Hindustan Unilever Limited (HUL) announced its results for the quarter ending 31st December 2019.
Domestic Consumer Growth was 4% with Underlying Volume Growth at 5%. Reported EBITDA improvement was 335 bps (210 bps on comparable basis after adjusting for accounting impact of Ind AS 116 on leases). Profit after tax (bei*) grew by 21%.
Home Care
Home Care continued its trajectory of good performance with double digit topline growth. In Fabric Wash, our focus on core and premiumisation continues to yield strong results. During this quarter, we launched Comfort Perfume Deluxe in select geographies. Household Care saw good growth on the back of market development. Upgradation to liquid dishwash in urban areas continues to build momentum.
Beauty & Personal Care
Beauty and Personal care was impacted by a higher than expected slowdown to market growth and delayed winter. Hair and Color cosmetics performed well. In Personal wash, negative market growths coupled with the pricing actions to pass on benefits of lower commodity have impacted topline delivery. Skin care performance was impacted by delayed winter while we saw good growths in the non-winter part of the portfolio. We launched Love Beauty & Planet and new variants in Vaseline body lotions. Hair Care registered healthy performance across the portfolio. During this quarter, we launched the shampoo and conditioner range of Love Beauty & Planet and Indulekha Neemraj Oil. Color Cosmetics continues to tap into new opportunities by unlocking the rising aspirations of women across the country. We continue to step up innovations in this category. Oral Care delivered a steady quarter driven by Close Up.
Foods & Refreshment
Foods & Refreshment delivered robust growth across categories. Beverages saw broad-based growth in the quarter. Ice Cream and Frozen Desserts sustained focus on distribution expansion and building the innovation pipeline ahead of season. Foods registered good growth led by activations basis differentiated consumer insights. In this quarter, we launched Hellmann’s Mayonnaise in Kolkata.
Margin improvement sustained
Margin expansion was driven by our savings agenda and leverage in other expenses. Earnings before interest, tax, depreciation and amortization (EBITDA) at Rs. 2445 Crores was up by 19% (14% on comparable basis after adjusting for accounting impact of Ind AS 116). Profit after tax (bei*), at Rs. 1691 Crores was up 21%, and Profit after tax, at Rs. 1616 Crores increased by 12%.
Sanjiv Mehta, Chairman and Managing Director commented: This quarter witnessed an overall challenging market environment, mainly reflecting a sharp slowdown in rural and discretionary spends. In this tough environment, HUL has delivered a resilient performance which is reflective of the strength of our brands, consistency in strategy and execution prowess. Our continued focus on innovation and market development has helped sustain underlying volume growth at a steady 5%. We have also delivered a healthy margin improvement.
In the short term, demand outlook and market growth continue to be challenging. In this environment, we will continue to invest behind our brands and offer superior value to our consumers. We will continue to manage our business with agility by leveraging our data and tech capabilities. I remain confident of the medium to long term prospects of Indian FMCG sector and am hopeful that policy measures will spur the rural economy and drive consumption.
*Before exceptional items