Dear Colgate Shareholders
This year Colgate is celebrating its 80th year in India a testimony to the brand'scommitment to the country where Colgate is an intrinsic part of most households.
In 2016 for the sixth consecutive year Colgate was ranked as India's #1 Most TrustedBrand in the Economic Times Brand Equity Most Trusted Brand Survey a consumer surveyconducted by Nielsen. Colgate's trust' has been nurtured through the yearswith our expertise in Oral Care and with our core value of Caring' as itsbedrock. Colgate's trust is reflected in the quality of our products and also inour dedication to serving the communities in which we do business. We have built our brandin India with consistency while keeping the Consumer at the heart of everything we do.
In FY 2016-17 Colgate continued to focus on its strategic pillars of Engaging toBuild our Brands Innovation for Growth E_ectiveness and E_iciency and Leading to Winin order to achieve our goals and sustain our momentum in the market. At Colgate it isnot only delivering the numbers that matters but also conducting business with integrityand respect.
"At Colgate it is not only delivering the numbers that matters but alsoconducting business with integrity and respect."
In FY 2016-17 sales growth moved positively with net sales increasing 4.0% over theprevious year. While volume was under pressure largely due to so_ness in the wholesalechannel gross margin expanded 40 bps due to selling price increase and focussedcost-e_iciency programs within the Company. We increased our advertising spends by 14% inFY 2016-17 as we continued to invest behind innovation and building our brands in aheightened competitive environment. We maintained our strong balance sheet and cash flowand our leadership in both toothpaste and toothbrush categories in FY 2016-17 withvolume market shares for the year at 55.1% and 47.4% respectively.
FY 2016-17 was a year of unprecedented challenges with liquidity crunch and thechanging macroeconomic conditions. Despite these challenges Colgate proactively tookpositive measures to ensure ease of business for our business partners by extending creditto our distributors providing additional incentives accelerating the processing of tradeclaims and advancing payments to our supply chain partners. Such proactive supportreinforces the trust our partners have on Colgate.
Colgate is a frontrunner in using technology as an enabler in order to build a strongerengagement with urban and rural constituents. In 2016 we launched a one-of-a kind servicePocket Dentist' in partnership with Indian Dental Association whichprovides individualized professional dental advice. Currently launched in two districts ofUttar Pradesh Pocket Dentist' detects multiple dialects and responds to the 30 mostcommon oral health questions thereby addressing 91% of the total oral health queries.
Innovation is essential for driving growth and we believe in tapping into localinsights and leveraging trends basis consumer needs. In 2016 we launched
Colgate Cibaca Vedshakti toothpaste based on the insight that consumers value theuse of natural ingredients to help prevent dental problems. This new addition furtherenhances our existing Naturals portfolio. In 2016 we also launched Colgate SensitiveClove our first toothpaste using the natural ingredient-clove for protection againstsensitivity.
At Colgate we have a deep understanding of our responsibility and are dedicated tocontributing to the communities where we live and work. In India we are committed towardspromoting preventive health care with a special focus on oral health promoting educationaddressing inequalities and conserving our natural resources.
"In India we are committed towards promoting preventive health care with aspecial focus on oral health promoting education addressing inequalities and conservingour natural resources."
We believe oral health care is an area that needs attention and as a leader in OralCare in the country we continue to Keep India Smiling' through our OralHealth Month
(OHM) program. OHM is our annual dental health awareness program run in partnershipwith the Indian Dental Association (IDA) now for over 13 years. In 2016 the OHM programenabled a total of 6 million free dental check-ups across India.
One of our most engaging programs Bright Smiles Bright Futures (BSBF)which started in 1976 in association with the Indian Dental Association (IDA) has reached142 million school children till date. BSBF spreads oral hygiene education and awarenessamong children between the ages of 6 and 14 years. This program reached a total of 8.2million school children in the year 2016.
Skill building is the need of the hour and we believe that every small step in thisdirection counts. In 2016 Colgate started the Saksham program in association withSEEDS and Implementation Partner-IL&FS Skills in Lucknow with 55 students. Thisis a pragmatic initiative for Social and Economic Empowerment of the underprivileged youththrough an Employability Linked Skill Development program. A total of 202 youth have beentrained and certified through Saksham during FY 2016-17 and the program has now expandedto Muza_arpur in Bihar and Moradabad in Uttar Pradesh.
Water is a key pillar of Colgate's Sustainability Initiatives. Colgate's priorityfocus areas include promoting water conservation awareness among all consumers partneringwith local and global organisations to bring water to under-served areas reducing ourmanufacturing water intensity as well as engaging vendors and suppliers towards watersensitisation.
In 2016 Colgate launched the Water program in association with Water forPeople' focusing on the quality and accessibility of drinking water hygiene educationwater conservation and supporting sanitation in schools with harvested water.
Also as part of our Making Every Drop of Water Count commitment Colgateimplemented a campaign in India featuring Indian Water Heroes and their success stories tosensitise and inspire people towards the cause of water conservation.
For FY 2017-18 our overarching priority and objective is to continue to remain focusedon innovations increasing e_ectiveness and e_iciency and giving back to the communitieswhere we live and work in line with our core values of Caring Global Teamwork andContinuous Improvement. Our product pipeline will continue to be supported withengaging marketing programs and strong advertising investment.
As we move ahead together I would like to thank all Colgate stakeholders for theircommitment towards achieving our goals with the highest ethical standards and I wouldalso like to express my appreciation for the support we receive from our consumerscustomers suppliers shareholders and directors.
Colgate-Palmolive (India) Limited