Hindustan Unilever (HINDUNILVR) Q4 1997 earnings summary

Executive summary

• 1997 net sales rose 18.5% YoY to Rs 7,819.71 crore; profit before tax and exceptional items increased 40.5% to Rs 850.25 crore.

• Growth was supported by 64 product innovations; more than 50% of growth came from innovations, alongside higher profits.

• Brooke Bond Lipton India’s amalgamation was completed in 1997, with integration synergies beginning to be realised.

Financial highlights

• Gross turnover increased 17.2% YoY to Rs 8,342.75 crore; net turnover rose 18.5% to Rs 7,819.71 crore.

• Profit before tax and exceptional items rose 40.5% to Rs 850.25 crore; net profit after tax and exceptional items grew 35.3% to Rs 560.37 crore.

• Excluding exceptional items, profit after tax was Rs 580.25 crore versus Rs 412.70 crore in 1996; exceptional items reduced 1997 net profit by Rs 19.88 crore after tax.

• Exports reached a record Rs 1,152 crore; exports of beverages rose over 60% and Home and Personal Care exports increased over 20%.

Outlook and guidance

• 1998 consumer spending was expected to be affected by the economic slowdown; continued growth would require strong innovation and more competitive products.

• Tea supply configuration restructuring was expected to be completed by end-1998; ice cream manufacturing reconfiguration was also expected to be completed in 1998.

• Proposed Lakme acquisition, valued at approximately Rs 200 crore excluding manufacturing undertakings, was expected before June 1998; effective net cash outflow was estimated at approximately Rs 130 crore.

• Proposed Pond’s India amalgamation, effective from 1 January 1998 if approved, required shareholder, creditor, RBI and High Court approvals.