DR VN BRIMS

GROUP A

It’s all in

7/14/2014

DR VN BRIMS

Corporate Purpose

Our purpose is to meet the everyday needs of

people everywhere - to anticipate the aspirations

of our customers and consumers and to respond

creatively and competitively with branded

products and services which raises the quality of

life

HUL WANTS TO BE IN EVERYONE'S LIFE EVERY

TIME…. WITH THEIR QUALITY PRODUCTS

Sustain ITC’s position as one of India’s most

valuable corporations through world class

performance, creating growing value for the Indian

economy and the Company’s stakeholders

DR VN BRIMS

KEY VARIABLE 1991 2000 2005

Population(millions) 846 1000 1087

Population < 20 yrs 400 471 480

Urbanisation % 26 32 33

Literacy Level % 52 58 65

Emerging Face of India

DR VN BRIMS

Growing disposable income

Young age profile - 35 % population below 14

years- Increased media reach (urban 80 %, rural

40%) growing rapidly

Changing approach and ambitions

Changing Consumer

DR VN BRIMS

Large scale strong local competitors with, low cost

structures

Major multinationals

(P&G, Colgate, L'Oreal, Nestle) present

Market open to innovation, and requiring value

Active, Polarized Competition

Cigarettes 24%

Hotels 4%

Paper 8%

Agri 14%

Others 50%Food

Personal CareLifestyle Retail

EducationMatches, Incense

sticksIT

ITC

DR VN BRIMS

Pre 1990 Post 1990

Foods Tata Tea Kellogg's

Nestle Heinz

Personal Products Colgate L'Oreal

Balsara Oriflame

Avon

Amway

Detergents TOMCO P&G

Nirma Henkel

Godrej

Competitive Scenario

DR VN BRIMS

Oral (36%)

Hair Oils (15%)

Instant Coffee (32%)

Market Position(2001)

MARKET LEADER

Jams & squashes – 74%

Household care – 65%

Hair Care - 64%

Talcum Powder – 62%

STRONG NUMBER TWO

0 10 20 30 40 50 60 70 80

Personal Wash ( 59%)

Fabric wash (39%)

Household Care (65%)

Skin Care (55%)

Hair Care (64%)

Talcum Powders (62%)

Deodorants (New)

Colour Cosmetics (New)

Branded Tea (36%)

Ice Creams (25%)

Jams & Squashes (74%)

R & G Coffee (54%)

Branded Staples (18%)

Branded Salt (16.8%)

Cooking Fats & Oils (27%)

Ketchup (40.6)

DR VN BRIMS

Focus on Power Brands

Explore growth opportunities in new Channels

Reduce total system cost

A pro-active, flexible, fast moving organisation culture

Strategic Thrusts

DR VN BRIMS

0 20 40 60 80

Agricluture

Industry

Services

GDP

Population

Indian Economy Snapshot

Oct.30,2002, J P Morgan Investor Conference, Goa

GDP 2002-03 estimated

at USD 500 bln.

Predominance of

population in Agriculture

Services share – rising

Per capita Income

growing @ 9% CAGR

Fiscal Deficit Concern

Infra Constraints –

Road, Telecom, Power

FMCG market depressed

DR VN BRIMS

Growth thru

Focus on

Power

Brands

Improving

Foods

Profitability

Securing

Future of

Non-FMCG

Businesses

KEY STRATEGIC OBJECTIVES

Sustained profitable “quality’ growth

Strategy Recap

DR VN BRIMS

Focus on Power Brands

63 Brands110 Variants

30 Power Brands 10 Regional

Jewels

Focus resources

on 30 power

brands to deliver

sustainable profitable growth

Consumer insight, tech development

guiding innovation

Great attention to brands

Focused spend

Dedicated resources

Supply chain efficiency

Effective market establishment

Opportunity in Home and Personal Care(HPC) product category –

Detergents, shampoo, skincare, toothpaste

Redefining potential of foods – Tea and Ice-cream

Consumer relevant innovation in Lifebuoy, Knorr, Liril, Lipton Ice Tea, Kissan

Cross category extensions in Fair & lovely, Max, Lakme

Leveraging channel opportunities – wholesale, key account, e-tailing

Promoting out-of-home(OOH) consumption thru Tea, Softy vending machines

DR VN BRIMS

Improving Foods profitability Beverages, Foods, Ice-creams

Portfolio rationalization

Value added innovation

Reengineering supply chain

Margin Improvement on traditional

Portfolio – Tea and oils

Reasonable scale of operation

DR VN BRIMS

Non-FMCG…… non core

Divested

AFS - Agro

Quest Int’l

Adhesives

Nickel Catalyst

Seeds

Transfer

Leather

Mushrooms

Transferred

to

subsidiaries

for potential

JV /

Disposal

Generating

excellent value

for share holders

Non-FMCG Business

DR VN BRIMS

FMCG, 68%

Branded Exports, 6%

Others, 26%

FMCG, 84%

Branded Exports, 8

%

Others, 8%

Focused Portfolio

1999 2003%age of Sales Contribution

DR VN BRIMS

Increasing Accessibility : Lower Price Points

Driving Affordability : Strategic Price Reductions

S

DR VN BRIMS

World Class Advertising

S

DR VN BRIMS

Alternative Media

Visual Demonstration of Product Superiority

On the Streets

S

DR VN BRIMS

S

DR VN BRIMS

Creating New Channels

Direct Selling : HLL network

Project Shakti

45,000 Shakti ammas,

30,000 Shakti maans

100,000 Villages

S

DR VN BRIMS

Direct Selling : HLL network

Product Range

Lever Home range

Male Grooming

Home care

Ayurveda

Personal wash

Reach 1400 home towns

236000 consultants

S

DR VN BRIMS

Rural Selling through SHGs

Extended into 4 major states

Over 14000 villages covered

Touching 20Mn rural lives

S

DR VN BRIMS

Supply Chain For Competitive Advantage

New units to leverage fiscal incentives

Manufacturing flexibility enhanced

Project LEAP: end to end connectivity

Connectivity with HLL stockiest

DR VN BRIMS

New Business Opportunities

Herbal Health and Beauty

Lever Ayush

Cough Naashak Syrup,

Headache Naashak

Hair Poshak Oil

Dandruff Naashak Shampoo,

Body Rakshak Soap

Confectionary

Choco Max

Max Magic

Water

Pureit

DR VN BRIMS

Strategic intent to sustain market leadership and grow market

positions across brands and categories

Invest behind brands and deliver consumer value

Drive top-line growth with profitable and sustainable margins

Focus on innovations, product quality and competitiveness of

distribution system

Achieve cost leadership across the extended supply chain;

Strategy Recap

DR VN BRIMS

Financial Overview 2008

Post Recession

DR VN BRIMS

Consumer spending in FMCG continues

4th consecutive year of accelerated growth

Strong Portfolio performance

Goals – Profitable sustainable, competitive growth

2008 2009

DR VN BRIMS

STRATEGY

Leverage brand portfolio and consumer understanding by

Straddle the pyramid

Driving consumption & penetration opportunity

Leverage Unilever scale and know how

Build segments & markets for the future

Cost efficiencies

Build capabilities for the future

Integrate economic, environment & social objectives with

business agenda

Execution as critical as strategy

Goal 2009: Sustainable, competitive &

profitable growth

DR VN BRIMS

Affluent

Aspiring

Striving

Portfolio straddling the pyramid

Particulars Laundry Soap Shampoo Tea

HUL Share 38.1% 51.6% 46.3% 23.0%

Nearest Competitor 12.2% 9.4% 23.7% 21.1%

Source: AC Nielsen

S

DR VN BRIMS

11

124

96

3

46

131

Changing Income Pattern

Rich Class

Top End Business

Changing Attitudes

Aspiring Class

Trebling

Credit Culture

Striving Class

Opportunity

2003

181 mn households2013

231 mn households

Changing Shape of India … from a pyramid to a diamond

S

DR VN BRIMS

SAP

R/3

Primary Secondary

Masters Down Load

From Central UNIFY

Invoicing & Collections

Closing stock sync for

Replenishment

Loading & Delivery

Memo

MIS & RS

Infrastructure

MOC ClosureCentral

Promotion Norms

Merchandising

MIS

Regional

Server(RS)

Outlet

Mass

Outlet

Product Info

Outlet wise Order

Masters- Product

Price, Promotion

Norms

Daily Sales

Stock

Using Technology for better execution

IT ENABLING FEET ON STREET

Front Line of Execution,

Enabled by smart device

Strong IT backbone

DR VN BRIMS

2013 Trends shaping India,

Doing well by Doing Good

Changing customers Emerging Urban-Poor Different Rural India

S

DR VN BRIMS

Land of many India's

Pressure on Infra

S

DR VN BRIMS

Winning with brands and Innovations

Driving Preference with Consumers

Straddling the Pyramid Accessible packs and formats

Affluent

Aspiring

Striving

S

DR VN BRIMS

Building winning brands by integrating business and social priorities S

DR VN BRIMS

END TO END COST FOCUS TO FUEL GROWTH

DR VN BRIMS

Continuous improvement across value chain

30 HUL factories = 0 effluent discharge

Waste Water Usage CO2 emissions

30+ projects

~4000 Tonnes of Packaging Material usage reduced

Lower packaging use lower cost

DR VN BRIMS

CONTINUOUS IMPROVEMENT ACROSS VALUE CHAIN: SUSTAINABLE SOURCING

Win-win partnership lower cost of sourcing

DR VN BRIMS

A TALENT POWERHOUSE WITH A STRONG SET OF VALUES

Employer Brand

Best Employer

Best Employer Brand Asia

INTEGRITY

RESPECT

RESPONSIBILITY

PIONEERING

DR VN BRIMS

ANNUAL

REPORT

ANALYSIS

T

DR VN BRIMS

Remuneration Policy

Aims at attracting & retaining High Caliber talent

Report of the Director

On Talent Management front , company has implemented

& continuously refines sharply focused initiatives

encompassing recruitment, training & retention

HRD

‘Employer of choice’ anchored in its ethos – Building

winning business , leaders & creating value for India

Culture : Rewards Performance, continuous

learning, collaboration & capability building across the

organization.

T

DR VN BRIMS

HRM

Winning With People : Talent Pipeline ready to match our

growth ambitions.

The ‘2006 HLL Performance Share Scheme’ was introduced

as a measure to reward and motivate employees as also to

attract talent and retain key employees

Research , Development & Innovation

HR – Strengthening 4 Key Areas:

Building a robust and diverse talent pipeline,

Enhancing individual and organizational capabilities for

future readiness,

Driving greater employee engagement and

Strengthening employee relations further through

progressive people practices at the shop floor.

T

DR VN BRIMS

The company's believes that a 'fair day's work deserves a fair day's

wages’

36,000 employees, including about 1,400 managers, are all sharply

focused on the common goal, which is to "add vitality to life".

200,000 indirect jobs in those sectors of the economy connected with

the company's operations

On an average, HUL creates five indirect jobs for every single

permanent employee

Environment for Empowering the people

Attracting, Motivating and Retaining the Best Talent

HR STRATEGIES

T

DR VN BRIMS

The manager works in different functions across villages and

international locations

Progress is based on:

Merit

Ability and Performance

Adhering to the Company's Code of Business Principles

The values of Truth, Courage, Action and Caring form the

bedrock of these business principles

Creating a new generation of Industrial Workmen

HR STRATEGIES

T

DR VN BRIMS

Succession Planning at HUL

Two-horse race

Back-up candidate

Talent-rich organisation

Never very obvious as to who will land the job

For CEO-level appointment, any time there are at least three

people in the race

ST

DR VN BRIMS

Career By Choice

A programme which allows women who have fallen off the

career ladder to rejoin the workforce.

ST

DR VN BRIMS

Key Jobs Key People

Unique nine-box tool called

the LDT – Leadership

Differential Tool

Plots a person based on his

performance

‘Hot People’

Rewarded Disproportionately

ST

DR VN BRIMS

HUL 70-20-10 Model

HUL uses a 70-20-10 model for

capability building

70 percent of the person’s capability is

built on the job

20 percent is through formal coaching

10 percent of capability building

through formal training programs

ST

DR VN BRIMS

Summary

HULs up-and-running business model is a treat for investors seeking

exposure in the FMCG segment. The company has delivered in the past

and has the potential to do better in future. In the small and medium

term.

ITCs growth story is still evolving. ITC is eyeing the pie which HUL and

other FMCG players currently enjoy. ITC has proved its expertise in the

cigarettes, hotels, paper and agri-businesses. Investors who want to

bank on its execution ability in FMCG can consider the stock with a

long-term horizon.

DR VN BRIMS