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HUL: Consumer Connect
PAT grew by 18 per cent to rs 6,080 crore and net profit stood at rs 6,036 crore, up by 15 per cent
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Hindustan Unilever (HUL) is India’s largest fast-moving consumer goods (FMCG) company with a historical presence in India of over 80 years. Nine out of 10 Indian households use one or more of HUL brands to feel good, look good and get more out of life, giving the company a unique opportunity to contribute towards a brighter future for its customers and consumers. With over 40 brands across 12 distinct categories, the company is part of the daily life of millions of consumers.
The group’s “legacy of doing well by doing good” elevates it effortlessly to the position of sectoral leader in BW Businessworld’s list of the Most Respected Companies (MRC) in the FMCG segment.
FY19 saw remarkable all-round progress for HUL. The company delivered over Rs 8,500 crores of EBITDA. The EBITDA margins, as per the latest annual report, were at its highest-ever at 22.9 per cent and the profit crossed the Rs 6,000-crore mark for the first time. Profit after tax (before exceptional items) grew by 18 per cent to Rs 6,080 crore and net profit stood at Rs 6,036 crore, up by 15 per cent.
HUL continued to focus and drive ‘Project Shakti’, which aimed at providing livelihood opportunities as micro-entrepreneurs in rural India. HUL has more than one lakh ‘Women Shakti Entrepreneurs’ across the country, who make a living by distributing HUL products, Sanjiv Mehta, Chairman and MD, HUL, said in a report.
In the current financial year, HUL continued to post volume growth despite the challenging macroeconomic conditions due to falling consumption, poor demand and negative consumer sentiments. In its second quarter results for FY20, HUL reported a five per cent growth in volume, a third straight quarter of volume growth for this FMCG giant. However, HUL’s volume growth in the year-ago quarter was in double digits at 10 per cent. Mehta, in fact, admitted that the rural growth had decelerated further in Q2 versus the June quarter of FY20, when urban growth was on a par with rural growth. “It is now only 0.5 times ahead of urban growth, pointing to a sharp slowdown in rural areas,” he said.
In number terms, HUL reported a 21.2 per cent year-on-year growth in net profit to Rs 1,848 crore for the July-September quarter (Q2) of FY20. Growth was aided by cut in corporate tax rates announced by the Finance Minister in August last year.
Hindustan Unilever Foundation (HUF), the not-for-profit outfit of HUL that anchors water management related community development and sustainability initiatives continued with its good work in FY19. In fact HUF’s water conservation capacity stood at 900 billion litres cumulatively. To underscore the importance of the water potential created by HUF; one billion litres of water can meet the drinking water needs of over 8 lakh adults for an entire year.
Under its Project Shakti initiative, which aims to financially empower and provide livelihood opportunities to women in
rural India, HUL created 1,09,100 ‘Shakti Entrepreneurs’ whom its calls ‘Shakti Ammas’. The goal is to scale up
this number to 5 million at the end of 2020.
Going forward, the company has made clear commitments to make 100 per cent of its plastic packaging reusable, recyclable or compostable by 2025. In 2018, HUL said it had collected a total of about 20,000 tonnes of plastics in partnership with NGOs and start-ups in more than 20 cities across India. During 2019, through a partnership with ‘waste to electricity installation’, HUL said it was able to process approximately 15,000 tonnes of plastic waste and convert it into electricity. The balance was used for co-processing in Cement Kilns, it said.