Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — CLSA Investor Forum 2011
44 slides from Hindustan Unilever's conference presentation, 2011
Slide 1: Winning Today Winning Tomorrow
Winning Today Winning Tomorrow
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: Context: Turbo charging the Compass
Context Turbo charging the Compass
Slide 4: Context: Turbo charging the Compass
Context Turbo charging the Compass
Slide 5: India: Large consumption opportunity
India: Large consumption opportunity FMCG - $ bln 137 62 87 50 28 FY 10 E FY 15 P FY 20 P Base Case High Case CAGR of 12% in base case; 17% with high estimates *Source: Industry Reports
Slide 6: Penetration & Consumption: Head room for growth
Penetration & Consumption: Head room for growth Penetration Consumption All India penetration $ per capita consumption 79 Skin Care 7.9 Skin Care 48 4.3 0.8 Annual Monthly China Indonesia India Hair Care Shampoo 88 2.3 2.1 60 0.6 Annual Monthly China Indonesia India 89 Oral Care 3.3 Ice cream 60 1.7
Slide 7: Changing consumer aspirations: Favourable
Changing consumer aspirations: Favourable Demand Elasticity Personal Care/Foods Explosion LSM 1 LSM 2-4 LSM 5-7 LSM 8 LSM 8+ (new categories) 7.7 x LSM 8+ 4.9 x LSM 5-7 3.1 x LSM 2-4 1.7 x LSM 1 1x Laundry, Cleansing Pers Prod Foods 0 2000 4000 6000 8000 10000 Exp per HH / year (INR) HUL Participati
Slide 8: HUL uniquely positioned to leverage the opportunity
HUL uniquely positioned to leverage the opportunity Portfolio Capabilities Strong Brands Across Benefits & Price Points Consumer Understanding, Supply Chain, Go-to-Market Global Leverage Talent R&D, Brand Development, Buying No.1 Employer*, Diverse Talent Pool *awarded by Aon Hewitt in 2011
Slide 9: We have sharpened our strategy…
We have sharpened our strategy… …and stepped up focus on execution
Slide 10: Results
Results Domestic Consumer Business Growth 15% 14% 12% 11% 8% 8% MQ'10 JQ'10 SQ'10 DQ'10 MQ'11 JQ'11 UVG* 11% 11% 14% 13% 14% 8% Financials 2010-11 Growth Turnover $4.2 bn $410 mn EBIT margin 12.8% ∆ -190 bps EPS Cents 23 4.7% *Underlying Volume Growth; Conversion rate: 1$=INR 45.76
Slide 11: Externally recognized
Externally recognized Consumers Customers Most responsive supplier of the year 6 EMVIES in 2011 6th most innovative eQ* at 89 Value Award by company globally - Forbes (world class level) TESCO India *Nielsen Equity Management Program Score Employees Communities Golden Peacock Global Award for Corpor
Slide 12: Context: Turbo charging the Compass
Context Turbo charging the Compass
Slide 13: Turbo charging the Compass
Turbo charging the Compass Driving virtuous circle of growth
Slide 14: How will we win
How will we win NON-NEGOTIABLES 1 Deliver superior products, design, branding and marketing Winning with brands and 2 Bigger, better, faster innovations innovation 3 Appeal to more consumers across needs and price points 4 Lead market development Winning in the 5 Win with winning customers NV1d SNIA
Slide 15: Deliver superior products
Deliver superior products Portfolio with blind >50% of portfolio product wins: tripled launched/ relaunched 3X 2X Personal Products X Soaps & Detergents Packaged Foods Beverages Water
Slide 16: Win in core…
Win in core… Soaps & Detergents Beverages
Slide 17: …and drive categories of tomorrow
…and drive categories of tomorrow Personal Products Packaged Foods
Slide 18: Winning in Skin & Hair Care
Winning in Skin & Hair Care Reshaping our portfolio Building future segments Transforming the experience Integrated communication
Slide 19: Reshaping our portfolio
Reshaping our portfolio Towards aspirational beauty and expertise
Slide 20: Leading market development
Leading market development New benefits Anti Aging Premium Whitening Colour Cosmetics New regimes Hair Conditioners Hair treatments New consumers Male consumers
Slide 21: Transforming experience
Transforming experience Through Point of Sale Beauty Salons Assisted sales with professionally trained Lakme Salons: Evolving Beauty Advisors: Largest footprint beauty experience
Slide 22: With integrated communication
With integrated communication Traditional media CRM Online CRM: Consumer Relationship Module
Slide 23: Strategy delivering results
Strategy delivering results Premium Skin Lightening Hand & Body Market Size in $ Mln Market Size in $ Mln VHW Share 278 163 HUL Share 213 126 182 146 77 57 2008 2009 2010 2011 2008 2009 2010 2011 Hair Conditioners Face Wash Market Size in $ Mln 174 Market Size in $ Mln HUL Share HUL Share 129 87 42
Slide 24: Personal Products: Driving growth
Personal Products: Driving growth Portfolio contribution Growth contribution PP* / Total sales PP incremental/ Total incremental sales (FY 2010-11) (FY 2010-11) Personal Products Rest *PP: Personal Products
Slide 25: Building Packaged Foods with Knorr & Kissan
Building Packaged Foods with Knorr & Kissan Building Savoury Soups Soupy Noodles Dish Penetration Building Spreads & Dressings
Slide 26: Accelerating growth in Ice Creams
Accelerating growth in Ice Creams Leveraging strong portfolio Leading market development Creating Successfulout of home experience implementation of MDM Delivering results $ mn revenue - CAGR 22% More than 150 parlours * Calendar Year; ^ Financial Year
Slide 27: How will we win
How will we win NON-NEGOTIABLES Winning with brands and innovation Winning in the marketplace 1 2 3 4 5 6 Deliver superior products, design, branding and marketing Bigger, better, faster innovations Appeal to more consumers across needs and price points Lead market development Win with winning custo
Slide 28: Win with winning customers: Rural
Win with winning customers: Rural Rural coverage tripled in 2010 Every village in the country mapped Technology leveraged for blueprinting Rigorous ROI model for each state Shakti & Shaktiman Khushiyon ki Doli 45000 Shakti Ammas & 23000 Largest ever consumer contact programme Shaktiman acr
Slide 29: Win with winning customers: Modern Trade
Win with winning customers: Modern Trade eQ* at 89 MT Share > GT Shares Continuous improvement (world class level) in Increasing Market (145 bps gain in 09) Customer Service Shares Profitability Improved *Nielsen Equity Management Program Score
Slide 30: Execution powerhouse: Project iQ
Execution powerhouse: Project iQ • Rolled out Nationally • Drive higher throughput through perfect stores
Slide 31: How will we win
How will we win NON-NEGOTIABLES 5 6 7 Deliver superior products, design, branding and marketing Bigger, better, faster innovations Appeal to more consumers across needs and price points Lead market development Win with winning customers Be an execution powerhouse Lean, responsive and consumer led va
Slide 32: Lean, responsive & consumer led value chain
Lean, responsive & consumer led value chain Consumer Perceived Quality • Product incidents • Consumer complaints E2E Competitive Cost • Manufacturing & Distribution excellence Service & • Commodity Risk Execution Management • CCFOT • OSA *CCFOT: Customer Case Fill On Time; OSA: On Shelf Availability
Slide 33: Results
Results Integrated Service & Competitive Quality Culture Execution Cost 2700+ Distributors Global Buying Scale MT Distribution & Multi-functional Collaboration Savings 123 125 140 100 127 100 Reduction in consumer complaints # Improvement in Shelf QDI 2007 2009 Current 2009 2010 2011 Indexed CCF
Slide 34: ROMI: Comprehensive approach
ROMI: Comprehensive approach Optimum allocation to Optimised promotional advertisement, promotions sell out & trade spends Optimal advertising production & fee ROMI: Return on Marketing Investment
Slide 35: Results
Results AD Preview Score Indexed production & media fees Driving promotional efficiencies CY2010 YTD June'11
Slide 36: How will we win
How will we win NON-NEGOTIABLES 1 Deliver superior products, design, branding and marketing Bigger, better, faster innovations Hf ig q a 3 Appeal to more consumers across needs and price points 4 Lead market development Winning in the 5 Win with winning customers 6 Be an execution powerhouse 7 Lean,
Slide 37: Winning with People
Winning with People # 1 Dream employer across High people engagement campuses HUL 65 TAS 62 P&G 59 BCG 55 .McKinsey & Co 53 # 1 Best employer in India, 2011 awarded by Aon Hewitt Indexed Employee Engagement Scores
Slide 38: Building a consumer & customer centric organisation
Building a consumer & customer centric organisation Consumer & Customer Centricity 3500 employees on street, Customer Credo 16,000 outlets converted into perfect stores
Slide 39: Driving a new performance culture
Driving a new performance culture Comprehensive Framework Measured by Business Performance Results Culture Index
Slide 40: How will we win
How will we win NON-NEGOTIABLES Winning with people 11 12 Deliver superior products, design, branding and marketing Bigger, better, faster innovations Appeal to more consumers across needs and price points Lead market development Win with winning customers Be an execution powerhouse Lean, responsive
Slide 41: Leading responsible growth
Leading responsible growth GROW MARKETS ENSURE SUSTAINABLE RESPONSIBLE RESPONSIBLY PRACTICES LEADERSHIP
Slide 42: Launched India Water Body
Launched India Water Body aay oot use: ~ St - Ae (Five Water: conservation projects live ins districts ie yada : : =i ——— —. <2 ) et. - ” See SS tie Plas { “RG Senet s ae = Y Ke _ : 300000 people to - benefit aM, ie LVASSA billi ae eae over 50 billion BIDAR e gousires liters of water to be . harvest
Slide 43: Business Goals… unchanged
Business Goals… unchanged • Winning with Brands and Innovations Growth • Competitive • Profitable Growth 2 0 0 9 1 1 • Sustainable Growth
Slide 44: Thank You
Thank You