Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — dbAccess Global Consumer Conference 2024
77 slides from Church & Dwight's conference presentation, Jun 4, 2024
Slide 1: Church & Dwight Co., Inc. dbAccess Global Consumer Conference 2024
CHURCH & DWIGHT CO., INC. dbAccess Global Consumer Conference 2024
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: Who We Are
Who We Are Matt Farrell Chairman, President & Chief Executive Officer 3
Slide 4: Historical Total Shareholder Return
Historical Total Shareholder Return 10 YEAR 5 YEAR 3 YEAR 2023 2024 YTD 12.6% 8.8% 4.0% 18.7% 13.8% 2024 YTD is through May 31, 2024 dbAccess Global Consumer Conference 4
Slide 5: Evergreen Model
Evergreen Model Domestic: 3% Organic Net Sales +4% International: 8% SPD: 5% Gross Margin +25 to +50 bps Marketing Constant %, Higher YOY $ SG&A (25) to 0 bps Operating Margin +50 bps EPS Growth +8% dbAccess Global Consumer Conference 5
Slide 6: Net Sales Growth: 10 Year History
Net Sales Growth: 10 Year History 12.3% 9.8% 9.2% 8.1% 10 Year Average: 6.0% 4% to 5.1% 5% 6.3% 3.2% 3.6% 2.9% 2.9% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E Outlook as of May 2, 2024 dbAccess Global Consumer Conference 6
Slide 7: Power Brands
POWER BRANDS 7
Slide 8: 7 Power Brands
more than 70% of sales & profits are represented by these 7 POWER BRANDS 8
Slide 9: Church & Dwight's Business Segments
Church & Dwight’s Business Segments 78% 17% 2023 Domestic International Total Company Net Sales $5.9B 5% Specialty Products Division dbAccess Global Consumer Conference 9
Slide 10: A Balanced and Diversified Portfolio
A Balanced and Diversified Portfolio 5% SPD 46% Household 2023 49% Personal Care dbAccess Global Consumer Conference 10
Slide 11: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $5.9 $ Billions $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. dbAccess Global Consumer Conference 11
Slide 12: 7 Power Brands Today and More to Come
7 Power Brands Today and More to Come Net Sales $7.0 $ Billions $6.0 7 $5.0 6 $4.0 5 $3.0 4 3 $2.0 2 $1.0 $0.0 1 1846 2006 2011 2012 2017 2021 2022 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 2023 dbAccess Global C
Slide 13: Financials
Financials Rick Dierker Chief Financial Officer & Head of Business Operations 13
Slide 14: FY 2024 Financial Outlook
FY 2024 Financial Outlook Reported Sales Growth 4% to 5% Domestic: 3% to 4% Organic Sales Growth 4% to 5% International: 8% SPD: 4% to 5% Gross Margin +75 bps Marketing 11% Adjusted SG&A FLAT Adjusted EPS Growth 8% to 9% Cash from Operations $1.05 B+ Organic sales and adjusted EPS are non-GAAP measu
Slide 15: Organic Sales Growth: 10 Year History
Organic Sales Growth: 10 Year History 9.6% 4% to 10 Year 5.3% 5% Average: 3.5% 4.3% 4.4% 4.3% 4.2% 3.6% 3.2% 2.7% Evergreen Target: 1.4% 4.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E Organic sales is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most directly c
Slide 16: 2024 Focus On Gross Margin
2024 Focus On Gross Margin Evergreen Target: +25 to +50 bps +75 bps 45.5% ~60 bps remaining to 44.1% get back to 2019 gross margin levels 2018 2019 2020 2021 2022 2023 2024E Outlook as of May 2, 2024 dbAccess Global Consumer Conference 16
Slide 17: 2024 Marketing Spend Target
2024 Marketing Spend Target 11.7% 11.8% 12.1% 11.1% 10.9% ~11.0% 10.0% 2018 2019 2020 2021 2022 2023 2024E Outlook as of May 2, 2024 dbAccess Global Consumer Conference 17
Slide 18: Consistent Strong Adjusted EPS Growth
Consistent Strong Adjusted EPS Growth 8% to 9% midpoint: $3.44 $3.17 $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% -1.7% 6.7% 2016 2017 2018 2019 2020 2021 2022 2023 2024E Note: Adjusted EPS growth is a non-GAAP measure. Refer to the Appendix for a reconciliation to the m
Slide 19: 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 dbAccess Global Consumer Conference 19
Slide 20: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 3.8% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 1.8% ~2.0% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $224 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E
Slide 21: Why We Are Winning
Why We Are Winning 21
Slide 22: We Have a Winning Formula
We Have a Winning Formula A balanced Low private Online and diversified label success portfolio exposure Strong and Acquisitive consistent company innovation 22
Slide 23: Product Portfolio of Both Value and Premium Products
Product Portfolio of Both Value and Premium Products 37% 2023 63% Value Premium dbAccess Global Consumer Conference 23
Slide 24: Low Private Label Exposure
Low Private Label Exposure Weighted Average Private Label Share of Our Categories 16% 14% 12% Private Label 10% Consistently ~12% 8% 6% 4% 2% 0% 2018 2019 2020 2021 2022 2023 Source: Nielsen Total U.S. AOC dbAccess Global Consumer Conference 24
Slide 25: eCommerce Continues to Accelerate for our Brands
eCommerce Continues to Accelerate for our Brands % of Global Church & Dwight Consumer Net Sales 20% 2% 2016 2017 2018 2019 2020 2021 2022 2023 dbAccess Global Consumer Conference 25
Slide 26: Category Leading Innovation
Category Leading Innovation 26
Slide 27: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily High growth Asset Leverage Deliver #1 or #2 and high margin light C&D sustainable share brands that are manufacturing, competitive brands fast moving logistics and advantage consumables purchasing 27
Slide 28: U.S. Story
U.S. Story 28
Slide 29: US Domestic Sales Evergreen Target: +3%
US Domestic Sales Evergreen Target: +3% 3% United States 4% 8% International 5% Specialty Products dbAccess Global Consumer Conference 29
Slide 30: Consumer Domestic Organic Sales Performance
Consumer Domestic Organic Sales Performance We Are Leaders 10.7% In Growing Categories We Thrive In 5.7% Difficult Evergreen Environments 4.3% 4.0% Target: 3.0% 3.1% 3.6% 3.0% 2.0% Acquisitions 1.4% Have Room To 0.9% Run 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Organic sales growth is a non
Slide 31: Healthy, Growing Categories: 7 Power Brands
8 Healthy, Growing Categories: 7 Power Brands 2019 2020 2021 2022 2023 Laundry Clumping Litter Stain Fighters VMS Gummy Power Flossing Dry Shampoo Alcohol Free Mouthwash Acne Patch Source: Circana; Total US – MULO; Data through L52 WE12.31.23 dbAccess Global Consumer Conference 31
Slide 32: Market Shares and Innovation in our Major Categories
Market Shares and Innovation in our Major Categories 32
Slide 33: Mouthwash
TheraBreath. Mouthwash
Slide 34: TheraBreath Acquisition Still Has Lots Of Room To Run
TheraBreath Acquisition Still Has Lots Of Room To Run … Total Points of Distribution Household Penetration 2.8x 2.6x Mouthwash Category 2019 63.1% 1.4% 2020 65.7% 2.7% 2021 64.2% 3.2% 2022 61.8% 4.5% TDP Change vs YA -7.8% 3.5% 57.8% 2023* 63.4% 7.3% Source: Circana, Total US – Multi Outlet, WE12.31
Slide 35: TheraBreath: All Time Share High Achieved In Q1 2024
TheraBreath: All Time Share High Achieved In Q1 2024 #1 NON- Mouthwash Dollar Share ALCOHOL 16.0% all-time share high +45% +59% 2.6% 2019 2020 2021 2022 2023 Q1 2024 Source: Circana; Total MULO Total Mouthwash, L52 WE 3.24.2024 dbAccess Global Consumer Conference 35
Slide 36: Acne Treatment
Hero. Acne Treatment
Slide 37: Hero Acquisition Still Has Lots Of Room To Run
Hero Acquisition Still Has Lots Of Room To Run … Total Points of Distribution Household Penetration 3.7x Acne Treatment Category 2019 16.3% 0.2% 2020 19.3% 0.9% 2021 20.5% 2.8% 2022 20.3% 4.4% TDP Change vs YA -2.3% 204.0% -20.4% 2023* 21.9% 6.4% Source: Circana, Total US – Multi Outlet, WE12.31.202
Slide 38: Hero: All Time Share High Achieved In Q1 2024
Hero: All Time Share High Achieved In Q1 2024 #1 ACNE BRAND Total Acne Dollar Share 19.2% all-time share high 0.2% 2019 2020 2021 2022 2023 Q1 2024 Source: Circana; Total MULO Acne Treatment, L52 WE 3.24.2024 dbAccess Global Consumer Conference 38
Slide 39: International & Specialty Products
International & Specialty Products Michael Read President, Consumer International and Specialty Products 39
Slide 40: Consumer International
Consumer International 40
Slide 41: International Organic Sales Evergreen Target: +8%
International Organic Sales Evergreen Target: +8% 3% United States 4% 8% International 5% Specialty Products dbAccess Global Consumer Conference 41
Slide 42: International Sales By GMG & Subsidiaries
International Sales By GMG & 6 Subsidiaries 37% 27% Canada Global International Markets Net Sales Group 12% ~$1B UK 8% Mexico 7% 3% 6% Australia Germany France dbAccess Global Consumer Conference 42
Slide 43: GMG Continues to be the Fastest Grower
GMG Continues to be the Fastest Grower International sales has tripled GMG has doubled its importance in size since 2009 18% 37% GMG GMG 2009 2023 82% 63% Countries Countries dbAccess Global Consumer Conference 43
Slide 44: Investing in GMG Infrastructure across 5 regions
Investing in GMG Infrastructure across 5 regions • APAC (Singapore, 2016) • CHINA (Shanghai, 2017) • EA (London, 2018) • LATAM (Panama, 2018) • IME (Mumbai, 2021) dbAccess Global Consumer Conference
Slide 45: Geographic Expansion: International Runway Ahead
Geographic Expansion….International Runway Ahead % of % of U.S. Domestic International Sales Sales Top 10 CPG Company 41% 59% AVG% Church & Dwight 83% 17% dbAccess Global Consumer Conference 45
Slide 46: Brands Consumers Love That Travel The Globe
Brands Consumers Love That Travel The Globe U.S. Brand Expansion International OTC & Acquisition and Leveraging Personal Care Portfolio Acceleration Innovation dbAccess Global Consumer Conference 46
Slide 47: International Organic Sales Performance
International Organic Sales Performance Evergreen 9.2% Target: Our Brands Travel 8.6% 8.5% 8.8% 8.0% Well 7.8% 7.8% 5.0% Investing in GMG Infrastructure 2.8% Accelerating recent acquisitions 2017 2018 2019 2020 2021 2022 2023 Q1 2024 Organic sales growth is a non-GAAP measure. Refer to the Appendix
Slide 48: Specialty Products
Specialty Products 48
Slide 49: SPD Organic Sales Evergreen Target: +5%
SPD Organic Sales Evergreen Target: +5% 3% United States 4% 8% International 5% Specialty Products dbAccess Global Consumer Conference 49
Slide 50: Specialty Products Division
Specialty Products Division 55% 12% Animal Megalac 2023 Nutrition SPD Net Sales ~$321MM 33% Specialty Chemicals dbAccess Global Consumer Conference 50
Slide 51: Animal & Food Production
Animal & Food Production Delivers Gut Health Solutions & Maximizes Feed Efficiency dbAccess Global Consumer Conference 51
Slide 52: Animal Productivity: Growing International Presence
Animal Productivity: Growing International Presence % International Sales 17% +25% Net Sales Growth in 2023 <6% 2015 2023 dbAccess Global Consumer Conference 52
Slide 53: How We Run The Company
How We Run The Company 53
Slide 54: 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 55: 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 56: 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 57: Climate Is More Relevant Than Ever, Especially For Younger Consumers
Climate Is More Relevant Than Ever, Especially For Younger Consumers 67% make a sustainable planet their top priority. Datapoints shown for Gen Z Source: Pew Research Center, survey April 20-29, 2021; NCP survey, 2021 57
Slide 58: 1888: Promoting the Importance of Preserving the Environment
1888: Promoting the Importance of Preserving the Environment dbAccess Global Consumer Conference 58
Slide 59: Church & Dwight's Environmental Heritage
Church & Dwight’s Environmental Heritage 1888 1907 1970s 2017 2018 2021 2023 Company Company Sole sponsor of Partnering 100% of global Commitment Commenced introduces institutes the first Earth Day. with the Arbor electricity to Science projects for pro- use of Day demand offset Based Targets Scienc
Slide 60: Our ESG Score Remains High
Our ESG Score Remains High 2022 CCC B BB BBB A AA AAA 2023 CCC B BB BBB A AA AAA 2024 CCC B BB BBB A AA AAA dbAccess Global Consumer Conference 60
Slide 61: 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 62: Industry Leading Revenue Per Employee
Industry Leading Revenue Per Employee Revenue per Employee $1,020 (in ‘000s) CHD CLOROX PG Kenvue COLGATE KIMBERLY RECKITT NEWELL EDGEWELL Source: Most recent SEC filings dbAccess Global Consumer Conference 62
Slide 63: eCommerce Talent
eCommerce Talent % of Global Church & Dwight Consumer Net Sales 20% 2% 2016 2017 2018 2019 2020 2021 2022 2023 dbAccess Global Consumer Conference 63
Slide 64: Simple Compensation Structure
Simple Compensation Structure Net Revenue Bonuses are tied 100% to business results. Strategic Gross Initiatives Margin Management is required to Expansion be heavily invested in company stock. Cash EPS From Operations dbAccess Global Consumer Conference 64
Slide 65: All Church & Dwight Employees Focus On Gross Margin
All CHURCH & DWIGHT Employees Focus On Gross Margin Gross margin is 20% of all employees’ annual bonus. dbAccess Global Consumer Conference 65
Slide 66: Key Gross Margin Growth Drivers
Key Gross Margin Growth Drivers Good to Supply Chain Great Cost Optimization Optimization Acquisition New Products Synergies dbAccess Global Consumer Conference 66
Slide 67: 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 68: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 3.8% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 1.8% ~2.0% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $224 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E
Slide 69: 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 70: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $5.9 $ Billions $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. dbAccess Global Consumer Conference 70
Slide 71: Strong Fundamentals
1 Strong organic growth. 2024: 2 Meaningful gross margin expansion. Strong 3 Great new product pipeline. Fundamentals 4 Investing in International and E-commerce. Strong cash flow generation to fund 5 future acquisitions.
Slide 72: Slide 72
Slide 73: 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 74: 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 75: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2023 2022 2021 2000 2019 Adjusted SG&A Reconciliation SG&A - Reported 15.2% 20.8% 11.7% 12.1% 14.4% Brazil Charge 0.0% 0.0% 0.0% 0.0% -0.2% Flaw less Earnout Adjustment 0.0% 0.0% 1.9% 1.9% -0.2% Flaw less I ntangible Asset
Slide 76: 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 77: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2023 2022 2021 2020 2019 2018 2017 2016 Adjusted EPS Reconciliation EPS - Reported $ 3.05 $ 1.68 $ 3.32 $ 3.12 $ 2.44 $ 2.27 $ 2.90 $ 1.75 Pension Settlement Charge $ - $ - $ - $ - $ - $ - $ 0.12 $ - Brazil Charge $ - $ -
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