Operational review
Home, Personal Care and Baby
Neil Brimacombe
Business executive: Exports and International (excluding Nigeria);
Home, Personal Care and Baby
Salient features
- Marketing investment increased by 59%
- Key efficiency benchmarks achieved
- Exceptional performance achieved in major categories – Body care and pest categories
Segment overview
This division houses a portfolio of entrenched brands, many with a heritage and pedigree built over years, including:
- Personal care: Ingram’s, Dolly Varden, Status, Perfect Touch, Protein Feed, Kair and Lemon Lite
- Home care: Doom, Jeyes, Airoma, Peaceful Sleep and Dyrange
- Baby care: Purity and Elizabeth Anne’s
Strategy
The division is focused on supporting the long-term competitiveness of its brands with appropriate investment in marketing, research and new product development.
During the year, the focus was on reinvesting in core brands and strengthening business disciplines. As part of a detailed strategy with clear targets, the division concentrated on pricing, costs, service levels, consumers and its own people.
| Rm | 2015 | 2014 | % change |
|---|---|---|---|
| Turnover | 2 147,1 | 1960,2 | 10 |
| Operating income* | 443,6 | 398,5 | 11 |
| Operating margin (%) | 20,7 | 20,3 |
*Before abnormal items
Performance
The success of this collective effort is reflected in operating income rising 11% to R444 million, and an operating margin of 20,7%.
Home care
Growth was driven by the pest segment, although margins improved across all categories except fabric care. The marketing investment in this category rose by 38%.
Personal care
Exceptional performance was noted in the body care category. Continuous improvement programmes resulted in better margins in all categories except the highly competitive hair care segment. The marketing investment increased by 112% in this category.
Baby care
The nutrition and well-being segments recorded satisfactory top-line growth of 9%, although margins contracted in the nutritional segment due to input costs not being fully recovered in pricing. Purity launched a range of core pouches in July 2015 to increase its market share. Marketing investment rose by 18%.
Outlook
Moderate growth is expected in 2016. Ongoing priorities are continuous cost reductions, improving efficiencies (specifically forecast accuracy, service levels and equipment efficiency) and continued innovation in line with strategy. The Isando reconfiguration project will be completed in June 2016 and these benefits, as well as the recent investment in pouches for the baby nutrition segment, will support performance. In the longer term, we are confident the division is well positioned with leading brands to drive market growth and share recovery, and expand into new segments in core brands through sustained innovation.