International biz could be revenue-driver: Emami

Goenka, in the company’s latest annual report, said during the later part of FY20, the Covid-19 pandemic impacted the company’s international exposure but it is optimistic that this business segment could emerge as a “revenue-driver” in the coming days. (Representative image)

FMCG major Emami’s international business accounted for 16% of its total revenues in the last fiscal, which was up from 13% in the previous fiscal, led by a strong performance in Bangladesh.

The company’s overhauling of distribution in key geographies resulted in a 16% growth in international revenues, increasing exposure within the company’s revenue profile from 13% to 16%, Sushil Goenka, managing director, Emami, said.

Goenka, in the company’s latest annual report, said during the later part of FY20, the Covid-19 pandemic impacted the company’s international exposure but it is optimistic that this business segment could emerge as a “revenue-driver” in the coming days.

The MD said the company’s international business growth in the last financial year was led by strong performance in Bangladesh. “The company completed the integration of Creme 21 into Emami’s system and even introduced related products in key international markets. Besides, Emami 7 Oils in One emerged as a more visible international brand, increasing its share in the global business. During the year under review, the company launched its variants in Bangladesh and GCC countries. The company launched a new range of BoroPlus products in Russia, engaged local celebrities for endorsement and extended direct distribution.”

Emami had last year acquired Creme 21, a Germany-based personal care brand, which has strong presence in Middle-East and European markets, for nearly Rs 100 crore.

During the last financial year the company’s revenues stood at `2654.88 crore against `2692.94 crore in FY19. “The company entered the financial year under review (FY20), addressing weak rural demand, liquidity concerns, food inflation and sluggish consumption sentiment. Besides, the company’s winter performance had been affected by a delayed winter onset and the extension of the season that affected the offtake of summer products. The country was yet to recover from these realities when it was affected by the onslaught of the Covid-19 pandemic during the last quarter of the year under review. The result: consumer spending in niche and discretionary categories was affected and the FMCG sector ended 2019-20 with a sense of uncertainty,” Goenka said.

On a decline in the sales of “Fair and Handsome”, considering that the brand is a market leader, he said the reasons for a decline comprised liquidity crunch, lower disposable incomes and increased preference for facial hair within the age group of 20 to 29 years (moderating surface application area by 25-30%). The company took corrective actions and intended to relaunch the brand in Q4FY20 around a new strategy, formulation, packaging and communication. However, due to the lockdown, it postponed the relaunch to this fiscal.

The company said in a post-Covid world, it expects consumers to be increasingly concerned about their hygiene and health. It expects an increase in online purchases. Thus, the company is scaling its e-commerce presence. “The availability of large SKUs on e-commerce channels is value-accretive, strengthening consumer engagement. Our existing healthcare products address lifestyle issues and are positioned to attract consumers in a post-Covid-19 world,” Goenka added.

Emami, in the annual report, said it has strengthened its presence in the modern trade format, where it collaborated with key brands and the result was enhanced shelf visibility and availability.