Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Arisaig Consumer Symposium 2017
57 slides from Hindustan Unilever's conference presentation, Sep 26, 2017
Slide 1: Investor Presentation filing letter to stock exchanges
° 6 ° ° Hiadurtow Ondever Limilod Hindustan Unilever Limited 26th September, 2017 Stock Code: BSE: 500696 NSE; HINDUNILVR ISIN: INEQ30A01027 BSE Limited, Corporate Relationship Department, 2nd Floor, New Trading Wing, Rotunda Building, P.J. Towers, Dalal Street, Mumbai — 400 001 Dear Sir, Sub: Inves
Slide 2: Winning Decisively
WINNING DECISIVELY ARISAIG CONSUMER SYMPOSIUM | 26 SEPT 2017 Sanjiv Mehta, CEO & MD
Slide 3: 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 4: Long Term Performance
LONG TERM PERFORMANCE
Slide 5: HUL Performance - Last 5 Years at a Glance
HUL PERFORMANCE - LAST 5 YEARS AT A GLANCE Net Sales EBITDA $968 mn $5423 mn $527 mn $3546 mn ~$ 1.9 billion added ~EBITDA 1.8X 4 FY’11-12: Reinstated to reflect key IndAS impacts
Slide 6: Strategy on Track and Delivering in Last 5 Years
STRATEGY ON TRACK AND DELIVERING IN LAST 5 YEARS Consistent margin 9 % CAGR improvement annually 2.8x market capitalization ~300 bps $14 bn 2.8X $41bn improvement in profitability 2012 24% CAGR 2017 Consistent, Competitive, Responsible, Profitable Growth delivered 5
Slide 7: Recent Developments
RECENT DEVELOPMENTS
Slide 8: Challenging Environment in the Last Few Quarters
CHALLENGING ENVIRONMENT IN THE LAST FEW QUARTERS Subdued Rural growth yet to Demonetization GST Volatile Consumer markets recover Commodity costs Palm Fatty Acid Distillate Crude Oil 7
Slide 9: Yet Resilient Performance Delivered
YET RESILIENT PERFORMANCE DELIVERED DQ’16 MQ’17 JQ’17 USG: 0% USG: 8% USG: 6% Net Profit: +7% Net Profit: +6% Net Profit: +9% 8
Slide 10: GST: Transition & Where We Stand Today
GST: TRANSITION & WHERE WE STAND TODAY Swift & Smooth Transition Pricing: Price drops Present Situation in Trade started landing from Day 1 Output tax changes • First secondary invoice at Detergent powders • Early part of SQ’17 was 12:08 am on 1st July affected by various myths in Hair Care (excl. h
Slide 11: HUL: Winning Decisively
HUL: WINNING DECISIVELY
Slide 12: We Continue to Remain Optimistic on the India Growth Story
WE CONTINUE TO REMAIN OPTIMISTIC ON THE INDIA GROWTH STORY 11
Slide 13: And Positive on Mid-Long Term Outlook for FMCG
AND POSITIVE ON MID-LONG TERM OUTLOOK FOR FMCG Premiumisation Millennials Increasing Urbanization Age profile of Indian Population Population in cities Cont. % 2016 2019 Source: CIA World Factbook’16 Premium 23% 1.7% Almost DOUBLE Popular 38% 0.9% Mass 38% -2.3% 438 Emerging Cities Population (in mn
Slide 14: 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 13
Slide 15: 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 14
Slide 16: Winning with Brands & Innovation
WINNING WITH BRANDS & INNOVATION 15
Slide 17: Key Thrusts
KEY THRUSTS Strengthening the Building brands Innovating across Market Development core with purpose the portfolio Addressing needs Strengthening Magic and of all consumers Naturals craftsmanship 16
Slide 18: Strengthening the Core
STRENGTHENING THE CORE Surf Lux Red Label Kissan Fair & Lovely Dove Fair & Lovely 17
Slide 19: Building Brands with Purpose
BUILDING BRANDS WITH PURPOSE Rin 18
Slide 20: Innovating Across the Portfolio
INNOVATING ACROSS THE PORTFOLIO 19
Slide 21: Market Development
MARKET DEVELOPMENT BUILDING CATEGORIES OF THE FUTURE How these categories have evolved over the years Strong double digit growth, every year Male grooming Hair Conditioners Hand Wash Face Wash Liquids Fabric conditioners ~2.5x HUL Growth Rate Green Tea Body Wash 20
Slide 22: Addressing Needs of All Consumers
ADDRESSING NEEDS OF ALL CONSUMERS Only 1 in 10 washes uses a HUL Premium laundry powder More Benefits Huge scope for premiumization Rising Income Democratizing trends across core, while driving premiumization 21
Slide 23: Addressing Needs of All Consumers
ADDRESSING NEEDS OF ALL CONSUMERS High end Naturals Indulekha Hair Oil $7 Salon Care Daily Damage Care Mass Beauty Clinic Plus sachet Family 1.6 cents Democratizing trends across core, while driving premiumization 22
Slide 24: Strengthening Naturals
STRENGTHENING NATURALS Within Existing Brands Building Master Brands Building Specialist Brands Lever Ayush 23
Slide 25: Lever Ayush Rolled Out Nationally
LEVER AYUSH ROLLED OUT NATIONALLY Oral Care Skin Care* Body Lotions Hand Wash Hair Care Soaps 27SKUs across 6 categories in the popular range 24 * Includes Face wash & Face creams
Slide 26: Magic & Craftsmanship
MAGIC & CRAFTSMANSHIP WITH DIFFERENTIATED CONTENT Television Website Social Media Digital video E-Commerce 25
Slide 27: Magic & Craftsmanship
MAGIC & CRAFTSMANSHIP WITH DIFFERENTIATED CONTENT Create Curate Channelize PRM + Online Behaviour + FB Look Alikes 250K Makeup Junkie Personae Targeted 2x Click Throughs achieved 100+ partners, 900+ ideas, 100 shortlisted 26
Slide 28: Winning in the Market Place
WINNING IN THE MARKET PLACE 27
Slide 29: Key Thrusts
KEY THRUSTS Winning in Many Indias Effective coverage and Partner of choice across (WiMI) assortment all channels MODERN TRADE COLLABORATE WITH EXTERNAL PARTNERS 28
Slide 30: Winning in Many Indias (WiMI)
WINNING IN MANY INDIAS (WIMI) HELPING TURBO CHARGE GROWTH WITH AGILITY Central India Pricing, Product Adaptation Empowerment Cluster Specific Mixes – Authority to spend on local Content, Communication, activation now vests with Schemes Cluster Heads Growth of last 2 years of Central Branch > All Ind
Slide 31: Effective Coverage & Assortment
EFFECTIVE COVERAGE & ASSORTMENT MORE THROUGHPUT FROM MORE STORES More Stores More Assortment Every Day Perfection More Assortment in More Stores at More Frequency 30
Slide 32: Effective Coverage & Assortment
EFFECTIVE COVERAGE & ASSORTMENT MORE THROUGHPUT FROM MORE STORES Technology Differentiated approach Upskilling the talent Demand Capture Training Development What to sell to the store Increase Tailor made Assortment for Demand Demand retention ‘every’ store Fulfilment Generation 31
Slide 33: Partner of Choice Across Channels
PARTNER OF CHOICE ACROSS CHANNELS Strengthening the existing channels Building channels of the future Wholesale General Trade E-Commerce Drug-pharmacy & beauty Modern Trade E-Commerce Shares & Profitability in E-Commerce > Modern Trade > General Trade 32
Slide 34: Winning Through Continuous Improvement
WINNING THROUGH CONTINUOUS IMPROVEMENT 33
Slide 35: Key Thrusts
KEY THRUSTS Profitable Growth Everyday customer service & Building back-end quality at the moment of truth capabilities 34
Slide 36: Profitable Growth
PROFITABLE GROWTH A Business Model That Works Max the Mix End-to-end cost focus Channel, Portfolio Geography Margin accretive Pricing innovation Symphony ZBB LOGISTICS A&P OVERHEADS 35
Slide 37: Consistent Margin Improvement Plan
CONSISTENT MARGIN IMPROVEMENT PLAN DRIVEN BY SAVINGS 300 bps Margin Improvement ~18% ~15% 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 36
Slide 38: Consistent Savings Delivery Plan
CONSISTENT SAVINGS DELIVERY PLAN Unlocking savings by Smart spending & New & disruptive Cutting complexity ownership mindset thinking and driving agility Targeting and delivering end to end savings of ~6% of turnover Additional investment for future growth 37
Slide 39: Everyday Customer Service & Quality at the Moment of Truth
EVERYDAY CUSTOMER SERVICE & QUALITY AT THE MOMENT OF TRUTH Brilliant Consumer Culture & Deliver on Outlet level Quality Focus People Mix Focus Principles Q at every stage Zero Defects Q mindset in the More stores – Customer level of the SC Last mile Better served analysis 38
Slide 40: Build Back End Capabilities
BUILD BACK END CAPABILITIES Order Shipment Shipment Tracking & Reporting & Management Planning Tendering Monitoring Analytics 39
Slide 41: Winning with People
WINNING WITH PEOPLE 40
Slide 42: Winning with Our People
WINNING WITH OUR PEOPLE Flexible and Agile Diversity & Inclusion Employee Wellbeing Founders mentality 36% of Managers are WOMEN 100% WOMEN EMPLOYEE FACTORY CCBT CAREER BREAK POLICY 41
Slide 43: Retaining Top Employer Position
RETAINING TOP EMPLOYER POSITION Employer of Choice # 1 Employer Dream Employer 6th YEAR in a row Mid Career recruits & 8th YEAR in a row Women 42 As per Nielsen Survey in 2015 &16
Slide 44: CCBT
CCBT FASTER, MORE CONSUMER & CUSTOMER CENTRIC, FUTURE PROOFED HUL Brand Development Brand Building Cross-functional CCBTs CCBTs : GLOBAL – LOCAL BRAND COMMUNITIES CROSS FUNCTIONAL Consumer & Customer Centric Bigger innovations Faster innovations All about experimentation, empowerment and collaborati
Slide 45: CCBT: Innovations Landing Faster
CCBT INNOVATIONS LANDING FASTER 44
Slide 46: CCBT: Agile Execution Backed by Big Data Analytics
CCBT AGILE EXECUTION BACKED BY BIG DATA ANALYTICS Advanced Analytics More Power to Users Speed of Analysis Cross Functional Linking Analytics driven insights 45
Slide 47: CCBT: Digitising HUL Across the Value Chain
CCBT DIGITISING HUL ACROSS THE VALUE CHAIN Insight generator Consumer Planning Mass Marketing to Massive Customer Manufacturing Customization Simulator & Distribution Optimizer 46
Slide 48: CCBT: Key Projects Deployed Across the Value Chain
CCBT MULTIPLE KEY PROJECTS DEPLOYED ACROSS THE VALUE CHAIN Insight Generator Planning Manufacturing Distribution • Livewire: Real time • Customized serving • Mass Customization • Automated data analytics • Shorter & Flexible • Digital Factories warehousing planning cycle Simulator & Customer Consume
Slide 49: Unilever Sustainable Living Plan
UNILEVER SUSTAINABLE LIVING PLAN 48
Slide 50: Doing Well by Doing Good
DOING WELL BY DOING GOOD Enhancing livelihoods Swachh Aadat Water conservation Sustainable sourcing Swachh Bharat Weaving the Sustainability Agenda across the business 49
Slide 51: Enhancing Livelihood
ENHANCING LIVELIHOOD Shakti Brands with purpose Prabhat >390,000 Youth benefited till date 72,000 Shakti Ammas 48,000 Shaktimaans empowered through Project Shakti 680,000* People benefitted directly Cumulative impact till 2016 *This includes direct impact through Swacchata Dhoot 50
Slide 52: Swachh Aadat, Swachh Bharat
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 200,000 lives through our with 20 million views pilot ‘Swachhata Doots’ 75 million people reached 51
Slide 53: Suvidha Centre Launched
SUVIDHA CENTRE LAUNCHED URBAN WATER HYGIENE & SANITATION COMMUNITY CENTRE Circular economy principle used to reduce water usage Fresh water used Waste water from for brushing, these activities washing, bathing becomes input for etc. flushing toilets ~10 mn litres of water savings per annum ADDRESSIN
Slide 54: Hindustan Unilever Foundation
HINDUSTAN UNILEVER FOUNDATION Water Conservation Crop Yield Person Days Generated >600,000 tonnes* >3.7 million* 300 billion litres* Cumulative Annual Agriculture Cumulative Person Days Generated Cumulative and Collective Potential Production HUF AV 53 * Assured Figures as of March 2016
Slide 55: Sustainable Sourcing
SUSTAINABLE SOURCING Tomatoes Tea 100% tomatoes used 46% Tea (16% in 2011) is in Ketchup sourced from sourced from estates sustainable sources certified as sustainable 54
Slide 56: 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 55
Slide 57: Thank You
For more information & updates THANK YOU For More Information 56