hul market share

8/8/2019 HUl Market Share

1/161

Hindustan Lever Limited

Investor presentation

June 2006

GROWTHAGENDA

2006HIGHLIGHTS

INDIA

OPPORTUNITY

OVERVIEW

Agenda


2/162

GROWTHAGENDA

2006HIGHLIGHTS

INDIAOPPORTUNITY

OVERVIEW

Agenda

HLL - Investor presentation June 2006

16,000+ employees

1,200+ managers

2,000+ suppliers &

associates

80 company factories

45 C&FAs, 4,500 Stockists

Direct Coverage - 1 Mn outlets

Total coverage - 6.3 Mn outlets

Market reach - 166 Mn households

(8 out of 10 in India)

t

t

t t t

t

t

t

t

t t

t

t t t

t t t

t

t

t t

t t

t

t t

t

t

t t

t t t t

t

t t

t

t

India

Population 1027 Mln

5,545 Towns

2.5 Mln outlets

6,38,000 Villages

5.0 Mln outlets

* Source:

(1) Statistics on India, Total Coverage : AC Nielsen, Census of India 2001

(2) Statistics on Market reach : MRUC, Hansa Research - Guide to Indian Markets 2006

HLL - Indias largest FMCG company


3/163


Turnover 2,464

PBIT 328

Net Profit (bei) 302

EPS 14c

Market Capitalisation 9,216

Mn $

PBIT % 13.3%

Surplus Cash Generated 441 Personal

Products

26%

Beverages

11%

Foods

3%

Ice Creams

1%

Exports

12%

Others

3% Soaps &

Detergents

44%

* Figures based on FY2005 Audited Results

++ Market Capitalization as on 13th June 2006

Financial Overview2005


CategoryHLL -

MarketShare (%)

Fabric Wash 37.0

Personal Wash 55.9

Packet Tea 29.3

Skin 57.1Shampoo 47.5

Talcum Powder 60.7

Dishwash 56.5

Jams 73.0

Market Leader

#2Market

Share (%)

15.4

9.4

20.5

5.123.2

4.8

10.8

4.4

Source : A.C Neilsen - Quarter Ended March 2006 Value shares

Toothpaste 31.0

Instant Coffee 37.3

Ketchups 23.9

Strong No. 247.0

62.7

39.0

HLL -Market

Share (%)

#1Market

Share (%)

Leadership across categories


4/164


HLL Equity Capital - 50 Mn $

++Market Capitalization as on 13th June 2006

Market Capitalization - 9,216 Mn $

* Shareholding pattern as on 31st March 2006

Unilever

51.6%

FIIs

14.2%

Dome stic FIs,

Mutual Funds

14.9%

Others

19.3%

HLL shareholding pattern

GROWTHAGENDA

2006HIGHLIGHTS

INDIA

OPPORTUNITY

OVERVIEW

Agenda


5/165


Indian economy

5.6

4.8

6.56.1

4.4

5.8

4.0

8.5

6.9

8.1

0

1

2

3

4

5

6

7

8

9

1990-

91

1997-

98

1998-

99

1999-

2000

2000-

01

2001-

02

2002-

03

2003-

04

2004-

05

2005-

06

250

300

350

400

450

500

550

600

GDP growth rate (%) Per Capita Income ($)

Growing service sector leading the economyGrowing service sector leading the economy

$ 469 bn

$604 bn

$929 bn

$ 1411 bn

2000

2005

India GDP (US $ bn)BRIC estimates 2010

2015

Growing service sector

Low interest rates and steady inflation

External sector growth

Strong savings rate

Infrastructure

Volatility in Agriculture

Labour reforms

Oil prices

ConcernsConcernsPositivesPositives

Demographics provide tailwind to growthDemographics provide tailwind to growth


India Opportunity

India : Opportunities and challenges

HLL : Well positioned to create substantial value

FMCG industry : Potential inflection points


6/166


India Opportunity





Evolving trade structure

A pyramid with large differentiated segment of consumers

Increasing per capita income drives FMCG growth

Opportunity to grow consumption and penetration


Opportunities & Challenges


7/167


R2

= 87%

-

50

100

150

200

250

300

350

400

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Per Capita disposable Income (USD)

HPC

SpendPerCapita(USD)

Source: Euromonitor, Morgan Stanley Research

Per capita incomes in the long term drives consumption

High R-squared for developed and developing countries

High income countries have higher consumption

Disposable income per capita vs HPC spend per capita (2004)

Increasing per capita incomedrives FMCG growth


0

2.3

4.6

6.9

9.2

11.5

13.8

16.1

0 230 460 690 920 1150 1380Per Capita Income ($)

PerCapitaFMC

GE

xpenditure

($)

CHANDIGARHCHANDIGARH

GUJARATGUJARAT

BIHARBIHAR

Correlation of above 0.8 between FMCG consumption and PCI

Growth in income is a good indicator of growth in FMCG consumption

As Indias real income continues to grow at 7% + levels FMCG will benefit

Increasing per capita incomedrives FMCG growth


8/168


India - 2013

2003181 mn hhlds

131

46

3

2013231 mn hhlds

124

11

96

Rich

Aspirers

Strivers

Source : NCAER

The shape of India is going to changefrom a pyramid to a diamond

HLL - Investor presentation June 2006Source : Euromonitor

Laundry

1.2 1.8 1.83.9

6.2

11.0

India China Indonesia Thailand Malaysia South

Africa

Shampoo

0.2 0.3

1.1

2.4 2.73.1

China India Indonesia Thailand Malaysia South

Africa

Per Capita Consumption (US $ )

Opportunity to grow consumption andpenetration


9/169


Source : Euromonitor

Skincare

0.3 0.62.3

4.7

7.4 7.7

Ind ia Ind on esia Chi na Sou th

Africa

Malaysia Thailand

Toothpaste

0.4 0.51.0

2.0

2.9

3.6


Africa

Deodorants

0.0 0.0 0.10.6 0.8

4.9


Africa



Penetration %

Source : MRUC, Hansa Research - Guide to Indian Markets 2006

Category All India % Urban % Rural %

Deodorants 2.1 5.5 0.6

Toothpaste 48.6 74.9 37.6

Skin Cream 22.0 31.5 17.8

Shampoo 38.0 52.1 31.9

Utensil Cleaner 28.0 59.9 14.6

Instant Coffee 6.6 15.5 2.8

Washing Powder 86.1 90.7 84.1

Detergent Bar 88.6 91.4 87.4

Toilet Soap 91.5 97.4 88.9

Opportunity to drive penetration & consumption



10/1610


Evolving trade structure

25% of turnover to come through organized retailing

22 2632 32

50 5164 70 70

8797

76 5961 54

2846

36 17 5

2 714 22

313

3

15 1324

0%

20%

40%

60%

80%

100%

India

Indonasia

Malaysia

Thailand

China

Taiwan

P

hilippines

Korea

Singapore

HongKong

Australia

RetailTrade

Others TraditionalTrade

Modern Trade

Well entrenched traditional trade but also growing influence of Modern retail:

7.5 mn small stores stocking FMCG products

Modern trade grown by 25% p.a in last 3 years


FMCG modern trade stores increasing at a CAGR of 15% in the last 5 years

They account for 3% of FMCG today

Modern trade accounts for 9% of FMCG in metros, 20% in South Indian metros

HLL market share in Modern trade significantly higher in key categories

(compared with General trade)

0.70.8

0.91.1

1.2

1.5

1.8

2.1

2.42.5

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Stores % contribution to

FMCG

Source : AC Nielsen

1

2

1

0

2

3

4

5

Thousands

0

%

FMCG M odern Trade stores


11/1611


India Opportunity





Versatile distribution network with multi-channel capabilities

Innovation and R&D capabilities to straddle the pyramid

An unmatched brand portfolio

Track record of building profitable mass market brands


Strong local talent base

Combining corporate responsibility and business strategies to aid the

development of rural India

HLL : Uniquely posit ioned


12/1612


India Opportunity





India Opportunity

PotentialInflection

points

HighIndirect taxes

Poorinfrastructure

Archaiclaborlaws

Indirect taxes inIndia : 25-30%of End ConsumerPrice

VAT in China :

14.5%

Source: Mckinsey


13/1613

GROWTHAGENDA

2006HIGHLIGHTS

INDIAOPPORTUNITY

OVERVIEW

Agenda


FMCG Markets Growth m omentum acceleratingGrowth driven by

rural markets

%%

3 .8

9 .9

8 .4

4 .5

6 .1

7 .7

4 .2

4 .83 .5

2 .2

5 .86 .4

1.44 .6

1.9

1.8

14.0

9 .1

2 .51.7

1.0( 0 . 2 )

( 0 . 9 )

0 .6

JQ'04 SQ'04 DQ'04 MQ'05 JQ'05 SQ'05 DQ'05 MQ'06

Total FMCG market Urban Rural

Source: A C Nielsen


14/1614


HLL FMCG growth

7.1

11.9

15.9 15.818.3

MQ'05 JQ'05 SQ'05 DQ'05 MQ'06

HighlightsFMCG growth momentum sustained

Strong FMCG Volume growth

%%


Sales grow by 11.6% for the quarter

FMCG grows by 18.3%; HPC (+20.0%), Foods (+10.8%)

Growth broadbased and ahead of market

A&P spends higher by 45.3%

PBIT grows by 26.9%

PBIT margin improvement of 140 bps driven by better mix

PAT bei grows by 13.6%

Underlying PAT bei grows by 34.5%

Net Profit grows by 77.0%

Impact of Nihar brand sale, other exceptional items

MQ06 Highlights


15/1615

GROWTHAGENDA

2006HIGHLIGHTS

INDIAOPPORTUNITY

OVERVIEW

Agenda


New Management Committee (MC) effective from 1st March 2006

One HLL Customer development organisation

Segmented approach to general trade, modern trade and top-end channels

Modern trade structure being strengthened to leverage market opportunities

Consolidation of customers; improved customer service

Robust FMCG market growth; expected to continue

International companies seeking market position

High inflation in key raw materials

Invest behind our brands and deliver consumer value

Achieve cost leadership across the extended supply chain; margin improvements to

come by winning in market place, judicious price increases

Growth agenda

CAPABILITY BUILDING

MARKETS, STRATEGY


16/16


India : A buoyant economy with huge opportunity

Big opportunity to grow Penetration & Consumption

Market share gains - Key focus area; further strengthening our

competitive position in strategic categories

Continued investments behind innovation / brands

Cost pressures, particularly in Laundry expected to continue; to be

managed by cost effectiveness programs and judicious price increases

Building capability for long term value creation - Top priority

New organization to leverage One HLL and One Unilever

In summary

Thank youThank you

hul market share

Documents