HINDUSTAN UNILEVER LTD - (HUL) - NET PROFIT UP 17%; NET SALES UP 12%

HINDUSTAN UNILEVER LTD

Harish Manwani, Chairman & Nitin Paranjpe, MD & CEO

September Quarter 2012

Financial Results

16% Domestic Consumer Sales Growth; PAT (bei) up 23% in  Sep. Quarter 2012.

Hindustan Unilever Limited announced its results for the quarter ending 30^th September 2012.

During the quarter, the Domestic Consumer business sustained its robust performance growing at 16% with underlying volume growth of 7%. Overall growth in the quarter was impacted by the budget rationalization in the Canteen Stores Department (CSD).

Soaps & Detergents grew 22%; double digit growth across all segments

Laundry delivered another quarter of strong performance with all brands and formats growing in double digits. The focus on driving upgradation saw both Surf and Rin register double digit volume growth. Comfort fabric conditioners continued to lead market development; the portfolio was expanded with the launch of the One Rinse variant. Household Care also registered double digit growth.

Skin Cleansing sustained its broad based growth momentum. While Dove and Pears are driving category premiumization, Lifebuoy recorded one of its highest growth rates. The liquids portfolio saw accelerated growth led by Lifebuoy Handwash and Lux Bodywash.

Personal Products grew 12%; growth stepped up in Hair & Oral

Hair delivered a strong quarter with broad based growth. During the quarter, the TRESemmé brand was launched in India with an exciting proposition of ‘salon style hair at home everyday’. The portfolio was further strengthened with the relaunch of Clinic Plus and a new Hair Fall Rescue range under Dove.

Oral Care registered volume led double digit growth with Close Up buoyed by its re-launch in the quarter and Pepsodent driven by the premium range.

In Skin Care, growth was led by Ponds, Vaseline and Dove. The re-launch of Fair & Lovely (FAL) in the previous quarter has been well received.

Beverages grew 10%; led by premium Tea & Coffee

Tea growth was led by the top end while growth in the mass end was revived with the re-launch of Taaza. In Coffee, Bru sustained its growth momentum across both Instant and Roast & Ground (R&G) formats and the premium range was expanded with a new offering – Bru Exotica Guatemala.

Packaged Foods grew 10%; driven by key brands

Knorr soups grew in double digits through focused in-market activation and actions are in place to step up growth in the rest of the portfolio. Kissan Ketchups sustained growth in non-CSD channels andKwality Walls maintained its double digit growth trajectory.

Volatile cost environment; competitive intensity heightens

The operating context remained challenging during the quarter with a volatile cost environment and heightened competitive intensity. Overall industry media spend was up significantly to its highest levels in over 15 quarters. A&P was stepped up and maintained at competitive levels, higher by 118 Crores (+70 bps) in the quarter.

Net Profit After Tax (bei) up 17%

Profit before interest and tax (PBIT) grew by 19% with PBIT margin improving 100 bps. Profit after tax but before exceptional items, PAT (bei), grew to Rs. 806 Crores during the quarter. Net Profit at Rs.807 Crores grew 17%.

The Board of Directors have declared an interim dividend of Rs 4.5 per equity share of face value Re. 1 each, for the year ending 31^st March 2013. In addition, an amount of Rs 8 per share has been declared as a Special Dividend to be paid out of the accumulated P&L balance and exceptional income generated in the first half of FY 2012-13 and will be funded from the current cash balances.

Harish Manwani, Chairman commented: “In a volatile and uncertain environment, we continue to sustain our growth momentum while steadily improving our margins. Our consistent performance is being driven by a relentless focus on brand building, bigger and better innovations and disciplined execution in the marketplace.

RESULTS TABLE

Q2FY13	%DIF YoY	Q2 FY12	%Dif QoQ	Q1 FY13	FY 12
615,541	12	551,600	(2)	625,015	2,173,560	1.a. Net Sales
481,313	18	409,267	(2)	492,564	1,697,483	i)  Domestic FMCG - HPC
106,264	9	97,347	(1)	106,997	391,897	ii) Domestic FMCG - Foods
587,577	16	506,614	(2)	599,561	2,089,380	Domestic FMCG - Total (i+ii)
27,964	(38)	44,986	10	25,454	84,180	iii) Others
15,540	65	9,412	21	12,862	38,077	1.b. Other Operating Income
631,081	12	561,012	(1)	637,877	2,211,637	1. Total Income (net) [1.a. + 1.b.]
539,176	11	484,054	(1)	546,995	1,904,328	2. Expenses [sum of (a) to (g)]
270,084	18	229,829	8	250,286	858,489	a) Cost of materials consumed
82,603	8	76,311	4	79,713	302,414	b) Purchases of stock-in-trade
(25,742)	389	(5,263)	(480)	6,775	12,873	c) Changes in inventories of FG, SIT, WIP
33,049	15	28,731	(1)	33,286	110,728	d) Employee benefits expense
5,769	1	5,710	0	5,763	21,825	e) Depreciation
76,898	18	65,137	(6)	81,961	263,478	f)  Advertising & Promotions
96,515	15	83,599	8	89,211	334,521	g) Other expenses
91,905	19	76,958	1	90,882	307,309	3. Profit from operations
14,875	83	8,111	(32)	21,861	27,831	4. Other Income
106,780	26	85,069	(5)	112,743	335,140	5. Profit Before finance costs(3+4)
633	1,073	54	20	528	124	6. Finance costs
106,147	25	85,015	(5)	112,215	335,016	7. Profit after finance costs (5-6)
158	(96)	4,442	(100)	60,469	11,887	8. Exceptional Items - credit (net)
106,305	19	89,457	(38)	172,684	346,903	9. Profit Before Tax (7+8)
(25,613)	25	(20,565)	(35)	(39,565)	(77,763)	10. Tax expense
80,692	17	68,892	(39)	133,119	269,140	11. Net Profit After Tax [9+10]
-		-		-	-	12. Extraordinary Items
80,692	17	68,892	(39)	133,119	269,140	13. Net Profit (11+12)

Basic EPS on a Face Value of Rs.1 for Q2 FY 13 stands at Rs.3.73; compared to Rs.3.19 in Q2 FY 12; and Rs. 6.16 in Q1 FY 13. The EOS for FY 12 total was Rs.12.46.

The EPS for the Half Year ended sep,2012 is Rs.9.89 against Rs. 6.09 for the HY ended Sep,2011.

Overall, the performance of HUL for the second quarter ended Serp,2012 is good. While competition is quite intense in all product lines, HUL has been able to improve its sales in all product lines with mostly double digit growth in all of them.

Thus, future also is expected to be quite promising.

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