MAM

HUL y-o-y ad spends up by 13 per cent, down q-o-q by 2.6 per cent in Q3-2014

BENGALURU: Indian FMCG major Hindustan Unilever Limited spent 13 per cent more in Q3-2014 towards advertising and marketing at Rs.929.46 crore as compared to the Rs.822.16 crore during Q3-2013, but 2.57 per cent lower than the Rs.954.02 crore for Q2-2014.

 

During the nine month period ended December 31, 2013 (y-t-d), the company spent Rs. 2773.26 crore, 15.04 per cent more than the corresponding period during the last year. During FY2013, HUL spent Rs.3231.88 crore towards advertising and marketing during FY2013.

 

Overall, the FMCG giant saw standalone revenue during Q3-2014 increase by 9.39 per cent to Rs.7037.78 crore from the Rs.6433.69 crore during the corresponding quarter of last year and increase by 4.31 per cent from the Rs.6747.20 crore during the immediate trailing quarter.

 

Its nine month revenue to December 31, 2013 increased by 8.67 per cent to Rs.20472.47 crore from Rs.18839.25 crore during the nine month period ended December 31, 2012. HUL had revenue of Rs.25206.38 crore during FY2013.

 

Based on this advertising and marketing  spends percentage with respect to revenue during Q3-2014 was 13.21 per cent, in Q3-2013 it was 12.78 per cent and in the immediate preceding quarter it was 14.14 per cent.

 

The corresponding advertising and marketing spends percentage of overall standalone revenue was slightly higher at 13.55 per cent during the nine month period ended 31 December 2013 at Rs.2773.26 crore as compared to the 12.8 per cent (Rs.2410.75 crore) during the corresponding period of last year. During FY2013, the percentage of standalone revenue that the company spent towards marketing and advertising was 12.82 or Rs.3231.88 crore.

 

HUL’s PAT jumped by 22.02 per cent to Rs.1062.31 crore during Q3-2014 from Rs.871.36 crore in Q3-2013 and was up by b16.26 per cent from the Rs.913.80 crore during Q2-2014. PAT for the nine month period of FY 2014 at Rs.2995.36 crore was lower by a little less than half a per cent as compared to the Rs.3009.47 crore during the corresponding period of last year. HUL’s PAT for FY2013 was Rs.3796.67 crore.

 

The company reported healthy performance and growth in most of the segments it operates in. Here is a reproduction of a part of the company’s press release.

 

Soaps and Detergents deliver a healthy performance

 

 Skin Cleansing delivered another quarter of volume led growth. The category performance was driven by Dove, Pears, Lifebuoy and Breeze. Pears was relaunched during the quarter with a new proposition around younger looking skin. The liquids portfolio saw accelerated growth led by Lifebuoy Handwash.

 

 In Laundry, growth was led by the premium segment. Surf growth was buoyed by the robust performance in Surf Excel Easy Wash and Excel Matic while Rin saw good growth on the bars portfolio. Wheel was re-launched with a superior formulation at the end of the quarter. Comfort fabric conditioners continued to lead market development with sustained high growth. Household Care delivered another strong quarter with both Vim and Domex growing in double digits.

 

 Personal Products growth steps up

 

 Skin Care grew well in a slowing market. The re-launch of Fair & Lovely, with the new ‘Best Ever Formula’ and a focused activation plan in the last quarter, is on track. Lakme and Dove grew well and the facial cleansing portfolio registered strong growth, driven by a range of differentiated innovations launched earlier in the year.

 

Hair Care sustained its strong growth momentum with broad based double digit volume growth. Dove led the category performance with accelerated growth while Sunsilk, Clinic Plus and TRESemmé continued to make very good progress.

 

 In Oral Care, both Pepsodent and Close Up delivered stepped up double digit growth in a competitive market. Pepsodent GermiCheck which was relaunched in the last quarter with a superior product and proposition did particularly well. A&P investments were significantly stepped up to sustain our competitive position in this category.

 

 Colour Cosmetics maintained its strong innovation led growth momentum across both Lakmé and Elle 18. Lakmé continues to strengthen its position in premium make up driven by a range of exciting and contemporary offerings from Absolute and 9 to 5.

 

 Beverages led by double digit growth in tea

 

Tea delivered another quarter of broad based growth with Taj Mahal, Red Label, 3 Roses and Taaza growing in double digits, driven by a strengthened mix and focused in-market activities. The sustained thrust on leading market development for tea bags, enabled flavoured and green tea bags more than double sales in the quarter. The Lipton Clear Green Tea portfolio was expanded with the launch of new packs. In a slowing Coffee market, Bru continued to drive category premiumization, led by Bru Gold.

 

 Packaged Foods growth steps up; Kissan, Knorr and Kwality Walls grow in double digits

 

 Kissan further accelerated with both Ketchups and Jams delivering strong growth on the back of impactful activation. Knorr had a good quarter particularly on Instant Soups which more than doubled volumes while the growth in Kwality Walls was driven by sharper in-market execution and the robust performance of Cornetto and Creamy Delights. Magnum continues to do well.

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