Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — FY2003 Earnings Presentation
56 slides from Hindustan Unilever's earnings presentation, Feb 17, 2004
Slide 1: Financial Results DQ'03 & FY'03
Financial Results DQ’03 & FY’03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 2: Highlights - '03
Highlights - ‘03 · HPC Power Brands double +6.5% Vs +3.2% in ‘02 • HPC grows by 4.6% ‘03 : Led by PP +14.8% • Brooke Bond grows by (+6%) • Processed Food gains momentum ; grows by (+20%) • Operating Profit (PBIT) grows (+5.8%) • Final Dividend : Rs 3.00 / Share. DQ’03 & FY’03 Results Presentation 17
Slide 3: Contents
Contents DQ’03 Highlights FY’03 Highlights Business Performance Financials DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 4: DQ 2003 Results Highlights
DQ 2003 Results Highlights • FMCG grows by (+4.0%) ; Volume Led • Power Brands grow by (+6.2%) • HPC sustains growth(+4.4%) in a difficult market(-5.7%) •Personal Products grow by (+19.4%) •HPC Power Brands grow by (+5.8%) DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 5: DQ 2003 Results Highlights
DQ 2003 Results Highlights • Foods grow (+2.1%) in a declining market(-5.5% ) •Processed Foods maintains strong growth momentum - grows by (+25.3%) •Foods Power Brands grow by (+7.6%) • FMCG Exports grow by (+14.3%); DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 6: DQ 2003 Results Highlights
DQ 2003 Results Highlights • Operating Profits (PBIT) up 1.0% - Margins up 72 bps. In the context of : • Competitive Strategy in Laundry • Higher investments in quality • Driving growth through appropriate price points positioning • PBT & PAT factor in interest on Bonus Debentures (Rs 30 cr) • Net P
Slide 7: FMCG Sales
FMCG Sales Topline grows for 5th consecutive quarter FMCG Sales Growth% 4.0 1.2 DQ'02 DQ'03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 8: Power Brands Sales
Power Brands Sales Power Brand Strategy Continues to Deliver Total Power Brands Growth% 6.2 3.7 DQ'02 DQ'03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 9: HPC Sales
HPC Sales Consistently beating the market HPC Market Growth% HPC Sales Growth% 6.1 4.4 -0.4 DQ'02 DQ'03 -5.7 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 10: HPC
HPC Power Brands Lead Growth HPC Sales Growth% HPC Power Brand Growth% 6.1 6.3 5.8 4.4 DQ'02 DQ'03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 11: HPC Power Brands
HPC Power Brands Delivering strong growth - DQ’03 Sunsilk : 64% Lakme :46% Pears : 34% CloseUp : 35% Clinic : 27% Pepsodent :17% FAL : 16% Wheel : 11% Lifebuoy : 10% Nihar : 10% * Group Basis DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 12: Total Foods Sales
Total Foods Sales Growth for 3rd Consecutive Qtr Food Market Growth% Food Sales Growth% 2.1 DQ'02 DQ'03 -5.9 -5.5 -14.4 * Total foods comprises Beverages, Processed Foods and Ice creams DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 13: Total Foods
Total Foods Power Brands Lead Growth Foods Sales Growth% Foods Power Brand Growth% 7.6 2.1 DQ'02 DQ'03 -6.1 -14.4 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 14: Total Foods Power Brands
Total Foods Power Brands Delivering strong growth - DQ’03 Kissan : 28% Knorr : 84% Bru : 36% Annapurna: 6% Taaza : 19% * Group Basis DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 15: Exports
Exports FMCG exports grow by double digit Growth % FMCG Exports Total Exports 13.1 14.3 4.9 DQ'02 DQ'03 -14.6 • FMCG Exports grow by smart double digit in all the 4 quarters in 2003 • Castor & Marine performance impacts total exports DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 16: Contents
Contents DQ’03 Highlights FY’03 Highlights Business Performance Financials DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 17: FY 2003 Results Highlights
FY 2003 Results Highlights • FMCG sales up (+3.6%); Power Brands growth (+6.9%) • HPC sustains growth(+4.6%) in a declining market(-4.9%) •Personal Products grow by (+14.8%) •HPC Power Brands up (+6.5%) Vs (+3.2%) in ‘02 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 18: FY 2003 Results Highlights
FY 2003 Results Highlights • In a declining market(-9.0% ) Foods sales were flat ; however •Processed Foods accelerates (+19.7%) •Foods Power Brands up by (+8.8%) Vs (-11.1%) in ‘02 •Beverages decline restricted to (-3.5%) • FMCG Exports grows by (+14.3%) DQ’03 & FY’03 Results Presentation 17th Feb,
Slide 19: FY 2003 Results Highlights
FY 2003 Results Highlights • Operating Profits (PBIT) improves by 5.8% - Margins up 75 bps • PBT & PAT factor in interest on Bonus Debentures (Rs 60 cr) • Profit After Tax (before exceptionals) grows by 4.2% DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 20: HPC Power Brands
HPC Power Brands Achieving growth in the face of competition Lakme :54% Lifebuoy : 20% FAL : 20% Nihar : 18% Sunsilk : 16% Pears : 13% P’dent :13% Ponds: 12% CloseUp : 10% Wheel : 7% Lux : 5% * Group Basis DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 21: Total Foods Power Brands
Total Foods Power Brands Achieving growth in the face of competition Kissan : 21% Knorr : 48% Bru : 27% Annapurna: 12% Brooke Bond : 6% * Group Basis DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 22: Power Brands
Power Brands Mega Six - each> $ 100 mn Wheel Lux Brooke Bond Rin Lifebuoy Fair & Lovely * Group Basis DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 23: Contents
Contents DQ’03 Highlights FY’03 Highlights Business Performance Financials DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 24: Soaps & Detergents Performance Highlights
Soaps & Detergents Performance Highlights • Innovation led growth continues in Personal wash – Lifebuoy and Pears lead; deliver double digit growth – Lux grows and gains substantial market share – Decline in Breeze and other brands restrict overall growth DQ’03 & FY’03 Results Presentation 17th Feb,
Slide 25: Soaps & Detergents Performance Highlights
Soaps & Detergents Performance Highlights • Powerful competitive actions in Fabric Wash – Aggressive strategy in response to Premium Fabric Wash competition • Strategy begins to show results • Surf Excel volumes surges : high double digit growth in DQ’03 – Wheel grows – Improved performance in Rin –
Slide 26: Personal Products: Strong broadbased growth
Personal Products Strong broadbased growth Growth in Strong Double Digits 19.4% • Across Quarters In DQ’03 Personal Products Growth% • Across Categories 14.8 • Across Brands 1.1 • Volume Led FY'02 FY'03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 27: Personal Products: Strong broadbased growth
Personal Products Strong broadbased growth Growth in Strong • Strong growth in Skin (+20.5%) Double Digits 19.4% In DQ’03 • Toothpaste grows by (+12.0%) Personal Products Growth% 14.8 • Volume led (+21.5%) growth in Shampoos • Innovation led double digit growth in Colors (+33.6%) 1.1 FY'02 FY'03 DQ’
Slide 28: Personal Products: All Power Brands Surge
Personal Products All Power Brands Surge FAIR & LAKME 53.8 PONDS NIHAR 17.5 19.9 11.6 LOVELY 18.6 7.6 1.0 0.1 FY'02 FY'03 FY'02 FY'03 FY'02 FY'03 FY'02 FY'03 2.8 SUNSILK 15.6 PEPSODENT 12.5 CLINIC CLOSE 9.6 UP FY'02 FY'03 FY'02 FY'03 FY'02 FY'03 FY'02 FY'03 -6.4 -15.8 -23.9 -4.6 DQ’03 & FY’03 Result
Slide 29: Beverages Strategic Actions
Beverages Strategic Actions • Master Brand “BROOKE BOND” launched 5.7 – Brooke Bond grows by (+6%) during the year Brooke Bond FY'02 FY'03 – Low Commodity prices & competition from loose tea continue -11.0 Master Brand grows in 2003 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 30: Beverages Strategic Actions
Beverages Strategic Actions Bru 27.1 • Coffee grows by 6.2% in 2003 10.7 – Instant Coffee grows by a strong 18.7% – Bru continues double digit growth (+27.1%) FY'02 FY'03 Continued double digit • Leveraging emerging opportunities growth – Exploiting ‘OOH’ – Driving Lipton equity in Ice Tea DQ’03 & F
Slide 31: Processed Foods On Growth Path
Processed foods On Growth Path... • Culinary Products on growth Path – 26.2% growth led by Kissan & Knorr • Popular Foods grows by (+11.4%) in 2003 – Annapurna grows by double digits 12.4 Kissan 21.3 Knorr 47.6 Annapurna FY'02 FY'03 FY'02 45.7 FY'03 -5.4 FY'02 FY'03 -22.7 DQ’03 & FY’03 Results Prese
Slide 32: Foods: Growth Opportunities through Innovations
Foods Growth Opportunities through Innovations “From the Knorr Stable” “From the Kissan Stable” Kissan Ketchups Knorr Soupy Snax Kissan Jams Kissan Bistix DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 33: Growing in the face of competition
Growing in the face of competition • New and attractive Price Points • Investments in Brand quality • Innovations • Exploiting emerging channels DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 34: New and attractive Price Points
Growing in the face of competition New and attractive Price Points Lux Dove Lifebuoy Vaseline FAL Ponds Cream Rs.5 Rs 25 Rs 2, Rs 4.50 Rs 4 Rs 5 Rs 5 Rs 5 Pepsodent Rs 10 Ponds DFT Surf Rin Rin Rs 20 Excel Shakti NMB Rs 40 Rs 5 Rs.1.50 Rs.1 Rs.5 Clinic/ Clinic Rs 5 Rs 5 Sunsilk Taaza Rs 0.50 DQ’03 &
Slide 35: Low Price Competition: Lifebuoy and Wheel
Growing in the face of competition Low Price Competition Lifebuoy Lifebuoy Growth% continues on 24 20.2 Sales : high growth >$100 Mn path FY'02 FY'03 Biggest Wheel Growth% detergent 5.8 6.7 Sales : >$100 Mn brand in India FY'02 FY'03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 36: Investments in Brand Quality
Growing in the face of competition Investments in Brand Quality “Improved performance & sensorials” Lifebuoy Lux Hamam Rexona Superior wash Rin NMB within budgets Rin Shakti Powder Wheel Active Rin Shakti Bar Wheel Double Whiteness - “No Mud” Total Investment > Rs 60 cr DQ’03 & FY’03 Results Present
Slide 37: Innovations
Growing in the face of competition Innovations Fair & Lovely - Anti Ponds Marks & Dark Skin Lakme - Water Color Sunsilk - Naturals Clinic - Mint Surf Excel - Kissan Bistix 50% Water & Effort Pepsodent - Family Pack DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 38: Exploiting emerging channels
Growing in the face of competition Exploiting emerging channels • HLL Network • Sales increases > 4 times • Exponential growth in coverage •Rural Initiative •Focused Distribution Infrastructure •Project Shakti •Touching 20 mn lives DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 39: Exploiting emerging channels: Modern Trade
Growing in the face of competition Exploiting emerging channels • Modern Trade – Leveraging HLL Scale & Scope – Direct engagement – Surging growth & Shares DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 40: Contents
Contents DQ’03 Highlights FY’03 Highlights Business Performance Financials DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 41: DQ 2003 Sales Summary
DQ 2003 Sales Summary Rs Crores DQ 2002 DQ 2003 Growth % Domestic FMCG 2119 2203 4.0 - HPC 1691 1766 4.4 - Total Foods 428 437 2.1 Exports 369 315 (14.6) Others 41 66 63.1 CONTINUING BUSINESSES 2528 2583 2.2 Disposals / Discontinued 106 0 NET SALES 2635 2583 (1.9) DQ’03 & FY’03 Results Presentation
Slide 42: DQ 2003 Results
DQ 2003 Results Rs Crores DQ 2002 DQ 2003 Growth % EBIT 626 632 1.0 Fin Income (net) 65 44 (32.8) 691 676 (2.2) Int on Bonus Deb -30 PBT 691 646 (6.5) Tax ( incl Deferred ) -148 -131 Tax adj prior year 14 48 PAT ( bei ) 557 562 1.0 Net Profit 481 495 2.9 DQ’03 & FY’03 Results Presentation 17th Feb,
Slide 43: Exceptional Items - DQ'03
Exceptional Items - DQ’03 Exceptional Items DQ'03 Amount (Rs Cr) Business Restructuring Cost: a) Provision for Est loss on disposal of FA (45.5) b) Compensations under VRS etc. (45.8) Additional provision for retirement benefits mainly (62.5) arising out of increase in annuity rates Savings due to F
Slide 44: Segmental Revenue
Segmental Revenue Rs Crores DQ 2003 % Growth Soaps and Detergents 1,095 (3.0) Personal Products 688 19.7 Beverage 309 (3.0) Processed Foods 108 (44.0) Memo : Process Foods (Cont) 108 24.0 Ice Cream 16 (8.8) Exports 315 (14.6) Others 107 Net Segment Revenue 2,630 (1.1) DQ’03 & FY’03 Results Presentat
Slide 45: Segmental Results
Segmental Results Rs Crores DQ'03 % Growth Soaps and Detergents 324 (2.2) Personal Products 294 15.2 Beverage 60 (14.3) Processed Foods 4 Ice Cream (5) 45.7 Exports 24 (38.0) Others (5) -- Total 695 1.6 Less : Interest (32) -- Add : Unallocable net income (17) -- Net Segment Result 646 (6.5) DQ’03 &
Slide 46: Segment Margins
Segment Margins 44.3 42.7 45 40 35 29.4 29.6 30 25.5 26.4 25 22.0 19.5 20 15 10.4 10 7.5 4.1 5 -3.4 0 -5 Detergents PP Beverages Foods Exports Overall -10 DQ '02 DQ '03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 47: FY 2003 Sales Summary
FY 2003 Sales Summary Rs Crores FY 2002 FY 2003 Growth % Domestic FMCG 8132 8427 3.6 - HPC 6437 6734 4.6 - Total Foods 1695 1693 (0.1) Exports 1221 1246 2.1 Others 157 246 56.9 CONTINUING BUSINESSES 9510 9920 4.3 Disposals / Discontinued 445 219 (50.8) NET SALES 9955 10138 1.8 DQ’03 & FY’03 Results
Slide 48: FY 2003 Results
FY 2003 Results Rs Crores FY 2002 FY 2003 Growth % EBIT 1926 2037 5.8 Fin Income (net) 271 268 (1.4) 2197 2305 4.9 Int on Bonus Deb -60 PBT 2197 2245 2.2 Tax (Curr + Def) -480 -488 Tax (Prior Period) 14 48 PAT ( bei ) 1731 1804 4.2 Net Profit 1770 1772 0.1 DQ’03 & FY’03 Results Presentation 17th Feb
Slide 49: Exceptional Items - FY'03
Exceptional Items - FY’03 Exceptional Items FY'03 Amount (Rs Cr) Edible Oils and Fats Disposal Profit 56.2 Business Restructuring Cost: a) Provision for Est loss on disposal of FA (54.2) b) Compensations under VRS etc. (45.8) c) Mushroom Disposal. (19.0) Additional provision for retirement benefits
Slide 50: Segmental Revenue
Segmental Revenue Rs Crores FY '03 % Grow th Soaps and Detergents 4,379 (0.1) Personal Products 2,410 15.0 Beverage 1,184 (3.9) Processed Foods 602 (15.7) Memo: Processed Foods (Cont) 385 18.5 Ice Cream 93 (12.9) Exports 1,246 (0.8) Others 367 Net Segm ent Revenue 10,245 2.1 DQ’03 & FY’03 Results Pr
Slide 51: Segmental Results
Segmental Results Rs Crores FY '03 % Growth Soaps and Detergents 1,088 (4.1) Personal Products 884 16.3 Beverage 226 (7.7) Processed Foods 1 101.9 Ice Cream 0 102.7 Exports 62 (35.8) Others (15) Total 2,245 2.5 Less : Interest (67) -- Add : Unallocable net income 67 -- Net Segment Result 2,245 2.2 D
Slide 52: Segment Margins
Segment Margins 45 40 36.3 36.7 35 30 25.9 24.8 25 21.6 21.8 19.8 19.0 20 15 10 7.6 4.9 5 -4.0 0.1 0 -5 Detergents PP Beverages Foods Exports Overall -10 FY '02 FY '03 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 53: Cash generation continues to be strong
Cash generation continues to be strong Cash Flow ‘03: Rs Crores Year 2003 Year 2002 Business Operation 2151 2062 WC Change (126) (44) Treasury income 267 272 Total Cash Generated 2292 2290 Interest on BD (60) Capex (188) (156) Tax paid (407) (441) Total Cash Deployed (655) (597) Surplus Cash Generat
Slide 54: Rewarding the shareholder
Rewarding the shareholder Dividend Per Share of Re 1 2002 2003 Interim 2.500 2.500 Final 2.659 3.000 Total 5.159 5.500 Distribution Tax 0.341 0.705 Total Payout 5.500 6.205 DQ’03 & FY’03 Results Presentation 17th Feb, 2004
Slide 55: In Summary...
In Summary... • Strategy on Course and delivers – Power Brand continues to lead growth – Power in Power : 6 mega brands – FMCG Share 93% of HLL – Foods Profitability momentum continues • Sustained generation of value and cash • Well poised for market challenges • Firmly in saddle to drive growth age
Slide 56: Thank You
Thank You DQ’03 & FY’03 Results Presentation 17th Feb, 2004