The consolidated net sales for Q4 FY12 has increased by 31% at Rs 1324.94 crore. The domestic business grew by 21% with healthy growth across core categories.

Home care grew by 28%, more than 3x of the category growth of 9%, led by strong marketing investments and distribution synergies benefits. The company continues to gain and enjoy market leadership position across all three formats of coils, aerosols and electrics. It has launched new innovative marketing campaigns and new media on air for Goodknight.

Soap sales growth was 30%, nearly 1.5x of the 20% value category growth. Volume growth of 17% against category volume growth of 4%. The company has launched new variant Rosewater & Almonds under Godrej No.1. Gross margins maintained at previous quarter level and expanded on Y-o-Y basis, led by efficient commodity buying and cost saving initiatives.

Hair Care sales growth was 13%, led by Godrej Expert powder hair colours and Nupur natural mehandi. During the quarter new media campaign launched for Godrej Expert powder hair colours range of products.

International business grew strongly with 27% organic growth. The overall sales has grown by 49% to Rs 518 crore. EBIDTA increased by 98% to Rs 87 crore. Net profit was at Rs 38 crore, up by 26%

Megasari in Indonesia registered strong sales growth of 30%, with sales at Rs 255 crore, on the back of strong marketing investments, distribution expansion and healthy performance of new products launched. The operating margin expands to 20.7% (before payment of technical & business support fee). New product launches viz. HIT magic paper, HIT extra power electric and MITU range of baby products continue to outperform. Middle east business registered sales of Rs 6 crore.

Africa business comprises of Rapidol, Kinky, Tura and the newly acquired Darling group. Sales stood at Rs 128 crore and operating margin at 19.3%. Rapidol continues to grow strongly led by growth in Renew hair colours in caucasian hair colour market - product cross pollinated from India. Integration of Darling group of companies is on track.

Latin America showed strong sales growth of 29%, with sales at Rs 82 crore, led by distribution expansion and new product launches. The strongest operating margin for quarter at 16.3%, expands around 740 bps sequentially and 300 bps on Y-o-Y basis, led by strong sales growth and prudent cost management. Initial responses to the recently launched new products have been very positive. This along with developing business in neighboring countries continues to be backed by strong marketing investments.

Europe showed strong sales growth of 21%, with sales at Rs 48 crore, led by strong performance of own brands. One of the strongest operating margin for quarter at 10.5%, expands around 470 bps sequentially, led by strong sales growth and prudent cost management.

Overall company's OPM inclined by 157 bps to 18.9% on the back of favourable category sales mix, integration led cost savings initiatives, efficient commodities sourcing, competitive and efficient advertising spends. The profit before tax and EO was up by 28% to Rs 232.74 crore

Management Comment

Commenting on the results, Mr. Adi Godrej, Chairman GCPL, said:

Our performance is a reflection of our rigorous effort in driving six strategic pillars of growth, viz, leading in the core categories, growing our international business systematically in line with our 3 by 3 strategy, driving innovation, building a best in class supply chain, creating a future ready sales organisation and fostering an agile and professional entrepreneurial culture.

On all operating parameters, the business has done extremely well. While the macroeconomic environment continues to be challenging, I believe our strong performance is a reflection of the robustness of our business model, a great team and our ability to efficiently manage risks and challenges. I continue to be very confident of the opportunities for GCPL both in India and overseas. We will continue to pursue a prudent but aggressive growth strategy through a blend of organic and inorganic initiatives.

Company's performance

Consolidated results for quarter ended March 2012

(The results are not comparable due to acquisitions / amalgamations made)

The net sales has increased by 31% at Rs 1324.94 crore. The domestic business grew by 21% with healthy growth across core categories.

Home care grew by 28%, more than 3x of the category growth of 9%, led by strong marketing investments and distribution synergies benefits. The company continue to gain and enjoy market leadership position across all three formats of coils, aerosols and electrics. It has launched new innovative marketing campaigns and new media on air for Goodknight.

Soap sales growth was 30%, nearly 1.5x of the 20% value category growth. Volume growth of 17% against category volume growth of 4%. The company has launched new variant Rosewater & Almonds under Godrej No.1. Gross margins maintained at previous quarter level and expanded on Y-o-Y basis, led by efficient commodity buying and cost saving initiatives.

Hair Care sales growth was 13%, led by Godrej Expert powder hair colours and Nupur natural mehandi. During the quarter new media campaign launched for Godrej Expert powder hair colours range of products.

International business grew strongly with 27% organic growth. The overall sales has grown by 49% to Rs 518 crore. EBIDTA increased by 98% to Rs 87 crore. Net profit was at Rs 38 crore, up by 26%

Megasari in Indonesia registered strong sales growth of 30%, with sales at Rs 255 crore, on the back of strong marketing investments, distribution expansion and healthy performance of new products launched. The operating margin expands to 20.7% (before payment of technical & business support fee). New product launches viz. HIT magic paper, HIT extra power electric and MITU range of baby products continue to outperform. Middle east business registered sales of Rs 6 crore.

Africa business comprises of Rapidol, Kinky, Tura and the newly acquired Darling group. Sales stood at Rs 128 crore and operating margin at 19.3%. Rapidol continues to grow strongly led by growth in Renew hair colours in caucasian hair colour market - product cross pollinated from India. Integration of Darling group of companies is on track.

Latin America showed strong sales growth of 29%, with sales at Rs 82 crore, led by distribution expansion and new product launches. The strongest operating margin for quarter at 16.3%, expands around 740 bps sequentially and 300 bps on Y-o-Y basis, led by strong sales growth and prudent cost management. Initial responses to the recently launched new products have been very positive. This along with developing business in neighboring countries continues to be backed by strong marketing investments.

Europe showed strong sales growth of 21%, with sales at Rs 48 crore, led by strong performance of own brands. One of the strongest operating margin for quarter at 10.5%, expands around 470 bps sequentially, led by strong sales growth and prudent cost management.

Overall company's OPM inclined by 157 bps to 18.9% on the back of favourable category sales mix, integration led cost savings initiatives, efficient commodities sourcing, competitive and efficient advertising spends. There was fall in other expenditure by 350 bps to 15.86% of adjusted net sales. However, the raw material cost increased by 220 bps to 43.81%, staff cost by 120 bps to 8.26% and advertisement & publicity was up by 20 bps to 7.53% of adjusted net sales. As a result, the operating profit inclined by 42% to Rs 250 crore.

Other income declined by 32% to Rs 18.38 crore. The interest cost increased by 78% to Rs 19.36 crore while depreciation has gone up by 17% to Rs 15.53 crore due to various acquisitions. There was a forex loss of Rs 0.75 crore. The profit before tax and EO was up by 28% to Rs 232.74 crore

There was EO income of Rs 25 crore in the quarter which is one time exit compensation for its Brylcreem Manufacturing and Distribution license for India and Sri Lanka The tax outgo was 51% up to Rs 60.08 crore due to rise in tax rate from 21.9% to 23.3%. After considering minority interest, the net profit was up by 36% to Rs 192.65 crore due to overall good performance.

For FY12

(The results are not comparable due to acquisitions made)

Net sales grew by 32% to Rs 4866.16 crore. OPM has increased by 30 bps to 18% due to decreased in other expenditure by 227 bps to 16.34%, purchase of traded goods by 85 bps to 7% and advertising & publicity cost by 58 basis points to 8.86% of adjusted net sales. The operating profit inclined by 34% to Rs 875.9 crore.

Other income has inclined by 11% to Rs 52 crore. Interest cost has increased by 51% to Rs 65.84 crore. Depreciation increased by 29% to Rs 64.44 crore due to various acquisitions. There was forex loss of Rs 20.5 crore. Profits before tax and EO has grown by 27% to Rs 777.12 crore.

There was EO income of Rs 200.17 crore which is one time exit compensation for its Kiwi manufacturing and distribution & Brylcreem Manufacturing and Distribution license for India and Sri Lanka. Total tax expenditure has increased by 64% to Rs 226.05 crore. The profit after considering minority interest increase by 41% to Rs 726.72 crore.

Recent developments

In accordance with the Scheme of Amalgamation of the erstwhile Godrej Household Products Limited with the company which was sanctioned by the High Court of Judicature at Bombay, an amount of Rs13.12 crore for the quarter and Rs 52.75 crore for the year ended on March 31, 2012, equivalent to the amortisation of the Goodknight and Hit Brands is directly debited to the General Reserve instead of being debited to the Statement of Profit and Loss.

The Kiwi Manufacturing and Distribution license for the use of Kiwi Shoe Care and Kiwi Kleen Brands in India and Sri Lanka granted to the erstwhile Godrej Household Products Ltd. by Sara Lee Corporation, USA, has been terminated with effect from April 3, 2011. The Company has received Rs 156.19 crore and its wholly owned subsidiary Godrej Household Products Lanka (Private) Ltd. has received Rs 18.98 crore as a one-time exit compensation.

During the year, the Company completed the acquisition of 51% stake in Darling Group operations in South Africa, Nigeria and Mozambique through its subsidiary Godrej Mauritius Africa Holdings Ltd. The Darling Group is a market leader in hair extension products in the African continent.

In January 2012, the Company entered into an agreement to acquire 60% stake in Cosmetica Nacional, a market leading hair colorant and cosmetics Company in Chile. The acquisition has been completed in April 2012.

During the year, the company issued 16,707,317 equity shares of Rs.1 each at a premium of Rs 409 per equity share to Baytree investments (Mauritius) Pte. Ltd. on preferential basis. The issue proceeds aggregating to Rs 684.99 crore have been utilized to retire debt and for general corporate purpose.

The Govt of India, Ministry of Corporate Affairs has issued a Notification dated December 29, 2011, amending the Companies (Accounting Standards) Rules, 2006, in respect of Accounting Standard (AS) 11 relating to 'The Effects of Changes in Foreign Exchange Rates', wherein enterprises have been given an option to accumulate exchange differences in a 'Foreign Currency Monetary Item Translation Difference Account' subject to the conditions specified in the Notification. Accordingly, the Company has exercised the option to accumulate the foreign currency losses for the year ended March 31, 2012 amounting to Rs 15.24 crore in the consolidated results arising on long term foreign currency monetary items in the 'Foreign Currency Monetary Item Translation Difference Account'. Out of the above accumulated amount, Rs 11.21 crore is remaining to be amortized as at March 31, 2012.

The Brylcreem Manufacturing and Distribution license for the use of Brylcreem Brand in India and Sri Lanka granted to the erstwhile Godrej Household Products Ltd and its subsidiary by Sara Lee Corporation USA, subsequently assigned to Unilever, is to be terminated on March 31, 2012 with agreement effective from December 23, 2011. The Company received Rs 24.76 crore and its wholly owned subsidiary Godrej Household Products Lanka (Private) Ltd received Rs 0.24 crore as a one-time Termination Fee, which will be accounted on March 31, 2012.

During the year Company has granted 20,000 shares under Employee Stock Purchase Plan to its employees / directors.

During the year, under the Employee Stock Grant Scheme, 2011, the Company has granted 114102 stock grants to eligible employees in two tranches of 109632 and 4470 stock grants respectively. Out of the total 114102 stock grants, 19136 stock grants have lapsed on account of employees leaving the services of the Company before the vesting date and hence 94966 stock grants are outstanding as at March 31, 2012. l/3rd of outstanding stock grants of second shall vest each year on May 31, 2012, May 31, 2013 and May 31, 2014 and l/3rd of outstanding stock grants of second equivalent number of equity shares of Rs.1 each in the Company shall be issued to the eligible employees.

The Board has declared a fourth interim dividend for the year 2011-12 at the rate of Rs.1.75/- per share {175% on the face value of Rs.1 each)

Valuation

The scrip is trading at Rs 544.85 on BSE.

The total promoters holding in the company stand at 63.97%.

Godrej Consumer: Consolidated Results