Hul

75 years of Independence…

FMCG SECTOR FMCG SECTOR >> 4th largest sector in the economy >> total market share of Rs 450 bn >> growth of 50% by 2010 >> main players HUL,ITC, COLGATE-PALMOLIVE,NIRMA

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HINDUSTAN UNILEVER LIMITED Type Founded Headquarters Key people

Public 1933 Mumbai, India Harish Manwani Chairman Douglas Baillie, CEO

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Industry Products

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Employees Parent

Fast moving consumer goods Home and personal care,food and beverages 15,000 Anglo-Dutch Co. Unilever

HISTORY > 1931, Unilever set up its first Indian subsidiary of Hindustan Vanaspati Manufacturing Co. > 1933, Lever Brothers India Limited > 1935 ,United Traders Limited . > 1956 ,formed Hindustan Lever Limited. > July 19, 2007,changed the name to Hindustan Unilever Limited

ESTABLISHMENT ESTABLISHMENT • Hindustan Unilever Limited (abbreviated to HUL) formerly Hindustan Lever Limited is India's largest consumer products company and was formed in 1933 as Lever Brothers India Limited

HUL >> Largest FMCG Co. in India >> 20 distinct categories # home and personal care products # food and beverages >> manufactured by 40 factories across India >> combined volume of 4 million tonnes >> sales of Rs 10,000 crores >> 51.55% of equity held by parent Co. Unilever >> rest distributed among 380,000 individual shareholders and financial institutions >> distribution reaches 6.3mn retail outlets and 250 rural consumers >> Golden super star trading house

POPULAR BRANDS

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BATHING SOAPS:

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LAUNDRY ITEMS: Surf Excel, Rin and Wheel SKIN CARE: Fair & Lovely, Pond’s and Vaseline HAIR CARE: Sunsilk and Clinic ORAL CARE: Pepsodent and Close up DEODORENTS: Axe and Rexona COSMETICS: Lakme AYURVEDIC: Ayush TEA: Brooke Bond and Lipton COFFEE: Bru FOOD: Kissan, Annapurna and Knorr ICE CREAM: Kwality Wall’s

Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

MISSION >>> to add Vitality to life. >>> help people feel good, look good and get more out of life.

MANAGEMENT STRUCTURE > HEADED BY CHAIRMAN > 5 WHOLE TIME DIRECTORS > 5 INDEPENDENT NON-EXECUTIVE DIRECTORS

MANAGEMENT STRUCTURE Mr.Harish Manwani Chairman

Mr.Douglas Baillie CEO and Managing Director

75 years of Independence…

PRODUCT SECTORS Detergents Food

Deodr ants

So a

p

Health Care

SECTORS Co

Oral C

are

sm tic e s

Hair Care

PRODUCTS

SOAP BRANDS • • • • • • • •

LUX BREEZE REXONA LIRIL HAMAM LIFEBOY DOVE PEARS

SOAP MARKET  60% Market Share  The strategy for 2006-07 would be to increase the market share from existing 60% to 70%.  Competitors :GodrejSoap: Cinthol , Shikhakai, Evita, Cinthol  Strategies  New product offering i.e. Fair & Lovely soap  Share went down from 3.6% to 2.4% 20062007

DETERGENTS Market share 2.5% -35%  Surf Excel, Rin,Wheel  Competitor - P&G - Ariel and Tide , Nirma  STING Policy against Nirma

PERSONAL CARE SECTOR Loosing 4.5% market share

 Fair & Lovely, Ponds,Vaseline  Strategy-BOGOF  HLL is the market leader in the shampoo category with an 50 per cent market share  Shampoos-Sunsilk, Clinic plus,Clinic All Clear

ORAL CARE SECTOR  Pepsodent,Closeup  Competitor-Colgate  Pepsodent and CloseUp, grew at 11% Colgate brand grew at 14%  Unilever has a market capitalisation of $95 billion against Colgate's $34 billion. Unilever's annual sales are around $50 billion which is almost four times Colgate's $13 billion.

FOOD SECTOR  Market share 70%  TEA:Brook Bond,Lipton  COFFEE: Brook Bond Bru largest brand.  Food: Kissan, Annapuna, Knorr-Largest brand  Ice Creams- Kwality, Amul

28%

HUL’s market share dropped to 18.6% in volume terms.

38%

Coffee Icecream

Coffee-Nescafe’s

share slipping from 31.8% to 23.6%. Coffee Market Share 21%

TEA

34%

30 25 20 15 10 5 0 Tea

Coffee

Icecream

GROWTH IN THE PRODUCTS Penetration % 90%

Toilet Soaps Tea Laundry - NSD

70%

50%

Toothpaste Shampoo

30%

Ice-Creams

Skin Creams Staples

Colour Cosmetics Tomato 5%

10%

Deodorant 15%

Growth %

MARKET POSITION MARKET LEADER Personal Wash 60% Fabric Wash 42% Household Care 62% Skin Care 53% Hair Care 63% Talcum Powders 65% Branded Tea 35% Ice Creams 25% Jams & Squashes 78% R&G Coffee 56% Branded Staples 15% Branded Salt 18% Cooking Fats & Oils

STRONG NUMBER 2 Oral Hair Oils Instant Coffee Ketchup 39%

36% 14% 36%

75 years of Independence…

“INDIAN CONSUMER” • The Indian middle class is prospering with around 70 million households earning anywhere between Rs80,000 and Rs18 lakh per annum. These comprise 34 per cent of the slightly over 200 million middle class households. • Indian Consumer is no longer Price Obsessed. • Indian consumer goods market is expected to reach $400billion by 2010 • Higher disposable incomes, there is money left over for daily products even after spending on durables

“FMCG Tricks” • Main reasons for the revival in the FMCG space is that the wallet share of the consumer which was being diverted to aspirational products is now coming back to FMCG products. • Indian consumer on spending spree. • There is a difference between FMCG and Consumer Durables.

Why Name Change ? • Provides Optimum balance between maintaining the heritage of the company and the future benefits with the corporate name of Unilever. (February 20, 2007). • Will be source of considerable strength and synergies to harness Unilever’s global scale and size for the benefit of the Indian business both in domestic and export markets. • It would also assist in attracting and retaining talent both locally and internationally

“Edge Over Competitors” • Unilever, in its worldwide operations, strives to be a multilocal multinational. Working since 1912. •Reflected national priorities over the years and remained committed towards India. •Large market capitalization and Product Variety. •Good Company policies such as:Developing and using relevant technology Generating productive employment Stimulating industrialization and dispersing its benefits Adding value to agriculture Sustaining export performance

• Experimenting and taking aggressive steps. • Caught in scandal -whether on excise duty disputes. • Situation has changed, P/E ratio is greater than HUl. • E-Choupal

• System driven and conservative manner. • Closely linked to parent Unilever. • Profits has decreased even when the market is growing above 10%. • Project Shakti.

“Project Shakti” • To distribute their products in remote rural areas through its Project Shakti. (2000). • Thirty per cent of FMCG business comes from villages with a population less than 2,000 • To reach areas of low access and low market potential. Currently covers all districts of Andhra Pradesh and Karnataka, reaching almost 5,000 villages through 800 self-help groups (SHGs). • The Shakti model trains women from SHGs to distribute HLL products of daily consumption such as Detergents, Toilet soaps and Shampoos

“Company Profits” 7000 6000 5000 4000

Quarter Ending Profits in Million

3000 2000 1000 0

Jun,06

Dec,06

Jun,07

Source: Company Reports

“Modern Day Scenario” • For the quarter ending June 2007, HUL has posted a growth of 13%(8%, 2006) in net sales to reach Rs. 34.31 billion. The profits have been even better off, with PAT growing at 24.4% to reach 4.72 billion. • The company is on a cost cutting spree, with reduced expenditure on advertisement by 2.7%( over 900 million). • FMCG BSE Index is above 2600 points. • Share Khan has given BUY recommendation for HUl with CMP of 204.7 having Target price of 290.

“Mergers and Acquisitions”

• Amalgamation of new businesses -- Brooke Bond Lipton India in 1996-97; Pond's India in 1998; and a smaller subsidiary, Industrial Perfumes, in 1999 • The erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993 • In 1995, HUL and yet another Tata company, Lakme Limited, • HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994 • In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee • In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India.

• In1994, the company entered into a strategic alliance with the Kwality Ice-cream Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were acquired. • In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in Public Sector Undertakings (PSU) to Private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. • In 2003, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.

Every 2 out of 3 is effected.

Awards  Hindustan Unilever Limited (HUL) was conferred the Commendation Certification for Significant Achievement in HR Excellence by the Confederation of Indian Industry (CII). Mumbai, October 22, 2007:  Hindustan Unilever Limited (HUL) was in September 2007 rated among the top four companies globally in a global study of ‘Global Top Companies for Leaders’ by Hewitt Associates in partnership with Fortune magazine and the RBL Group

Awards  HLL has been declared a Mini Ratna by the Government of India .  Upgraded in 2006 as a Schedule B Company by the Department of Public Enterprises  HINDUSTAN Lever Ltd (HLL) has bagged 20 India Star awards and three Asia Star awards for innovation in packaging concepts and systems.

Source: Times of India

Profit Trends For Past Five Years 2000 1800 1600 1400 1200 1000 800 600 400 200 0

NetProfit In Rs. Crores

2002 2003 2004 2005 2006 Source: kotaksecurities.com

Future Plans  HLL has drawn up a comprehensive plan to expand its portfolio in the area of Health Care and Contraceptives.  Chemicals business (encompassing Flavours, Fragrances and other Specialty Chemicals), as well as several non-FMCG export businesses such as Thermometers and Mushrooms.  HLL has been pepping up its rural distribution systems and has launched low unit price variants of its popular brands to draw in new users in the rural areas.

Social Responsibility  Hindustan Latex set up the Hindustan Latex Family Planning Promotion Trust (HLFPPT) a not for profit organization, for the purpose of designing and implementing social sector intervention projects, particularly in the area of Reproductive Health, Women Empowerment and HIV prevention and control activities, with the objective of creating planned social change.  HLFPPT is today India’s top social marketing organization.

Social Responsibility  HLL promises a `Golden Future' for girl child.  PROJECT SHAKTI :The objectives of Project Shakti are to create incomegenerating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards through health and hygiene awareness.

Future Technology Third Party Logistics (3PL): 3PL describes businesses that provide one or many of a variety of logistics-related services. Types of services would include public warehousing, contract warehousing, transportation management, distribution management, freight consolidation.

Conclusion With it’s long and luminous history HUL is India’s true pride. It is a company which the customers in rural as well as urban India relate to. This explains the deep penetration of HUL in Indian market. Past few years trends may be disturbing but there has been multi facets to the decrease in profits. It would be innocent thought to rule out a behemoth of the ranks of HUL. The future for HUL is demanding newer and high level innovations so as to cope up with increasing competition. However HUL is well equipped with all what is needed of this Indian Giant.

Thank you!!