PZ Cussons to Retain Africa Business; Unveils Ambitious Growth Strategy

PZ Cussons (LON: PZC) announced it will retain its Africa business following a strategic review, outlining ambitious growth plans and risk-mitigation measures. Markets are responding positively to the news that PZ Cussons will be growing its emerging markets.

The decision comes after the Group concluded that offers received for the Africa portfolio did not reflect its inherent value. Instead, PZ Cussons will focus on building a balanced portfolio between developed markets (UK and ANZ) and emerging markets (Indonesia and Nigeria).

The Group is selling its 50% equity interest in PZ Wilmar Limited to Wilmar International Limited for $70 million, a transaction expected to close shortly. This sale is part of a broader effort to streamline operations and focus on core businesses.

PZ Cussons plans to grow its Africa business through three key pillars: core growth in Nigeria, Kenya, and Ghana; category expansion into areas like Men's Grooming and Beauty; and pan-Africa growth leveraging its existing footprint. The company has more than doubled the number of stores it serves directly in Nigeria since FY22, which has been a significant driver of growth.

The long-term opportunity in Africa is substantial, with a projected population increase of over 900 million in the next 25 years. Nigeria's population is expected to grow by over 100 million, benefiting from urbanization and a rapidly expanding middle class. Recent economic and currency trends have been favorable, contributing to strong, double-digit revenue growth in the Africa business during the first half of the financial year.

To mitigate risks associated with operating in Nigeria, PZ Cussons has implemented operational and financial “guardrails,” primarily focused on foreign exchange management and cash generation. The Board will regularly review adherence to these measures.

The Group plans to divest approximately £30 million of surplus assets, mostly in Africa, and has identified an additional £7 million of non-core assets for disposal during the current financial year. These moves are part of a broader strategy to simplify the business and focus on core categories like Hygiene, Baby, and Beauty.