Introduction to Hindustan Unilever Limited

August 2012

Safe harbour statement

This Release / Communication, except for the historical information, may contain statements, including
the words or phrases such as expects, anticipates, intends, will, would, undertakes, aims, estimates,
contemplates, seeks to, objective, goal, projects, should and similar expressions or variations of these
expressions or negatives of these terms indicating future performance or results, financial or
otherwise, which are forward looking statements. These forward looking statements are based on
certain expectations, assumptions, anticipated developments and other factors which are not limited
to, risk and uncertainties regarding fluctuations in earnings, market growth, intense competition and
the pricing environment in the market, consumption level, ability to maintain and manage key customer
relationship and supply chain sources and those factors which may affect our ability to implement
business strategies successfully, namely changes in regulatory environments, political instability,
change in international oil prices and input costs and new or changed priorities of the trade. The
Company, therefore, cannot guarantee that the forward looking statements made herein shall be
realized. The Company, based on changes as stated above, may alter, amend, modify or make
necessary corrective changes in any manner to any such forward looking statement contained herein
or make written or oral forward looking statements as may be required from time to time on the basis
of subsequent developments and events. The Company does not undertake any obligation to update
forward looking statements that may be made from time to time by or on behalf of the Company to
reflect the events or circumstances after the date hereof.

Contents

About the Company

India FMCG Market Opportunity

Our Strategy

Financial Information, Shares & Governance

Contact Information

About the Company

Our Vision

We work to create a better future everyday.

We help people feel good, look good and get more out of life with brands and
services that are good for them and good for others.
We will inspire people to take small everyday actions that can add up to a big
difference for the world.
We will develop new ways of doing business that will allow us to double the size
of our company while reducing our environmental impact.

HUL: Indias largest FMCG Company

More than 75 years

of experience in
India
Get more
out of life

Direct distribution
reach of > 2 Mn
stores

Products touch the

lives of 2 out of 3
Indians everyday

No.1 and strong

No.2 in more than
95% of the
business

7 brands > Rs. 1000 crs; 13 brands > Rs. 500 crs
17 out of top 100 most trusted brands in India^

^Brand Equity Survey, 2011

Pan India footprint

Population 1.2 billion
5545 Towns

2.5 million outlets

638,000 villages

5 million outlets

Source: Statistics on India, Total Coverage : Nielsen, Census of India 2011

HUL manufacturing locations (own and outsourced)
Mn = Million

~ 15,000 employees

~ 2,000 suppliers & associates

~ 70 Manufacturing locations

40+Depots, 2700+ Distributors

Direct coverage 2 mn+ outlets

Portfolio straddling the pyramid

Fabric Cleaning

Skin Cleansing

Soaps & Detergents: 48%

% contribution of the segment to total revenue (April - December 2011)

Hair

Skincare

Tooth Paste

Personal Products: 31%

8

Portfolio straddling the pyramid

Tea

Coffee

Beverages: 12%
% contribution of the segment to total revenue (April - December 2011)

Processed Foods

Ice Creams

Packaged Foods: 6%

Water

Others: 3%
9

External Recognition
Consumers

Customers

Most responsive supplier of

the year

6 EMVIES in 2011
6th most innovative company
globally - Forbes

eQ* at 89

Value Award by TESCO

India

(world class level)

*Nielsen Equity Management Program Score

Employees

Communities

No.1 Employer of choice by

Nielsen Campus track
Golden Peacock Global Award for Corporate
Social Responsibility for the year 2011

Golden Peacock Environment Management

Award for 2011 in the FMCG category
No.1 Employer by Aon Hewitt

Best Employer Brand in Asia,

2011

10

India FMCG Market Opportunity

11

Large consumption opportunity

FM CG - $ bln
137

62

87
50
28
FY 10 E

FY 15 P
Base Case

FY 20 P

High Case

CAGR of 12% in base case; 17% with high estimates

Source: FMCG roadmap to 2020 CII Report, 2010

12

Head room for growth

Consumption

Penetration

per capita consumption

All India penetration

Skin Care

Skin Care
2011

2011

2010

79

5.9 5.3

2010

79

65

63

48

45

3.2 2.7
0.6 0.6
China

Indonesia

India
Annual

Shampoo
2011

1.7 1.6

DQ

Dec

Hair Care

2010

2011

89

1.6 1.5

88

2010

79

75

63

60

0.5 0.4
China

Indonesia

India

Annual

Dec

Oral Care

Ice cream
2011

DQ

2011

2010

91

89

80

2010

78
63

2.4 2.4

60

1.2 1.1
0.3 0.3
China

Indonesia

India

Annual
Data Source: Euromonitor

Data Source: IMRB Factbook

DQ

Dec
13

Rising incomes to favor Personal Care and Foods

Demand elasticity

Personal Care / Foods explosion

7.7 x

LSM 8+ (new
categories)

4.9 x

LSM 8+

LSM 5-7

3.1 x

LSM 2-4

1.7 x

LSM 1

1x
0

5000

10000

LSM 1

LSM 2-4

Laundry, Skin Cleansing

LSM 5-7

LSM 8+

Pers Prod

Foods

Exp per HH / year (INR)

*HUL Participating Categories; HH: Households

*Source : Family Budget Survey, Consumer Panel

14

HUL: Uniquely positioned to exploit the opportunity

Portfolio

Strong brands across benefits & price points

Talent

Capabilities

Consumer understanding, supply chain,

go-to-market

Global leverage

No.1 Employer*, diverse talent pool

R&D, brand development, buying
*awarded by Aon Hewitt in 2011

15

Our Strategy

16

Clear and compelling strategy

Strategic framework

Sustainable Living Plan

Our Goals

Consistent Growth

Competitive Growth

Profitable Growth

Responsible Growth

17

A business model that works

Virtuous circle of growth

Cost
Leverage
+
Efficiencies

Profitable
Volume
Growth

Innovation
A&P/R&D

Focused on execution

Cost
Savings

FY 2011-12: Delivered on goals

Competitive growth

Consistent growth

Profitable growth

Ahead of market

Volume led

Margin expansion

18
140 bps

18
8

UVG
Market

FMCG growth %

17.5%

10

14

Price

USG

HUL

Domestic consumer
Sales growth

HUL
EBIT

HUL FMCG growth %

19

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

Project Popeye

Mission Bushfire Perfect stores

How will we win

22

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

23

Bigger, better and faster innovations

Covering 60%+ of portfolio

Lux relaunch with silk protein

extract

Rin bar relaunch with superior

formulation and packaging

Vim relaunched with 100

Nimbuon ki Shakti

Fair & Lovely Future Tube:

Aspirational & affordable

Sunsilk Keratinology
Haircare range for salon treated hair

Dove: Nourishing Oil Care

range with Vita Oils

Fair & Lovely Facewashes

Lakme Sun expert

Dove Body lotions with

advanced deep care
complex

Now more accessible with

Re.1 sachet

Pepsodent G relaunched

Clear Relaunched

24

Bigger, better and faster innovations

Covering 60%+ of portfolio

Kissan range expanded and relaunched

Soupy Noodles
Rs.5 pack

CupaSoup
instant soups
Pureit Marvella RO

Taj Mahal green Teabags

Taj Mahal flavoured Teabags

Brooke Bond 3 Roses

relaunched
Bru Gold

Bru Exotica

Bru Lite

25

How will we win

26

Lead market development: Skincare

More usage

More users

More benefits

27

Lead market development: Hair

More usage

More users

More benefits

Increasing Consumption in
Rural

Driving Hair conditioners

Serums, Masks, Treatments

for Salon treated hair

28

Stepping up front end execution

More stores

Better Stores

Better served*
310 bps

DISTRIBUTED:

CORE SERVICED

6.5 Mn

Product

Proposition

: 2 Mn+
Place
Pack

Direct
Price

2010

2011

Promotion

* Modern Trade on shelf availability

29

How will we win

30

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

31

Focus on cash and savings

Step up in cost savings

Savings as a % of Turnover

Maximizing ROCE

Optimizing investments

% Contributed by

Delivering cash

TWC as a % of turnover

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

32

Driving Return on Marketing Investments

Getting more out of advertising

More ads pre-tested

Improvement in Ad preview scores

Production and media fees

Up by 50%

Up by 800 bps

Lower by 900 bps

Persuasion

70%

2010

2010
2011

2011

Awareness

33

Driving Return on Marketing Investments

Optimizing promotional spends

More green activities

Higher ROI

Up by > 50%

Higher by 1100 bps

Up 200 bps

ROI Positive

More activities evaluated

-/-

+
TO Growth

2010

ROI: Return on Investment

2011

2010

-/-

2011

34

How will we win

35

Winning with People: Building a talent powerhouse

# 1 Best employer in India, 2011
awarded by Aon Hewitt

No.1 Employer of choice by Nielsen

Campus track

# 1 Dream employer across campuses*

High people engagement

108
65

HUL

62

TAS

59

P&G
BCG
.McKinsey & Co

100

55
53

2010
* Survey by Nielsen

2011
Indexed Employee Engagement Scores

Performance culture that respects our values

A broad based systematic approach

Strengthening Performance culture

Sharper differentiation

Aligned goals

Reward linked to
performance
Variable

Standards of Leadership

Fixed

2006-07
Delivery

Performance culture index is up by 14% in 2011

2011-12

How will we win

39

Unilever Sustainable Living Plan

Three big goals

40

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
41

Financial Information, Shares & Governance

43

HUL Financial Performance

Rs. Crore

2005

2006

2007

2008-09^

2009-10

2010-11

2011-12

Net Sales

11,061

12,103

13,675

20,239

17,524

19,381

21,736

Operating Profit

1,471

1,709

1,934

2,845

2,566

2,458

3,073

Operating Profit Margin

13.3

14.1

14.1

14.1

14.6

12.7

14.1

Net Profit

1,408

1,855

1,925

2,496

2,202

2,306

2,691

6.4

8.41

8.73

11.46

10.10

10.58

12.46

1967

1595

1680

2029

3441

1892

2870

Earning Per Share (Rs.)

Net Cash Flow from Operating
Activities

Operating Profit - Profit from Operations Before Other Income, Interest and Exceptional Items

44

Financial year 2011-12 Results

FMCG exports demerged reported numbers not comparable

HUL (as reported)

Rs Cr

HUL (ex FMCG exports)

Particulars

FY'10-11 FY'11-12 Growth% FY'10-11 FY'11-12 Growth%

Net Sales

19,381

21,736

12%

18,451

21,736

18%

PBITDA

2,678

3,291

23%

2,584

3,291

27%

PBIT

2,458

3,073

25%

2,382

3,073

29%

PBIT margin (%)

12.7%

14.1%

140 bps

12.9%

14.1%

120 bps

PAT bei

2,156

2,592

20%

2,096

2,592

24%

Net Profit

2,306

2,691

17%

2,246

2,691

20%

Domestic Consumer Business grows at 17.5%

EBIT margins up 140 bps

PAT (bei) up 20%

45

Performance trends EPS and DPS

Earnings per Share (Rs.)

14.0
12.0

Dividend per Share (Rs.)

10.0
8.0
10.0

6.0

9.0

4.0

8.0
7.0

2.0

6.0

2011-12

2010-11

2009-10

2008-09

2007

2006

5.0
4.0
3.0
2.0
1.0

2008-09: 15 months period

Calendar year 2007, includes Platinum Jubilee special dividend of Rs.3 per share

2011-12

2010-11

2009-10

2008-09

2007

2006

Share Listing & Ownership

Shareholding pattern
Listing Details
Stock Exchange

Stock Code

Bombay Stock Exchange

500696

National Stock Exchange

Hindunilvr

Others
General 4%
Public
14%

FIIs
19%

Uniliver
53%
DII
8% MFs
2%

FII: Foreign Institutional Investors

Status as on 31st March, 2011

Corporate Governance
HUL firmly believes in maintaining high standards of
Corporate Governance
To succeed, we believe, requires the highest standards of corporate behaviour towards everyone we
work with, the communities we touch, and the environment on which we have an impact. This is our
road to sustainable, profitable growth and creating long-term value for our shareholders, our people,
and our business partners.
The Board of Directors of the Company represents an optimum mix of professionalism, knowledge and
experience. The total strength of the Board of Directors of the Company is nine Directors, comprising
Non-Executive Chairman, four Executive Directors and four Non-Executive Independent Directors.
I believe that nothing can be greater than a business, however small it may be, that is governed by
conscience; and that nothing can be meaner or more petty than a business, however large,
governed without honesty and without brotherhood.
William Hesketh Lever
For details, refer investor center at:
http://www.hul.co.in/investorrelations/CorporateGovernance/?WT.LHNAV=Corporate_Governance

Board of Directors

Management Committee

Further information & contact details

More information is available at http://www.hul.co.in/investorrelations/

The IR team can be contacted by

telephone as follows:
+91 22 39832211
Or by e-mail at:
Investor.Relations-hul@unilever.com

Introduction to Hindustan Unilever Limited

August 2012

52