Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Hindustan Lever — FY2001 Earnings Presentation
48 slides from Hindustan Unilever's earnings presentation, Jan 22, 2002
Slide 1: Results 2001
HINDUSTAN LEVER LIMITED Analyst Meet Mumbai, January 22, 2002 Results 2001 © HLL 2002 1
Slide 2: Economy
Economy Economy 2
Slide 3: Economic slowdown continuing
economic economic slowdown slowdown continuing continuing g GDP growth decelerates to 5% g Fiscal deficit continues to be under pressure; however, inflation continues to slide g Rupee depreciated by 2.7% in SH ’01; FY ‘01: 3.3% g Overall markets remain depressed in 2001; demand declines in several F
Slide 4: Results: 2001
Results: Results: 2001 2001 4
Slide 5: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) 5
Slide 6: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) g Operating margin for the year improves from 14.8% to 16.1% and Foods profit doubles 6
Slide 7: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) g Operating margin for the year improves from 14.8% to 16.1% and Foods profit doubles g PAT growth 17.6% for the year; 16.4% for DQ 7
Slide 8: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) g Operating margin for the year improves from 14.8% to 16.1% and Foods profit doubles g PAT growth 17.6% for the year; 16.4% for DQ g Exceptional income
Slide 9: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) g Operating margin for the year improves from 14.8% to 16.1% and Foods profit doubles g PAT growth 17.6% for the year; 16.4% for DQ g Exceptional income
Slide 10: Highlights of 2001
highlights highlights of of 2001 2001 g Power Brands grow by 6.5% in the year (8.2% for DQ) to deliver company topline growth of 3.5% (4.3% for DQ) g Operating margin for the year improves from 14.8% to 16.1% and Foods profit doubles g PAT growth 17.6% for the year; 16.4% for DQ g Exceptional income
Slide 11: Results for 2001
results results for for 2001 2001 Rs crore FY 2001 FY 2000 % Growth Net Sales 10972 10604 3.5 Other Income 382 345 10.6 Costs1 (9411) (9284) 1.4 PBT 1943 1665 16.7 Tax (incl. Deferred Tax) (402) (355) 13.2 PAT 1541 1310 17.6 Exceptional Items (net) 100 – Net Profit 1641 1310 25.3 1incl restructuring
Slide 12: Like-to-like comparison
like-to-like like-to-like comparison comparison g IN g OUT g Lakme Lever g Quest g Lipton Exports g Animal Feeds g Bestfoods g Nickel Catalyst g Aviance g Adhesives % Growth DQ 2001 2001 Published Comparable Published Comparable Net Sales 4.3 3.7 3.5 2.8 PAT 16.4 23.8 17.6 21.0 12
Slide 13: Shareholder will be delighted!
shareholder shareholder will will be be delighted! delighted! Rs 2001 2000 Interim 2.50 1.50 Final (Proposed) 2.50 2.00 2001 dividend Total 5.00 3.50 includes distribution Dividend per share of Re 1 from exceptional income 13
Slide 14: A strong balance sheet...
aa strong strong balance balance sheet... sheet... Rs crore Dec 2001 Dec 2000 Share Capital 220 220 Reserves 2823 2268 Loan Funds 84 112 Total 3127 2600 Fixed Assets 1320 1203 Investments & Deposits 2325 2143 Other Current Assets (net) (764) (746) Deferred Tax 246 – Total 3127 2600 14
Slide 15: ...and high profitability continues
…and …and high high profitability profitability continues continues Rs crore FY 2001 FY 2000 % Growth Net Sales 10972 10604 3.5 Operating Profit 1761 1567 12.4 Operating Margin % 16.1 14.8 2001 2000 Return on Net Worth % 53.9 52.6 ROCE % 62.4 64.5 15
Slide 16: Results: DQ 2001
Results: Results: DQ DQ 2001 2001 16
Slide 17: Quarter sales grow by 4.3%, PBT by 17.4%
quarter quarter sales sales grow grow by by 4.3%, 4.3%, PBT by PBT by 17.4% 17.4% Rs crore DQ 2001 DQ 2000 % Growth Net Sales 2763 2648 4.3 Other Income 75 86 (12.6) Costs1 (2228) (2214) 0.6 PBT 610 520 17.4 Tax (incl. Deferred Tax) (110) (90) PAT 500 430 16.4 Exceptional Items (net) (64) – Net Prof
Slide 18: FMCG lead sales growth
FMCG lead FMCG lead sales sales growth growth Rs crore DQ 2001 DQ 2000 % Growth Net Sales 2763 2648 4.3 FMCG 2305 2138 7.8 HPC 1658 1502 10.3 Foods 647 636 1.8 Exports 389 390 (0.1) Others 69 120 (42.4) 18
Slide 19: Exceptional items: DQ
exceptional exceptional items: items: DQ DQ Rs crore Profit on disposal of Nickel Catalyst/ 17 Adhesive Businesses Less Provision for fixed asset write-off and (43) estimated related costs: Ice Cream Provision for fixed asset write-off: Culinary (19) Additional liability for retirement benefits (63)
Slide 20: Group PAT up 17% in 2001
group PAT up group PAT up 17% 17% in in 2001 2001 Rs crore HLL % Growth Group % Growth Net Sales 10972 3.5 11585 0.6 Adj. for business 10874 2.8 11585 2.7 transfers FMCG 8876 4.9 9364 5.0 Exports 1653 (6.7) 1829 (5.0) Others 345 1.6 392 (46.0) PBT 1943 16.7 1896 15.4 PAT 1541 17.6 1471 16.5 Net Prof
Slide 21: Progress against strategy
progress progress against against strategy strategy ...on ...on course course strategy strategy recap recap g Growth through focus on 30 power brands in FMCG g Improving Foods Profitability g Securing future of the Non-FMCG businesses 21
Slide 22: Power brands lead group sales growth
power power brands brands lead lead group group sales sales growth growth % Growth MQ JQ SQ DQ Year Overall (FMCG) 2.6 3.2 8.0 6.8 5.0 Power Brands 3.3 5.7 10.1 8.2 6.5 HPC 4.8 9.0 11.5 13.3 9.2 Foods 1.0 (3.3) 6.3 (3.3) 0.1 22
Slide 23: ...and outpace market growth in HPC
...and ...and outpace outpace market market growth growth in in HPC HPC Market HLL Power % Growth Growth Group Brands Personal Wash (9.3) (2.9) 5.3 Fabric Wash (2.0) 6.9 9.2 Dishwash 13.2 11.4 13.5 Toothpaste 2.4 6.4 8.0 Shampoo 10.6 15.8 16.5 Skin (excl. Talc) 4.4 21.1 21.6 Talcum Powder (0.6) 15.0
Slide 24: ...and foods
…and …and foods foods Market HLL Power % Growth Growth Group Brands Packet Tea (6.4) (11.7) (5.9) Coffee (2.7) 14.7 20.6 Vanaspati (2.6) 11.4 11.4 Culinary Jams (12.4) (7.0) (7.0) Ketchup (0.8) (6.0) (6.0) Atta (Branded) 9.1 (15.4) (15.4) Salt 4.7 (5.1) (5.1) market growth: ORG value (urban+rural) 2
Slide 25: Foods profit doubles
foods foods profit profit doubles doubles g Operating profit doubles g Gross margin up 500 basis points g Further cost reduction planned through g supply chain reconfiguration g restructuring initiatives g Potential for value added products 25
Slide 26: New homes for non-core
new new homes homes for for non-core non-core g Divestments completed g AFS g Quest g Nickel Catalyst g Adhesives g Transfer of Seeds, Leather, Mushroom to subsidiaries for potential JV/divestment 26
Slide 27: Business Performance
Business Business Performance Performance 27
Slide 28: Soaps and Detergents
Soaps Soaps and and Detergents Detergents 28
Slide 29: ...growth rate improve in SH
…growth …growth rate rate improve improve in in SH SH % Growth FH 2001 SQ 2001 DQ 2001 FY 2001 Personal Wash (4.8) 0.9 (2.5) (2.9) Fabric Wash 5.2 9.5 8.1 6.9 Household Care 15.3 4.1 10.6 11.4 Category Sales Growth Market Share % Dec 2000 May 2001 Nov 2001 Toilet Soaps 59.2 59.9 60.0 Detergents (Pow
Slide 30: Mass market brands lead growth in soaps and detergents
mass mass market market brands brands lead lead growth growth in in soaps soaps and and detergents detergents g Group sales up 3% g Fabric Wash sales up 7%; share gain in detergent bars; g Wheel relaunched, gain market leadership g Surf franchise relaunched g Personal wash sales down 3%, although ma
Slide 31: Personal Products
Personal Personal Products Products 31
Slide 32: Record growth in all categories in DQ
record record growth growth in in all all categories categories in in DQ DQ % Growth FH 2001 SQ 2001 DQ 2001 FY 2001 Oral Care (3.7) 3.8 18.4 6.0 Hair Care 2.3 17.3 24.9 10.3 Skin (excl. Talc) 22.1 1.4 30.8 21.1 Talcum Powder 10.4 14.1 29.9 15.0 Category Sales Growth Market Share % Dec 2000 May 2001
Slide 33: Power brands lead growth
power power brands brands lead lead growth growth g Group sales up 14% g Skin care category leads growth (+21%) g Fair & Lovely franchise expanded; registers strong growth g Shampoo continues healthy growth trend (+16%); Clinic, Sunsilk and Lux register double digit growth g Toothpaste sales back on
Slide 34: Beverages
Beverages Beverages 34
Slide 35: Portfolio rationalisation impacts tea sales; strong growth in coffee
portfolio portfolio rationalisation rationalisation impacts impacts tea tea sales; sales; strong strong growth growth inin coffee coffee % Growth FH 2001 SQ 2001 DQ 2001 FY 2001 Packet Tea (14.5) (6.4) (10.6) (11.7) Coffee 10.1 12.9 23.3 14.7 Category Sales Growth tea tea market market remain remain
Slide 36: Step change in beverages profitability
step step change change inin beverages beverages profitability profitability g Focus on profitability; Gross margin up 850 basis points g Taj grows in the face of all round downtrading g Bru grows 20% in a market which declined by 3% 36
Slide 37: Foods
“Lf tsZ ‘Trusted by mothers who care ae ol 37
Slide 38: Foods sales growth led by Modern and Dalda
foods foods sales sales growth growth led led by by modern modern and and dalda dalda % Growth FH 2001 SQ 2001 DQ 2001 FY 2001 Culinary (7.1) 6.7 (2.4) (3.3) Oils & Fats 16.1 9.9 25.7 17.5 Modern 94.7 78.0 28.3 65.6 Branded Staples (13.0) 3.5 (21.3) (11.6) Category Sales Growth g Group sales up 14%
Slide 39: Continuing thrust on innovation
continuing continuing thrust thrust on on innovation innovation g Dalda Activ g Ready to eat Chapati g Knorr rice@ease g Flavoured Spreads 39
Slide 40: Ice cream business to be repositioned
ice ice cream cream business business to to be be repositioned repositioned g Group sales down 4%; losses continue g Focus strategy for business turnaround g comprehensive plan to cover: g distribution width g product portfolio rationalisation g supply chain and sourcing arrangements g fixed cost ba
Slide 41: Other Business
Other Other Business Business 41
Slide 42: HPC products lead export thrust
HPC products HPC products lead lead export export thrust thrust g Continued thrust on exports opportunities in core categories; manufactured exports up 11% g HPC exports up 36% g Tea exports volumes up but value down 2% due to decline in commodity prices g Marine (+57%) and Leather (+43%) exports re
Slide 43: Confectionery venture takes off
confectionery confectionery venture venture takes takes off off g ‘Max’ range of confectionery test market successful g National roll out started in DQ g No1 position in the segment within 6 months in Tamil Nadu 43
Slide 44: Major initiatives in manufacturing and IT
major major initiatives initiatives in in manufacturing manufacturing andand ITIT g Fast track implementation of Manufacturing Strategy g 7 Units commissioned with an investment of Rs 162 cr in record time 44
Slide 45: New manufacturing sites
new new manufacturing manufacturing sites sites n Sumerpur n Assam n Khalilabad n Haldia n Silvassa (2) n Goa 45
Slide 46: Major initiatives in manufacturing and IT
major major initiatives initiatives in in manufacturing manufacturing andand ITIT g Fast track implementation of Manufacturing Strategy g 7 Units commissioned with an investment of Rs 162 cr in record time g Enhanced connectivity in HPC Supply Chain g RS Net covers 600 stockists accounting for 40% s
Slide 47: In summary
in in summary summary % Growth DQ 2001 2001 HLL Sales 4.3 3.5 Group Sales 5.0 2.8 FMCG 6.8 5.0 Power Brands 8.2 6.5 Dividend Rs 5.00 HLL PAT 16.4 17.6 (PY Rs 3.50) per share (incl. distribution Group PAT 17.0 out of exceptional item) HLL EPS (Rs) 7.46 47
Slide 48: Thank you
HINDUSTAN LEVER LIMITED Analyst Meet Mumbai, January 22, 2002 Thank Thank you you © HLL 2002 48