introductiontohul_tcm114-284399

8/10/2019 IntroductiontoHUL_tcm114-284399

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Introduction to Hindustan Unilever LimitedAugust 2012


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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 expressions or variations of these

expressions or negatives of these terms indicating future performance or results, financial or

otherwise, which are forward looking statements. These forward looking statements are based on

certain expectations, assumptions, anticipated developments and other factors which are not limited

to, risk and uncertainties regarding fluctuations in earnings, market growth, intense competition andthe pricing environment in the market, consumption level, ability to maintain and manage key customer

relationship and supply chain sources and those factors which may affect our ability to implement

business strategies successfully, namely changes in regulatory environments, political instability,

change in international oil prices and input costs and new or changed priorities of the trade. The

Company, therefore, cannot guarantee that the forward looking statements made herein shall be

realized. The Company, based on changes as stated above, may alter, amend, modify or make

necessary corrective changes in any manner to any such forward looking statement contained hereinor make written or oral forward looking statements as may be required from time to time on the basis

of subsequent developments and events. The Company does not undertake any obligation to update

forward looking statements that may be made from time to time by or on behalf of the Company to

reflect the events or circumstances after the date hereof.


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Contents

1

2

3

4

About the Company

India FMCG Market Opportunity

Our Strategy

Financial Information, Shares & Governance

5 Contact Information


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1 About the Company


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Our Vision

We work to create a better future everyday.

We help people feel good, look good and get more out of life with brands and

services that are good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big

difference for the world.

We will develop new ways of doing business that will allow us to double the size

of our company while reducing our environmental impact.


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HUL: Indias largest FMCG Company

More than 75 years

of experience in

India Products touch the

lives of 2 out of 3

Indians everyday

Direct distribut ion

reach of > 2 Mn

stores No.1 and strong

No.2 in more than

95% of the

business

Get moreout of life

7 brands > Rs. 1000 crs; 13 brands > Rs. 500 crs

17 out of top 100 most trusted brands in India^

^Brand Equity Survey, 2011


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Pan India footprint

Source: Statistics on India, Total Coverage : Nielsen, Census of India 2011HUL manufacturing locations (own and outsourced)Mn = Million

~ 15,000 employees

~ 2,000 suppliers & associates

~ 70 Manufactur ing locations

40+Depots, 2700+ Distr ibutors

Direct coverage 2 mn+ outlets

Population 1.2 billion5545 Towns 2.5 million outlets

638,000 villages 5 million outlets


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Portfol io straddling the pyramid

Fabric Cleaning Skin Cleansing Hair Skincare Tooth Paste

Soaps & Detergents: 48% Personal Products: 31%

% contribution of the segment to total revenue (April - December 2011)


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Portfol io straddling the pyramid

Tea Coffee Processed Foods Ice Creams Water

Beverages: 12% Packaged Foods: 6% Others: 3%% contribution of the segment to total revenue (April - December 2011)


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*Nielsen Equity Management Program Score

Most responsive supplier of

the year

Value Award by TESCO

India

6 EMVIES in 20116thmost inn ovative company

globally - Forbes

eQ* at 89

(world class level)

No.1 Employer by Ao n Hewitt Best Employer Brand in Asia,

2011

Golden Peacock Global Award for Corporate

Social Responsibi lity for th e year 2011

Golden Peacock Environment Management

Award f or 2011 in the FMCG catego ry

External Recognition

ConsumersCustomers

Employees Communities

No.1 Employer of choice by

Nielsen Campus tr ack


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2 India FMCG Market Opportunity


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Large consumption opportunity

CAGR of 12% in base case; 17% with high estimates

2850

87

FY 10 E FY 15 P FY 20 P

FMCG - $ bln

Base Case High Case

62

137

Source: FMCG roadmap to 2020 CII Report, 2010


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Head room for growth

Penetration

Data Source: Euromonitor

per capita consumption

Consumption

7963

45

7965

48

Ann ual DQ Dec

Skin Care

2 01 1 2 01 0

All India penetration

8979

63

8875

60

Annual DQ Dec

Hair Care

2011 2010

9180

63

8978

60

Annual DQ Dec

Oral Care

2011 2010

Data Source: IMRB Factbook

5.9

3.2

0.6

5.3

2.7

0.6

China Indonesia India

Skin Care

2 01 1 2 01 0

1.7 1.6

0.5

1.6 1.5

0.4

China Indonesia India

Shampoo

2 01 1 2 01 0

2.4

1.2

0.3

2.4

1.10.3

China Indones ia Ind ia

Ice cream

201 1 20 10


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Rising incomes to favor Personal Care and Foods

0 5000 10000

LSM 1

LSM 2-4

LSM 5-7

LSM 8+

LSM 8+ (newcategories)

Exp per HH / year (INR)

LSM 1 LSM 2-4 LSM 5-7 LSM 8+

Laundry, Skin Cleansing Pers Prod Foods

1x

1.7 x

3.1 x

4.9 x

7.7 x

*Source : Family Budget Survey, Consumer Panel*HUL Participating Categories; HH: Households

Demand elasticity Personal Care / Foods explosion


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HUL: Uniquely positioned to exploit the opportuni ty

Strong brands across benefits & price points Consumer understanding, supply chain,

go-to-market

R&D, brand development, buyingNo.1 Employer*, diverse talent pool

*awarded by Aon Hewitt in 2011

Portfolio Capabilities

Talent Global leverage


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3 Our Strategy


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Clear and compelling strategy

Consistent Growth

Competitive Growth

Profitable Growth

Responsible Growth

Strategic framework Sustainable Living Plan Our Goals


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Virtuous circle of growth

A business model that works

ProfitableVolumeGrowth

Innovation

A&P/R&D

CostLeverage

+Efficiencies

Cost

Savings

Focused on execution


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Market HUL Domestic consumerSales growth HULEBIT

FY 2011-12: Delivered on goals

Competitive growthAhead of market

Consistent growthVolume led

Profitable growthMargin expansion

14

18

UVG Price USG

10

8

18

17.5%

140 bps

HUL FMCG growth %FMCG growth %


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Winning Principles

Our first priority is to our consumers,

then customers, employees and

communities. When we fulfill our

responsibilities to them our

shareholders will be rewarded.


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Embedding consumer and customer centricity

Consumer & Customer License

Project Popeye

Mission Bushfire Perfect storesCustomer Credo


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How will we win


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Better quality products, stronger brands

Tripled blind product w ins % Improved brand equity scores

X

2009

2010

2011

2X

3X

3/4th of portfolio

holding/gaining *

Measured for the top 25 brands; *Exit 2011 Vs second half 2009


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Bigger, better and faster innovations

Covering 60%+ of portfolio

Kissan range expanded and relaunched Soupy NoodlesRs.5 pack

0

Pureit Marvella RO

CupaSoupinstant soups

Bru Exotica Bru Lite

Taj Mahal flavoured TeabagsTaj Mahal green Teabags

Brooke Bond 3 Roses

relaunched

Bru Gold


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How will we win


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Lead market development: Hair

More usage More users More benefits

Increasing Consumption in

Rural

Serums, Masks, Treatments

for Salon treated hairDriving Hair conditioners


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Stepping up front end execution

Product

Pack

Proposition

Price

Place

Promotion

Better Stores

CORE SERVICED: 2 Mn+

DISTRIBUTED: 6.5 Mn

Direct

More stores

2010 2011

Better served*

* Modern Trade on shelf availability

310 bps


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How will we win


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Differentiated Supply Chain

Driving benefits across value chain

Consumer

perceived

quality

E2E

competitive

costs

World class

service

Live Superior Service.

Delivery Sustainable, Profitable Growth

Flawless execution, Safety and Sustainabili ty


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Focus on cash and savings

2008-09 2011-12

Step up in cost savingsSavings as a % of Turnover

Delivering cashTWC as a % of turnover

2010-11 2011-12

Maximizing ROCEOptimizing investments

TWC: Trading working capital; includes debtors, creditors and inventory excludes cash; ROCE: Return on Capital employed

52%Productivity

ImprovementCapacity

increase

in 2011

% Contributed by

48%New Capital

Investments


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Driving Return on Marketing Investments

Getting more out of advertising

Awareness

Persuasion

70%

201020112010

2011

Improvement in Ad preview scoresUp by 800 bps

Product ion and media feesLower by 900 bps

More ads pre-testedUp by 50%

D i i R M k i I


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Driving Return on Marketing Investments

Optimizing promotional spends

+

-/-

-/- +TO Growth

ROIPositiv

e

20102011

20102011

More green activitiesHigher by 1100 bps

Higher ROIUp 200 bps

More activities evaluatedUp by > 50%

ROI: Return on Investment


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How will we win


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Winning with People: Building a talent powerhouse

53

55

59

62

65

.McKinsey & Co

BCG

P&G

TAS

HUL

# 1 Dream employer across campuses*

2010 2011

100

108

High people engagement

* Survey by Nielsen Indexed Employee Engagement Scores

# 1 Best employer in India, 2011

awarded by Aon Hewitt

No.1 Employer of choice by Nielsen

Campus track

P f lt th t t l


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Performance culture that respects our values

A broad based systematic approach


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Strengthening Performance culture

Aligned goals Sharper differentiation Reward linked to

performance

2006-07 2011-12

Fixed Variable

Performance cul ture index is up by 14% in 2011

Delivery

StandardsofLeadershi

p


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How will we win

U il S t i bl Li i Pl


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Unilever Sustainable Living Plan

Three big goals

U il S t i bl Li i Pl


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Unilever Sustainable Living Plan

India Highlights 2011

30 mill ion people reached with Lifebuoy soap handwashing

programmes in 2010-11

30 mill ion people have gained access to safe drinking water by

using Pureitin-home water purifier, since 2005

Around 60%of our major food and beverage brands Brooke Bond,

Bru, Knorr, Kissan and Kwality Walls comply with the Healthy

Choice guidelines

Reduced CO2emissions by 14.7%, water use by 21.5% and

waste by 52.8%in our factories, over 2008 baseline

Improved CO2efficiency in transportation by 17.8%

60% of tomatoesin Kissan Ketchup are sourced sustainably


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4 Financial Information, Shares & Governance


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HUL Financial Performance

Rs. Crore 2005 2006 2007 2008-09^ 2009-10 2010-11 2011-12

Net Sales 11,061 12,103 13,675 20,239 17,524 19,381 21,736

Operating Profit 1,471 1,709 1,934 2,845 2,566 2,458 3,073

Operating Profit Margin 13.3 14.1 14.1 14.1 14.6 12.7 14.1

Net Profit 1,408 1,855 1,925 2,496 2,202 2,306 2,691

Earning Per Share (Rs.) 6.4 8.41 8.73 11.46 10.10 10.58 12.46

Net Cash Flow from Operating

Activities1967 1595 1680 2029 3441 1892 2870

Operating Profit - Profit from Operations Before Other Income, Interest and Exceptional Items

Financial year 2011 12 Results


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Financial year 2011-12 ResultsFMCG exports demerged reported numbers not comparable

Rs Cr

Particulars FY'10-11 FY'11-12 Growth% FY'10-11 FY'11-12 Growth%

Net Sales 19,381 21,736 12% 18,451 21,736 18%

PBITDA 2,678 3,291 23% 2,584 3,291 27%

PBIT 2,458 3,073 25% 2,382 3,073 29%

PBIT margin (%) 12.7% 14.1% 140 bps 12.9% 14.1% 120 bps

PAT bei 2,156 2,592 20% 2,096 2,592 24%

Net Profit 2,306 2,691 17% 2,246 2,691 20%

Domestic Consumer Business grows at 17.5%

EBIT margins up 140 bps

PAT (bei ) up 20%

HUL (as reported) HUL (ex FMCG exports)


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Performance trends EPS and DPS

2008-09: 15 months period

Calendar year 2007, includes Platinum Jubilee special dividend of Rs.3 per share

Earnings per Share (Rs.)

Dividend per Share (Rs.)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2006

2007

2008-09

2009-10

2010-11

2011-12

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2006

2007

2008-09

2009-10

2010-11

2011-12


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Stock Exchange Stock Code

Bombay Stock Exchange 500696

National Stock Exchange Hindunilvr

Listing Details

Share List ing & Ownership

FII: Foreign Institutional Investors

Status as on 31stMarch, 2011

Shareholding pattern

Uniliver

53%

MFs

2%

DII

8%

FIIs

19%

GeneralPublic

14%

Others

4%


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Corporate Governance

HUL firmly believes in maintaining high standards of

Corporate Governance

To succeed, we believe, requires the highest standards of corporate behaviour towards everyone we

work with, the communities we touch, and the environment on which we have an impact. This is our

road to sustainable, profitable growth and creating long-term value for our shareholders, our people,

and our business partners.

The Board of Directors of the Company represents an optimum mix of professionalism, knowledge and

experience. The total strength of the Board of Directors of the Company is nine Directors, comprising

Non-Executive Chairman, four Executive Directors and four Non-Executive Independent Directors.

For details, refer investor center at:

http://www.hul.co.in/investorrelations/CorporateGovernance/?WT.LHNAV=Corporate_Governance

I believe that nothing can be greater than a business, however small it may be, that is governed by

conscience; and that nothing can be meaner or more petty than a business, however large,

governed without honesty and without brotherhood.

William Hesketh Lever
http://www.hul.co.in/investorrelations/CorporateGovernance/?WT.LHNAV=Corporate_Governancehttp://www.hul.co.in/investorrelations/CorporateGovernance/?WT.LHNAV=Corporate_Governance


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Board of Directors


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Management Committee


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Further information & contact details

More information is available at http://www.hul.co.in/investorrelations/

The IR team can be contacted by

telephone as follows:

+91 22 39832211

Or by e-mail at:

[email protected]

Introduction to Hindustan Unilever Limited
http://www.hul.co.in/investorrelationshttp://www.hul.co.in/investorrelationshttp://www.hul.co.in/investorrelations


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Introduction to Hindustan Unilever LimitedAugust 2012

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