Colgate Palmolive India : Conference call transcriptMay 26 2022

"Colgate-Palmolive (India) Limited Investor

Conference Call"

May 26, 2022

MANAGEMENT: MR. ARVIND CHINTAMANI - VICE PRESIDENT

(MARKETING), COLGATE-PALMOLIVE(INDIA) LIMITED

MR. M.S. JACOB - CHIEF FINANCIAL OFFICER,

COLGATE-PALMOLIVE(INDIA) LIMITED

MS. SUJATA NAIRI - ASSOCIATE DIRECTOR (COMMERCIAL

FINANCE & INVESTOR RELATIONS), COLGATE-PALMOLIVE

(INDIA) LIMITED

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	Colgate Palmolive India Limited
	May 26, 2022
Moderator:	Ladies and gentlemen good day and welcome to the Colgate Palmolive India Limited investor
	conference call for the financial year 2021-2022.
	Please note that the conference call will include forward-looking statements. These statements
	are made on the basis of the company's views and assumptions as of this time and are not
	guarantees of future performance.
	As a reminder all participant lines will be in the listen-only mode and there will be an
	opportunity for you to ask questions after the presentation concludes. At that time, you may
	click on the audio question tab below the media player or you may type your questions and
	submit via text. Participants connected via telephone call may enter '*' and '1' on your touch
	tone telephone to ask a question. Should you need assistance during the conference, please
	signal an operator by pressing '*' then '0' on your touch tone telephone. Please note that this
	conference is being recorded.
	Joining us today from Colgate-Palmolive (India) Limited team is Mr. Arvind Chintamani -
	Vice President, Marketing, Mr. M.S. Jacob - Chief Financial Officer and Ms. Sujata Nairi -
	Associate Director (Commercial Finance & Investor Relations).
	Today's session will begin with a brief presentation by the speakers sharing their views on the
	overall company's performance and strategy. This will be followed by the Q&A session. I now
	handover the proceedings to Mr. Arvind Chintamani. Thank you and over to you sir.
Arvind Chintamani:	Thanks Inba and good afternoon, everyone. Hope you're all doing well. You had a good day
	and you and your families have been keeping safe and healthy. Welcome to the call. I'll begin
	by drawing your attention to the safe harbor statement.
	Before I go into the presentation, remind us all that we are in the midst of a leadership change.
	Here at Colgate, we're extremely proud that Ram has been promoted to lead the newly set up
	global enterprise Oral Care for Colgate-Palmolive, another feather in the cap for us at Colgate
	India as talent continues to do well. We are equally excited to welcome Prabha Narasimhan,
	who will join Colgate India as Managing Director and CEO effective September 1st. We're
	looking forward to having Prabha with us. She brings a rich and diverse experience and
	understanding across categories in this country. We are looking forward to the new perspective
	to drive our growth ambitions. So welcome to Prabha.
	With that I want to highlight some of the key things that we are looking at across our business;
	starting with 'Brand Health' which of course is the most important thing for us to be focusing
	on to build a sustainable business.
	The first measure is top of mind 'Awareness'. This is a really critical measure for us. It's a
	measure of which brand are people thinking of first when they think of the category and our
	top-of-mind brand awareness for Colgate stands at 71% in Quarter 1 of 2022, this is 700 basis
	points above where we were a couple of years back. And if you think about our trade structure

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Colgate Palmolive India Limited

May 26, 2022

in India which is a mom and pop trade structure, the self-service trade structure where you can see the product, what is in the mind becomes the most important factor in what people ask for. Top of mind awareness is an extremely critical measure and we are going strength-to-strength. In fact, these numbers are the highest we've had in the last 5 years. So very strong 'Brand Health' over there and this reflects in behavior. If you look at the next number there, which is 'Penetration' which is the percentage of people who bought us. Our penetration as Colgate at 88% is not only the highest in the Oral Care category but it's in fact the highest across all brands in India. Colgate is the most penetrated brand in this country and that makes us really proud. So strong 'Brand Health' is the first key highlight.

In terms of financial metrics - you've seen these numbers but we're also very proud that we've crossed the Rs. 5,000 crores threshold for this calendar year. It's a big moment, with very strong gross margins at 67.1% and strong EBITDA above 30%.

On digital and analytics - we wanted to highlight the fact that Colgate is driving basket penetration for Oral Care on e-commerce. On the new and growing RE, we are showing leadership and we have driven the category forward across various e-tail portals.

On 'Sustainability' which is a very big commitment for us. We are extremely proud that this year saw Colgate launching recyclable tubes, the first not only in the world but also in India. We launched with recycling toothbrush, the first fully recycled toothbrush in the country as well. I'll speak to both these a little more as we go forward.

These were the highlights and we will use our strategic framework as a framework for the conversation today. You've seen this before. It's our consistent framework to drive profitable growth with six pillars and we will start with winning with brands. When it comes to building brands our master brand Colgate has a positive philosophy which in Hindi is said as, 'Dil Me Ummeed Jagao, Smile Karo Aur Shuru Ho Jao' and of course we translate this into all the regional languages and our rallying cry as a brand is to be a catalyst for optimism.

We want to encourage people to think positively and to believe that they can get over their hesitations and doubts if they can focus on the optimistic view. We've been telling stories from around the country on optimism. I want to share with you our latest story which is the story of Kiran Kanojia, India's first female blade runner who went on to complete a marathon. It's a remarkable story. I'm really excited to start the presentation off by sharing this story. Can we please play the video?

'Smile Karo Aur Shuru Ho Jao', what an incredible story of an incredible person who reminds us again that if you can look at the bright side and persevere - anything is possible.

Moving from Colgate the master brand to India's #1 toothpaste Colgate strong teeth. Seven out of every ten households in India purchase a Colgate strong teeth product every year. In terms of market share, it is more than two times the market share for any other toothpaste. For us this is the flagship brand and continues to be. If you go back in history, Colgate strong teeth started

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its journey in 2000 and we relaunched it once in 2007 and then more recently in 2019 where we saw double digit growth on the back of the relaunch. I'm really happy to announce that we are in the middle of another relaunch for Colgate Strong Teeth in Quarter 2 of this year. We are bringing to life the fact that strong teeth are the starting point of good digestion and good nutrition. If your teeth are strong, you're able to chew your food better. That gives you the best from the food. So strong teeth make a strong you and our new reason to believe is calcium boost which helps your teeth get stronger. This is the new packaging that's out in the market, rolling out across the country. We're also very happy to announce that we have two fantastic stars partnering with us on this journey - Shahid Kapoor and Rana who are bringing this message to life across different parts of the country.

With that let me share with you one of these pieces of communication that we will be playing in parts of the country. Can we please play the video? Only if your teeth are strong, you get the best nutrition from your food and Colgate Strong Teeth with calcium boost makes your teeth stronger like no other toothpaste. I hope you enjoyed that.

Moving from India's #1 toothpaste to India's #1 toothbrush and that's Colgate Super Flexible which is #1 selling and the #1 distributed toothbrush in the country by a large margin. In fact, it's more than 1.7 times the market share of the next toothbrush brand. As you can see on screen Super Flexi is now in the market as of Quarter 2 of this year in a new Avatar. At the bottom you see the new toothbrush in the dynamic new look, in exciting new colors and a very contemporary modern packaging with the reminder that the ultra-flexible technology continues to power the toothbrush and critically at the same price point of Rs. 20 which is the heart of the category, making it accessible for so many people across the country. Not only is the packaging exciting, the product inside has superior technology with a new bristle profile for enhanced cleaning and of course, the handle technology that reaches all corners of the mouth. We are very excited about this relaunch and we are putting behind it the might of the Colgate system. This will be our largest ever in store activation in the toothbrush category in terms of distribution and in terms of visibility. So huge initiative in this quarter with Colgate Strong Teeth and with Colgate Super Flexible toothbrushes.

Moving on from Super Flexi to another critical part of our portfolio which is Naturals. Talking about salt, we all know that salt as an ingredient is the first ingredient that comes to mind in this country, in our culture to take care of Oral Care problems, at home we have all been told by our parents and our grandparents about the power of salt and Colgate Active Salt for the last two decades has owned this space and we've gone from strength to strength and our brand strength continues to grow. In fact, Colgate Active Salt is a #1 natural ingredient toothpaste in this country. To extend the strength of Colgate Active Salt, we have got new avatars of Colgate Active Salt Neem for healthy gums and Colgate Active Salt Lemon to fight yellowness, these are again available across channels as we speak, very exciting innovations powering the salt franchise. Of course, we continue to support the Colgate Active Salt franchise as we've always done with top celebrities, we've got Samantha, continuing the partnership with us in parts of the country and we've got Raima in parts of the country, bringing to life the proposition that the Colgate Active Salt to prevent your dental problems.

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We continue to grow from strength to strength on this brand. Staying with Naturals, we are also continuing our growth journey on Colgate Vedshakti with a new product and a new piece of communication. This is our best ever Colgate Vedshakti product. I will presently share with you the new communication but we're backing this initiative with a lot of activity including aggressive sampling across the country. Like you know we have a regimen under Colgate Vedshakti with a mouth protect spray which is the #1 selling on the go Oral Care solution in the market today. We have Vedshakti Oil Pulling which brings to a modern format, the ancient ritual of oil pulling together with Colgate scientific expertise. Let us now please see the video of the relaunch for Colgate Vedshakti. Germs from your mouth can enter your body and Colgate Vedshakti stops them in the mouth. That was a section on winning with brands.

Now I'm going to dive into leading innovation and share with you some of our most recent launches. Our philosophy on innovation is three-fold; bring technological superiority to the products that we launch, think platform out when we think innovation and not just singular product and to look for new opportunities to innovate again. And to start on technological superiority we have put out a really exciting launch on toothpaste into the Indian market on whitening. Remember that whitening as a benefit is the most searched benefit in this country when it comes to searches. People are looking to whiten their teeth and we have with Colgate Visible White O2, launched the most revolutionary technology into the Indian market. This product has active oxygen technology that releases small bubbles of oxygen as you brush your teeth to lift away stains and to restore the natural white of your teeth, in fact making your teeth whiter in about three days. We have exciting communication that is out now across touchpoints. Let's see this video that features Dolly Singh, Toshada Uma and Prarthana. Let's please play the video. Whitens teeth in just three days, revolutionary technology and an encouragement more than anything for young people to follow their own code on beauty and not fall for social norms and be confident of their smiles and be themselves. And it's not just television advertising we have put out there's host of communication as an integrated brand experience that we're doing on Visible White O2 and across social media with influencers. We've seen some incredible feedback coming our way on this campaign and on this launch, a really exciting launch for us in this quarter. It will continue to be supported throughout the year.

Moving from whitening to the space of therapeutics, the space of addressing problems in the mouth, conditions in the mouth and the biggest problem in the mouth in India according to the Dental Council of India is gum problems. Not many people realize but 9 out of 10 Indian adults have some form of gum problems through a year and to which Colgate has launched Colgate Gum Expert with turmeric extract which gives you relief from gum bleeding which is a big problem. If not corrected can eventually lead to tooth loss. So an exciting launch on Colgate Gum Expert with turmeric - the only product out there of this kind and there seems to be some really strong early response on the product as we are rolling this out in the country. It's a launch that we are supporting and let's see the communication that is going out and let's play the video please. The communication, as you saw, highlights the fact that people tend to ignore their gum problems including bleeding gums and we are encouraging them to take care of the problem early on with Colgate Gum Expert.

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