Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — Investor Presentation (May 2010)
43 slides from Hindustan Unilever's investor presentation, May 26, 2010
Slide 1: Winning Today and Tomorrow
Winning Today and Tomorrow Analyst Meet May 26, 2010
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 Context Winning Today Emerging Trends Winning Tomorrow
Slide 4: Context: Recent Performance
Context : Recent Performance 24 USG %* 22 20.0 20 18 16 14 13.0 12.2 12 10 8.0 8 6 4 2 0 2006 2007 2008-9 2009-10 Domestic FMCG CAGR: 13% over the last 4 years 08-09 Annualised 130 bps increase in operating margin
Slide 5: Agenda
Agenda Context Winning Today Emerging Trends Winning Tomorrow
Slide 6: Winning Today: Principles
Winning Today : Principles • Leverage brand portfolio and consumer understanding to develop winning mixes by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Step up execution focus • Costs, Cash and Service • Speed SUPERIOR PRODUCTS
Slide 7: Winning through brands and innovation: HPC
Winning through brands and innovation : HPC Fabric Wash Personal Wash Hair Skin/Deo Tooth Paste Premium Popular Mass Innovation intensity stepped up
Slide 8: Winning through brands and innovation: Foods
Winning through brands and innovation : Foods Tea Coffee Processed Foods Ice Creams Premium Popular Mass Innovation intensity stepped up
Slide 9: With a step up in A&P
With a step up in A&P 18.0 14.5 15.0 14.1 13.5 12.5 12.0 11.3 9.0 6.0 3.0 0.0 MQ '09 JQ'09 SQ'09 DQ'09 MQ'10
Slide 10: Winning in the marketplace: Micro Marketing
Winning in the marketplace : Micro Marketing Micro Marketing Tea : Differentiated blends • Why ? The “Many Indias” • Varied Consumer preference • Nature of competition different ds • Triggers & barriers different l en a b t te re n • How ? Tailoring the Mix iffe 5 d • Right pricing by geography 3 •
Slide 11: Execution: Customer Service > 90%
Execution : Customer Service > 90% Casefill on Time 95% 90% 85% 80% 75% 2008 2009 MQ 2010
Slide 12: Execution in the field
Execution in the field FCS • Billing More Stores • More Frequently • With Better Assortment MQ 09 JQ 09 SQ 09 DQ 09 MQ 10
Slide 13: Execution: Greater Speed
Execution : Greater Speed • We live in an era of volatility • Demands greater flexibility and agility • Speed is a key competitive advantage • Through 2009, several actions taken • Execution cycle times analysed by element • Actions to deliver 50% reduction in cycle times agreed • March Quarter 2010
Slide 14: Results: Strong pick up in volume growth
Results : Strong pick up in volume growth 10.9 4.6 2.0 1.0 JQ'09 SQ'09 DQ'09 MQ'10 Step up in volume growth
Slide 15: Growth ahead of market
Growth ahead of market Volume 10.9 Growth 9.6 % 7.8 Value Growth 6.4 HUL Market Competitive growth delivered
Slide 16: Winning Today: Summary
Winning Today : Summary • Several actions taken through 2009 and MQ 2010 – Strengthening portfolio – Stepping up execution • Results positive – Substantial step up in volume growth – Growth ahead of market • Need to sustain and build on momentum
Slide 17: Agenda
Agenda Context Winning Today Emerging Trends Winning Tomorrow
Slide 18: Emerging Trends
Emerging Trends WHO TRENDS • More Affluence CONSUMERS • Changing Attitudes CUSTOMERS • Hybrid Trade COMPETITION • Intense • More Conscious SOCIETY / • Only sustainable business ENVIRONMENT models will survive
Slide 19: Agenda
Agenda Context Winning Today Emerging Megatrends Winning Tomorrow
Slide 20: Business Goals
Business Goals • Winning with Brands•and Innovations Competitive Growth • Profitable Growth • Sustainable Growth
Slide 21: Winning Tomorrow: Our Approach
Winning Tomorrow : Our Approach • Winning with Brands and Innovations • Winning in the Market Place • Winning through Continuous Improvement • Winning with People
Slide 22: Brands & Innovations: Principles
Brands & Innovations : Principles • Straddle the pyramid and drive consumption on the core • Lead market development in emerging categories
Slide 23: Straddling the pyramid: Laundry Example
Straddling the pyramid –Laundry Example Segment % Contribution Price per KG Powders 19 > Rs.110/kg Premium 18 Rs.50/kg Mid Priced 63 Mass Rs.30/kg Segment % Contribution Price per KG 16 Premium Rs.100/kg Bars 13 Mid Priced Rs.50/kg 71 Mass Rs.28/kg Principle : Cover all price and benefit segments
Slide 24: Leveraging global know-how to build Beauty
Leveraging global know-how to build Beauty : across Brands, Categories & Formats Hair Conditioners Hand & Body 80 72.3 60 61.3 56.4 52.4 48.9 40 36.9 33.1 20 21.8 10.8 5.7 0 YEC06 YEC07 YEC08 YEC09 M Q 10 HUL Competitor Male Grooming Premium Skin Lightening
Slide 25: Processed Foods: Model based on conversion
Processed Foods : Model based on conversion Unhealthy fried snacks Traditional Indian Scratch Cooking Pkt tea Rs. 17,000 crs * Sweets Rs. 11,500 crs* Rs. 5,700 crs Healthy Soups/Noodles Ice cream Meal Makers Tea bags – no boiling Different eating habit Different preparation method Leveraging global
Slide 26: Winning Tomorrow: Our Approach
Winning Tomorrow : Our Approach • Winning with Brands and Innovations • Winning in the Market Place • Winning through Continuous Improvement • Winning with People
Slide 27: Winning in the marketplace: Principles
Winning in the marketplace : Principles • Win with : Winning customers • Win in : Winning geographies • Win with : Technology
Slide 28: Winning with winning customers: Modern Trade
Winning with winning customers : Modern Trade Market Shares up by 160 bps Customer Service scores up MT Share > GT Shares Continuous improvement in 100% (145 bps gain in 09) Customer Service 43 90% 80% 70% 60% 42 50% FY 2008 FY 2009 Profitability improved Improvement in Profitability 41 40 FY 2008 F
Slide 29: Winning in winning geographies: Rural
Winning in winning geographies : Rural New Markets New outlets +500,000 (current villages) stores Shakti/ Shaktiman
Slide 30: Winning with technology: iQ
Winning with technology : iQ Deliver Assortment Reduce Out Of Stock Build Assortment S ophisticated analytics for outlet level interventions Identify Opportunities S imple front-end for better execution by salesmen
Slide 31: Winning Tomorrow: Our Approach
Winning Tomorrow : Our Approach • Winning with Brands and Innovations • Winning in the Market Place • Winning through Continuous Improvement • Winning with People
Slide 32: Delivering Continuous Improvement: Approach
Delivering Continuous Improvement : Approach • Continuous improvements in – Customer Service – Cash – System Costs • Delivered through – Leading edge IT solutions – Cross functional teams
Slide 33: Continuous Improvement: Cash, Costs, Service
Continuous Improvement : Cash, Costs, Service Indexed Cost Savings Inventory & Customer Service 92% 40 90% 35 88% 30 86% 25 84% 226 82% 20 181 80% 15 144 78% 10 100 100 76% 5 74% 72% 0 2005 2006 2007 2008 2009 2008 2009 MQ 2010 Order Servicing Days on Hand
Slide 34: Continuous Improvement: Indirects
Continuous Improvement : Indirects 7.5 6.8 7.0 6.5 6.0 6.0 5.4 5.5 5.0 2008 2009 2010 % Turnover Reducing costs structurally
Slide 35: Winning Tomorrow: Our Approach
Winning Tomorrow : Our Approach • Winning with Brands and Innovations • Winning in the Market Place • Winning through Continuous Improvement • Winning with People
Slide 36: Winning with People: Approach
Winning with People : Approach • Talent • Culture • Capabilities
Slide 37: Talent: Our Edge
Talent : Our Edge 100% PPO acceptance Dream Employer HUL voted as the overall “Dream Employer” in B-school survey No.1 among companies considered In top 3 on campus HUL 64 McKinsey CRI P&G 62 TAS 58 ABG 57 .Mckinsey & Co 57 CITI 53 Bharti Airtel 39 BCG 37 CTS 35 Goldman Sachs 34
Slide 38: Culture: Embedding Consumer Centricity
Culture : Embedding Consumer Centricity Levercare Objective: Objective: Set up a world-class consumer and customer connect system to reach the company, and equally to help brands reach out to them. SCOPE SCOPE Features: •• CONSUMER CONSUMER •• DISTRIBUTOR DISTRIBUTOR • Multiple channels to connect -
Slide 39: 4000 Feet on Street, 14,600 Perfect Stores
Culture : Embedding Customer Centricity B, Raja Ahmed, Mohd. Singh, Deepak Sharma, Ashish Hussain, Shaikh V, Kosal Raman Dey, Raju Gaur, Pankaj Suman, Manish Sharma, Vishnu Panchal, Nilesh T N, Sethupathy R, Rajesh A T K, Kiran Sharma, Mukul Sharma, Arvind Banerjee, Arijit Y, Krishna Prasad Dholey,
Slide 40: Capability: Building sustainable business models
Capability : Building sustainable business models Grow Markets Ensure Responsible Strategy leadership in a responsible Sustainable for a sustainable Manner practices @HUL tomorrow Actions Our Brands Our People Our Processes Grow Markets Societal Building Outcome and Fuel legitimacy and Reputation In
Slide 41: In Summary
In Summary • In time, India will be amongst the largest consumer markets • Winning Today : Early results positive – Strengthening portfolio – Stepping up execution • Winning Tomorrow – Winning with brands and innovation – Winning in the marketplace – Winning with continuous improvement – Winning wit
Slide 42: Business Goals
Business Goals • Winning with Brands•and Innovations Competitive Growth • Profitable Growth • Sustainable Growth
Slide 43: Thank You
thank You @
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