Dabur India (DABUR) Q4 97/98 earnings summary

Executive summary

• FY98 turnover including other income reached Rs 824.80 crore; sales turnover was Rs 811.36 crore, with profit after tax of Rs 44.39 crore.

• Project Stars, informed by McKinsey recommendations, refocused strategy on core FMCG strengths, operating efficiency and shareholder value.

• Strategic plan targeted Rs 2,000 crore turnover by 2003, with a narrower portfolio and emphasis on 12–15 major brands.

Financial highlights

• FY98 sales turnover was Rs 811.36 crore vs Rs 706.81 crore in FY97; turnover including other income was Rs 824.80 crore vs Rs 721.71 crore.

• Profit before tax was Rs 45.37 crore vs Rs 42.57 crore; profit after tax was Rs 44.39 crore vs Rs 42.90 crore.

• Other income included Rs 117.79 lacs profit on asset sales, including Rs 100.66 lacs capital profit; strategic management consultancy costs of Rs 149.37 lacs were written off.

• Directors recommended a 35% dividend, or Rs 3.50 per share, vs 30% for FY97.

Outlook and guidance

• Turnover target reset to Rs 2,000 crore by 2003, with growth centered on core competencies and fewer, stronger brands.

• Planned priorities included supply-chain and procurement efficiency, distribution, sales-force effectiveness, lower manufacturing costs and quality improvements.

• Plans included US launches of traditional herbal products through a separate subsidiary; registrations for anti-cancer products were targeted in Thailand, South Africa, Hungary and Turkey during FY99.

• A professional CEO was being recruited to lead day-to-day management as promoters shifted toward strategic direction.