Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — CAGNY 2023
142 slides from Church & Dwight's conference presentation, Feb 22, 2023
Slide 1: Church & Dwight Co., Inc. CAGNY 2023
CHURCH & DWIGHT CO., INC. CAGNY 2023
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; the impact of the COVID-19 pandemic and the Company’s response; gross margin changes; trade, marketing, and SG&A spending; sufficiency of cash f
Slide 3: A Look Back at 2022
A Look Back at 2022 1 Inflation resulted in unplanned materials, labor and transportation costs. 2 Additional pricing action was taken again in our largest categories, laundry and litter. 3 ARM & HAMMER Litter, ARM & HAMMER LLD and Batiste achieved all time high market shares. 4 Zicam, TheraBreath a
Slide 4: Historical Total Shareholder Return
Historical Total Shareholder Return 10 YEAR: 5 YEAR: 3 YEAR: 2022: 13.3% 11.4% 5.9% (20.4%) CAGNY 2023 4
Slide 5: We have confidence in our future
We have confidence in our future. Steady U.S. Sustainable high Consistent Digitally Long-term Strong 2023 growth International innovation savvy evergreen fundamentals ahead growth rate model is healthy CAGNY 2023 5
Slide 6: Who We Are
Who We Are 6
Slide 7: Church & Dwight's Business Segments
Church & Dwight’s Business Segments TOTAL COMPANY 2022 Net Sales: $5.4 BILLION 77% Domestic 17% International 6% Specialty Products Division CAGNY 2023 7
Slide 8: Power Brands
FIRST RESPONSE POWER BRANDS
Slide 9: 14 Power Brands
more than 85% of sales & profits are represented by these 14 POWER BRANDS
Slide 10: Our Winning Formula
Our Winning Formula 1 2 3 4 A balanced Low private Strong and Acquisitive and label consistent Company diversified exposure innovation portfolio CAGNY 2023 10
Slide 11: Product Portfolio of Both Value and Premium Products
Product Portfolio of Both Value and Premium Products 40% 60% Value Premium CAGNY 2023 11
Slide 12: A Balanced and Diversified Portfolio
A Balanced and Diversified Portfolio 6% SPD 46% Household 2022 48% Personal Care CAGNY 2023 12
Slide 13: Low Private Label Exposure
Low Private Label Exposure Weighted Average Private Label Share of Our Categories 20% Private Label Consistently 15% ~12% 10% 5% 0% 2017 2018 2019 2020 2021 2022 -5% Source: Nielsen Total U.S. AOC CAGNY 2023 13
Slide 14: Only 5 Of Our 17 Categories Have Private Label Exposure
Only 5 Of Our 17 Categories Have Private Label Exposure PREGNANCY TEST KITS BAKING SODA GUMMY VITAMINS 50% 30% 20% 40% 25% 15% 20% 30% 15% 10% 20% 10% 5% 10% 5% 0% 0% 0% TOOTHACHE CLUMPING LITTER 30% 20% 15% 20% 10% 10% 5% 0% 0% Source: Nielsen Total U.S. AOC, data through 12/25/22 CAGNY 2023 14
Slide 15: Consistent Innovation
Consistent Innovation CAGNY 2023 15
Slide 16: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $ Billions $5.4 $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. CAGNY 2023 16
Slide 17: Acquired 13 of 14 Power Brands Since 2001
Acquired 13 of 14 Power Brands Since 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2005 ACQUIRED 2006 ACQUIRED 2008 #1 CONDOM #1 EXTREME #2 PREGNANCY #1 DEPILATORY #2 BATTERY #1 LAUNDRY #1 ORAL CARE VALUE LAUNDRY TEST KIT POWERED ADDITIVE PAIN RELIEF DETERGENT TOOTHBRUSH ACQU
Slide 18: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily #1 High growth and Asset Leverage C&D Deliver or #2 share high margin light manufacturing, sustainable brands brands that are logistics and competitive fast moving purchasing advantage consumables CAGNY 2023 18
Slide 19: 14 Power Brands Today, 20 Tomorrow
14 Power Brands Today, 20 Tomorrow $6.0 Net Sales $ Billions $5.5 14 $5.0 13 12 $4.5 $4.0 11 $3.5 $3.0 10 9 $2.5 8 $2.0 7 6 $1.5 $1.0 5 $0.5 1 $0.0 1846 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Note: Trojan, Nair and
Slide 20: Our Winning Formula
Our Winning Formula 1 2 3 4 A balanced Low private Strong and Acquisitive and label consistent Company diversified exposure innovation portfolio CAGNY 2023 20
Slide 21: Financials
Financials
Slide 22: Evergreen Model
Evergreen Model Organic Sales +3% Gross Margin +25 bps Marketing FLAT SG&A -25 bps Operating Margin +50 bps EPS Growth +8% CAGNY 2023 22
Slide 23: FY 2022 Financial Highlights
FY 2022 Financial Highlights FY OUTLOOK ACTUALS (as of October 28th) Reported Sales Growth 3% 3.6% Organic Sales Growth 1% 1.4% Gross Margin contraction -170 bps -3% to -2% -2% Adjusted EPS $2.93 to $2.97 $2.97 -13% to -11% -49% Reported EPS $2.90 to $2.94 $1.68 Cash from Operations $800MM $885MM Or
Slide 24: Outlook
2022 2023 OUTLOOK 2024
Slide 25: 2023 Adjusted EPS Growth Breakdown
2023 Adjusted EPS Growth Breakdown (outlook 0-4%) Core Adjusted EPS Growth 10% Incremental Marketing (3%) Incentive Comp Normalization (3%) Interest and Taxes (ex. Hero) (2%) Adjusted EPS Growth 2% (mid-point) Adjusted EPS is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most
Slide 26: FY 2023 Financial Outlook
FY 2023 Financial Outlook Reported Sales Growth 5% to 7% Domestic: 2-3% Organic Sales Growth 2% to 4% International: 3-5% SPD: 5-6% Gross Margin +100 to +120 bps Marketing +50 bps, 10.5% SG&A higher Operating Profit Margin flattish Other Expense ~-$110M Effective Tax Rate ~23% Adjusted EPS Growth 0
Slide 27: Reported Sales Growth: 10 Year History
Reported Sales Growth: 10 Year History 14.0% 12.0% 10.0% 10 Year 5% to 7% 8.0% Average: 6.3% 6.0% 4.0% 2.0% 0.0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E CAGNY 2023 27
Slide 28: Organic Sales Growth: 10 Year History
Organic Sales Growth: 10 Year History 10.0% 9.0% 8.0% 7.0% 6.0% 10 Year 5.0% 2% to 4% Average: 4.0% 3.9% 3.0% Evergreen 2.0% Target: 1.0% 3.0% 0.0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Organic sales is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most dire
Slide 29: Volume Trend Improving
Volume Trend Improving 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% FY14 FY15 FY16 FY 17 FY 18 FY 19 FY 20 FY21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E CAGNY 2023 29
Slide 30: 2023 Focus On Gross Margin
2023 Focus On Gross Margin 45.5% 45.2% 1 Inflation moderating 44.4% +100 bps to 43.6% +120 bps 2 Productivity programs 41.9% 3 Margin accretive acquisition 4 Improved case fill 2018 2019 2020 2021 2022 2023E CAGNY 2023 30
Slide 31: 2023 Marketing Spend Target
2023 Marketing Spend Target 12.1% 11.7% 11.8% 1 Full year marketing support on 11.1% +50 bps improved product supply 10.0% 2 10.5% of sales which includes $30M incremental marketing investment 2018 2019 2020 2021 2022 2023E CAGNY 2023 31
Slide 32: 2023 SG&A
2023 SG&A higher 14.2% 14.1% 13.6% 13.0% 1 Hero stand alone SG&A 2 $30M normalization of 2023 incentive compensation 3 Long term evergreen leverage targets remain in place 2019 2020 2021 2022 2023E Note: Adjusted SG&A is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most comp
Slide 33: Consistent Strong Adjusted EPS Growth
Consistent Strong Adjusted EPS Growth 0% to 4% $3.02 $2.97 $2.83 $2.47 $2.27 $1.94 $1.77 9.3% 9.6% 17.0% 8.8% 14.6% 6.7% -1.5% 2016 2017 2018 2019 2020 2021 2022 2023E Note: Adjusted EPS growth is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most comparable GAAP measures. CA
Slide 34: EPS 2023
EPS 2023 First Half EPS Impacted By: 1 Continued choppiness from discretionary brands 2 International supply challenges 3 Return-to-normal promotional activity 4 Higher marketing dollars Second Half EPS Impacted By: 1 Productivity outpacing inflation 2 Improved global supply 3 Lapping lower performa
Slide 35: "Best In Class" FCF Conversion
“Best In Class” FCF Conversion 10 Year Average: 119% 128% 129% 131% 126% 126% 125% 123% 112% 116% elevated CAPEX 108% 97% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Refer to the Appendix for a reconciliation to the most directly comparable GAAP measures. CAGNY 2023 35
Slide 36: Cash Conversion Cycle
Cash Conversion Cycle Tight Control Of Working Capital Drives Cash Conversion Cycle Improvement 52 40 elevated 34 36 inventories 32 32 27 21 22 22 18 18 19 15 days 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGNY 2023 36
Slide 37: Strong Balance Sheet
Strong Balance Sheet TOTAL DEBT/BANK EBITDA 2.6x 2.2x 1.9x 1.9x 1.6x 2.1x 1.5x 1.4x 1.7x 1.4x 1.7x 1.4x 1.2x 0.7x CREDIT RATING 0.5x A3/BBB+ 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Note: Total debt/EBITA is a non-GAAP measure. Refer to the Appendix for a reconcili
Slide 38: Significant Financial Capacity
Significant Financial Capacity (in $millions) Cash & Cash $270 Equivalents on Hand Leverage Acquisition • 2022 TTM Bank $2,900 Capacity Power: EBITDA = $1,226M $3.2B • Example: Acquisition EBITDA multiple of 12x Current Debt Outstanding $2,675 *as of December 31, 2022 CAGNY 2023 38
Slide 39: Prioritized Uses Of Free Cash Flow
Prioritized Uses Of Free Cash Flow 1 TSR-Accretive M&A 2 Capex For Organic Growth & G2G 3 New Product Development 4 Debt Reduction 5 Return Of Cash To Shareholders CAGNY 2023 39
Slide 40: Ensuring A Steady Supply For Our Categories
Ensuring A Steady Supply For Our Categories 2021 - 2023 LLD Litter Baking Soda VMS Technology Capacity Sustainability CAGNY 2023 40
Slide 41: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 4.4% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 2.0% 1.8% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $250 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E
Slide 42: 4% Dividend Increase In 2023
4% Dividend Increase In 2023 $1.05 $1.09 $1.01 $0.96 $0.87 $0.91 122 $0.76 consecutive years of dividends +119% +7.0% +14.5% +4.6% +5.5% +5.2% +4.0% +4.0% +35% 2017 2018 2019 2020 2021 2022 2023 CAGNY 2023 42
Slide 43: U.S. Consumer Update
U.S. Consumer Update
Slide 44: U.S. Consumer Business: Our Future Is Bright
U.S. Consumer Business: Our Future Is Bright 1 2 3 We are leaders We thrive in Acquisitions in growing difficult have room categories environments to run CAGNY 2023 44
Slide 45: We're Leaders In Healthy, Growing Categories
1 We’re Leaders In Healthy, Growing Categories IRI Market Advantage; Total US – MULO; Data through WE12.26.21 CAGNY 2023 45
Slide 46: We Know How To Grow Share
We Know How To Grow Share 2018 2019 2020 2021 2022 1.0 1.0 1.0 -14.0 0.2 1.0 1.0 1.0 -1.0 0.6 7 out of 14 -1.0 -1.0 -1.0 -1.0 -0.2 -1.0 -1.0 1.0 1.0 -0.5 power brands 1.0 -1.0 -1.0 -1.0 -2.8 maintained or 1.0 1.0 1.0 1.0 -2.0 grew share in 2022. -1.0 -1.0 -1.0 -1.0 -0.3 -1.0 -1.0 -1.0 -1.0 0.1 -1.0
Slide 47: With Case Fill Improvements, We Expect 9 Out of 14 Brands to Grow
And With Case Fill Improvements, We Expect 9 Out of 14 Brands to Grow Share Quarterly Fill Rates ~97% ~97% ~93% ~93% 91% 90% 89% Below 80% Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Actual Estimate CAGNY 2023 47
Slide 48: We Thrive In Difficult Environments
2 We Thrive In Difficult Environments 40% of Our Portfolio is Value Low Interaction With Private Label ONLY 5 OF OUR 17 CATEGORIES HAVE EXPOSURE Source: IRI Data CAGNY 2023 48
Slide 49: Fabric Care
FABRIC CARE The clean you need at a fraction of the cost.
Slide 50: Liquid Laundry Detergent
LIQUID LAUNDRY DETERGENT LLD CATEGORY $ Consumption Chg vs YAG $ Consumption Chg vs. YAG 2022 2022 15.5% 10.2% 7.7% 6.7% 6.8% 5.6% 5.1% 3.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Category growth moderated while A&H consumption grew, achieving record share. Source: IRI Data
Slide 51: Consumer Migration From Premium To Value Detergent
Consumer Migration From Premium To Value Detergent Accelerating In Recessionary Environment Premium vs Value Liquid Laundry Detergent Dollar Share LLD PREMIUM LLD VALUE 3.0 LLD 2.0 1.7 VALUE 1.0 1.2 0.0 0.3 -1.0 -2.0 LLD -3.0 -2.9 PREMIUM -4.0 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source:
Slide 52: ARM & HAMMER Liquid Laundry Detergent All-Time Share High
In Fact, ARM & HAMMER Liquid Laundry Detergent Achieved an All-Time Share High in Q4 2022 16 15 14.9 14 13 12 11 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 '17 '17 '17 '17 '18 '18 '18 '18 '19 '19 '19 '19 '20 '20 '20 '20 '21 '21 '21 '21 '22 '22 '22 '22 2017 2018 2019 2
Slide 53: Litter
LITTER Litter Slides Right Out
Slide 54: Cat Litter
CAT LITTER $ Consumption Chg vs YAG 2022 14.9% 13.9% 13.5% 12.8% C Q1 Q2 Q3 Q4 ARM & HAMMER Litter consumption continued double-digit growth in 2022. Source: IRI Data
Slide 55: A&H Litter Only Major Brand To Grow Share In 2022
A&H Litter Only Major Brand To Grow Share In 2022 Clumping Litter Dollar Share 40.0 36.7 36.7 35.0 30.0 25.0 23.2 24.5 20.0 22.7 20.9 15.0 2019 2020 2021 2022 Source: IRI Total MULO + Pet A&H Clumping Litter Sales, PE 12.25.2022 CHURCH & DWIGHT ANALYST DAY 2023 55
Slide 56: A&H Litter Value Portfolio A "Pennywise" Choice
A&H Litter Value Portfolio A “Pennywise” Choice For Consumers In Recessionary Environment A&H Value “Orange Box” – Dollar Share 11.6 10.5 Source: IRI Total MULO + Pet A&H “Orange Box” Clumping Litter Sales, PE 12.25.2022 CAGNY 2023 56
Slide 57: Our Recent Acquisitions have Room to Run
3 and Our Recent Acquisitions have Room to Run December 2021 October 2022 New distribution + Waterpik New distribution + Dental Hygienist Detailing = International Runway = continued growth momentous expansion CAGNY 2023 57
Slide 58: Alcohol-Free Mouthwash
ALCOHOL-FREE MOUTHWASH Don’t Feel the Burn
Slide 59: Total Mouthwash
TOTAL MOUTHWASH $ Consumption Chg $ Share of Total Mouthwash 2019 - 2022 Category 2019 - 2022 +49% #2 8.1% Alcohol-Free +45% Mouthwash 5.6% +59% 3.9% +19% 2.6% 2019 2020 2021 2022 2019 2020 2021 2022 Innovation, displays, and distribution gains continue to deliver THERABREATH growth in Total Mouthwa
Slide 60: Plenty Of Room To Run On Distribution
And There’s Plenty Of Room To Run On Distribution … TOTAL POINTS OF DISTRIBUTION 3.8x 3.6x 2.5x 1.4x Total Points of 1,968.9 1,878.7 1,295.0 740.8 524.8 Distribution TDP -26.3% +7.1% -5.8% -6.2% +60.7% Change vs YA Source: IRI, Total US – Multi Outlet, L13W W/E 12/25/22 CAGNY 2023 60
Slide 61: TheraBreath Created by Influencers
TheraBreath Created by Influencers Following a ed Copy link You two are absolutely beautiful together @ & €)) Shailey and Sammy : Creator ® user5097583219040 Both beautiful 2. Micah Manansala
Slide 62: Acne Patch
ACNE PATCH Revealing the Hero Within
Slide 63: Acne Treatment
ACNE TREATMENT ACNE TREATMENT CATEGORY $ Consumption Chg $ Consumption Chg 2018 - 2022 2018 - 2022 $810 +54% $686 $592 $589 $591 +519% +362% +++% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Double-digit category growth fueled by category-leading HERO MIGHTY PATCH Source: Numerator Data
Slide 64: Lots of Room To Run On Distribution
And Lots of Room To Run On Distribution Total Points of Distribution Distribution Opportunity Neutrogena Clean & Clear Clearasil Hero Total Points of ONLY IN Distribution 1,955 461 332 TDP Change vs YA +116 -77 -127 IRI Total US – Multi Outlet L52 w/e 12/25/22 CAGNY 2023
Slide 65: Pimple emergency? Don't pop it, patch it.
Pimple emergency? Don’t pop it, patch it.
Slide 66: In Summary
In Summary … 1 2 3 We are leaders We thrive in Acquisitions in growing difficult have room categories environments to run and we haven’t even talked about our 2023 New Product pipeline yet … CAGNY 2023 66
Slide 67: 2023 Innovation
2023 Innovation
Slide 68: Big Ideas and New Benefits Drive 2023 Launches
Big Ideas and New Benefits Drive 2023 Launches CAGNY 2023 68
Slide 69: Micropoint XL for Blemishes
Micropoint XL for Blemishes • Targets early-stage blemish clusters • Features 1,385 dissolving Micropoints • Specially contoured to fit jawline, cheeks and chin
Slide 70: Kids oral care rinses
• Builds healthy oral care habits among kids ages 6-12 • Dentist-formulated rinses are free of dyes • Made with certified organic flavors
Slide 71: Thinnest non-latex condom
• Thinnest non-latex condom in America • Designed to enhance body heat transfer • Odorless and colorless
Slide 72: PMS gummy
• Over 90% of women experience some form of PMS symptoms • Innovative solutions trending on-line; our gummy features chasteberry and B-6 • Helps expand Vitafusion’s women’s health platform
Slide 73: Cordless Slide
CORDLESS SLIDE • Convenient, compact and portable • Collapses to 50% of its size • Comes in 3 colors for consumer preference
Slide 74: Overnight Deep Cleanse
OVERNIGHT DEEP CLEANSE • Removes impurities • Prevents oil buildup overnight • Wake up to fresher hair
Slide 75: Face Prep & Smooth
PREP & SMOOTH FACE • Preps skin for makeup by smoothing & exfoliating in one easy step • Convenient touch-free, mess-free application
Slide 76: Ultra-compact lightweight litter
• Ultra-compact clumps that shrink waste and odors • No-mess scooping • Meets consumer lightweight litter needs
Slide 77: Insight-Driven Litter Innovation Drives Record-Breaking Sales
Insight-Driven Litter Innovation Drives Record-Breaking Sales 77 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 CAGNY 2023
Slide 78: Our Next Litter Revolution: HardBall
Our Next Litter Revolution: HardBall Lightweight Litter: Perfected! 2010 2014 2023 IRI Data: Total US MULO + Pet CY 2022 Ending 1/1/23 CAGNY 2023 78
Slide 79: HardBall Has The Potential To Transform the Category
HardBall Has The Potential To Transform the Category Total Clumping Share Lightweight Share 75% 95% Other Other 25% 5% A&H A&H IRI Data: Total US MULO + Pet CY 2022 Ending 1/1/23 CAGNY 2023 79
Slide 80: What is HardBall?
What is HardBall? A sorghum-based new and different kind of litter. What is sorghum? Sorghum is a HardBall: easy, sustainable, non-clay, no-mess scooping lightweight grain CAGNY 2023 80
Slide 81: Virtually Indestructible Clumps Make Maintenance a Breeze
Virtually Indestructible Clumps Make Maintenance a Breeze Less Stays Clean Easy Waste Longer Maintenance CAGNY 2023 81
Slide 82: HardBall Delivers Key Category Benefits
HardBall Delivers Key Category Benefits It's surprisingly lightweight, yet exceptionally strong! Virtually indestructible clumps make maintenance a breeze! Sustainable: Renewable, Light Weight to Transport CAGNY 2023 82
Slide 83: Give it the Hammer!
Give it the Hammer! New ARM & HAMMER Masterbrand Campaign
Slide 84: The recession is looming
$396 Additional amount spent by the average U.S. household per month for the same goods versus a year ago The recession is looming. 53% Financial issues are sapping have had to make different people’s spirits, leaving them choices due to a lack of money feeling overwhelmed, anxious, and exhausted. 9
Slide 85: They feel powerless
They feel : a| powerless.
Slide 86: It's leading to an open window for reconsideration
21% Are reusing products more It’s leading to an open 22% Are buying more products in bulk window for reconsideration. People are reconsidering brands 37% Are shopping different stores that were once on autopilot — Are shopping all in the name of finding maximum 46% different brands value in limited
Slide 87: ARM & HAMMER is made for this moment
ARM & HAMMER is made for this moment. The hardworking brand that’s packed with power, priced to be accessible to all, and eager to help.
Slide 88: Price pinch?
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Slide 89: Building Desire and Demand: Our 360 Plan
Building Desire and Demand with Consumers: Our 360 Plan NATIONAL TV & DIGITAL VIDEO INFLUENCER & BRANDED SOCIAL eRETAIL PR CAGNY 2023 89
Slide 90: Digital Acceleration
Digital Acceleration
Slide 91: We Continue To Grow Online
We Continue To Grow Online Percentage of Net Sales 16%* 15% 13% 8% 7% 5% 2% 2016 2017 2018 2019 2020 2021 2022 *Excludes last milers, scan and go etc. CAGNY 2023 91
Slide 92: We Have a Digital First Ambition
We Have a Digital First Ambition with a… Commerce BUILD AUTHENTIC Excellence in Future Proof RELATIONSHIPS Mindset (Digital) Media our Talent Action Insight Data CAGNY 2023 92
Slide 93: Commerce Mindset to Excel Across all Channels
Commerce Mindset to Excel Across all Channels IN-STORE ONLINE ✓ Eye-level ✓ Short form video ✓ Easily reachable ✓ Strong product & lifestyle images ✓ Adjacency ✓ Compelling descriptions ✓ Relevant keywords CAGNY 2023 93
Slide 94: Excellence in Digital Media
Excellence in Digital Media - Right Content for the Right Vehicles YESTERDAY TODAY print store TV video social influencers retail audio media Few assets per campaign Dozens of assets per campaign ~70% FY 2023 digital media spend as % of total CAGNY 2023 94
Slide 95: Digital Acceleration is Fueled By People
Digital Acceleration is Fueled By People Digital Upskilling Best of breed partners & agencies Actionable analytics CAGNY 2023 95
Slide 96: Laying The Foundation for Future Growth
Laying The Foundation for Future Growth Consumer Intelligence Leaning Into Commercial Team & Analytics Digitally Savvy Brands DIGITAL Social Listening Ratings + Reviews CAGNY 2023 96
Slide 97: International Story
International Story
Slide 98: International Organic Sales Evergreen Target
International Organic Sales Evergreen Target: +6% 2% United States 3% 6% International 5% Specialty Products CAGNY 2023 98
Slide 99: International Today: Sales By GMG + Subsidiaries
International Today: Sales By GMG + Subsidiaries 28% Canada INTERNATIONAL 2022 Net Sales: ~$900M 35% Global Markets 22% Europe Group 8% 7% Australia Mexico CAGNY 2023 99
Slide 100: Historical Organic Performance vs. Evergreen Target
Historical Organic Performance vs. Evergreen Target 10.0% 9.2% 8.6% Evergreen 8.1% 7.8% 7.8% Model: 6.0% 5.0% 3.3% 2.8% Orders & Demand Supply Fill Rates China Lockdowns 2014 2015 2016 2017 2018 2019 2020 2021 2022 Organic sales growth is a non-GAAP measure. Refer to the Appendix for a reconciliatio
Slide 101: 2022 Organic Growth of 2.8%
2022 Organic Growth of 2.8% Despite supply challenges and Russia sales suspension, the Subsidiaries and 4 of 5 GMG regions posted positive growth ~4% Intermittent Covid lockdowns and water-flosser contraction Organic sales is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most
Slide 102: Brands Consumers Love That Travel The Globe
Brands Consumers Love That Travel The Globe U.S. Power Brand International OTC & Acquisition Expansion and Personal Care Acceleration Leveraging Innovation Portfolio CAGNY 2023 102
Slide 103: Geographic Expansion: International Runway Ahead
Geographic Expansion….International Runway Ahead % of % of % of International U.S. Domestic International Sales Sales Sales Top 10 CPG Company 41% 59% AVG% Church & Dwight 82% 18% CAGNY 2023 103
Slide 104: Key Investments For Growth
Key Investments For Growth eCommerce & Direct eCommerce & Digital Pricing & Revenue Selling Capability in China Capability Acceleration Growth Management Local Manufacturing and 2023 Officially Opened India & Middle Infrastructure Expansion in Asia East Region in March 2022 CAGNY 2023 104
Slide 105: Committed To International Organic Growth
Committed To International Organic Growth • Long international runway for existing brands • Leverage newly acquired brands • Global Markets Group fueled by Emerging Markets • Strategic investments in Resources & Capabilities CAGNY 2023 105
Slide 106: Specialty Products Division
Specialty Products Division
Slide 107: SPD Organic Sales Evergreen Target
SPD Organic Sales Evergreen Target: 5% 2% Domestic 3% 6% International 5% Specialty Products CAGNY 2023 107
Slide 108: Specialty Products Division
Specialty Products Division SPD 2022 Net Sales: $350M 69% +3.7% vs 2021 Animal Nutrition 31% Specialty Chemicals CAGNY 2023 108
Slide 109: Animal Productivity: Pre-Biotics, Pro-Biotics & Food Processing Safety
Animal Productivity: Pre-Biotics, Pro-Biotics, & Food Processing Safety CAGNY 2023 109
Slide 110: Animal Productivity: Growing International Presence
Animal Productivity: Growing International Presence % INTERNATIONAL SALES 12% <6% 2015 2022 CAGNY 2023 110
Slide 111: SPD is Becoming Less Cyclical
SPD is Becoming Less Cyclical 20% 10% 0% -10% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CAGNY 2023 111
Slide 112: Positioned For Organic Growth
Positioned For Organic Growth • Trusted brand • Aligned with consumer trends • Diversified to multiple species • Global growth runway CAGNY 2023 112
Slide 113: How We Run the Company
How We Run the Company
Slide 114: Diversified Portfolio
Diversified Portfolio FABRIC CARE HOME HEALTH & HAIR & SKIN PERSONAL WATERPIK INTERNATIONAL CARE WELL-BEING CARE CARE CAGNY 2023 114
Slide 115: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Brands consumers Long history of Highly productive We strive to be Good shareholder love around the being a friend to people in a place asset light returns beco
Slide 116: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Highly productive Asset Light Good shareholder people in a place returns become where people great shareholder matter returns CAGNY 2023 116
Slide 117: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Brands consumers Long history of Highly productive We strive to be Good shareholder love around the being a friend to people in a place asset light returns beco
Slide 118: Church & Dwight Heritage
Church & Dwight Heritage 1888 1907 1970s 2017 2018 2021 Company Company Sole sponsor Partnering 100% of Commitment introduces institutes the of first Earth with the global to Science pro- use of Day. Arbor Day electricity Based environmental recycled Foundation demand Targets wall charts paperboard
Slide 119: Environmental Goals
Environmental Goals AIR WATER SOLID WASTE 100% carbon neutral 10% reduction of 75% recycling rate via offsets by 2025 water use annually** Committed to 1.5 C o science-based targets over the next 10 years for scope 1 and 2* o * Well below 2 C for scope 3 ** Normalized CAGNY 2023 119
Slide 120: ESG Recognition
ESG Recognition CAGNY 2023 120
Slide 121: Our ESG Scores Continue to Improve
Our ESG Scores Continue to Improve 2020 CCC B BB BBB A AA AAA 2021 CCC B BB BBB A AA AAA 2022 CCC B BB BBB A AA AAA CAGNY 2023 121
Slide 122: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Highly productive Asset Light Good shareholder people in a place returns become where people great shareholder matter returns CAGNY 2023 122
Slide 123: Industry Leading Revenue Per Employee
Industry Leading Revenue Per Employee $1,020 Revenue per Employee (in ‘000s) CHD CLOROX PG ENERGIZER COLGATE RECKITT NEWELL EDGEWELL KIMBERLY Source: Most recent 10K filings CAGNY 2023 123
Slide 124: Simple Compensation Structure
Simple Compensation Structure 1. Bonuses are tied 100% to Gross business results. Net Revenue Margin Expansion 2. Equity compensation is 100% stock options. 3. Management is required to be heavily invested in Cash From EPS company stock. Operations CAGNY 2023 124
Slide 125: All Church & Dwight Employees Focus On Gross Margin
All Church & Dwight Employees Focus On Gross Margin Gross margin is 25% of all employees’ a n n u a l b o n u s . CAGNY 2023 125
Slide 126: Key Gross Margin Growth Drivers
Key Gross Margin Growth Drivers Good to Supply Great Cost Chain Optimization Optimization Acquisition New Synergies Products CAGNY 2023 126
Slide 127: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Highly productive Asset Light Good shareholder people in a place returns become where people great shareholder matter returns CAGNY 2023 127
Slide 128: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 4.4% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 2.0% 1.8% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $250 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E
Slide 129: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Highly productive Asset Light Good shareholder people in a place returns become where people great shareholder matter returns CAGNY 2023 129
Slide 130: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $ Billions $5.4 $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. CAGNY 2023 130
Slide 131: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily #1 High growth and Asset Leverage C&D Deliver or #2 share high margin light manufacturing, sustainable brands brands that are logistics and competitive fast moving purchasing advantage consumables CAGNY 2023 131
Slide 132: A Look AHEAD to 2023 – Strong Fundamentals
A Look AHEAD to 2023 – Strong Fundamentals 1 Top line strength including organic sales growth and solid contribution from recent acquisitions. 2 Meaningful gross margin expansion. 3 New product pipeline providing consumers with exciting new offerings. 4 Advertising investment to strengthen the long-
Slide 133: Slide 133
Slide 134: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Church & Dwight Co., Inc.’s Reconciliation of Non-GAAP Measures: The following pages provide definitions of the non-GAAP measures used in this presentation and reconciliations of these non- GAAP measures to the most directly comparable GAAP measures. These non-GAA
Slide 135: Reconciliation of Non-GAAP Measures: Organic Sales Growth
RECONCILIATION OF NON-GAAP MEASURES ORGANIC SALES GROWTH The presentation provides information regarding organic sales growth, namely net sales growth excluding the effect of acquisitions, divestitures and foreign exchange rate changes, from year-over-year comparisons. Management believes that the p
Slide 136: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2022 2021 2000 2019 Adjusted SG&A Reconciliation SG&A - Reported 20.8% 11.7% 12.1% 14.4% Brazil Charge 0.0% 0.0% 0.0% -0.2% Flawless Earnout Adjustment 0.0% 1.9% 1.9% -0.2% Flawless I ntangible Assets I mpairment -7.7% 0.0
Slide 137: Reconciliation of Non-GAAP Measures: Earnings Per Share
RECONCILIATION OF NON-GAAP MEASURES EARNINGS PER SHARE This presentation discloses reported EPS excluding the following, namely, earnings per share calculated in accordance with GAAP adjusted to exclude significant one-time items that are not indicative of the Company’s period-to-period performance.
Slide 138: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2022 2021 2020 2019 2018 2017 2016 Adjusted EPS Reconciliation EPS - Reported $ 1.68 $ 3.32 $ 3.12 $ 2.44 $ 2.27 $ 2.90 $ 1.75 Pension Settlement Charge $ - $ - $ - $ - $ - $ 0.12 $ - Brazil Charge $ - $ - $ - $ 0.03 $ - $
Slide 139: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Free Cash Flow: Free cash flow (a non-GAAP measure) is defined as cash from operating activities (a GAAP measure) less capital expenditures (a GAAP measure). Management views free cash flow as an important measure because it is one factor in determining the amount
Slide 140: Reconciliation of Non-GAAP Measures: Total Debt to Bank EBITDA
RECONCILIATION OF NON-GAAP MEASURES TOTAL DEBT TO BANK EBITDA Total Debt to Bank EBITDA is a ratio used in our debt agreements. Bank EBITDA (a non-GAAP measure) is a form of adjusted EBITDA, and represents earnings from Income (a GAAP measure), excluding interest income, interest expense, and before
Slide 141: Total Debt to Bank EBITDA, Continued
RECONCILIATION OF NON-GAAP MEASURES TOTAL DEBT TO BANK EBITDA, Continued Total Debt to Bank EBITDA is a ratio used in our debt agreements. Bank EBITDA (a non-GAAP measure) is a form of adjusted EBITDA, and represents earnings from Income (a GAAP measure), excluding interest income, interest expense,
Slide 142: Reconciliation of Non-GAAP Measures (Q4'22)
RECONCILIATION OF NON-GAAP MEASURES (Q4’22) CAGNY 2023 142