Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Edelweiss India e-Conference 2021
41 slides from Hindustan Unilever's conference presentation, Feb 15, 2021
Slide 1: Exchange filing cover letter: Investor Presentation
15th February, 2021 Stock Code BSE: 500696 NSE: HINDUNILVR ISIN: INE030A01027 BSE Limited, National Stock Exchange of India Ltd Corporate Relationship Department, Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, P.J. Towers, Bandra – Kurla Complex, Dal
Slide 2: Chartering the Unchartered
CHARTERING THE UNCHARTERED Sanjiv Mehta, Chairman & Managing Director Hindustan Unilever Limited 15th February, 2021 Sensitivity: Public
Slide 3: 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 4: India's Largest FMCG Company
INDIA’S LARGEST FMCG COMPANY 3 Sensitivity: Public 3
Slide 5: 130+ Years of Proud History in India
130+ YEARS OF PROUD HISTORY IN INDIA Sunlight soap Indian subsidiaries Unilever increases consolidated under HUL - GSK CH merger introduced stake in HUL to 67% to India Hindustan Lever Limited 1888 1931 1956 2007 2013 2018 2020 Unilever sets up HLL renamed as HUL market cap subsidiary in “Hindustan
Slide 6: A $6BN Powerhouse
A $6BN POWERHOUSE OUR FOOTPRINT RECOGNITION 9 out of 10 ‘Employer of Choice’ households in the industry use one or more of for 12 years in a row our brands Most Innovative Our brands are available in Companies 8 mn+ stores #8 Globally #1 in India 21,000 Employees working across 14 HUL brands 31 owne
Slide 7: Category Leadership in >90% of Our Business
CATEGORY LEADERSHIP IN >90% OF OUR BUSINESS #1 #1 #1 #1 Skin Skin Hair Fabric Cleansing Care Care Wash #1 #1 #1 #1 Household Health Food Tea Ketchup Care Drinks Sensitivity: Public 6
Slide 8: Performance Over the Last Decade
PERFORMANCE OVER THE LAST DECADE CONSISTENT GROWTH PROFITABLE GROWTH HIGH CAPITAL EFFICIENCY 103.7% 128.5% FY FY 2009-10 2019-20 9% CAGR 890 bps Best in CLASS Sales growth* EBITDA improvement^ ROCE sustained CONSISTENT TRACK RECORD OF HIGH PERFORMANCE *On comparable basis. On reported basis, 10-year
Slide 9: Leading Value Creation
LEADING VALUE CREATION 1000% 900% 800% 700% 600% 500% 400% 300% 200% 100% 0% Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 HUL BSE FMCG SENSEX Market $ 13 bn 5.6X $ 72 bn capitalisation 2011** Current* + $59 bn Sensitivity: Public *Market capitalization as on 12th Febr
Slide 10: FY 21: A Year Like No Other
FY 21: A YEAR LIKE NO OTHER Sensitivity: Public 9
Slide 11: From Pandemic to Vaccine Rollout
FROM PANDEMIC TO VACCINE ROLLOUT COVID CASES TOUCHED ~100k PER DAY, COVID VACCINE ROLLOUT AND NOW UNDER ~10k PER DAY 98K 10K May’20 Sep’20 Feb’21 Rapid Development | Secured Vaccines | Daily New Cases Fastest rollout > 7.5mn already covered Source: COVID cases: Worldometer Vaccine rollout: MOHFW 10
Slide 12: From Economic Meltdown to a Sharper Than Anticipated Recovery
FROM ECONOMIC MELTDOWN TO A SHARPER THAN ANTICIPATED RECOVERY ECONOMY BOUNCING BACK FROM SHRINKING CONSUMER CONFIDENCE, THE LOWS OF H1’FY21 OUTLOOK ON FUTURE OPTIMISTIC 10.5% Consumer Confidence Index 6.1% 4.2% 140 0.3% 120 100 80 -7.7% 60 40 -15.7% 20 FY'19 FY'20 H1 FY'21 H2 FY'21 FY'21 FY'22 (AE)
Slide 13: The Pandemic Has Shaped New Consumer Behaviours
THE PANDEMIC HAS SHAPED NEW CONSUMER BEHAVIOURS Cocooning Stocking & Saving E-everything Contactless culture Clean living Life interrupted Protective measure Fear factor 12 Sensitivity: Public
Slide 14: Some of These Trends Will Continue Post the Pandemic
SOME OF THESE TRENDS WILL CONTINUE POST THE PANDEMIC People realize it’s a Before COVID During COVID It sustains after COVID better habit COVID Cocooning Clean Living E-Everything Protective Measure Stocking & Saving* Life Interrupted Contactless Culture Fear Factor *Saving is expected to continue w
Slide 15: COVID Obsessive Categories Saw a Sharp Surge
COVID OBSESSIVE CATEGORIES SAW A SHARP SURGE Expect to normalize in 2021 Volume Growth (YA) 16X 20% X 10% HAND SANITIZER 2019 2020 0% Volumes Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 -10% 1.5Y Y -20% Toilet Soap, Toilet Cleaners, Hand Wash, Hand Sanitizers HAND WASH 2019 2020 Volumes Sources: Niels
Slide 16: COVID Relevant Categories Are Back to Pre-COVID Levels
COVID RELEVANT CATEGORIES ARE BACK TO PRE-COVID LEVELS Expect to sustain in 2021 Volume Growth (YA) Aided by Hygiene and Cocooning 20% 10% 0% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 -10% -20% DISHWASH, TEA, HFD, TOOTHPASTE, SHAMPOO Sources: Nielsen for Volume growth 15 Sensitivity: Public
Slide 17: COVID Resistant Categories
COVID RESISTANT CATEGORIES Expect to normalize with increase in mobility in 2021 Volume Growth (YA) Complete Lockdown India Unlocking 20% 10% 0% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 -10% -20% Mar'20 Q2'20 Q3'20 Q4'20 -30% -40% -20% -30% Hand & Body, Face Care -51% Improving mobility -73% Source
Slide 18: COVID Impacted Categories
COVID IMPACTED CATEGORIES Expect to rebound strongly in 2021 with increase in mobility 17 Sensitivity: Public
Slide 19: Categories Which Slowed Down in 2020 Will Rebound
CATEGORIES WHICH SLOWED DOWN IN 2020 WILL REBOUND SKIN CARE FABRIC WASH CAGR 7% CAGR : 9% CY’14 CY’19 CY’14 CY’19 Profits 4x COLOR COSMETICS ICE CREAM CAGR : 14% CAGR : 15% CY’14 CY’19 Highly Profitable CY’14 CY’19 Profits 3x THESE CATEGORIES REMAIN STRUCTURALLY ATTRACTIVE FOR US 18 Sensitivity: Pub
Slide 20: Significant Channel Shifts
SIGNIFICANT CHANNEL SHIFTS Led by preference for proximity, contactless culture and closure of malls RENNAISSANCE OF E-COMMERCE ACCELERATION MT SIGNIFICANTLY IMPACTED, THE HUMBLE GROCER A STRUTURAL SHIFT NOW RECOVERING 16% 11% 9% 9% 5% 4% 3% 1% 2x -1% -2% Contributions vs Pre-COVID -6% -13% -20% -24
Slide 21: Navigating Through the Pandemic
NAVIGATING THROUGH THE PANDEMIC 20 Sensitivity: Public
Slide 22: We Followed a Segmented Portfolio Approach
WE FOLLOWED A SEGMENTED PORTFOLIO APPROACH HEALTH, HYGIENE & NUTRITION DISCRETIONARY c.80% c.15% Skin Care, Color Cosmetics, Deos OUT OF HOME c.5% Water, Ice Cream, Food Solutions, Vending Skin Cleansing, Home Care, Hair Care, Oral Care, Packaged Foods, Tea, Coffee 21 Sensitivity: Public
Slide 23: Our Focus Areas
OUR FOCUS AREAS CONTINUITY OF SUPPLY PULSE ON CONSUMER DEMAND WIN IN HIGH GROWTH CHANNELS 22 Sensitivity: Public
Slide 24: Supply Lines Restored at Speed with Agility
SUPPLY LINES RESTORED AT SPEED WITH AGILITY Service levels @ Pre-COVID 130+ Alternate 100% Factories & suppliers depots operational ~90 Flex 11 Wage settlements during COVID formulations 23 Sensitivity: Public
Slide 25: Brands Repurposed with Contextual Communication
BRANDS REPURPOSED WITH CONTEXTUAL COMMUNICATION 24 Sensitivity: Public
Slide 26: Impactful Innovations Across the Portfolio (Hygiene)
IMPACTFUL INNOVATIONS ACROSS THE PORTFOLIO HYGIENE: NEEDS HYGIENE: BENEFITS HYGIENE: FORMATS 25 Sensitivity: Public
Slide 27: Impactful Innovations Across the Portfolio (Nutrition, Home Care)
IMPACTFUL INNOVATIONS ACROSS THE PORTFOLIO NUTRITION IN-HOME CARE 26 Sensitivity: Public
Slide 28: Execution Edge in General Trade Sharpened
EXECUTION EDGE IN GENERAL TRADE SHARPENED STRENGTHENING OUR COVERAGE EXPANDING RURAL REACH E-ROUTE TO MARKET Effective Coverage* 1.1X 1.1X 1.1X 2x X Growths 2020 vs 2019 Entrepreneurs 2020 vs 2016 Pre- Jun'20 Sep'20 Dec'20 COVID 3.4 lakh Outlets onboarded Assortment 6x 2X 1.8X 1.7X X Avg. orders per
Slide 29: E-Commerce Accelerated
E-COMMERCE ACCELERATED PORTFOLIO DESIGNED FOR STRONG PERFORMANCE EVERYDAY GREAT EXECUTION CHANNEL 2x Growth^ & Contribution^ Shares Best-in-class online availability Post vs Pre COVID and discoverability ^DQ’2020 compared with DQ’2019 28 Sensitivity: Public
Slide 30: Segmented Portfolio Approach Enabled Us to Grow Majority of Business
SEGMENTED PORTFOLIO APPROACH ENABLED US TO GROW MAJORITY OF OUR BUSINESS HEALTH, HYGIENE AND NUTRITION DISCRETIONARY OUT OF HOME c. 80% c. 15% c. 5% 10% 10% -1% -15% 6% -25% -25% -45% -69% JQ'20 SQ'20 DQ'20 JQ'20 SQ'20 DQ'20 JQ'20 SQ'20 DQ'20 HEALTH, HYGIENE AND NUTRITION STRONG; DISCRETIONARY RECOV
Slide 31: DQ'20: Robust Performance
DQ’20: ROBUST PERFORMANCE STRONG FUNDAMENTALS GROWTH COMPETITIVE & PROFITABLE BUSINESS GAINING MOMENTUM % Business Gaining Penetration* Reported TO Growth Domestic Consumer Growth 7% 3% 20% 86% > 60% 19% -7% -9% MQ'20 JQ'20 SQ'20 DQ'20 % Business Winning Share^ PAT Growth *As per Kantar Worldpanel f
Slide 32: Making Sustainable Living Commonplace
MAKING SUSTAINABLE LIVING COMMONPLACE SUSTAINABLE BECOMING PLASTIC HEALTH AND ENHANCING WATER NEUTRAL WELL-BEING LIVELIHOODS SOURCING Hindustan Unilever >30 million person days >150 million employment generated by Foundation (HUF) >67% Plastic recyclable* 76% Tomatoes** people impacted till date HUF
Slide 33: Reimagining HUL for the Next Decade
REIMAGINING HUL FOR THE NEXT DECADE 32 Sensitivity: Public
Slide 34: Reimagining HUL: Our Vision
REIMAGINING HUL: OUR VISION YESTERDAY TOMORROW Consumer Ecosystem Data & Tech Reimagine Customer Ecosystem HUL Ecosystem Operations Ecosystem MOVING FROM LINEAR VALUE CHAIN TO NON LINEAR ECOSYSTEMS FOR TRANSFORMATION BUILDING DISTINCTIVE CAPABILITIES ACROSS THE VALUE CHAIN 33 Sensitivity: Public
Slide 35: Spotlight: Lakme Ecosystem
SPOTLIGHT: LAKME ECOSYSTEM Innovation System Manufacturing & Logistics System Open Innovation & Crowd Sourcing Data, Tech & Analytics Original Design & Automated & Manufacturing Robotized Warehouse Media Room Analytics Centre Digital Twins Digital Factory Consumer System Control Tower Customer Ecosy
Slide 36: Spotlight: Customer Ecosystem
SPOTLIGHT: CUSTOMER ECOSYSTEM Building Direct Coverage& Assortment Engine Consumer Offtake & Share Analytics Back End Shopper eb2c Retailer eb2b: Shikhar Purchase Data Distributor Hyperlocal Seamless Debtor Risk Delivery Credit Retail lending Demand Generation Ecosystem Demand Capture Ecosystem Ware
Slide 37: Spotlight: Operations Ecosystem
SPOTLIGHT: OPERATIONS ECOSYSTEM SOURCE MAKE DELIVER SERVICE Digital Twins to Demand Big data analytics Chemical Hub Multicategory optimise & improve Future-fit distribution fulfilment by last to improve Mfg. network processes, quality & infrastructure delivered through mile optimisation availability
Slide 38: Powered by Intelligent Data Ecosystem
POWERED BY INTELLIGENT DATA ECOSYSTEM Enterprise Data Lake Consumer Data Customer Supply Chain Lake Development Data Data Lake Lake POS Based Digital Deaveraged Data Retail Simulations based on WiMI Measures Predictive analytics for CCBTs Process Optimisation Going direct for uncovered/ perennially
Slide 39: Reimagining HUL: An Integrated End to End Transformation Program
REIMAGINING HUL: AN INTEGRATED END TO END TRANSFORMATION PROGRAM CONNECTED CONSUMERS CONNECTED STORES AGILE OPERATIONS Generating better insights Engagement & Faster & better feedback innovation Demand Demand Demand generation capture fulfilment Plan Source Navigate the Crafting effective shopper to
Slide 40: Looking Ahead: Hope and Optimism
LOOKING AHEAD: HOPE AND OPTIMISM INDIA IS REFORMING OUR STRENGTHS Landmark reforms • Goods & Services Tax Brand portfolio • Insolvency and Bankruptcy Code Ease of doing business Talent & capabilities • Rank improved +79 vs 2014 • Corporate tax reduced to 25% from 35% Focus on infrastructure developm
Slide 41: Thank You!
THANK YOU! Sensitivity: Public
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