Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — CLSA Investors' Forum 2013
43 slides from Hindustan Unilever's conference presentation, 2013
Slide 1: CLSA Investors' Forum 2013
R SRIDHAR · CLSA INVESTORS’ FORUM 2013
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: Introducing Hindustan Unilever Limited (HUL)
INTRODUCING HINDUSTAN UNILEVER LIMITED (HUL) FY 2012 - 13 USD 4.7 billion USD 700 million USD 32 cents INR / USD = 54.45 (average for FY 2012-13) Segments % Revenue % Results Soaps & Detergents 49.3 40.0 Personal Products 29.0 48.3 Beverages 11.6 11.8 Packaged Foods 5.9 0.9 Others 4.2 -1.0 • Leading
Slide 4: Driven by a Compelling Strategy & Goals
DRIVEN BY A COMPELLING STRATEGY & GOALS Strategic framework Sustainable Living Plan Our Goals Winning Today, Winning Tomorrow • Consistent Growth • Competitive Growth • Profitable Growth • Responsible Growth
Slide 5: We Have Delivered on Our Goals
WE HAVE DELIVERED ON OUR GOALS Consistent & Competitive Growth Profitable Growth Domestic Consumer 14.9% 14.1% ~Rs 35 +80 Bln bps Turnover 2011-12 2012-13 USG 18 16 UVG 9 7 PBIT Margin Domestic Consumer Business = Domestic FMCG + Water; USG: Underlying Sales Growth; UVG: Underlying Volume Growth
Slide 6: Made Progress on Our Sustainability Priorities
MADE PROGRESS ON OUR SUSTAINABILITY PRIORITIES 45 million people gained Reduced CO2 emissions by 22%, 69% of our agri raw access to safe drinking water use by 29%, waste by 77%* materials sourced from water through Pureit sustainable sources Out of 38, 30 HUL factories have 47 million people touched
Slide 7: Sustained Our Strong Track Record
SUSTAINED OUR STRONG TRACK RECORD 109% 45.5 97% 95% 88% 35.4 78% 74% 25.5 Return on Capital Employed Return on Net Worth Cash from Operations (Rs Bln)
Slide 8: Continued to Build Bigger Brands
CONTINUED TO BUILD BIGGER BRANDS Now Rs 1000 Cr+ Soap | Facewash | Bodywash | Body Lotions | Deodorant | Shampoo | Conditioner | Hair Oils 2010-11 The 1000 7 CrORE Club 2012-13 10
Slide 9: Continued to Win with Consumers & Customers
CONTINUED TO WIN WITH CONSUMERS & CUSTOMERS 18 HUL brands feature in ‘Most ‘Supplier of the Year’ Award from Trusted Brands’ 2012 List Walmart, Tesco, Metro, Hypercity
Slide 10: Retained Our Top Employer Position
RETAINED OUR TOP EMPLOYER POSITION Employer Brand Best Employer Best Employer Brand Asia Dream Employer : 4 Years in a row Source: Nielsen / Bloomberg
Slide 11: Continued to Be Recognized
CONTINUED TO BE RECOGNIZED AIMA Forbes HUL in Super 50 list of FORTUNE HUL No. 2 in Fortune India’s list of Most Admired Companies HUL is Multinational of the Year at AIMA Managing Awards 2013 ‘The World’s Most Innovative Companies’ : (ricci IR GLOBAL HUL wins Golden Peacock QQ, Occupational Health
Slide 12: Continued to Reward Our Shareholders
CONTINUED TO REWARD OUR SHAREHOLDERS Particulars FY 2011-12 FY 2012-13 18.5 Dividend Per Share 7.5 18.5 Interim 3.5 4.5 Special - 8.0 7.5 Final 4.0 6.0 6.5 Total Dividend (Rs billion) 16.2 40.0 Dividend Distribution Tax (Rs billion) 2.6 6.6 Dividend Per Share of Re. 1 Total Dividend Outflow (Rs bill
Slide 13: Winning Today, Winning Tomorrow
wes WINNING TODAY WINNING TOMORROW DESH MVE LER MIG SO % bO Vw HE! Ni
Slide 14: Looking Ahead, as India Evolves
LOOKING AHEAD, AS INDIA EVOLVES young & aspiring consumers rising incomes & affluence a very different rural India increasing urbanization evolving trade environment aware & connected
Slide 15: The Outlook for FMCG in the Medium-Long Term Remains Attractive
THE OUTLOOK FOR FMCG IN THE MEDIUM – LONG TERM REMAINS ATTRACTIVE Emerging Trends Head room for growth Large Opportunity Skin Creams Penetration – All India CII FMCG Roadmap 2020 c. 80% c. 50% c. 35% Annual Quarter Month Nascent Categories Penetration - All India 8% 6% 5% 5% Face Wash Body Lotions H
Slide 16: However, in the Near Term..
HOWEVER, IN THE NEAR TERM.. Slowing Economic Growth Moderating FMCG market growth High Consumer Inflation 11 10 10 10 >600 bps 8 4 SQ'12 DQ'12 MQ'13 JQ'13 Food Inflation CPI GDP Growth % OVERALL MARKET VOLUME GROWTH Jan-12 Avg 2012 Jul-13 Source: Trading Economics, MOSPI, Nielsen
Slide 17: We Remain Committed to Our Strategy
WE REMAIN COMMITTED TO OUR STRATEGY Strategic Framework Sustainable Living Plan Our Goals Winning Today, Winning Tomorrow • Consistent Growth • Competitive Growth • Profitable Growth • Responsible Growth
Slide 18: Winning Today, Winning Tomorrow
wes WINNING TODAY WINNING TOMORROW DESH MVE LER MIG SO % bO Vw HE! Ni
Slide 19: Driving Preference with Consumers
1 DRIVING PREFERENCE WITH CONSUMERS
Slide 20: Reaching Up, Down and Wide
REACHING UP, DOWN AND WIDE Straddling the pyramid Accessible packs/formats
Slide 21: Superior Products & Service
SUPERIOR PRODUCTS & SERVICE Blind Product Wins Quality (Red) Incidents % Redefining Standards 3.8% 65% 1.3% 2010 2012 2011 2012 CRQS: Consumer Relevant Quality Standards
Slide 22: Exciting Innovation Across the Portfolio
EXCITING INNOVATION ACROSS THE PORTFOLIO Innovation touched >50% of portfolio in 2012; we continue to invest and build for the future
Slide 23: Anticipating Evolving Needs to Reshape Portfolio
ANTICIPATING EVOLVING NEEDS TO RESHAPE PORTFOLIO
Slide 24: Leveraging Global to Win Local
LEVERAGING GLOBAL TO WIN LOCAL
Slide 25: Competitive Brand Investments
COMPETITIVE BRAND INVESTMENTS Higher Brand Support Brand Equity Scores 12.9 12.1 up 23% 80% of the portfolio holding or gaining* 2011-12 2012-13 *Measured for the top 25 brands; Q42012 Vs. Q42011
Slide 26: 'Be Digital': Embracing the Change
2 ‘BE DIGITAL’ : EMBRACING THE CHANGE
Slide 27: Structured Interventions, Digital Hub, Mobile Day, Media Lab
Structured Interventions Digital Hub Mobile Day Media Lab >10,000 man hours Launched March 2013 Employee Immersions Launched April 2013 500+ people 3rd largest globally Voice / Video Social / Search Reverse Mentoring Apps / Games
Slide 28: Social
Social Ne ( ee > Search Al : i
Slide 29: Stepping Up Investments in Digital
& Stepping up investments Working with CMI to measure Optimizing Planning ~3X 2010 2011 2012 Digital spends
Slide 30: Building the Execution Edge in the Marketplace
3 BUILDING THE EXECUTION EDGE IN THE MARKETPLACE
Slide 31: Technology Enabling Feet on the Street
TECHNOLOGY ENABLING FEET ON THE STREET Front Line of Execution Enabled by a Smart Device Strong IT backbone Samsung Android Tablet Smartphone Android & Windows Smartphone Android & Windows Entry level Android Smartphone Entry Level Mobile phone on Java Every Day Great Execution
Slide 32: Driving Quality of Reach: Perfect Stores
DRIVING QUALITY OF REACH: PERFECT STORES Bill Data + Sophisticated Analysis = Simple Outlet level Jobs To Be Done • Right Availability • Right Assortment • Right Merchandising Deploying technology and analytics to win in the marketplace Perfect Stores growth & share > Other Stores growth & share
Slide 33: Scaling Up in Rural
SCALING UP IN RURAL Dramatic expansion in reach Shakti HUL – Tata Teleservices Alliance Reach = Competitive Advantage 2012 >3x 48,000 Shaktiammas 2009 >30,000 Shaktimaans 135,000 Villages Active in 13 Circles
Slide 34: Leading Market Development in Rural
LEADING MARKET DEVELOPMENT IN RURAL Driving adoption of new categories Retail Consumer Contact Awareness
Slide 35: Winning in Modern Trade
WINNING IN MODERN TRADE Customer Collaboration In-Store Execution Shopper Activation Category Advisorship with Dominant POS visibility across • Joint Shopper Activation Bharti Walmart for Personal key stores with modular, cut Partnerships with Key Customers Wash, Hair and Skin through assets • Shopp
Slide 36: Building Capability for Shopper Insight
BUILDING CAPABILITY FOR SHOPPER INSIGHT
Slide 37: Lean, Agile & Efficient
LEAN, AGILE & EFFICIENT INNING TODAY INNING TOMORROW
Slide 38: End to End Cost Focus
END TO END COST FOCUS Cost Savings* Non Material Supply Chain Costs* Overheads* 100 100 131 100 85 72 2010 2011 2012 2010 2011 2012 2010 2011 2012 Savings Up, Costs Down *All charts indexed to 2010 (Base = 100)
Slide 39: Efficient Supply Chain
EFFICIENT SUPPLY CHAIN Service up, Inventory down Innovation OTIF Capex Productivity CCFOT 92% Productivity Improvement Inventory DOH (Indexed) New Capital Investment 80% 100 93 48% 39% ~10% Capacity 88 added in 87 61% 52% 2012 2010 2011 2012 2010 2012 2011 2012 . CCFOT: Customer Case Fill On Time;
Slide 40: An Organization with a Winning Culture
5 AN ORGANIZATION WITH A WINNING CULTURE
Slide 41: Winning with & through Our People
WINNING WITH & THROUGH OUR PEOPLE Strong Organizational Consumer & Bias for Values Diversity Customer Centricity Action PERFORMANCE CULTURE
Slide 42: HUL Well Positioned
HUL WELL POSITIONED Strong Brands Leading Category Positions Portfolio – Up, Wide & Down HUL at No.1 or strong No. 2 position across categories Capabilities, Competitive Edges Global Leverage Talent Powerhouse
Slide 43: CLSA Investors' Forum 2013
R SRIDHAR · CLSA INVESTORS’ FORUM 2013