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Tag: Harish Manwani

  • HUL marketing spends up in third quarter

    HUL marketing spends up in third quarter

    BENGALURU: Indian FMCG giant Hindustan Unilever Ltd (HUL) is one of the biggest advertisers in India. On Indian television, the company releases the highest number of advertisements by far according to Broadcast Audience Research Council of India (BARC) weekly data for top 10 advertisers across genre. According to BARC’s weekly data for calendar year 2017 (week 1 starting Saturday, 31 December 2016 to week 52 ending on Friday, 29 December 2017), the FMCG behemoth released a staggering 68,12,298 ad insertions. This number does not include the television insertions by Brooke Bond Lipton India Ltd (Lipton), Lakme Lever Ltd (Lakme) and Ponds India Ltd (Ponds).

    Industry sources said that HUL had promoted its products quite aggressively in Q3 2018 by way of sops to the players across the sales and distribution chain as well as to consumers for some of its brands. In the current fiscal that started on 1 April 2017 (FY 2018) and will end on 31 March 2018, the company spent the highest amount as yet in the quarter ended 31 December 2017 (Q3 2018, quarter under review) towards advertisement and sales promotions at Rs 1,107 crore. In terms of percentage of total revenue also, HUL’s Q3 2018 ad and sales promotion spend works out to 12.66 percent, another peak for this year. HUL’s year-over-year (y-o-y) and quarter-on-quarter (q-o-q) spends towards advertisement and sales promotion in Q3 2018 increased 29.47 percent and 8.21 percent respectively.Please refer to the graph below for HUL’s ad and sales promotion spends during the last eight quarters.

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    HUL was the top advertiser during all the 52 weeks of 2017 according to BARC data.Please refer to the graph below:

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    It must be noted that BARC provides weekly data – BARC’s week commences on a Saturday and ends on the next Friday. Hence the quarterly TV insertions numbers mentioned above are approximate.

    HUL’s Tea and beverages company Lipton was present among BARC’s top 10 advertisers across genre lists during 50 of the 52 weeks. In week 52 of 2017, Lipton had 32,049 ad insertions, the highest by it in the year, while in week 19 of 2017 it had 15,719 TV ad insertions, the lowest while it was present in BARC’s list of top 10 advertisers across genre. Lakme was present in BARC’s weekly lists for 3 weeks of 2017, while Ponds was present in the lists for 15 of the 52 weeks of 2017. Assuming that these three advertisers released 20 percent additional television advertisements during the year, the total number of TV insertions by HUL during the year works out to almost 82 lakhs.

    HUL chairman Harish Manwani said: “We have delivered another strong performance in the quarter, with broad based growthacross categories and further improvement in margins. We remain positive about the mid-term outlook of the industry and willcontinue to invest strongly in our core brands and developing categories of the future. There are early signs of commodity costinflation and we will further sharpen our focus on cost effectiveness programs and manage our business dynamically forcompetitiveness and sustained profitability.”
     

  • HUL marketing expenses down in Q2-17, HY1-17

    HUL marketing expenses down in Q2-17, HY1-17

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) spent 7.6 per cent less towards Advertisement and Promotions expense (marketing spends, ASP) in the quarter ended 30 September 2016 (Q2-17, current year) as compared to Q2-16(year-over-year or y-o-y) on a standalone basis. Also, quarter-over-quarter (q-o-q) ASP declined 3.2 per cent in the current quarter as compared the immediate trailing quarter Q1-17. HUL spent Rs 851.38 crore (10 per cent of Total income from operations or TIO) in Q2-17, Rs 921.04 crore (11 per cent of TIO) in Q2-16 and Rs 879.75 crore (10 per cent of TIO) in Q1-17 towards ASP.

    ASP was also down, both in terms of absolute rupees as well as percentage of TIO during the half year ended 30 September 2016 (HY1-17) versus the corresponding half year period of the previous year. As a matter of fact, ASP in HY1-17 was the lowest since HY1-13.

    HUL chairman Harish Manwani said, “In challenging market conditions, we delivered another quarter of profitable growth. We remain focused on market development, consumer led innovations and an even sharper drive on operating efficiencies. With a good monsoon, weexpect a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry. Our strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged.”

    Trends

    During aneighteen quarter period starting Q1-13 until Q2-17, HUL’s ASP in Q4-15 was the highest in absolute rupees at Rs1,027.89 crore (13.4 per cent of TIO), while in terms of per centage of TIO in current fiscal, it was highest in Q2-14 at Rs954.02 crore (13.8 per cent of TIO). Please refer to Fig A below. ASP shows linear increasing trend in terms of absolute rupees while in terms of ASP as per centage of TIO, the trend shows a decline during the eighteen quarter period under consideration in this report.

    Please refer to Fig B below. HUL’s ASP in HY1-17 at Rs 1,731.13 (10 per cent of TIO) was 4.6 per cent lower than the Rs 1,813.77 crore (11.2 per cent of TIO) in HY1-16. As is obvious, HY1-17 ASP is the lowest over a five year period starting HY1-13 in terms of per centage of TIO and second lowest during the same period in terms of absolute rupees. ASP during the first half period of a fiscal shows a declining trend in terms of per centage of TIO during the period HY1-13 to HY1-17.

    The company’s TIO in the current quarter increased 1.6 per cent y-o-y to Rs8.480.26 crore as compared to Rs8,348.60 crore but declined 3.7 per cent q-o-q  from Rs8,802.82 crore q-o-q. Please refer to Fig C below. TIO represented by the broken light blue line shows a linear increasing trend during the eighteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in Q2-17 increased11.6 per cent y-o-y to Rs 1,095.60 crore (12.9 per cent margin) as compared to Rs982.06 crore (11.8 per cent margin) and increased by 11.5 per cent q-o-q from Rs 982.17 crore (11.2 per cent margin). PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the eighteen quarter period under consideration in this report.

    HUL’s Q2-17 reporton categories

    Home Care: Robust growth with continued momentum on premium laundry In Fabric Wash, growth was driven by the premium segment as Surf maintained its strong volume-led growth. In Household Care, Vim liquiddid well on the back of sustained market development. The water business continued to do well.

    Personal Care: Growth impacted by slowing markets and Personal Wash volumes. In Personal Wash, the performance was impacted by price increases taken during the quarter. Skin Care growth was driven by the BB andCC creams. Hair Care growth was led by the premium brands Dove and TRESemmé. The recently acquired Indulekha brand continued toperform well and was extended to four new states in the quarter. In Oral Care, the overall performance was subdued, though Pepsodent started recovering post relaunch. Lakme Colour Cosmetics sustained its broad based innovation led growth. In Deodorants, Axe Signature continuedto gain ground during the quarter.

    Refreshment: Strong growth led by Tea. In Tea, all key brands grew well driven by focused in-market initiatives. Lipton Green Tea and the Natural Care portfolio registered anotherquarter of high growth on sustained market development. In Coffee, Bru Gold continued to lead premiumisation and performed well. In Ice Cream & Frozen Desserts, Magnum Minis were launched during the quarter.

    Foods: Modest growth in a challenging market. The focus continues to be on market development for the category. Kissan range of premium Jams gained further traction with consumersand Instant Soups led the growth for Knorr.

  • HUL marketing expenses down in Q2-17, HY1-17

    HUL marketing expenses down in Q2-17, HY1-17

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) spent 7.6 per cent less towards Advertisement and Promotions expense (marketing spends, ASP) in the quarter ended 30 September 2016 (Q2-17, current year) as compared to Q2-16(year-over-year or y-o-y) on a standalone basis. Also, quarter-over-quarter (q-o-q) ASP declined 3.2 per cent in the current quarter as compared the immediate trailing quarter Q1-17. HUL spent Rs 851.38 crore (10 per cent of Total income from operations or TIO) in Q2-17, Rs 921.04 crore (11 per cent of TIO) in Q2-16 and Rs 879.75 crore (10 per cent of TIO) in Q1-17 towards ASP.

    ASP was also down, both in terms of absolute rupees as well as percentage of TIO during the half year ended 30 September 2016 (HY1-17) versus the corresponding half year period of the previous year. As a matter of fact, ASP in HY1-17 was the lowest since HY1-13.

    HUL chairman Harish Manwani said, “In challenging market conditions, we delivered another quarter of profitable growth. We remain focused on market development, consumer led innovations and an even sharper drive on operating efficiencies. With a good monsoon, weexpect a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry. Our strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged.”

    Trends

    During aneighteen quarter period starting Q1-13 until Q2-17, HUL’s ASP in Q4-15 was the highest in absolute rupees at Rs1,027.89 crore (13.4 per cent of TIO), while in terms of per centage of TIO in current fiscal, it was highest in Q2-14 at Rs954.02 crore (13.8 per cent of TIO). Please refer to Fig A below. ASP shows linear increasing trend in terms of absolute rupees while in terms of ASP as per centage of TIO, the trend shows a decline during the eighteen quarter period under consideration in this report.

    Please refer to Fig B below. HUL’s ASP in HY1-17 at Rs 1,731.13 (10 per cent of TIO) was 4.6 per cent lower than the Rs 1,813.77 crore (11.2 per cent of TIO) in HY1-16. As is obvious, HY1-17 ASP is the lowest over a five year period starting HY1-13 in terms of per centage of TIO and second lowest during the same period in terms of absolute rupees. ASP during the first half period of a fiscal shows a declining trend in terms of per centage of TIO during the period HY1-13 to HY1-17.

    The company’s TIO in the current quarter increased 1.6 per cent y-o-y to Rs8.480.26 crore as compared to Rs8,348.60 crore but declined 3.7 per cent q-o-q  from Rs8,802.82 crore q-o-q. Please refer to Fig C below. TIO represented by the broken light blue line shows a linear increasing trend during the eighteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in Q2-17 increased11.6 per cent y-o-y to Rs 1,095.60 crore (12.9 per cent margin) as compared to Rs982.06 crore (11.8 per cent margin) and increased by 11.5 per cent q-o-q from Rs 982.17 crore (11.2 per cent margin). PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the eighteen quarter period under consideration in this report.

    HUL’s Q2-17 reporton categories

    Home Care: Robust growth with continued momentum on premium laundry In Fabric Wash, growth was driven by the premium segment as Surf maintained its strong volume-led growth. In Household Care, Vim liquiddid well on the back of sustained market development. The water business continued to do well.

    Personal Care: Growth impacted by slowing markets and Personal Wash volumes. In Personal Wash, the performance was impacted by price increases taken during the quarter. Skin Care growth was driven by the BB andCC creams. Hair Care growth was led by the premium brands Dove and TRESemmé. The recently acquired Indulekha brand continued toperform well and was extended to four new states in the quarter. In Oral Care, the overall performance was subdued, though Pepsodent started recovering post relaunch. Lakme Colour Cosmetics sustained its broad based innovation led growth. In Deodorants, Axe Signature continuedto gain ground during the quarter.

    Refreshment: Strong growth led by Tea. In Tea, all key brands grew well driven by focused in-market initiatives. Lipton Green Tea and the Natural Care portfolio registered anotherquarter of high growth on sustained market development. In Coffee, Bru Gold continued to lead premiumisation and performed well. In Ice Cream & Frozen Desserts, Magnum Minis were launched during the quarter.

    Foods: Modest growth in a challenging market. The focus continues to be on market development for the category. Kissan range of premium Jams gained further traction with consumersand Instant Soups led the growth for Knorr.

  • Ad spends at Hindustan Unilever shrink marginally in Q1-2017

    Ad spends at Hindustan Unilever shrink marginally in Q1-2017

    MUMBAI: Hindustan Unilver Ltd (HUL) shaved off Rs 13-odd crore in advertising spends in Q1-2017.

    According to its latest quarter (30 June 2016) financials reported yesterday, the FMCG megacorp spent Rs 879.73 crore on advertising and promotions (A&P) as compared to Rs 892.73 crore in the previous year’s corresponding period. At this level, A&P is at 11 per cent of sales and is down 60 basis points, says the company.

    Since April 2016, the company has reorganized its businesses under four main categories: home care, personal care, foods, and refreshments with a residual segment called “others” and has even reconstituted its management committee based on this structure.

    It has also started reporting its results in compliance with the Ind AS (Indian accounting system) since Q1-2017.

    HUL reported revenues of Rs 7987.4 crore as against Rs 7712.74 crore in Q1-2016. Chairman Harish Manwani said that the market conditions were challenging with growth slowing down in both volume and value terms. HUL, however, tracked ahead of the market with an improvement in its margins, he said. Both in value and volume terms, the company grew four per cent, even as operating margin swelled by 70 basis points. Operating profit in Q1-2017 stood at Rs 1542.60 crore (Q1-2016 Rs 1437.08 crore) while net profit was at Rs 1,173.90 crore in Q1-2017 (Rs 1069.17 crore in Q1-2016).

    HUL’s re-categorisation of its product portfolio means that:

    Home care includes: fabric wash, household care, water (Surf Excel, Rin, Active Wheel, SunLight, Comfort, Vim Domex, Cif and Unilever Pure).

    Personal Care includes personal wash, skin care, hair care, oral care, deodrants, cosmetics (Lux, Dove, Pears, Rexona, Hamam, Lifebuoy, Fair & Lovely, Pond’s, Vaseline, Lakme, St Ives, Clinic Plus, Sunsilk, Tresemme, Indulekha, Closeup, Pepsodent, Ayush and Axe).

    Refreshment includes: Tea, Coffee, ice-creams and frozen desserts (Taj Mahal, Red Label, 3 Roses, Taaza, Lipton, Bru, Kwality Walls, Magnum).

    Foods includes ketchups, jams soups and instant noodles (Kissan, Knorr, Annapurna.)

    The standout during the quarter was the home care segment, which saw sales expanding by seven per cent. It was followed by refreshment which grew by five per cent, food by four per cent and finally personal care which expanded by two per cent.

    The home care segment, according to the company, is witnessing growth in the fabric wash category primarily from the premium products with Surf doing well, even as the Unilever Pure water devices are reporting traction in off take.

    The refreshment segment reported a healthy growth in green and natural teas, even as ice cream and frozen desserts grew robustly in Q1-2017.

    In the foods segment, Kissan Ketchups expanded healthily, even as Knorr soups and noodles reported robust growth, says the company.

    The personal care segment witnessed a shrinkage in the personal wash category even as the skin care category grew with BB and CC creams doing well in the premium range.

    The company also completed its acquisition of Indulekha – including the trademarks Indulekha and Vayodha – from Mosons group on 7 April 2016. The acquisition is costing HUL Rs 330 crore plus a deferred consideration of 10 per cent of domestic sales from the brands, payable annually, over five years.

    HUL also said that it is going ahead with its intention to divest from any business which is not part of its core activities. This means it is offloading its 50 per cent equity stake in its 21 year old joint venture in Kimberly-Clarke Lever Private Ltd (KCCL) to its joint venture partner Kimberly-Clarke. The company produces and markets baby & child care and feminine care products under the brand Huggies and Kotex.

    Manwani, in the Q1-2017 investor report, expressed concern on recent volume trends, saying that market growth is likely to continue to remain muted but he was optimistic about the medium term impact of the monsoon and seventh commission payout. “Even though input costs could rise, the company will continue to focus on volume driven growth with an improvement in margins,” he said.

    Observers, however, opine that HUL, along with other FMCG MNCs, is under attack from a host of new home grown nimbler and hungry-for-growth competitors such as Patanjali Ayurveda. How it tackles their onslaught in the coming year will impact its performance.

  • Ad spends at Hindustan Unilever shrink marginally in Q1-2017

    Ad spends at Hindustan Unilever shrink marginally in Q1-2017

    MUMBAI: Hindustan Unilver Ltd (HUL) shaved off Rs 13-odd crore in advertising spends in Q1-2017.

    According to its latest quarter (30 June 2016) financials reported yesterday, the FMCG megacorp spent Rs 879.73 crore on advertising and promotions (A&P) as compared to Rs 892.73 crore in the previous year’s corresponding period. At this level, A&P is at 11 per cent of sales and is down 60 basis points, says the company.

    Since April 2016, the company has reorganized its businesses under four main categories: home care, personal care, foods, and refreshments with a residual segment called “others” and has even reconstituted its management committee based on this structure.

    It has also started reporting its results in compliance with the Ind AS (Indian accounting system) since Q1-2017.

    HUL reported revenues of Rs 7987.4 crore as against Rs 7712.74 crore in Q1-2016. Chairman Harish Manwani said that the market conditions were challenging with growth slowing down in both volume and value terms. HUL, however, tracked ahead of the market with an improvement in its margins, he said. Both in value and volume terms, the company grew four per cent, even as operating margin swelled by 70 basis points. Operating profit in Q1-2017 stood at Rs 1542.60 crore (Q1-2016 Rs 1437.08 crore) while net profit was at Rs 1,173.90 crore in Q1-2017 (Rs 1069.17 crore in Q1-2016).

    HUL’s re-categorisation of its product portfolio means that:

    Home care includes: fabric wash, household care, water (Surf Excel, Rin, Active Wheel, SunLight, Comfort, Vim Domex, Cif and Unilever Pure).

    Personal Care includes personal wash, skin care, hair care, oral care, deodrants, cosmetics (Lux, Dove, Pears, Rexona, Hamam, Lifebuoy, Fair & Lovely, Pond’s, Vaseline, Lakme, St Ives, Clinic Plus, Sunsilk, Tresemme, Indulekha, Closeup, Pepsodent, Ayush and Axe).

    Refreshment includes: Tea, Coffee, ice-creams and frozen desserts (Taj Mahal, Red Label, 3 Roses, Taaza, Lipton, Bru, Kwality Walls, Magnum).

    Foods includes ketchups, jams soups and instant noodles (Kissan, Knorr, Annapurna.)

    The standout during the quarter was the home care segment, which saw sales expanding by seven per cent. It was followed by refreshment which grew by five per cent, food by four per cent and finally personal care which expanded by two per cent.

    The home care segment, according to the company, is witnessing growth in the fabric wash category primarily from the premium products with Surf doing well, even as the Unilever Pure water devices are reporting traction in off take.

    The refreshment segment reported a healthy growth in green and natural teas, even as ice cream and frozen desserts grew robustly in Q1-2017.

    In the foods segment, Kissan Ketchups expanded healthily, even as Knorr soups and noodles reported robust growth, says the company.

    The personal care segment witnessed a shrinkage in the personal wash category even as the skin care category grew with BB and CC creams doing well in the premium range.

    The company also completed its acquisition of Indulekha – including the trademarks Indulekha and Vayodha – from Mosons group on 7 April 2016. The acquisition is costing HUL Rs 330 crore plus a deferred consideration of 10 per cent of domestic sales from the brands, payable annually, over five years.

    HUL also said that it is going ahead with its intention to divest from any business which is not part of its core activities. This means it is offloading its 50 per cent equity stake in its 21 year old joint venture in Kimberly-Clarke Lever Private Ltd (KCCL) to its joint venture partner Kimberly-Clarke. The company produces and markets baby & child care and feminine care products under the brand Huggies and Kotex.

    Manwani, in the Q1-2017 investor report, expressed concern on recent volume trends, saying that market growth is likely to continue to remain muted but he was optimistic about the medium term impact of the monsoon and seventh commission payout. “Even though input costs could rise, the company will continue to focus on volume driven growth with an improvement in margins,” he said.

    Observers, however, opine that HUL, along with other FMCG MNCs, is under attack from a host of new home grown nimbler and hungry-for-growth competitors such as Patanjali Ayurveda. How it tackles their onslaught in the coming year will impact its performance.

  • FY-16: Challenging markets push HUL marketing spends up 16.9 percent

    FY-16: Challenging markets push HUL marketing spends up 16.9 percent

    BENGALURU:  Indian FMCG giant Hindustan Unilever Limited (HUL) spent 16.9 percent more towards Advertisement and Promotions expense (marketing spends, ASP) in the year ended 31 March 2016 (FY-16, current year) as compared to FY-15 on a standalone basis. HUL’s standalone ASP in the current year was Rs 4,526.17 crore (14.1 percent of Total Income from operations or TIO) as compared to Rs 3872.40 crore (12.6 percent of TIO) in the previous year.

    Note: (1) The unit of currency in this report is the Indian rupee – Rs (also conventionally represented by INR). The Indian numbering system or the Vedic numbering system has been used to denote money values. The basic conversion to the international norm would be:
    (a) 100,00,000 = 100 lakh = 10,000,000 = 10 million = 1 crore.
    (b) 10,000 lakh = 100 crore = 1 arab = 1 billion.
    (2) All numbers mentioned in this report are standalone numbers of HUL, unless stated otherwise.

    HUL chairman Harish Manwani said, “In challenging markets and a deflationary cost environment, we have delivered another year ofcompetitive and profitable growth. The consistency of our performance is a result of managing our business dynamically, and executing ourstrategy with even greater rigour and discipline. Our sustained focus on investing behind brands, sharpeningour executional capabilities anddriving market development has enabled us to keep winning with consumers in a rapidly changing market.”

    Trends:

    This year, HUL’s marketing spends have been the highest in terms of absolute rupees. Over a four year period starting FY-13 until FY-16, HUL’s ASP has been the highest in terms of percentage of TIO at 14.1 percent. Even on a y-o-y basis, its ASP has been higherin terms of absolute rupees as well as on a percentage of TIO basisacross all the four quarters in fiscal 2015-16 as compared to the four quarters of fiscal 2014-15.

    For Q4-16 (quarter ended March 31, 2016, current quarter) ASP was 6 percent more year-over-year (y-o-y) at Rs 1,089.95 crore (13.7 percent of TIO) as compared to Rs 1,027.89 crore but was 4.2 percent lower quarter-over-quarter (q-o-q) as compared to Rs 1,137.79 crore (14.3 percent of TIO).

    During a sixteen quarter period starting Q1-13 until Q4-16, the Indian FMCG major’s ASP in Q1-16 was the highest in absolute rupees at Rs 1,153.39 crore (14.2 percent of TIO), while in terms of percentage of TIO in current fiscal, it was highest in Q2-16 at Rs 1,145.04 crore (14.6 percent of TIO). Please refer to Fig A below. ASP shows linear increasing trend, both interms of absolute rupees as well as in terms of ASP as percentage of TIO during the sixteen quarter period under consideration in this report.

    It is seen from Fig A, that HUL’s ASP is generally the highest in absolute rupees in Q1 of a fiscal, the only exception being FY-14, when Q2-14 and Q3-14 ASP were higher that Q1-14 ASP. However, Q1 ASP has always been higher in absolute rupees than the previous year’s Q4 ASP. Based on this trend, it is likely that HUL’s ASP in Q1-17 will be more than or equal to Rs 1,090 crore

    The company’s TIO in the current year increased 3.8 percent to Rs 31,987.17 crore as compared to Rs 30,805.62 crore in FY-15. TIO in the current quarter increased 3.5 percent y-o-y at Rs 7,945.66 crore from Rs 7,675.63 crore andwas almost flat (declined by 0.4 percent) q-o-q as compared to Rs 7,980.99 crore in Q3-16. Please refer to Fig B below. TIO shows a linear increasing trend during the sixteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in FY-16 declined 5.4 percent to Rs 4,082.37 crore (12.8 percent margin) as compared to Rs 4,315.26 crore (14 percent margin). PAT in the current quarter increased by 7 percent y-o-y to Rs 1089.59 crore (13.7 percent margin) from Rs 1,018.08 crore (13.3 percent margin) and increased 12.2 percent q-o-q from Rs 971.40 crore in Q3-16. PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the sixteen quarter period under consideration in this report.

    HUL’s Q1-16 report about categories

    During the quarter, the Domestic Consumer business grew at 4 percent, with 4 percent underlying volume growth. Growth in the quarter was impactedby the phasing out of Excise Duty incentives, a one-time credit for excise duty refund in the base quarter and marginal price de-growth.

    Soaps and Detergents: Volume growth partially offset by price deflation. Skin Cleansing was driven by strong volume growth on Dove, Lifebuoy and Hamam. In Laundry, growth was led by the premium segment,with Surf maintaining its strong double digit growth momentum. Comfort Fabric Conditioner delivered another strong performance on the
    back of sustained market development. Household Care performance was led by Vim liquids.
    The quarter witnessed price deflation in this segment, albeit at lower levels, arising from actions taken earlier to pass on the benefit of lowercommodity costs to consumers.

    Personal Products: Healthy underlying performance

    The reported growth for this segment was impacted by the phasing out of Excise Duty incentives, a one-time credit for excise duty refund inthe base quarter and the residual impact from the re-alignment of channel spends.

    Skin Care delivered broad based volume growth across Fair & Lovely, Pond’s and Vaseline. The performance of Fair & Lovely was led by BBcream, whilst growth in Pond’s and Lakme was driven by the premium portfolio.

    Hair Care registered another quarter of volume led growth, with Dove and TRESemmé leading the category performance.

    In Oral Care, Close Up continued to do well, while Pepsodent core was relaunched in the quarter.

    Color Cosmetics sustained innovation led double digit growth with Lakme Absolute and 9 to 5 strengthening its position in premium makeup.

    Beverages: Consistent growth

    Tea registered broad based growth, driven by market development and strengthened brand equities across the portfolio. Lipton Green Teamaintained its strong growth momentum. Bru Coffee delivered another quarter of double digit growth.

    Packaged Foods: Double digit growth sustained

    Market development continues to be a key driver of growth for this segment. Kissan delivered another robust quarter on both ketchups andjams, while the solid growth on Knorr was led by Instant Soups. Ice Creams registered double digit growth driven by sharper in-marketexecution on Kwality Walls and the extension of Magnum to new cities.

    Water: Innovation led growth

    Pureit delivered double digit growth led by the strong performance in the ‘Reverse Osmosis’ segment. The portfolio was further strengthenedwith the launch of the ‘PureitUltima with Oxytube’ device in quarter.

    Click here for HUL’s investor release.

     

     

  • FY-16: Challenging markets push HUL marketing spends up 16.9 percent

    FY-16: Challenging markets push HUL marketing spends up 16.9 percent

    BENGALURU:  Indian FMCG giant Hindustan Unilever Limited (HUL) spent 16.9 percent more towards Advertisement and Promotions expense (marketing spends, ASP) in the year ended 31 March 2016 (FY-16, current year) as compared to FY-15 on a standalone basis. HUL’s standalone ASP in the current year was Rs 4,526.17 crore (14.1 percent of Total Income from operations or TIO) as compared to Rs 3872.40 crore (12.6 percent of TIO) in the previous year.

    Note: (1) The unit of currency in this report is the Indian rupee – Rs (also conventionally represented by INR). The Indian numbering system or the Vedic numbering system has been used to denote money values. The basic conversion to the international norm would be:
    (a) 100,00,000 = 100 lakh = 10,000,000 = 10 million = 1 crore.
    (b) 10,000 lakh = 100 crore = 1 arab = 1 billion.
    (2) All numbers mentioned in this report are standalone numbers of HUL, unless stated otherwise.

    HUL chairman Harish Manwani said, “In challenging markets and a deflationary cost environment, we have delivered another year ofcompetitive and profitable growth. The consistency of our performance is a result of managing our business dynamically, and executing ourstrategy with even greater rigour and discipline. Our sustained focus on investing behind brands, sharpeningour executional capabilities anddriving market development has enabled us to keep winning with consumers in a rapidly changing market.”

    Trends:

    This year, HUL’s marketing spends have been the highest in terms of absolute rupees. Over a four year period starting FY-13 until FY-16, HUL’s ASP has been the highest in terms of percentage of TIO at 14.1 percent. Even on a y-o-y basis, its ASP has been higherin terms of absolute rupees as well as on a percentage of TIO basisacross all the four quarters in fiscal 2015-16 as compared to the four quarters of fiscal 2014-15.

    For Q4-16 (quarter ended March 31, 2016, current quarter) ASP was 6 percent more year-over-year (y-o-y) at Rs 1,089.95 crore (13.7 percent of TIO) as compared to Rs 1,027.89 crore but was 4.2 percent lower quarter-over-quarter (q-o-q) as compared to Rs 1,137.79 crore (14.3 percent of TIO).

    During a sixteen quarter period starting Q1-13 until Q4-16, the Indian FMCG major’s ASP in Q1-16 was the highest in absolute rupees at Rs 1,153.39 crore (14.2 percent of TIO), while in terms of percentage of TIO in current fiscal, it was highest in Q2-16 at Rs 1,145.04 crore (14.6 percent of TIO). Please refer to Fig A below. ASP shows linear increasing trend, both interms of absolute rupees as well as in terms of ASP as percentage of TIO during the sixteen quarter period under consideration in this report.

    It is seen from Fig A, that HUL’s ASP is generally the highest in absolute rupees in Q1 of a fiscal, the only exception being FY-14, when Q2-14 and Q3-14 ASP were higher that Q1-14 ASP. However, Q1 ASP has always been higher in absolute rupees than the previous year’s Q4 ASP. Based on this trend, it is likely that HUL’s ASP in Q1-17 will be more than or equal to Rs 1,090 crore

    The company’s TIO in the current year increased 3.8 percent to Rs 31,987.17 crore as compared to Rs 30,805.62 crore in FY-15. TIO in the current quarter increased 3.5 percent y-o-y at Rs 7,945.66 crore from Rs 7,675.63 crore andwas almost flat (declined by 0.4 percent) q-o-q as compared to Rs 7,980.99 crore in Q3-16. Please refer to Fig B below. TIO shows a linear increasing trend during the sixteen quarter period under consideration in this report.

    HUL’s Profit after Tax (PAT) in FY-16 declined 5.4 percent to Rs 4,082.37 crore (12.8 percent margin) as compared to Rs 4,315.26 crore (14 percent margin). PAT in the current quarter increased by 7 percent y-o-y to Rs 1089.59 crore (13.7 percent margin) from Rs 1,018.08 crore (13.3 percent margin) and increased 12.2 percent q-o-q from Rs 971.40 crore in Q3-16. PAT shows a linear decreasing trend in terms of percentage of TIO, but indicates a linear increasing trend in terms of absolute rupees during the sixteen quarter period under consideration in this report.

    HUL’s Q1-16 report about categories

    During the quarter, the Domestic Consumer business grew at 4 percent, with 4 percent underlying volume growth. Growth in the quarter was impactedby the phasing out of Excise Duty incentives, a one-time credit for excise duty refund in the base quarter and marginal price de-growth.

    Soaps and Detergents: Volume growth partially offset by price deflation. Skin Cleansing was driven by strong volume growth on Dove, Lifebuoy and Hamam. In Laundry, growth was led by the premium segment,with Surf maintaining its strong double digit growth momentum. Comfort Fabric Conditioner delivered another strong performance on the
    back of sustained market development. Household Care performance was led by Vim liquids.
    The quarter witnessed price deflation in this segment, albeit at lower levels, arising from actions taken earlier to pass on the benefit of lowercommodity costs to consumers.

    Personal Products: Healthy underlying performance

    The reported growth for this segment was impacted by the phasing out of Excise Duty incentives, a one-time credit for excise duty refund inthe base quarter and the residual impact from the re-alignment of channel spends.

    Skin Care delivered broad based volume growth across Fair & Lovely, Pond’s and Vaseline. The performance of Fair & Lovely was led by BBcream, whilst growth in Pond’s and Lakme was driven by the premium portfolio.

    Hair Care registered another quarter of volume led growth, with Dove and TRESemmé leading the category performance.

    In Oral Care, Close Up continued to do well, while Pepsodent core was relaunched in the quarter.

    Color Cosmetics sustained innovation led double digit growth with Lakme Absolute and 9 to 5 strengthening its position in premium makeup.

    Beverages: Consistent growth

    Tea registered broad based growth, driven by market development and strengthened brand equities across the portfolio. Lipton Green Teamaintained its strong growth momentum. Bru Coffee delivered another quarter of double digit growth.

    Packaged Foods: Double digit growth sustained

    Market development continues to be a key driver of growth for this segment. Kissan delivered another robust quarter on both ketchups andjams, while the solid growth on Knorr was led by Instant Soups. Ice Creams registered double digit growth driven by sharper in-marketexecution on Kwality Walls and the extension of Magnum to new cities.

    Water: Innovation led growth

    Pureit delivered double digit growth led by the strong performance in the ‘Reverse Osmosis’ segment. The portfolio was further strengthenedwith the launch of the ‘PureitUltima with Oxytube’ device in quarter.

    Click here for HUL’s investor release.

     

     

  • Q3-2016: HUL YoY marketing spends up 16.4%

    Q3-2016: HUL YoY marketing spends up 16.4%

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) Advertisement and Promotions expense (marketing spends, ASP) in Q3-2016 (quarter ended 31 December, 2015, current quarter, Q3-16) was 16.4 per cent more YoY at Rs 1,137.79 crore (14.3 Total Income from operations or TIO) as compared to Rs 977.12 crore (12.6 per cent of TIO), but declined 0.6 per cent QoQ from Rs 1,145.04 crore (14.4 per cent of TIO).

    Note: (1) 100 lakh = 100,00,000 = 1 crore = 10 million.

    (2) All figures in this report are standalone figures filed by the company. The trends are based on the numbers submitted by the company or picked up from the company’s website.

    Company Speak

    HUL chairman Harish Manwani said, “We have stepped up investment behind our brands and delivered another quarter of profitable volume led growth, consistent with our strategic intent. In an environment of moderating growth and benign input costs, we remain focused on innovation and market development to drive volumes competitively whilst improving operating margins. As channels and markets evolve, we continue to make strategic interventions to strengthen our portfolio and sharpen our executional capabilities to serve our consumers even better.”

    Advertising and Sales Promotion (ASP) trends

    Last quarter (Q2-16), HUL’s ASP was the highest both in terms of absolute rupees and percentage of TIO at Rs 1145.04 crore and 14.4 per cent during a 15 quarter period starting Q1-2013 until Q3-2016. The current quarter’s ASP (mentioned above) is the second highest during the same period. It must be noted than in the current fiscal (FY-2016) during all the three quarters to date, HUL’s ASP has been the highest in rupees and in terms of percentage during the period under consideration and has been above 14 per cent – in Q1-2016, it was 14.2 per cent.

    The lowest ASP in absolute rupees was in Q2-2013 at Rs 768.98 crore (12.2 per cent), while it was lowest in terms of percentage of TIO in Q4-14 at 11.8 per cent (Rs 840.34 crore). The white broken trend line indicates that ASP in absolute rupees during the period under consideration shows an upward trend. ASP in terms percentage of TIO (broken pink line) also shows an upward trend, though not as sharp as in the case of absolute rupees during the period under consideration. As a matter of fact, since Q1-2013, the company’s ASP has been the highest in absolute rupees in the first quarter (Q1) and the lowest in the second quarter (Q2), the only exception being in the year 2014, where Q2-2014 ASP was the highest in the year and was more than Q1-2014 ASP, which was second highest in that year. In FY-2013 and FY-2014, ASP was lowest in Q4, while in Q4-2015, ASP was more than in Q3-2015.

    HUL Revenue and PAT

    Please refer to Fig B above. HUL reported 2.7 per cent YoY growth in TIO in Q3-2016 at Rs 7,980.99 crore as compared to Rs 7,774.32 crore and was 0.3 per cent higher QoQ as compared to Rs 7,955.39 crore. The company’s TIO shows a linear increasing trend as indicated by the broken blue trend line in Fig B. TIO in Q1-2016 is the highest reported by the company during the 15 quarter period under consideration in this report.

    HUL’s PAT in Q3-2016 was 22.4 per cent lower YoY at Rs 971.40 crore (12.2 per cent margin) as compared to Rs 1,252.17 crore (16.1 per cent margin) and was one per cent more QoQ as compared to Rs 962.24 crore (12.1 per cent margin). During the period under consideration, HUL’s highest PAT was highest in Q1-2013 at Rs 1,331.19 crore (20.9 per cent of TIO), both in terms of absolute rupees and in percentage of TIO. While PAT in absolute rupees shows a linear increasing trend as indicated by the broken pink trend line in Fig B, while in terms of percentage of TIO, the linear trend is declining as indicated by the broken yellow line.

    HUL’s take on categories and its brands

    Soaps and Detergents

    Robust volume growth offset by price deflation was seen. The segment witnessed continued price deflation in the quarter given the benign input costs. Skin Cleansing was driven by strong volume growth on Dove, Pears and Lifebuoy. The liquids portfolio registered another quarter of double digit growth. In Laundry, growth momentum was sustained with both Surf and Rin growing volumes in double digit while Comfort Fabric Conditioners led market development of the category and delivered another quarter of high growth. Household Care performance was driven by Vim.

    Personal Products

    The reported growth of this segment was impacted by the delayed winter and the one-time realignment of channel spends undertaken with a view to driving its effectiveness in the marketplace Skin Care delivered volume led growth driven by Fair and Lovely, Pond’s and Lakme. Fair and Lovely continued to do well and saw an encouraging response to the BB cream. The performance of Pond’s was led by premium skin lightening while Lakme growth was buoyed by premium innovations and facewash. Hair Care maintained its strong volume led growth momentum, with Dove and TRESemmé leading the category performance. In Oral Care, the overall performance was subdued. Close Up growth was driven by impactful activation while Pepsodent Clove and Salt continued to do well. Lakme Colour Cosmetics sustained its strong innovation led growth across the core, Absolute and 9 to 5 ranges.

    Beverages

    In Tea, Red Label, Taj Mahal and 3 Roses grew well, driven by focused in-market initiatives. Lipton Green Tea registered another quarter of high growth on sustained market development. In Coffee, Bru delivered double digit growth and achieved market leadership.

    Packaged Foods

    The segment saw its ninth successive quarter of double digit growth. Sustained market development and recent innovations resulted in another quarter of double digit growth across all key brands. Kissan maintained its strong growth momentum across both Ketchups and Jams. Knorr growth was led by new variants of Instant Soups and a new range of Knorr Chef’s Masalas was introduced at the quarter end. Ice Creams delivered another strong quarter, led by Magnum and sharper in-market execution on Kwality Walls.

  • Q3-2016: HUL YoY marketing spends up 16.4%

    Q3-2016: HUL YoY marketing spends up 16.4%

    BENGALURU: Indian FMCG giant Hindustan Unilever Limited (HUL) Advertisement and Promotions expense (marketing spends, ASP) in Q3-2016 (quarter ended 31 December, 2015, current quarter, Q3-16) was 16.4 per cent more YoY at Rs 1,137.79 crore (14.3 Total Income from operations or TIO) as compared to Rs 977.12 crore (12.6 per cent of TIO), but declined 0.6 per cent QoQ from Rs 1,145.04 crore (14.4 per cent of TIO).

    Note: (1) 100 lakh = 100,00,000 = 1 crore = 10 million.

    (2) All figures in this report are standalone figures filed by the company. The trends are based on the numbers submitted by the company or picked up from the company’s website.

    Company Speak

    HUL chairman Harish Manwani said, “We have stepped up investment behind our brands and delivered another quarter of profitable volume led growth, consistent with our strategic intent. In an environment of moderating growth and benign input costs, we remain focused on innovation and market development to drive volumes competitively whilst improving operating margins. As channels and markets evolve, we continue to make strategic interventions to strengthen our portfolio and sharpen our executional capabilities to serve our consumers even better.”

    Advertising and Sales Promotion (ASP) trends

    Last quarter (Q2-16), HUL’s ASP was the highest both in terms of absolute rupees and percentage of TIO at Rs 1145.04 crore and 14.4 per cent during a 15 quarter period starting Q1-2013 until Q3-2016. The current quarter’s ASP (mentioned above) is the second highest during the same period. It must be noted than in the current fiscal (FY-2016) during all the three quarters to date, HUL’s ASP has been the highest in rupees and in terms of percentage during the period under consideration and has been above 14 per cent – in Q1-2016, it was 14.2 per cent.

    The lowest ASP in absolute rupees was in Q2-2013 at Rs 768.98 crore (12.2 per cent), while it was lowest in terms of percentage of TIO in Q4-14 at 11.8 per cent (Rs 840.34 crore). The white broken trend line indicates that ASP in absolute rupees during the period under consideration shows an upward trend. ASP in terms percentage of TIO (broken pink line) also shows an upward trend, though not as sharp as in the case of absolute rupees during the period under consideration. As a matter of fact, since Q1-2013, the company’s ASP has been the highest in absolute rupees in the first quarter (Q1) and the lowest in the second quarter (Q2), the only exception being in the year 2014, where Q2-2014 ASP was the highest in the year and was more than Q1-2014 ASP, which was second highest in that year. In FY-2013 and FY-2014, ASP was lowest in Q4, while in Q4-2015, ASP was more than in Q3-2015.

    HUL Revenue and PAT

    Please refer to Fig B above. HUL reported 2.7 per cent YoY growth in TIO in Q3-2016 at Rs 7,980.99 crore as compared to Rs 7,774.32 crore and was 0.3 per cent higher QoQ as compared to Rs 7,955.39 crore. The company’s TIO shows a linear increasing trend as indicated by the broken blue trend line in Fig B. TIO in Q1-2016 is the highest reported by the company during the 15 quarter period under consideration in this report.

    HUL’s PAT in Q3-2016 was 22.4 per cent lower YoY at Rs 971.40 crore (12.2 per cent margin) as compared to Rs 1,252.17 crore (16.1 per cent margin) and was one per cent more QoQ as compared to Rs 962.24 crore (12.1 per cent margin). During the period under consideration, HUL’s highest PAT was highest in Q1-2013 at Rs 1,331.19 crore (20.9 per cent of TIO), both in terms of absolute rupees and in percentage of TIO. While PAT in absolute rupees shows a linear increasing trend as indicated by the broken pink trend line in Fig B, while in terms of percentage of TIO, the linear trend is declining as indicated by the broken yellow line.

    HUL’s take on categories and its brands

    Soaps and Detergents

    Robust volume growth offset by price deflation was seen. The segment witnessed continued price deflation in the quarter given the benign input costs. Skin Cleansing was driven by strong volume growth on Dove, Pears and Lifebuoy. The liquids portfolio registered another quarter of double digit growth. In Laundry, growth momentum was sustained with both Surf and Rin growing volumes in double digit while Comfort Fabric Conditioners led market development of the category and delivered another quarter of high growth. Household Care performance was driven by Vim.

    Personal Products

    The reported growth of this segment was impacted by the delayed winter and the one-time realignment of channel spends undertaken with a view to driving its effectiveness in the marketplace Skin Care delivered volume led growth driven by Fair and Lovely, Pond’s and Lakme. Fair and Lovely continued to do well and saw an encouraging response to the BB cream. The performance of Pond’s was led by premium skin lightening while Lakme growth was buoyed by premium innovations and facewash. Hair Care maintained its strong volume led growth momentum, with Dove and TRESemmé leading the category performance. In Oral Care, the overall performance was subdued. Close Up growth was driven by impactful activation while Pepsodent Clove and Salt continued to do well. Lakme Colour Cosmetics sustained its strong innovation led growth across the core, Absolute and 9 to 5 ranges.

    Beverages

    In Tea, Red Label, Taj Mahal and 3 Roses grew well, driven by focused in-market initiatives. Lipton Green Tea registered another quarter of high growth on sustained market development. In Coffee, Bru delivered double digit growth and achieved market leadership.

    Packaged Foods

    The segment saw its ninth successive quarter of double digit growth. Sustained market development and recent innovations resulted in another quarter of double digit growth across all key brands. Kissan maintained its strong growth momentum across both Ketchups and Jams. Knorr growth was led by new variants of Instant Soups and a new range of Knorr Chef’s Masalas was introduced at the quarter end. Ice Creams delivered another strong quarter, led by Magnum and sharper in-market execution on Kwality Walls.

  • O&M bags maximum statuettes at IndIAA Awards

    O&M bags maximum statuettes at IndIAA Awards

    MUMBAI: Ogilvy & Mather bagged the maximum number of six awards at the IndIAA Awards, which are organised by theIndia Chapter of the International Advertising Association (IAA).

     

    O&M was awarded for its creative work on brands such as Titan, Kinley, SBI Life, Hero Indian Super League, BMW and Vodafone.

     

    On the other hand, amongst media agencies, Maxus won four awards for Dabur Vatika, Vodafone, Titan and Hero Motocorp.

     

    IndIAA Awards, which held on 13 October at ST Regis Hotel, saw 16 winners from various creative and media agencies. It also included various agency partners from digital, activation, PR and events.

     

    IndIAA awards chairman Pradeep Guha said, “The IndIAA Award format ensured that ‘ads for awards only’ didn’t come through and this itself was the differentiator.”

     

    IAA India chapter president Srinivasan Swamy added, “With the IndIAA Awards, IAA has added another interesting concept to its existing cache of clutter-breaking events. We attempted IndIAA Awards as an experiment; we wanted to create a different way of awarding creativity. With the response to our call for entries and the turnout today, we know that this concept has been very well accepted.”

     

    On the jury for the awards were Unilever COO and Hindustan Unilever non-executive chairman Harish Manwani, Titanmanaging director Bhaskar Bhat, Standard Chartered Bank group head of brand and chief marketing officer Sanjeeb Chaudhuri, State Bank of India managing director and group executive (national banking) B Sriram and Kelloggs India managing director Sangeeta Pendurkar.

     

    “Great brands are built around insights, not analytics,” said Manwani, while addressing the audience in the ceremony.