Brands
P&G Health halves q-o-q marketing spends in Q4-2014, ups 3.2 per cent in FY-2014
BENGALURU: Consumer goods company Procter & Gamble Hygiene and Health Care Limited (P&G Health) reduced its ad and sales promotion spends (ASP) to less than half in the quarter ended 30 June 2014 (Q4-2014, current quarter) as compared to the immediate trailing quarter (Q3-2014). The company says that its focus on innovation and productivity continued to sustain growth momentum by delivering an increase in net sales.
P&G Health spent Rs 37.99 crore (7.8 per cent of Operating Income or TIO) towards ASP in Q4-2014 versus Rs 83.16 crore (16.6 per cent of TIO) in the quarter ended 31 March 2014 (Q3-2014) and was 33.1 per cent lower y-o-y than the Rs 56.75 crore (13.4 per cent of TIO).
Across 10 quarters starting Q4-2012 until the current quarter, its Q4-2014 APS spends both in terms of absolute rupees and as percentage of TIO were the lowest. Though in terms of absolute rupees, P&G Health’s ASP shows an upward linear trend, in terms of percentage of TIO, the linear trend is downwards.
Notes: (1) The company’s financial year ends on30 June, hence results for the quarter ended30 June 2014 are Q4-2014, for the quarter ended 30 September 2013 are Q1-2014; for the quarter ended31 December 2013 are Q2-2014 and for the quarter ended 31 March 2014 are Q3-2014. Similar nomenclature is applicable for other years.
(2) 100,00,000 = 100 lakh = 10 million = 1 crore
P&G Health’s ASP is made up of two components – advertisement (ad) and trade incentives (incentive) spends. From FY-2008 (year ended 30 June 2008) until FY-2013, the company’s ASP is split has shifted towards increasing incentive spends – the company’s incentive spend has moved from about 20 per cent of ASP to 44 per cent in FY-2014, with ad spends proportionately moving downwards from 80 per cent in FY-2008 to 56 per cent in FY-2013. This does not mean that the company has been spending lower amount of money towards ad spends, it’s just that with higher budgets, the skew is more towards spending more on trade incentives.
P&G Health’s ASP in FY-2014 at Rs 294.49 crore was just 3.2 per cent more than the Rs 285.27 crore in FY-2013, again, the lowest percentage growth over the last 7 financial years starting FY-2008 until FY-2014.
The company’s TIO in Q4-2014 was down 2.9 per cent to Rs 486.1 crore versus the Rs 500.67 crore in Q3-2014 and was 14.9 per cent more than the Rs 423.08 crore in Q1-2014. P&G Health’s FY-2014 TIO at Rs 205.09 crore was 21.6 per cent more than the Rs 168.68 crore in the preceding financial year. Please refer to Fig 1 below.
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P&G Health’s PAT in Q4-2014 at Rs 89.92 crore (18.5 per cent of TIO) was 11.3 per cent more than the Rs 80.76 crore (16.1 per cent of TIO) in Q3-2014 and was 73.4 per cent more than the Rs 51.87 crore (12.3 per cent of TIO) in Q4-2013.
In FY-2014, PAT at Rs 302.02 crore (14.7 per cent of TIO) was 48.6 per cent more than the Rs 203.22 crore (12 per cent of TIO) in FY-2013.
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P&G Health, in its earnings release says that both its feminine and healthcare businesses continued to deliver double digit growth in a competitive market environment behind superior products, strong initiatives and product portfolio strength. It says further that the launch of Old Spice is delivering in line with its expectations. Among its product portfolio, the company has brands such as Whisper (feminine hygiene) and Vicks (healthcare), and Old Spice.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI:Â Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
