Hindustan Unilever Limited (HUL) announced its results for the quarter ended 30th September 2024. In SQ’24 (Second Quarter 2024), HUL reported an Underlying Sales Growth¹ (USG) of 2% and Underlying Volume Growth[b] (UVG) of 3%. EBITDA margin at 23.8% continued to remain healthy. Profit After Tax before exceptional items (PAT bei) and Profit After Tax (PAT) declined by 2% and 4% respectively.
In the base quarter, there was a one-off indirect tax credit from a favourable resolution of past litigation which benefited both topline and bottomline in the Beauty and Wellbeing segment. Excluding this one-off, USG, UVG and PAT (bei) growth is 3%, 3% and 2% respectively.
Consolidated financial results:
- Total sales at Rs. 15,729 crores grew by 2% during the quarter.
- Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter at Rs. 3,793 crores (SQ 23: Rs. 3,797 crores) was marginally lower. EBITDA margin at 24.1% declined by 60 bps vs SQ 23.
- Exceptional items in SQ 24 include restructuring expenses of Rs. 16 crores (SQ 23: Rs. 57 crores) and acquisition and disposal related Rs. Nil (SQ 23: Rs. 52 crores credit).
- Profit after tax (PAT) for the quarter at Rs. 2,595 crores (SQ 23: Rs. 2,657 crores) declined by 2%.
Home Care
Home Care grew by 8% with high-single digit UVG. The growth was broad-based, with both Fabric Wash and Household Care experiencing high-single-digit volume increases. The liquids portfolio, which achieved strong double-digit volume growth, continued to outperform.
The company strengthened its liquids segment with the expansion of the Rin liquid line and entered the floor cleaner market with a superior product under the Vim brand. Additionally, the market development journey in fabric enhancers was bolstered by the launch of Comfort beads.
Beauty & Wellbeing
Beauty & Wellbeing grew 7% (1% reported) with mid-single digit UVG. Hair Care continued its growth momentum and grew in high-single digit led by outperformance in Sunsilk, Dove and Tresemme. Skin care and Colour cosmetics delivered a mid-single digit growth. Premium Skin portfolio maintained its double-digit growth trajectory. During the quarter, Tresemme’s Lamellar Gloss range, Ponds’ Hydra Miracle Body Gel Lotion, Glow and Lovely’s Niacinamide Serum and Lakme’s on-trend collection of Lip Oil and Lip Glaze to name a few, were launched.
Personal Care
Personal Care declined 5% with negative pricing and low-single digit volume decline. Skin cleansing declined primarily on account of pricing actions taken during the year. Premium portfolio grew ahead of the segment and within that bodywash continued to strengthen its market leadership with high double-digit growth.
Oral Care delivered a competitive high-single digit growth led by Closeup. Harnessing our WiMI strategy, Lux introduced a superior range of Sandalwood soap and bodywash in the quarter.
Foods & Refreshment
Foods & Refreshment declined 2% with a low-single digit volume decline. Tea continued to cement its market leadership through value and volume share gains. Green and Functional tea maintained their strong volume growth however overall category volumes remained subdued.
Coffee grew in double digits. Nutrition drinks continued to gain market shares while consumption remained subdued. Foods grew volumes in low-single digit. Strong volume growth in Food Solutions, Mayonnaise, Peanut Butter, and International sauces continued on the back of market development actions, range extensions and distribution expansion.
Ice-cream maintained its volume vis-à-vis last year. Horlicks ₹10 sachet, Diabetes Plus chocolate flavour, Knorr’s Korean Kimchi Soup and Kissan’s 100% Fruit based spread were launched in the quarter.
Advertising and promotion
The FMCG giant, has also reported a significant decline in its advertising and promotion (A&P) spending for the second quarter ending September 30, 2024.
The company’s A&P (Advertising and promotion) expenditure was Rs 1,464 crore, reflecting a year-on-year decrease of 14.88% from Rs 1,720 crore in the same quarter last year.
Moreover, advertising costs fell by 10.95% compared to the previous quarter, which recorded Rs 1,644 crore in June 2024.
Interim dividend
The Board of Directors declared an interim dividend of INR 19/- per share for year ending 31st March 2025. Given the business operations are well funded, and the company’s financial model continues to be strong, the Board of Directors have additionally declared a special dividend of INR 10/- per share resulting in a total dividend payout of INR 6,814 Crores.
Rohit Jawa, CEO and Managing Director, commented: “In September quarter, FMCG demand witnessed moderating growth in Urban markets while Rural continued to recover gradually.
“In this context, we delivered a competitive and profitable performance. We continued to execute on our strategic priorities of transforming our portfolio whilst generating healthy EBITDA margin and cash flows, providing attractive returns to our shareholders.
“We remain watchful of gradual recovery in consumer demand while creating a sustained competitive advantage through our business fundamentals: investing behind our aspirational brands, scaling market-making innovations and maintaining operational rigor,” Jawa said.
