Splash Profit Up by 6.6% in 2008

Splash Corporation, the country’s largest wholly Filipino-owned beauty and personal care company posted a net income of P298 million in 2008, up by 6.6% from P279 million in 2007.

In spite of the adverse economic conditions in 2008 particularly the spike in inflation and the general market anxiety brought about by the global financial crisis that softened consumer demand, Splash was able to grow sales by 5.1% to P3.165 billion from P3.01 billion in 2007.

The company’s megabrands – Maxipeel and Skin White – both hit the billion-peso sales mark and continue to dominate their respective markets. Maxipeel Exfoliant continues to rule its category with an 82% market share. Skin White lotion and soap increased their lead further with market shares of 29% and 45%, respectively in 2008, up significantly from their respective 25% and 36% shares in 2007. Another core brand, Kolours Hair Dye, increased its market leading share to 58% in 2008 from 49% in 2007.

Early in 2008, the company seeing the tell-tale signs of an impending economic crisis, worked on improving its internal business processes which resulted in increasing its gross profit margin to 52.5% in 2008, an improvement from the 51% gross margin in 2007. However, increases in operating costs resulted in a decline in operating profit margin to 8.1% in 2008 from a year-ago level of 10.8%.

While the full brunt of the global economic crisis will be felt in 2009, Splash remains optimistic that it can churn out another respectable performance particularly given its strong brand health and the continuous improvements in processes that could result in a more cost-effective operation..