In these unprecedented times, we prioritised the well-being of our people and virtualising the organisation by providing resources and support that would allow us to operate effectively amid social distancing. Rigorous cost management initiatives helped navigate the uncertainty and strengthened our ability to innovate and tide over the supply chain disruption with enterprising spirit and agility.

With diverging consumption trends across categories, Marico has prudently invested behind its core brands in categories that are indispensable in daily life. Advertising and Promotion spends as a percentage of sales, was about 8.7% in FY21, down 130 bps than last year, as we drove spend efficiencies and rationalised investment in discretionary categories.

During the year, we have incurred capital expenditure of `142 Crores for capacity expansion and maintenance of existing manufacturing facilities. Cash generated from operations at `2,068 Crores in FY21, remained the primary source of liquidity. A comprehensive SKU rationalisation exercise and stricter credit control led to lower working capital requirements during the year. We have accrued about `200 Crores in savings from aggressive cost management initiatives across domestic and overseas operations, which also helped reduce the impact of sharp input cost inflation in the second half of the year.

We ensure adequate access to funding and leverage the surplus to meet our operating needs and strategic objectives while managing the cash flows in a cost-efficient manner. Moreover, in case any exigencies arise in future affecting the liquidity position, Marico would be in a comfortable position to borrow capital given that it enjoys AAA credit rating and maintain a strong balance sheet. As on March 31, 2021, its Debt/EBITDA was extremely comfortable at 0.22x.

Owing to the aforementioned approach, there was a further improvement in the capital efficiency ratios during the year. Return on Capital Employed (ROCE) improved from 42.4% to 44.6% and Return on Equity (ROE) was up from 34.8% to 37.1%.

Financial performance

In FY21, Marico achieved a consolidated turnover of `8,048 Crores, up 10% y-o-y, and consolidated PAT (excluding one-offs) of `1,162 Crores, up 11% y-o-y. The operating margin stood at 19.8%. Our dividend payout ratio for the year was at 83% as a result of the healthy operating performance and stable financial position.

83%

Dividend payout ratio for FY21

A detailed discussion on the financial and operational performance in FY21 is available in the Management Discussion and Analysis section of the Report.