Hindustan Unilever (HINDUNILVR) Q4 2004 earnings summary

Executive summary

• FY2004 net sales declined 2.1% to Rs 9,926.95 crore, primarily due to business disposals; net profit fell 32.4% to Rs 1,197.34 crore amid price reductions, brand investment and competitive pressure.

• Strategic actions focused on core FMCG brands, product affordability, supply-chain efficiency and a two-division structure; FMCG demand showed a modest recovery in late 2004.

Financial highlights

• Standalone gross turnover was Rs 10,888.38 crore versus Rs 11,096.02 crore; net sales were Rs 9,926.95 crore versus Rs 10,138.35 crore.

• Standalone PBDIT fell 27.9% to Rs 1,756.20 crore; PBT before exceptional items declined 32.9% to Rs 1,505.32 crore.

• Standalone PAT was Rs 1,197.34 crore, down 32.4%; EPS was Rs 5.44 versus Rs 8.05.

• Consolidated sales were Rs 10,598.20 crore versus Rs 10,836.95 crore; consolidated net profit was Rs 1,208.40 crore versus Rs 1,687.34 crore.

Outlook and guidance

• FY2005 GDP growth was expected at 6–7%, conditional on the monsoon and other unanticipated developments; business plans incorporated that outlook.

• The FMCG market had returned to modest growth in recent months, with low category penetration and rising aspirations supporting longer-term demand potential.

• Processed Foods and Ice Creams expected improved performance in 2005; the outlook depended on innovation, supply-chain streamlining and cost management.