Welcome to Colgate-Palmolive India

COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – MAY 2008

Welcome to Colgate-Palmolive India


COUNTRY STATISTICS1. Economy* :

• Inflation at 7.8% (# May 2008)• US $ 300 bn in foreign exchange reserves• Infrastructure investment expected – US $ 492bn• F/X @ 42.70/$ (# May 2008)

2. Growth Rates* :• GDP 8.7%• Industry 8.9%• Agriculture 2.6%• Service sector 10.7%

3. Rural Bias** :• 772 mn people = 72% of the population live in villages• Agriculture contributes 20 % of India’s GDP • Literacy rate 59% - communication is difficult• Only 80% villages are electrified

* Source : Citibank** Source : 2001 Census Data# indicative


COUNTRY AND INDUSTRY PROFILE


FMCG sector continues to be buoyant

Source: AC Nielsen Retail Measurement Services

*

*

58,56154,221

50,43649,43846,809

71,130

83,709

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2001 2002 2003 2004 2005 2006 2007

6%

18%

21%

8%8%2%

Rs. In Million


Growth in all key categories including toothpaste

Growth in categories is Value basedEstimates based on data from AC Nielsen Retail Measurement Services

7.5

10.6

13.2

17.5

14.6

8.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Toilet Soaps WashingPowder

DetergentCakes

Toothpaste Skin Creams Shampoos

%


3 Yr. Growth in all key categories

7.1

11.5

8.6 9.0

11.3

14.8

15.9

0

2

4

6

8

10

12

14

16

18

Toilet Soaps WashingPowder

DetergentCakes

Toothpaste Toothbrush Skin Creams Shampoos

(%)

Growth in categories is Value basedEstimates based on data from AC Nielsen Retail Measurement Services


Indian Oral Care market offers significant opportunities to drive penetration

Category Penetration

44 44 45 46 49 53 53

36 36 35 35 35 35 35

70 71 72 73 74 78 78

0

25

50

75

100

2001 2002 2003 2004 2005 2006 2007

Toothpaste Toothpowder Dentifrice

Source: Indian Readership SurveyDentifrice = Toothpaste or toothpowder


Opportunity to increase per capita consumption by increasing the frequency of brushing teeth

Source: AC Nielsen Retail Measurement Services & Indian Readership Survey

7%110India - Urban

86%285Malaysia

61%219China

%age - twice a day brushing

Per Capita Consumption (Grams/HH/Month)

7%92India - Urban

86%285Malaysia

61%219China

%age - twice a day brushing

Per Capita Consumption (Grams/HH/Month)


COMPANY PROFILE


ROGER CALMEYERVP SOUTH ASIA & MD INDIA

PRABHA PARAMESWARAN VP - MARKETING

MOSES A ELIAS EVP & CFO

SHEKHAR BHARATWAJVP - CUSTOMER DEVELOPMENT

LAURENCE WHEELEREVP – MFG & PSC

K V VAIDYANATHANLEGAL DIRECTOR &

CO. SECRETARYVP - HUMAN RESOURCES

LEADERSHIP TEAM

SANJEEV DALIDIRECTOR GSSO

SURENDRA MANEKV-P IGTC


HISTORY• Incorporated in 1937

• Only CP subsidiary publicly listed with shares traded on a Stock Exchange

1937 – 1978 Pvt. Ltd. Co. Colgate-Palmolive Co – 100% Indian Public – NIL

1979 - 1993 Public Ltd. Co. Colgate-Palmolive Co – 40% Indian Public – 60%


2006 Public Ltd. Co. Colgate-Palmolive Co – 40% Colgate-Palmolive (Asia) Pte. – 11%Indian Public – 49% (Comprising ofIndian Financial Institutions 13%Foreign Financial Institutions 8%Pvt. Corporates 4%Individuals 24%

Total nos shareholders : 136,015)

2007 Reduction of Capital (Face Value of share reduced from Rs 10 to Re 1)Rs 9 paid back to shareholders in Dec 2007

• Incorporated in 1937

• Only CP subsidiary publicly listed with shares traded on a Stock Exchange

1937 – 1978 Pvt. Ltd. Co. Colgate-Palmolive Co – 100% Indian Public – NIL



2006 Public Ltd. Co. Colgate-Palmolive Co – 40% Colgate-Palmolive (Asia) Pte. – 11%Indian Public – 49% (Comprising ofIndian Financial Institutions 13%Foreign Financial Institutions 8%Pvt. Corporates 4%Individuals 24%

Total nos shareholders : 136,015)

2007 Reduction of Capital (Face Value of share reduced from Rs 10 to Re 1)Rs 9 paid back to shareholders in Dec 2007


Aurangabad

Goa

HyderabadMumbai

Baroda

NEPAL

CP FACTORIES - 6DENTIFRICE CM’s - 1

Kodur

TOOTHBRUSH CM’s - 6PCP/HCP CM’s - 3

SuratDaman

Baddi

OPERATIONS NETWORK

Need for outsourcing due to historical regulatory environment

BUSINESS COMPLEXITY


Chennai

AlleppyTrichy

Hasangadh

Bhubaneshwar

Patna

Calcutta

Gauhati

IndoreAurangabad

Kanpur

Morinda

Jaipur

Ghaziabad

Bangalore

Goa

Hyderabad

Delhi

Mumbai

BarodaRaipur

WAREHOUSES - 23

DC & WAREHOUSES - 3

Vijaywada

Uttaranchal

Bhiwandi

TripuraJamshedpur

SATELLITE WH’s - 4

Jammu & KashmirHimachal

Chandigarh

Hubli

Historically each State has had its regime of sales & local taxes, in addition to a Central Sales Tax

WAREHOUSE & DISTRIBUTION

NETWORK


CATEGORIES / PRODUCTSCATEGORIES / PRODUCTS


Colgate was voted “The Most Trusted Brand” in

India for the fourthconsecutive year in the

Brand Equity ORG-MARG ACNielsen survey

across all brands and categories. This is the

sixth survey and “Colgate”has been the only brand to be consistently ranked in the top 3 for all the six years and to hold the leadership for four consecutive years.


MOST TRUSTED BRAND

Ranked India’s # 1 Most Trusted Brand for the 4th time in a row in the Brand Equity – A.C. Nielsen 2007 Survey

Only Brand to be ranked among the top 3 in all the 6 surveysconducted so far

Only one to retain the premier position across categories for 4 consecutive years

Prior to this, Colgate was also rated as the #1 brand by the A&M- MODE Annual Survey for India’s Top Brands for eight out of nine years during the period 1992 to 2001.


DISTRIBUTION NETWORK• 1843 direct accounts & 3,814,284 indirect accounts

• 2nd most widely distributed product in the country

• Numeric Distribution of CP Paste @ Dec 2007:

Urban 83.4%

Rural 76.2%

Urban + Rural 79.5%


Strategic Position

* Urban only

Source: AC Nielsen Retail Measurement ServicesPeriod : Jan+Dec 07

Category Value SOM % Market Position Relative Share

Tooth Paste 48.4 1 1.6

Tooth Powder 44.3 1 1.4

Tooth Brush 34.9 1 2.2

Liquid Handwash* 6.9 4 0.1


Share of MarketToothpaste

2005 2006 2007CY Q1

2007CY Q1

2008 2007-2006Colgate 46.7 47.8 48.4 48.2 48.3 0.6Competitor 1 32.1 30.4 29.9 30.0 29.8 (0.6)All Other 21.2 21.8 21.7 21.8 22.0 (0.1)

- Share of market - Value- Source: AC Nielsen Retail Measurement Services


Share of MarketToothpowder


2005 2006 2007CY Q1

2007CY Q1

2008 2007-2006Colgate 46.6 44.2 44.3 44.2 45.5 0.1Competitor 1 31.5 31.0 31.0 31.6 30.0 (0.1)All Other 21.9 24.8 24.7 24.2 24.5 (0.0)


Share of MarketToothbrush


2005 2006 2007CY Q1

2007CY Q1

2008 2007-2006Colgate 30.9 34.4 34.9 34.9 37.2 0.5Competitor 1 19.9 16.5 15.5 16.7 13.9 (1.0)Competitor 2 11.6 9.9 15.9 13.2 17.6 6.0All Other 37.7 39.2 33.7 35.2 31.2 (5.5)


BUSINESS MODEL


Closer toDRIVING - Customer

GROWTH - Consumer- Profession

FUNDINGGROWTH

Efficiency & Effectivenessin Everything

INNOVATION EVERYWHERE

Consumer InnovationCentre

BEST PLACETO WORK

BUSINESS MODEL


Closer to the Customer….Disha & eChoupal50% of India’s GDP and purchasing power lies in rural

Only 60% of villages are connected by an all weather road

Currently CP reaches only 79% of the universe, barriers to further coverage expansion being

Inefficient last mile logisticsScaling up distribution through stockist is expensive and difficult to track

Advent of two new rural coverage projects for rapid distribution in rural areas :

Ride with someone who goes deeper –eChoupal (village gathering place)

Train independent traders to go deeper -Disha


Closer to the Customer….Disha & eChoupal

eChoupalE-Choupal is a concept wherein trained farmers (Sanchalak) manage prominently located IT enabled Choupals

Activity increased from 120 choupals (Jan 05) to 5,335 choupals (Dec 07)

DishaDisha covers 47,000 Haats – unregulated periodic markets (market size - US $1.0 billion) at 1/100 of the conventional cost using unemployed youth in rural India

No of villages covered - increased from 162 (Dec 04) to 4,620 in (Dec 07)


social c

ause

Oral cancer

Pledge collection from all

contact points

OHM 2007 – The wheels in motion…

• Brush Up Challenge• Consumer Contact

Program• Shopper Engagement

Program• ITC E-Choupal• Disha

• Media • Public Relations• Trade Activities• On pack messages

‘Supporting the treatment of oral cancer patients’ Collection of pledges from all contact points

• In Clinic | Baddi Factory| Corporates • Rotary• Rural Camps• Regional Initiatives• Mobile Vans


OHM 2007 -Innovation Everywhere

• 66 % increase in participation of dentists

• 72 % increase in town coverage for free dental checkups

• Additional reach to 432 villages

• Reaching out to over 11 million people through OHM 2007


OHM 2007 - Rural Initiatives

• Target: 30K – 100K population villages

• Dental check-up camps in 42 villages/small towns

• Pre-publicity unit in schools & Anganwadis for 1 day

• Dental Camp for 2 days in one town

Pledge collection at all customer contact points

Reaching out to Rural India for the first time with a 3 tier approach

• Target Schools and farmers• Brushing Activity in Schools &

Checkup camps at Choupal Sagars

• 181 villages & 18 Choupal Sagars

• Reaching out to 156villages with project Disha in UP

• Reaching out to 36villages in Maharashtra through schools and haats

• Checkups in Kota Dussera Mela


Colgate Brush Up ChallengeCreated a Guinness record in ‘Most people brushing their teeth (multiple venue)’ with 177,003 kids brushing at the same time


Closer to the Profession….Professional Oral Care• Leverage long standing partnership with the Indian Dental

Association built on trust with the profession• Professional endorsement / recommendation for our brands drives

consumer preference- Builds credibility- Reinforces therapeutic superiority

• Dental profession also a source of business for professional products

• Significant enhancement of dentist detailing reach-- 30,000 dentists (60% of dentist universe) under detailing

coverage in 2007• Professional oral care distribution network consolidated in 60 towns


Closer to the Profession…. Professional Oral Care

BRMO - Brand Recommended Most Often by Dentists

BUMO - Brand Used Most Often by Dentists

Source : Dentist Track 2006 and 2007

YearColgate Comp Colgate Comp

Toothpaste 2007 80% 4% 87% 5%2006 77% 3% 86% 5%2005 75% 6% 82% 5%

Toothbrushes 2007 71% 14% 75% 16%2006 61% 17% 66% 21%2005 54% 23% 62% 23%

BRMO BUMO


Efficiency & Effectiveness in Everything….GTC India

CompetenciesProduct Development : Dentifrice, Soaps, Creams, Talc

Analytical & Micro : Across all Categories

Global Stability Studies : UAP, PCP and OC

Technical Consumer : Oral Sensory PanelSkin Sensory PanelOdor Evaluation Board

Clinical : UAP, Skin, Oral care

Global Statistical Support


Efficiency & Effectiveness in Everything….Global Shared Services Organisation - GSSO

Expanding Global IT capacity & providing resources with leading edge Technology talent

Provide world class IT Services to Colgate Business worldwide

Performance and Reliability as #1 priority

Integrate seamlessly (ONE team) with all Shared service Organizations, Global Development and Enterprise Data center

Leverage time difference - Follow-the-Sun approach (Enterprise Data Center / End User Computing)


Experiment

Follow-The-Sun& programming

Application Support - 227

Grid Projects

Ownership &Accountability

20

55

95

196

270 +

131

Global Support

October 2004 April 2005 October 2005 April 2006 October 2006 January 2008

Normal O

peration

Start-up

Efficiency & Effectiveness in Everything….GSSO Ramp up

25

100

75

200

150

270

50

Headcount


Efficiency & Effectiveness in Everything….Billing Update on Mobile Phones

Provide the latest billing information to concerned CP Sales employees via an SMS.“In-house” web application to keep track of sales performanceIntegration of Colgate’s application with the mobile service provider’s application, allowing billing data to be downloaded from SAPBilling information is now available from anywhere on a 24x7 basisCost savings and an effective use of technology in a very inexpensive manner.


Innovation EverywhereConsumer Innovation Centre

• Dedicated to new product development for the Indian consumer

• A cross-functional team that generate ideas and follow a rigorous innovation process to deliver world class products to satisfy consumer needs.

STRATEGY

PROCESS

PASSION


Best Place To Work• “You Can Make A Difference” Program

3 Global Award winning projects in last 5 years

550 winners from FY2000 till 2007

• Global Talent Pool2005 2006 2007

International Training 25 50 30

Short Term Assignments/ Secondments 13 8 16


FINANCIAL REVIEW


FINANCIAL STRATEGY

Grow Top line

Reduce Costs

Invest in Brand Building

/ New Products

Grow NPAT


(Rs Crores)Quarter Ended

Quarter Ended

Year Ended

Year Ended

31/Mar/08 31/Mar/07 31/Mar/08 31/Mar/07(Audited) (Audited)

- Net Sales (Excl. Excise Duty) 391.33 343.25 1,473.38 1,295.14 - Other Income 21.40 17.35 84.78 67.00

Total Revenue 412.73 360.60 1,558.16 1,362.14

- (Increase) / Decrease in Stock in Trade 3.68 0.13 (2.17) (5.56) - Raw and Packing Material Cost 75.47 59.14 280.03 239.27 - Purchase of Goods 97.65 94.61 354.92 342.65 - Employee Cost 30.74 25.09 117.28 111.91 - Voluntary Retirement Scheme - (0.78) 1.00 58.02 - Depreciation , Amortisation and Impairment 5.45 3.65 19.84 15.26 - Advertising & Sales Promotion 73.45 63.93 256.51 207.50 - Other Expenditure 59.78 46.81 237.26 190.50

Total Expenditure 346.22 292.58 1,264.67 1,159.55

Interest Expense 0.36 0.25 1.44 0.98

Profit from Ordinary Activities Before Tax 66.15 67.77 292.05 201.61

Provision for Taxation -Current Tax 12.87 13.94 58.25 53.98-Deferred Tax (2.64) 2.19 (2.16) (16.74)-Fringe Benefit Tax 0.30 1.05 4.25 4.20

Net Profit after Tax 55.62 50.59 231.71 160.17

Paid-up Equity Share Capital @ 13.60 #136.00 @ 13.60 #136.00(@ - Face value: Rupee 1 per share)(# - Face value: Rupees 10 per share)Reserves excluding Revaluation Reserve 148.61 144.53

Basic and Diluted EPS (Rs.) 4.09 3.72 17.04 11.78

Dividend (Rs.Per share)First Interim Dividend - - 6.00 4.25Second Interim Dividend - 3.25 - 3.25Final Dividend (Proposed) 7.00 - 7.00 - Special Dividend (Proposed) - 2.00 - 2.00 Total 7.00 5.25 13.00 9.50

Aggregate of Public shareholding - Number of Shares 66,636,481 66,636,481 66,636,481 66,636,481 - Percentage of holding 49% 49% 49% 49%

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2008


Grow ToplineQuarterly Sales Growth

(% = current year vs previous year)

2,000

2,250

2,500

2,750

3,000

3,250

3,500

3,750

4,000

4,250

Apr-Jun 2006 Jul-Sep 2006 Oct-Dec 2006 Jan-Mar 2007 Apr-Jun 2007 Jul-Sep 2007 Oct-Dec 2007 Jan-Mar 2008

(Rs.

MM

) 15.1%12.8%

13.6%13.3%

13.7%14.0%

14.0%

19.9%


Net Sales

1,473

1,295

964

1,124

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

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

(Rs.

Cro

res)

+2.7%

+15.2%

+16.6%

+13.8%


Costs (Excl. Advt. & Depre.)

- All numbers adjusted to reflect Operating results for 2007-08, 2006-07 & 2005-06

987882752

666

69.1%

66.9%67.0%

68.1%

0

200

400

600

800

1,000

1,200

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

(Rs.

Cro

res)

Cost % Sales


Advertising


198

137

211

257

17.4%16.3%

17.6%

14.2%

50658095

110125140155170185200215230245260

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

(Rs.

Cro

res)

10%

11%

12%

13%

14%

15%

16%

17%

18%

Advertising % Sales


EBITDA


230202

174161

15.6%

16.7%

15.5%15.6%

3045607590

105120135150165180195210225240

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

(Rs.

Cro

res)

5%

7%

9%

11%

13%

15%

17%

19%

EBITDA % Sales

+8.0%+10.2%

+16.0% +13.6%


EBIT


210187159

139

14.4%

14.2% 14.4%

14.2%

30

50

70

90

110

130

150

170

190

210

230

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

(Rs.

Cro

res)

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

EBIT % Sales

+13.8%+14.7%

+17.2% +12.3%


Profit Before Tax


178199

247

293

17.7%

18.5%

19.9%19.1%

60

110

160

210

260

310

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

(Rs.

Cro

res)

15%

20%

25%

PBT % Sales

+17.6%

+11.5%

+24.3%

+18.8%


Income Tax


65

51

62 61

20.7%

24.9%

25.9%

36.4%

0

10

20

30

40

50

60

70

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

(Rs.

Cro

res)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Tax Tax Rate


Profit After Tax


232

185

147

113

15.8%14.3%

13.1%

11.7%

75

95

115

135

155

175

195

215

235

255

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

(Rs.

Cro

res)

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

PAT % Sales

+29.9%

+4.9%

+26.0%

160

137

+21.4%

+16.4%

+25.4%

231

+44.3%


EPS, DPS & Payout

17.0

11.8

8.3

10.1

13.0

9.5

7.0

7.5

85%

92%

89%

95%

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

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

(Rs.

)

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

EPS DPS Payout


Net Working Capital

-262

-226-201

-123

-17.8%-17.5%

-17.8%

-12.8%

-300

-250

-200

-150

-100

-50

0

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

(Rs.

Cro

res)

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

NWC % Sales


Fixed Assets

80

160 16819171

924

8

50

75

100

125

150

175

200

225

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

(Rs.

Cro

res)

FA Cap WIP


Cash Gen. from Operations


282

122

185

209

50

100

150

200

250

300

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

(Rs.

Cro

res)


Treasury Portfolio

217

271306

313

0

50

100

150

200

250

300

350

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

(Rs.

Cro

res)

- 2007-08 numbers are post payout of Rs 143.20 crores on account of Reduction of Capital


Return on Capital & Equity


310.7%

83.3%

136.3%

108.2%95.4%

53.7%

66.3%64.0%

20.0%

45.0%

70.0%

95.0%

120.0%

145.0%

170.0%

195.0%

220.0%

245.0%

270.0%

295.0%

320.0%

345.0%

2004-05 2005-06 2006-07 2007-08ROE ROCE

Reduction of Capital


Share Price PerformanceSensex, BSE FMCG, COLGATE

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

Apr-07 Oct-07 Apr-08-

500

1,000

1,500

2,000

2,500

3,000

Sensex BSE FMCG CP


Average Yield

1.7%

3.4%

2.9%

3.8%

0.1%

0.6%

1.1%

1.6%

2.1%

2.6%

3.1%

3.6%

4.1%

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

BSE Sensex - 1.03%

SP - 332

SP - Share Price as on 31st March

SP - 432

SP - 182SP - 382


Shareholder ReturnsYear Shares Value

(LC)

1978 IPO - 250 6,2501994 Rights - 1,280 25,6002008 * Holdings - 14,080 53,78,560* as on March 31, 2008

Dividend Received 1,398,699(including Capital reduction of Rs. 9 per share)

Compounded return of 26% since the IPO


THANK YOU

Documents

Welcome to Colgate-Palmolive India