P&G ups ad spend in FY12 despite fall in profit

MUMBAI: FMCG major Procter & Gamble (P&G) increased its ad spend by 25.95 per cent in its financial year ended 30 June 2012. The company spent Rs 2.33 billion in FY12 as compared to Rs 1.85 billion a year earlier on advertising and promotions.

The ratio of advertising and promotions spend to total sales of P&G was, however, marginally lower at 17.96 per cent against 18.44 per cent a year earlier.

P&G recorded annual revenue of Rs 12.97 billion, which is 29.31 per cent more than Rs 10.03 billion a year earlier. Its net profit rose 19.87 per cent from Rs 1.51 billion in FY11 to Rs 1.81 billion FY12.

For the quarter ended 30 June 2012, the FMCG giant spent Rs 482.8 million on ads and promotions; a 6.55 per cent increase from Q4 FY12‘s Rs 453.1 million. The revenue for this period was reported as Rs 3.13 billion having scaled up by 27.76 per cent from the corresponding quarter in 2011 at Rs 2.45 billion.

The company‘s net profit for the quarter ended 30 June 2012 was 1 per cent less at Rs 352.7 million compared with Rs. 356.3 million a year earlier. The decrease in profit is mainly attributed to increased expenses under change in inventories of finished goods, work-in-progress and stock-in trade. In the last quarter of FY 11, the company actually earned Rs 34.1 million under this category while this year it spent Rs 62.1 million on the same.

The FMCG giant was one of the sponsors at this year‘s Olympics Games held in London and earned quite a few pats on the back for its global ‘Thank You Mom‘ campaign. In India too, P&G carried out activities and initiatives as part of this campaign. Apart from sponsoring Indian boxer Mary Kom (who went on to win a bronze in the Flyweight (51kg) category), the company also carried out the ‘Fulfill her Wish‘ initiative.

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