Hindustan Unilever

HUL's topline numbers were in line with expectations, however margin expansion was above our expectation. The net sales for Q3 FY12 increased by 16% to Rs 5937.63 crore. Domestic Consumer business grew at 16.5% with strong underlying volume growth of 9%. All segments delivered double digit growth.

Soaps and Detergents grew by 21% with growth ahead of the market. Laundry registered a strong performance with double digit growth across all brands. Rin Bar and Surf Excel quickwash were re-launched during the quarter with an improved formulation. The business continued its focus on driving upgradation.

Skin Cleansing delivered strong double digit growth across premium, popular and mass segments. Lux benefited from the re-launch in September quarter and Lifebuoy from its strong proposition of germ protection. Dove continues to drive category premiumization.

Personal Products delivered broad based volume led growth of 14% with strong performance in Skin and Hair In Skin care, Fair and Lovely (FAL), Vaseline and Ponds grew in double digits. FAL core grew strongly while Vaseline and Ponds continue to lead market development and build segments of the future. Dove Body lotion was launched and Lakme portfolio expanded with the introduction of Lakme Absolute - a high performance long wear makeup range.

Hair grew ahead of the market with double digit growth in Dove, Clinic Plus and Clear. Dove growth momentum accelerated and the business doubled during the quarter. Oral Care registered modest growth in a competitive environment. Pepsodent G was re-launched in the fast growing advance care segment.

Beverages delivered competitive growth of 11% with both Tea and Coffee growing in double digits In Tea, growth was led by the premium portfolio. Taj Mahal registered strong growth in Modern Trade and 3 Roses strengthened its proposition of health and taste. Coffee delivered strong growth nationally with innovations leading premiumization of the category. Bru Gold (100% coffee) was successfully launched during the quarter. Packaged Foods grew by 14% and continued to lead market development. Kissan delivered strong growth benefiting from the relaunch in September quarter. Knorr soups performance was muted on account of slowdown in market while Knorr soupy noodles were in line with plans. Soups range was expanded during the quarter with noodle variants and Cup-a-Soup. Kwality Walls continued its strong growth momentum with exciting innovations and increased coverage.

Strategy on water business is on track with expansion of Pureit portfolio. The Go to Market transformation is

expected to be completed by March 2012.

The inflationary pressures during the quarter were primarily on account of currency depreciation.

OPM has inclined by 221 basis points to 16.3% due to fall in ASP cost and other expenditure. Profit before tax before exceptional item inclined by 33% to Rs 993.3 crore.

Harish Manwani, Chairman commented:

We have delivered another strong quarter of competitive growth with improvement in margins. The results, delivered against a backdrop of an uncertain economic environment, are reflective of the strength of our brands, consistency in our strategy and relentless focus on execution. We will continue to manage our business dynamically to deliver competitive, profitable and sustainable growth

For quarter ended December 2011

The net sales has increased by 16% to Rs 5937.63 crore. Domestic Consumer business grew at 16.5% with strong underlying volume growth of 9%. All segments delivered double digit growth.

Soaps and Detergents grew by 21% with growth ahead of the market. Laundry registered a strong performance with double digit growth across all brands. Rin Bar and Surf Excel quickwash were re-launched during the quarter with an improved formulation. The business continued its focus on driving upgradation.

Skin Cleansing delivered strong double digit growth across premium, popular and mass segments. Lux benefited from the re-launch in September quarter and Lifebuoy from its strong proposition of germ protection. Dove continues to drive category premiumization.

Personal Products delivered broad based volume led growth of 14% with strong performance in Skin and Hair In Skin care, Fair and Lovely (FAL), Vaseline and Ponds grew in double digits. FAL core grew strongly while Vaseline and Ponds continue to lead market development and build segments of the future. Dove Body lotion was launched and Lakme portfolio expanded with the introduction of Lakme Absolute - a high performance long wear makeup range.

Hair grew ahead of the market with double digit growth in Dove, Clinic Plus and Clear. Dove growth momentum accelerated and the business doubled during the quarter. Oral Care registered modest growth in a competitive environment. Pepsodent G was re-launched in the fast growing advance care segment.

Beverages delivered competitive growth of 11% with both Tea and Coffee growing in double digits In Tea, growth was led by the premium portfolio. Taj Mahal registered strong growth in Modern Trade and 3 Roses strengthened its proposition of health and taste. Coffee delivered strong growth nationally with innovations leading premiumization of the category. Bru Gold (100% coffee) was successfully launched during the quarter. Packaged Foods grew by 14% and continued to lead market development. Kissan delivered strong growth benefiting from the relaunch in September quarter. Knorr soups performance was muted on account of slowdown in market while Knorr soupy noodles were in line with plans. Soups range was expanded during the quarter with noodle variants and Cup-a-Soup. Kwality Walls continued its strong growth momentum with exciting innovations and increased coverage.

Strategy on water business is on track with expansion of Pureit portfolio. The Go to Market transformation is

expected to be completed by March 2012.

The inflationary pressures during the quarter were primarily on account of currency depreciation.

OPM has inclined by 221 basis points to 16.3% due to fall in ASP cost by 280 basis points to 11.6% and other expenditure by 120 basis points to 15.3% of adjusted net sales. However there was rise in raw material and packaging material cost by 310 basis points to 39.6% of adjusted net sales. The operating profit inclined by 34% to Rs 970.49 crore.

Other income has increased by 4% to Rs 80.08 crore, which includes interest income, dividend income and net gain on sale of other non-trade investments. Interest expenses increased by 650% to Rs 0.45 crore. Depreciation saw a rise of 1% to Rs 56.82 crore. Profit before tax before exceptional item inclined by 33% to Rs 993.3 crore.

There was an exceptional expense of Rs 12.38 crore which includes restructuring costs. As a result, the profit before tax after exceptional items has inclined by 21% to Rs 980.92 crore.

Tax outgo has increased by 32% to Rs 227.11 crore. The net profit has increased by 18% to Rs 753.81 crore.

For nine months ended December 2011

The net sales has increased by 16% to Rs 117127.47 crore. OPM has inclined by 100 basis points to 14.9%. The operating profit inclined by 24% to Rs 2551.44 crore.

Other income inclined by 6% to Rs 208.35 crore. Interest cost has increased by 381% to Rs 1.01 crore while depreciation inclined by 3% to Rs 170.12 crore. Profit before tax before exceptional items increased by 24% to Rs 2588.66 crore.

Exceptional income stood at Rs 90.79 crore. Total tax paid has increased by 30% to Rs 609.56 crore. The net profit inclined by 19% to Rs 2069.89 crore.

Soaps & detergents

The revenue has increased by 21% to Rs 2645.97 crore for Q3 FY12. PBIT margins had inclined by 570 basis points to 13.5%. As a result, PBIT had increased by 110% to Rs 355.89 crore. The category contributed around 45% to the revenues while the contribution to PBIT stood at 36%.

The revenues for 9M FY12 grew by 18% to Rs 7793.56 crore. PBIT margins had declined by 157 basis points to 11.7%. The PBIT had increased by 37% to Rs 913.18 crore. The category contributed around 45% to the revenues while the contribution to PBIT stood at 35%.

Personal care

The revenues grew 14% to Rs 1886.17 crore for Q3 FY12. PBIT margin have decreased by 290 basis points to 25.9%. The PBIT has increased by 2% to Rs 488.12 crore. The category contributed around 32% to the revenues while the contribution to PBIT stood at 50%.

The revenues grew 17% to Rs 5129.5 crore for 9M FY12. PBIT margin have decreased by 50 basis points to 25.3%. There was increase in PBIT by 15% to Rs 1295.41 crore. The category contributed around 30% to the revenues while the contribution to PBIT stood at 50%.

Beverages

The sales grew by 11% to Rs 670.38 crore for Q3 FY12. The segment contributed 11% to the total revenues. PBIT margin has declined by 110 basis points to 15.7%. PBIT has inclined by 4% to Rs 105.18 crore. It contributes 11% to the total PBIT.

The sales for 9M FY12 grew by 13% to Rs 1932.2 crore. The segment contributed 12% to the total revenues. PBIT margin has declined by 120 basis points to 13.9%. PBIT increased by 4% to Rs 268.31 crore. It contributes 10% to the total PBIT.

Packaged Foods

The sales have increased by 13% to Rs 306.41 crore for Q3 FY12. PBIT margin was negative, as a result, the loss at PBIT was at Rs 5.97 crore.

The sales grew by 17% to Rs 1010.33 crore for 9M FY12. PBIT margin was down by 10 basis points to 2.8%. PBIT stood at Rs 27.88 crore, up by 13%.

Export revenues

The export revenues increased by 16% to Rs 337.5 crore for Q3 FY12. Margin has inclined by 540 basis points to 13.2%. As a result, there was a incline in PBIT by 97% to Rs 44.62 crore. The category contributed around 6% to the revenues while the contribution to PBIT stood at 5%.

The export revenues increased by 14% to Rs 934.77 crore for 9M FY12. Margin inclined by 20 basis points to 9.9%. There was a incline in PBIT by 44% to Rs 92.32 crore. The category contributed around 6% to the revenues while the contribution to PBIT stood at 4%.

Valuation

The scrip is trading around Rs 385.5 at BSE.

Promoters of the company hold 52.51% stake in the company.

Hindustan Unilever: Standalone Results

Hindustan Unilever: Standalone Segmented Results