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COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2009

Welcome to Colgate-Palmolive India


INDUSTRY PROFILE


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%


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, 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


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


%


3 Yr. Category Growth

Colgate, 16.6Colgate, 15.2

Market, 5.9

Market, 13.9

0

5

10

15

20

25

Toothpaste Toothbrush


%


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


Opportunity to increase per capita consumption

Source: AC Neilsen

Per Capita Consumption

(Grams/Year)

China 255

Malaysia 293

India 108


COMPANY PROFILE


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


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


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


Toothpaste Portfolio


Toothpaste / Toothpowder Portfolio


Toothbrush Portfolio


Personal Care / Home Care Portfolio


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.


Distribution Network

• 2032 direct accounts & 4,224,630 indirect accounts

• Numeric Distribution of Colgate Toothpaste @ Dec 2008:

Urban 84%

Rural 79%

Urban + Rural 81%


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


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


Market Share - Toothpowder


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)


Market Share - Toothbrush


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)


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


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


Closer toDRIVING - Customer

GROWTH - Consumer- Profession

FUNDINGGROWTH

Efficiency & Effectivenessin Everything

INNOVATION EVERYWHERE

Consumer InnovationCentre

BEST PLACETO WORK

Leadership Development

BUSINESS MODEL


• 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


• 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


Converting 1,21,825 children into Oral Care ambassadors

“Little Dentist” Program

1.47 million individuals pledged to follow good oral hygiene habits


OHM - Summary1.09 million direct contacts | 2.43 million direct influences Public Dental Check ups :


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


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


FINANCIALS


Financial Strategy

Grow Top line

Reduce Costs

Invest in Brand Building

/ New Products

Grow NPAT


(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


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%


Net Sales


Costs (Excl. Advt. & Depre.)


Advertising


EBITDA

- 06-07 figures include VRS charge of Rs 58.8 crores

+7.7%

+14.5%+51.5%

-13.2%


EBIT


+2.4%

-4.8%

+53.9%

+14.4%


Profit Before Tax


+5.5%+7.3%

+44.9%

+18.2%


Income Tax


Profit After Tax

- 06-07 figures include VRS charge (net of tax) of Rs 39 crores

+16.4%

+21.5%

+44.7%

+25.2%


EPS, DPS & Payout


Net Working Capital


Cash Gen. from Operations

- 06-07 figures include VRS payout of Rs 54.5 crores


Treasury Portfolio


Return on Capital Employed


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%


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


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


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


THANK YOU

Welcome to Colgate-Palmolive India - AceAnalyseraceanalyser.com/Analyst Meet/100830_20090531.pdf ·...

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