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Colgate-Palmolive

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REPORT ON THE COMPANY OPERATIONS OF

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PAST FIVE YEARS SALES AND PROFIT TRENDS
ABOUT THE COMPANY
PRODUCT RANGE IN DIFFERENT CATEGORIES
NEW TECHNOLOGY AND INNOVATIONS
SUSTAINABILITY AND OPERATIONS
COST ANALYSIS AND THEIR PAST FIVE YEAR TRENDS
MARKET SHARES IN DIFFERENT SEGMENTS
CONTENTS

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Colgate-Palmolive (India) Ltd is engaged in the personal care business, which includes oral care. The oral care products manufactured by the company include toothpastes, toothbrushes, toothpowder, whitening products and mouthwash.
The personal care products manufactured by the company include body wash, liquid hand wash, shave preps, skin care and hair care.
Colgate-Palmolive (India) Ltd was incorporated in the year 1937. In the year 1983, the company introduced their successful product Colgate Plus toothbrush in the market.
ABOUT THE COMPANY

PAST FIVE YEAR PERFORMANCE

Colgate-Palmolive (India) Limited reported its first quarter results for the financial year 2012-13 with net sales of Rs. 736.1 crore, an increase of 20% over the same quarter of the previous year.
Net profit for the quarter is reported at Rs. 117.4 crore, a 17% increase over the net profit of Rs. 100.4 crore for the same quarter of the previous year.
During the quarter, the Company achieved a volume growth of 11%. The Company enhanced its leadership position in the toothpaste category to 54.5% volume market share (Jan’12-Jun’12) from 52.4% (Jan’11-Jun’11). The flagship brands “Colgate Dental Cream”, “Active Salt”, “Max Fresh”, “Colgate Sensitive” and “Colgate Total” contributed to this consistent growth
The toothbrush category has strengthened its market leadership position at a market share of 38.2% (Jan’12 – Jun’12) as against 36.3% (Jan’11 - Jun’11).
The mouthwash category continues its growth momentum which has been enhanced by the recent launch of Colgate Plax Fresh Tea in Q4 2011-12.

During the Past Five Years the Company has focused on the Following main areas to drive growth in the Oral Care Segment.
INNOVATING TO DRIVE CONSUMER AWARENESS: Colgate has increased its Rural and Urban Penetration to 91% and 63% respectively over 80% and 46% in 2008. This has been achieved by an innovative approach to drive awareness by education. Colgate has contacted 104Mn Children to leverage kids as change agents. Colgate has increased its Distribution coverage to 5.14 Mn in 2013 from 4.3Mn on 2010.
INNOVATING TO DRIVE CONSUMER IN NEW SEGMENTS: Colgate has focused on Modern Trade to increase its volumes. As per a recent survey by Colgate 36% of the people visited a Modern Trade outlet in the Last Month. Strong Focus is also in the Rural Markets to drive growth. Still approximately 329Mn People don’t use a Toothpaste and Colgate is Focusing on tapping these untapped potential customers.
INNOVATING TO DRIVE CONSUMER ENGAGEMENT: Colgate’s store coverage has grown by 40% and rural distribution by 25% in the last one. Over 1 million shoppers have been engaged through unique in-store and point-of-sale displays that are helping drive product and category awareness and are driving sales
INNOVATING TO DRIVE SHAREHOLDER VALUE: Your Company has an uninterrupted track record of paying dividend and has delivered compounded Annual Return of 27% since the Initial Public Offer in 19 7 8. Colgate is committed to drive growth through innovation, creating value for all its shareholders.

Colgate-Palmolive is now a Rs. 2895cr plus organization with 54.5% market share in the Indian toothpaste market; this is the highest since 1998. It has about 10 extensions to its flagship product Colgate Dental Cream, an extensively wide range of toothbrush, and one mouthwash, oral care accounts for 80% of its sales.
Colgate is striving to gain higher market share in rural India, and it has been successful in this area by developing strong distribution strength in rural areas. Colgate has the highest reach among all consumer products companies in the country.
To compete with P&G’s Oral-B Pro-Health Colgate has launched innovative products like Colgate Total Pro Gum Health and Colgate Sensitive. To maintain its competitive advantage Colgate has also launched new production facilities to increase its reach. Although the market share has increased, it has been at the cost of profit margins. In January ’13 Colgate achieved a market share of 55.9% in the toothpaste market. It has also expanded its market share in toothpastes from 38.7% in January ’12 to 41.4% in January ’13. The advertising expense increase was so high that its operating profit margin declined by 2.3 percentage points as compared to the previous year.
MARKET SHARE IN DIFFERENT SEGMENTS

SALES AND COSTS TRENDS (LACS INR):

Over the past 5 years Colgate-Palmolive India has seen continually increasing sales revenue. From 08-09 to 12-13, the sales have increased to 181% and the profits have increased to 171%, whereas the cost of goods sold has increased by 62%. Profits saw a dip in the year 10-11 as compared to the previous year.
Both, Employee cost and operations cost of the company have gone by by 71% over the past 5 years.
The cost of raw materials including chemicals, oils, tubes, containers etc. was Rs.901.82cr in 2011, Rs.1093.57cr in 2012 and Rs.1227.99cr in 2013, i.e. an increase of 36%, which is low as compared to the increase in other costs and sales. The manpower costs, raw materials costs and operations costs have been an almost constant proportion of sales over the time.

HORIZONTAL ANALYSIS
PREVIOUS YEAR COST TRENDS

The company believes that integrating sustainability into its daily operations will not only help improve people’s lives but also help making better decisions and this will increase customer loyalty, deliver and ensure long term value to the shareholders and give competitive benefit.
Reducing waste has been one of the most important goals of the company; there have been efforts to reduce waste right from manufacturing operations to product-end-of-life after consumer use. The aim has been to reduce solid waste to achieve environmental and economic gains. In India, Colgate has successfully implemented an innovative solution to recycle its waste, wherein the waste is utilized by a nearby company as a key ingredient; this has given savings of $190000 per year. Colgate aims to reduce waste to landfill per ton of product manufactured by 15% by 2015. In the initial phase of this program it has launched a data collection tool for solid waste.
Colgate has taken up sustainability drive through various initiatives, like Annual Safety Week, wherein all the company facilities incorporate activities around themes like hand safety, industrial ergonomics, forklift safety, along with employees, their families also participate in the programs. It also supports a program called “Positive Step” for children living with HIV/AIDS, and it has been observed that this program helps children become more confident, healthier and perform better in their academics. In the rural areas Colgate implemented a special program that helped build awareness of good oral care and offered scholarships to children. They also celebrate Earth Day by planting trees, volunteering in the community and pledging to conserve resources.
Colgate has achieved $3mn savings through plastic packaging reduction, the company is its distribution efficiency and reducing green house gas emission by increasing the use of ships and trains for transportation instead of trucks and aircrafts, this use of intermodal transportation also reduces costs. It is also improving the efficiency of its leased car fleet and working on tracking the green house gas emission by its fleet across the globe. Globally, 52% of Colgate’s facilities recycle or reuse water in some way.
Colgate has roped in their retail partners in the improvement journey; they have a course on supply chain collaboration wherein, customer development, customer service and supply chain employees address commercial challenges and deliver best-in-class services to their retail partners. They aim to cover 70% of the suppliers in Responsible Sourcing Self-Assessment and/or third party audit.
SHARE PRICES
(1) Over the years Colgate-Palmolive has led the development of oral care category in India through relevant innovations and latest technology advancements. The launch of Colgate Active Salt Healthy White is yet another step in that direction. Colgate Active Salt Healthy White is an innovation from Colgate and has been developed on a core consumer insight of using a combination of salt and lemon to remove yellowness. Integrating the benefits of salt and lemon, this new toothpaste offers an innovative every day solution to yellowness removal.
(2)Colgate Visible white: first of its kind whitening toothpaste today, Colgate, the market leader in oral care creates the beauty segment within Oral Care. It is aimed at creating and growing the whitening segment in the toothpaste category that is so far undeveloped in India. Colgate Visible White offers whiter teeth in just one week. It is supported by the advanced science and technology that is behind all of Colgate's oral care products. We are confident that Colgate Visible White will mark a new chapter in the Toothpaste category in India & make teeth whitening a core part of the beauty regimen of consumers
(3) Colgate revolutionizes Toothbrush technology with the launch of Colgate SlimSoft, a toothbrush with super slim and ultra-soft tapered bristles. Colgate SlimSoft has 17 times slimmer tip bristles than ordinary toothbrushes to remove plaque effectively.
NEW TECHNOLIGIES AND INNOVATIONS:
SUSTAINABILIY AND OPERATIONS

The Share Prices if the Company have been continuously increasing despite slumps in the SENSEX.
The Share Price has shown a CAGR of 30% since 2010 and has grown to 1460(Apr 13) from 712 in 2010.
The major reason for the high growth of the Company Share is because of the volume growth and the growth of the Brand Identity of Colgate Pamolive in India.

TOOTH POWDER PORTFOLIO
RECENT LAUNCHES
PRODUCT RANGE

TOOTHBRUSH AND BODY CARE PORTFOLIO
TOOTHPASTE PORTFOLIO

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