Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — IIFL India Investor Forum Mumbai (February 2010)
53 slides from Hindustan Unilever's conference presentation, February 2010
Slide 1: Investor Presentation February, 2010
Investor Presentation February, 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 Our Vision Market Context Strategy & Execution Current Performance
Slide 4: Our Vision
Our Vision To earn the love and respect of India, by making a real difference to every Indian.
Slide 5: Agenda
Agenda Our Vision Market Context Strategy & Execution Current Performance
Slide 6: Market Context: DQ’09
Market Context: DQ’09 • FMCG market continues to grow, albeit at a slower pace • Lower pricing component due to Laundry price reductions • Downtrading in Laundry and Tea • High food inflation • Commodity costs firming up • Intensifying competitive environment • Step up in media spends across categor
Slide 7: Market Growth - FMCG
Market Growth - FMCG Value Grow th 20.8 18.9 18.6 18.1 17.1 16.1 14.9 9 MQ08 JQ08 SQ08 DQ08 MQ09 JQ09 SQ09 DQ09 Market continues to grow • Value growth tempered by price reductions • Volume continues to grow albeit at slower pace. Source : AC Nielsen- DQ market growth
Slide 8: Market Growth - Categories
Market Growth - Categories Laundry Soaps Hair (Shampoo + Conditioners) Tea Source : AC Nielsen- DQ market growth Value Growth Volume Growth
Slide 9: Downtrading in Laundry & Tea
Downtrading in Laundry & Tea 70 80 MASS POPULAR PREMIUM 74 62 62 63 62 73 72 72 71 70 71 71 61 61 61 61 70 69 70 70 72 60 60 59 60 59 60 60 50 50 500 bps shift 40 40 300 bps shift 30 30 20 20 10 0 10 MQ07 SQ07 MQ08 SQ08 MQ09 SQ09 0 Mass Bars MQ07 JQ07 SQ07 DQ07 MQ08 JQ08 SQ08 DQ08 MQ09 JQ09 SQ09 Oct
Slide 10: Intensified Competitive Environment
Intensified Competitive Environment Step up in media investment within FMCG – several entries in new categories &segments
Slide 11: Changing Income Patterns
Changing Income Patterns 2003 2013 181 mn households 231 mn households Affluent Top End Business 3 Affluent 11 Changing attitudes Aspirers 46 Aspirers 124 Trebling Credit Culture 131 Strivers 96 Strivers B.O.P Opportunity The shape of India is changing… from a pyramid to a diamond Source : National
Slide 12: The Consumption Opportunity
The Consumption Opportunity Per Capita Consumption (US $ ) Detergents Shampoos 2.2 1.1 1.9 1 1.4 0.3 India China Indonesia India China Indonesia Ice-Cream Skin Care 2.8 3.2 0.9 0.8 0.2 0.3 India China Indonesia India China Indonesia Source : Euromonitor, 2006
Slide 13: Agenda
Agenda Our Vision Market Context Strategy & Execution Current Performance
Slide 14: Strategy & Execution
Strategy & Execution • Leverage brand portfolio and consumer understanding by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Winning with consumers, channels, segments/markets of tomorrow • Build markets and capabilities for the future • Leverag
Slide 15: Key Interventions
Key Interventions • Improved competitiveness of mass laundry • Active deployment of full portfolio in Soaps • Entire portfolio relaunched • Continue to drive Personal Products and Foods • Enhanced brand investment across the portfolio • Step-up in cost saving programmes and better operating leverage
Slide 16: Strategy & Execution
Strategy & Execution • Leverage brand portfolio and consumer understanding by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Winning with consumers, channels, segments/markets of tomorrow • Build markets and capabilities for the future • Leverag
Slide 17: Portfolio Straddling the Pyramid
Portfolio Straddling the Pyramid Fabric Personal Shampoo Skin Tooth Tea Coffee Wash Wash Paste Affluent Aspiring Striving Strong brands across categories addressing needs of every consumer Identifying the opportunity and filling it is important
Slide 18: Restoring Competitiveness in Laundry
Restoring Competitiveness in Laundry Time to Shine • Price Correction on Bars • Aggressive Consumer Promotion Affluent • Drive Machine Wash – Surf Matic • Adjusting relative price Aspiring • Aggressive Consumer Promotion Striving • Price Correction on Wheel bars & powders • Competitive Brand Investm
Slide 19: Strengthening Mass Laundry
Strengthening Mass Laundry Price reductions on Brand investments ‐ Wheel Powders and Bars SKU Sep 08 Dec 08 Mar'09 Sep'09 Dec'09 SOV % Rin Adv Bar 15.1 200 Gms Rs 9 Rs 14 Rs 14 Rs 12 Rs 10 Wheel Blue Powder ` Rs 10/- 275 gms 250 gms 275 gms 350 gms 350 gms 7.7 Wheel Blue Bar 3.4 Rs 10/- 200 gms 200
Slide 20: Deploy the full Portfolio in Soaps
Deploy the full Portfolio in Soaps Portfolio Rejuvenation
Slide 21: Relaunching Lux with new proposition
Relaunching Lux with new proposition Create Create intrigue intrigue about about Build Build awareness awareness and and Get Get consumers consumers to to try try Lux. Lux. new new Lux Lux engage engage PR : 10 second teasers across 45 channels TVC launch through reality show integration Unveil by T
Slide 22: Rejuvenating Breeze
Rejuvenating Breeze Proposition & Pack Product •Enhanced TFM •Improved Perfumes Price •Benchmarked with market Promotion •Aggressive Sale Plan
Slide 23: Driving Premium Cleansing: Dove
Driving Premium Cleansing: Dove Inviting Inviting women women toto take take Experience/ Experience/ To To build build Superiority Superiority the the Face Face Test Test Amplification Amplification On pack Innovations Real Women TVC and Testimonial Visibility Digital : Starting a debate on PR Edito
Slide 24: Driving consumption: FAL variants & uptrading
Driving consumption : FAL variants & uptrading Successful Launch – Fair & Lovely Winter Fairness Cream Improved Mix – Consumers uptrading from sachet to Tube
Slide 25: Strategy & Execution
Strategy & Execution • Leverage brand portfolio and consumer understanding by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Winning with consumers, channels, segments/markets of tomorrow • Build markets and capabilities for the future • Leverag
Slide 26: Building new segments: Vaseline Healthy White
Building new segments: Vaseline Healthy White Educational Product is Hero Campaign Attack current habit Drive Experience Is your body as fair as your face Amazing skin on ‐ ground activation Aligned Aligned Promo Strategy Promo Strategy Target Early Adopters : Youth thru digital Media for Habit chan
Slide 27: Building Dove across Categories & segments
Building Dove across Categories & segments Win first in Markets of future: Modern Trade Dove Hair : Launched May 2007 Now No.1 in Modern Trade Consistently make her feel Adopt new mediums All India Urban Base Metro Modern Store Beautiful 30 16 25.1 15.2 25 14 12 20 11.6 17 10 15 8.8 8 7.2 6 10 5 5.4
Slide 28: Segments of tomorrow – Hair Conditioners
Segments of tomorrow – Hair Conditioners HUL Shares and Market Growth% Conditioners Market 40 45 in India Growing 36.3 40 41.8 HUL Shares 34.4 Fast with huge 35 Market Growth% 32.2 40.4 35 28.4 potential 30 32.9 28 33.1 30 32.3 27.4 25.1 25 Sachets to generate trials 25 22.2 25.6 20 20 18.7 15 17.2
Slide 29: Segments of tomorrow – Surface Cleaners
Segments of tomorrow – Surface Cleaners 2.2 Surface Cleaner current Per Capita Consumption US$ market size at $ 63 mln Surface Cleaner Market (2008) Growing at CAGR of 14.1% with accelerating growth 0.9 rate 0.5 0.01 Removes toughest dirt with minimum effort Philippines Thailand China India Extensiv
Slide 30: Building New Markets: Pure-it
Building New Markets: Pure-it Product Superiority: Unchallenged Innovative Offerings Pure – it Auto Fill Broadens Portfolio Pure – it Compact Entry in Discount Segment Extension of Reach: Retail Channel 14500 outlets 40 ‐50% revenue
Slide 31: Market /Category Development: Soups & Savoury
Market /Category Development : Soups & Savoury Knorr Soups Re-launched with Improved Taste and World Class Packaging Unique claim: 100% real vegetables which has high resonance with Consumers & is brought alive in TVC Packaging – a benchmark for global Knorr Packaging Knorr – Meal Maker Opportunity
Slide 32: Building new Capabilities – Brilliant Activation
Building new Capabilities – Brilliant Activation ‘Call Me’ interactive campaign Generated over 3 million unique calls >2% market share gain in Non Metros Accelerated Launch of Axe Growth Boost achieved after campaign
Slide 33: Expanding footprint: Out of Home capabilities
Expanding footprint : Out of Home capabilities • SWIRL’S - a successful concept in Europe • 85 parlours Various • FRESH : Fresh Ingredients shop and product • CHOICE : Create Your Own formats • THEATER & FUN : Specially for You 85 No. of Swirl Parlours 40 20 2007 2008 Current 1.2 million consumer ex
Slide 34: Strengthening capabilities: Winning at Point of Sale
Strengthening capabilities: Winning at Point of Sale Winning Winning In MT In GT Power Power of of Power Power of of One One Shopper Shopper People People Analytics Analytics Unilever Unilever Insights Insights iQ iQ GTM GTM (U) (U) Channel Channel Programs Programs Lean Lean & & Agile Agile Organiz
Slide 35: Creating a million perfect stores…
Creating a million perfect stores… Creation of Perfect Stores + Mass Customization Intelligent Information Systems • Business insights from execution and sales data to seamlessly support business decisions • To enable superior execution and planning of events • Appropriate product assortment to maxi
Slide 36: Leveraging Unilever: Global R&D Centres
Leveraging Unilever: Global R&D Centres Beverages, Processed Fabric Wash, Fabric Wash, Hair Care, Deos, Foods, etc. Beverages, Processd Oral Care, Surface Cleaners, Foods, etc. etc. Port Vlaardingen, Sunlight, NL UK Colworth, Trumbull, UK US Shanghai, China Bangalore , India Skin Care, Deos, Shampoo
Slide 37: Unilever Research and Development Strengths
Unilever Research and Development Strengths Spray Technology Skin Mildness Product Processing Deodorants and Moisturizing e.g. Ice Cream Hair Structured Science of Tea Technology Oils and Emulsions
Slide 38: Leveraging Global Technology: Pond’s White Beauty
Leveraging Global Technology: Pond’s White Beauty Right Size / Product is Hero Right Value Reframe vocabulary : Spots removal too! Affordable formats : Mini Jar + Sachet Aligned Aligned Promo Strategy Promo Strategy Target top end : Heavy Niche Media for expertise : Impact thru Non TV
Slide 39: Strategy & Execution
Strategy & Execution • Leverage brand portfolio and consumer understanding by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Winning with consumers, channels, segments/markets of tomorrow • Build markets and capabilities for the future • Leverag
Slide 40: Enhancing execution capability
Enhancing execution capability Field Execution All India DOH Inventory Order Servicing 150 100 115 75 100 50 95 50 25 0 75 0 2008 Sep '09 Dec'09 Dec'08 Jun'09 Dec'09 Days on Hand (Finished Goods) Customer Order Servicing % Field Execution Scores Enhanced Customer Service with higher cash delivery In
Slide 41: Step up in cost efficiencies
Step up in cost efficiencies Indexed CEPs • Sustained Improvement in Cost Savings Programme 226 181 144 100 100 100 2005 2006 2007 2008 2009 Indexed Indirects 95.77 • Tight focus on discretionary costs 84.5 2007 2008 2009
Slide 42: To Recap….. Key Interventions
To Recap….. Key Interventions • Improved competitiveness of mass laundry • Active deployment of full portfolio in Soaps • Entire portfolio relaunched • Continue to drive Personal Products and Foods • Enhanced brand investment across the portfolio • Step-up in cost saving programmes and better operat
Slide 43: DQ Volume Growth > Market Value
DQ Volume Growth > Market Value Market shares expected to improve going forward Market Leader Strong No. 2 66.7 50.2 56.4 48.6 42.8 41.9 45.8 45.3 35.8 30.9 31.2 27.2 23.8 24 22.1 21.9 10.5 11.5 10.1 7.3 6 4.7 Fabric Personal Dishwash Skin Shampoo Deos Packet Jams Toothpaste Coffee Wash Wash Tea Ket
Slide 44: Strategy & Execution
Strategy & Execution • Leverage brand portfolio and consumer understanding by • Straddling the pyramid & deploying full portfolio • Driving consumption & penetration opportunity • Winning with consumers, channels, segments/markets of tomorrow • Build markets and capabilities for the future • Leverag
Slide 45: Embedding sustainability
Embedding sustainability Prosperity People Planet (Social) (Environment) (Economic) Enhance livelihoods Health Eco efficiency (Hygeine and Nutrition) (Water, GHG, Packaging) Who :Brands will lead the effort Where: Around our units of operation How: Through Partnerships
Slide 46: Corporate Responsibility: Our Approach
Corporate Responsibility: Our Approach 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 Innovations C
Slide 47: Corporate Responsibility: Key Actions in 2009
Corporate Responsibility: Key Actions in 2009 Strategic Thrusts Key Actions HUL Foundation set up Brands 12 tea estates identified; initiated sustainable tomato sourcing Volunteering of 100,000+ hrs (2 X 2008) Contributed towards disaster relief People Bihar floods, 26/11 trust, AP/Karnata
Slide 48: Agenda
Agenda Our Vision Market Context Strategy & Execution Current Performance
Slide 49: DQ’09: Performance Highlights
DQ’09: Performance Highlights • Volume growth accelerates through the year to 5% • Sales growth 5%; • Soaps shares stabilise – 10 bps increase • Volumes shares grow in Laundry – 100 bps in powders and 60 bps in Bars • Personal Products growth momentum sustained through the year • Underlying operatin
Slide 50: DQ’09: Financial Results
DQ’09: Financial Results Rs Crores DQ'09 DQ'08 Growth% Net Sales 4504 4308 4.6 EBITDA 788 764 3.1 PBIT 742 723 2.6 PBIT margin (%age) 16.5 16.8 - Underlying PBIT 757 718 5.4 Underlying PBIT margin(%age) 16.8 16.7 Exceptional Items 44.5 (38.5) - PBT bei 781 753 3.8 PBT 826 714 15.6 PAT bei 599 612 (2
Slide 51: Looking Ahead
Looking Ahead • FMCG market growth to sustain • Short term impact of food inflation • Overall growth opportunity remains strong • Competitive environment intensifies significantly • Especially in Laundry, Hair & Skin • Reflected in increased media spends • Several new entries in emerging segments •
Slide 52: Thank You
Thank You @
Slide 53: Investor Presentation February, 2010
Investor Presentation February, 2010
Hindustan Unilever — IIFL India Investor Forum Mumbai (February 2010) on 6ix