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Marico ups advertising and sales promotion spends by 12% in Q3FY19 on YoY basis

Investment towards brand building will be further ramped up to support market growth initiatives in core categories, expansion into adjacent categories and a visibly strong innovation pipeline for the next two to three years

Indian FMCG major Marico has increased its advertising and sales promotions expenses by 12% in Q3FY19 on a year-on-year basis. The actual expenses for Q3FY18 were Rs 164.37 crore compared with Rs 146.67 crore in the same quarter of the previous year.

Marico’s India Business recorded a turnover of Rs 1,449 crore (US$ 201 million), a growth of 13% over the same period last year. The operating margin was at 21.0% before corporate allocations.

In Q3FY19, revenue from operations grew by 15% YoY to Rs 1,861 crore (US$ 258 million), with an underlying domestic volume growth of 5% and constant currency growth of 11% in the international business. EBITDA grew by a healthy 16%, while PAT growth came in at 12% due to higher tax expenses.

In the international business, the company expects to clock organic broad-based double-digit constant currency growth in the medium term.

Rural led the growth in the traditional channel, while the new-age channels of modern trade and e-commerce continued to surge ahead. CSD grew by 12%.

Healthy Foods grew by 23% in value terms. Saffola Masala Oats consolidated its value market share at ~70% in the flavoured oats category (December 2018 MAT), as the brand registered a significant increase in overall penetration, especially in metro cities of Mumbai and New Delhi.

Male Grooming grew 13% in value terms. Set Wet Hair Gels continued to lead the growth in the Hair Gels category, registering record offtakes on the back of its 56% value market share.

Commenting on the performance, Saugata Gupta, MD and CEO, said, “In Q3, we have delivered a reasonably good performance. We have further consolidated the core portfolio in India and have now stabilised the international businesses. Having reinvigorated the new product development and go-to-market processes, I am looking forward to an exciting journey ahead. We will continue to invest in brands, talent and capability and results will follow. Our CSR and sustainability agendas have a mandate of building a business with purpose and we will intensify our efforts in that direction.”

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