Hyderabad: The Board of Directors of Emami Limited met on Monday, 27th May 2019 to consider the audited financial results of the company for the quarter and year ended 31st March 2019.
During the quarter, the Domestic business was impacted due to a prolonged winter affecting the sales of summer products like cool oils, talcs and deodorants. Weak rural sentiment and adverse liquidity conditions also impacted demand during the quarter. Despite these challenges, the company closed the quarter with Net sales of ₹ 635 cr which grew by 5%. In FY19, however Net Sales at ₹ 2,659 cr grew by 7%.
Domestic business grew by 3% during the quarter due to muted growth of summer brands. However, non-summer brands like Kesh King, BoroPlus, 7 Oils in One and Healthcare range grew in double digits. Market share gains continued for key brands like Navratna, Zandu & Mentho Plus balms, Kesh King etc.
During the quarter, the company launched HE Magic Duo, a unique deodorant that packs two fragrances in one bottle. The company also roped in Bollywood actor, Varun Dhawan to endorse Navratna Cool and Smart cool.
International Business Net Sales grew by 19% during the quarter led by a strong performance in SAARC and MENAP regions.
During the quarter, Gross margin at 60.8% and EBIDTA margin at 24.2% declined by 440 bps and 390 bps respectively due to an increase in raw material costs. In FY19, Gross margin at 65.7% declined by 200 bps and EBIDTA margins at 26.9% declined by 140 bps due to increase in raw material costs. Despite this, EBIDTA grew by 1%.
Acquisition of Creme 21
Emami acquired Creme 21, a leading personal care brand of Germany having major business in Middle East and other focus markets. Skin care and Body care products of Creme 21 fit very well with Emami’s International Business portfolio. Emami is realigning its marketing strategy, product formulations and geographic expansion plans and expects good growth from it upon full integration.
Mr Mohan Goenka, Director, Emami Limited said:
“An extended winter pushing back the onset of summer has adversely impacted the performance of our summer portfolio which contributes over 40% to the 4th Quarter topline. The agrarian crisis too moderated the rural growth. While modern trade registered an encouraging growth of 33%, channel liquidity in the domestic market has been another speed breaker this quarter.”
Mr Harsha V Agarwal, Director, Emami Limited said:
“Challenging operating environment & general sluggishness in demand across sectors, especially rural over the past few quarters restricted our growth for FY19 to single digit. Despite the challenges, our haircare portfolio with Kesh King and Emami 7 Oils-in-One as well as healthcare brands like Nityam have performed very well during the last quarter and registered a handsome growth. Our outlook for FY20 remains positive based on our continued focus on innovation, strategy of strengthening our core brands along with consistent market development to meet the changing consumer needs.”