Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — FY2023 Earnings Presentation
41 slides from Hindustan Unilever's earnings presentation, Apr 27, 2023
Slide 1: Exchange filing cover letter under Regulation 30
27th April, 2023 Stock Code BSE: 500696 NSE: HINDUNILVR ISIN: INE030A01027 BSE Limited, National Stock Exchange of India Ltd Corporate Relationship Department, Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, P.J. Towers, Bandra – Kurla Complex, Dalal
Slide 2: Hindustan Unilever Limited MQ & FY 2023 Results
Hindustan Unilever Limited MQ & FY 2023 Results 27th April 2023 Sensitivity: Public
Slide 3: 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 4: Sanjiv Mehta
Sanjiv Mehta Chief Executive Officer and Managing Director Sensitivity: Public
Slide 5: FY'23: Strong all-round performance in a challenging environment
FY’23 : Strong all-round performance in a challenging environment Underlying Volume Gr. Business Winning EBITDA EPS 5% >75% 23.4% 13% YoY Growth Business winning shares 9% YoY growth YoY Growth As per March’23 MAT Business winning report based on Nielsen market data (HUL relevant categories) 4 Sensi
Slide 6: Driven by a clear and compelling strategy
Driven by a clear and compelling strategy Navigating the short term While making progress on our challenges with agility long-term strategic priorities Developing our portfolio Growing our consumer franchise Win with our brands powered by purpose and innovation & Lead in the channels of the future B
Slide 7: FY'23 highlights: Home Care
FY’23 highlights : Home Care ▪ 28% revenue growth, volumes grew close to double- digits ▪ Premium portfolio continues to grow ahead of the rest of the portfolio ▪ ‘Surf excel’ became the first Home & Personal Care brand in India to cross US$ 1 bn in turnover ▪ Home Care liquids crosses Rs. 3000 cr.
Slide 8: FY'23 highlights: Beauty & Personal Care
FY’23 highlights : Beauty & Personal Care ▪ 12% revenue growth, volumes grew low single digit despite decline in market volumes ▪ ‘Lux’ & ‘Pond’s’ cross Rs. 2000 cr. turnover each; five BPC brands in this club now ▪ Transforming portfolio through innovations and entry into fast growing demand spaces
Slide 9: FY'23 highlights: Foods & Refreshment
FY’23 highlights : Foods & Refreshment ▪ 5% revenue growth led by Ice Cream, Coffee and Foods. Volumes grew low single digit ▪ HFD continues to gain consumer traction driven by market development; penetration and market shares grew handsomely ▪ Value and volume market leader in Tea; widened gap vs n
Slide 10: Our brands are getting bigger…
Our brands are getting bigger… FY’23 Turnover ₹ 50 Bn+ ₹ 20 Bn+ ₹ 10 Bn+ 19 2 19 brands 3 brands >₹10 bn New brands >₹20 bn New brands >₹10 bn Brands >1000 cr. annual Turnover Sensitivity: Public 9
Slide 11: …and stronger
…and stronger Product Superiority Product Superiority Award winning marketing campaigns 2X more superior products vs 2019 Sensitivity: Public 10
Slide 12: Winning with customers
Winning with customers Shikhar in 1.2 million stores Excellent execution Perfect stores 1.2X X Effective Pre-COVID MQ'21 MQ'22 MQ'23 Coverage 1.2Y Y Assortment Pre-COVID MQ'21 MQ'22 MQ'23 Continuously stepping-up Digitised demand capture >30% Online & Offline coverage & assortment Sensitivity: Publi
Slide 13: Agile & future-fit operations
Agile & future-fit operations Agile Innovation Hub Digitised factories Automated warehouse REPEATABLE | DIGITAL | DATA LED 60 SKUs launched through 7 nano factories the AI Hub platform DBNR* < 3.5 days Faster fulfilment *DBNR : Days before next run for A class SKUs Sensitivity: Public 12
Slide 14: Doing well by doing good
Doing well by doing good Climate & Waste Nature Social 97% 2.6 trillion litres >9 million Reduction in CO2 Emissions Cumulative Water potential created by HUF People reached through Prabhat (kg/tonne of production) in manufacturing along with its partners initiatives on economic empowerment, operati
Slide 15: Rohit Jawa
Rohit Jawa 2022 : Chief of Transformation, Unilever 2017 : EVP, North Asia and Chairman, Unilever China 2013 : EVP, Chairman and CEO, Unilever Philippines 2010 : SVP, Global Marketing Operations 2006 : Regional VP, Laundry, Global VP Radiant brand, Unilever Asia 2004 : VP, Home Care, Unilever Vietna
Slide 16: Ritesh Tiwari, Chief Financial Officer
Ritesh Tiwari Chief Financial Officer Sensitivity: Public
Slide 17: Operating context: Inflation moderating sequentially
Operating context : Inflation moderating sequentially YoY inflation softening Key commodities remain elevated vs long term averages MQ’23 vs MQ’22 100% Brent Crude -16% Soda Ash -6% 50% Caustic Soda -25% Crude Palm Oil -39% Tea -1% 0% Barley 8% Milk Powder (SMP) 18% -50% Brent Caustic Crude Skimmed
Slide 18: FMCG Market: Gradual improvement in volumes
FMCG Market : Gradual improvement in volumes FMCG market growth FMCG market growth (Urban + Rural) (Rural) Value Volume Value Volume 10% 10% MAT L6M L3M MAT L6M L3M 0% 0% MAT L6M L3M MAT L6M L3M -10% -10% March’23 March’23 As per March’23 Nielsen market data (HUL relevant categories) 17 Sensitivity:
Slide 19: MQ'23: Strong all-round performance continues
MQ’23 : Strong all-round performance continues Turnover Growth EBITDA PAT (bei)* Net Profit Growth Margin INR INR 11% 23.7% 2,471 cr. 2,552 cr. 4% -90 bps 8% 10% Underlying Volume Growth Change YoY Growth YoY EPS Growth YoY *PAT (bei) : Profit After Tax before exceptional items 18 Sensitivity: Publi
Slide 20: Building back gross margins, stepping up A&P
Building back gross margins, stepping up A&P Gross Margin up sequentially Stepped-up A&P investments 53% 50% 48% 46% 47% 12% 45% 9% 10% 9% 8% 7% Avg. FY'19 to FY'21 FY'22 JQ-22 SQ-22 DQ-22 MQ-23 Avg. FY'19 to FY'22 JQ'22 SQ'22 DQ'22 MQ'23 FY'21 UPG vs NMI Gap -8% -10% -7% -2% (YoY) Continue to drive
Slide 21: MQ'23: Segmental performance
MQ’23 : Segmental performance BEAUTY & PERSONAL FOODS & HOME CARE CARE REFRESHMENT 35% 35% 27% INR 5,638 cr. INR 5,188 cr. INR 3,794 cr. Segmental Revenue 19% 10% 3% Growth Segmental Margins 19% 26% 18% Segment Revenue Growth = Segment Turnover growth + Other Operating Income, Segment Margins (EBIT)
Slide 22: MQ'23: Innovations (1/2)
MQ’23 : Innovations (1/2) Sensitivity: Public 21
Slide 23: MQ'23: Innovations (2/2)
MQ’23 : Innovations (2/2) Tresseme hyaluronic Sensitivity: Public 22
Slide 24: MQ'23: Activations and communications
MQ’23 : Activations and communications Ice Cream film Red Label film Sensitivity: Public 23
Slide 25: HC: Stellar performance continues
HC : Stellar performance continues ❑ Fabric Wash: Strong double-digit growth led by premium portfolio ▪ Handsome market share gains continue, both value and volume ❑ Household Care: Strong double-digit value and volume growth driven by outperformance in Dishwash 24 Sensitivity: Public
Slide 26: BPC: Broad-based double-digit growth
BPC : Broad-based double-digit growth ❑ Skin Cleansing: Double-digit growth led by ‘Lux’. Price reductions taken in MQ’23 in soaps portfolio ▪ Market development actions in bodywash continue to yield good results ❑ Hair Care: Strengthened market leadership and delivered volume led mid single-digit g
Slide 27: F&R: Steady performance in Foods, Coffee and HFD
F&R : Steady performance in Foods, Coffee and HFD ❑ Beverages: Strengthened market leadership in Tea. Higher inflation in premium teas vis-à-vis loose tea leading to consumers downgrading. Coffee continues to perform well delivering double-digit growth ❑ Health Food Drinks: Mid-single digit growth,
Slide 28: MQ'23: Results summary
MQ’23 : Results summary Rs. Crores Particulars MQ’23 MQ’22 Growth Sales 14,638 13,190 11% EBITDA 3,471 3,245 7% EBITDA Margin 23.7% 24.6% -90 bps Other Income (Net) 136 86 PBT 3,425 3,128 9% Tax 873 801 Net Profit 2,552 2,327 10% PAT before exceptional items 2,471 2,283 8% Note: Exceptional items in
Slide 29: FY'23: Solid all-round performance in a challenging environment
FY’23 : Solid all-round performance in a challenging environment Turnover EBITDA PAT (bei)* Net Profit INR INR INR INR 58,154 cr. 13, 632 9,720 cr. 9,962 cr. 16% 9% 11% 13% Growth YoY Growth YoY Growth YoY EPS Growth YoY *PAT (bei) : Profit After Tax before exceptional items 28 Sensitivity: Public
Slide 30: Unprecedented inflation impacting gross margin
Unprecedented inflation impacting gross margin Gross Margin 52% 54% 52% 50% 46% 17% 12% 11% 7% 6% 3% UPG 2% NMI 0% 0% -1% FY'19 FY'20 FY'21 FY'22 FY'23 Net Material Inflation = Material Cost Inflation post impacts of buying efficiencies, hedging, product design to value, etc. Sensitivity: Public 29
Slide 31: Protecting business model through dynamic financial management
Protecting business model through dynamic financial management -140 bps 9% growth -3.6% +1.2% 24.8% +1.0% 23.4% Absolute A&P up Rs. 140 cr. vs PY EBITDA EBITDA FY’22 FY’23 Sensitivity: Public 30
Slide 32: FY'23: Delivering double digit EPS growth
FY’23 : Delivering double digit EPS growth 2% 0% 2% 13% 16% 1% 10% 9% Exceptional items include Tax Prior Period adjustments Sensitivity: Public 31
Slide 33: FY'23: Segmental performance
FY’23 : Segmental performance BEAUTY & PERSONAL FOODS & HOME CARE CARE REFRESHMENT 32% 38% 28% INR 21,230 cr. INR 21,831 cr. INR 14,876 cr. Segmental Revenue 28% 12% 5% Growth Segmental Margins 18% 26% 18% Segment Revenue Growth = Segment Turnover growth + Other Operating Income, Segment Margins (EB
Slide 34: FY'23: Proposed dividend
FY’23 : Proposed dividend Particulars FY’23 FY’22 Dividend per share 39 34 Interim 17 15 Final* 22 19 Total Dividend (Rs. Crores) 9,163 7,989 *Final Dividend number for FY 2022-23 is subject to approval by shareholders at the AGM Sensitivity: Public 33
Slide 35: In summary
In summary ❑ FY’23: Strong performance in a challenging environment leading to 4G growth ▪ Topline grew 16% adding c.8000 crores to our turnover ▪ >75% business winning market shares ▪ Healthy bottomline with EBITDA growth of 9%, EPS grew 13% ▪ Best rated Indian FMCG company in ESG ratings by DJSI a
Slide 36: Outlook
Outlook Sensitivity: Public
Slide 37: Operating environment remains volatile
Operating environment remains volatile Consumers’ perception of inflation Uncertain global context Weather vagaries loom remains high International Monetary Fund The Guardian World Economic Outlook, April 2023: A Rocky Recovery RBI survey on consumers’ perception of price Levels Weather tracker: Ind
Slide 38: Price and volume growth will re-balance
Price and volume growth will re-balance Price growth will tail-off further Volumes to recover gradually HUL Price Growth (UPG) 12% 12% FMCG Market volumes flat 0% 11% 11% (YoY MQ’23) 7% Rural Market Volumes declining -3% (YoY MQ’23) Overall inflation elevated 5.7% (CPI Mar’23) MQ'22 JQ-22 SQ-22 DQ-2
Slide 39: Looking ahead
Looking ahead Near-term Mid-long term ❑ Right price-value equation for competitive volume ❑ India FMCG sector continues to be very attractive growth ❑ Our value creation model remains unchanged: ❑ Build back Gross Margin Topline driven with modest margin expansion and prudent capital discipline ❑ St
Slide 40: Hindustan Unilever Limited MQ & FY 2023 Results
Hindustan Unilever Limited MQ & FY 2023 Results 27th April 2023 Sensitivity: Public
Slide 41: Standalone results for the quarter and financial year ended 31st March 2023
STANDALONE RESULTS FOR THE QUARTER AND FINANCIAL YEAR ENDED 31st MARCH 2023 MQ’23: 11% Turnover Growth, Underlying Volume Growth 4%, EPS Growth at 10% FY’23: Turnover ₹58K Cr. up 16%, EPS Growth at 13% Mumbai, 27th April 2023: Hindustan Unilever Limited announced its results for the quarter and year