With effect from October 18, 2021. Sudhir Sitapati will join GCPL as Managing Director and Chief Executive Officer.
The key focus area for the new MD would be to drive double-digit organic growth and category management, also he will be able to provide an outsider's perspective to business across categories.
During the year, GCPL has grown in double digits at 11% and has delivered an EBITDA growth of 14%.
The company has been able to drive a resurgence in household insecticides and delivered a full-year INR sales growth of 15%. Hygiene (including soaps) continued its strong momentum and delivered a 24% growth for the year.
The value for money products has witnessed sequential recovery both in India and Africa, the USA, and the Middle East delivering sales growth of 14% for the year.
From a geography perspective, India recorded sales growth of 35% led by growth across the portfolio.
The overall rural portfolio grew at 1.4X of urban.
The Africa, USA, and Middle East businesses saw recovery and delivered constant currency sales growth of 9%.
The return ratios continue to move up and the net debt-to-equity ratio came down.
The expense in innovation would be like mid-single digit and it depends on year to year.
As of now, GCPL reached close to around 1.3 million outlets. It continues to see an increase of 6 to 8 percentage in the direct reach.
FMCG in Indonesia has not done particularly well this year.
Indonesia’s margins were 35% Q4 and for FY ’21, the margins would be hovering around the 27 -28 percentage mark and the company still feels there is an opportunity in terms of expanding margin.
Q4FY21 Highlights:
During the quarter, the company’s overall sales grew by 27%, EBITDA grew by 21%, and PAT grew by 20% excluding exceptional items.
Hygiene continued its strong growth momentum growing by 38% and GCPL looks forward to strongly building on this category in the years ahead.
Value for money products grew by 27%. Growth in household insecticides was at 28%. The company also saw continued strong growth momentum in the household insecticide and hygiene categories and sequential recovery in value for money products.
The consolidated EBITDA margins at 20% decreased by a 110-basis point year-over-year due to a drop in the India and Latin America and SAARC margins.
In India, margins decreased by 500 basis points year-on-year driven by the lag between the increase in input cost and end consumer price increases.
The company has taken a 6 to 7 percentage price increase in soaps in Q4FY21 itself, and sequentially the price increase would be to the tune of 3 to 4 percentage.
Product Range Updates:
GCPL had launched natural sticks, but they did not perform well from an efficacy perspective (they did not have to knock down effect) and hence they were not able to sort of effectively compete against the illegal incense sticks.
The company continues to be the market leader in coils by far.
Most of the double-digit growth comes from the core categories and some of these new categories like hair care or even this liquid wash where there is a lot of opportunities because penetration is still low.
The chemist was a big retail initiative that the team took last year. The channel has close to 20 percent growth in the whole of last year
Around 18% market in India is specifically driven by Gold Flash new machine that is the biggest product category.
GCPL is the second-largest soap manufacturer in the country with kind of low teens kind of market share and in the household insecticides category, and nearly half of the market in terms of our market share position.
A mix of air fresheners and liquid detergents and the new age hygiene formats is relatively underpenetrated and hence significant opportunity in terms of distribution.
International Business:
New launches in Indonesia like Saniter soap, Mr. magic hand wash, long-lasting paper burning format have seen good traction during the year.
In Africa, the company is targeting mid to high teens margin over the next 3-4 years.
For Africa's business, the company will be concentrating on distribution and marketing as management believes category-wise and geography wise it is well placed.
Future Outlook:
The company may potentially get into new categories, there might be acquisitions that come up.
GCPL has a very strong product pipeline and will continue to see a lot of new launches coming in from their end.
The company does have kind of very smart packed price architecture strategy and it also sees a lot of sachet kind of offerings from their end whether it be in a hair-color portfolio or whether it is even in the hand wash portfolio.
The focus of the company is to achieve double-digit growth.
Total reach of the company is 6mn outlets whereas direct reach is 1.3mn. Company is targeting to increase direct reach by 6-8% every year
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