PZ Cussons plc (PZC) Earnings Call Transcript & Summary

So good morning, and welcome to the PZ Cussons Capital Markets Day. Obviously, today, we're doing this virtually, and I hope wherever you are, you are within an arm's reach of care and protection. We certainly are, and I will be using my Carex 50 ml on the go just to show how handy the size is. Let me start by introducing myself. I am Jonathan Myers, the CEO of PZ Cussons, and I'm delighted to say that I'm joined here today by our new CFO, Sarah Pollard. It's been a while since we've hosted one of these in at least a decade, so we appreciate you making the efforts to join us. Over the next couple of hours, we're looking forward to setting out the path ahead for the business and our journey to sustainable value creation. We'll be clear on how we will do this, starting with knowing what business we are in: the business of branded consumer goods. We build brands, which enables us to create value. Our strategy is well-defined and is designed to get us back to sustainable and profitable revenue growth. We understand the roles that each part of our business needs to play and that includes a plan for our business in Nigeria, a question that I know many of you have had on your minds. As we grow revenue, we will also grow investment, committing the right resources behind the priorities we have set out. Building on good work in the past, we will be elevating sustainability as we broaden our ESG efforts to put it at the heart of everything we do and making some clear commitments against which you can measure us over time. But we have not been waiting to get started on the journey. We've been getting stuff done. As you know from the updates we've already given through my first 10 months, we set out to get off to a fast start in our financial year, unleashing some parts of our business with turbo boosters to renew momentum and enabling us to respond to the disruptive demand patterns of the past year. Meanwhile, in the background, we worked on renewing our strategy and rebuilding the leadership team, including the appointment of a new CFO. And together, we're here to tell our story as well as a few guest video appearances by other members of our team as we go through the morning. I'll set out our new strategy and what has shaped it. And then we'll take a closer look at how the strategy comes to life on some of our leading brands. I'll then fill you in on how we're going to elevate sustainability within our overall program before we take a closer look at some of the enablers of our strategy, and then Sarah will set out the financial framework behind it. Finally, we've allowed plenty of time at the end for us to respond to your questions and hear what's on your minds. So a couple of quick refreshers on the shape of our business and our leadership as we start today. While we operate and thrive in many markets around the world, not least the U.S., where St. Tropez has a solid track record of growth over recent years, actually, just 4 main markets represent the lion's share of our business. We have nearly 4,000 employees around the world, and we operate in 4 broad product categories. As for leadership, we're rebuilding a team capable of turning this business around and delivering the new strategy to unlock our full potential. We effectively have a new leadership team versus just a year or so ago with an intentional mix of fresh eyes from the outside combined with talent from within. With the 3 newest members only joining the leadership team in January of this year, we now have a diverse team that on the one hand has more than a century of experience and expertise from blue chip, branded FMCG players, such as Unilever, P&G, Coca-Cola, Nestle and L'Oréal, and on the other hand, we also have more than a century of PZ Cussons experience. Together, we have a balance of developed and developing market know-how, experience of turnarounds and, above all, a shared determination to get the job done. Alongside this team, we also have the broader organization of PZ Cussons employees, representing the diverse consumer base we have around the world, and they are rediscovering their sense of passion and pride in serving consumers better. And I'd like to pause here to thank our employees who have worked tirelessly throughout the pandemic to ensure our products were available when consumers the world over turns to their most trusted brands at the moment they needed the most. I've been humbled by what the organization has achieved. And here is how we capture that hard work in some of the TV advertising we aired on Carex last year. [Presentation]

So I hope you can see how Paul and the work of his colleagues have brought our values to life over the past year. Before we look ahead, let's take a quick look back to see what we have learned from our past to help shape our future. Many of you will know, I'm sure, the rich history of PZ Cussons founded well over a century ago by Messrs Paterson & Zochonis, over on the left there, in Sierra Leone before expansion across many markets and into many types of business. They showed the zeal of pioneers and the willingness of entrepreneurs to seek out new opportunities. At its best, it has been a story of strong growth, built on a set of family values that guided generations of business leaders to do the right thing as the company expanded around the world, investing organically in the business as well as building the portfolio over time. Most notably, with the acquisition of our Greater Manchester neighbor, Cussons, in the 1970s to give us the PZ Cussons we have today. However, we have to face reality and accept that in recent years, we have lost our way and fallen short of our previous track record of performance. A steady erosion of our top line over 7 years put pressure on all other lines through the P&L as the business thought to protect profitability even if it meant pulling back on marketing investment, in many ways, the lifeblood of building brands. Although the dividend was maintained and increased over this time, we were unable to hold our profitability, and we spread our diminishing investment levels thinly across a complex array of activities. So as we look to what we can learn to help inform our future, we identified a number of drivers of this decline. First of all, that we were not looking externally enough. In too many cases, though not all, we took our eyes off the consumer, how they and their shopping habits were changing. While we were still bringing innovation to market, the new products were not always laser beam focused on delighting the consumer, justifying the value we ask them to pay or laddering up to what the overall brands stood for. Then the absence of revenue growth held back the ability to invest in our brands. Gross margins came under pressure, as we were unable to justify pricing in the absence of investment, and what funds we did have often migrated to consumer price promotion in an effort to maintain unit volumes versus investing in building brands to justify pricing and nudge up gross margins. And whatever investment funds were available, they were spread thin across a diverse and complex portfolio, which meant we were really competitive on any one brand in a given market. So if eyes were not looking externally to the consumer to inform our actions, where was the focus of the organization? Too often, the answer was internally distracted from winning in the market by the double impact of restructuring the organization to mirror the global-local matrix often found in much, much larger multinationals and then of reengineering our systems and processes that again would have been much better suited to much larger businesses than our own. Not only did this consume significant organizational attention, it also gave us a cost base we could not afford. Add all of these things together, declining revenues, underinvestment, a complex portfolio and huge multiyear internal projects, and we lost a compelling employee proposition that is critical to driving the momentum of our business. We lost key talent as they saw little prospect for career progression and, more broadly, the organization lost confidence and belief and too often got used to not winning in the market. However, if we cut through the fog of complexity and recent underperformance, we begin to see the building blocks of our return to sustainable growth. While we might look like a multinational business to many, the reality is, our business now is really quite concentrated with just 4 markets accounting for roughly 90% of our net sales: Australia/New Zealand, Indonesia, Nigeria and the U.K. Also, most of our brands are strongest in their home markets, with 90% of our brands generating most of their net sales in only 1 or 2 markets, where often they hold market-leading positions in their categories. In essence then, we're not a multinational, we're a multi-local, and we need a strategy that builds from that base in the U.K.: in Indonesia, in Australia/New Zealand, and yes, in Nigeria. So as I mentioned Nigeria, I want to be really clear upfront that we believe Nigeria represents an attractive opportunity for us. Of course, we have a long history in the country, but our pride and affection for the past is no reason to stay if it does not make sense objectively for the future. But right now, it does. Nigeria remains a land of opportunity for consumer brands with population growth set to make it the third most populous country after India and China by the middle of the century, from an already sizable 200 million-plus population today. Of course, volatility exists in a number of forms, not least foreign exchange. In the past, we may have been too reliant on hoping that macroeconomic headwinds would turn favorable. Now as we look forward, we will focus on actions we can take ourselves to improve our business. And Sarah will take you through our self-help plan later. Because if we demystify the complex operations we have in Nigeria, we believe we have 2 valuable assets at our core. Firstly, a strong portfolio of brands with a subset of market leaders in attractive and growing categories. While we continue to tidy up our long tail of brands and SKUs at our core, we have #1 brands with high levels of awareness and strong brand equities that have been decades in the making, resulting in high levels of household penetration, including broadly half of all households buying Premier soap or Devon King's cooking oil in the past year. And secondly, these brands are well activated and deeply distributed through our established route-to-market model as we work through our distributor network to get the right SKUs on the shelves or tabletops of the right outlets across the country, with Morning Fresh, for example, in 65% weighted distribution. So overall, in Nigeria, we have strong brands and a proven route to market that, we believe, represent the foundation of our return to profitable growth in the country. Looking more broadly than just Nigeria and, importantly, looking externally to shape our future strategy, we also see, as others do, shifting consumer and shopper trends that will guide how we play our portfolio to win. The long-term desire for more holistic health and well-being has collided in at least the short term with pandemic-driven demand for hygiene benefits. We expect to see midterm trends continue to put health and hygiene high up the priority list, but exactly how habits evolve is still to be seen. Of course, sustainability continues to become increasingly important for consumers as well as a broader cross-section of stakeholders, and we'll have a lot more to say about that in a few minutes. Another impact of the pandemic has been the unprecedented acceleration of trends already underway for shoppers to diversify their spend across multiple channels, with e-commerce hitting new highs and the resurgence of the local store when allowed to be open, as shoppers have shunned city centers and once busy high streets. And importantly, for us, the rise of emerging markets continues, with many having seen a softer economic dip during the pandemic than developed markets. So drawing on all of these factors, internal and external, shorter and long term, we're excited to talk to you today about our new strategy: building brands for life, today and for future generations. Building brands, because that is what we see as our job, and we're passionate about it; for life, because we're building them for the long term, but also because our brands should touch and improve consumers' lives; today, to give a sense of urgency and our bias to get on with things; and for generations to come, future generations of consumers and employees and to do business sustainably for our environment and the communities in which we live and work. [Presentation]

Put simply, we're setting out to reignite our pioneering spirit. The road map for us to do this is in front of you now, setting out our new strategy on one page. As you can see right at the top, we're calling out the business we're in, the business of building brands. We will do this to serve consumers better, beating competition and justifying the price we ask the consumer to pay from their pocket. We define our core categories, each of them attractive in terms of future growth and where we have a right to win, as hygiene, effectively combining Personal and Home Care, Baby and Beauty. Get this right, and we will realize our financial ambition of getting back to sustainable, profitable revenue growth over the long term, delivering a reliable track record of low to mid-single-digit top line growth as part of a broader financial framework that Sarah will talk you through. We will have a clear focus on the leading brands in our core categories in the priority markets, and we are already adopting the PZ Cussons growth wheel to build those brands in a systematic and repeatable way. Underpinning these strategic choices is a set of enablers that will help bring the strategy to life, starting by putting sustainability at the heart of all we do, evolving our culture to build on the strengths of the past by adding what's needed to win today, dialing up our leadership capabilities, or as I choose to call it, leadership at all levels and building the capabilities we need to compete effectively: better brand building, revenue growth management, digital marketing, e-commerce and so on. To free up organizational capacity and investment, we will be dramatically simplifying our complex operations and our ways of working, most notably in Nigeria. So yes, this is a transformation for the company, but it will come in phases. Many of the issues we're dealing with have been years in the making. So there'll be years in the fixing. I'm sure we'll hit some bumps along the way, but we're clear on the journey required. It starts with a turnaround. Let's not be shy about it. We have to stem the declines and invest efforts and resources in our core brands and capabilities to kick start them again. This will mean deprioritizing other parts of the business and driving organizational change. It will also mean targeted investment where necessary, and we're already well underway with this phase. Then as we stabilize our core, we'll move to growing the subset of our overall portfolio faster than the balance by playing across more channels or entering adjacent categories and giving ourselves the financial momentum to reinvest for sustained growth. And finally, we'll be able to move to accelerating beyond the core, driving growth to serve more consumers in our existing or new geographies with existing and new brands, whether homegrown organically or through acquisition. We think the transformation journey will be an exciting one, and we're looking forward to making progress through the phases. We're clear, though, the journey starts with hard work, fixing or strengthening the leading brands in our priority markets. These priority markets provide a good balance for us. We are split evenly between developed and emerging markets, giving us the stability of the U.K. and Australia/New Zealand, combined with the faster growth potential of Nigeria and Indonesia, albeit with increased volatility. Yes, we do operate in a number of other markets, but these 4 plus the specific addition of the U.S. for St. Tropez will represent our priority markets. Importantly, we have leading brand positions in each of them, with the potential for brand expansion into adjacent categories and new usage occasions, which takes us to which brands then. If these are our priority markets, then which are our priority brands or, as we're calling them, our must-win brands. Well, as you can see from the bull's eye in front of you, we're putting a sharpened focus on a subset of our portfolio: Sanctuary Spa, St. Tropez, Cussons Baby, Carex, Premier, Joy, Morning Fresh and Original Source. To make the grade, must-win brands need to be a leading brand, #1 or #2, in their overall category, such as Morning Fresh with almost 50% share of washing up liquid in Australia or, in a specific subcategory, such as St. Tropez, with a 50% share of prestige tanning in the U.S. They also need to play in one of our core categories of Hygiene, Baby or Beauty. And of course, for now, they need to be in one of our top 4 markets or for St. Tropez, the U.S. In other words, a market where we already have sufficient scale on the ground, and we are confident in our route-to-market capability. We also need to be sure we have a proven model for growing the brand and hence justifies the investment. More on this in a moment. Finally, they need to have the potential to live up to the role we are setting for the must-win brands to grow revenue faster than the balance of our portfolio. Essentially, the must-win brands are the engine of our return to growth. So what are the balance? What are the portfolio brands? Well, as I'll come on to show you, these are still sizable as a whole. So how we choose to manage them is important. Each one will have a clearly specified role to play in the portfolio. Some could be potential must-win brands once they meet the criteria and have a validated business model. We want to create some healthy competition within the organization to strive for this. Others may simply play the role of giving us scale within a specific category with a target retailer in order to help us secure a bigger win for one of the must-win brands. And of course, other portfolio brands could simply provide us with higher levels of short-term profitability or fixed cost absorption to free up investment for our must-win brands. And finally, there may well be some brands in there over time where the greatest value to us could be generated by divesting them. But we're not necessarily going to put up the for-sale sign today as that's not the best way for us to protect and improve their value. Stepping back, what's important here is making the priority calls, forcing the choices by brand and then bringing them to life in how we manage the brands differently. So that's what we're doing. We have already started driving different ways of working between the 2 parts of our portfolio. Must-win brands get priority, whether that's investment levels to enable them to be competitive for their category in their market, and that does vary quite significantly across our portfolio, or the innovation resources to bring the brand proposition to life. It also requires the continual journey of refining and strengthening our business model for the brand. And finally, to the joy and delight of brand managers across the PZ Cussons world, it means disproportionate management attention on the development and tracking of plans and performance. We've already completed our third monthly cycle of must-win brand reviews with key commercial members of the executive leadership team coming together with the local teams to drive and support the development of deeper understanding and stronger plans on each of our must-win brands. That does not mean we pay scant attention to the portfolio of brands, quite the opposite. We strive to get clear on their roles and then right size resources, including constraining them where necessary while always looking for the future must-win brands to incubate and elevate. As I say, we have already been hard at working in adopting these new choices. In a year when top line momentum gave us options as we work through one quarter to the next, we've been able to get a head start on the new strategy. As we stand today, the must-win brands generate half of our net sales, so focused enough to force prioritization choices within the business but also large enough to be able to move the needle for the total company as we start to get them growing ahead of the portfolio brands. If we compare them to the previous focus brands that you may recognize from how we currently report progress, then we moved from 14 focus brands to 8 must-win brands, of which 2 play in 2 markets, from quite a broad 75% of net sales to a more targeted 50% of net sales, all playing in a narrower set of categories with more attractive prospects for the future. The good news is, they already generate a disproportionate share of our gross profit. So we have the oxygen within the P&L to generate investment, and that is exactly what we've been doing, with 3 quarters of all our consumer marketing investment going against our must-win brands this year. Enough of how we select, define and support the various brands in our portfolio. Let's move on now to look at our model to grow them with the priority on the must-win brands. As I said earlier, the model we're adopting is the PZ Cussons growth wheel. And in its simplest form, it looks like this, a multifunctional effort to drive the wheel around to deliver growth in terms of household penetration or trial rate, which translates into market share and profitable revenue growth. Put simply, but holistically, it's brand building. And we're going to take a closer look at each part of the wheel, starting with consumability, essentially creating products that consumers need, want and desire. Whether it's NGN 50 for a bar of Premier soap in rural Nigeria or $50 for St. Tropez in Manhattan, we are looking to use product innovation, formulation and packaging to create the right range of products and pack sizes that meet consumer needs wherever the product is being consumed, at home, in a salon or out and about, and to break down barriers to trial. Our goal here is serving more consumers and doing it better than the competition. As we do this, we want to make sure we deliver these products at the right price, offering attractive value for all involved, starting with the consumer. Creating hero SKUs in our lineup will mean must-buy lines for shoppers and must top lines for our retail customers and distributors. Using some of the revenue growth management tools that I have talked to many of you about before, we will be able to improve price mix on our range quarter in, quarter out, helping us mitigate inflation, avoid [indiscernible], protect or grow our gross margins so we can generate fuel to support investments in our brands. [indiscernible] portfolios to create good, better, best lineups that will never give up ground on the entry-level price points but will also offer a benefit-driven ladder to move up to superior offerings at higher price points. Lots of work to be done here, but a big opportunity for us. And help justify the value of our brands in whatever tier they play, we need to build and communicate the equity of the brands, what they stand for in the minds of consumers so that we appeal to target consumers and justify the price we are asking them to reward us with. This means sharply defined brand propositions that have functional and emotional appeal, supported by the laser beam relevant product innovation I mentioned earlier. On some brands, we have this now. Others are still work in progress. However, once we have the propositions, we need to be disciplined and consistent in how we activate the brand, starting with what does it take to win in digital marketing and social media before defaulting to TV advertising. Finally, we need to be ready to put our money where our mouth is. As we sharpen the growth wheels and validate the return on investment, we will be ready to invest at the right level for a given brand in its home market. We don't want to starve our core markets of investment at competitive levels while we fund elsewhere. Finally, the first moment of truth as some businesses call it, the shelf, the shop, the e-commerce side, how do we turn up when you go shopping? First of all, we have to be ready to flow where the shopper is choosing to shop regardless of where we have been strong in the past or where we make more or less return. Our role is to serve the shopper when and how they want to shop and then optimize our model to make it sustainable. And the team has made great progress here over the past 12 months as shoppers have changed habits and channels like never before in such a short time period. We need to go further, though, and ensure we are fit to win across all channels in all markets. E-commerce is clearly part of this, and we have been working hard to develop all 3 subchannels as we see them online. Firstly, pure-play e-retailers, such as Amazon, Ocado, all look fantastic. Then our direct-to-consumer sites, hosted by the likes of The Hut Group or Shopify. And finally, the bricks and clicks among our offline customer base, such as tesco.com, sephora.com and so on. Our Beauty business has been leading the way for us here, in line with general shopper trends in the Beauty category. We have now seen our total e-commerce sales hit 40% of overall beauty sales. However, we have so much further to go, whether it's driving even more progress in e-commerce or unlocking new distribution opportunities as new usage occasions emerge, and you'll hear more about this on Carex in just a moment. So hopefully then, you've all been spun around our growth wheel and been given an insight into how we are adopting a repeatable model from one brand to the next across different parts of the business. But to really bring it to life, I'd like to hand over to some of the people who are actually doing it as opposed to me just talking theory. So let's ask Kieran to pick it up from here.

Hi. I'm Kieran Hemsworth, and I'm the new MD of the U.K. Personal Care business. I am really thrilled to have joined PZ Cussons at this exciting time. I've already met some amazing people, and it's already clear that there are so many great opportunity for the brands in our portfolio. And I'm here to talk about one of those great opportunities: Carex. Let's first introduce you to Carex. Carex is the U.K.'s #1 hand hygiene brand. It's the #1 brand in the washing and bathing category, and it is the #1 brand, both in hand wash and in hand gels. Carex has over 25 years' experience of caring and protecting hands in the U.K. The majority of the brand is manufactured in the U.K. at our Agecroft factory in Manchester. Over 80% of U.K. consumers are aware of the brand, and it was bought by half the U.K. population last year. Some brands are known for care, and some brands are known for protection. But we are different to other hygiene brands as we are known for our no compromise care and protection. We believe we can capitalize on this unique positioning in the following 3 ways: one, by improving U.K. hand hygiene, particularly when consumers are out and about; two, by building brand preference in hand hygiene; and three, taking that care and protecting positioning into new usage occasions. By doing this, over the next 5 years, we believe we can grow brands penetration and value and take our share of hand hygiene to well over 50%. As Jonathan mentioned, we can deliver this vision by working across the brand growth wheel. In consumability, for example, we have launched Carex hand and surface spray that kills bacteria and viruses on both hands and surfaces. We have also launched Carex advanced hand wash that protects hands for up to 3 hours. And from a sustainability perspective, we have launched our refill packs, which have already saved 900 tons of plastic. In memorability, we have increased our media investment by over 100%, which has driven our awareness through a new TV campaign, featuring hand wash and hand sanitizer called Protecting the Nation. [Presentation]

Shopability is a real focus for us at the moment. We know from research last year that 77% of consumers will continue to wash their hands when they get home, and 63% of the consumers will continue to take hand gel with them when they are out and about. We need consumers to think of taking hand gels with them, along with their mobile phone, keys and wallet when they venture outside. As we come out of lockdown, we'll remind consumers via social media as we've done with parents sending their kids back-to-school over the last few weeks. We have also started a distribution drive to ensure our handy, pocket-sized gel packs are sighted in impulse locations, in convenience stores, petrol forecourts and food-to-go outlets, to drive impulse purchase when we are finally out and about. We know during the pandemic, consumers have reached for their most trusted brands such as Carex. Kantar identified Carex as the fastest-growing FMCG brand last year in the U.K. Along with increased investment and focus, this provides us with a fantastic platform for further momentum over the next 5 years. And remember, when you're out and about, always carry Carex.

Hi. I'm Awie Newell, Managing Director of PZ Cussons Beauty. I'm here to talk to you about our biggest brand, St. Tropez. St. Tropez is the original and most iconic tanning brands in the world. We continue to lead and define the category through purpose-led communication and groundbreaking innovation. St. Tropez's mission is very clear. We want to inspire women to glow with confidence inside and out all year round. 25 years of leadership and experience in this field positions us well to continue our drive to acquire more consumers. This means that we continue to understand what our consumers are looking for, whether it's in the U.K., U.S.A. or selected markets in Europe. And this is how we come up with innovation season after season. Combining our natural tanning performance with skincare credentials drives demand for our brands all year long, and this has been one of our strongest growth drivers for the brand. We are also very clear in our growth markets: the U.S.A., U.K. and selected markets in Europe. Let me take you through our growth flywheel, specifically the U.S.A. U.S.A. is not only our biggest market, it is also our biggest growth market. St. Tropez is the #1 prestige tanning brand in the U.S., and we have demonstrated that we can repeatedly win and grow in this market over the last 10 years. Led by consumer insight, we know there is plenty of headroom for growth. Our objective: to double our consumer numbers in the next 5 years. When we look at our flywheel, starting with consumability, this means 2 focus areas for St. Tropez: best-in-class innovation and continuous investment in our core hero products. On attractiveness, we have price laddering for self-tan to gradual tan to appeal to multiple target segments and usage occasions as well as reinvestment back into our brand, driving desirability and memorability. On memorability, St. Tropez communication strategy is digital and social first. And this year, with increased marketing investment, I'm pleased to share that U.S. model, presenter and All American Girl, Ashley Graham, is the new face, body and voice of the brand, a huge collaboration for the brand, which is already unlocking new audiences across our markets. I will introduce her shortly. Finally, on shopability, our aim is to always outperform competition in retail execution, be it in store or online, and this April sees our biggest retail execution, occupying the best locations in store with our retail partners across the globe. Let me introduce you to Ashley Graham, model, presenter, mom and the new voice of St. Tropez. She epitomizes our mission, inspire women worldwide to glow with confidence all year round. [Presentation]

Our communication strategy is digital first, supporting our omnichannel strategy, driving our brand's rich content in both bricks and clicks. These two combined resulted in our online sales being 45% of our turnover. Our digital-first 360 strategy includes cross-platform social-first campaigns, authentic content-rich storytelling, sampling and in-store innovation, to name a few. And as we inspire women to glow with confidence all year round, we are confident our plans will strengthen our position to be the #1 prestige tanning brand globally and to be the leaders in tanning innovation and as we win where the shopper shops for online sales to be 50% of our turnover and, most importantly, our #1 mission to double our consumers in 5 years. Thank you so much for your time.

Hi. I'm Daniel Gyefour, Head of Marketing for the PZ Consumer business in Africa. I'll be taking the next few minutes to walk you through the strategic priorities behind one of our flagship brands in Africa, which is Premier, our key play in the skin cleanse and bar category in Nigeria. The Premier brand is one of PZ Cussons' longest running plays in the Nigerian market, with a deep-rooted heritage that spans over 30 years. It continues to be the best-selling bar soap in the Family Care segment whilst also holding the title of being the most distributed bar soap in the category overall. With the brand essence, that speaks to the confidence to be your best. The brand has, over the years, embodied values associated with being authentic, adventurous, and delivering superiority in all respects. The brand consists of two sub-offerings: the first being Premier Cool deo, a sensorial hygiene range targeted at young male adults in the Hygiene segment; and Premier Care Naturals, a skin care range targeted at families, that is, adults and children alike. Premier Cool deo, the lead range amongst the 2, sits on the freshness platform, delivering a superior cooling sensation in use, in addition to a germ protection benefit, creating a unique package offering that consumers are willing to pay more for, especially so in this times of pandemic. The family care range, on the other hand, sits on a mild cleansing and entry-level beauty benefits platform, delivering basic beauty and care benefits to consumers in use, and it's able to deliver this benefit via carefully selected natural ingredients, naturals being a key macro trend in the African space. The focus for the Premier brand over the past few years has been on building equity and increasing [ bind rates ]. This has been realized by a mixture of above and below the line initiatives, such as our tactical trial building consumer activations, our strategic partnership with Manchester City Football Club, our always on-digital campaigns and our thematic TV communication, reinforcing the functional superiority of our range. Moving on to our brand strategy. We have identified three key strategic priorities from the growth wheel, which presents us with the best growth potential over the next 5 years. The first strategic priority from the growth wheel focuses on consumability, where we are looking to use innovations to close our portfolio gaps presently and for the future. We would also be driving more single-minded focus on our portfolio range by ensuring that our portfolio is streamlined in line with consumer needs and expectations. Our second priority speaks to memorability, which would see us build brand equity and distinctiveness through compelling consumer propositions and offerings that are relevant to our target audience. We would leverage the overall Premier brand strength to play across a range of subsegments by ensuring that we are delivering to a wide range of consumer needs and expectations in order to deliver on additional growth potential. Consistent investment support is factored into plan to make sure that all this is brought to life. Our final priority speaks to shopability. This pillar sees us fixing distribution gaps we have in some specific geographies in our markets today. Beyond that, we would focus our efforts behind improving the efficiency and effectiveness of our current route to market, whilst expanding our sales force to improve route demand. So what would success look like? We are aiming to double the revenue by 2030. This, we believe, would be possible by rallying the entire business behind one single-minded objective of serving more consumers better. Our ambition would be to deliver a sustainable revenue growth profitably in a consistent manner within the next 5 years, in turn, consolidating our market leadership position while at it. The team and I are charged up and super excited about the future prospects of the Premier brand, now more than ever.

So hopefully, you've got a flavor there for how we are bringing some of our must-win brands to life with the PZ Cussons growth wheel. Now as I said earlier, we're putting sustainability at the heart of all we do as part of our new strategy. And I'm reassured to say that PZ Cussons already has a solid pedigree on this. In fact, I'd go as far as saying it's already in our DNA to think and care about the legacy we leave for future generations, linking all the way back to the founding family values of the business. Amongst our sustainability commitments over many years, we've had a strong stance against animal testing. We have worked hard on palm oil traceability, and we've been bold in our plastics promise. We have also worked to play our part in our local communities, whether that's been collaborating with charities in Indonesia to build children's education and playground facilities or contributing to the PZ Cussons foundation in Nigeria, as they supported the construction of classrooms in Hardawa community or installing a solar-powered borehole in Adamawa state. More recently, the global pandemic has seen us step up our social engagement activities in many markets, such as providing sanitizer gel to the vulnerable or moisturizing and bathing products to key workers. We're proud of this work and of this heritage, but we also know we can and must do more, not just because we want to but because demand from you and many of our stakeholders is increasing. More consumers are basing their purchase decisions on the ethics, purpose and environmental stance of the brands they buy or the companies behind them. They want to know their choice makes a difference. Where the consumer goes, retailers follow, and we're working with our retail customers around the world to meet their demands on suppliers to help deliver for their shoppers. And working in the other direction, back up our supply chain, we are expecting more from our supplier base, too. And we are working with our suppliers in order to ensure that we all live up to the highest standards. Together with our suppliers, we can make a difference to the communities in which we operate. We're proud of how long we have served our communities, and we want to ensure that we are with them for generations to come. And this matters for us as an organization, too. Our people, our employees define us. We know from our engagement programs that this is high up on the agenda for our employees who increasingly want to feel like their work is a force for good. Not only does this help drive retention of our top talent, it's also a critical tool in attracting new generations of dynamic and diverse employees who are increasingly ruling prospective employers out if they are not agitating for progress in this area. We are convinced, a strong stance on this will help us build and retain the diversity and inclusive nature of this company. Finally, we know this matters to all of you, our investors. Your focus on ESG is on the rise. This is a good thing, and we welcome it. It drives us to set the bar higher in how we perform and to let you know more about our progress in our reporting. We also know there's a tangible value attached to our efforts in this area, with valuation upsides being identified based on our ability to improve performance. Doing the right thing has the potential to create value. So with these many demands from many stakeholders in mind, today, we're keen to show some pioneering spirit ourselves and maybe even some corporate bravery by setting out our ambition to secure B-Corp certification for PZ Cussons in the next 5 years. For those that know B-Corp and what it means to be certified, you'll know this is a challenging goal but also an inspiring one. In some areas, we're very confident we'll be able to make it. In others, we know there will be a lot of work to do. We're aiming to assess and certify more and more parts of our business over the coming 5 years so that we build up to total group-wide certification as our overall goal. We're setting the bar high and looking to be in good company, along with brands like Ben & Jerry's, BrewDog or Patagonia; and larger businesses, such as Natura & Co, The Body Shop and Aesop. So we see this as a bold statement of intent combined with something of a leap of faith. No other U.K.-listed company has achieved group-wide certification. So there's a very good chance we may be the first. We know it's the right thing to do, and we're determined to get there even if we don't understand every twist and turn on the road ahead. But our commitment level is high. And to back that up, as many of you will know, delivery on progress towards this goal is hardwired into the incentive plans of our top management as part of our newly approved remuneration policy. And for those less familiar with B-Corp certification, it provides a more integrated and holistic way to assess our efforts to provide for all stakeholders. It relies on multifaceted assessments of our operations to generate a numeric score that indicates progress towards the goal of eventual and sustained certification. It's increasingly building awareness among consumers as a mark of trust for brands and companies that are setting themselves stretching goals with its logo beginning to appear on packaging. And retailers, such as Ocado and Waitrose are also seeing the opportunity to reassure and influence shoppers by creating virtual B-Corp shopping aisles online. And of course, this integrated effort sits on top of the specific commitments we have made and will make on targeted areas of interest and concern, such as palm oil, where we are already sourcing from 100% no deforestation, no peat, no exploitation suppliers; carbon emissions, which we cut by 12% last year; or water usage, which we cut by 18% last year. Finally, in case you're looking for some reassurance that this multiyear ambition is not some sort of procrastination to play for time, let's take a closer look at our plastic promise to show that our bias is to action. We've committed to reducing our plastic usage by 25% by 2025 and increasing recyclability and the use of recycled materials. We've already been taking action this year, for example, on Carex and the Sanctuary Spa. We've broadened distribution and increased our range of refill alternatives to our plastic pump dispensers with each refill representing an 85% reduction versus the equivalent purchase of 4 pump packs. For Christmas 2020, we removed all plastic from our gift sets on the Sanctuary Spa, a major milestone delivered. And coming soon, in the next few weeks, we have new I'm Plant Based innovation on our Original Source brand, using 100% post-consumer recycled material in the U.K., while on the other side of the globe, we will be rolling out a new Morning Fresh bottle that uses 15% less plastic in every unit. And the Indonesian team is working to make our Cussons baby wipes biodegradable by early next year. So I hope the message is clear. This is important to us. We set a challenging and bold ambition for years to come, but we're not waiting to get started. For us, it's part of the overall reset needed on our culture, our capabilities and our bias to action, which is what we'd like to update you on now.

My name is Matt Stripe, and I am the Chief Human Resources Officer for PZ Cussons. I'd like to briefly talk you through the 3 key people-related enablers helping us unlock and drive the execution of our new strategy. They are building on our strong culture, driving leadership at all levels and ensuring that we are building and investing in the capabilities we need. Let me start with culture. The strategy provides the clarity of where we are going and what we need to deliver and achieve it. It's, therefore, critical that each person in the organization is clear on their role and engaged and passionate about that role in its delivery. In our internal rollout communication, we have brought the strategy to life for our people and created a compelling vision of where we are going in order to create excitement and reignite that pioneering spirit. We've done this through executive-led town halls, sharing our plans for the future and showing visible leadership to make it real and local. These town halls have been repeated and tailored as they've been rolled out across the different markets and manufacturing sites around the world, reaching every employee with consistent, but locally relevant messages. The plan is that these town halls will continue in a quarterly ribbon to update, share and drive performance very visibly. Teams are turning these ambitions into clear plans that they have shaped and now own with local [ breakout ] discussions to communicate and operationalize. Through the COVID pandemic, we have rightly and necessarily had to focus on wellness and well-being. And this approach has provided us with the ability to talk directly to all employees and ensure that they are aware of all the support available to them and for us to emphasize its criticality. We are also reviewing and reshaping our values, ensuring that we do not lose what makes the organization special but continue to build on our rich history and ensure that they are right for today and for the future. Finally, we are realigning our human resource processes and ensuring that our employees are incentivized and rewarded for successful delivery, that we attract, retain and develop the most talented and capable people and provide them with compelling career paths. As Jonathan highlighted earlier, we have fundamentally reshaped the executive leadership team. We have reviewed our executive succession health and talent depth and have clear plans in place to improve and build long term strength. We have reestablished the ribbon and discipline of talent management to ensure we understand and collectively develop our future leaders. We are setting the standard for leadership. We want to ensure leadership at all levels. This is aligned to the review of our values with a core group of future leaders, we will be defining the transformational leadership needed. We are bringing this new standard to life. Jonathan and the whole executive team have consciously focused on driving and role modeling a better type of leadership across PZ Cussons, one based on transparency, accountability and delivery at pace. Leaders are not just being told about the strategy, but being involved and equipped to turn the strategy into local, specific and owned plans through the strategy cascade process and then with the expectation of delivery. We are providing transparency of business performance and aligning short-term reward to motivate high performance, whilst also incentivizing leaders to build long-term value creation through a focused, long-term incentive plan. We will be investing in building the future leadership capability needed to return the business to sustainable, profitable revenue growth and nurturing a high engagement, high-performance culture. The discipline of talent management is scaled across the business aimed at defining, finding, nurturing and moving talent for the benefit of that talent and PZ Cussons. Where we currently have leadership gap, we will focus on the acquisition of that talent required in those areas in order to deliver our strategy, for example, in areas such as ESG. We recognize that there is also a need to get the basics right. And we'll be clear about what is expected of managing others at every level and hold leaders accountable. We'll focus investment on ensuring all our managers have the skills to lead in this new blended world of work through targeted virtual learning, for example, in resilience and virtual communication. The core management skills are as important today as they've ever been, and we will invest in ensuring strong, consistent capability. Through accessible bite-sized modular learning, for example, managing performance and coaching. We know we need to prioritize investment to build the critical capabilities we need to successfully drive growth locally, and we're already making progress. We are well progressed through a core development, bold leaders, bold brands marketing capability development program. 1/3 of our marketers have already completed the first phase of structured development. The program is based around building capabilities within a framework defining the world-class marketing capabilities needed in PZ Cussons. It also aims to build a common understanding and language, whilst continuing to strengthen marketing leadership skills. We are assessing the impact of our work to date, and we'll be redoubling our efforts to deeply embed this capability across the organization. The program has received very positive feedback from attendees. In revenue growth management, which, in particular, targets top line growth from increasing price and mix, core commercial skills will be deepened in our people and leaders to ensure we understand and continue to drive sustainable growth and enhance our margins. In digital and e-commerce, we are delivering the digital tools, technologies and test and learn e-commerce trials needed by our brands to support digital first, multichannel approaches across the market. Becoming a data-driven organization, building data and analytics capabilities to underpin the strategy, identifying new opportunities via consumers and customer insights, leveraging existing developments for automated KPIs supporting every aspect of the business and driving revenue growth management. All of this comes together to build the new stronger organization, capable of executing the strategy and getting back to being PZ Cussons at its best. And of course, the glue that binds all of this work together is the shared passion and determination to turn this business around and deliver the results that we can all be proud of in the coming years.

Thanks to Matt, and thanks, Jonathan, for the introduction earlier. I'm Sarah Pollard, PZ Cussons' new CFO and was absolutely thrilled to have joined the business in January of this year. My career has been spent with consumer goods and retail blue-chip businesses with Diageo, Tesco and Unilever. And more recently as Deputy CFO of Nomad Foods, home to Captain Birds Eye and its successful brand-led turnaround. I'm delighted to have the opportunity to talk to you today about our new strategy, and 2-months in, what I can already see is a very clear path to sustainable value creation. We should absolutely be pleased with all that we've accomplished in the past year, but are under no illusion, there is lots more for our new team to do to realize the exciting opportunities ahead of us. And we look forward to updating you again when we report our FY '21 full year results. But for now to the topic of complexity, and we will dramatically reduce our internal complexity to enable our transformation. We've already removed layers of regional management, allowing our emerging talent to progress, and speeding up decision-making. And of course, we see the associated savings in our current cost base. The commercial capabilities, Matt has just shown you, will be focused in our local market teams. Who are best placed to understand local consumers and their emerging needs and are best placed to implement at pace. Some strategic enablers are best led from the center by our expert teams there. And of course, financial control and corporate governance require global coordination. But gone are the days of large and unwieldy central commercial teams. We'll also assess what aspects of our infrastructure, our processes and our systems are fit for purpose, and where we need to adapt. We do have a long tail, both the brands and individual product SKUs and we'll rationalize where it makes sense to do so. Lastly, but by no means least, we will be determined in transforming how we do business in Nigeria, liberating the team to focus on capturing the commercial opportunity that Jonathan outlined. So what exactly will our self-help plan entail? Firstly, we'll actively manage the portfolio and assign our different businesses, each discrete and deliberate roles. We'll prioritize our investment and focus behind our hygiene and baby brands where we enjoy already leading positions and the potential for future profitable growth is clear. And you heard Daniel reference our ambition to double the size of the premier soap brand. But our must-win brands account for a lower proportion of our Nigerian portfolio than is the case overall for the group. So we need to preserve the value in all of our sizable products categories. For example, we'll focus the Electricals business to further improve its profitability and manage its stock and foreign exchange exposures. We're encouraged that the Nigerian business returned to profit in the first half and are now targeting mid- single-digit operating margins over time. Our intent is also for Nigeria to be a net cash contributor to the group, shielding us from the risk of further currency devaluations and optimizing our overall net debt position. And with that in mind, capital injections will need to clear a high hurdle rate and CapEx focused on maintaining and improving the efficiency of our manufacturing operations, and of course, ensuring the health and safety of our workforce. Our proud history in Nigeria means that we've built up a portfolio of assets, some of which are now noncore. Commercial and residential property and some manufacturing assets which we will optimize to realize capital. We've already announced the sale of our Nutricima business and the closure of our Coolworld Electrical Retail Stores. We're strengthening our distribution footprint and reducing the number of suppliers on which we're reliant, but with no disruption to our operations. Lastly, we'll streamline our internal processes and are set up overall to liberate the time of our teams to focus behind creating value, driving profitable revenue growth in our branded business in Nigeria. So now let's move to the financials. The first half of this current financial year marks the start of our journey. Our brands were invaluable in meeting consumer needs when shoppers turn to their most trusted brands, especially in hygiene. Overall, revenues grew 15%, highest still across our priority brands. Our employees and our manufacturing operations show themselves to be resilient in navigating through such volatile and challenging times. And the growth was broad based with all of our geographical regions reporting profitable revenue growth and beyond hygiene, with 9 of our 14 Focus Brands in growth, driven of course, by Carex, but also Morning Fresh, Cussons Baby and St. Tropez. This allowed us to reinvest behind our brands in media and consumer campaigns and to start the process of building our new commercial capabilities. Our net debt position reduced considerably, giving us the flexibility to invest further behind future profitable growth. So now let me share the financial framework that will underpin our new strategy. There's a clear correlation between value creation and growth in the consumer goods sector. We're targeting low to mid-single-digit sustainable revenue growth and for that growth to be profitable. And that's our goal, too, for the next financial year, despite the exceptional COVID impacts in this current year. Let's look in more detail at the drivers of profitable revenue growth for PZ Cussons. Starting top right of the wheel. Our must-win brands will grow ahead of portfolio brands over time. And their higher-than-average gross margins will drive a positive mix benefit for the group's overall profitability. We'll write our plans and set our budgets with the absolute determination that our brand-building activities will allow us to take price. So growth won't come from volume alone. And you heard Jonathan describe this in more detail as attractiveness. Our innovation coming to market will yield further price/mix improvements. And secondly, we will also look to drive our gross margins up through our supply chain, capturing factory efficiencies, looking at both co-source and in-house manufacturing options and leveraging our global procurement expertise in smart buying. This will be critical as we now face into a less benign raw materials cost outlook. Additionally, we will set our rate of overheads growth to be lower than the rate of our revenue growth. We do need to invest, but we'll be disciplined, reallocating investments to behind our strategic enablers and safeguarding corporate governance, of course, but then continue to seek out opportunities for cost savings elsewhere, and generally adopting a truly cost-conscious mindset. The resulting profitable growth will, in turn, fuel future growth by continued investment in media and consumer support in building our brands. And not only will we invest more in absolute terms, but we will also maximize the returns from that investment, as we build our digital marketing capabilities and shifting more of our investment to social media. And taken together, that model means we can target low to mid-single-digit sustainable revenue growth and with our margins moving up over time. We're well positioned to invest in our new strategy. Our balance sheet is stable and resilient, not only providing protection in the event of future economic turbulence, but also affording us real flexibility in how we now best deploy our capital. Our must-win brands are structurally advantaged. They enjoy leading positions, are relatively more profitable and have proven very responsive to the support that they've received so far this year. They will be the focus of our innovation efforts, our media and consumer investments and the leading edge commercial capabilities that we're building. To justify that disproportionate support, they must grow relatively faster than the overall portfolio over time and at least maintain their gross margins. We'll use revenue growth management capabilities to drive price/mix. Improving our gross margins and giving us the space in our P&L to continue to invest in our brands. Moving then on to free cash flow. Our net debt is at a low level, appropriate as we navigate through unprecedented times. So we will be building on that good work and seeking to optimize our working capital further. Determining the right level of stockholding throughout our manufacturing network to ensure customer service and availability with our retailers, of course, but without unnecessary capital tied up in the value chain. We'll review our cash collection efforts and comfort ourselves that they are timely. And we'll also work with our suppliers to agree optimal terms. We will be ready to invest CapEx where it makes sense to do so, supporting profitable growth, enabling sustainability commitments and reducing our manufacturing costs. Although, with hurdle rates set with reference to an appropriate cost of capital benchmark, we'll have our cash work harder for us and available to optimize our interest costs. And we're currently working to fully understand the implications of the Chancellor's recent budget on our future ETR and cash taxes. So in summary, we have the ability to both invest to grow the business profitably and maintain a sustainable dividend, which we know is so important to our shareholder base. And although we're not announcing a formal dividend policy today, as we believe the still volatile macroeconomic backdrop warrants us retaining a degree of flexibility, we will maintain a sustainable dividend going forward. We're not ruling out acquisitions if they offer the right strategic fit, timing and value. They can absolutely play a role to further reshape our portfolio and drive future growth. But we do not need, and so I'm not looking to acquisitions to fix our core business. Instead, we're focusing on building our existing must-win brands today and for future generations and have the financial resilience and flexibility to do just that. And so on that note, I'll hand back to Jonathan to summarize the session, and we both look forward to taking your questions.

Thanks, Sarah. So let me wrap up, along with the renewed leadership team in place, we now have a clear strategy to guide us for the next 3 to 5 years that we have talked you through this morning. It sets out our financial ambition, where we're going to play and how we're going to win. We also have a good view of what needs to be done to enable the transformation. As I said already, though, it won't be an overnight fix, and we need to be realistic about the time it will take to stabilize and then sustainably grow the business. We will move through different phases on the transformation journey. And as we look to our long-term ambition of unlocking the full potential of PZ Cussons, I see a business that will move from low to mid-single-digit revenue growth, and will be capable of delivering a mid-teens operating margin. We are determined to deliver on getting back to a track record of sustainable value creation. And we know that our ability to execute is just as important as having a clear strategy. And I'm as excited today about the opportunities for the business as the day I started in May last year. There will, of course, be some setbacks along the way, and there's certainly hard work ahead. But as we tried to demonstrate, we've been hard at work already and made a start on the journey. We look forward to updating you on progress along the way. Now that is certainly enough from us for one morning, and we'd like to hear from you, and we would welcome your questions.

Jonathan, Sarah, thank you very much, indeed. So we do now turn to the Q&A. [Operator Instructions]. And the first question comes from Nicola Mallard.

Right. A couple of questions, if I may. First, you mentioned the long tail in Nigeria. And what's the plan there? I mean, clearly, you're going to be focusing behind the must-win brands? I mean just some of these brands just whither on the vine, you said, obviously, they're not putting any for-sale signs up straightaway. So just a question there. And then the second question was around the must-win brands and revenue target growth rates for them. You said low mid really for the group, but the must-wins would be in advance of that. And is there a target specifically for them?

Okay. Thanks, Nicola. Thanks for joining us today. Why don't I pick up both of those? And then Sarah is welcome to join with anything else that she would want to say. So first of all, the long tail, what's the plan? You asked specifically about Nigeria. And I think we're very clear for the non-must-win brands, we're calling out that we have very specific roles for the balance of the brands that we're calling portfolio brands. As Sarah said, the waiting to portfolio versus must-win is slightly different in Nigeria versus other markets, since it's a very valid question. And we think we have some brands that actually will be very viable contenders in the future to be must-win brands. And we're keen to grow and actually accelerate our growth on some of those brands, which have very solid positionings. There are some others where actually, we think we have duplication, we have complexity. And over time, then we're trying for those to play a role of enabling us to extract some more profitability in order to fund in the must-win brands, if you like, starve the tail to grow the head. So rather than it being a wither on the vine, as you put it in terms of somehow an unconscious walking away from a brand, actually, we're trying to find some very specific roles for the brands. And whether it's in Nigeria or more broadly, we are looking for there to be a delta in performance between our must-win brands and the portfolio brands. And the best way for you to take a look at those, to give you an idea of what we have in mind, is to look at what we have previously on Focus Brands versus the balance of the portfolio, which is captured in our LTIP targets and published, is which is where we're talking about a delta of between 0% and 6% of the Focus Brands performing ahead of the rest of the business. And we would be looking for something like that to indicate low single or mid-single-digit performance on must-win brands ahead of the portfolio.

The next question comes from Damian McNeela.

It was just -- I think in your sort of -- on the transformation journey, Jonathan, you mentioned that you're well advanced. I was just wondering whether you could provide us with a bit more color of what's left to achieve in the turnaround. And then specifically in Nigeria, clearly, there's a lot of work that's already been done in Nigeria, but also, could you give us a sort of an indication of how long we've got to work through the issues in Nigeria before you feel comfortable that, that's been turned around. Please?

So why don't I give you an answer on the transformation journey and then maybe Sarah can talk a little bit about Nigeria timing. So I say well advanced, we're off to a good start, right? Obviously, we reported both the top line momentum in the first half, the fact that it was broad-based across a number of all of our regions and the fact that we had a large number of our Focus Brands, as we were reporting them, in growth and more than just hygiene brands, i.e., it's more than just a COVID story, right? But we're being cautious and sanguine about declaring job done on the turnaround and that 2 reported quarters have fixed, as I said, the issues that have been years in the making. And part of that is because we want to be rightly cautious about how much more there is to do. I mean, please remember that after -- it feels like a long 10 months enroll, I still haven't been to any of the markets outside the U.K. And we can count on one hand the number of days that Sarah has even been in an office since she started in the company. So you have to cut us some slack on really making sure we've got to the bottom of everything. But actually, there's a much bigger macro dynamic that I think prevents us from declaring job done too early, and that is the obvious volatility of the global pandemic, not so much the impact of what happens when we have a pandemic somewhere. We have seen that. But actually, it's more the uncertainty of future ways and future levels of locking down or then relaxing the lock down. And that has a massive impact, whether it be, if you argue, a positive impact, whether you like saying that in terms of stimulated demand for our hygiene brands. But let's not forget, there's also a negative impact for us of lockdowns, which is that some of our core routes to market for our beauty business are effectively locked up and the doors are shut, be that salons or department stores. So I think we need to see a few more months and quarters of how we believe the pandemic is going to evolve before we're ready to say when we are ready to have the final point of our turnaround. Sarah, Nigeria.

So on Nigeria, you already saw us announce at the interims, the action that we've taken in terms of the sale of the Nutricima business and the closure of the Coolworld Stores. Jonathan referenced the monthly must-win brand meetings that we chair with our brand colleagues around the business. Actually, on Nigeria, just to give a signal on our intent and bias for action there, we actually, with our executive colleagues, Chair of [indiscernible] Nigerian Simplification meeting. We have a very clear plan to get done what we need to get done. Some of those milestones, I fully expect us to hit in this calendar year, some will take us into 2022, '23. But we're not resting on our laurels by any means.

The next question comes from Darren Shirley.

A couple for me, if you don't mind. In terms of -- it's obviously, going to -- you've talked numerous occasions about having to increase investment behind the brands. Can you just give us an idea of how much additional investment needs to go in? Is it a 50% increase? Is it a double? Is it a triple? Just to give us an idea to sort of where the base is and where you need to get to. You talked a little bit about sort of African proceeds and have commercial and resi assets over there or property. Can you just give us an idea of sort of the size of the opportunity over in Nigeria? And then maybe a last one. I think you talked about -- when you were talking about sort of memorability around within the growth we you said some brands were already there, I think, Jonathan? I mean, if you could give us an example of which brands do you think are there so we can have a look for ourselves? Cheers.

I'm sure that was 3 questions, Darren, but I'm going to let you off. So very happy to answer those. Let me do the first and the third and then maybe the Africa proceeds question, I can lead to Sarah. So I'll answer those first. So first of all, on the investment level. And I'm going to give you an enigmatic answer, and then I'll give you a more direct answer. So the enigmatic answer is it's the right level for the must-win brand to compete in that category in that market. So why do I say it like that? If I take 2 of the brands that we heard about this morning, we've got Premier Soap in Nigeria, and we have St. Tropez in the U.S. for us to be competitive on our marketing and consumer investment in Nigeria on Premier Soap, we need to be talking 3% to 5% of our net sales broadly that we need to be -- should be investing in building the equity and building awareness and memorability amongst consumers. That will place us at a competitive level versus some of the other spenders that we see in the market and the larger players, be that a Dettol, in antibacterial or an EVA in beauty. If we were then to look, for example, at St. Tropez in the U.S., though, actually, the competitive benchmark for a prestige skin care business sold through, whether it's online or offline, but increasingly prestige channels. And we need to be looking at a low to mid-teens investment level for us to be competitive with the likes of L'Oreal or other players who are willing to spend more aggressively in building brand equity on a prestige product like St. Tropez. So what we're trying to get to with this strategy is the ability to say for the brands that really matter in the markets which we're declaring as core, that we will be investing at the right level. But if we add all of them together, there's no doubt we will continue to see an increase in the rate of M&C as a percent of our net sales, not recklessly out of control, always informed by a sensible return on our investment but giving us the confidence that we're building the brand and that we're building the trial that comes with it. And actually, of course, we're already off to a start on that as we've reported in our first half results. And if I just deal with memorability, validating the growth will, to some extent, we are being harsh on ourselves and our teams and we are declaring that we're never ever going to get it done. It's like we're walking towards the horizon, and as long as we keep going, it's a reason to keep going in that direction. But we are saying that we believe some of them have got to a stage where we believe this now merits investing, if you like, at that fully competitive level that we just talked about. And I would give an example of St. Tropez in the U.S. as a market where we believe we have got that right. I think increasingly, Morning Fresh in Australia, we have got that right. And increasingly, the Sanctuary Spa brand as part of our beauty business, we have got that right. The other one where I think we are learning fast, but we have a validated model but need to constantly revalidate is, of course, Carex, where we are watching closely and listening closely to consumers and shoppers as they start telling us about how their needs and habits are evolving, as all of us go through lockdowns, exactly as Kieran was describing, is it more soap when they're at home? Or is it more gel when they're out in the bout? How are they going to use refills versus pumps? All of these habits that we're seeing emerge. And so I think particularly on Carex, I would say it's investment grade, for lots of reasons we have confidence in investing in Carex. But boy, do we need to be keeping a laser beam eye on how shoppers and consumers are behaving and what our competition are doing.

And on the Nigeria asset sales, you'll appreciate we are at different degrees of completion in terms of those commercial discussions. But I could imagine a scenario where the proceeds might be between a few million and a few tens of million in sterling terms.

Okay. Very helpful. And do you mind if I squeeze one more then if you don't...

Go on Darren.

In terms of the -- obviously, the mid-single-digit growth target and the relative outperformance in the must-win brands. Is that outperformance -- is that going to be particularly volume driven? Is that what you're looking for from these businesses? Or is it going to be -- is price/mix going to be more of a feature because of the nature of those brands?

Yes. So let me try to answer that one, Darren. It is absolute -- we are absolutely looking for a rich mix of volume and price/mix, right? Ultimately, our consumer goods business wins and flourishes, particularly our mass consumer goods business, when we are getting more units into the hands of more consumers and into more households, right? And ideally, then getting them to buy additional units in different categories or different price tiers. So yes, unit volume has to play a role, but it is not, as I suggested, sometimes in the past, where we have, if you like, blinding pursued unit volume, what we have to do is balance that with, I believe, broadly an even mix of volume and price/mix. It will vary by market and by category, so that we're able to nudge up our gross margins in order to give ourselves the oxygen in the P&L. And hence, why I call out revenue growth management as being such an important lever for our future business performance. Thanks. That was 4.

And the next question comes from Sriram Gurijala.

I've got 2. The first one is on portfolio. You mentioned that most of your core brands are still only in 1 or 2 countries. And do you have any plans to expand them into -- expand geographically? And at what point would -- how do you evaluate the noncore parts of the business? It's like Electricals or you even have an edible oil business in Africa and then OTC in Africa. So how do you see the -- what's the criteria for those businesses? Where do they need to be in 3 years or 5 years for them to remain in the portfolio? And the second one is on margins. You said that Africa could be -- could recover to mid-single-digit margins. But thinking about Europe Americas, you have mid-20s margins, which is well above any of your European peers. Can you talk about whether the investment level is at appropriate levels in the developed markets business? And where could margins go in that division?

Okay. So why don't I answer the portfolio, and then maybe Sarah can answer the margin question. Sriram, thanks for joining, by the way, today. So we see 2 ways of growing our core brands within the portfolio, and then I'll come to some of the others that you mentioned, right? Actually, one way for us to grow our brands is not going through geographic expansion, which can sometimes be costly and a higher risk, particularly if you don't have knowledge and expertise on how to do that. And an example I would give would be our efforts to try and grow Rafferty's Garden by expanding into China and maybe taking our eye off growing Rafferty's Garden and investing sufficiently in its home market of Australia. But -- and so therefore, actually, the primary lever of growth, we believe is going to be by expanding some of our existing must-win brands into near-in adjacencies where they can credibly play with the equity that we've already built and be competitive versus whoever else is the incumbent in that subcategory. But yes, you're absolutely right. Over time, we do think there's going to be the opportunity and the potential for us to expand geographically, but we want to make sure that we do it first of all, with confidence and informed confidence based on a rock-solid understanding of the local market. And we also want to make sure that we are doing it in a way that is not going to starve the home market of the investment that is required to win, right? And that's really an important principle as we try and move forward. As for other parts of the business, which aren't necessarily must-win brands today, you mentioned 2, both of them happen to be in Nigeria. As Sarah called out, our Electricals business has an important role to play. It's a very sizable business for us. It appears in our revenue line, but the most important thing we need to do with our Haier Thermocool business is to improve the profitability of that business. We do believe it has a role to play, but the best way for us to create value in the short-term is to improve profitability. As for the cooking oils business, you're referring to our PZ Wilmar joint venture, it plays an important part in our business. And we believe Devon King's, for example, is a very sizable brand, very deeply distributed within Nigeria. And we're working closely with our joint venture partners to continue to grow value and create value on that business and as you know, that turns up in our bottom line as a profit contribution, but without revenue.

Thanks, Jonathan. So Sriram, thank you for the question in terms of our developed markets margin potential. So you're absolutely right to say, whilst moving our Nigerian business to a mid-single-digit operating margin structure is good and necessary in itself, it's not enough to move the needle for the overall business. So we will be as demanding of our teams in our developed markets to continue to grow their margins and have absolute confidence they can, not only because our brands enjoy leading positions, but the competitive dynamic in our developed markets is very different. And here, when we talk about the brand-building wheel, we're talking about good marketing and consumer investments, helping us become a little less reliant on the more short-term price promotional investment that we've typically relied on to shore up our volume. So the growth will be higher quality, and we will absolutely insert price and mix expectations, both in the base business in our developed markets, but also any new innovation coming to market, if that answers the question.

Yes, it does. Could I squeeze in a follow-up on sustainability? You set a 5-year target to be incorporated across the business, that's great. I think you also said that you're in the process of estimating Scope 3 Emissions in your last annual report. Could you provide an update on where that is? And whether you would provide a carbon-neutrality target anytime in the near future?

Yes. So let me -- if you -- in a sense, hit the pause button on the answer to both of those 3 and obviously, what we've done today is try and set a very high bar with an ambitious goal in terms of B Corp certification. But we're really looking to use, frankly, as effectively as a glue, to pull together many of the individual commitments that we have made and will make in areas of interest and concern. So what I would say today is give us a little more time to come back to you, and we will answer your questions on what are some of the specific things that we're going to commit to beyond what we've already said today. It's a big area of capability investment, frankly, that we need to kick off, and we are working hard to build our muscle in sustainability. We don't come from a position of 0, but we know it's an area where we can do a lot more. So as we build that muscle, we're very happy to come back and indeed engage much more comprehensively with you and all of our investors. In a way which should be able to address more of the questions that I know you've got already.

The next question comes from Erik Salz.

Yes. My question is around the digital strategy that you've talked about. And you've mentioned working with the health group, Shopify, Amazon. I was wondering, can you talk a little bit more about the pros and cons of using those different channels? And what's the most profitable way? And why would you choose one over the other for different brands?

Okay. So let me try and do that, Erik. Thanks for calling in today. So as I try to indicate in the words that I used in the presentation, we do not lump e-commerce or digital as one single route to market. We think actually, we need to be a lot more forensic than that. And there are, in our minds, 3 distinct ways for us to engage with shoppers who want to shop online. We've got a lot of work to do offline as well, but we think there are 3 ways online. The first is pure-play retailers. It's [indiscernible], it's look fantastic, which happens to be the Hub Group, it's Amazon. And we have a lot of work to do there. And I have to say, with some of those, without going into detail on each of them specifically, we've seen some very explosive growth in the last year. We then know for some brands where consumers have a higher level of engagement with the brand or with the category, consumers are willing to go out of their way to track down a very specific brand for a very specific occasion. And this obviously plays to, if you like, in our world, the higher involvement categories, which might be self-tanning, where you really want to get that right and the risk of getting it wrong could be quite bad or actually, when you've got an indulgent moment when you are looking for a gift for your mother, for a family member or actually a little bit of indulgence just for me. And so that plays more naturally to St. Tropez, and that plays more naturally to Sanctuary. And that's why with both of those brands, we have worked with, for example, the Hub Group, to open up direct-to-consumer sites, and we are learning fast and we are also revising fast, which is the beauty of operating in the online world, so that we're making sure we continue to see good steady growth in that area. I would not overlook, though, what I call the bricks-and-clicks channel which is if you're shopping on sephora.com, ulta.com, for us particularly in the U.S., or even it could be coles.com in Australia or tesco.com here in the U.K. and there are also big upsides for us to be driving stronger online shares. And linking it back to the question about profitability, it's why I said in -- again, in what I set out, actually, our job is to respond to where the shopper wants to shop, right? And then as we find out where that is, we optimize and create sustainable and profitable models, right, which is what we have done in all of the examples I've given, but I'm not going to go into the relative ups and downs between them, right, so that we are able to meet the consumer and shopper demand, whilst also sustainably meeting our own profit requirements from an exploding online world, which is what we're seeing and what we want to continue to support. I hope that answers the question, Erik.

The next question comes from Fletcher Tully.

Sorry about that. 2 questions from me, please. You've pointed out where the previous strategy fell short. But then looking on Slide 20, I look at your sources of growth and quite a few of these sources of growth look rather familiar. So if you could point out the main differences, that would be greatly appreciated. And then secondly, on deploying capital from your very resilient balance sheet. I note you talked about revenue growth and margin growth, but there doesn't seem to be any discussion around the returns on capital from deploying that balance sheet. So if you could address that, that would be great?

Okay. Fletcher. Thanks for calling in. I'll do the first and then Sarah can pick up on the second. So essentially, what you're saying is what's different, right? If I can just parity or paraphrase, I should say, your question, all right? And because, as you say, in some ways, the previous strategy, focus, scale, accelerate, was calling out the need for us to try to do a bit less and to try to put a bit more focus against a certain number of brands. What you can see already is that we are narrowing our focus to fewer categories and to fewer brands and also calling some much clearer prioritization of our markets. So I do believe that we are being clear on the where-to-play choices and setting ourselves a smaller subset of the business, which we are going to then disproportionately prioritize the management attention and investment. I think the next big difference is that we are trying to build a systematic and repeatable way of growing the brands we have called out as our priorities, right? And hence, why we've developed the PZ Cussons growth wheel so that we are able to, for each brand, validate and strengthen the growth wheel that we have, whilst having something that we can compare across our business, and ensure that as anybody makes progress in any part of the world, we're able to then to cross-reference that back to the growth wheel of any other part of the world, and we develop, if you like, the mechanism and the glue that will enable us to create a brand-building network within the company so that we can build all of our brands as we improve and learn things in any of our markets, right? I would also say, though, as you heard from Matt, we have put a concerted effort into going from, frankly, the PowerPoints and the piece of paper to the role that each and every individual can play in bringing this strategy alive. You saw some examples of the materials being used at the deployment and engagement session in one of our manufacturing sites in Thailand, and that's because we have consistently and repeatedly rolled out this strategy from top to bottom, from business unit to business unit, so that everybody understands the role they play and what they need to do. That we're humble enough to call out where we went wrong, but we are proud enough, bold enough and excited enough to say what we're going to do right in the future. So I think there are quite a number of differences in the future. And hopefully, we'll be able to demonstrate that as we bring it to life.

And then Fletcher, in terms of return on capital, it's a good question because I think it is a muscle that we haven't exercised in the recent past as well as we might. I need a little bit of time to work out what those best mechanisms are, but you should expect to see us setting ourselves internal targets, tracking how we're progressing across our different markets and potentially looking at how management incentives would line up to that overall goal. I think what I would talk to is we're already bringing more of a return lens to our CapEx choices for the coming year. I'm going to have the team think more about the return on the payback on any new innovation and looking more over the life cycle of any new innovation. And specifically, perhaps some of the bigger capital choices that we might make 1 day in the future if we were ever to look to acquisition. I think you can be entirely confident that not only would we ensure the strategic fit that the timing was right, that we could be confident to integrate any new brand or business without distracting the team from the core, but also, we will absolutely set ourselves a very clear return on invested capital hurdle for any acquisition activity we did in the future.

I just had a quick follow-up. You mentioned entering new geographies, do you have any geographies in mind?

Obviously, we've done our homework on where we think the potential might be in the future, but it's nothing we're ready to activate now. And there's nothing we're ready to say. We'll just be cautious. And we do, of course, have some what we might call enterprise or entrepreneurial businesses already in some of our other, if you like, satellite markets. We have some good markets in Southeast Asia. We have some very good markets in the shape of Kenya and Ghana. And we have also put, if you like, a first foot down on 1 or 2 places in Western Europe. But for now, we want to keep the organization's focus on the 4 priority markets plus the U.S. for St. Tropez.

So the penultimate question comes from [ Barney Randall. ]

Jonathan, can I just check, you're very clear about, obviously, the Focus Brands, I think, of which you articulated, I think there were 14. Are you able to say a little bit more about the non-Focus Brands, how many they amount to? And I guess, specifically, I know you talked about then not perhaps receiving the investment, the brand investments that the Focus Brands will. And I know you suggested that they may be a cash cow, I can see that short term. But I suppose to touch on Nicola's previous point, 5 years down the line, with FMCG background, if they haven't received investment support, then presumably, they do start to wither. So have you identified, I suppose, a likely list of people where that -- those brands more naturally sit, whether they've got in geography revenue synergies, whether there are sort of very similar brands that sit alongside them, but one can imagine that there are other FMCG businesses where those brands would more naturally sit. So I guess, have you identified that road map and, yes, how are you looking to execute on that? And I suppose the last question I had, if it's possible, you talked very clearly about Carex clearly benefiting from COVID and the lockdown. Are you able to identify perhaps 1 or 2 brands that have suffered the most and whether they sit within the Focus Brand portfolio or they sit outside of it?

Let me do that. Barney, thanks for your time. Thanks for the questions. So we have over 50 brands in our global portfolio, just to put it into perspective, all right? And I don't want anyone to walk away this morning, thinking that if you're not in that 8 must-win brands, then that means we have got 42-plus that are immediately having the for-sale sign put up on them. Absolutely not. We want the portfolio brands to have very specific roles identified, some of which will be, as you say, potentially wither on the vine and could well be, if you like, cash cows that might help us generate profit for something else. But if you think that's what we need for the other 42, then I need to reiterate and paint a stronger picture that actually we see a rich mix within those portfolio brands. Some of which are the in -- we will be incubating as the must-win brands of the future. Because in 5 years, I do not expect us to be saying our list of must-win brands is just 8, and I do not expect us to be saying our priority markets are only 4. So what we have done already is get clear, where do we think we have got roles that -- brands that we think need to be incubated and have the potential to be elevated. Where do we think actually there are some perfectly legitimate roles for them to play within our portfolio, which doesn't automatically mean they need to be sold, but doesn't equally automatically mean they should be top of the list for prioritization of investment and focus. But of course, there will be some, which we don't think will make the cut. And over time, we will look at what is the right way and the right time for us to realize value but we're not saying that today. And I'm certainly not going to mention who do we think they have the best synergies with, so we can all phone them and see where they plug in, right? That will all come over time. Our focus today is on driving the must-win brands and being clear on the portfolio, the roles of the portfolio brands, so that we can navigate our way towards them. As to brands that have maybe suffered during COVID whilst Carex and Morning Fresh or hygiene brands have clearly benefited. I'll give you 2 very clear examples. St. Tropez has had a very -- a bit of a roller coaster over the last 12 months, right? Both from shopper habits and consumer habits. If you think about the shopper habits, you know what, I don't much fancy going down the high street to a boot or a super drug in the U.K. I can't go to a department store, if the department store doors are locked. So there's no doubt, despite a surge of effort from us to try and unlock our online business on St. Tropez, our beauty business has seen some challenges on that brand. Another brand, Fudge part of -- a large part of our Fudge hair care business is sold in salons. The doors are locked on our salon. So there's no doubt, Fudge has also hurt. It's not one of our must-win brands, although of course, St. Tropez is. So I just want to give you an example, we have both portfolio brands and must-win brands that have been hindered, if you like, in reaching their target shopper as a result of the ups and downs of lockdowns over the last 12 months. Hopefully, that answers your question, Barney.

And in fact, that was the final question. We have no more questions queued. So Jonathan, perhaps I could hand back to you in the room.

Great. Thank you very much, and thanks to everyone who's made the time to join us today. I hope you all walk away with a sense of our conviction and determination to turn this business around and to unlock the full potential of PZ Cussons. For those of you that didn't manage to get any questions in, we're more than happy to follow-up with questions over the coming weeks. Obviously, we'll be updating you on progress at our next trading update, which is towards the end of April. And then our full year results over the summer. And I sincerely hope it's not going to be another decade until we have another Capital Markets Day where we can update you on progress. Thank you very much for joining.