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Tag: Advertisement spends

  • HUL ramps up ad spends in second Covid2019 quarter

    HUL ramps up ad spends in second Covid2019 quarter

    BENGALURU: FMCG major and the largest player in terms of advertising and marketing spends, Hindustan Unilever (HUL) upped its advertising spends by 43 per cent during the second Covid2019 quarter – (Q2 2021, the quarter ended 30 September 2020, quarter or period under review) as compared to the immediate trailing quarter Q1 2021. The company had pared quarter over quarter (q-o-q) and year-on-year (y-o-y) advertisement expenses in the first quarter of fiscal 2020 (Q1 2021, quarter ended 30 June 2020) during which the Covid2019 lockdown was in place by over 30 per cent to Rs 800 crore from Rs 1,175 crore (down 31.9 per cent) in Q4 2020 and Rs 1,167 crore (down 31.4 per cent) in Q2 2020 respectively. For the period under review, HUL spent Rs 1,144 crore towards advertisement expenses as compared to Rs 1,200 crore in the corresponding year ago quarter. All numbers in this report are consolidated numbers unless stated otherwise.

    The company reported 15.2 percent y-o-y and 8.2 percent q-o-q increase in total revenue at Rs 11,776 crore as compared to Rs 10,223 crore in Q2 2020 and Rs 10,885 crore in Q1 2021 respectively. However, in terms of percentage of total income (operating revenue plus other income), HUL’s ad spends during fiscal 2021 were down when compared to previous periods. The FMCG major’s ad spends in Q2 2021 of Rs 1,144 crore were 9.7 percent of operating revenue of 11,776 crore. Please refer to the figure below:

    For the half year ended 30 September 2020 (H1 2021) the company had spent Rs 1,944 crore (8.6 percent of total revenue), which was 17.9 per cent lower than the Rs 2,367 crore (11.4 per cent of total revenue) during the corresponding year ago quarter. For FY 2020 and FY 2019, HUL had spent Rs 4,688 crore (11.9 per cent of total revenue) and Rs 4,552 crore (11.7 per cent of total revenue) respectively.
    The company reports numbers for four segments, the largest of which in terms of revenue is the beauty segment, followed by the home, foods & refreshments, and ‘Others’.

    The company has reported y-o-y revenue growth for the four segments. In an earnings press release, HUL said that growth in Q2 2021 was competitive and profitable with reported turnover growth of 16 per cent and domestic consumer growth (excluding the impact of merger of GSK CH and acquisition of ‘VWash’) of 3 per cent. The FMCG player avers that the strength of its portfolio is demonstrated by the fact that 70 per cent of its business was gaining penetration and that health, hygiene and nutrition products, which formed cumulatively 80 per cent of its portfolio, grew in double digits.

    Company Speak:

    HUL chairman and managing director Sanjiv Mehta said: “In the context of a challenging economicenvironment, our growth has been competitive and profitable. We continue to demonstrate execution prowess,agility, adaptability, resilience, and passion of our people. We have expanded our portfolio with consumerrelevant innovations and have invested strongly behind our brands. Our operations and service levels are now back to pre-COVID levels and we have accelerated the pace of digitizing our operations under the ‘Re-imagine HUL’ agenda. The economic outlook has improved given the various initiatives taken by the Government and Reserve Bank ofIndia. In our sector, rural markets have been resilient but the demand in urban India especially in metropolitancities has been muted. We believe that the worst is behind us and we are cautiously optimistic on demand recovery.”

    Segment Results

    Excerpts from the HUL Q2 2021 earnings release

    Home Care:

    Household Care delivered strong performance across all segments led by continued penetrationgains. We have stepped up our innovation intensity to address the ‘clean living’ needs of consumers; ‘Domex’ range is now available nationally. In Fabric Wash, we have reduced our prices to pass on benefits of lowercommodity costs to consumers. Category consumption of Laundry has been adversely impacted due to confinedliving. Continued focus on driving market development has enabled us to grow our Liquids and Fabric Sensationsegments strongly.

    Beauty & Personal Care:

    Skin Cleansing grew in double digits on back of a very strong performance in ‘Lifebuoy’and a good delivery in ‘Lux’. Hand Sanitizers and Handwash segments continue to gain penetration and havedelivered robust growths. Oral care grew in double digits with accelerated momentum in ‘Close Up’. Hair Care alsogrew in double digits; our portfolio interventions along with repurposed communications are resonating well withconsumers and driving salience. In Skin Care, ‘Glow & Lovely’ and ‘Glow & Handsome’ have successfully landed onshelves across the nation and we continue the journey towards a more inclusive vision of beauty. While theessential part of Skin Care saw pickup in demand, ‘winter portfolio sell-in’ was impacted due to muted tradesentiment and liquidity constraints.

    Foods & Refreshment:

    Foods, Tea and Coffee sustained the high growth momentum and grew in double digits; ourconsumer-focused activations and innovations are leveraging the ‘in-home consumption’ trend. Our prudent anddynamic management of unprecedented inflation in Tea has enabled all our brands to grow in double digits andthis positions us well. Performance of our Nutrition business was competitive and disrupted supply lines are nowfully restored. In the quarter, we expanded ‘Boost’ nationally with the narrative of ‘Play a bigger game’ andlaunched a special film on ‘Horlicks’ to celebrate the deeper meaning of growth that stems from courage andconfidence. While we saw sequential improvement, Ice Creams, Foods Solutions and Vending businesses continueto be impacted due to out-of-home consumption loss.
     

  • India set to be 7th biggest advertisement market by 2020 : Magna Global report

    India set to be 7th biggest advertisement market by 2020 : Magna Global report

    MUMBAI: In its latest report on the global advertising marketplace, Magna Global estimates that media owner advertising revenues grew by +3.2 percent in 2015 to $503 billion. This is lower than the previous forecast (+3.9 percent in June 2015) and represents a slowdown compared to the 2014 growth (+4.9 percent).

     

    In 2016, advertising revenues will be boosted by economic stabilization and the incremental spending generated around non-recurring even-year events (US Presidential and General elections, UEFA Football championship in Europe, Summer Olympics in Brazil). Magna Global is thus predicting ad sales to grow by +4.6 percent, marginally less than its previous forecast. Neutralizing the impact of non-recurring events (NREs) in 2014, 2015 and 2016 (generating approximately 0.9 percent of extra growth in even-numbered years), the global ad market would have grown by +4.1 percent in 2015 and +3.7 percent in 2016, which suggest no real 2016 acceleration in the underlying ad demand, beyond the cyclical drivers.

    In terms of geographies, Asia-Pacific emerged as the most dynamic region with a growth rate of 6.5 per cent. As China is slowing down (slightly), India has become the most dynamic economy among BRICs and among all the large nations monitored by Magna. Real DGP grew by 7.3 per cent in 2015 and will grow again by 7.5 per cent in 2016 according to the IMF. In that context advertising spending grew by 16.3 per cent in 2015 to approximately $8 billion allowing India to become the 12th biggest ad market in the world at the expense of Russia.

    Looking at India specifically, Magna reports that advertising revenue will increase by Rs 68 billion (Rs 6,800 crore) and is expected to touch Rs 487 billion (Rs 48,700 crore) in 2015. Television revenue on the back of increased volume will add +18.5 percent (December 2014 +11.9 percent) to reach Rs 200 billion (Rs 20,000 crore). While the television market’s share is up by a percentage point (41 per cent), print goes down from 41 per cent to 38 per cent to touch Rs 183 billion  (Rs 18,300 crore) with a growth of 7.7 per cent. In 2016 television and print is estimated to grow at +15.1 percent and 8.2 per cent respectively.

    Digital formats will continue to grow the maximum at 49 percent to touch Rs 57 billion (Rs 5,700 crore), increasing their market share to 12 per cent. Ad sales generated from video and social increasingly will be through mobile impressions while the desktop in the near future will still be the domain for search and display. Share of mobile will increase from 32 per cent to close to half the pie in 2016.

    Newer formats and revenue streams after Twitter and Instagram opening up new advertising and influencer management platforms, bandwidth expansion through 4G launch and traditional advertisers increasing their digital budgets, will contribute to the growth of 67.3 per cent in 2016.

    Radio, with a market share of 4 percent will also grow at 14 per cent in 2015. Through the expansion of foot print, and there by volume, is estimated to add 16 per cent in 2016. Last but not the least, OOH will grow at 11.9 percent in 2015 and by another 10.4 per cent in 2016.

     

    Magna Global estimates total advertising revenue to touch Rs 576 billion (Rs 57,600 crore) in 2016. The T20 World Cup, encouraging response from audiences to non-cricketing leagues, state elections, 4G launch are some of the drivers for the advertising economy in 2016 in India. E-commerce will continue to pursue GMV’s, most action will be seen in the telecom sector followed by auto and FMCG advertising.

     

    Digital television and expansion of the measurement panel will allow advertisers to reach more consumers and broadcaster to better monetize their audience in 2016. While so far India is bucking the global trend of declining spends on Print by growing at a high single digit rate, Digital market shares are projected to equal Print by 2020.

     

    Hope 2016 round of data will get the currency out of the data dark period and aid the category to fight market share erosion. The second round of the Phase III auction, commissioning of the new stations won in the first round of bidding will keep radio top of mind.