HUL June Quarter 2014 Financial Results
During the quarter, the Domestic Consumer business grew at 13%, ahead of market, with 6% underlying volume growth.
Soaps and Detergents: Broad based double digit growth
In Skin Cleansing, Dove, Pears, Lux, Lifebuoy, Liril and Hamam grew well. There was a step up in price growth as judicious pricing actions were taken to manage input cost inflation. Lux was re-launched during the quarter with improved product sensorials and aesthetics.
In Laundry, growth was led by the premium segment with Surf sustaining its strong growth momentum and Rin accelerating across both powders and bars. Wheel continued to show improved growth post its re-launch at the end of last year. Comfort Fabric Conditioner continued to lead market development and deliver robust growth. Vim led the performance in Household Care.
Personal Products: Strong growth in a challenging environment
In Skin Care, growth stepped up with Fair and Lovely, Pond’s and Lakme delivering double digit growth. Fair and Lovely continued to build momentum post its re-launch in SQ 2013. Pond’s growth was led by premium skin lightening and talc and a new Pond’s Men range was launched during the quarter. Both Lakme and the overall facial cleansing portfolio sustained robust growth.
Hair Care delivered another quarter of volume led double digit growth driven by Dove, with Clinic Plus doing well and TRESemmé continuing to make good progress.
In Oral Care, investments were continued to sustain our competitiveness in the category. Close Up delivered double digit growth with the re-launch of the core and the introduction of the new ‘Diamond Attraction’ variant. The recovery of Pepsodent is making progress.
Colour Cosmetics maintained its high growth momentum across both Lakme and Elle 18. Lakme continues to strengthen its position in premium make up driven by exciting and contemporary innovations.
Beverages: Double digit growth in Tea & Coffee
Tea delivered a strong volume led performance, driven by strengthened brand equities and focused in-market activities. A new premium offering, ‘Taj Mahal – A Flavour of Darjeeling’ was added to the portfolio. Green Tea registered another quarter of high growth on sustained market development. In Coffee, growth stepped up on the core and Bru Gold continued to do well.
Packaged Foods: Market development drives growth
Market development activities continue to be the key driver of growth in this segment. The quarter saw a step up in the growth rate as Kissan delivered another robust performance, driven by impactful activation while Knorr growth was led by Instant Soups which more than doubled sales. Ice Creams registered one of its strongest quarters driven by Magnum which continued to perform very well and through sharper in-market execution on Kwality Walls during an extended summer season.
Water: Strengthening category leadership
In a challenging durables market, Pureit delivered double digit growth, led by the solid performance of premium devices. The initial response to Pureit Ultima, which was launched in the last quarter with superior functionality and aesthetics, has been very encouraging.
Profitable growth sustained
The operating environment remained challenging with market growth further slowing down. Overall competitive activity remained high despite the lower media intensity in the quarter. Given this context, investments were sustained at competitive levels across segments with absolute A&P spends increasing by Rs 55 Crores. Cost inflation continued to be managed through a mix of judicious pricing and cost savings. Profit before interest and tax (PBIT) grew by 23% and PBIT margin improved by +130 bps.
The results of the quarter include aone time credit of about Rs. 32 Crores (~45 bps) on account of adjustments for unutilized pension corpus relating to earlier periods.Profit after tax before exceptional items, PAT (bei), grew by 15% to Rs. 1020 Crores while Net Profit atRs.1057 Crores, was up 4%, impacted by the higher exceptional income arising from the sale of properties and tax credits in the base quarter.
Harish Manwani, Chairman commented: “We continue to grow ahead of our markets and have delivered another quarter of strong top and bottom-line performance. While we are seeingheadwinds on market growth, consumer spending and inflation, we remain focused on managing the business for long term competitive and profitable growth and implementing our strategy with even greater rigor.”
Hindustan Unilever Limited,
B. D. Sawant Marg,
Chakala, Andheri (E),
Mumbai - 400 099.
T: +91 22 39832429 (Prasad Pradhan)