Colgate Palmolive (Pakistan) Limited (PSX: COLG) – a multinational company operating in consumer goods segments: Oral care, personal care, fabric care, and surface care – has had a good FY17. The firm announced an earnings increase of 15.5 percent along with Rs20 per share dividend in addition to an interim dividend of Rs1.5.
For FY17, the firm’s net turnover posted a growth of 13.6 percent year-on-year, which was primarily driven by strong product mix and media support behind brands. The firm’s increase in gross profit and improvement in margin for the year came from lower input costs such as raw material, freight, and utilities and selective price changes; the decrease in input costs emanated from lower oil prices since FY14, and hence low input costs have been a key driving factor for the company’s profitability.
Selling and distribution costs that are around 20 percent of the net revenues of the company increased by 19.2 percent year-on-year on the back of increased spending of media and promotion.
The firm has been doing well in all its business segments. In FY16, the company re-launched its two brands: Bright and Bonus Tristar that powered the powder detergent category growth. It also launched a new variant in its soap category and continued leadership in the oral care category with strong performance of its flagship brand, “Colgate Maximum Cavity Protection” in FY16.
FY17 has seen the same enthusiasm. Uniquely formulated Colgate Sensitive Pro Relief mouth wash was launched to strengthen the brand’s leadership in oral care. Along with this, Colgate Sensitive Original and Colgate Maximum Cavity Protection were re-launched with new packaging. Where bar soaps continued with double digit growth, the firm expanded Palmolive Naturals Shampoo to increase distribution foot print and visibility. In the fabric care category, media and advertising spend was higher as competition increased for the same category as Bonus lies in.
The top and mid-tier brands Brite and Express continued to do well.
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