presentationhll

8/14/2019 PresentationHLL

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Hindustan LeverLimited

MISSION

INDIAS LARGEST FMCG MARKETER

To add vitality to life and to meet everyday

needs for nutrition, hygiene and personal

care with brands that help people feel

good, look good and get more out of life


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OUTLINE

1. HERITAGE: PAST MILESTONE

3. HERITAGE: PRESENT STATURE

5. ORGANIZATION

7. BUSINESS AND BRANDS

9. CITIZEN LEVER

11.FINANCIAL ASPECTS

13.LOOKING AHEAD


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1. HERITAGE: PAST MILESTONE

Formed in 1956 with merger of Hindustan Vanaspati

Manufacturing Company, Lever Brothers India Limited andUnited Traders Limited

First foreign subsidiary to offer 10% equity to Indian public

Unilever approves research activity by HLL in 1957

HLL research centre opens in Mumbai in 1967


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Liberalization in 1991, HLL allowed to explore every product and

segment, no constraint on production capacity

Recognized as Star Trading House in exports by Government Of

India in 1992

Tata Oil Mills (TOMCO) merges with HLL in 1993-the biggest inIndian industry till that time

HLL forms NLL ( Nepal Lever Limited)


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HLL and US based Kimberley Clark Corporation form 50:50

JV in 1994

Acquisition of Kwality and Milkfood and introduction of Walls in

1994

50:50 JV with Indian cosmetics major- Lakme Limited : Lakme

Lever Limited formed in 1995

Recognized as Super Star Trading House in 1995

Brooke Bond Lipton India Limited merges with HLL in 1996


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HLL introduces branded atta, Surf Excel launched

Merger of Ponds India Limited with HLL in 1998 due to overlaps

in Personal products, Chemicals and Export business

Implementation of Direct consumer contact called Project Bharti

Acquisition of 74% stake in Modern Food Industries Limited in

2000

Enters Ayurvedic health and Beauty care category with the Ayush

Therapy Centres in 2002


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Launch of Hindustan Lever Network (HLN) in 2003

Acquisition of Amalgam Group ( leader in value added Marine

Products exports)

Launch of Pureit water purifier in 2005


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2. HERITAGE:PRESENT STATURE

HLL is India's largest FMCG company

Unilever ,the parent company has 51.55% equity holding, 380000

individual shareholders and financial institutions

20 distinct categories in Home and Personal care productsand Food and Beverages

Scale of combined volume of 4 mn tonnes and sales of more

than 13000 crore


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One of the largest exporters

Recognized as Golden Super Star trading House by

Government Of India

About 16000 employees , including 1200 managers

HLL brands are manufactured over 80 factories across India

Outsourcing from 150 other units


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Operations involve more than 2000 suppliers and associates

Distribution channel comprises about 7000 redistribution

stockists, covering 6.3 million retail outlets

It covers the entire urban and about 250 million rural consumers

Regular responsiveness for natural calamities- earthquake in

Gujarat , tsunami


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More than 380 patents demonstrating its leading role in

Consumer relevant R&D

Largest player in hot beverages out of home segment with

more than 15000 tea and coffee vending points


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3. ORGANIZATION

MANAGEMANT STRUCTURE

- BOARD

- DIVISIONS

- CENTRAL FUNCTIONS


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BOARD : APEX BODY

Headed by the Chairman and comprising 5 whole time directors

and 5 independent non-executive Directors

Operations supervised by National Management comprising the

Vice Chairman, MD (HPC), MD (Foods) and the Finance Director


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BOARD OF DIRECTORS

CHAIRMAN : Mr. Harish Manwani

CEO and Managing Director: Mr. Douglas Baillie

VICE CHAIRMAN: Mr. M. K. Sharma

Managing Director( Foods): Mr. S. Rabindranath


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Finance and IT Director: Mr. D. Sundaram

Executive Director: Mr. Nitin Paranjpe

DIRECTOR:

- Mr. Sanjiv Kakkar

- Mr. A. Narayan


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- Mr. V. Narayanan

- Mr. D.S. Parekh

- Mr. C.K.Prahlad

- Mr. S. Ramadorai


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DIVISION

HOME AND

PERSONAL CAREFOODS


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The divisions are further reorganized into categories

Each category and each function Sales, Commercial,

Manufacturing is headed by the Vice President

Divisions management committee comprises of Vice President

and Managing Director

Regional Sales Manager and Area Sales Manager head the

regional branches in Delhi, Kolkata, Chennai and Mumbai for

managing Sales operations


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Marketing Manager heads a team of brand managers for each

Category in Marketing

Commercial team of a division is responsible for Supply Chain

Management

Each division has a nationwide manufacturing base

Each factory headed by teams of Production, Engineering,

Quality Assurance, Commercial and Personnel managers


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CENTRAL FUNCTIONS- Finance

- Human Resources

- Technology

- Research

- Information technology

- Legal and Secretarial

- Corporate Affairs


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4. BUSINESS AND BRANDS

A. Home and Personal care

C.Foods

E. New Ventures

G.Exports


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PERSONAL WASH

A. HOME AND PERSONAL CARE


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FABRIC WASH


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ORAL CARE


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SKIN CARE


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HAIR CARE


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DEODRANTS AND TALCS


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COLOUR COSMETICS


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AYURVEDIC PERSONAL AND HEALTH CARE


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TEA

B. FOODS


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COFFEE


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ICE CREAM


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OTHER FOODS

OTHER CULINARY PRODUCTS


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C. NEW VENTURE

- HINDUSTAN LEVER NTEWORK

- AYUSH AYURVEDIC PRODUCTS AND SERVICES

- PUREIT WATER PURIFIER


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Direct selling arm of HLL

Multi category business opportunity started in 2003 in the area of

Network marketing

Having 3.5 lakh consultants trained by expert managers

Offers opportunity to build a business with different categoriesof HPC and Food products

Products exclusive to HLN, unavailable in retail channel


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Spread to 1500 towns/cities , backed by 42 offices and more than

250 service centres

Requires lowest investment for entry

Widest reach among direct selling companies in India

Highly affordable prices

Focused training system and tools to aid self development


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RANGE OF PRODUCTS

HOME AND PERSONAL CARE

- Detergents ( Lever Home)

- Home Cleaning ( Lever Home)

- Personal care and cosmetics for women ( Aviance)

- Soaps ( Ayush Spa range, Aviance and Denim Xclusive)


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- Health care ( Ayush Spa)

- Male Grooming ( Denim Xclusive)

- Kids care ( Little Animalz)

- Oral care ( Mentadent)


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FOOD

- Childrens nutrition ( Ayush Poshak Rasayana)

- Ready-to-cook rice meals ( Indus Valley)


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Most advanced purifier, no electricity or tap water supply needed

Meets the germ kill criteria for toughest regulatory agency in the

US - The Environment Protection Agency (EPA)

Devoted work for 5 years by Indian and international experts


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D. EXPORTS

Taken up in 1962 due to foreign exchange shortage

Largest exporter of branded FMCG

Sourcing base for Unilever brands in HPC and Tea for supplies

to other Unilever companies

Preferred supplier to clients in categories in which India has

Competitive advantage: Marine Products, Castor and Rice


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Enjoys international recognition

Geography comprises countries in Asia, Africa, Australia,

North America and Europe

Accounts for 12% of the turnover


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HOME AND PERSONAL CARE

- PRODUCTS

Soaps, Skin care, Oral care

- BRANDSLux, Lifebuoy, Pears, Fair & lovely, Dove, Vaseline, Close-Up,

Pepsodent, Signal

HLL is the only source of Pears soap across the world

EXPORT PORTFOLIO


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BEVERAGES

- PRODUCTS

Branded packet Tea , Instant Tea

- BRANDSBrooke Bond, Brooke Bond Red Label, Brooke Bond Taj Mahal,

Lipton, Lipton Yellow Label, Lipton Green Label, Lipton Brisk,

Lipton 3-in-1 primex, Chinese Rickshaw


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MARINE PRODUCTS

- PRODUCTS

Surimi, Crabsticks, Shrimps

- BRANDS

Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold Seal

Tara, Prima

Icelandic, worlds third largest seafood company, is one of the

customers


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RICE

- PRODUCTS

Basmati Rice, Basmati Rice-based ready-to-eat Rice meals

- BRANDS

Gold Seal Indus alley, Rozana, Annapurna

CASTOR

- PRODUCTSCastor Oil, Castor Oil based, Specialty Castor Oils

- BRANDS

Topsol


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5. CITIZEN LEVER

CORPORATE SOCIAL RESPONSIBILITY

Commitment to all stake holders Consumers,

Employees, Environment and the Society that the

Organization operates in


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SNAPSHOT

Focused on Import Substitution in 1950 when BOP was an issue

Most of the Investment in designated backward areas and zero

industry districts in 1980s , reviving sick industries, developing

local entrepreneurship

Focusing on health and hygiene, women empowerment

Shakti

Lifebuoy Swasthya Chetna

Fair and Lovely foundation


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Community support activities like education and rehabilitation of

special or underprivileged children, care for the destitute and others

Happy HomesYashodadham

TERI-CSR special award from The Energy and Resource Institute

for commitment to every aspect of Sustainable Development

Environment Management PracticesGreening Barrens

Trust, Transparency, Accountability and Responsibility in dealings

with Employees and Shareholders


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CHANGING LIVES IN RURAL INDIA

Seeks to empower underprivileged rural women by providing income

generating opportunities

Started in 2001 and extended to about 1 lakh villages in 15 states

Targets villages with population of less than 2000 people

Health and hygiene education through Shakti-Vani programme

(social communication programme)


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Access to relevant information through iShakti community portal

(information related to agriculture, health, vocational training,

animal husbandry)

Has about 30000 women entrepreneurs in its fold

Covers about 15 million rural population


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HEALTH AND HYGIENE EDUCATION

Initiated in 2002 in media dark villages (UP, MP, Bihar, WB,Orissa, Maharashtra)

Spreading awareness about the importance of washing hands

with soap

Reached 27000 villages and 80 million people

Initiated due to presence of diseases such as Diarrhoea


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It is a multi-phased activity

Effects behaviour change through demonstration by means of

pictorial story, quizzes etc.

Targets children and mother


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ECONOMIC EMPOWERMENT OF WOMEN

Launched in 2003

Provides information, resources, inputs and support in the areas

of education, career and enterprise

Targets women from low income groups in rural as well as urbanIndia

Renowned Indian women, physicians , activists are members of

the foundation


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Career guidance is provided by organizing career fairs

About 5 lakh students have benefited from 150 towns and cities,

getting acquainted with over 200 career options

Scholarships are provided

Vocational training in areas of embroidery, garment designing etc.


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SPECIAL EDUCATION AND REHABILITATION

Initiated in 1976, with the setting up of Asha Daan-home forabandoned, challenged children and the destitute

Needs are met through special classes of basic skills,

physiotherapy and corrective surgery

Takes care of over 300 infants and HIV-positive patients

Opened schools for challenged children helping them become

self reliant


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REBUILDING LIVES

Is a village reconstructed in Gujarat which was wrecked byearthquake in 2001

Comprises 289 homes with over 1100 residents

Provision of school building, playground and a multi purposeCommunity centre


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ENVIRONMENT POLICY

Maintaining environment management systems across the companto meet statutory requirement

Assessing environmental impact and setting annual improvement

objectives

Appropriate training to employees

Co-operation with suppliers, co-packers, external bodies and

government


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Formal review of environment performance at every HLL site

Nomination of HLL environment coordinator

Responsibility for environment management at each unit will

rest with the unit head

Heads of departments are responsible for environmental

performance at department levels


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Formal risk assessment exercise undertaken at product

development stage

Development of treatment technique for any wastes generated

as a result of new product

Development of technology to use non conventional forest

seed oils for soap making


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WATER CONSERVATION AND HARVESTING

Initiated to conserve and regenerate the scarce water resource

To reduce water consumption in its operations- HLL has

reduced ground water consumption by 50%

Regenerate sub-soil water tables through the principles of 5R- Reduce, Reuse, Recycle, Recover, Renew

Help villages to implement models of watershed development


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70% of HLL sites are now zero discharge sites

Energy consumption per unit of production has come down

by 61% since 1996

Since 2003, all sites have begun to harvest rain water


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6. FINANCIAL ASPECTS

- BROAD OUTLOOK

- SALES AND RESULTS FOR 2006- 2006 HIGHLIGHTS

- DIVISION WISE GROWTH IN 2006

- SUMMARY - 2006

- SALES SUMMARY FOR MQ-07

- RESULTS SUMMARY FOR MQ-07- MQ-07 HIGHLIGHTS

- CATEGORY WISE SALES GROWTH: MQ-07

- MARKET SHARE PERFORMANCE


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SALES TREND FOR PAST 10 YEARS

6000

7000

8000

9000

10000

1100012000

13000

14000

1997

Y

1998

Y

1999

Y

2000Y

2001Y

2002Y

2003

Y

2004Y

2005

Y

2006

Y

YEAR

SALES

(inRs.

Cr)

Continuously rising sales apart from a dip in 2002

Sharp increase in the past three years

BROAD OUTLOOK


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Rising profit apart from a dip in 2004

Constant absolute increase for major part of the decade

NET PROFIT TREND FOR THE PAST 10 YEARS

0

500

1000

1500

2000

1997Y

1998Y

1999Y

2000Y

2001Y

2002Y

2003Y

2004Y

2005Y

2006Y

YEAR

PAT(Rs.Cr)


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EXPORT TREND FOR PAST 10 YEARS

0

500

1000

1500

2000

2500

1997Y

1998Y

1999Y

2000Y

2001Y

2002Y

2003Y

2004Y

2005Y

2006Y

YEAR

EXPORTS

(inRs.

Cr)

Rising initially, stable since 2002


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HLL SHARE PRICE ON BSE FOR THE PAST TEN

YEARS

0

50

100

150

200

250

1997Y

1998Y

1999Y

2000Y

2001Y

2002Y

2003Y

2004Y

2005Y

2006Y

YEAR

Rs.perShareofRe.1

Rising sharply after a plunge in 2004


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SALES AND RESULTS FOR 2006

12103

1709

1862

1540

1855

11061

1471

1604

1355

1408

0 5000 10000 15000

SALES

PBIT

PBT

PAT

NET

PROFIT

INDICATORS

Rs. Crore

2005

2006


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2006 HIGHLIGHTS

Sustained top line growth (+9.4%) on the back of a 11% growth

in 2005

FMCG grows by 12.8%; HPC (+13.7%), Foods (+9.0%)

Growth broadbased

A&P spends higher by 27%

PBIT grows by 16.2%


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PAT and Net Profit grow by 13.7% and 31.8% respectively

EPS grows by 31.4% from Rs. 6.40 to Rs. 8.40

Exports decline by 5.11%

Board recommends a Final Dividend of Rs. 3 per share, up from

Rs. 2.50 in 2005


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DIVISION WISE GROWTH IN 2006

BROAD BASED GROWTH IN HPC (Value Growth %)

Soaps and DetergentsLaundry

Personal Wash

Personal Products Shampoos

Skin

Toothpaste


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BROAD BASED GROWTH IN FOODS (Value Growth %)

Beverages Tea

Coffee

Ice Cream

Processed Food

Salt

Atta

Culinary


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SUMMARY - 2006

Good topline growth for the year

Substantial Investments behind brands throughout the year

Good progress in all HPC categories

Food grows well driven by strong growth in processed food and

ice cream categories and recovery in tea

Cost pressures continued, managed by selective price increases

and cost effectiveness programmes


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SALES SUMMARY FOR MQ-07

27983184Net Sales

220Discontinued Business

27763184Continuing Business

2250Others

276352Exports

24792783FMCG

432531Foods

20472252HPC

MQ 06MQ 07Rs. Crores


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RESULTS SUMMARY FOR MQ-07

443393Net Profit

14959Exceptional Items

294334PAT

364415PBT

333379PBIT

367412EBITDA

MQ 06MQ 07Rs. Crores


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MQ-07 HIGHLIGHTS

Continuing sales grows 14.7%

FMCG business grows by 12.3%; HPC (+10.0%) , Foods(+22.9%)

A&P spends higher by 17.5%

EBITDA up 12.2% ; PBIT grows by 13.7%

PAT grows by 13.6%


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Net Profit declines 11.2% as base MQ06 includes profit on

account of sale of Nihar brand

Exports grow by 27.7% on the back of a growth in HPC, Foods

and Specialty ( Non-FMCG)

Investment behind brands stepped up


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All Key HPC categories grow

Laundry

Shampoo

Skin

Personal Wash

Toothpaste


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- Launch of White Beauty

Toothpaste Growth led by Close Up;- Strong activation on the Pepsodent 10/10 platform


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Foods Topline

Tea

Coffee

Ice Cream

Salt

Atta

Culinary


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BUSINEES PERFORMANCE FOODS

Tea grows well in strong double digits;- All brands grow well

Bru Instant leads double digit growth in Coffee

Strong growth in Processed Foods portfolio;

- Shares improve in Ketchup and Jams

- Knorr and Kissan grow in high double digits


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Ice Cream continues to perform strongly;

- Launch of Moo Range of ice creams on the healthplatform

- Distribution extended to Mini metros


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MARKET SHARE PERFORMANCE

23.724.925.5Tea

30.030.430.2Oral

54.854.754.3Skin care

46.948.548.0Hair

55.355.354.6Personal wash

36.435.835.3Laundry

MQ07DQ06JQ06CATEGORY


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7. LOOKING AHEAD

FMCG markets expected to grow at current levels

High levels of innovation to be sustained and A&P investments

to be made competitively and effectively

Focus on core foods portfolio to continue

Phased implementation programme to commence for the

Foods Strategy for the long term


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Continued investments in capability building in the area of

modern trade and supply chain

In the Direct-to-home channel , HLL aims to reach 600 million

consumers in 5 lakh villages through 1 lakh entrepreneurs by 2010

LOOKING AHEAD..


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