August 2012 2 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. 3 Contents 1 2 3 4 About the Company India FMCG Market Opportunity Our Strategy Financial Information, Shares & Governance 5 Contact Information 4 1 About the Company 5 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. 6 HUL: Indias largest FMCG Company More than 75 years of experience in India Products touch the lives of 2 out of 3 Indians everyday Direct distribution reach of > 2 Mn stores No.1 and strong No.2 in more than 95% of the business Get more out of life 7 brands > Rs. 1000 crs; 13 brands > Rs. 500 crs 17 out of top 100 most trusted brands in India^ ^Brand Equity Survey, 2011 7 Pan India footprint 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 Population 1.2 billion 5545 Towns 2.5 million outlets 638,000 villages 5 million outlets 8 Portfolio straddling the pyramid Fabric Cleaning Skin Cleansing Hair Skincare Tooth Paste Soaps & Detergents: 48% Personal Products: 31% % contribution of the segment to total revenue (April - December 2011) 9 Portfolio straddling the pyramid Tea Coffee Processed Foods Ice Creams Water Beverages: 12% Packaged Foods: 6% Others: 3% % contribution of the segment to total revenue (April - December 2011) 10 *Nielsen Equity Management Program Score Most responsive supplier of the year Value Award by TESCO India 6 EMVIES in 2011 6 th most innovative company globally - Forbes eQ* at 89 (world class level) No.1 Employer by Aon Hewitt Best Employer Brand in Asia, 2011 Golden Peacock Global Award for Corporate Social Responsibility for the year 2011 Golden Peacock Environment Management Award for 2011 in the FMCG category External Recognition Consumers Customers Employees Communities No.1 Employer of choice by Nielsen Campus track 11 2 India FMCG Market Opportunity 12 Large consumption opportunity CAGR of 12% in base case; 17% with high estimates 28 50 87 FY 10 E FY 15 P FY 20 P FMCG - $ bl n Base Case High Case 62 137 Source: FMCG roadmap to 2020 CII Report, 2010 13 Head room for growth Penetration Data Source: Euromonitor per capita consumption Consumption 79 63 45 79 65 48 Annual DQ Dec Skin Care 2011 2010 All India penetration 89 79 63 88 75 60 Annual DQ Dec Hair Care 2011 2010 91 80 63 89 78 60 Annual DQ Dec Oral Care 2011 2010 Data Source: IMRB Factbook 5.9 3.2 0.6 5.3 2.7 0.6 Chi na Indonesi a Indi a Skin Care 2011 2010 1.7 1.6 0.5 1.6 1.5 0.4 Chi na Indonesi a Indi a Shampoo 2011 2010 2.4 1.2 0.3 2.4 1.1 0.3 China Indonesia India Ice cream 2011 2010 14 Rising incomes to favor Personal Care and Foods 0 5000 10000 LSM 1 LSM 2-4 LSM 5-7 LSM 8+ LSM 8+ (new categori es) Exp per HH / year (INR) LSM 1 LSM 2-4 LSM 5-7 LSM 8+ Laundry, Skin Cleansing Pers Prod Foods 1x 1.7 x 3.1 x 4.9 x 7.7 x *Source : Family Budget Survey, Consumer Panel *HUL Participating Categories; HH: Households Demand elasticity Personal Care / Foods explosion 15 HUL: Uniquely positioned to exploit the opportunity Strong brands across benefits & price points Consumer understanding, supply chain, go-to-market R&D, brand development, buying No.1 Employer*, diverse talent pool *awarded by Aon Hewitt in 2011 Portfolio Capabilities Talent Global leverage 16 3 Our Strategy 17 Clear and compelling strategy
Consistent Growth
Competitive Growth
Profitable Growth
Responsible Growth Strategic framework Sustainable Living Plan Our Goals Virtuous circle of growth A business model that works Profitable Volume Growth Innovation A&P/R&D Cost Leverage + Efficiencies Cost Savings Focused on execution 19 Market HUL Domestic consumer Sales growth HUL EBIT FY 2011-12: Delivered on goals Competitive growth Ahead of market Consistent growth Volume led Profitable growth Margin expansion 14 18 UVG Price USG 10 8 18 17.5% 140 bps HUL FMCG growth % FMCG growth % 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 Project Popeye Mission Bushfire Perfect stores Customer Credo 22 How will we win 23 Better quality products, stronger brands Tripled blind product wins % Improved brand equity scores
X 2009 2010 2011 2X 3X 3/4 th
of portfolio holding/gaining * Measured for the top 25 brands; *Exit 2011 Vs second half 2009 24 Bigger, better and faster innovations Covering 60%+ of portfolio Lux relaunch with silk protein extract Rin bar relaunch with superior formulation and packaging Fair & Lovely Future Tube: Aspirational & affordable Lakme Sun expert Pepsodent G relaunched Dove: Nourishing Oil Care range with Vita Oils Now more accessible with Re.1 sachet Clear Relaunched Dove Body lotions with advanced deep care complex Vim relaunched with 100 Nimbuon ki Shakti Sunsilk Keratinology Haircare range for salon treated hair Fair & Lovely Facewashes 25 Bigger, better and faster innovations Covering 60%+ of portfolio Kissan range expanded and relaunched Soupy Noodles Rs.5 pack 0 Pureit Marvella RO CupaSoup instant soups Bru Exotica Bru Lite Taj Mahal flavoured Teabags Taj Mahal green Teabags Brooke Bond 3 Roses relaunched Bru Gold 26 How will we win 27 Lead market development: Skincare More usage More users More benefits 28 Lead market development: Hair More usage More users More benefits Increasing Consumption in Rural Serums, Masks, Treatments for Salon treated hair Driving Hair conditioners 29 Stepping up front end execution Product Pack Proposition Price Place Promotion Better Stores CORE SERVICED : 2 Mn+ DISTRIBUTED: 6.5 Mn Direct More stores 2010 2011 Better served* * Modern Trade on shelf availabi li ty 310 bps 30 How will we win 31 Differentiated Supply Chain Driving benefits across value chain Consumer perceived quality E2E competitive costs World class service Live Superior Service. Delivery Sustainable, Profitable Growth Flawless execution, Safety and Sustainability 32 Focus on cash and savings 2008-09 2011-12 Step up in cost savings Savings as a % of Turnover Delivering cash TWC as a % of turnover 2010-11 2011-12 Maximizing ROCE Optimizing investments TWC: Trading working capital; includes debtors, creditors and inventory excludes cash; ROCE: Return on Capital employed 52% Productivity Improvement Capacity increase in 2011 % Contributed by 48% New Capital Investments 33 Driving Return on Marketing Investments Getting more out of advertising Awareness P e r s u a s i o n
70% 2010 2011 2010 2011 Improvement in Ad preview scores Up by 800 bps Production and media fees Lower by 900 bps More ads pre-tested Up by 50% 34 Driving Return on Marketing Investments Optimizing promotional spends + -/- -/- + TO Growth R O I
P o s i t i v e
2010 2011 2010 2011 More green activities Higher by 1100 bps Higher ROI Up 200 bps More activities evaluated Up by > 50% ROI: Return on Investment 35 How will we win Winning with People: Building a talent powerhouse 53 55 59 62 65
.McKinsey & Co BCG P&G TAS HUL # 1 Dream employer across campuses* 2010 2011 100 108 High people engagement * Survey by Nielsen Indexed Employee Engagement Scores # 1 Best employer in India, 2011 awarded by Aon Hewitt No.1 Employer of choice by Nielsen Campus track Performance culture that respects our values A broad based systematic approach Strengthening Performance culture Aligned goals Sharper differentiation Reward linked to performance 2006-07 2011-12 Fixed Variable Performance culture index is up by 14% in 2011 Delivery S t a n d a r d s
o f
L e a d e r s h i p
39 How will we win 40 Unilever Sustainable Living Plan Three big goals 41 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 CO 2 emissions by 14.7%, water use by 21.5% and waste by 52.8% in our factories, over 2008 baseline
Improved CO 2 efficiency in transportation by 17.8%
60% of tomatoes in Kissan Ketchup are sourced sustainably 43 4 Financial Information, Shares & Governance 44 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 Earning Per Share (Rs.) 6.4 8.41 8.73 11.46 10.10 10.58 12.46 Net Cash Flow from Operating Activities 1967 1595 1680 2029 3441 1892 2870 Operating Profit - Profit from Operations Before Other Income, Interest and Exceptional Items 45 Financial year 2011-12 Results FMCG exports demerged reported numbers not comparable Rs Cr 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% HUL (as reported) HUL (ex FMCG exports) Performance trends EPS and DPS 2008-09: 15 months period Calendar year 2007, includes Platinum Jubilee special dividend of Rs.3 per share Earnings per Share (Rs.) Dividend per Share (Rs.) - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 2 0 0 6
Stock Exchange Stock Code Bombay Stock Exchange 500696 National Stock Exchange Hindunilvr Listing Details Share Listing & Ownership FII: Foreign Institutional Investors Status as on 31 st March, 2011 Shareholding pattern Uniliver 53% MFs 2% DII 8% FIIs 19% General Public 14% Others 4% 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. For details, refer investor center at:
http://www.hul.co.in/investorrelations/CorporateGovernance/?WT.LHNAV=Corporate_Governance 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 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 52 Introduction to Hindustan Unilever Limited August 2012