Welcome to Colgate-Palmolive India - AceAnalyseraceanalyser.com/Analyst Meet/100830_20090531.pdf ·...
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COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
FMCG sector is buoyant
468 494 504542
585
711
864
1016
0
200
400
600
800
1000
1200
2001 2002 2003 2004 2005 2006 2007 2008
Source: AC Nielsen
Rs. In Billion
6% 2% 8%8%
22%
22%
18%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
2008 Key Category Growth
% Growth in ValueSource : AC Nielsen
16.2
18.4
14.5
7.6
19.0
16.2
0
5
10
15
20
25
Toilet Soaps Det Cakes Toothpaste Toothbrush Skin Creams Shampoo
%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
% Growth in ValueSource : AC Nielsen
Colgate, 18.0 Colgate, 17.3
Market, 7.6
Market, 14.5
0.0
5.0
10.0
15.0
20.0
25.0
Toothpaste Toothbrush
%
2008 Key Category Growth
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
3 Yr. Category Growth
12.2 12.913.9
5.9
18.2
15.4
0
5
10
15
20
25
Toilet Soaps Det Cakes Toothpaste Toothbrush Skin Creams Shampoo
% Growth in ValueSource : AC Nielsen
%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
3 Yr. Category Growth
Colgate, 16.6Colgate, 15.2
Market, 5.9
Market, 13.9
0
5
10
15
20
25
Toothpaste Toothbrush
% Growth in ValueSource : AC Nielsen
%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
A significant opportunity to drive penetration
Source: Indian Readership SurveyDentifrice = Toothpaste or toothpowder
69 70 71 72 73 74 76 78 79
44 44 44 45 4650 51
5457
36 35 36 34 35 35 35 3531
0
10
20
30
40
50
60
70
80
90
2000 2001 2002 2003 2004 2005 2006 2007 2008
Dentifrice Toothpaste Toothpowder
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Opportunity to increase per capita consumption
Source: AC Neilsen
Per Capita Consumption
(Grams/Year)
China 255
Malaysia 293
India 108
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
ROGER CALMEYERVP SOUTH ASIA & MD INDIA
PRABHA PARAMESWARAN VP - MARKETING
MOSES A ELIAS CFO / DIRECTOR
SHEKHAR BHARATWAJVP - CUSTOMER DEVELOPMENT
LAURENCE WHEELEREVP – MFG & PSC
K V VAIDYANATHANLEGAL DIRECTOR &
CO. SECRETARY
ADITYA SINGHVP - HUMAN RESOURCES
LEADERSHIP TEAM
SANJEEV DALIDIRECTOR GSSO
SURENDRA MANEKVP- IGTC
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Aurangabad
Goa
HyderabadMumbai
Baroda
NEPAL
CP FACTORIES - 7KodurTOOTHBRUSH CM’s - 6PCP/HCP CM’s - 3
SuratDaman
Baddi
OPERATIONS NETWORK
Need for outsourcing due to historical regulatory environment
Business Complexity
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Aurangabad
Goa
HyderabadMumbai
Baroda
NEPAL
CP FACTORIES - 4Kodur
TOOTHBRUSH CM’s - 6PCP/HCP CM’s - 3
SuratDaman
Baddi
OPERATIONS NETWORK
Need for outsourcing due to historical regulatory environment
Business Complexity
(WAREHOUSES - 23
DC & WAREHOUSES - 3)SATELLITE WH’s - 4
Sold
In Merger
Merged with CPIL
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Rated as the #1 brand by the A&M – MODE Annual Survey for India’s Top Brands for eight out of nine years during the period1992 to 2001
Ranked as India’s Most Trusted Brand across all categories for four consecutive years 2003 to 2006 by Brand Equity’s “Most Trusted Brand” Survey
In Brand Equity’s 2007 “Most Trusted Brand” survey, Colgate was rated the leading FMCG Brand, 2nd position in overall survey.
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Distribution Network
• 2032 direct accounts & 4,224,630 indirect accounts
• Numeric Distribution of Colgate Toothpaste @ Dec 2008:
Urban 84%
Rural 79%
Urban + Rural 81%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Strategic Position
Source: AC NielsenPeriod : Jan to Dec 08
Category Value SOM % Market Position Relative Share
Toothpaste 48.5 1 1.6
Toothpowder 46.4 1 1.5
Toothbrush 37.7 1 2.8
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Market Share - Toothpaste
- Market Share - Value- Source: AC Nielsen
2005 2006 2007 2008 Jan-Mar 08 Jan-Mar 09 2008-2007
Colgate 46.7 47.8 48.4 48.5 48.2 50.2 0.1
Competitor 1 32.1 30.4 29.8 29.6 29.8 28.0 (0.2)
All Other 21.2 21.8 21.7 21.9 22.0 21.7 0.2
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Market Share - Toothpowder
- Market Share - Value- Source: AC Nielsen
2005 2006 2007 2008 Jan-Mar 08 Jan-Mar 09 2008-2007
Colgate 46.6 44.2 44.3 46.4 45.5 45.8 2.1
Competitor 1 31.5 31.0 31.0 30.5 30.0 29.9 (0.5)
All Other 21.9 24.8 24.7 23.1 24.5 24.4 (1.6)
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Market Share - Toothbrush
- Market Share - Value- Source: AC Nielsen
2005 2006 2007 2008 Jan-Mar 08 Jan-Mar 09 2008-2007
Colgate 31.0 34.4 34.9 37.7 37.2 37.0 2.8
Competitor 1 19.8 16.5 15.5 13.5 13.9 12.5 (2.0)
Competitor 2 11.6 9.9 15.9 18.4 17.7 20.6 2.5
All Other 37.6 39.2 33.7 30.4 31.2 29.9 (3.3)
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Category Contribution(% to Company Sales)
95.1% 95.7%
2.9% 2.6%2.0% 1.7%
70%
75%
80%
85%
90%
95%
100%
105%
2007-08 2008-09
ORAL CARE PERSONAL CARE HOME / OTHERS
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Urban-Rural Contribution(% to Company Sales)
68% 67% 66% 65%
32% 33% 34% 35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2005 2006 2007 2008
Urban Rural
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Closer toDRIVING - Customer
GROWTH - Consumer- Profession
FUNDINGGROWTH
Efficiency & Effectivenessin Everything
INNOVATION EVERYWHERE
Consumer InnovationCentre
BEST PLACETO WORK
Leadership Development
BUSINESS MODEL
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
• School Contact Program
• Shopper Engagement Program
• ITC E-Choupal – School Contact Program
• Media • Public Relations• Trade Activities• On pack messages
• In Clinic• Mobile Vans• Factory Checkups – Goa& Baddi• School Dental Checkups
OHM 2008
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
• Over 10,000 dentists participated in OHM 2008– Expanded to more towns– Non IDA dentists also
participated
• Partnership with dental colleges for the first time– 32 dental colleges
participated in OHM 2008– Over 800 dentists
OHM ‘05
OHM ‘06
OHM ‘07
OHM ‘08
Towns 50 102 175 200Dentists 3500 5000 8300 10290
24% increase in number of participating dentists in OHM 2008
OHM ‘07 OHM ‘08
IDA 7000 8290
Non IDA 1300 2000
Partnership with profession
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Converting 1,21,825 children into Oral Care ambassadors
“Little Dentist” Program
1.47 million individuals pledged to follow good oral hygiene habits
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
OHM - Summary1.09 million direct contacts | 2.43 million direct influences Public Dental Check ups :
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Closer to the Profession….Professional Oral Care• Leverage long standing partnership with the Indian Dental
Association built on trust with the profession• Professional endorsement / recommendation for our brands drives
consumer preference- Builds credibility- Reinforces therapeutic superiority
• Dental profession also a source of business for professional products
• Significant enhancement of dentist detailing reach-- 38,000 dentists (60% of dentist universe) under detailing
coverage in 2008• Professional oral care distribution network consolidated in 60 towns
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Closer to the Profession…. Professional Oral Care
BRMO - Brand Recommended Most Often by Dentists
BUMO - Brand Used Most Often by Dentists
Source : Dentist Track 2006 and 2007
YearColgate Comp Colgate Comp
Toothpaste 2007 80% 4% 87% 5%2006 77% 3% 86% 5%2005 75% 6% 82% 5%
Toothbrushes 2007 71% 14% 75% 16%2006 61% 17% 66% 21%2005 54% 23% 62% 23%
BRMO BUMO
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Financial Strategy
Grow Top line
Reduce Costs
Invest in Brand Building
/ New Products
Grow NPAT
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
(Rs. Lacs) Quarter Quarter Year Ended Year Ended Year Ended Year Ended Ended Ended 31-Mar-09 31-Mar-08 31-Mar-09 31-Mar-08
31-Mar-09 31-Mar-08 (Audited) (Audited) (Audited) (Audited)
- Net Sales (Excl. Excise Duty) 45,546 39,133 169,481 147,338 169,521 147,385 - Operating Income 1,674 1,631 7,601 6,333 6,463 5,610
Total Revenue 47,220 40,764 177,082 153,671 175,984 152,995
- (Increase) / Decrease in Stock in Trade 687 368 (450) (217) (453) (82) - Raw and Packing Material Cost 11,274 7,547 39,562 28,003 59,172 36,167 - Purchase of Goods 8,091 9,765 35,019 35,492 9,373 23,737 - Employee Cost 3,890 3,074 13,854 11,728 15,090 12,382 - Voluntary Retirement Scheme 486 - 486 100 486 100 - Depreciation/ Amortisation/ Impairment 635 545 2,295 1,984 2,825 2,093 - Advertising & Sales Promotion 7,021 7,345 27,172 25,651 27,172 25,651 - Other Expenditure 6,492 5,839 26,774 23,609 29,290 24,221
Total Expenditure 38,576 34,483 144,712 126,350 142,955 124,269
Profit from Operations Before Other Income and Interest 8,644 6,281 32,370 27,321 33,029 28,726
Other Income (Net) 380 370 2,271 2,028 1,978 1,991
Profit Before Interest 9,024 6,651 34,641 29,349 35,007 30,717
Interest Expense 11 36 110 144 154 123
Profit from Ordinary Activities Before Tax 9,013 6,615 34,531 29,205 34,853 30,594
Provision for Taxation 1,306 1,053 5,509 6,034 6,030 6,926
Net Profit After Tax and before Minority Interest 7,707 5,562 29,022 23,171 28,823 23,668
Minority Interest - - - - 245 92
Net Profit after Tax and Minority Interest 7,707 5,562 29,022 23,171 28,578 23,576
Paid-up Equity Share Capital 1,360 1,360 1,360 1,360 1,360 1,360 (Face value: Rupee 1 per share)
Reserves excluding Revaluation Reserve 20,270 14,861 20,167 15,369
Basic and Diluted Earnings per share after Minority Interest (Rs.) 5.67 4.09 21.34 17.04 21.01 17.34
Public shareholding
- Number of Shares 66,636,481 66,636,481 66,636,481 66,636,481 66,636,481 66,636,481 - Percentage of holding 49% 49% 49% 49% 49% 49%
CONSOLIDATEDSTANDALONE
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Grow ToplineQuarterly Sales Growth
(% = current year vs previous year)
2,000
2,250
2,500
2,750
3,000
3,250
3,500
3,750
4,000
4,250
4,500
4,750
Apr-Jun 2007 Jul-Sep 2007 Oct-Dec 2007 Jan-Mar 2008 Apr-Jun 2008 Jul-Sep 2008 Oct-Dec 2008 Jan-Mar 2009
(Rs.
MM
) 13.3%13.7% 14.0%
14.0%16.2% 13.4%
14.1%
16.4%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
EBITDA
- 06-07 figures include VRS charge of Rs 58.8 crores
+7.7%
+14.5%+51.5%
-13.2%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
EBIT
- 06-07 figures include VRS charge of Rs 58.8 crores
+2.4%
-4.8%
+53.9%
+14.4%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Profit Before Tax
- 06-07 figures include VRS charge of Rs 58.8 crores
+5.5%+7.3%
+44.9%
+18.2%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Profit After Tax
- 06-07 figures include VRS charge (net of tax) of Rs 39 crores
+16.4%
+21.5%
+44.7%
+25.2%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Cash Gen. from Operations
- 06-07 figures include VRS payout of Rs 54.5 crores
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Ratios
FY2005 FY2006 FY2007 FY2008 FY2009 CAGR
Growth (%)Net Sales 2.7 16.6 15.2 13.8 15.0 15.1%PBT 17.6 5.5 7.3 44.9 18.3 18.0%PAT 4.9 21.4 16.4 44.7 25.3 26.5%
Book Value (Rs) 18.4 19.9 20.6 11.9 15.9EPS (Rs) 8.3 10.2 11.8 17.0 21.3DPS (Rs) 7.0 7.5 9.5 13.0 15.0Payout Ratio (%) 95.1 84.5 92.5 98.2 82.1Average Yield (%) 3.8% 1.7% 2.9% 3.4% 3.2%
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Ratios
FY2005 FY2006 FY2007 FY2008 FY2009Returns (%)ROE 83.3 101.2 117.8 309.8 2,134.4RONW 45.9 52.8 58.1 104.7 153.4ROCE 53.7 61.5 61.1 110.9 154.9
RatiosAsset Turnover (X) 11.4 9.4 7.9 8.2 9.3Inventory (Days)** 25.3 22.3 21.2 17.8 17.1Debtors (Days)** 5.9 1.9 2.5 2.2 2.3Net Working Capital (%/s) -12.8% -17.9% -17.5% -17.8% -17.8%
EVA*** (Rs MM) 691.3 972.3 820.4 1,488.7 1,958.1
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Share Price Performance
17,287
9,709
412
471
8,000
10,000
12,000
14,000
16,000
18,000
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
300
320
340
360
380
400
420
440
460
480
500
Sensex Colgate
COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009
Shareholder ReturnsYear Shares Value
(LC)
1978 IPO - 250 6,2501994 Rights - 1,280 25,6002009 * Holdings - 14,080 66,31,680* as on March 31, 2009
Dividend Received 1,623,979(includes Capital reduction)
Compounded return of 27% since the IPO