Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Q4 2011 Earnings Presentation
32 slides from Hindustan Unilever's earnings presentation, Feb 7, 2012
Slide 1: Results DQ'11 – Investor Presentation
Results DQ’11 – Investor Presentation Feb 7, 2012 1
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 1 Strategy 2 Business Environment 3 Current Quarter Performance 4 Looking Ahead 3
Slide 4: Our strategy and goals remain unchanged
Our strategy and goals remain unchanged Competitive Growth Profitable Growth Sustainable Growth 4
Slide 5: DQ'11 – Challenging business environment
DQ’11 – Challenging business environment 15 13 12 FMCG markets grow in double digits 10 albeit slower than previous quarters • Soaps and Detergents growth led by pricing MQ JQ SQ DQ Nielsen reported market growth (%) Competitive pressures continue Global uncertainty and local factors impact se
Slide 6: Strong Performance in the quarter
Strong Performance in the quarter Growth competitive and profitable • Domestic Consumer business grows 16.5% • Strong 9.1% UVG with good price growth • Double digit growth across all FMCG segments • Water GTM transformation on track; likely to be completed by March • Strong performance in Modern Tra
Slide 7: Delivered on goals
Delivered on goals Competitive growth Profitable growth Sustainable growth Ahead of market Step up in margins Volume led 230 bps up 16.5% 16.5% 9.1% 6.7% Market HUL Topline Op Profit UVG Price USG *Growth – Domestic consumer business growth (includes water) 7
Slide 8: Winning consistently
Winning consistently Domestic Consumer Business Sales Growth (%) 16.5 16.5 12.8 9.0 FH'10-11 SH'10-11 FH'11-12 DQ'11 UVG* (%) 12.6 13.5 9 9 *UVG: Underlying Volume Growth 8
Slide 9: All segments grow in double digits
All segments grow in double digits Growth % DQ ’11 Soaps & Detergents 20.7 Personal Products 14.0 Beverages 11.3 Packaged Foods 13.5 Domestic FMCG 17.2^ Domestic Consumer 16.5* ^ Excludes Other Operational Income * Including water 9
Slide 10: Winning with brands
Winning with brands Continued focus on innovations Rin Bar relaunch Surf Excel Quickwash Pond’s Active Moisture Dove Body lotions with improved formulation whiteness technology Revitalizing 24 hr moisturizer advanced deep care complex Axe shower gels for men Domex Toilet Cleaners Pepsodent G – Gum c
Slide 11: Media intensity sustains
Media intensity sustains Investing for growth Industry GRP – indexed chart GRP excl S&D GRP S&D 120 121 127 125 Industry GRPs lower in Soaps & Detergents 117 100 115 100 109 Competitive spends maintained (SOV/SOM) 92 89 76 FH'09-10 SH-09-10 FH'10-11 SH'10-11 FH'11-12 DQ'11 • A&P at Rs 690 crores
Slide 12: Winning in the market
Winning in the market MT accelerates, Rural delivers strong growth MT indexed business size Modern Trade gaining shares • Focus on building win-win partnerships and superior customer service • Benefits from new store openings and ‘Cash and FH'10 SH'10 FH'11 SH'11 Carry’ Rural indexed business size
Slide 13: Inflationary pressures continue, adverse currency impact
Inflationary pressures continue Adverse currency impact Crude remains high $ / INR : Sharp depreciation 25% up YoY +18% since July 52.6 47.7 45.3 44.4 DQ 10 JQ 11 SQ 11 DQ 11 MQ'11 Jul-11 Sep-11 Dec-11 Source: Bloomberg data and internal estimates 13
Slide 14: Winning with continuous improvement
Winning with continuous improvement Driving competitive costs Higher Savings Indexed CEPs Operating Leverage 134 110 Indexed Overheads as % of turnover 100 100 95 2009-10 91 2010-11 YTD 2011-12 2009-10 2010-11 YTD 2011-12 CEPs - Cost effectiveness programmes 14
Slide 15: Stepping up Return on Marketing Investments
Winning with continuous improvement Stepping up Return on Marketing Investments (ROMI) Production fees Indexed production & Promotional media fees effectiveness + ROI Positive Advertisement effectiveness >2/3rd 2010 Indexed Ad preview scores -/- + 2011 up up15%* by TO Growth 15%* -/- 2010 Current *C
Slide 16: Category Highlights
CATEGORY HIGHLIGHTS
Slide 17: Laundry
Laundry Growth ahead of market in all segments Laundry USG % All brands grow in double digits; fair mix of volume and price JQ'11 SQ'11 DQ'11 • Focus on upgradation continues • Rin growth momentum sustained • Wheel grows strongly on strength of micro marketing Re-launched during the quarter • Su
Slide 18: Skin cleansing
Skin cleansing Broad based growth Growth ahead of market Lux and Lifebuoy grow in double digits • Lux benefits from re-launch • Lifebuoy continues to drive relevance of germ protection Indexed business size of premium portfolio * Focus on premiumization continues; Dove delivers strong double d
Slide 19: Skin Care
Skin Care Growth momentum sustained Indexed business size - Facewash Strong double digit growth in FAL, Pond’s and Vaseline; volume led • FAL led by Core FH'10 SH'10 FH'11 SH'11 • Vaseline led by lotions Focus on market development continues • Strong performance in facewash sustained Dove body
Slide 20: Skin market development
Skin market development More usage More users More benefits 20
Slide 21: Hair and Oral
Hair and Oral Good performance in a challenging environment Hair delivers strong double digit volume led growth; ahead of market • Dove expands consumer franchise; business size doubles • Robust growth in Clinic Plus underpinned by volumes • Clinic Plus conditioners launched • Clear grows in doubl
Slide 22: Hair care
Hair care Building a comprehensive range More usage More users More benefits Increasing Consumption in Driving Hair conditioners Serums, Masks, Treatments Rural for Salon treated hair 22
Slide 23: Beverages
Beverages Growth robust and competitive Tea grows in double digits on strength of premium portfolio • 3 Roses builds on proposition of health and taste • Taj Mahal delivers strong growth led by MT • Tea bags lead market development Coffee grows in double digits; benefits from contemporary portfo
Slide 24: Coffee innovations
Coffee innovations Building a premium portfolio 100% Pure Soluble Coffee with superior aroma Premium freeze dried coffee from exotic locales Light tasting coffee with Classic Mocha Flavor 24
Slide 25: Packaged Foods
Packaged Foods Leading market development Kissan benefits from re-launch; grows in double digits • Strong performance in both Jams and Ketchups Knorr performance muted • Soupy noodles performs in line with plans • Soups impacted by market slowdown • Key innovations include Knorr ‘Cup-a-Soup’ and
Slide 26: DQ'11 – Results
DQ’11 – Results Rs Cr Particulars DQ'10 DQ'11 Growth% Net Sales 5,027 5,853 16.4 PBITDA 725 970 33.9 PBIT 669 914 36.6 PBIT margin (%) 13.3 15.6 PBT bei 746 993 33.2 Exceptional Items 64 (12) - PBT 810 981 21.1 PAT bei 587 762 29.9 Net Profit 638 754 18.2 26
Slide 27: DQ'11 – Exceptional items
DQ’11 – Exceptional items Rs Cr Particulars DQ'10 DQ‘11 Assets Sale 49 Sale of long term investment 16 Restructuring Cost (1) (12) Others (0) Total 64 (12) 27
Slide 28: 9 months ended Dec 31, 2011 – Results
9 months ended Dec 31, 2011 – Results Rs Cr Particulars YTD FY'10-11 YTD FY'11-12 Growth% Net Sales 14,502 16,879 16.4 PBITDA 2,053 2,551 24.3 PBIT 1,888 2,381 26.2 PBIT margin (%) 13.0 14.1 PBT bei 2,083 2,589 24.3 Exceptional Items 123 91 - PBT 2,207 2,679 21.4 PAT bei 1,642 1,993 21.4 Net Profit
Slide 29: Impact of FMCG Exports demerger
9 months ended Dec 31, 2011 – Results Impact of FMCG Exports demerger Rs Cr HUL (as reported) HUL (post demerger) YTD YTD YTD YTD Particulars Growth (%) Growth (%) FY’10-11 FY’11-12 FY’10-11 FY’11-12 Net Sales 14,502 16,879 16.4 13,810 16,081 16.4 PBIT 1,888 2,381 26.2 1,833 2,297 25.3 PBIT Margin (
Slide 30: DQ'11 summary
DQ’11 summary Strong 16.5%* growth in a challenging environment • Broad based and ahead of market Focus on driving core and leading market development continues Operating margins up by 230 bps PAT (bei) at Rs. 762 crores grows by 30%; Net Profit at Rs.754 crore up by 18% * Domestic Consumer
Slide 31: Looking ahead
Looking ahead FMCG markets will continue to grow Headwinds • Environment characterized by • Competitive intensity ~ to continue • Inflationary pressures ~ combined with volatility • Uncertainty ~ global and local factors Tailwinds • Consumer demand drivers continue to be strong • Differentiated capa
Slide 32: Results DQ'11 – Investor Presentation
Results DQ’11 – Investor Presentation Feb 7, 2012 For more information please visit http://www.hul.co.in 32