ICICISecuritiesIndiaUnlimited2003_tcm114-136523

8/12/2019 ICICISecuritiesIndiaUnlimited2003_tcm114-136523

1/63

I CICI - Securities Annual I nvestor Conference, New York September, 2003September, 2003

Presentation at ICICI Securities - India UnlimitedPresentation at ICICI Securities - India UnlimitedSecond Annual Investor ConferenceSecond Annual Investor Conference

New York, September 8-10, 2003New York, September 8-10, 2003


2/63


FH03 Performance HighlightsFH03 Performance Highlights

StrategyStrategy

ContentsContents

EconomyEconomy

OverviewOverview

2003 and beyond...2003 and beyond...


3/63


FH03 Performance HighlightsFH03 Performance HighlightsFH03 Performance Highlights

StrategyStrategyStrategy

ContentsContents

EconomyEconomy

OverviewOverviewOverview

2003 and beyond...2003 and beyond...2003 and beyond...


4/63


Economic OutlookEconomic Outlook

2001-02 2002-03 2003-04 (E)*

Agriculture 5.7 (3.2) 7.5

Industry 3.3 6.0 5.0

Services 6.8 7.1 7.5

GDP 5.6 4.3 6.5

Fourth Largest economy in PPP terms

GDP growth second only to China among Asian Economies

Strong Revival expected in Agricultural growthResurgence of manufacturing sector

Strong performance of services sector

Growth%

* CMIE Estimates


5/63


Indian Economy - SnapshotIndian Economy - Snapshot

Positives

Favorable monsoons

Healthy GDP growth at 6.5% estimated for 2003-04 (CMIE estimates)

Revival of industrial growth to 6% in 2002-03 Strong forex reserves at 81 bn $

Current account surplus at 2.8 bn $ (Apr - Dec 02)

Upturn noticed in broadbased demand conditions

(Non food credit expected to rise by 16.0% in 2003-04) Robust growth of 17.8% in exports in 2002-2003

Low inflation 3-4%

Rapid development of infrastructure

Concern Fiscal defict at 9.3% in 2002-03 and expected to rise in 2003-04

Lag effect of poor agri-output in 2002-03

Total foodgrains production drop of 13.9% in 2002-03


6/63




ContentsContents

EconomyEconomyEconomy

OverviewOverview



7/63


Our purpose is to meet the

everyday needs of people everywhere -

to anticipatethe aspirations of our

customers and consumersand to

respond creatively and competitively

withbranded products and services

which raises the quality of life

Hindustan Lever

Corporate Purpose

Hindustan Lever

Corporate Purpose


8/63


Hindustan Lever

. Indias largest & leading FMCG company

Hindustan Lever

. Indias largest & leading FMCG company

Turnover 100 2193

EBITDA (Operational) 21 461

Net Profit (bei) 17 373

EPS 7.98 (Rs) 18c

Economic Value Added 12 263

Market Capitalisation 412 9035

* Figures based on FY2002 A udited Results

Personal

Products

21%

Beverages

12%

Foods

7%

Ice Creams

1%

Exports

12%

Others

3%Soaps &

Dets43%

* Based on FY2002 segmental revenues

US $ MnRsBln


9/63


Source : Mkt Capitalisation at BSE ( 4th September 2003 )

Market Capitalisation Market Capitalisation

ONGC Reliance Indian Oil HLL Infosys

Market Cap (US $Bln) 20.3 12.6 9.7 9.0 6.1

% of Total Market 10.3 6.4 4.9 4.6 3.1

% Wt in Sensex 15.0 9.0 9.7

% Wt in Nifty 12.4 8.9 6.0

20.3

12.6

9.79.0

6.1

0.0

5.0

10.0

15.0

20.0

25.0

ONGC Reliance Indian Oil HLL Infosys

Hindustan Lever

...on the Indian Bourses

Hindustan Lever

...on the Indian Bourses

(US

$Bln)


10/63


58.9

39.8

59.555.4

33.7

63.5

54.7

64.1

30.7

49.8

33.9

74.9

27.6

8.3

14.8

0

10

20

30

40

50

60

70

80

90

100

PersonalWas

h

FabricWas

h

Dishwas

h

Skin

Toothpaste

TalcumPowder

HairWas

h

Deodrants

PacketTe

a

R&GCoffe

e

InstantCoffe

e

Jam

s

Ketchup

s

BrandedAtt

a

BrandedSalt

Market Leader Strong No. 2

Hindustan Lever

.dominant player across FMCG categories

Hindustan Lever

.dominant player across FMCG categories

Mark

etShare%

Source: : A C Neilson ORG Retail A udit


11/63


FMCG

...Opportunities in India

FMCG

...Opportunities in IndiaCategory

Market Size(US $Mn)

HLL -Market

Share (%)

UrbanPenetration

(%)

RuralPenetration

(%)

TotalPenetration

(%)

Fabric Wash 1210 39.8 89.6 82.9 84.9

Personal Wash 938 58.9 97.9 90.7 92.8

Packet Tea 635 30.7 91.2 82.2 84.9

Toothpaste 409 33.7 69.8 32.3 43.5

Skin 312 55.4 36.6 19.8 24.7

Hair Wash 230 54.7 40.1 16.3 23.3

Talcum Powder 148 63.5 66 36.8 45.1

Branded Atta 107 8.3 44 30.2 34.3

Dishwash 102 59.5 54.6 11.5 24.4Instant Coffee 55 33.9 N.A. N.A. N.A.

R&G Coffee 30 49.8 N.A. N.A. N.A.

Ketchups 25 27.6 12.5 0.7 4.2

Deodrants 19 64.1 N.A. N.A. N.A.

Jams 13 74.9 N.A. N.A. N.A.

Source : Indian Readership Survey 2002

Signif icant scope for growth Clearly differentiated strategies for : - High penetration categories > 50%:Drive upgradation / consumption - Low penetration categories : Drive penetration


12/63


13.9

9.0

4.7

2.6

0

2

4

6

8

10

12

14

16

18

20

22

UK Brazil Thailand India

1.311.46

0.87

0.50

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0


FABRIC WASHPer Capita ( Kgs )

PERSONAL WASHPer Capita ( Kgs)

0.23

0.61

0.40

0.07

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0


0.40

0.72

0.38

0.04

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0


TOOTHPASTEPer Capita (Kgs )

SHAMPOOPer Capita ( Kgs)

FMCG


FMCG



13/63


50.0

19.0

20.011.0

Water Soap Naturals Shampoo

HLL Share of

Shampoos

60%

Share of Hair wash occasions

HLL Share of

Hair Wash

7%

Redefine potential for growth

FMCG


FMCG



14/63



StrategyStrategy

ContentsContents





15/63


RecapRecap

HPCSustained Profitable Growth

FOODSImproved Profitability

DOMESTIC FMCG

EXPORTSFocus on core , value add

OTHERSDivest / discontinue

NON FMCG

STRATEGIC FOCUS


16/63


Focus resources on 30 Power brands

Power brands selected to occupy all

relevant consumer appeal & price segments

Marketing spend, level of innovation

supported by consumer insight & new

technology platforms

Grow Power Brands by

consumer relevant innovation

cross category extensions

leveraging channel opportunit ies

Strategic Focus

Power Brands

Strategic Focus

Power Brands

Greater rigour

Focused advertising and promotion spend

Reduction in brand cannibalization

Efficient supply chain

Effective market activation

moremoremore isisisisisisisisisisisislesslessless3030PowerPower

BrandsBrands

1010RegionalRegional

JewelsJewels

63 Brands63 Brands110 Variants110 Variants


17/63


HPC

...Power Brands Drive Growth

HPC

...Power Brands Drive Growth

-1.8

5.34.9

5.6

3.5

-4.0

4.1

6.3

8.2

4.6

6.16.1

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

MQ 02 JQ 02 SQ 02 DQ 02 MQ 03 JQ'03

HPC- HLL Sales Growth

HPC- Power Brands Growth

Growth %


18/63


FAL : 16%Lifebuoy : 33% Ponds : 22%

HPC Power Brands

...Delivering strong growth - FH03

HPC Power Brands

...Delivering strong growth - FH03

* Group Basis

Nihar : 11%

Lakme : 53%

Pepsodent : 15% Sunsilk : 6% Lux : 7%


19/63


(7.5)

(9.8)

4.3

(10.0)

(5.0)

-

5.0

10.0

FH02 SH02 FH03

(16.1)

(11.6)

17.6

(15.0)

(10.0)

(5.0)

-

5.0

10.0

15.0

20.0

25.0

FH02 SH02 FH03

Strong growth in Foods Power Brands

...Strategy shows results

Strong growth in Foods Power Brands

...Strategy shows results

Power Brands BeveragesPower Brands Beverages(20.0)

Power Brand Processed FoodsPower Brand Processed Foods

Power Brand Total FoodsPower Brand Total Foods

* Processed Foods and Total Foods exclude Edible Oils and Fats business

(11.0) (11.3)

4.7

(15.0)

(10.0)

(5.0)

-

5.0

FH02 SH02 FH03


20/63


* Group Basis

Annapurna : 26%

Bru : 17% Taaza : 11%

Foods Power Brands

Delivering strong growth - FH03

Foods Power Brands

Delivering strong growth - FH03

3 Roses : 10%

Kissan : 11%


21/63


Foods business to be fit for growth & scale

Reasonable scales of operations achieved

Focus now on improving profitability

Portfol io rationalization

Value added innovation

Re-engineering the supply chain

Improve margins on t raditional portfolios -Tea,

Oils

Stop value destruct ion in Ice Creams - new strategy

formulated

Focus on premium products in 6 citadel cities

Turnaround Modern Foods

Aggressive investments in brand building &

developing new categories

700

-550

700

1,170

555

Overall HLL

Foods excl

ODF

Processed

Foods excl

ODF

ODF Beverages Ice Creams

Bps change in Gross Margins in 2002

strategy delivers step changein margin profile

Strategic Focus

Foods : Underlying Profitability

Strategic Focus

Foods : Underlying Profitability


22/63


Strategic Focus

Non FMCG Businesses

Strategic Focus

Non FMCG Businesses

Exports

Discontinue non value-adding exportsFocus on core categories - position as Preferred Competitive Source

Non Core : Build only on Country / Company strengths; exit others

Other Non FMCG BusinessesOpening up of the economy & access to world class technology

Need to focus on core businesses

Variety of options actively reviewed - best solution for each business

Seek players with global expertise who are able to support future growth


23/63


Strategic Focus

Core - Value added Exports

Strategic Focus

Core - Value added ExportsGrowth %

Core Value added port fol io drives growth

Continuing ExportsContinuing Exports

-28.3

4.6 5.3

-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

FY 02

MQ 03 JQ 03

ExportsExports

1.0

15.2

7.7

0.0

5.0

10.0

15.0

FY 02 MQ 03 JQ 03


24/63


NonFMCG

business

AFS

Quest

Nickel Catalyst

Adhesives

Seeds

Diversey Lever

DIVESTED TRANSFER

Leather

Mushrooms

Transferred to subsidiariesfor potential JV / disposal

Strategic Focus

Securing the future of Non FMCG

Strategic Focus

Securing the future of Non FMCG


25/63


Effective execution of strategyEffective execution of strategy

HPCSustained Profitable Growth

FOODSImproved Profitability

DOMESTIC FMCG

EXPORTSFocus on core , value add

OTHERSDivest / discontinue

NON FMCG

STRATEGIC FOCUS

HPC records all round performance - profitable growth

Step change in profitability of Foods business - Fit for Growth

Ice Cream strategy halves losses

Exports portfolio rationalised - core exports do well

Significant progress on divestment of non-core businesses


26/63


FH03 Performance HighlightsFH03 Performance Highlights


ContentsContents





27/63


Source: : A C Neilson ORG Retail A udit

Growth % 2000 2001 2002 FH - 2003

Personal Wash 6.1 -9.9 -6.1 -1.6

Fabric Wash 5.7 -2.9 -2.1 -4.6

Dishwash 19.2 11.1 -1.8 -2.9

Toothpaste 10 2 -5.5 -11.8

Shampoo 12.5 10.7 7.8 -5.2

Skin Products 12.9 2.6 0.6 4.3

Packaged Tea 0.3 2.4 -9.7 -14.1

HPC 7.6 -2.3 -3.1 -3.3

FMCG 6.7 -1.5 -3.5 -2.8

Market GrowthMarket Growth

... key categories decline in 2002, depressed trend continues in FH03


28/63


FH 2003 Results

Highlights

FH 2003 Results

Highlights

Overall sales grows by 2.2%, Continuing businesses grow by 3.2%

HPC FMCG grows by 4.5% with power brands growing by 6.2%

Good improvement in foods sales performance

Sales impacted by

Uncertainty in VAT implementation

Truckers strike

Operating profit improves by 9%, margins up 114 bps

PAT (bei) improves by 10.5%


29/63


FMCG Sales

Growth Momentum Picks up

FMCG Sales

Growth Momentum Picks up

-3.9

2.6

-0.9

1.4

2.1

-0.2

-4.0

1.0

MQ 02 JQ 02 SQ 02 DQ 02 MQ 03 JQ 03

FMCG Sales

Growth %


30/63


HPC PerformanceHPC Performance

1.9

4.5

5.5

Total HPC

...accounts for 65% of revenue & 85% of profits

FH 2002

SH 2002

Growth %

-5.5

-1.3

-3.3

1.4

5.44.6

1.3

5.3

6.2

-6

-4

-2

0

2

4

6

8

HPC MARKET HLL GROUP HPC GROUP POWER BRANDS

HPC sustains growth momentum HPC Category and PowerBrands beat the market

* Market growth rates as per ORG New Panel

FH 2002

SH 2002

FH 2003

FH 2003

S & D t tS & D t t


31/63


Soaps & Detergents

Performance Highlights

Soaps & Detergents

Performance Highlights Innovation led growth in Personal wash Strong growth inspite of truckers strike

Growth momentum in Lux and Lifebuoy sustained

Slew of launches/relaunches in the category

Laundry Market impacted adversely with continued downtrading.

Pressure on the mid price and premium segments of the portfolio

Rin re-formulated and launched with patented Nil Mineral Bar technology Surf Excel prices reduced and brand relaunched in JQ03; volumes surge

Dishwash grows by 8.3% in JQ03 in a declining market (-)2.7%

Vim Polycoat launched

Pe sonal WashPersonal Wash


32/63


Personal Wash

...Innovation led growth

Personal Wash

...Innovation led growth

1.4

-4.3

11.1 11.3

8.88.1

0.3-2.3-7.7

-12.9

13.1

-3.1

-15

-10

-5

0

5

10

15

MQ 02 JQ 02 SQ 02 DQ 02 MQ 03 JQ'03

PW Market Growth HLL PW sales Growth

Growth %

Lif b


33/63


Lifebuoy

...Excellent innovation led performance

Strong double digit growth for 5 consecutive quarters >30 % growth for 4 consecutive quarters.

-3.7

26.6

35.4 35.6 36.3

31.3

16.8

15.815.5

16.816.7

17.6

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

MQ 02

JQ 02 SQ 02 DQ 02 MQ 03 JQ 03

14.5

15

15.5

16

16.5

17

17.5

18

Lifebuoy Growth Lifebuoy Market Shares

Soaps and DetergentsSoaps and Detergents


34/63


Soaps and Detergents

Recent Innovations

Soaps and Detergents

Recent Innovations

Personal ProductsPersonal Products


35/63


Personal Products

Performance Highlights

Personal Products

Performance Highlights Growth sustained in JQ03

Growth led by Skin, Talc, Hair Oil and Shampoos

Strong double digi t growth in Skin for 5 consecutive quarters

FAL, Lakme and Ponds show high growths

Oral performance better than market decline Value proposition redefined

New SKUs launched at convenient price points

Share gain from low price competition

Shampoo sales growth driven by volume growth

Market Value decline continues Sunsilk registers strong growth of 8% in JQ03

New SKUs launched at convenient price points in MQ03

Value proposition redefined

Hair oils deliver double digi t growth for 3 consecutive quarters

PP shows strong growth for thePP shows strong growth for the


36/63


PP shows strong growth for the

second consecutive quarter ...

PP shows strong growth for the

second consecutive quarter ...

MQ03 growth sustained

1111....1111

15151515....9999

8888....1111

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

FYFYFYFY 02020202 MQMQMQMQ 03030303 JQJQJQJQ 03030303

Personal Products

Growth %

Skin-Consistently beating the marketSkin-Consistently beating the market


37/63


Skin-Consistently beating the market

...Backed by volume growth

Skin-Consistently beating the market

...Backed by volume growth

Strong growth for six consecutive quartersDouble digit growth for 5 consecutive quarters

4.9 3.5

48.6

21.824.0

14.3

-5.7

-1.32.2

9.17.7

19.0

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

MQ 02 JQ 02 SQ 02 DQ 02 MQ 03 JQ'03

Skin Market Growth HLL Skin Sales Growth

Growth %

Skin Power Brands


38/63


Skin Power Brands

Surge ahead..

18181818....6666

26262626....1111

8888....8888

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000

30303030....0000


FAIR & LOVELYFAIR & LOVELY

0000....1111

53535353....3333 53535353....1111

0000....0000

10101010....0000

20202020....0000

30303030....0000

40404040....0000

50505050....0000


LAKMELAKME

1111....0000

21212121....1111

23232323....0000

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000


PONDSPONDS

Growth %

Personal ProductsPersonal Products


39/63


Personal Products

Recent Innovations

Personal Products

Recent Innovations

BeveragesBeverages


40/63


Beverages

Core Portfolio Strengthened

Beverages

Core Portfolio Strengthened Tea impacted by weak commodity prices & low cost loose tea players

Topline decline restricted to (-)2.7% and flat UVG in JQ03

Good improvement in beverages sales performance

Power Brands 3 Roses, Red Label and Taaza grow well

Master Brand BROOKE BOND launched

Bru delivers strong growth for 6 consecutive quarters Leveraging new opportunities

OOH channel

Lipton Ice Tea Business

Beverages


41/63


Beverages

...Power Brands deliver growth

---- 12121212....8888

---- 8888....7777

5555....4444

---- 15151515....0000

---- 10101010....0000

---- 5555....0000

0000....0000

5555....0000


RED LABELRED LABEL

---- 15151515....6666

10101010....555512121212....3333

---- 15151515....0000

---- 10101010....0000

---- 5555....0000

0000....0000

5555....0000

10101010....0000

15151515....0000


TAAZATAAZA

---- 5555....0000

10101010....00009999....0000

---- 5555....0000

0000....0000

5555....0000

10101010....0000


3 ROSES3 ROSES

10.7

17.5

15.6

0.0

5.0

10.0

15.0

FY 02 MQ 03 JQ 03

BRUBRU

Growth %

BeveragesBeverages


42/63


Beverages

Recent Innovations

Beverages

Recent Innovations

Processed foodsProcessed foods


43/63


Popular Foods shows strong double digit growth in both quarters of 2003

CPD grows by 18.5%in JQ03 backed by strong UVG

Wide assortment of consumer exciting innovations

Processed foods

...On Growth Path

Processed foods

...On Growth Path

Processed FoodsProcessed Foods


44/63


Processed Foods

...Continue to grow

Processed Foods

...Continue to grow

Healthy growth trend after profitability improvement

((((6666....7777))))

7777....0000

20202020....7777

((((10101010....0000))))

((((5555....0000))))

----

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000

FYFYFYFY'''' 02020202 MQMQMQMQ'''' 03030303 JQJQJQJQ'''' 03030303

Processed Foods Sales Growth

* Processed Foods excludes Edible Oi ls and Fats business

Growth %

Culinary Products


45/63


Culinary Products

...Volume growth momentum sustained

7777....6666

---- 2222....9999

18181818....5555

---- 15151515....0000

---- 10101010....0000

---- 5555....0000

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000

30303030....0000


CPD SalesCPD Sales

5555....0000

((((13131313....8888))))

9999....2222

((((15151515....0000))))

((((10101010....0000))))

((((5555....0000))))

0000....0000

5555....0000

10101010....0000

FYFYFYFY'''' 02020202 MQMQMQMQ'''' 03030303 J QJQJQJQ'''' 03030303

CPD UVGCPD UVG

Growth %

Popular Foods


46/63


Popular Foods

...Strong Growths in 2003 backed by UVG

---- 16161616....9999

17171717....7777

23232323....2222

---- 25252525....0000

---- 20202020....0000

---- 15151515....0000

---- 10101010....0000

---- 5555....0000

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000

30303030....0000

FYFYFYFY 02020202 MQMQMQMQ03030303 JQJQJQJQ 03030303

Popular Foods SalesPopular Foods Sales

28282828....3333

22222222....3333

((((25252525....8888))))

((((30303030....0000))))

((((25252525....0000))))

((((20202020....0000))))

((((15151515....0000))))

((((10101010....0000))))

((((5555....0000))))

0000....0000

5555....0000

10101010....0000

15151515....0000

20202020....0000

25252525....0000

30303030....0000

FYFYFYFY'''' 02020202 MQMQMQMQ'''' 03030303 JQJQJQJQ'''' 03030303

Popular Foods UVGPopular Foods UVG

Growth %

Processed FoodsProcessed Foods


47/63


Recent InnovationsRecent Innovations

EBITDA Margin ProgressionEBITDA Margin Progression


48/63


8

10

12

14

16

18

20

22

1996

1997

1998

1999

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

20002001

2002

Rolling 12-month EBITDA Margins

EBITDA Margin ProgressionEBITDA Margin Progression

% Sales

2003

E i V l Add dEconomic Value Added


49/63


80

120152

188

237

271

0

50

100

150

200

250

300

1997 1998 1999 2000 2001 2002

* EV A = Net Operating Profit after Taxes - Cost of capital Employed

US $ Mn

CAGR 27.6 %

Economic Value AddedEconomic Value Added

Delighting the shareholderDelighting the shareholder


50/63


Delighting the shareholderDelighting the shareholder

RsShareholder receipt in last6 months (per Re 1 Share)

Final Dividend (2002) 2.659*

Interim Dividend (2003) 2.500*

Special Dividend 1.765*

Bonus Debenture 6.000

Total 12.924

* Pursuant to change in dividend tax incidence announced in recent Budget

Dividend Per Share of Re 1 2001 2002 2003

In ter im 2.500 2.500 2.867

Final 2.500 3.000

Total 5.000 5.500 2.867

ContentsContents


51/63




ContentsContents



2003 and beyond...2003 and beyond...

2003 & B d2003 & Beyond


52/63


2003 & Beyond..2003 & Beyond.. Growth in current categories

High Penetration Categories - upgradation/consumption

Low Penetration Categories

Greater consumer insight Technology led innovation

Scale up New Init iatives

New categories, new consumers & new Consumption opportunities

Continued thrust on innovation in Foods

Building a New Exports Horizon

2003 & Beyond2003 & Beyond


53/63


Leverage Channel Opportunities

Ice Cream Vending

Lakme Beauty Salons

Beverages Out of Home

2003 & Beyond..2003 & Beyond..


54/63

Lever AyushLever Ayush


55/63


Lever AyushLever Ayush

Ayush launched in June 02 after rigorous R&Dand extensive clinical testing

5 OTC non prescript ive products introduced

Purity of ayurvedic ingredients endorsed by AVP ,Coimbatore

Soaps, Oils and Shampoos launched nationally

Roll Ons and Cough Syrup under test Ayush Therapy Centre started

truth of Ayurvedaproof ofScience

truth of Ayurvedaproof ofScience

Extending Max to ConfectioneryExtending Max to Confectionery


56/63


! Max forays into confectionery

! Child centric product development / innovation

! Nationally rolled out post success in Tamilnadu

! Max range of confectionery annualised sale > US $ 10 Mn

Max set to become the largest kids impulse brand

Extending Max to ConfectioneryExtending Max to Confectionery

HLL - Network


57/63


HLL Network

Aviance relaunched as HLL Network - Jan03

Portfolio widened

Products added:

Lever home range

Male grooming

Reach - 1068 towns

1,15,000 consultants in July03 to grow to 1 Mn by 2007

Sales increases 3 fold



58/63


! Leveraging on cost arbitrage opportuni ties with the West

& Unilever sourcing

! Focus on categories with company / country specificadvantage

! Build sourcing partnerships on the basis of

- World class quality

- Technological / process expertise

- Customer service

- Cost competitiveness

! Exports not at the cost of domestic business

! Sourcing business will improve Exports margin basket


Key InitiativesKey Initiatives


59/63


RS-net implementation

- Connectivity with HLL RSs

Benefits

System cost reduction

Secondary Sales Tracking

Robust sales & production planning

Higher ROI for Redistribution Stockist

Field force focus on the HLL Way of Sales

Project Leap

Shared Services

A New Paradigm Supply ChainA New Paradigm Supply Chain

...maketodaywhat we

sold yesterday

...maketodaywhat we

sold yesterday

Key InitiativesKey Initiatives

P j t Sh kti


60/63


Project ShaktiProject Shakti

Self Help Groups (SHGs) appointed as Dealers

SHGs distr ibute goods directly to consumers Piloted in 2001& extended across several states

Partnerships with several NGOs forged

More than 5000 vil lages covered touching

7.5 Mn rural lives

40% increase in no of villages covered prior to the project

Key Initiatives

Th HLL W i S l

Key Initiatives

Th HLL W i S l


61/63


The HLL Way in SalesThe HLL Way in Sales

Improved Secondary Sales focus

Differentiated approach to channels

Redefined role of Stockist

Diamond model- new sales organisation

Diamond ModelDiamond Model

ff ff


62/63


Different Channels, Different NeedsDifferent Channels, Different Needs

WholesaleWholesale

Retail TradeRetail Trade

MT & SSTMT & SST

Mass retailMass retail

Key A/cRetail

Key A/cRetail

WholesaleWholesale

CSDCSD

RuralRural

Go as 'one'Go as 'one'

PC specificPC specific

Concern approach toConcern approach to

derive critical massderive critical mass


63/63


Thank YouThank You

Documents

ICICISecuritiesIndiaUnlimited2003_tcm114-136523