Hindustan Unilever Limited (HUL) increased its advertising spends by 20 per cent in the quarter ending September 30, 2017 compared with the corresponding quarter last year. In Q2FY18, the company spent Rs 1,023 on advertising, up from Rs 851 crore in Q2FY17. In the first quarter ending June 30, 2017, the company had spent Rs 905 crore on advertising.
On the reasons behind increasing the ad spend in the quarter, the company said, “Advertising and promotion spends were stepped up to support innovations.”
Announcing the results for the quarter, the company said that its comparable (reflecting the accounting impact of GST) domestic consumer growth was 10 per cent and underlying volume growth was 4 per cent.
Compared to corresponding period last year, EBITDA at Rs 1,682 crore was up by 20 per cent. The company attributed its strong savings programme for sustaining sequential margins.
Profit after tax before exceptional items, PAT, at Rs 1,236 crore was up by 14 per cent, net profit at Rs 1276 crore, was up 16 per cent for the quarter.
“While transition to GST impacted trade purchases in early part of the quarter, consumer offtake remained stable. Trade conditions continue to improve and the wholesale channel is steadily normalising,” said the company.
Harish Manwani, Chairman, HUL, said, “In a challenging business environment, we delivered a particularly strong overall performance. This reflects the strength of our brands and our relentless focus on execution in the market place. I am pleased that we were able to swiftly implement GST and quickly pass on the net benefit through price reductions to consumers across the country.”
Despite short-term challenges, we are confident of the medium-term outlook for the FMCG industry and remain focused on driving consumer value and profitable volume driven growth.”
Segment-wise business performance:
Home Care: Robust volume-led growth sustained
Laundry saw robust double-digit growth across the category. Growth in household care was led by a strong performance of Vim Bar. The water business saw the launch of the new RO 2-in-1 range.
Personal Care: Broad-based growth across Personal Products and Personal Wash
Personal wash witnessed broad based growth across key brands. Growth in hair care was led by Dove; Indulekha continued its strong momentum and further strengthened its brand credentials by receiving clinical validation of being an ayurvedic medicine to prevent hair fall and also help grow hair. Colour cosmetics delivered yet another quarter of double-digit growth. Lever Ayush got off to a good start after its national launch last quarter.
Foods: Growth driven by Kissan
Kissan delivered strong growth driven by Ketchups. Knorr saw the launch of multiple new variants under both soups & noodles.
Refreshment: Robust growth sustained
Tea delivered yet another quarter of strong broad-based growth. Ice cream & frozen desserts also delivered robust volume led growth.