Hindustan Lever

Limited
INDIA”S LARGEST FMCG MARKETER

MISSION
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
OUTLINE

1. HERITAGE: PAST MILESTONE

3. HERITAGE: PRESENT STATURE

5. ORGANIZATION

7. BUSINESS AND BRANDS

9. CITIZEN LEVER

11.FINANCIAL ASPECTS

13.LOOKING AHEAD
1. HERITAGE: PAST MILESTONE

Formed in 1956 with merger of Hindustan Vanaspati

Manufacturing Company, Lever Brothers India Limited and
United 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

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 in

Indian industry till that time

HLL forms NLL ( Nepal Lever Limited)

HLL and US based Kimberley Clark Corporation form 50:50
JV in 1994

Acquisition of Kwality and Milkfood and introduction of Wall’s 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

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
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

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 products

and Food and Beverages

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

than 13000 crore
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

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
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
3. ORGANIZATION

MANAGEMANT STRUCTURE
- BOARD
- DIVISIONS
- CENTRAL FUNCTIONS
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
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

Finance and IT Director: Mr. D. Sundaram

Executive Director: Mr. Nitin Paranjpe

DIRECTOR:

- Mr. Sanjiv Kakkar

- Mr. A. Narayan
- Mr. V. Narayanan

- Mr. D.S. Parekh

- Mr. C.K.Prahlad

- Mr. S. Ramadorai
 DIVISION

HOME AND
FOODS
PERSONAL CARE
The divisions are further reorganized into categories

Each category and each function – Sales, Commercial,

Manufacturing is headed by the Vice President

Division’s 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
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
CENTRAL FUNCTIONS
- Finance

- Human Resources

- Technology

- Research

- Information technology

- Legal and Secretarial

- Corporate Affairs
4. BUSINESS AND BRANDS

A. Home and Personal care

C. Foods

E. New Ventures

G.Exports
A. HOME AND PERSONAL CARE

PERSONAL WASH
FABRIC WASH
ORAL CARE
SKIN CARE
HAIR CARE
DEODRANTS AND TALCS
COLOUR COSMETICS
AYURVEDIC PERSONAL AND HEALTH CARE
B. FOODS

TEA
COFFEE
ICE CREAM
OTHER FOODS
OTHER CULINARY PRODUCTS
C. NEW VENTURE

- HINDUSTAN LEVER NTEWORK

- AYUSH AYURVEDIC PRODUCTS AND SERVICES

- PUREIT WATER PURIFIER

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 categories

of HPC and Food products

Products exclusive to HLN, unavailable in retail channel

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

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)

- Health care ( Ayush Spa)

- Male Grooming ( Denim Xclusive)

- Kids care ( Little Animalz)

- Oral care ( Mentadent)

FOOD

- Children’s nutrition ( Ayush Poshak Rasayana)

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

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

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
Enjoys international recognition

Geography comprises countries in Asia, Africa, Australia,

North America and Europe

Accounts for 12% of the turnover

EXPORT PORTFOLIO

HOME AND PERSONAL CARE

- PRODUCTS
Soaps, Skin care, Oral care

- BRANDS
Lux, Lifebuoy, Pears, Fair & lovely, Dove, Vaseline, Close-Up,
Pepsodent, Signal

HLL is the only source of Pears soap across the world

BEVERAGES

- PRODUCTS
Branded packet Tea , Instant Tea

- BRANDS
Brooke 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
MARINE PRODUCTS

- PRODUCTS
Surimi, Crabsticks, Shrimps

- BRANDS
Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold Seal
Tara, Prima

Icelandic, world’s third largest seafood company, is one of the

customers
RICE
- PRODUCTS
Basmati Rice, Basmati Rice-based ready-to-eat Rice meals

- BRANDS
Gold Seal Indus alley, Rozana, Annapurna

CASTOR
- PRODUCTS
Castor Oil, Castor Oil based, Specialty Castor Oils

- BRANDS
Topsol
5. CITIZEN LEVER

CORPORATE SOCIAL RESPONSIBILITY

Commitment to all stake holders – Consumers,

Employees, Environment and the Society that the
Organization operates in
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 1980’s , reviving sick industries, developing
local entrepreneurship

Focusing on health and hygiene, women empowerment

Shakti
Lifebuoy Swasthya Chetna
Fair and Lovely foundation
Community support activities like education and rehabilitation of
special or underprivileged children, care for the destitute and others
Happy Homes
Yashodadham

TERI-CSR special award from The Energy and Resource Institute

for commitment to every aspect of Sustainable Development
Environment Management Practices
Greening Barrens

Trust, Transparency, Accountability and Responsibility in dealings

with Employees and Shareholders
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)
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

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

It is a multi-phased activity

Effects behaviour change through demonstration by means of

pictorial story, quizzes etc.

Targets children and mother

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 urban

India

Renowned Indian women, physicians , activists are members of

the foundation
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.

SPECIAL EDUCATION AND REHABILITATION

Initiated in 1976, with the setting up of Asha Daan-home for

abandoned, 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
REBUILDING LIVES

Is a village reconstructed in Gujarat which was wrecked by

earthquake in 2001

Comprises 289 homes with over 1100 residents

Provision of school building, playground and a multi purpose

Community centre
ENVIRONMENT POLICY

Maintaining environment management systems across the company

to 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
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
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
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

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

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
BROAD OUTLOOK

SALES TREND FOR PAST 10 YEARS

14000
13000
SALES ( in Rs. Cr)

12000
11000
10000
9000
8000
7000
6000
Y

Y
97

98

99

00

01

02

03

04

05

06
19

19

19

20

20

20

20

20

20

20
YEAR

Continuously rising sales apart from a dip in 2002

Sharp increase in the past three years

 NET PROFIT TREND FOR THE PAST 10 YEARS

2000

1500
PAT ( Rs. Cr)

1000

500

0
Y

Y
97

98

99

00

01

02

03

04

05

06
19

19

19

20

20

20

20

20

20

20
YEAR

Rising profit apart from a dip in 2004

Constant absolute increase for major part of the decade

 EXPORT TREND FOR PAST 10 YEARS

2500
EXPORTS (in Rs. Cr)

2000
1500
1000
500
0 Y

Y
Y

Y
97

98

99

00

01

02

03

04

05

06
19

19

19

20

20

20

20

20

20
20
YEAR

Rising initially, stable since 2002

 HLL SHARE PRICE ON BSE FOR THE PAST TEN
YEARS
Rs. per Share of Re. 1

250
200
150
100
50
0
Y

Y
Y

Y
98

06
97

99

00

01

02

03

04

05
19

19

19

20

20

20

20

20

20

20
YEAR

Rising sharply after a plunge in 2004

SALES AND RESULTS FOR 2006

NET 1408
PROFIT 1855

1355
PAT 1540
INDICATORS

1604 2005
PBT 1862
2006
1471
PBIT 1709

11061
SALES 12103

0 5000 10000 15000

Rs. Crore
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%

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
DIVISION WISE GROWTH IN 2006

BROAD BASED GROWTH IN HPC (Value Growth %)

Laundry
Soaps and Detergents
Personal Wash

Shampoos
Personal Products
Skin

Toothpaste
BROAD BASED GROWTH IN FOODS (Value Growth %)

Tea
Beverages
Coffee

Ice Cream
Salt

Processed Food Atta

Culinary
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
SALES SUMMARY FOR MQ-07

Rs. Crores MQ’ 07 MQ’ 06

HPC 2252 2047
Foods 531 432
FMCG 2783 2479
Exports 352 276
Others 50 22
Continuing Business 3184 2776
Discontinued Business 0 22
Net Sales 3184 2798
RESULTS SUMMARY FOR MQ-07

Rs. Crores MQ’ 07 MQ’ 06

EBITDA 412 367

PBIT 379 333

PBT 415 364

PAT 334 294

Exceptional Items 59 149

Net Profit 393 443

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%

Net Profit declines 11.2% as base MQ’06 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

 GROWTH %

0
10
20
30
40
50
60

SOAPS AND

9.6
DETERGENTS

PERSONAL 10.8
PRODUCTS

BEVERAGES
16.1

PROCESSED
47.9

FOODS

ICE CREAM
21.1
CATEGORY WISE SALES GROWTH :MQ07
All Key HPC categories grow

Laundry

Shampoo

Skin

Personal Wash

Toothpaste
HPC – CATEGORY PERFORMANCE

Soaps and Detergents

Market Shares Steady in Personal Wash;

- Lifebuoy and Lux register double digit growth

- Lux Pinkful launched in current quarter

Market Shares continue to improve in laundry; Category grows in

double digits
- A good performance by all the brands led by Surf and Wheel
Personal Products

Strong all round growth in Shampoo Category;

- Clinic all clear returns to strong double digit growth; Sunsilk
and Clinic plus continue to grow well

- Launch of Scalp oil control boosts sales in Clinic all clear

- Sunsilk damage repair and Anti dandruff variant launched

Skin Growth Improves

- FAL and top end range of Pond’s do well
 - Launch of White Beauty

Toothpaste Growth led by Close Up;

- Strong activation on the Pepsodent 10/10 platform
Foods Topline

Tea

Coffee

Ice Cream

Salt

Atta

Culinary
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

Ice Cream continues to perform strongly;
- Launch of “Moo Range” of ice creams on the health
platform

- Distribution extended to Mini metros

MARKET SHARE PERFORMANCE

CATEGORY JQ’06 DQ’06 MQ’07

Laundry 35.3 35.8 36.4

Personal wash 54.6 55.3 55.3

Hair 48.0 48.5 46.9

Skin care 54.3 54.7 54.8

Oral 30.2 30.4 30.0

Tea 25.5 24.9 23.7

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
LOOKING AHEAD..

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
THE END