Clorox Company (the) · NYSE:CLX
Clorox Company (the) — The Clorox Company — CAGNY 2021 Virtual Conference
35 slides from Clorox Company (the)'s conference presentation, Feb 18, 2021
Slide 1: CAGNY 2021
CAGNY 2021 LINDA RENDLE Chief Executive Officer
Slide 2: Safe Harbor
SAFE HARBOR Except for historical information, matters discussed in this presentation, including statements about the Company’s future volume, sales, organic sales growth, costs, cost savings, earnings, earnings attributable to the Company, earnings per share, diluted earnings per share, margins, fo
Slide 3: Key Messages
KEY MESSAGES • IGNITE Strategy is on track and continues to position Clorox well • We are accelerating growth through new opportunities • Long-term investment case remains attractive 3
Slide 4: Who We Are
a THE CLOROX COMPANY NS CAGNY CONFERENCE CLX 2021
Slide 5: Diverse, US-Centric Portfolio $6.7B
DIVERSE, US-CENTRIC PORTFOLIO 41% • 30% CLEANING • 7% PROFESSIONAL PRODUCTS $6.7B Health & NET SALES Wellness • 4% VITAMINS, MINERALS and SUPPLEMENTS 26+ • 12% BAGS, WRAPS • 7% CAT LITTER COUNTRY / 27% TERRITORY HOUSEHOLD • 8% GRILLING OPERATIONS 17% • 9% FOOD PRODUCTS • 4% WATER FILTRATION 8,800 LI
Slide 6: Choiceful, Disciplined Playbook
CHOICEFUL, DISCIPLINED PLAYBOOK Leading brands loved Purposeful & targeted by consumers in where we play ECONOMIC PROFIT Deeply rooted Purpose-driven growth: discipline sustains ESG integration as a operational excellence competitive advantage 6
Slide 7: Leading Brands Loved by Our Consumers
LEADING BRANDS LOVED BY OUR CONSUMERS • Over 80% of our global portfolio from #1 and #2 share brands • Majority of our portfolio has superior consumer value • Accelerating growth with purpose-driven brands 7
Slide 8: Big-Share Brands, Mid-Sized Categories
BIG-SHARE BRANDS, MID-SIZED CATEGORIES Grilling CLX #1 Bleach CLX #1 • Categories that are more rational and less crowded with multinationals Water Filtration CLX #1 Wipes CLX #1 • Grow categories with deep consumer insights and world-class capabilities Premium Trash CLX #1 Salad Dressing CLX #1 • D
Slide 9: Operational Excellence
OPERATIONAL EXCELLENCE Our leading brands, world-class capabilities and deeply rooted discipline drive operational excellence +175bps Sales Growth Low Margin From Top-Tier Strong Through Selling & Cost ROIC Cash Flows Innovation Admin Savings 9 Cost Savings Target is +175 bps EBIT Margin. EBIT (a no
Slide 10: Purpose-Driven Growth
| PURPOSE-DRIVEN GROWTH We CriAMPION PEOPLE TO BE WELL & THRIVE EVERY SINGLE DAY
Slide 11: IGNITE Strategy Progress Update
IGNITE STRATEGY Progress Update
Slide 12: IGNITE Strategy
IGNITE STRATEGY Purpose We champion people to be well & thrive every single day Vision Exceptional innovators who earn people’s enduring loyalty Maximize economic profit Objectives Purpose-driven growth Fuel growth in our brands Strategy Innovate brand and shopping experiences of the future Reimagin
Slide 13: Leverages Relevant Consumer Megatrends to Accelerate Growth
LEVERAGES RELEVANT CONSUMER (Transition to MEGATRENDS TO ACCELERATE GROWTH Accelerating Growth) Multicultural/ Health & Wellness Millennials ACCELERATING THE CORE Personalization & Responsibility Customization 13
Slide 14: Driving Progress on IGNITE Strategy
DRIVING PROGRESS ON IGNITE STRATEGY FUEL GROWTH INNOVATE EXPERIENCES COST SAVINGS BIGGER, STICKIER (+200BPS FY20) INNOVATION Cost savings +200BPS refers to EBIT Margin benefit from cost savings. EBIT (a non-GAAP measure) represents before income taxes (a GAAP measure), excluding interest income & in
Slide 15: Bigger, Stickier Platforms
BIGGER, STICKIER PLATFORMS HIGHER SALES GROWTH FROM INNOVATION 2X-3X FY17-FY19 FY19-FY21e 15
Slide 16: Driving Progress on IGNITE Strategy
DRIVING PROGRESS ON IGNITE STRATEGY REIMAGINE WORK EVOLVE PORTFOLIO FASTER DECISIONS, STRENGTHENING THE MORE GROWTH CORE, PURSUING NEW FOCUSED GROWTH RUNWAYS 16
Slide 17: Innovate Experiences: Fueling Kingsford's Growth
IGNITE Progress INNOVATE EXPERIENCES Example 1 EXAMPLE: FUELING KINGSFORD’S GROWTH CATEGORY BIGGER, PURPOSE- VISION & STICKIER DRIVEN & FRICTIONLESS INNOVATION PERSONALIZED SHOPPING PLATFORM 17
Slide 18: Innovate Experiences: Healthier, More Profitable Category
IGNITE Progress INNOVATE EXPERIENCES Example 1 HEALTHIER, MORE PROFITABLE CATEGORY HIGHER STRONGER HIGHER HOUSEHOLD REPEAT RATES MARKET SHARE PENETRATION (+2.8PTS) (+1.1PTS) (+1.2PTS) 18 Results for Kingsford Charcoal Last 52 weeks ending 12/27/20. SOURCE: IRI.
Slide 19: IGNITE Creates a Virtuous Cycle That Strengthens Our Advantage
IGNITE CREATES A VIRTUOUS CYCLE THAT STRENGTHENS OUR ADVANTAGE • More fuel • Consistent reinvestments • Strong innovation • Portfolio evolution 19
Slide 20: Accelerate Growth
TEECORSY COMPANY 4 CAGNY CONFERENCE CLX 2021
Slide 21: Lasting Shifts in Consumer Behavior
LASTING SHIFTS IN CONSUMER BEHAVIOR CREATES NEW GROWTH OPPORTUNITIES GREATER THE ROLE OF HIGHER FOCUS PREFERENCE HOME HAS ON HEALTH & FOR TRUSTED CHANGED HYGIENE BRANDS 21
Slide 22: Doubling Down on Our Strengths
DOUBLING DOWN ON OUR STRENGTHS BUILDING A GLOBAL CLEANING & DISINFECTING BRAND • Leading and trusted brand • Established capabilities and relationships • Scaling up to meet growing demand across channels and markets In Home • Building a strong ecosystem and more growth runways (strategic Out of Home
Slide 23: Building a Global Disinfecting & Cleaning Brand: Out-of-Home
BUILDING A GLOBAL DISINFECTING & CLEANING BRAND GROWING CLOROX OUT-OF-HOME BUSINESS New Forms & New Applications Technologies Strategic New Channels Partners 23
Slide 24: Building a Global Disinfecting & Cleaning Brand: International
BUILDING A GLOBAL DISINFECTING & CLEANING BRAND GROWING CLOROX INTERNATIONAL Dedicated New Forms & Supply Chain Applications Localized Trade Up, Insights New Markets 24
Slide 25: Financial Update
FINANCIAL UPDATE KEVIN JACOBSEN EVP & Chief Financial Officer
Slide 26: Key Takeaways
KEY TAKEAWAYS • Strong track record of delivering value for shareholders • IGNITE strategy targeted to accelerate our financial performance • Raising our IGNITE strategy financial goals 26
Slide 27: Strong Track Record of Delivering Value
STRONG TRACK RECORD OF DELIVERING VALUE ANNUAL TSR CONSISTENTLY IN TOP 1/3 OF PEER SET 1-YEAR 5-YEAR 10-YEAR 20-YEAR CLX 47% 19% 17% 11% Top 1/3 of Peer Group Peer 7% 8% 12% 10% Average 27 SOURCE: FactSet, Annual Total Share Return as of June 30, 2020. .Peers consist of 16 companies: CHD, CL, EL, GI
Slide 28: Strong Track Record of Delivering Value
STRONG TRACK RECORD OF DELIVERING VALUE 20-YEAR TSR (as of 6/30/2020) 734 CLOROX 216 S&P 500 Jun-00 Jun-05 Jun-10 Jun-15 Jun-20 28 SOURCE: FactSet, 20 Year Total Share Return as of June 30, 2020.
Slide 29: Growing Operating Cash Flow
GROWING OPERATING CASH FLOW OPERATING CASH FLOW (as % of Sales) 23% 16% 16% 14% 15% $0.8B $0.9B $1.0B $1.0B $1.5B FY16 FY17 FY18 FY19 FY20 Free Cash Flow % of Sales 10% 11% 13% 13% 19% Free Cash Flow (a non-GAAP measure) represents Net Cash less Capital Expenditures. 29 See reconciliation in the sup
Slide 30: Disciplined Uses of Cash
DISCIPLINED USES OF CASH Business Growth Support Dividend (Strong reinvestments in FY21) (Average annual dividend increase FY18-FY20) CLX 9% People/ A&P CAPEX Tech +100bps +70bps Peer Average 4% +60bps STRONG CASH Cash Returned to Shareholders FLOW Debt Leverage* (Nearly $4B in last 5 years) (Target
Slide 31: Disciplined Use of Cash Drives Top-Tier ROIC
DISCIPLINED USE OF CASH DRIVES TOP-TIER ROIC RETURN ON INVESTED CAPITAL (ROIC) 30% Peer average: 17% CLX ROIC as of Fiscal Year Ending June 30, 2020 Return on invested capital (ROIC), a non-GAAP measure, is calculated as earnings before income taxes (a GAAP measure) and interest expense, computed on
Slide 32: Raising IGNITE Strategy Financial Goals
RAISING IGNITE STRATEGY FINANCIAL GOALS Original IGNITE NEW Annual Goals Annual Goals Sales Growth +2% to 4% +3% to 5% EBIT Margin Improvement +25 to 50 bps +25 to 50 bps Free Cash Flow % of Sales 11% to 13% 11% to 13% EBIT (a non-GAAP measure) represents before income taxes (a GAAP measure), exclud
Slide 33: Strategy on Track, Raising Sales Goal
STRATEGY ON TRACK, RAISING SALES GOAL 5% • Raising sales goal by 1pt 4% 3 – 5% 3% 2 – 4% • Making strong reinvestments to accelerate IGNITE strategy 2% 1% 2% • Supported by new growth opportunities as a result of COVID-19 0% 2014 2015 2016 2017 2018 2019 2014 – 2019 IGNITE IGNITE Average Original Ne
Slide 34: Attractive Long-Term Investment Case
ATTRACTIVE LONG-TERM INVESTMENT CASE • Strengthening competitive advantage • Attractive business model consistently driving strong cash flow • Disciplined use of cash to drive top tier shareholder return 34
Slide 35: The Clorox Company
Aw. THE CLOROX COMPANY a CAGNY CONFERENCE CLX 2021