Pz Cussons Plc · LSE:PZC
Pz Cussons — FY2024 Earnings Presentation
33 slides from Pz Cussons's earnings presentation, Sep 18, 2024
Slide 1: 2024 Full Year Results
2024 FULL YEAR RESULTS 18 SEPTEMBER 2024
Slide 2: Agenda
AGENDA Introduction Financial review Strategic update Summary Q&A 2
Slide 3: Overview
OVERVIEW TRANSFORMING INTO A BUSINESS WITH A MORE FOCUSED PORTFOLIO AND STRONGER BRANDS DELIVERING SUSTAINABLE PROFITABLE GROWTH 1 2 3 Continued operational Portfolio transformation Favourable performance progress progressing trends Delivery against FY24 strategic Sale of St. Tropez underway; Q1 LFL
Slide 4: Financial Review
FINANCIAL REVIEW SARAH POLLARD - CHIEF FINANCIAL OFFICER FOR EVERYONE, FOR LIFE, FOR GOOD. 4
Slide 5: Summary Financials
SUMMARY FINANCIALS REPORTED RESULTS ARE MATERIALLY IMPACTED BY THE DEVALUATION OF THE NAIRA WHICH DECLINED 70% DURING FY24 £m unless otherwise stated FY24 FY23 19.6% (£128.4m) reported revenue decline of which £130.6m attributable to Naira devaluation Revenue 527.9 656.3 LFL revenue growth (%) 4.4%
Slide 6: Group Revenue
GROUP REVENUE CONSTANT CURRENCY REVENUE GROWTH DRIVEN BY GROWTH IN AFRICA AND UK PERSONAL CARE LFL +4.4% Price/mix growth of 6.8% Volume (2.4)% 506.4 (3.8) (5.9) 31.8 (0.6) 527.9 FX1 (149.9) Double digit % growth in UK Decline Pricing-driven Closure of in- Personal Care in Beauty Growth in ANZ and o
Slide 7: Operating Profit
OPERATING PROFIT CONSTANT CURRENCY GROWTH OFFSET BY FX 3.6 (3.0) 2.4 (21.4) 3.4 73.3 58.3 Improvement in ANZ gross margin Family Care and Single-digit % UK gross margin improvement and Translational Wilmar Joint underlying offsetting revenue Asia overheads FX impact Venture growth growth decline red
Slide 8: Segmental Performance: Europe and Americas
SEGMENTAL PERFORMANCE: EUROPE AND AMERICAS VERY STRONG GROWTH IN UK PERSONAL CARE AND CHILDS FARM PROGRESS OFFSET BY A DECLINE IN BEAUTY £m unless otherwise stated FY24 FY23 Revenue 200.7 205.8 LFL revenue growth (1.9)% (0.5)% UK Personal Care grew double-digits. Customer de-stocking in Beauty Opera
Slide 9: Segmental Performance: APAC
SEGMENTAL PERFORMANCE: APAC STRONG MARGIN GROWTH AND IMPROVING REVENUE MOMENTUM IN Q4 £m unless otherwise stated FY24 FY23 ANZ: Strong, volume-led growth in Morning Fresh and Radiant Revenue 175.2 190.7 Indonesia: Revenue decline due to reduction in consumer spend across category. Returned to growth
Slide 10: Segmental Performance: Africa
SEGMENTAL PERFORMANCE: AFRICA LIMITED VOLUME DECLINE DESPITE PRICE INCREASES £m unless otherwise stated FY24 FY23 Revenue 151.7 256.3 40.8% reported decline, primarily due to Naira devaluation LFL revenue growth 26.5% 13.4% Price/mix driven. Mid-single digit volume declines. Volumes grew in Q4 Opera
Slide 11: Cash Flow and Net Debt
CASH FLOW AND NET DEBT COMPARABLE GROSS AND NET DEBT POSITIONS HAVE IMPROVED SIGNIFICANTLY DUE TO CASH GENERATION AND REPATRIATION Gross debt £84.6m reduction in Naira cash balance Net debt/ (cash) gross debt, funded in now at normal levels part by repatriation £139.9m reduction of Naira in Naira ca
Slide 12: FY25 Outlook
FY25 OUTLOOK BASED ON Q1 AVERAGE FX RATES, FY25 OPERATING PROFIT IS EXPECTED TO BE £47-53M FY25 GUIDANCE - AT CURRENT FX RATES UNCERTAINTY DUE TO NAIRA MOVEMENTS £58.3m c. £40m £47-53m FX rates: (NGN/GBP): FY24 average FY24 closing rate Q1 FY25 average 1,256 1,893 1,9793 c.£18m adverse FX movement 3
Slide 13: Q1 FY25 Performance
Q1 FY25 PERFORMANCE STRONG REVENUE GROWTH AT THE START OF FY25 Q1 LFL REVENUE GROWTH COMMENTARY 1.7% growth ex-Africa Group 4.7% Price/mix: 5.7% Volume: (1.0)% Price/mix: (1.6)%; Volume 3.3% Broad-based, volume-led growth across most Europe and brands 4.6% Americas ANZ and Indonesia brand growth ove
Slide 14: Strategic Update
STRATEGIC UPDATE JONATHAN MYERS - CHIEF EXECUTIVE OFFICER
Slide 15: Our Strategy in Summary
OUR STRATEGY IN SUMMARY BUILD SERVE REDUCE DEVELOP GROW BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY Introduction Financial review Strategic update Summary 15
Slide 16: A Reminder of Our Priorities for FY24
A REMINDER OF OUR PRIORITES FOR FY24 WE HAVE DELIVERED AGAINST THE FY24 PRIORITIES WE ESTABLISHED AT THE BEGINNING OF THE YEAR 1 Further simplifying and strengthening Nigeria 2 Returning the UK to sustainable, profitable growth 3 Driving further expansion from the core 4 Continuing to transform capa
Slide 17: Our FY24 Priorities: Nigeria
NIGERIA OUR FY24 PRIORITIES: NIGERIA WE HAVE ADDRESSED US DOLLAR SOURCING CHALLENGES WHILST STRENGTHENING THE BUSINESS IMPROVEMENTS IN CASH AND FUNDING… …WHILST EXPANDING OUR ROUTE TO MARKET AND MAINTAIN BRAND POSITIONS Reduced requirement for US Dollars due to: Market shares of key brands have +50%
Slide 18: Our FY24 Priorities: UK
UK OUR FY24 PRIORITIES: UK CONTINUED SIGNIFICANT IMPROVEMENT IN PROFITABILITY IN UK PERSONAL CARE …contributing to significantly improved performance for the UK Personal Care business UK Personal Care op. profit margin • >20% revenue growth • Returned to growth • Increased listings with 12% growth f
Slide 19: Our FY24 Priorities: Expansion
EXPANSION OUR FY24 PRIORITIES: EXPANSION SECOND YEAR OF DOUBLE-DIGIT CHILDS FARM REVENUE GROWTH PLUS ONGOING BUSINESS INTEGRATION CONTINUED GROWTH IN UK MARKET SHARE AND INTERNATIONAL DISTRIBUTION IN-HOUSE PRODUCTION COMMENCED IN AUGUST Value sales growth, FY241 • Launched in Premium Grocery Chain W
Slide 20: Our FY24 Priorities: Capabilities
CAPABILITIES OUR FY24 PRIORITIES: CAPABILITIES COMBINING UK PERSONAL CARE AND UK BEAUTY WILL SAVE £3M P.A. AND ADDRESS PREVIOUS UNDERPERFORMANCE UK Personal Scale Care Combined business is c.30% larger than Personal Care Two separate teams, processes Simplification and partners One team and one face
Slide 21: Portfolio Transformation
PORTFOLIO TRANSFORMATION CRYSTALISE VALUE FOR SHAREHOLDERS FROM ASSETS BETTER SUITED TO ALTERNATIVE OWNERSHIP STRUCTURES Africa portfolio PZ Cussons’ only material presence Portfolio includes non-core categories in US and Beauty of Cooking Oils and Electricals Limited synergy with remainder Signific
Slide 22: Our Priorities for FY25
OUR PRIORITES FOR FY25 WE ARE CLEAR ON OUR PRIORITIES FOR THE COMING YEAR 1 Drive our businesses in the UK, ANZ and Indonesia 2 Strengthen our brand-building capabilities and embed our new operating model 3 Deliver the portfolio transformation to maximise shareholder value Introduction Financial rev
Slide 23: Summary
SUMMARY FOR EVERYONE, FOR LIFE, FOR GOOD. 23
Slide 24: Key Messages
KEY MESSAGES TRANSFORMING INTO A BUSINESS WITH A MORE FOCUSED PORTFOLIO AND STRONGER BRANDS DELIVERING SUSTAINABLE PROFITABLE GROWTH 1 2 3 Portfolio Continued underlying Confident in long-term transformation progress opportunities Actions are well underway to We have continued to PZ Cussons is trans
Slide 25: Q&A
Q&A FOR EVERYONE, FOR LIFE, FOR GOOD. 25
Slide 26: Appendix
APPENDIX FOR EVERYONE, FOR LIFE, FOR GOOD. 26
Slide 27: Foreign Exchange Analysis
FOREIGN EXCHANGE ANALYSIS £m % FY24 revenue FY24 FY23 % change Revenue impact (£m) GBP 34% 1.00 1.00 - - NGN 24% 1,257 536 (57)% (130.6) AUD 17% 1.92 1.78 (7)% (6.7) IDR 12% 19,550 18,174 (7)% (5.3) USD 6% 1.26 1.20 (5)% (1.9) Other 7% - - (5.4) Total 100% (149.9) 27 Table shows the impact of transl
Slide 28: Revenue Split by Market
REVENUE SPLIT BY MARKET Other 5% Nigeria UK Africa 24% 34% Europe & Americas £151.7m FY24 £200.7m revenue: £527.9m Other 4% Indo US 11% 4% ANZ 18% APAC £175.2m 28 Excludes central revenue of £0.3m. St. Tropez contributed £32m revenue in FY24.
Slide 29: Cash Flow and Net Debt
CASH FLOW AND NET DEBT £m FY23 Net Debt / (Cash) (5.7) Change2 0.3 41.6 (25.8) (21.9) 8.7 FX and other 120.7 FY24 Net Debt / (Cash)1 115.3 of which gross debt 166.6 £m of which gross cash (51.3) EBITDA 75.9 (2.9) Adjusting items (12.1) Working capital3 (9.4) Capex (6.1) (0.3) Share of JV results (10
Slide 30: Adjusting Items and Foreign Exchange Impact on Statutory Accounts
ADJUSTING ITEMS AND FOREIGN EXCHANGE IMPACT ON STATUTORY ACCOUNTS ADJUSTING ITEMS FOREIGN EXCHANGE IMPACTS £m unless otherwise stated FY24 Statement of Revaluation of ‘quasi-equity’ intra-group loans where the change in value does changes in equity £70.6m not flow through the P&L given the Simplific
Slide 31: Working Capital Reconciliation
WORKING CAPITAL RECONCILIATION £m unless otherwise stated FY24 FY23 Inventories 2.3 (8.4) Movement in receivables mainly relates to the FX impact on Naira-denominated Trade and other receivables 15.3 (13.4) receivables in the UK. Trade and other payables 77.5 30.3 £77.5m largely driven by increase i
Slide 32: Historic NGN/GBP Rates
HISTORIC NGN/GBP RATES Q1 FY25: 0 FY23: 536 FY24: 1,256 1,979 500 1000 1500 2000 31 Aug 2024 closing rate: 2,100 1 June 2022 1 December 2022 1 June 2023 1 December 2023 1 June 2024 32 Rates shown are NGN/GBP rates used to translate the P&L in the respective periods
Slide 33: Glossary
GLOSSARY Term Definition APM Alternative performance measure Adjusted earnings per share Earnings per share from continuing operations adjusted for the impact of adjusting items Brand Investment An operating cost related to our investment in brands (previously 'Media & Consumer') Adjusted operating