Strong performances by the power brands saved Hindustan Lever Ltd (HLL) from posting a growth decline in sales during the year ended December 2001. Overall net sales of the company rose 3.50 per cent at Rs 10,972 crore. Net sales of the power brands grew by 6.50 per cent.
With the major contribution coming from the value-added power brands, the net profit of the company grew by 25.3 per cent at Rs 1,641 crore. Net profit margins rose 14.04 per cent in fiscal 2001, from 12.35 per cent in fiscal 2000, while return on net worth improved to 53.93 per cent from 52.65 per cent and earnings per share went up to Rs 7.46 per share from Rs 5.95 per share.
Hindustan Lever's strategy to drive growth from the power brands paid well during the year ended December 2001. The company's annual report for the year shows that sales of 30 power brands rose by 6.50 per cent as against the 3.50 per cent overall growth rate of company.
The company's market share in most of the home and personal care categories, increased as these brands grew faster than the market. For example, the Pepsodent power brand grew by 8 per cent, much higher that the market growth of 2.40 per cent. In the personal wash segment, HLL's power brands grew by 5.30 per cent while overall market show a decline of 9.3 per cent.
In the dishwash segment, HLL's powerbrands grew by 13.50 per cent and the market grew by 13.2 per cent. In the personal care category, oral care brands grew by 8 per cent while the market grew by 2.4 per cent. The company's shampoo brands rose by 16.5 per cent as against market growth of 10.6 per cent. Its skincare brands grew 21.6 per cent while the market grew by 4.4 per cent. In talcum powders, HLL's brands grew 16.3 per cent while the market growth was negative at -0.6 per cent.
The company has a near 60 per cent market share in toilet soaps and over 40 per cent market share in detergents. However, the share of soaps and detergents in HLL's business mix remained around 40 per cent in the last two years. The share of personal products rose to 21 per cent in 2001 from 17 per cent in 2000, while share of foods fell to 33 per cent from 37 per cent in the previous year.
...exports dip
HLL's exports during the year ended December 2001 was lower at Rs 1,845 crore compared with Rs 1,934 crore in 2000. The company suffered a setback in exports for the first time in the last decade. Exports of the company grew from Rs 214 crore in 1992 to Rs 1,152 crore in 1997 and Rs 1,845 crore in 2001. Economic Value Added (EVA) crossed the Rs 1000-crore mark at Rs 1,080 crore in 2001, up 25.87 per cent from Rs 858 crore in 2000. The company's EVA was modest at Rs 41 crore in 1992.
