Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — Consumer Analyst Group of New York (CAGNY) 2019
134 slides from Church & Dwight's conference presentation, Feb 21, 2019
Slide 1: Consumer Analyst Group of New York
Consumer Analyst Group of New York February 21, 2019
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; gross margin changes; trade and marketing spending; marketing expense as a percentage of net sales; sufficiency of cash flows from operations; e
Slide 3: Agenda
wn)” —Who We Are @ 05 - International Story Q»~ —Why We Are Winning (7) 06 - Animal Productivity Story (eye — 2019 Innovations (#) 07 - How We Run The Company ) 04— ARM & HAMMER Ga) 08 - Financials
Slide 4: The Short Story
The Short Story We have CONFIGENCE! in our future. © Digitally savvy © Consistent innovation © International growth continues © Animal Productivity opportunity © Strong 2019 outlook
Slide 5: Deliver Outstanding Returns to Our Shareholders
Deliver Outstanding Returns to Our Shareholders 10 YEAR: 5S YEAR: 3 YEAR: 2018: 20.5% § 17.6% § 18.0% § 33.2%
Slide 6: Who We Are
QO] Who We Are Matt Farrell, President and Chief Executive Officer
Slide 7: We Have an Evergreen Business Model
We Have an Evergreen Business Model Organic Sales 37% Growth 8% EPS Growth
Slide 8: Organic Sales Sources
Organic Sales — Sources - | 2% United States — 3% + 6% International @ | 5% Specialty Products W% .- o—,
Slide 9: > TROANR Nir [es
> TROANR Nir [es 1] sean _ ik bat Gis , Batiste — |
Slide 10: These Brands Drive Our Results
These 11 Brands Drive Our Results more than 80% of sales & profits are represented by these 11 POWER BRANDS
Slide 11: Our Portfolio Is Balanced & Diversified
Our Portfolio Is Balanced & Diversified A well-balanced portfolio of household and personal care products. | Specialty Products: Personal Care: 48% 17%
Slide 12: Diversified Product Portfolio
Diversified Product Portfolio Our Unique Product Portfolio Has Both Value and Premium Products Premium: 65%
Slide 13: We Operate in the Land of Giants
We Operate in the Land of Giants 2018 Net Sales (billions) $66.8 $58.3 P&G Unilever Kimberly Clark Colgate Reckiti* Clorox Church & Dwight © 13
Slide 14: Nimble Organizational Structure
Nimble Organizational Structure quick decision easy making communication ability to adapt
Slide 15: We are an Acquisition Platform
We are an Acquisition Platform Gi) @ @ @ Revenue Operational Excellent Access to Growth Efficiencies Integration Capital Track Record
Slide 16: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria OMO® Primarily #1 Higher growth, Asset Light Leverage CHD Deliver or #2 share higher margin manufacturing, sustainable brands brands logistics and competitive purchasing advantage
Slide 17: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions $4.5 $4.0 Net Sales (Billions) [$4.1] 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 © Batiste femfresh Gyyreon Topplk Viviscat SQ passeorr nbn SG a vy ns Rey FelinePine Sn Neatr waterpik © Note: Trojan, Nair and First Response
Slide 18: Acquired Power Brands Since 2001
Acquired 10 of our 11 Power Brands Since 2001 Acquired 2001 Acquired 2001 Acquired 2001 Acquired 2001 Acquired 2005 ‘FIRST. [Bens #1 Laundry Additive #1 Oral Care Pain Relief #1 Dry Shampoo * oS TROJAN® Vn Netr <> #1 Extreme Value Laund e F #1 Battery P. d #1 Condom Rca #1 Pregnancy Kit #1 Depilator
Slide 19: Power Brands Today, Tomorrow
1] Power Brands Today, 20 Tomorrow Net Sales (Billions) $4.0 $3.5 $3.0 $2.5 $2.0 $15 $1.0 $0.5 $0.0 2005 2006 2008 2011 2012 2017 .--
Slide 20: Why We are Winning
O2 Why We are Winning
Slide 21: 2018 Organic Sales
2018 Organic Sales 4.3% United States 4.3%} 7.8% International @ | -3.4% Specialty Products (5 ix Oo;
Slide 22: Why We are Winning
Why We are Winning We are in the right categories. We know how fo grow share. We have low exposure fo private label. We are winning in e-commerce.
Slide 23: We Are in the Right Categories
We Are in the Right Categories P2015 | P2018 lumping ter I Se Se Woter Roses I i es ST an A. oo. on Toothache i i es Sc Vierins Ss Cn A. oo. oe Baking Soda | i | Batery Toothbrush I SS Ss Sc Louncry es HairThining ET a | | Pregnancy Test kits J) [i gy. Scinfigtes (TT DL BD Condoms | | | | Depilatori
Slide 24: We Know How to Grow Share
We Know How to Grow Share 7 out of 11 power brands maintained or grew share in 2018 2017 Hoeriiv TM DDD MT x waterpi 24
Slide 25: We Have Low Exposure to Private Label
We Have Low Exposure fo Private Label Weighted Average Private Label Share of our Categories 20.0% ~12% ~ ~12% —_ 10.0% 0.0% 2013 2014 2015 2016 2017 2018 fa Say
Slide 26: Private Label Shares are Stable
Private Label Shares are Stable Only 5 of our | 5 categories have private label exposure PREGNANCY TEST KITS BAKING SODA GUMMY VITAMINS 50.0% 30% eS 20% 40.0% 25% — a _ aaa 20% —- 15% 10% 20.0% sea 10.0% 5% 5% 0.0% 0% 0% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016
Slide 27: We Continue to Win in E-Commerce
We Continue to Win in E-Commerce Church & Dwight Sales T% @ 5% AS wax Wate rfl _/ wey, Ign Va ae! —. | ae 5 NZS =a \* " 2% 1% a 2015 2016 2017 2018 2019E
Slide 28: We Have #1 Products on Amazon
We Have #1 Products on Amazon
Slide 29: 2019 Innovation
03 2019 Innovation
Slide 30: Waterpik Sonic-Fusion
waterpik sonic-fusion. Now you can brush and floss at the same time. ©) Only 16% of ww Jal American adults . floss daily. A (
Slide 31: OxiClean Dark Protect
OxiClean Dark Protect for dark and black fabrics. 42% of all wash *, loads are dark loads.
Slide 32: ARM & HAMMER plus OxiClean Fade Defense
ARM & HAMMER plus oxiClean Fade Defense for vibrant whites and bright colors. “Color fading” ranks ¥ as the #2 laundry frustration.
Slide 33: ARM & HAMMER Cloud Control
ARM & HAMMER Cloud Control. Breathe easy clumping litter. Eliminate “cloud of nasties” when changing litter.
Slide 34: vitafusion & L'il Critters Organic Vitamins
vitafusion & L’il Critters organic vitamins. More of what y consumers want and less of what they don’t. py
Slide 35: Nair Leg Masks
Nair Leg Masks. the first mask for legs that beautifies skin while removing hair. 86% of facial mask — . ¥ users are interested in leg masks.
Slide 36: Your legs deserve the attention
PP | “Your legs deserve the attention.”
Slide 37: Orajel Toothache Strips
Orajel Toothache Strips. Instant, targeted, long-lasting pain relief. Stays in place and dissolves for long- | lasting relief. ‘Toormacne. HE a ue STRIPS "
Slide 38: Batiste
Batiste Hydrating y i» Volumizing for dry hair. for fine hair. Refreshes hair o 4 Refreshes and adds without drying. Be 2 g voy and texture. Oe v 28% think dry shampoo isn't for their hair type. © 38
Slide 39: Trojan The Edge
Trojan The Edge. Take pleasure to the limit. Changing sensations v to stimulate both partners.
Slide 40: Because it's a big, sexy world
“Zs “Because it’s a big, sexy world
Slide 41: ARM & HAMMER #MorePowerToYou
04 ARM & HAMMER #MorePowerloYou
Slide 42: Brands Consumers Love
BRANDS CONSUMERS LOVE
Slide 43: Trojan, Nair brands
TROJANS one Yp = Noir O—;
Slide 44: Stain Fighters Category: OxiClean Hits a Record
Stain Fighters Category: OxiClean Hits a Record OxiClean Dollar Share of Stain Fighters 53.0% Laem | ““WHEN WINE LEAKED IN MY GUESTS’ SUITCASE, WE WERE GIGGLIN’ ALL NIGHT!”” 2015 2016 2017 2018 Source: Nieken AOD, date ending 12/26/18 44
Slide 45: First
FIRST
Slide 46: First ARM & HAMMER Trademark: 1905
First ARM & HAMMER Trademark: 1905
Slide 47: ARM & HAMMER is a Part of the American DNA
ARM & HAMMER is a Part of the American DNA
Slide 48: U.S. households buy ARM & HAMMER product every year
Tin2. U.S. households Buy qn ARM & HAMMER product every year
Slide 49: Consumers Love Arm & Hammer
Consumers Love Arm & Hammer | America’s #1 Trusted g So aa 7 = 688,000,000,000 cookies made with ARM & HAMMER Baking Soda 31,000,000,000 gallons of swimming pool water are treated with ARM & HAMMER Baking Soda. 300,000 kidney dialysis patients use ARM & HAMMER Baking Soda to purify their blood.
Slide 50: Consumers Love Arm & Hammer
Consumers Love Arm & Hammer Al A | F INLY ONE with FLO-THRU TECHNOLOGY i :() of refrigerators are Key ae fresher because of a ARM & HAMMER Baking Soda
Slide 51: A Billion Dollar Brand
a BILLION dollar brand.
Slide 52: Engage the consumer by using emotion
In the PAST, we would educate the consumer on features and benefits. ————_— In the PRESENT and FUTURE, we engage the consumer by using emotion.
Slide 53: More Power To You
™ MORE POWER TO YOU. The true power of ARM & HAMMER is derived from the ingenuity of the people who use it.
Slide 54: Powerful products stacked with solutions
We create powerful producis stacked with solutions —to tackle everyday challenges with strength and a smile. MORE POWER TO YOU.
Slide 55: Bryant Park
BRYANT T PARK,
Slide 56: Bryant Park, NYC
BRYANT PARK, NYC December 2018 4,454 photo booth visits 1,398 video auditions 100% positive brand experience
Slide 57: More Power To You People Magazine Spread
More Power To You People Magazine Spread : Print ad in the REAL PEOPLE . REAL STORIES. th J REAL POWER. _ January 7 issue of people magazine. 57
Slide 58: 40% of ARM & HAMMER media spend is digital
Slide 59: ARM & HAMMER video ads
Slide 60: ARM & HAMMER video ad
Slide 61: ARM & HAMMER Baking Soda Gives You The Power
ARM & HAMMER™ Baking Soda Gives You The Power To Tackle Any Challenge. 61
Slide 62: Analyst Coverage: J.P. Morgan, Deutsche Bank, Raymond James
Andrea Teixeira, Steve Powers, Joe Altobello, J.P. Morgan Deutsche Bank Raymond James
Slide 63: Analyst Coverage: Suntrust, Oppenheimer, Jefferies
Bill Chappell, Rupesh Parikh, Kevin Grundy, Suntrust Oppenheimer Jefferies
Slide 64: More Power To You
MORE POWER TO YOU.
Slide 65: International Story
O5 International STOry
Slide 66: International Evergreen Target: 6%
International Evergreen Target: 6% _ 7 6% International -)
Slide 67: International Net Sales: Increasing Scale
International Net Sales: Increasing Scale Footnote: In constant dollars o7
Slide 68: International Organic Net Sales: Faster Growth
International Organic Net Sales: Faster Growth Net Sales Average Growth 2012 - 2014 2015 - 2018 Our growth rate has more than doubled on a much larger base ...
Slide 69: International Business is Growing Organically
International Business is Growing Organically Evergreen growth target 6.0%
Slide 70: International Net Sales Composition
International Net Sales Composition 2018 International Net Sales: $710 million Total Export _ Brazil 2%
Slide 71: 2018 Sources of International Organic Growth
2018 Sources of International Organic Growth Subsidiaries: +4.3% wAGh te Export Markets: +16.0% a)
Slide 72: Fuel for Growth: Subsidiaries
Fuel for Growth: Subsidiaries Sales: Exceed $510 MM Enabled by: 1. Brand Expansion — OxiClean Ultra Gel, VMS, Batiste... 2. Acquisition Acceleration - Waterpik 3. Pricing 72
Slide 73: Fuel for Growth: Asia
Fuel for Growth: Asia Sales: Exceed $90MM for the first time Enabled by: Pes a) 1. DKSH distribution expansion SE Asia ©4 2. China reboot — Jahwa partnership launch in Q1 2019 "4
Slide 74: Building Global Capabilities: Recent Accomplishments
Building Global Capabilities: Recent Accomplishments Local teams Doubled our staff in Built DIC capability established in Singapore and in Europe and Shanghai and Taiwan Panama Australia f tie | Launched New Direct Creating Localized Subsidiary in Germany Marketing content 74
Slide 75: Committed to 6% Organic Growth
Committed to 6% Organic Growth * RUnway for existing brands tT * Grow acquired brands Toppik Viviscal Anusol’ waterpik ¢ Exports grow double digits wa (i> ¢« Investments in SE Asia & China Ge 75
Slide 76: Animal Productivity Story
06 Animal Productivity STOry
Slide 77: Specialty Products Evergreen Target: 5%
Specialty Products Evergreen Target: 5% | 5% Specialty Products WF oe 0;
Slide 78: Source of Specialty Product Growth
Source of Specialty Product Growth 6% Animal Productivity wes ev 5% 7 3% Bulk Chemicals ge
Slide 79: Humans are consuming resources faster than we are replacing them
Humans are consuming resources faster than we are replacing them. 79
Slide 80: Consumers Drive Alternatives to Traditionally Raised Livestock
Consumers Drive Alternatives to Traditionally Raised Livestock Consumers Retailers Farmers * no antibiotics ever * no added hormones * no chemicals added © 80
Slide 81: Natural Solutions
Slide 82: Acquisitions Created a More Balanced Business
Slide 83: ...and an International Presence
Slide 84: Positioned for 5% Organic Growth
Slide 85: How We Run the Company
Slide 86: We Have FIVE Operating Principles
Slide 87: Key Gross Margin Growth Drivers
Slide 88: Incentive Compensation Directly Linked to TSR
Slide 89: All CHD Employees Focus on Gross Margin
Slide 90: Friend of the Environment
Slide 91: Sustainability Goals
Slide 92: Water
Slide 93: Solid Waste
Slide 94: Air
Slide 95: ESG Recognition
Slide 96: Financials
Slide 97: Evergreen Model
Slide 98: Evergreen Model – Organic Sales
Slide 99: Full Year 2018 Highlights
Slide 100: 2019 Outlook
Slide 101: 2019: 7-9% EPS Growth
Slide 102: 2019 Organic Sales Outlook
Slide 103: Gross Margin Expansion in 2019
Slide 104: Being the leading brand gives us the ability to take price
Slide 105: Commodities & Distribution Costs Continue to Rise
Slide 106: CHD Consistent Solid Organic Sales Growth
Slide 107: Focus on Gross Margin
Slide 108: Marketing Spend
Slide 109: Superior SG&A Management
Slide 110: SG&A Mostly Flat Excluding Acquisition Amortization
Slide 111: Consistent Strong Adjusted EPS Growth
Slide 112: Strong Adjusted Margin Expansion
Slide 113: Best in Class FCF Conversion
Slide 114: Cash Conversion Cycle
Slide 115: Strong Balance Sheet
Slide 116: Prioritized Uses of Free Cash Flow
Slide 117: Significant Financial Capacity
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Church & Dwight — Consumer Analyst Group of New York (CAGNY) 2019 on 6ix