RNS Number : 8020J
PZ CUSSONS PLC
16 April 2020
16(th) April 2020
PZ Cussons Plc
("PZ Cussons" or the "Group")
Trading Update for the Third Quarter 2020
PZ Cussons Plc, a leading international consumer products group,
today updates on its trading during the third quarter 2020, ended
29(th) February 2020 ('Q3' or 'the quarter').
-- Continued progress on the implementation of the Group strategy.
o Focus Brand revenue in Q3 grew compared to last year, driven
by Cussons Baby, Morning Fresh, a return to growth for Carex and
good performance of Electricals
o Completion of the sale of local Polish brand Luksja and
announcement of disposal of Nutricima in Nigeria.
o Appointment of new CEO, Jonathan Myers, starting 1(st)
-- Overall revenue in the quarter declined against last year,
albeit at a reduced rate compared to the first half of the
-- Key markets continued to be impacted by consumer fragility,
and towards the end of the period, the start of Covid-19
-- Balance sheet remained strong, with net debt of GBP116m
versus GBP183m at the same time last year, and headroom of GBP147m
under our committed bank facilities. Continued focus on management
actions to manage liquidity across the Group.
-- Impact of Covid-19 continues to be significant, although
varies depending on business unit and market.
-- Our full year profit guidance remains within consensus range, albeit at the lower end.
Q3 Regional Revenue Performance
In Europe & the Americas, there was some improvement in UK
personal care with the rate of decline in the quarter softening
compared to the first half of the year. Carex benefitted from a
significant increase in demand towards the end of the quarter
driven by the Covid-19 pandemic. Our Beauty category faced tough
competitive conditions in the UK in particular, resulting in a
decline in revenue for the quarter compared to last year.
In Asia Pacific, continued good growth in Indonesia in the
quarter versus last year was offset by increased promotional spend
and competitor activities in Australia, mainly across the Food and
In Africa, revenue declined overall in Q3 compared to last year.
Continued growth in Electricals and in selected premium brands was
impacted by continued decline in our value brands in Home and
Impact of COVID-19
Our People and Wider Role in Society
Our people, whether working from home or keeping our factories
around the globe running, have responded fantastically to the
challenges facing us. Protecting them whilst continuing to produce
products that can genuinely help stop the spread of Covid-19
remains our priority. The innovation, rapid product development and
response to unprecedented conditions shown by our teams has been
outstanding, and underlines both the scale of the challenges facing
us, and the strength of our brands and teams.
Our key manufacturing sites across all regions remain open, with
our employees demonstrating huge commitment to ensuring that
production of our important hygiene products continues. Where
possible, all employees who can work from home are doing so,
although each of our markets requires a different approach to this.
Ensuring safe and secure conditions for those who still need to
come to a place of work continues to be a priority.
We are also conscious of our wider role in society and will
continue to support those most at risk in our communities. Our
approach varies from market to market but we have programmes in
place to distribute free soap, sanitiser and hand wash to those
most vulnerable and in need. For example, in the UK, our "That's
why we Carex" programme is working with the homeless, elderly and
other vulnerable groups. In Nigeria, the PZ Cussons Foundation is
distributing soap in the north of the country while in Asia we
support those communities close to our manufacturing sites.
The impact of Covid-19 across our businesses is significant,
although very different across business unit and market.
In the UK, we are experiencing exceptionally high demand for our
Carex hand wash and sanitiser gel products and Imperial Leather
soap. Our focus remains on sourcing, producing and distributing
these. Our team has shown exceptional ability to reconfigure
products and supply chains rapidly, but we continue to face
challenges in sourcing packaging and raw materials to enable us to
fully meet demand.
Our Beauty business has been severely impacted. St Tropez has
been hit hard by the social distancing measures in place in the UK,
US and across Europe. Our significant marketing activities planned
for Q4 have been cancelled and we expect this business to be slow
to recover. Our other beauty brands have also been adversely
impacted with the focus of retailers at this time on hygiene and
personal care and the closure of hair salons.
In Asia, our Indonesian business has continued to trade largely
as normal with increased customer demand for our hygiene related
products offsetting a reduction in some of our lotions and creams.
Australia has seen a recent spike in demand for Morning Fresh and
Raffertys Garden as a result of Covid-19 but also a severe
reduction in Beauty sales.
The situation in Nigeria is uncertain. The recent fall in the
global oil price has led to further economic pressure, and the
Covid-19 situation continues to develop. All our Nigerian
businesses are likely to be impacted by the significant disruption
to both manufacturing and route to market.
The Group has historically maintained a prudent financial
position, and we entered the current crisis with a strong balance
PZ Cussons' external funding is through a syndicated borrowing
facility which is provided by a syndicate of six lenders in the
form of a GBP325 million committed multi-currency revolving credit
facility committed until 28 November 2023. As at 29(th) February
2020, we had headroom of GBP147m under our committed
We continue to focus on management actions to manage liquidity
carefully across the group. Recent actions taken have included the
cancellation of capital expenditure projects, the review of the
cost base, particularly in those areas of the business most
impacted by Covid-19 and working capital initiatives across our
business. At this time, we have not elected to participate in the
UK furlough scheme or similar schemes in other countries.
We completed the sale of local Polish brand Luksja for GBP9.2m
in the quarter and recently announced the disposal of Nutricima,
our Nigerian milk business, for $20.3m. Our target debt level for
the year-end remains at GBP110m in line with guidance at the half
Whilst there is a high level of uncertainty regarding the full
impact of Covid-19 across all of our different businesses and
markets continues, at this point our guidance on profit remains
within consensus, albeit at the lower end.
Given the current uncertain environment, we plan to issue our
preliminary results for the year ended 31(st) May 2020 in late
summer, with a date to be confirmed in due course.
- Ends -
Alan Bergin (Interim Chief Financial
Officer) 0161 435 1236
Tim Linacre / Guy Scarborough 07949 939 237 / 07917 178 920
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(END) Dow Jones Newswires
April 16, 2020 02:00 ET (06:00 GMT)
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