Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — CAGNY Conference 2015
186 slides from Church & Dwight's conference presentation, Feb 20, 2015
Slide 1: CAGNY Conference
CAGNY Conference February 20, 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements relating to, among other things, expected future financial and operating results, including earnings per share, reported net sales growth and organic sales growth, volume growth, including the effects of new products, gross
Slide 3: Opening Remarks
1. Opening Remarks Jim Craigie 2. “Top 10” TSR Drivers 3. FY2014 Results 4. 2015 Financial Outlook 5. Q&A Jim Craigie Matt Farrell Matt Farrell Jim Craigie / Matt Farrell
Slide 4: "Playing to Win" In 2015 With Aggressive But Achievable Plan
1. Excellent 2014 Results 2. Exiting 2014 With Strong Momentum 3. “Playing to Win” In 2015 With Aggressive But Achievable Plan 4. Low Exposure To International Headwinds 5. Returning Cash to Shareholders 6. Aggressively Pursuing Acquisitions 4
Slide 5: Opening Remarks
1. Opening Remarks Jim Craigie ( 2. “Top 10” TSR Drivers Jim Craigie 3. FY2014 Results Matt Farrell 4. 2015 Financial Outlook Matt Farrell 5. Q&A Jim Craigie / Matt Farrell
Slide 6: Our Investors Love Us
Ou Investors Love Us, Our Non-Investors Keep © Missing the Boat” CHD Investor Non-CHD Investor
Slide 7: Total Shareholder Return CAGR
TOTAL SHAREHOLDER RETURN* CAGR 3 Years 5 Years 10 Years 2014 (2012 - 2014) (2010 - 2014) (2005 - 2014) Church & Dwight 21.1% 22.1% 23.1% 18.1% S&P 500 11.4% 17.9% 13.0% 5.4% * Total Shareholder Return (TSR) is stock price appreciation plus dividends. 7
Slide 8: Total Shareholder Return CAGR Ranking
Total Shareholder Return CAGR 3 Year 5 Year 10 Year 2014A (2012-2014) (2010-2014) (2005 – 2014) Church & Dwight 21.1% 22.1% 23.1% 18.1% Ranking: #1 #1 #1 #1 Energizer 20.9% 20.3% 17.1% 10.5% Kimberly Clark 18.9% 21.9% 17.9% 10.1% Clorox 15.9% 20.0% 15.0% 9.0% P&G 15.4% 14.5% 11.9% 8.1% Reckitt 11.7%
Slide 9: Great History, But What About The Future?
, Great History, But What About The Future? _ 10 Reasons Why CHD Can Continue to Deliver Superior TSR Results!
Slide 10: "Top 10" TSR Drivers: 1. Resilient Portfolio
“Top 10” TSR Drivers me __ cc 1. Resilient Portfolio
Slide 11: CHD's Resilient Portfolio
CHD’s Resilient Portfolio "COC CHD’s Product and Geographic Portfolio Can Continue to Excel Despite Major Headwinds 1. Recession Resistant | 2. Relatively Minimal Exposure to Weakening Foreign Economies 3. Low Impact From Foreign Exchange Rates 11
Slide 12: Our Unique Product Portfolio Has Both Value and Premium Products
Pour Unique Product Portfolio Has Both Value and “oF Premium Products COC 60% |) 40% Premium “Value 12
Slide 13: Price vs. Premium Brands
Category Price vs. Premium Brands Laundry Detergent Fabric Softener Sheets Toothpaste Cleaners Vitamins 50-65% lower than Tide Over 50% lower than Bounce 50% lower than Crest / Colgate 45% lower than Scrubbing Bubbles 45% lower than One-A-Day gummies 13
Slide 14: Premium, Mid and Value Growth
+12.5% -0.3% -18.8 -18.9% Premium Mid Value Extreme Value Pre-2008 Recession vs. 52 Weeks Ending Dec 2014 Source: Nielsen Homescan Panel 52 W/E 6/28/08 vs. 52 Weeks Ending 12/27/14. 14
Slide 15: Household Penetration by Price Tier
52 Weeks Ending December 2014 60.0% % Household Penetration 50.0% 48% 40.0% 27% 30% 30.0% 20.0% 10.0% 0.0% Value Mid Premium Nielsen Homescan Panel : Value incl Extreme Value + PL, 52wks ending Dec 27, 2014 15
Slide 16: Laundry Detergent Dollar Share by Priced Tiers
% Laundry Detergent $ Share Priced Tiers 2009 2014 Premium 41.1% 42.0% Mid-Priced 28.9% 26.6% Value 26.6% 28.7% Private Label 3.5% 2.7% Source: C&D Custom Nielsen Scanning CY 2009 vs 52 wks end 12/27/14 16
Slide 17: Value Laundry Detergent Share
Phoenix Rem MF Brands 0.8% 4.9% Rem MF 2.0% Phoenix Sun Brands P&G 16.0% 1.9% 14.7% C&D C&D 46.6% Sun 9.8% 49.6% Henkel 31.5% Henkel 22.0% Source: C&D Custom Nielsen Scanning Database, $ Share, Value + Extreme Value (excl PL) FY 2009 vs 52 wks end 12/27/14 17
Slide 18: Dollar Share Laundry Detergent Manufacturers
Dollar Share Laundry Detergent Manufacturers 2009 2014 Change P&G 60.1% 59.8% (0.3 pts.) CHD 10.6% 14.2% +3.6 pts. Sun 14.7% 12.5% (2.2 pts.) Henkel 6.9% 6.3% (0.6 pts.) All Other 7.6% 7.3% (0.3 pts.) Source: C&D Custom Nielsen Scanning Database FY 2009 vs 52 wks end 12/27/14 18
Slide 19: CHD's Resilient Portfolio
-CHD’s Resilient Portfolio "COSC CHD’s Product and Geographic Portfolio Can Continue to Excel Despite Major Headwinds 1. Recession Resistant 2. Relatively Minimal Exposure to Weakening Foreign Economies 3. Low Impact From Foreign Exchange Rates 19
Slide 20: Sales by Geography
Sales Sales United United States States 84% 89% 20
Slide 21: CHD's Resilient Portfolio
CHD’s Resilient Portfolio "COSC CHD’s Product and Geographic Portfolio Can Continue to Excel Despite Major Headwinds 1. Recession Resistant 2. Relatively Minimal Exposure to Weakening Foreign Economies 3. Low Impact From Foreign Exchange Rates 21
Slide 22: Foreign Exchange Headwind on EPS
Foreign Exchange Headwind on EPS 2015 PROJECTED CHD 2.5% COLGATE 10% P&G 12% 22
Slide 23: 2. Successful Mega Brands Share Growth Formula
“Top 10" TSR Drivers Ts “aN js) Se 2. Successful Mega Brands Share Growth Formula
Slide 24: CHD's Consistent Share Growth Formula
HD’s Consistent Share Growth Formula Innovative New Products Increased Marketing Spending Increased Distribution | Share Growth 24
Slide 25: Gross Sales in $Billions
Gross Sales in $Billions 1.5 1.0 0.5 0.0 2007 2008 2009 2010 2011 2012 2013 2014 25
Slide 26: Source: Syndicated Media Research (Dec. 2012 – Nov. 2014)
Source: Syndicated Media Research (Dec. 2012 – Nov. 2014) 26
Slide 27: Change in All Distribution Channels
Change in All Distribution Channels 2014 Change 2009 - Index vs. 2009 - Index A&H Liquid Detergent 100 196 A&H Clumping Litter 100 184 Trojan Condoms 100 118 First Response Diag. 100 112 XTRA Liquid Detergent 100 135 Nair Dep/Wax/Bleach 100 103 Spinbrush Toothbrushes 100 148 OxiClean Stainfighter 10
Slide 28: CHD CHD CHD
2008 2009 2010 2011 2012 2013 2014 CHD CHD CHD CHD CHD CHD CHD A&H XTRA OxiClean First Response (PTK) Nair Trojan Spinbrush Orajel (Toothache) Vitamins N/A N/A N/A N/A Source: Nielsen All Outlet YE 2007, 2008, 2009, 2010*, 2011* 2012*, 2013, 2014 All Outlet 28
Slide 29: way eo
way eo 29
Slide 30: The Power Brands Represented Over 80% of CHD's Sales & Profits
The Power Brands Represented Over 80% CHD’s YQ Sales & Profits —_ 80% Power Brands 30
Slide 31: Power Brands Market Positions
A&H A&H Products in 86% of US Households Trojan #1 Condom Brand XTRA #1 Extreme Value Laundry Detergent First Response #1 Pregnancy Kit Brand Nair #1 Depilatory Brand Spinbrush #1 Battery Powered Toothbrush Brand OxiClean #1 Laundry Additive Brand Orajel #1 Oral Care Pain Relief Brand L’il Critters
Slide 32: Brand Category Top 10 SKUs by Sales
Brand Category # of Top 10 SKU’s by $ Sales Condoms 10 Oral Pain Relief 6 Battery-Powered Toothbrush 5 Depilatories 7 Laundry Additives 4 Pregnancy 4 Cat Litter 2 Liquid Laundry Detergent 1 Child Gummy Vitamins 5 Adult Gummy Vitamins 9 Source: Nielsen 52 weeks ending 12-20-14 32
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Slide 34: The Mega Brands Represent Approximately 60% of CHD's Sales & Profits
The 4 Mega Brands Represent Approximately G 60% of CHD’s Sales & Profits __ aa 34
Slide 35: Mega Brand Sales Growth 2008-2014
2008 2014 Arm & Hammer 100 150 OxiClean 100 149 Trojan 100 124 Vitamins 100 404 TOTAL 100 162 35
Slide 36: Apply Same Successful Share Growth Formula to Mega Brands
Apply Same Successful Share Growth Formula to Mega Brands Innovative New Products =a Increased Marketing Spending Increased Distribution a aa Share Growth on Mega Brands 36
Slide 37: Mega Brand Advantages
Bigger Bang for Marketing Investment Greater Licensing Potential Bigger Bang for R&D Investment Lower Organizational Costs 37
Slide 38: Ad Spend on Mega Brands Drives Bigger Bang
Ad $’s Spent on Mega Brands Drives Bigger oO Bang for $! $1 Ad Spending on Any 1 Category Covered by a Mega Brand a is ay —_ 38
Slide 39: Entering New White Space to Expand Breadth of Mega Brands
ering New White Space to Expand Breadth of Mega Brands 2013 2014 39
Slide 40: CHD Revenue and Marketing Spending Split
% CHD Revenue % CHD Marketing Spending Other Other 25% 40% Mega Mega Brands Brands 60% 75% 40
Slide 41: Arm & Hammer Licensed Products
Licensed Products generated in excess of $185MM in Retail Sales Over 400 Licensed Products prominently feature the Arm & Hammer logo across 10 additional store aisles including: Arm & Hammer Vacuum Bags and Filters - #1 selling bags and filters Arm & Hammer Diaper Pails – fastest growing bra
Slide 42: R&D Investment Can Be Spread Across All Mega Brand Categories
oS R&D Investment Can Be Spread Across All Mega LO. Brand Categories Baking Soda Product Benefits =Deodorizes =Cleans =Whitens Fabric Carpet Oral Personal Care Care Care Care e < ee <7 42
Slide 43: Mega Brands Require Less Organizational Costs
And, Mega Brands Require Less Organizational © Costs Multiple Brand Teams Leader Mega Brand a a 9 x . Team a od = = a Leaders Leader ea ea oe =. = = Marketing Sales Operations == R&D__ Finance Leader Pa a a ae
Slide 44: Mega Brand Benefits Summary
Lower R&D Investment Bigger Buy for Marketing Spending Greater Licensing Revenue Potential Lower Organizational Costs 44
Slide 45: A True Mega Brand for Today's Consumer
A True Mega Brand for Today’s Consumer A Billion Dollar Portfolio with the Right Combination of: ■ Performance ■ Innovation ■ Trust ■ Value 45
Slide 46: Arm & Hammer Categories
Baking Deo Pet Supplies Cleaners Laundry Personal Floor Air Baby Home Textiles Care Care Care Care Pool Paint 46
Slide 47: Arm & Hammer Covers More Aisles Than Any Other Brand
ARM & HAMMER Covers More Aisles Than Y Any Oth rsh Oder Grabber , Slee Grabber wat Aol
Slide 48: Arm & Hammer Categories
Pet Care Baking Goods Fabric Care Oral Care Anti-Perspirant/ Deodorant Carpet Care 48
Slide 49: Top Brands
Top 100 Brands 1. L’Oreal 5. Crest 17. Colgate 23. Tide 24. OxiClean 25. ARM & HAMMER 34. Clorox 75. Gain Source: Syndicated Media Research (Dec. 2012 – Nov. 2014) 49
Slide 50: Marketing Media Mix
Print Digital Media In-Store Online Public Relations 50
Slide 51: 160+ Year Old Brand Delivering High Single Digit Growth
_ 160+ Year Old Brand Delivering High Single Digit Growth! 2008 2014 51
Slide 52: 2014 A&H Mega Brand Innovations
2014 A&H Mega Brand Innovations 52
Slide 53: 2014 Results: Liquid Detergent
2014 Results • Excellent Retail Distribution • Best New Product Launch Since A&H w/ OxiClean • Helped drive 20th consecutive quarter of ARM & HAMMER Liquid Detergent Share growth vs YAG 53
Slide 54: 2014 Results: Cat Litter
2014 Results • Outstanding incremental distribution • Drove >20% Increase in A&H Cat Litter sales • Strengthened #2 share position • Helped drive 8% category growth 54
Slide 55: 2014 Results: Toothpaste
2014 Results • Superb whitening & excellent cleaning • Strong distribution • Repairs and • Delivered best sales strengthens enamel growth since 2010 • Delights consumers • 2X growth in total with outstanding taste toothpaste category 55
Slide 56: A&H Mega Brand Grew Share in 2014
, Despite Competitive Attacks, A&H Mega Brand Grew Share in 2014 __ 8.7% 2014 56
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Slide 58: #2 Most Advertised Brand in Fabric Care
» #2 Most Advertised Brand in Fabric Care » Loved By Its Consumers 58
Slide 59: 2014
2014 59
Slide 60: Reported Media Spend
100 87 41 40 37 20 17 Source: Reported Media spend ($MM), 52 week data December 2013 through November 2014 60
Slide 61: OxiClean Categories
Laundry Additive: $1B Category 2014 Laundry Detergent: $7B Category Bleach Alternative: $900MM Category Auto Dishwashing: $1B Category 61
Slide 62: 2014 Results
2014 Results • Excellent Retail Distribution • Achieved 1.0% SOM • > 80% Incremental 62
Slide 63: 2014 Results
2014 Results • Excellent Retail Distribution (bleach section) • Achieved 2.2% SOM • > 65% Incremental 63
Slide 64: 2014 Results
Eliminates toughest 2014 Results stains • Solid distribution Delivers crystal clear and clean • Achieved 2.0% dishes every time SOM in Q4 Great performance • #3 player by year at value to super end premium detergents 64
Slide 65: OxiClean Increased Advertising by 66% in 2014
OxiClean Increased Advertising by 66% in 2014 65
Slide 66: Media Offers Cross-Ruffs
Media Offers Cross-Ruffs In-Store Online Public Relations 66
Slide 67: Consumption in 2014
Laundry Additive: Auto Dishwashing: +26% consumption Laundry Detergent: in 2014 Bleach Alternatives: 67
Slide 68: Acquired Trojan Brand in 2001
PSO ie Y i) p | @ cquired Trojan Brand in 2001 _ HAN. Just Condoms: #1 Brand with 70% Market Share 68
Slide 69: Launched Vibrators in 2005
aunched Vibrators in 2005 TR: Ni TROJAN; SeOUA VIBRATIONS vibratin e vibrating EU | se resting twister tri-ohoriar 1 MULTI-SPEED MASSAGER 69
Slide 70: Successful Launch Into Lubricants in 2013
Successful Launch Into Lubricants in 2013 Arouses’ & INTGENSIFIES 70
Slide 71: Trojan Mega Brand Today
jan Mega Brand Today [NEW Natural Feeling For HIM! timate Stimulation For HER! TROJAN LUBRICANTS Ga yi TROJAN DOUBLE =CSTASYS | vibrating tri-ohoriar ‘Arouses & RELEASES™ wuTeAsMooTI™ WaRANT | inside for HIM Bisipecrores, INTERSIRED WaRICAKT outside for HER = a Wotion Aetnatet) 10 LATEX CONDOMS INTE
Slide 72: Trojan Mega Branding Delivered Strong Sales Growth
‘Trojan Mega Branding Delivered Strong Sales Growth 2008 2014 72
Slide 73: Trojan Condoms Innovation in 2014
Trojan Condoms Innovation in 2014 • Ultra smooth lubricant inside for him • Stimulating ribbing for extra pleasure • Stimulating ribbing and intensified lubricant on outside for her 73
Slide 74: Trojan Vibrations Innovation in 2014
Trojan Vibrations Innovation in 2014 Three-in-one compact vibrator Vibrating ring designed for A variety pack for play and extended reach & protection: continuous contact - 4 Pure Ecstasy Condoms - 4 Arouses & Intensifies Lubricant Packets - 1 Duo Vibrating Ring 74
Slide 75: 2014 Trojan Lubricants Innovation
2014 Trojan Lubricants Innovation TROJAN ey FROJAN 28) UBRICANTS LUBRICANTS Aes oa EXPLORE Just Pure Fun~ Premium Tier Value Tier (Gy 75
Slide 76: Trojan 2014 Results
Vibrators: Condoms: • Record annual sales Lubricants: • Record annual share in sexual health category 76
Slide 77: The 4th Mega Brand is Vitamins
e 4th Mega Brand is Vitamins 17
Slide 78: Vitamins Acquired in October 2012
Acquired in October 2012 Fastest Growing Segment of Growing Vitamin Category Pioneered Gummy Vitamin Form For Kids (L'il Critters) a 66% of all kids’ vitamins today Launched Gummy Form for Adults in 2009 (Vitafusion) a Still only 8% of all adult vitamins 2 Adult VMS category is $6.9B 21 times kids’
Slide 79: Vitamins 2008 vs 2014
404 100 2008 2014 79
Slide 80: Innovation: Vitafusion Multi Plus Line
nnovation: Vitafusion Multi Plus Line 84% of adult vitamin users take a multivitamin plus at least one other supplement a We combined multivitamin with the 4 biggest supplements make Nutrition Taste Goc (vitafusion) 80
Slide 81: 2014 Innovation: L'il Critters Multi Plus Line
2014 Innovation: L’il Critters Multi Plus Line 2 Same multi plus approach to kids’ vitamins é Sie ool We make Nutrition Taste mat - fares . 81
Slide 82: Supporting Product Innovations With a 35% Increase in Advertising
" Supporting Product Innovations With a 35% Increase in Advertisin itafusion” ~ 435% 82
Slide 83: Vitamins 2014 Results
• #1 Gummy Brand For Kids & Adults • Vitafusion: double digit sales growth in all 12 months in 2014 83
Slide 84: CHD Organic Revenue Growth
CHD Organic Q1 Q2 Q3 Q4 Revenue +1.2% +3.0% +4.7% +5.2% Growth 84
Slide 85: 2015 Plan Reflects Continued Focus On
2015 Plan Reflects Continued Focus On » Major New Product Launches on Every Mega Brand » 75% of CHD Ad Spending on 4 Mega Brands =» Continue to Drive Trial on 2014 White Space Launches to Expand Breadth of Mega Brands 85
Slide 86: Arm & Hammer Big Launches for 2015
ARM & HAMMER Big Launches for 2015 ARM & HAMMER ARM & HAMMER ARM & HAMMER Truly Radiant Clump & Seal plus OxiClean Rejuvenating Toothpaste, Manual Lightweight Litter Odor Blaster Toothbrushes, & Rinse 86
Slide 87: OxiClean Big Launches for 2015
OxiClean Big Launches for 2015 OXICLEAN White OXICLEAN White OXICLEAN OXICLEAN Revive Laundry Revive Stain Versatile Stain Washing Machine Detergent Remover Remover Plus Odor Cleaner Blasters 87
Slide 88: Vitamins Big Launches for 2015
Vitamins Big Launches for 2015 Vitafusion First Response Extra Strength Line Reproductive Health 88
Slide 89: Trojan Big Launches for 2015
Trojan Big Launches for 2015 TROJAN H20 TROJAN H20 TROJAN TROJAN TROJAN Closer & Closer & Studded Magnum Vibrating Sensitive Sensitive Bareskin Bareskin Bullet Lubricant Lubricant Condom Condom 89
Slide 90: 2015 New Product Details
ae 2015 New Product Details 40 Minutes orless! n 10 Minutes or Less!
Slide 91: "Top 10" TSR Drivers: 3. Ferociously Defend Our Brands
“Top 10" TSR Drivers ™
Slide 92: Stain Fighters Share
Stain Fighters Share 40.5% 27.0% 2006 2009 Nielsen FDMxWM, Dollar Share of Stain Fighters 92
Slide 93: Innovative New Forms, Products and Claims
e Did This Through Innovative New Forms, New Products and Claims... _2007 J 2008 Jf 2009 Mf 2009-10
Slide 94: First Response Yearly Marketing Spending
Series 1 500 400 300 200 100 100 500 0 Source: First Response Actual Yearly Marketing Spending 94
Slide 95: The #1 Laundry Brand Attacked the Category With Major Launch
In Mid-2009, the #1 Laundry Brand Attacked Oo: the Category With Major New Product Launch | fide jide \ fide ain rele \ y X p ae 95
Slide 96: More Power In Every Drop
More Power Seeks out Clings to In Every Drop! stains in your and breaks down wash! stains! 96
Slide 97: Co-Branded OxiClean With Other Leading CHD Brands
"We Also Co-Branded OxiClean With Other Leading CHD Brands to Drive Higher Brand Awareness Branded Launches Co- Branded Launches 97
Slide 98: Reported Media Spend
100 87 41 40 37 20 17 Source: Reported Media spend ($MM), 52 week data December 2013 through November 2014 98
Slide 99: Stain Fighter Market Share
Market Share 2009 2014 Change OxiClean 40.5% 44.6% +4.1 pts. P&G 11.5% 11.4% -0.1 pts. Reckitt 13.8% 7.3% -6.5 pts. SC Johnson 20.1% 19.2% -0.9 pt. Source: Nielsen Scanning Database, Stain Fighters – AOC FY 2009, FY 2014. 99
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Slide 101: CHD Ferociously Defended With Innovative New Products
CHD Ferociously Defended With Innovative New Products A&H Clean Scentsations OxiClean Laundry Detergent iow A DETERGENT 101
Slide 102: Increase in Ad & Trade Spending
+ 5% Increase in Ad & Trade Spending 102
Slide 103: Total Laundry Detergent Market Share
Total Laundry Detergent Market Share 2013 2014 Change P&G 59.3 59.8 +0.5 CHD 14.0 14.2 +0.2 Sun 12.8 12.5 -0.3 Henkel 6.6 6.3 -0.3 103
Slide 104: 4. Driving International Growth
“Top 10” TSR Drivers is _— 4. Driving International Growth
Slide 105: International Share of Revenue 2001 vs 2014
2001 2014 INTERNATIONAL - 2% INTERNATIONAL - 16% 105
Slide 106: International Net Revenues in 2014
International Net Revenues in 2014 Were >$500 Million With 95%* in 6 Countries Brazil Other 4% 5% Mexico 10% Canada Australia 35% 10% France UK 15% 21% * Includes exports from these subsidiaries to over 100 countries. 106
Slide 107: International CAGR by Country 2007-2014
2007 vs. 2014 CAGR Australia +9% England +8% Mexico +7% Canada +6% Brazil +6% France +1% 107
Slide 108: CHD International Organic Revenue Growth
CHD International 2014 FY 2014 Q4 Organic Revenue Growth +3.3% +7.4% 108
Slide 109: Leveraging "One Company" Strengths Across All Functions
1. Continue to Grow International Power Brands 2. Expanding Corporate Power Brands 3. Building Scale Through Acquisitions 4. Leveraging “One Company” Strengths Across All Functions 109
Slide 110: 5. Expanding Gross Margin
5. Expanding Gross Margin
Slide 111: 2004-2014 Gross Margin Expansion
2004 — 2014 Gross Margin Expanded 800 bps Lo 2004 2014 111
Slide 112: Gross Margin vs Peers
Gross Margin 2004 2014 Change CHD 36.5% 44.1% +760 bps Colgate 55.1% 58.5% +340 bps Kimberly-Clark 33.6% 33.9% +30 bps P&G* 50.9% 48.9% (200 bps) Clorox* 44.8% 42.2% (260 bps) Source: SEC Filings *June 30 Fiscal Year End 112
Slide 113: Gross Margin Actions and Examples
Actions Examples • Good to Great Cost Optimization • Reformulation, Reduce Packaging, Reduce Program SKU’s, Laundry Compaction, Hedges • Supply Chain Restructuring • New Laundry & Cat Litter Plants - York, PA (2008) - Victorville, CA (2012) • Acquisition Synergies • Acquire Higher Margin Brands • Im
Slide 114: Annual Bonus Tied to Gross Margin
— .. 3 25% of All « . $$ : A "Annual "s%5%.$ , Bonus ¢ Se %
Slide 115: 2014 Gross Margin Impacted by Launch Costs and Price War
2014 Gross Margin Impacted by Costs to Launch Record Number of New Products & Price War 2013 2014 Gross Margin 45.0% 44.1% Change vs. YAG +80 bps -90 bps Good News: Q4 2014 Gross Margin = 45.0% 115
Slide 116: 6. Proven Track Record on Acquisitions
6. Proven Track Record on Acquisitions
Slide 117: Clear Acquisition Guidelines to Ensure Accretive Acquisitions
ave Clear Acquisition Guidelines to Ensure _ Accretive Acquisitions m= Primarily #1 or #2 Share Brands m Higher Growth, Higher Margin Brands m Asset Light m Leverage CHD Capital Base in Manufacturing, Logistics and Purchasing = Deliver Sustainable Competitive Advantage 17
Slide 118: Church & Dwight Revenue Development – Past 10 Years
CHURCH & DWIGHT REVENUE DEVELOPMENT – PAST 10 YEARS $3,194 $3,298 $2,922 $2,749 $2,521 $2,589 $2,422 $2,221 $1,946 $1,737 $1,462 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ in millions 118
Slide 119: Acquired Brands and Year Acquired
YEAR ACQUIRED Arm & Hammer $1 Billion Brand --- Trojan #1 Condom Brand 2001 XTRA #1 Extreme Value Laundry Detergent 2001 First Response #1 Pregnancy Kit Brand 2001 Nair #1 Depilatory Brand 2001 Spinbrush #1 Battery Powered Toothbrush Brand 2005 OxiClean #1 Laundry Additive Brand 2006 Orajel #1 Oral
Slide 120: Pre-Acquisition Share vs 2014 Share
Year Pre-Acquisition 2014 Acquired Share Share Trojan 2001 68.9% 76.1% XTRA 2001 5.1% 6.0% First Response 2001 12.0% 30.4% Nair 2001 22.8% 53.3% Spinbrush 2005 30.1% 37.8% OxiClean 2006 26.1% 44.6% VMS 2012 2.7% 3.6% Nielsen All Outlet Scanning Share for 2012-2014 Nielsen FDMx Share for 2005 and Lat
Slide 121: Recent Small Acquisitions
Annual Sales L’il Drug Stores ~$50MM Vi-Cor ~$25MM 121
Slide 122: $2.5B Dry Powder for New Acquisitions
F Actively Pursuing New Acquisitions With Significant Dry Powder eC Dry Powder 122
Slide 123: 7. "Best in Class" Free Cash Flow Conversion
7. “Best in Class” Free Cash Flow Conversion
Slide 124: Free Cash Flow 2004-2014
$470 $413 $375 $289 $163 $138 $MM 2004 2006 2008 2010 2012* 2014 111.9% NI 183.1% NI 100% NI 143.9% NI 118% NI 113% NI • 2012 includes $36 million tax payment that was deferred to 2013 due to Hurricane Sandy. 124
Slide 125: Free Cash Flow Conversion vs Peers 2007-2014
Year Average 2007 - 2014 119.0% Church & Dwight 114.3% Clorox 119.0% Energizer 99.4% Colgate 96.1% P&G 91.4% Consumer Staples Average 88.9% Kellogg 85.2% Kraft 84.3% Coca-Cola 77.1% Pepsi 58.4% Campbell's 53.5% Avon 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% Source : Bloomberg 125
Slide 126: Dividend Growth and Payout Ratio Target
$1.34 $1.24 $1.12 $0.96 +8% Target: $0.68 +11% $0.31 +17% 40% $0.23 +41% +119% Payout +35% +35% Ratio 2009 2010 2011 2012 2013 2014 2015 126
Slide 127: 8. Superior Overhead Management
8. Superior Overhead Management
Slide 128: Revenue, Employees and EPS 2004 vs 2014
2004 2014 Change Revenue $1.5B $3.3B 113% # Employees 3,800 4,150 9% EPS $0.68 $3.01 343% 128
Slide 129: Revenue Per Employee vs Peers
Revenue Revenue Per Employees ($MM) Employee Church & Dwight (Total) 4,150 $3,298 $794,700 Procter & Gamble 121,000 $84,200 $695,600 Clorox 8,400 $5,623 $669,400 Colgate 37,700 $17,100 $453,200 Kimberly Clark 58,000 $21,063 $363,200 Energizer 15,000 $4,646 $309,700 Avon 39,100 $10,863 $274,100 Sourc
Slide 130: SG&A Less Advertising vs Peers
60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% CHD RB K GIS KMB CLX CL TAP HSY PG ENR KO PEP EL AVP SG&A data as reported is taken from latest SEC 10K filings as of 12/14. For peers that do not break out SG&A and marketing, above result is total SG&A less advertising per SEC filings 130
Slide 131: Management Team Walks the Walk on Tight Overhead Controls
Management Team “Walks the Walk” on Tight Overhead Controls 131
Slide 132: 9. Expert Management Team
9. Expert Management Team
Slide 133: Leadership Expertise and Longevity
| We Beliove in Leadership Expertise and Longevity Versus Cross- Functional Experiences and Management Turnover m= Our 8 Strategic Business Unit Leaders are “Lifers”. =m The Average Experience of Our SBU Leaders in The CPG Industry is 24 Years. 133
Slide 134: Original Power Brands Exceeded Category Growth Rate
8 Original Power Brands Exceeded Category Growth Rate 41 Out of 56 Times in Last 7 Years Able to Minimize Headcount Growth Outstanding Execution Across All Functions Able to Absorb Acquisitions With Minimal Additional Headcount Source: Nielsen All Outlet 2008-2014 134
Slide 135: Management Compensation Tied to Business Results
"CMC 1. Bonuses Tied 100% to Business Results: - 25% Net Revenue — 25% Gross Margin Expansion - 25% EPS - 25% Free Cash Flow 2. Equity Compensation is 100% Stock Options 3. Required to be Heavily Invested in Company Stock 135
Slide 136: 10. TSR Junkies
“Top 10” TSR Drivers ) 10. TSR Junkies
Slide 137: Ten-Year Results Summary
• Net Revenues Have Nearly Doubled to $3.3 Billion. • Gross Margins Have Increased 740 bps to 44.1%. • Marketing Spending Has Increased 200 bps to 12.6%. • SG&A Has Decreased 180 bps to 12.1%. • Operating Income Has Increased 710 bps to 19.4%. • EPS Has Increased 227% From $0.92 to $3.01. • Free Cas
Slide 138: 1 Year, 3 Year, 5 Year TSR
1 YEAR: 3 YEAR: 5 YEAR: 10 YEAR: 138
Slide 139: Driven by a Great Team of TSR Junkies
Driven by a Great Team of TSR Junkies & FEBRUARY 139
Slide 140: Comparing Industry TSR and Church & Dwight TSR Drivers
COMPARING INDUSTRY TSR 10 YEAR TSR CAGR UNDERSTANDING CHURCH & DWIGHT TSR DRIVERS 1 Resilient Portfolio 18.1% 2 Successful Mega Brands Share Growth Formula 15.9% 3 Ferociously Defend Our Brands 10.5% 4 Driving International Growth 10.3% 5 Expanding Gross Margin 6 Proven Track Record on Acquisitions
Slide 141: Here's Matt!
“Here’s Matt!” 141
Slide 142: FY2014 Results
1. Opening Remarks Jim Craigie 2. “Top 10” TSR Drivers Jim Craigie ( 3. FY2014 Results Matt Farrell } 4. 2015 Financial Outlook Matt Farrell 5. Q&A Jim Craigie / Matt Farrell 142
Slide 143: FY2014 Results Summary
($ in millions) 2013 2014 Δ Net Sales $3,194.3 $3,297.6 3.2% Organic Growth 2.3% 3.5% Gross Margin 45.0% 44.1% -90 bps Mktg. % of Sales 12.5% 12.6% +10 bps SG&A as % of Sales 13.0% 12.1% -90 bps Operating Margin 19.5% 19.4% -10bps Effective Tax Rate 34.0% 33.8% EPS $2.79 $3.01 8% Free Cash Flow 468.
Slide 144: Quarterly Organic Growth
5.2% 4.7% 3.0% 1.2% Q1 Q2 Q3 Q4 144
Slide 145: Quarterly Gross Margin
45.0% 44.1% 43.6% 43.4% Q1 Q2 Q3 Q4 145
Slide 146: Quarterly Marketing and SG&A
14.0% 13.8% 11.2% 11.5% Q1 Q2 Q3 Q4 146
Slide 147: 2014 Growth
2014 Growth * Market share is Nielsen 52-week 12/22/13 All-Outlet 147
Slide 148: Cash Conversion Cycle
DSO DIO (DPO) CCC 46 43 40 32 34 35 32 2008 2009 2010 2011 2012 2013 2014 148
Slide 149: Free Cash Flow
FCF = Operating Cash – CAPEX dollars in millions $500 $470 $413 $400 $375 $300 $238 $200 $100 $0 2008 2010 2012 2014 FCF % NI 122% NI 131% NI 118% NI 113% NI Excludes New Plant, Abbott Settlement in 2009. Excludes Pension Settlement in 2010. Excludes a $36 million federal tax payment that was deferr
Slide 150: Total Debt / Bank EBITDA
Total Debt / Bank EBITDA 1.9x 1.6x 1.4x 1.2x 1.5x 0.6x 0.5x 2008 2009 2010 2011 2012 2013 2014 150
Slide 151: Significant Financial Capacity
Significant Financial Capacity (in millions) Cash and Cash Equivalents on Hand $400 Acquisition Leverage Capacity $2,100 Power $2.5B Credit Rating Current Debt $1,100 BBB+/Baa1 2014 Bank EBITDA = $769M; December 31, 2014 Leverage capacity to 3.5x EBITDA Acquisition EBITDA multiple of 12x 151
Slide 152: 2015 Financial Outlook
1. Opening Remarks Jim Craigie 2. “Top 10” TSR Drivers Jim Craigie 3. FY2014 Results Matt Farrell [4.2015 Financial Outlook Matt Farrell } 5. Q&A Jim Craigie / Matt Farrell 152
Slide 153: Arm & Hammer Big Launches for 2015
ARM & HAMMER Big Launches for 2015 ARM & HAMMER ARM & HAMMER ARM & HAMMER Truly Radiant Clump & Seal plus OxiClean Rejuvenating Toothpaste, Manual Lightweight Litter Odor Blaster Toothbrushes, & Rinse 153
Slide 154: Arm & Hammer Clump & Seal
ARM & HAMMER Clump & Seal: Drive Premium Litter Offerings Across All Growth Segments 2014 Results: • Clump & Seal was the most successful Litter new product launch • Major contributor to category growth of 8% 2015: • Extending premium line of Clump & Seal to both Lightweight and Naturals 154
Slide 155: OxiClean Odor Blasters
Designed to attack tough laundry odors at their core! Unique Proposition: • Sharp focus on odor removal with the powerful, stain- fighting reassurance of OxiClean OxiClean Odor Blasters Versatile Stain Remover 155
Slide 156: Arm & Hammer Scentsations In-Wash Boosters
Powerfully Clean. Vibrantly Fresh. Unique Proposition Builds on Successful New for 2015 2014 Launch: • New entry in $290MM Scent Booster category • Long-lasting, vibrant scents inspired by nature’s wonders! • The only scent booster with Arm & Hammer Clean the freshening power of In-Wash Freshness Sc
Slide 157: Truly Radiant Platform Expansion in 2015
Truly Radiant™ Platform Expansion in 2015 First and only manual Alcohol Free & Building on Truly Radiant toothbrushes that feature an Peroxide Free positioning: strength & oscillating head Only Whitening Rinse beauty Powered by one’s own that Strengthens brushing motion to help Enamel & Prev
Slide 158: OxiClean Big Launches for 2015
OxiClean Big Launches for 2015 OXICLEAN White OXICLEAN White OXICLEAN OXICLEAN Revive Laundry Revive Stain Versatile Stain Washing Machine Detergent Remover Remover Plus Odor Cleaner Blasters 158
Slide 159: OxiClean White Revive
Bleach-like whitening without the risk of chlorine damage! Unique Proposition Builds on Successful 2014 New for 2015 Launch: • Revives dingy whites • Safe for colors; none of the perceived damaging effects of chlorine bleach • No harsh chemical smell or fumes Stain Remover Liquid Additive Laundry De
Slide 160: OxiClean Odor Blasters
Designed to attack tough laundry odors at their core! Unique Proposition: • Sharp focus on odor removal with the powerful, stain- fighting reassurance of OxiClean OxiClean Odor Blasters Versatile Stain Remover 160
Slide 161: OxiClean Washing Machine Cleaner
OxiClean Washing Machine Cleaner • Breaks down the build-up of biofilms, resulting in cleaner, odor-free machines and laundry 161
Slide 162: Vitamins Big Launches for 2015
Vitamins Big Launches for 2015 Vitafusion First Response Extra Strength Line Reproductive Health 162
Slide 163: Vitafusion Extra Strength Line
Vitafusion Extra Strength Line • Each product delivers the high concentration of a key ingredient that consumers seek 163
Slide 164: First Response Prenatal Vitamins
• Leveraging Prenatal Diagnostics Leadership to Enter Fast Growing Prenatal Vitamin Category • Unique Offering: Supporting Every Stage of Pregnancy 164
Slide 165: Trojan Big Launches for 2015
Trojan Big Launches for 2015 TROJAN H20 TROJAN H20 TROJAN TROJAN TROJAN Closer & Closer & Studded Magnum Vibrating Sensitive Sensitive Bareskin Bareskin Bullet Lubricant Lubricant Condom Condom 165
Slide 166: Trojan Lubricant
Trojan Lubricant • TROJAN H20 Closer & Sensitive Lubricant is water-based and feels thinner so consumers can experience each other and not the lubricant TROJAN H20 TROJAN H20 Closer & Closer & • Dries with less mess Sensitive Sensitive Lubricant Lubricant 166
Slide 167: Trojan Condom
Trojan Condom • Trojan Studded Bareskin – has studs on the outside for her, and is very thin, for his pleasure • Trojan Magnum Bareskin is our thinnest Magnum condom ever, for extra pleasure 167
Slide 168: Trojan Vibrating Bullet
Trojan Vibrating Bullet • Small, discreet & very powerful vibrator • Perfect for partner play 168
Slide 169: Get Out of the Grey Area
GET OUT OF THE GREY AREA. See the unedited parody of how a couple who read “that book” find 50 Shades of Real Pleasure at www.TrojanLubricants.com. 169
Slide 170: 2015 Outlook
2015 Outlook Organic Sales +2-3% Gross Margin +25 bps Marketing ~12.5% SG&A Leverage Operating Margin +50 bps Effective Tax Rate ~34.5% EPS, ex Pension Charge +7-9% Currency Neutral EPS (Midpoint) +10.5% Outlook as of February 3, 2015 170
Slide 171: Organic Sales Growth Outlook
Domestic: 2-3% 5% 4% 3.5% International: 2-3% 2% 2-3% SPD: 1-3% 2011 2012 2013 2014 2015 171
Slide 172: Marketing Spending as % of Sales
12.6% 12.5% ~12.5% 2013 2014 2015 172
Slide 173: Marketing Spending Will Focus on Mega Brands and Digital
Marketing Spending Will Focus on 4 Mega Brands and Have Stronger Digital Presence • 70% Television • 20% Digital • 10% Print 173
Slide 174: EPS 2009-2015 Outlook
includes 2.5% F/X drag $3.22-3.28(3) $3.01 $2.79 (2) $2.45 $1.98 (1) $2.21 $1.74 2009 2010 2011 2012 2013 2014 2015 (1) Excludes Pension Settlement (2) Adjusted EPS Excludes a Deferred Tax Valuation Allowance Charge of $0.09 From Q4 2011. (3) 2015 7-9% ex-$0.05 Pension Charge 174
Slide 175: Capital Expenditures as % of Sales
Capital Expenditures as % of Sales 2.8% 2.6% 2.1% 2.1% 2.5% 2.1% $64 $77 $75 $67 $71 $70 2010 2011 2012 2013 2014 2015 Base Business 175
Slide 176: Avid Gummy Vitamin Acquisition Delivering Exceptional Results
Avid Gummy Vitamin Acquisition Delivering Exceptional Results y iPr ki Expanding Capacity by 75% in 2015 176
Slide 177: Dividend Growth and Payout Ratio Target
Target: 40% Payout $1.34 $1.24 Ratio $1.12 $0.96 +8% $0.68 +11% $0.31 +17% $0.23 +41% +119% +35% +35% 2009 2010 2011 2012 2013 2014 2015 177
Slide 178: Cash Flow Priorities
1. 2. - Y& New Product Development Capex For Organic Growth & G2G Return Of Cash To Shareholders Debt Reduction 178
Slide 179: "Playing to Win" In 2015 With Aggressive But Achievable Plan
1. Excellent 2014 Results 2. Exiting 2014 With Strong Momentum 3. “Playing to Win” In 2015 With Aggressive But Achievable Plan 4. Low Exposure To International Headwinds 5. Returning Cash to Shareholders 6. Aggressively Pursuing Acquisitions 179
Slide 180: Opening Remarks and Q&A
Opening Remarks FY2014 Results “Top 10” TSR Drivers 2015 Financial Outlook Jim Craigie Matt Farrell Jim Craigie Matt Farrell Q&A Jim Craigie / Matt Farrell } 180
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Slide 182: Appendix
Appendix
Slide 183: Reconciliations
Reconciliations The following pages address the non-GAAP measures used in this presentation and reconciliations of non-GAAP measures to the most directly comparable GAAP measures: Non-GAAP measures: Organic Sales Growth. 183
Slide 184: Organic Sales Reconciliation
Organic Sales Reconciliation System Calendar/ Shipping Year Reported FX Acq/Div Disc. Ops. Upgrade Other Terms Organic 2014 5.2 1.2 -1.2 0.0 0.0 0.0 0.0 5.2 2013 9.3 0.5 -7.6 0.0 -0.3 0.0 0.0 1.9 2012 6.3 0.8 -3.1 0.0 0.6 0.6 0.0 5.2 2011 6.2 -1.0 -1.2 0.8 -0.3 -0.6 0.2 4.1 2010 2.7 -1.1 0.5 0.0 0.0
Slide 185: Reconciling Items 2009-2014
Reconciling Items 2009-2014 2014 2013 2012 2011 2010 2009 Net Sales NA NA NA NA 2,589.2 2,520.9 Rpt Gross Margin NA NA NA NA NA 43.7% Adjustment NA NA NA NA NA -28.4 Adj Gross Margin NA NA NA NA NA 44.8% Rpt SG&A NA NA NA NA 374.8 Rpt Patent Settlement 20.0 Adjustment NA NA NA NA -24.3* -20.0 Adj SG
Slide 186: Reconciling Items 2009-2014
Reconciling Items 2009-2014 The presentation provides information regarding the Company’s earnings per share and gross margin adjusted to exclude restructuring charges related to plant closing expenses, proceeds of the litigation settlement, and the pension settlement charge. Management believes tha