Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — CLSA Investor Conference 2018
64 slides from Hindustan Unilever's conference presentation, Sep 12, 2018
Slide 1: Cover letter to stock exchanges
Hindustan Unilever Limited Unilever House B D Sawant Marg Chakala, Andheri East Mumbai 400 099 Tel: +91 (22) 3983 0000 Web: www.hul.co.in 12th September, 2018 CIN: L15140MH1933PLC002030 Stock Code: BSE: 500696 NSE: HINDUNIL VR /SIN: INE030A01027 BSE Limited, National Stock Exchange of India Ltd Corp
Slide 2: Re-imagining HUL
RE-IMAGINING HUL CLSA INVESTOR CONFERENCE | 12 SEP 2018 Sanjiv Mehta, Chairman & Managing Director
Slide 3: 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 4: Rapid Pace of Change: Last 5 Years
RAPID PACE OF CHANGE : LAST 5 YEARS Market Disruptions & Climate Consumers & Context Extremities Competition Market Growth GST: Biggest Tax Growing affluence reform in India and aspirations 2012 2013 2014 2015 2016 2017 481Mn Foods safety Rapid increase in Urban – Rural Growth Internet and 130Mn Dem
Slide 5: Performance in the Last 6 Years
PERFORMANCE IN THE LAST 6 YEARS Net Sales EBITDA Market Capitalization ~$1.9bn ~$573 Mn ~$37bn* added^ added added All nos compared with FY’11-12 which is reinstated to reflect key IND AS accounting impact ^Not adjusted for GST accounting impact & hence the net sales number looks deflated 4 *Differe
Slide 6: A Few Examples of Consistent High Performance
A FEW EXAMPLES OF CONSISTENT HIGH PERFORMANCE Laundry Hair Care Tea 5
Slide 7: Laundry – Last 6 Years
LAUNDRY – LAST 6 YEARS Turnover Profitability 1.8 X 3.7 X Consistent Growth in Topline & Bottom line 6 All nos are basis internal management reporting & compared with FY’11-12
Slide 8: Hair Care – Last 6 Years
HAIR CARE – LAST 6 YEARS Turnover Market Share 1.9 X ~700bps Consistent delivery on all fronts powered by strong portfolio 7 All nos are basis internal management reporting & compared with FY’11-12. Market share increase is as of MAT July18
Slide 9: Tea – Last 6 Years
TEA – LAST 6 YEARS Turnover Profitability 1.8 X 2.0 X No. 1 Tea Company in India 8 All nos are basis internal management reporting & compared with FY’11-12
Slide 10: Being Recognised
BEING RECOGNISED Best Performing # 3 Company globally Economic Times – #8 Globally and Corporate Citizen of Unilever Business for building leaders Company of the year #1 in India the year 2014 2014 2015 2018 2018 ‘Dream Employer’ for 9 years in a row among top Indian universities 9
Slide 11: HUL Share Performance
HUL SHARE PERFORMANCE Performance vs Indices HUL Market Capitalization $ 12 4.1 X $ 49 billion billion 2012 Current* BSE FMCG HUL among the top 5 most valuable companies in India* BSE SENSEX 2011 2012 2013 2014 2015 2016 2017 2018 Markets rewarding our Consistent, Competitive, Profitable and Respons
Slide 12: The World Around Us Is Changing
THE WORLD AROUND US IS CHANGING.. With dramatic disruptions … A 20 word tweet can start a revolution today ! 11
Slide 13: It's an Age of Change and Disruption
IT’S AN AGE OF CHANGE AND DISRUPTION Millennials / Gen Z There is a thrill of Changing family dynamics purpose Globally connected but Digital disruptions Uncertainties and Volatility reshaping business models there is a search for are the new normal authenticity 12
Slide 14: And Hence There Is a Need For...
AND HENCE THERE IS A NEED FOR... Consumer Centricity Speed & Agility Digital Connectivity Being Glocal 13
Slide 15: FMCG Continues to Be a Big Opportunity in India
FMCG CONTINUES TO BE A BIG OPPORTUNITY IN INDIA INDIA INDONESIA CHINA PHILIPPINES US$ 29 ~2X INDIA ~4X INDIA ~ 5X INDIA PER CAPITA FMCG CONSUMPTION To tap this big opportunity, we need more money in the hands of more people i.e. Inclusive Growth 14 Source: Nielsen as of MAT March’18
Slide 16: Markets Showing Early Signs of Revival
MARKETS SHOWING EARLY SIGNS OF REVIVAL Rural vs Urban Rural vs Urban Tailwinds Currency & Crude value growth volume growth Good monsoon 1.3X 1.5X 1X 1X Increasing MSP* 2013 Q218 2013 Q218 Upcoming elections Rural Growth Indexed Rural Growth Indexed Urban Growth Urban Growth Rural growth on an upward
Slide 17: Winning in the Future Needs a Different Approach
WINNINIG INIHE FUTURE NEEDS A DIFFERENT ARRROAGH “~s
Slide 18: Re-imagining
RE-|
Slide 19: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 18
Slide 20: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 19
Slide 21: India Is a Heterogenous Country
INDIA IS A HETEROGENOUS COUNTRY Diverse Varied affluence Different media Differential category demographics levels habits adoption Multiple languages LSM 7+ = 9% nationally Mobile internet penetration: Market share in adjacent 8 Major religions (Range of 5-48%) Rural- 18%*; Urban- 59%* states also n
Slide 22: Winning in Many Indias (WiMI)
WINNING IN MANY INDIAS (WiMI) WiMI in action Distinctive strategy at a cluster level Madhya Pradesh, Chhattisgarh, Empowered Cluster Rajasthan Heads enabling faster decision Customized product making closest to propositions & the point of action media deployment 14 Consumer for every cluster Cluster
Slide 23: CCBTs: Mini-Boards in Action
CCBTs: 15 MINI-BOARDS IN ACTION Building a stronger sense of empowerment & ownership Multi functional Merger of Brand Development representations in CCBTs & Brand Building Marketing Customer Development Supply Finance Chain Research & Development Responsible for delivering in-year P&L 22 *CCBT: Clus
Slide 24: Liberating the Management Committee to Focus on Longer Term Goals
LIBERATING THE MANAGEMENT COMMITTEE TO FOCUS ON LONGER TERM GOALS Build new Greater focus on Explore Inorganic Coach & Mentor business models talent & capabilities growth opportunities CCBTs 23 *CCBT: Cluster Category Business Teams
Slide 25: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 24
Slide 26: Strengthening the Core
STRENGTHENING THE CORE Focus on driving Constantly Focused SKUs at Offering multiple penetration & innovating and cluster level to value additions Making the core weighted renovating the address demands across the core more aspirational distribution core of all Indias portfolio 25
Slide 27: Creating Categories of the Future
CREATING CATEGORIES OF THE FUTURE Opportunities to premiumize and up trade; huge headroom to grow India Nascent Category Penetration % Up- 20 Trading Consumption 1 Dishwash Conditioner Washing Instant Coffee Hand Wash* Soups* Face Wash Body Wash* Body Lotion Liquids Liquids Hair Penetration 26 Sourc
Slide 28: Market Development & Premiumization
MARKET DEVELOPMENT & PREMIUMIZATION Powered by education demos and sampling Business Results Science of Sampling Consumer X contacts 8X Growing at ~2X HUL Average 2014 2017 27
Slide 29: Bridging Portfolio Gaps
BRIDGING PORTFOLIO GAPS Pioneering Trends BB Male grooming range co- Building the Anti No 1 in Green Tea cream created with Amazon Perspirant category Making Traditional Toilet cleaning powder Tailormade for the Indian India’s No.1 Fabric Ingredients made for Indian toilets skin tones Conditioner br
Slide 30: Building Naturals
BUILDING NATURALS Naturals portfolio growing ~2.5X of overall HUL average 29
Slide 31: Building Specialist Brands - Indulekha
BUILDING SPECIALIST BRANDS - INDULEKHA Turnover 5x X MQ 17 JQ 17 SQ 17 DQ 17 MQ 18 JQ 18 Growth exceeding our acquisition business case 30
Slide 32: Expanding Ice Cream Portfolio
EXPANDING ICE CREAM PORTFOLIO Innovations Rs. 10* Access Packs Acquisition Tap into Distribution and Unlock Portfolio Synergies 31 *Equivalent to $0.14
Slide 33: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 32
Slide 34: Building Brands with Purpose
BUILDING BRANDS WITH PURPOSE 33
Slide 35: Consistently Evolving Brand Communication
CONSISTENTLY EVOLVING BRAND COMMUNICATION 2005 2011 2013 2017 Pride Loyalty & Forgiveness Empathy & Love Learning from Failure 2005 2008 2010 2014 2017 A cup of motherly A cup with little Taste & Taste & Health & Taste love sips of life Togetherness Togetherness 34 Surf AV
Slide 36: Building Iconic Engagement Platforms
BUILDING ICONIC ENGAGEMENT PLATFORMS Lux Golden Rose Lakmé Fashion Lifebuoy help a child FAL Foundation Awards Week reach 5 Surf Excel Haar Ko Red Label Taste and Kissan Tiffin Rin Career Academy Harao Togetherness Timetable 35
Slide 37: Building Differentiated Content
BUILDING DIFFERENTIATED CONTENT Digital Video LFW* Content Social Media PR & Influencers Ecommerce Massive outreach with bloggers & influencers 36 *LFW : Lakmé Fashion Week
Slide 38: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 37
Slide 39: General Trade Will Continue to Remain Big
GENERAL TRADE WILL CONTINUE TO REMAIN BIG More throughput from more stores All GT channels will remain relevant Driving effective coverage & assortment Wholesale Shakti EFFECTIVE COVERAGE ASSORTMENT Retail 1.8X 1.7X X X Aids Width of Accessibility at arm’s Deep Rural distribution reach of desire d
Slide 40: Building Channels of the Future
BUILDING CHANNELS OF THE FUTURE Modern Trade ECommerce Exclusive male grooming range co- Driving visibility across Modern Trade created with partner Our Growth & Profitability in ECommerce > Modern Trade > Traditional Trade 39
Slide 41: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 40
Slide 42: Technology Available Today Opens Up a Lot of Opportunities
TECHNOLOGY AVAILABLE TODAY, OPENS UP A LOT OF OPPORTUNITIES Internet of Things Cloud Technology Artificial intelligence Distinctive Technology giving Competitive Advantage Consumer Appropriate Need/ Unmet Large Part Problem of the Value Chain 41
Slide 43: Our Data Strategy
OUR DATA STRATEGY What data do we have today and what more we need to meet the business strategy 42
Slide 44: We Chose to Disrupt Than Be Disrupted
WE CHOSE TO DISRUPT THAN BE DISRUPTED Insights R&D Manufacturing Consumer Distribution Communication Journey 43
Slide 45: Re-imagining HUL: Our Vision
RE-IMAGINING HUL: OUR VISION “Re-imagine HUL of the future by choreographing a holistic approach across the value chain to completely transform the way we do business in a connected world” 44
Slide 46: Re-imagining Supply Chain
RE-IMAGINING SUPPLY CHAIN Plan Source Make Deliver • 1 Day Planning • Integrated e- Cycle (real-time) tendering • Digital Factory • New Logistic models • Integrated S&OP • Realtime Forecast • Smart Robotics • Efficient • Segmentation • Smart Inventory • Network redesign Fulfilment Centres 2.0 modell
Slide 47: Re-imagining Marketing
RE-IMAGINING MARKETING Granular data analysis Advanced Analytics & Social Listening: Always and tracking Decision Support System on Conversation Precision Marketing: Precision Targeting Consumer Journey and Deployment MAXIMA 46 Re-imagining Marketing AV
Slide 48: Re-imagining Customer Development
RE-IMAGINING CUSTOMER DEVELOPMENT Demand Demand Capture Capture Demand Fulfilment Demand Generation Providing superior customer service through vertical task specialization across the three pillars interlinked through modular IT capabilities 47
Slide 49: Demand Capture
DEMAND CAPTURE Salesman Chatbots Advanced Analytics / AI Shikhar app Enhance salesman Driving better and All inclusive retailer productivity with chatbots sharper assortment engagement tool Algorithmic User friendly Customer Product Know your Smarter Segmentation Interface Engagement Discovery Curre
Slide 50: Demand Fulfilment
DEMAND FULFILMENT Demand Fulfilment Depot Redistribution Stockist Outlet • Project Shogun: Deliver with speed to trade and ensure efficient fulfilment • Impact App : A delivery interface to unlock benefits for retail stockist Eliminate RS Improved quality Leverage technology delivery cost of deliver
Slide 51: Demand Generation
DEMAND GENERATION Demand Generation • Scaling up B2C (HumaraShop) • Leverage technology to improve shelf presence 50
Slide 52: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 51
Slide 53: Generating Fuel for Growth by Constant Reinvention
GENERATING FUEL FOR GROWTH BY CONSTANT REINVENTION Savings as a % of End-to-end cost Leveraging Investing back into Turnover focus Technology virtuous cycle of growth 1.7x x 2014 2015 2016 2017 Powered by 52
Slide 54: Re-imagining HUL
RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 53
Slide 55: Engraining New Standards of Leadership
ENGRAINING NEW STANDARDS OF LEADERSHIP 54
Slide 56: Bringing an Organization Wide Change
BRINGING AN ORGANIZATION WIDE CHANGE Building an Owner’s Nurturing an Holistic Diversity and mindset experimentation culture Wellbeing Inclusion Distinctive Technology giving Competitive Advantage ESOP Consumer Appropriate Need/ Unmet Large Part Problem of the Value Chain 55
Slide 57: Focussed on Wellbeing, Diversity & Inclusion
FOCUSSED ON WELLBEING, DIVERSITY & INCLUSION Physical, Mental, Emotional & Purposeful Embracing inclusion and diversity Wellbeing in all forms Leadership commitment to gender balance; Gender neutral policies Embracing inclusion beyond gender - hire the best PwD* talent Driving cultural interventions
Slide 58: Our Purpose & Values
WHILE WE RE-IMAGINE HUL, WHAT WE WILL NOT CHANGE IS OUR PURPOSE & VALUES 57
Slide 59: Legacy of Doing Well by Doing Good
LEGACY OF DOING WELL BY DOING GOOD Founder’s Vision in the 19th Our Purpose today century “I believe that nothing can be greater than a business, however small it may be, that is governed by conscience; and that nothing can be meaner or more petty than a business, however large, governed without hon
Slide 60: Unilever Sustainable Living Plan
UNILEVER SUSTAINABLE LIVING PLAN Health & Wellbeing Sustainable Sourcing Water Conservation Enhancing Livelihoods 80,000+ Shakti 100% entrepreneurs TOMATOES are network sourced from sustainable sources 1.7 million people 450 billion litres benefitted >67 million people reached - of water potential L
Slide 61: Thought Leadership on Plastics
THOUGHT LEADERSHIP ON PLASTICS Our Commitment Progress Way Forward • Factory and packaging • All our plastics packaging wastage reduced by 54% & • Co-create with the to be reusable, recyclable 33% respectively Government - National or compostable by 2025 Framework for Extended • >1800 tons of plasti
Slide 62: In Summary
IN SUMMARY The external context is fast Focussed on Leveraging Building evolving and FMCG The new structure delivering consistent, technology to re- capabilities and in India continues to (WIMI, CCBTs) has competitive, imagine our ways re-imagining our be an immense made HUL more profitable and of w
Slide 63: HUL Is Re-inventing Itself to Be Future Ready!
HUL IS RE-INVENTING ITSELF TO BE FUTURE READY! 62
Slide 64: Thank You
ForTHANK more YOU information & updates For More Information 63