HINDUSTAN UNILEVER LIMITED - Q2 FY 18-19 RESULTS REVIEW

HINDUSTAN UNILEVER LIMITED

Q2 FY 18-19

DETAILS FROM

INVESTOR PRESENTATION

GOALS

·       Consistent Growth

·       Competitive Growth

·       Profitable Growth

·       Responsible Growth

SUMMARY

❑ Demand sustained;

·      rural grows ahead of urban

❑ Crude and currency headwinds

·      partially offset by benign veg oil and food prices

❑ HUL : Strong performance in the quarter

·       Domestic Consumer Growth 12%;

·       Underlying Volume Growth 10%

·       EBITDA at Rs. 2019 crores up 20%;

·       margin up by 160 bps

·       Strong savings program and leverage in other expenses mitigates material inflation and drives margin improvement

·       PAT (bei) at Rs.1522 crores up 23%;

·       Net Profit at Rs. 1525 crores up 20%

WHAT DID SPEED AND AGILITY DO?

·       Faster landing of innovations and price changes (1.4X)

·       Enhanced reach and improved quality of  distribution (1.3X)

·       Optimized inventory holding while sustaining high service levels (0.8X)

·       Savings % Turnover dialled up(1.2X)

SALES GROWTH

·       HOME CARE On stronger volumes=+13%

·       BEAUTY AND PERSONAL CARE  (Broad based) 11%+

·       FOOD AND REFRESHMENT (across categories) 12%+

HOME CARE

Fabric Wash: Double digit growth across the portfolio led by premiumization and market development

❑ Household Care: Another quarter of strong volume growth

▪ Domex – ‘Pick up the Brush’ campaign launched in South India

❑ Purifiers: Sharpening portfolio strategy in line with evolving consumer needs; performance impacted in the quarter

BEAUTY AND PWERSONAL CARE

·       Personal Wash: Robust growth across premium portfolio;

·       Dove and Pears lead category growth

·       Penetration step up- Lifebuoy Rs. 5 access pack launched

·       Skin Care: Momentum across brands continued to deliver strong results

·       Men’s Fair & Lovely relaunch well received

·       Hair Care: Strong double digit growth across key brands

·       TRESemmé relaunched with superior fragrance and packaging

·       Colour Cosmetics: Another quarter of double digit growth on the back of rollout of successful innovations

·       “Kareena Kapoor Khan by Lakmé Absolute” an exclusive makeup range launched

·       Oral Care: Central and North markets performed well; overall delivery below expectations

·       Deodorants: Impressive growth led by strong performance of innovations;

·       Axe Ticket continued to gain traction

FOOD AND REFRESHMENT

·       Beverages: Broad based double digit growth for the quarter

·       WiMI strategy delivering strong results

·       Focused market development accelerated green tea growth

·       Ice Cream & Frozen Desserts: Sustained strong growth momentum

·       Acquired Adityaa Milk Ice cream; integration commenced

·       Foods : Double digit growth led by ketchups and jams

SEGMENTAL PERFORMANCE:

HOME CARE : Inflation impact now visible on a sequential basis; Revenue Growth : 12%;Margins :16%

Beauty : Gross margins step up; brands well supported; Revenue growth at 10%; Margins Growth :26%

Food : Healthy gross margins; benefit of full portfolio play Revenue Growth 12%; Margins growth : 17%

SQ 2 RESULTS SUMMARY:

(In Crores)

Particulars SQ’18     SQ’17    Growth %

Sales            9138     8199     11^(DOMESTIC SALES 12% Growth)

EBITDA         2019     1682     20                              (Margin improvement 160bps)

Other Income 305      204

Exceptional Items – Credit / (Charge) (35) 36

PBT               2152     1801     20

Less : Tax     627       525

PAT Bef.Exce Items)1522 1236     23

Net Profit      1525     1276     20

EQUITY        216 216

EPS              7.04      5.90

▪ Domestic Consumer Growth at 12%^

▪ EBITDA improvement 160bps

▪ Other Income up due to interest on prior period tax assessment order

On26th sep, Acquired “Aditya Milk” and front end distribution system of Vijaykant Dairy,

FIRST HALF YEAR

Sales         18494        17293        7^

EBITDA     4270                    3548                    20

PAT bei     3090                    2528                    22

Net Profit   3054                    2559                    19

▪ Comparable* Domestic Consumer Growth at 14%^

▪ Comparable* EBITDA improvement 130bps

Interim dividend Rs.9 for half year (Rs.8 last year FIRST HALF) record date 26.10.18

Looking ahead

Near term

❑ Demand outlook stable

❑ Crude increase and currency depreciation key watch outs

Our strategy

❑ Focus on volume driven growth and improvement in operating margin

❑ Consistent, Competitive, Profitable, Responsible Growth

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Agile & responsive supply chain and data driven capabilities will enable to best serve consumer needs