Procter & Gamble Home Products, an unlisted arm of the world’s biggest consumer goods firm, recorded a 1% decline in sales in FY20, pulled down by the Covid-led disruption in March and slowdown in its beauty business. The company, which sells Tide detergent, Pampers diapers and Pantene shampoo in India, posted sales of Rs 5,831 crore while net profit declined 75% to Rs 152 crore during the year to March 2020, according to financials sourced from AltInfo. A year ago, it had recorded net profit at Rs 616 crore on sales of Rs 5,911 crore.
P&> said it delivered a resilient performance in the fiscal despite a challenging economic environment and pandemic-related disruption in March 2020.
“Company results were trending towards single-digit sales growth for the fiscal year before the lockdown in March 2020. Profit after tax was impacted by a higher effective direct tax rate, a one-time help in the previous year, and operational costs increase partly offset by productivity,” said a P&> India spokesperson. “We continue to remain focused and are making strong progress on driving balanced top and bottom line growth.”
In the consumer segment, P&> in India also has two listed subsidiaries — Procter & Gamble Health & Hygiene, which markets feminine hygiene brand Whisper, and shaving products maker Gillette India. The combined sales of all three units fell 2% to Rs 10,556 crore, growing slower than Hindustan Unilever which increased sales by 2% on a significantly higher base of Rs 39,783 crore.
“Overall, as the P&> group, we have witnessed sharp recovery on the business after the lockdown was lifted and registered profitable high single-digit growth in the July-September quarter. All our manufacturing facilities are operational, and our production and service are back to pre-COVID levels. Our distribution levels are also higher than pre-COVID, and we are reaching out to more stores,” added the spokesperson.
Over the past few years, Procter & Gamble Home Products has been exiting unprofitable categories and product sizes, in line with its global strategy. The move slowed down its revenue growth but turned it profitable. Also, there is a gradual shift in the positioning — from higher margin, urban-centric products to low-priced ones.
While sales of its largest segment of household care which sells laundry, baby care and air freshners, expanded marginally, that of the beauty care category, which includes skin and hair care products, fell 10%. The company controls more than half of the Indian market for diapers, with sales exceeding Rs 2,100 crore, or accounting for third of the overall revenue. According to its regulatory filing, detergents–the category in which it competes with Hindustan Unilever–accounted for 41% of its sales at roughly Rs 2,400 crore.
Credit: Stocks-Markets-Economic Times