Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — SQ'10 Earnings Presentation
33 slides from Hindustan Unilever's earnings presentation, Oct 26, 2010
Slide 1: Results – SQ ’10 Investor Presentation
Results – SQ ’10 October 26, 2010 Investor Presentation
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 • Market Context • SQ’10 Highlights • Performance Review • Category Overview • SQ’10 – Financial Results • Looking ahead SQ‘10 Results - Oct 26, 2010
Slide 4: Market Context
Market Context • Overall FMCG market growth lower than previous quarters • Monsoon in line with expectations in most states and market prospects remain positive • Competitive intensity remains high • Inflation levels continue to be high; upward trend in key input costs SQ‘10 Results - Oct 26, 2010
Slide 5: SQ’10 Highlights
SQ’10 Highlights • Strong 14% underlying volume growth in Domestic Consumer business • Net Sales grows 11%; ahead of market • Soaps & Detergents sustain robust volume growth • Personal Products: 6th consecutive quarter of double digit growth • Packaged Foods & Water continue strong growth momentum •
Slide 6: SQ’10 Highlights
SQ’10 Highlights • Buying efficiencies and cost savings programmes partly offset input cost inflation and competitive pricing in Soaps & Detergents • Gross Margin lower by 20 bps • Step-up in Brand investment maintained • A&P up 30 bps; Advertising spend up 90 bps • Other expenses higher from step u
Slide 7: Accelerating volume growth momentum
Accelerating volume growth momentum 14% 11% 11% 5% 2% SQ'09 DQ'09 MQ'10 JQ'10 SQ'10 Domestic Consumer Business (FMCG including Water) Underlying Volume Growth SQ‘10 Results - Oct 26, 2010
Slide 8: Growth ahead of Market
Growth ahead of Market September Quarter Volume Growth* September Quarter Value Growth Market HUL *Volume growth is tonnage growth value weighted Market HUL^ ^ HUL value growth is GSV growth SQ‘10 Results - Oct 26, 2010
Slide 9: Strengthening the core: SQ’10 launches
Strengthening the core: SQ’10 launches Lux Sandal & Cream launch Lifebuoy relaunch with “100% better protection from germs” Vaseline Petroleum Jelly Relaunch with 2 new variants Vim relaunch “with extra power of Lime” Modern: Chapati & Kream Roll “OK” dish wash bar launch: Straddling portfolio at ma
Slide 10: Thrust to build emerging categories continues
Thrust to build emerging categories continues Lip Care: Launch of 2 new variants Pureit Marvella: entry in to premium segment Premium Skin Care: Lakme Perfect Radiance Anti Aging: Age Miracle Serum Launch of Vaseline Moisturizing Cream Knorr Soupy Noodles: being rolled out nationally SQ‘10 Results -
Slide 11: Competitive environment continues to be intense
Competitive environment continues to be intense Increased competitive intensity reflected in GRP trends *FH’10 = JQ’09+SQ’09; SH’10 = DQ’09+MQ’10 SQ‘10 Results - Oct 26, 2010
Slide 12: Continued Brand Building investment
Continued Brand Building investment % 15.7 14.5 13.8 13.5 14.1 11 11 14 5 2 SQ'09 DQ'09 MQ'10 JQ'10 SQ'10 A&P % of sales UVG Advertising Spend grew by 21%; 90 bps up SQ‘10 Results - Oct 26, 2010
Slide 13: Inflationary trend in input costs
Inflationary trend in input costs CPO Benzene 158 Tea 144 146 121 100 2007 2008 2009 JQ'10 SQ'10 Indexed Chart average market prices (Source: Market Rate, Tea auction average). HUL buying cost may be different SQ‘10 Results - Oct 26, 2010
Slide 14: Strong savings delivery & operating leverage
Strong savings delivery & operating leverage CEP & Indirects Productivity help mitigate cost inflation Indexed CEPs 139 127 100 2008‐09 2009‐10 FH'10‐11 FH’10-11 CEP : annualised for Full Year Indexed Overheads (as a % of TO) SQ‘10 Results - Oct 26, 2010
Slide 15: Category revenue growth
Category revenue growth Growth% SQ‘10 Soaps & Detergents 6.3 Personal Products 14.7 Beverages 9.3 Processed Foods 26.2 Ice Cream 9.0 Domestic FMCG 9.7 ^ Domestic Consumer 10.5 * ^ Excludes Other Operational Income * Including water SQ‘10 Results - Oct 26, 2010
Slide 16: Laundry: Strengthened leadership position
Laundry: Strengthened leadership position • Growth ahead of market - in value and volume • Surf Excel volume growth led by bars and Surf Excel Matic powder • Rin delivers double digit growth post relaunch • Wheel Powder volumes grow ahead of segment growth • Comfort fabric conditioner is national an
Slide 17: Laundry: Competitive growth momentum
Laundry: Competitive growth momentum Growth ahead of market Volume growth across Brands HUL Market Volume Growth Value Growth FH'09-10 SH'09-10 FH'10-11 Consistent volume growth in Powders Bars: Accelerating volume growth FH'09‐10 SH'09‐10 FH'10‐11 FH'09‐10 SH'09‐10 FH'10‐11 Market Growth Source: AC
Slide 18: Personal Wash: Step up in growth momentum
Personal Wash: Step up in growth momentum • Personal wash delivered strong growth, ahead of market • Value and volume • Across all segments • Lux records double digit growth • New variants performing well; Lux Sandal & Cream launched • Strong growth in fast growing Premium segment • Dove Rs.20 price
Slide 19: Lifebuoy Relaunch
Lifebuoy Relaunch • New & Improved Lifebuoy • Advanced Germ Protection ingredients • Recommended by Indian Public Health Association • World’s No.1 germ protection soap SQ‘10 Results - Oct 26, 2010
Slide 20: Skin Care: Market development yielding results
Skin Care: Market development yielding results • Skin care delivers strong growth led by successful innovations • Portfolio expansion in male grooming; successful launch of FAL Max Fairness for Men & Vaseline Menz • Pond’s White Beauty continues strong growth; building premium skin lightening market
Slide 21: Strong innovation momentum
Strong innovation momentum New launches during September Quarter Vaseline Petroleum Jelly Relaunched: with 2 new variants Premium Skin Care: Lakme Perfect Radiance Launch of Vaseline Moisturizing Cream Anti Aging: Age Lip Care: Launch of 2 Miracle Serum new variants SQ‘10 Results - Oct 26, 2010
Slide 22: Hair: Competitive growth continues
Hair: Competitive growth continues • Hair continues double digit growth momentum, ahead of market • Strong volumes drive growth across portfolio for fourth consecutive quarter • Strong innovation and market development • Sunsilk Blackshine “Hair Expert Campaign” performing well • Clinic Plus drives
Slide 23: Oral Care: Gaining traction
Oral Care: Gaining traction • Toothpaste regains momentum; growth led by volumes • Close-up & Pepsodent deliver growth • Pepsodent rejuvenated with strong relaunch: Superior “Germi Check” proposition Market Growth Source: AC Nielsen SQ‘10 Results - Oct 26, 2010
Slide 24: Beverages grow in a slowing market
Beverages grow in a slowing market • Tea: • Market growth slows due to high commodity costs • Red Label grows strongly; especially low unit price (LUP) packs • Premium portfolio maintained volumes amidst downtrading • Coffee: • Double digit sales growth underpinned by strong volume growth • Bru: Now
Slide 25: Processed Foods: Strong & profitable growth
Processed Foods: Strong & profitable growth • Robust growth in Processed Foods business; led by Knorr and Kissan • Knorr Portfolio: • Soups perform well led by “Thick Tomato” • Soupy Noodles being rolled out nationally – Consumer response continues to be extremely positive • Kissan: • Growth led by
Slide 26: Pureit continues growth momentum
Pureit continues growth momentum • Pureit continues to deliver strong growth underpinned by volumes • Portfolio now “straddles the pyramid” at four price points Premium • Entry at top end, “Pureit Marvella” – Mid Priced fully automatic water purifier Mass • Continued to invest behind the brand SQ‘10
Slide 27: SQ’10 – Results
SQ’10 – Results Rs Cr Rs Crores SQ'10 SQ'09 Growth% Net Sales 4681 4228 10.7 PBITDA 647 652 (0.8) PBIT 592 606 (2.3) PBIT margin (%age) 12.6 14.3 - PBT bei 668 652 2.6 Exceptional Items 40 (135) - PBT 709 516 37.3 PAT bei 534 500 6.8 Extraordinary Items (net of Tax) - - Net Profit 566 429 32.1 SQ‘10
Slide 28: SQ’10 – Exceptional Items
SQ’10 – Exceptional Items Rs Cr Particulars SQ'10 SQ'09 Assets Sale 26 31 Restructuring Cost (3) (166) Sale of investment 20 Others (3) Total 40 (135) SQ‘10 Results - Oct 26, 2010
Slide 29: First Half FY’11 – Results
First Half FY’11 – Results Rs Cr Rs Crores FH'10-11 FH'09-10 Growth% Net Sales 9475 8704 8.9 PBITDA 1328 1367 (2.9) PBIT 1219 1278 (4.6) PBIT margin (%age) 12.9 14.7 - PBT bei 1338 1352 (1.1) Exceptional Items 59 (132) - PBT 1397 1220 14.5 PAT bei 1055 1037 1.7 Extraordinary Items (net of Tax) - 4 N
Slide 30: Summary
Summary • Growth ahead of market in aggregate – both volume and value • Underlying volume growth 14% – sustained momentum • Actions to strengthen leadership yielding positive results • Effective cost management mostly offsets input cost increases and pricing impact • PAT (bei) Rs.534 crore, up 6.8%;
Slide 31: Looking ahead
Looking ahead • Good monsoon augurs well for FMCG markets • Commodity inflation on the rise; continued focus on cost and cash management • Competitive intensity will remain high • We remain committed to – • Win Today: Improve competitiveness and strengthen leadership in core categories • Win tomorro
Slide 32: Thank you
Thank you For more information, please visit http://www.hul.co.in SQ‘10 Results - Oct 26, 2010
Slide 33: Results – SQ ’10 Investor Presentation
Results – SQ ’10 October 26, 2010 Investor Presentation