Marico Results: EBITDA registers 11% growth
FMCG major Marico announced 11 percent EBITDA growth and 13 percent profit after tax growth for the year ending March 2020. The company has registered strong growth in Saffola edible oils and food products segment. Marico registered Rs 7,315 crore as yearly revenue, reporting one percent growth in domestic revenue. The company registered better performance for the full year but lockdowns due to COVID-19 during March led to lower sales.
The impact of lockdowns during second half of March 2020 resulted in 3 percent decline in volume for Marico. Compared to many other companies in the sector, Marico was able to strengthen its presence in edible oils segment. Saffola has strong brand value and the company has launched healthy foods under the same brand name in order to project it to health conscious consumer base.
As the personal hygiene segment is expected to register growth, Marico has launched Mediker Hand Sanitizer in April 2020. The company has also planned fruits and vegetable cleaning liquid, Veggie Clean in April 2020. Marico has interesting product line and the company is expecting growth in many segments during first quarter of the current financial year.
The International business declined by 6% in constant currency terms with MENA and South Africa businesses posting sharp drops, while Bangladesh and Vietnam still ended in the green, given relatively limited restrictions imposed in these regions in the month of March.
Marico’s India Business recorded a turnover of INR 1,146 crore, down 8% on a year-on-year basis. The operating margin improved to 22.8% in Q4FY20 as against 21.5% in Q4FY19 despite an unfavorable portfolio mix, partly due to rationalized A&P spends and tighter cost controls.
Premium Hair Nourishment and Male Grooming declined by 19% and 9% in volume terms respectively, as discretionary personal care portfolios lost favour during the lockdown.
Saugata Gupta, MD & CEO commented, "The unfortunate outbreak of COVID-19 and consequent lockdown has brought about severe hardships to various sections of our society. Marico is committed to working with all stakeholders to make a difference to the lives of those affected. At this time, we are focusing on the movement of food and grocery items of daily use to our consumers, subject to all safety norms. While persistently soft consumption trends have led to muted volume growth in FY20, we have continued to gain market share in our core franchises on the back of our trusted leader brands."
Marico’s International business declined by 6% in constant currency terms in Q4FY20 but the company management is confident about recovery in the second quarter. The operating margin in the international business stood at 18.0% in Q4FY20 vs 19.1% in Q4FY19 due to a significant uptick in A&P spends on new launches.