide TV market report from Futuresource Consulting.

Global TV sales rose in 2014 by three per cent to reach 235 million units, with trade value up to $94 billion. The TV market landscape remains varied across the globe, with some regions, such as Latin America, experiencing significant growth, caused by the Brazilian World Cup and the start of analogue switch-offs in the region, which are set to continue beyond the forecast period.

Europe, too, enjoyed three per cent growth. APAC, however, saw declines during 2014 but remained the largest region for TV demand, accounting for 37 per cent of shipments. With saturation in many countries within the region relatively low, Futuresource expects growth to return in the coming years.

The report anticipates that trade value globally in 2015 will fall by three per cent to $91 billion. This decline in sales value is due mainly to a continued depressed market in China as well Russia’s economic issues. Economic uncertainty continues to affect many markets in Europe, contributing to expected declines in many countries across the continent.

However, according to Futuresource, the decline won’t last, with larger screens and 4K models being adopted faster than previously forecast. Whilst industry opinion on curved screens remains mixed, strong growth is expected from them in 2015, with the growth in the 4K market helping their performance. Meanwhile, Smart TV continues to grow its share of the market, although not at the pace previously anticipated.

“Although we expect to see a decrease in worldwide shipments in 2015, Futuresource expects the TV market to recover well in the longer term. In the coming years Futuresource believes that replacement demand will increase with sets bought at the start of flat panel boom being upgraded. Also, the shift in consumer preference to larger screen sizes will help the performance of 4K sets,” said Futuresource Consulting senior market analyst Jack Wetherill.

July 29, 2015
PVR to install Dolby Atmos in 50 screens across India

MUMBAI: Multiplex operator PVR is planning to install Dolby Atmos in 50 of its cinema screens across the country over the next two years.

When completed, this will be one of the largest rollouts of Dolby Atmos screens by any multiplex chain in India until now.

The deal encompasses properties across India and has a huge catchment across geographies vis-?-vis North, South, East, and West. PVR plans to install Dolby Atmos in significant properties, including PVR Sangam (Delhi), PVR Market City (Bangalore), Lulu Mall (Kochi), Ambience Mall (Gurgaon), PVR Phoenix (Mumbai), amongst others.

As of now PVR’s two existing properties are equipped with Dolby Atmos technology.

“At PVR, we believe in bringing the most revolutionary and state-of-the-art technologies to its patrons to deliver the highest-quality movie experience. Our collaboration with Dolby goes a long way. Dolby is amongst one of the most celebrated brands in the market for premium sound quality, and it perfectly fits with PVR’s mission to offer its audience the ultimate in moviegoing experiences. Feeling extremely optimistic about the association, we together as brands will go an extra mile to woo our audience,” said PVR chairman and managing director Ajay Bijli.

PVR joint managing director Sanjeev Kumar Bijli added, “I believe Dolby Atmos is indeed the best sound technology available in the market. For our brand, PVR, we want nothing but the best. We want to make movie watching a real-time experience for our patrons. And with the premium sound technology that Dolby Atmos offers, we are very confident about the results.”

Dolby Laboratories chief marketing officer and senior vice president Bob Borchers said, “Dolby looks forward to working with PVR to bring the Dolby Atmos experience to many more moviegoers in India. With Dolby Atmos, the audience is no longer just watching a movie; they are experiencing it. We are confident that moviegoers will go back again and again for the extraordinary experience that only Dolby Atmos can deliver.”

July 29, 2015
Q1-2016: Just Dial revenue up 25%

BENGALURU: Indian search engine and directory services provider Just Dial Limited (Just Dial) reported a 24.9 per cent jump its total income from operations (TIO) in the quarter ended 30 June, 2015 (Q1-2016) to Rs 168.62 crore as compared to the Rs 135.03 crore in Q1-2015 and a 7.9 per cent increase from the Rs 156.28 crore in Q4-2015.

Let us look at the other numbers reported by Just Dial

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

The numbers in this report are unaudited and unconsolidated.

Just Dial’s PAT for Q4-2016 increased 18 per cent to Rs 33.17 crore (19.7 per cent of TIO) as compared to the Rs 28.11 crore (20.8 per cent of TIO) in the corresponding quarter of last year, but was 29.7 per cent lower than the Rs 47.16 crore (30.2 per cent of TIO in Q4-2015.

Simple EBIDTA in Q1-2016 at Rs 48.42 crore (14.3 per cent of TIO) was 42.4 per cent higher than the Rs 34 crore (25.2 per cent of TIO) in Q1-2015 and was 14.3 per cent more than the Rs 42.36 crore (27.1 per cent of TO) in the immediate trailing quarter.

The company’s Total Expenditure (TE) in Q1-2016 at Rs 126.93 crore (75.3 per cent of TIO) was 18.9 per cent more than the Rs 106.74 crore (79 per cent of TIO) in Q1-2015 and was 5.9 per cent more than the Rs 119.89 crore (76.7 per cent of TIO) in Q4-2015.

Employee Benefit Expense (EBE) is the major expense head for Just Dial. EBE in Q1-2016 at Rs 88.11 crore (52.3 per cent of TIO) was 30.9 per cent more than the Rs 6.732 crore (49.9 per cent of TIO) in Q1-2015 and 1.2 per cent more than the Rs 87.07 crore (55.7 per cent of TIO) in Q2-2015.

Just Dial reported depreciation and amortisation expense (Depreciation) of Rs 6.73 crore (four per cent of TIO) the current quarter, which was 17.9 per cent more than the Rs 5.71 crore (4.2 per cent of TIO) in Q1-2015 and was 12.7 per cent less than the Rs 5.97 crore (3.8 per cent of TIO) in Q4-2015.

July 28, 2015
Renault appoints Ranbir Kapoor as brand ambassador

NEW DELHI: After endorsing Nissan’s Micra, actor Ranbir Kapoor has now been roped in as new brand ambassador for Renault India.

The move comes in the wake of the automobile company’s fourth year of operations in the country.

The association marks the union of two iconic brands that are synonymous with passion and innovation, have universal appeal and also boast of an illustrious and successful lineage.

This association will leverage the versatility and legacy of both Renault and Kapoor, as he represents the underlying brand promise of Renault: ‘Passion for Life’.

Renault India operations country CEO and managing director Sumit Sawhney said, “Being a fourth generation actor who personifies the iconic lineage of the Kapoor family, he ideally portrays a rare blend of talent, class, intelligence and popularity that complements Renault’s legacy and brand ethos which hinges on three pillars – vibrant, forward looking and connected to people.”

Kapoor added, “I have always known Renault to be an iconic and inspirational brand the world over. I am happy to be associated with a brand, which is very young, and which has quickly established itself in India, becoming the number one European brand. I look forward to being part of the Renault family and its fascinating growth journey in India.”

July 28, 2015
Q1-2016: Jagran Prakashan y-o-y revenue up 9.3%; Radio City op profit up 40%

BENGALURU: Indian publishing group Jagran Prakashan Limited (JPL) reported 9.3 per cent growth in consolidated operating revenue in the quarter ended 30 June, 2015 (Q1-2016) to Rs 481.15 crore as compared to the Rs 440.29 crore in Q1-2015. Q-o-Q, JPL’s revenue grew 13.8 per cent as compared to the Rs 422.74 crore in Q4-2015.

The company’s consolidated profit after tax (PAT) in the current quarter increased 18.5 per cent to Rs 66.36 crore as compared to the Rs 55.99 crore in Q1-2015. However, q-o-q PAT was 39.7 per cent lower than the Rs 129.67 crore in Q4-2015. Adjusted PAT after extraordinary items in Q1-2016 at Rs 179.94 crore was however higher than Q1-2015 and Q2-2015 PAT.

Note: 100,00,000 = 100 lakh = 10 million = 1 crore

JPL’s radio subsidiary Music Broadcast Limited (MBL), which has 20 radio stations under the brand ‘Radio City’ reported 40 per cent higher operating profit at Rs 14.5 crore in Q1-2016 as compared to Rs 10.4 crore in the corresponding year ago quarter. The company reported a loss of Rs 2.2 crore in Q1-2016 on account of Rs 13.6 crore (exceptional items) incentives to the management team in respect of their past services in terms of agreement with the erstwhile promoters. If the exceptional items are not considered, then MBL’s PAT would be 74 per cent higher in Q1-2015 at Rs 11.3 crore as compared to the Rs 6.5 crore in the corresponding year ago quarter. In the immediate trailing quarter Radio City’s PAT was Rs 8.47 crore.

Advertising and Circulation numbers

Consolidated advertisement revenue was up by 11.9 per cent to Rs 345.54 crore in Q1-2016 as compared to the Rs 308.89 crore in Q1-2015, while standalone advertisement revenue up by 8.4 per cent to Rs 312.23 crore as compared to the Rs 288.01 crore in Q1-2015. Radio City reported advertising revenue of Rs 13.08 crore in Q1-2016.

Consolidated Circulation revenue in the current quarter increased 5.1 per cent to Rs 100.51 crore as compared to the Rs 95.66 crore in Q1-2015. Standalone circulation revenue increased 5.4 per cent to Rs 94.48 crore in Q1-2016 as compared to the Rs 89.64 crore in the corresponding year ago quarter.

Let us look at the other numbers reported by Jagran Prakashan

Total Expense in Q1-2015 at Rs 369.45 crore was 12.2 per cent more than the Rs 329.35 crore Q1-2015 and 6.6 per cent more than the Rs 346.61 crore in the immediate trailing quarter.

Cost of Raw materials consumed in Q1-2016 at Rs 155.89 crore was 4.2 per cent less than the Rs 162.7 crore in Q1-2015, but 8.3 per cent more than the Rs 346.61 crore in Q4-2015.

The company’s radio segment results have been mentioned above. The segment reported 10.3 per cent growth in operating revenue to Rs 47.4 crore as compared to the Rs 43 crore in Q1-2015. For Q4-2015, MBL reported revenue of Rs 53.93 crore.

MBL’s interest costs have been increasing with time. In Q1-2016, the company paid more than six times the interest it paid at Rs 5.10 crore as compared to the Rs 0.80 crore in Q1-2015 and 26.2 per cent more than the Rs 4.04 crore in Q4-2015.

Company speak

JPL chairman and managing director Mahendra Mohan Gupta said, “Q1-2016 was eventful for more than one reason. The company not only completed the long awaited acquisition of Radio City but it also delivered the highest ever profit and probably the highest growth in advertisement revenue in the industry. This robust performance in an economically difficult time could be possible due to the company’s ability to timely sense the inordinate delay in economic recovery and act accordingly.”

“From the first quarter itself, Radio City has started contributing to the company’s profits and I am confident that this acquisition is going to be hugely value accretive. Finally, even though the economy is not yet supporting the growth, the first quarter’s performance gives me the confidence that we will continue to grow and meet your expectations,” added Gupta.

July 28, 2015
Q2-2015: Forex pulls down Hasbro revenue; Licensing & Entertainment op income halves

BENGALURU: American multinational toy and board game company Hasbro, Inc., (Hasbro) reported 3.8 per cent decline in net revenue to $797.66 million in the quarter ended 28 June, 2015 (kQ2-2015) as compared to the $829.26 million in the corresponding year ago quarter (quarter ended 29 June, 2014) impacted by negative forex of $71.5 million says the company. If the forex loss was neglected, net revenue in Q2-2015 grew 4.8 per cent in the current quarter as compared to the previous quarter.

For the six month period ended 28 June, 2015 (6M-2015), Hasbro reported almost flat revenue(0.2 percent higher) at $1511.16 million as compared to the $1508.72 million in 6M-2014 (six months ended 29 June, 2014).

Hasbro’s Licensing and Entertainment segment contributes around six per cent to Hasbro’s revenue. The segment reported almost flat revenue in Q2-2015 $47.64 million as compared to the $47.66 million in the corresponding year ago quarter. However, its operating income halved (declined by 49 per cent) to $7.44 million in Q2-2015 as compared to the $14.65 million in Q2-2014, primarily due to digital gaming expenses, including the final quarter of amortization expense from certain digital gaming rights says the company.

Company speak

Net earnings attributable Hasbro increased 22.7 per cent to $41.81 million (5.2 per cent of net revenue) in Q1-2016 as compared to the $33.48 million (four per cent of net revenue in Q2-2014).

“Our second quarter results continue a strong start to the year with good underlying momentum in our Franchise and Partner brands across geographies,” said Hasbro chairman, president and CEO Brian Goldner. “The execution of our brand blueprint strategy, including our recent decision to sell our final manufacturing locations and the continued development of new relationships in content development, furthers the transformation of Hasbro into an organization focused on global brand building. We are well positioned for the remainder of 2015, but importantly we continue to develop our capabilities for the long-term execution of our strategy toward unlocking the full potential value of our brands.”

“Our second quarter results came with numerous challenges, including a significant negative foreign exchange impact and difficult year-over-year comparisons in several brands,” said Hasbro CFO Deborah Thomas. “Even with these challenges, we delivered a strong second quarter and a good first half of 2015. We continue to make important investments across our business to promote brand initiatives and to further improve the global efficiency of Hasbro. Some of these investments will be more prominent in the second half of 2015 than they were in the first six months of the year.”

Segment Revenue

Licensing and Entertainment segment

Hasbro’s Licensing and Entertainment segment numbers have been mentioned above.

US and Canada segment

Hasbro’s US and Canada segment net revenues increased one per cent to $385.2 million compared to $383 million in Q2-2014. The segment’s results reflect growth in the Boys and Preschool categories says Hasbro. The US and Canada segment reported operating profit of $47.1 million, essentially flat with $46.9 million in Q2-2014.

International segment

International Segment net revenues were $362.8 million compared to $396.8 million in 2014. Growth in the Preschool category was more than offset by declines in the Boys, Games and Girls categories. On a regional basis, growth in Latin America was offset by declines in Europe and Asia Pacific. Emerging markets revenues declined 11 per cent in the quarter. Excluding an unfavourable $69.5 million impact of foreign exchange, of which approximately two-thirds of the impact was in Europe and the remainder in Latin America, net revenues in the International Segment grew nine per cent and approximately nine per cent in emerging markets.

The International Segment reported operating profit of $25.4 million compared to the $29.2 million in 2014, which was also negatively impacted by foreign exchange.

Category Performance

Boys category

Q2- 2015 net revenues in the Boys category increased one per cent to $340.4 million. This growth was driven by year-over-year revenue gains in Hasbro franchise brand Nerf, as well as shipments in support of Jurassic World and growth in Marvel and Star Wars products. These increases more than offset the anticipated decline in Transformers, which faced difficult comparisons versus the 2014 shipments in support of the theatrical release of Transformers: Age of Extinction.

Games category

Games category revenues declined six per cent in the quarter to $211.6 million. Magic: The Gathering declined in the quarter as the major set release occurred in the first quarter 2015 versus the second quarter 2014.

Over the first six months of the year, Magic: The Gathering revenues increased. Additional revenue declines in Duel Masters and Angry Birds products were partially offset by gains in franchise brand Monopoly as well as in several other games brands including Trouble, Clue and Twister.

Girls category

The Girls category revenues declined 22 per cent in the second quarter 2015 to $127.5 million. Furby was the leading driver of this decline, along with smaller declines in Franchise Brands My Little Pony and Nerf Rebelle in the quarter. Growth in Play-Doh Dohvinci and shipments of Disney Descendants partially offset these declines.

Preschool category

Preschool category revenues increased 14 per cent in the second quarter 2015 to $118.1 million. Growth in Franchise Brand Playdoh and shipments of Jurassic World more than offset revenue declines in core Playskool products.

July 28, 2015
Kestone Integrated Marketing Services opens Singapore office

MUMBAI: In order to expand its base globally, Kestone Integrated Marketing Services has opened its office in Singapore.

Kestone in India employs over 2,500 people with a reach in over 100 Indian and 20 international destinations. It has accomplished over 10,000 man days of projects in helping its clients grow. The intent is to carry forth this expertise and experience into other geographies as well.

Kestone IMS president Piyush Gupta said, “Singapore being one of the open economies in the world provides us the opportunity to be client centric as well as help in meeting the marketing objectives on a global scale. Our new office in Singapore is a step in our growth to provide comprehensive and customized solutions.”

Having worked with some big brands, Kestone focuses on a result oriented marketing solutions through an integrated approach.

“Kestone’s expertise lies in designing and engineering ideas that form an integral part of an accurate marketing mix,” added Gupta.

July 27, 2015