HUL ups ad spend by 21.27% in Q4 FY13

MUMBAI: Fast moving consumer goods major Hindustan Unilever Ltd (HUL) increased its spending on advertising and promotions for the fifth consecutive quarter ended 31 March as competitive intensity in the category continued to be high.

The FMCG giant ramped up its spending into the fourth quarter of FY13 with ad spends increased by a robust 21.27 per cent in Q4 FY13 when compared to Q4 FY12.

HUL‘s advertising and marketing expenditure in the fourth quarter of FY12 stood at Rs 6.77 billion which grew to Rs 8.21 billion in the fourth quarter of FY13 ended 31 March 2013. The percentage of total income dedicated to advertising also grew from 11.74 per cent in Q4 FY12 to 12.70 in Q4 FY13.

The company‘s income for the period grew by 12.14 per cent on a year on year basis from Rs 57.66 billion in Q4 FY12 to Rs 64.66 billion in Q4 FY13. Its net profit grew by 14.56 per cent as the net profit in Q4 FY12 was Rs 6.87 billion compared to Rs 7.87 billion in Q4 FY13.

HUL said, "The operating context remained challenging during the fourth quarter with input costs holding firm and high competitive intensity. Advertising and promotion was stepped up and maintained at competitive levels."

HUL chairman Harish Manwani said, "In an environment that continued to be challenging, we have delivered another quarter of broad-based growth and margin expansion."

This quarter saw quite a few ad campaigns do well for the FMCG major, these included Dove‘s rescue from split ends; Sunsilks‘ perfect straight hair and Lux‘s deo spray magic spell. HUL gained by these campaigns as it reflects in the annual results declared by the FMCG major.

The annual figures reflect a growth from FY12, as the FMCG company increased its advertising spends by a hearty 21.99 per cent in FY13. HUL‘s advertising and marketing outflows increased from Rs 26.97 billion (FY12) to Rs 32.90 billion (FY13).

The total income from advertising also grew from 11.51 per cent in FY12 to a healthy 12.18 per cent in FY13. The FMCG‘s income for the period also grew by 15.22 per cent on a annual basis from Rs 234.36 billion in FY12 to Rs 270.03 billion in FY13. And the new profit grew by a stellar 37.12 per cent, seeing it rise from Rs 27.91 billion in FY12 to Rs 38.29 billion in FY13.

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