Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Q2 2011 Earnings Presentation
34 slides from Hindustan Unilever's earnings presentation, Jul 29, 2011
Slide 1: Results – JQ'11 Investor Presentation
Results – JQ’11 July 29, 2011 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 • Strategy • Business Environment • Current Quarter Performance • Looking ahead JQ‘11 Results - July 29, 2011
Slide 4: Compass sets the right direction
Compass sets the right direction AMBITIOUS GOALS GROWTH MINDSET CONSUMER AND CUSTOMER FOCUS PERFORMANCE CULTURE JQ‘11 Results - July 29, 2011
Slide 5: Driving virtuous circle of growth
Driving virtuous circle of growth …at the center of our strategy JQ‘11 Results - July 29, 2011
Slide 6: How we will win
How we will win JQ‘11 Results - July 29, 2011
Slide 7: Business Environment – JQ'11
Business Environment – JQ’11 • FMCG market grew in double digit • Rebalancing between volume and price in soaps and detergents • Strong growth in Personal Products led by volumes • Competitive intensity continues, heightens in some categories • Crude oil prices remain high; volatility in other input
Slide 8: Competitive growth in challenging environment
Competitive growth in challenging environment • Domestic Consumer business grows 15%; ahead of market • Strong 8% UVG* with good price growth • Double digit growth across all FMCG segments • Personal Products growth momentum continues (+19%); volume led • Operating profit grows by 11.3%; down by 40
Slide 9: Competitive growth in challenging environment
Competitive growth in challenging environment • Cost of goods sold higher by 480 bps; • High impact of input costs especially in Soaps & Detergents • Dynamically managed through judicious price increases and continued focus on savings • Competitive brand investment across segments • Advertising spen
Slide 10: Strong topline growth; positive pricing across segments
Strong topline growth; positive pricing across segments 14% 15% 12% 11% 8% 6% -1% -1% -4% -4% JQ'10 SQ'10 DQ'10 MQ'11 JQ'11 Price growth Sales growth JQ‘11 Results - July 29, 2011
Slide 11: All segments grow in double digit
All segments grow in double digit Growth% JQ‘11 Soaps & Detergents 13% Personal Products 19% Beverages 13% Packaged Foods 18% Domestic FMCG 15% ^ Domestic Consumer 15% * ^ Excludes Other Operational Income * Including water JQ‘11 Results - July 29, 2011
Slide 12: Winning with Brands: Continued focus on innovations
Winning with Brands: Continued focus on innovations Ponds Pure White Deep Cleansing Successful innovations in Facial Foam with activated carbon impulse & ‘in-home’ Clear relaunched with total scalp care Bru Exotica: World’s finest FAL Multivitamin Face Wash coffee experience for double action fairne
Slide 13: High media intensity continues; S&D softens
High media intensity continues; S&D softens Industry GRP – Indexed Chart 161 157 157 139 137 131 123 112 100 2008-09 2009-10 2010-11 SH'10-11 JQ'11 FMCG excl S&D S&D Lower industry spends in commodity sensitive categories S&D: Soaps and Detergents JQ‘11 Results - July 29, 2011
Slide 14: A&P remains competitive
A&P remains competitive Efficiencies driven through ROMI Category Competitive SOV/ SOM* Media Spends Personal Products Packaged Foods Soaps & Detergents aligned to market Beverages Market promotional intensity lower; spends optimised A&P at 11.5% of sales; lower by 420 bps *SOV/ SOM by HUL sub categ
Slide 15: Winning in the Market: More Stores, Better Stores
Winning in the Market: More Stores, Better Stores Delivering results; focus continues JQ‘11 Results - July 29, 2011
Slide 16: Inflationary pressures remain high
Inflationary pressures remain high Palm Oil Crude Oil 50% up 380 CPO Index volatility in palm oil 260 PFAD Index 330 280 213 230 169 173 180 142 130 100 80 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 MQ'09 FH'09-10 SH'09-10 FH'10-11 SH'10-11 JQ'11 Current Jul-06 Jul-05 Jul-07 Jul-08 Jul-09 Jul-
Slide 17: Winning through continuous improvement: Quality & Service
Winning through continuous improvement: Quality & Service Superior Products 3X 2X X Excellence in Customer Service FH'09 DQ'10 123 125 June'11 100 Indexed % of blind product wins 2007 2009 Current Indexed CCFOT JQ‘11 Results - July 29, 2011
Slide 18: Winning through continuous improvement: Stepping up savings
Winning through continuous improvement: Stepping up savings Focus on ROMI + ROI Positive Up by >10% -/- + Steady Continuous TO Growth 100 Cost Control SC Savings 93 140 162 -/- 88 127 85 100 2008-09 2009-10 2008-09 2010-11 2009-10 JQ'11 2010-11 JQ'11 Indexed overheads Indexed CEPs (as % of TO) JQ‘11
Slide 19: Category Highlights
Category Highlights JQ‘11 Results - July 29, 2011
Slide 20: Laundry: Successful defence of leadership position
Laundry: Successful defence of leadership position • Sustained competitive growth • Led by pricing and good volumes • Across all brands • Both powders and bars grow in double digit • Strong performance by Rin • 6th consecutive quarter of double digit volume growth • Comfort – building consumer franc
Slide 21: Skin Cleansing: Growth across segments
Skin Cleansing: Growth across segments • Growing ahead of market • Lifebuoy grows in double digit • Premium portfolio sustains growth momentum • Liquids: Business tripled in 2 years • New innovations in Body Wash, Handwash and Hand Sanitizer JQ‘11 Results - July 29, 2011
Slide 22: Leading market development
Leading market development Range of Handwash Hand Sanitizers Body Wash Portfolio Innovations during the quarter JQ‘11 Results - July 29, 2011
Slide 23: Skin Care: Strong growth momentum across portfolio
Skin Care : Strong growth momentum across portfolio • Double digit volume growth in Fair & Lovely driven by core • Vaseline & Pond’s sustain strong growth • Lakme: driving premiumization across skin care & colours • Expanding portfolio • FAL Multivitamin Face Wash • Pond’s Pure White Face Wash in pr
Slide 24: Continued focus on innovations
Continued focus on innovations JQ‘11 Results - July 29, 2011
Slide 25: Hair & Oral Care: Double digit growth
Hair & Oral Care: Double digit growth • Hair: Broad based growth across brands • Dove – accelerating growth momentum • Strong volume growth in Clinic Plus and Sunsilk • Portfolio strengthened with Clear relaunch • Toothpaste – volume led double digit growth in both the brands • Pepsodent Germi Check
Slide 26: Clear: Total scalp care
Clear: Total scalp care N U T R I U M 10: A REVOLUTIO NARY DESIG N IN SCALP CARE TECHNO LOGY Nourishes scalp 3-layers deep, to boost scalp health & increase its natural resistance against dandruff & scalp problems Customised solution for Men and Women Communication JQ‘11 Results - July 29, 2011
Slide 27: Beverages: Expanding the portfolio
Beverages: Expanding the portfolio • Tea delivers double digit growth • Led by premium portfolio • Red Label continues its growth momentum Bru Exotica: launched in • Strong growth in coffee Modern Trade • 3 new premium variants of Bru launched in modern trade • Ice tea launched in 3 formats and 2 fl
Slide 28: Packaged Foods: Strong volume led growth
Packaged Foods: Strong volume led growth • Double digit growth in Knorr, Kissan and Modern • Recent innovations continue to build consumer franchise • Sustained investment behind the brands • Ice Cream delivers record growth, momentum accelerated • Successful innovations • Expanding distribution • B
Slide 29: Pureit: Business strategy on track
Pureit: Business strategy on track • Building portfolio to straddle across consumer segments; Pureit Intella launched • ‚Go to Market‛ model being transformed • Managing a diversified portfolio • Designed for scale up; optimising costs Germkill performance constant Rs. 900 1000 2000 3200 5900 Innova
Slide 30: JQ'11 – Results
JQ’11 – Results Rs Cr Rs Crores JQ'11 JQ'10 Growth% Net Sales 5504 4794 14.8 PBITDA 754 681 10.8 PBIT 698 627 11.3 PBIT margin (%age) 12.7 13.1 PBT bei 749 669 11.8 Exceptional Items 59 19 - PBT 807 688 17.4 PAT bei 578 521 11.0 Extraordinary Items (net of Tax) - - Net Profit 627 533 17.6 JQ‘11 Resu
Slide 31: JQ'11 – Exceptional Items
JQ’11 – Exceptional Items Rs Cr Particulars JQ'11 JQ'10 Assets Sale 51 18 Sale of long term investment 4 Dilution of stake in subsidiary 4 Others 4 (4) Total 59 19 JQ‘11 Results - July 29, 2011
Slide 32: Summary
Summary • Strong 15% growth in domestic consumer business; ahead of market • Broad based momentum across portfolio • High input cost inflation, sustained focus on continuous improvement • Brand support maintained at competitive levels • PAT (bei) at Rs.578 crore, grows by 11%; Net Profit Rs.627 cror
Slide 33: Looking ahead: Our strategy remains consistent
Looking ahead: Our strategy remains consistent • FMCG market will continue to grow • Changing mix of volume and price • High cost inflation combined with volatility • Competitive environment will continue to remain intense • Our strategy and focus • Strengthen leadership positions and leading market
Slide 34: Thank you
Thank you For more information, please visit http://www.hul.co.in JQ‘11 Results - July 29, 2011