In This Article:
Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
PZ Cussons PLC (FRA:1ZQ) reported solid trading in the UK, Indonesia, and ANZ, with like-for-like revenue growth of 2%.
-
The company achieved a 3rd consecutive quarter of growth in Indonesia, driven by targeted innovation and strengthened retail execution.
-
In ANZ, PZ Cussons PLC's brands demonstrated resilience by growing market share despite market-wide declines.
-
The UK business saw a significant improvement in profitability, supported by overhead efficiencies and increased retail distribution.
-
Net debt reduced from 115 million to 106 million, aided by stronger free cash flow.
Negative Points
-
The devaluation of the Nigerian naira led to a decline in reported revenue and profitability, with a 55% decrease in the exchange rate.
-
Revenue declined by 28 million pounds, with 46 million attributable to foreign currency translation impacts.
-
Adjusted operating profit decreased by 3.6 million pounds, primarily due to adverse FX movements.
-
Profit before tax declined to 19.8 million pounds, reflecting reduced operating profit and increased interest charges.
-
Adjusted earnings per share fell by 10%, influenced by a statutory loss in the Nigerian business and reduced sterling value of minority interests.
Q & A Highlights
Q: Can you elaborate on the improvements in the UK market, particularly regarding distribution and execution? A: Unidentified_1 (likely CEO): The improvements in the UK are due to a combination of factors, including a new integrated leadership team and the merging of two business units, which allowed for overhead efficiencies and best practice sharing. This has led to significant distribution wins and better in-store execution, with a focus on being competitive and winning wherever the shopper shops.
Q: What are the current market conditions in Indonesia, and how has the price analytics platform impacted your performance there? A: Unidentified_1 (likely CEO): In Indonesia, we've seen a moderation of pressures on shopper spending due to a more benign economic environment. Our improvements have been driven by self-help measures, such as expanding distribution and using data analytics to optimize pricing and promotions. The price analytics platform has helped us manage the mix effectively, ensuring our products reach more consumers.
Q: How are you planning for future cost structures, especially in light of potential strategic changes? A: Unidentified_2 (likely CFO): We have been building capabilities in digital, brand building, and governance, and are now focusing on making our cost base competitive. This includes optimizing manufacturing, integrating business units, and managing costs related to our operations in Nigeria. We aim to generate savings to reinvest in growth and shareholder returns.