Pz Cussons Plc · LSE:PZC
Pz Cussons — FY2022 Earnings Presentation
35 slides from Pz Cussons's earnings presentation, Sep 22, 2022
Slide 1: 2022 Full Year Results
2022 FULL YEAR RESULTS MOVING FROM TURNAROUND TO TRANSFORMATION 22 SEPTEMBER 2022
Slide 2: Cautionary note regarding forward-looking statements
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 chain and consu
Slide 3: Agenda
AGENDA 01. 03. INTRODUCTION STRATEGIC UPDATE 02. 04. FINANCIAL REVIEW SUMMARY FOR EVERYONE, FOR LIFE, FOR GOOD. 3
Slide 4: Moving from turnaround to transformation
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY MOVING FROM TURNAROUND TO TRANSFORMATION TWO YEARS OF STRATEGIC PROGRESS AND CONSISTENT PERFORMANCE STRONG FOUNDATIONS FROM WHICH TO TRANSFORM THE BUSINESS SECOND YEAR OF MANAGING NEAR-TERM GOOD PROGRESS IN CONFIDENT IN OUR STRATEGIC PROGRESS VOLATILIT
Slide 5: We are building brands for life
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY WE ARE BUILDING BRANDS FOR LIFE. TODAY AND FOR FUTURE GENERATIONS INCREASED MUST WIN BRAND INVESTMENT VS. FY20 AND IMPROVED RETURNS #1 #1 #1 #1 IN MANUAL DISHWASH IN PRESTIGE TANNING IN BABY TOILETRIES3 IN LIQUID HAND WASH 47.9% 20.0% 20%+ 37.1% Market
Slide 6: For everyone, for life, for good.
FOR EVERYONE, FOR LIFE, FOR GOOD. 6
Slide 7: Underlying trading momentum is strong
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY UNDERLYING TRADING MOMENTUM IS STRONG SEQUENTIAL REVENUE IMPROVEMENTS UNDER OUR NEW STRATEGY HYGIENE, BABY, BEAUTY REVENUE (EX. CAREX) IS UP 19% SINCE CMD BRAND INVESTMENT UP 80% VS. FY20 Rolling annual total revenue, by quarter, £m REVENUE AND MARKET
Slide 8: Financial Review
FINANCIAL REVIEW SARAH POLLARD, CHIEF FINANCIAL OFFICER
Slide 9: Summary financials
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SUMMARY FINANCIALS £m, unless otherwise stated FY22 FY21 • Second year of LFL revenue growth Revenue £592.8m £603.3m • Reported revenue declined 1.7%, with LFL growth more than offset by disposals and FX LFL revenue growth 2.9% 7.1% • MWB revenue decli
Slide 10: Group revenue
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY GROUP REVENUE LIKE FOR LIKE GROWTH DRIVEN BY AFRICA AND APAC Group like for like +2.9% • 2.9% LFL revenue growth driven by Africa and APAC. Europe/Americas decline driven by Carex normalisation in the UK • Growth in 7/8 of our existing Must Win Brands
Slide 11: Margin bridge
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY MARGIN BRIDGE COST MITIGATION AND UNDERLYING GROWTH OFFSETS ADVERSE MIX AND CAREX • Gross margin decline driven by adverse 11.8% (90)bps geographic revenue mix and Carex, offset by 20bps (10)bps 11.5% 70bps broad-based improvement elsewhere • Reduction
Slide 12: Cost inflation
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY COST INFLATION £40M COST INFLATION IN FY22 LARGELY OFFSET BY PRICING AND COST MITIGATION IMMEDIATE AND ONGOING OPPORTUNITIES LONG-TERM OPPORTUNITIES 01. REMOVING COSTS THE CONSUMER 02. PRICING AND REVENUE GROWTH 03. INVEST FOR PRODUCTIVITY GAINS DOESN’
Slide 13: Segmental performance
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SEGMENTAL PERFORMANCE Europe and APAC Africa Total Group Americas • Europe and Americas LFL revenue grew mid-single- digits, excluding Carex. Carex gained share as the category normalised post Covid-19 Revenue £193.0m £173.8m £222.0m £592.8m • Europe a
Slide 14: Cash flow and net debt
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY CASH FLOW AND NET DEBT OPERATING CASH FLOW AND NIGERIA PROPERTY SALES FUNDING INVESTMENT AND DIVIDEND Net 25.8 £m Debt/ • Reduction in net debt to £9.8m in 2022 EBITDA FY21 Net Debt 30.7 0.3x (0.1x net debt/EBITDA) 58.0 Change (20.9) (0.2)x • Gross pro
Slide 15: Q1 trading update
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY Q1 TRADING UPDATE STRONG START TO FY23 Q1 FY23 • Good start to the year with continued price/mix improvement • Morning Fresh in Australia and Premier in Europe and Americas (5.3)% Nigeria key performers • Europe and Americas growth from Sanctuary Spa r
Slide 16: FY23 outlook and guidance
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY FY23 OUTLOOK AND GUIDANCE CONTINUED STRONG MOMENTUM, H2-WEIGHTED FY23 OUTLOOK TECHNICAL GUIDANCE Notwithstanding the significant • Interest charge: £4m challenges related to cost inflation • ETR: 22-24% and consumer spending, which will • Capex: 2% of
Slide 17: Strategic Update
STRATEGIC UPDATE MOVING FROM TURNAROUND TO TRANSFORMATION JONATHAN MYERS, CHIEF EXECUTIVE OFFICER
Slide 18: The turnaround
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY THE TURNAROUND TURNAROUND TRANSFORMATION FIX THE CORE EXPAND FROM THE CORE OLD PZC NEW PZC FOR EVERYONE, FOR LIFE, FOR GOOD. 18
Slide 19: The turnaround: progress addressing legacy issues
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY THE TURNAROUND WE HAVE MADE GOOD PROGRESS ADDRESSING OUR LEGACY ISSUES DRIVERS OF OUR PREVIOUS UNDERPERFORMANCE (presented in March 2021 Capital Markets Day) Took our eyes off the Lack of growth led to Diversified portfolio Internal distraction of Lost
Slide 20: Our strategy in summary: Build brands
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY OUR STRATEGY IN SUMMARY BUILD SERVE REDUCE DEVELOP GROW BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY FOR EVERYONE, FOR LIFE, FOR GOOD. 20
Slide 21: Build brands
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW BUILD BRANDS BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY HIGHER AND MORE EFFICIENT BRAND INVESTMENT Brand Investment has continued to shift … and efficiency of media spend towards Must Win Brands … has also increased
Slide 22: For everyone, for life, for good.
FOR EVERYONE, FOR LIFE, FOR GOOD. 22
Slide 23: Serve consumers
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW SERVE CONSUMERS BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY WINNING WHERE THE SHOPPER SHOPS E-Commerce strategy driving Rafferty’s Successful Amazon Prime Day Garden share gains growth in Beauty1 % market share 34 +1.
Slide 24: Reduce complexity
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW REDUCE COMPLEXITY BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY SIGNIFICANT PORTFOLIO AND BUSINESS SIMPLIFICATION UK SKU rationalisation and supplier consolidation Nigeria Simplification Previously Today Better Route-to
Slide 25: Develop people
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW DEVELOP PEOPLE BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY INVESTMENT IN BUILDING A STRONGER CULTURE AND TEAM Hiring externally and promoting internally, newly-created REFRESH OF CORPORATE VALUES roles include: ‘LEADE
Slide 26: Grow sustainably
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW GROW SUSTAINABLY BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY INVESTING IN SUSTAINABILITY AND FOR SUSTAINABLE GROWTH EVOLVING CONSUMER DEMAND NEW SUSTAINABILITY GOALS Carbon neutral in our operations by 2025 Net zero e
Slide 27: Grow sustainably: Childs Farm and investment
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILD SERVE REDUCE DEVELOP GROW GROW SUSTAINABLY BRANDS CONSUMERS COMPLEXITY PEOPLE SUSTAINABLY INVESTING IN SUSTAINABILITY AND FOR SUSTAINABLE GROWTH ACQUISITION OF CHILDS FARM INVESTMENT IN OUR BUSINESS • Launch of OatDerma trading ahead of • Procure
Slide 28: From turnaround to transformation
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY FROM TURNAROUND TO TRANSFORMATION BUILDING A HIGHER GROWTH, HIGHER MARGIN, SIMPLER AND MORE SUSTAINABLE BUSINESS TURNAROUND TRANSFORMATION FIX THE CORE EXPAND FROM THE CORE OLD PZC NEW PZC FOR EVERYONE, FOR LIFE, FOR GOOD. 28
Slide 29: Our strategy in summary
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY OUR STRATEGY IN SUMMARY WE BUILD BRANDS TO SERVE CONSUMERS BETTER WITH HYGIENE, BABY AND BEAUTY AT OUR CORE LOW TO MID SINGLE-DIGIT REVENUE GROWTH, WITH MID-TEENS MARGINS WHERE TO PLAY HOW TO WIN PZ Cussons Growth Wheel Focus on leading brands PZ Cusso
Slide 30: Our strategy in summary
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY OUR STRATEGY IN SUMMARY WE BUILD BRANDS TO SERVE CONSUMERS BETTER WITH HYGIENE, BABY AND BEAUTY AT OUR CORE MID LOW TO MID SINGLE-DIGIT REVENUE GROWTH, WITH MID-TEENS MARGINS WHERE TO PLAY HOW TO WIN PZ Cussons Must Win Brands in New markets New Must G
Slide 31: Summary
SUMMARY FOR EVERYONE, FOR LIFE, FOR GOOD.
Slide 32: Moving from turnaround to transformation
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY MOVING FROM TURNAROUND TO TRANSFORMATION BUILDING A HIGHER GROWTH, HIGHER MARGIN, SIMPLER AND MORE SUSTAINABLE BUSINESS SECOND YEAR OF MANAGING NEAR-TERM GOOD PROGRESS IN CONFIDENT IN OUR STRATEGIC PROGRESS VOLATILITY ADDRESSING OUR LEGACY STRATEGY AND
Slide 33: Q&A
Q&A
Slide 34: Appendix
Cussons APPENDIX i|
Slide 35: Glossary
GLOSSARY Term Definition Adjusted net debt Cash, short-term deposits and current asset investments, less bank overdrafts and borrowings. Excludes IFRS 16 lease liabilities A B Corp is a company that has been certified by the non-profit organisation B Lab as meeting rigorous standards of environmenta