Unilever South Asia. Sanjiv Mehta. Dec 4 th 2018

Transcription

1 Unilever South Asia Sanjiv Mehta Dec 4 th 208

2 My Introduction - 26 years with Unilever Varied Functional Roles Chairman UL North Africa and Middle East to date CMD, HUL & EVP UL South Asia Chairman UL Bangladesh Chairman UL Philippines 7 years as CEO of Unilever Businesses 2

3 Home to 25% of world population South Asia Multiple commonalities India Pakistan Bangladesh Sri Lanka Colonial history Cricket Nepal 30+ Languages 8+ Religions Food and spices Big festivals 3

4 Huge headroom to grow Large millennial population Low FMCG consumption Fast growing region Countries % population below 24 years # Median Age # 45% 28 52% 24 46% 27 38% 33 South Asia $29 Indonesia $58 China $20 FMCG Consumption per capita* 2x Real GDP growth South Asia GDP growth relative to world Improved Ease of doing business rankings** # Source: CIA Factbook * Source: Nielsen ** 209 movement vs 208 4

5 AV : South Asian consumers 5

6 Unilever s 30+ years of presence in South Asia Sunlight soap introduced to India Sri Lanka operations begin Indian subsidiaries consolidated under Hindustan Lever Limited Unilever Nepal set up as HLL s subsidiary Unilever increases stake in HUL to 67% Unilever sets up subsidiary in India Unilever Pakistan incorporated Unilever Bangladesh carved out HLL renamed as Hindustan Unilever Limited HUL market cap crosses $50bn 6

7 Largest FMCG company in each of the countries Great fusion of global and local brands Global Local 80% Revenue from categories with No. market position Skin Cleansing Face Care Hair Care Hand & Body Toothpaste 2 Laundry Household Care Tea Ketchup Noodles 2 2 Not Tracked Market share is as of MAT Sep 8 7

8 Unilever South Asia performance Last 0 years Double digit topline growth Robust margin* expansion Broad based sales growth Turnover growth Bangladesh Sri Lanka Nepal % 0 years CAGR bps Pakistan India 6% 0% 4% 4% 9% 4% UVG years CAGR All numbers based on internal management reporting * Underlying Operating Margin 8

9 INDIA S LARGEST FMCG COMPANY 9 9

10 Hindustan Unilever Limited : 4.5bn powerhouse HUL performance Our footprint Recognition 0% CAGR over 0 years* 530 bps EBIT improvement Nearly every household uses one or more of our brands Dream Employer for 9 years in a row among top Indian universities #8 Globally and # in India Among the top 5 most valuable companies in India with market cap of $5b** Our brands are available in 8mn+ stores 3 HUL brands in India s Top 50 Most Trusted Brands *HUL performance as per India local reporting ** Market capitalization converted to USD based on rate as of 22 nd Nov 208 0

11 Consistent high performance across Divisions A few examples in the last 6 years Beauty & Personal Care Home Care Foods & Refreshment* Hair Fabric Solutions Tea Turnover Market Share Turnover Profitability Turnover Profitability.9x ~ 700 bps.8x 3.7x.8x 2.0x Largest Beauty & Personal Care company in India Largest Home Care company in India Largest Tea company in India *On completion of merger with GSKCH, our F&R business will become one of the largest in the country All nos are basis internal management reporting & compared with FY -2. Market share increase is as of MAT Sep 8

12 Our strategy is anchored around.. Growth Underpinned by Unilever Sustainable Living Plan Consistent, Competitive, Profitable, Responsible Growth 2

13 Strategy in action Building Blocks Strengthening the Core Creating categories of future Driving premiumization Fuel for growth Execution Excellence Enabled by Structure Capabilities Culture Being Future Fit 3

14 Strategy in action Building Blocks Strengthening the Core Creating categories of future Driving premiumization Fuel for growth Execution Excellence Enabled by Structure Capabilities Culture Being Future Fit 4

15 Our Core portfolio Straddling the price-benefit pyramid For e.g. Hair Rs. 432 ($5) High end naturals Salon care Anti-dandruff Daily damage care Mass beauty Sachet at Re. (.5 US cents) Family 5

16 Strengthening the Core Making the Core more aspirational through purpose led brands Constantly innovating and renovating the Core Focused SKUs at deaveraged level using local insights Focus on driving penetration & weighted distribution 6

17 Building iconic engagement platforms Lakmé Fashion Week Fair & Lovely Foundation Lifebuoy Help a child reach 5 Lux Golden Rose Awards Rin Career Academy Surf Excel Haar ko Harao Red Label taste of togetherness Kissan Tiffin Time Table 7

18 Innovations driving our growth 8

19 Our Market development portfolio Nascent categories penetration Hand Wash* 22 Instant Coffee Face Wash Body Lotion Washing Liquids Hair Conditioner Soups* Dishwash Liquids Body Wash* 2 Source: IMRB As of MAT Aug 8 (Urban + Rural) ; *Urban only. 9

20 Creating categories of the future Market development model Driving category penetration SEED ACCELERATE EXPLODE 20% of Business Growing at ~ 2x of HUL average Doubled in size in the last 5 years 2.2 x UPTO 0% 0% TO 20% 20% AND ABOVE CATEGORY PENETRATION 200 million consumer contacts 20

21 Leading with trends Naturals Perfume on the go Fabric sensations Male grooming Health Reinvent Indian look 2

22 Driving Premiumization Market growing faster in the premium segment Example : Fabric Solutions 207 HUL share of segment* Price HUL share of segment* Premium 28%.3x Premium 3.0x 3.5x Mid 39%.2x Mid.5x 2.0x Mass 33% x Mass x x *Source: Nielsen MAT Sep 8 (Urban + Rural) 22

23 Fuel for growth End-to-end cost focus Powered by Savings.7x Materials Non Material Supply Chain Costs x Return on Marketing Investments Overheads % of Turnover Organization wide effort Crowd sourcing of ideas Driving virtuous cycle of growth 23

24 Execution excellence Agile Supply Chain Front end execution Speed to market Inventory days Service.8x x 55 x +000bps x Effective Coverage* 0.6x Faster landing of innovations x x x Assortment No. of days Art of pricing Driving high customer service while optimizing inventory Leveraging analytics to drive better coverage and sharper assortment * Effective coverage is measured as no. of outlets with monthly average billing >INR 500 ($7.0); 208 nos are as of Oct 8 24

25 India is a heterogenous country Diverse demographics Varied affluence levels Different media habits Differential category adoption Multiple languages 8 Major religions LSM 7+ = 8% nationally (Range of 5-48%) Mobile internet penetration: Rural- 8%*; Urban- 59%* Penetration in adjacent states also not the same *A report published jointly by the Internet and Mobile Association of India (IAMAI) and KANTAR-IMRB: March 8 25

26 Customer Development Sharper strategy leveraging the ecosystem Traditional trade channels will remain relevant Building channels of the future Demand Capture Right outlets, Right frequency, Right assortment Demand Fulfill On time delivery at optimal cost Demand Generate World class in store execution Wholesale Aids Width of distribution Retail Accessibility at arm s reach of desire Shakti Deep rural distribution Modern Trade - Driving visibility Explode Ecommerce - Partnerships and exclusive ranges Growth and profitability in E-Com > Modern Trade > Traditional Trade 26

27 Strategy in action Building Blocks Strengthening the Core Creating Categories of future Driving premiumization Fuel for growth Execution Excellence Enabled by Structure Capabilities Culture Being Future Fit 27

28 Winning in Many Indias WiMI in action From 4 branches to 4 consumer clusters Distinctive strategy at a cluster level Customized product propositions & media deployment for every cluster Empowered Cluster Heads enabling faster decision making closest to the point of action WiMI is a competitive edge for HUL 28

29 Winning in Many Indias few examples Proposition in face care Pricing and proposition in fabric solutions Product in Refreshment Low penetration markets Uttar Pradesh Tamil Nadu Punjab and Karnataka Grow by removing barriers of proxy usage Other markets Majority mass Majority mid Designed for color and taste preference Leverage by increasing usage occasions Upgradation through mid and premium bars and powders Upgradation through top end formats Matic liquids 29

30 C4G in action Country Category Business Team : 5 Mini Boards Functions in a CCBT Empowered to deliver in-year P&L More consumer & customer centric Land bigger, faster innovations Merger of brand building and brand development Liberating HUL Leadership Team to focus on longer term goals, exploring inorganic growth opportunities and managing disruptions 30

31 Digital trends shaping India Rise of vernacular content Exponential data growth 480+ million internet users with more mobile viewers Rs. 205/GB in 206 Rs. 9/GB in 207 Plummeting data costs driving increased usage (4 hours video per day) Rapidly evolving digital infrastructure 3 rd largest start-up ecosystem in the world Data Sources: Decoding Digital Impact; 207 Report by BCG & Google; YT data extracted in April 208 Kantar IMRB Internet Report 206, 207; 207 KPMG Google Report on Indian Languages Defining India s Internet 3

32 Leading the disruption along our value chain AI Augmented Decision Making Digital Factory & Robotics Robotics Warehouses Digitization of Stores Precision Marketing Performance Management Factory Distribution Center Distributor Store Consumers B2B Model and assured N+ Delivery Harnessing the power of Data as an enterprise asset 32

33 Winning culture: Focus on Wellbeing, Diversity & Inclusion Nurturing an experimentation culture Building an Inclusive Workplace Holistic Wellbeing Distinctive Technology giving Competitive Advantage +200 bps improvement in gender balance Consumer Need/ Unmet Problem Appropriate Large Part of the Value Chain Embracing inclusion beyond gender and breaking stereotypes People with purpose Physical and mental wellbeing 33

34 UNILEVER SUSTAINABLE LIVING PLAN

35 Unilever Sustainable Living Plan Health & Wellbeing Sustainable Sourcing Enhancing Livelihoods Thought Leadership >67 million people reached - Lifebuoy Handwashing Programme 83 billion litres of safe drinking water provided by Pureit ~. million people impacted through Domex Toilet Academy 00% tomatoes are sourced from sustainable sources 52% tea is sourced from estates certified as sustainable.7 million people benefitted 600,000+ women enrolled 90,000+ Shakti entrepreneurs network Over 420,000 people trained 00% of our plastics packaging to be reusable, recyclable or compostable by billion litres of water saving potential created 35

36 AV : USLP in action 36

37 Key Messages Unilever has a rich history and deep heritage in South Asia spanning over 00 years South Asia has huge headroom to grow being home to the largest millennial population, growing affluence, rising urbanization and burgeoning digital connectivity Unilever has strong business in South Asia and a clear and compelling strategy across divisions We are future proofing our business through market development, agile organization structures and building distinctive capabilities across the value chain leveraging data and technology USLP continues to be our key differentiator 37

38 Unilever South Asia Sanjiv Mehta Dec 4 th 208