Operational review

HOME, PERSONAL CARE AND BABY (HPCB)

Strategic outlook

We are looking to deliver growth in Home Care, off the back of existing brand strength supported by affordable product innovation. We will be launching several unique innovations as well as looking to drive geographic expansion of some of our leading brands into new markets in Africa.

In Personal Care, our picture of success is for Ingram’s to be developed into a leading master brand with innovation-led growth, aided by improved profitability. Progress has been made in focusing the portfolio, with work underway to improve on-shelf availability and distribution of the retained portfolio.

Our strategic priorities in Baby Care are to consolidate our position as a consumer-centric, business, developing a Purity master-brand that delivers on its mission to help every South African child realise their full potential. We are focused on improving factory efficiencies and site logistics, and enhance the value proposition with improved labelling, as well as leveraging baby feeding expertise through our recently launched Purity Owned Parenting Platform and Journey Journal App.

Overall revenue in HPCB increased by 5% to R2,8 billion due to a sustained strong performance from Home Care.

The strong volume uplift in Home Care was attributable to increased demand and effective in-store execution. Revenue for the year increased by 12%. However, the business was adversely affected by trading restrictions which were introduced in the early stages of the lockdown, and depressed the overall growth in operating income to an increase of only 5% when compared to the prior year.

Personal Care enjoyed a strong overall recovery in the second half, driven by a well-executed Ingram’s winter campaign. Revenue for the full year increased by 3% to R661 million on the back of 7% price inflation and a volume reduction of 4%. A weak first half together with Covid-19 related cost pressures in the second half, resulted in lower profitability with operating income declining by 11% to R79 million.

Volumes across the Baby Care segment were affected by adverse demand dynamics during the various lockdown stages, with revenue declining marginally to R975 million. Operating income fell sharply to R111 million (2019: R151 million) as a result of the lower sales volumes combined with overhead under-recoveries and additional Covid-19 related costs.

Financial highlights

+5%

R2,8bn

Revenue
2019: R2,7 billion

 

-6%

R510,4m

Operating income
2019: R545,6 million

Revenue by segment

Revenue by segment

Performance summary

Strong volume uplift in Home Care due to increased demand and effective in-store execution
Well-executed Ingram’s winter campaign boosts revenue in Personal Care
Progressed rationalisation of tail-end brands in Personal Care with the sale of eight brands
Baby Care segment affected by adverse demand dynamics during the various lockdown stages; strong innovation launches to benefit FY21

Operating facilities

Home, personal care and baby (HPCB) map

Gauteng

  • HPCB (Isando)

Western Cape

  • Baby