Hindustan Unilever sees 1.5% rise in Q1 net profit, ad spends increase by 11%

Hindustan Unilever (HUL) released its financial results for the quarter ending June 30, 2024. The company reported a 1.5% year-on-year increase in Q1 FY25 net profit, reaching Rs 2,538 crore. Total sales for the April-June quarter rose by 2% year-on-year to Rs 15,523 crore. Advertising and promotion spending for Q1 FY25 increased by 11% compared to the same period last year, reaching Rs 1,644 crore from Rs 1,481 crore.

The Home Care segment performed well with a 4% underlying sales growth (USG) and high-single digit underlying volume growth (UVG). Fabric Wash saw high-single digit volume growth driven by strategic actions across both mass and premium segments, while Household Care grew in mid-single digits due to a strong premium dishwash portfolio performance.

Beauty & Wellbeing achieved a 3% USG with mid-single digit UVG. Hair Care volumes grew in double digits thanks to strong performances from Sunsilk, Clinic Plus, and Dove. Skin Care and Color Cosmetics had muted volume growth due to declines in the mass portfolio, although investments in future channels, formats, and premium portfolios continued to yield positive results.

Personal Care saw low-single digit UVG but a 5% decline in USG. Skin Cleansing had low-single digit volume growth, though revenue decreased due to pricing actions. Bodywash maintained market leadership, and Oral Care grew in mid-single digits due to pricing. Lux and Lifebuoy were relaunched with superior formulations during the quarter.

Foods & Refreshment recorded a 1% USG with stable volumes, impacted by a harsh summer. Nutrition Drinks (Horlicks & Boost) underperformed despite competitive wins, while adult nutrition products performed well. Tea continued to strengthen its market leadership in value and volume shares, and Coffee grew in double digits due to pricing. Foods saw low-single digit volume growth, led by strong performance in Food Solutions, Mayonnaise, Peanut Butter, and International sauces.

Ice-cream experienced double-digit volume growth due to strong summer launches. New products included Bru’s specialty coffee range ‘Southern Trails,’ Kwality Walls’ Strawberry Sundae, and Hellman’s 5-in-1 mayonnaise seasoning mix.

The EBITDA margin was 23.8%, up 20 basis points from the previous year. Gross Margin improved by 170 basis points, and advertising and promotion investments increased by 90 basis points.