Clorox Company (the) · NYSE:CLX
Clorox Company (the) — The Clorox Company — CAGNY 2022
36 slides from Clorox Company (the)'s conference presentation, Feb 24, 2022
Slide 1: CAGNY 2022
G The Clorox Company CAGNY 2022 February 24, 2022
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: Strategic Update
STRATEGIC UPDATE LINDA RENDLE Chief Executive Officer 3
Slide 4: Well Positioned to Enhance Profitability & Create Long-Term Shareholder Value
Well Positioned to Enhance Profitability & Create Long-Term Shareholder Value • Our iconic brand portfolio has delivered significant growth & brand strength over the past two years • We are taking decisive actions to mitigate near-term headwinds & build a stronger, more resilient company • Our IGNIT
Slide 5: Global Portfolio of Leading Brands Trusted & Loved By Our Consumers
Global Portfolio of Leading Brands Trusted & Loved By Our Consumers 41% HEALTH & WELLNESS 27% HOUSEHOLD $7.3 Billion 9,000 25 100+ COUNTRY/ 16% LIFESTYLE FY21 NET SALES EMPLOYEES TERRITORY MARKETS 16% INTERNATIONAL OPERATIONS Results from fiscal year 2021 5
Slide 6: Choiceful, Disciplined Playbook
Choiceful, Disciplined Playbook Creates Competitive Advantage & Shareholder Value Leading brands loved by Purposeful & targeted in consumers where we play ECONOMIC PROFIT World class capabilities to Purpose-driven growth with drive operational excellence integrated ESG goals 6
Slide 7: Brands and Portfolio Have Never Been Stronger
Brands and Portfolio Have Never Been Stronger >80% 9 of 10 75% Majority 20% of portfolio is #1 U.S. homes have of portfolio has of businesses 2-Year Stack or #2 share our products superior growing market Growth2 brands consumer value share1 1Reflects dollar market share, IRI MULOP 13 weeks ending De
Slide 8: Continuing to Make Strategic Investments to Enhance Brand Strength & Drive Future Growth
Continuing to Make Strategic Investments to Enhance Brand Strength & Drive Future Growth • Accelerate topline Innovation Brand-Building momentum • Strengthen competitive moat Digital & Data Supply Chain • Build greater agility & Analytics resilience for the long-term 8
Slide 9: 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 & shopping experiences of the future Reimagine
Slide 10: IGNITE Positions Us Well to Build A Stronger Clorox
IGNITE Positions Us Well to Build A Stronger Clorox By Mitigating Headwinds & Capitalizing on Tailwinds Tailwinds How We are Capitalizing • Higher focus on health & hygiene • Launching bigger, sticker innovation led by lasting shifts in consumer behavior • Greater preference for trusted brands • Bra
Slide 11: Laser-Focused on Rebuilding Margins
Laser-Focused on Rebuilding Margins Remove COVID- Cost Savings Pricing Related Expenses • On track for • Taking pricing on • In-housing another year of 85% of the portfolio production strong cost savings • MSD to DD% • Optimizing supply • Robust pipeline increases chain that we continue to • In-mark
Slide 12: Capitalizing on Consumer Megatrends & Pandemic-Driven Shifts in Consumer Behavior
Capitalizing on Consumer Megatrends & Pandemic-Driven Shifts in Consumer Behavior IGNITE Leverages Four Create Long-Term Growth Consumer Megatrends Platforms Across our Portfolio • Heath & wellness • Multicultural millennials “Help me feel • Responsibility healthier everyday” • Personalization & cus
Slide 13: Help Me Feel Healthier Everyday
Help Me Feel Healthier Everyday Building a Global Cleaning & Disinfecting Brand (Retail) 13
Slide 14: Help Me Feel Healthier Everyday
Help Me Feel Healthier Everyday Building a Global Cleaning & Disinfecting Brand (INTL & PPD) 14
Slide 15: Help Me Feel Healthier Everyday
Help Me Feel Healthier Everyday Capitalizing on Tailwinds in our Household Essentials Portfolio 15
Slide 16: Help Me Create Joyful Experiences
Help Me Create Joyful Experiences 16
Slide 17: Help Me Act Responsibly
Help Me Act Responsibly so% PLANT BASED 15 DAYS ODOR ‘CONTROL GUARANTEED" 10X CLEANING POW! 80% LESS PLASTICt
Slide 18: Winning Frictionless Shopping to Sustain Momentum
Winning Frictionless Shopping to Sustain Momentum Comprehensive Strong Retail Digital Omni-Channel Execution Transformation Planning 18
Slide 19: Building Upon Progress We Have Made on IGNITE
Building Upon Progress We Have Made on IGNITE • Stronger, more relevant brands with purpose 3 – 5% +1pt Sales • Healthier core businesses Growth • Bigger, sticker innovation 2 – 4% • Fuel growth through expanded cost savings funnel • Advancing our ESG initiatives IGNITE IGNITE Original Revised IGNIT
Slide 20: Confident That Our Strategy & Actions Will Create Long-Term Shareholder Value
Confident That Our Strategy & Actions Will Create Long-Term Shareholder Value TODAY TOMORROW LONG-TERM • Mitigating near- • Rebuild margins • Drive consistent & term headwinds as pricing & in- profitable growth +3 to 5% housing flow Sales Growth • Investing to through strengthen our competitive moat
Slide 21: Well Positioned to Enhance Profitability & Create Long-Term Shareholder Value
Well Positioned to Enhance Profitability & Create Long-Term Shareholder Value • Our iconic brand portfolio has delivered significant growth & brand strength over the past two years • We are taking decisive actions to mitigate near-term headwinds & build a stronger, more resilient company • Our IGNIT
Slide 22: Financial Update
FINANCIAL UPDATE KEVIN JACOBSEN EVP & Chief Financial Officer 22
Slide 23: Key Messages
Key Messages • Long track record of creating shareholder value • Remain focused on delivering accelerated financial performance • Taking decisive actions to address near-term cost headwinds and rebuild margins 23
Slide 24: Long Track Record of Creating Shareholder Value
Long Track Record of Creating Shareholder Value 20-Year TSR (as of 12/31/2021) 650 Clorox 517 S&P 500 Jan-01 Dec-01 Jan-06 Dec-06 Jan-11 Dec-11 Jan-16 Dec-16 Jan-21 Dec-21 SOURCE: FactSet, 20 Year Total Share Return as of December 31, 2021 24
Slide 25: Healthy Cash Flow Generation Fueling Business Reinvestment & Cash Return to Shareholders
Healthy Cash Flow Generation Fueling Business Reinvestment & Cash Return to Shareholders $ in billions +10% CAGR (FY17-FY21) $1.3 B 19% $0.9 B $0.8 B $0.8 B $0.6 B 13% 13% 13% 11% FY17 FY18 FY19 FY20 FY21 Free Cash Flow Free Cash Flow as a % of Sales Free cash flow (a non-GAAP measure) represents ne
Slide 26: Disciplined Uses of Cash
Disciplined Uses of Cash STRONG INVESTMENT OVER THE LAST 2-YEARS TOP-TIER DIVIDEND GROWTH 1 CLX 7% Increased Increased Increased Peer average 5% A&P CAPEX Capabilities CASH RETURNED TO SHAREHOLDERS2 DEBT LEVERAGE3 $4.7 B over the last 5 Years Target: 2.0 – 2.5x $1.5 B 1.9 x 2.1 x 1.9 x 1.9 x $1.2 B
Slide 27: Disciplined Uses of Cash Driving Top-Tier ROIC
Disciplined Uses of Cash Driving Top-Tier ROIC CLX 26% Peer average 17% Return on invested capital (ROIC) as of fiscal year ending June 30, 2021. ROIC (a non-GAAP measure) is calculated as earnings before income taxes (a GAAP measure) and interest expense, computed on an after-tax basis as a percent
Slide 28: Remain Focused on Delivering Accelerated Financial Performance
Remain Focused on Delivering Accelerated Financial Performance Annual Goals Sales Growth +3 to 5% Adj. EBIT Margin Improvement +25 to 50bps Free Cash Flow % of Sales 11 to 13% Adjusted EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income, inte
Slide 29: Targeting to Accelerate Our Topline Growth
Targeting to Accelerate Our Topline Growth 5% • Stronger, more 4% 3 – 5% relevant brands 3% 2 – 4% 2% • Stronger core businesses 1% 2% • New growth runways, 0% supported by lasting 2014 2015 2016 2017 2018 2019 shifts in consumer 2014 – 2019 IGNITE IGNITE behavior Average Original Revised 2014-2019
Slide 30: Taking Decisive Actions to Address Near-Term Cost Headwinds & Rebuild Margin
Taking Decisive Actions to Address Near-Term Cost Headwinds & Rebuild Margin Short-Term Medium to Long-Term • Pricing • Margin accretive innovation • Cost savings • In-housing production • Optimizing supply chain 30
Slide 31: Long-Term Investment Case Remains Solid
Long-Term Investment Case Remains Solid • Strengthening competitive advantage • Attractive business model that delivers strong cash flow • Disciplined uses of cash supporting long-term value creation 31
Slide 32: CAGNY 2022
G The Clorox Company CAGNY 2022 February 24, 2022
Slide 33: CAGNY 2022 Appendix
CAGNY 2022 APPENDIX 33
Slide 34: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Dollars in millions & percentages based on rounded numbers Fiscal Fiscal Fiscal Fiscal Fiscal Year Year Year Year Year 2017 2018 2019 2020 2021 Net cash provided by operations – GAAP $871 $974 $992 $1,546 $1,276 Less: Capital expenditures $231 $194 $206 $254 $331 (1) Fr
Slide 35: Debt to Adjusted EBITDA Reconciliation (Debt Leverage)
Debt to Adjusted EBITDA Reconciliation (Debt Leverage) FY FY FY FY FY (1) EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT 6/30/17 6/30/18 6/30/19 6/30/20 6/30/21 to
Slide 36: Return on Invested Capital Reconciliation
Return on Invested Capital Reconciliation Dollars in Millions and percentages based on rounded numbers FY21 Earnings before income taxes (GAAP measure) $ 900 Add back: Noncash U.S. GAAP charges(2)(3) $ 357 (1) In accordance with SEC's Regulation G, this schedule provides the definition of a non-GAAP