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Tag: Godrej Consumer Products

  • Godrej Consumer Products ‘Soaps’ category sees strong turnaround in Q2-2015 with new marketing campaign

    Godrej Consumer Products ‘Soaps’ category sees strong turnaround in Q2-2015 with new marketing campaign

    BENGALURU: Godrej Consumer Products Limited (GCPL) reported 9.1 per cent growth in Total Income from Operations (TIO) in Q2-2015 to Rs 2060.12 crore from Rs 1888.51 crore in Q1-2015 and 5 per cent growth from Rs 1961.72 crore in Q2-2015. For HY-2015, TIO grew 7 per cent to Rs 3948.63 crore from Rs 3668.62 crore in HY-2014.

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

    The company in its press release says that despite the Soaps category continued de-growth in this quarter the company saw a good turnaround with sales growth of 13 per cent. Godrej No. 1 recorded a sharp uptick in growth rates, aided by new marketing campaign and focused activation programmes. The launch of Cinthol’s new germ protection variant “Confidence+” has received an encouraging response, adds the company.

    The company’s Ad and Publicity spend (Ad spend)  at Rs 211.69 crore ( 10.3 per cent of TIO) for the current quarter was 15.4 per cent lower than the Rs 250.20 crore (13.2 per cent of TIO) in the immediate trailing quarter and was 4 per cent lower than the Rs 220.60 crore in the corresponding quarter of last year.

    Over a 10 quarter period starting Q1-2013 until Q2-2015, ad spend shows an upward linear trend in absolute rupee terms, while the spends seems to have flattened out to in terms of percentage of TIO. GCPL‘s ad spend in terms of absolute rupees has been in Q1-2015 at Rs 250.20 crore above. In terms of percentage of TIO, the company’s ad spend was highest in Q1-2014 at 13.8 per cent of TIO. Please refer to Fig A below.

    GCPL’s  PAT in Q2-2015 at Rs 234.53 (11.4 per cent of TIO) crore in Q2-2015 was 63.5 per cent higher than the Rs 143.45 crore in Q1-2015 and 20.3 per cent higher that the Rs 195.97 crore (9.9 per cent of TIO) in Q2-2014. For HY-2015, PAT at Rs 377.98 crore was 15.4 per cent more than the Rs 327,68 crore in HY-2014.

    Over the10 quarter period under consderation, PAT has been highest in Q4-2013, both in terms of absolute rupees and in terms of percentage of TIO at Rs 334.14 crore and 19.4 per cent of TIO. Over the period under consideration, PAT in terms of absolute rupees shows an upward linear trend, while PAT in terms of percantage of TIO shows a slight downward trend, probably on account  of the high PAT in Q4-2013 mentioned above. Please refer to Fig B below.

    Commenting on the financial performance of Q2-2015, Godrej group chairman Adi Godrej said,

    “Consumer demand remained subdued in the second quarter of fiscal year 2014-2015, making this one of the slowest years of growth for the Indian FMCG industry in over a decade. We have however, continued to outperform the market and our brands have further strengthened their leadership positions. Our net profit grew strongly this quarter at 20 per cent. Sales were however impacted by a soft performance in the household insecticide category due to the deficient and delayed monsoon in India, and the impact of an adverse forex translation in our international businesses. Overall, our international businesses delivered a good constant currency growth of 12 per cent. Indonesia, our largest international business, achieved a strong constant currency growth of 15 per cent.”

    “We believe that the Indian FMCG industry is now showing early signs of recovery. Growth has improved in the latter part of this quarter, particularly in September. While any recovery is likely to be gradual, we believe that after many quarters, environmental indicators are now trending in the right direction. We are confident that the second half of this year will be better than the first half.

    In this uncertain environment, we continue to focus on sustaining and extending leadership in our core categories. We are managing our costs prudently in the near term, while investing for the longer term. We are also continuing our pace of launching exciting new products.

    The medium and long-term growth prospects in India and our other emerging markets remain robust. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results,” added Godrej.

     

    Click here to read the unaudited financial result

     

    Click here to read the press release

  • Godrej Consumer ad spend rises Q-on-Q in Q3 after a fall in Q2

    Godrej Consumer ad spend rises Q-on-Q in Q3 after a fall in Q2

    BENGALURU: Godrej Consumer Products is one of the large advertisers in the FMCG segment in India. The company says that in Q3-2014, it continued to outperform the FMCG market with an 18 per cent y-o-y growth in net sales. Its India business grew 14 per cent (ex contract manufacturing), while its international business grew 25 per cent in the quarter, while its consolidated net profit after tax and minority interest increased by 16 per cent.

    Advertisement and Sales Promotion (Ad & SP) spends as per the numbers reported by the company in Q3-2014 and earlier periods over six consecutive quarters (starting Q2-2013) show an upward trend in terms of percentage of operating revenue and total expense. However, it may be noted that the company’s Ad & SP spend in Q3-2014 was higher than in Q2-2014. Please refer to figure A below:

     

    Figure A

    In value terms also, Ad and SP spend by the company has trended upwards (Figure B)

     

    Figure B

     

    During the six quarters, Godrej CP’s PAT trend is also upwards, but at a much lower rate as is evident from Figure C below. Q1-2014 saw a 60 plus per cent dip in PAT as compared to the PAT in Q4-2013. PAT across the six quarters under consideration actually peaked in Q4-2013 at Rs.334.14 crores. Even the PAT in the latest quarter, Q3-2014 is just 58.6 per cent at Rs.195.77 crores of the Q4-2013 PAT.

     

    Figure C

    The company’s operating revenue and Total expense during period has moved upwards, there was no dip in Q1-2014, the growth in revenue was just 0.44 per cent as compared to the previous quarter Q4-2013. –Refer Figure D.

     

    Figure D

     

    Figure E represents the q-o-q movement of Operating Revenue, Total expense,  PAT and Ad and SP spend in percentage terms. Please note that the Q2-2013 percentage change below is in relation to Q1-2013.

     

    Figure E

    Figure F represents the overall Picture in terms of Rupees.

    Figure F

    Adi Godrej’s Comments:

    Godrej Group Chairman Adi Godrej 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,” added Godrej.

    Category Review as indicated by Godrej CP

     

    Household Insecticides:

    Sales growth at 8 plus per cent; 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 plus per cent, 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 plus per cent 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 per cent. We continue to do well aided by a new TV campaign for Ezee.

     

    Click here for Press release

     

    Click here for Q3-2014 results

     

    Performance Update