Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — SQ'11 Earnings Presentation
33 slides from Hindustan Unilever's earnings presentation, Nov 1, 2011
Slide 1: Results SQ'11 – Investor Presentation
Results SQ’11 – Investor Presentation November 1, 2011
Slide 2: Safe harbour statement
Safe harbour statement This Release / Communication, except for the historical information, may contain statements, including the words or phrases such as ‘expects, anticipates, intends, will, would, undertakes, aims, estimates, contemplates, seeks to, objective, goal, projects, should’ and similar
Slide 3: Agenda
Agenda Strategy Business Environment Current Quarter Performance Looking ahead SQ‘11 Results - November 1, 2011 (2)
Slide 4: Consistent Strategy
Consistent Strategy • Competitive Growth • Profitable Growth • Sustainable Growth SQ‘11 Results - November 1, 2011 (3)
Slide 5: Business Environment – SQ'11
Business Environment – SQ’11 • FMCG market grows in double digits • Growth in Soaps & Detergents led by pricing • High competitive intensity • Inflationary pressures continue SQ‘11 Results - November 1, 2011 (4)
Slide 6: Competitive & profitable growth in a challenging environment
Competitive & profitable growth in a challenging environment • Domestic Consumer business grows 18.5% • Strong 9.8% UVG* with good price growth • Double digit growth across all FMCG segments • Strong performance in Modern Trade and Rural • Operating profit grows by 30.1%; up 130 bps • Growth driving
Slide 7: Accelerated growth momentum; sustained volume growth
Accelerated growth momentum; sustained volume growth Domestic Consumer Business Sales Growth 18% 15% 13% 9% FH'10-11 SH'10-11 JQ'11 SQ'11 UVG* 12.6% 13.5% 8.3% 9.8% *UVG: Underlying Volume Growth; SQ‘11 Results - November 1, 2011 (6)
Slide 8: All segments grow in double digits
All segments grow in double digits Growth% SQ‘11 Soaps & Detergents 22% Personal Products 18% Beverages 15% Packaged Foods 21% Domestic FMCG 20%^ Domestic Consumer 18.5%* ^ Excludes Other Operational Income * Including water SQ‘11 Results - November 1, 2011 (7)
Slide 9: Winning with Brands: Continued focus on innovations
Winning with Brands: Continued focus on innovations Fair & Lovely Future Tube: Relaunch of Lakme Fruit Aspirational & affordable Moisture Range Lux relaunch with silk Vaseline relaunched: protein extract Multi layer moisture Vaseline Lip Therapy Face Wash: Range Pond’s White Beauty with 4 new varian
Slide 10: Winning with Brands: Continued focus on innovations
Winning with Brands: Continued focus on innovations Kissan range relaunched: Helping moms in providing Knorr Soupy Noodles: goodness and nutritive value to their kids Accessible Rs.5 pack Unique green tea experience with 3 flavours Taj Mahal Tea Bags: Pureit Marvella: Entry 7 flavours for 7 days int
Slide 11: High media intensity continues
High media intensity continues Industry GRP – Indexed Chart 157 165 151 139 152 131 123 124 100 2008-09 2009-10 FH'10-11 SH'10-11 FH'11-12 FMCG excl S&D S&D S&D: Soaps and Detergents Source: Mindshare & HUL internal estimates SQ‘11 Results - November 1, 2011 (10)
Slide 12: A&P remains competitive across segments
A&P remains competitive across segments Category Competitive SOV/ SOM* Brand investment Personal Products Packaged Foods Beverages Soaps & Detergents • A&P spends maintained at Rs.651 crore; lower by 200 bps • Spends increased in Personal Products, Beverages and Packaged Foods • Recalibrated in Soap
Slide 13: Winning in the Market: Rural delivers strong growth
Winning in the Market: Rural delivers strong growth Indexed Business Size Coverage expansion Shakti & Shaktiman FH'2010-11 SH'2010-11 FH'2011-12 Rural activation: Khushiyon ki Doli SQ‘11 Results - November 1, 2011 (12)
Slide 14: Winning in the Market: Modern Trade accelerates
Winning in the Market: Modern Trade accelerates Focus on Customer Service No.1 Supplier of Choice eQ^ scores highest in industry Indexed Business Size FH'10-11 SH'10-11 FH'11-12 Increasing Market Share 2008 2009 2010 2011* *YTD September 2011; ^Nielsen Equity Management Program Score SQ‘11 Results -
Slide 15: Inflationary pressures remain high
Inflationary pressures remain high Commodity Inflation % increase in SQ’11 vs SQ’10 52% 45% 20% • Prices moderate from recent highs Palm Oil Crude Coffee • Currency depreciation to have USD INR an adverse impact going 10% + depreciation forward 49 48 45 45 44 Jan'11 July'11 Aug'11 Sep'11 Oct'11 Aver
Slide 16: Winning through continuous improvement: Stepping up savings
Winning through continuous improvement: Stepping up savings ROMI* + ROI Positive >2/3rd -/- + SC^ Savings Other Costs TO Growth 100 140 163 -/- 93 127 88 100 85 2008-09 2008-09 2009-10 2009-10 2010-11 2010-11 FH'11-12 FH'11-12 Indexed overheads Indexed CEPs (as % of TO) *ROMI: Return on Marketing In
Slide 17: Category Highlights
Category Highlights SQ‘11 Results - November 1, 2011 (16)
Slide 18: Home Care: Broad based competitive growth
Home Care : Broad based competitive growth • Laundry: Growth ahead of market • All brands grow in double digits; fair mix of volume and price • Rin growth momentum continues • Strong traction in premium portfolio; Comfort range expanded with the launch of anti bacterial variant • Household Care: Vim
Slide 19: Skin Cleansing: Strong performance in core & emerging segments
Skin Cleansing: Strong performance in core & emerging segments • Double digit growth, ahead of the market • Lux and Lifebuoy grow in double digits; featured in top 5 most trusted brands* • Lux relaunched during the quarter with superior product • Premium portfolio sustains growth momentum • 10th con
Slide 20: Superior products with salient advertising & activation
Superior products with salient advertising & activation Lux relaunch with silk protein extract: Silky skin like never before Dove 7 days no make up: activated across different media SQ‘11 Results - November 1, 2011 (19)
Slide 21: Skin Care: Growth momentum accelerates
Skin Care: Growth momentum accelerates • Growth ahead of market • Strong double digit growth in Fair & Lovely, Pond’s and Vaseline • Focus on leading market development continues • Face Wash: New range launched under Dove; business doubles • Pond’s White Beauty Naturals range introduced • Vaseline:
Slide 22: Innovations in SQ'11
Innovations in SQ’11 Fair & Lovely unique tube innovation: Aspirational & affordable Pond’s White Beauty Naturals with Camellia leaf extracts for spotless, fair skin Vaseline moisturiser relaunched: Multi layer moisture Vaseline Lip Therapy with 4 new variants Face Wash: Range expansion Lakme Fruit
Slide 23: Hair & Oral Care: Good growth amidst heightened competitive intensity
Hair & Oral Care: Good growth amidst heightened competitive intensity • Hair delivers double digit growth led by volumes • Dove: growth momentum accelerates • Nourishing Oil Care range launched with Vita Oils • Increased accessibility with Re.1 sachet • Oral care: growth stepped up, both brands grow
Slide 24: Beverages: Sustained growth
Beverages: Sustained growth • Tea delivers broad based growth • Strong performance in premium and popular segments; all brands grow in double digits • Leading market development with Tea bags; new range of flavored tea bags launched under Taj • Coffee performs well amidst high commodity prices • Bot
Slide 25: Packaged Foods: Leading market development
Packaged Foods: Leading market development • Double digit growth in Kissan and Knorr • Kissan range relaunched with “100% Real” proposition • Knorr Soupy Noodles driving penetration with Rs. 5 pack • Kwality Walls continues strong growth momentum • Led by innovations and distribution • “Cornetto Luv
Slide 26: Pureit: Business strategy on track
Pureit: Business strategy on track • Pureit now straddles the entire consumer pyramid • Entry into large “RO Water Purifier” segment with Pureit Marvella RO • GTM* progressing as per schedule, to be completed by year end • Distribution across modern electronic retail chains scaled up • Pureit wins G
Slide 27: SQ'11 – Results
SQ’11 – Results Rs Cr Particulars SQ'11 SQ'10 Growth% Net Sales 5522 4681 18.0 PBITDA 827 647 27.8 PBIT 770 592 30.1 PBIT margin (%age) 13.9 12.6 PBT bei 847 668 26.7 Exceptional Items 44 40 - PBT 891 709 25.7 PAT bei 652 534 22.3 Extraordinary Items (net of Tax) - - Net Profit 689 566 21.7 SQ‘11 Re
Slide 28: SQ'11 – Exceptional Items
SQ’11 – Exceptional Items Rs Cr Particulars SQ'11 SQ'10 Assets Sale 47 26 Sale of long term investment 20 Restructuring Cost (3) (3) Others (3) Total 44 40 SQ‘11 Results - November 1, 2011 (27)
Slide 29: First Half FY'12 – Results
First Half FY’12 – Results Rs Cr Particulars FH'11-12 FH'10-11 Growth% Net Sales 11026 9475 16.4 PBITDA 1581 1328 19.1 PBIT 1468 1219 20.4 PBIT margin (%age) 13.3 12.9 PBT bei 1595 1338 19.3 Exceptional Items 103 59 - PBT 1699 1397 21.6 PAT bei 1231 1055 16.7 Extraordinary Items (net of Tax) - - Net
Slide 30: Interim Dividend
Interim Dividend Rs. Particulars FY 2012 FY 2011 Interim Dividend Per Share 3.5 3.0 No. of Shares (Cr) 216 218 Total Dividend (Rs Cr) 756 655 Div. Dist. Tax (Rs Cr.) 123 109 Total Div. Outflow (Rs Cr.) 879 763 SQ‘11 Results - November 1, 2011 (29)
Slide 31: SQ'11 summary
SQ’11 summary • Strong 18.5%* growth in a challenging environment • Broad based and ahead of market • Operating margins up by 130 bps; PAT (bei) at Rs. 652 crore grows by 22.3%; Net Profit at Rs.689 crore up by 21.7% • Sustained focus on continuous improvement • Brand investments maintained at compe
Slide 32: Looking ahead
Looking ahead Headwinds Tailwinds • Uncertain global economic • Strong monsoon augurs well environment • Diverse portfolio straddling the • Inflation and adverse impact of pyramid rupee depreciation • Differentiated capabilities for • Competitive intensity competitive advantage FMCG Markets will con
Slide 33: Our strategy remains consistent
Our strategy remains consistent • Competitive Growth • Profitable Growth • Sustainable Growth Winning Today Winning Tomorrow SQ‘11 Results - November 1, 2011 (32)