COLPALNSEfinancial year 2021June 2, 2022

Colgate Palmolive (India) Limited

7,586words
27turns
7analyst exchanges
1executives
Management on call
Arvind Chintamani
Vice President, Marketing, Mr. M.S. Jacob - Chief Financial Officer and Ms. Sujata Nairi -
Key numbers — 36 extracted
71%
first when they think of the category and our top-of-mind brand awareness for Colgate stands at 71% in Quarter 1 of 2022, this is 700 basis points above where we were a couple of years back. And i
700 basis point
gory and our top-of-mind brand awareness for Colgate stands at 71% in Quarter 1 of 2022, this is 700 basis points above where we were a couple of years back. And if you think about our trade structure Colg
88%
‘Penetration’ which is the percentage of people who bought us. Our penetration as Colgate at 88% is not only the highest in the Oral Care category but it's in fact the highest across all brands
Rs. 5,000 crore
f financial metrics – you've seen these numbers but we're also very proud that we've crossed the Rs. 5,000 crores threshold for this calendar year. It's a big moment, with very strong gross margins at 67.1% an
67.1%
00 crores threshold for this calendar year. It's a big moment, with very strong gross margins at 67.1% and strong EBITDA above 30%. On digital and analytics – we wanted to highlight the fact that Col
30%
alendar year. It's a big moment, with very strong gross margins at 67.1% and strong EBITDA above 30%. On digital and analytics – we wanted to highlight the fact that Colgate is driving basket pe
Rs. 20
-flexible technology continues to power the toothbrush and critically at the same price point of Rs. 20 which is the heart of the category, making it accessible for so many people across the country. N
70 million
ou recall Colgate toothpaste for diabetics. We all know that diabetes is a big concern , we have 70 million diabetics and growing. But what most people don't realize is that diabetics unfortunately tend t
67%
vations and another iconic brand Palmolive; the brand has very high aided brand awareness, about 67% of people recognize the brand, a number that many brands will be really envious of. When we ask
80%
et's play Colgate Palmolive India Limited May 26, 2022 the video please. Your mouth is 80% soft skin, so get yourself Colgate Gentle. That was the piece on innovations. Let me move on
250 million
at the reach of these posts we are finding that we are getting the potential reach of more than 250 million people from these organic posts in earned media every quarter. And it fills us with just immense
rs,
onal content, right? This is something that is exploding. We are able to tap into local influencers, partner with them and build local insight-based communication as we grow these partnerships. Beyo
Advertisement
Guidance — 15 items
Arvind Chintamani
opening
“With that let me share with you one of these pieces of communication that we will be playing in parts of the country.”
Arvind Chintamani
opening
“This will be our largest ever in store activation in the toothbrush category in terms of distribution and in terms of visibility.”
Arvind Chintamani
opening
“Moving from toothpaste to platform innovations and another iconic brand Palmolive; the brand has very high aided brand awareness, about 67% of people recognize the brand, a number that many brands will be really envious of.”
Arvind Chintamani
opening
“We want to remind you to look out for our ESG report which will be out in June this year.”
Arvind Chintamani
opening
“We continue our partnership with Seva Mandir in supporting digital and financial literacy for rural women and the target there is also very strong 12,000 women in the calendar year.”
Arvind Chintamani
qa
“We are well placed to exploit the growth as it comes going forward.”
M.S. Jacob
qa
“Colgate Palmolive India Limited May 26, 2022 Sustainable profitable growth is a key pillar of the way we drive the business but it comes with the assumption that the top line growth will be reasonable.”
Arvind Chintamani
qa
“You've seen the big relaunch on Colgate Strong Teeth coming through and we think that whether it is naturals or whether it is family or whether it's therapeutics it's going to have to be innovation, constant innovation and communication within the cultural codes of different regions that are going to gain going forward.”
Arvind Chintamani
qa
“We can't be doing the same thing and expect to grow and that's our core philosophy.”
Amnish Aggarwal
qa
“Finally, you can throw some light on what's the demand trend and what sort of outlook we can expect in the say coming, you can say quarter or two at least?”
Risks & concerns — 5 flagged
We all know that diabetes is a big concern , we have 70 million diabetics and growing.
— Arvind Chintamani
We have continued to focus on delivering top-line growth but it's also a reality that the category is not growing right now so that's one challenge we are confronting with.
— M.S. Jacob
A lot of it is to do with the macro impact of higher inflation, lower growth etc.
— M.S. Jacob
Amnish you've seen across categories there's a definite impact of the inflationary environment that we've seen more in rural than in urban.
— Arvind Chintamani
Toothbrushes we've typically seen slowdown because people are able to delay their purchase but eventually even a toothbrush runs out.
— Arvind Chintamani
Advertisement
Q&A — 7 exchanges
Q
As a company we continue to stay focused on growth. That's a big opportunity in the country. So, Arvind took you through all the innovations we are delivering in the category. We are offering newer-new innovations on the premium side, you saw O2, saw diabetics, gum etc. We've got major relaunches of CDC, opaque toothbrush, Super Flexi etc. We have continued to focus on delivering top-line growth but it's also a reality that the category is not growing right now so that's one challenge we are confronting with. A lot of it is to do with the macro impact of higher inflation, lower growth etc. But
Arvind Chintamani
I'll just add that. When we think of growth, we must always look at the strength of the brand and where that's headed. And as growth returns to the category, we feel really very good because our brands have been strengthening. As long as we continue to innovate ahead of the category as you see we are clearly, whether it's going into wide spaces and building them and leading growth in segments like whitening or in lifestyle related therapeutic conditions like diabetes or in new places like face etc. combined with solid brand strength and playing in new innovative spaces while keeping the core b
Q
I just want to check one aspect because what I noticed is that in terms of the growth that you reported for the quarter. I mean your growth is actually lower than what the parent company reported at the global level and we are supposed to be a high growth emerging market. In this context if you can throw some light on the kind of conversations that you typically have with the parent company, in terms of the operating parameters that are most important for them, is it absolute growth, is it relative market share or does a good growth and profitability makes up for everything? If you can give us
M.S. Jacob
In terms of the priority for us clearly, we've been identified as a country that's expected to contribute to the overall growth of the corporation. Yes, the recent quarter was not the most encouraging one but you will have to look at it a little bit longer term. We delivered ahead of corporate growth for many years. The discussion with local teams , of course , we the local leadership team that runs it on a day-to-day basis have always been driving top line growth. Colgate Palmolive India Limited May 26, 2022 Sustainable profitable growth is a key pillar of the way we drive the business but it
Q
What we've seen now for the last few quarters is that the share of the Natural segment has begun to ebb a little bit, declined a little bit so is a flattening and a slight reduction. In fact, what we call the Family Toothpaste segment of which Colgate Strong Teeth is player has become the #1 segment again in Nielsen. We're not saying and we are not feeling by any stretch that naturals as a phenomenon, across categories is going to go away, it’s here to stay but the very strong growth that we saw that was fueled further by COVID, we are beginning to see it wane for now. That said you've seen we
Management
Q
My question is regarding the you can say volume growth because our top line has grown by say 1.4%. What kind of volume growth we have you can say posted in this quarter and for the full year, that is one? Secondly, what is the quantum of price increase which we have undertaken because I believe some of the products like for example Colgate Total have seen sharp increase in the price say at least at the MRP level? The third question is what is the trend in the market share for our core categories?
M.S. Jacob
In terms of the quarter, we've taken price increase in the mid-single digit and, so you can do the math to track that out. On a full-year basis it's more evenly balanced between the two. That's the kind of numbers we are looking at. On your second question mentioned the price increase, the kind of levels so we won’t comment on specific brands and what the pricing should be. We have models that show the elasticity at different price levels for different sub-brands. We use the output of that study to make those calls. Did you have a third question? Colgate Palmolive India Limited May 26, 2022 On
Q
I mean a gross margin is a result rather than a target I would say of doing all the right things. So, you know our pricing is competitive. The environment in trade continues to be quite competitive. We've been matching all that happening in the market. At the same time, we have a very successful program called the Funding the Growth program where we have cross functional teams looking to take costs out of the system and we continue to find innovative and smart ways to drive cost lower. The combination of that and what we call our revenue growth management or RGM that I referred to in during my
Arvind Chintamani
I think we just said so we are seeing on household panel shares, our shares holding at levels that we've seen in the previous quarters. Different segments go up and down but at an overall category level we're holding shares at levels we've seen in the previous quarters.
Q
On penetration Dev at an annual level there has been no change; that it's a highly penetrated category in urban, fairly highly penetrated in rural parts of the country where it's still sort of in the 80s but in most of the countries high 90% levels of penetration. Penetration at an annual level still holding at very high levels no change and we don't expect that to change. It's hard to read penetration at a quarterly level because if you don't buy within a quarter you could buy in the next and you won't get registered but we're not seeing any penetration declines. Toothbrushes we've typically
Management
Q
If we step back on oral health habits in India, it's very interesting to realize that between 2010 and 2016 approximately in that range, the penetration of toothpaste in this country grew between anywhere between 10 and 12 percentage points. The growth was driven by Colgate where we did a lot of things we did from an education perspective in rural India and from a portfolio perspective. One of the key things was the free toothbrush that we drove across the low price point portfolio. And so, driving behavior change is something we are very familiar with; not just in this country that we've done
Management
Speaking time
Moderator
9
Arvind Chintamani
8
M.S. Jacob
6
Amnish Aggarwal
3
Richard Liu
1
Advertisement
Opening remarks
Arvind Chintamani
Thanks Inba and good afternoon, everyone. Hope you're all doing well. You had a good day and you and your families have been keeping safe and healthy. Welcome to the call. I'll begin by drawing your attention to the safe harbor statement. Before I go into the presentation, remind us all that we are in the midst of a leadership change. Here at Colgate, we're extremely proud that Ram has been promoted to lead the newly set up global enterprise Oral Care for Colgate-Palmolive, another feather in the cap for us at Colgate India as talent continues to do well. We are equally excited to welcome Prabha Narasimhan, who will join Colgate India as Managing Director and CEO effective September 1 st . We're looking forward to having Prabha with us. She brings a rich and diverse experience and understanding across categories in this country. We are looking forward to the new perspective to drive our growth ambitions. So welcome to Prabha. With that I want to highlight some of the key things that we
M.S. Jacob
Thank you, Arvind. Before I jump into the financials, I would like to make a mention of this wonderful award we received recently, Best Audit Committee award conferred by the Asian Center for corporate governance, testimony to the high standards of governance at the company. On the financials; our financial strategy remains unchanged driving top-line and Colgate Palmolive India Limited May 26, 2022 volume, driving margins up, non-variable overheads down, advertising investment up and operating profit up. This is the Q4 results that you would have seen in the morning today. We delivered about Rs. 1,293 crores in net sales, up 1.4% mainly driven by toothpaste, toothbrush declined given it's a little more discretionary category in terms of consumption. Gross margins 66.6%, down 90 bps but we are pleased given the level of inflation that we are seeing in costs. Advertising continues to be at healthy levels as we calibrate between quarters, 11.3% for the quarter. EBITDA at 33.2% marginally
Advertisement
← All transcriptsCOLPAL stock page →