HUL spent Rs 1,215 cr on advertising in Q2 FY2022; net profit up 9%

Hindustan Unilever Limited has delivered a strong performance in the second the quarter ended September 30, 2021, with domestic consumer growth of 11% and Profit After Tax (PAT) growth of 9%. Performance was broad based, with all 3 divisions growing competitively. Business fundamentals remained strong with more than three-fourths of the business gaining market share and penetration.

Operating margins:

EBITDA margin was stepped up sequentially vs JQ’21 and is at 25%. PAT at Rs 2,187 crore increased by 9% year-on-year. HUL continues to invest on building it brands, portfolio and future-fit capabilities. The conglomerate’s focused actions on Net Revenue Management and savings have enabled it to manage inflationary pressures and deliver a healthy bottom-line performance.

Home Care:

Home Care grew 15% driven by high double-digit growth in Fabric Wash. Household care continued to perform well and grew on a strong base. Liquids and Fabric Sensations continue to outperform. Calibrated price increases were taken across Fabric Wash and Household Care portfolios to partly offset the high inflation in input costs. Extending its Clean Future journey, ‘Surf Excel Matic’ has transitioned to bottles made from 50% recycled plastic while using 100% biodegradable actives in its formulation. Home Care also launched ‘Smart Fill’ machines to empower consumers to reduce plastic waste.

Beauty & Personal Care:

Beauty & Personal Care grew 10% led by Skin Care, Colour Cosmetics and Hair Care. Contextual communications in Hair Care continue to yield good results as it delivered another quarter of strong performance. Skin Care and Colour Cosmetics delivered high double-digit growths as mobility improved. Soaps grew on a high base led by strong growths in beauty and premium segment. Hand Hygiene portfolio declined against a strong prior year comparator. ‘VWash’ had another strong quarter. A calibrated approach towards price increase has helped protect the business model as vegetable oil prices remain at elevated levels. During this quarter ‘Pond’s Gold Beauty’ range, limited edition lip colours in ‘Lakme’ and ‘Vaseline Lip Therapy’ range were launched. Premium beauty brands ‘Lakme’, ‘Simple’ and now ‘Love Beauty and Planet’ are also available on dedicated D2C platforms. Lakme saw 30% of its sales come through digital platforms.

Foods & Refreshment:

Foods & Refreshment grew at 7% against a strong prior year comparator. Tea grew on a very strong base and further strengthened its market leadership. Focus on market development in Nutrition is yielding good results. Health Food Drinks volumes grew double-digit and it continued to gain penetration sequentially. Ice Creams recovered strongly driven by effective communications and innovations. Foods had a soft quarter on the back of high teens growth in the base period. ‘Kissan Peanut Butter’ and ‘Hellman’s Mayonnaise’ innovations are picking up momentum. In this quarter, ‘Horlicks’ expanded its high sciences range with the launch of ‘Horlicks Diabetes Plus’.

Commenting on the Q2 FY2022 performance, Sanjiv Mehta, Chairman and Managing Director, HUL, said, “September quarter witnessed a sequential improvement in trading conditions, albeit remained challenging with unprecedented levels of input cost inflation and subdued consumer sentiments. In this backdrop, we have delivered a strong performance growing topline in double digits and stepping up profitability sequentially. Large parts of our business continue to gain market shares and penetration. Calibrated price increases and laser sharp focus on savings have helped us protect our business model while ensuring the right price-value equation for our consumers. Through our ‘Re-Imagine HUL’ programme, we have further strengthened the digital capabilities across our organisation. We are making significant progress in our sustainable living journey. We are on track to collect and process more plastic waste than we sell in our packaging this year through our network of partners. Looking forward, we remain cautiously optimistic about demand recovery. In these times of uncertainty and unprecedented input cost inflation, we continue to firmly focus on delivering Consistent, Competitive, Profitable and Responsible Growth.”