Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — JP Morgan Investor Conference 2016
59 slides from Hindustan Unilever's conference presentation, Sep 15, 2016
Slide 1: Winning Decisively
WINNING DECISIVELY JP MORGAN INVESTOR CONFERENCE | 15 SEPT 2016 Sanjiv Mehta, CEO & MD
Slide 2: Safe Harbor Statement
SAFE HARBOR 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 e
Slide 3: Hindustan Unilever Limited - A Snapshot
HINDUSTAN UNILEVER LIMITED- A SNAPSHOT FY 2015-16 OPERATING NET REVENUE NET PROFIT EPS (BASIC) CASH FROM OPS PROFIT Rs 320 bln Rs 54 bln Rs 41 bln Rs 18.87 Rs 56 bln+ USD 5 bln USD 842 mln USD 639 mln USD 29 cents USD 873 mln+ INR/USD = 64.15 80+ years in India with strong brands and leading market
Slide 4: Driven by a Clear Strategy
DRIVEN BY A CLEAR STRATEGY A Compelling Framework A Model Which Works A Clear Set of Goals • Consistent Growth • Competitive Growth • Profitable Growth • Responsible Growth 4
Slide 5: FY 2015-16: A Challenging Environment
FY 2015-16: A CHALLENGING ENVIRONMENT Subdued Consumer Markets* Volatile Commodity Prices High Competitive Intensity Market growth at its lowest in a decade Source: Nielsen Crude Oil $ 108 $ 86 $ 49 $ 47 FY 2014 FY 2015 FY 2016 Current Palm Fatty Acid Distillate $ 690 $ 723 $ 600 $ 530 12 13 14 15 Y
Slide 6: We Acted Decisively in 2015 as Commodity Prices Fell
WE ACTED DECISIVELY IN 2015 AS COMMODITY PRICES FELL Scenario in 2009 Commodity Prices soften Growth of small UVG players 2009 Loss of market share- not quick to respond to RM price MQ JQ SQ DQ changes -58% Driving volume led profitable growth in 2015 Commodity Prices Growth of small Swift actions
Slide 7: Delivered on Our Goals
DELIVERED ON OUR GOALS COMPETITIVE GROWTH CONSISTENT GROWTH PROFITABLE GROWTH RESPONSIBLE GROWTH Ahead of the Healthy UVG in a Expanding margins whilst Continued progress on our market soft market sustaining competitive inv sustainability priorities 17.2% 16.3% FY 14-15 JQ'15 SQ'15 DQ'15 MQ'16 FY 15
Slide 8: Sustained Strong Track Record
SUSTAINED STRONG TRACK RECORD 140% 130% 128% 128% 130% 58 56.7 120% 56 109% 110% 54 100% 52 50.5 50.1 90% 50 80% 48 45.5 70% 46 60% 44 50% 42 40% 40 2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16 Return on Capital Employed (%) Cash from operations (Rs. bln) Consistent delivery at >1
Slide 9: Winning with Consumers & Customers
WINNING WITH CONSUMERS & CUSTOMERS 17 HUL brands feature in the 9 HUL brands feature in HUL consistent recipient of ‘Most Trusted Brands’ 2015 BrandZTM Top 50 Most Valuable various Supplier Awards from edition Indian Brands ranking leading retail customers Best Brand of Beauty Business Director’s Aw
Slide 10: Retained Top Employer Position
RETAINED TOP EMPLOYER POSITION EMPLOYER OF CHOICE DREAM EMPLOYER Campus Mid Career recruits Women 5th YEAR in a row EMPLOYER 7th YEAR in a row As per Nielsen Campus Track B-School Survey 10
Slide 11: Continued Recognition
CONTINUED RECOGNITION HUL wins the ET ‘Company of the Year’ Award for Corporate HUL recognised as the ‘Most HUL adjudged as the ‘Marketer HUL recognised as Most Excellence Innovative Marketer on Mobile’ of the Year 2015’ Innovative Company in India HUL HUL won Gold for our HUL receives HUL bags Corp
Slide 12: Strategy on Track and Delivering
STRATEGY ON TRACK AND DELIVERING Net Sales EBIT 54 314 31 217 FY 11-12 FY 15-16 FY 11-12 FY 15-16 A > Rs. 300 bln Company 20 consecutive quarters of margin expansion ~100 bln added in the last 4y All values in Rs. bln 12
Slide 13: Rewarded Shareholders
REWARDED SHAREHOLDERS Dividend Per Share (Rs.) 16 15 13 10.5* 7.5 2011-12 2012-13 2013-14 2014-15 2015-16 Approval to the scheme for transfer of General Reserve Balance to P&L Account underway *excluding special dividend of Rs. 8 per share 13
Slide 14: Looking Ahead, We Remain Optimistic on the India Growth Story
LOOKING AHEAD, WE REMAIN OPTIMISTIC ON THE INDIA GROWTH STORY 14
Slide 15: Positive on the Mid-Long Term Outlook for FMCG
AND POSITIVE ON THE MID–LONG TERM OUTLOOK FOR FMCG Millennials Increasing Urbanization Mobile Internet penetration Premiumisation Cont% 2016 2019 Premium 23% 1.7% 0.9% Popular 38% 2015 2019 438 Emerging Cities Mass 38% -2.3% World’s largest millennials 6 Metropolises 34% 47% population (470+ Mn) Eme
Slide 16: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 16
Slide 17: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 17
Slide 18: Key Thrusts
KEY THRUSTS Innovating across the Magic and portfolio Driving the Core Going beyond TV Craftsmanship 18
Slide 19: Innovation Remains the Lifeline of the Business
INNOVATION REMAINS THE LIFELINE OF THE BUSINESS 19
Slide 20: Building Our Presence in Naturals
BUILDING OUR PRESENCE IN NATURALS Within the existing portfolio Extending our presence to new brands Indulekha and St. Ives AV 20
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Slide 23: Democratizing Trends Across Core
DEMOCRATIZING TRENDS ACROSS CORE Recruiting new users into Fair and Lovely Core Building aspiration around core with Fair and Lovely variants BB Cream Ayurveda Powder Cream 23
Slide 24: Strengthening the Core Through Innovation and Premiumisation
STRENGTHENING THE CORE THROUGH INNOVATION AND PREMIUMISATION More benefits More benefits Rising Income Rising Income Meeting consumer needs across price points 24
Slide 25: Building Brands with Purpose
BUILDING BRANDS WITH PURPOSE Surf Excel AV 25
Slide 26: Surf Excel
ie) Surf RFL Boy 2 y 200416 excel With Subtitle
Slide 27: Building Craftsmanship in Marketing
BUILDING CRAFTSMANSHIP IN MARKETING Through Products Through various media During Shopping Experience Revolutionizing consumer Reviving art of copy with compelling advertorial Marketing at the Point of Sale promos 27
Slide 28: Bringing Magic in Marketing Alive in E-Commerce
BRINGING MAGIC IN MARKETING ALIVE IN E-COMMERCE Hero Images of all products on website Thematic Banners resulting in 2X click rate Collaborating with E com partners for activation & 6X jump in laundry 1.4X jump in offtake launches & dish wash sales 28
Slide 29: Going Beyond TV
GOING BEYOND TV Made for Web content Print Innovation Mobile Marketing Leveraging Outdoor 29
Slide 30: Be Beautiful - A Leading Beauty Publisher
BE BEAUTIFUL- A LEADING BEAUTY PUBLISHER 350+ Articles 100+ videos Leading to 10x better conversion on E-commerce 30
Slide 31: Brands Interacting with Consumers via Mobile
BRANDS INTERACTING WITH CONSUMERS VIA MOBILE LSM 0-3 LSM 4-7 LSM 8+ 31 Lo Kar Lo Baat AV
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Slide 33: Ahead of the Curve to Win in Digital
AHEAD OF THE CURVE TO WIN IN DIGITAL Pioneering & Holistic approach Deploying with Eco-system of Grow our brands Experimenting to digital scale partners & business sustainably 33
Slide 34: Building Capability to Tap into Consumer Insight - People Data Center
BUILDING CAPABILITY TO TAP INTO CONSUMER INSIGHT- PEOPLE DATA CENTER Targeting right influencers Spotting new trends with right messaging Targeting new segments 34
Slide 35: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 35
Slide 36: Key Thrusts
KEY THRUSTS Continued focus on Building Channels Customer development of the Future Market Development 36
Slide 37: More Throughput from More Stores
MORE THROUGHPUT FROM MORE STORES More Stores More Assortment Every Day Perfection More Assortment in More Stores at More Frequency 37
Slide 38: WiMI Strategy Reaping Benefits
WIMI STRATEGY REAPING BENEFITS LIFTING CENTRAL INDIA Uttar Rajasthan Pradesh Bihar Madhya Pradesh Indicative map of India Sharply Activating Clusters through Micromarketing Central India growing faster than all Product Mix tailor-made according to consumer preferences India, despite market slowdown
Slide 39: Evolution of Channels
EVOLUTION OF CHANNELS Channel Evolution Emerging Channels Rise of Specialist Format Closed format large Open format grocer large grocer Modern Trade E-Commerce Drug-pharmacy Drug-pharmacy & beauty 12% of FMCG* in 2016 4% of FMCG* by 2019 *Market 39
Slide 40: Building E-Commerce - The Channel of the Future
BUILDING E COMMERCE- THE CHANNEL OF THE FUTURE Resourcing ahead of Winning across the the curve platform Our market share in E commerce > Modern Trade > General Trade 40
Slide 41: Market Development Remains a Priority
MARKET DEVELOPMENT REMAINS A PRIORITY Drive trials through experiential Sampling Aggressive investment behind trial generation * 8X * vs. 2014 Leading trends in new segments 41
Slide 42: Developing the Market Across Categories
DEVELOPING THE MARKET ACROSS CATEGORIES Home Care Personal Care Refreshment Foods Home to Home Sampling Online Awareness Wet Sampling In-Store Sampling 42
Slide 43: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 43
Slide 44: Key Thrusts
KEY THRUSTS Bringing efficiencies in Customer service and quality Building back-end ways of working at the moment of truth capabilities 44
Slide 45: Bringing Cost Efficiencies in Ways of Working
BRINGING COST EFFICIENCIES IN WAYS OF WORKING Project Symphony Zero based budgeting Ullage reduction Focused on value & growth Decisions based on data Driven by experienced bus. leadership Making Savings a common agenda across functions 45
Slide 46: End to End Focus
END TO END FOCUS Material Cost Savings* NMSCC Savings* Media Savings* 174 141 140 100 100 100 2013 2015 2013 2015 2013 2015 Media inflation savings *Numbers indexed to 2013, base considered 100; NMSCC- Non Material Supply Chain Costs 46
Slide 47: Service at the Point of Purchase
SERVICE AT THE POINT OF PURCHASE Primary CCFOT Secondary CCF On Shelf Availability (MT) 115 102 113 100 100 100 2013 2015 2013 2015 2013 2015 CCFOT - Customer Case Fill On Time; MT –Modern Trade 47
Slide 48: Quality at the Moment of Truth
QUALITY AT THE MOMENT OF TRUTH Consumer-Customer and Brilliant Quality Thriving quality culture and brand led Fundamentals people Ensure zero safety incidents Q mindset in the Last mile Q in Design Leverage IT for Distributor Retail Quality Drive supplier Quality Q @ the Point of Sale Grass-root a
Slide 49: Using the Power of Big Data and Analytics
USING THE POWER OF BIG DATA AND ANALYTICS Advanced Analytics Power to user Drive further simplification Analytics Driven Insights Speed of Think End to End Analysis Think Tech. Think Delight Indicative map of India Cross Function Linking 49
Slide 50: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 50
Slide 51: Winning with Our People
WINNING WITH OUR PEOPLE Flexible and Agile Diversity and Inclusion Employee Well Being Founder’s mentality 51
Slide 52: Igniting the Entrepreneurial Spirit
IGNITING THE ENTREPRENEURIAL SPIRIT BUILDING PARTNERSHIPS FOR THE FUTURE Content Partners briefed on 14 brands 900+ ideas in the first round Unilever Foundry Content Day 52
Slide 53: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 53
Slide 54: Hindustan Unilever Foundation
HINDUSTAN UNILEVER FOUNDATION Water Conservation Crop Yield Person Days Generated 1.5 lakh tonnes* 20 lakh* 200 billion litres* Cumulative Annual Agriculture Cumulative Person Days Generated Cumulative and Collective Potential Production Impact >250 Mn people by 2020 | 1 in every 5 Indians * Assured
Slide 55: Doing Well by Doing Good
DOING WELL BY DOING GOOD SWACHH AADAT, SWACHH BHARAT Mass Media- Haath Muh Bum Swachh Basti Swachhata Doot Most Viewed Campaign on YouTube with > 20 million views Two lakh people reached through on- Two lakh people reached through pilot > 75 million people reached ground program in Delhi and Mumbai
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Slide 57: Ahead of the Curve in Initiating Steps on Institutional Agenda
AHEAD OF THE CURVE IN INITIATING STEPS ON INSTITUTIONAL AGENDA Pioneering initiative by CII-HUL to promote food safety sciences (CHIFSS) 57
Slide 58: We Have What It Takes
WE HAVE WHAT IT TAKES… Great Heritage Great Brands Great People Great Capability Distribution Rural Supply Chain IQ Finance USLP 58
Slide 59: Thank You
THANK For YOU more information & updates For More Information 59
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