PZ Cussons boss: ‘It’s a bit of a strange company, isn’t it?’

Two questions usually crop up when talking to Brits about PZ Cussons, explains CEO Jonathan Myers. “If you ask most people about us, first they’ll say: ‘who?’ And then if they do know, they’ll say: ‘it’s a bit of strange company, isn’t it?” 

It’s hardly ideal for a FTSE 250 company with dozens of consumer-facing brands and a 135-year history. But a strange company it is. Founded in 1884 to trade commodities in Sierra Leone, it expanded first into Nigeria before going around the world. Now, as well as brands like Imperial Leather and St Tropez, its portfolio includes a dwindling Nigerian property empire, a range of hand sanitisers and luxury shampoos, and until recently, an Australian yoghurt business.

The confusion was unhelpful and Myers is the first to admit PZ Cussons had lost its way by the time he took over as CEO in May 2020. After decades of growth, it was on a seven-year losing streak of declining sales and five years of declining profits. Scandal entered the mix a month before Myers joined when it emerged his predecessor, Alex Kanellis, had been withdrawing cash and payments from the company. The only silver lining of this news was that it was buried beneath the panic of an emerging global pandemic.

‘It’s a bit of a strange company, isn’t it?’ 

In the almost three years since, Myers has begun a transformation. While the boom in its top-selling Carex hand gel has eased since the peak of the pandemic, progress has been steady, with like-for-like sales up 6.1% in its half-year results out this week. It marks the fifth consecutive quarter of profitable revenue growth.

Coming into a business floundering under a disparate set of global enterprises, Myers made it simple. “It all started with knowing what business we’re in,” he says. “And we are a brand-building business. We are going to do three core categories – hygiene, baby and beauty – in four countries: the UK, Australia, Indonesia and Nigeria.” That meant no Australian yoghurt business (sold), and no Nigerian properties (almost all sold). “You’ll notice in our strategy we don’t say we aspire to be a world-class real estate company. So what were we doing with so many properties on our books?”

Instead, PZ Cussons is now based on growing its nine ‘must-win brands’. To qualify, a brand must be in one of its three core categories in one of the four main countries. Most critically, it must also be first or second in its category or subcategory. Think Carex: top liquid soap in the UK. Or Original Source: top vegan shower gel. (“You could argue that’s niche,” says Myers. “But it’s growing fast as a subcategory.”)

While it owns about 50 brands altogether, these nine ‘must wins’ make up about half of PZ Cussons’ sales, two-thirds of its profitability, and now receive three-quarters of its marketing budget, Myers says.

The latest joined in March last year: Childs Farm, an eco-friendly babycare brand, acquired for £36.8m. The sale exemplified the streamlined focus Myers has brought in, using the profits from the sale of some Nigerian properties to ensure no extra borrowing was needed. As well as being a leading brand in a core category, Childs Farm was also “a demonstration that we’re back on the front foot when it comes to building and acquiring brands, rather than just selling brands,” Myers says. Not that the selling is over. “We’re always reviewing and will continue to review,” Myers adds with measured caution. “I would expect there to be disposals in the future but equally, as we’ve demonstrated with Childs Farm, there will be acquisitions too.”

We’re a ‘multi-local’

While establishing PZ Cussons’ ‘must-win brands’, Myers has also been dismantling the multinational matrix built by his predecessors. “We’d created an infrastructure more suited to a multinational”, he explains. “And actually since I’ve arrived, we have begun saying: ‘look, we’re not a multinational, even though we might look like it from the outside. Actually, we’re a multi-local.’

“So what we care about now is winning in Nigeria versus our competitors there. Or winning in Indonesia versus those competitors. We’re not going for a global average versus much bigger multinationals who have multiple global category teams sitting a long way away.”

Such a model sounds ripe for inefficiency, but Myers insists that’s not the case. “That might be true if we operated a global supply chain but our supply chain is set up to support the markets we operate in, rather than to support all markets.” Particularly in the last few years with its core markets spread across four continents and freight costs hitting record highs, “it’s actually been much better for us to manufacture locally.”

This strategy is a vital differentiator for PZ Cussons, often branded a ‘mini-Unilever’ for its global reach of personal care brands. It’s a moniker Myers doesn’t love. “Well, I should be flattered, right? Because Unilever is a fine competitor… But I’ve heard it quite a few times and I always try to push back and say: ‘No, our strength is we’re a multi-local. That’s our competitive edge.”

Myers gives several examples of how this is so. In Kenya, for example, PZ Cussons launched a menthol and caffeine shower gel because the menthol was found to have a cooling effect on the skin in hot climates. While that could have happened inside a typical multinational, “it might have been either less likely or slower to happen because someone’s sitting in the ivory tower who has to sign it, would say: ‘That makes no sense, why would you do that?’” Myers argues. By contrast, PZ Cussons in Kenya has its own factory meaning “the R&D guys can do the innovation, run it, see how consumers react. It’s a chance for us to go fast.”

In the UK too, PZ Cussons is innovating. Imperial Leather has been relaunched as a more premium brand, with new fragrances and new packaging, a move largely driven by inflation with the products up from around £1 to £1.50, but “there’s now a reason we’re asking a higher price”. It balanced the rebrand with the launch of Cussons Creations last summer, a budget range for shoppers more conscious on price.

PZ Cussons is still a bit of a strange business but that’s not always a bad thing. For example, its international footprint is a big draw for investors, says Myers, because “there aren’t many FTSE 250 companies which have significant exposure to non-UK geographies. So it’s a way for investors to buy into something on a UK stock market with exposure to emerging markets.”

It is also on a mission to achieve B Corp status by 2026, a feat no other FTSE 350 company is yet to achieve. It is a bold ambition in part a response to growing pressure from investors, lobby groups, and the public to prove different things – whether it’s plastic, water use, or diversity and inclusion. “One of the benefits of B Corp is that it’s a holistic measure across multiple aspects of our operations and our policies and our intent.”

Myers says he’s so committed to the goal, it’s now linked to executive remuneration. But he draws a clear line in the sand. While “it’s important to have a purpose as a company and to do business the right way”, he is wary of falling into thinking “that every brand needs to wrap itself in a hessian shirt and be an eco-warrior”.

PZ Cussons may at times seem like a strange company. But it’s definitely not that kind of company.