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HUL ad spends swell 19% in Q3 2020

Beauty & personal care grew nine per cent with robust performance across categories.

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Mumbai: FMCG behemoth Hindustan Unilever Ltd (HUL) has reported a 20 per cent growth in sales and 19 per cent rise in profit for the quarter ended 30 December 2020.

Interestingly, the ad spends for the consumer goods major grew by 19 per cent y-o-y to reach Rs 1,392 crore for the quarter. In 2019, the ad spends for the corresponding quarter stood at Rs 1,171 crore.

EBITDA margins remained healthy at 24 per cent. Net profit grew to Rs 1,921 crore. Domestic consumer growth grew at seven per cent. Higher mobility, consumer relevant innovations and investments behind market development are driving business momentum. Their business fundamentals remained strong with 86 per cent of our business gaining penetration.

The company reported that health, hygiene and nutrition, which makes up 80 per cent of its portfolio, continued to grow in double digits, along with a significant improvement in discretionary categories.

Home Care: With increased mobility, Fabric Wash performance in the quarter improved sequentially. Household care continued its strong performance across segments delivering double-digit growth. 

Beauty & personal care: The category grew nine per cent with robust performance across products  and strong double-digit growths in skin cleansing, hair care and oral care. Skin cleansing performance was led by ‘Lifebuoy’ and double-digit growth in the premium segment. Skin Care portfolio growths were led by good demand pick-up in the winter portfolio. Consumer-focused portfolio interventions in Hair Care are yielding strong results. ‘Close Up’ and ‘Pepsodent’ accelerated as contextual communications drove brand salience. Color Cosmetics performance is improving sequentially. 

Foods & refreshment: The segment sustained its high growth momentum, growing at 19 per cent. In tea, all brands continued to grow in high double-digits and well ahead of the market. In foods, ketchups and soups performed strongly growing high double-digits. The nutrition business too grew in double-digits as business returned to normalcy post restoration of disrupted supply lines. Ice creams, foods solutions and vending businesses are improving progressively as out-of-home consumption occasions increase.

HUL chairman & MD Sanjiv Mehta commented, “With Covid cases coming down sharply and increasing mobility, economic activity in the country continues to improve. The rapid rollout of vaccines will give further impetus to economic growth. The near-term demand outlook is improving, and we expect to see revival in urban while rural should continue to do well. Inflationary pressures are building up in select commodities and we will manage them judiciously. I am confident that we are very well positioned to capture the growth opportunities and accelerate momentum.”

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