Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — CLSA Conference (September 2020)
42 slides from Hindustan Unilever's conference presentation, Sep 9, 2020
Slide 1: Winning in the new normal
Winning in the new normal Sanjiv Mehta, Chairman & Managing Director Hindustan Unilever Limited 9th September, 2020 Sensitivity: Internal
Slide 2: Safe Harbor Statement
Safe Harbor 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 e
Slide 3: India's Largest FMCG Company
INDIA’S LARGEST FMCG COMPANY 3 Sensitivity: Internal
Slide 4: 130+ years of presence in India
130+ years of presence in India Sunlight soap Indian subsidiaries Unilever increases HUL - GSK CH merger introduced consolidated under stake in HUL to to India Hindustan Lever Limited 67% 1888 1931 1956 2007 2013 2018 2020 Unilever sets up HLL renamed as HUL market subsidiary in “Hindustan cap cross
Slide 5: A $6bn execution powerhouse
A $6bn execution powerhouse Our footprint Recognition 9 out of 10 ‘Employer of Choice’ households in the industry use one or more of for 11 years in a row our brands Most Innovative Our brands are available in Companies 8 mn+ stores #8 Globally #1 in India 21,000 Employees working 14 HUL brands acro
Slide 6: With category leadership in >90% of our business
With category leadership in >90% of our business 6 Sensitivity: Internal
Slide 7: Consistent track record of high performance
Consistent track record of high performance High return on capital Consistent growth Profitable growth employed 109.1% 128.5% FY FY 2012-13 2019-20 9% CAGR 890 bps ROCE over 10 years* EBITDA improvement over 10 years^ *On comparable basis. On reported basis, 10-year sales CAGR stands at 8%. ^On comp
Slide 8: Leading value creation
Leading value creation 500% 400% 300% 200% 100% 0% 31-Dec-13 30-Sep-14 30-Jun-15 31-Mar-16 31-Dec-16 30-Sep-17 30-Jun-18 31-Mar-19 31-Dec-19 HUL BSE FMCG SENSEX MARKET $17 bn 4X $ 68 bn CAPITALISATION 2013 Current* + $51 bn *Market capitalization as on 31st August 2020 and converted to USD based on
Slide 9: Navigating the crisis
Navigating the crisis 9 Sensitivity: Internal
Slide 10: Social and economic toll of the virus
Social and economic toll of the virus Rising COVID-19 cases Wide range of unknowns Uncertain economic outlook Total COVID-19 cases in India 5.2% 4.4% 4.1% As on 7th Sept 42,04,613 3.1% -23.9% Vaccine | Containment | Recovery 31-Dec 19-Feb 9-Apr 29-May 18-Jul 6-Sep JQ'19 SQ'19 DQ'19 MQ'20 JQ'20 10 Se
Slide 11: Progression of lockdowns and unlocks
Progression of lockdowns and unlocks 1st case 1 Day Curfew West Bengal Haryana Lockdown 1.0 Lockdown 2.0 Lockdown 3.0 Lockdown 4.0 Unlock phases in India 1.0 to 4.0 Punjab Uttar Pradesh 30% Districts Himachal Pradesh 53% of GDP Delhi Delhi Rajasthan Karnataka 28% Districts Madhya Pradesh 28% of GDP
Slide 12: Businesses across industries disrupted
Businesses across industries disrupted People: Fearful and confined On-ground operational Cost and liquidity constraints to home challenges 12 Sensitivity: Internal
Slide 13: Our five priorities
Our five priorities People Supply Demand Community Cost & Cash 13 Sensitivity: Internal
Slide 14: #1 Priority: People
#1 Priority : People 14 Sensitivity: Internal
Slide 15: Health and safety remains our #1 priority
Health and safety remains our #1 priority Medical support and 6 1 Tiered Protocol on safety insurance People Care 5 2 Contactless operations Helpline Communication Cascades Monitor health & wellbeing 4 3 Highest safety standards Working from home Supporting our partners Sensitivity: Internal 15
Slide 16: Stringent safety protocols
Stringent safety protocols Rigorous operating Special care for high risk Trade operations with social guidelines group distancing Proactive testing Maximum attention to people with One of 1st to provide medical insurance Shutdowns & full sanitization co-morbidity or >50 years of age Best operating p
Slide 17: Energised and engaged
Energised and engaged Virtual connects Health & wellbeing Learning at fingertips Leadership check-ins | Team Rituals Empowering holistic wellbeing Strengthening learning culture 17 Sensitivity: Internal
Slide 18: Creating milestones
Creating milestones VWash acquisition: E2E Fully virtual annual close and Seamless virtual integration virtual execution AGM 18 Sensitivity: Internal
Slide 19: #2 Priority: Rebuilding Supply Lines
#2 Priority : Rebuilding Supply Lines 19 Sensitivity: Internal
Slide 20: Multitude of operational challenges
Multitude of operational challenges Permits and Permissions Operational constraints Supply Security Operations | Containment zones Material availability | Alternative ~1,000 notifications complied Manpower | Logistics suppliers | Formulation flexibility 20 Sensitivity: Internal
Slide 21: Navigated with agility and nimbleness
Navigated with agility and nimbleness New demand capture and Portfolio prioritization Capacity unlocks fulfilment models X 0.8X 0.4X 0.3X 0.3X 0.2X Number of SKUs produced Sanitizer ~120X | Handwash ~6X Disrupt before we get disrupted 21 Sensitivity: Internal
Slide 22: Enabling business turnaround
Enabling business turnaround Sequential improvement Fast tracking innovations Contactless operations in operations X X 0.9X 0.7X 0.05 X Before March April May June post onwards lockdown 50+ product & pack innovations 100% operations restored c.90% salons now operational 22 Sensitivity: Internal
Slide 23: #3 Priority: Emerging Demand Spaces
#3 Priority: Emerging Demand Spaces Sensitivity: Internal 23
Slide 24: Future normal: Evolving consumer needs
Future normal: Evolving consumer needs Clean living Preventive immunity CONSUMER PULSE Protective measure Cocooning E-everything Fear Factor Value seeking Sensitivity: Public 24
Slide 25: Fear factor
Fear factor Creating social awareness COVID relevant innovations Public service message Safe hygiene practices Sensitivity: Public 25
Slide 26: Clean living, protection & immunity
Clean living, protection & immunity >90% portfolio relevant or repurposed for COVID times Repertoire of trusted and purpose-led brands Contextual communications Sensitivity: Public 26
Slide 27: Cocooning
Cocooning Catering to confined living Building relevance through Dialing up in-home portfolio propositions & activations Sensitivity: Public 27
Slide 28: Value seeking
Value seeking Well placed to meet all our consumer needs Portfolio straddling the price pyramid c.50% of GT business from across categories price point and access packs ₹₹₹ High income ₹₹ Mid income ₹ Low income Sensitivity: Public 28
Slide 29: E-everything
E-everything Winning in a rapidly evolving channel landscape Accelerating E-Commerce journey Digitizing general trade Creating the connected store eB2B: A competitive advantage 2.3 Lakh 2X Market shares Margins Order value & Outlets onboarded #SKUs ordered E-Comm & MT GT Vs. pre-COVID levels Sensiti
Slide 30: E-everything
E-everything Pivot to digital marketing models New models of market development Data driven marketing via content platforms Sensitivity: Public 30
Slide 31: #4 Priority: Serving Communities
#4 Priority: Serving Communities 31 Sensitivity: Internal
Slide 32: #HULStandsWithTheNation
#HULStandsWithTheNation INR100 Cr committed to fight COVID-19 Price reductions on essentials Product donations 15% price cuts in essentials Better value to consumers Sensitivity: Public 32
Slide 33: #HULStandsWithTheNation
#HULStandsWithTheNation INR100 Cr committed to fight COVID-19 Healthcare support Helping the underprivileged Sensitivity: Public 33
Slide 34: #5 Priority: Cost and Cash Agility
#5 Priority: Cost and Cash Agility 34 Sensitivity: Internal
Slide 35: Profitable and cash generating business model
Profitable and cash generating business model Strong cash flow from Healthy EBITDA margins Robust margins across divisions operations 19% 25% 28% INR 9,770 Cr 20% JQ’2020 JQ’2020 F.Y. 2019-20 35 Sensitivity: Internal
Slide 36: Deft P&L management to address volatility & support growth
Deft P&L management to address volatility & support growth Headwinds due to COVID-19 Cost agility Savings agenda dialled up Adverse mix BMI spends recalibrated, competitiveness De-leverage maintained COVID-related on-cost Unlocking synergies from Nutrition business Sensitivity: Public 36
Slide 37: Our five priorities are serving us well
Our five priorities are serving us well Our five priorities Resilient performance in challenging times People 97% Business gaining volume share Supply Demand 90% Business increasing/maintaining Spont Community +200 bps Step-up in brands share of voice JQ’20 vs JQ’19 Cost and Cash Basis L3M July’20 d
Slide 38: FMCG India: Long-term potential remains intact
FMCG India: Long-term potential remains intact 38 Sensitivity: Internal
Slide 39: Headroom to grow
Headroom to grow Grow penetration Increase consumption Drive premiumization Indian FMCG Market Price Segmentation Handwash* 31 2019** Instant Coffee Face Wash India X Premium 29% Washing Liquids Indonesia ~2X Body Lotion 42% China ~4X Mid Dishwash Liquids Hair Conditioner FMCG per capita consumption
Slide 40: Our strategy remains consistent
Our strategy remains consistent Guiding framework 4G growth model Fundamentals of growth Consistent, Competitive, Profitable, Purpose-led, Future-Fit Responsible Growth 40 Sensitivity: Internal
Slide 41: HUL #ComeOutStronger
HUL #ComeOutStronger Organizational strengths Key metrics Brand portfolio fit for future normal Competitive volume-led growth Bench strength of talent and experience to manage turbulence Absolute profit Growth fundamentals remain robust Cash delivery Nimble and agile organization 41 Sensitivity: Int
Slide 42: Thank you!
Thank you! Sensitivity: Internal
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