Our Business At A Glance - PZ Cussons

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1Strategic ReportGovernanceFinancial StatementsOther InformationOur business at a glanceWho we are and what we doPZ Cussons is part of the group of companies controlled by PZ CussonsPlc, a FTSE listed dynamic consumer products group. Together, we havecreated some of the our markets best-loved and most trusted brands inthe personal and Homecare Categories. Our brand Portfolio includestrusted brands like Premier, Morning Fresh, Cussons Baby, ImperialLeather, Carex, Canoe, Zip, Venus, Joy, Robb and Stella.Our core brandsOur categoriesOur focus will be on the following core brandsin Nigeria:We operate the following categories:Personal CareHome CareFood & NutritionElectricalsAssociated brand:See page 10Where we operateGood4BusinessWe operate across Nigeria and export someof our brands to Ghana, Benin, Niger Republic,Sudan, Chad and the CongoSustainability principles are integrated acrossall aspects of our business:Business governance and ethicsEnvironmentSourcing Community and Charity through thePZ Cussons Nigeria Foundation whichreceives an annual donation from theGroup but directs its charitable activitiesat arm’s length.See page 18PZ Cussons Nigeria Plc Annual Report & Accounts Ending May 202020247 PZ Cussons Nigeria AR2020 Text FC.indd 104/01/2021 16:43

2Board of directors and otherCorporate informationDirectors Mr. Gbenga Oyebode, MFRChairman, Non-Executive Director(Appointed 11 December 2020)Chief Kolawole Jamodu, CFRChairman, Non-Executive Director(Retired 11 December 2020)Mr. Panagiotis Katsis (Greek)Managing Director/Chief Executive Officer(Appointed 01 July 2020)Mr. C. Giannopoulos (Greek)Managing Director/Chief Executive Officer(Retired 30 June 2020)Mr. L. BatagarawaNon-Executive Director(Retired 11 December 2020)Mr. P. Usoro, SANNon-Executive DirectorMrs. E. EbiIndependent Non-Executive DirectorMallam D. MuhammadIndependent Non-Executive DirectorCompany Secretary/Legal AdviserMrs. Jacqueline EzeokwelumeRegistered Office45/47 Town Planning WayIlupeju Industrial EstateP.M.B. 21132Ikejawww.pzcussons.com.ngRegistration NumberRC 693RegistrarsFirst Registrars & Investors ServicesLimitedPlot 2, Abebe Village RoadIganmu ComplexP.M.B. 12692LagosIndependent AuditorsDeloitte & TouchéCivic Towers, Ozumba MbadiweVictoria IslandLagosMs. Joyce F. CokerExecutive DirectorMr. G. Sotiropoulos (Greek)Executive DirectorMr. Zuber Momoniat (South African)Executive Director/Chief FinancialOfficer (Appointed 01 April 2020)Mr. Pedro Barreto (Portuguese)Executive Director(Retired 31 March 2020)Mr. Alex GomaExecutive Director(Retired 30 September 2019)20247 PZ Cussons Nigeria AR2020 Text FC.indd 204/01/2021 16:43

3Strategic ReportGovernanceFinancial StatementsOther InformationFinancial highlightsReported resultsRevenueN66,992m(2019: N74,336m)% change: -10%Operating (Loss)/Profit(N7,068m)(2019: N2,273m)% change: -411%Basic and diluted earnings per share(1.74) Kobo(2019: 0.25 Kobo per share)% change: -797%Statutory resultsOperating (Loss)/Profit(Loss)/Profit before taxation(2019: N2,273m)% change: -411%(2019: N1,942m)% change: -511%(N7,068m)(N7,984m)Final dividend per share*Net assets**(2019: N15 Kobo per share)% change: -33.3%(2019: N45,752m)% change: -24%10 KoboN34,560m* Final Dividend of 10 Kobo per share for 2020 is subject to approval by the shareholders at the AGM** Net assets is total assets less total liabilitiesPZ Cussons Nigeria Plc Annual Report & Accounts Ending May 202020247 PZ Cussons Nigeria AR2020 Text FC.indd 304/01/2021 16:43

4Notice of meetingNotice is hereby given that the72nd Annual General Meeting ofPZ Cussons Nigeria Plc will be heldat the Command Centre, 45/47 TownPlanning Way, Ilupeju, Lagos Nigeria onFriday 29 January 2021 at 11.00 am forthe following purposes:Ordinary Business1. To lay before members the Report ofthe Directors, Financial Statementsfor the year ended 31 May 2020, theReport of the Auditors and the AuditCommittee thereon.2. To declare a dividend.3. To elect/re-elect Directors.4. To authorise the Directors to fix theremuneration of the Auditors.5. To elect members of the AuditCommittee.Special Business6. To approve the remuneration of theDirectors.7. To consider and pass the followingresolution as an ordinary resolutionof the Company:“That the general mandate given tothe Company to enter into recurrenttransactions with related parties forthe Company’s day-to-day operations,including the procurement of goodsand services, on normal commercialterms, in compliance with the NSE RulesGoverning Transactions with RelatedParties or Interested Persons, be and ishereby renewed.”Dated this 11th day of December 2020By Order of the BoardJacqueline EzeokwelumeCompany Secretary/Legal AdviserFRC/2015/NBA/00000020208PZ Cussons Nigeria PLC45/47, Town Planning WayIlupeju Industrial EstateLagoswww.pzcussons.com.ngNOTESAttendance by Proxy1. In view of the COVID-19 pandemic, attendance at theAnnual General Meeting (“AGM”) shall only be by proxy.A shareholder of the Company entitled to attend andvote at the AGM is advised to select from the underlisted proposed proxies, to attend and vote in his stead:a. Mr. Gbenga Oyebode, MFRb. Mr. Panagiotis Katsisc. Mr. Paul Usoro, SANd. Mrs. Elizabeth Ebie. Chief Isaac Obarindef. Honourable Bright Nwabughogug. Mr. Eric Akinduroh. Mr. Patrick Ajuduai. Sir Sunday Nwosu2. The Proxy Form is attached to this AGM notice foryour use. All instruments of proxy must be depositedat the registered office of the Company at 45/47, TownPlanning Way, Ilupeju, Lagos, Nigeria, or submitted viaemail to info@firstregistrarsnigeria.com, or depositedat the office of the Registrars, First Registrars &Investors Services Limited, No. 2 Abebe Village Road,Iganmu, Lagos, Nigeria not later than 48 hours beforethe time fixed for the meeting.3. It is a requirement of the law under the StampDuties Act, CAP S8, Laws of the Federation of Nigeria2004 that any instrument that is intended to be usedby or on behalf of any person entitled to vote at anymeeting of shareholders must be duly stamped by theCommissioner of Stamp Duties.Note that the payment of stamp duties for allinstruments of proxy shall be at the Company’sexpense.4. In the case of Joint Shareholders, the signature ofany one of them will suffice, but the names of all JointShareholders must be stated.5. If the Shareholder is a Corporation, the Proxy formmust be under the Common Seal or under the handof the same officer or attorney duly authorized by theCorporation to act on its behalf.Closure of Registeri) QualificationMembers whose names appear in the Register ofMembers at the close of business on 19th October 2020shall be qualified to receive dividends.ii) Closure of RegisterThe Register of Members and Transfer Books of theCompany will be closed from Monday, 11th January2021 to Friday, 15th January 2021 (both dates inclusive)for the purpose of preparing an up-to-date Register ofMembers.iii) Payment of DividendIf the dividend of ten (10) Kobo per share recommendedby Directors is approved by members at the Annual72nd General Meeting, the dividend payments will bemade on Monday, 1st February 2021 to Members whosenames appear in the Register of Members at the closeof business on 19th October 2020.Nominations for the Audit CommitteeThe Audit Committee consists of three Shareholdersand three Directors. In accordance with section 359(5) of the Companies and Allied Matters Act, CAP C20,any member may nominate a Shareholder as a memberof the Committee by giving notice in writing of suchnomination to reach the Company Secretary at least 21days before the Annual General Meeting.Unclaimed Dividend Warrants and ShareCertificatesShareholders are hereby informed that several dividendwarrants and share certificates remain unclaimed. Somedividend warrants have not been presented to the bankfor payment or to the Registrar for revalidation. A listof such members has been circulated with the AnnualReport. Affected members are advised to contact theRegistrars.E-dividend/BonusPursuant to the directive of the Securities and ExchangeCommission, members are hereby advised to open bankaccounts, stock broking accounts and CSCS accounts forthe purpose of the payment of e-dividend/bonus. Relevantforms are attached to this Annual Report for completion tofurnish the particulars of these accounts to the Registrar.Rights of Shareholders to Ask QuestionsPursuant to Rule 19.12(c) of The Nigerian Stock ExchangeRulebook 2015, shareholders have the right to ask questionsnot only at the Meeting, but also in writing prior to theMeeting and such questions shall be submitted to theCompany Secretary not later than two weeks before thedate of the Meeting.COVID-19 and Challenges of Convening aPhysical Meeting1. As a result of the COVID-19 Regulations issued bythe President of the Federal Republic of Nigeria andthe directives of the Lagos State Government banninggatherings of more than 50 persons whether held in publicor privately, as well as the social distancing rules prescribedby the Nigeria Centre for Disease Control, the directors areconscious of and very concerned about the wellbeing andlives of all the shareholders of the Company.2. This is evidenced in the decision to hold this AGM ina manner that does not compromise the safety of livesof the Company’s stakeholders or contravene the rulesand regulations issued by the Federal and Lagos StateGovernments for the promotion of public health andsafety of all.3. The meeting will be presided over by the Chairman ofthe Board of Directors (the “Board”) and the membersof the Board who are resident in Lagos have committedto attend. Given the continued restrictions on publicgatherings, the Board has resolved to deploy technology toenable shareholders of the Company attend and observeremotely the proceedings at the meeting. Accordingly,each shareholder will be able to either phone-in via a tollfree line or observe the proceedings through an internetwebcast known as Microsoft Teams. The Board of Directorshereby advise Shareholders to explore these virtual(electronic) means of attending the meeting that havebeen put in place by the Company in strict compliance withextant COVID-19 regulations.4. To avoid compromise in the integrity of the system to bedeployed, the Board of Directors have directed that robustdetails of these arrangements (dial in details and specificphone numbers) be provided to Shareholders individually.The Company’s Registrars will ensure that the details aresent to the telephone numbers and email addresses ofindividual Shareholders which are recorded in the Registerof Members.5. The Board of Directors therefore encourageShareholders to complete the Proxy Forms attached tothe Notice of the AGM to ensure that their votes count.The Board further enjoins Shareholders to embracevirtual participation in the AGM. In this wise, a shortlist ofindividuals who will serve as proxies has been provided(and specified in these Notes). Shareholders are advisedto entrust their votes in the care of the appointed Proxies.Each Shareholder is required to tick the relevant box ontheir Proxy Form to guide the decision of their proxy onwhether to vote for or against the proposed resolutions onthe agenda. Such proxy forms will be accepted for use inconjunction with the Annual General Meeting.6. The Board of Directors strongly encourage Shareholdersto vote in advance of the Annual General Meeting via theuse of the Proxy Form to ensure a proper capture of allvotes. This is regardless of the plan by a Shareholder tolog-in and join the virtual AGM.7. All Shareholders may on Friday, 29 January 2021, log-into the Annual General Meeting from its commencementat 11am using the details that will be sent to the telephonenumbers and email addresses of all Shareholders. Werecommend that Shareholders afford themselves ampletime to complete the login process in advance of thecommencement of the AGM at 11am to afford them acomplete and hitch free viewing. Where any difficulty isencountered, kindly call this technical support number08034023889.8. Should you have any questions regarding the contentsof this Notice, please contact the PZ Cussons Secretariat at08039221410 and your queries will be attended to.PZ Cussons Nigeria Plc Annual Report & Accounts 202020247 PZ Cussons Nigeria AR2020 Text FC.indd 404/01/2021 16:43

5Strategic ReportGovernanceFinancial StatementsOther InformationChairman’s statementWe have seen a contraction in ourHome and Personal Care brandsresulting in price reductions anddiscounting and ultimately lowermargins. In our Electricals business,we saw a stable revenue performancebut a decline in profits due to highercosts arising from logistics.Distinguished Shareholders,On behalf of the Board, I welcomeyou all to the 72nd Annual GeneralMeeting of your company. There is nodoubt that this was one of the mostchallenging periods for businessesgenerally in the country. Our company,PZ Cussons Nigeria PLC, was disruptedespecially in the second half ofour financial year as a result of thedecline in oil prices and the impactof COVID-19. We could not be moreproud of the way that all our peopleresponded, and on behalf of the Board,I thank them for their incredible hardwork, commitment and dedication.Review of the OperatingEnvironmentNigeria’s Gross Domestic Product (GDP)increased by 2.5% which was lowerthan the projected 3% by InternationalMonetary Fund. This was before theoutbreak of COVID-19 pandemiccoinciding with the second half ofour financial year. The impact of thispandemic was monumental on SupplyChain disruptions because of globallockdown and attendant impact oncost of production.Globally, prices of crude oil slumped.This had big impact on Nigeria’s foreignreserves and Naira exchange rate withother basket of currencies especiallyDollar and Pound Sterling. In the lastquarter of the financial year, CentralBank of Nigeria adjusted the exchangerate in the Official Window fromN307/1 to N360/1 while the rateat I&E Window was adjusted furtherfrom N360/ 1 to N380/1 .Government sustained land borderclosure that came with twin effect ofreducing impact of smuggling on theeconomy and consequently on ourbusiness as well as restricting the salesof our goods across the landlockedneighboring and other West Coasteconomies serviced through theland borders.Operating Resultsand PerformanceRevenue and profit were hampered bythe continuation of adverse economicconditions which worsened in thefinal quarter of the financial year asa result of the decline in oil pricesand the impact of COVID-19. This ledto the closure of the open markets,difficulties in distributing productsaround the country and a preferenceby the consumer on food products.The factors highlighted above nodoubt impacted the performance ofour company during the period underreview. Consolidated revenue declinedby 10% from N74.3 billion in FY2019 toN67billion in FY2020. Revenue in thefirst 9 months of the year was stablecompared to last year but worsenedin the last quarter of the financial yearas a result of COVID-19 which ledto the closure of the open markets.Profit before Tax declined to a loss ofN7.2 billion from a profit position ofN1.15 billion in 2019. The loss for theyear was largely attributable to declinein sales in our Home and Personal Carecategories as a result of pricing andpromotional pressure of N3.4 billionwhich accelerated in Q4 as a result ofCOVID-19 and associated restrictionsin the country which led to furthersales volume decline. Other factorscontributing to the annual loss includeadditional port clearing charges ofN0.7bn, an exchange loss of N1bnarising in Q4 from the devaluation ofthe Naira from N360/ 1 to N380/ 1,factory under- recoveries of N1.1billion due to lower production andthe impact of group charges of N2.2bnarising in the year. These chargesrelate to the costs incurred in runningour current SAP system and other ITrelated services provided. The overalltop and bottom line results weredisappointing but our focus on liquiditydelivered strong net cash position ofN10.7 billion. This reflected effortsto prioritize trade receivables and areduction in stocks generally.PZ Cussons Nigeria Plc Annual Report & Accounts Ending May 202020247 PZ Cussons Nigeria AR2020 Text FC.indd 504/01/2021 16:43

6Chairman’s statementNotwithstanding the results andmacro-economic headwinds in thecountry, the Board and managementremain confident of the future ofthe Company. We will continue withstrategies and initiatives to return theCompany to profitability and improveshareholder return.Commercial ReviewPZ Consumer: The Fast MovingConsumer Good (FMCG) sectorcontinues to experience intensecompetitive activities acrosscategories. This was made morechallenging by the impact of theCOVID-19 crisis, especially the closureof the open markets, and the resultingdrop in oil prices. We have seen shifts inthe consumption of our Personal Careand Beauty products as consumers’habits have changed in response toCOVID-19 pandemic and the associatedrestrictions on movement and socialinteractions.Our focus brands of Premier, CussonsBaby and Morning Fresh in the Personaland Home Care Categories continueto hold their leadership position in themarket. In these uncertain times,consumers reach for trusted marketleading brands offering health andwellbeing solutions. PZ CussonsNigeria is in a strong position withmany of our brands well placed tomeet these needs.Our Personal Care flagship brand,Premier, retains its leadership positionas Nigeria’s No1 family soap brand. Ina highly competitive Nigerian bar soapmarket, earlier in the year, our PremierCool brand was strengthened withimproved fragrance and cooling effectsand our Premier Classic was relaunchedin February 2020 to offer superior2-in-1 benefits to care and protect yourfamily. Also, to help drive awarenessof the importance of handwashing,a ‘how to wash your hands with soap’instructional campaign, aligned withWHO guidelines, was launched.Morning Fresh has delivered highdouble digit sales growth this yearas result of management’s growthinitiatives. This year saw the launch ofa new environmentally friendly lighterweight pack, and a double tamperproof seal which protects the integrityof the brand and product.Cussons Baby has maintained andstrengthened its leadership position inbaby care, with market share over 30%.Tailor-made advertising and consumerpromotions supported the CussonsBaby gift pack range. Cussons Babywas adversely impacted by COVID-19in the final quarter of the financialyear as consumers focused on othercategories, despite delivering a strongfirst half set of results.We will continue to sharpen our focuson consumer needs and behaviours,building stronger brands that willmeet those existing and emergingneeds. Offering brand and productexperiences that stand out, have a clearpurpose, and deliver real value will helpus keep ahead of the game, and secureongoing consumer loyalty.During the financial year, our focusremained on building a World ClassSupply Chain despite the challengesposed by the COVID-19 Pandemic.Going forward, we shall continue todrive business processes optimization,distribution network simplification,building reliable manufacturinginfrastructure, sourcing strategies andreduction in lead times to increase ourspeed to market. Building a flexible,agile, world-class supply chain willcontinue to be our ultimate goal.Electrical Business. Electricalsrevenue was overall flat compared tolast year, supported by a strong energysaving proposition. In the final monthsof the financial year, as a result ofCOVID-19, the closure of many retailpoints and preference of consumerspending on other categories offsetthe good performance recorded earlierin the year.With almost 50 years’ experience,Haier Thermocool continues to be themost trusted premium home appliancebrand in Nigeria; promising stylish,convenient, affordable and energysaving benefits. The Haier ThermocoolGenPal Inverter Air Conditioning isgaining significant momentum in themarket and driving the over

Managing Director/ Chief Executive Officer (Retired 30 June 2020) Mr. L. Batagarawa Non-Executive Director (Retired 11 December 2020) Mr. P. Usoro, SAN Non-Executive Director Mrs. E. Ebi Independent Non-Executive Director Mallam D. Muhammad Independent Non-Executive Director Ms. Joyce F. Coker Executive Director Mr. G. Sotiropoulos (Greek)

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