Markets like India added most to margins: Unilever

Unilever, at the Morgan Stanley Global Consumer and Retail virtual conference on Tuesday, said the minority view was that the company needed to reset its margin in order to improve the market share.

MUMBAI: British consumer giant Unilever said some of its largest businesses including in India added the most to its margin in recent years, in contrast with the view that the company’s focus on higher sales growth could hurt the margin.

Unilever, at the Morgan Stanley Global Consumer and Retail virtual conference on Tuesday, said the minority view was that the company needed to reset its margin in order to improve the market share.

"But some of our fastest growing and most competitive businesses have been with the largest contributors to our significant margin in the last few years. Our Indian business increased its Ebitda (earnings before interest, tax, depreciation and amortisation) by nearly 900 basis points, growing an average 9% in the last 10 years with 75% of the business growing share," chief financial officer Graeme Pitkethly said.


The Indian unit, Hindustan Unilever, is the country’s largest consumer products firm and its performance is considered a proxy for broader consumer sentiment in the local market. Last fiscal year, its Ebitda of Rs 9,600 crore and margin at 25.1% were the highest on record.

In an interaction with ET in October, HUL chairman Sanjiv Mehta had said it had shifted focus to absolute profit and volume share rather than just growing value and margins. Last quarter, HUL reported a 150-basis-point (or 1.5-percentage-point) fall in its gross margin, even as the Ebitda margin rose 30 bps due to cost saving initiatives and synergies from the merger of GlaxoSmithKline’s Indian consumer business with it.
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