We have always believed in striving for the best and playing a proactive role in defining the industry’s next-practices. We strongly believe as long as we focus on building capability ahead of growth, results will follow.
While the macro environment in India and overseas geographies remained subdued during FY16, your Company delivered reasonably good growth in line with its strategy. The consolidated top line grew 7% on the back of an underlying volume growth of 7%. The consolidated profit after tax grew strongly by 26% compared to last year.
During the year, your Company’s India business grew by 7% with an underlying volume growth of 7%. We continued to expand our franchise faster than the category growths, reflecting the strong equity of our brands. In fact, more than 80% of our portfolio gained share during the year which is commendable as we already are market leaders in 90% of our portfolio. The India business improved operating margins to 21.6% led by softer input costs.
The international business grew by 4% in constant currency terms while sustaining operating margins at 18% which structurally shifted from 8-9% three years ago. International business growth potential looks encouraging with strategic investments planned in core markets of Bangladesh, Vietnam, Middle East North Africa (MENA) and South Africa coupled with the expansion in adjacent markets of South Asia, Indo China region and East Africa.
Your management believes that sustainability has to be at the core of whatever we do. During the year, your Company continued to work on various sustainability initiatives in the areas of energy management, water management, farm productivity improvement etc.
Brands with a purpose also drive long-term sustainability. Three lead brands - Nihar Naturals, Nihar Shanti Amla and Saffola – were instrumental in these efforts. Saffolalife’s heart health campaigns for women, Nihar Shanti Amla’s child education efforts (Chote Kadam Pragati ki Aur) and Nihar Natural’s woman empowerment campaign (I am capable) took up socially relevant causes during the year.
Your Company has taken definitive steps in creating an enabling environment to promote diversity. I am happy to inform you that 29% of our leadership talent in consumer facing functions of Technology and Marketing are women. We are also actively promoting multi-cultural diversity in our overseas units and driving higher mix of millennial’s in our managerial talent. You will be glad to know that your Company was ranked No. 3 in the FMCG industry in the 2015 Great Places to Work Study in India.
Over the last few years we have significantly increased our investment in R&D in order to drive cutting edge research, product development and clinical studies to create innovative and efficacious products for the consumer. We have a dedicated team of 92 members in R&D, 40% of whom hold a master’s degree and above. They are working in various streams of Advanced Technology, Product Development, Packaging, Quality, Clinical Studies and Nutrition. A similar increase in focussed investments have also been directed towards our IT and digital initiatives to make the organisation future ready. The year FY17 has started with a sense of cautious optimism. While macros are stable, severe drought conditions create stress on consumption. However, with prospects of a good monsoon and good economic growth we believe consumption will pick up later during the year. We remain confident of delivering improved volume growth in India and a double digit constant currency growth in International.
Over the medium-term, your Company aspires to be a leading emerging market multinational with leadership position in two core categories of nourishment and male styling in two continents of Asia and Africa. Your Company has already initiated definitive steps to meet this aspiration by seeking to win amongst consumers, trade and talent. Towards this goal, the Company will continue to step up efforts in its five areas of Transformation where it will develop top quartile capability and processes. They are Innovation, Go To Market transformation, Talent Value Proposition, IT & Analytics and Value Management. While driving growth, we will also continue to retain our focus on best-in-class governance and risk management.
I am proud to be leading your Company as we complete 25 years of operations which is truly a momentous landmark for us. It has been a wonderful journey so far and I truly believe that the best is yet to come. Your team is committed to deliver and build further momentum on our consistent track record of sustainable profitable growth.
With warm regards,
Managing Director and CEO
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