Clorox Company (the) · NYSE:CLX
Clorox Company (the) — The Clorox Company — Investor Day (October 2015)
194 slides from Clorox Company (the)'s investor day presentation, Oct 1, 2015
Slide 1: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 2: Benno Dorer, Chief Executive Officer
Benno Dorer Chief Executive Officer
Slide 3: Key Messages
Key Messages • Staying on Strategy 2020 as it is producing strong shareholder returns • Investments in profitable growth are beginning to show positive results • Strategy 2020 Accelerators and continued strong execution to make accelerated growth sustainable
Slide 4: Agenda for the Day
Agenda for the Day Strategy 2020 Update & Accelerators………………….. 9:00am - 10:30am Break……………………………………………………... 10:30am - 10:50am Profitable Growth Execution……………………………….. 10:50am - Noon Lunch/Q&A……………………………………………………. Noon - 1:00pm
Slide 5: Clorox Presenters
Clorox Presenters • Strategy 2020 Update Benno Dorer • Portfolio Momentum Nick Vlahos Acceleration • 3D Innovation Denise Garner • 3D Technology Transformation Eric Reynolds • Growth Culture Benno Dorer • Execution Winning With Retailers Matt Laszlo • Innovation Behind Value Dawn Willoughby & Nick V
Slide 6: Other Clorox Management in Attendance
Other Clorox Management in Attendance James Foster EVP – Product Supply, Enterprise Performance, & IT Jacqueline Kane EVP – Human Resources & Corporate Affairs Laura Stein EVP – General Counsel Jon Balousek SVP & General Manager – Household & Lifestyle Manjit Singh SVP – Chief Information Officer
Slide 7: Other Clorox Management in Attendance
Other Clorox Management in Attendance Kathryn Caulfield VP – Corporate Communications & Responsibility Chip Conradi VP – Tax & Treasury Kevin Jacobsen VP – Financial Planning and Analysis Steve Austenfeld VP – Investor Relations Landon Dunn Sr. Manager – Investor Relations
Slide 8: Clorox Board of Directors in Attendance
Clorox Board of Directors in Attendance Dr. Richard Carmona Vice Chairman, Canyon Ranch and 17th Surgeon General of the United States Jeffrey Noddle Retired Executive Chairman, SuperValu Inc. Pamela Thomas-Graham Chief Marketing & Talent Officer – Head of Banking and Wealth Management New Markets, C
Slide 9: Safe Harbor
Safe Harbor Except for historical information, matters discussed in this presentation, including statements about the success of the Company’s future volume, sales, costs, cost savings, earnings, foreign currencies, and foreign currency exchange rates, cash flows, plans, objectives, expectations, gr
Slide 10: Over 80% of Sales Are Generated From Brands With a #1 or #2 Share
Over 80% of Sales Are Generated From Brands With a #1 or #2 Share Position (FY15 Sales: $5.7B) International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Charcoal 11% Glad 15% Lifestyle : 17% Litter 6% Household : 32%
Slide 11: Advantaged Portfolio: Big Share Brands in Mid-Sized Categories
Advantaged Portfolio Big Share Brands in Mid-Sized Categories Clorox Smaller 23% Players 32% Clorox is Private ~3X Label the size of next Competitor E 3% 20% branded competitor Competitor D 4% Competitor C Competitor B Competitor A 5% 5% 8% Note: Clorox share excludes Kitchen Bouquet, Salad Crispins
Slide 12: Portfolio with Significant Synergies
Portfolio with Significant Synergies Customer Supply Chain Brand Building Scaled teams, Common consumer Scale across Buy, capabilities, and Make, Ship trends, insights, 3D broker network demand creation Health & Wellness Sustainability Fragmentation Affordability Over 80% of our portfolio ha
Slide 13: Portfolio Supported by Consumer Megatrends
Portfolio Supported by Consumer Megatrends Health & Wellness Sustainability MEGA TRENDS Fragmentation Affordability
Slide 14: #1 Share of Voice Across Most Categories
#1 Share of Voice Across Most Categories 100% 100% 100% 100% 81% 80% 60% 51% 53% 40% 24%31% 30% 26% 19% 21% 20% 0% Bleach Wipes Bottled Salad Trash Charcoal Brita Pour- Cat Litter Dressing Thru Clorox Competitor #1 Competitor #2 Source: Nielsen Ad Intel as of May, 2015. Data range is Jan 1, 2014 thr
Slide 15: Strong Shareholder Return
Strong Shareholder Return TSR % 1,000 Total Shareholder Return Over 2x the +954% 20 Year Ending 6/30/2015 S&P 500! 800 +734% 600 +451% 400 200 0 Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun 95 97 99 01 03 05 07 09 11 13 15 CLX S&P 500 Peer Companies Average
Slide 16: We Have Delivered a Strong FY15
We Have Delivered a Strong FY15 FY15 FY15 +3% Sales Growth +4% EPS Growth (+5% Currency Neutral) $5,655 $4.57 $5,533 $5,514 $4.39 $4.31 FY13 FY14 FY15 FY13 FY14 FY15
Slide 17: FY15 Success Factors
FY15 Success Factors Focus on Core Increased Investments in Demand Innovation Investment
Slide 18: Market Share is Responding
Market Share is Responding Last 3 Months Last 12 Months +0.3pts Flat Last 24 Months -0.4pts Note: Clorox share excludes Kitchen Bouquet, Salad Crispins, Salad Kits, Veggie Kits, LDL, Laundry Detergent, Washing Machine Cleaners, Wash N Dri, Glad Straws, Cooking Bags, Litter Additives & Equipment and
Slide 19: Strong Results Are Recognized by Shareholders
Strong Results Are Recognized by Shareholders Total Shareholder Return 1 Year Ending 6/30/15 20% 17% 15% 3% 10% 7% 14% 2% 5% 4% 3% 5% 0% 1% Clorox Peers S&P 500 Share Price Appreciation Dividend Paid
Slide 20: Leading Through Strategic Change in CPG
Leading Through Strategic Change in CPG Digital Consumer Challenging International Revolution Focus on Value Retail Headwinds Environment
Slide 21: 2020 Strategy
2020 Strategy Mission • We make everyday life better, every day • Maximize economic profit Objectives • Big-share brands in midsized categories and countries • Engage our people as business owners • Increase brand investment behind superior value and more targeted 3D plans Strategy • Keep the core h
Slide 22: Long-Term Growth Algorithm Remains Unchanged
Long-Term Growth Algorithm Remains Unchanged U.S. Domestic International ~80% of Clorox Sales ~20% of Clorox Sales +2-4% annual growth +5-7% annual growth 1.5 - 3.0 pts 1.0 - 1.5 pts = 3 - 5 pts company growth company growth company growth Annual EBIT Margin Improvement: +25 to 50 bps Annual Free Ca
Slide 23: Strategy Accelerators Drive Profitable Growth
Strategy Accelerators → Drive Profitable Growth 2020 Goals (Annual)
Slide 24: Accelerators in Action
Accelerators in Action Accelerate Investment Consumer Value Behind Digital Measure Innovation: Growth & Fuel Brands Bigger, Faster, Longer
Slide 25: Nick Vlahos, Chief Operating Officer
Nick Vlahos Chief Operating Officer Household, Lifestyle & Core Global Functions
Slide 26: Investing Behind Growth Tailwinds
Investing Behind Growth Tailwinds • Engage our people as business owners • Increase brand investment behind superior value and more targeted 3D plans Strategy • Keep the core healthy and grow into new categories, channels, and existing countries • Reduce waste in work, products, and supply chain to
Slide 27: Key Messages
Key Messages • Clorox will invest differentially behind our Growth Brands • Fuel Brands will grow more profitably to support growth • Increase demand investment to grow Household Penetration
Slide 28: 1 Point of Household Penetration = $50M+ Sales
1 point of Household Penetration = $50M+ Sales Cleaning Household Lifestyle Segment Segment Segment $22M $20M $10M *Dollar Opportunity of 1pt of HH Pen based on 1 purchase per year Source: IRI Panel Data, Total U.S. All Outlets, NBD Weighted
Slide 29: New Usage Occasions Drives Penetration
New Usage Occasions Drives Penetration New Faces New Spaces New Places New Demographic or Consumes Product in a New Channel or Behavioral Group New Way Location in Store
Slide 30: Portfolio Segmentation
Portfolio Segmentation High Fuel Growth Sales Growth Potential Low High
Slide 31: Fuel Brand: Kingsford Charcoal
Fuel Brand: Kingsford Charcoal International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 32: Kingsford Drives Charcoal Category Growth
Kingsford Drives Charcoal Category Growth $ Market Share Market Share Change vs YA 1.0% 80% 74% 0.5% 60% 7 out of 10 Consumers 0.0% 40% choose Kingsford -0.5% 19% 20% -1.0% 7% 0% -1.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Kingsford Private Label All Other FY'14 FY'14 FY'14 FY'14 FY'15 FY'15 FY'15 FY'15 Source: I
Slide 33: Profitable Growth With New Faces, Spaces & Places
Profitable Growth With New Faces, Spaces & Places Targeted Drive New Expand Retail Demand Spend Usage Occasions Distribution Margin Enhancement through Operational Excellence
Slide 34: Digital Execution Behind Seasonal Grilling Occasions
Digital Execution Behind Seasonal Grilling Occasions
Slide 35: Growth Brand: Burt's Bees
Growth Brand: Burt’s Bees International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 36: Strong Foundation of Leadership
Strong Foundation of Leadership +8% 120+ #1 Natural brand 5 Year Items launched CAGR over past 3 yrs 26% 20% Nearly 1/2 of new NPC NPC Market of NPC sales over last Share Category 3 yrs Growth Source: IRI MULO 52we 8-9-15; CAGR represents Domestic POS data including IRI + SPINS + WF; Brand Health Tr
Slide 37: Growth With New Faces, Spaces & Places
Growth With New Faces, Spaces & Places Drive Expand into International Trial & Awareness Adjacencies Expansion on Core
Slide 38: Focus on Core: Fastest Growing Lip Balm
Focus on Core → Fastest Growing Lip Balm Retail Dollars vs Year Ago 20% Latest 6 months 17% 10% 7% 3% 0% -2% -10% Burt's Bees Chapstick Blistex EOS Source: IRI MULO 26wk Ending 6/21/15
Slide 39: Expanding Into Lip Color & Face Care
Expanding Into Lip Color & Face Care
Slide 40: International Expansion
International Expansion Retailer eCommerce Asia Expansion Partnership
Slide 41: Growth Brand: Food
Growth Brand: Food International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 42: Hidden Valley Is the #1 Salad Dressing and Growing
Hidden Valley Is the #1 Salad Dressing and Growing… $ Market Share Share Change vs YA 1.0% 30% 22% 0.5% 20% 15% 13% 0.0% 10% 0% -0.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hidden Valley Kraft Private Label FY'14 FY'14 FY'14 FY'14 FY'15 FY'15 FY'15 FY'15 Source: IRI MULO Date Ending 6/21/15 Total Salad Dressing
Slide 43: Growth With New Faces, Spaces & Places
Growth With New Faces, Spaces & Places Accelerate Dry Better for You Ethnic Ranch Expansion Enhancers
Slide 44: Food Innovation Pillars
Food Innovation Pillars Accelerate Dry Better for You Ethnic Ranch Expansion Enhancers
Slide 45: Accelerate Ranch
Accelerate Ranch • Strong early results: Hidden Valley +1pt of Market Share in Q4 FY15 • Hidden Valley Share of “Ranch Flavors" increased +11 share points Shipped: Feb 2015 Shipped: Sept 2015 Early 2016 Source: IRI MULO Date Ending 6/21/15 Bottled Salad Dressing
Slide 46: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 47: Food Innovation Pillars
Food Innovation Pillars Accelerate Dry Better for You Ethnic Ranch Expansion Enhancers
Slide 48: Expanding Dry into High Margin Adjacencies
Expanding Dry into High Margin Adjacencies Share Change vs YA 4.0% 2.0% 0.0% -2.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY'14 FY'14 FY'14 FY'14 FY'15 FY'15 FY'15 FY'15 Source: IRI MULO Date Ending 6/21/15 Dry Salad Dressing
Slide 49: Driving Household Penetration Across Categories
Driving Household Penetration Across Categories
Slide 50: Food Innovation Pillars
Food Innovation Pillars Accelerate Dry Better for You Ethnic Ranch Expansion Enhancers
Slide 51: Better For You Platform
Better For You Platform There is a gap between healthier products Opportunity consumers want and what is available Fresh & Real Simple & Wholesome Solution
Slide 52: Food Innovation Pillars
Food Innovation Pillars Accelerate Dry Better for You Ethnic Ranch Expansion Enhancers
Slide 53: Key Messages
Key Messages • Clorox will invest differentially behind our Growth Brands • Fuel Brands will grow more profitably to support growth • Increase demand investment to grow Household Penetration
Slide 54: Denise Garner, Chief Innovation Officer
Denise Garner Chief Innovation Officer
Slide 55: Innovation is a Key Component of the Strategy
Innovation is a Key Component of the Strategy • Engage our people as business owners • Increase brand investment behind superior value and more targeted 3D plans Strategy • Keep the core healthy and grow into new categories, channels, and existing countries • Reduce waste in work, products, and supp
Slide 56: Key Messages
Key Messages • Strong commitment to innovation is working • Strategy 2020 will drive greater value from innovation • Improved processes will result in faster speed to market and “real- time” measurement of the “value” of our products
Slide 57: Broad-based Approach to Innovation
Broad-based Approach to Innovation KEEP THE CORE HEALTHY GROW MARKET SHARE Product & Product Marketing Superiority New Product Cost-o- Platforms EXPAND MARGIN vation & ACCELERATE GROWTH Adjacency Expansion *Cost-o-vation is a term used at Clorox that describes innovation that improves product perfor
Slide 58: Innovation is Delivering Growth
Innovation is Delivering Growth 5% Incremental Sales Growth from Innovation (Last 12 months) 4% 3.3% 3.4% 2.9% 3.0% 3.0% 3% 2.8% 2% 1% 0% FY11 FY12 FY13 FY14 FY15 FY16 Outlook *FY16 Outlook based on Aug 3rd Earnings Release
Slide 59: Strong Innovation Across Portfolio in FY15
Strong Innovation Across Portfolio in FY15 Clorox Cleaning Utensils (International) Glad Odorshield with Gain Burt’s Natural Lip Crayon Clorox Power Gel (International) Fresh Step Extreme Clorox Scrub Singles Lightweight Hidden Valley Ranch Withs Clorox Dust Wipes
Slide 60: Faster Time to Market
Faster Time to Market Goal: Reduce time to market by 50% - Accelerate decision making - Right-sized testing Plans - Faster, more efficient development process
Slide 61: Platforms Provide Bigger Value
Platforms Provide Bigger Value • Glad “Stretchable Strength Platform” has many sequels • Meeting unmet consumer needs has allowed for premium differentiation
Slide 62: Generating Long-Term Value From Innovation
Generating Long-Term Value From Innovation Increase Optimize the Internal Demand 3Ds 3-Year Metric Investment
Slide 63: 3-Year Metric to Improve Innovation Stickiness
3-Year Metric to Improve Innovation “Stickiness” • Increase year 2 & 3 spending on successful innovation • Leverage platforms to allow for “Blockbuster” introductions, followed by “Sequels” Internal 3-Year Metric • More “Adjust & Nurture” post-launch for slower building innovations
Slide 64: Building Upon 60:40
Building Upon 60:40 80% 60% 56% > 50% of portfolio has a 60:40 48% blind preference win vs next 40% 35% strongest competitor 20% 7% 0% FY04 FY08 FY12 FY15 Source: Clorox Internal
Slide 65: New Metric: Consumer Value Measure (CVM)
New Metric: Consumer Value Measure (CVM) To Date Process FY16 & Beyond Product Experience 60/40 Testing 60/40 Testing Perception Brand Equity Price Price Total Consumer Value
Slide 66: Consumer Value Measure
Consumer Value Measure Total Product Experience x Perception Consumer Price Value • Proprietary real-time data Superior Value • Correlates to change in market share Parity Value • Captures all value drivers Inferior Value
Slide 67: CVM: How Do We Use It?
CVM: How Do We Use It? Above 450 line, Benefit > Price Product & Perception Index Superior Value Category Average Below 450 line Price > Benefit Inferior Value Product x Perception Price Index Price Based on Marn, Roegner, Zawada (McKinsey) pricing work published in “The Pricing Advantage” (April 20
Slide 68: CVM: Clorox Disinfecting Wipes Example
CVM: Clorox Disinfecting Wipes Example Product & Perception Index Category Average Product x Perception Price Index Price Based on Marn, Roegner, Zawada (McKinsey) pricing work published in “The Pricing Advantage” (April 2004)
Slide 69: Superior CVM Drives Market Share Gain
Superior CVM Drives Market Share Gain CDW Market Share 50% 48% 46% 44% Q2 FY14 Q4 FY15 Source: IRI MULO Week Ending 6/21/15 Latest 13 Weeks
Slide 70: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 71: Key Messages
Key Messages • Strong commitment to innovation is working • Strategy 2020 will drive greater value from innovation • Improved processes will result in faster speed to market and “real- time” measurement of the “value” of our products
Slide 72: Eric Reynolds, Chief Marketing Officer
Eric Reynolds Chief Marketing Officer
Slide 73: Investments in Technology Will Provide Growth
Investments in Technology Will Provide Growth • Engage our people • Increase investment behind our brands Strategy • Expand our brands into new categories, channels, and existing countries • Reduce waste in our work, products, and supply chain to fund growth • Portfolio Momentum Strategy • 3D Innova
Slide 74: Key Messages
Key Messages • Accelerating investment in Digital, including media • Analytics confirm a strong ROI on digital investments • Leveraging Bay Area partnerships is a competitive advantage
Slide 75: Today's Big Disruptors
Today’s Big Disruptors People Technology
Slide 76: People Are More Polarized
People Are More Polarized Geography Income Ethnicity Generations Interests Urban & Rural Haves vs. Minority Millennials Fewer Shared Have Nots Populations Experiences Counties & Gen X Cities Boomers
Slide 77: Technology Brings Connectivity, Immediacy
Technology Brings Connectivity, Immediacy “Always On” consumers expect personalization Hello, Eric. Welcome back. and authenticity Look what we found just for you.
Slide 78: Technology Reshapes Consumer Journeys
Technology Reshapes Consumer Journeys
Slide 79: Our Response
Our Response Driving Consumer Engagement More More More Targeted Personal Real-Time
Slide 80: We Are Accelerating Investment in Digital Media
We Are Accelerating Investment in Digital Media % of Working Media on Digital Clorox now 41% invests over 40% 34% 25% of our media in 22% digital FY13 FY14 FY15 FY16 Proj.
Slide 81: Digital Has Great Creative and Business Potential
Digital Has Great Creative and Business Potential
Slide 82: Technology Enables One-to-One Communication
Technology Enables One-to-One Communication RECIPES Right Message, Right Context, Right Medium
Slide 83: Technology Enables One-to-One Communication
Technology Enables One-to-One Communication
Slide 84: Digital Improves ROI
Digital Improves ROI Enhanced More More Targeting Personalized Real Time Across Channels
Slide 85: Hidden Valley Campaign ROI Comparison
Hidden Valley | Campaign ROI Comparison ROI per Marketing Dollar Spent TV X Enhanced Targeting TV + 1.6X More Personalized More Real TV + + + + 2.1X Time Across Channels
Slide 86: We Leverage Our Location for Innovative Partnerships
We Leverage Our Location for Innovative Partnerships
Slide 87: Our Bay Area Neighbors Make Great Partners
Our Bay Area Neighbors Make Great Partners
Slide 88: We Have Momentum in eCommerce
We Have Momentum in eCommerce ~50% Sales Growth (FY15 vs FY13) FY13 FY14 FY15
Slide 89: eCommerce-Enabled Innovation
eCommerce-Enabled Innovation
Slide 90: eCommerce-Enabled Innovation
eCommerce-Enabled Innovation Intelligent Pitcher
Slide 91: Momentum in eCommerce
Momentum in eCommerce Strong Momentum YoY Growth 2020 Aspirational Sales Goal +86% $500M +24% $300M +65% FY15 FY20 FY20 Professional Products +18% Prior Current
Slide 92: Key Messages
Key Messages • Accelerating investment in Digital, including media • Analytics confirm a strong ROI on digital investments • Leveraging Bay Area partnerships is a competitive advantage
Slide 93: Leading Change With Consumers Is in Our DNA
Leading Change With Consumers Is in Our DNA
Slide 94: We've Been Doing it for 102 Years
We've Been Doing it for 102 Years
Slide 95: Top-10 Most Trusted CPG Brand
We’re Preparing for the Next 100 Top-10 Most Trusted CPG Brand Based on Women in the United States, Harris Poll EquiTrend study 2015
Slide 96: Benno Dorer, Chief Executive Officer
Benno Dorer Chief Executive Officer
Slide 97: Building a Stronger Growth Culture
Building a Stronger Growth Culture • Engage our people as business owners • Increase brand investment behind superior value and more targeted 3D plans Strategy • Keep the core healthy and grow into new categories, channels, and existing countries • Reduce waste in work, products, and supply chain to
Slide 98: Key Messages
Key Messages • Strong organizational culture is a solid foundation • High employee engagement versus global benchmarks • Focus on growth culture in support of Strategy 2020
Slide 99: Strong Organizational Culture is a Solid Foundation
Strong Organizational Culture is a Solid Foundation Operational Strong Values People Centric Excellence
Slide 100: Broadly Recognized by Reputable Institutions
Broadly Recognized by Reputable Institutions
Slide 101: Clorox Engagement Exceeds Global Benchmarks
Clorox Engagement Exceeds Global Benchmarks 90% Top 5% 85% 80% 86% 85% 75% 77% 70% 2015 CPG Norm Global High Clorox Performing Co. CPG Norm: The Towers Watson global fast-moving consumer goods norm is based on responses from more than 126,346 employees from 61 global organizations. Global High Perfo
Slide 102: Key Engagement Strengths
Key Engagement Strengths I understand how my work contributes to Clorox's strategy. I am empowered to make the decisions needed to do my job well. Clorox has established a I believe leaders at Clorox make climate where one can decisions that are consistent challenge our traditional with our company
Slide 103: Building a Stronger Growth Culture
Building a Stronger Growth Culture Engaged Decisive Invest in growth Empowered Accountable IDEA COMPANY Consumer- Demand-building Responsible 3D Technology 3D innovation centric Portfolio momentum
Slide 104: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 105: Key Messages
Key Messages • Strong organizational culture is a solid foundation • High employee engagement versus global benchmarks • Focus on growth culture in support of Strategy 2020
Slide 106: Break
Break
Slide 107: Benno Dorer, Chief Executive Officer
Benno Dorer Chief Executive Officer
Slide 108: Continued Strong Commitment to Operational Excellence
Continued Strong Commitment to Operational Excellence Superior Value Retail Margin to Consumers Execution Enhancement
Slide 109: Matt Laszlo, Chief Customer Officer
Matt Laszlo Chief Customer Officer
Slide 110: Key Messages – Winning With Retailers
Key Messages – Winning With Retailers • Long history of winning with retailers is a signature Clorox competency • Shifting consumer dynamics will continue to change the retail landscape • Clorox capabilities will continue to position us as thought and growth leaders at the physical and digital shelf
Slide 111: Clorox Has Anticipated Emerging Retail Channels
Clorox Has Anticipated Emerging Retail Channels Mass Merch Club Dollar Home/Hardware
Slide 112: Insight to Execution
Insight to Execution Insights Category Management Shopper Marketing Retail Operations Supply Chain
Slide 113: Customer Segmentation & Capability Deployment
Customer Segmentation & Capability Deployment Accelerate Growth Maintain Momentum Maximize Profit Professional 65% U.S. Volume 10% U.S. Volume 20% U.S. Volume 5% U.S. Volume
Slide 114: Current Emerging Retail Channels
Current Emerging Retail Channels Big Box Urban Delivery Click & Collect Fragmentation
Slide 115: Continuing to Win With Big Box Stores
Continuing to Win With Big Box Stores • Walmart + Clorox: Strong partnership - Category Captain in 11 categories • Target: Clorox named Vendor of the Year in 3 categories in 2015 - Cleaning, Trash & Food
Slide 116: Uniquely Positioned To Win With Small Formats
Uniquely Positioned To Win With Small Formats • Future growth - Dollar channel: adding over 1,000 new stores per year - Walmart Neighborhood Markets: adding ~200 new stores per year through 2019 • Clorox wins in Small Formats - Smaller footprint = limited assortment - Limited assortment = #1 & #2 br
Slide 117: Accelerating Investments in e-Commerce
Accelerating Investments in e-Commerce • Clorox brings dedicated teams & a broad portfolio of products with a compelling digital shelf presence • Distinct and classic Clorox capabilities - Through The Mail Skus - Compelling Digital Shelf presence - Supply Chain Flexibility • 2020 Sales Aspirational
Slide 118: Continued Strong Growth In Professional Channel
Continued Strong Growth In Professional Channel • Cleaning & Foodservice – recognizable brands and consumer-facing penetration - 18% sales growth over last 2 years • Healthcare – superior clinical knowledge and hospital penetration Source: GHX data and Clorox internal data
Slide 119: Key Messages – Winning With Retailers
Key Messages – Winning With Retailers • Long history of winning with retailers is a signature Clorox competency • Shifting consumer dynamics will continue to change the retail landscape • Clorox capabilities will continue to position us as thought and growth leaders at the physical and digital shelf
Slide 120: Dawn Willoughby & Nick Vlahos
Dawn Willoughby & Nick Vlahos Chief Operating Officers
Slide 121: Key Messages – Innovation Behind Value
Key Messages – Innovation Behind Value • Innovation behind value drives profitable growth • Value is a function of Product, Perception and Price • We innovate for improved value at all price points
Slide 122: Why Value Matters
Why Value Matters Share & HH Pen Profitable Improved Value Growth Growth
Slide 123: Low Out Of Pocket (LOOP) Innovation
Low Out Of Pocket (LOOP) Innovation 22ct Snack Bag 9ct Wipes 2ct S.O.S 16oz Bleach 22ct Sandwich Bag
Slide 124: Value Is More Than Price
Value Is More Than Price Total Product Experience x Perception Consumer Price Value
Slide 125: Clorox Bleach: Improving Value Through Perception
Clorox Bleach: Improving Value Through Perception International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 126: Increased Control
Consumer Need Increased Control
Slide 127: Solution: Clorox Splash-Less Bleach
TM Solution: Clorox Splash-Less Bleach 10X Thicker Drive Does Not Splash x Awareness of Benefit 9% price premium
Slide 128: Product Innovation to Drive Value
Product Innovation to Drive Value Distinctive benefits Awareness of benefits Better shelf presence
Slide 129: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 130: Decide: Improved Package with Stronger Claims
Decide: Improved Package with Stronger Claims Old Bottle New Bottle
Slide 131: Delight: More Products, Better Shelf Presence
Delight: More Products, Better Shelf Presence Innovation Drove Increased Distribution
Slide 132: Clorox Splash-Less Bleach FY15 Results
Clorox Splash-Less Bleach FY15 Results +27% Sales ~25% of Clorox Growth Bleach Sales +1.3 points +3.2pts HH Pen $ Share Growth Growth Source: MA IRI MULOP FY15 Ending 6/21/15; IRI Panel Data, Total U.S. All Outlets, NBD Weighted;
Slide 133: Splash-Less Driving Total Clorox Bleach Share Gains
Splash-Less Driving Total Clorox Bleach Share Gains +0.8 pts $ Share Growth Source: MA IRI MULOP FY15 Ending 6/21/15
Slide 134: Glad: Improving Value Through Product Experience
Glad: Improving Value Through Product Experience International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 135: Old Glad – Past Perceptions
Old Glad – Past Perceptions Stagnant Commoditized Category Business Low Margin for Retailers
Slide 136: Q4 Results – Premium Trash
The New Glad Q4 Results – Premium Trash +0.9 pts +20% +6% vs YA Premium Trash vs YA Sales Growth Market Share Top-Line Driver Category Growth Growth Driver Source: IRI MULO Date Ending 6/21/15 Trash Disposal Category
Slide 137: Driving Value across the 3-Ds
Driving Value across the 3-Ds Distinctive benefits and Incremental Demand Unique Partnership for Better Value Support behind innovation innovation
Slide 138: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 139: Decide: More Merchandising Behind Innovation
Decide: More Merchandising Behind Innovation
Slide 140: Delight: Sustaining Success of Innovation Platform
Delight: Sustaining Success of Innovation Platform
Slide 141: Introducing Glad with Clorox
Introducing Glad with Clorox Key Benefits: • Antimicrobial protection of the drawstring combining two highly trusted brands! - 45% of the population use a disinfecting product in or around the trash can - Additional value benefit to drive incremental growth leveraging the power of Clorox
Slide 142: FY15: Strong Year for Glad
FY15: Strong Year for Glad +7% +6% Trash $ Category Sales Growth Growth +0.8pts +0.3pts HH Pen $ Share Growth Growth Source: IRI MULO Date Ending 6/21/15 Trash Disposal Category; IRI Panel Data, Total U.S. All Outlets, NBD Weighted Premium Trash
Slide 143: Future Runway For Growth
Future Runway For Growth 2012 2015 % of Share % of Share Base Base 44% Premium Segment 31% Premium Premium 2/3 Volume & 3/4 Profit 69% 56% Want Currently Purchase Odor Neutralization Opportunity Odor Neutralization 91% 52% 39% Source: IRI Infoscan Data - Total U.S. Multi-Outlet (Food/Drug/Mass + Wal
Slide 144: Improved Consumer Value Measure
Improved Consumer Value Measure +25% +18% since 2013 since 2013
Slide 145: Key Messages – Innovation Behind Value
Key Messages – Innovation Behind Value • Innovation behind value drives profitable growth • Value is a function of Product, Perception and Price • We innovate for improved value at all price points
Slide 146: Dawn Willoughby, Chief Operating Officer
Dawn Willoughby Chief Operating Officer Cleaning, International & Professional Products
Slide 147: Key Messages – Creating Value in International
Key Messages – Creating Value in International • International continues to play an important role in the Clorox portfolio • Challenges exist due to FX headwinds and slowing economies • Our “Go Lean” approach will mitigate current challenges and position the business for long-term profitable growth
Slide 148: International is a Key Component of our Portfolio
International is a Key Component of our Portfolio International : 19% Cleaning : 32% Home Care 17% International 19% Burt's Bees 4% Laundry 10% Brita 4% PPD 5% Food 9% Glad 15% Charcoal 11% Litter Lifestyle : 17% 6% Household : 32%
Slide 149: Why We Like International
Why We Like International Peru Leading Midsized Faster Strong Brands Countries Category Operational Growth Rates Performance
Slide 150: Strong Growth in Local Currency, However FX is Real
Strong Growth in Local Currency, However FX is Real Sales Growth 10% 10% Exchange Rate 7% vs YAGO Canada -17% 5% 4% Argentina -10% 2% Australia -22% 0% Chile -13% -1% Colombia -35% -5% -3% Mexico -21% FY 2013 FY 2014 FY 2015 Currency Neutral As Reported Source: Foreign Exchange Rates based on Spot M
Slide 151: Go Lean Approach
“Go Lean” Approach Pricing Focus on Right-Size Optimize Maximization Cost Savings Infrastructure Demand Creation 4 Pillars of Profitability
Slide 152: Pillar 1: Pricing Maximization
Pillar 1: Pricing Maximization Pricing Maximization
Slide 153: Ayudin Argentina: Price Behind Innovation
Ayudin Argentina: Price Behind Innovation Value Message Strong Claims Innovate on Strong Equity
Slide 154: Accelerating Profitable Growth
Accelerating Profitable Growth
Slide 155: Pillar 2: Focus on Cost Savings
Pillar 2: Focus on Cost Savings Focus on Cost Savings
Slide 156: Increased Cost Savings and Value Extraction
Increased Cost Savings and Value Extraction 11 LATAM Countries
Slide 157: Pillar 3: Right-Size Infrastructure
Pillar 3: Right-Size Infrastructure Right-Size Infrastructure
Slide 158: Go Lean to Improve Profitability
“Go Lean” to Improve Profitability • Our “Go Lean” approach right-sizes our infrastructure to our current business environment • Reduced 8% of International workforce through: - Process improvements - Work simplification - Centralization of work
Slide 159: Pillar 4: Optimizing Demand Creation
Pillar 4: Optimizing Demand Creation Optimize Demand Creation
Slide 160: Investing in Higher ROI Opportunities
Investing in Higher ROI Opportunities 15% A&SP % Sales % Spend on Digital Media 20% (Latin America) 10% 17% 10% 7% 10% 5% 4% 7% 4% 0% 0% Fast Growth Stable Challenging FY14 FY15 FY16 (est)
Slide 161: Go Lean Approach
“Go Lean” Approach Pricing Focus on Right-Size Optimize Maximization Cost Savings Infrastructure Demand Creation 4 Pillars of Profitability
Slide 162: Future Growth Ahead
Future Growth Ahe THE CLOROX COMPANY
Slide 163: We Have Strong Leading Brands Across International
We Have Strong Leading Brands Across International Source: Nielsen Retail Measurement for International geographies except; Aztec for Australiz, Horwath for Dominican Republic and IDRetail for Uruguay
Slide 164: We Have a Highly Engaged International Organization
We Have a Highly Engaged International Organization 90% 86% 85% 85% 80% 77% 75% 70% Clorox International CPG Norm Global High 2015 Performing Co. CPG Norm: The Towers Watson global fast-moving consumer goods norm is based on responses from more than 126,346 employees from 61 global organizations. Gl
Slide 165: Key Messages – Creating Value in International
Key Messages – Creating Value in International • International continues to play an important role in the Clorox portfolio • Challenges exist due to FX headwinds and slowing economies • Our “Go Lean” approach will mitigate current challenges and position the business for long-term profitable growth
Slide 166: Steve Robb, Chief Financial Officer
Steve Robb Chief Financial Officer
Slide 167: Key Messages
Key Messages • Investments in the U.S. in profitable growth are producing positive results • Strong cash flow has benefited shareholders over the long-term • Focus on expanding margins via cost savings will continue to be a core competency
Slide 168: FY16 Outlook
FY16 Outlook Based on August 3rd Earnings Call • Categories: +1% to +2% Sales • Innovation: +3pts 0% to +1% • FX: about -3pts • Trade/Other: -1pt • Gross Margin: Flat EBIT Margin • Selling & Admin: < 14% of Sales +25bps to +50bps • Advertising & Sales Promotion: > 9% of Sales Diluted EPS • Tax rate:
Slide 169: Long-Term Growth Algorithm Remains Unchanged
Long-Term Growth Algorithm Remains Unchanged U.S. Domestic International ~80% of Clorox Sales ~20% of Clorox Sales +2-4% annual growth +5-7% annual growth 1.5 - 3.0 pts 1.0 - 1.5 pts = 3 - 5 pts company growth company growth company growth Annual EBIT Margin Improvement: +25 to 50 bps Annual Free Ca
Slide 170: FY15 Strong Free Cash Flow
FY15 → Strong Free Cash Flow $900 Projected $800 $858 10% - 12% $786 of Sales $780 $700 $M $600 $622 $500 $733 $649 $590 $400 $433 $300 FY12 FY13 FY14 FY15 Goal Operating Cash Flow Free Cash Flow Free Cash Flow = Operating Cash Flow from Continuing Operations – Capital Expenditures
Slide 171: Use of Cash Priorities
Use of Cash Priorities Business Growth Support Dividend (includes targeted M&A) Free Cash Flow Debt Leverage1 Share Repurchases (Target: 2.0 – 2.5x) 1. Debt Leverage = Gross Debt / EBITDA
Slide 172: Nearly $2 Billion Returned To Shareholders in Last 4 Years
Nearly $2 Billion Returned To Shareholders in Last 4 Years FY15 Payout Ratio 64% $800 $733 $649 $590 $600 $433 $400 $M $532 $568 $200 $454 $330 $0 FY12 FY13 FY14 FY15 FCF Cash Returned to Shareholders
Slide 173: Healthy Dividend Growth
Healthy Dividend Growth… Dividends Have Increased Each Year Since 1977 Dividend Yield as of June 30th, 2015 4% 2.8% Peer Average: 2.6% 2% 0% AVP PG KMB KO K GIS PEP CLX CPB RB-GB KHC HSY TAP CL CHD EPC EL
Slide 174: Long Track Record of Share Repurchases
…and Long Track Record of Share Repurchases $100 Repurchased Nearly 40% of Shares over last 10 Years $80 $60 $40 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 Shares Outstanding 214M 133M Shares Outstanding are as of June 30th, 2015
Slide 175: Top-Tier ROIC
Top-Tier ROIC 40% 30% 27% 20% Peer Average: 14% 10% 0% CL CLX EL RB-GB HSY CPB PEP CHD KO GIS PG KMB K KHC TAP EPC AVP Return on invested capital (ROIC), a non-GAAP measure, is calculated as earnings from continuing operations before income taxes and interest expense, computed on an after-tax basis
Slide 176: Cost Savings Continue to Deliver +150bps
Cost Savings Continue to Deliver EBIT Margin Benefit from Cost Savings 300 bps 250 bps 200 bps +150bps Annual Goal 150 bps 100 bps 50 bps 0 bps FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16+
Slide 177: Strong Pipeline of Cost Savings
Strong Pipeline of Cost Savings Resin ~2% Efficiency Reduction Plant Consolidation World Class Manufacturing Bleach Concentration Improved Product Performance Reduce weight of charcoal briquette Packaging Every Year Reduction
Slide 178: Bleach Network Optimization 1990s
Bleach Network Optimization 1990s (9 Plants)
Slide 179: Bleach Network Optimization Today
Bleach Network Optimization Today (6 Plants → 5)
Slide 180: Cost Savings That Deliver Improved Performance
Cost Savings That Deliver Improved Performance Clorox Disinfecting Wipes Improvement • Addresses consumer dissatisfaction with improved functionality of closure • $2M of savings reinvested to drive growth Brita Pitcher Margin Improvement • Pitcher redesign improves consumer experience with entry lev
Slide 181: Opportunities Exist Within SG&A
Opportunities Exist Within SG&A 55% 45% % of Sales 35% Goal: 25% < 14% Sales 14.1% 15% 5% CHD KHC KMB GIS CLX TAP K PG EPC HSY RB- CL KO PEP EL AVP GB SG&A % of Sales as of Latest Fiscal Year End CLX as of June 30th, 2015
Slide 182: Long-Term Investment Case Remains Solid
Long-Term Investment Case Remains Solid • FX headwinds likely to lessen over the long-term • Investing behind our brands to grow categories and share • Solid pipeline of innovation and cost savings, including SG&A • Free cash flow: 10% to 12% of Sales
Slide 183: Near-Term Priorities
Near-Term Priorities • Invest in our categories by supporting innovation • Continue executing with operational excellence by driving EBIT margin expansion • Prioritize profitability of our International segment, while managing FX
Slide 184: Strong Shareholder Return
Strong Shareholder Return TSR % 1,000 Total Shareholder Return Over 2x the +954% 20 Year Ending 6/30/2015 S&P 500! 800 +734% 600 +451% 400 200 0 Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun Jun 95 97 99 01 03 05 07 09 11 13 15 CLX S&P 500 Peer Companies Average
Slide 185: Key Messages
Key Messages • Investments in the U.S. in profitable growth are producing positive results • Strong Cash Flow has benefited shareholders over the long-term • Focus on expanding margins via cost savings will continue to be a core competency
Slide 186: Benno Dorer, Chief Executive Officer
Benno Dorer Chief Executive Officer
Slide 187: 2020 Strategy: Constancy of Purpose
2020 Strategy → Constancy of Purpose Mission • We make everyday life better, every day • Maximize economic profit Objectives • Big-share brands in midsized categories and countries • Engage our people as business owners • Increase brand investment behind superior value and more targeted 3D plans Str
Slide 188: Strong Results Are Recognized by Shareholders
Strong Results Are Recognized by Shareholders Total Shareholder Return 1 Year Ending 6/30/15 20% 17% 15% 3% 10% 7% 14% 2% 5% 4% 3% 5% 0% 1% Clorox Peers S&P 500 Share Price Appreciation Dividend Paid
Slide 189: Strategy Accelerators Drive Profitable Growth
Strategy Accelerators → Drive Profitable Growth 2020 Goals (Annual)
Slide 190: Market Share is Responding
Market Share is Responding Last 3 Months Last 12 Months +0.3pts Flat Last 24 Months -0.4pts Note: Clorox share excludes Kitchen Bouquet, Salad Crispins, Salad Kits, Veggie Kits, LDL, Laundry Detergent, Washing Machine Cleaners, Wash N Dri, Glad Straws, Cooking Bags, Litter Additives & Equipment and
Slide 191: Continued Strong Investments Behind Innovation
Continued Strong Investments Behind Innovation
Slide 192: And Continue into 2016
A 7 Jf. of And Continue into
Slide 193: Key Messages
Key Messages • Staying on Strategy 2020 as it is producing strong shareholder returns • Investments in profitable growth are beginning to show positive results • Strategy 2020 Accelerators and continued strong execution to make accelerated growth sustainable
Slide 194: Lunch/Q&A In the Café
Lunch/Q&A In the Café