Marico once again optimistic about India ad spends, up 14% YoY in Q1
Marico has gone aggressive with ad spends this quarter, a sharp change from the lukewarm 9.5% ad spends in the same period last year due to volatile environment
Marico Limited has announced its financial results for Q1FY19. Revenue from Operations is INR 2,027 crore, up by 20% YoY. The India business volumes grew by 12.4%, while the International business posted a constant currency growth of 7% (volume growth of 3%).
Advertising & Sales Promotion spends in the India business was up 14% YoY on a comparable basis.
For 2017-18, turnover stood at INR 6,333 cr while Net Profit was at INR 814 cr.
Commenting on the Q1FY19 performance, Saugata Gupta, MD & CEO, Marico Ltd, said, “We had a satisfactory start to the year delivering healthy topline growth coupled with a resilient margin performance. The domestic business recorded broad-based volume growth while the international business got off to a slower start. The prospects for the rest of the year look encouraging as offtake growth and market shares are trending favourably. We will continue to aggressively drive growth in core and new growth engines by investing behind brands and capability building.”
EBITDA was at INR 355 crore, up 9% YoY. PAT was at INR 256 crore, up 10% YoY.
Rural growth (28%) outpaced urban growth (16%) for the fourth straight quarter, strongly backed by the recent MSP hikes, farm loan waivers and the likelihood of normal monsoons.
The company is focusing on Digital initiatives in a big way to improve consumer engagement, drive sales through E-commerce for internet-savvy consumers and build Data Analytics capabilities. ECommerce (over 1% of India business in FY18) is expected it to contribute 3% of the India business in the next couple of years. For FY19 and beyond, the Company retains the target of 8-10% volume growth and healthy market share gains in the India business and double-digit constant currency growth in the International business.
The FMCG Business in India achieved a turnover of INR 1,628 crore (USD 243 million), a growth of 23% over the same period last year.
During the quarter, Marico focused on innovation with new product introductions in Healthy Foods, Hair Nourishment and Male Grooming. Parachute Rigids (packs in blue bottles) posted a volume growth of 9%. The portfolio grew 38% in value terms owing to price hikes taken during the previous year. The Coconut Oil franchise strengthened its leadership, holding a volume market share of 59% (June 2018 MAT)
Saffola refined edible oils grew 10% in volume terms. The franchise gained traction in Modern Trade and E-Commerce. In addition to tactical inputs towards improving the consumer value proposition, the Company upped media investments in the brand. The brand had 70% volume market share (June 2018 MAT).
Healthy Foods grew by 23% in value terms. Saffola Masala Oats had a value market share of 69%.
Value Added Hair Oils registered a volume growth of 15%. Premium Hair Nourishment (Livon and H&C Silk n Shine) grew 67% in value terms on a comparable basis.
Male Grooming (Set Wet Range/Parachute Advansed Hair Cream) grew 44% in value terms on a comparable basis.
Marico’s International business grew by 7% in constant currency terms (volume growth of 3%) in Q1FY19. The operating margin (before corporate allocations) was at 20.0%. Bangladesh grew by 9% in constant currency (cc) terms. Middle East and North Africa posted a volume led recovery, growing 17% (in cc terms). Vietnam was flattish as the growth in Home and Personal Care (HPC) was offset by the decline in Foods. Myanmar faced one-off supply constraints. South Africa (including Isoplus) posted a growth of 7% (in cc terms). New Country Development & Exports grew 5% in cc terms.
Advertising & Sales Promotion spends in the India business was up 14% YoY on a comparable basis. For 2017-18, turnover stood at INR 6,333 cr while Net Profit was at INR 814 cr.
Commenting on the Q1FY19 performance, Saugata Gupta, MD & CEO, Marico Ltd, said, “We had a satisfactory start to the year delivering healthy topline growth coupled with a resilient margin performance. The domestic business recorded broad-based volume growth while the international business got off to a slower start. The prospects for the rest of the year look encouraging as offtake growth and market shares are trending favourably. We will continue to aggressively drive growth in core and new growth engines by investing behind brands and capability building.”
EBITDA was at INR 355 crore, up 9% YoY. PAT was at INR 256 crore, up 10% YoY.
Rural growth (28%) outpaced urban growth (16%) for the fourth straight quarter, strongly backed by the recent MSP hikes, farm loan waivers and the likelihood of normal monsoons.
The company is focusing on Digital initiatives in a big way to improve consumer engagement, drive sales through E-commerce for internet-savvy consumers and build Data Analytics capabilities. ECommerce (over 1% of India business in FY18) is expected it to contribute 3% of the India business in the next couple of years. For FY19 and beyond, the Company retains the target of 8-10% volume growth and healthy market share gains in the India business and double-digit constant currency growth in the International business.
The FMCG Business in India achieved a turnover of INR 1,628 crore (USD 243 million), a growth of 23% over the same period last year.
During the quarter, Marico focused on innovation with new product introductions in Healthy Foods, Hair Nourishment and Male Grooming. Parachute Rigids (packs in blue bottles) posted a volume growth of 9%. The portfolio grew 38% in value terms owing to price hikes taken during the previous year. The Coconut Oil franchise strengthened its leadership, holding a volume market share of 59% (June 2018 MAT)
Saffola refined edible oils grew 10% in volume terms. The franchise gained traction in Modern Trade and E-Commerce. In addition to tactical inputs towards improving the consumer value proposition, the Company upped media investments in the brand. The brand had 70% volume market share (June 2018 MAT).
Healthy Foods grew by 23% in value terms. Saffola Masala Oats had a value market share of 69%.
Value Added Hair Oils registered a volume growth of 15%. Premium Hair Nourishment (Livon and H&C Silk n Shine) grew 67% in value terms on a comparable basis.
Male Grooming (Set Wet Range/Parachute Advansed Hair Cream) grew 44% in value terms on a comparable basis.
Marico’s International business grew by 7% in constant currency terms (volume growth of 3%) in Q1FY19. The operating margin (before corporate allocations) was at 20.0%. Bangladesh grew by 9% in constant currency (cc) terms. Middle East and North Africa posted a volume led recovery, growing 17% (in cc terms). Vietnam was flattish as the growth in Home and Personal Care (HPC) was offset by the decline in Foods. Myanmar faced one-off supply constraints. South Africa (including Isoplus) posted a growth of 7% (in cc terms). New Country Development & Exports grew 5% in cc terms.
