Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — FY2010 Earnings Presentation
47 slides from Hindustan Unilever's earnings presentation, May 25, 2010
Slide 1: Results – MQ '10 & FY 2010 Investor Presentation
Results – MQ ’10 & FY ’2010 25th May 2010 Investor Presentation
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 • Market Context • MQ’10 Highlights • Category Overview • MQ’10 – Financial Results • FY’10 Performance Review • Looking Ahead MQ‘10 Results - 25th May 2010
Slide 4: MQ'10 – Market Context
MQ’10 – Market Context • FMCG market continues to grow • At a slower pace • Increased competitive intensity • Aggressive pricing actions • FMCG media spends remain high • Continued high food inflation * Market Growth as reported by AC Nielsen MQ‘10 Results - 25th May 2010
Slide 5: MQ'10 Highlights
MQ’10 Highlights • Strong volume growth at 11% • Overall growth ahead of market • PP, Foods & Water grow in double digit • Decisive actions to strengthen leadership in Laundry & Personal Wash • Net sales and Domestic Consumer business grow at 8% MQ‘10 Results - 25th May 2010
Slide 6: MQ'10 Highlights
MQ’10 Highlights • Continued innovation to drive new categories/ segments for the future • Male grooming: Vaseline Menz • Nutritional Tea in mass segment: Brooke Bond Sehatmand • Soupy Noodles: Knorr • Pureit at mass end: Pureit Compact • Go to Market capabilities significantly strengthened • Sustai
Slide 7: MQ'10: Innovation led growth
MQ’10: Innovation led growth MQ‘10 Results - 25th May 2010
Slide 8: MQ'10: Expanding portfolio in Skin
MQ’10: Expanding portfolio in Skin Entry in to Male Grooming Skin Care Sales Growth MQ'09 JQ'09 SQ'09 DQ'09 MQ'10 Building Facial Cleansing Portfolio MQ‘10 Results - 25th May 2010
Slide 9: MQ'10: Expanding portfolio in Foods
MQ’10: Expanding portfolio in Foods Healthy Knorr Soupy Noodles ‐ Entry into afternoon snacking Noodles Soups Filling snack Healthy Convenient Does not interfere with main meal Tasty (loved by kids) Loved by Moms A healthy and exciting snack for kids Healthy Soup + Noodles = Knorr Soupy Noodles Exce
Slide 10: Leveraging technology to win in GT: Project iQ
Leveraging technology to win in GT: Project iQ S ophisticated analytics for outlet level interventions S imple front-end for better execution by salesmen MQ’10: Roll out in Urban GT MQ‘10 Results - 25th May 2010
Slide 11: Volume Growth – Increasing Momentum
Volume Growth – Increasing Momentum Underlying Volume Growth % 10.9 4.6 2.0 1.0 JQ'09 SQ'09 DQ'09 MQ'10 Double Digit Volume Growth *FMCG only MQ‘10 Results - 25th May 2010
Slide 12: Growth – Ahead of Market
Growth – Ahead of Market Volume 10.9 Growth 9.6 % 7.8 Value Growth 6.4 HUL Market Growth in MQ’10 – ahead of market in volume and value Market Growth Source: AC Nielsen MQ‘10 Results - 25th May 2010
Slide 13: Intensified Competitive environment
Intensified Competitive environment Indexed GRP Trend - FM CG 148 145 117 103 104 100 Jan'08 FH'08 SH'08 FH'09 SH'09 MQ'10 Step up in media investment within FMCG MQ‘10 Results - 25th May 2010
Slide 14: Sustaining Competitive Brand Investments
Sustaining Competitive Brand Investments A&P as a % of Net Sales % 14.1 14.5 13.5 12.5 JQ'09 SQ'09 DQ'09 M Q'10 UVG +2.0% +1.0% +4.6% +10.9% Including investment behind Innovations MQ‘10 Results - 25th May 2010
Slide 15: Effective Management of Commodity Costs
Effective Management of Commodity Costs Mixed Commodity Trends CPO Benzene May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Tea MQ'08 JQ'08 SQ'08 DQ'08 MQ'09 JQ'09 SQ'09 DQ'09 MQ'10 COGS down -80 bps; superior cost management partly offset by laundry
Slide 16: Accelerated Cost savings & Operating leverage
Accelerated Cost savings & Operating leverage Indexed CEPs Sustained Improvement in Cost Savings Programme 226 231 181 144 100 100 2005 2006 2007 2008 2009 MQ'10 MQ CEP are annualised for Full Year Indexed Indirects (as a % of TO) 100 95 85 76 Tight focus on discretionary costs 2007 2008 2009 M Q'10
Slide 17: Category Revenue growth
Category Revenue growth Growth % MQ‘10 Soaps & Detergents -1.9 Personal Products 18.9 Beverages 15.3 Processed Foods 22.7 Ice Cream 21.7 Domestic FMCG 7.8 ^ All categories grew strongly in volumes ^ Excludes Other Operational Income MQ‘10 Results - 25th May 2010
Slide 18: Laundry: Straddling the Pyramid
Laundry : Straddling the Pyramid Premium Mid Priced Mass Portfolio covering Formats and Price Points MQ‘10 Results - 25th May 2010
Slide 19: Heightened Competitive Intensity
Heightened Competitive Intensity Laundry (Powders+Bars) Market Indexed GRP 177 Heightened Competitive Intensity – Soaring Media Spends 100 MQ'09 MQ'10 Premium Heightened Competitive Intensity Mid Priced ‐ Aggressive Pricing Actions both in Powders & Bars Mass MQ‘10 Results - 25th May 2010
Slide 20: Our Response
Our Response Rs 70/kg Rs 50/kg Rin: Competitive Pricing Rin: Product Superiority Now at Rs.50/ KG Rs. 1 Crore Safedi Challenge HUL SOV% in Laundry Market 55 55 ` 45 SQ'09 DQ'09 MQ'10 Improved Formulation Increased Brand Investment MQ‘10 Results - 25th May 2010
Slide 21: Initial Results - Positive
Initial Results - Positive Indexed Rin Powder Volume 185 RIN Avg Ton/ Month 146 • Accelerating Growth Momentum 100 • Strong Double Digit Volume Growth 2009 MQ'10 Mar-10 • Powders Volume Market Share Gain JQ'09 SQ'09 DQ'09 Jan'10 Feb'10 Mar'10 MQ‘10 Results - 25th May 2010
Slide 22: Rejuvenated Personal Wash Portfolio
Rejuvenated Personal Wash Portfolio • Returns to strong growth • Both value and volume growth ahead of market • Maintained sequential market share • Broad based robust growth across Premium Portfolio Premium • Beauty Segment expanded with Innovation Mid Priced • Strengthened Germ Kill Proposition in
Slide 23: Leading Market development in Skin Care
Leading Market development in Skin Care • Strong Double digit growth driven by volumes • Sequential Market Share gain in fast growing premium segments – Anti Aging and Premium Skin Lightening • Leading market development across all segments • Building Facial Cleansing – multi brand portfolio • Entry
Slide 24: Vaseline Menz – From male grooming to daily preparation
Vaseline Menz – From male grooming to daily preparation Anti Spot Whitening MT – Face Wash, Body Anti Spot Whitening Oil Control Range Lotion, Shower Gel SPF 15 Range Aligned Promo Strategy Activation Market Shares Source: AC Nielsen MQ‘10 Results - 25th May 2010
Slide 25: Hair and Oral: Growth ahead of Market
Hair and Oral: Growth ahead of Market • Hair grows significantly ahead of market • Sequential shampoo market shares up; leadership gap widened • Conditioners continue to gain market share; • Renewed thrust in Anti Dandruff segment • Clear superior credentials strengthened and Dove Dandruff Therapy l
Slide 26: Strong Brand Portfolio in Hair
Strong Brand Portfolio in Hair Presence across Price Points Shampoo Premium Mid Priced Presence across Benefits: Beauty, Anti Dandruff, Health, Moisturizing etc. Mass Expanding into Conditioners HUL Straddles Pyramid across Price Points & Benefits MQ‘10 Results - 25th May 2010
Slide 27: Hair Market: Increased Competitive Intensity
Hair Market : Increased Competitive Intensity Market Heat – Soaring up 150 100 MQ'09 MQ'10 Shampoo Market Indexed GRP Aggressive Promotions MQ‘10 Results - 25th May 2010
Slide 28: Strengthened Leadership in Hair
Strengthened Leadership in Hair HUL SOV% in Shampoo Market 53 52 50 ` 46 47 Hair Fall Therapy Strengthened Co creation Improved SQ'09 DQ'09 Jan'10 Feb'10 Mar'10 Dandruff Therapy Credentials Formulation Innovation across Portfolio Increased Brand Investment HUL Shares Market Growth% 41.8 40.4 Shampoo
Slide 29: Strong Performance in Beverages
Strong Performance in Beverages • Robust volume driven growth Premium • Tea portfolio strengthened • Strong entry at mass end with Brooke Bond Sehatmand Popular • With accelerated 13 state launch, Sehatmand gaining shares in launch markets • Relaunch of heritage brand Ruby in Karnataka - gains Disco
Slide 30: Entry into Mass segment through Nutritional Tea
Entry into Mass segment through Nutritional Tea Daily Vitamin Power with 3 Cups Leaf & Dust Format Sehatmand: Now in 13 States MQ‘10 Results - 25th May 2010
Slide 31: Processed Foods: Expanding Portfolio
Processed Foods: Expanding Portfolio • Accelerating market development of Processed foods through Knorr Soupy Noodles • Launched nationally in MT and across channels in South- Extremely positive response in market • Knorr Soups and meal makers grow strongly • Double Digit growth in Kissan Jams & Ket
Slide 32: Building Ice Cream consumption in/out of home
Building Ice Cream consumption in/out of home • Category grows in double digit • led by Impulse & Take Home, covering all price points • 8 new launches in 3 different formats • Selection, Cornetto & Paddle Pop • Increased consumption through availability and visibility • Summer Innovations and more
Slide 33: Pureit Straddles the Pyramid
Pureit Straddles the Pyramid • Pureit market development on plan with strong growth momentum Premium • Pureit – Building Repeatable Models Mid Priced • Pureit Compact launched at Rs.1000 Mass • Pureit Autofill launched – a Pureit that fills itself • Stronger & more persuasive communication campaign:
Slide 34: Innovation led growth across categories & segments
Innovation led growth across categories & segments MQ‘10 Results - 25th May 2010
Slide 35: MQ'10 – Results
MQ’10 – Results Rs Cr Rs Crores MQ 10 MQ 09 Growth% Net Sales 4316 3988 8.2 EBITDA 595 596 (0.1) PBIT 545 555 (1.8) PBIT margin (%age) 12.6 13.9 - PBT bei 573 573 0.1 Exceptional Items 143 (107) - PBT 717 466 53.8 PAT bei 422 457 (7.6) Extraordinary Items (net of Tax) 52 0 Net Profit 581 395 47.1 MQ
Slide 36: MQ'10 – Exceptional Items
MQ’10 – Exceptional Items Rs Cr Particulars M Q'10 M Q'09 Assets Sale 5 7 Sale of long term investment 91 - Actuarial valuation - Employee Benefits 53 (60) Restructuring Cost (7) (26) Others (28) Total 143 (107) MQ‘10 Results - 25th May 2010
Slide 37: MQ'10 – Analysis of Net Profit
MQ’10 – Analysis of Net Profit Rs Crores MQ'10 MQ'09 Growth% Net Profit 581 395 47.1 Less: Exceptional/Extraordinary Items (Net of Tax) 159 (62) Profit After Tax bei 422 457 (7.6) Less: Foreign Exchange (MTM) Impact (Net of Tax)* (0) 2 Profit after Tax before Excep./ Extraordinary items 422 459 (7.9
Slide 38: MQ'10 in Summary
MQ’10 in Summary • Strong volume growth at 11%; overall growth ahead of market • PP, Foods & Water grow in double digit • Decisive actions to strengthen leadership in laundry & Personal Wash • Net sales and Domestic Consumer business grow at 8% • Continued innovation to drive new categories/ segment
Slide 39: Financial year 2009-10 Performance Review
Financial year 2009- 10 Performance Review MQ‘10 Results - 25th May 2010
Slide 40: FY'10 – Performance Highlights
FY’10 – Performance Highlights • Improved growth momentum through the year; exiting at 11% volume growth • Strong double digit growth in PP in all four quarters • Foods & Water grow double digit driven by innovation and portfolio expansion • Soaps & Detergents grow at 1.5% • Entry into new categorie
Slide 41: Strengthened Portfolio: HPC
Strengthened Portfolio : HPC Fabric Wash Personal Wash Shampoo Skin Tooth Paste Launches /Relaunches in 2009-10 - HPC MQ‘10 Results - 25th May 2010
Slide 42: Strengthening the Portfolio - Foods
Strengthening the Portfolio - Foods Tea Coffee Processed Foods Ice Creams Launches /Relaunches in 2009-10 - Foods MQ‘10 Results - 25th May 2010
Slide 43: FY'10 – Results
FY’10 – Results Rs Cr Rs Crores FY' 10 FY' 09* Growth% Net Sales 17524 16477 6.4 EBITDA 2750 2555 7.6 PBIT 2566 2396 7.1 PBIT margin (%age) 14.6 14.5 - PBT bei 2707 2556 5.9 Exceptional Items 55 (19) - PBT 2763 2537 8.9 PAT bei 2059 2065 (0.3) Extraordinary Items (net of Tax) 56 (9) - Net Profit 220
Slide 44: FY'10 – Dividend
FY’10 – Dividend Rs. Particulars FY 2010 FY 2009* Growth% 2008-09^ Dividend Per Share 6.5 6.0 8.3 7.5 Interim 3.0 2.8 7.1 3.5 Final 3.5 3.2 9.4 4.0 No. of Shares (Crores) 218 218 218 Total Dividend (Rs Crores) 1418 1635 Div. Dist. Tax (Rs Cr.) 238 278 Total Div. Outflow (Rs Cr.) 1656 1913 *Annualise
Slide 45: Looking ahead
Looking ahead • Competition will intensify further - unblinking defense of our strong market leadership • Our Focus remains to : • Continuously strengthen competitiveness of our Portfolio and Brands • Deliver bigger and better innovations • Lead market development – entry into new categories and seg
Slide 46: Thank you
Thank you For more information, please visit http://www.hul.co.in MQ‘10 Results - 25th May 2010
Slide 47: Results – MQ '10 Investor Presentation
Results – MQ ’10 25th May 2010 Investor Presentation