Marico (MARICO) Q4 12/13 earnings summary

Executive summary

• FY13 revenue from operations rose 15% to INR 4,596 crore; volume growth was 12%, including 4% inorganic growth, and reported PAT rose 25% to INR 396 crore.

• Domestic consumer business grew 18%; international FMCG grew 8% amid regional challenges, while Kaya grew 21% but remained loss-making at PBIT level.

Financial highlights

• Revenue from operations increased to INR 4,596 crore from INR 3,980 crore; PAT rose to INR 396 crore from INR 317 crore.

• Excluding exceptional and non-comparable items, normalized PAT was INR 384 crore, up 18% YoY versus reported growth of 25%.

• FY13 Q4 revenue was INR 1,008.8 crore; PBT was INR 127.1 crore including INR 33.2 crore of exceptional items, and PAT was INR 83.9 crore.

• Advertisement and sales promotion rose to INR 598 crore, or 12.9% of total income, from INR 426 crore and 10.6%; ~40% of absolute ASP was spent on new products.

Outlook and guidance

• FY14 onward, Saffola edible oils were expected to return to double-digit volume growth; medium-term volume growth target was ~15%.

• Medium-term volume growth targets: Parachute 7–8% p.a.; value-added hair oils 15–17% p.a. over 2–3 years; youth brands 20–25% growth with 17–18% operating margins.

• International FMCG EBITDA margin was expected to reach ~13% over 2–3 years; GCC/MENA growth was forecast above 25% in FY14 from a lower base.

• Kaya priorities were same-store growth, clinic profitability, cautious expansion and a 4–5-store Kaya Skin Bar prototype in FY14.