Colgate-Palmolive ad spend down by 8% in Q1'18

Colgate-Palmolive (India) cut down its advertising spend by 7.9 per cent in the first quarter of financial year 2017-18. The company had spent Rs 143.35 crore on advertisements in the quarter that ended on June 30, 2017 compared to Rs 155.6 crore in the corresponding quarter in last year. During the last financial year that ended on March 31, 2017, the company had spent Rs 511.73 crore on advertisements.

Colgate-Palmolive reported net sales for the quarter of Rs 1109.9 crore, a decrease of 3% over Q1 of the previous year, largely due to destocking in the trade channel ahead of the implementation of GST. Volume declined 5% during the quarter.

Reported net profit after tax for the quarter was Rs 136.4 crore, an increase of 8% vs Q1 of the previous year.

The company continues to maintain its leadership position in both the toothpaste and toothbrush categories, with volume market shares at 54.3% and 45.0%, respectively, in Q1 2017-18.

Issam Bachaalani, Managing Director at Colgate-Palmolive (India) Ltd, said, “In the run-up to the implementation of GST, we did expect many challenges, including an impact on trade pipeline inventory. Colgate has been long preparing for this and in anticipation took necessary steps to minimise business disruption. We are pleased to inform that the required changeover in our systems and processes has been smoothly accomplished.”

Despite the transition challenges leading to softness in sales, we are pleased to report an 8% increase in profits, margin expansion of 50 bps and EBITDA by 150 bps.

GST has enabled us to pass on the benefits to our consumers leading to a reduction in MRPs by 8 to 9% for our key categories of toothpastes and toothbrushes.

We continue to focus on our priorities of strengthening the core of our business and driving competitive and profitable growth while staying committed to our values and sustainability initiatives.”

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