Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Investor Day (July 2016)
55 slides from Hindustan Unilever's investor day presentation, Jul 19, 2016
Slide 1: Winning Decisively
WINNING DECISIVELY ANNUAL INVESTOR MEET | 19 JULY 2016 Sanjiv Mehta, CEO & MD
Slide 2: 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 3: FY 2015-16: A Challenging Environment
FY 2015-16: A CHALLENGING ENVIRONMENT Subdued Consumer Markets* Volatile Commodity Prices High Competitive Intensity Rural growth at its lowest in a decade Source: Nielsen Crude Oil $ 108 $ 86 $ 51 $ 47 FY 2014 FY 2015 FY 2016 Current Palm Fatty Acid Distillate $ 690 $ 723 $ 570 $ 530 '12 '13 '14 '1
Slide 4: We acted promptly in 2015 as commodity prices fell
WE ACTED PROMPTLY IN 2015 AS COMMODITY PRICES FELL Scenario in 2009 Commodity Prices soften Growth of small UVG players Loss of market share 2009 as we were not quick to respond to raw MQ JQ SQ DQ material price changes -58% Driving volume led profitable growth in 2015 Commodity Prices Growth of sma
Slide 5: Delivered on Goals
DELIVERED ON GOALS RESPONSIBLE GROWTH Continued progress on our Sustainability priorities 5 UVG – Underlying Volume Growth; PBIT – Profit Before Interest and Tax
Slide 6: Progress on Sustainability Priorities
PROGRESS ON SUSTAINABILITY PRIORITIES 6 * vs. 2008 baseline
Slide 7: Sustained Strong Track Record
SUSTAINED STRONG TRACK RECORD 140% 130% 128% 128% 130% 58 56.7 120% 56 109% 110% 54 100% 52 50.5 50.1 90% 50 80% 48 45.5 70% 46 60% 44 50% 42 40% 40 2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16 Return on Capital Employed (%) Cash from operations (Rs. Bln) 4 consecutive years >100%
Slide 8: Winning with Consumers & Customers
WINNING WITH CONSUMERS & CUSTOMERS 17 HUL brands feature in the 9 HUL brands feature in HUL consistent recipient of ‘Most Trusted Brands’ 2015 BrandZTM Top 50 Most Valuable various Supplier Awards from edition Indian Brands ranking leading retail customers Best Brand of Beauty Business Director’s Aw
Slide 9: Retained Top Employer Position
RETAINED TOP EMPLOYER POSITION EMPLOYER OF CHOICE DREAM EMPLOYER Campus Mid Career recruits Women 5th YEAR in a row EMPLOYER 7th YEAR in a row 9 As per Nielsen Campus Track B-School Survey
Slide 10: Continued Recognition
CONTINUED RECOGNITION HUL wins the ET ‘Company of the Year’ Award for Corporate HUL recognised as the ‘Most HUL adjudged as the ‘Marketer HUL recognised as Most Excellence Innovative Marketer on Mobile’ of the Year 2015’ Innovative Company in India HUL HUL won Gold for our HUL receives HUL bags Corp
Slide 11: Strategy on Track and Delivering
STRATEGY ON TRACK AND DELIVERING Net Sales EBIT 5,409 31,425 3,073 21,736 FY 11-12 FY 15-16 FY 11-12 FY 15-16 A > 30,000 Crore Company Consistent increase in Operating profits ~10,000 Crores added in the last 4y 11
Slide 12: Rewarded Shareholders
REWARDED SHAREHOLDERS 16 15 Particulars 2014-15 2015-16 Dividend Per Share 15.0 16.0 Interim 6.0 6.5 Final 9.0 9.5 No. of Share (Crs.) 216.35 216.39 2014-15 2015-16 Total Dividend Outflow* (Rs. Crs.) 3881 4140 Dividend Per Share Approval to the scheme for transfer of General Reserve Balance to P&L A
Slide 13: HUL: Winning Decisively
HUL: WINNING DECISIVELY
Slide 14: We remain optimistic on the India growth story
WE REMAIN OPTIMISTIC ON THE INDIA GROWTH STORY 14
Slide 15: And positive on the mid-long term outlook for FMCG
AND POSITIVE ON THE MID–LONG TERM OUTLOOK FOR FMCG Millennials Increasing Urbanization Mobile Internet penetration Premiumisation Cont% 2016 2019 Premium 23% 1.7% 0.9% Popular 38% 2015 2019 438 Emerging Cities Mass 38% -2.3% World’s largest millennials 6 Metropolises 34% 47% population (470+ Mn) Eme
Slide 16: Our Strategy Remains Unchanged
OUR STRATEGY REMAINS UNCHANGED A Compelling Framework A Model Which Works A Clear Set of Goals • Consistent Growth • Competitive Growth • Profitable Growth • Responsible Growth 16
Slide 17: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 17
Slide 18: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 18
Slide 19: Key Thrusts
KEY THRUSTS Innovating across the Magic and portfolio Driving the Core Harnessing Non-TV Craftsmanship 19
Slide 20: Innovation remains the lifeline of the business
INNOVATION REMAINS THE LIFELINE OF THE BUSINESS 20
Slide 21: Building our presence in Naturals
BUILDING OUR PRESENCE IN NATURALS Within the existing portfolio Extending our presence to new brands Indulekha and St. Ives AV 21
Slide 22: Strengthening the Core
STRENGTHENING THE CORE Surf Excel Clinic Plus Red Label 22
Slide 23: Strengthening the core through innovation and premiumisation
STRENGTHENING THE CORE THROUGH INNOVATION AND PREMIUMISATION More benefits More benefits Rising Income Rising Income Meeting consumer needs across price points 23
Slide 24: Building Brands with Purpose
BUILDING BRANDS WITH PURPOSE Lifebuoy Chamki and Red Label AV 24
Slide 25: Building Craftsmanship in Marketing
BUILDING CRAFTSMANSHIP IN MARKETING Through Products Through various media During Shopping Experience Revolutionizing consumer Reviving art of copy with compelling advertorial Marketing at the Point of Sale promos 25
Slide 26: Magic in Marketing Alive in E-Commerce
MAGIC IN MARKETING ALIVE IN E-COMMERCE Hero Images of all products on Thematic Banners resulting in 2X Collaborating with E commerce website click rate partners for activations & launches 26
Slide 27: Harnessing Non TV
HARNESSING NON TV Made for Web content Print Innovation Mobile Marketing Leveraging Outdoor 27
Slide 28: Building capability to tap into consumer insight - People Data Center
BUILDING CAPABILITY TO TAP INTO CONSUMER INSIGHT- PEOPLE DATA CENTER Targeting right influencers Spotting new trends with right messaging Targeting new segments 28
Slide 29: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 29
Slide 30: Key Thrusts
KEY THRUSTS Continued focus on Building Channels Customer development of the Future Market Development 30
Slide 31: More Throughput from More Stores
MORE THROUGHPUT FROM MORE STORES More Stores More Assortment Every Day Perfection More Assortment in More Stores at More Frequency 31
Slide 32: WIMI Strategy Reaping Benefits
WIMI STRATEGY REAPING BENEFITS LIFTING CENTRAL INDIA Uttar Rajasthan Pradesh Bihar Madhya Pradesh Sharply Activating Clusters through Micromarketing Central India growing @ Product Mix tailor-made according to consumer preferences 1.5x all India, despite market slowdown 32
Slide 33: Evolution of Channels
EVOLUTION OF CHANNELS Channel Evolution Emerging Channels Rise of Specialist Format Closed format large Open format grocer large grocer Modern Trade E-Commerce Drug-pharmacy Drug-pharmacy & beauty 12% of FMCG* in 2016 4% of FMCG* by 2019 33 *Market
Slide 34: Building E-Commerce - the Channel of the Future
BUILDING E COMMERCE- THE CHANNEL OF THE FUTURE Resourcing ahead of Winning across the the curve platform Our market share in E commerce > Modern Trade > General Trade 34
Slide 35: Market Development Remains a Priority
MARKET DEVELOPMENT REMAINS A PRIORITY Drive trials through experiential Sampling Aggressive investment behind trial generation. 8X 35
Slide 36: Developing the Market Across Categories
DEVELOPING THE MARKET ACROSS CATEGORIES Home Care Personal Care Refreshments Foods Home to Home Sampling Online Awareness Wet Sampling In-Store Sampling 36
Slide 37: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 37
Slide 38: Driving the Virtuous Cycle of Growth
DRIVING THE VIRTUOUS CYCLE OF GROWTH A Business Model That Works Max the Mix End-to-end cost focus Channel, Non Material Portfolio Materials Supply Chain Geography Costs Margin Return on accretive Pricing Marketing Overheads innovation Investments 38
Slide 39: Key Thrusts
KEY THRUSTS Bringing efficiencies in Customer service and quality Building back-end ways of working at the moment of truth capabilities 39
Slide 40: Bringing Cost Efficiencies in Ways of Working
BRINGING COST EFFICIENCIES IN WAYS OF WORKING Project Symphony Zero based budgeting Ullage reduction Focused on value & growth Decisions based on data Driven by experienced business leadership Making Savings a common agenda across functions 40
Slide 41: End to End Focus
END TO END FOCUS Material Cost Savings* NMSCC Savings* Media Savings* 174 141 140 100 100 100 2013 2015 2013 2015 2013 2015 *Numbers indexed to 2013, base considered 100; NMSCC- Non Material Supply Chain Costs 41
Slide 42: Service at the Point of Purchase
SERVICE AT THE POINT OF PURCHASE Primary CCFOT Secondary CCF On Shelf Availability (MT) 113 115 102 100 100 100 2013 2015 2013 2015 2013 2015 CCFOT - Customer Case Fill On Time; MT –Modern Trade 42
Slide 43: Amazingly Simple Whilst Driving Discipline
AMAZINGLY SIMPLE WHILST DRIVING DISCIPLINE DELIGHT THROUGH SPEED & SIMPLICITY Think End to End Think Delight Think Tech. Think Discipline Relevant and No Touch Processes Customers new age Simplify process Vendors technology Eliminate exceptions Employees adoption 43
Slide 44: Quality at the Moment of Truth
QUALITY AT THE MOMENT OF TRUTH Consumer-Customer and Brilliant Quality Thriving quality culture and brand led Fundamentals people Ensure zero safety incidents Q mindset in the Last mile Q in Design Leverage IT for Distributor Retail Quality Drive supplier Quality Q @ the Point of Sale Grass-root a
Slide 45: Use the Power of Big Data and Analytics
USE THE POWER OF BIG DATA AND ANALYTICS Advanced Analytics Power to user Embedding and Integration Analytics Driven Insights Training and capability Speed of development Analysis Cross Function Linking 45
Slide 46: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 46
Slide 47: Winning with Our People
WINNING WITH OUR PEOPLE Flexible and Agile Diversity and Inclusion Employee Well Being Winning Culture 47
Slide 48: Winning Culture
WINNING CULTURE Founder Mentality Entrepreneurial spirit • Owner’s Mindset – Long term lens • Frontline Obsession - Robust frontline • Insurgency - Real time feedback with strong control systems 48
Slide 49: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 49
Slide 50: Hindustan Unilever Foundation
HINDUSTAN UNILEVER FOUNDATION Water Conservation Crop Yield Person Days Generated 1.5 lakh tonnes* 20 lakh* 200 billion litres* Cumulative Annual Agriculture Cumulative Person Days Generated Cumulative and Collective Potential Production Impact >250 Mn people by 2020 | 1 in every 5 Indians 50 * Assu
Slide 51: Doing Well by Doing Good
DOING WELL BY DOING GOOD SWACHH AADAT, SWACHH BHARAT Mass Media Swachh Basti Swachhata Doot Haath Muh Bum Most Viewed Campaign on YouTube Touched 200,000 lives through the Touched 100,000 lives through our with 20 million views pilot ‘Swachhata Doots’ 75 million people reached Haath Muh Bum AV 51
Slide 52: Winning Decisively
WINNING DECISIVELY 1 Winning with brands and innovation 2 Winning in the marketplace 3 Winning through continuous improvement 4 Winning with people 5 Unilever Sustainable Living Plan 52
Slide 53: We Have What It Takes
WE HAVE WHAT IT TAKES… Great Heritage Great Brands Great People Great Capability Distribution Rural Supply Chain IQ Finance USLP 53
Slide 54: Strategic Thrusts by Category
ForCATEGORY more information & updates STRATEGIC THRUSTS Home Care Personal Care Refreshment Foods 54
Slide 55: Thank You
THANK For YOU more information & updates For More Information 55