13 April 2023
Sixth consecutive quarter of revenue growth – strength and depth of portfolio driving performance
PZ Cussons plc today issues a trading update for its third quarter, ended 4 March 2023.
Group Summary [1]
· Q3 LFL revenue growth of 6.2%, in line with year-to-date performance
· Europe & the Americas region back to strong revenue growth and with significantly improved margin
· Progress against strategy to grow Must Win Brands including:
– L aunching Morning Fresh into the adjacent auto-dishwash category in Australia; and
– Childs Farm performing well with the recent launch of SlumberTime innovation
· Expect FY23 adjusted profit before tax to be at least in line with current market estimates [2]
| Revenue | Q3 | YTD | |
| £m | LFL % | LFL % | |
| Europe & the Americas | 49.3 | 9.9% | (1.2)% |
| Asia Pacific | 47.6 | 1.0% | 5.3% |
| Africa | 68.4 | 7.7% | 12.6% |
| Group [3] | 166.0 | 6.2% | 6.1% |
Jonathan Myers, Chief Executive Officer, said:
“We have delivered another quarter of mid-single digit revenue growth, in line with our longer-term ambition. This represents a sixth consecutive quarter of growth, with the business underpinned by the strength and depth of our portfolio and our ongoing strategy to invest behind our brands, build internal capabilities and serve consumers better.
As anticipated, performance has strengthened in Europe & the Americas, with a return to revenue growth and a marked improvement in profitability in the quarter. As a result, we remain confident in delivering against FY23 expectations and that further strategic progress will be made in the balance of FY23 and into FY24.”
Performance commentary
Group Q3 like for like revenue growth of 6.2% was driven primarily by price/mix improvements. Reported revenue growth was 13.5%, reflecting the full period contribution of Childs Farm which was acquired in March 2022 as well as favourable foreign exchange movements. Year to date, revenue has grown by 6.1% on a LFL basis.
As anticipated, performance in Europe & the Americas improved significantly in Q3. This was a result of our strategic focus on innovation and marketing, with particularly strong performances from St. Tropez US and the combined Imperial Leather and Cussons Creations portfolio. Carex revenue declined in Q3 reflecting the reduction in the UK Hand Hygiene category more broadly. Childs Farm is performing as expected and is on track for double-digit revenue growth in FY23, on a pro-forma basis.
Asia Pacific performance has been driven by strong growth in Australia, reflecting continued successful Revenue Growth Management activity and sustained share gains across our major brands. We recently launched Morning Fresh into the auto-dishwash category, leveraging its brand strength with a 50% share in washing-up liquid. In Indonesia, Cussons Baby revenue declined slightly, in line with the overall category, reflecting increased pressure on consumer spending in recent months as well as some retailer de-stocking.
Africa trading continues in line with our expectations, with all Must Win Brands in good growth. Strong trading throughout December and January was partly offset by disrupted demand in Nigeria in February due to bank note changes and the elections. These disruptions have largely dissipated and we are now seeing a return to more normal demand patterns.
Outlook
Although we remain alert to ongoing external volatility, we continue to expect FY23 adjusted profit before tax to be at least in line with current market expectations. This includes a 3-4% benefit, compared to FY22, due to the translation of results of our overseas operations.
Reporting calendar
PZ Cussons will issue a brief update on trading following the end of the financial year.
PZ Cussons will host a Childs Farm ‘deep-dive’ event for analysts and institutional investors on 4 July. The event will be led by Sarah Pollard, Chief Financial Officer, and will include presentations from Paul Yocum, Managing Director of Business Development, and Andrew Geoghegan, Chief Marketing Transformation Officer.
Conference call
PZ Cussons management will host a call for analysts and institutional investors today at 08:00 UK time.
Dial in details are as follows:
+44 20 3936 2999/ +44 808 189 0158
Access Code: 395221