Pz Cussons Plc · LSE:PZC
Pz Cussons — H1 FY23 Earnings Presentation
28 slides from Pz Cussons's earnings presentation, Feb 8, 2023
Slide 1: Interim Results 2023
2023 INTERIM RESULTS 08 FEBRUARY 2023
Slide 2: Agenda
AGENDA 01. 03. INTRODUCTION STRATEGIC UPDATE 02. 04. FINANCIAL REVIEW SUMMARY FOR EVERYONE, FOR LIFE, FOR GOOD. 2
Slide 3: Building a higher growth, higher margin, simpler and more sustainable business
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILDING A HIGHER GROWTH, HIGHER MARGIN, SIMPLER AND MORE SUSTAINABLE BUSINESS CONTINUED PROFITABLE LIKE FOR LIKE REVENUE GROWTH FY23 OUTLOOK REITERATED CONTINUED PROFITABLE NAVIGATING EXTERNAL STRATEGIC PROGRESS & SIMPLIFYING & LFL REVENUE GROWTH ENVI
Slide 4: Financial Review
FINANCIAL REVIEW SARAH POLLARD, CHIEF FINANCIAL OFFICER FOR EVERYONE, FOR LIFE, FOR GOOD.
Slide 5: Summary Financials
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SUMMARY FINANCIALS ROBUST FINANCIAL PERFORMANCE DESPITE THE CHALLENGING MACRO ENVIRONMENT H1 FY23 H1 FY22 Revenue £336.9m £283.7m • 18.8% reported revenue increase reflects contribution of Childs Farm, positive FX impact LFL revenue growth 6.1% (2.0)%
Slide 6: Group Revenue
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY GROUP REVENUE LIKE FOR LIKE GROWTH DRIVEN BY AFRICA AND APAC FX LFL +6.1% • 6.1% LFL revenue growth driven by APAC and 6 DAYS Africa • Growth in majority of Must Win Brands • Price/mix growth of 11.4%. Volume (5.4)% • Acquisition of Childs Farm in Marc
Slide 7: Margin Bridge
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY MARGIN BRIDGE MARGIN PHASING CONSISTENT WITH PREVIOUS GUIDANCE. EXPECT IMPROVEMENT IN H2 11.6% (270)bps • Gross margin decline driven primarily by adverse geographic revenue mix Geographic mix • Strong Africa and ANZ Home Care growth 50bps 9.9% 30bps •
Slide 8: Segmental Performance: Europe and Americas
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SEGMENTAL PERFORMANCE: EUROPE AND AMERICAS ADVERSE MARGIN MIX AND INVESTMENT OFFSETTING GROWTH IN MOST BRANDS H1 FY23 H1 FY22 Revenue £99.5m £95.1m • Total revenue growth includes contributions from Childs Farm, favourable FX and additional reporting d
Slide 9: Europe and Americas Margin
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY EUROPE AND AMERICAS MARGIN MARGINS IMPACTED BY EXTERNAL HEADWINDS Carex and St.Tropez margins above average 20.6% Brand Investment Childs Farm White space opportunities 9.5% Washing and Bathing down 8% in H1 Price/mix actions < inflation H1 FY22 Carex
Slide 10: Europe and Americas Margin: Expect Improved Margins in H2
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY EUROPE AND AMERICAS MARGIN EXPECT IMPROVED MARGINS IN H2 Improved St.Tropez and Carex trends Full period benefit of price/mix actions taken in H1 20.6% More benign cost environment 9.5% H1 FY22 Carex and Investment H1 FY23 H2 FY23 External dynamics Ope
Slide 11: Segmental Performance: APAC
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SEGMENTAL PERFORMANCE: APAC STRONG REVENUE AND MARGIN GROWTH, LED BY AUSTRALIA H1 FY23 H1 FY22 Revenue £102.2m £84.4m • Very strong revenue growth and share gains in Australia LFL revenue growth 7.5% 0.3% • Slight decline in Indonesia due to softer Bab
Slide 12: Segmental Performance: Africa
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY SEGMENTAL PERFORMANCE: AFRICA CONTINUED STRONG REVENUE AND MARGIN GROWTH H1 FY23 H1 FY22 Revenue £133.2m £102.2m • LFL revenue driven by further distribution gains LFL revenue growth 15.6% 22.1% • All major brands reported double digit LFL growth Opera
Slide 13: Cash Flow and Net Debt
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY CASH FLOW AND NET DEBT BALANCE SHEET REMAINS STRONG. NET DEBT INCREASE DRIVEN BY SEASONALITY OF WORKING CAPITAL AND FX Net Debt/ £m EBITDA 13.5 (15.8) FY22 Net Debt 9.8 0.1x Change 25.9 0.3x 4.2 (6.9) H1 FY23 Net Debt1 35.7 0.4x (11.4) £m (10.7) EBITDA
Slide 14: FY23 Outlook
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY FY23 OUTLOOK OUTLOOK REITERATED. ON TRACK FOR IMPROVED PERFORMANCE IN H2 FY23 OUTLOOK TECHNICAL GUIDANCE “As previously guided, we expect a • ETR 26-27% stronger operating margin (22-24% previously) performance in the second half of the year driven by
Slide 15: Strategic Update
STRATEGIC UPDATE JONATHAN MYERS, CHIEF EXECUTIVE OFFICER FOR EVERYONE, FOR LIFE, FOR GOOD.
Slide 16: 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 SINGLE-DIGIT REVENUE GROWTH, WITH MID-TEENS MARGINS WHERE TO PLAY HOW TO WIN PZ Cussons Must Win Brands in New markets New Must Growth Wheel
Slide 17: Navigating the External Environment
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY NAVIGATING THE EXTERNAL ENVIRONMENT STRATEGIC PROGRESS ENABLES US TO SERVE COST-CONSCIOUS CONSUMERS BETTER INNOVATION REFRAMING VALUE PACK SIZE AND FORMAT £1.50 90p – £1 90p – 95p Using innovation and positioning our Capturing consumers trading down in
Slide 18: Addressing Legacy Issues: Nigeria
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY ADDRESSING LEGACY ISSUES: NIGERIA WE HAVE SIGNIFICANTLY IMPROVED FINANCIAL AND OPERATIONAL PERFORMANCE IN NIGERIA RETURN TO PROFIT GROWTH AFTER YEARS OF DECLINE Over £30m proceeds from property sales REDUCED Africa operating profit (£m) De-listed tail
Slide 19: Transformation Well Underway in ANZ
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY TRANSFORMATION WELL UNDERWAY IN ANZ ON TRACK FOR A THIRD YEAR OF LIKE FOR LIKE REVENUE GROWTH SHARE 48.4% 31.9% 8.3% +110bps +200bps +100bps CATEGORY GROWTH Extended leadership position Further online share gains Successful NPD Gaining share from Priva
Slide 20: Investing to Build Our Brands
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY INVESTING TO BUILD OUR BRANDS INCREASED AND FOCUSED INVESTMENT TO SUPPORT STRONGER BRAND-BUILDING ACTIVITY INVESTMENT IN MWBS SINCE LAUNCH OF STRATEGY x2 MWB Portfolio H1 20 H1 23 FOR EVERYONE, FOR LIFE, FOR GOOD. 20
Slide 21: Investing to Build Our Must Win Brands
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY INVESTING TO BUILD OUR MUST WIN BRANDS SUCCESSFUL RECENT CAMPAIGNS FOR ORIGINAL SOURCE AND SANCTUARY SPA STRENGTHENED MARKET POSITION SANCTUARY SPA BRAND INVESTMENT FOLLOWING TARGETED BOLD CAMPAIGNS INCREASED THREE-FOLD VS. H1 FY21 No.1 1 VEGAN SHOWER
Slide 22: Childs Farm Progressing Well
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY CHILDS FARM PROGRESSING WELL LEVERAGING GROUP CAPABILITIES TO SUPPORT GROWTH AUSTRALIA INTEGRATION INTERNATIONAL PARTNERSHIPS Launch of D2C website FOR EVERYONE, FOR LIFE, FOR GOOD. 22
Slide 23: Summary
SUMMARY
Slide 24: Building a higher growth, higher margin, simpler and more sustainable business
INTRO FINANCIAL REVIEW STRATEGIC UPDATE SUMMARY BUILDING A HIGHER GROWTH, HIGHER MARGIN, SIMPLER AND MORE SUSTAINABLE BUSINESS CONTINUED PROFITABLE NAVIGATING EXTERNAL STRATEGIC PROGRESS & SIMPLIFYING & LFL REVENUE GROWTH ENVIRONMENT INVESTMENT IN BRANDS STRENGTHENING NIGERIA FY23 OUTLOOK REITERATED
Slide 25: Q&A
Q&A FOR EVERYONE, FOR LIFE, FOR GOOD.
Slide 26: Appendix
APPENDIX
Slide 27: 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
Slide 28: Foreign Exchange Analysis
FOREIGN EXCHANGE ANALYSIS % FY22 revenue FY22 average H1 FY22 H1 FY23 GBP 29% 1.00 1.00 1.00 NGN 32% 558 569 509 AUD 13% 1.84 1.86 1.74 IDR 13% 19,331 19,741 17,780 USD 6% 1.35 1.38 1.18 Other 7% - - - Total 100% FOR EVERYONE, FOR LIFE, FOR GOOD. 28