Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Hindustan Lever — Q2 2006 Earnings Presentation
37 slides from Hindustan Unilever's earnings presentation, Jul 31, 2006
Slide 1: Hindustan Lever Limited Results – JQ '06 Analyst Meet
Hindustan Lever Limited Results – JQ ’06 Analyst Meet 31 July 2006
Slide 2: Results Summary - JQ'06
Results Summary - JQ’06 • Net Sales grow by 8.7%, Continuing business up 10.0% • FMCG grows by 12.1%; HPC 13.9%, Foods 3.9% • Soaps & Detergents (+13.1%), Personal Products (+15.1%)* • Beverages (-3.7%), Processed Foods (+24.2%), Icecream (+34.3%) • A&P spends higher by 20.5% • PBIT grows by 21.9% •
Slide 3: Highlights
Highlights • FMCG market growth continues - both urban and rural markets growing well • 2/3rd of FMCG sales growth is volume led • Key competitive categories of Laundry & Shampoo maintain growth momentum • Thrust on brand investments and innovation continues • Cost savings, buying efficiencies and j
Slide 4: FMCG Market growth
FMCG Market growth Growth driven by rural markets % 13 .6 14 .0 9 .9 10 .2 9 .1 8 .4 7 .7 6 .0 8 .4 4 .6 3 .8 6 .4 4 .2 5 .8 1.8 4 .8 3 .7 4 .6 1.4 1.0 2 .2 ( 0 .2 ) 1.9 2 .5 0 .6 1.7 JQ'04 SQ'04 DQ'04 M Q'05 JQ'05 SQ'05 DQ'05 M Q'06 JQ'06 ( 0 .9 ) Total FMCG m arket Urban Rural Good agricultural gr
Slide 5: Continuing Sales growth
Continuing Sales growth 3083 2974 2804 2798 2732 9 14 14 13 10 JQ'05 SQ'05 DQ'05 MQ'06 JQ'06 Continuing Sales (Rs crores) Growth y-o-y (%) * Adjusting for demergers, disposals JQ’06 Results - 31 July 2006
Slide 6: Double-digit FMCG growth sustained
Double-digit FMCG growth sustained 2731 2583 2501 2435 2383 12 16 16 18 12 JQ'05 SQ'05 DQ'05 MQ'06 JQ'06 FMCG Sales (Rs crores) Growth y-o-y (%) Underlying FMCG volume growth 7.7% JQ’06 Results - 31 July 2006
Slide 7: Segment growths
Segment growths Segment Market Growth % Growth % Soaps & Detergents 13.1 9.6 Personal Products 13.3 12.2 Beverages (3.7) 5.5 Processed Foods 24.2 9.0 Ice Cream 34.3 NA FMCG 12.1 10.2 Market growth - Source: A. C. Nielsen JQ’06 Results - 31 July 2006
Slide 8: Home & Personal Care
ae us Home & Personal Care
Slide 9: All key HPC categories grow
All key HPC categories grow Laundry Shampoo Skin Personal Wash Toothpaste HPC growth - Value 13.9%, Volume 9.5% JQ’06 Results - 31 July 2006
Slide 10: HPC - Category performance - Laundry
HPC - Category performance - Laundry • Strong growth , primarily volume led • Good portfolio performance - All brands grow well • Surf Excel relaunched - ‘Dirt is Good’ and 10/10 proposition • New extensions in the category • Fabric Liquid - Surf Excel Gentle Wash launched, • Fabric Conditioner - Co
Slide 11: HPC - Category performance - Personal Wash
HPC - Category performance - Personal Wash • Volume led growth momentum sustained • Good growth in Lux – Introduction of 2 variants - Aqua Sparkle & Festive Glow in MQ’06 – Gains 280 bps share in 12 months • Entire Lifebuoy range relaunched with better sensorial, improved product performance and new
Slide 12: HPC - Category performance - Shampoo
HPC - Category performance - Shampoo • Strong volume and value growth • All brands - Sunsilk, Clinic Plus, Clinic All Clear grow well • Introduction of variants - Clinic All Clear Hairfall Defense in SH’05 , Ice Cool in current quarter – Clinic All Clear gains 270 bps share in 12 months • Entire Sun
Slide 13: HPC - Category performance - Skin
HPC - Category performance - Skin • Good volume led growth • Fair & Lovely leads the growth – Fairness Meter and Sunblock launched, Ayurvedic relaunched, Menz Active test launched • Vaseline ‘Aloe Fresh Summer Body Lotion’ launched in MQ’06 help the brand grow well in an off-season • Ponds’ top-end
Slide 14: HPC - Category performance - Toothpaste
HPC - Category performance - Toothpaste • Closeup leads growth in category – Good performance by CloseUp Milk Calcium launched in MQ • Modest growth in Pepsodent – Pepsodent Complete 10/10 launched JQ'05 Value Share JQ'06 32.5 Toothpaste 30.2 Market shares - Source: A. C. Nielsen JQ’06 Results - 31
Slide 15: Key Innovations/Activations - FH'06
Key Innovations/Activations - FH’06 Lifebuoy range relaunch New variants Wheel Active relaunch Vim liquid Niche products - relaunch Migration Surf Excel Gentle Wash & Comfort Fabric Conditioner Surf Excel range relaunch JQ’06 Results - 31 July 2006
Slide 16: Key Innovations/Activations - FH'06
Key Innovations/Activations - FH’06 FAIR & LOVELY Fairness Meter Menz Active Test Ayurvedic Sunblock launch Relaunch Elle 18 Nail & Lip range relaunch Vaseline Aloefresh Summer body lotion Lakme Happy Hour collection JQ’06 Results - 31 July 2006
Slide 17: Key Innovations/Activations - FH'06
Key Innovations/Activations - FH’06 CloseUp Milk Calcium Ponds launch Top-end range New Rexona Deos Pepsodent Complete Clinic All Clear Ice Cool launch Sunsilk range relaunch JQ’06 Results - 31 July 2006
Slide 18: Foods
Foods
Slide 19: Foods Topline
Foods Topline Tea Coffee Icecream Salt Atta Culinary Beverages - (3.7%) Processed Foods - 24.2% Icecream - 34.3% Foods - 3.9% JQ’06 Results - 31 July 2006
Slide 20: Foods - Category performance - Beverages
Foods - Category performance - Beverages • Tea declines in a sluggish market • Brand investments stepped-up - higher A&P • ‘Taj Mahal’ range relaunched • Instant Coffee leads growth in Coffee JQ'05 Value Share JQ'06 29.9 Tea 29.1 44.6 Total Coffee 46.2 Market shares - Source: A. C. Nielsen JQ’06 Res
Slide 21: Foods - Category performance - Proc Foods
Foods - Category performance -Proc Foods • Strong growth driven by successful brand relaunches • Annapurna in SQ’05, Knorr in DQ’05 and Kissan in MQ’06 • All brands (Knorr, Kissan, Annapurna) and product categories grow JQ’06 Results - 31 July 2006
Slide 22: Foods - Category performance - Icecream
Foods - Category performance -Icecream • Highest ever quarterly growth at 34% led by impulse category • Growth driven by focus on availability, affordability and excitability • Business turned around in 2005, highest PBIT margins in over 3 years recorded in JQ’06 JQ’06 Results - 31 July 2006
Slide 23: Key Innovations/Activations - FH'06
Key Innovations/Activations - FH’06 Taj Mahal tea and Kissan range relaunch JQ’06 Results - 31 July 2006
Slide 24: Key Innovations/Activations - FH'06
Key Innovations/Activations - FH’06 Ice Creams - Season 2006 range JQ’06 Results - 31 July 2006
Slide 25: Exports and Other ventures
Exports and Other ventures
Slide 26: Exports Topline
Exports Topline FMCG Specialty (Non-FMCG) Growth in FMCG exports offset by decline in Specialty JQ’06 Results - 31 July 2006
Slide 27: Other Ventures
Other Ventures Shakti z Now extended to 370 districts in 15 states, Over 80,000 villages covered z 24,000 Shakti entrepreneurs, touching 90 mn rural lives z In districts where Shakti is operational for some time, it accounts for 20-25% of HLL’s rural sales Water z Extended to over 15 key cities in T
Slide 28: Financial performance
ae us Financial performance
Slide 29: Sales summary
Sales summary Rs Crores JQ'06 JQ'05 Growth% HPC 2286 2007 13.9 Foods 444 428 3.9 FMCG 2731 2435 12.1 Exports 329 322 1.9 Others 24 46 (48.5) Continuing business 3083 2804 10.0 Discontinued business 0 33 (99.9) Net Sales 3083 2836 8.7 JQ’06 Results - 31 July 2006
Slide 30: Results
Results Rs Crores JQ'06 JQ'05 Growth% PBIT 421 345 21.9 PBIT margin (percentage) 13.6 12.2 140 bps Financial Income (Net) 42 43 (1.5) PBT 463 388 19.3 PAT bei 379 300 26.2 Exceptional Items 1 (19) NM Net Profit 381 282 35.1 • PAT bei higher (than PBT) due to tax incentives • Net Profit higher (than
Slide 31: Results: PBIT Margin Trends
Results: PBIT Margin Trends % 16.4 13.6 12.2 12.7 11.9 10.5 MQ '05 JQ '05 SQ '05 DQ '05 MQ '06 JQ '06 FH 2005 = 11.4% FH 2006 = 12.8% JQ’06 Results - 31 July 2006
Slide 32: Investment behind brands stepped up
Investment behind brands stepped up FMCG A&P as a % of FMCG Sales 12.4 12.2 11.4 10.3 9.7 JQ ’05 JQ ’06 2004 2005 FH 2006 • FMCG A&P spend for JQ’06 (Rs 340 crores) increases by 21% y-o-y JQ’06 Results - 31 July 2006
Slide 33: Results: Key Raw Material price trends
Results: Key Raw Material price trends Soda Ash Caustic Soda LAB 156 137 110 Indexed to 100 DQ'04 MQ'05 JQ'05 SQ'05 DQ'05 MQ'06 JQ'06 • Rising raw material prices pose a continuing challenge JQ’06 Results - 31 July 2006
Slide 34: Board recommends an interim dividend of Rs 3.00 per share
Dividend • Board recommends an interim dividend of Rs 3.00 per share Dividend Per Share of Re 1 2006 2005 Interim 3.00 2.50 Distribution Tax 0.42 0.35 Total Interim Dividend 3.42 2.85 JQ’06 Results - 31 July 2006
Slide 35: To sum up..
To sum up.. • Broad-based double digit sales growth; and ahead of market • Growth momentum sustained in competitive categories of Laundry and Shampoo • Looking forward: • Thrust on innovation, market activation and appropriate A&P spends behind brands will continue, for driving growth • Continued co
Slide 36: Thank you
Standard background – white/icon Thank you JQ’06 Results - 31 July 2006
Slide 37: Hindustan Lever Limited Results – JQ '06 Analyst Meet
Hindustan Lever Limited Results – JQ ’06 Analyst Meet 31 July 2006