It gives me great pleasure to inform you that Your Company performed well during2015-16 with steady growth in its revenues and Profitability.
The year was marked by a further slow-down in the FMCG industry with demand continuingto be sluggish and rural economy coming under stress due to a below normal monsoon andunseasonal rains. The international markets also faced headwinds in terms of slowingeconomies geo-political issues and currency volatility in some of our markets. TheCompany navigated these challenges well and reported good volume driven growth in itssales across the geographies. Fiscal 2015-16 saw a strong improvement in thecompanys EBIDTA margins on account of gross margin expansion across the portfolio.
KEY HIGHLIGHTS OF THE COMPANYS PERFORMANCE DURING 2015316 WERE :
Sales of the company went up by 8.1% to 8436 crore
Profit After Tax recorded increase of 17.5% to 1253 crore
EBIDTA margins of the company increased by over 170 basis points to 20.6%
Two more of our brands joined the 100 crore club - Dabur Gulabari and Dabur LalTail
Moving forward on its journey to make itself Future Ready the Company rolled out ahost of new products and campaigns aimed at the new generation. These include initiativesin baby care hair and skin care beverages and OTC health. In order to tap into the fastgrowing healthcare segment the Company launched a doctor advocacy programme called ProjectLead which seeks to engage with doctors in order to increase awareness about our productsand obtain their endorsement. This programme will be strengthened further during next3scal by enhancing the team and the portfolio of products which are being detailed.
The Company uses various communication channels to reach out to its consumers. Our newbrands and campaigns targeting the youth continued to rule the consumer mind-space andwon a number of accolades during the year. Dabur
Amla Hair Oil was named the best hair oil at Femina Beauty Awards. Daburs HairOil and Toothpaste brands were ranked in Top 100 Most Trusted Brands 2015 List by BrandEquity and Hajmola Yoodley was ranked among the Buzziest Brands of 2015 by Afaqs.
The Vatika BraveAndBeautiful campaign which showcased the story of a cancer survivorcoming out stronger after losing her hair to cancer won several awards during the year.It bagged 8 awards at Goafest 2015 including the Grand Prix in addition to winning theBlue Elephant at Kyoorius Awards 2015 in Advertising for Good category. Thecampaign had gone viral on social media getting more than 2 million shares and likes. Moredetails of our new initiatives campaigns and activations are provided in the ManagementDiscussion and Analysis section of this report.
At this point I would like to highlight a few important trends in the consumer sectorwhich are likely to have a signi3cant impact on consumer behaviour and consumption goingforward. One of these is the emerging preference for Ayurvedic herbal and naturalproducts which is gaining momentum. This is happening due to back to rootstrend among people from all demographics and income strata. The traditional and culturalbonds of the Indian consumer are very potent and that is leading to a strong connect withtraditional healthcare solutions provided by Ayurveda. This is also in sync with theglobal trend towards natural and herbal products which are free of chemicals. Your Companyhas been the pioneer for Ayurveda based health and personal care products in India and isset to gain from this trend.
Secondly the world is changing like never before with the internet and mobile networksbecoming central to our lives. It is notable that 3.17 billion people worldwide are activeinternet users and this has gone up from 1.02 billion in 2005. Social networking is one ofthe most popular online activities and there are about 1.6 billion active facebook usersworldwide. Over 1 billion people in the world are active users of the one of the mostpopular mobile messaging apps and this is increasing with every passing day.
Connecting with family and friends expressing opinions entertainment and onlineshopping are among the most popular reasons for internet usage. India is no di3erent asthe younger consumers are increasingly becoming more and more digitally in3uenced andinclined towards browsing and shopping online. This is one of the biggest changes which ishappening and it needs to be factored into our plans and strategies for being FutureReady.
Thirdly consumers are increasingly getting concerned about health and better quality oflife with some of the lifestyle diseases gaining prominence and starting to impact youngersections of population. With this the focus on health is going up even among children andteenagers and people are inclined towards healthier food alternatives and products forpreventive and holistic health care.
Dabur is taking cognizance of these changes and crafting its future strategies in linewith these developments. The company has set up several portals including the healthcareportal www. liveveda.com to engage with digitally active consumers who are seekinginformation and advice on common healthcare problems. The Company plans to capture the Ecommerce wave by tying up with partners in the space as well as promote its own dedicatedportals. Digital marketing is increasingly becoming a tool for connecting with people andcreating awareness about our brands and investments in digital space are going up.
The Company is also planning to enhance its range of healthcare products based onAyurvedic herbal solutions to address the emerging health care issues. Your company has astrong R&D infrastructure which has been carrying on research on Ayurveda and herbalproducts for a number of decades. Now the Company has partnered with Central Council ofResearch in Ayurvedic Sciences (CCRAS) an apex research body under the Ministry of AYUSHGovernment of India for collaboration and co-operation in R&D for development andcommercializing of products in Ayurveda. During 2015-16 Dabur entered into a licenseagreement with CCRAS to commercially produce two such Ayurvedic drugs which will belaunched by the Company in due course.
Daburs International business continued to cater to its consumers with acustomised and localized range of products in its core markets of Middle East AfricaEurope North America and South Asia. In these markets as well the naturalstrend is gathering pace and consumers are tending to prefer products which are herbal andnatural. Since our brands are already positioned on this benefit the company stands togain and the resilience of its business in these markets despite the geopoliticaldisturbances is an outcome of this strong connect with local consumers.
Overall your Company is positioned well to tap some of the emerging opportunities andis investing strongly in innovation enhancing its consumer connect and optimising itsdistribution networks to deliver superior growth across its markets and categories.Investments in manufacturing and supply chain are lined up to strengthen the competitiveadvantage. The Company is also investing in creating a strong IT infrastructure toleverage technology for enhancing e3ciencies and productivity.
I would like to take this opportunity to thank our dedicated and motivated employeeswho are the greatest asset of the Company and who have with their passion hard work andcommitment taken it to this level. We also thank our stakeholders and partners in growthfor reposing their con3dence and faith in the Company. It is your trust and commitmentthat inspires us to set high standards of growth and performance and continue to deliverhigh returns to our stakeholders. We look forward to continuing on the path of excellenceand Profitable growth into the coming years.
Dr Anand C Burman