HUL Q1 FY23 profits up 11% at Rs 2,289 cr; reports 19% turnover growth

Hindustan Unilever Ltd has reported 19% turnover growth for the first quarter ended June 30, 2022, with underlying volume growth of 6%. EBITDA margin at 23.2% remained healthy despite unprecedented inflationary headwinds. Profit After Tax before exceptional items (PAT bei) grew 17%, while Profit After Tax (PAT) grew 11%. This robust performance has been reported in a challenging environment.

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Operating margins remain healthy

EBITDA margin at 23.2% remained healthy despite the unprecedented inflation in input costs. YoY EBITDA margin declined 110 bps. PAT (bei) was up 17% YoY. PAT at Rs 2,289 crore was up 11% YoY. The difference between PAT (bei) and PAT growth is largely due a one-off prior period tax credit HUL had in base period. HUL continues to manage its business dynamically driving savings harder across all lines of P&L and taking calibrated pricing actions using the principles of Net Revenue Management. The group continues to invest competitively behind its brands.

Home Care: Stellar performance continues

Home Care delivered 30% growth driven by strong performance in Fabric Wash and Household Care. Both categories grew in high double-digits with all parts of the portfolio performing well. Liquids and Fabric Sensations continued to outperform driven by effective market development actions. Calibrated price increases were taken across Fabric Wash and Household Care portfolios as input cost continue to inflate at significantly high levels. During the quarter Comfort Delicates was launched which is specially made for delicate clothes.

Beauty & Personal Care: Strong growth ahead of the market

Beauty & Personal Care growth of 17% was broad based. Hair Care grew in high double-digit led by strong performance in premium portfolio. Soaps delivered price-led double-digit growth driven by strong performance in Lux, Dove and Pears. Skin Care and Color Cosmetics delivered strong YoY growth on a soft base. Premium portfolio in Skin Care performed well and is significantly ahead of pre-Covid levels. Calibrated pricing action were taken across the portfolio to offset the impact of record inflation in input costs. During the quarter, Tresemme’s Hair Care range ‘Pro Pure’, Baby Dove Derma Protect Baby Wash, Vaselines’s summer range of body moisturisers and Lakme’s Facial Foams were launched.

Foods & Refreshment: Steady performance on a high base comparator

Foods & Refreshment grew 9% driven by solid performance in Ice-cream, Coffee and Food Solutions. Ice Cream had a very strong quarter broad based across brands and formats taking it significantly ahead of pre-COVID levels. Tea delivered steady performance and cemented its market leadership. Coffee had a strong quarter growing in double-digit. Health Food Drinks continued to gain market share and penetration on the back of focused market development actions. Foods grew in double-digit led by Jams. Unilever Food Solutions delivered a solid performance and continued to build its salience with professional chefs.

Commenting on the performance, Sanjiv Mehta, CEO and Managing Director, HUL, said, “In an environment which remains challenging, marked by unprecedented inflation and consequential impact on consumption, we have delivered yet another quarter of robust topline and bottom-line performance. We have grown competitively whilst protecting our business model by maintaining margins in a healthy range. While there are near term concerns around inflation, the recent softening of commodities, forecast of a normal monsoon, and monetary/ fiscal measures taken by the government augur well for the industry. We are confident of the medium to long term prospects of the Indian FMCG sector and remain focused on delivering a Consistent, Competitive, Profitable and Responsible growth.”