Pz Cussons Plc · LSE:PZC
Pz Cussons — Investor Day (July 2023)
57 slides from Pz Cussons's investor day presentation, Jul 4, 2023
Slide 1: Childs Farm Capital Markets Event
Childs Farm Capital Markets Event 4TH July 2023
Slide 2: Welcome to the world of Childs Farm
Welcome to the world of Childs Farm 2
Slide 3: Introduction
oe Childs Farm’
Slide 4: Agenda and Speakers
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A AGENDA 1 Introduction SPEAKERS 2 Global Baby Market Sarah Pollard Chief Financial Officer 3 Introduction to Childs Farm Andrew Geoghegan 4 Group Chief Marketing Transformatio
Slide 5: Childs Farm - a highly successful acquisition
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A CHILDS FARM - A HIGHLY SUCCESSFUL ACQUISITION A unique brand in an attractive market Highly complementary fit for PZ Cussons Good progress to date, building on strong foundat
Slide 6: Leveraging PZ Cussons' strategy to grow Childs Farm
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A LEVERAGING PZ CUSSONS’ STRATEGY TO GROW CHILDS FARM BUILD SERVE REDUCE DEVELOP GROW BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY 6 6
Slide 7: Global Baby Market
Global Baby Market
Slide 8: PZ Cussons' baby business in context
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A PZ CUSSONS’ BABY BUSINESS IN CONTEXT Baby BABY 19% PERSONAL CARE BABY FOOD FY23 GROUP REVENUE SPLIT CATEGORY ATTRACTIVENESS • Higher margin • Resilient demand • Synergies wit
Slide 9: Baby personal care is a large category growing around 10% per annum
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A BABY PERSONAL CARE IS A LARGE CATEGORY GROWING AROUND 10% PER ANNUM BASED UPON OUR GEOGRAPHIC FOOTPRINT WE ARE ALREADY IN 2 OF THE TOP 5 PRIORITY MARKETS OF UK, ANZ, INDONESI
Slide 10: Growth drivers differ by type of market
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A GROWTH DRIVERS DIFFER BY TYPE OF MARKET DEVELOPING MARKETS DRIVEN BY VOLUME GROWTH … DEVELOPED MARKETS DRIVEN BY PREMIUMISATION… Rising disposable incomes Increasing importan
Slide 11: Universal factors and local nuances driving the category
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A WE UNDERSTAND BOTH THE UNIVERSAL FACTORS AND LOCAL NUANCES DRIVING THE CATEGORY UNIVERSAL FACTORS LOCAL NUANCES Indonesia Africa Hygiene, sleep, and comfort Bathing typically
Slide 12: Technical and commercial expertise from the wider PZ Cussons Group
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A WE HAVE STRONG TECHNICAL AND COMMERCIAL EXPERTISE FROM THE WIDER PZ CUSSONS GROUP Existing capabilities…. Newly-formed ‘Parentology Council’ to formally share understanding a
Slide 13: Introduction: a few words from our founder
Introduction: a few words from our founder
Slide 14: A few words from our founder
A few words from our founder Joanna Jensen Founder of Childs Farm
Slide 15: Childs Farm Overview
Childs Farm Overview
Slide 16: Childs Farm today
Childs Farm today Revenue Market share in UK Industry-leading Net Promoter Score £14m 13% 43 >100,000 total distribution points in the UK: High Street Grocery Online 16 FY23 revenue. Market share based upon total Child and Baby category for 52 weeks ended 10 June 2023. See appendix for further detai
Slide 17: Childs Farm product split
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A Childs Farm product split SUN CHILD FY23 sales BABY 17
Slide 18: Our Consumer - The Mindful Mum
Our Consumer – The Mindful Mum Wants to do right by her child, herself and the planet Demographics Touchpoints • 25-44 (30-40) • Social media: Facebook & • ABC1 (50-74k) Instagram • Educated with a bachelors • Web: researching degree or masters degree • Word of mouth • Lives in the suburbs of key ci
Slide 19: Key brand attributes dominate share of importance for purchasing
Key Childs Farm brand attributes dominate share of importance for purchasing Relative share of importance of each attribute when purchasing Proven to be good for sensitive skin Good value for money Proven to be good for skin conditions Made with natural ingredients Whether it’s a trusted brand
Slide 20: There is clear white space to win
There is clear white space to win More effective than medicinal brands, plus fun and engaging for the children Fun Cosmetic Effective We believe we can beat these with a combination of: 1. Better or equal performance 2. Addition of the fun factor! Serious 3. Fragrance differentiation TYPICAL / DIREC
Slide 21: Brand strength provides potential for expansion into adjacent categories
Brand strength provides the potential for expansion in to adjacent categories over time 9 IN 10 consumers are interested in product extensions 21 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 22: Our winning formula
Our winning formula
Slide 23: The brand was ripe for acceleration
The brand was ripe for acceleration 3. LEVERAGING THE 1. ELEVATING THE 2. NEW PRODUCT 4. INTERNATIONAL PZC PLAYBOOKS TO BRAND PROPOSITION DEVELOPMENT EXPANSION “RECRUIT NEW MUMS” 23 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summ
Slide 24: 1. Elevating the brand proposition
1. Elevating the brand proposition
Slide 25: A clear mission to unlock the world for children with sensitive skin
We have a clear mission to unlock the world for children with sensitive skin Human truth Cultural Brand truth truth Core Brand Belief: Care without fun takes the joy out of childhood 25 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials &
Slide 26: Our Magic Formula: Funbelievably Kind
Our Magic Formula: Enabling children and parents to live in an open Funbelievably Kind world Connection between a parent and child is precious. Love lives in these moments, and imagination runs free. But when you have sensitive skin it’s not like that. Touch becomes a source of stress not solace and
Slide 27: Everything we do starts with serving parents' everyday need occasions
Everything we do, starts with serving our parents’ everyday need occasions 27 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 28: Products deliver on more occasions and needs
Combined with deeper understanding of a baby/child’s skin, our products deliver on more occasions and needs Milia Weaning Dry Skin Cradle Cap Illness Nappy Dribble Rash Teething Skin to Skin 28 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Finan
Slide 29: A diverse product range of superior experiences
A diverse product range of superior experiences A complete offering for new-borns to children across all personal care sub-categories & formats Baby Child Suncare OatDerma™ SlumberTime™ Calm and gentle, nurturing Making every bath time fun We bring our fun outdoors Superior nourishment Our distincti
Slide 30: Sustainability has been top of Joanna's vision from the start
Sustainability has been top of Joanna’s vision from the start and we continue that today 30 *from June 2020- May 2023 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 31: A right to win against our key competitors
All of this gives us a right to win against our key competitors Minimum Responsibly No animal Vegan PCR content/ Carbon Only B Corp Not Made in 95% Natural & ethically testing Sustainable Neutral Plus sustainable China Origin sourced packaging organisation palm oil derivatives ✓ ✓ ✓ ✓ 100% ✓ ✓ ✓ ✓
Slide 32: 2. New Product Development
2. New Produg Development TA Childs Farm v | a" }
Slide 33: PZ Cussons Approach to Innovation
PZ Cussons Approach to Innovation OPPORTUNITY/ INSIGHT-LED Brand/Business Consumer Need Need Informed by Informed Brand Planning by Insight REMARKABLE INNOVATION Technical Possibilities Led by R&D SOLUTION-LED 33 Introduction Global Baby Market Introduction to Childs Far\m Childs Farm Overview Our W
Slide 34: Successful launch of SlumberTime
Successful launch of SlumberTime The 1st 3 step routine to calm both babies skin & their senses 34 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 35: A Strong Early Response
A Strong Early Response #1 Rate of Sales SKU in Baby in Boots and Tesco 15% of total D2C revenue +10% with 70% of customers new to Incremental the site category sales in Boots and Tesco 35 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials
Slide 36: 3. Leveraging our brand-building playbook to recruit new mums
3. Leveraging our brand-building playbook to recruit new Mums
Slide 37: The PZ Cussons brand-building playbook
THE PZ CUSSONS BRAND-BUILDING PLAYBOOK PZ Cussons Growth Wheel 37 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 38: Significant growth in total distribution under PZ Cussons' ownership
Significant growth in total distribution under PZ Cussons’ ownership We have grown distribution across our existing ….And added new customers. customers…. +21% April 2023 June 2023 Sept 2023 Oct 2023 AT ACQUISITION TODAY 38 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Over
Slide 39: Social led game plan focused on recruiting new mums
Brought together in a social led game plan focused on recruiting new mums +46% Follower growth in 10 months Followers and engagement are ahead of the competition Engagement Childs Farm 1.1% My Little Coco 0.2% Dove Baby 0.1% Nala’s Baby 0.4% Aveeno Baby 0.5% Johnson’s Baby 0.3% 0 50 100 150 200 July
Slide 40: Authentic ambassador partnership to endorse our proposition
Build an authentic credible partnership with an ambassador to endorse our proposition & products 15 pieces of tier 1 press coverage Combined reach of over 4 UK & Ireland million PR event 70+ organic story mentions Stories Engagement: 3.2% 40 Introduction Global Baby Market Introduction to Childs Far
Slide 41: Childs Farm's first ever TV Commercial
Childs Farm’s first ever TV Commercial 41 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 42: 4. International expansion
“am Childs Farm’ ee ( d e H/ ~ 4, International : expansion
Slide 43: Ambition to establish Childs Farm as No.1 choice across key international markets
Ambition to establish Childs Farm as the No.1 choice for our mindful mums across key international markets In markets with Targeted retail Leverage Targeting upper Utilise our a proven right channels, ‘differentiated premium tier in provenance, to win focusing on dualism’: the category founder and b
Slide 44: The UK is just the beginning
The UK is just the beginning… Today FY24 FY25+ TRANSFORM MUST WIN NEW TEST, LEARN AND EXISTING TRADING TERRITORIES EXPLORE MARKETS Market: UK ANZ Ireland Thailand DE AU Spain India Middle East CH USA Market £0.2bn £0.5bn £1.4bn £0.6bn (c.13% Size: share) 44 Market sizes exclude nappies and includes
Slide 45: In Germany our product beats the leading brand 2 to 1 in a blind test
In Germany our product beats the leading brand 2 to 1 in a blind test Statistically significant preference of Childs Farm over Weleda Derma 46 17 19 16 2 Definitely prefer Somewhat prefer Both equally Somewhat prefer Definitely prefer Childs Farm Childs Farm Weleda Weleda Source: Ayton in-home Usage
Slide 46: Online-first approach to the £1bn US market
Online-first approach to the £1bn US market Online Regional launch National launch FY24 FY25+ June July-Aug Amazon launch DTC Launches 46 Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A
Slide 47: Partnership and endorsement from the leading US distributor
Partnership and endorsement from the leading US distributor “Once I saw the data and the background of how it has grown in the UK….I can see in the US that, because of Joanna and what she’s built, how we can succeed. So we’re really excited to launch in the US.” Scott Emerson, CEO and founder, The E
Slide 48: Financials and Summary
Financials and Summary
Slide 49: Ambition to triple revenue over five years with operating margins reaching 20%+
Ambition to triple revenue over five years with operating profit margins reaching 20%+ £40m+ x3 9 in 10 Childs Farm consumers are Significant interested in other opportunity in, and products interest from, India and Spain £14m Existing footprint US market is 5x the size of the UK and with improvemen
Slide 50: Childs Farm - a highly successful acquisition
Introduction Global Baby Market Introduction to Childs Farm Childs Farm Overview Our Winning Formula Financials & Summary Q&A CHILDS FARM - A HIGHLY SUCCESSFUL ACQUISITION A unique brand in an attractive market Highly complementary fit for PZ Cussons Good progress to date, building on strong foundat
Slide 51: Childs Farm
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Slide 52: Appendix
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Slide 53: Today's Speakers
Today’s Speakers Sarah Pollard Andrew Geoghegan Paul Yocum Katie Barker Chief Financial Chief Marketing Managing Director, Global Head of Sales and Officer Transformation Officer Business Development Marketing, Childs Farm Experience at PZ Cussons: 2+ years 2 years 2 years 15 years Overview: Board m
Slide 54: Significant headroom for UK growth
Significant headroom for UK growth given half of Households buying the category are not currently aware of Childs Farm 3.7m Households buy baby/child specific hair/skin care 5.6m Households have 1.6m Households aware of Childs children aged 0-7 years Farm 0.5m Households buy Childs Farm regularly 28
Slide 55: PZ Cussons 'Parentology Council'
We have established a PZ Cussons ‘Parentology Council’ to share understanding and best practice REVENUE CORE BRAND CONSUMER INSIGHTS INNOVATION GROWTH AND RANGES CONNECTIONS MANAGEMENT What are the How can we better Packaging Which messages Pricing and trends across use our portfolio of innovations
Slide 56: Net Promoter Score analysis
Net Promoter Score analysis Source: Strategy&, August 2021
Slide 57: Disclaimer
Disclaimer Cautionary note regarding forward-looking statements This announcement contains certain forward-looking statements relating to expected or anticipated results, performance or events. Such statements are subject to normal risks associated with the uncertainties in our business, supply chai