•  26% Total Shareholder Return since listing, 78% Dividend payout in FY18, 41.3% Return on Capital Employed in FY18, 33.5% Return on Net Worth in FY18
  • Going forward, we have identified five areas of transformation – Innovation, Go To Market, Value Management, IT and Analytics, and Enhancing our Talent Value Proposition – to build Marico of the future
  • Marico is a household name in India with brands like Parachute, Parachute Advansed, Saffola, Hair & Care, Nihar Naturals, Livon, Set Wet, Mediker and Revive. In the international markets, Marico is represented by the brands Parachute, Parachute Advansed, Nihar Naturals, Isoplus, HairCode, Fiancée, Caivil, Hercules, Black Chic, Code 10, Ingwe, X-Men and Thuan Phat.
  • 1 out of every 10 Coconuts grown in India is used by Marico
  • Against the backdrop of structural reforms and a challenging input cost environment, the past year was a test of resilience for the Indian economy and our business. However, relentless focus on execution and cost management and the strength of your Company’s brands have helped us manage the headwinds and deliver a modest performance.
  • We are market leaders in 90% of our portfolio and continue to accelerate category leadership in newer markets. While our FY18 performance was soft, our commitment to deliver enhanced value for our stakeholders remains steadfast as we strive to deliver top-quartile performance and predictable sustainable growth in the coming years.
  • The India business grew 9% with an underlying volume growth of 1.5%. Annual volume growth was dampened by destocking in trade prior to GST implementation. The India business operating margins were dented by significant inflation in copra prices. The international business grew 9% in constant currency terms with an underlying volume growth of 1%.
  • In the India business, the Coconut Oil franchise reached a volume market share of 59% on the back of healthy offtake growth. The Value-Added Hair Oils portfolio also improved its volume market share to 34%. The Leave-in Hair Serums portfolio showed signs of sustainable growth. In the second half, the Male Grooming portfolio came back to a double digit growth path, signalling an upward trend. However, Saffola Edible Oils had a challenging year. We have now diagnosed the issue and rolled out a multi-pronged action plan to ensure recovery and growth. Saffola’s Oats franchise consolidated its lead in the savoury oats category with a volume market share of 70%. Your Company also passed on the benefits of reduction in GST rates to consumers by lowering retail prices of Value-Added Hair Oils and Saffola Edible Oils in July 2017 and Premium Hair Nourishment, Male Grooming and Skin Care portfolios in November 2017. During the year, growth in the rural business outpaced growth in urban. e-commerce and Modern Trade posted healthy growth and should lead growth in FY19. e-commerce is now over 1% of the India turnover.
  • During the year, the international business grew 9% in constant currency terms. Though adverse forex movements muted the reported value growth, margins remained healthy. Bangladesh grew in double digits, while Vietnam had an exceptionally muted year due to sluggish growth in the male shampoo category and instability in our Go-to Market execution. We are taking definitive steps to reignite growth in this category.
  • With rural sales contributing 32% of domestic revenues, the Company expects to take this up by at least 3-4 percentage points in the next 3-5 years by driving penetration through price point packs and focused GTM initiatives.
  • During the year, we made a strategic investment in Revofit, an integrated fitness and holistic wellness solutions app, which complements our aspirations in the nutraceuticals and wellness space. The performance of Beardo, in which your Company invested in the previous year, was also satisfactory.
  • For FY19 and beyond, we retain the target of 8-10% volume growth in India accompanied by healthy market share gains. Accelerated innovation and our focus on Digital will be strong enablers.
  • Making inroads into male styling and grooming platforms:  Marico acquired 45% equity stake in Zed Lifestyle Pvt. Ltd., the parent company of Beardo – an online-only male styling and grooming brand. With this investment, Marico has made an entry into the future-ready male grooming portfolio both in the online and salon space.
  • Beardo is a discerning brand for the urban man who is on a lookout for safe and specialised products/options to grow and maintain his beard. The Beardo product portfolio includes beard growth oil, wax and shampoo for beard; wax and serum for hair; lotion, soap, and facewash. Beardo has a strong presence in the online channels and salons, and almost three-fourth of its revenue is generated on e-commerce. With Beardo, Marico will cater to a niche category of consumers while gaining real-time access to rapidly changing trends data.
  • Following an upward growth trajectory, the e-commerce industry has transformed the way business is done in India. Having forayed into this space in 2016, Marico has identified e-commerce as one of its key focus areas in terms of its distribution channels. With dedicated efforts to scale up, the e-commerce business has grown 4 times over in the last one year. Currently, e-commerce contributes over 1% to the Company’s domestic business. In some personal care portfolios, the contribution of e-commerce has been recorded to be as high as 33%. The Company plans to launch a range of dedicated premium products across categories, which may be digital only or digital-first only portfolios. The Company has identified specific channel partners across beauty, food and groceries segments to help scale our e-commerce business. The e-commerce business is expected to contribute ~2% of Marico’s domestic turnover in FY19.
  • Marico India, the domestic business, achieved a turnover of ₹4,969 crore (US$770 million) in FY2018, a growth of 9% over last year. Volume growth for the year was at 1.5%. The value growth was higher owing to price increases taken in the Coconut Oil portfolio. Annual volume growth this year was dampened by destocking in trade prior to GST implementation, which led to a sharp volume decline across portfolios in Q1 FY2018 and a subdued year for Saffola Edible Oils. The operating margin for the India business was at 21.3% (before corporate allocations) versus 24.3% in FY2017. Lower operating margins can be attributed mainly to the gross margin contraction on account of the severe input cost push during the year.
  • During the year, the copra prices went up by 75% while the Company increased the consumer prices by ~22%, as it chose to resort to the approach of protecting the franchise at the cost of short-term margin losses. The Company expects copra prices to stay firm in H1 FY2019 and soften only in H2 FY2019.
  • The Saffola refined edible oils franchise declined 1% in volume terms during FY2018. The franchise encountered multiple short-term headwinds during the year, namely, a slowdown in orders from the Canteen Stores Department (CSD) due to rationalisation of turnover limits imposed by the Ministry of Defence and sluggishness in the super premium segment of edible oils market, while the mid segment witnessed growth. Despite the headwinds, the brand gained a market share of 324 bps and further strengthened its leadership position in the super premium refined edible oils segment to 69% during the 12 months ended March 2018.  To overcome the near-term challenges, the Company has made tweaks in its variant communication, market/ channel/ media prioritisation, pricing and promotion strategies. We are confident that these initiatives will bear fruit towards the end of H1 FY2019.
  •   Saffola’s foray into healthy foods, Saffola Oats, continues to consolidate its strong second position in the oats category with a value market share of 28%. Saffola Oats is the highest distributed oats brand in the country. Saffola Masala Oats (SMO) maintained its momentum, on the back of focused inputs and a renewed promotional campaign, which led to a consolidation in its value share to 70% (March 2018 MAT) in the flavoured oats category.
  • Overall, the Healthy Foods franchise clocked a topline of ~₹ 125 crore in FY2018. The Company aspires to grow the Healthy Foods franchise to an ₹ 450-500 crore level over the next 4-5 years, on the back of continuous innovations in this space.
  • For FY2019 and beyond, the Company retains the target of 8-10% volume growth.

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