Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — Shareholder Meeting (April 2022)
32 slides from Church & Dwight's shareholder meeting presentation, Apr 28, 2022
Slide 1: Annual Shareholders' Meeting 2022
CHURCH & DWIGHT CO., INC. ANNUAL SHAREHOLDERS’ MEETING 2022 April 28, 2022
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: 2021 was another solid year. We have confidence in our future.
2021 was another solid year. We have confidence in our future. Steady U.S. Sustainable high Consistent Digitally Evergreen Strong growth International innovation savvy model is 2022 ahead growth rate healthy outlook 3
Slide 4: Church & Dwight: Who We Are
CHURCH & DWIGHT: Who We Are
Slide 5: We started with ARM & HAMMER baking soda
We started with ARM & HAMMER baking soda 5
Slide 6: We Are a $5.2 Billion Company
WE ARE A $5.2 BILLION COMPANY Fabric Care Health & Well-Being Home Care Personal Care Specialty Hair Care Waterpik 6
Slide 7: Power Brands
FIRST RESPONSE VheraBreath POWER BRANDS
Slide 8: These Brands Drive Our Results
THESE 14 BRANDS DRIVE OUR RESULTS more than 80% of sales & profits are represented by these 14 POWER BRANDS 8
Slide 9: Acquired 13 of Our 14 Power Brands Since 2001
ACQUIRED 13 OF OUR 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
Slide 10: 14 Power Brands Today, 20 Tomorrow
14 POWER BRANDS TODAY, 20 TOMORROW Net Sales (Billions) $5.5 14 $5.0 13 $4.5 12 $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 Note: Trojan, Nair and First Res
Slide 11: Long History of Growth Through Acquisitions
LONG HISTORY OF GROWTH THROUGH ACQUISITIONS Net Sales (Billions) $5.2 $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. 11
Slide 12: We Have Clear Acquisition Criteria
WE HAVE CLEAR ACQUISITION CRITERIA Primarily #1 Higher growth, Asset Light Leverage CHD Deliver or #2 share higher margin manufacturing, sustainable brands brands logistics and competitive purchasing advantage 12
Slide 13: How We Run the Company
How We Run the Company
Slide 14: Evergreen Model
EVERGREEN MODEL TSR Model Organic Net Sales Growth 3.0% Gross Margin +25 bps Marketing FLAT SG&A -25 bps Operating Margin ∆ +50 bps EPS Growth 8% 14
Slide 15: Organic Sales Evergreen Model
ORGANIC SALES EVERGREEN MODEL Domestic 2.0% International 6.0% SPD 5.0% Total Organic Sales +3.0% 15
Slide 16: 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 16
Slide 17: We Have Five Operating Principles
WE HAVE FIVE OPERATING PRINCIPLES Brands Consumers Love 1 Leverage Brands 2 Friend of the Environment 3 Leverage People Highly productive people in a place where people matter 4 Leverage Assets Asset Light 5 Leverage Acquisitions GOOD shareholder returns become GREAT shareholder returns 17
Slide 18: Friend of the Environment
FRIEND OF THE ENVIRONMENT 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 charts paperboar
Slide 19: Earth Day 2022
Earth Day 2022 www.armandhammer.com/en/earthday Sustainability efforts on social media, email and website: Recycling Programs Sustainably Sourced Packaging Arbor Day Foundation Partnership Branded content Downloadable guide: Go Green Tips & Tricks
Slide 20: 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 20
Slide 21: ESG Recognition
ESG RECOGNITION 2021 NATIONAL TOP 100 21
Slide 22: Financials
Financials
Slide 23: Full Year 2021 Highlights
FULL YEAR 2021 HIGHLIGHTS Domestic +3.6% International +5.0% Organic Sales Growth +4.3% SPD +12.0% Gross Margin 43.6%, -160 bps Marketing % 11.1%, -100 bps Adjusted SG&A 13.6%, -50 bps Adjusted EPS Growth +6.7% to $3.02 Cash from Operations $994MM FCF Conversion 116% Organic sales, adjusted SG&A, FC
Slide 24: First Quarter 2022 Highlights
FIRST QUARTER 2022 HIGHLIGHTS Domestic +2.7% International +0.3% Organic sales growth +2.7% SPD +9.2% Gross Margin 42.6%, -190 bps Marketing % 7.9%, -10 bps Adjusted SG&A 13.1%, -50 bps Adjusted EPS Growth flat Cash from Operations $153MM Organic sales, adjusted SG&A and adjusted EPS are non-GAAP me
Slide 25: 2022 Outlook: +4-8% Adjusted EPS Growth
2022 OUTLOOK: +4-8% ADJUSTED EPS GROWTH Reported Sales Growth +5-8% Organic Sales Growth +3-6% Gross Margin down Effective Tax Rate ~23% Adjusted EPS Growth low end of +4-8% Cash From Operations ~$920mm Outlook as of April 28, 2022. Organic sales, gross margin, SG&A, adjusted operating margin and ad
Slide 26: 4.0% Dividend Increase in 2022
4.0% DIVIDEND INCREASE IN 2022 $1.01 $1.05 $0.96 $0.91 121 $0.87 +5.2% +4.0% +5.5% $0.76 +14.5% +4.6% +7.0% consecutive years of dividends +119% +35% 2017 2018 2019 2020 2021 2022 26
Slide 27: Reconciliations
Reconciliations www.churchdwight.com 27
Slide 28: 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 29: Reconciliation of Non-GAAP Measures
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
Slide 30: Total Company Organic Sales Reconciliation
TOTAL COMPANY ORGANIC SALES RECONCILIATION Acquisitions Discontinued System Calendar / Shipping Year Reported FX & Divestitures Operations Upgrade Other Terms Organic 1Q22 4.7% 0.3% 2.3% 0.0% 0.0% 0.0% 0.0% 2.7% 2021 6.0% -0.9% 0.8% 0.0% 0.0% 0.0% 0.0% 4.3% 30
Slide 31: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted SG&A: This presentation discloses the Company’s SG&A expenses as a percent of net sales. Adjusted SG&A, as used in this presentation, is defined as selling, general and administrative expenses excluding significant one-time items that are not indicative o
Slide 32: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Adjusted EPS: 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. We b