PZ Cussons sees sales growth but faces cost headwinds

By

Sandra Halliday

Published
Apr 13, 2022

PZ Cussons reported Q3 figures on Wednesday and said revenue rose by 8.5% on a one-year like-for-like basis to £146.3 million.

The beauty and personal care firm that recently bought the Childs Farm business said it saw “strong revenue momentum… sustained growth and continued strategic progress”, and its 2022 outlook is unchanged.

As mentioned, group sales rose by a healthy amount and were actually up 13.9% on a two-year like-for-like basis at the firm that owns Fudge, Charles Worthington, Sanctuary Spa, and St Tropez.

But over one year, Europe and Americas sales fell 5.3% to £41.8 million (although they were up 3.2% over two years), while Asia Pacific rose 4.3% in one year and 7.7% in two. Its African ops were up 25.8% in a year and 29.8% in two years.

Revenue growth was driven by a “price/mix contribution of over 8%, with volumes maintained”.

In Beauty, revenue growth continued to be very strong across most brands, “driven by a combination of successful marketing activation and distribution gains. In St Tropez in the US, demand remained high with double-digit growth in 'sell-out' data, but revenue has been affected by supply challenges”.

It also said its cost headwinds in the quarter were partly offset by pricing and productivity actions, “enabling continued marketing investment to build our Must Win Brands”.

CEO Jonathan Myers said: “It is just over a year since we set out our new strategy, to return PZ Cussons to sustainable, profitable revenue growth. We are focusing on building our Must Win Brands, driving executional excellence, dramatically reducing complexity and transforming our functional capabilities. 

“We are aligning our portfolio around the core categories of Hygiene, Baby and Beauty and our priority markets. Our strategy is working, with revenue momentum from our Must Win Brands improving, and up 12.6% compared to before the pandemic. We also have a stronger portfolio following the disposal of non-core assets and the recent acquisition of Childs Farm.”

But he added that the “external environment is amongst the most challenging many of us have seen. Input costs have continued to escalate in recent weeks, and it is likely that household budgets will soon come under pressure. Our teams are working hard to address both of these dynamics. We are removing costs that the consumer does not value, and have plans in place to meet evolving consumer needs, including innovation to offer everyday great value as well as more premium-priced launches.”