Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — Barclays Global Consumer Staples Conference 2023
106 slides from Church & Dwight's conference presentation, Sep 5, 2023
Slide 1: Church & Dwight Co., Inc. Barclays Global Consumer Staples Conference 2023
CHURCH & DWIGHT CO., INC. Barclays Global Consumer Staples Conference 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: Agenda
Agenda Who We Are and Why We Are Winning Financials Category Insights and Trends International Story Specialty Products Division How We Run the Company
Slide 4: Who We Are and Why We Are Winning
Matt Farrell Chairman, President and Chief Executive Officer WHO WE ARE AND WHY WE ARE WINNING W h o W e Ar e a n d W h y W e Ar e W i n n i n g 4
Slide 5: Historical Total Shareholder Return
Historical Total Shareholder Return 10 YEAR: 5 YEAR: 3 YEAR: 2022: 2023 YTD*: 13.3% 11.4% 5.9% (20.4%) 19.4% *2023 YTD is through September 1, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n i n g 5
Slide 6: Evergreen Model
Evergreen Model Organic Sales +3% Gross Margin +25 bps Marketing FLAT SG&A -25 bps Operating Margin +50 bps EPS Growth +8% W h o W e Ar e a n d W h y W e Ar e W i n n i n g 6
Slide 7: Reported Sales Growth: 10 Year History
Reported Sales Growth: 10 Year History 14.0% 12.0% +8.0% 10.0% 10 Year Average: 8.0% 6.3% 6.0% 4.0% 2.0% 0.0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Outlook as of July 28, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n i n g 7
Slide 8: Organic Sales Growth: 10 Year History
Organic Sales Growth: 10 Year History 10.0% 9.0% 8.0% 7.0% +5.0% 6.0% 10 Year Average: 5.0% 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 directl
Slide 9: Power Brands
FIRST RESPONSE VheraBreath POWER BRANDS
Slide 10: 14 Power Brands
more than 85% of sales & profits are represented by these 14 POWER BRANDS
Slide 11: Church & Dwight's Business Segments
CHURCH & DWIGHT’S Business Segments 2023E Net Sales 77% Domestic ~$5.8B 17% International 6% Specialty Products Division Outlook as of July 28, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n i n g 11
Slide 12: Product Portfolio of Both Value and Premium Products
Product Portfolio of Both Value and Premium Products 40% 60% Value Premium W h o W e Ar e a n d W h y W e Ar e W i n n i n g 12
Slide 13: We Have a Winning Formula
We Have a Winning Formula 1. A Balanced And Diversified Portfolio 2. Low Private Label Exposure 3. Strong and Consistent Innovation 4. We are an Acquisitive Company W h o W e Ar e a n d W h y W e Ar e W i n n i n g 13
Slide 14: A Balanced and Diversified Portfolio
1. A Balanced and Diversified Portfolio 6% SPD 46% Household 2023E 48% Personal Care Outlook as of July 28, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n i n g 14
Slide 15: Low Private Label Exposure
2. Low Private Label Exposure Weighted Average Private Label Share of Our Categories 20% 18% Private Label 16% Consistently 14% ~12% 12% 10% 8% 6% 4% 2% 0% 2017 2018 2019 2020 2021 2022 2023E Source: Nielsen Total U.S. AOC Outlook as of July 28, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n i n g
Slide 16: Private Label Exposure
Private Label Exposure PREGNANCY TEST KITS BAKING SODA GUMMY VITAMINS 50% 30% 20% 40% 25% 15% 20% 30% 15% 10% 20% 10% 5% 10% 5% 0% 0% 0% TOOTHACHE CLUMPING LITTER MOUTHWASH 30% 15% 15% 20% 10% 10% 10% 5% 5% 0% 0% 0% Source: Circana thru 6/25/23 Outlook as of July 28, 2023 W h o W e Ar e a n d W h y
Slide 17: Strong and Consistent Innovation
3. Strong and Consistent Innovation W h o W e Ar e a n d W h y W e Ar e W i n n i n g 17
Slide 18: We are an Acquisitive Company
4. We are an Acquisitive Company Net Sales ($ Billions) $5.8 $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. Outlook as of July 28, 2023 W h o W e Ar e a n d W h y W e Ar e W i n n
Slide 19: Acquired 13 of 14 Power Brands Since 2001
Acquired 13 of 14 Power Brands Since 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2001 ACQUIRED 2005 ACQUIRED 2006 ACQUIRED 2008 #1 CONDOM #1 EXTREME #2 PREGNANCY #1 DEPILATORY #2 BATTERY #1 LAUNDRY #1 ORAL CARE VALUE LAUNDRY TEST KIT POWERED ADDITIVE PAIN RELIEF DETERGENT TOOTHBRUSH ACQU
Slide 20: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily #1 High growth and Asset Leverage C&D Deliver or #2 share high margin light manufacturing, sustainable brands brands that are logistics and competitive fast moving purchasing advantage consumables W h o W e Ar e a n d W h y W e Ar e W i n n i n g 20
Slide 21: Entering Two More Billion Dollar Categories
Entering Two More Billion Dollar Categories Category size ($ Billions) Liquid Laundry Detergent $6.7 Gummy Vitamins $4.0 Toothpaste $4.0 Clumping Litter $2.7 Unit Dose $2.3 Mouthwash $2.0 Scent Boosters $1.3 Acne Treatments $1.3 Sources: Circana and Company data W h o W e Ar e a n d W h y W e Ar e W
Slide 22: Our Recent Acquisitions Have Room to Run
Our Recent Acquisitions Have Room to Run Acquired December 2021 • #5 most loved brand by Gen Z • New distribution +Waterpik Hygienist Detailing + International Expansion = Big Growth Runway • Doubling distribution since acquisition Source: Numerator W h o W e Ar e a n d W h y W e Ar e W i n n i n g
Slide 23: Our Recent Acquisitions Have Room to Run
Our Recent Acquisitions Have Room to Run Acquired October 2022 • #1 most loved brand by Gen Z • New distribution + International Expansion = Big Growth Runway • Tripling distribution since acquisition Source: Numerator W h o W e Ar e a n d W h y W e Ar e W i n n i n g 23
Slide 24: 14 Power Brands Today, 20 Tomorrow
14 Power Brands Today, 20 Tomorrow Net Sales ($ Billions) $6.0 $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 a
Slide 25: Financials
Rick Dierker Chief Financial Officer and Head of Business Operations FINANCIALS Financials 25
Slide 26: Evergreen Model
Evergreen Model Organic Sales +3% Gross Margin +25 bps Marketing FLAT SG&A -25 bps Operating Margin +50 bps EPS Growth +8% Financials 26
Slide 27: Outlook Progression
Outlook Progression FY OUTLOOK FY OUTLOOK FY OUTLOOK (as of February 3) (as of April 27) (as of July 28) Reported Sales Growth 5-7% 6-7% ~8% Organic Sales Growth 2-4% 3-4% ~5% Gross Margin +100 to +120 bps +120 bps +200 bps Adjusted EPS 0-4% 2-4% ~6% Cash from Operations $925MM $950MM $1B Financials
Slide 28: Organic Sales Growth: 10 Year History
Organic Sales Growth: 10 Year History 10.0% 9.0% 8.0% 7.0% +5.0% 6.0% 10 Year Average: 5.0% 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 directl
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 1H 2H 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Outlook as of July 28, 2023 Financials 29
Slide 30: 2023 Focus On Gross Margin
2023 Focus On Gross Margin 160 bps delta to 2019 levels 45.5% +200 bps 45.2% 44.4% 43.9% 43.6% 41.9% 2018 2019 2020 2021 2022 2023E Outlook as of July 28, 2023 Financials 30
Slide 31: Return To Historical Inflation Will Drive Continued Margin Expansion
Return To Historical Inflation Will Drive Continued Margin Expansion 10.0% 9.0% COVID average 8.0% 7.0% % of total COGS 6.0% 5.0% 4.0% 3.0% Historical average 2.0% 1.0% 0.0% 2013 - 2019 2020 - 2022 2023E Outlook as of July 28, 2023 Financials 31
Slide 32: Ramping Back Marketing Spend in 2023
Ramping Back Marketing Spend in 2023 +100 bps 12.1% 11.7% 11.8% 11.0% represents $60MM YOY 11.1% 11.0% increase in marketing 10.0% investment 2018 2019 2020 2021 2022 2023E Outlook as of July 28, 2023 Financials 32
Slide 33: Consistent Strong Adjusted EPS Growth
Consistent Strong Adjusted EPS Growth +6% $3.15 $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. O
Slide 34: Best In Class FCF Conversion
“Best In Class” FCF Conversion 10 Year Average: 119% 128% 129% 131% 126% 126% 125% 123% 116% 112% 108% 97% Elevated CAPEX 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. Financials 34
Slide 35: Cash Conversion Cycle: Tight Control Of Working Capital
Cash Conversion Cycle: Tight Control Of Working Capital Drives Cash Conversion Cycle Improvement 52 Elevated 40 inventories 34 36 32 32 27 21 22 22 18 18 19 14 days 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Financials
Slide 36: 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 reconcil
Slide 37: Significant Financial Capacity
Significant Financial Capacity (in $millions) Cash & Cash $270 Equivalents on Hand Leverage Capacity $3,300 Acquisition • 2022 TTM Bank EBITDA = $1,308M Power: $3.6B • Example: Acquisition EBITDA multiple of 12x Current Debt Outstanding ~$2,675 *as of December 31, 2022 Financials 37
Slide 38: 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 Financials 38
Slide 39: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 4.3% 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 40: Ensuring A Steady Supply For Our Categories
Ensuring A Steady Supply For Our Categories 2021 - 2024 LLD Litter VMS Financials 40
Slide 41: 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 Financials 41
Slide 42: Category Insights and Trends
Barry Bruno EVP, CMO & U.S. President CATEGORY INSIGHTS AND TRENDS Category Insights and Trends 42
Slide 43: Liquid Laundry Detergent
LIQUID LAUNDRY DETERGENT LLD CATEGORY $ % Chg vs. YAG $ % Chg vs. YAG 2023 2023 10.3% 9.2% 3.7% 2.8% Q1 Q2 Q1 Q2 LLD category growing +~3% while ARM & HAMMER consumption is 3X at +~9% Source: Circana Data
Slide 44: Fabric Care Category: Migration to Value Continues
Fabric Care Category: Migration to Value Continues Liquid Laundry Detergent - Value vs Premium Dollar Share Change vs YA Total US - Multi Outlet 3.0 Value 2.0 1.4 0.2 1.0 0.0 1.2 -1.0 -2.0 -2.2 Premium -3.0 -4.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2022 2023 Source
Slide 45: Arm & Hammer Laundry: Converting and Retaining Consumers
ARM & HAMMER Laundry: Converting and Retaining Consumers Over the Long Term ARM & HAMMER Liquid Laundry Detergent Market Share 16.0 14.4 14.0 12.0 10.0 8.0 6.0 5.0 4.0 2.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD Category Insights and Trends 4
Slide 46: Give It The Hammer
“Give It The Hammer” The Right Message for Today
Slide 47: Cat Litter
CAT LITTER LITTER CATEGORY $ % Chg vs. YAG $ % Chg vs. YAG 2023 2023 14.2% 12.4% 13.1% 12.2% Q1 Q2 Q1 Q2 Strong category growth fueled in part by double-digit ARM & HAMMER consumption Source: Circana Data
Slide 48: VMS
VMS ADULT GUMMY CATEGORY $ % Chg vs. YAG $ % Chg vs. YAG 1.5% 0.6% 1.5% -6.4% -4.9% -8.8% -9.4% -20.6% Q3 22 Q4 22 Q1 23 Q2 23 Q3 22 Q4 22 Q1 23 Q2 23 Category has grown 2x vs. pre-Covid and has now stabilized. Vitafusion struggling in 2023 as a consequence of 2022 supply issues. Source: Circana Dat
Slide 49: Vitafusion Has Returned to Healthy Supply
Vitafusion Has NEW Advertising & Packaging Returned to Healthy Supply New brand positioning has led to: Vitafusion Case Fill • New Advertising Campaign • New & Higher-Impact Display 95% 98% Program 81% 77% 77% 65% 54% Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2022 2022 2022 2023 2023 2023 Q3 QTD has achieved highes
Slide 50: Slide 50
Slide 51: Alcohol-Free Mouthwash
ALCOHOL-FREE MOUTHWASH ALCOHOL-FREE MOUTHWASH CATEGORY $ % Chg vs. YAG $ % Chg vs. YAG 2023 2023 103.6% 71.3% 18.6% 20.5% Q1 Q2 Q1 Q2 Strong category growth fueled primarily by explosive TheraBreath consumption … Source: Circana Data
Slide 52: TheraBreath became #1 Alcohol-Free Mouthwash
In August TheraBreath became the #1 Alcohol-Free Mouthwash! Total US - Dollar Share - Alcohol-Free Segment 33.04 29.79 ~19pt share 28.07 Former gap at Category acquisition Leader 14.11 Source: Circana Rolling 4/4/5 Weeks W/E 8.20.23 Category Insights and Trends 52
Slide 53: TheraBreath Has Grown Distribution +50% YoY
TheraBreath Has Grown Distribution +50% YoY with Plenty of Runway Ahead Total Points of Distribution 2.6x 2.2x 1.8x 0.9x Total Points of Distribution 2,026.9 1,723.1 1,417.8 790.5 745.8 TDP Change vs YA +2.8% -8.4% +7.7% +52.9% -0.1% Source: IRI, Total US – Multi Outlet, L13W W/E 07/30/2023 Category
Slide 54: Acne Treatment
ACNE TREATMENT ACNE TREATMENT CATEGORY $ % Chg vs. YAG $ % Chg vs. YAG 2023 2023 66.8% 44.6% 20.0% 20.9% Q1 '23 Q2 '23 Q1 '23 Q2 '23 Strong category growth fueled primarily By HERO consumption … Source: Circana Data
Slide 55: Hero Has Grown Distribution +200% YoY
Hero Has Grown Distribution +200% YoY … Total Points of Distribution 4.7x 1.9x 1.3x 0.8x Neutrogena Biore Clean & Clear Hero Clearasil Total Points of Distribution 1,967 822 527 421 316 TDP Change vs YA +9.7% -5.2% -15.3% +199.6% +8.1% Source: Circana Total US MULO – L13 w/e 7/30/23 Category Insight
Slide 56: Hero Cosmetics Room to Keep Running
HERO Cosmetics Room to Keep Running HHP June 2023 20.3% 11.5% 5.6% Hero Acne Patch Acne Treatments Source: Numerator Data
Slide 57: Slide 57
Slide 58: Innovation
Innovation
Slide 59: Power Sheets
POWER SHEETS laundry detergent No drips. No spills. No plastic bottles. Just a POWERFUL CLEAN. Available on Amazon and Walmart.com
Slide 60: Slide 60
Slide 61: 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 Category Insights and Trends 61
Slide 62: Micropoint XL for Blemishes
Micropoint XL for Blemishes • Featuring over 1,000 dissolving Micropoints • Which target early-stage blemish clusters • Specially contoured to fit jawline, cheeks and chin Category Insights and Trends 62
Slide 63: Digital Acceleration
Digital Acceleration
Slide 64: We Continue to Grow Online & Win Share
WE CONTINUE TO GROW ONLINE & WIN SHARE % OF NET SALES #1 BRANDS 18% 2% 2016 2017 2018 2019 2020 2021 2022 Q2 2023
Slide 65: Connecting with Consumers & Building Capabilities
CONNECTING WITH CONSUMERS & BUILDING CAPABILITIES ONLINE-FIRST USING SOCIAL BUILDING LAUNCHES AS A PRIMARY TOOL INTERNAL CAPABILITIES ~75% of our media spend is now digital, driven by CTV, Retail Media & Social
Slide 66: International Story
International Story
Slide 67: International Organic Sales Evergreen Target
International Organic Sales Evergreen Target: +6% 2% United States 3% 6% International 5% Specialty Products International Story 67
Slide 68: International Today: Sales By GMG + Subsidiaries
International Today: Sales By GMG + Subsidiaries 28% Canada 2023E 35% Net Sales Global Markets ~$950M 22% Europe Group 8% 7% Australia Mexico Outlook as of July 28, 2023 International Story 68
Slide 69: Subsidiaries & Global Markets Group Offices
6 Subsidiaries & 5 Global Markets Group Offices International Story 69
Slide 70: Historical Organic Performance vs. Evergreen Target
Historical Organic Performance vs. Evergreen Target 12.0% 10.0% 10 Year Average: 8.0% 7.0% 6.0% Evergreen Target: 4.0% 6.0% 2.0% 0.0% 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 directly comparable GAA
Slide 71: 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 International Story 71
Slide 72: 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 40% 60% AVG% CHURCH & DWIGHT 83% 17% International Story 72
Slide 73: Committed To International Organic Growth
Committed To International Organic Growth • Long international runway for existing brands • Leverage newly acquired brands • GMG fueled by Emerging Markets • Investments in Resources & Capabilities International Story 73
Slide 74: Specialty Products Division
Specialty Products Division
Slide 75: SPD Organic Sales Evergreen Target
SPD Organic Sales Evergreen Target: 5% 2% Domestic 3% 6% International 5% Specialty Products Specialty Products Division 75
Slide 76: Specialty Products Division
Specialty Products Division 69% Animal Nutrition 2023E Net Sales ~$350M 31% Specialty Chemicals Outlook as of July 28, 2023 Specialty Products Division 76
Slide 77: Animal Productivity: Pre-Biotics, Pro-Biotics, & Food Processing Safety
Animal Productivity: Pre-Biotics, Pro-Biotics, & Food Processing Safety Specialty Products Division 77
Slide 78: SPD Organic Growth
SPD Organic Growth 6.0% Evergreen 5.0% Target: 4.0% 5.0% 3.0% 2.0% • Return of low cost imports 1.0% • Weakening dairy and poultry 0.0% markets -1.0% -2.0% -3.0% -4.0% FY22 FY23E Outlook as of July 28, 2023 Specialty Products Division 78
Slide 79: Positioned For Organic Growth
Positioned For Organic Growth • Trusted brand • Aligned with consumer trends • Diversified to multiple species • Global growth runway Specialty Products Division 79
Slide 80: How We Run the Company
How We Run the Company
Slide 81: Diversified Portfolio
Diversified Portfolio FABRIC CARE HOME HEALTH & HAIR & SKIN PERSONAL WATERPIK INTERNATIONAL CARE WELL-BEING CARE CARE How We Run the Company 81
Slide 82: 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 83: 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 84: 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 85: Church & Dwight's Environmental Heritage
CHURCH & DWIGHT’s Environmental 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 ch
Slide 86: 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 How We Run the Company 86
Slide 87: 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 2023 CCC B BB BBB A AA AAA How We Run the Company 87
Slide 88: 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 89: Industry Leading Revenue Per Employee
Industry Leading Revenue Per Employee $1,020 Revenue per Employee (in ‘000s) CHD CLOROX PG ENERGIZER COLGATE KIMBERLY RECKITT NEWELL EDGEWELL Source: Most recent 10K filings How We Run the Company 89
Slide 90: Simple Compensation Structure
Simple Compensation Structure Gross Net Margin Revenue Expansion • Bonuses are tied 100% to business results. • Management is required to be heavily Cash invested in company stock. From EPS Operations Strategic Initiatives How We Run the Company 90
Slide 91: All Employees Focus On Gross Margin
All CHURCH & DWIGHT Employees Focus On Gross Margin 20% Gross margin is of all employees’ annual bonus. How We Run the Company 91
Slide 92: Key Gross Margin Growth Drivers
Key Gross Margin Growth Drivers Good to Supply Great Cost Chain Optimization Optimization Acquisition New Synergies Products How We Run the Company 92
Slide 93: 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 94: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 4.3% 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 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E
Slide 95: We Have Five Operating Principles
We Have Five Operating Principles 1 2 3 4 5 Leverage Friend of the Leverage Leverage Leverage Brands Environment People Assets Acquisitions Brands consumers Long history of Highly productive We strive to be Good shareholder love around the being a friend to people in a place asset light returns beco
Slide 96: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales ($ Billions) $5.8 $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. Outlook as of July 28, 2023 How We Run the Company 96
Slide 97: Slide 97
Slide 98: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures
Slide 99: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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-GAAP financial measures should not be considered i
Slide 100: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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
Slide 101: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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-
Slide 102: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures 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 $ - $ - $ - $
Slide 103: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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 dete
Slide 104: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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
Slide 105: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial 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
Slide 106: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Forecasted Reported and Organic Sales Reconciliation Forecasted Adjusted Diluted Earnings Per Share Reconciliation Reconciliations 106
Church & Dwight — Barclays Global Consumer Staples Conference 2023 on 6ix