Hindustan Unilever's FY23 annual report: Top 10 highlights you should know

FMCG giant Hindustan Unilever (HUL) battled with commodity cost inflation, saw new brand additions, and rejigged key management positions in the fiscal year 2022-23 (FY23), showed a report by Motilal Oswal Financial Services.
 

At the bourses, shares of HUL surged 25 per cent in March 2022-23 period, as against 0.7 per cent rise in the S&P BSE Sensex, during the same period.
 

Analysts see HUL’s performance to be impressive in the last 3-5 years, with an Ebitda (earnings before interest, tax, depreciation, and amortisation) CAGR (compounded annual growth rate) of 12.4 per cent/13.4 per cent and a PAT (profit-after-tax) CAGR of 14.1/13.6 per cent.
 

"With hopes of normal monsoon, recovery in rural areas, and reduction in commodity costs, the company is likely to regain its mid-to-high teens earnings growth trajectory going ahead," the brokerage firm added, sharing a 'buy' call on the counter, and target price of Rs 3,100. 
 

Meanwhile, here are the top 10 key takeaways from HUL's annual report:
 

Market share edges higher: More than 75 per cent of HUL's portfolio has gained market share, both in value, and volume terms. The conglomerate now has 19 brands with over Rs 1,000 crore annual sales from 16 brands last year. 
 

Hair-care clocks highest market-share: The FMCG major's hair-care segment achieved highest-ever market share as portfolio products expanded to hair serums, and masks. 
 

Focus on premiumisation: The company has five digital-first brands - Simple, Love Beauty & Planet, Baby Dove, Acne Beauty, and Find Your Happy Place. The content hub 'BeBeautiful', 'Lakme's Virtual Try-ons’, and ‘SmartPick’ are helping consumers to experience products and understand the latest trends.
 

Home-care doubles in 3 years: The size of the company's home care liquids business doubled in the last three years to over Rs 3,000 crore in annual turnover. Surf Excel crossed $1 billion in annual turnover, becoming the first home and personal care brand in India to achieve this milestone.
 

Margins under pressure: The steep inflation in raw material prices affected both gross and Ebitda margin profile of the company in FY23. Gross margin contracted 360 basis points (bps) to 47.3 per cent in FY23, while Ebitda margin declined 140 bps to 23 per cent. 
 

Managerial remuneration declines: In FY23, remuneration for the positon of Chief Executive Officer (CEO), and Managing Director (MD) declined 1.3 per cent to Rs 22.4 crore from Rs 22.1 crore in FY22. The remuneration for Chief Financial Officer, too, slipped 1.5 per cent to Rs 7.5 crore in FY23 from Rs 7.4 crore, in the year-ago period.
 

Change in management positions: Sanjiv Mehta will step down as CEO and MD of the company after serving ten years at the company. He will join Danone Board of Directors, a French food giant, with effect from July 1, 2023. Rohit Jawa will assume his responsibility with effect from June 27, 2023.
 

Evolving distribution landscape: The company's B2B app, Shikhar, is now present across 1.2 million retail outlets. Their D2C business, too, has grown to 16 brand websites and covers around 9 million retail stores. It is also the first FMCG company to participate in the Open Network for Digital Commerce (ONDC).
 

Dapada factory joins WEF's Global Lighthouse Network: The company's factory in Dapada a became the first manufacturing site in the Indian FMCG industry to join the World Economic Forum’s Global Lighthouse Network, the world’s most digitally advanced factories. 
 

New product launches: Tresemme launched pro-pure range in the clean beauty space, Indulekha's new ayurvedic hair serum and mask, Horlicks Millet Chocolate flavour, Lakme's Lumi Cream, Kissan Hazelnut Choco Peanut Spread, and extensive beauty brand Novology.