Download - HUl Market Share
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8/8/2019 HUl Market Share
1/161
Hindustan Lever Limited
Investor presentation
June 2006
GROWTHAGENDA
2006HIGHLIGHTS
INDIA
OPPORTUNITY
OVERVIEW
Agenda
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8/8/2019 HUl Market Share
2/162
GROWTHAGENDA
2006HIGHLIGHTS
INDIAOPPORTUNITY
OVERVIEW
Agenda
HLL - Investor presentation June 2006
16,000+ employees
1,200+ managers
2,000+ suppliers &
associates
80 company factories
45 C&FAs, 4,500 Stockists
Direct Coverage - 1 Mn outlets
Total coverage - 6.3 Mn outlets
Market reach - 166 Mn households
(8 out of 10 in India)
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India
Population 1027 Mln
5,545 Towns
2.5 Mln outlets
6,38,000 Villages
5.0 Mln outlets
* Source:
(1) Statistics on India, Total Coverage : AC Nielsen, Census of India 2001
(2) Statistics on Market reach : MRUC, Hansa Research - Guide to Indian Markets 2006
HLL - Indias largest FMCG company
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8/8/2019 HUl Market Share
3/163
HLL - Investor presentation June 2006
Turnover 2,464
PBIT 328
Net Profit (bei) 302
EPS 14c
Market Capitalisation 9,216
Mn $
PBIT % 13.3%
Surplus Cash Generated 441 Personal
Products
26%
Beverages
11%
Foods
3%
Ice Creams
1%
Exports
12%
Others
3% Soaps &
Detergents
44%
* Figures based on FY2005 Audited Results
++ Market Capitalization as on 13th June 2006
Financial Overview2005
HLL - Investor presentation June 2006
CategoryHLL -
MarketShare (%)
Fabric Wash 37.0
Personal Wash 55.9
Packet Tea 29.3
Skin 57.1Shampoo 47.5
Talcum Powder 60.7
Dishwash 56.5
Jams 73.0
Market Leader
#2Market
Share (%)
15.4
9.4
20.5
5.123.2
4.8
10.8
4.4
Source : A.C Neilsen - Quarter Ended March 2006 Value shares
Toothpaste 31.0
Instant Coffee 37.3
Ketchups 23.9
Strong No. 247.0
62.7
39.0
HLL -Market
Share (%)
#1Market
Share (%)
Leadership across categories
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8/8/2019 HUl Market Share
4/164
HLL - Investor presentation June 2006
HLL Equity Capital - 50 Mn $
++Market Capitalization as on 13th June 2006
Market Capitalization - 9,216 Mn $
* Shareholding pattern as on 31st March 2006
Unilever
51.6%
FIIs
14.2%
Dome stic FIs,
Mutual Funds
14.9%
Others
19.3%
HLL shareholding pattern
GROWTHAGENDA
2006HIGHLIGHTS
INDIA
OPPORTUNITY
OVERVIEW
Agenda
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8/8/2019 HUl Market Share
5/165
HLL - Investor presentation June 2006
Indian economy
5.6
4.8
6.56.1
4.4
5.8
4.0
8.5
6.9
8.1
0
1
2
3
4
5
6
7
8
9
1990-
91
1997-
98
1998-
99
1999-
2000
2000-
01
2001-
02
2002-
03
2003-
04
2004-
05
2005-
06
250
300
350
400
450
500
550
600
GDP growth rate (%) Per Capita Income ($)
Growing service sector leading the economyGrowing service sector leading the economy
$ 469 bn
$604 bn
$929 bn
$ 1411 bn
2000
2005
India GDP (US $ bn)BRIC estimates 2010
2015
Growing service sector
Low interest rates and steady inflation
External sector growth
Strong savings rate
Infrastructure
Volatility in Agriculture
Labour reforms
Oil prices
ConcernsConcernsPositivesPositives
Demographics provide tailwind to growthDemographics provide tailwind to growth
HLL - Investor presentation June 2006
India Opportunity
India : Opportunities and challenges
HLL : Well positioned to create substantial value
FMCG industry : Potential inflection points
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8/8/2019 HUl Market Share
6/166
HLL - Investor presentation June 2006
India Opportunity
India : Opportunities and challenges
HLL : Well positioned to create substantial value
FMCG industry : Potential inflection points
HLL - Investor presentation June 2006
Evolving trade structure
A pyramid with large differentiated segment of consumers
Increasing per capita income drives FMCG growth
Opportunity to grow consumption and penetration
India : Opportunities and challenges
Opportunities & Challenges
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8/8/2019 HUl Market Share
7/167
HLL - Investor presentation June 2006
R2
= 87%
-
50
100
150
200
250
300
350
400
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Per Capita disposable Income (USD)
HPC
SpendPerCapita(USD)
Source: Euromonitor, Morgan Stanley Research
Per capita incomes in the long term drives consumption
High R-squared for developed and developing countries
High income countries have higher consumption
Disposable income per capita vs HPC spend per capita (2004)
Increasing per capita incomedrives FMCG growth
HLL - Investor presentation June 2006
0
2.3
4.6
6.9
9.2
11.5
13.8
16.1
0 230 460 690 920 1150 1380Per Capita Income ($)
PerCapitaFMC
GE
xpenditure
($)
CHANDIGARHCHANDIGARH
GUJARATGUJARAT
BIHARBIHAR
Correlation of above 0.8 between FMCG consumption and PCI
Growth in income is a good indicator of growth in FMCG consumption
As Indias real income continues to grow at 7% + levels FMCG will benefit
Increasing per capita incomedrives FMCG growth
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8/8/2019 HUl Market Share
8/168
HLL - Investor presentation June 2006
India - 2013
2003181 mn hhlds
131
46
3
2013231 mn hhlds
124
11
96
Rich
Aspirers
Strivers
Source : NCAER
The shape of India is going to changefrom a pyramid to a diamond
HLL - Investor presentation June 2006Source : Euromonitor
Laundry
1.2 1.8 1.83.9
6.2
11.0
India China Indonesia Thailand Malaysia South
Africa
Shampoo
0.2 0.3
1.1
2.4 2.73.1
China India Indonesia Thailand Malaysia South
Africa
Per Capita Consumption (US $ )
Opportunity to grow consumption andpenetration
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8/8/2019 HUl Market Share
9/169
HLL - Investor presentation June 2006
Source : Euromonitor
Skincare
0.3 0.62.3
4.7
7.4 7.7
Ind ia Ind on esia Chi na Sou th
Africa
Malaysia Thailand
Toothpaste
0.4 0.51.0
2.0
2.9
3.6
India China Indonesia Thailand Malaysia South
Africa
Deodorants
0.0 0.0 0.10.6 0.8
4.9
India China Indonesia Thailand Malaysia South
Africa
Opportunity to grow consumption andpenetration
HLL - Investor presentation June 2006
Penetration %
Source : MRUC, Hansa Research - Guide to Indian Markets 2006
Category All India % Urban % Rural %
Deodorants 2.1 5.5 0.6
Toothpaste 48.6 74.9 37.6
Skin Cream 22.0 31.5 17.8
Shampoo 38.0 52.1 31.9
Utensil Cleaner 28.0 59.9 14.6
Instant Coffee 6.6 15.5 2.8
Washing Powder 86.1 90.7 84.1
Detergent Bar 88.6 91.4 87.4
Toilet Soap 91.5 97.4 88.9
Opportunity to drive penetration & consumption
Opportunity to grow consumption andpenetration
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8/8/2019 HUl Market Share
10/1610
HLL - Investor presentation June 2006
Evolving trade structure
25% of turnover to come through organized retailing
22 2632 32
50 5164 70 70
8797
76 5961 54
2846
36 17 5
2 714 22
313
3
15 1324
0%
20%
40%
60%
80%
100%
India
Indonasia
Malaysia
Thailand
China
Taiwan
P
hilippines
Korea
Singapore
HongKong
Australia
RetailTrade
Others TraditionalTrade
Modern Trade
Well entrenched traditional trade but also growing influence of Modern retail:
7.5 mn small stores stocking FMCG products
Modern trade grown by 25% p.a in last 3 years
HLL - Investor presentation June 2006
FMCG modern trade stores increasing at a CAGR of 15% in the last 5 years
They account for 3% of FMCG today
Modern trade accounts for 9% of FMCG in metros, 20% in South Indian metros
HLL market share in Modern trade significantly higher in key categories
(compared with General trade)
0.70.8
0.91.1
1.2
1.5
1.8
2.1
2.42.5
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Stores % contribution to
FMCG
Source : AC Nielsen
1
2
1
0
2
3
4
5
Thousands
0
%
FMCG M odern Trade stores
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8/8/2019 HUl Market Share
11/1611
HLL - Investor presentation June 2006
India Opportunity
India : Opportunities and challenges
HLL : Well positioned to create substantial value
FMCG industry : Potential inflection points
HLL - Investor presentation June 2006
Versatile distribution network with multi-channel capabilities
Innovation and R&D capabilities to straddle the pyramid
An unmatched brand portfolio
Track record of building profitable mass market brands
HLL : Well positioned to create substantial value
Strong local talent base
Combining corporate responsibility and business strategies to aid the
development of rural India
HLL : Uniquely posit ioned
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8/8/2019 HUl Market Share
12/1612
HLL - Investor presentation June 2006
India Opportunity
India : Opportunities and challenges
HLL : Well positioned to create substantial value
FMCG industry : Potential inflection points
HLL - Investor presentation June 2006
India Opportunity
PotentialInflection
points
HighIndirect taxes
Poorinfrastructure
Archaiclaborlaws
Indirect taxes inIndia : 25-30%of End ConsumerPrice
VAT in China :
14.5%
Source: Mckinsey
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8/8/2019 HUl Market Share
13/1613
GROWTHAGENDA
2006HIGHLIGHTS
INDIAOPPORTUNITY
OVERVIEW
Agenda
HLL - Investor presentation June 2006
FMCG Markets Growth m omentum acceleratingGrowth driven by
rural markets
%%
3 .8
9 .9
8 .4
4 .5
6 .1
7 .7
4 .2
4 .83 .5
2 .2
5 .86 .4
1.44 .6
1.9
1.8
14.0
9 .1
2 .51.7
1.0( 0 . 2 )
( 0 . 9 )
0 .6
JQ'04 SQ'04 DQ'04 MQ'05 JQ'05 SQ'05 DQ'05 MQ'06
Total FMCG market Urban Rural
Source: A C Nielsen
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8/8/2019 HUl Market Share
14/1614
HLL - Investor presentation June 2006
HLL FMCG growth
7.1
11.9
15.9 15.818.3
MQ'05 JQ'05 SQ'05 DQ'05 MQ'06
HighlightsFMCG growth momentum sustained
Strong FMCG Volume growth
%%
HLL - Investor presentation June 2006
Sales grow by 11.6% for the quarter
FMCG grows by 18.3%; HPC (+20.0%), Foods (+10.8%)
Growth broadbased and ahead of market
A&P spends higher by 45.3%
PBIT grows by 26.9%
PBIT margin improvement of 140 bps driven by better mix
PAT bei grows by 13.6%
Underlying PAT bei grows by 34.5%
Net Profit grows by 77.0%
Impact of Nihar brand sale, other exceptional items
MQ06 Highlights
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8/8/2019 HUl Market Share
15/1615
GROWTHAGENDA
2006HIGHLIGHTS
INDIAOPPORTUNITY
OVERVIEW
Agenda
HLL - Investor presentation June 2006
New Management Committee (MC) effective from 1st March 2006
One HLL Customer development organisation
Segmented approach to general trade, modern trade and top-end channels
Modern trade structure being strengthened to leverage market opportunities
Consolidation of customers; improved customer service
Robust FMCG market growth; expected to continue
International companies seeking market position
High inflation in key raw materials
Invest behind our brands and deliver consumer value
Achieve cost leadership across the extended supply chain; margin improvements to
come by winning in market place, judicious price increases
Growth agenda
CAPABILITY BUILDING
MARKETS, STRATEGY
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8/8/2019 HUl Market Share
16/16
HLL - Investor presentation June 2006
India : A buoyant economy with huge opportunity
Big opportunity to grow Penetration & Consumption
Market share gains - Key focus area; further strengthening our
competitive position in strategic categories
Continued investments behind innovation / brands
Cost pressures, particularly in Laundry expected to continue; to be
managed by cost effectiveness programs and judicious price increases
Building capability for long term value creation - Top priority
New organization to leverage One HLL and One Unilever
In summary
Thank youThank you