Management Discussion and Analysis
(within the limits set by the Company’s competitive position)
INDUSTRY OVERVIEW needed to support the growth are developed through its
The rapidly changing lifestyles and sugar-rich diets have funding of growth initiatives such as reduction in costs
made Oral health, one of the key public health concerns in associated with direct materials, distribution and logistics,
almost every part of the world. advertisement and promotional materials and reduction
of packaging materials. The predominant business of the
In India, while Oral Care category penetration is high
Company continues to be Oral Care and the outlook for
(+95%), more than 80% of people don’t brush their teeth
the oral health industry is positive given the size of the
at night. This against the backdrop of increasing Oral
opportunity. Your Company believes that the Company’s
Diseases, up to 77 % suffering from Gum problems every
business will continue to grow strongly in the next
year, up to 71% children (12 years old) and upto 86.4%
several years on the back of its experience in operating
adults 35-45 years from Cavities, presents a situation that
in a growth environment and its continued focus on
needs immediate attention.#
capturing significant opportunities through innovation
While, as a Country, we have made giant strides with Oral and operational excellence. For years, the Company has
Health initiatives, in the last few decades, our population been successful in identifying and meeting consumer
and segmentation expanse offers opportunities to explore needs within its core categories, through its consistent
new avenues towards enhancement of Oral Health in India. focus on the introduction of innovative products and the
With increased awareness around this topic, we are seeing deployment of valuable consumer and shopper insights in
increased expenditure on oral healthcare. Well informed the launch of successful new products.
on the perils of neglect, people are actively seeking Your Company caters to all types of oral care needs
preventive solutions leading to an increase in demand a consumer may possibly have. The Company’s end
for effective Oral Care products from trustworthy Brands, users belong to all age groups and diverse geographical
thereby contributing to good oral hygiene. locations (urban and rural), as well as household size and
BUSINESS AND STRATEGY type. We further interact with diverse wholesalers, modern
trade stores and other retailers to ensure our products
Your Company is strongly focused in the Personal Care
reach the length and breadth of the country.
business which includes Oral Care that accounts for over
95% of the Company’s sales turnover. Within the Oral Care The strategic focus of the Company continues to win with
segment, the Company continues to sustain its leadership the brands, leading innovation, achieving distribution and
position both in the Toothpaste and Toothbrush categories in-store excellence, nurturing future leaders, re-imagining
for the financial year ended March 31, 2022 despite a a healthier future for all and thereby enhancing the overall
challenging business and competitive environment. As a shareholders’ value.
leading consumer products Company, we are also deeply Digital Transformation
committed to advancing technology that can address Your Company took big steps in the journey of digital
changing consumer needs. This is consistent with your and data transformation. The Data and Analytics Center
Company’s sustained endeavor to leverage technology in of Excellence has been set up to build data science
order to create products that will improve the quality of life capabilities internally. During the year, your Company
for our consumers. launched the ‘Smile Store Program’, - a transformation
Your Company follows a closely defined business strategy initiative focused on assortment build up in retail, applying
to develop and increase its market leadership position in data science models and rich shopper data. This was driven
key product categories. On an ongoing basis, management by an extensive change management exercise with all our
focuses on a variety of key indicators to monitor business extended sales force and integrating the technology in our
health and performance. These indicators include market order-taking systems. The results are encouraging with a
share, net sales, gross profit margin, operating profit, net double-digit increment in our monthly average assortment
income and earnings per share. The monitoring of these per store. The program continues to gain momentum and
indicators and the Company’s Code of Conduct and is becoming an effective lever to drive our distribution
Corporate Governance practices help to maintain business excellence and new product launch Go-to-market.
health and strong internal controls. The investments Digital Transformation continued to be a key priority
#
Source: National Oral Health Policy 2021
80
Corporate Overview || Financial Statements
Statutory Reports
Management Discussion and Analysis (Contd.)
for the Company’s Business Operations. Your Company and an increased risk of mouth infections. The toothpaste
leveraged several channels to reach out and engage for Oral Health of Diabetics is designed for the oral health
with its stakeholders, including full funnel omni-channel problems commonly faced by Diabetics.
performance marketing, driving rural reach and building Sustainability
regional content.
Your Company is focused on bringing world-class sustain-
Colgate - Our Brand Purpose able innovation to not only improve oral care but also work
Your Company continued to build on its ‘Smile karo aur towards preserving the environment. The pioneering tech-
shuru ho jao’ campaign in 2021, which brings to life its nology of the recyclable tubes was rolled out on Colgate
brand purpose of ‘Everyone deserves a future to smile Active Salt and Colgate Vedshakti variants first, with other
about’. Our latest ‘Smile Karo’ campaign features Kiran brands in its portfolio to follow. We are the first oral care
Kanojia, India’s first woman blade runner to run a marathon. brand to launch such an initiative at scale and decided to
Our continued strategy is to inspire people to be optimistic share the technology with others.
through stories like Kiran’s.
Colgate Toothbrushes
We also brought to millions of people the story of Sindhutai
For the first time, the Company launched a new Master-
Sapkal, who was forced to beg on the streets in her early
brand campaign for toothbrushes, positioning Colgate
twenties and then went on to become ‘mai’ for thousands
toothbrushes as ‘Smart Brush for a Healthy Mouth’. It
of orphans. Her smile and optimism reflects the power to
establishes Colgate toothbrushes as the expert devices
change the world for a better place to be.
that understand the complexities of the mouth to ensure
Colgate Strong Teeth superior oral care.
Your Company also re-launched its largest single brand The campaign brings this alive beautifully through the key
‘Colgate Strong Teeth toothpaste’ with Calcium boost sub equities - Colgate ZigZag, especially engineered with
callout in relation to remineralization. The TVC ‘Daant 16 degree criss cross bristles, is designed for germ protec-
strong toh main strong’ featuring Shahid Kapoor and Rana tion against ~700 types of germs in the mouth that can
Daggubati puts the spotlight on the importance of strong cause oral care problems.
teeth, which helps in better chewing leading to better Our mouth is made up of 80% soft tissues and hence
nutrition.
needs gentle care. Colgate Gentle has dense, Ultra Soft
Colgate Visible White O2 Bristles which give superior foam resulting in the softest
Your Company launched a revolutionary teeth whitening brushing experience.
product, Colgate Visible White O2, with our #SmileOutLoud Colgate Super Flexi toothbrush - Ultra Flexible Technology,
campaign. The campaign cut through the noise and India’s #1 selling toothbrush brand was unveiled in a
challenged the age-old conventions of what is considered new avatar-featuring product enhancements for better
as ‘beauty’. The new whitening toothpaste, Colgate Visible cleaning. It was re-launched with bright, vibrant colors,
White O2, promises whiter teeth in just 3 days, when used attractive packaging, giving it a very modern & premium
as directed. look.
#SmileOutLoud celebrates three women influencers - As we continue to advance and scale our social and
Toshada Uma, Dolly Singh, and Prarthana Jagan, who have sustainability initiatives, we launched Colgate RecyClean
successfully challenged stereotypes using their unique - a first of its kind toothbrush with bristles that are plant
beauty to make their mark in the world. Their radiantly
derived and Bisphenol A (BPA) free while the handle is
defiant smiles speak of the bold beauty and confidence
made from 100% recycled plastic.
with which they face the world, having turned their
Palmolive Face Cleansing
so-called imperfections into expressions of their authenticity.
Your Company launched a new line of premium, natural
Colgate Toothpaste for Oral Health of Diabetics
Face Cleansing Foams, Gels, Masques and Scrubs under
Your Company roped in celebrated cricketer R. Ashwin
the Palmolive brand.
to educate and inform our consumers about the rather
unknown link between Type II diabetes and gum The launch was accompanied by an advertising cam-
problems. There is an established link between Diabetes paign ‘Say Yes to You’. Recognising that women, across
Annual Report 2021-22 81
Management Discussion and Analysis (Contd.)
strata and communities, end up prioritizing either work who is responsible for managing both the overall risk and
or their loved ones in a bid to care for others over indulg- the individual controls mitigating that risk. Our assessment
ing in much-needed self-love, we launched the campaign of risk considers both short and long-term risks, including
#SayYesToYou. While introducing Palmolive’s new indul- how these risks are changing, together with emerging
gent Face Cleansing range, the campaign encourages risk areas. These are reviewed on an ongoing basis, and
women to prioritize themselves while juggling the many formally by the Risk Management Committee and the
responsibilities they shoulder in life, at work, and in their Board at least once a year. The Company has carried out
families. The campaign goes beyond the traditional way the Stakeholder engagement and materiality assessment
of dissecting women’s skin conditions and issues, instead and has identified the key risks and opportunities, such as,
portraying them as people who have diverse interests and Occupational Health and Safety, Human Rights, Diversity
a desire to indulge in them. and Inclusion, Commodity price risk, single source raw
material, credit risk, Product Stewardship, Energy emissions,
RISKS AND OPPORTUNITIES
Responsible Supply Chain, Consumer Health and Safety,
Risk management is integral to your Company’s strategy Water Stewardship, Waste Management, Business Ethics,
and to the achievement of its long-term goals. Our success Cyber security and data protection, regulatory changes,
lies in our ability to identify the opportunities generated by social media and brand reputation risk, etc.
our business and the markets we operate in.
The detailed explanation and outcome of each of
The purpose of timely risk assessment is to identify the these risks and opportunities is given in the Business
strategic threats, operational issues, compliance with Responsibility and Sustainability Report, forming part of
laws and disclosure obligations and to convert them into the Board’s Report.
the opportunities, wherever possible. Thus, in order to
INTERNAL FINANCIAL CONTROLS
deliver value to our customers, distributors, employees,
communities, shareholders and other stakeholders, it is Your Company has an adequate and talented team of
internal auditors that oversees the internal financial
inevitable to understand and manage the risks faced by
processes, policies, and recommends robust internal
the Company.
financial controls from time to time. These internal
Risk assessment is done on a regular basis. The Leadership
financial controls help to put in place checks on the
team reviews the processes and identifies and assess the implementation of the internal financial controls, policies &
risks faced by their respective categories and proposes the procedures that are adopted by the Company for ensuring
Risk Mitigation plan. an orderly and efficient conduct of its business. These
The Company has adopted Enterprise Risk Management internal financial controls help in safeguarding assets,
(ERM) to ensure timely identification and creation of prevention & detection of frauds and/or errors, maintaining
mitigation plans. The Company has formed an ERM the accuracy and completeness of the accounting & financial
Sub-Committee, which meets at regular intervals to refresh records. These controls help in the timely preparation of
the risk roadmap and create a plan for addressing them. transparent, complete and accurate financial information
The said plan is presented before the Risk Management and statements as per the laid down accounting standards
Committee and the Board of Directors. and principles. The Audit Committee of your Company
Our ambition is to continuously improve our operational evaluates the internal financial controls system periodically.
efficiency and effectiveness. Our approach to risk EMPLOYEE HEALTH AND WELL-BEING
management is designed to provide reasonable assurance At Colgate-Palmolive, we aim to ensure that you are at your
that our assets are safeguarded, the risks facing the best-your healthiest, happiest and most driven self. The
business are being assessed and mitigated and all Company constantly evaluates and adopts better policies
information that may be required to be disclosed is and initiatives that enable improved employee health and
reported to the Company’s senior management and the well being thereby also leading to better efficiency and
Audit Committee and the Board. productivity at the workplace.
For each of our principal risks, we have a Risk Management Guided by this principle, we have an Employee Assistance
Framework detailing the controls we have in place and Program which is available to all employees + 3 family
82
Corporate Overview || Financial Statements
Statutory Reports
Management Discussion and Analysis (Contd.)
members to seek help from certified professionals on any our people, the community we live in and the supplier
mental health challenges. Every year in June, the Company diversity we work with.
celebrates ‘Live Better’ which is a global initiative aimed at We continue our company-wide discussion on DE&I,
encouraging employees to adopt a healthier lifestyle. We supported by sensitization and awareness sessions.
also have company sponsored medical check-ups which We provided allyship training to all our employees to
the employees can avail of. understand how they can champion and support a diverse
Flexi-work Policy workforce. Ingrained from inception, our governance
Post the COVID-19 pandemic, the Company prepared for policies are adhered to not just in India but globally.
the safe return to work for all our employees. Employee Your Company has been recognized as one of the Best
Health & Safety is at the forefront of all the things that Organizations for Women 2022 by the Economic Times,
we do. In order to make it convenient and for ensuring powered by Femina.
ease in transition, we launched a hybrid working policy
The total number of people employed by the Company as
called ‘BlendIn’ which provides employees the flexibility to
on March 31, 2022 was 2,363.
choose 2 days in a week where they would want to work
from home, making only 3 days mandatory for them to Details of changes in key financial ratios as compared to
work from office, with the benefit of flexi working hours immediately previous financial year:
barring the core hours. Particulars FY 2021-22 FY 2020-21
Mental Health and Well-being Debtors Turnover #
29.65 38.54
The Company recognizes our responsibility to prioritize Inventory Turnover 4.81 4.90
mental health. With the recent pandemic, it has become Interest Coverage Ratio^ 236.30 184.11
more and more critical to keep physical as well as mental
Current Ratio $
1.37 0.85
health in check.
Debt Equity Ratio* 0.05 0.08
We believe in re-imagining a healthier future for all-and
healthier means overall health-oral, physical and mental by Operating Profit Margin (%) 27 27
providing the right opportunities and resources to help the Net Profit Margin (%) (after tax) 21 22
employees take care of their mental health, from facilitating The Company’s key financial ratios continue to be very healthy.
a strong Company culture that empowers colleagues to The Return on Net Worth in the FY 2021-22 decreased to 74% from 75% in
connect with each other to offering robust benefits that the immediate previous financial year due to higher equity in the current
year since the second interim dividend was declared post year end for
position mental health as integral to overall health. FY 2021-22.
The Company has launched the following initiatives:
#
Credit was extended to certain distributors at year end so there is an
increase in debtors ultimately reducing the debtors turnover ratio.
Employee Assistance Program ^Debt and Interest expense appearing in the Financial Statements for the
current year wholly relate to the lease liability as per Ind AS 116.
WYSA App for mental health & well being $
Current ratio depicted higher than previous year, due to unpaid dividend of
Mental Health awareness training previous year, paid subsequent to year end.
*Debt mainly pertains to lease liabilities which are on reducing balance.
Guided Meditation Sessions Equity is higher compared to previous year since the second interim
dividend was declared post year end for FY 2021-22.
Ongoing flexibility in work schedules for reduced
stress The detailed discussion on Financial Performance with
respect to operational performance, Internal Control
Diversity, Equity and Inclusion (DE&I)
systems and their adequacy and Segment–wise or product-
We at Colgate-Palmolive are committed to our DE&I
wise performance, innovation and technology are forming
journey. We are constantly working towards creating
part of the Board’s Report.
a world where our people would feel Colgate is a place
where they belong and where they can bring their OUR APPROACH
authentic selves to work and feel welcomed, respected The investments needed to support growth are
and valued. For the same, changes, new policies & developed through continuous, Company-wide
processes are taken to enable an inclusive environment initiatives to improve realizations, lower costs and
across our offices and plants. This includes impacting increase effective asset utilization. Through these
Annual Report 2021-22 83
Management Discussion and Analysis (Contd.)
initiatives, termed as the Company’s revenue growth supply of your Company’s products to consumers across
management and funding-the-growth initiatives, your the country. In the true spirit of partnership, your Company
Company seeks to become even more effective and sponsored the health insurance benefit and supplied
efficient throughout its businesses. These initiatives are personal hygiene kits to the employees of its distributors.
designed to drive sustainable revenue growth for your Going forward, your Company expects the challenging
Company and better value products for the shoppers. market conditions and unfavorable macro-economic
Through these initiatives your Company also focuses on conditions to continue. Your Company believes that it
reducing costs associated with direct materials, indirect is well prepared to meet the challenges ahead due to its
expenses, distribution and logistics, and advertising strong financial condition, experience of operating in
and promotional materials, among other things, and challenging environments and continued focus on its key
encompass a wide range of projects, examples of which priorities. These priorities include: growing sales through
include raw material substitution, reduction of packaging greater engagement with consumers, delivering world-
materials, consolidating suppliers to leverage volumes class innovation and working with its distributors and retail
and increasing manufacturing efficiency through SKU partners; driving efficiency on every line of the income
reductions and formulation simplification. statement to increase margins; generating strong cash
Against a challenging backdrop of COVID-19, your flow performance and utilizing that cash effectively to
Company took adequate and pre-emptive measures to enhance total shareholder returns, and leading to win by
strengthen and nurture its relationship with stakeholders. staying true to the organization’s culture and focusing on
In order to ensure the health and safety of employees and its stakeholders. Your Company’s commitment to these
their families, your Company took appropriate measures priorities, together with the strength of its brands, its best-
including restrictions on travel and enhancing the hygiene in-class distribution network and its cost-saving initiatives,
& sanitation protocols across all offices and plants. Your should position your Company well to increase stakeholder
Company worked with various regulatory authorities & value over the long term.
industry groups to facilitate a more regular and consistent
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