Hindustan Unilever (HINDUNILVR) Q4 2003 earnings summary

Executive summary

• FY 2003 net turnover rose 1.8%; continuing-business turnover grew 4.3% after adjusting for disposals and discontinued businesses.

• Strategy centered on FMCG and 35 priority brands; non-FMCG businesses fell to 8% of the portfolio from 24% three years earlier.

• Operational focus combined consumer-relevant innovation and affordable pricing with cost reduction and supply-chain efficiency.

Financial highlights

• Net sales were Rs 10,138.35 crore, up 1.8%; gross turnover was Rs 11,096.02 crore, versus Rs 10,951.61 crore in 2002.

• Profit before tax and exceptional items increased 2.2% to Rs 2,244.95 crore; PBIT rose 4.8% to Rs 2,311.72 crore.

• Adjusted PAT before exceptional items rose 4.2% to Rs 1,804.34 crore; reported net profit was Rs 1,771.79 crore, up 0.1%.

• Exceptional items, net of tax, were a Rs 32.55 crore charge versus Rs 38.42 crore income in 2002.

Outlook and guidance

• FY 2004 economic outlook was cautious, with GDP growth expected at 6–7%; business plans incorporated this assumption.

• Growth priorities included continuous innovation, improved quality, competitive pricing, rural penetration, modern trade and out-of-home channels.

• A Ten Point Program targeted margin rebuilding through supply-chain, logistics, procurement and operational-efficiency savings.