Home, Personal Care and Baby (HPCB)

(R’million) 2014   2013   % change   Turnover (Rm) 1 960,2   1 877,0   4%   Operating income before abnormal items (Rm) 398,5   439,3   (9%)   Operating margin (%) 20,3%   23,4%       Salient features Challenging trading environment Significantly increased level of marketing investment Input cost inflation which was not fully recovered in pricing, resulted in margin compression

The period under review proved to be challenging for the HPCB business. It delivered modest revenue growth and compressed operating profit on the back of market contraction in several categories in which the business competes. The HPCB categories continue to witness significant levels of brand investment, high innovation rates and aggressive pricing.

Home care category growth was driven by the Pest segment. However, aggressive competitor pricing led to high levels of discounting in the Pest and Fabric Care segments. This, coupled with input cost inflation which was not fully recovered in pricing, resulted in margin compression.

The Personal Care performance was driven by reasonable revenue growth in Body Care. However, margins also contracted due to input cost inflation not fully recovered in pricing, with volume declines experienced in the highly competitive Hair Care and Fragrance segments.

Within Baby Care, both the Nutrition and Well-being segments delivered satisfactory revenue growth. The Baby Care category has slowed as a result of market contraction in jarred baby foods and consumers down-trading to lower priced alternatives. Both Baby Cereals and Porridges have seen good volume growth.