HUL's promotional spends drop 3.58% to Rs 26.97 bn in FY'12

MUMBAI: Fast moving consumer goods (FMCG) major Hindustan Unilever (HUL) has reduced its spend on advertising and promotions by 3.58 per cent in the fiscal ended 31 March 2012 compared to the year-ago period.

The company spent Rs 26.97 billion on promotions, down from Rs 27.97 billion.

Despite the fall in marketing spends, the company has reported a 16.99 per cent increase in its net sales year on year which stood at Rs 229.88 billion for the fiscal as against Rs 196.48 billion in the prior year.

HUL’s consolidated net profit was up 21.54 per cent to Rs 27.91 billion compared to Rs 22.96 billion in 2010-11.

Meanwhile, for the quarter ended 31 March 2012 (standalone), the ad and promotional expenses of HUL spurted 8.67 per cent. The company spent Rs 6.77 billion in the final quarter, up from Rs 6.23 billion a year ago.

The company’s net sales grew 20.6 per cent to Rs 56.60 billion, in comparison to Rs 46.94 billion. Correspondingly the net profit for the quarter under review also saw an increase of 20.63 per cent to Rs 6.87 billion.

HUL chairman Harish Manwani said, “Our performance through the year has been consistent, with broad based growth ahead of the market, driven by a relentless focus on innovation and in-market execution. In a year of competitive intensity and high volatility, a sharp focus on cost management helped the business to continue to invest behind our brands and capabilities while delivering an improvement in margins.”

During the quarter domestic consumer business grew at 20 per cent with strong underlying volume growth of 10 per cent. Soaps and detergents grew 28 per cent as momentum was sustained in both bars and powders with Rin benefiting from the bars being relaunched in the third quarter of 2011. The focus on driving upgradation stepped up growth rates in Surf. During the quarter, Rin made a foray into the fabric blues segment with the launch of Rin Perfect Shine. Household Care delivered robust double-digit growth led by Vim and Domex.

The personal care category grew at 17 per cent and was strongly volume led in the process. Skin cleansing registered double-digit growth across all price segments. Lux accelerated its momentum, delivering the third successive quarter of double-digit growth post its relaunch. Lifebuoy Clini-care 10 was launched with the breakthrough ‘Activ Naturol Shield’ technology to further strengthen its germ protection superiority in the hygiene segment.

In skin care Fair & Lovely (FAL), Ponds and Vaseline continued to grow in double digits. FAL growth was broad-based with the FAL Menz variant more than doubling during the quarter. Vaseline grew on the back of a robust performance in lotions and Ponds performed well at the premium end. Innovations in the quarter were led by the relaunch of Ponds Age Miracle, FAL anti-Marks, FAL Under Eye Serum and Vaseline Menz.

In Hair Care, Dove, Sunsilk and Clear delivered double-digit growth. Dove sustained its growth momentum and volumes doubled in the quarter. Conditioners continued to lead market development with growth in high double digits.

Oral Care registered modest growth in a competitive environment. Pepsodent GumCare performed well gaining from stepped up investments and distribution expansion.

Packaged Foods grew 10 per cent, buoyed by Kissan and Kwality Walls Kissan. The Knorr franchise was expanded with the introduction of a new Chicken variant and multi-packs in Soupy Noodles. Kwality Walls continued its strong growth momentum, led by innovations and distribution expansion.

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