Hindustan Unilever Limited announced its results for the quarter and financial year ending 31st March 2016.
During the quarter, the Domestic Consumer business grew at 4%, with 4% underlying volume growth. Growth in the quarter was impacted by the phasing out of Excise Duty incentives, a one-time credit for excise duty refund in the base quarter and marginal price de-growth.
Soaps and Detergents: Volume growth partially offset by price deflation
Skin Cleansing was driven by strong volume growth on Dove, Lifebuoy and Hamam. In Laundry, growth was led by the premium segment, with Surf maintaining its strong double digit growth momentum. Comfort Fabric Conditioner delivered another strong performance on the back of sustained market development. Household Care performance was led by Vim liquids.
The quarter witnessed price deflation in this segment, albeit at lower levels, arising from actions taken earlier to pass on the benefit of lower commodity costs to consumers.
Personal Products: Healthy underlying performance
The reported growth for this segment was impacted by the phasing out of Excise Duty incentives, a one-time credit for excise duty refund in the base quarter and the residual impact from the re-alignment of channel spends.
Skin Care delivered broad based volume growth across Fair & Lovely, Pond’s and Vaseline. The performance of Fair & Lovely was led by BB cream, whilst growth in Pond’s and Lakme was driven by the premium portfolio.
Hair Care registered another quarter of volume led growth, with Dove and TRESemmé leading the category performance. In Oral Care, Close Up continued to do well, while Pepsodent core was re-launched in the quarter.
Color Cosmetics sustained innovation led double digit growth with Lakme Absolute and 9 to 5 strengthening its position in premium make up.
Beverages: Consistent growth
Tea registered broad based growth, driven by market development and strengthened brand equities across the portfolio. Lipton Green Tea maintained its strong growth momentum. Bru Coffee delivered another quarter of double digit growth.
Packaged Foods: Double digit growth sustained
Market development continues to be a key driver of growth for this segment. Kissan delivered another robust quarter on both ketchups and jams, while the solid growth on Knorr was led by Instant Soups. Ice Creams registered double digit growth driven by sharper in-market execution on Kwality Walls and the extension of Magnum to new cities.
Water: Innovation led growth
Pureit delivered double digit growth led by the strong performance in the ‘Reverse Osmosis’ segment. The portfolio was further strengthened with the launch of the ‘Pureit Ultima with Oxytube’ device in quarter.
Margin improvement sustained
Lower input costs resulted in 240 bps reduction in Cost of Goods Sold. Brand investments were sustained at competitive levels; overall A&P was up by Rs 65 crore (+40 bps). Profit before interest and tax (PBIT) grew by 11% and PBIT margin improved by 115 bps. Profit after tax before exceptional items, PAT (bei), grew by 13% to Rs 1031 crore. Net Profit at Rs 1090 crore, was up 7% with the growth rate impacted by the higher exceptional income arising from the sale of subsidiary in the base quarter.
Financial Year 2015-16: Competitive and profitable growth delivered
The Domestic Consumer business grew by 4% with 6% underlying volume growth. Reported growth was impacted by -110ps arising from the phase out of excise duty incentives. Profit before interest and tax (PBIT) grew by 10% with PBIT margin improving +90 bps, despite the net excise duty impact of -50bps on PBIT. Profit after tax but before exceptional items, PAT (bei), grew by 6% to Rs.4078 crore. Net Profit was at Rs 4082 crore, with the growth rate impacted by the higher exceptional income arising from subsidiary and property related sales in the previous year. The strong track record of cash generation was sustained with cash from operations exceeding Rs 5000 crore for yet another year.
Commenting on the results, Harish Manwani, Chairman, HUL commented, “In challenging markets and a deflationary cost environment, we have delivered another year of competitive and profitable growth. The consistency of our performance is a result of managing our business dynamically, and executing our strategy with even greater rigour and discipline. Our sustained focus on investing behind brands, sharpening our executional capabilities and driving market development has enabled us to keep winning with consumers in a rapidly changing market.”