FMCG Cygnus_Sep09

© Cygnus Business Consulting & Research Pvt. Ltd. 2009

1

Vol.909 September 2009

CONTENTS

INDUSTRY AT A GLANCE ....................................................................................................2 KEY DEVELOPMENTS ..........................................................................................................3

MARKETING .......................................................................................................................3 OPERATIONS ......................................................................................................................5 HUMAN RESOURCES.........................................................................................................5 GOVERNMENT INITIATIVES ..........................................................................................6 OTHERS................................................................................................................................6

INDUSTRY STATISTICS .........................................................................................................7 PRODUCT FOCUS ...................................................................................................................8

Hair Oil ..................................................................................................................................8 Uses ....................................................................................................................................8 Segments & Brands .............................................................................................................8 Market Shares .....................................................................................................................8 Export Activities .................................................................................................................9 Regulations .........................................................................................................................9 Threat to the product ..........................................................................................................9 Outlook ..............................................................................................................................9

COMPANY SCAN...................................................................................................................10 Colgate Palmolive India Ltd..................................................................................................10

Product Range ..................................................................................................................10 Business Strategies ............................................................................................................10 Common-size Comparison................................................................................................12 Cost Structure Analysis .....................................................................................................12 Stock Market Performance ................................................................................................12 Recent Strategies ...............................................................................................................13 Outlook ............................................................................................................................13

STOCK SCAN .........................................................................................................................14 UPCOMING EVENTS ...........................................................................................................16

Industry Monitor

FMCG

Industry Monitor – FMCG September 2009

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 2

INDUSTRY AT A GLANCE

MARKETING Unilever goes crowdsourcing to spice up Peperami's TV ads, UK

FMCG companies hog more air time on DD channels, India

FMCG majors to focus on processed food sector, India

FMCG players mull 3-6% hike in prices, India

Biscuit prices to rise by 10%, India

Fall in input costs, discount cut lift FMCG companies' profit margins, India

Emami group plans edible oils venture, India

Priyagold to launch chocolates in September, India

Godrej eyes village salons to promote brands, India

Dabur eyes Rs1bn sales from Glucose, India

Dabur looks to increase global presence, India

GSK to launch 5-6 products in current year, India

OPERATIONS

Britannia eyes buyouts, looks to borrow Rs20bn, India

Godrej Group to exit tea, edible oils businesses, India

Himachal firm to invest Rs1.3bn in Gujarat, India

Slump continues in tea production and export, India

Sri Lanka July tea output down 11.1% on bad weather, Sri Lanka

HUMAN RESOURCES

HUL rejigs operations, offers VRS to 200 staffers, India

GOVERNMENT INITIATIVES

Sugar guidelines not so sweet for soft drink makers, USA

OTHERS

Yahoo! to launch FMCG ad tool with Nectar card data, Global

Poor rains not a worry for FMCG companies, India

Unilever Vietnam helps improve community health, Vietnam



KEY DEVELOPMENTS

MARKETING Europe UK: Unilever goes crowdsourcing to spice up Peperami's TV ads Unilever is offering $10,000 (£6,087) in a competition to find ideas for its next TV campaign for snack food brand Peperami, using its quirky Animal character, as it decides to drop its ad agency of 16 years and turn to crowdsourcing for creative ideas. Unilever wants to turn the best idea into a TV and print campaign, with the caveat that the ad has to feature the cheeky Peperami character Animal, created by Lowe London. Asia Pacific India: FMCG companies hog more air time on DD channels FMCG companies have more screen presence than carmakers and telecom companies on all Doordarshan (DD) channels, though the latter two are pushing hard for rural sales. The top 10 advertisers on all the 50 DD channels are FMCG companies. Hindustan Unilever (HUL), the country’s largest consumer products company and the biggest advertiser, leads the pack as the top private advertiser on DD with a 9% share. HUL is followed by ITC with a 2% share. Other top advertisers include: Wipro, Emami, Dabur, Colgate-Palmolive, Heinz, Perfetti Van Melle, Godrej Consumer Products and Reckitt Benckiser. India: FMCG majors to focus on processed food sector Major FMCG players like Hindustan Unilever Ltd (HUL), Godrej Group, Dabur Foods and CavinKare are all set to concentrate on the Rs350 billion branded processed food segment. While Hindustan Unilever is sharpening focus on its foods business this year, the Godrej Group is planning to expand its Foods Division. CavinKare is setting up manufacturing facilities for its new launches and also increasing its advertisement budget by 50% to promote its brands. Meanwhile, Dabur Foods is reportedly investing in R&D projects and brand building activities to gain a competitive edge in this sector. India: FMCG players mull 3-6% hike in prices Fast moving consumer goods majors like Britannia, ITC and Parle Products are mulling price hikes and cost-cutting measures on the back of a weak monsoon season, coupled with soaring sugar prices. Sugar is a key input for many of these companies and, since January this year, sugar prices have risen by over 40%. In fact, there is further scope for increase with the weak monsoons. Further, imports too will be costlier this year despite being duty free, as international prices of sugar have reached a 28-year high because of heavy import demands from India and Mexico and lower harvesting in the top sugar-growing country Brazil. India: Biscuit prices to rise by 10% In India about 40 companies that account for almost one-third of the organised biscuit market are intending to increase prices by 10% across the board from next month to cope with soaring prices of key ingredients like sugar, milk and milk powder. The price hike, the steepest in the industry in two years, will come into effect on September 1, according to the Indian Biscuit Manufacturers Association (IBMA), which represents these second-string biscuit makers whose list include Priyagold, Anmol, Cremica, Bonn and Crown. India: Fall in input costs, discount cut lift FMCG companies' profit margins The FMCG sector has managed to log a modest performance for the quarter ended June 2009 compared with the performance logged in the corresponding period last year. However, this cannot be held as a sign of robust recovery in consumer demand, as low input prices and lesser discounts, too, have played a key role in improving the profit margins of the sector. The 12 leading FMCG companies reveal an 18% Y-o-



Y rise in net profit, while the net sales registered half that growth. The volumes have shown healthy growth for most players, driven by aggressive advertising and discount offers, with freebies doled by most players. Growth in profit has been aided by lower input cost leading to healthy increase in operating margins. India: Emami group plans edible oils venture The Rs20 billion Emami group has chalked out ambitious initiatives for its edible oils venture. The company proposes to take up plantation of bio fuel crops (jatropha) and other edible & non-edible oil seeds in Ethiopia. Closer home, it is also looking to set up greenfield edible and non-edible oil refineries in Gujarat and south India. While the Ethiopian venture in the state of Oromia will entail an investment of roughly Rs4 billion, the Gujarat and south Indian projects will involve an investment of Rs2.25 billion each. India: Priyagold to launch chocolates in September After successfully launching juices, leading biscuit brand Priyagold is planning to enter the chocolates segment with the long-term aim of becoming a major player in the FMCG food products. Surya Food & Agro, which has recently added wafers and cookies to its portfolio, will launch chocolates next month, according to the company's Director, Shekhar Agarwal. The company aims to generate sales of Rs250-300m from chocolates, wafers and cookies this year. India: Godrej eyes village salons to promote brands Godrej Consumer Products Ltd will tap salons and barber shops across 50,000 villages across the country as it increases its focus on small towns and the rural market. The FMCG major, which already has a marketing base in 17,000 villages that account for 38% of the company's personal care products, is working on a strategy of raising it to 50% within a year. Godrej will rope in 50,000 salons and barber shops in semi-urban and rural areas to promote its hair care brands like 'Nupoor' mehandi and 'Expert' hair colour as also other personal care and cosmetics products, creating more employment opportunities in the process. India: Dabur eyes Rs1bn sales from Glucose Dabur expects its health supplement brand “Glucose D” to clock in sales of around Rs1 billion by the end of this fiscal. Dabur Glucose has been one of the fastest growing categories with an annual growth rate of 20-25% and at this rate the company expect around Rs800m-1bn sales in this fiscal. The company is not planning to launch new flavours of Glucose D, instead wants to be more focused on marketing its existing brands. India: Dabur looks to increase global presence Consumer products company, Dabur India Ltd., is looking to expand its international presence and is shopping for companies in Africa, apart from trying to build a distribution network in the US. Dabur makes and sells products in the personal, home care and healthcare space under brands such as Vatika. Some of these products are need to be cleared by the US Food and Drugs Administration before they can be sold in the US. In Africa, Dabur, which already has a presence in the continent, is looking to expand into South Africa and also in other countries. India: GSK to launch 5-6 products in current year FMCG firm GlaxoSmithKline (GSK) is planning to launch five-six products in the remaining half of the year to maintain a double-digit growth rate. The company has earlier announced that it would launch around 10-12 products in the current year, including some from the international portfolio of its parent company. It had already launched Horlicks Bar and Junior Horlicks Biscuits, and will soon introduce more such products particularly in the biscuit segment. GSK is looking at expanding its existing range of products in nutritional food product segment and the new launches would be supplementing its existing product portfolio.



OPERATIONS

Asia Pacific India: Britannia eyes buyouts, looks to borrow Rs20bn Biscuits major Britannia Industries is seeking shareholders’ approval for a proposal to enhance its borrowing limit to Rs20 billion to chase inorganic growth opportunities. The company may need to look at options for raising resources, including borrowings, should there be an exceptional situation such as large acquisition opportunities. The company has adequate liquidity to maintain and grow its business operations. India: Godrej Group to exit tea, edible oils businesses As a part of a strategy to focus on the core business of beverages and confectioneries under its Godrej Hersheys joint venture, the Godrej Group now plans to exit from its edible oil and tea business. The Godrej Tea business includes brands like Godrej Noble House and Godrej Chai House, whereas in the edible oils category it has Godrej Cooklite, Godrej Oil and Godrej Vanaspati brands. The core business of Godrej Beverages and Foods Ltd (GBFL) is confectionery and beverages. Confectionery brand Nutrine is market leader, with 20% market share in Indian hard boiled candy market, led by product Mahalacto. Sofit is a pioneer and market leader in the emerging soyamilk category and Jumpin is a strong player in the competitive fruit drink category. India: Himachal firm to invest Rs1.3bn in Gujarat Himachal Pradesh-based frozen food manufacturer Himalya International has plans to invest Rs1.3 billion in a new unit in Gujarat. Work on the Gujarat facility will begin in this month, with commercial production slated to commence by September next year. The unit will produce ready-to-eat products made of vegetables, frozen mushrooms, mozzarella cheese, yogurt and various appetizers. Himalya plans to produce 9,000 tonnes of mushrooms; 5,940 tonnes of mozzarella cheese and 9,000 tonnes of yoghurt annually. India: Slump continues in tea production and export The tea industry is looking at the second half of the year for a revival of fortunes as both production and export continue to be on the downswing for the first six months. The production has been hampered by adverse weather conditions. Though the June crop is up by 12 million kg, the overall production for six months ended June has shown a decline by the same margin. The production in the first half of the year stood at 334 million kg. The global tea production is also facing a shortfall of 78 to 80 million kg, which has pushed up the prices. By the end of the year, the shortage is expected to touch 100 million kg. Sri Lanka: Sri Lanka July tea output down 11.1% on bad weather Sri Lanka's tea output fell 11.1% in July, due to rain hindering growth of the nation's No. 1 agricultural export. Tea output last month fell to 25.12 million kg from 28.27 million a year earlier, according to data compiled by the Sri Lanka Tea Board. In some areas, there was excess rain and other areas there were poor rains affecting the growth. Tea is one of Sri Lanka's main foreign currency revenue earners after garment exports and remittances.

HUMAN RESOURCES

Asia Pacific India: HUL rejigs operations, offers VRS to 200 staffers Hindustan Unilever (HUL), the country’s largest consumer products company, is offering VRS to about 200 people as it moves to optimise resources in an increasingly competitive scenario. The VRS is being offered to its staff in clerical and field sales offices, and has already been kicked off recently. The eligibility criteria will be for people over 40 years of age who have spent over 15 years with the company. HUL is realigning operations across divisions, as it deals with heightened competition at the trade level and by rival brands taking away its share.



GOVERNMENT INITIATIVES Americas USA: Sugar guidelines not so sweet for soft drink makers New American Heart Association sugar guidelines, which were released recently, may come as a hard blow to soft drink makers, who were singled out as the top source of "discretionary" sugar calories. Thrifty consumers, stung by an ailing economy, have already cut back on soft drink consumption. US carbonated soft drink volume fell 3% in 2008, the biggest drop since the early 1980s. According to Director of the US Centers for Disease Control and Prevention, it is favour that soft drink tax as a potential way to combat obesity may only make matters worse.

OTHERS Global Global: Yahoo! to launch FMCG ad tool with Nectar card data Yahoo plans to launch a service in the UK that would enable advertisers to use Nectar data from Sainsbury's, as well as Yahoo!'s sales records. Yahoo! claims that the information will enable FMCG brands to tailor online ads based on consumers' shopping habits. Brands will be able to measure the effectiveness of their campaigns by analysing subsequent retail sales. It is thought that Yahoo! will eventually add data from other Nectar partners to the service. Consumers will be promised extra Nectar points to share their data. FMCG brands account for just 4% of total online ad spend, according to Yahoo!. It hopes to increase this figure by encouraging brands to use its service from October. Asia Pacific India: Poor rains not a worry for FMCG companies The June-September outlook for the monsoon has deteriorated, leading to concerns about rural growth getting impacted. But, FMCG firms are not perturbed just yet. The reasons is being a fall in weightage of agriculture in the GDP and growing urban consumption. Agricultural growth could reduce to -2% Y-O-Y, down from its earlier estimate of +1.4%. A bad monsoon can lead to inflation in food prices, which in turn could result in a fall in the share of wallet for sectors like FMCGs, durables, etc. Vietnam: Unilever Vietnam helps improve community health The Unilever Vietnam Fund has provided VND463.9 million (or nearly US$26,000) to carry out a project to improve community health in four communes in the northern province of Ha Nam. The project aims to tackle the issues of personal and environmental hygiene in Nguyen Ly and Hoa Hau communes in Ly Nhan district, and Nguyen Uy commune and Que town in Kim Bang district from August to December this year. The project will assist the construction of hygienic toilets in private houses and public areas, and promote personal and environmental hygiene, particularly the practice of using soap to wash hands, through various activities and the media.



INDUSTRY STATISTICS

Month-wise Industrial Production of Soap of All Kinds (IPP) in India

(tonnes) Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Apr 46384 43071 46156 33428 41293 34518 34822May 48455 49564 48409 43855 46797 35563 42417Jun 49124 58418 44312 43174 47499 32757 37062Jul 49163 58097 47096 48163 44663 37374 36813Aug 50308 54176 40746 44309 41748 37284 44172Sep 48852 50119 37683 39938 38423 33461 43342Oct 41392 49572 38191 39741 33547 31073 35295Nov 43686 46946 40654 37940 42199 31105 36019Dec 42530 44373 40590 37166 31772 27123 32577Jan 42859 37386 38712 37888 29436 34928 41529Feb 44831 38823 37393 36599 33316 31886 42505Mar 42975 41999 36992 42347 40823 36332 48652Source : CSO, Cygnus Research

Month-wise Industrial Production of Soap of All Kinds in India

20000

25000

30000

35000

40000

45000

50000

55000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

To

nn

e

2006-07 2007-08 2008-09

Source: CSO, Cygnus Research



PRODUCT FOCUS

Hair Oil In India, more than 60% of the population uses hair oil on a regular basis. Hair oiling is the major niche of the hair care segment. The hair oil market has four categories: Coconut, Amla, light and cool. The penetration level of hair oil is around 87%. The market size is Rs30 billion for hair oil market. Unlike in other countries, the demand for hair oil in India is quiet high and still increasing. This presents vast market opportunity for the manufacturers. Uses There are several types of hair oils that solve problems such as dry scalp, dry or brittle ends, split ends, extremely unnatural thin or fine hair, and eczema on the scalp. Hair oils can make the scalp look healthy again and in turn produce healthier hair. There are several oils that nourish the scalp, moisturise the hair, and protect the hair from the damaging rays of the sun. Segments & Brands The hair oil market has four categories: Coconut, amla, light and cool. Each category, it so happens, has a different dominant brand. In the coconut hair oil segment, Parachute, manufactured by Dabur India, is the leading brand. In the amla segment, Dabur Amla leads the pack. Bajaj Almod drops is the leading brand in Light and fragrant hair oils segment. In the cool hair oil segment, Navaratna, manufactured by Emami, is the leading brand. Market Shares Of the total Rs30 billion hair oil market, coconut hair market contributes 55%, light hair oil market 17% cooling hair oil market 10% and Amla hair oil 18%. In the Coconut hair oil segment, marico - the leading brand manufactured by Parachute - controls a market share of 56%, while Shalimar controls 8% and Dabur controls 5%. Strategies to tap emerging rural market The companies are ramping up their promotional activities to tap the rural

Hair Oil Segments

Light17%

Amla18%

Cooling10%Coconut

55%

Coconut Hair Oil Market Share-2009

Marico56%

Others31%

Shalimar8%

Dabur5%

Source: Market Sources; Cygnus Research

Segment-wise Top Brands • Coconut – Parachute (Dabur) • Amla – Dabur Amla (Dabur) • Light and fragrant hair oils – Bajaj Almond Drops (Bajaj) • Cool hair oil – Emami Navaratna (Emami)



market. Rural market presents a major opportunity for the hair oil manufacturers. The companies are coming up with small packs to increase their brand penetration. The companies are using the following strategies:

Make it economical (especially as compared to the market leader) Make the brand available in different packaging options Increase availability (i.e. make the brand available even in the smallest shops/vendors in the village) Grab shelf space at eye level in visible area Educate consumers about added benefits at pop On ground activities (ex. stalls on Bazaar day)

Export Activities The overseas demand for perfumed hair oil overseas has increased after 2006-07. However, there was no much increase in 2007-08 and (Apr-Dec) 2008-09, due to lower demand. Regulations The Central Board of Excise and Customs (CBEC), on June 3, 2009, intimated to impose 8% excise on coconut oil packs below 200ml. FMCG companies may re-engineer the packaging of coconut hair oil by increasing the grammage to escape the purview of the Central Board of Excise & Customs' decision to impose eight per cent excise on product packs under 200ml. Threat to the product Since more than 50% of the Indian population uses Hair oil on a regular basis, there is no direct threat to this product. Outlook Despite market slowdown, India remains one of the fastest growing beauty markets globally, growing at 13% per annum and valued at US$6.3 billion; And hair oil segment is also growing at a double digit rate. The companies are designing strategies to tap the rural market. The government increased budget allocation for rural areas under various schemes aimed at developing rural India. The climate in India makes people in the country use hair oil for different reasons.

Source: DGFT; Cygnus Research

Exports - Perfumed Hair Oil

100

200

300

2004-05 2005-06 2006-07 2007-08 2008-09

Rs m



COMPANY SCAN

Colgate Palmolive India Ltd Colgate-Palmolive (India) Limited engages in the manufacture and marketing of fast moving consumer goods in India and internationally. It primarily offers oral care and personal care products. The company’s oral care products include toothpastes, toothbrushes, toothpowder, and whitening products. Its personal care products consist of shower gel, shower cream, bar soaps, liquid hand washes, shave creams, and skin care products. It also offers household products, which include a dish washing paste. In addition, it provides specialised dental care products for gingivitis treatment, sensitivity treatment, tooth whitening, fluoride therapy, and mouth ulcer treatment. The company was founded in 1937 and is based in Mumbai, India. Colgate-Palmolive (India) Limited is a subsidiary of Colgate-Palmolive Company. The company has grown to a Rs13000m plus organisation with an outstanding record of enhancing value for its strong shareholder base. The company dominates the Rs24000m Indian toothpaste market by commanding close to 50% of the market share. Product Range

Business Strategies • Colgate-Palmolive considers environmental, health and safety issues in all its significant business

transactions, including acquisitions, divestitures, discontinuance of operations, and entry into joint ventures.

• Colgate-Palmolive provides the public with safe and effective products and will strive to produce products that have the lowest practical impact on the environment.

Company’s Performance at a Glance

Segments Products Oral Care Colgate Toothpaste, Colgate Toothbrush, Colgate Toothpowder, Whitening Products Personal Care Deodorant, Bodywash, Soaps, Toiletries Home care Dishwashing, Household Cleaners, Fabric Conditioners

Performance at a Glance Item(Rs m) 2004-05 2005-06 2006-07 2007-08 2008-09 Net Sales 9642.20 11241.90 12951.40 14733.80 17708.20OPM % 20.92 19.56 16.82 21.27 20.86NPM % 11.75 12.24 12.37 15.73 16.39Depreciation 223.70 314.30 152.60 198.40 229.50Interest 11.60 5.90 9.80 14.40 11.00PAT 1132.90 1376.00 1601.70 2317.10 2902.20Source: BSE India; Cygnus Research

Key Ratios at a Glance 2004-05 2005-06 2006-07 2007-08 2008-09 Debt-Equity Ratio 0.01 0.02 0.02 0.02 0.02Long Term Debt-Equity Ratio 0.01 0.02 0.02 0.02 0.02Current Ratio 0.97 0.85 0.90 0.85 0.91OPM (%) 20.92 19.56 16.82 21.27 20.86NPM (%) 11.75 12.24 12.37 15.73 16.39ROCE (%) 71.69 71.23 90.01 129.95 178.61RONW (%) 45.86 52.84 71.23 104.67 153.35Source: BSE India; Cygnus Research



Performance Analysis

The net sales of the company during the year 2008-09, have resulted to an increase of 20.19% to reach Rs17708.2, from Rs14733.8m in the year 2007-08 at Rs14733.8m. During the year soaps, cosmetics and toilet preparations segment has registered an increase of 14% and the tooth brushes and shaving brushes has increased by 24% when compared to that of 2007-08. The operating costs of the company have remained the same at 79% as a percentage of sales and the operating profit of the company has increased by 17.88% during 2008-09. The net profit of the company has also increased by 25.25% to reach Rs2902.2m. During AMJ09, the net sales of the company have increased by 19.09% to reach Rs4854m from Rs4076m in AMJ08. The operating profit has increased by 35.78%, net profit also increased by 33.36% to reach Rs1027.8m.

Performance Analysis

Quarterly Performance Financial Year Performance

AMJ09 AMJ08 Var (%) 2008-09 2007-08 Var (%)

Sales 4854.00 4076.00 19.09 17708.20 14733.80 20.19 Other Income 85.80 311.70 -72.47 227.10 847.80 -73.21 PBIDT 1311.50 965.90 35.78 3693.60 3133.30 17.88 Interest 4.50 1.10 309.09 11.00 14.40 -23.61 PBDT 1307.00 964.80 35.47 3682.60 3118.90 18.07 Depreciation 56.30 63.50 -11.34 229.50 198.40 15.68 PBT 1250.70 901.30 38.77 3453.10 2920.50 18.24 TAX 222.90 130.60 70.67 550.90 603.40 -8.70 PAT 1027.80 770.70 33.36 2902.20 2317.10 25.25 Source: BSE India; Cygnus Research

Net Sales

8000

12000

16000

20000

2004-05

2005-06

2006-07

2007-08

2008-09

Rs m

Product Mix 2007-08

Soaps & Toiletries

88%

Tooth & Shaving Brushes

11%

Others1%

Source: BSE India; Cygnus Research



Common-size Comparison The net sales of Colgate have registered an increase of 20% during 2008-09, while Dabur India registered an increase of 16% and Emami 12%. The operating cost of Colgate as a percentage of sales stood at 80% while it is 82% for Dabur India and 83% for Emami. Of the total operating cost components of the company, the raw material consumption is the major component; stood at 22.34% as a percentage of sales. It stood at 36.9% and 25.63% for Dabur India and Emami respectively as a percentage of sales. Colgate advertisement expenditure reached 15.34% as a percentage of sales which is higher than that of Dabur and Emami. The net profit of the company stood at 16.39% as a percentage of sales while it is 15.45% and 10.35% as a percentage of sales for Dabur India and Emami. Cost Structure Analysis

The cost structure components of the company include raw material, staff cost, advertising, traded goods purchases, depreciation, interest and other expenditure. The raw material consumption cost of the company has increased by 334 basis points at 22.34%. The other expenditure of the company has declined by 98 basis points. The staff cost has increased slightly by 7 basis points. The advertising expenditure of the company as a percentage of sales has declined by 207 basis points, but the actual expenditure increased. The traded goods purchases have declined by 431 basis points. The depreciation has declined slightly by 5 basis points. The interest has also declined by 4 basis points and the tax paid by the company come down by 98 basis points. Stock Market Performance The stock market has started reviving with the rise in the investors’ confidence. The Sensex has crossed 15000 mark in the month of July 2009. The positive cues sent by the elections have increased the investor confidence. The benchmark index for FMCG has also increased more than Sensex. The effect of global slowdown was very minimal on this sector and the players of this sector have performed very well during

Common Size Comparison for 2008-09 (% of sales)

Colgate Dabur Emami

Other Income 1.28 0.88 0.53Raw Material Consumed 22.34 36.90 25.63Other Expenses 15.12 12.19 18.36Staff Expenses 8.10 6.92 6.17Advertising Expenses 15.34 11.78 15.21Purchase of traded goods 19.78 15.27 19.65Interest 0.06 0.55 3.94Depreciation 1.30 1.13 1.11PBT 19.50 17.58 12.22Tax 3.11 2.13 1.88PAT 16.39 15.45 10.35Source: BSE India; Cygnus research

Cost Structure as Percentage of Net Sales

2004-05 2005-06 2006-07 2007-08 2008-09

Raw Material Consumed 12.26 18.41 18.47 19.01 22.34Other Expenses 10.57 12.48 14.71 16.10 15.12Staff Expenses 7.75 7.69 13.12 8.03 8.10Advertising Expenses 14.19 17.60 16.02 17.41 15.34Purchase of Traded Goods 38.94 26.17 26.46 24.09 19.78Depreciation 2.32 2.80 1.18 1.35 1.30Interest 0.12 0.05 0.08 0.10 0.06Tax Charges 6.73 4.47 3.20 4.10 3.11Source: BSE India; Cygnus Research



the quarters JFM09 and AMJ09 and clocked a growth rate of 13% on an average. The share prices of the company have also been following upward trend. The share prices have increased by 62% in the month of July 2009, when compared to that of August 2008. The major change in the share prices of the company was observed in the month of June 2009, reached Rs605.9 from Rs474.25 in May 2009.

Recent Strategies The company, as a part of its continuous effort to improve oral hygiene in the country, announced the ‘Learn and Earn’ offer, designed to enable consumers to learn the 5 simple oral care tips and earn scholarships worth Rs10,000 each. The key focus of this campaign is to reach out to children and not only educate them about the basic oral care habits but also support them in their educational endeavour through scholarships. Outlook The net sales of the company are expected to increase by 15% during 2009-10 to reach Rs20364.43m. The company’s recent pull strategy of Learn and Earn is likely to pay off well through increased sales. There is a steady increase in the volume and the market share of the company which indicates the strengthening position in the Oral care market and benign competitive scenario. The company is expected to perform well driven by price hikes and improvement in product mix, new product launches (particularly under the Palmolive brand) and heavy investments in building brand equity.

Relative Market Cap Performance

45

85

125

165

Aug-0

8

Sep-0

8

Oct

-08

Nov-0

8

Dec-

08

Jan-0

9

Feb-0

9

Mar-

09

Apr-

09

May-0

9

Jun-0

9

Jul-

09

Colgate BSE SensexBSE FMCG

Share Holding Pattern

Insti-tutions22%

Public27%

Pro-moters51%




STOCK SCAN

15 Jul-26 Jul 27 Jul- 02 Aug 03 Aug-09 Aug 10 Aug-14 Aug

SENSEX

Sensex ended on a positive note during this period on increased capital inflow by funds.

Improving global cues made Sensex to register gain during this period.

Sensex ended on a negative note during this period, as realty, metals, auto, infrastructure stocks had not been performed well.

Investors remain bullish during this period and buying seen in the market. Sensex gained during this period.

BSE FMCG

The bench mark index for FMCG has registered a growth of 153 points.

The FMCG index has increased by 65 points during this week.

The FMCG index has declined by 164 points during this week.

During this week, the index has increased by 74 points.

P&G

The share prices of the company have increased by 2% during this week.

Share prices have further increased by 3% during this week.

Share prices declined by 5.6% during this week.

Share prices declined by 0.9% during this week.


90

110

130

16-J

ul

17-J

ul

18-J

ul

19-J

ul

20-J

ul

21-J

ul

22-J

ul

23-J

ul

24-J

ul

25-J

ul

26-J

ul

27-J

ul

28-J

ul

29-J

ul

30-J

ul

31-J

ul

1-A

ug

2-A

ug

3-A

ug

4-A

ug

5-A

ug

6-A

ug

7-A

ug

8-A

ug

9-A

ug

10-A

ug

11-A

ug

12-A

ug

13-A

ug

14-A

ug

SensexGodrej ConsumerP&GBSE FMCG


95

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115

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SensexBSE FMCGHUL




Godrej Consumer

The share prices of the company have soared by 20% during this week.

Share prices declined by 2% during this week.

Share prices further declined by 3.2% during this week.

Share prices increased by 5.3% during this week.

HUL Share prices have increased by 5.7% during this week.

Share prices declined by 2.5%.

Share prices further declined by 5.2% during this week.

Share prices declined by 1.54%.



UPCOMING EVENTS

1. Event Astana Beauty - 2009 Date Sep 01, 2009 Venue Sport Complex Alatau, Astana,

Highlights

Astana Beauty - 2009 provides professionals with the platform from which to interact and conclude business with their trade & consumer clients. At the expo, visitors will have a unique opportunity to meet and interact with companies who represent the products for beauty.

Contact Details

ITECA Caspian, 63, Ac. Hasan Aliyev Str., 5th Floor, Baku, Azerbaijan. Tel: +(99)-(41)-4474774; Fax: +(99)-(41)-4478998, Web: www.iteca.az

2. Event Thailand Health & Beauty Show (Thailand HBS) Date Sept 02-06, 2009

Venue Impact Exhibition & Convention Center, 99 Popular Road, T.Banmai, A.Pakkred, Nonthaburi, Bangkok, Krung The, Thailand

Highlights

The exhibition will give opportunity for the healthcare and pharma industry to showcase the total solutions, facilities, infrastructures available in the health and beauty industry under one roof.

Contact Details

Department Of Export Promotion, 22/77 Rachadapisak Road Chatuchak, Bangkok, Thailand, Tel: +(66)-(2)-5115066; Fax: +(66)-(2)-5116008

3. Event Beauty Forum Austria Date Sep 05-06, 2009 Venue Salzburg Exhibition Centre, Salzburg

Highlights

BEAUTY FORUM AUSTRIA is Austria's No. 1 cosmetic trade fair aiming at offering exhibitors and visitors a business platform. With around 250 exhibiting companies and brands and over 6.500 visitors, it is must-see event for the Austrian cosmetic industry. Every year the latest trends and innovations are on show.

Contact Details

Health & Beauty Marketing Ges.m.b.H. Weibenwolffstr, Linz, Austria Tel: +(43)-(721)-165373

4. Event In-Cosmetics India Date Sep 09-10, 2009 Venue Bombay Exhibition Centre - NSE Exhibition Complex, Mumbai, Maharastra

Highlights

In-cosmetics India is the leading exhibition and conference in India for personal care ingredients. Taking place annually in the autumn and situated in Mumbai, it allows leading suppliers to do business face-to-face with over 2500 unique visitors.

Contact Details

Reed Exhibitions India. 11th Floor, Building No. 9-A, DLF Cyber City, Phase - III, Sector 25-A, Gurgaon, India, Tel: +(91)-(124)-4686300; Fax: +(91)-(124)-4686309, Web: www.reedexpo.in

5. Event Beauty World Date Oct 02-04, 2009 Venue Estonian Fairs Centre, Pirita tee 28, Tallinn, Harju, Estonia

Highlights

Beauty World provides professionals with the platform from which to interact and conclude business with their trade & consumer clients. At the expo, visitors will have a unique opportunity to meet and interact with companies who represent the products they admire so greatly, to gather the information they need to make informed purchase decisions, and indeed to purchase directly from the exhibitors on site.

Contact Details

Estonian Fairs Limited. Pirita Tee, Tallinn, Estonia Tel: +(372)-(613)-7337; Fax: +(372)-(613)-7447



6. Event Uroda - Cosmetics and Hairdressing Fair Date Oct 03-04, 2009 Venue Exhibition Center Gdansk, Gdansk, Poland

Highlights

Uroda - Cosmetics and Hairdressing Fair is the largest cosmetics and hairdressing exhibition in Northern Poland. It brings the worldwide professional beauty industry together all at one place at one time. It has established itself as the continent's premiere beauty industry exhibition.

Contact Details

GDA SK International Fair Co. Mi dzynarodowe Targi Gda Skie, 5 Beniowskiego St, Gdansk, Poland Tel: +(48)-(58)-5549200; Fax: +(48)-(58)-5522168

7. Event Cosmetic Expo Date Nov 21-23, 2009

Venue Damascus International Fairground, Fairgrounds-Airport Highway P.O.Box : 5377, Damascus, Syria

Highlights

Cosmetic Expo 2009 is going to be a high-profile event showing the most ambitious opportunities in Syria. It is going to be one of the biggest, most comprehensive exhibitions in cosmetic field. This is the sixth edition of the event.

Contact Details

Syrian Expo Centre, P.O.Box:5377, Damascus, Syria Tel:+(963)-(11)-33221100; Fax:+(963)-(11)-3347037

8. Event Professional Beauty & Fitness India Date Nov 29-01, Dec, 2009 Venue India Expo Centre EXPO XXI, Greater Noida, India

Highlights

Expomedia Events India presents the 4th edition of Professional Beauty & Fitness India [Formerly known as Professional Beauty India (PBI)], a B2B exhibition aimed at bringing together the entire spectrum of the beauty industry.

Contact Details

Expomedia Events India Pvt Ltd 2nd Floor, Som Datt Tower, K-2, Sector 18, Noida, India. Tel:+(91)-(120)-2516110; Fax:+(91)-(120)-2516020

9. Event Expo Beauty-Armenia Date Dec 19-21, 2009 Venue Yerevan Exhibition Centre, Yerevan, Armenia

Highlights

Expo Beauty-Armenia provides professionals with the platform to interact and conclude business with their trade & consumer clients. At the expo, visitors will have a unique opportunity to meet and interact with companies who represent the products they admire so greatly, to gather the information they need to make informed purchase decisions, and indeed to purchase directly from the exhibitors on site.

Contact Details

Logos Expo Centre, 3, Hakob Hakobyan Str., Yerevan, Armenia. Tel:+(374)-(1)-235775; Fax:+(374)-(1)-235775

10. Event International Perfumes & Cosmetics Exhibition Date Dec 24, 2009 to Jan 02, 2010 Venue Kuwait International Fairs Ground, Kuwait

Highlights

International Perfumes & Cosmetics Exhibition is a trade fair for Cosmetics, Perfumery, Toiletries, Hairdressers and Health Care. Apart from the product innovations it offers an extensive, programme of seminars, numerous activities.

Contact Details

Kuwait International Fair. P. O. Box 656, Safat, Kuwait. Tel:+(965)-(5)-387100; Fax:+(965)-(5)-398123



11. Event Cosmetica Hannover Date Jan 23-24, 2010 Venue Hannover Fairgrounds, Hannover, Germany

Highlights

Cosmetica Hannover is the largest and significantly attractive professional event for the beauty industry. The event will be promoted to attract trade buyers from the region's beauty, health and fitness sectors, as well as top-end consumers by invitation.

Contact Details

Kosmetik International Messe Gmbh. Geschaftsfuhrerin, Gaggenau - Baden, Germany. Tel:+49-7225-916150

12. Event Beautyworld Frankfurt Date Jan 30-02 Feb, 2010 Venue Messe Frankfurt. Ludwig-Erhard-Anlage 1 , Frankfurt, Germany

Highlights

Organised by Messe Frankfurt GmbH, the Beautyworld Frankfurt is 4 days event for cosmetics and beauty products industry. Held at Exhibition Centre Frankfurt, Hessen, Germany. The event will be attended by large number of hairdressing saloons, department stores, beauty professionals, spa owners, etc.

Contact Details

Messe Frankfurt GmbH. Ludwig-Erhard-Anlage, 1, Frankfurt Am Main, Germany. Tel:+(49)-(69)-75750; Fax:+(49)-(69)-75756433

13. Event Makeup & Costume Today Date Feb 12-14, 2010 Venue Chennai Trade Centre, Chennai, India

Highlights

The Makeup & Costume Today is recognised as the foremost event of makeup and connecting with the international brands of business. It provides an opportunity to professional makeup artists and top brands in bridging with people of makeup artistry. Organized by Buysell Interactions Pvt. Ltd. The exposition proves to generate fruitful results for salon owners, cosmetology school owner or instructor, spa professionals, etc.

Contact Details

Buysell Interactions Pvt. Ltd. No. 5, Shanmugam Street, Royapettah, Chennai, India. Tel:+(91)-(44)-42177899; Fax:+(91)-(44)-28350839

14. Event Health Fitness & Beauty Expo Date Feb 12-14, 2010 Venue Reliant Center Houston, Houston, United States of America

Highlights

Health Fitness & Beauty Expo is one of the leading trade fairs in Houston. The Exhibition will showcase Health, Fitness, & Beauty Expo everything from Anti-aging to fashion, nutritional breakthroughs, cosmetics, cosmetic procedures including non-invasive, luxury items including green conscious buying, fragrance, skin care, etc.

Contact Details

International Exhibitions, Inc. 1635, West, Houston, United States of America. Tel:+(1)-(713)-5291616; Fax:+(1)-(713)-8211169

Documents

FMCG Cygnus_Sep09