PZ Cussons plc (PZC) Earnings Call Transcript & Summary

It's now 10:30, just about, and I'm very pleased to therefore declare this meeting open and to welcome you all to the 2021 Annual General Meeting of PZ Cussons Plc. As I think most of you know already, my name is Caroline, Caroline Silver, and I'm chair of the company. And first and foremost, I'd like to say how enormously pleased I am that we can actually be here in person together after the very considerable challenges that we've all faced over the last 18 months. So it's really good to see you, and thank you very much for coming out on this cold morning to be with us. It's not our normal venue as we are currently renovating Aviator Way. Renovating is probably a little bit too grand a term. It's a refresh and a renovation designed to make sure we can encourage people back into the office. But we can't be there together this year, but we look forward to meeting there next year and having you join us there in our refreshed offices. Shortly, I will ask Jonathan, our new CEO. They're not so new now, Jonathan, new to the meeting, but not so new, to talk to you about the company's performance over the last financial year, as set out in our full year results for the year ended 31st of May 2021, and to comment briefly on current trading. We'll then turn to the formal business of the meeting, which, as you'll all remember, can be a little bit lengthy, but we'll turn to that in a minute. Before that, though, what I would like to do is introduce to you the other members of your Board. I can't see if we're up there. Yes, we are. Usually, we have a little screen in front. So you're in a position of some superiority to me today because you can see what's going on, but I can't. So if there's something much funnier behind, please let me know. So first of all, let me introduce the other members of the Board. Some you're going to recognize from previous years, but we also have some very excellent new Board members joining us. You can see our Board on the screen. Dariusz who is here. Dariusz Kucz, our nonexec and designated Workforce Engagement Director, has joined us today from Germany; Kirsty Bashforth, our Remuneration Committee Chair; and Jerry Townsend, our Audit and Risk Committee chair are here with us. And we also welcome new Board members who have joined us since the 2020 AGM. Sarah Pollard, our CFO who joined us in January, and two new Nonexecutive Directors, Jitesh Sodha and Valeria Juarez, who have joined us during the year. And I know that they will all be pleased to speak to you after the meeting if you have any particular questions and would like to chat to them outside the meeting itself. I would like to note that due to circumstances beyond his control, our Senior Independent Director, John Nicolson, is unable to join us today, but you can see him on the screen there. Before Jonathan gets his chance to speak to you all in person today, I just want to say a few words about this first year of our turnaround and the very substantial changes that have taken place, both within the company and externally. Over the last 1.5 years, under the leadership of a new and reenergized leadership team, we have developed a new strategy shared that with investors at the Capital Markets Day in spring. We've also recently refreshed our company culture and reviewed and involved our corporate purpose and values, and you will hear more about this from Jonathan. But I would like to say that the response to that and the engagement with this has been truly a joy to see across the entire business. Both the Board and the management team are committed to playing our part as a sustainable business. And in this respect, I believe we are being truly ambitious setting a long-term objective to certify as a B corporation. We have, for the first time, recruited a Chief Sustainability Officer to guide us on that journey. And we recognize the importance of this to all our stakeholders, and we will be devoting appropriate time and resources to it. Whilst progress across the business has been very gratifying, it has not been without challenges. We have seen unprecedented volatility in some of our key brands, and all of our teams have needed to respond with real agility whether in response to changes in consumer demand, supply chain issues, rising costs or unprecedented lockdowns at different times across our key markets. And I'm truly impressed by the continued energy and resilience shown by all our people across the world in responding together to these challenges. So with that, I'm going to hand over to Jonathan for his overview of the year.

Now I'm going to stand up. So sorry, you have to twist your necks to look at me. But the first thing I want to say is what a privilege it is to be doing this in person versus the rather sterile experience that we had last year staring at a camera lens, which didn't feel in any way human. So it's much nicer to get a chance to meet you all today. And I think perhaps the second thing I want to say is what a genuine privilege it is for me to be presenting to you as CEO of PZ Cussons. And I know that in the audience today, we have people who have trodden this path before me. And I very much take it seriously that my job is to pass the baton on again in the future, passing it on in a better place than I picked it up. And I think that's the role for any person in this kind of role. And I'm not alone in doing that. I'm joined today by a number of the U.K.-based members of the executive leadership team. I think there's a cluster over there. If you want to put your hands up guys and just at least indicate that you're here, and perhaps afterwards, people can pounce on you. But if you look back at the slide above the board, what you'll see is a very intentional mix of new fresh eyes coming from people who have worked in world-class businesses and, therefore, generally know what good looks like, combined with intentionally a very rich tranche of PZ Cussons talent that we have promoted up to the leadership team so that, together, we have the best of the outside world and the best of the inside world to take us on to the next chapter for PZ Cussons because all of this group share my passion to reignite our pioneering spirit so we can get this business back to sustainable, profitable revenue growth. And when we look for inspiration for a pioneering spirit, we don't have to look far. Well, we certainly have to look a long way back to the founders of the company, as you can see on the left-hand side, over 130 years ago and bravely, I would say, setting up business in West Africa, really demonstrating a boldness of vision that they then built on as they expanded operations across Africa and elsewhere. And of course, more recently, we welcomed the customs business into the PZ family, creating PZ Cussons. And of course, we now have operations, for example, as you can see on the right-hand side here in Greater Manchester, that's an example of our site over in Agecraft in Salford. And what is the business then that we have today as a legacy of where our pioneering forefathers set out? Well, this is our business, GBP 600 million in revenue last year. We have four main markets. I want to stress that because whilst you may think we have many operations around the world, which we do, we are actually very concentrated in four markets. 90% of our revenues are now in those four markets. So as a result, we don't like to use the phrase multinational to describe us. We choose to use the phrase multi-local because our job is to win in those markets and with the consumers who are -- we are competing for their attention and for the naira or the dollar in their pocket, right? And that's what we're setting out to achieve. And I think I don't need to say that at some point in recent years, we didn't necessarily achieve what we wanted to, and our results were disappointing. Therefore, a year ago, we embarked on a new strategy for the company, building brands for life today and for future generations. Those words are very intentional, right? And we agonized over them to make sure we get them right because words matter here. And this one slide or one piece of paper effectively summarizes the strategy that we've now embarked upon. So we're really clear, our job is to serve consumers. The way you grow brands is by reaching more consumers by constantly opening more doors, persuading more people to put you in their trolley or whatever it is they're containing their shopping in. And as a result, our job is to serve consumers better than the competition. Very intentionally, we're trying to put a competitive edge in there because we have to fight or have to earn the right for the consumers to buy our brands. And we've declared as our core, because the first job of the strategy is to identify your core, are the three categories of hygiene, which is home care and personal care combined, things that make things cleaner, which, in a COVID or a post-COVID world, we've all recognized that perhaps even more important than we might have felt 2 to 3 years ago; plus baby; plus beauty. They are our three core categories, which are highly attractive categories globally and in the markets in which we're playing. And we aspire to deliver low to mid-single-digit sustainable, profitable revenue growth, and I'll come on in a moment to explain the financial model that we have adopted to drive that. But we also need to be really clear how we're going to allocate our resources against our priorities. So the first is where to play. It's in those four markets. We're calling those our priority markets plus the U.S. for our beauty business, where recently we've seen some fantastic growth over 3 to 5 years of St. Tropez. And then it's also leading brands, and I will come on to tell you how we have chosen to designate our brands to force a clarity of focus against what we now believe is our core set of brands out of a very long list. And then we have a model to drive our growth on those brands. We've called it the PZ Cussons Growth wheel, and I'm going to take you through that and give you some examples in a moment. And all of those are underpinned by a determination to enable the delivery of the strategy. We call them -- these are Must Win drivers. And yes, it's sustainability, I'll say a bit more about that, but it's absolutely culture and people and, above all, leadership. Going back a little bit to that pioneering spirit, the pioneering zest that we are trying to reclaim from our past to be the fuel for the future. And as we focus on the future, we also need to tidy up some of the legacies of the past, which means some dramatic simplification. So I said I'd come on to talk about the Must Win Brands because that's what we're calling them, the brands that represent our core. So we see this as a bull's eye. And in the middle of the bull's eye, we have eight brands, all of which are the #1 or 2 in their category or subcategory that are playing in our priority markets and within which we have a right to win versus competition. And we did a lot of thorough work a year ago to choose which brands go in and which brands are in the portfolio brands. And these represent half of our sales, 2/3 of our gross profit, and they justify and secure 3/4 of our marketing investment. And they did that last year, and they've done that again this year. And our job is to drive those faster because we believe those are the ones where we have the right to win, and they will be the engine of growth. But it doesn't mean we don't care about our portfolio brands. There are some very big and important brands in our portfolio list, and some of those will get elevated up to a Must Win Brand over time. And we want to create healthy competition within the company for those which can make it to the grade, right? And actually, I would say that the first horse in the race at the moment would be Imperial Leather, which is a brand that we all yearn for being in the Must Win Brands, but has lost its way a little bit in the last few years and looks very different if you go to Indonesia versus Kenya versus the U.K. So we are working fast to make sure we've got a very valid business model and business plan for Imperial Leather that will justify the investment that you'll secure if you become a Must Win Brand. So I said that we were going to use the PZ Cussons growth wheel then to grow our brands. So let me give you a little walk around the wheel, right? And there are four parts to the PZ Cussons growth wheel. And the idea is that this is a model that is simple. This is not necessarily rocket science, but it encapsulates best-in-class thinking for how you build brands, consumer goods brands. And it enables us to compare baby in Indonesia with beauty in the U.S. and everything in between. Start with consumability. Are we introducing products that consumers want to buy and will help build the brand that we are trying to convey? A really good example here is original source right here in the U.K. It's the #1 vegan shower gel already in the market, already well known for being natural and a little bit disruptive. And what we've introduced this summer is I'm Plant Based at a higher price because we want to start nudging up the price points in which we're selling our products. And we're making sure that the products and the experience really delivers for the consumer. So the formulation is 100% natural. The bottle is 100% recycled, and it's 100% recyclable. And for the target consumer, we know they're willing to pay a premium because those are the benefits that they're really looking for. We also want to make sure our products are attractive in terms of value that's attractive to the consumer, whether you're spending NGN 50 on a bar of soap in Lagos or $50 on St. Tropez in Manhattan. And we want to make sure it's attractive for our retail partners, be those distributors in our developing markets or large supermarket chains in developed markets. And of course, we want to make sure it's attractive to us financially, so that we're able to generate more funds to invest in brands over time. And a really good example of a brand that has made great progress here is Cussons Baby in Indonesia, where we play in a number of subcategories within the overall baby market. And the team on the ground there have really targeted the subcategories with the highest gross margins, and therefore, not only have they consistently driven gross net sales over recent years, they have done it at the same time as improving their gross margin, which is a really good way of growing the top line and also generating more funds in the P&L to then reinvest in building the brand. And that's important because we want our brands to stand for something, and that's where memorability comes in. If you really believe the brand stands for something and it appeals to you, then you will be willing to pay a little bit more for it. It's a great way to justify value and a really good example here, but we've done it on many brands with the St. Tropez where we signed up Ashley Graham, a U.S.-based celebrity influencer and endorser. And actually, we linked it to a specific product where she launched the $55 right at the top of our price points product, the St. Tropez Glow Kit, which sold out faster than we could make it 3x, right? And it's a really good example of a business that have worked very well on both the U.K. side of the Atlantic and the U.S. using the same social media, digitally activated influencer. And then finally, we need to make sure that the products are there for you to buy wherever you are so that you are always, I hope, within an arm's reach of one of our Must Win Brands. And a really good example there would be Premier soap in Nigeria, where we've been overhauling our route to market, getting that mix right between our active distributors and using wholesalers, particularly in the north, so that we can get our products into more stores so they're genuinely more available for consumers to buy. And our job is to constantly raise the bar on all parts of the wheel on each of our Must Win Brands so that when we put GBP 1 of investment on the brand, we increased our confidence that we're going to get a return on that investment. Another area where we're investing, and we are convinced we will get a return, even if it's going to take some hard work to get there, is looking at one of the Must Win drivers, and that's sustainability. Caroline would already made a reference to this. And this is a really good example of where we are genuinely building on the good work of those that have come before us. Many of you will remember good for business, which was already making progress in this area. And what we've now done, as said, that we want to put sustainability at the heart of our strategy. And as a demonstration of that, that we want to get B Corp certification by 2026. And you may know brands or individual businesses that have achieved that so far, Ben & Jerry's Ice Cream, The Body Shop. But as yet, no group has qualified within the FTSE 250. So this is a real example of us trying to get back to the pioneering spirit and setting a bold ambition and then getting someone like Joanna to come and help us work out how we get there and deliver it. Joanna is our new Chief Sustainability Officer, and she's hit the ground running in the last 2 months and already making a real difference. And I said that we were adopting to support this strategy, a clear financial model as well. And this is where we are trying to increase the value of our proposition, what we're calling through price/mix. So either by getting a little bit more on every bottle you buy or a little less sold on such a deep discounted promotion and slowly nudging up our price/mix over time, which helps us grow our gross margin. And the way we do that is also by making sure we keep a laser beam-focused on our supply chain so that we're investing in what the consumer wants in our products and our packaging, but we are challenging every cost the consumer doesn't see or value. That's what helps us generate a gross margin, which we can then invest where we want to in overheads because we know that we'd put some critical capabilities in if we're to win, but we only grow those overheads at a rate slower than total sales. So in other words, we're generating some leverage in our P&L. And that's what is then enabling us to invest in our media and consumer activation, which is the brand building effort that is the lifeblood of building brands. And the more we can get those wheels turning, then the more we actually then generate momentum that sustains over time. And are we making progress? Well, obviously, for FY '21, which we reported the full year results back in September, you can see that we reported EPS growth for the first time in 7 years. And that was enabled by us delivering adjusted profit before tax growth of 11%, and that was the first time we had grown the bottom line in 5 years. And combined with continued focus on balance sheet management, we were able to reduce net debt yet again and return to an increased dividend. And the real fuel for this came from the top line and ensuring as we grew the business last year by 7% with those Must Win Brands ahead of the total business growing by 11% and then making sure we had targeted investments in marketing, brand building and in overheads, but still growing the operating margin at the bottom line. And again, you can see the good work on the balance sheet, which enabled us to drive 70% free cash flow conversion. That was last year. What about this year? Well, at the time we announced our full year results, we also gave an update on FY '22. And what we said then was that we are expecting a return to growth in our second quarter. Obviously, we reported a decline in our first quarter on a year-on-year basis, up against the real spike, the peak of the pandemic 12 months ago. But if you look over a 2-year basis, you see real solid growth versus a pre-pandemic level. And we still stand by our expectation to return to revenue growth in Q2. But we also have to have our eyes wide open that we continue to work in very volatile external environment. We may have got used to shops being open and being able to buy what we want. If you'd be shopping in Indonesia in the last 3 months, you would have seen that many stores are closed, there are curfews and that people are being encouraged to stay at home. It is only just unlocking. So we still have a demand volatility. We still have a demand volatility in the U.K. Are people using liquid soap as much as they were a year ago? Are they using hand gel as much as they were a year ago? How behavior is changing? And then perhaps the thing that has taken the entire industry by surprise is the unremitting commodity inflation and the supply chain disruption that has come as demand has picked up post COVID and, in particular for us, see containers all in the wrong places, the cost of moving those around go through the roof, and we have been working flat out to mitigate all the cost pressures and in some places that has meant taken pricing as well whilst also managing the supply chain so that we can continue to serve our customers with exceptional customer service. But as we do that, we have maintained investment. Investment in the key capabilities, but also investment in our Must Win Brands, right? And our overall expectation continues to be low to mid-single-digit revenue growth for the year and then our adjusted profit before tax, in line with current expectations. So really, we're very clear what business we're in. We have a strategy. We are making investments and we are serious about sustainability being at the heart of what we're doing. And I hope we've demonstrated that we've already made a start. But actually, before I hand back, I just want to move on to say a little bit about the fact that we remember that it's not just slides on PowerPoint. It's actually people, it's employees of PZ Cussons. We said that culture was one of the important drivers of our business and the turnaround that we're driving for. And as a result of that, as Caroline mentioned, we have worked on what are we here for, what is our purpose and then what are the values that we want to live up to. And in six very simple words, we have tried to portray why PZ Cussons is here: For everyone. I said at the beginning, you build consumer brands by serving more consumers. So in that sense, we want to be for everyone. This is also for everyone of all backgrounds. We want to be inclusive. We want to promote diversity. This is also for everyone because we want to be serving the needs of all of our stakeholders. That's actually a critical part of becoming a B corp is that we say all of our stakeholders are important, not just but including shareholders. So we are here for everyone. For life. Part of that is because, literally, we're making people -- we're enabling people to wash their hands, some markets to wash their clothes. It's very simple, actually delivering some -- again some basic needs in life. It's also to deliver against desires in life, St. Tropez. We're giving confidence with St. Tropez. But it's life in the sense of vitality. It's a sense of people can have more fun and a better life as a result of PZ Cussons and what we do. And we're very clear that it's -- okay. I think that incoming -- there we go, there we go, there we go. And we're very clear, it's for good. For good in the sense of permanence, we want PZ Cussons to be around, but also for good in the sense of we want the world to be a better place because PZ Cussons is in it. So those are six words, very carefully chosen. But what about the values because I said we'd look to values as well. And here, I have to pay credit to those that have come before, and we have looked very hard at the can-do values that many of you will remember, and some of you were involved with creating and launching. And we have tried to take the essence of those and also add on what we need to help deliver the strategy for the future. So now there are four words. So in total, we're talking about 10 words, 6 for the purpose, 4 for the values. We want people to be bold, to make a pioneering move, not to be reckless but to take informed risks and not to do -- not play, not to win, right? We want people to play to win in our business. We want them to do with energy. Honestly, the way in which we will get more consumers energized to do what we want them to do is by us demonstrating our energy. And then we recognize it isn't always easy. So we have to strive. It takes some resilience and some determination, but we also recognize that when PZ Cussons people come together, actually, we can make more progress on this. So we want PZ Cussons employees to bring their best selves to work, and that is exactly what we are rolling out right now. And if you look -- I'm sure all of you are avid social media users. So when you get a chance to look on LinkedIn, you put in PZ Cussons and you will see reports naturally coming up organically from employees of the rollout in Australia, the rollout in Indonesia where people are engaging in the new purpose and the new values and talking about, with fun, how they're going to use it to help deliver what they want to. So last words from me. We've made a solid start, right? We have delivered some things that we said we were going to do. We've definitely made some progress on our strategy, but our eyes are wide open. There is a lot more to do, and we are only at the beginning of the journey. We have a lot to do in managing right here right now, those cost pressures that I talked about and the supply chain disruption. But we know that we will get back to growth, and we know we will get back to growth for the year, and we will do that whilst also maintaining the financial flexibility to maintain a sustainable dividend as we indicated with our increase for FY '21. And with that, I will pass back to Caroline.

Thank you, Jonathan. This is bringing us to the formal business of the meeting. But first, I'd like to pause and see if there are any questions following Jonathan's review or in respect of the annual report and accounts that I leave before you. So let me just pause and see if there are any questions. And there are some microphones coming around. If you'd like to raise your hand, and then we'll get a microphone to you.

Did I see one at the back there? Did I see a question? Yes, the gentleman at the back on your side there.

Forgive me on balancing your very comprehensive set of accounts in my hand. So there might be a few gaps between, but I've got three points actually to raise. Well, on a positive note, I just like to say on behalf of the certain private shareholders, it was nice to receive a bacon bap at when we came. So a small token of breakfast when we arrived, which is good. And also, like I said, this is to be a very comprehensive set of accounts from some of the accounts I've read in the past for public limited companies. Right. On Page 66 of the accounts, in your remarks, you mentioned the term disposal accounting, which, in layman's terms, I mean -- I presume a loss on an arm of the business that has been disposed of during the year. Could anybody on the Board enlighten me further on that?

Do you want to give us -- should we do them one at a time?

Okay. Right.

Would you like to -- Sarah. So let me pass over to Sarah, who's our CFO, to talk through, as you rightly say, the complexities of disposal accounting.

Thank you, Caroline.

I'm a retired accountant, so it's...

Okay. Well, you will be putting me through my paces then. So let me do my best. So we disposed of Nutricima in the year, which was our loss-making milk business in Nigeria. And as we do that, we had some historical ForEx exposures that effectively recycle from the balance sheet into the P&L. And we have to recognize that loss, which offset otherwise the disposal on that business. It was a noncash accounting loss.

Right. Okay. The second one is on slightly controversial note. I've noticed that even though the company has unfortunately made a loss during the year, which I understand under the last 18 months of tough trading, the salary -- I'm not going -- I don't know half on any individual person here, but I noticed on at least a couple of occasions, the salaries of two of the Board have increased substantially over the year. I'm noticing one of the small notes, it was mentioned some 10% pension increase or something in that. Now presumably, some of this will be due to perhaps an increase in shareholding in the people, perhaps putting money into the business and getting some out as well as a result of that. But is there any link between the performance of the company in general to the salaries of the Board?

So let me answer that one in the first instance, and then I'll ask our Remuneration Chair, Kirsty, if she wants to add anything to it. But -- so in terms of the disclosures of the salaries, I think what you're probably referring to is the executive directors who had an increase in salary, in line with the workforce. So our workforce, as a whole, had a 3% increase in salary rise, our executive directors, it's all the same. So that's the only increase in salaries that you all have seen going on amongst the executive directors. We have a short-term and a long-term incentive scheme. Both of those are set out with very clear performance targets that are set and disclosed. And actually that we have to spend quite a lot of time making sure accurately reflect achievable but stretchy targets for management. And in contrast to previous years, actually, last year's performance met those targets. And so there were payouts under those bonus schemes and incentive schemes, not just for the senior directors, but also cascading through the organization as a whole. And those are consistent with market practice and benchmarked against our competitors and our peers as well. And I think just to your last point, there are shareholding guidelines, which ensure that our senior employees and our two directors -- executive directors, accrue and keep a shareholding during the period when they're employed by the company and a little bit afterwards to make sure that we align their interests with yours as shareholders as well. Kirsty, anything to add on that?

Yes. Just a couple of -- can you hear me?

Yes.

Just a couple of additional points. You mentioned pension. Pensions of new directors are aligned with the wider workforce again around the 10% level, which is fully disclosed in the remuneration policy. You might have noticed also the nonexecutive directors received a little pay rise. That, again, is after many years of no rise again is benchmarked. And you might have also noticed the senior independent director's fees seem to go up 100%. That's actually because, benchmark, it was very low and it's a standard amount that has gone up to across all other sort of senior independent directors. I hope that helps.

Right. Yes, it's very interesting. Right. And finally -- sorry, on Page 136, I was interested to note that there's a mention of Thermocool Engineering Company Limited as being one of the subsidiaries of PZ Cussons. Could one of the Board enlighten me how an engineering company fits into the plan of the...

I think -- I'm happy to answer this in there, not -- it's not an engineering company per se. It's one of our companies within the African Holdings around the electrical retailing business. So I think what I would describe as rather a grand name for something that's selling our electrical products in Nigeria. It's not really an -- no, don't worry we're not trying to get an engineering company. But I have to say, and on behalf, in particular, of the team around here who works very hard on the somewhat thankless task at times of putting together the Annual General report here, thank you so much for reading and for finding things in it. It actually makes it really good for us to know that you've gone through it, and you've got these questions. So thank you for doing that, not that I wish to encourage everybody too.

It's my pleasure.

Really well done. So do we have some more questions just on the side here?

Yes. Do you -- can I just ask on the going on the sustainability thing? Do we make or grow our own ingredients? And what sort of control do we have over quality of those ingredients and of our own manufacturing?

Jonathan, take that one. So I'm going to ask Jonathan, if he'd like to...

Yes. So the answer on do we make all grow is no. But do we work with suppliers and ensure that they meet the highest standards, either as defined by our supplier code of conduct and due diligence that we conduct when we onboard a supplier or that we assure ourselves and then that their policy that they might subscribe to actually is also in line with ours, and we always work to ensure that we're sourcing ingredients of the highest quality. And then actually making sure that before we ship them, we're also shipping products out that are of the highest quality.

Just you might have noticed that this year in the long-term incentive targets, we've also included a goal on ethical sourcing. So to your point about quality and control, there's going to be a target over 3 years to ensure that our partners sign up -- our suppliers sign up to that quality code and a sustainability charter. So we're tying that into the incentives for the executives as well.

As the balance sheet is now stronger and interest cover is healthier, would the Board now reconsider share buybacks, both to improve earnings per share and to mitigate against the dilutive effect of share incentive plans?

Good question. Very good question. And you're right to call out the strong balance sheet. And I must say that having a strong balance sheet during troubled and turbulent times of the pandemic was actually tremendous in terms of one less thing to think about. You make a very good point about use of capital, capital allocation strategies, and it's something we continually review. So we never say that anything is off the table, and we do continually look at what's the best use of our capital. So certainly one thing that's in the armor. But as Jonathan said, we also look at all of the things that we could do with the money, whether it's returning it to shareholders, whether it's investing it behind our Must Win Brands, whether it's thinking about how we grow the business. But it's certainly something we look at across the range of options.

I do have another point, I hope you don't mind.

Go ahead. No.

Your vision of the future is impressive really with lots of thought about revenue growth. Should your focus be just as sharp on expanding profit margins?

Well, I think it's a good call out, but -- and Jonathan is going to jump on me, I can see here. But the word in there is the sustainable profit book. So it's profitable revenue growth. So you are absolutely right, it's not all about the top line. The bottom line is really important. But I think what we really want to emphasize is that you can save your way to a bottom line growth, but that's not real growth. You grow from the top, but you also increase the jaws. You increase the margin along the way. So you're absolutely right, and we're on it.

100%. You almost took the words out of my mouth. So we have clearly said at our Capital Markets Day when we talk to a broader base of investors that our goal is to get to a mid-teens operating margin from the 11% that we reported last year. We want to do that in a sustainable way. And genuinely, I believe that the sustainable way of doing that is by driving sensible revenue growth that we then transfer through the P&L into improved levels of profitability. Let me just -- I said that it was 7 years since we've grown revenue and 5 years since we've grown profit. So we took 2 years, right, where we grew the profit without the revenue and then we were in trouble. And when you're not growing revenue in the consumer goods business, it catches up with you unless we've got other dramatic interventions to take in the operating model. And so we are clear that we want to grow the profitability, but the way we are going to do that is by driving sustainable profitable revenue growth at the top line.

And to Kirsty's point again, the way that we look at incentivizing the management team reflects both of those drivers, not just the top or the bottom. It's getting the wheel -- Jonathan's wheel to work. Good question. Thank you for the questions and for paying attention to all the materials that we've sent you. We do appreciate it. And if there are no more, I will move on to the formal business of the meeting. As you can see, I put my glasses on so it's getting serious. I'm going to start with the correction. Some of the Eagle eye amongst you, and we very definitely do have that in our shareholder base, I'm glad to say, may have noticed that there's a typo in the form of proxy and the notice of meeting. Resolution 19 incorrectly refers to Resolution 16. It should be Resolution 18. So we apologize for this error. It's a small one. We do not propose formally correcting it. You'll be relieved to know we don't need to recirculate anything because we've taken advice that the resolution remains valid if we pass it with its current wording, but I just should point it out to you. So all business transacted at today's meeting will be voted on by way of a poll with one vote for every share held. The poll would be administered as usual by our registrar, Computershare. Only shareholders or their proxies or corporate representatives are entitled to vote on the poll. If you have previously lodged a completed proxy form and you do not wish to change your vote, then you do not need to take any action. And you made those gently during this part. Your vote has been cast and will be included in the count. I anticipate that this should be the case for the majority of shareholders in the room today. But for those of you who either wish to change your proxy vote or who have not previously cast a proxy vote and wish to take part in the poll, you will need to complete the poll card, which can be found on the reverse of your attendance card. If you wish to complete the poll or to vote on the poll in more than one capacity, you will need a separate card for each capacity in which you vote. And if you're unable to find your poll card or require further cards, please raise your hand and a representative from Computershare here in the room with us will assist you. So in the interest of time, it would be helpful and I think less confusing for everyone if you complete your poll card as I walked you through the resolutions. And again, to be clear, if you've already previously lodged your proxy form and you don't wish to change your vote, then no action is required. And if you require any assistance completing your poll card, raise your hand and a representative from Computershare will be pleased to help you. So members of the Company Secretary team are also available, Kevin and Karim, around to offer any assistance, which you might require to. And at the end of the procedure, the cards will be collected when I've declared the poll closed. So same arrangements as usual. Any questions from anybody on this before we get going? Great. Then I will move to the resolutions. So we have 21 items of business for your consideration set out in the notice of meeting today. A full explanation is included in the notice of meeting. But as I go through, I will give you a short summary. And as I mentioned before, it's easiest to complete the poll card as we step through. So the resolutions put before the meeting today are as follows: Resolution 1, to receive the annual report and financial statements for the year ended 31st of May 2021. Resolution 2 seeks approval by way of an advisory vote of the directors' remuneration report for the year ended 31st of May 2021, which is contained in the annual report and financial statements. Resolutions 3 and 4 deal with the amendment of the Directors' remuneration policy and long-term incentive plan, respectively, to adjust the award granted in 2020. Resolution 5 deals with the declaration of the final dividend. Resolutions 6 to 14 cover the election or reelection of all directors, a separate resolution being put forward in respect of each director. You may recall that from previous years, in relation to the reelection of Independent nonexecutive directors, a company who seek the approval of not only its shareholders as a whole, but also separately of independent shareholders. For these purposes, independent shareholders are all those shareholders who are outside of the group comprising of the founding Zochonis family and certain wider family groups. And because of its size, that group of shareholders is treated as a controlling shareholder for the purposes of the U.K. listing rules. In order to meet these separate approval requirements, shareholders will vote on all directors' reelections, just as we do with other resolutions. But subsequently, however, I will ask our registrar to separate out the votes of the controlling shareholders from the results of the vote on Resolutions 6 to 14 to give us the two separate approvals. So 6 to 14, I will just pause here for a moment to enable anyone completing a poll card to cast their vote against or for each of the resolutions 6 to 14 because that's a lot of boxes. [Voting]

Jolly good. Okay. Moving on. Resolutions 15 and 16 are our audit-related resolutions regarding the reappointment of Deloitte LLP and the setting of their fees. Resolution 17 authorizes political donations and expenditure. Resolutions 18 to 20 cover capital and other issues, including authorizations relating to the allotment of share capital, preemption rights and the notice period for general meetings. Resolutions 18 to 20 are proposed as special resolutions. They are in line with our previous policy and with resolutions put forward at past AGMs. And Resolution 21 proposes the adoption of a new set of articles of association of the company, which have been updated to reflect changes to company law and market practice since they were last updated some time ago. The poll count for the resolutions put to the meeting today will be done by Computershare for us and will be combined with the proxy votes that have already come in. And the final results will be announced to the London Stock Exchange as soon as practicable, following the conclusion of this meeting and will also be shown on our website. However, unless Kirsty tell me otherwise, based on the votes and proxy instructions received before the meeting, I can confirm indicatively that all resolutions have been passed. That, everyone, concludes the formal business of our meeting today. It only remains for me to thank you all for your attendance today. It's really appreciated to see you in person. So thank you. We wish you a safe journey home. We will be around for a few moments for a while after the meeting if there are further questions that you'd like to ask us. And there are also a memento or two, a little goody bag outside for you to explore some of our products directly. And thank you very much for coming, and I declare the meeting closed. Thank you.