Gillette India q-o-q ad spend up 28 per cent in Q4-2014; PAT down 23 per cent

BENGALURU: Procter & Gamble Hygiene and Health Care Limited (P&G) subsidiary Gillette India Limited (Gillette) advertising and sales promotion spend (Ad & SP)in Q4-2014 at Rs 123.84 crore (27.19 per cent of Total Income from Operations of Op Rev) was 27.8 per cent more than the Rs 96.9 crore (22.69 per cent of Op Rev) in the immediate trailing quarter and a whopping 85.92 per cent more than the Rs 66.61 crore (18.66 per cent of Op Rev) during last year’s quarter Q4-2014.

Note: Gillette’s financial year ends on 30 June. However, in keeping with convention in India, its June ended quarter has been termed as Q1 (instead of Q4 of the previous year), Its September ended quarter has been termed as Q2 (instead of Q1 of Gillette India’s new fiscal), the December ending quarter has been indicated as Q3 (instead of Q2 of Gillette’s fiscal), and the March ended quarter as Q4 (instead of Q3 of Gillette’s fiscal) in this article and figures/graphs.

Gillette’s ad & SP trends upwards both in terms of absolute rupee value as well as percentage of Op Rev across nine quarters starting Q4-2012 until Q4-2014. Please refer to Fig 1 below for Gillette’s Ad & SP Exp. Over 4 quarters starting Q1-204 to Q4-2014, Gillette’s ad & SP Exp was Rs 387.90 crore or 23.34 per cent of Op Rev.

Gillette’s PAT has nose-dived (-23.19) per cent to Rs 8.48 crore (1.86 per cent of Op Rev) in Q4-2014 from Rs 11.04 crore (2.59 per cent of Op Rev) in the immediate trailing quarter Q3-2014 and was less than a third (down by -68.78 per cent) of the Rs 27.16 crore (7.16 per cent of Op Rev) of the year ago quarter Q4-2013. Overall, during the nine quarters under consideration, Gillette’s PAT has shown a falling trend in terms of absolute rupee value as well as in terms of percentage of Op Rev. The company’s PAT over four quarters starting Q1-2014 until Q4-2014 was Rs 51.13 crore or 3.08 per cent of Op Rev.

The company’s Op Rev shows an upward trend. During Q4-2014, Op Rev at Rs 455.50 crore was 6.68 per cent more than the Rs 426.97 crore in Q3-2014 and 27.62 per cent more than the Rs 356.92 crore in Q4-2013. During the last four quarters starting Q1-2014 until Q4-2014, Gillette’s Op Rev was Rs 1662.13 crore. Please refer to Fig 2 below.

Three segments contribute to the company’s income from operations – grooming, portable power and oral care. Grooming segment includes blades, razors and toiletries, portable power includes batteries and oral care includes toothbrushes, toothpaste and oral care products. Gillette India’s products are sold under the brand Gillette with sub-brands like Fusion and Mach 3. Gillette India caters to men’s personal care products such as razors, blades, shaving creams, gels, men’s skincare products, among others in India.

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