Hindustan Unilever Limited Q3 FY2024 Results

Standalone Financial Results Overview:

1. Total Sales: Recorded at Rs. 14,928 crores, slightly lower than DQ22.

2. EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation):

• EBITDA for the quarter stood at Rs. 3,540 crores (DQ22: Rs. 3,537 crores).
• EBITDA margin increased to 23.7%, showing a 10 bps improvement compared to DQ22.

3. Profit After Tax Before Exceptional Items:

• Rs. 2,541 crores for the quarter (DQ22: Rs. 2,581 crores), reflecting a 2% decline.

Additional Read: Q3 Results Dashboard

4. Exceptional Items in DQ23:

• Restructuring expenses amounted to Rs. 30 crores (DQ22: Rs. 57 crores).
• Acquisition and disposal-related costs were nil (DQ22: Rs. 45 crores).

5. Profit After Tax:

•  Rs. 2,519 crores for the quarter (DQ22: Rs. 2,505 crores), showing a 1% growth.

6. Approval and Review:

• The results have undergone review by the Audit Committee.
• Approved by the Board of Directors at their meeting on 19th January 2024.

7. Statutory Auditors’ Report:

• The statutory auditors issued an unmodified report on the financial results, providing assurance on their accuracy and compliance.

Consolidated Financial Results Overview:

1. Total Sales: Registered at Rs. 15,294 crores, marginally lower than DQ22.

2. EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation):

• EBITDA for the quarter amounted to Rs. 3,666 crores (DQ22: Rs. 3,694 crores).
• EBITDA margin declined to 24%, showing a 10 bps decrease compared to DQ22.

3. Exceptional Items in DQ23:

• Restructuring expenses totaled Rs. 30 crores (DQ22: Rs. 58 crores).
• Acquisition and disposal-related costs were nil (DQ22: Rs. 45 crores).

4. Profit After Tax:

• Recorded at Rs. 2,508 crores for the quarter (DQ22: Rs. 2,481 crores), indicating a 1% growth.

5. Approval and Review:

•  The results underwent scrutiny by the Audit Committee.
• Approval was granted by the Board of Directors during their meeting on 19th January 2024.

6. Statutory Auditors’ Report:

• The statutory auditors issued an unmodified report, confirming the accuracy and compliance of the consolidated financial results.

7. Board Approval:

• The statement was officially approved by the Board of Directors during their meeting held on 19th January 2024.

Additional Read: HUL Share Price

Loss Attributed 

The Group’s attributable share of the net loss after tax amounted to Rs 1 crore and Rs 4 crores for the quarter ended 31 December 2023 and the period from 01 April 2023 to 31 December 2023, respectively, as disclosed in the Statement. This pertains to a specific joint venture, Nutritionalab Private Limited. The total comprehensive loss for the same periods was also Rs 1 crore and Rs 4 crores, respectively.

It’s important to note that these figures are based on the interim financial information of Nutritionalab Private Limited, which, crucially, has not undergone a formal review.

Overview

1. Resilient Performance:

• HUL demonstrated resilience in the December Quarter of 2023.
• Underlying Volume Growth (UVG) reached 2%, with Home Care and Beauty & Personal Care, contributing about 75% to the business, exhibiting mid-single digit UVG and overall volume recovery.
• Marginal revenue decline in Home Care with mid-single digit UVG for the quarter.
• Strong double-digit growth of 14% on a 2-year CAGR basis, driven by high single-digit UVG.
• Fabric Wash volumes grew in mid-single digits YoY, fueled by premium portfolio outperformance.
• Household care volumes increased in low single digits, led by Dishwash.
• Flat revenue in Beauty & Personal Care with mid-single digit UVG.
• Skin Cleansing revenue declined due to price reductions passing on benefits of lower commodity costs.
• Market development initiatives in body wash yielded positive results.
• Hair Care achieved double-digit growth driven by volume, with successful launches in various segments.
• Underlying Sales Growth (USG) remained flat due to the impact of price reductions.
• EBITDA margin increased to 23.7%, marking a 10 bps YoY improvement.
• Profit After Tax before exceptional items (PAT bei) declined by 2%, while Profit After Tax (PAT) grew by 1%.

Product Launches and Market Developments:

• Key launches in the quarter included Glow & Lovely Powder finish crème, new active skin barrier care range by Simple, Sunsilk hair serums, Close-up naturals range, and Lakme’s range of make-up products.
• Market development actions in body wash and premium non-winter portfolio sustained positive results.

Outlook and Strategy:

• Despite a low-single digit decline in UVG in Foods & Refreshment, efforts to offset higher commodity costs impacted pricing.
• HUL continues to focus on maintaining a strategic balance between volume growth, price management, and market development.
• The 2-year CAGR analysis reflects the company’s strong performance, particularly in Home Care, even on a very high base.

Future Prospects:

• The company remains optimistic about future prospects, considering the sustained growth in key segments and ongoing market development initiatives.
• Strategic launches and a balanced approach to pricing and volume growth underline HUL’s commitment to navigating market challenges effectively.

Market-Driven Growth in Foods & Refreshment:

• The revenue in the Foods & Refreshment segment witnessed a 1% growth, primarily attributed to advancements in the Market Development portfolio.
• Tea category showcased notable strength, solidifying its position in both value and volume market leadership.
• Green Tea and flavoured tea segments exhibited commendable performance.
• Coffee experienced robust double-digit growth, primarily influenced by pricing strategies.
• Health Food Drinks achieved competitive modest price-led growth, driven by the success of the Plus range.
• Strong growth was observed in Foods Solutions, Mayonnaise, and Peanut Butter.
• Ice Cream sustained mid-single-digit growth, even on a high base.
• Noteworthy product launches during the quarter included Knorr Korean K-Pot noodles and Bru Gold in Vanilla, Caramel, and Hazelnut flavours.

Strategic Gross Margin and Investments

• The EBITDA margin improved to 23.7%, marking a 10 bps enhancement compared to DQ’22.
• Gross Margin and Advertising & Promotion (A&P) investments increased by 400 bps and 270 bps, respectively, versus the previous quarter (DQ’22).
• A dynamic business management approach ensured an optimal price-value equation and competitive investments in brands and long-term capabilities.

Performance in FY’24 (9-month period):

• Turnover reached Rs. 44,886 Crores, demonstrating a 3% growth.
• Both EBITDA and Profit After Tax (bei) exhibited a robust 6% growth, while Net Profit grew by 4%.

About Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited (HUL), India’s largest FMCG Company with a 90-year legacy, is committed to sustainable living. Our diverse portfolio of 50+ brands spans 16 FMCG categories, touching the lives of millions. Producing over 65 billion units annually, we reach consumers through nine million retail outlets and digital platforms. Driven by the company’s Compass strategy, they integrate sustainability, ensuring consistent, competitive, profitable, and responsible growth. As part of Unilever, a global leader, HUL operates in a rapidly evolving world, emphasising digitisation and sustainability.

HUL, a top ESG-rated FMCG Company in India, is also the preferred employer across sectors. Their purpose-led journey aligns with Unilever’s commitment to Food, Home Care, Personal Care, and Refreshment products, sold in over 190 countries.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.For Research Disclaimers Click Here: https://bit.ly/3Tcsfuc