Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — JQ 2013 Earnings Presentation
29 slides from Hindustan Unilever's earnings presentation, Jul 27, 2013
Slide 1: JQ 2013 Results Presentation – July 27, 2013
JQ 2013 Results Presentation – July 27, 2013 1
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 1 Strategy 2 Business Context 3 Current Quarter Performance 4 Looking Ahead 3
Slide 4: Clear and Compelling Strategy
Clear and Compelling Strategy Strategic framework Sustainable Living Plan Goals Consistent Growth Competitive Growth Profitable Growth Responsible Growth 4
Slide 5: JQ 2013 – Context
JQ 2013 – Context Challenging business environment Further slowdown in market growth (volume & value) across categories • Premium segments & discretionary categories particularly under pressure • Price growth component continues to fade - relatively benign input environment in first half Overall
Slide 6: Input costs relatively benign during quarter
Input costs relatively benign during quarter Recent trend reversal Brent Crude PFAD Exchange Rate ($/barrel) ($/Ton) USD/INR 6 Source: Bloomberg data and internal estimates
Slide 7: JQ 2013 Competitive growth with strong margin improvement
JQ 2013 Competitive growth with strong margin improvement Domestic Consumer business grows by 7% • 4% Underlying Volume Growth, ahead of market • Further fade in price growth arising from deflation in Soaps and pricing anniversary in Detergents Operating Margin (PBIT) expands to 15.2%; up 70 bps
Slide 8: Price growth component fading
Price growth component fading 20 100 18 Domestic Consumer Business 16 90 14 80 12 5 70 10 6 8 60 6 50 10 4 4 6 40 2 3 - 30 DQ'12 MQ'13 JQ'13 Underlying volume growth Price growth Relatively benign input environment in first half Price deflation in Soaps & pricing anniversary in Detergents 8 Dome
Slide 9: Sustaining underlying volume growth in a slowing market
Sustaining underlying volume growth in a slowing market Underlying Volume Growth (UVG) Impact of Transport strike related up- stocking at end March DQ'12 MQ'13 JQ'13 Reported UVG 5% 6% 4% Normalized UVG 9
Slide 10: Winning with Brands: Continued focus on innovations
Winning with Brands Continued focus on innovations Surf excel Vim Domex Lakme Fresh Fairness Lakme Pond’s Lakme Axe Blast Detergent Liquid Anti Germ Liquid Zero Stain for Salon like Clean up CC cream BB Cream 9 to 5 Sunsilk Dove Cellular repair TRESemme – Taj Mahal Gold & Knorr Meal Makers Range of
Slide 11: Investing competitively AND expanding Margins
Investing competitively AND expanding Margins PBIT Margin % 16.0 15.2 14.9 14.5 14.3 13.7 MQ 2012 JQ 2012 SQ 2012 DQ 2012 MQ 2013 JQ 2013 Bps Change PBIT Margin +170 +180 +100 +40 +60 +70 A&P -80 +160 +70 +100 +90 +20
Slide 12: Growth across segments
Growth across segments Sales growth % Revenue growth % Soaps & Detergents 8 8 Personal Products 2 2 Beverages 17 16 Packaged Foods 6 5 Domestic Consumer grows at 7% Sales growth = Segment Turnover growth excluding Other Operational Income 12 Revenue growth includes Other Operational Income
Slide 13: Personal Product performance
Personal Product performance Excluding Skin, PP sustains double digit growth - ahead of market Market context: Sharp moderation in growth • Volume growth down >1000 bps in the last 12 months HUL Performance across categories Skin Care Hair Care Oral Care Colour Cosmetics FAL -- ++ ++ ++ Others + 1
Slide 14: Category Highlights
CATEGORY HIGHLIGHTS
Slide 15: Skin Cleansing: Sustaining strong performance
Skin Cleansing Sustaining strong performance Another quarter of double digit underlying volume growth • Lifebuoy , Breeze, Dove & Lux deliver robust volumes Consumer value improved – commodity cost benefit passed on • Further price deflation in quarter Liquids do well with continued market dev
Slide 16: Home Care: Growth led by premium segment
Home Care Growth led by premium segment Laundry: Surf & Rin sustain double digit growth • Broad based growth across Surf ; Rin led by bars • Wheel volumes improve further • Liquid portfolio expanded with launch of Surf excel Liquid Household Care : Strong growth led by Vim • Vim Anti Germ Dish W
Slide 17: Skin Care: Ponds, Lakme and Dove do well
Skin Care Ponds, Lakme and Dove do well Market volume growth flat Strong double digit UVG in Pond’s, Lakme & Dove FAL holding position in a slowing market segment; impacted by strong base effect • Plans underway to step up growth momentum Continued thrust on building Beauty expertise • Pond’
Slide 18: Hair Care: Volume led double digit growth
Hair Care Volume led double digit growth Good broad based growth • Sunsilk sustains strong momentum; Radiant Shine variant launched • Clinic Plus benefits from the relaunch • Dove performance led by bottles • Range strengthened - Cellular repair with keratin actives TRESemmé continues to do well
Slide 19: Oral Care: Sustained double digit growth
Oral Care Sustained double digit growth Close-up performance driven by exciting activation • Tie-up with blockbuster Bollywood film very well received • Launch of limited edition packs Pepsodent growth led by Expert Protection range • Good response on Trip to Disney land Hongkong promotion Inv
Slide 20: Color Cosmetics: Broad based growth across portfolio
Color Cosmetics Broad based growth across portfolio Strong double digit volume growth Lakme continues to strengthen its position in Premium Make up • ‘Absolute’ & ‘9 to 5’ - growing momentum; nearly double sales this quarter o ‘Absolute POPTINTs’ – successful limited edition launch at LFW o 9 to
Slide 21: Beverages: Tea growth accelerates
Beverages Tea growth accelerates Tea : strong activation and innovation led growth • All key brands grow in double digits • Taaza delivers robust growth on the back of its re-launch • Strengthened proposition around health for Red Label • Fresh range of premium teas introduced under Taj Mahal • Fo
Slide 22: Packaged Foods: Growth led by Kissan & Knorr soups
Packaged Foods Growth led by Kissan & Knorr soups Kissan delivers a strong performance Knorr led by sustained double digit growth in soups • Soupy Noodles making progress • Portfolio expanded with launch of ‘Easy to cook’ range Kwality Walls registers modest growth – continues to be impacted b
Slide 23: Pureit: Growth steps up in a slowing durables market
Pureit Growth steps up in a slowing durables market Pureit continues to strengthen leadership Innovations perform well and lead growth • RO, Advanced & UV devices grow volumes Portfolio expanded with launch of ‘Marvella ROSlim’ Strong emphasis on driving superior service standards • ‘Pureit
Slide 24: JQ 2013 – Results
JQ 2013 – Results Rs Cr Particulars JQ'12 JQ'13 Growth % Net Sales 6,250 6,687 7 PBITDA 966 1,086 12 PBIT 909 1,019 12 PBIT margin (%) 14.5 15.2 70 bps PAT bei 855 885 4 Net Profit 1,331 1019 (23) 4% Underlying Volume Growth, ahead of market Net Profit growth impacted by large property sale in b
Slide 25: JQ 2013 - PBIT to Net Profit
JQ 2013 - PBIT to Net Profit Rs Cr Particulars JQ’12 JQ’13 Growth % PBIT 909 1019 12.1 Add : Other Income 219 177 (19) Less : Finance Costs 5 6 18 Exceptional Items – Credit / (Charge) 605 106 (82) PBT 1727 1296 (25) Less : Tax (396) (277) (30) Net Profit 1331 1019 (23) • Other income includes • Int
Slide 26: JQ 2013 – Results Summary
JQ 2013 – Results Summary Competitive growth with margin improvement • 4% underlying volume growth, ahead of market • PBIT up 12%, margin expands +70 bps 26
Slide 27: Continuing to build for the future
Continuing to build for the future Beauty Foods & Beverages 27
Slide 28: Looking Ahead
Looking Ahead Strategy unchanged; continue to invest for competitive, profitable, consistent & responsible growth HUL well positioned : Brands, Capabilities, Talent Near term concerns • Slowing market • Volatility • Media inflation Remain positive on the medium-long term outlook for FMCG 28
Slide 29: For more information & updates
For more information & updates 29