Hindustan Unilever Limited Annual Investor Seminar 2012
Agenda
Winning Today, Winning tomorrow Brand and Capability experience Q&A
Nitin Paranjpe
8.45 am to 9.45 am
Business heads 10.00 am to 1.00 pm CEO & CFO 1.00 pm to 1.30 pm
Hindustan Unilever Limited
Winning Today, Winning Tomorrow
Clear and compelling strategy
Strategic framework
Sustainable Living Plan
Our Goals
Consistent Growth
Competitive Growth
Profitable Growth
Responsible Growth
A business model that works
Virtuous circle of growth
Profitable Volume Growth
Cost Leverage + Efficiencies
Innovation A&P/R&D
Cost Savings
Focused on execution
FY 2011-12: Delivered on goals
Competitive growth
Ahead of market
Consistent growth
Volume led
Profitable growth
Margin expansion
18 18 14 10 8 17.5% 140 bps
UVG Market HUL
Price
USG
Domestic consumer Sales growth
HUL EBIT
FMCG growth %
HUL FMCG growth %
Stepped up the growth momentum
Increasing FMCG USG (%)
Higher PP contribution (%)
Higher Foods contribution to F&B
18
31
31
34
10 8
28
FY10
FY11
FY12
FY10
FY12
FY10
FY12
PP Personal Products; USG: Underlying Sales growth; F&B: Foods & Beverages
Straddling the pyramid
Compass - How will we win
Strengthening capabilities - Widening competitive gap
3
5
Sustainability - USLP
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.
Embedding consumer and customer centricity
Consumer & Customer License
Customer Credo
Mission Bushfire Perfect stores
Project Popeye
Our approach to Winning
Step up in innovations Covering 60%+ of portfolio
Lux relaunch with silk protein extract
Fair & Lovely Future Tube: Aspirational & affordable
Dove: Nourishing Oil Care range with Vita Oils
Lakme Absolute range
Fair & Lovely Facewashes
Sunsilk Keratinology for salon treated hair
Pepsodent G relaunched
Rin bar relaunch with superior formulation and packaging
Vim relaunched with 100 Nimbuon ki Shakti
Vaseline hand and body
Face Wash: Range expansion across brands
Clear Relaunched
Step up in innovations Covering 60%+ of portfolio
Kissan range expanded and relaunched
Soupy Noodles CupaSoup extension instant soups
Fruttare Naturally refreshing flavours with 100% Fruit
Selection 5 Rich and Creamy International flavours
Lipton Ice Tea
Green and flavored Teabags Bru Gold 100% coffee Bru Exotica Pureit Marvella RO
Better quality products, stronger brands
Tripled blind product wins %
Improved brand equity scores
3X
2011
2X
3/4th
2010
of portfolio holding/gaining *
2009
Measured for the top 25 brands; *Exit 2011 Vs second half 2009
Driving mix through premiumization
Skin care (Face)
Market construct (%)
Moving up the ladder
Segments Premium
Market CAGR 2009-11 (%)
20
40
30
Mid
35
50
Mass
10
Building segments of future
Facewashes
Size: >Rs. 900 crs. Growth: c. 50%
Hand & Body
Size: >Rs. 2300 crs. Growth: c. 30%
Handwashes
Size: >Rs. 250 crs. Growth: c. 30%
Noodles
Size: >Rs. 1700 crs. Growth: c. 30%
Market size and growth for 2011
Building segments of future
Premium Skin lightening
Size: >Rs. 800 crs. Growth: c. 30%
Anti Aging
Size: >Rs. 250 crs. Growth: c. 30%
Conditioners
Size: >Rs. 250 crs. Growth: c. 30%
Tea bags
Size: >Rs. 140 crs. Growth: c. 40%
Market size and growth for 2011
Building segments of future Delivering results
Portfolio contribution
Growth contribution
Core Categories
Future Categories
During financial year 2011-12
Our approach to Winning
Leading market development
More Users
Drive preference
More Usage
Drive consumption
More Benefits
Develop segments
Repeatable models Successful deployment in Skin and Hair
More users More usage More benefits
Stepping up front end execution
More stores
Better Stores
Better served*
310 bps
DISTRIBUTED:
6.5 Mn
Proposition
Product
CORE SERVICED
: 2 Mn+
Place
Pack Price Promotion
Direct
2010
2011
* Modern Trade on shelf availability
Delivering results
Perfect Stores
Increasing contribution, higher growth
Modern Trade
Accelerating
Rural
Distribution gains
Growth in perfect stores significantly higher
contribution
growth
contribution
growth
Average
Perfect stores
2010-11
2011-12
2010-11
2011-12
Our approach to Winning
Differentiated Supply Chain Driving benefits across value chain
Live Superior Service. Delivery Sustainable, Profitable Growth
World class service
Consumer perceived quality
E2E competitive costs
Flawless execution, Safety and Sustainability
Focus on cash and savings
Savings as a % of Turnover
Step up in cost savings
Optimizing investments
Maximizing ROCE
TWC as a % of turnover
Delivering cash
% Contributed by
2010-11
2011-12
52%
Capacity increase in 2011
2008-09 2011-12 Productivity Improvement
48%
New Capital Investments
TWC: Trading working capital; includes debtors, creditors and inventory excludes cash; ROCE: Return on Capital employed
Driving Return on Marketing Investments Getting more out of advertising
More ads pre-tested
Up by 50%
Improvement in Ad preview scores
Up by 800 bps
Production and media fees
Lower by 900 bps
70%
Persuasion
2010
2010 2011 Awareness
2011
Driving Return on Marketing Investments Optimizing promotional spends
More activities evaluated
Up by > 50%
More green activities
Higher by 1100 bps
Higher ROI
Up 200 bps
ROI Positive
+
+
TO Growth
2010
-/2010 2011
-/-
2011
ROI: Return on Investment
Our approach to Winning
Performance culture that respects our values A broad based systematic approach
PERFORMANCE CULTURE
Strengthening Performance culture
Aligned goals
Sharper differentiation
Reward linked to performance
Fixed Variable
Standards of Leadership
2006-07 Delivery
2011-12
Performance culture index is up by 14% in 2011
Engaged to win
Step up in employee engagement scores
Near Nil man days lost
2009
2010
2011
preceding 5 year average
2009
2010
2011
Engagement scores for WL2+
Building a talent powerhouse
# 1 Employer of choice by Nielsen Campus track
# 1 Best employer in India, 2011 awarded by Aon Hewitt
# 1 Dream employer across campuses Survey by Nielsen
Straddling the pyramid
Compass - How will we win
Strengthening capabilities - Widening competitive gap
3
5
Sustainability - USLP
Widening competitive gap Capability thrusts
Winning with beauty
Winning in Foods
Winning in Rural
Segmented business models
Leveraging technology
Target right for growth Expertise and authority program World class instore experience Beauty training
Robust supply chain CD capabilities Relevant experience models Talent and culture
Shakti/Shaktiman Telecom Financial Inclusion
Differentiated models - Lean and agile
Business planning and operations Transactions Business analytics Digital Media
Winning in Rural Sizeable opportunity
Large Consumer base
Significant contribution
Growing rapidly
Rising Income
Consumption and uptrading
146 million Households
~40% of FMCG
Double digits
3.6X increase in government expenditure
Strong growth in emerging categories
HUL rural: fast growing and profitable Expanded distribution, stepped up execution
Direct Distribution
Tripled
Expanding presence
Project Shakti
Consumer awareness
Khushiyon Ki Doli
Leveraging partnerships
Project Express
Winning in rural
Expanding HUL Rural presence Project Shakti
45,000 Shaktiammas 30,000 Shaktimaans 15 States 100,000 Villages
Driving consumer awareness and retail contact Khushiyon ki Doli
2010 3 28,000 10 mln 170,000
States
2011 5 70,000 25 mln 400,000
Villages
Consumers
Retailers
Addressing rural cost to serve challenge Project Express
HUL TTSL Distribution Alliance
<20k markets across India
Win win model
IN PROGRESS COMPLETED
Coverage expansion Improved servicing Higher income for Shakti entrepreneurs
Rolled out in four states
Scale up in progress
Widening competitive gap Capability thrusts
Winning with beauty
Winning in Foods
Winning in Rural
Segmented business models
Leveraging technology
Target right for growth Expertise and authority program World class instore experience Beauty training
Robust supply chain CD capabilities Relevant experience models Talent and culture
Shakti/Shaktiman Telecom Financial Inclusion
Differentiated models - Lean and agile
Business planning and operations Transactions Business analytics Digital Media
Building competitive gaps Leveraging IT for growth
Supporting Customer Development Enhancing brand engagement Driving S&OP Supporting transactions
Improving coverage, quality of information and insights in traditional trade
Global digital capability
Enabled by End to End systems for business planning and operations
Simplified payment processing
Leveraging IT for growth Supporting customer development
Leveraging IT for growth Driving new age communication - digital
Digital Readiness
Engagement based communication
Mobile, Social search, gaming and DTH
Consumer insights, analytics, ROI
Build consumer centric platforms
Building capability More brands, more platforms, always on Significant step up in investment
Focus on earned media 4.2 Mn Social networking fans added in 2011 >1 billion social impressions generated
500% increase in search, 100% in social and 90% on mobile Online video is 10% of total digital spends
CMI integration on DTH, mobile and display Pre-testing of digital creatives Digital campaign effectiveness
Axe Angels Club -Top 10 FB page in India -2nd largest Unilever FB page JammyArt.com: Indias largest Kida UGC platform BeBeautiful.in: Indias largest beauty platform
Driving new age communication Mobile gaming
Reach
10 million game downloads
Impact
Avg. of 4.5 plays per person Excellent User Reviews
Driving new age communication Mobile activation
Driving new age communication Integrated video plus social networking
1st ever FMCG campaign from India to enter the Facebook Studio hall of fame
3.3 lakhs channel views 126 subscriptions 60 videos
Straddling the pyramid
Compass - How will we win
Strengthening capabilities - Widening competitive gap
3
5
Sustainability - USLP
Unilever Sustainable Living Plan Three big goals
Unilever Sustainable Living Plan India Highlights 2011
30 million people reached with Lifebuoy soap handwashing programmes in 2010-11 30 million people have gained access to safe drinking water by using Pureit in-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 CO2 emissions by 14.7%, water use by 21.5% and waste by 52.8% in our factories, over 2008 baseline Improved CO2 efficiency in transportation by 17.8% 60% of tomatoes in Kissan Ketchup are sourced sustainably
Winning today winning tomorrow Driven by a clear and compelling strategy
Strategic framework Sustainable Living Plan Our Goals
Consistent Growth
Competitive Growth
Profitable Growth
Responsible Growth
Hindustan Unilever Limited Annual Investor Seminar 2012
