Hindustan Unilever Limited · NSE:HINDUNILVR

Hindustan Unilever — CLSA 2018 India Forum

49 slides from Hindustan Unilever's conference presentation, Nov 16, 2018

  1. Slide 1: Re-imagining HUL

    RE-IMAGINING HUL CLSA 2018 INDIA FORUM | 16 NOV 2018 Srinivas Phatak, Chief Financial Officer

  2. 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

  3. Slide 3: Rapid Pace of Change: Last 5 Years

    RAPID PACE OF CHANGE : LAST 5 YEARS Market Disruptions & Climate Consumers & Context Extremities Competition Market Growth GST: Biggest Tax Growing affluence reform in India and aspirations 2012 2013 2014 2015 2016 2017 481Mn Foods safety Rapid increase in Urban – Rural Growth Internet and 130Mn Dem

  4. Slide 4: Performance in the Last 6 Years

    PERFORMANCE IN THE LAST 6 YEARS Net Sales EBITDA Market Capitalization ~$1.9bn ~$573 Mn ~$38bn* added^ added added All nos compared with FY’11-12 which is reinstated to reflect key IND AS accounting impact ^Not adjusted for GST accounting impact & hence the net sales number looks deflated 4 * Differ

  5. Slide 5: A Few Examples of Consistent High Performance

    A FEW EXAMPLES OF CONSISTENT HIGH PERFORMANCE Laundry Hair Care Tea Consistent delivery on all Consistent Growth in No. 1 Tea Company in India fronts powered by strong Topline & Bottom line portfolio 5 All nos are basis internal management reporting & compared with FY’11-12

  6. Slide 6: Being Recognised

    BEING RECOGNISED Best Performing # 3 Company globally Economic Times – #8 Globally and Corporate Citizen of Unilever Business for building leaders Company of the year #1 in India the year 2014 2014 2015 2018 2018 ‘Dream Employer’ for 9 years in a row among top Indian universities 6

  7. Slide 7: HUL Share Performance

    HUL SHARE PERFORMANCE Performance vs Indices HUL Market Capitalization $ 12 4.1 X $ 50 billion billion BSE FMCG 2012 Current* HUL among the top 5 most valuable companies BSE SENSEX in India* 2011 2012 2013 2014 2015 2016 2017 2018 Markets rewarding our Consistent, Competitive, Profitable and Respons

  8. Slide 8: It's an Age of Change and Disruption

    IT’S AN AGE OF CHANGE AND DISRUPTION Millennials / Gen Z There is a thrill of Changing family dynamics purpose Globally connected but Digital disruptions Uncertainties and Volatility reshaping business models there is a search for are the new normal authenticity 8

  9. Slide 9: And Hence There Is a Need For...

    AND HENCE THERE IS A NEED FOR... Consumer Centricity Speed & Agility Digital Connectivity Being Glocal 9

  10. Slide 10: FMCG Continues to Be a Big Opportunity in India

    FMCG CONTINUES TO BE A BIG OPPORTUNITY IN INDIA INDIA INDONESIA CHINA PHILIPPINES US$ 29 ~2X INDIA ~4X INDIA ~ 5X INDIA PER CAPITA FMCG CONSUMPTION To tap this big opportunity, we need more money in the hands of more people i.e. Inclusive Growth 10 Source: Nielsen as of MAT March’18

  11. Slide 11: Markets Showing Early Signs of Revival

    MARKETS SHOWING EARLY SIGNS OF REVIVAL Rural vs Urban Tailwinds Currency & Crude value growth Good monsoon 1.3X Increasing MSP* 1X 2013 Q318 Upcoming elections Rural Growth Indexed Urban Growth Rural growth on an upward trajectory; Gradual improvement in demand 11 * MSP : Minimum Support Price Sourc

  12. Slide 12: Winning in the Future Needs a Different Approach

    WINNINIG INIHE FUTURE NEEDS A DIFFERENT ARRROAGH “~s

  13. Slide 13: Re-imagining

    RE-|

  14. Slide 14: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 14

  15. Slide 15: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 15

  16. Slide 16: India Is a Heterogenous Country

    INDIA IS A HETEROGENOUS COUNTRY Diverse Varied affluence Different media Differential category demographics levels habits adoption Multiple languages LSM 7+ = 9% nationally Mobile internet penetration: Market share in adjacent 8 Major religions (Range of 5-48%) Rural- 18%*; Urban- 59%* states also n

  17. Slide 17: Winning in Many Indias (WiMI)

    WINNING IN MANY INDIAS (WiMI) WiMI in action Distinctive strategy at a cluster level Madhya Pradesh, Chhattisgarh, Empowered Cluster Rajasthan Heads enabling faster decision Customized product making closest to propositions & the point of action media deployment 14 Consumer for every cluster Cluster

  18. Slide 18: CCBTs: Mini-Boards in Action

    CCBTs: 15 MINI-BOARDS IN ACTION Building a stronger sense of empowerment & ownership Multi functional Merger of Brand Development representations in CCBTs & Brand Building Marketing Customer Development Supply Finance Chain Research & Development Responsible for delivering in-year P&L 18 *CCBT: Clus

  19. Slide 19: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 19

  20. Slide 20: Strengthening the Core

    STRENGTHENING THE CORE Focus on driving Constantly Focused SKUs at Offering multiple penetration & innovating and cluster level to value additions Making the core weighted renovating the address demands across the core more aspirational distribution core of all Indias portfolio 20

  21. Slide 21: Creating Categories of the Future

    CREATING CATEGORIES OF THE FUTURE Opportunities to premiumize and up trade; huge headroom to grow India Nascent Category Penetration % Up- 20 Trading Consumption 1 Hand Wash* Dishwash Washing Instant Coffee Soups* Body Wash* Conditioner Face Wash Body Lotion Liquids Liquids Hair Penetration 21 Sourc

  22. Slide 22: Market Development & Premiumization

    MARKET DEVELOPMENT & PREMIUMIZATION Powered by education demos and sampling Business Results Science of Sampling Consumer X contacts 8X Growing at ~2X HUL Average 2014 2017 22

  23. Slide 23: Building Naturals

    BUILDING NATURALS Naturals portfolio growing ~2.5X of overall HUL average 23

  24. Slide 24: Building Specialist Brands - Indulekha

    BUILDING SPECIALIST BRANDS - INDULEKHA Turnover 5x X MQ 17 JQ 17 SQ 17 DQ 17 MQ 18 JQ 18 Growth exceeding our acquisition business case 24

  25. Slide 25: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 25

  26. Slide 26: Building Brands with Purpose

    BUILDING BRANDS WITH PURPOSE 26

  27. Slide 27: Consistently Evolving Brand Communication

    CONSISTENTLY EVOLVING BRAND COMMUNICATION 2005 2011 2013 2017 Pride Loyalty & Forgiveness Empathy and Love Learning from Failure 2005 2008 2010 2014 2017 A cup of motherly A cup with little Taste & Taste & Health & Taste love sips of life Togetherness Togetherness 27 Surf AV

  28. Slide 28: Building Iconic Engagement Platforms

    BUILDING ICONIC ENGAGEMENT PLATFORMS Lux Golden Rose Lakmé Fashion Lifebuoy help a child FAL Foundation Awards Week reach 5 Surf Excel Haar Ko Red Label Taste and Kissan Tiffin Rin Career Academy Harao Togetherness Timetable 28

  29. Slide 29: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 29

  30. Slide 30: General Trade Will Continue to Remain Big

    GENERAL TRADE WILL CONTINUE TO REMAIN BIG More throughput from more stores All GT channels will remain relevant Driving effective coverage & assortment Wholesale Shakti EFFECTIVE COVERAGE ASSORTMENT Retail 1.8X 1.7X X X Aids  Width of Accessibility at arm’s Deep Rural distribution reach of desire d

  31. Slide 31: Building Channels of the Future

    BUILDING CHANNELS OF THE FUTURE Modern Trade ECommerce Exclusive male grooming range co- Driving visibility across Modern Trade created with partner Our Growth & Profitability in ECommerce > Modern Trade > Traditional Trade 31

  32. Slide 32: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 32

  33. Slide 33: Technology Available Today Opens Up a Lot of Opportunities

    TECHNOLOGY AVAILABLE TODAY, OPENS UP A LOT OF OPPORTUNITIES Internet of Things Cloud Technology Artificial intelligence Distinctive Technology giving Competitive Advantage Consumer Appropriate Need/ Unmet Large Part Problem of the Value Chain 33

  34. Slide 34: We Chose to Disrupt Than Be Disrupted

    WE CHOSE TO DISRUPT THAN BE DISRUPTED Insights R&D Manufacturing Consumer Distribution Communication Journey 34

  35. Slide 35: Re-imagining HUL: Our Vision

    RE-IMAGINING HUL: OUR VISION “Re-imagine HUL of the future by choreographing a holistic approach across the value chain to completely transform the way we do business in a connected world” 35

  36. Slide 36: Re-imagining Supply Chain

    RE-IMAGINING SUPPLY CHAIN Plan Source Make Deliver • 1 Day Planning • Integrated e- Cycle (real-time) tendering • Digital Factory • New Logistic models • Integrated S&OP • Realtime Forecast • Smart Robotics • Efficient • Segmentation • Smart Inventory • Network redesign Fulfilment Centres 2.0 modell

  37. Slide 37: Re-imagining Marketing

    RE-IMAGINING MARKETING Granular data analysis Advanced Analytics & Social Listening: Always and tracking Decision Support System on Conversation Precision Marketing: Precision Targeting Consumer Journey and Deployment MAXIMA 37 Re-imagining Marketing AV

  38. Slide 38: Re-imagining Customer Development

    RE-IMAGINING CUSTOMER DEVELOPMENT Demand Demand Capture Capture Demand Fulfilment Demand Generation Providing superior customer service through vertical task specialization across the three pillars interlinked through modular IT capabilities 38

  39. Slide 39: Demand Capture

    DEMAND CAPTURE Salesman Chatbots Advanced Analytics / AI Shikhar app Enhance salesman Driving better and All inclusive retailer productivity with chatbots sharper assortment engagement tool Algorithmic User friendly Customer Product Know your Smarter Segmentation Interface Engagement Discovery Curre

  40. Slide 40: Demand Fulfilment

    DEMAND FULFILMENT Demand Fulfilment Depot Redistribution Stockist Outlet • Project Shogun: Deliver with speed to trade and ensure efficient fulfilment • Impact App : A delivery interface to unlock benefits for retail stockist Eliminate RS Improved quality Leverage technology delivery cost of deliver

  41. Slide 41: Demand Generation

    DEMAND GENERATION Demand Generation • Scaling up B2C (HumaraShop) • Leverage technology to improve shelf presence 41

  42. Slide 42: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 42

  43. Slide 43: Generating Fuel for Growth by Constant Reinvention

    GENERATING FUEL FOR GROWTH BY CONSTANT REINVENTION Savings as a % of End-to-end cost Leveraging Investing back into Turnover focus Technology virtuous cycle of growth 1.7x x 2014 2015 2016 2017 Powered by 43

  44. Slide 44: Re-imagining HUL

    RE-IMAGINING HUL Re-imagining our Re-imagining our Re-imagining magic Re-imagining our structure portfolio in marketing trade channels Re-imagining the Re-imagining fuel for Re-imagining culture value chain growth of the organisation 44

  45. Slide 45: Bringing an Organization Wide Change

    BRINGING AN ORGANIZATION WIDE CHANGE Building an Owner’s Nurturing an Holistic Diversity and mindset experimentation culture Wellbeing Inclusion Distinctive Technology giving Competitive Advantage ESOP Consumer Appropriate Need/ Unmet Large Part Problem of the Value Chain 45

  46. Slide 46: Our Purpose & Values

    WHILE WE RE-IMAGINE HUL, WHAT WE WILL NOT CHANGE IS OUR PURPOSE & VALUES 46

  47. Slide 47: Unilever Sustainable Living Plan

    UNILEVER SUSTAINABLE LIVING PLAN Health & Wellbeing Sustainable Sourcing Water Conservation Enhancing Livelihoods 80,000+ Shakti 100% entrepreneurs TOMATOES are network sourced from sustainable sources 1.7 million people 450 billion litres benefitted >67 million people reached - of water potential L

  48. Slide 48: In Summary

    IN SUMMARY The external context is fast Focussed on Leveraging Building evolving and FMCG The new structure delivering consistent, technology to re- capabilities and in India continues to (WIMI, CCBTs) has competitive, imagine our ways re-imagining our be an immense made HUL more profitable and of w

  49. Slide 49: Thank You

    ForTHANK more YOU information & updates For More Information 49

Hindustan Unilever — CLSA 2018 India Forum on 6ix