Clorox Company (the) · NYSE:CLX
Clorox Company (the) — The Clorox Company — 32nd Annual Bernstein Strategic Decisions Conference 2016
22 slides from Clorox Company (the)'s conference presentation, Jun 2, 2016
Slide 1: 32nd Annual Strategic Decisions Conference
32nd Annual Strategic Decisions Conference Benno Dorer – Chief Executive Officer Steve Robb – Chief Financial Officer June 2nd, 2016
Slide 2: 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 3: Key Messages
Key Messages • Strategy 2020 is continuing to produce strong shareholder returns • Strong progress on Strategy Accelerators and investments in profitable growth • Long-term investment case remains solid
Slide 4: Advantaged Portfolio: Over 80% of Sales From #1 or #2 Share Brands
Advantaged Portfolio Over 80% of Sales From #1 or #2 Share Brands International: 19% FY15 Company Sales: $5.7B Cleaning : 32% Latin America – 12% Home Care – 17% Canada – 3% Laundry – 10% Australia / NZ – 2% International Professional – 5% Rest of World – 2% 19% Cleaning 32% Lifestyle: 17% Lifestyle
Slide 5: Advantaged Portfolio: Big Share Brands in Mid-Sized Categories
Advantaged Portfolio Big Share Brands in Mid-Sized Categories Clorox Smaller 23% Players 33% Clorox is ~3X Private the size of next Competitor E Label 3% 19% branded competitor Competitor D 4% Competitor C Competitor B Competitor A 5% 5% 8% Source: IRI Infoscan Data - Total U.S. Multi-Outlet (Food/D
Slide 6: Advantaged Portfolio: Supported by Consumer Megatrends
Advantaged Portfolio Supported by Consumer Megatrends Health & Wellness Sustainability MEGA TRENDS Fragmentation Affordability
Slide 7: Advantaged Portfolio: Driving Significant Synergies
Advantaged Portfolio Driving 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 sa
Slide 8: Strategy Accelerators Drive Profitable Growth
Strategy Accelerators → Drive Profitable Growth
Slide 9: Strong Progress Across Strategy Accelerators
Strong Progress Across Strategy Accelerators New, Digital-Led Cutting Speed to Market by 50% Creative Agency Partners Investing Behind Growth FY16 Record-High Engagement Brands to Accelerate Top-line
Slide 10: Strong U.S. Category Growth & Share Momentum
Strong U.S. Category Growth & Share Momentum 0.4 Clorox Share & Category Performance 4% 0.3 (Last 3 years) 3% 0.2 2% Category % Change 0.1 1% $ Share Chg - 0% (0.1) -1% (0.2) -2% (0.3) -3% (0.4) -4% (0.5) -5% Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16
Slide 11: Increasing Investments in Profitable Growth
Increasing Investments in Profitable Growth Focus on Core Increased Investments in Demand Innovation Investment
Slide 12: Strong Product & Commercial Innovation
Strong Product & Commercial Innovation Glad with Clorox Clothes Clorox Antimicrobial (International) Burt’s Natural Lipsticks Clorox Wipes with Micro-Scrubbers Fresh Step with Stephen Curry Brita Infinity Febreze Partnership “Connected” Pitcher Hidden Valley with Greek Yogurt Clorox Bleach Crystals
Slide 13: FY16 YTD Performance (Q3)
FY16 YTD Performance (Q3) YTD FY16 Vs. Year Ago +2% Sales $4.2B (+5% FX Neutral) EBIT Margin 19.1% +190 bps Diluted EPS $3.67 +17% (cont. ops) EBIT (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income & interest expense.
Slide 14: FY16 Outlook
FY16 Outlook Based on May 3rd Earnings Call • Categories: +1% to +2% Sales • Innovation: +3pts +1% to +2% • FX: about -3pts • Trade/Other: Flat • Gross Margin: about +150bps EBIT Margin • Selling & Admin: about 14% of Sales about +50bps • Advertising & Sales Promotion: about 10% of Sales Diluted EPS
Slide 15: Renew Life Acquisition
Renew Life Acquisition • Closed May 2, 2016 • Purchase Price – $290M (2.5x Sales) • Calendar 2015 Sales – About $115M • #1 Brand in probiotics and herbal cleansing products in Natural Channel Source: SPINS with Vitamin Shoppe, IR MULO 52 weeks sending Nov 29, 2015, and Whole Foods 52 weeks ending No
Slide 16: Renew Life: An Attractive Category
Renew Life: An Attractive Category +15% growth expected from probiotic segment Two-thirds of US consumers experience digestive health issues 50% of purchases are based on a Doctor recommendation Source: Mintel Group, Ltd. (2015), Estimates based on Mintel (2015), Nutrition Business Journal (2014), a
Slide 17: Renew Life: Strong Strategic Fit
Renew Life: Strong Strategic Fit Health & US Centric Clear Plan for Wellness Value Creation
Slide 18: Areas We Are Watching Carefully
Areas We Are Watching Carefully • Expect an improving, but material impact from F/X of about -2pts in FY17 • Starting in Q4 FY16, we expect gross margins to expand at a slower rate due to less commodity benefit and continued trade investment • Consistent with Strategy 2020, expect EBIT Margin to exp
Slide 19: 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 to +5pts company company growth company growth growth Annual EBIT Margin Improvement: +25 to +50 bps Annual Free
Slide 20: Long-Term Investment Case Remains Solid
Long-Term Investment Case Remains Solid • Investing behind leading brands to grow categories and share − 3%+ annual growth from innovation − Advertising projected at about 10% of Sales in FY16 • Margin improvement opportunities continue to exist − Strong cost savings track record − Driving SG&A to b
Slide 21: Strong Shareholder Return
Strong Shareholder Return Total Shareholder Return TSR % 20 Year Ending 3/31/2016 1,000 900 CLOROX 869 800 Peer 831 700 600 500 400 S&P500 359 300 200 100 0 Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar 96 98 00 02 04 06 08 10 12 14 16 CLX S&P 500 Peer Companies Average Peer includes 13 companies: CPB
Slide 22: Key Messages
Key Messages • Strategy 2020 is continuing to produce strong shareholder returns • Strong progress on Strategy Accelerators and investments in profitable growth • Long-term investment case remains solid
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