PZ Cussons Continues to Soar with Impressive Revenue Growth and Strong Brand Expansion

PZ Cussons continues to reap the rewards of its investment in brand, with the company announcing its third straight year of revenue growth for the period ending 31 May 2023.

During this time, the multinational hygiene firm experienced a 10.7% increase in revenue, reaching £656.3m compared to the previous year's £592.8m. Furthermore, the company achieved a like-for-like revenue growth of 6.1%, up from 2.9% in 2022, marking a consistent trend of growth for three consecutive years.

The business, PZ Cussons, known for brands like Carex, Imperial Leather, and Original Source, has been transitioning from a "trade-led" organization to a brand-building company. Despite this, its operating profit margin decreased slightly from 11.3% to 11.2%, which the business attributed to being in-line with guidance.

In its FY23 results, PZ Cussons saw an increase of 20 basis points in brand investment in absolute terms, although it decreased slightly as a percentage of revenue. The exact figure was not disclosed. This decrease was part of a planned normalization of investment in Carex throughout the year, with most brands receiving more investment compared to FY22. PZ Cussons prioritized its "must-win" brands in this strategy.

Despite a 3% decline in the UK washing and bathing category, PZ Cussons achieved positive overall financial results. This decline affected the growth of Carex in the year. However, the CFO, Sarah Pollard, mentioned that the first quarter of the 2024 financial year shows significant improvement compared to FY23. Additionally, three of the "must-win" brands, Sanctuary Spa, Original Source, and St Tropez, experienced growth in the past year despite challenging market conditions. PZ Cussons aims to achieve sustainable and profitable growth in the UK as one of its key ambitions for FY24.

The company acknowledged the challenging economic conditions faced by its customers. During an investor call on September 26, CEO Jonathan Myers emphasized the company's efforts to understand the changing needs of consumers in relation to economic difficulties. PZ Cussons is committed to providing the best possible value to its customers. Myers highlighted the importance of product innovations in achieving this goal, citing the successful launch of Cussons Creations, a budget line of shower gels, alongside the relaunch of its premium brand, Imperial Leather. He noted that Cussons Creations has quickly become a top 10 brand in the washing and bathing sub-category, offering a reasonable everyday price.

Myers expressed satisfaction with the overall results, stating that they have achieved a third consecutive year of revenue growth and a more than 10% increase in operating profit since implementing their strategy almost three years ago. He went on to explain that these improvements were made possible by investing in their brands and capabilities, focusing on innovation and productivity to better serve cost-conscious consumers, and streamlining operations to reduce complexity within the company.