Indian FMCG major Marico Limited reduced its advertising and promotions spend by 37% in the quarter ending June 30, 2020, over the corresponding quarter of the previous year. However, the company’s ad spends were slightly up by 7% from the January-March 2020 quarter.
Marico spent Rs 137 crore on advertising and sales promotion in Q1FY21 while the ad spends were at Rs 219 crore in Q1FY20. The company had spent Rs 126 crore in Q4FY20.
“A&P spends stood at 7.1% of sales, given the rationalization of spends in a subdued demand environment with supply constraints. After minimal spends in April, the company continued to invest for growth in the core portfolios in light of improving traction during the rest of the quarter. Similarly, trade spends during the quarter were also rationalized accordingly,” the company said in its BSE filing.
In Q1FY21, Marico’s revenue from operations was at Rs 1,925 crore, down 11% YoY.
The domestic business was severely impacted in April due to supply-chain disruptions following the extension of the national lockdown but was able to scale up sequentially in May and June as restrictions were relatively eased, the company said.
The Company gained market share in more than 90% of the portfolio on MAT basis, with accentuated gains during Q1.
With social distancing becoming increasingly prevalent, consumers favoured neighbourhood GT stores as well as E-Commerce platforms over Modern Trade during the quarter. The CSD business during the quarter was nearly reduced to its half, which had a meaningful impact on the overall volume growth of India business.
While the international business de-grew by 4% in constant currency terms, Bangladesh continued to hold the fort by delivering a commendable 10% constant currency growth, while other geographies recorded double-digit drops.
EBITDA was up 1%, led by 300 bps expansion in operating margins which was attributable to softer input costs, rationalization of A&P spends in discretionary portfolios and very aggressive cost control. PAT was at Rs 331 crore, up 3% YoY on a like-to-like basis.