HUL Q1FY25: Ad & promotion spends increase by 11% compared to Q1FY24

Hindustan Unilever reported a 1.5% year-on-year increase in its net profit for Q1 FY25, reaching Rs 2,538 crore.

Hindustan Unilever (HUL) announced its results for the quarter ended June 30, 2024. HUL reported a 1.5% year-on-year increase in its Q1 FY25 net profit, reaching Rs 2,538 crore. The FMCG firm's total sales for the April-June quarter rose by 2% year-on-year to Rs 15,523 crore. The total ad and promotion spends for Q1 FY25 increased by 11% compared to Q1 FY24, rising to Rs 1,644 crore from Rs 1,481 crore.

Home Care delivered a strong performance with 4% USG and high-single digit UVG. Fabric Wash grew volumes in high-single digit led by structural actions taken across the portfolio, in both mass and premium segments. Household Care grew volumes in mid-single digit driven by strong performance in premium dishwash portfolio.

Beauty & Wellbeing delivered 3% USG with mid-single digit UVG. Hair Care grew volumes in double-digit driven by a strong performance in Sunsilk, Clinic Plus and Dove. Skin care and Colour cosmetics had a muted volume performance in the quarter driven by decline in mass portfolio. Investments in channels as well as formats of the future and premium portfolio continued to yield healthy results.

Personal Care delivered low-single digit UVG while USG declined by 5%. Skin Cleansing had a low-single digit volume growth but revenue declined on account of pricing actions taken. Bodywash continues to strengthen market leadership. Oral Care delivered mid-single digit growth driven by pricing. During the quarter, Lux and Lifebuoy were re-launched with a superior product formulation.

Foods & Refreshment had a USG of 1% with volumes remaining stable. The category was impacted by a harsh summer season. Nutrition Drinks (Horlicks & Boost) had subdued performance in the quarter albeit continuing to win competitively. Adult nutrition range performed well. Tea continued to cement its market leadership through value and volume share gains. Coffee delivered double digit growth driven by pricing. Foods grew volumes in low-single digit led by outperformance in Food Solutions, Mayonnaise, Peanut Butter, and International sauces.

Ice-cream delivered double-digit volume growth aided by strong launches during the summer season. Bru’s specialty coffee range ‘Southern Trails’, Kwality Walls’ Strawberry Sundae, and Hellman’s 5 in 1 mayonnaise seasoning mix were launched in the quarter.

EBITDA margin at 23.8% was up by 20 bps versus JQ’23. Gross Margin improved 170 bps and A&P investments increased 90 bps.

Rohit Jawa, CEO and managing director commented, ‘HUL’s first quarter performance reflects our decisive actions of transforming our portfolio in high growth spaces aided by gradual recovery of rural markets. Our commitment to unlocking access to aspiration, market making and premiumisation supported by our distinctive capabilities is a key driver of our competitive edge. We continue to focus on driving competitive volume growth, generating fuel to invest behind our brands and making our business future fit. We remain confident of the medium to long term potential of Indian FMCG sector. With our strong brands, execution prowess and distribution might, HUL is well positioned to leverage this growth opportunity as we continue transforming our business to outperform."