Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Q3 2012 Earnings Presentation
32 slides from Hindustan Unilever's earnings presentation, Jan 22, 2013
Slide 1: December Quarter 2012 Results Presentation
December Quarter 2012 Results Presentation – January 22, 2013 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 Context 3 Current Quarter & Nine Months Performance 4 Looking Ahead 3
Slide 4: Clear and Compelling Strategy
Clear and Compelling Strategy Strategic framework Sustainable Living Plan Goals Consistent Growth Competitive Growth Profitable Growth Responsible Growth 4
Slide 5: DQ 2012 – Business Context
DQ 2012 – Business Context Challenging operating environment FMCG markets sustain levels of double digit growth • Soaps & Detergents growth continues to be price led • Discretionary categories relatively soft MT retail growth slows significantly • Pace of store expansion down – net store closure
Slide 6: Input costs holding firm
Input costs holding firm Brent Crude Premium North India Tea ($/barrel) (Rs/Kg) 179 186 109 109 110 156 DQ 11 SQ 12 DQ'12 DQ 11 SQ 12 DQ'12 Exchange Rate PFAD USD/INR ($/Ton) 55.2 54.2 847 805 680 51.0 DQ 11 SQ 12 DQ'12 DQ 11 SQ 12 DQ'12 6 Source: Bloomberg data and internal estimates
Slide 7: DQ 2012 - Consistent broad based growth and profit improvement
DQ 2012 - Consistent broad based growth and profit improvement Domestic Consumer business grows by 15% • 5% Underlying Volume Growth • Home and Personal Care (HPC) grows by 15% and Food & Beverages (F&B) by 13% • Rural growth sustains, CSD recovers, MT Retail decelerates Operating Margin (EBIT)
Slide 8: Broad based growth
Broad based growth Growth % DQ ’12 Soaps & Detergents 20 Personal Products 13 Beverages 18 Packaged Foods 8 Domestic FMCG^ 15 15 Domestic Consumer^ ^ Excludes Other Operational Income 8 Domestic Consumer business = Domestic FMCG + Water
Slide 9: Winning with Brands
Winning with Brands Continued focus on innovations Lifebuoy Color Changing handwash Dove Elixir precious hair oils Sunsilk perfect straight shampoo Vaseline GermSafe healthy skin jelly Brylcreem hair styling range for men Knorr Soupy Noodles relaunch 9
Slide 10: Category Highlights
CATEGORY HIGHLIGHTS
Slide 11: Skin Cleansing
Skin Cleansing Broad based growth Double digit growth sustained across segments • Premium segment continues to grow well • Lux & Lifebuoy deliver another solid performance Liquids portfolio extended • Lifebuoy color changing hand wash introduced 11
Slide 12: Home Care
Home Care Growth led by the premium segment Laundry – All formats grow in double digits • Momentum continues on premium portfolio • Surf & Rin deliver another quarter of double digit volume growth • Surf buoyed by Easy Wash re-launch • Rin growth led by step up in bars • Actions taken to accelerat
Slide 13: Skin Care
Skin Care Double digit growth led by premium segment Market growth slowing in Skin Double digit growth in Pond’s, Vaseline & Dove • Pond’s Age Miracle continues to deliver strongly • Lotions perform well Fair & Lovely retains strong position post relaunch • FAL sachet pricing transition still
Slide 14: Hair Care
Hair Care Double digit growth led by premium formats Sunsilk, Clinic Plus & Dove bottles grow well TRESemmé launch results very positive Conditioners – strong quarter; growth further accelerates Entry into new regimes with the Dove Elixir & Brylcreem ranges 14
Slide 15: Foray into premium hair oils segment
Foray into premium hair oils segment Dove Elixir: Precious Hair Oils with real ingredients 15
Slide 16: Oral Care
Oral Care Accelerated double digit growth Both brands grow in double digits Close-up gains from its re-launch in the previous quarter Pepsodent growth led by the premium segment 16
Slide 17: Beverages
Beverages Robust performance across portfolio Tea delivers one of its strongest quarters • Growth broad based; step up in 3 Roses, Red & Taj Mahal • Market development focus driving solid tea bags growth Coffee maintains it double digit growth momentum • Premium offerings continue to do well 17
Slide 18: Tea
Tea Stepping up the growth momentum Strengthening the Core Going deeper & building accessibility Upgrading the Consumer through Market Development 18
Slide 19: Packaged Foods
Packaged Foods Growth led by Kissan and Knorr Kissan Ketchup sustained double digit growth Growth accelerates on Knorr Soups portfolio Re-launch of Soupy Noodles with a superior mix • Actions during quarter to manage pipeline prior to launch Kwality Walls registers modest growth – impacted b
Slide 20: Pureit
Pureit Growth in a challenging environment Pureit continues to strengthen leadership in a slowing durables market Strengthened portfolio – innovations leading growth • ‘Marvella UV’ & ‘Advanced’ launches well received • ‘Marvella RO’ & 3000 liters Germ Kill Kits grow volumes Good progress on i
Slide 21: DQ 2012 – Results
DQ 2012 – Results FMCG exports demerged – reported numbers not comparable Rs Cr HUL (as reported) HUL (ex FMCG exports) Particulars DQ’11 DQ’12 Growth% DQ’11 DQ’12 Growth% Net Sales 5,844 6,434 10.1 5,559 6,434 15.7 PBITDA 970 1,089 12.2 928 1,089 17.3 PBIT 914 1,030 12.7 876 1,030 17.5 PBIT margin
Slide 22: DQ 2012 - PBIT to Net Profit
DQ 2012 - PBIT to Net Profit Rs Cr Particulars DQ’11 DQ’12 Growth PBIT 914 1030 13% Add : Other Income 80 134 67% Less : Finance Costs 0 8 Exceptional Items – Credit / (Charge) (12) (7) PBT 981 1148 17% Less : Tax (227) (277) 22% Net Profit 754 871 16% • Other income includes interest income, divide
Slide 23: DQ 2012 – Summary
DQ 2012 – Summary Consistent broad based growth and profit improvement • 15% growth in Domestic Consumer business with 5% UVG • Operating Profit margin at 16%, up 40 bps • PAT (bei) grows by 15% Strategy on track and delivering 23 Domestic Consumer Business = Domestic FMCG + Water; UVG – Underly
Slide 24: Nine Months Ending 31st December 2012
NINE MONTHS ENDING 31ST DECEMBER 2012
Slide 25: Nine months ending 31st December 2012
Nine months ending 31st December 2012 FMCG exports demerged – reported numbers not comparable Rs Cr HUL (as reported) HUL (ex FMCG exports) Particulars YTD DQ’11 YTD DQ’12 Growth% YTD DQ’11 YTD DQ’12 Growth% Net Sales 16,856 18,839 11.8 16,059 18,839 17.3 PBITDA 2,551 3,032 18.8 2,453 3,032 23.6 PBI
Slide 26: Looking Ahead
Looking Ahead Positive medium-long term outlook for FMCG HUL well positioned to leverage opportunities and deliver consistent performance Near term concerns • Global and local volatility • Inflationary pressures We remain committed to our strategy of delivering consistent, competitive, profi
Slide 27: Royalty Arrangements with Unilever
ROYALTY ARRANGEMENTS WITH UNILEVER
Slide 28: Royalty arrangements with Unilever: Background - the case for change
Royalty arrangements with Unilever Background - the case for change Unilever increasingly globalizing resources in recent years • Greater expertise, superior innovations and scale advantages • Increased emphasis on Developing & Emerging Markets (D&E) • Pace of innovations and scope of services to
Slide 29: Leveraging Unilever increasingly in recent years
Leveraging Unilever increasingly in recent years Examples 29
Slide 30: Royalty arrangements with Unilever: Request for review
Royalty arrangements with Unilever Request for review Current Royalty agreement effective Jan 2010 • Effective Royalty cost: 1.4% of turnover Request for review received from Unilever • Detailed evaluation and due diligence led by senior HUL team Rates benchmarked across peer group Approval
Slide 31: Royalty arrangements: New arrangement approved by the HUL Board
Royalty arrangements with Unilever New arrangement approved by the HUL Board New agreement effective 1st February 2013 for provision of technology, trademark licensing and services • Existing royalty cost of ~1.4% of turnover will increase in a phased manner (by 30-70 bps per annum) to ~3.15% of t
Slide 32: December Quarter 2012 Results Presentation
December Quarter 2012 Results Presentation – January 22, 2013 32 For more information please visit http://www.hul.co.in