Brands
Q3-2016: Godrej Consumer Products marketing spend up 15%
BENGALURU: Godrej Consumer Products Limited (GCPL) reported 15.1 per cent year-on-year (YoY) growth in advertisement and publicity expenses (Ad, marketing) in Q3-2016 (quarter ended 31 December, 2015, current quarter) at Rs 250.69 crore (10.6 per cent of net Total Income from Operations or TIO) as compared to Rs 217.89 crore (9.7 per cent of TIO), but 1.3 per cent lower quarter-on-quarter (QoQ) than Rs 253.99 crore (11.3 per cent of TIO).
Note: 100,00,000 = 100 lakhs = 10 million = 1 crore
Godrej group chairman Adi Godrej said, “In a challenging operating environment, we have delivered a resilient and competitive performance in Q3-2016. Our consolidated organic constant currency sales growth of nine per cent and EBITDA growth of 19 per cent are well ahead of the market growth. Our India business sustained its volume growth leadership with a growth of nine per cent. Our international business too delivered healthy performance, with an organic constant currency sales growth of nine per cent. Operating earnings growth was ahead of sales growth across most of our geographies, aided by lower commodity costs, calibrated price hikes, stringent cost management and the effective leveraging of brand platforms.”
“While the pace of economic recovery is slower than anticipated, we are hopeful of continuing our relative outperformance in the quarters ahead. Over the next few quarters, we will be introducing several exciting new launches to stimulate demand and extend leadership in our core categories. We are also enhancing our go-to-market infrastructure and investing strategically for the future. Overall, we expect our focus on innovation, distribution initiatives and superior on-ground execution to aid growth ahead of the market. The medium and long-term growth prospects in India and our other emerging markets remain robust. We believe that there is still a lot of headroom for growth across these markets, given the low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results in the future,” concluded Godrej.
Trends
Please refer to Fig A below. GCPL’s Q2-2016 ad spends mentioned above were the highest in absolute rupees during the 15 quarter period starting Q1-2013 until Q3-2016 in this report. Its highest ad spend in terms of percentage of TIO was in Q1-2014 at 13.8 per cent (Rs 239.06 crore). During the period under consideration in this report, its lowest ad spends both in absolute rupees and in terms of percentage of TIO was in Q2-2014 at Rs 145.78 crore and 7.5 per cent. It must be noted that in the nine month period ended 31 December, 2016 (9M-2016), the company has spent Rs 755.80 crore towards marketing expenses as compared to Rs 679.78 crore in 9M-2015, Rs 687.19 crore in 9M-2014 and Rs 486.09 crore in 9M-2013.
During the period under consideration in this report, ad spends in terms of absolute rupees and percentage of TIO shows a linear increasing trend as indicated by the broken blue and maroon trend lines in Fig A below.
GCPL reported 5.4 per cent YoY growth in TIO in Q3-2016 at Rs 2,356.15 crore as compared to Rs 2,235.71 core and five per cent higher QoQ as compared to Rs 2,244.94 crore. During the 15 quarter period under consideration in this report, TIO shows a linear increasing trend as indicated by the broken green trend line.
Profit after tax (PAT) in Q3-2016 at Rs 322.95 crore (13.7 per cent margin) was 22.5 per cent higher YoY as compared to 263.57 crore (11.8 per cent margin) and 12.5 per cent higher QoQ as compared to Rs 287.16 crore (12.8 per cent margin). During the 15 quarter period in this report, PAT shows a linear increasing trend both in terms of absolute rupees and percentage of TIO as in obvious from the broken red and black trend lines in Fig B below.
Category review by GPCL
Household Insecticides
Household Insecticides sustained its double-digit volume growth momentum with a sales growth of 15 per cent. The company attributes growth to the success of its new launches, effective communication and superior on-ground execution. GCPL says that it has consistently gained market share across formats and ended the quarter with its highest ever market share. Good Knight continues to lead category penetration and drive market development initiatives
Soaps
GCPL’s Soaps business maintained its robust mid-single digit volume growth in a highly competitive environment. This was offset by deflationary pressures, resulting in a value growth of two per cent. As part of its focus to premiumise its portfolio, GPCL launched Godrej No. 1 Nature Soft – Glycerin & Honey variant in the winter soap space. It says that its premium soap brand Cinthol continues to lead volume and value growth. GPCL claims that it remains competitive on sales promotion investments, in a low commodity cost environment.
Hair Colours
The sales of Hair Colours declined by one per cent in Q3-2016. While Godrej Expert Rich Crème recorded a growth in the high teens, powder hair colour growth declined due to channel de-stocking. This was caused by up-stocking towards the end of the previous quarter, ahead of price hikes and a decline in value growth due to price-off trade offers. Godrej Expert Rich Crème continues to gain market share and lead distribution reach and household penetration in the crème category. GCPL introduced Godrej Expert Rich Crème in a multi-application pack priced at Rs 120 and also launched a new advertisement campaign.
Liquid Detergents
Liquid Detergents delivered a double-digit, volume driven sales growth of 11 per cent, despite the late onset of the winter. During the quarter, GCPL restaged our Ezee brand with a newly designed bottle. New insight driven communication was also launched to drive brand relevance and penetration.
Air Fresheners
Godrej Aer continues to perform well, aided by innovative product offerings and various consumer engagement initiatives. GPCL says that it has continued to gain market share and Aer is now the number one player in the home sprays air care market (on an exit market share basis). It recently launched Aer pocket, which targets the bathroom air care segment.
Health and Wellness
The company says that its Health and Wellness portfolio of hand washes and hand sanitiser, under Godrej Protekt, has been successfully introduced in the general trade. The initial response has been encouraging.
Premium Hair Care
BBLUNT, GCPL’s range of premium hair care products, has been launched in modern trade and premium general trade outlets.
Brands
UK’s OnlyFans seeks US investor at $3bn valuation after owner’s death
The adult video platform is seeking stability after the death of its billionaire owner
LONDON: OnlyFans is looking for a new partner. The London-based adult video platform is in advanced talks to sell a minority stake of less than 20 per cent to Architect Capital, a San Francisco-based investment firm, in a deal that would value the business at more than $3bn (£2.2bn).
The move is driven by an urgent need for stability. Leonid Radvinsky, the Ukrainian-American billionaire who owned OnlyFans, died of cancer last month at the age of 43, leaving the future of one of Britain’s most profitable privately held businesses suddenly uncertain.
The choice of Architect Capital is not arbitrary. The firm has deep expertise in financial services, which aligns neatly with OnlyFans’ ambitions to offer banking products to its creators, many of whom have long struggled to access basic financial services because of the nature of their work.
The numbers behind OnlyFans are, by any measure, staggering. The platform posted revenues of $1.4bn in the year to 30th November 2024, with a pre-tax profit of $684m, up four per cent on the prior year. Payments to creators totalled $7.2bn over the same period, a rise of nearly ten per cent. Radvinsky personally collected $701m in dividends from the business in 2024 alone, on top of more than $1bn in such payments he had already received. The platform, run through its parent company Felix International, hosts 4.6m creator accounts, with performers keeping 80 per cent of subscription proceeds and the platform pocketing the remaining 20 per cent. It has 377m fan accounts in total.
The current minority stake talks represent a notable scaling back of ambitions. In January, OnlyFans was reported to be in discussions with Architect about selling a majority stake of 60 per cent. Before that, the company had explored a sale to a consortium led by Forest Road Company, a Los Angeles-based investment firm. Neither deal materialised.
OnlyFans has built an enormously lucrative business on content that mainstream finance has long refused to touch. Now, with its owner gone and a $3bn valuation on the table, it is looking for the kind of respectable institutional backing that might finally persuade the banks to take its calls.
