Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Merrill Lynch India Conference 2009
39 slides from Hindustan Unilever's conference presentation, Feb 2, 2009
Slide 1: Merrill Lynch India Conference Investor Presentation
Merrill Lynch India Conference Investor Presentation 2nd Feb 2009
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 FMCG Markets Our Vision and Strategy 2008 in context Financials & Summary
Slide 4: FMCG Markets
FMCG Markets ¾ Sustain Robust Growth –no slowdown in consumer spending ¾ Broad based growth – Urban and rural; Urban > Rural ¾ Strong Volume growth in Personal Care and Foods ¾ Increase in Average Price from pricing & premiumisation ¾ Pricing element will come down going forward, if downward commodi
Slide 5: Agenda
Agenda FMCG Markets Our Vision and Strategy 2008 in context Financials & Summary
Slide 6: Our vision
to earn the love and respect im of\India, by making a ia E me difference LO Every |ndian. | Nos yA \ a
Slide 7: Goal: Sustainable, competitive & profitable growth
Goal: Sustainable, competitive & profitable growth STRATEGY z Leverage brand portfolio and consumer understanding by ¾ Straddle the pyramid ¾ Driving consumption & penetration opportunity z Leverage Unilever scale and know how z Build segments & markets for the future z Cost efficiencies z Build cap
Slide 8: Leverage brand portfolio
Leverage brand portfolio
Slide 9: Portfolio straddling the pyramid
Portfolio straddling the pyramid Particulars Laundry Soaps Shampoo Skin Tooth Tea Coffee Paste HUL Share 38.1% 51.6% 46.3% 51.7% 29.6% 23.0% 45.2% Nearest Competitor 12.2% 9.4% 23.7% 7.5% 48.5% 21.1% 39.2% Affluent Aspiring Striving Source : A.C Nielsen 2008 Value shares
Slide 10: Changing Income Pattern
Changing Income Pattern 2003 2013 181 mn households 231 mn households Rich Classes Top End Business 3 Affluent 11 Changing attitudes Aspiring Classes 46 Aspirers 124 Trebling Credit Culture 131 Strivers 96 Striving Classes B.O.P Opportunity The shape of India is going to change… from a pyramid to a
Slide 11: Uptrading : Consumption Impact - HPC
Uptrading : Consumption Impact - HPC $ Expenditure / HH / Month 107 8.5 x 71 5.6 x 45 3.6 x 1.8 x 23 x 13 LSM 1 LSM 2-4 LSM 5-7 LSM 8+ LSM 8+ (All categories) Source : Family Budget Survey, Consumer Panel
Slide 12: Uptrading : HPC Mix Change
Uptrading : HPC Mix Change $ 13 $ 23 $ 45 $ 71 $ 107 LSM 1 LSM 2-4 LSM 5-7 LSM 8 LSM 8+ Dets PP New Categories Source : Family Budget Survey, Consumer Panel
Slide 13: Uptrading : Dove Shampoos
Uptrading : Dove Shampoos Market Leader in MT in premium shampoos
Slide 14: Uptrading: Ponds Top End
Uptrading: Ponds Top End Market Leader in Anti Ageing Segment (1.5 times share of next competitor) Consumer Satisfaction Ratio : 89% Top End Counters Global trainers More than 1000 advisors across 74 cities More than 750 counters in operation
Slide 15: The Consumption Opportunity
The Consumption Opportunity Per Capita Consumption (US $ ) Detergents Shampoos 2.2 1.1 1.9 1 1.4 0.3 India China Indonesia India China Indonesia Ice-Cream Skin Care 2.8 3.2 0.9 0.8 0.2 0.3 India China Indonesia India China Indonesia Source : Euromonitor, 2006
Slide 16: Processed Foods Opportunity
Processed Foods Opportunity - Rising Incomes - Nuclear families - Convenience - Trade Structure ACN-tracked Euromonitor’s categories est Packaged, 5% $ 1.3 Bln $ 6.4 Bln $ 12.8 Bln $ 13 Billion 0.5% gr 11.5% growth 13.1% growth Unpackaged/ Fresh, 95% $ 240 Billion
Slide 17: Building Category: Processed Foods
Building Category: Processed Foods Soups Meal Makers 400 Cr ($80 m) Dish Maker Market growing at 25% Knorr enters the centre of the plate with the launch of Meal Makers and Indian Soups
Slide 18: Tapping 'Out of Home' Opportunity
Tapping ‘Out of Home’ Opportunity 60% LSM 8+ consumers work between 9 a.m. to 6 p.m. Premium Market estimated at $ 300 mn. Growing over 20% p.a.
Slide 19: OoH – HUL Uniquely Poised
OoH – HUL Uniquely Poised Brands Segment Solution Products Lipton, Brooke Bond, Bru, Top-end Connoisseur Tea Knorr Bags, Turbo Tea Masstige Freshly brewed Strength in tea, coffee & coffee, Ice Tea & Cold coffee soup Penetration Cardamom Tea, Bru Coffee, Serve 1.7 bln cups p.a. Tea Bag Tea Some Key r
Slide 20: Indian water purifier market 2007
Indian water purifier market 2007 Market Size 550 $ mn Size of Opportunity $575 mn 329 246 27 Institutional Domestic Boiling Bottled Rs Cost Per Lt. 3.33 0.58 0.40 10.0 Cost of Pure-It Water including Initial Cost Rs 0.35 Per Litre
Slide 21: Pureit… a breakthrough innovation
Pureit’ … a breakthrough innovation Complete protection … `as safe as boiled water’ Meets US EPA standards Works without electricity, pressurized piped water Affordable: Device Rs 2000 ( $40) Germkill Battery Rs 350 ($7) Rs 0.35 per litre ( < 1 $ cent) (incl. initial price) Progress >700 towns, 20 s
Slide 22: Build Capabilities for the future
Build Capabilities for the future
Slide 23: The new GTM model
The new GTM model Distributor Unbundling Sales force Distributor Quality Technology Zero Service Inventory Mix Model
Slide 24: Mumbai Pilot Results
Mumbai Pilot Results 2007 (22 Distributors) 2008 (5 Distributors) •GT - Down from 22 Distributors in 2007 to 5 distributors in 2008 • 5 Kiosk Distributors
Slide 25: Using IT for better execution
Using IT for better execution Cust Mtkg RS UNIFY MIS PORTAL CD Ops Masters Down Load Promotions From Central UNIFY Outlet, TPR, Norms MIS Product Information Merchandising Invoicing & Collections Closing stock sync for replenishment Outlet wise order Masters – Product, price, promotion, Quantum Load
Slide 26: Embed sustainability
Embed sustainability
Slide 27: Growing Environmental Concern
Growing Environmental Concern
Slide 28: Our strategic choices
Our strategic choices Prosperity People Planet (Economic) (Social) (Environment) 1. Enhance livelihoods 1. Health 1. Water 2. Empowerment 2. GHGs Who :Brands will lead the effort Where: Around our units of operation How: Through Partnerships
Slide 29: Our strategic choices
Our strategic choices Prosperity People Planet (Economic) (Social) (Environment) 1. Enhance livelihoods 1. Health 1. Water 2. Empowerment 2. GHGs Partner DHAN foundation Partner with Pratham 45% water returned to for enhancing livelihood for girl child education ground Sourcing from Primary LB Swast
Slide 30: Progress on Environment
Progress on Environment 100 100 Energy Consumption CO2 Emission 78 67 GJ/ T Kgs/ T 2004We are already ahead of targets !! 2007 2004 2007 100 100 Water Consumption COD 79 M3/ T Kgs/ T 16 2004 2007 2004 2007 Indicative Nos.; 2004 as base 100
Slide 31: Corporate Governance
Corporate Governance Unilever and HUL Policies Code of Business Principles Internal Controls and Business Risk Mgmt Operational Controls Assurance Crisis Management Policy
Slide 32: Agenda
Agenda FMCG Markets Our Vision and Strategy 2008 in context Financials & Summary
Slide 33: Financial Overview 2008
Financial Overview 2008 Mn $ Turnover 3801 EBIT 532 EBIT % 14.0% PAT (bei) 462 Reported Profit 488 EPS 22c Market Capitalisation 11105 Personal Products Soaps and 26% Detergents Exports Processed Breverages 48% 8% Foods 11% 4% Others Icecreams 2% 1% * Figures based on FY 2008 Unaudited Results ++ Ma
Slide 34: Market Leaders across Categories
Market Leaders across Categories Market Leader Strong No. 2 62.8 58.4 56 51.6 51.7 48.5 46.3 45.2 39.2 38.1 31.5 29.6 25.8 27.4 23.7 23 21.1 15.4 12.2 11.7 9.4 8.2 7.5 7.1 Fabric Personal Dishwash Skin Shampoo Talcum Deos Packet Coffee Jams Toothpaste Ketchups Wash Wash Powder Tea HUL – Market Share
Slide 35: Key Financials
Key Financials 2008** 2007 2006 Continuing sales growth* 19.2% 13.5% 10.0% EBIT/ Sales % 14.0% 14.1% 14.1% EBIT Growth 18.4% 15.4% 16.2% EPS (cents) 22 20 19 Operating cash flow* NA $420 Mn $365 Mn * Before restructuring, disposal ** Unaudited results FY 2008. Year ending will be 15 months ending Ma
Slide 36: Agenda
Agenda FMCG Markets Our Vision and Strategy 2008 in context Summary
Slide 37: Summary
Summary z Consumer spending in FMCG continues z Growth broad based and across all categories z 4th consecutive year of accelerated growth in FMCG portfolio. z Our goal remains unchanged z Competitive, profitable sustainable growth z Continue to strengthen portfolio and capabilities for the futur z S
Slide 38: Thank you
Thank you
Slide 39: Merrill Lynch India Conference Investor Presentation
Merrill Lynch India Conference Investor Presentation 2nd Feb 2009
Hindustan Unilever — Merrill Lynch India Conference 2009 on 6ix