HUL board approves hiking royalty to parent from 2.65 per cent to 3.45 per cent of turnover

The company asserted that the new arrangement will ensure that it "continues to receive the technology, services and IP support from Unilever".

Published: 19th January 2023 06:21 PM  |   Last Updated: 20th January 2023 08:37 AM   |  A+A-

Hindustan Unilever Ltd.

Hindustan Unilever Ltd.

Express News Service

NEW DELHI: Board of FMCG major Hindustan Unilever (HUL) has approved raising royalty and central services arrangement fee by 80 bps to its parent Unilever Plc for getting tech, trademark licenses and services.In the new agreement, the fee is increased from 2.65% in FY22 to 3.45% of turnover in staggering manner over a period of three years.

This is the first time in 10 years such a hike is undertaken as the previous agreement was inked in January 2013 for a period of 10 years. This time the arrangement is effective February 1, 2023, for a period of five years.A 45 bps raise will take place from February to December 2023, followed by a 25 bps from January to December 2024 and a 10 bps from January 2025, HUL informed the exchanges. This arrangement is subject to regulatory approvals.

HUL reported a revenue of Rs 51,193 crore in financial year 2022 and paid 2.65% of the turnover as royalty fee to parent Unilever. Its turnover stood at Rs 43,516 crore in the first nine months of FY23, up   17%. “India remains one of the top three strategically prioritised markets for Unilever with dialled up access to innovations, investments, capabilities, and talent development,” it said.HUL on Thursday reported a 7.9% YoY) increase in its net profit to Rs 2,481 crore for the third quarter of FY23.

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