Overview

From a modest start in 1937, when handcarts were used to distribute Colgate Dental Cream Toothpaste, Colgate-Palmolive (India) (NSE:COLPAL) today has one of the widest distribution networks in India - a logistical marvel that makes Colgate available in almost 6.28 plus million retail outlets across the country. The Company has grown to a ₹4500 crore plus organization with an outstanding record of enhancing value for its strong shareholder base. The company leads the ₹10,500 crore plus Indian toothpaste market.¹

Since 1976, Colgate has worked in close partnership with the Indian Dental Association (IDA) to spread the message of oral hygiene to children across the country under its 'Bright Smiles, Bright Futures' Schools Dental Education Program. This program has successfully reached more than 162 million school children between the age of 6-14 years across 4,31,336 schools in urban and rural India across the country since its launch. In the year 2018 alone, the BSBF program reached 11.5 million children across the country. The program focuses on children so that the message of good oral hygiene is carried home to families and the community at large. In 2004, as an additional effort to create awareness for good oral hygiene 'Oral Health Month' (OHM), was introduced. Since its launch, OHM is conducted each year during October-November, where free dental check-ups are conducted by Colgate in partnership with Indian Dental Association across the country. Conducted in designated towns and cities to establish and promote the importance of good oral hygiene, OHM is Colgate's mass consumer contact program.

The strong relationship and the trust of generations of consumers, trade and the dental profession built over decades of operations in India has made Colgate a trusted household name. Colgate has been ranked as India’s #1 Most Trusted Oral Care Brand for nine consecutive years from 2011-2019 by The Economic Times - Brand Equity - Most Trusted Brands Survey, conducted by Nielsen. Colgate has also been ranked as the Most Trusted Oral Hygiene Brand by TRA’s Brand Trust India Study Report for the ninth consecutive year, from 2011 to 2019.

Colgate was ranked as India’s Most Trusted Oral Hygiene brand in 2019, for the 9th consecutive year, as per TRA’S Brand Trust Report for India, a consumer survey conducted among the country’s top 1000 brands.Further, Colgate also continues to be the No.1 Most Trusted Oral Care Brand in the country for the 9th year in a row, as per The Economic Times Brand Equity Consumer Survey, conducted by Nielsen.

The company is strongly focussed in the Personal Care business which includes Oral Care. The Oral Care business accounts for over 90 per cent of the Company’s sales turnover. Within Oral Care, the Company continues to sustain the leadership position both in the Toothpaste and Toothbrush categories for the financial year ended March 31, 2020 despite a challenging business and competitive environment. As a leading consumer products company, Colgate-Palmolive India is also deeply committed to advancing technology that can address changing consumer needs. This is consistent with the company’s sustained endeavour which is to leverage technology to create products that will improve the quality of life for its consumers.

The Company follows a closely defined business strategy to develop and increase market leadership positions in key products categories. On an ongoing basis, management focuses on a variety of key indicators to monitor business health and performance. These indicators include market share, net sales, gross profit margin, operating profit, net income and earnings per share. The monitoring of these indicators and the Company’s Code of Conduct and Corporate Governance practices help to maintain business health and strong internal controls. The investments needed to support the growth are developed through its funding the growth initiatives such as reduction in costs associated with direct materials, distribution and logistics, advertisement and promotional materials and reduction of packaging materials. While the predominant business of the Company has been confined to Oral Care where it continues to face intense competition, the outlook for industry is positive given the size of the opportunity. The Company believes that with its experience in operating in the challenging environment and continued focus to capture significant opportunities for growth by identifying and meeting consumer needs within its core categories, through its focus on the introduction of innovative products and the deployment of valuable consumer and shopper insights in the launch of successful new products, the Company’s business will continue to grow strongly in the next several years.

Products

The company has wide range of products under following brands.

• Colgate
• Palmolive Naturals
• Protex
• Sanex
• Soft Soap
• Hill's
• Sorriso Toothpaste
• SpeedStick
• Lady Speed Stick
• Suavitel
• Murphy Oil Soap
• meridol®
• Palmolive Dish Soap
• Irish Spring
• Tom's of Maine
• Tahiti
• Softlan
• Ajax
• Fleecy
• Pinho Sol
• Axion
• Cuddly
• Sta-soft
• elmex®
• Fabuloso
• Soupline
• Hello
• Fluffy
• PCA Skin
• Filorga
• Elta MD

Recent Products launched

In the financial year 2019-20, following products were launched/re-launched:

Colgate Strong Teeth: Colgate strong teeth was re-launced with new amino shakti, making it its best ever formulation to give unbeatable strength to the teeth.

Colgate Zig Zag Neem: The latest addition to the toothbrush portfolio is Colgate Zig Zag Neem toothbrush. It’s bristles are infused with Neem extracts.

Colgate Super Flexi Virat Pack: A special edition of Super Flexi toothbrush- the Virat Kohli Signature Series was launched. This limited edition range marks the first ever autographed range of toothbrushes by Colgate.

Premium Powered Toothbrushes with B150: Colgate Proclinical 150 was launched with 2 variants Deep clean & Charcoal. It has an advanced sonic technology with 30,000 brush strokes per min for superior plaque removal.

Colgate Charcoal Clean: Colgate Charcoal clean toothpaste is Colgate’s latest offering which includes Charcoal - the new trending ingredient in personal care & Oral care. With Bamboo Charcoal and Wintergreen mint, this toothpaste promises a clean mouth experience and refreshing breath. Disrupting the Oral care shelf with its clutter breaking black packaging, this black gel toothpaste launched in Nov’19 is already a hot favourite amongst users and across key retail customers.

Colgate Kids ZERO Toothpaste: The allnatural fruit flavoured kids toothpaste, with 0% artificial preservatives, colours, flavours or sweeteners specifically designed for different age groups of children.

Palmolive Luminous Oils Shower Gel: Palmolive Luminous Oils Shower Gel is infused with botanical oils and natural extracts was recently launched. This range of Shower gel elevates the mood and makes for an indulgent bathing experience.

Colgate Super Flexi Charcoal: Toothbrush brand Superflexi has re-launched its Black variant with charcoal infused bristles.

Palmolive Luminous Oils Shampoo: Palmolive Luminous Oils Shampoo are specially crafted to provide nourishment to your hair, moisturize and strengthen them from within. It is made with a luxuriously rich blend of Essential Oils with Camellia, Rose extracts that help make your hair stronger, smoother and shiner.

Business Overview

In India, almost one-third of the population does not have access to modern oral care. To address this situation, the Company has launched various outreach programs under the Keep India Smiling Mission. The Keep India Smiling mission continues Colgate’s 80 plus years of commitment to build strong foundations and create a meaningful impact in the lives of people. It includes the company’s long running, panIndia flagship programs, like - Bright Smiles, Bright FuturesTM (BSBF) - to provide foundational Oral Health education, the Oral Health Month (OHM), to provide free dental-check-ups and foundational community initiatives like providing better water accessibility, women empowerment and livelihood programs. Adding to these flagship programs, the company launched the Keep India Smiling Foundational Scholarship, to offer financial support and mentorship to people from less privileged backgrounds across India to help them translate their dreams into reality. Launched in partnership with ShikshaDaan Foundation, a non-profit organisation that specialises in providing education and development to the underprivileged and Buddy4Study as technology partners, this is a distinct, national program which offers scholarships and mentorships across the fields of education, sports and community betterment.²

Colgate launched the ‘Smile karo aur shuru ho jao’ campaign, in line with its brand purpose of ‘Everyone deserves a future to smile about’. This new brand expression lays emphasis on the positive power of smile in starting new journeys, rooted in the Indian cultural insight of ‘never say never’ attitude. Through this campaign Colgate brings to life stories of real people championing optimism and has featured the inspiring stories of Haimanti Sen, the 22-yearold college student who turned a skywalk into a classroom for the underprivileged, Anand Arnold, the first Indian wheelchair bodybuilder, Yashaswi Jaiswal, the youngest Indian to score a double century in the history of ‘List A’ Cricket, Divyanshu Ganatra, India’s first visually impaired solo paragliding pilot, and Sindhutai (Maai), mother to 1,400 orphans.

In its continuous endeavor to Keep India Smiling, Colgate received a Guinness World Record for most people brushing simultaneously at a single venue in November, 2019, when 26,382 people smiled their way through this record-breaking brushing event. It is yet another statement of Colgate’s commitment to elevate the Oral Health consciousness in the country.

In recent years, the Company has experienced heightened competitive activity, particularly within the Naturals segment. Such activity includes aggressive marketing claims, as well as increased promotional spending. A new campaign “Mooh Swachh Toh Aap Healthy” (A pure mouth means a healthy you) for premium Ayurvedic toothpaste Colgate Vedshakti was announced in March’20. The campaign highlights the role of the mouth as the gateway to its body and how an unhealthy mouth, can increase the possibility of bacteria entering its system leading to higher risk of several health issues. Colgate Vedshakti promises to not only clean but purify the mouth for better Oral and Overall health. The high decibel campaign kick-started with the launch of a TV Campaign. The campaign was amplified further across mediums like Print, Digital & Social Media. To ensure widespread reach, the brand also promoted the campaign through brand engagement with top Instagram influencers across states. The campaign was brought to life in market space by its existing bestin-class distribution network across the country who with their team of salesmen ensured placement of the products in 2,00,000 new stores.

The investments needed to support growth are developed through continuous, Company-wide initiatives to improve realizations, lower costs and increase effective asset utilization. Through these initiatives, which are referred to as the Company’s revenue growth management and funding-the-growth initiatives, the Company seeks to become even more effective and efficient throughout its businesses. These initiatives are designed to drive sustainable revenue growth for the Company and better value products for its shoppers. Through these initiatives the Company also focuses on reducing costs associated with direct materials, indirect expenses, distribution and logistics, and advertising and promotional materials, among other things, and encompass a wide range of projects, examples of which include raw material substitution, reduction of packaging materials, consolidating suppliers to leverage volumes and increasing manufacturing efficiency through SKU reductions and formulation simplification.

As the global pandemic COVID-19 started impacting India, the company in order to ensure health and safety of its employees and their families took adequate pre-emptive measures on travel restriction and enhancing the hygiene & sanitization protocols across all offices and plants and were amongst the first FMCG companies to allow work from home to all its employees. Colgate team displayed their leadership qualities and worked with various regulatory authorities & industry groups to facilitate a more regular and consistent supply of its products to consumers across the country. The Company in collaboration with other FMCG companies worked on “Suraksha Store” initiative of the Central Government to ensure hygiene and safety practices to be adopted by retail stores in allocated geographies thus making those stores a safer place to shop by Consumers. The company enrolled more than 1 lakh stores under the program within a short span of 30 days. Colgate-Palmolive India is very agile through these times and adapted seamlessly to the need of the hour. For the company the previous year 2019-20 had a strong volume and value growth, however for the impact of COVID-19 led to partial closures followed by complete lockdown towards the end of March 2020 which impacted its business operations. With restrictions getting picked up and markets opening the key to driving business initially will be covering and servicing all the stores. Looking forward, the Company expects challenging market conditions and unfavourable macroeconomic conditions to continue. The Company believes it is well prepared to meet the challenges ahead due to its strong financial condition, experience operating in challenging environments and continued focus on the Company’s key priorities: growing sales through engaging with consumers, delivering world-class innovation and working with its distributors and retail partners; driving efficiency on every line of the income statement to increase margins; generating strong cash flow performance and utilizing that cash effectively to enhance total shareholder returns; and leading to win by staying true to the Company’s culture and focusing on its stakeholders. The Company’s commitment to these priorities, together with the strength of the Company’s brands, its best-in-class distribution network and its cost-saving initiatives, should position the Company well to increase stakeholder value over the long term.

Financial Highlights

Reported Net Sales for the financial year 2019- 20 stood at Rs 4,487.57 crores against Rs 4,432.44 crores of previous year. Net Sales increased by 1.2% in comparison to the previous year. Reported Net Profit after tax for the financial year 2019-20 was Rs 816.47 crores, an increase of 5.3% over the previous year.

Colgate-Palmolive has announced an interim dividend worth Rs 490cr for the financial year FY21. The company has presented its quarterly result for September 2020 (Q2FY21) quarter, under which Colgate posted a net profit of Rs 274.2cr compared to Rs 244.1cr in the corresponding period of the previous year.³

"Excluding the one time impact of tax rate change in the previous year, the Net profit growth is 32%," Colgate said.

Further, the company's net sales were at Rs 1,277.6cr in the quarter under review, increasing by 5.3% over the same quarter of the previous year. Colgate's domestic net sales for the quarter witnessed a 7.1% growth.

Ram Raghavan, Managing Director at Colgate-Palmolive (India) Ltd, said, “Colgate-Palmolive India is very pleased with its performance as the company continue to see momentum strengthening across the portfolio with Domestic revenue growing at 7.1% this quarter."

He added, "The company's resilience and disciplined approach to managing all revenue and cost drivers, despite all the uncertainties and challenges around it drove improvements in key financial metrics with gross margins and EBITDA at 67.9% and 32% respectively. The company's Net Profit before tax grew by 32% and Colgate-Palmolive India is pleased that the company were able to increase shareholder value while the company continue to drive innovation that meets the needs of its consumers."

On segment-wise performance, Raghavan said, "All categories saw positive growth this quarter with Toothpaste continuing its accelerated performance, driven by strong brand fundamentals and household penetration."

"The company's sharp focus aimed at fulfilling demand and ensuring uninterrupted access ensured agile and innovative approaches, specifically in its Supply Chain and Distribution efforts," Raghavan added.

The company's board declared a First Interim Dividend for the Financial Year 2020-21 of Rs 18 per share of Rs 1 each (face value). The dividend payout to the shareholders will be Rs 489.6cr and will be paid on and from November 17, 2020, to those shareholders whose names are on the Register of Members of the Company as on November 2, 2020.

Recent developments

November 11, 2020; Launch of the first Anti-bacterial Toothbrush from Colgate. ⁴

Colgate-Palmolive (India) Limited, the market leader in Oral Care in the country, announced the launch of the all-new Colgate Zig Zag Anti-Bacterial Toothbrush, a first-of-its-kind from Colgate in the Zig Zag portfolio. The brand has signed the inspirational Ayushmann Khurrana as the brand ambassador for the launch.

ColgateWhen our toothbrushes are stored, germs attach themselves to our toothbrushes and can end up in our mouths while brushing. Colgate India’s latest Zig Zag Anti-Bacterial Toothbrush equipped with 100% silver-ion anti-bacterial bristles repel bacteria and keep them from attaching to the bristles. In addition, Zig Zag's multi-angled bristles remove germs in between teeth. Available for sale at offline and e-commerce stores, the toothbrush is sold at ₹30 for a single unit.

Commenting on the campaign, Mr. Arvind Chintamani, Vice President, Marketing, Colgate-Palmolive (India) Limited, said, “At Colgate, we are constantly innovating to help consumers lead healthier lives and Colgate Zig Zag Anti-bacterial is a result of this mission. We have introduced advanced silver-ion bristle technology on Colgate Zig Zag Anti-bacterial toothbrush at an affordable price of ₹30. You can find this toothbrush now in millions of stores across the country and on e-commerce platforms.” 

RedFuse Communications, WPP’s integrated communications partner to Colgate India, has crafted an evocative communications campaign to bring to life the idea of how your regular toothbrush acts as a carrier for germs to your mouth, establishing the clear need for Colgate Zig Zag Anti-Bacterial toothbrush. It is slated to build experiences across TV, OTT, and social media in the months to come.

Speaking about the campaign, Delna Sethna, Executive Creative Director, Red Fuse, said, "For new Colgate Zig Zag Anti-bacterial, the communication objective was to explain the advanced technology benefits very simply to everyone. With Ayushmann Khurrana as our ambassador, we are excited with the integrated campaign we created and executed across media, including this year’s IPL season."

October 22, 2020; Colgate Vedshakti launches a first of its kind germ-kill Mouth Spray. ⁵

Colgate-Palmolive (India) Limited, the market leader in oral care in the country, has launched Vedshakti Mouth Protect Spray—a portable spray that fits easily in the pocket and helps you control germ build-up in your mouth in just one easy spray!

Our mouths have millions of germs. These germs are constantly growing as you go about your everyday life—after eating, drinking, or even when the mouth is idle and salivary flow is limited. This germ build-up has many consequences like enamel erosion, infections in the mouth, and an increasingly relevant problem—mask breath!

Colgate Vedshakti Mouth Protect Spray is formulated with powerful Ayurvedic ingredients—Clove, Star Anise, Fennel and Mint. Each time you use Vedshakti Mouth Protect spray, it kills germs instantly, on contact with the mouth.

Vedshakti Mouth Protect Spray not only kills germs in the mouth but also provides long lasting freshness with its minty saunf flavor. Creating a new category of oral care, Colgate Vedshakti Mouth Protect Spray is priced at ₹99 for a bottle that gives you more than 100 sprays.

Speaking about the launch, Mr. Arvind Chintamani, Vice President, Marketing, Colgate-Palmolive (India) Limited, said, "When we are out of our homes, it's not easy to keep the constantly growing mouth-germs in check. Colgate Vedshakti Mouth Protect Spray is a breakthrough innovation. It provides instant germ-killing action in your mouth, refreshes mask-breath with its minty saunf flavor and fits easily into your pocket or purse! Now all you have to do is use Vedshakti spray and keep the mouth germs away!”

Conceptualized by RedFuse—WPP’s integrated communications partner to Colgate India, the campaign TVC aptly depicts the ease with which consumers can prevent germ build up in their mouths, anytime and anywhere with the message, Aa karo, germs ko naa karo (One spray, keeps mouth germs away)

Commenting on the launch campaign, Delna Sethna, Executive Creative Director, Red Fuse, said, “The idea for Colgate Vedshakti mouth spray’s campaign came to us from the product proposition itself. The TVC portrays the importance of oral health for overall health through the convenience and simplicity of a mouth spray.”

References

1. ^ https://www.colgateinvestors.co.in/background
2. ^ https://www.bseindia.com/bseplus/AnnualReport/500830/5008300320.pdf
3. ^ https://www.indiainfoline.com/article/news-sector-fmcg/colgate-palmolive-declares-dividend-of-rs490cr-for-fy21-q2-pat-rises-to-rs274cr-on-higher-domestic-sales-120102200575_1.html
4. ^ https://www.colgateinvestors.co.in/news/launch-of-the-first-anti-bacterial-toothbrush-from-colgate/
5. ^ https://www.colgateinvestors.co.in/news/colgate-vedshakti-launches-a-first-of-its-kind-germ-kill-mouth-spray/