PZ Cussons’ investment in brand continues to pay off as the business reports its third consecutive year of revenue growth for the 12 months to 31 May 2023.
Revenue at the multinational hygiene company increased by 10.7% from £592.8m to £656.3m for the year to. The business also saw like-for-like revenue growth hit 6.1%, up from 2.9% in 2022, similarly the third consecutive year of growth.
Its operating profit margin, however, reduced slightly from 11.3% to 11.2% something the business described as being in-line with guidance.
PZ Cussons, which owns brands such as Carex, Imperial Leather and Original Source, has been on a journey to change the company from a “trade-led” organisation to one that is in the business of building brands.
That theme continued in its FY23 results with its CFO Sarah Pollard noting brand investment increased by 20 basis points in absolute terms but had decreased slightly as a percentage of revenue. A precise figure wasn’t shared. This was due to a “planned normalisation” of Carex investment across the financial year with “most brands receiving more investment compared to FY22” with a focus on what the business dubs its “must-win” brands.
The overall positive financial results come in spite of a 3% decline in the UK washing and bathing category, which led to a fall in growth for Carex in the year. Pollard noted that the early signs for the first quarter of its 2024 financial year are “much improved” on FY23 and said three of its must-win brands – Sanctuary Spa, Original Source and St Tropez – all saw growth last year despite challenging category conditions. PZ Cussons considers returning the UK to sustainable, profitable growth one of its key ambitions for FY24.
How the CEO and CMO relationship underpinned PZ Cussons’ turnaroundThe company also paid attention to the difficult economic environment that its customers find themselves in. Its CEO Jonathan Myers told investors on a call today (26 September) that the business was working hard to understand “changing consumer needs” with regards to economic difficulties. He said PZ Cussons is determined to offer the “best possible value” for its customers.
He spoke of product innovations playing a key role in that pointing to the example of Cussons Creations, a budget line of shower gels, which was revealed alongside the relaunch of Imperial Leather, its more premium brand. Myers said that Cussons Creations was sold at a “reasonable everyday price” and that it was already a top 10 brand within the washing and bathing sub-category.
Speaking around the results as a whole, Myers said: “We have delivered a third consecutive year of like-for-like revenue growth and increased operating profit by over 10% since launching our strategy nearly three years ago.”
He continued: “We have achieved these improvements by investing in our brands and capabilities, serving cost-conscious consumers better with targeted innovation and productivity initiatives helping us to reduce complexity across the group.”