Hindustan Unilever EBITDA surged on 14.1% in 2015 and EBITDA Margin increased slightly on 0.72 pp from 16.6% to 17.4%

08-05-2015 • About Hindustan Unilever ($HINDUNILVR) • By InTwits

Hindustan Unilever reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Hindustan Unilever has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 11.7%.
• CAPEX is quite volatile: 42,278 in FY2015, 36,985 in FY2014, 34,987 in FY2013, 47,327 in FY2012, 85,473 in FY2011
• The company has highly profitable business model: ROIC is at 133.9%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Hindustan Unilever ($HINDUNILVR) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	196,478	229,877	263,172	285,394	311,997	9.3%
EBITDA	27,475	34,836	42,053	47,457	54,137	14.1%
Net Income	22,961	27,907	38,290	39,456	43,631	10.6%
Balance Sheet
Cash	17,757	10,091	5,334	9,306	9,051	-2.7%
Short Term Debt	0	0	163	371	360	-3.0%
Long Term Debt	0	0	84	84	70	-17.1%
Cash flow
Capex	3,334	2,806	4,415	6,064	6,057	-0.1%
Ratios
Revenue growth	-60.1%	17.0%	14.5%	8.4%	9.3%
EBITDA growth	-3.4%	26.8%	20.7%	12.8%	14.1%
EBITDA Margin	14.0%	15.2%	16.0%	16.6%	17.4%	0.7%
Net Income Margin	11.7%	12.1%	14.5%	13.8%	14.0%	0.2%
CAPEX, % of revenue	1.7%	1.2%	1.7%	2.1%	1.9%	-0.2%
ROIC	96.0%	99.9%	114.4%	133.0%	133.9%	0.9%
ROE	85.0%	87.0%	117.0%	123.3%	115.4%	-7.9%
Net Debt/EBITDA	-0.6x	-0.3x	-0.1x	-0.2x	-0.2x	0.0x

Revenue and profitability

The company's Revenue increased on 9.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 9.0% to 10.6% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Hindustan Unilever had CAPEX/Revenue of 1.9%. Hindustan Unilever showed small growth in CAPEX/Revenue of 0.72 pp from 1.2% in FY2012 to 1.9% in FY2015. For the last three years the average CAPEX/Revenue was 1.9%.

Return on investment

The company operates at high and attractive ROIC (133.92%) and ROE (115.35%). ROIC increased slightly on 0.93 pp from 133% to 134% in FY2015. ROE decreased on 7.9 pp from 123% to 115% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.0x. Net Debt / EBITDA increased on 0.027x from -0.2x to -0.2x in FY2015. Debt decreased on 5.6% in FY2015 while cash decreased on 2.7% in FY2015.

Appendix 1: Peers in Personal Products

Below we provide Hindustan Unilever benchmarking against other companies in Personal Products industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Procter & Gamble Hygiene & Health Care ($PGHH)	-65.3%	29.4%	29.9%	21.5%
Godrej Consumer Products ($GODREJCP)		32.0%	31.7%	18.6%	8.7%
Dabur India ($DABUR)		29.3%	16.3%	15.0%	10.3%
Colgate-Palmolive (India) ($COLPAL)	-55.8%	17.8%	17.5%	13.1%
Emami ($EMAMILTD)	-53.7%	16.6%	16.9%	7.2%
Median (7 companies)	-55.8%	28.1%	17.5%	13.1%	10.3%
Hindustan Unilever ($HINDUNILVR)		17.0%	14.5%	8.4%	9.3%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Emami ($EMAMILTD)	21.8%	20.9%	20.5%	24.3%
Bliss Gvs Pharma ($BLISSGVS)		27.2%	28.1%	20.9%
Procter & Gamble Hygiene & Health Care ($PGHH)	16.6%	16.3%	15.4%	20.7%
Colgate-Palmolive (India) ($COLPAL)	22.6%	21.7%	21.0%	18.6%
Dabur India ($DABUR)	18.7%	16.2%	16.0%	16.3%	16.8%
Median (7 companies)	18.2%	18.1%	16.0%	18.6%	16.0%
Hindustan Unilever ($HINDUNILVR)	14.0%	15.2%	16.0%	16.6%	17.4%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bliss Gvs Pharma ($BLISSGVS)		8.7%	5.0%	16.7%
Colgate-Palmolive (India) ($COLPAL)	1.8%	3.8%	4.9%	9.0%
Procter & Gamble Hygiene & Health Care ($PGHH)	5.5%	4.2%	2.2%	7.2%
Emami ($EMAMILTD)	4.0%	8.0%	5.0%	3.6%
Dabur India ($DABUR)	22.7%	4.4%	3.9%	3.0%	3.4%
Median (7 companies)	5.7%	4.2%	4.9%	3.6%	2.6%
Hindustan Unilever ($HINDUNILVR)	1.7%	1.2%	1.7%	2.1%	1.9%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Colgate-Palmolive (India) ($COLPAL)	134.8%	121.4%	120.4%	104.4%
Emami ($EMAMILTD)	28.2%	31.5%	36.7%	43.3%
Procter & Gamble Hygiene & Health Care ($PGHH)	25.2%	28.1%	30.3%	43.2%
Dabur India ($DABUR)	36.5%	29.4%	28.7%	30.8%	31.3%
Marico ($MARICO)	25.9%	23.2%	22.6%	26.9%	36.1%
Median (9 companies)	25.7%	25.6%	28.7%	26.9%	31.3%
Hindustan Unilever ($HINDUNILVR)	96.0%	99.9%	114.4%	133.0%	133.9%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bliss Gvs Pharma ($BLISSGVS)		0.0x	1.1x	1.9x
Godrej Consumer Products ($GODREJCP)	2.7x	1.6x	1.7x	1.5x	1.7x
Cupid ($CUPID)	2.2x	1.7x	0.5x	1.4x
Marico ($MARICO)	1.4x	1.5x	1.3x	0.9x	0.3x
Dabur India ($DABUR)	1.0x	0.8x	1.2x	0.3x	0.5x
Median (8 companies)	0.9x	0.8x	0.8x	0.6x	0.5x
Hindustan Unilever ($HINDUNILVR)	-0.6x	-0.3x	-0.1x	-0.2x	-0.2x

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