Conference Call by Hindustan Unilever Management with analysts on the results of the quarter Q4FY20 and financial year. Listen in to the full earnings transcript.
Management attending the call: Sanjeev Mehta Chairman and MD, Srinivas Pathak CFO
Introductory comments
We are falling back on our fundamentals at this point. There are many unknowns right now - the virus trajectory, treatments, timeline of containment measures, structural damages. But we do know that we have a strong portfolio and a sound balance sheet, and capable teams to take us through this period. Rural growth over the year slower than FY19.March second half: slowdown was exacerbated by the ensuing national lockdown. Adverse impact was already being felt by state actions such as border lockdowns and restrictions. A large part of the negative growth in March was because of distributor and trade inventory coming down.
15 day disruption impacted 10% sales 6% distributor inventory, 4% trade inventory. When a smooth supply chain gets disrupted, there are big upheavals that happen to the pipeline. We are now working to smoothen these disruptions as we have moved back up 70-80% level.
Completed the GSK Consumer Healthcare acquisition on April 1. Well positioned to scale up this business. Full year performance: Delivered growth of 2% domestic consumer growth, and 11.5% net profit growth.
Quarterly performance
Aggregate level corporate market share grew over 50 bps. Volumes lowered by 7%, as COVID impact started to happen since mid March. Market growth of 2% in the quarter - ours would have been close to 3%. Instead we had a revenue decline about 9%. 50% of that loss can be attributed to loss at distributor locations. Balance from lower stock of retailers and loss of consumer demand.
Quarter EBITDA: Delivered an EBITDA of 2065 crores. On a reported basis this would be a 40 bps reduction in EBITDA margin, but on a comparable basis it came to a 116 bps expansion, adjusting for in days. Net profit saw a decline as well in the quarter of 3.9% YoY.