Colgate-Palmolive cuts ad spend by 7% in Q2FY18

FMCG major Colgate-Palmolive (India) Ltd cut down advertising expenses by 7 per cent in the second quarter of FY’17-18 to Rs 119.23 crore from Rs 127.97 crore in the corresponding quarter of previous fiscal. The Company had spent 143.35 crore in the first quarter of this financial year.

The company reported net sales for the quarter ended September 30, 2017 at Rs 1,077.9 crore. Reported net sales declined by 10 per cent due to changes in treatment of indirect taxes post GST implementation. 

However, excluding this impact, net sales increased by 3 per cent over previous year (Refer Net Sales Reconciliation below). With overall GST transitions, volumes declined 0.9 per cent.

Reported net profit after tax for the quarter was Rs. 177.6 crore, down by 2 per cent from Rs 181.31 crore in Q2’16-17. Excluding the impact of tax reversals in both the periods, net profit after tax increased by 5 per cent over Q2 16-17.

The Company continues to maintain its leadership position in both the Toothpaste and Toothbrush categories, with volume market shares for the period Jan-Aug’17 at 54 pre cent and 45.5 pre cent respectively.

Issam Bachaalani, Managing Director at Colgate-Palmolive (India) Ltd, said, “With the implementation of GST, Colgate was able to pass on the benefits to consumers, leading to a reduction in MRPs by 8 to 9 per cent for our key categories of Toothpastes and Toothbrushes. Post GST implementation, we have seen consumer demand picking up. Colgate’s action to pass the benefit to the consumers by reduction in MRP while maintaining trade margins has been well received.”

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