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ITC Q4 profit up 26% on year

Financial Results for the Year ended 31st March, 2012

Q4 Pre-tax profit of Rs. 2268 crores and Post-tax profit of Rs. 1614 crores represents a growth of 23.5% and 26.0% respectively. 

Board recommends Dividend of Rs. 4.50 per share for 2011/12 (previous year Dividend Rs. 2.80 per share and Special Dividend Rs. 1.65 per share). 

Non-cigarette FMCG segment registers robust revenue growth of 23.6% and continues to demonstrate improving profitability.  

Hotels business continues to be impacted by the weak economic environment in global source markets and slowdown of the domestic economy. 

Agri Business profits grow 13.6% driven by better realisations and higher volumes. 

Paper and Pulp investments leveraged to improve value capture. Segment results grow by 14.3% for the year. 

The Company posted yet another year of impressive results with topline growth and high quality earnings reflecting the robustness of its corporate strategy of creating multiple drivers of growth. This performance is particularly remarkable when viewed against the backdrop of the extremely challenging business context in which this was achieved, namely, a slowdown in the economic growth, sustained high inflation and continuing cascading impact of arbitrary increases in VAT on cigarettes. 
 
Gross Revenue for the year grew by 14.2% to Rs. 34871.86 crores. Net Revenue at Rs. 24798.43 crores grew by 17.2% primarily driven by a 23.6% growth in the non-cigarette FMCG businesses, 20.0% growth in Agri business and 16.6% growth in the Cigarettes segment. Pre-tax profits increased by 22.4% to Rs. 8897.53 crores while Net Profits at Rs. 6162.37 crores registered a growth of 23.6%. Earnings Per Share for the year stands at Rs. 7.93 (previous year Rs. 6.49). Cash flows from Operations stood at Rs. 8334 crores compared to Rs. 7528 crores in the previous year. 

For the 4th quarter, Net Turnover at Rs. 6861.35 crores registered a growth of 17.6% driven by robust performance in the Non-cigarette FMCG, Agri and Cigarettes segments. Pre-tax profits at Rs. 2268.36 crores and Post Tax profits at Rs. 1614.36 crores grew at an impressive rate of 23.5% and 26.0% respectively over the same period last year. 

The Directors are pleased to recommend a Dividend of Rs. 4.50 per share (previous year – Dividend Rs. 2.80 per share and Special Dividend Rs. 1.65 per share) for the year ended 31st March, 2012. Total cash outflow in this regard will be Rs. 4089.04 crores (previous year Rs. 4002.09 crores) including Dividend Distribution Tax of Rs. 570.75 crores (previous year Rs. 558.62 crores). Read more…

Special News

Achal Bakeri, CMD, Symphony Ltd

Achal Bakeri, CMD, Symphony Ltd, is responsible for the overall strategy, execution and policy formation of the company. Mr. Bakeri leads the management of critical organisational functions such as corporate strategy, international growth opportunities and people development. A leader with a design thinking approach, Mr. Bakeri comes with a rich experience of over two decades in varied fields, including construction, exports, manufacturing and design development. An architect by training, Mr. Bakeri completed his graduation from the School of Architecture in Ahmedabad, Gujarat. He also holds an MBA from the University of South California, US.

Symphony Ltd is a world leader in evaporative air coolers. Established in 1988, the company focuses on innovative designs to create better and eco-friendly products for residential and commercial customers in 60 countries across the globe. The company sold 0.4 million units in India and 0.17 million units in rest of the world in 2011, leveraging from the acquisition of North America-based air cooler company Impco in 2008.
 
In an exclusive interaction with Anil Mascarenhas and Dolly Mirchandani of IIFL, Achal Bakeri says, “At Symphony, we innovate and constantly innovate to create better products for our consumers.”
 
What is the demand scenario for air coolers in India and abroad?

Air coolers are low energy products and environment-friendly. They are sold in the US and Europe as green products. Air coolers are no longer Indian products but available globally.
 
In the past, most factories in India did not have coolers. Workers in many factories used to work in extremely hot temperatures. Now, companies are realising the advantages of working in a cool and comfortable environment. Hence, they are investing money on coolers. Air coolers are gaining interest not just in India but also abroad. These products have to be developed and we are constantly innovating to make better and energy efficient products.
 
What is the mix between residential and commercial segment?

We manufacture and sell our products in both residential and commercial segments in 60 countries across the globe. The residential sector comprises almost 75% of our business, while the commercial and industrial contribute the rest.
 
The share of residential is more because we cater mostly to the Indian market. Also, bulk of our products is exported to the US, which is a big residential market.
 
Among the residential segment who are the big competitors?

The big players include Kenstar, a Videocon group company, Usha and Bajaj Electricals, to name a few.
 
In 1990s, many big companies like Crown, Onida and Khaitan had entered the air cooling business. However, most of these companies exited the business. In 2010, Maharaja Appliances entered the business. We are one of the largest air cooler companies in the world and have remained in this business for almost 24 years now.
 
More companies in India are engaged in the air conditioners business compared to air coolers. Why is this difference?

First let me tell you, air coolers are environment-friendly. Unlike air conditioners, which release CFC (chlouroflourocarbon) gas, air coolers do not emit hazardous greenhouse gases responsible for global warming and other environment-related problems. Secondly, air coolers consume only 5%-10% electricity compared to air conditioners. To give you some specifics, with power-saving technology, Symphony air coolers cool 750 sq. ft. while using just 0.18 units per hour compared to 1.8 units by an air conditioner. An air cooler can be comfortably used in open spaces (gardens, terraces and verandas) where an air conditioner will not be effective.
 
The air conditioners business expanded in India because of a few brands managed to push their products well. However, there is not much innovation in air conditioners business. Most of these products are a replica of the original creations. The percentage of coolers being sold in India is only 3%.

At Symphony, we innovate and constantly innovate. We focus on innovative design to create better and eco-friendly products. Many companies can’t dream of the products which we have innovated. We aim to design something new every year which would excite consumers.
 
I agree that currently the coolers market is smaller than air conditioners. More companies need to enter the air cooler business because any increase in the number of players would automatically expand the market—like it happened with ACs. 
 
Comment on your dealer network.

In the last three years, we have grown our network from 3,000 to over 10,000 now. This season, we are planning to take it to 13,000 to 14,000 networks. The retail dealers’ network is highly fragmented in India. Recently, the company has tapped the modern retail network which now contributes around 6% of sales, while this year we are expecting it to grow to 7% to 8%.
 
If you see, Orient and Bajaj are from electrical business. They are big players and have a huge network, which is a dream for Symphony. Our cooling business network is limited but we have the “right” network. We focus on three main important elements which are innovation, distribution and marketing. Read more…

Domestic News

H&R Johnson begins roll-out of Johnson Germ-Free sanitaryware in Tamil Nadu

H&R Johnson (India), India’s leading tile, bath & kitchen player announced its foray into the premium category health bathroom product business. As part of this foray, it announced the roll-out of Johnson’s Germ-Free sanitaryware in Tamil Nadu. This special range of anti-bacterial sanitaryware has been manufactured using the SilverNano Technology developed by the company’s scientists at its R&D Lab. H&R Johnson (India) is a division of Prism Cement Limited and is listed on Bombay Stock Exchange.
 
Johnson’s Germ-Free sanitaryware follows the launch of Germ-Free tiles pioneered by the company. With the distinction of being the only company to offer Germ-Free sanitaryware & ceramic tiles, H&R Johnson (India) has a huge leverage in offering end-to-end healthy bathroom solutions.
 
Commenting on the Germ-Free sanitaryware roll-out in Tamil Nadu, Mr Ajit Singh, Vice-President Johnson Bath Division at H&R Johnson (India) said, “The launch of Johnson’s Germ-Free sanitaryware is a significant step taken by our company in rolling-out super-premium innovations in the bathroom product business. This unique innovation reiterates our focus to amalgamate science & technology in the manufacturing of ceramic products that offer great value to our customers. We expect this addition of anti-bacterial sanitaryware to catalyze our future growth in Johnson Bath Division.”
 
The market-roll-out of Johnson’s Germ-Free sanitaryware in Tamil Nadu is expected to be completed by June 2012. Post this roll-out, the anti-bacterial sanitaryware will be available at the House of Johnson modern retail stores of the company as well as a large network of exclusive dealers in Tamil Nadu. The market roll-out of this specialised range will also be supported by its Marketing Offices & an extensive distribution network in Tamil Nadu. H&R Johnson (India) expects Tamil Nadu to be a key driver of business volumes in South India.
 
During the last fiscal, H&R Johnson (India)’s revenues crossed Rs. 1729 crores recording a business growth of 18%. Its overall contribution to Prism Cement’s consolidated revenues was 35% during the year. The Johnson Bath Division grew by 40% as against the Overall industry growth of 20% as well as organised sector’s growth of 30%. Johnson Bath Division clocked Rs. 103 crore revenues for H&R Johnson (India). As part of the company’s plans to scale-up the Johnson Bath Division, it plans to invest in building new capacities as well as enhance its existing distribution network going forward.
 
The Germ-Free sanitaryware launched by the company is an amazing melange of aesthetics and hygiene. An outcome of the SilverNano Technology developed by its scientists, this special sanitaryware is coated with special nano ceramic glaze comprising of Silver nano particles (ions) that helps prevent multiplication and growth of bacteria thereby keeping the sanitaryware free from germs. Through this unique innovation, Johnson assures a zone of health and safety in the bathroom.
 
H&R Johnson’s SilverNano Technology uses silver as a core ingredient to create anti-bacterial and anti-fungal properties. These silver nano ions potentially sterilize over 650 types of bacteria. The silver nano particles typically measuring 25 nanometres have a relatively large surface are due to their tiny particle size thereby increasing the contact area with bacteria and fungi and vastly improving its bactericidal and fungicidal effectiveness.
 
The anti-bacterial sanitaryware launched by Johnson has passed the severe BTS Research Institute’s test for bactericidal & fungicidal effectiveness with 99% results. Johnson’s anti-bacterial sanitaryware product range consists of 38 unique bathroom products. As an introductory pricing strategy, the company will offers a specialised Germ-Free bathroom set for Rs. 16650/- Only.

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Global News

General Mills to acquire Brazilian food maker Yoki Alimentos

General Mills said that it has signed a definitive agreement to acquire Yoki Alimentos S.A., a privately-held food company headquartered in São Bernardo do Campo, Brazil. General Mills currently expects the transaction to close during the first half of its 2013 fiscal year, which begins on May 28, 2012, after satisfaction of customary closing conditions.

Yoki is a family-owned Brazilian company established in 1960. Today, its Yoki and Kitano branded products hold leading market positions in several attractive and growing food categories, including snacks (popcorn and snack nuts), convenient meals (side dishes, dry soups), basic foods (grains and beans), and seasonings. Yoki employs more than 5,000 people, and has established a strong operating infrastructure in Brazil, including multiple manufacturing plants and national retail distribution. Yoki reported International Financial Reporting Standards sales of R$1.1 billion for the year ended December 2011.

Chris O’Leary, General Mills’ executive vice president and chief operating officer, International, said, “We are delighted to add Yoki’s talented people and strong brands to General Mills’ growing international business. Yoki adds key capabilities and geographic scale that will accelerate our growth in Brazil. We plan to focus on building the strong Yoki and Kitano product portfolio, expanding our current Haagen-Dazs and Nature Valley businesses in Brazil, and introducing additional General Mills brands in this important market over time.”

Mitsuo Matsunaga, Yoki’s chief executive officer, said, “I am very pleased to see our Yoki brands and businesses joining General Mills. Our family is confident that General Mills' global capabilities, combined with Yoki's outstanding employees and brand portfolio, will lead to accelerated growth in Brazil for years to come.”

As one of the biggest and fastest-growing economies in the world, Brazil is an attractive consumer market. A majority of its 200 million people now belong to the middle class and domestic consumption has become an important economic growth driver.

General Mills’ International operations have been growing rapidly in recent years. Fiscal 2012 international segment net sales are expected to exceed US$4 billion, including sales from the Yoplait International yogurt business acquired July 1, 2011. The addition of Yoki will more than double General Mills’ annual sales in Latin America to nearly US$1 billion.

General Mills said that along with the Yoki acquisition, its fiscal 2013 plans include strong cash returns to shareholders.

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