Press Releases2014

Aug 04, 2014
Essel Propack declares its Q1 results for FY15

Consolidated Performance Highlights:

  • Non oral care sales grew strongly by 16.6% over the previous year. Unforeseen offtake issues towards the end of quarter at the large oral care customers in China and capacity bottleneck in India depressed the growth in the oral care sales to 6.8% over the previous year. Overall non-oral care value share of sales for the quarter was 42.2%, higher by 2.1 pp over previous year.
  • Working capital productivity continues to be a key thrust area; Net working capital reduced by Rs.38 crores on underlying basis over the quarter.
  • Consolidated net debt in constant terms was lower Rs 25 crores over previous year. Further helped by interest rate reduction of 23bps, the finance cost for the quarter is 7.2% lower than the previous year.

Region wise Financial Highlights:

AMESA Performance Highlights:

  • Tubes/ laminates continue to grow strongly by 19.6% helped by
  • robust sales in the non oral care category in India,
  • ramp up of the newly commissioned  COCO project for oral care in India.
  • New customer development for plastic tubes at Wada leveraging the new line added during the last year.
  • The newly commissioned laminator being fully stabilized and supporting third party supplies both in the local and export market.  
  • Strong double digit growth in Egypt
  • Both India and Egypt are in the process of increasing capacity in the wake of sustained demand growth.  
  • The various India units continued to win accolade for innovation in non-oral care product development and commercialization.

EAP Performance Highlights:

  • Non oral care thrust is on plan, recording revenue growth of 68% .
  • Unforeseen reduction in offtake at large customers in China towards the end of quarter depressed the Oral care sales in the region  and lowered operating margin and profit
  • Continued growth in the non-oral care through the year is expected to get the unit back to top-line and bottom line growth by end of the year.
  • The installation of new facility for non-oral care category in the East of China is progressing per plan.
  • The region is investing to further improve supply chain capability and reduce supply chain costs through advanced IT systems

As the new customer acquisition gains momentum, the region will have more diversified portfolio and sustained stable growth.

AMERICAS Performance Highlights:

  • Americas Operating profit improved by 6.3% over the previous year helped by reduction in operating cost over previous year across all units.
  • New customer development in non-oral category is progressing per plan

EUROPE Performance Highlights:

  • Europe revenue grew 20% over the previous year helped by ramping up of the new oral care contract in Poland, and strong performance by Germany, leading to Operating profit expansion by 157%
  • New opportunities in non-oral care are being commercialized in the German and Polish units, involving conversion to laminated tubes
  • Russia unit is faced with customer attrition due to new competition – the focus is to manage costs and maintain prices while developing a new anchor customer.

Overall:

The business is poised to deliver on the strategy. Underlying growth and performance is assuring across units except for the specified issues in China and Flexible packaging business. These are being suitably addressed.

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