BENGALURU: Indian FMCG giant Hindustan Unilever Limited’s (HUL) Advertisement and Promotions expense (ASP) in Q1-2015 at Rs 948.88 crore (12.2 per cent of Total Income from Operations or TIO) was up 12.4 per cent as compared to the immediate trailing quarter Q4-2014’s Rs 830.34 crore (11.8 per cent of TIO). HUL’s above mentioned ASP in Q1-2015 was 6.2 per cent more than the Rs 889.78 crore (13.1 per cent of TIO).
Note: (1) Rs 100 lakh = Rs100,00,000 = Rs 1 crore = Rs 10 million.
(2) All figures in this report are standalone figures filed by the company.
The company has reported an 8.8 per cent jump in TIO in Q1-2015 to Rs 7716.34 crore from Rs 7094.1 crore in Q4-2014, and 13.3 per cent more than the Rs 6809.04 crore in Q1-2014.
Fig 1 below shows the PAT trend of the company over a nine quarter period starting Q1-2013 until Q1-2015. The ASP expense in terms of rupee value shows an upward linear trend, while in terms of percentage of TIO, ASP shows a downward linear trend. The company’s ASP in terms of rupees spent and also in terms of percentage of TIO was in Q2-2014, during which HUL spent Rs 954.02 crore (13.8 per cent of TIO).
As per Fig 2 below, HUL’s PAT has been showing a downward trend, both in rupee terms and percentage of TIO during the nine quarter period under consideration. In Q1-2015, the company reported PAT of Rs 1056.85 crore (13.7 per cent of TIO), which was 21.2 per cent more q-o-q and 3.7 per cent more y-o-y. In Q4-2014, the company had reported PAT of Rs 872.13 crore (12.3 per cent of TIO) and in Q1-2014 its PAT was 1019.25 crore (15 per cent of TIO). HUL’s highest reported PAT during the above mentioned nine quarter period was in Q1-2013 at Rs 1331.19 crore and 20.9 per cent of TIO.
Here’s what the company has to say about Q1-2015 results:
1. Net sales grew by 13.2 per cent during the quarter. Domestic Consumer Business (FMCG + Water) grew by 13.3 per cent with a 13.3 per cent growth in HPC and 13.4 per cent growth in food businesses.
2. Operating Profit (Profit from Operations before Other Income, Finance costs and Exceptional Items) for the quarter at Rs 124,982 lakh (Q1-2014: Rs 101,916 lakh) grew by 22.6 per cent.
3. Profit after tax from ordinary activities before Exceptional Items net of tax and prior period tax adjustments (refer note 6 and 7 below) for the quarter at Rs 101,968 lakh (Q1-2014: Rs 88,513 lakh) grew by 15.2 per cent.
4. Employee benefit expense for the quarter includes a one-time credit of an amount of Rs 3,244 lakh on account of adjustments for un-utilised pension corpus relating to earlier years. (Q1-2014: Nil)
5. Other income includes interest income, dividend income and net gain on sale of other non trade current investments aggregating to Rs 8,810 lakh (Q1-2014: Rs 7,974 lakh) and net gain on sale of non current investments Rs 10,622 lakh (Q1-2014 : Rs. 7,275 lakhs) and interest on income tax refunds of Rs 779 lakh (Q1-2014: Rs. 2,426 lakhs).
6. Exceptional items, net credit in Q1-2015 include profit on sale of surplus properties Rs 4,015 lakh (Q1-2014: Rs 10,625 lakh) and restructuring expenses Rs 51 lakh (Q1-2014: Rs Nil).
7. Taxation for the quarter includes net write back of excess tax provisions of earlier years amounting to Rs 1,056 lakh (Q1-2014: Rs 6,421 lakh).
8. Previous period figures have been re-grouped/reclassified wherever necessary, to conform to this period’s classification.
9. The text of the above statement was approved by the Board of Directors at their meeting held on 28 July 2014.