Hindustan Unilever (HINDUNILVR) Q4 2001 earnings summary

Executive summary

• Net sales rose 3.5% to Rs.10,972 crore in 2001; net profit increased 25.3% to Rs.1,641 crore, supported by cost control and power-brand growth.

• Power-brand sales grew 6.5%, ahead of 3.5% total sales growth; strategy prioritized FMCG growth, food profitability and value-preserving exits from non-core businesses.

Financial highlights

• Net sales increased to Rs.10,971.90 crore from Rs.10,603.79 crore; PBDIT rose 15.9% to Rs.2,095.77 crore and PBT before exceptional items increased 16.7% to Rs.1,943.37 crore.

• Net profit rose 25.3% to Rs.1,641.31 crore, including Rs.100.36 crore of exceptional income net of tax; PAT before exceptional items was Rs.1,540.95 crore.

• Operating expenses grew 1.3% against 3.5% net sales growth; cost of goods sold fell 1.4% to Rs.6,354 crore and staff costs declined 3.7% to Rs.592 crore.

• Standalone operating cash flow was Rs.1,307.46 crore; cash and bank balances ended the year at Rs.913.16 crore.

Outlook and guidance

• 2002 plans assumed GDP growth no higher than 5%; growth of 6% or more alongside stronger agricultural incomes was viewed as upside, not a planning assumption.

• Market recovery remained the near-term swing factor; 2002 priorities included scaling supply-chain initiatives across FMCG and sustaining investment in power brands and distribution.

• Tea-bag exports for Unilever Australia and the US were expected to begin in H2 2002; traded exports were to be phased out, while non-value-added sea-catch exports were slated for exit.

• Ice-cream turnaround measures planned for 2002 covered portfolio rationalisation, supply-chain optimisation, cost reduction, sourcing and distribution reach.