Colgate-Palmolive (India) Limited (CPIL) is India's leading provider of oral care products. The Company was incorporated in 23rd September, 1937. The range of products includes toothpastes, toothpowder and toothbrushes under the 'Colgate' brand, as well as a specialised range of dental therapies under the banner of Colgate Oral Pharmaceuticals. These have become an essential part of daily oral hygiene and therapeutic oral care in India. The Company also provides a range of personal care products under the brand name 'Palmolive', such as shaving creams, lotions, face creams, baby powder and talcum powder, etc. From a modest start in 1937, when hand-carts were used to distribute Colgate Dental Cream Toothpaste, Colgate-Palmolive (India) today has one of the widest distribution networks in India a logistical marvel that makes Colgate available in almost 4.5 million retail outlets across the country. The Company has grown to a Rs. 2200 crore plus organization with an outstanding record of enhancing value for its strong shareholder base. The company dominates the Rs. 4100 crore Indian toothpaste market by commanding more than 50% of the market share. 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 95 million school children covering around 1,94,000 schools in 250 towns across the country since its launch. 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 September / October, where free dental check ups are conducted by Colgate in partnership with IDA across the country. Conducted in designated towns and cities to establish and promote the importance of good oral hygiene, OHM is Colgates 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.In 2009, Colgate-Palmolive (India) was adjudged as the Best Value Creator (Mid Cap Category) in the 2009 Outlook Money NDTV Profits Awards. In 2003, Colgate was ranked Indias #1 Most Trusted Brand across all categories by Brand Equitys Most Trusted Brand Survey conducted in conjunction with Neilsen a position it held in succession for four consecutive years from 2003 to 2007 and has been the only brand in the top three coveted position in all the 8 surveys conducted since 2001. Prior to this, Colgate was also rated as the #1 brand by the A&M MODE Annual Survey for Indias Top Brands for eight out of nine years during the period
1992 to 2001
Financial Strategy
CPIL has focused to increase Volume, Margin, Advertising, Operating Profit and Cash Generation while reducing the overheads. The last 5 financials reveal that they are growing in Sales, Margin, Advertising and Operating Profit. CPIL sales has grown from Rs.1295 crores in fiscal year 2006-07 to Rs. 2221 crores in fiscal year 2010-11 achieving a CAGR of 14%
The Gross Margin of last 5 years is being steadily increasing from 719 in financial year 2006-07 to 1349 in financial year 2010-11.
In May 2009, The company has reported a net sales of Rs 472.20 crore, an increase of 16%. The company saw a volume growth of 15% with a strong 15% volume growth in the toothpaste category. The company increased its leadership position to a 52.2% marketshare between JanMar09. Colgate Dental Cream, Active Slat and Cibaca brands continued to deliver good growth. Net profit has seen a growth of 39% to Rs 77.07 crore due to better improvement in margin. The operating profit margin (OPM) of the company increased by 393 bps to 20.7% due to decrease in purchase of traded goods and ASP cost. As a result, the profit before tax before EO increased by 44% to Rs 94.99 crore. Net sales for the year ended March 09 increased by 15% to Rs 1770.82 crore, which also includes the other operating income of Rs 63.33 crore. OPM of the company inclined by 72 bps to 19.9% due to decrease in purchase of traded goods and ASP cost as a % of sales. The profit before tax before extraordinary item (EO) has increased by 19% to Rs 350.17 crore. The consolidated net sales for the year ended March 2009 increased by 15% to Rs 1759.84 crore, which also includes the other operating income of Rs 64.63 crore. During year, the company's market share in toothbrush stood at 37.6% and toothpowder at 48.9%. OPM of the company inclined by 44 bps to 20.6% due decreased in purchased of goods and advertising & sales promotion (ASP) cost. The profit before tax before extraordinary (EO) item has increased by 15% to Rs 353.39 crore. In December 08, CPIL and other companies were not much affected by economic slowdown as for in products like soap, detergent, toothpaste, hair oil etc., which are unavoidable purchases, consumers in it are moving towards value for money products. CPIL started investing on newer value-added toothpaste and tooth brush launching Laung, Kapoor, Neem and Tulsi in March. In September 2008, Colgate Palmolive faced a dent in profit margins because of higher material costs, as price increases didnt match cost escalation. They have emerged relatively unscathed, thanks to strong volume growth, timely procurement strategies and, in many cases, the consumers willingness to take price increases. Though raw material costs take away 45% -55% of net sales, they have a cushion in the form of advertising and promotional spends that account for 10% - 12% of sales. However, intense competition and frenetic new launches have made sure that they couldnt cut corners on ad spend. Price increases therefore have been the order of the day.