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COLGATE-PALMOLIVE (INDIA) LIMITED ANALYST MEET – OCT 2006 1

Welcome to Colgate-Palmolive India


• Business Update Roger Calmeyer

• Financial Review Moses Elias

• Questions & Answers

Agenda


Leadership Team

Debashish RoyV-P Human Resources

Roger CalmeyerV-P South Asia & MD India

Moses A EliasExec V-P & CFO

K VaidyanathanV-P & Company Sec

Vinay HegdeExec V-P Marketing

Shekar BharatwajV-P Sales


Leadership TeamRoger Calmeyer

V-P South Asia & MD India

Moses A EliasExec V-P & CFO

Arun PandeV-P Info Technology

K VaidyanathanV-P & Company Sec

Debashish RoyV-P Human Resources

Vinay HegdeExec V-P Marketing

Shekar BharatwajV-P Sales

Laurence WheelerExec V-P PSC

Surendra ManekV-P R&D

Sanjeev DaliDirector GSSO

Manish Lath GuptaCIC Head


Results Overview

• Positive Economic Indicators

- Oral Care market growth

• Strong volume growth and momentum

• Business Model proving effective

• Excellent profit performance


FMCG sector continues to be buoyant

4680949438 50436

5422158561

69760

30,000

40,000

50,000

60,000

70,000

80,000

2001 2002 2003 2004 2005 2006

Sale

s Rs

Cro

res

FMCG Sales

Estimated for based on Aug YTD’06 growth rateSource: AC Nielsen Retail Measurement Services

*

*


Non- food FMCG reverses declining trend of 2001- 2003

Growth in Non-food FMCG sales

0%

7%

18%

-1%

5%

-5%

0%

5%

10%

15%

20%

2002 2003 2004 2005 YTD Aug 06% Gr

owth

vs.

yea

r ago

Source: AC Nielsen Retail Measurement Services


Growth in all key categories including toothpaste

Growth Rate ( YTD Aug 2006 Vs YTD Aug 2005)

15.318.3

14.8 14.719.9 21.9

0

5

10

15

20

25

30

35

40

45

Toilet Soaps Washingpowders

DetergentCakes

Toothpaste Skin Creams Shampoos

%

Source: AC Nielsen Retail Measurement Services


Indian Oral Care market offers significant opportunities to drive penetration

Category Penetration

44 44 45 46 49 51

36 36 35 35 35 35

70 71 72 73 74 76

0

25

50

75

100

2001 2002 2003 2004 2005 2006 H1

Toothpaste Toothpowder Dentifrice

Source: Indian Readership SurveyDentifrice = Toothpaste or toothpowder


Opportunity to increase per capita consumption by increasing the frequency of brushing teeth

Source: AC Nielsen Retail Measurement Services & Indian Readership Survey

7%110India - Urban

86%285Malaysia

61%219China

%age - twice a day brushing

Per Capita Consumption (Grams/HH/Month)

7%92India - Urban

86%285Malaysia

61%219China

%age - twice a day brushing

Per Capita Consumption (Grams/HH/Month)


Strategic Position

Category Value Share Ranking Relative Share%

Toothpaste 47.6 # 1 1.6Toothpowder 43.8 # 1 1.5Toothbrushes 34.3 # 1 2.1Shower Gel* 39.6 # 2 0.8Liquid Hand Soap* 3.6 # 3 0.2Shaving Cream* 11.0 # 3 0.6Cold Cream* 4.2 # 4 0.1

* Urban only

Source: AC Nielsen Retail Measurement ServicesPeriod : YTD Sept 06


TOTAL TOOTHPASTE

2,500

3,000

3,500

4,000

4,500

5,000

Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06

Total

Revenue

3 per. Mov. Avg.(Revenue)


CP Sales per Capita (Rs)

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

2002 2003 2004 2005 2006


Closer toDRIVING - Customer

GROWTH - Consumer

- Profession

FUNDINGGROWTH

Efficiency & Effectivenessin Everything

INNOVATION EVERYWHERE

Consumer InnovationCentre

BEST PLACETO WORK

BUSINESS MODEL


CLOSER TO THE CUSTOMER

- E CHOUPAL- DISHA


eChoupal - Trained farmers (Sanchalak) manage prominently located IT enabled Choupals. Project started in UP, extended in 2006 to Maharashtraand Rajasthan

Disha - Disha covers 47,000 Haats – unregulated periodic markets at 1/100 of the conventional cost using unemployed youth in rural India

Current CP Coverage in choupals / villages more than 4000 nos

Closer to the Customer…. eChoupal & Disha


CLOSER TO THE CONSUMER

- ORAL HEALTH MONTH- BRIGHT SMILES BRIGHT FUTURES PROGRAM


360º Plan - 2006

BSBF+ Dental Checkups

On pack messages

Free Dental Check-ups- In dental clinics- Factories- Housing

Societies- Corporates

Mobile Vans

- Under privileged areas

Trade visibility and CCP

MuskurahateinDD

National

Media, Website

PR support


Significantly Increased Scale and Touch points

OHM '04 OHM '05 OHM '06

No. of towns 6 50 102No. of dentists 70 venues 3500 5000

Societies 70Corporate 170

BSBF/Schools 1000 2500 3000

No. of towns 7 14 14 plannedMedia Channel Hungama DD National

PDC's

PDC's - New Touchpoints

Spread a Smile

(Public Dental Check-ups)OHM '04 OHM '05 OHM '06

No. of cities 6 50 102No. of dentists 70 venues 3500 5000

Societies 70Corporate 170

BSBF/Schools 1000 2500 3000

No. of cities 7 14 14 plannedMedia Channel Hungama DD National

PDC's

PDC's - New Touchpoints

Spread a Smile

(Public Dental Check-ups)


CLOSER TO THE PROFESSION


Closer to the Profession…. Professional Oral Care

BRMO - Brand Recommended Most Often by Dentists

BUMO - Brand Used Most Often by Dentists

Source : Dentist Track 2005

23%62%23%54%Toothbrushes

6%82%5%75%Toothpaste

CompColgateCompColgate

BUMOBRMO


2002 - VRS at Sewri, Mumbai ; 80 employees

2002 - Divestment of Toothbrush Manufacturing Facility, Aurangabad

2003 - Discontinuation of a Toothpaste Contract Manufacturer, Mumbai

2003 - Acquired Land and commenced construction of state-of-the-art Toothpaste manufacturing facility at Baddi, HP

Land - 36,000 m2, Building - 16,300 m2

2004 - Closure of Toilet Soap Manufacturing, Aurangabad

2005 - Closure of Toothpaste Manufacturing in Nepal

2005 - Commencement of Production at Baddi, HP. No of employees - 208; Installed Capacity - 24,000 tons

2006 - VRS at Sewri, Mumbai ; 263 employees

Efficiency & Effectiveness in Everything….Rationalization of Supply Chain


FINANCIAL REVIEW


FINANCIAL STRATEGY

Grow Topline

Reduce Costs

Invest in Brand Building

/ New Products

Grow NPAT


Grow Topline (% = current year vs previous year)

2000

2250

2500

2750

3000

3250

3500

Rs MM Jan-Mar2004

Apr-Jun2004

Jul-Sep2004

Oct-Dec2004

Jan-Mar2005

Apr-Jun2005

Jul-Sep2005

Oct-Dec2005

Jan-Mar2006

Apr-Jun2006

Jul-Sep2006

(Rs.

MM

)

3.9%

6.4%

13.2%

21.2%

25.8%19.9%

15.1%


- All numbers adjusted to reflect Operating Results for 2006-07

Grow NPAT

175

225

275

325

375

425

475

Jan-Mar 2004 Apr-Jun 2004 Jul-Sep 2004 Oct-Dec 2004 Jan-Mar 2005 Apr-Jun 2005 Jul-Sep 2005 Oct-Dec 2005 Jan-Mar 2006 Apr-Jun 2006 Jul-Sep 2006

(Rs.

MM

)

-11.8%

10.0%

14.5%

46.2%

14.4%29.4%

63.7%


(Rs Crores) Quarter Quarter Half Year Half Year YearEnded Ended Ended Ended ended

Sept. 30,2006 Sept. 30,2005 Sept. 30,2006 Sept. 30,2005 March 31, 2006(Audited)

Total Revenue 338.25 287.87 662.60 560.13 1,170.28

- Net Sales (Excl. Excise Duty) 320.01 278.12 629.59 536.42 1,124.19 - Other Income 18.24 9.75 33.01 23.71 46.09

Total Expenditure 318.00 239.59 587.50 467.17 950.38

- (Increase) / Decrease in Stock in Trade (4.06) 16.59 (4.83) 13.71 4.18 - Raw and Packing Material Cost 57.71 37.53 120.81 92.88 206.99 - Purchase of Goods 85.57 76.16 158.88 148.50 294.19 - Staff Cost 29.78 24.89 56.60 46.94 96.88 - Voluntary Retirement Scheme 58.80 - 58.80 - - - Advertising & Sales Promotion 41.66 51.58 98.33 97.18 197.81 - Other Expenditure 48.54 32.84 98.91 67.96 150.33

Interest Expense 0.22 0.13 0.44 0.31 0.59

Depreciation , Amortisation and Impairment 3.56 3.90 7.25 6.47 31.43

Profit before Tax 16.47 44.25 67.41 86.18 187.88

Provision for Taxation -Current Tax 8.55 7.71 22.15 17.45 46.86-Deferred Tax (16.26) 2.99 (15.98) 6.27 (2.58)-Fringe Benefit Tax 1.00 2.67 2.00 3.60 6.00

Net Profit after Tax 23.18 30.88 59.24 58.86 137.60

Paid-up Equity Share Capital 136.00 136.00 136.00 136.00 136.00(Face value:Rupees 10 per share)Reserves excluding Revaluation Reserve 135.08

Basic and Diluted EPS (Rs.) 1.71 2.27 4.36 4.33 10.12

Aggregate of Non-promoter shareholding - Number of Shares 66,636,481 66,636,481 66,636,481 66,636,481 66,636,481 - Percentage of holding 49% 49% 49% 49% 49%

QUARTER ENDED SEPTEMBER 30, 2006UNAUDITED FINANCIAL RESULTS OF


Rs. CroresPre Tax Net of Tax Pre Tax Net of Tax

Reported Per Clause 41 16.47 23.18 67.41 59.24Increase (Y-o-Y) -62.8% -24.9% -21.8% 0.6%

Add :VRS Cost 58.80 39.01 58.80 39.01Contractor Termination (post VRS) 3.50 2.32 3.50 2.32

Sub-Total 78.77 64.51 129.71 100.57

Less :Profit on Sale of Apartment 6.00 3.98 6.00 3.98Excess Provisions nolonger required 8.50 5.64 8.50 5.64Prior year's tax provisionsno longer required 0.00 4.35 0.00 4.35

Profit 64.27 50.54 115.21 86.60Increase (Y-o-Y) 45.2% 63.7% 33.7% 47.1%

Operating Results

Quarter Half Year


Net Sales

630

1,124

939 964

0

200

400

600

800

1,000

1,200

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

+16.5%

+17.4%

+2.6%

536


Costs (Excl. Advt. & Depre.)


645 666

753

431

68.7% 69.1%

66.9%

0

100

200

300

400

500

600

700

800

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

Cost % Sales

370

69.0%

68.4%


Advertising


103

198

137

148

16.3%

17.6%

14.2%

15.7%

50

65

80

95

110

125

140

155

170

185

200

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

10%

11%

12%

13%

14%

15%

16%

17%

18%

Advertising % Sales

+44.5%

97+5.8%


EBITDA


146

161174

96

15.5%16.7%

15.6%15.2%

3045

60

75

90105

120

135

150

165180

195

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

5%

7%

9%

11%

13%

15%

17%

19%

EBITDA % Sales

+8.1%+10.2%

+38.6% 69


EBIT


89

142139

12213.0%

14.4%

12.7%

14.1%

30

50

70

90

110

130

150

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

5%

7%

9%

11%

13%

15%

17%

EBIT % Sales

+2.2%

63

+41.2%


Profit Before Tax

- All numbers adjusted to reflect Operating results for 2006-07

115

188178

15116.1%

18.5%

16.7%

18.3%

60

80

100

120

140

160

180

200

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

10%

15%

20%

PBT % Sales

+5.6%

+33.7%

86


Income Tax

2

5970

47

27

-15-5 -3

6

29%

36%

27%25%

-20

-10

0

10

20

30

40

50

60

70

80

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

0%

5%

10%

15%

20%

25%

30%

35%

40%

Curr Tax Def Tax FBT Tax Rate



Profit After Tax


87

138113108

11.5% 11.7%12.2%

13.8%

45

55

65

75

85

95

105

115

125

135

145

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

PAT % Sales

+21.4%

+4.62%

+47.1%

59


EPS, DPS & Payout

- All numbers adjusted to reflect Operating results for 2006-07

6.4

10.1

7.9

8.3

7.5

6.0

7.0

95%

85%85%

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

)

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

EPS DPS Payout


Net Working Capital

-133 -123

-201

-243-14.2%

-12.8%

-17.8%-300

-250

-200

-150

-100

-50

0

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

NWC % Sales


Cash + Bank + Investments

374

299

260

302

250

270

290

310

330

350

370

390

2003-04 2004-05 2005-06 6 months 2006-07

(Rs.

Cro

res)


Average Yield

4.2%4.6%

2.7%

2.0%

0.1%

0.6%

1.1%

1.6%

2.1%

2.6%

3.1%

3.6%

4.1%

4.6%

5.1%

2003-04 2004-05 2005-06 2006-07

BSE Sensex Average - 1.4%


Average PE

17.8 18.3

27.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2003-04 2004-05 2005-06

Industry Average - 17.0


Thank You

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