PZ Cussons plc (PZC) Earnings Call Transcript

Good morning or good afternoon all, and welcome to today's PZ Cussons Full Year Results Call. My name is Adam, and I'll be your operator for today. [Operator Instructions] I will now hand the floor to Jonathan Myers to begin.

Thank you, Adam, and good morning, and thank you to all of you for calling in to our results presentation for PZ Cussons financial year ended 31st of May 2026. For those of you viewing the slides, as we're presenting this morning, you can see straight away an example of how we built stronger brands last year. Here's us making a splash on Marble Arch about Original Source's tie-up with HYROX. The London leg of this global indoor fitness competition was a perfect opportunity to promote our latest innovation, the men's workout recovery range. Not only were we able to distribute tens of thousands of product samples at the event, we were also able to generate more than 16 million views online. Turning to the agenda for this morning. I'll start with a brief introduction before handing over to Jan. Some of you will have met Jan already since she joined 4 months ago, and she'll share some reflections from her fresh eyes before getting into an update on our financial performance. I'll then provide a broader update on strategic progress before a chance for you to ask any questions. So without further ado, let's get started. And there's no better place to start than a reminder of the investment case we set out at our Capital Markets event back in February. We have winning portfolios of locally loved brands. They play in our 3 core categories and our 4 lead markets. These brands are supported by 2 other attributes, which we also see as a source of competitive advantage: our go-to-market capabilities and our manufacturing scale and agility. Our portfolio is well balanced with each lead market playing its own role in delivering for the group overall. As Jan will cover, our balance sheet has been significantly strengthened, and we have set out a clear capital allocation policy. Overall, this gives us confidence in our growth ambition and target of double-digit total shareholder return through the cycle. Put all of this together, along with the actions taken following our strategic review, and we are now a more focused and more resilient business. So what of FY '26 then as we look through the lenses of this investment case and our refreshed strategy? Well, overall, we've seen some early signs of delivery. Performance was broad-based with growth across all 4 lead markets and our top 10 brands. Our ability to step up investments in brand-building activity to the highest level in recent years is paying off, supporting growth across the portfolio and enabling us to invest in the development of future innovation and activation plans as we build multiyear growth plans. We have seen a continued reduction in FX risk in Nigeria as our actions have materially reduced sensitivity to future currency fluctuations, along with the ongoing implementation of guardrails that we set out in February. And we have a significantly strengthened balance sheet, not least thanks to growth of GBP 12 million in free cash flow. As a result, the Board is proposing the resumption of dividend growth, the first increase in 4 years. Like all companies in our sector, we are, of course, mindful of the macroeconomic environment in which we're operating. However, we have started the year in line with our expectations and are pleased to confirm that the outlook for FY '27 is in line with market expectations. We remain confident that we are well placed to continue delivering sustainable growth over the long term. Now with that, I'll hand over to Jan.

Thanks, Jonathan. Good morning, everyone. It's great to be here presenting my first set of results at PZ Cussons, and I look forward to seeing some of you in person in the roadshow over the coming weeks. For those I haven't met yet, I joined PZ in late March from Severfield, where I was the Interim Chief Finance Officer. Before that, I was the CFO at Manchester Airports Group for more than 5 years. During this period, I oversaw the delivery of major investments and transformation projects, such as Manchester's GBP 1.3 billion investment in Terminal 2 as well as operational efficiencies, technology advancements and finance transformation. I also led the refinancing and operational response as we navigated through the COVID pandemic as passengers fell from 60 million down to 0 and then back up to 60 million. Prior to that, I held a number of senior commercial finance roles in global businesses across Europe and the U.S., having started my career qualifying with PwC, where I worked in corporate finance and M&A lead advisory. Before we get into the numbers, I thought it would be helpful to share some observations from my first few months in the role. Firstly, PZ Cussons is a brilliant company with a fantastic portfolio of locally loved brands, a number of which have long featured in my own household. I've loved meeting so many colleagues in my first few months, and it's clear that the business is full of brilliant people who are committed to the success of PZ and work hard every day to make it a reality. My first trip to Nigeria with Jonathan was in June, and it was brilliant to get under the skin of how the business and the market there works. Understanding the recent financial history of the business and how this was impacted by the devaluation has been top of my list since joining. I'm pleased to say that the guardrails that Jonathan and the team have been embedding have greatly reduced potential risk in the future. As I've learned about the business, I see 3 areas where I want to focus and I feel I can make a difference. Firstly, in supporting the business as we increasingly focus not only on investing in current year brands, campaigns and innovation, but also planning out over several years. This is largely about shifts in mindset and some of the principles of the longer-term planning that the infrastructure companies have worked at. Secondly, and related is improving returns. We have been clear with our shareholders what to expect in terms of the financial algorithm. To really drive this, I now want each and every one of our teams to understand the role they play in delivering on our commitments and what it means as they think about investment and required returns, whether that's money spent on TV commercial, a new line in a factory or an IT systems upgrade. We also need an eye on how that criteria needs to vary depending on the developed or the emerging markets, given the underlying differences in risk characteristics. Third, there are further opportunities for finance simplification. I'm a big user of AI myself, and I want the finance team to be embedding these tools into our everyday work in order to free up time to support with value-added decision-making. Now let's move on to the numbers where we've had a strong year financially. Starting with the summary financials. Group revenue increased by 5.4% to GBP 541 million, with like-for-like revenue growth of 5.8%. That growth was broad-based with growth across each of our 4 lead markets and across our top 10 brands in their respective largest markets. Adjusted operating profit increased to GBP 59.5 million with the margin improving to 11%. On the more relevant comparison basis, which excludes the contribution from the PZ Wilmar joint venture in both years, adjusted operating profit increased by 24.5% and margin improved by 170 basis points. Moving further down the P&L, net finance expense reduced significantly, reflecting the strengthening of the balance sheet. Adjusted profit before tax increased to just over GBP 50 million, while adjusted earnings per share decreased to 7.14p. This decrease is driven by 2 factors. Firstly, a high effective tax rate, which as explained at the half year is due to the post-tax income from PZ Wilmar joint venture no longer being recorded in our operating profit. And secondly, the mix of growth with Africa's strong performance driving a proportionally higher minority interest charge and in particular, as we saw strong growth in electricals in which we have a lower net ownership than elsewhere. Critically, free cash flow improved strongly to GBP 54.7 million compared with GBP 42.3 million last year, reflecting higher adjusted operating profit and lower cash exceptionals, partly offset by a working capital outflow. Net debt reduced significantly from GBP 112 million to GBP 25 million, driven by the improved free cash flow, proceeds from the sale of our 50% stake in PZ Wilmar and the disposal of surplus nonoperating assets. As a result of the performance in FY '26 and our confidence in the future, the Board has proposed a dividend increase of 2.8%, consistent with our progressive dividend policy. Turning now to revenue. The revenue bridge shows growth across each of the 3 reporting regions, each of the 4 lead markets and in both the developed and the emerging parts of the portfolio. The single largest contribution has again been from growth in Nigeria. Pleasingly, although this was largely inflation-driven, we have seen a much more stable economic environment in Nigeria. In fact, the movement in the naira has been favorable with the red down bar for FX driven by the strengthening of sterling against other currencies. So turning to operating profit. And with the 24.5% growth, I'm pleased with the quality of this delivery. We saw growth in both gross profit and reduction in overheads, thanks in part to GBP 8.5 million structural cost savings, allowing us to increase marketing investment by GBP 3.5 million. The GBP 59.5 million operating profit we reported includes GBP 5.4 million of FX gains as the revaluation of U.S. dollar-denominated liabilities in Nigeria reduced, thanks to the appreciation of the naira. This is a one-off gain in FY '26. And so I would encourage you to think of our normalized operating profit from which we will grow in FY '27 as being closer to GBP 54 million. This slide links the FY '26 performance back to the financial framework we set out at the Capital Markets event. Over the cycle, we are targeting mid-single-digit like-for-like revenue growth with increased marketing investment funded by gross margin expansion and overhead growth limited to be below that of revenue. I'm pleased to say that in FY '26, we delivered against this framework. The result is improved quality of earnings, revenue growth supported by investment, productivity gains funding that investment and a stronger, more resilient profit base. Looking now at the segments, starting with Europe and Americas. Revenue increased to GBP 200 million with like-for-like revenue growth of 0.9%. In the U.K., our lead market, revenue grew 0.5% to GBP 175 million. We delivered growth across the key washing and bathing brands, Carex, Imperial Leather, Original Source and Sanctuary Spa, with Sanctuary Spa, the biggest contributor driven by strong Christmas gifting. Outside of the U.K., revenue grew 3.8%. Most notably, St. Tropez returned to growth in North America, growing 6.9%, supported by the new operating model and partnership with Emerson. This was offset by some softness in Continental Europe. Operating profit was broadly flat as improved gross margins and good cost containment offset increases in marketing investment. Turning to APAC. Revenue was GBP 173 million, up 3.9% on a like-for-like basis, but flat on a reported basis, reflecting movements in the Indonesian rupiah and Australian dollar. In ANZ, revenue grew 4% to GBP 91 million, with growth across Morning Fresh, Radiant and Rafferty's Garden. Morning Fresh benefited from strong performance in Auto Dish. Rafferty's Garden grew strongly with early success from its relaunch into New Zealand and the 1-liter Original Source launch provided significant uplift to revenue. Indonesia grew 10.2% to GBP 61 million, driven by Cussons Baby with improvements in both price mix and volume. The growth was driven by the completion of the phased restaging of the overall brand and e-commerce remains a major growth driver with strong growth across TikTok Shop and Shopee. The reduction in adjusted operating profit reflected increased marketing investment behind Auto Dish and the Cussons Baby restaging, together with the depreciation of the Australian dollar and Indonesian rupee. Moving to Africa. Revenue increased to GBP 168 million, with like-for-like revenue growth of 14.7%. Revenue in our Nigerian lead market grew 22% to GBP 133 million, with growth in both price mix and volume. We delivered double-digit growth across the majority of our largest brands with Stella particularly strong, supported by increased exports and work to extend the purchase period beyond the seasonal peak of the Harmattan dry season. Route-to-market improvements also continued to support performance as we again grew both the quantity and the quality of stores served. Our electricals business grew revenue by over 20%, driven primarily by refrigeration products and continuing to capitalize on the strength of our exclusive showroom network. Adjusted operating profit growth included GBP 4.6 million benefit from the revaluation of U.S. dollar-denominated liabilities in Nigeria following the appreciation of the naira, partly offset by significantly increased marketing investment, including support for the Carex launch. Turning now to cash flow and net debt. Net debt reduced by GBP 87 million to GBP 25 million. The big drivers here being the increase in free cash flow and disposal proceeds. Free cash flow was GBP 54.7 million, up GBP 12 million, supported by higher operating profit and less cash exceptionals. The Wilmar disposal proceeds were GBP 47.8 million with a further GBP 27.6 million associated with surplus asset sales. You'll remember that in calculating leverage, we exclude the benefit of the cash held within Nigeria of GBP 24.5 million. So this results in an adjusted net debt to EBITDA of 0.7x, below the 1 to 1.5x range set out as part of the capital allocation policy. Taking a step back, the balance sheet has been transformed over recent years with gross debt GBP 174 million lower than 3 years ago. Related to the reduction in group debt is how our exposure to movements in the naira has materially reduced. A major source of the impact on operating profit has been the intercompany liabilities within Nigeria entity-denominated currency other than the naira. As the naira devalued, these liabilities increased in value, reducing our operating profit. The reduction in these liabilities has left us in a much stronger position. Historically, NGN 100 move would have driven more than GBP 7 million impact on operating profit. Today, that sensitivity on underlying operating profit is around GBP 1.5 million, and we continue to work to decrease these liabilities and therefore, the P&L sensitivity even further. Our capital allocation framework as set out at the Capital Markets event is clear. First, we are targeting adjusted net debt that is excluding cash held in Nigeria to the adjusted EBITDA in the range of 1 to 1.5x. Second, we have adopted a progressive dividend policy. Third, we will consider bolt-on M&A, and Jonathan will talk shortly about how Childs Farm represents something of a blueprint for what we're looking at. And fourth, cash returns to shareholders will be considered relative to those M&A opportunities. Given year-end adjusted net debt to EBITDA of 0.7x, we now have substantial flexibility within that framework. So the key message is not that leverage has reduced; it is that stronger cash generation, portfolio simplification and disciplined capital allocation have put the group in a much better position to invest behind growth, support a progressive dividend and evaluate additional shareholder returns or M&A where it creates value. Finally, turning to current trading and FY '27 guidance. As we said in the release this morning, the year has started in line with expectations. Like everyone else in the sector, we are mindful of the impact of the conflict in the Middle East. While there is still a number of unknowns, we have since the start -- at the start of the crisis, acted swiftly to understand and react to the impact and believe that the large majority of the cost inflation can be offset by mitigating actions already in place. As a result, we are comfortable confirming current market expectations for operating profit, which range from GBP 58 million to GBP 61.2 million. The H1-H2 split is expected to be more balanced than it was in FY '26, where operating profit was skewed more towards H1, given the majority of the FX gains fell in the first half of the year and the majority of the marketing spend came in the second half. Based on spot rates, we don't currently foresee a material FX impact year-on-year. And we'd expect net debt to be lower again, reflecting continued strong underlying cash generation. Overall, we enter FY '27 with good underlying momentum, a stronger balance sheet, reduced exposure to the Nigerian FX volatility and a better funded innovation pipeline. While there are external uncertainties to manage, the business is in a stronger position to continue delivering against the strategy and financial framework we have set out. And with that, I will hand back to Jonathan.

Thanks, Jan. Let me now come on to provide a broader update on progress and performance. Our strategy is focused and disciplined, centered around 3 core categories: Personal, Home and Baby Care in 4 lead markets: the U.K., Australia and New Zealand, Nigeria and Indonesia. We have a balanced geographic footprint with around 60% of revenue from developed markets and 40% from emerging markets. In our lead markets, our competitive advantage comes from our locally loved brands, our go-to-market capabilities and manufacturing scale and agility. Our strategy is built on these competitive advantages, which actually we sum up in just 10 words as 5 priorities: build brands, serve consumers, reduce complexity, develop people and grow sustainably. Finally, as Jan has discussed, we are clear on how we will allocate capital to maximize shareholder returns. So a clear framework of sharper portfolio choices, stronger execution and disciplined use of cash to drive sustainable long-term value. Now let's take a look at progress we have made against these 5 priorities, starting with some examples of how we are building brands and serving consumers. Gifting in the U.K. has been a clear success, where we've been learning and optimizing our plans each year. Take Sanctuary Spa gifting, where revenue is up more than 70% over the past 2 years. This has been achieved through improved product offering, optimizing the pricing architecture of the range, including playing at higher price points and through bigger, better in-store displays and activation. We broadened retailer participation in the program last Christmas, adding 7 new customers and pushed for stronger execution in those retailers already involved. Take Boots, for example. They sold a PZ gift set every 15 seconds in the run-up to Christmas last year. And it may surprise some of you, as you listen to this, with your mind secretly wandering off to the sun lounges you're hoping to secure around the pool in the next couple of weeks, we've actually already started making deliveries of our 2026 Christmas gift sets to retailers' warehouses, and we're well on track to delivering our first 1 million units of the season. Watch this space for more to come as we expand our offering to more brands at more price points and at other gifting occasions through the year. I hope I've given you all some inspiration for your own last-minute shopping when it comes to Christmas 2026. Moving from one season to another, let's move to our other highly seasonal business, St. Tropez. In June last year, we announced the decision to retain the brand and embark on a new strategic direction. It's reassuring, therefore, to be able to report that after 2 years of double-digit decline on St. Tropez in North America, our partnership with the Emerson Group is already bearing fruit with a return to growth of 7% in FY '26. Emerson's scale and expertise in the U.S. stretches across customer management, logistics and brand activation. When it's coupled with our dedicated multifunctional St. Tropez team of experts in the category, we have confidence that better brand building and stronger execution will unlock the potential we saw in the brand when we made the call to retain it. Take Amazon, for example, which was the first channel Emerson turned their attention to as part of the phased transition of the business from our own operation last year. It was already a growing channel for us, but Emerson brought their experience to bear, starting with getting the basics right, improving and optimizing product pages, increasing media efficiency and aligning promotional activity to Amazon events. As a result, our growth rate more than doubled, and Amazon is now St. Tropez's #1 customer in the U.S., not unlike many other premium beauty brands. However, there is no room for complacency. We have more to do in North America and elsewhere. We did not grow in the U.K. and have been working hard to improve performance here, especially in the run-up to the peak season. Though not yet reflected in the reported revenue numbers, we have seen sequential improvement in retail sales in the U.K. as we came into the summer 2026 season, accelerating to reach double-digit growth in the peak season and a return to market share growth. Looking to next year and beyond, we have stronger and bigger innovation for summer 2027. In fact, 4x the number of new products, including one patent-pending potential blockbuster launch. We'll also have innovation targeted at younger consumers as we seek to rejuvenate the brand and revitalize what it stands for. This includes where consumers see and interact with the brand. Hence, the U.K. launch on TikTok Shop just last month. It's clearly early days, and we're in the phase of testing out what works and what doesn't, but this is an example of how we are pushing the brand into new channels to reach new consumers. With our ANZ business returning to full year revenue growth, it's important to call out the role innovation played alongside expansion beyond the grocery channel and a renewed focus on New Zealand. We're making steady, sustained progress with our entry into the Auto Dish category, taking 160 basis points of share growth in the year, peaking at a 10% share when on promotion, where it stopped. As you may know, we're up against some formidable and well-established competition here, but we continue to see significant opportunity, given the strength of the Morning Fresh brand in the washing up liquid market, not least fueled by disruptive packaging innovation in that category, too. We've also seen a step change in the success of Original Source, getting the basics right to win in Australia, which is a market dominated by larger packs often with a pump. Hence, the launch of our new 1-liter pump pack has hit the ground running rather than our previous overreliance on the U.K. preferred 250 ml pack size, often dismissed as a travel size or one for the gym bag by the average Aldi shopper. In Indonesia, we completed the phased restage of our leading Cussons Baby brand, driving sustained market share growth through the year as well as double-digit revenue growth. We have activated the relaunched brand across all channels, including fast-growing e-commerce and quick commerce. In fact, from our Jakarta factory, enabling us to run at all hours, we are now live streaming from our own studios across TikTok Shop and other social media shopping platforms to reach our busy consumers wherever they are, at work, at home or stuck in typical Jakarta commuter traffic. Moving to Nigeria now. We've obviously talked at length about the opportunities we see for our business there and our strategy to unlock them. As Oghale set out at the Capital Markets event in February, we have 3 main priorities. It starts with growing our core. We're doing this by driving distribution and building stronger brands. Take Morning Fresh, the #1 washing up liquid in Nigeria. The Care We Share campaign has challenged household norms with the question, who should wash the dishes, positioning the brand as an advocate for shared responsibility in the modern Nigerian home and reinforcing the brand's benefit that cleaning the dishes is easier and faster with a product that really performs. Our own campaign was amplified by social media influencers, turning a simple question about household chores into a national conversation, reaching nearly 50 million people and helping elevate the brand beyond just the functional benefits on offer. We're also expanding the categories in which we play. The launch of Carex, increasingly a trusted authority in family hygiene, saw us deliver incremental revenue and win Brand of the Year in the Nigerian Marketing Awards. Finally, we continue to make progress delivering growth through exporting to new countries. In FY '26, we accelerated growth to West and Central African markets, contributing to growth in our Nigerian revenue and in hard currency, too. Jan talked about the opportunity for bolt-on M&A in the context of our capital allocation policy. And we see Childs Farm as a potential blueprint for this type of M&A, taking a growing founder-led brand on the next leg of this journey. Since our acquisition in 2022, we have created value through leveraging our competitive advantages. We've used innovation and a restage of the brand to strengthen its equity. We've leveraged our go-to-market capabilities to drive distribution and form exciting partnerships. And then we've in-sourced production where it makes sense and otherwise maintained effective arrangements with our third-party manufacturing partners. Alongside the competitive advantage that we can bring, we can also add scale advantage. In fact, the combined savings from organizational and manufacturing integration completed last year are in excess of GBP 4 million. It's also exciting to let you know today that, thanks to strong collaboration with the Emerson Group in the U.S., we have recently launched Childs Farm into Walmart. We secured online distribution earlier in the year and have now opened up in-store distribution over the past few weeks. In fact, such is the support from Walmart in their latest range review, Childs Farm is now on the shelves of every single one of Walmart's 4,600 stores in the U.S. While it's still very early days, and we are quite sanguine that the U.S. will be a challenging market to crack, our partnership with Emerson gives us a strong platform for growth on a brand that we have already proven in the U.K. Early signs from U.S. shoppers and the Walmart buying team are positive, but we recognize the hard work has only just begun. Stepping back then, how have we done with the overall acquisition? Well, the brand is now firmly profitable as well as growing and is on track for a post-return on capital employed in excess of our weighted average cost of capital in FY '27. This, combined with the opportunity in the U.S., reassures us that we made the right call to add Childs Farm to the PZ portfolio back in 2022. Meanwhile, we've also continued to reduce complexity across the business. Firstly, through portfolio simplification. Most significant was the GBP 50 million plus disposal of our stake in the noncore PZ Wilmar business, but we also exceeded the GBP 20 million to GBP 25 million guidance we communicated for other noncore surplus asset sales, achieving more than GBP 27 million from disposals in Asia and Africa. Secondly, through operational simplification, consolidating U.K. and European operating models into one set of systems and processes, building a central data warehouse to enhance reporting and analytics capabilities as well as the consolidations and integrations of 33 (sic) [ 30 ] brand websites, improving the shop window for our brands to consumers around the world as well as stepping up our cybersecurity measures. In summary, good progress made, but we are not yet done, making our business simpler and more focused. We've also made good progress strengthening the organization as we continue to invest in attracting and retaining the best people across the business to drive performance. In FY '26, our global engagement survey secured a 97% participation rate, itself an indication of an engaged organization. Overall, the survey generated an 83% global engagement score, well ahead of all industry and specific consumer sector benchmarks. To consolidate on this strong foundation, we've launched a renewed employee value proposition, Dare. Discover. Do., as we strive to attract great talent and create a stronger performance culture in the business. And of course, sustainability remains critical as we grow our brands, whether that's for our employees, our consumers or other stakeholders. We're making tangible progress on reducing our carbon footprint with a 73% reduction in Scope 1 and 2 emissions versus 2021 and securing an A- in the well-established and industry-recognized Carbon Disclosure Project scoring system in 2025. We are also reducing plastic intensity, for example, through bigger pack formats, continuing to improve the consumer experience and value on offer. And we know some challenges require more coordinated, broader intervention. So we are working through cross-industry collaborations to help transform the infrastructure around us. We were proud to join forces with our industry peers as a founding signatory of the U.K. Packaging Pact, an initiative to transform packaging and promote circularity, reuse and sustainability. For us, sustainability is central to our growth and remains critical to our long-term success. So now let me sum up. Our renewed strategy is starting to translate into delivery. We have so much more to do, but we take reassurance from the early signs of progress. FY '26 was a strong year in terms of performance with growth across all lead markets and our top 10 brands. Increased brand investment supported our growth in FY '26 and planted seeds for sustained growth in future years. In Nigeria, we have navigated significant external challenges and are now implementing effective guardrails to reduce FX risk and sensitivity, leading us to focus on driving well-established brands in a market with significant opportunity. Our balance sheet is in good shape, allowing us to invest in the business, renew dividend growth and give us the option for bolt-on M&A in the future. And we have started FY '27 in line with our expectations despite the obvious macroeconomic uncertainties that we are all well aware of. So as I pause for a moment to assess the bigger picture, reassured by our renewed momentum and informed by our refreshed strategy, I am confident that PZ Cussons is well placed to deliver sustainable growth over the coming years. With that, we'd be delighted to take your questions. So I'll pass over to Adam.

[Operator Instructions] We'll take our first question today from Matthew Webb at Investec.

Can I just start off by asking about St. Tropez and Childs Farm in the U.S. Clearly, very encouraging to see St. Tropez back into growth in the U.S. and the Childs Farm opportunity with Amazon sounds very encouraging as well. Can you just remind us of what the economics of your relationship with Emerson look like? And I suppose what I'm getting at really is, presumably, you effectively share the economics of the brand with them. And if this does turn out to be a significant success and revenue growth driver, what -- is that going to be dilutive to the margin? How does that work? That's my first question, please.

Thanks for the question. You're absolutely right. We're really pleased with the progress we've seen in North America as we've transitioned our St. Tropez and now Childs Farm activation and distribution to Emerson. The good news is they have worked really quickly to get St. Tropez back to growth as we saw Amazon doubling the growth rate but also as we look to expand and potentially broaden our distribution footprint beyond the historic footprint where we have concentrated. And that move is informed by really us working with Emerson to understand where the shopper for St. Tropez is now shopping. And the reality is they are broadening the channels in which they're shopping, not just to Amazon, but other places where historically we may not have been distributed. So we still see good runway for future growth combined with innovation. And now, of course, with Childs Farm in Walmart -- it was already on Amazon, with Childs Farm in Walmart, we have high hopes for long-term sustained growth, but it's really early days. Literally, we've been on the shelf for weeks. So at the moment, we work with Emerson, both as a highly effective logistics distribution company, a very effective customer management operation, but also in brand activation. And that could be social media activation, that could be media planning, that could be other PR activity that we choose to do. And without going into all the details, because I'm sure you [ wouldn't ] expect me to, we ensure that they are suitably incentivized to absolutely hit it out of the park, as the Americans might say, but ensure that we also protect our gross margins. And I can assure you that we are quite comfortable with the value creation that we have for ourselves as well as the opportunity for Emerson. So actually, we're in a position where all they want to do and all we want to do is drive really accelerated growth for a sustained period to come.

Excellent. That's great to hear. Second question on Nigeria, where I think that the -- clearly, the overall economic environment has improved and inflation is moderating, but I see it's still at quite a high rate. So I just wonder what your pricing strategy is in Nigeria at the moment. Should we continue to expect fairly regular price increases? What sort of average price increase do you think that you might be looking to take in that market over the, I don't know, next 12 months, say?

Very good question. So obviously, we are reassured by the more benign environment that we have experienced in terms of FX in Nigeria. And we've navigated obviously quite a lot of volatility over the last 2 or 3 years as well as put in place some guardrails to protect us against ongoing FX devaluation if that rears its head again. But inflation obviously is more of a common reality in emerging markets. So current inflation is running at about 15%. We had said, as we set out back in February, that we intend to grow our revenues low single digit above inflation. And obviously, from the numbers that Jan took you through just now, you can see that we were able to do that in FY '26. We are absolutely looking carefully, though, at maintaining our volume performance as well as protecting our margin integrity. And that is an important balance that we want to get right as we look at FY '27. So we were already anniversarying, if you'll excuse the ugly word, a lot of pricing in the first half of last year. So we are being very judicious and forensic in our analysis of how we unlock future price so that we make sure that we don't price ourselves out of our competitive set. So we're very clear what we want to achieve in the long term, and we have our hands very firmly on the tiller in the short term to ensure that the pricing we need to take, we do, but that we don't price ourselves beyond the position of competitiveness versus some of the other players in the market.

Got it. And then, sorry, final question. On Indonesia, it sounds like the sort of multistage relaunch or repositioning or refreshing or whatever you want to call it, Cussons Baby, is now pretty much done. I just wonder what's next? Are there plans for whether it's expanding that brand into adjacent categories, whether it's thinking about other possible brands in that market? What's the plan going to look like over the next year or so?

A great question, Matthew, because that is exactly the question that we have been working to answer for the last 18 to 24 months, right? And to some degree, it's all of the above, but I don't want you to think that's a lack of prioritization. So there's no doubt, job one is strengthening our core. And indeed, we have finished that phased restage, and that was literally changing packaging on the very significant number of SKUs that we have in the market that takes quite some time to get through particularly given some of the long supply chain to East Indonesia and some of the more distant islands. And the good news is, as that started hitting the shelves through the last 12 months, we saw a return to share growth that we have sustained through the full year, and that's what's underpinning the double-digit revenue growth from Cussons Baby. But we need to carry on investing in that brand and ensuring it's turning up in a way in which we can win in all channels: traditional trade, modern trade or very importantly now, particularly in the cities in e-commerce. And we've given you a few facts to prove that we are making some progress there. But we now need to get on with activating, continually recruiting new parents. That is the nature of the category. So to some extent, the job is never done on the core. But absolutely, our job is then to push up in terms of some of our price tiers in which we operate on Cussons Baby and the launch of SlumberTime and Cuddle Calm, where we took SlumberTime from Childs Farm to put on as Cuddle Calm technology for Cussons Baby, that was an example of how we started to nudge up pricing as we moved up the tiers, if you like, from good to better. But we also know that we want to play with a second and possibly third brand in Indonesia. And we have activation already in place where Original Source is beginning to get expanded into more distribution points in the modern trade. And we're looking at another brand that we will have relaunched and repositioned by the end of FY '27. So watch this space.

Next question comes from Damian McNeela from Deutsche Bank.

Jonathan, thank you for the reminder or heads up about Christmas shopping already, so always welcome in August. A couple for me, please. Jan, in your opening remarks, you talked about you want to bring a focus on improving returns. I was just wondering, can you provide us sort of a bit of a sense of how you look at returns? Are you talking about operating margins? Or are you talking sort of ROCE-type ROIC focus is my first question. Second question is on auto dishwash in Australia. Now you've clearly made some good progress in market share gains. I'm just wondering, though, how competitive is that category? And what are the sort of the medium-term outlooks for Morning Fresh auto dishwash? Will you continue to need to invest at that level to keep the brand growing? And then the last one is on Childs Farm in the U.S. Can you just give us some context to what the competitive backdrop for the brand looks like, whether they're sort of similar products or doing something like we would see in the U.K.? Or are there sort of brands like Childs Farm available out there?

Jan, do you want to first answer the first one? I'll go to the second after you.

Perfect. So I think to answer your question about whether I'm thinking ROCE or operating margins, actually both. So the business has been focused on prioritizing investment and looking at the benefits across each of the regions. And really, it's just improving on that. So whether it's those capital investments and really building some discipline around hurdle rates, understanding the risk and reward in those areas or whether it's our marketing investments and where we're looking at new product development or product activation and really thinking about the returns and the risk and where we will make best use of our investments.

Let me pick up on your other couple of questions...

No, I was just going to ask a follow-up for Jan. I just wondered, do we think, in time, PZ will provide a sort of a ROCE target for the business?

Maybe in time. It's a bit early days, but I will certainly be looking at it.