PZC Pz Cussons Plc

 

11 February 2025

RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2024

 

Solid overall trading in UK, Indonesia and ANZ

On track to meet FY25 expectations

 

Jonathan Myers, Chief Executive Officer, said: "Trading has been in line with expectations during the first half of our financial year and, together, three of our priority markets - the UK, Indonesia and ANZ - have delivered solid overall like for like revenue growth of 2%. New product innovation, competitive brand activation and increased retail distribution have combined to deliver the strongest performance in our UK business for three years, thanks in part to particularly successful Christmas sales for Sanctuary Spa gifting. Indonesia recorded a third consecutive quarter of growth and in ANZ our brands have continued to grow share, albeit against a backdrop of market softness.

 

Our H1 reported revenue and adjusted operating profit have continued to be impacted by the depreciation of the Naira. The more recent stabilisation of the exchange rate and our operational interventions on the ground have, however, enabled us to sustain our trading momentum in the Nigerian market whilst reducing our exposure to further currency depreciation.

 

We are progressing with our plans to transform our portfolio to unlock value and reduce complexity, through the processes involving our Africa business and the St. Tropez brand.

 

The trends of the first half of the year have continued into the second half, meaning we are on track to meet FY25 profit expectations.

 

We remain confident in the long-term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth."

 

£m unless otherwise stated	Adjusted			Statutory
	H1 FY25	H1 FY24	Change	H1 FY25	H1 FY24	Change
Revenue	249.3	277.1	(10.0)%	249.3	277.1	(10.0)%
LFL revenue growth	7.1%	2.2%	-	n/a	n/a	n/a
Operating profit/(loss)	27.0	30.6	(11.8)%	13.4	(89.7)	n.m
Operating margin	10.8%	11.0%	(20)bps	5.4%	(32.4)%	n.m
Profit/(loss) before tax	19.8	26.1	(24.1)%	6.4	(94.2)	n.m
Basic earnings per share	3.89p	4.32p	(10.0)%	1.19p	(10.84)p	n.m
Dividend per share	n/a	n/a	n/a	1.50p	1.50p	0.0%

 

See page 11 for definitions of key terms and page 12 for the reconciliation between Alternative Performance Measures and Statutory results.

'n.m.' represents non-meaningful growth rates.

Numbers are shown based on continuing operations. With the exception of LFL revenue growth, % changes are shown at actual FX rates.

H1 FY25 refers to the 6 months ended 30 November 2024 and H1 FY24 refers to the 6 months ended 2 December 2023.

 

Summary

Financial results

 

·    LFL revenue growth of 7.1% driven by pricing in Africa and growth in UK and Indonesia

o  Excluding Africa LFL growth revenue was 1.6% with volume growth of 2.0%.

·    Reported revenue decline of 10.0% is due to the 55% depreciation in the Nigerian Naira versus Sterling compared to the prior period (see page 10 for details on movements in FX).

·    Reduction in leverage, with gross debt reduced by £14 million to £153 million as at 30 November 2024, from £167 million as at 31 May 2024 with free cash flow of £22.7 million, an improvement on the comparative period.

·    Adjusted operating profit margin reduced by 20bps, to 10.8%, but grew 70bps if we exclude the contribution from the PZ Wilmar joint venture in Nigeria which is equity-accounted.

·    Profit before tax declined by 24.1%, reflecting the 11.8% reduction in operating profit and increased net finance expense.

·    EPS declined by 10.0% as the decline in PBT was partly offset by a reduced effective tax rate and a smaller impact of non-controlling interests, which are largely associated with Nigeria.

 

Delivery against the strategy

We are delivering against the three key priorities established for FY25:

1.    Drive our businesses in the UK, Indonesia and ANZ

 

·    UK: better execution and sharing of commercial best-practice

o  Strong Christmas gifting period, with sell-out value up more than 30% year on year, with Sanctuary Spa revenue up double-digits.

o  New listings secured for the Charles Worthington and Fudge hair care brands in Tesco and Waitrose.

o  Further growth from Childs Farm, including the announcement of a Bluey^TM partnership with BBC Studios.

·    Indonesia: continued revenue growth, and well placed to take share in a structurally attractive market

o  Third consecutive quarter of revenue growth driven by broader distribution, optimised pricing and promotional activity and consumer-relevant innovation launches.

·    ANZ: brand strength delivering market share gains

o  Market share gains in Morning Fresh, Rafferty's Garden and Radiant, partly offsetting category softness.

2.    Strengthen our brand-building capabilities and embed our new operating model

 

·    Organisational changes put in place during FY24 to strengthen group-wide brand building capabilities are enabling more competitive brand activation and strengthening our multi-year innovation pipeline:

o  Childs Farm re-stage and Imperial Leather innovation launching in the second half of FY25;

o  Major new innovations for Cussons Baby (Indonesia), Original Source (UK) and Morning Fresh (Australia), to be launched in FY26, are well-progressed;

o  Improved visibility, and validation, of Group-wide 3-year innovation plans.    

·    Integration of UK Personal Care and UK Beauty businesses largely complete, with annualised savings of £3 million achieved, as well as executional improvements due to sharing of best practice.

 

3.    Deliver the portfolio transformation to maximise shareholder value

 

·    The Group is progressing with plans to transform our portfolio to unlock value and reduce complexity, through the processes involving our Africa business and the St. Tropez brand. Further updates will be provided in due course.

Dividend

The Board is declaring a dividend of 1.50p per share, in line with last year's payment. The dividend will be paid on 9 April 2025 to shareholders on the register at the close of business on 7 March 2025.

 

The Group's future approach to dividend policy will remain under review, particularly in light of the ongoing portfolio transformation activity and the Board's intent to reduce financial leverage from current levels.      

 

Current trading and FY25 outlook

 

Performance to the end of January has been in line with our expectations and we expect Group LFL revenue growth trends to continue in the balance of the year.

 

In September 2024 we provided FY25 guidance for adjusted operating profit of £47-53 million. This included an estimate, based upon prevailing foreign exchange rates, of approximately £5 million of costs related to FX losses on intercompany loans. These costs, which relate to our Nigerian business and are non-cash, are now treated as an adjusting item. As a result, our adjusted operating profit guidance for the year has been revised upwards, by £5 million, to £52-58 million.

 

We continue to be confident in the long-term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.

 

For further information please contact:

Investors            

Simon Whittington - IR and Corporate Development Director      +44 (0) 77 1137 2928

 

Media

Headland PZCussons@headlandconsultancy.com                             +44 (0) 20 3805 4822

Susanna Voyle, Stephen Malthouse and Charlie Twigg

 

Investor and Analyst conference call

PZ Cussons' management will host a virtual audiocast presentation for analysts and institutional investors at 8.30am UK time to present the results and provide the opportunity for Q&A. Details of the presentation are as follows:

 

A webcast of the presentation is available at the link below and will also be available via our corporate website: www.pzcussons.com.

 

Audience Webcast link:

https://www.investis-live.com/pzcussons/6787d4b4995564000f8412a2/jdnh

Dial in: +44 20 3936 2999 / +44 800 358 1035

Access code: 335953

 

Notes to Editors

 

About PZ Cussons

PZ Cussons is a listed consumer goods business headquartered in Manchester, UK. We employ over 2,600 people across our operations in Europe, North America, Asia-Pacific and Africa. Since our founding in 1884, we have been creating products to delight, care for and nourish consumers. Across our core categories of Hygiene, Baby and Beauty, our trusted and well-loved brands include Carex, Childs Farm, Cussons Baby, Imperial Leather, Morning Fresh, Original Source, Premier, Sanctuary Spa and St. Tropez. Sustainability and the wellbeing of our employees and communities everywhere are at the heart of our business model and strategy, and captured by our purpose: For everyone, for life, for good.

 

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 consumer demand, along with risks associated with macroeconomic, political and social factors in the markets in which we operate. Whilst we believe that the expectations reflected herein are reasonable based on the information we have as of the date of this announcement, actual outcomes may vary significantly owing to factors outside the control of the PZ Cussons Group, such as cost of materials or demand for our products, or within our control such as our investment decisions, allocation of resources or changes to our plans or strategy. The PZ Cussons Group expressly disclaims any obligation to revise forward-looking statements made in this or other announcements to reflect changes in our expectations or circumstances. No reliance may be placed on the forward-looking statements contained within this announcement.

GROUP REVIEW  

Introduction from our Chief Executive Officer

 

As we launched the new strategy in 2021, we were clear that the turnaround, and ultimately transformation, of PZ Cussons, would be a multi-year journey. Many of the business' problems had been years in the making and would not be fixed overnight. The subsequent single-largest devaluation in the history of the Nigerian Naira which began in June 2023 added to our challenges, significantly impacting the business financially and operationally.

 

Nevertheless, I remain pleased with the progress that has been made in a number of areas - most notably the UK business which, after years of decline, has recorded its strongest profit performance since FY21. With this backdrop, and a somewhat more stable environment in Nigeria in recent months, I believe we are now firmly in the transformation phase of our journey. We are seeking to unlock value and reduce complexity, not only through operational improvements and clarity of resource allocation, but through portfolio action which will bring about a step-change in our geographic and category footprint. In doing so, we will focus on where we can be most competitive.  

To this end, as initially announced in April 2024, we are progressing with our plans to transform our portfolio to unlock value and reduce complexity, through the processes involving our Africa business and the St. Tropez brand. We have also been working hard to reduce our cost base and I am pleased that overheads, as a percentage of revenue, have already reduced by 80bps in the first half of the year.

 

Our day-to-day efforts continue to be on all of our existing operations but with a particular focus on the future to ensure we maximise the performance of the business units that will remain as they are today. This is comprised of the UK - which represents approximately half of the Group revenue excluding Africa and St. Tropez, and ANZ and Indonesia which contribute most of the remainder.

 

In the UK, we enjoy strong brands in the Personal Care category. These are supported by efficient, in-house production as well as strong relationships with our key retail customers. In the first half of the year, we have delivered the strongest profit performance for three years, with good revenue growth and continued improvement in profitability of Childs Farm.  

 

With 4.5 million births a year, Indonesia remains one of most important markets globally for Baby Personal Care - a category in which Cussons Baby is a leading brand. Despite some macro-economic challenges, we have continued to grow revenue in the first half of the year as a result of targeted innovation, strengthened retail execution and a number of Revenue Growth Management actions.

 

Our ANZ business similarly enjoys category-leading brands across both Home Care and Baby Food, including a c.50% share of the Australia hand dishwash category. Against a particularly soft market backdrop, with some channel disruption in the period, we have once again taken share in each of our key brands thanks to the quality of our execution.

 

At the same time, we are strengthening our future innovation pipeline. This has improved in large part due to the re-organisation undertaken during FY24 that has seen us establish a dedicated, central brand-building resource responsible for leading the development of longer-term plans.  

 

Summary

 

I would like to thank my PZ Cussons colleagues across the world for their hard work in recent months. We remain confident in the long-term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.

FINANCIAL REVIEW 

Overview of Group financial performance

Our reported financial performance for the six months ended 30 November 2024 continues to reflect the adverse impact of the devaluation of the Naira in June 2023 and in the 18 months period which followed. This is the primary driver of the reduction in revenue, adjusted operating profit and adjusted earnings per share. On a statutory basis, many of our key metrics improved given the comparative period included foreign exchange losses of £88.2 million  related to the Naira devaluation.

  

Adjusted profit before tax declined by 24.1%, as a result of the depreciation of the Naira. Adjusted earnings per share, however, declined by a smaller amount (10.0%) due to a lower effective tax rate of 18.2%, from  a statutory loss in our Nigerian business, and by a reduction in the Sterling value of the non-controlling interests in Nigeria. On a statutory basis, EPS was 1.19p (H1 FY24: loss of 10.84p).

 

Our financial leverage has increased as a result of the devaluation of the Naira and a key focus for the Group is to reduce this. It is therefore encouraging that gross debt once again fell during the first half of FY25, by £14.1 million, albeit due in part to the phasing of the dividend payment which took place in December. Notwithstanding any proceeds from our portfolio transformation activity, we expect leverage to fall further, with continued free cash flow supplemented by proceeds received through the sale of surplus, non-operating assets across the Group.

 

The Board is declaring a dividend of 1.50p per share, in line with last year's payment. The dividend will be paid on 9 April 2025 to shareholders on the register at the close of business on 7 March 2025.

 

Performance by geography

 

A disaggregation of our reporting segments is provided below. 

 

Revenue split by business unit

 

£m unless otherwise stated	H1 FY25
UK (ex. St Tropez)	82.3
St. Tropez	9.2
Other [1]	9.5
Europe and the Americas	101.0
Indonesia    ANZ	30.7 46.1
Other [2]	10.9
APAC	87.7
Nigeria (Electricals)	18.5
Nigeria (Family Care)	28.2
Other [3]	13.9
Africa	60.6
Group	249.3

 

[1] Includes revenue from continental Europe which is managed through third-party distributors

[2] Includes revenue from other Asia markets and non-branded revenue

[3] Includes primarily revenue from Kenya and Ghana

 

Europe and the Americas

 

£m unless otherwise stated	H1 FY25	H1 FY24	Growth/ (decline)
Revenue	101.0	97.2	3.9%
LFL revenue growth (%)	4.0%	(1.9)%	n/a
Adjusted operating profit	20.7	12.4	66.9%
Margin (%)	20.5%	12.8%	770bps
Operating profit/(loss)	19.6	(16.6)	n/a
Margin (%)	19.4%	(17.1)%	n/a

 

Revenue grew 4.0% on a LFL basis, reflecting price/mix growth of 2.9% and volume growth of 1.1%. Excluding St. Tropez, LFL revenue growth was 4.4%.

 

Sanctuary Spa, which grew double-digits, was a key driver of overall growth. Although aided by a soft comparative period, we have significantly increased our distribution points in Grocery and High Street customers, and we saw strong sell-in towards the end of the period with a successful Christmas gifting range. Carex grew strongly, with both volume and price/mix growth, in part due to the ongoing successful collaboration with Magic Light Pictures - owner of the Gruffalo intellectual property. This relationship has since expanded and we expect this to support growth over the coming months. Gains in distribution have also driven growth of our haircare brands - Fudge and Charles Worthington - which secured new listings at Tesco and Waitrose. Imperial Leather and Childs Farm recorded good growth - the latter benefiting from in-house manufacturing which was initiated in August 2024.

 

Original Source declined slightly following a particularly strong comparative period but our plans and investment support are weighted towards the second half of our financial year. St. Tropez revenue was unchanged as a solid performance in the UK was offset by a softer US performance where growth is expected to be second-half weighted.

 

Adjusted operating profit increased to £20.7 million, with a margin of 20.5%. This improvement was driven by the strong revenue growth and mix management activity across our brands, as well as phasing of certain costs in our UK business, primarily related to marketing. On a statutory basis, operating profit was £19.6 million - an improvement from the £16.6 million loss in the comparative period which included an impairment of the book value of Sanctuary Spa.

 

Asia Pacific

 

£m unless otherwise stated	H1 FY25	H1 FY24	Growth / (decline)
Revenue	87.7	88.8	(1.1)%
LFL revenue growth (%)	(1.1)%	(6.0)%	n/a
Adjusted operating profit	13.1	15.7	(16.6)%
Margin (%)	14.9%	17.7%	(280)bps
Operating profit	13.1	14.8	(11.5)%
Margin (%)	14.9%	16.7%	(180)bps

 

Revenue declined 1.1% on a like for like basis reflecting growth in Indonesia, offset by a decline in ANZ and a number of our smaller, distributor markets. Price/mix growth was (4.2)% and volume was 3.1%. Depreciation in the Indonesian Rupiah and Australian Dollar was offset by growth in non-branded revenue, which is excluded from the like for like calculation, resulting in reported revenue decline also of 1.1%.

 

Indonesia grew strongly in the first half of the year with Cussons Baby market share maintained compared to other multi-national peers. Growth was in part driven by the implementation of a new trade promotion analytics platform during FY24 which has enabled us to optimise pricing and promotional activity by channels and by customer, particularly in the competitive wipes segment. Additionally, supported by rapid growth in the live-streaming sales channel, eCommerce grew nearly 100% in H1. We are pleased with the launch in FY24 of Cussons Baby into the warming oil segment and we continue to see meaningful revenue growth opportunities with this innovation given our historically - limited presence in this very large segment with an estimated 80% of mothers purchasing the product.

 

Revenue in ANZ declined slightly due primarily to softer consumer spending in our categories with cost-of-living concerns remaining relatively high. In addition, towards the end of the period, worker strikes taking place at a customer's distribution centres resulted in some temporary disruption to our sales, although some of the lost revenue has been regained in the second half of the year. Nevertheless, we continued to grow market share and profitability, across each of our three main brands - Morning Fresh, Radiant and Rafferty's Garden.

 

Adjusted operating margin declined by 280bps against a strong comparative period, with favourable mix in ANZ and modest growth in Indonesia offset by a reduction in profitability from our smaller Asian markets. On a statutory basis, margin declined by 180bps, as the comparative period including certain adjusting items related to simplification and transformation projects, now completed.

 

Africa

 

£m unless otherwise stated	H1 FY25	H1 FY24	Growth / (decline)
Revenue	60.6	90.8	(33.3)%
LFL revenue growth (%)	28.0%	17.4%	n/a
Adjusted operating profit	8.7	13.7	(36.5)%
Margin (%)	14.4%	15.1%	(70)bps
Operating profit/(loss)	1.6	(62.7)	n/a
Margin (%)	2.6%	(69.1)%	n/a
Adjusted operating profit (ex. share of joint venture)	4.0	5.9	(32.2)%
Margin %	6.6%	6.5%	10bps

 

On a statutory basis, revenue declined by 33.3% largely because the Naira was approximately 55% lower on average during H1 FY25 compared to the prior period. LFL revenue growth of 28.0% was driven by further inflation-driven price increases.

 

In Nigeria Family Care, LFL revenue grew over 40%, with double-digit growth across our key Brands. Growth was driven by pricing, successfully offsetting increased costs, with volume declines of 11%. Market shares have, overall, been maintained due to continued growth in distribution points with 171,000 stores reached, up from 151,000 at the end of FY24. We have also delivered successful innovation launches including Robb Extra Menthol and Joy 'Soft Glow', and Brand activations such as Premier Cool 'Ready up your cool' and 'International Men's Day' campaigns. We also benefited from a strategic partnership with the 'Big Brother Naija' show.

 

Electricals revenue was £18.5 million and grew 20% on a constant currency basis. This was driven by continued price increases and favourable mix aided by our energy saving innovation. Volumes declined double digits as a result of category pressures and supply chain disruption although the latter improved towards the end of the period.

 

Adjusted operating margin declined by 70bps due to a more normal level of profit from the PZ Wilmar joint venture in Nigeria. Excluding the PZ Wilmar income, Africa margin increased by 10bps with further pricing in our Nigerian business more than offsetting the continued higher input costs in the first half. On a statutory basis, the operating profit was £1.6 million compared to a loss of £62.7 million in the comparative period which had reflected the increase in the value of historical USD denominated liabilities in our Nigerian subsidiaries and FX losses on the revaluation of these liabilities. Adjusting items of £7.1 million in H1 FY25 relate primarily to FX losses arising on loans previously classified as permanent as equity and accounted for in reserves.

 

Other financial items

Adjusted operating profit

Adjusted operating profit for the Group was £27.0 million, a decrease of £3.6 million from £30.6 million in the prior period. This was primarily driven by a £8.3 million increase in the Europe and Americas region, offset by a £7.6 million decrease in APAC and Africa, combined. Central costs increased by £4.3 million due primarily to costs attributable to business units but recorded centrally, as well as increased investment in our brand-building capabilities and an increase in audit fees. Adjusted operating profit margin decreased by 20bps to 10.8% but grew 70bps excluding the contribution from the PZ Wilmar joint venture which is equity-accounted and which had a particularly strong comparative period.

 

Adjusting items

Adjusting items in the period were £13.4 million before tax and primarily relate to ongoing transformation projects and foreign exchange losses on loans that were previously classified as permanent as equity. This compares to adjusting items of £120.3 million in the prior period which included foreign exchange losses arising on the Naira devaluation and an impairment charge.

 

After accounting for these adjusting items, the operating profit for the Group was £13.4 million compared to an operating loss of £(89.7) million in the prior period.

 

Net finance expense

Net finance expense in the period was £7.1 million compared to a net finance expense of £4.5 million in the prior period. This was driven mainly by lower interest income due to the successful repatriation of cash from Nigeria to the UK, which more than offset the reduction in interest expense as a result of lower gross borrowings.

 

Statutory profit before tax was £6.4 million, £100.6 million higher than the prior period while adjusted profit before tax was £19.8 million which was £6.3 million lower than the prior period.

 

Taxation

The tax charge in the period was £2.2 million compared to a tax credit of £27.2 million in the six month period to November 2024, reflecting the material impact of statutory FX losses suffered in Nigeria during FY24, and the full recognition of the resulting deferred tax asset. The effective tax rate ('ETR') on adjusted profit before tax decreased slightly to 18.2% (20.3% in the six months to November 2024) primarily due to the treatment of certain costs that are not tax-deductible.

 

Profit for the period

Profit for the period was £4.2 million which compared to a loss of £(67.0) million in the prior period. Basic earnings per share was 1.19p compared to a loss per share of (10.84)p in the prior period. Adjusted basic earnings per share was 3.89p which compares to 4.32p in the prior period.

 

Balance sheet and cash flow

Net debt as at 30 November 2024 was £106.1 million compared to £115.3 million at 31 May 2024. The Group now has no excess cash held in Naira following the repatriation of cash to the UK during FY24.

 

£m unless otherwise stated		H1 FY25	FY24
Total cash		46.4	51.3
Of which Naira		15.6	17.2
Gross debt		152.5	166.6
Net debt		106.1	115.3
Balance sheet rates (NGN/GBP):		2,124	1,893

 

Total free cash flow was £22.7 million compared to £20.0 million in the prior period. The increase reflects primarily an improvement in working capital movements and reduction in capital expenditure, offset by lower adjusted EBITDA.

 

£m unless otherwise stated		H1 FY25	H1 FY24
Adjusted EBITDA		33.3	39.7
Cash flow impact of adjusting items		(13.6)	(7.7)
Working capital movement [4]		4.6	(4.6)
Capital expenditure		(1.4)	(2.4)
Share of results of joint venture		(2.3)	(5.6)
Other		2.1	0.6
Free cash flow		22.7	20.0

 

Net assets increased to £244.0 million compared to £235.2 million at 31 May 2024 primarily due to a decrease in borrowings.

 

The Group has a £325.0 million committed credit facility which is available for general corporate purposes. The credit facility incorporates both a term loan, of up to £125.0 million, with the balance as a revolving credit facility (RCF) structure. Entered into in November 2022, the term loan is a two-year facility and the RCF a four-year facility, with both facilities retaining two, one-year extension options, the first of which was executed in October 2023. During the current period, management postponed the term loan extension window from October 2024 to March 2025, allowing the portfolio transformation projects to progress further before a decision needed to be taken on funding facility requirements. It should be noted that current levels of borrowing provide sufficient headroom even if the term loan was not extended beyond its current maturity of November 2025. As at 30 November 2024, the headroom on the committed facility was £172.0 million compared to £164.0 million at 31 May 2024.

 

Foreign exchange

The general appreciation of Sterling against our other currencies, and in particularly the devaluation of the Nigerian Naira, resulted in a £46.2 million reduction to H1 FY24 revenue as set out below.

 

	% of FY24	Average FX rates			Revenue impact
	revenue	H1 FY25	H1 FY24	% change	(£m)
GBP	33%	1.00	1.00	-	-
NGN (Nigeria)	28%	2,038	915	(55)%	(42.7)
AUD (Australia)	17%	1.94	1.92	(1)%	(0.5)
IDR (Indonesia)	12%	20,480	19,161	(6)%	(2.1)
USD (USA)	2%	1.29	1.25	(3)%	(0.2)
Other	8%	-	-		(0.7)
Total [5]	100%	-	-		(46.2)

 

Given the materiality of the movement in the Nigerian Naira in recent periods, the rates used in recent reporting periods are summarised below.

 

NGN/GBP	FY23	FY24	H1 FY24	H1 FY25
Rate used for P&L	536	1,256	915	2,038
Rate used for balance sheet	577	1,893	1,176	2,124

 

[4] In H1 FY24, the foreign exchange losses of £88.2 million in adjusting items have been netted against the working capital movement line item for improved comparison to H1 FY25.

[5] Table shows the impact of translating H1 FY24 revenue at H1 FY25 foreign exchange rates.

 

Glossary

 

Term	Definition
APM	Alternative performance measure
BEST values	Our PZ Cussons values (Bold, Energetic, Striving and Together)
Brand Investment	An operating cost related to brand marketing (previously 'Media & Consumer')
EBITDA	Earnings before interest, taxes, depreciation and amortisation
Employee wellbeing	% score based upon a set of questions within our annual survey of employees
EPS	Earnings per share
ETR	Effective tax rate
ExCo	Executive committee
Family Care	Refers to our Hygiene, Baby and Beauty brands in Nigeria and Africa
Free cash flow	Cash generated from operations less capital expenditure
Free cash flow conversion	Free cash flow as a % of adjusted EBITDA from continuing operations
Like for like (LFL) revenue growth	Growth on the prior year at constant currency, excluding unbranded sales and the impact of disposals and acquisitions, and adjusting for the number of reporting days in the period
Must Win Brands	The brands in which we place greater investment and focus. They comprise: Carex, Childs Farm, Cussons Baby, Joy, Morning Fresh, Original Source, Premier, Sanctuary Spa and St.Tropez
Net debt	Cash, short-term deposits and current asset investments, less bank overdrafts and borrowings. Excludes IFRS 16 lease liabilities
Personal Care	Refers to our UK business unit operating our Hygiene brands such as Carex, Original Source and Imperial Leather
Portfolio Brands	The brands we operate which are not 'Must Win Brands'
PZ Cussons Growth Wheel	Our 'repeatable model' for driving commercial execution, comprising 'Consumability', 'Attractiveness', 'Shoppability' and 'Memorability'
Revenue Growth Management (RGM)	Maximising revenue through ensuring optimised price points across customers and channels and across different product sizes
SKUs	Stock keeping unit
Through the Line	Marketing campaign incorporating both mass reach and targeted activity

Alternative Performance Measures

The Group’s business performance is assessed using a number of alternative performance measures (APMs). These APMs include adjusted profitability measures where results are presented excluding separately disclosed items (referred to as adjusting items) as we believe this provides both management and investors with useful additional information about the Group’s performance and supports a more effective comparison of the Group’s financial performance from one period to the next. 

Adjusted Consolidated Income Statement

	Unaudited Half year to 30 November 2024			Unaudited Half year to 2 December 2023
	Business performance excluding adjusting items	Adjusting items	Statutory results for the half year	Business performance excluding adjusting items	Adjusting items	Statutory results for the half year
	£m	£m	£m	£m	£m	£m
Revenue	249.3	-	249.3	277.1	-	277.1
Cost of sales	(145.8)	-	(145.8)	(167.8)	(72.2)	(240.0)
Gross profit	103.5	-	103.5	109.3	(72.2)	37.1
Selling and distribution expense	(41.6)	-	(41.6)	(44.5)	-	(44.5)
Administrative expense	(39.6)	(11.2)	(50.8)	(42.0)	(45.9)	(87.9)
Share of results of joint venture	4.7	(2.4)	2.3	7.8	(2.2)	5.6
Operating profit/(loss)	27.0	(13.6)	13.4	30.6	(120.3)	(89.7)
Finance income	2.2	0.2	2.4	8.3	-	8.3
Finance expense	(9.5)	-	(9.5)	(12.8)	-	(12.8)
Net finance expense	(7.3)	0.2	(7.1)	(4.5)	-	(4.5)
Net monetary gain arising from hyperinflationary economies	0.1	-	0.1	-	-	-
Profit/(loss) before taxation	19.8	(13.4)	6.4	26.1	(120.3)	(94.2)
Taxation	(3.6)	1.4	(2.2)	(5.3)	32.5	27.2
Profit/(loss) for the period	16.2	(12.0)	4.2	20.8	(87.8)	(67.0)
Attributable to:
Owners of the Parent	16.3	(11.3)	5.0	18.1	(63.5)	(45.4)
Non-controlling interests	(0.1)	(0.7)	(0.8)	2.7	(24.3)	(21.6)
	16.2	(12.0)	4.2	20.8	(87.8)	(67.0)

Details of adjusting items are provided in Note 4 to the condensed consolidated interim financial statements. Reconciliations from IFRS reported results to APMs are set out below.
Alternative Performance Measures (continued)

Adjusted operating profit and adjusted operating margin

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Group
Operating profit/(loss) from continuing operations	13.4	(89.7)
Exclude: adjusting items	13.6	120.3
Adjusted operating profit	27.0	30.6
Revenue	249.3	277.1
Operating margin	5.4%	(32.4)%
Adjusted operating margin	10.8%	11.0%
By segment
Europe & the Americas:
Operating profit/(loss) from continuing operations	19.6	(16.6)
Exclude: adjusting items	1.1	29.0
Adjusted operating profit	20.7	12.4
Revenue	101.0	97.2
Operating margin	19.4%	(17.1)%
Adjusted operating margin	20.5%	12.8%
Asia Pacific:
Operating profit from continuing operations	13.1	14.8
Exclude: adjusting items	-	0.9
Adjusted operating profit	13.1	15.7
Revenue	87.7	88.8
Operating margin	14.9%	16.7%
Adjusted operating margin	14.9%	17.7%
Africa:
Operating profit/(loss) from continuing operations	1.6	(62.7)
Exclude: adjusting items	7.1	76.4
Adjusted operating profit	8.7	13.7
Revenue	60.6	90.8
Operating margin	2.6%	(69.1)%
Adjusted operating margin	14.4%	15.1%
Central:
Operating loss from continuing operations	(20.9)	(25.2)
Exclude: adjusting items	5.4	14.0
Adjusted operating loss	(15.5)	(11.2)

Alternative Performance Measures (continued)

Adjusted gross profit and gross margin

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Gross profit	103.5	37.1
Exclude: adjusting items	-	72.2
Adjusted gross profit	103.5	109.3
Revenue	249.3	277.1
Gross margin	41.5%	13.3%
Adjusted gross margin	41.5%	39.4%

 

 

Adjusted share of results of joint venture

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Share of results of joint venture	2.3	5.6
Exclude: adjusting items	2.4	2.2
Adjusted share of results of joint venture	4.7	7.8

 

 

Adjusted profit before taxation

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Profit/(loss) before taxation from continuing operations	6.4	(94.2)
Exclude: adjusting items	13.4	120.3
Adjusted profit before taxation	19.8	26.1

 

 

Adjusted Earnings Before Interest Depreciation and Amortisation (Adjusted EBITDA)

 

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Profit/(loss) before taxation from continuing operations	6.4	(94.2)
Add back: net finance expense	7.1	4.5
Add back: depreciation	4.1	5.5
Add back: amortisation	2.1	3.6
Add back: impairment and impairment reversal	-	24.4
	19.7	(56.2)
Exclude: adjusting items1	13.6	95.9
Adjusted EBITDA	33.3	39.7

 

¹   Excludes adjusting items relating to impairment and finance income.

Alternative Performance Measures (continued)

 

Adjusted earnings per share

	Half year to 30 November 2024	Half year to 2 December 2023
	pence	pence
Basic earnings/(loss) per share	1.19	(10.84)
Exclude: adjusting items	2.70	15.16
Adjusted basic earnings per share	3.89	4.32
Diluted earnings/(loss) per share1	1.19	(10.84)
Exclude: adjusting items2	2.68	15.11
Adjusted diluted earnings per share	3.87	4.27

¹      In the half year to 2 December 2023, the basic and diluted loss per share are equal as a result of the Group incurring a loss for the year.

²      In the half year to 2 December 2023, this includes an adjustment of 0.13 pence per share arising from bringing the diluted loss per share in line with the basic loss per share
as outlined above.

 

Free cash flow

	Half year to 30 November 2024	Half year to 2 December 2023
	£m	£m
Cash generated from operations	24.1	22.4
Deduct: purchase of property, plant and equipment and software	(1.4)	(2.4)
Free cash flow	22.7	20.0

 

CONDENSED CONSOLIDATED INCOME STATEMENT

		Unaudited Half year to 30 November 2024	Unaudited Half year to 2 December 2023	Audited Year to 31 May 2024
	Notes	£m	£m	£m
Revenue	3	249.3	277.1	527.9
Cost of sales		(145.8)	(240.0)	(396.8)
Gross profit		103.5	37.1	131.1
Selling and distribution expense		(41.6)	(44.5)	(82.8)
Administrative expense		(50.8)	(87.9)	(139.3)
Share of results of joint venture		2.3	5.6	7.3
Operating profit/(loss)	3	13.4	(89.7)	(83.7)
Finance income		2.4	8.3	12.2
Finance expense		(9.5)	(12.8)	(24.2)
Net finance expense		(7.1)	(4.5)	(12.0)
Net monetary gain/(loss) arising from hyperinflationary economies3		0.1	-	(0.2)
Profit/(loss) before taxation		6.4	(94.2)	(95.9)
Taxation	7	(2.2)	27.2	24.1
Profit/(loss) for the period/year1		4.2	(67.0)	(71.8)
Attributable to:
Owners of the Parent		5.0	(45.4)	(57.0)
Non-controlling interests		(0.8)	(21.6)	(14.8)
		4.2	(67.0)	(71.8)
Earnings/(loss) per ordinary share1
Basic (p)		1.19	(10.84)	(13.60)
Diluted (p)2		1.19	(10.84)	(13.60)

¹   Wholly derived from continuing operations.

²   In the half year ended 2 December 2023, the basic and diluted loss per share are equal as a result of the Group incurring a loss for the period.

³   Represents the hyperinflation impact in relation to Ghana.

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Unaudited Half year to 30 November 2024	Unaudited Half year to 2 December 2023	Audited Year to 31 May 2024
		£m	£m	£m
Profit/(loss) for the period/year		4.2	(67.0)	(71.8)
Other comprehensive income/(expense)
Items that will not be reclassified to income statement:
Re-measurement gain/(loss) on net retirement benefit surplus		0.3	(5.2)	(6.8)
Taxation on other comprehensive income/(expense)		(0.1)	1.3	1.7
Total items that will not be reclassified to income statement		0.2	(3.9)	(5.1)
Items that may be subsequently reclassified to income statement:
Exchange differences on translation of foreign operations1		2.8	(55.6)	(69.4)
Share of other comprehensive expense of joint venture accounted for using the equity method		(0.1)	(8.5)	(20.0)
Cash flow hedges - fair value movements net of amounts reclassified		0.6	(0.9)	(0.6)
Total items that may be subsequently reclassified to income statement		3.3	(65.0)	(90.0)
Other comprehensive income/(expense) for the period/year		3.5	(68.9)	(95.1)
Total comprehensive income/(expense) for the period/year		7.7	(135.9)	(166.9)
Attributable to:
Owners of the Parent		7.9	(100.3)	(133.3)
Non-controlling interests		(0.2)	(35.6)	(33.6)
		7.7	(135.9)	(166.9)

¹   Includes a hyperinflation adjustment of £0.5 million (2 December 2023: £nil) in relation to Ghana.

CONDENSED CONSOLIDATED BALANCE SHEET

		Unaudited 30 November 2024	Unaudited 2 December 2023	Audited 31 May  2024
	Notes	£m	£m	£m
Assets
Non-current assets
Goodwill and other intangible assets	5	276.9	284.7	279.3
Property, plant and equipment		40.9	48.9	42.8
Investment properties		7.0	6.2	6.6
Right-of-use assets		8.7	11.6	10.2
Net investments in joint venture		2.3	44.5	-
Trade and other receivables		29.3	-	32.1
Deferred taxation assets		21.9	26.0	22.2
Current tax receivable		-	-	0.6
Retirement benefit surplus		33.1	34.2	32.1
		420.1	456.1	425.9
Current assets
Inventories		78.5	91.5	68.5
Trade and other receivables		104.7	96.5	99.0
Derivative financial assets	12	0.7	1.7	-
Current taxation receivable		4.3	1.5	0.2
Current asset investments	10	-	0.5	-
Cash and cash equivalents	10	46.4	128.1	51.3
		234.6	319.8	219.0
Assets held for sale		5.0	1.2	4.7
		239.6	321.0	223.7
Total assets		659.7	777.1	649.6
Equity
Share capital		4.3	4.3	4.3
Treasury shares		(33.0)	(35.0)	(34.5)
Capital redemption reserve		0.7	0.7	0.7
Hedging reserve		0.2	(0.7)	(0.4)
Currency translation reserve		(157.5)	(139.1)	(159.6)
Retained earnings		429.0	444.9	425.3
Other reserves		7.6	5.5	6.5
Attributable to owners of the Parent		251.3	280.6	242.3
Non-controlling interests		(7.3)	(9.1)	(7.1)
Total equity		244.0	271.5	235.2

 

To comply with the requirements of IAS 1 Presentation of Financial Statements, the full balances of investment properties have been restated to be presented separately on the face of the Consolidated Balance Sheet. As at 2 December 2023, these were included within the property, plant and equipment balance

CONDENSED CONSOLIDATED BALANCE SHEET

		Unaudited 30 November 2024	Unaudited 2 December 2023	Audited 31 May  2024
	Notes	£m	£m	£m
Liabilities
Non-current liabilities
Borrowings	10	152.5	219.0	160.3
Other payables		0.7	3.5	2.6
Lease liabilities		9.1	10.6	9.7
Deferred taxation liabilities		38.7	56.4	39.8
Retirement and other long-term employee benefit obligations		12.6	12.0	12.2
		213.6	301.5	224.6
Current liabilities
Borrowings	10	-	6.3	6.3
Trade and other payables		174.9	178.4	158.7
Lease liabilities	10	1.6	2.5	2.4
Derivative financial liabilities	12	0.2	0.4	0.5
Current taxation payable		24.8	15.8	21.7
Provisions		0.6	0.7	0.2
		202.1	204.1	189.8
Total liabilities		415.7	505.6	414.4
Total equity and liabilities		659.7	777.1	649.6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY