Church & Dwight Company, Inc. · NYSE:CHD
Church & Dwight — Q4 2023 Earnings Presentation
147 slides from Church & Dwight's earnings presentation, Feb 2, 2024
Slide 1: Church & Dwight Co., Inc. 2024 Analyst Day
CHURCH & DWIGHT CO., INC. 2024 ANALYST DAY
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; gross margin changes; trade, marketing, and SG&A spending; sufficiency of cash flows from operations; earnings per share; cost savings programs;
Slide 3: Who From Management is With Us Today?
Who From Management is With Us Today? Matt Farrell Rene Hemsey Chairman and Chief Executive Officer Chief Human Resources Officer Barry Bruno Carlen Hooker Chief Marketing Officer & President, U.S. Chief Commercial Officer Consumer Business Brian Buchert Surabhi Pokhriyal Strategy, M&A and Business
Slide 4: Agenda
Agenda Who We Are Financials U.S. Consumer and New Products Update Digital Acceleration International Story Specialty Products Division How We Run the Company Q&A 4
Slide 5: A Look Back: 2023
Strong reported and organic sales 1 growth and gross margin expansion. 2023 ARM & HAMMER LLD, ARM & HAMMER 2 Litter, Batiste, TheraBreath and Hero achieved all time high market shares. A Look Share gains on brands representing 3 close to 60% of our sales. Marketing spending back to historical 4 Back
Slide 6: Historical Total Shareholder Return
Historical Total Shareholder Return 10 YEAR 5 YEAR 3 YEAR 2023 12.6% 8.8% 4.0% 18.7% CHURCH & DWIGHT ANALYST DAY 2024 6
Slide 7: We have confidence in our future
We have confidence in our future. Steady U.S. Sustainable high Consistent Digitally savvy New Evergreen Strong 2024 growth ahead International innovation model is fundamentals growth rate healthy CHURCH & DWIGHT ANALYST DAY 2024 7
Slide 8: Who We Are
Who We Are Matt Farrell Chairman and Chief Executive Officer 8
Slide 9: Church & Dwight's Business Segments
Church & Dwight’s Business Segments 78% 17% 2023 Domestic International Total Company Net Sales $5.9B 5% Specialty Products Division CHURCH & DWIGHT ANALYST DAY 2024 9
Slide 10: Power Brands
FIRST RESPONSE VheraBreath. (2 Y o Ly i=) £ 7) =) [I O = a 7.) POWER BRANDS
Slide 11: 14 Power Brands
more than 85% of sales & profits are represented by these 14 POWER BRANDS 11
Slide 12: Focus from 14 Power Brands to 7 Power Brands
Focus from 14 Power Brands to 7 Power Brands. These seven brands primarily compete in larger categories and have the potential for global expansion. 12
Slide 13: Power Brands
POWER BRANDS 13
Slide 14: 7 Power Brands
more than 70% of sales & profits are represented by these 7 POWER BRANDS 14
Slide 15: We Have a Winning Formula
We Have a Winning Formula A balanced and Low private Strong and Acquisitive diversified label exposure consistent company portfolio innovation 15
Slide 16: A Balanced and Diversified Portfolio
A Balanced and Diversified Portfolio 5% SPD 46% Household 2023 49% Personal Care CHURCH & DWIGHT ANALYST DAY 2024 16
Slide 17: Product Portfolio of Both Value and Premium Products
Product Portfolio of Both Value and Premium Products 37% 2023 63% Value Premium CHURCH & DWIGHT ANALYST DAY 2024 17
Slide 18: Low Private Label Exposure
Low Private Label Exposure Weighted Average Private Label Share of Our Categories 16% 14% 12% Private Label 10% Consistently ~12% 8% 6% 4% 2% 0% 2018 2019 2020 2021 2022 2023 Source: Nielsen Total U.S. AOC CHURCH & DWIGHT ANALYST DAY 2024 18
Slide 19: Category Leading Innovation
Category Leading Innovation 19
Slide 20: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $5.9 $ Billions $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. CHURCH & DWIGHT ANALYST DAY 2024 20
Slide 21: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily High growth Asset Leverage Deliver #1 or #2 and high margin light C&D sustainable share brands that are manufacturing, competitive brands fast moving logistics and advantage consumables purchasing 21
Slide 22: 7 Power Brands Today and More to Come
7 Power Brands Today and More to Come Net Sales $6.5 $ Billions $6.0 $5.5 7 $5.0 6 $4.5 $4.0 5 $3.5 $3.0 4 3 $2.5 $2.0 2 $1.5 $1.0 $0.5 $0.0 1 184619981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023 CHURCH & DWIGHT ANALYST DAY 2024 22
Slide 23: Our Winning Formula
Our Winning Formula A balanced Strong and Low private Acquisitive and diversified consistent label exposure company portfolio innovation 23
Slide 24: Financials
Financials Rick Dierker Chief Financial Officer and Head of Business Operations 24
Slide 25: Q4 2023 Financial Highlights
Q4 2023 Financial Highlights Q4 OUTLOOK ACTUALS (as of November 3) Net Sales Growth +5.0% +6.4% Domestic: 5.7% Organic Sales +4.0% +5.3% International: 9.0% SPD: -9.2% Gross Margin expansion +260 bps Adjusted EPS +2.0%, $0.63 +4.8%, $0.65 Organic sales and adjusted EPS are non-GAAP measures. Refer t
Slide 26: FY 2023 Financial Highlights
FY 2023 Financial Highlights FY OUTLOOK ACTUALS (as of November 3) Net Sales Growth +9.0% +9.2% Domestic: 5.3% Organic Sales +5.0% +5.3% International: 8.5% SPD: -7.9% Gross Margin +210 bps +220 bps Reported EPS +80%, $3.03 +82%, $3.05 Adjusted EPS +6.0%, $3.15 +6.7%, $3.17 Cash from Operations ~$1B
Slide 27: Evolving the Evergreen Model
Evolving the Evergreen Model Prior New Domestic: 2% Domestic: 3% Organic Net Sales +3% International: 6% SPD: 5% +4% International: 8% SPD: 5% Gross Margin +25 bps +25 to +50 bps Marketing FLAT %, Higher $ FLAT %, Higher $ SG&A (25) bps (25) to 0 bps Operating Margin +50 bps +50 bps EPS Growth +8% +
Slide 28: New Evergreen Model Explained
New Evergreen Model Explained Organic • Fast growing categories • Fast growing acquisitions Net Sales • Taking share due to innovation • International growth Gross • Productivity outpacing inflation • Higher margin acquisitions Margin Marketing • Continue to drive efficiency • Higher $’s as the top
Slide 29: Outlook
2023 2024 OUTLOOK 2025
Slide 30: FY 2024 Financial Outlook
FY 2024 Financial Outlook New Evergreen Model 2024 Outlook Reported Sales Growth 4% to 5% Domestic: 3-4% Organic Sales Growth 4% 4% to 5% International: SPD: 4-5% 8% Gross Margin +25 to +50 bps +50 to +75 bps Marketing FLAT %, Higher $ FLAT %, Higher $ Adjusted SG&A (25) to 0 bps LEVERAGE Operating
Slide 31: EPS Growth 2024 - Back-Half Weighted
EPS Growth 2024 - Back-Half Weighted 16% First Half EPS Impacted By: Higher marketing spending in 1 8% support of new product launches mid-point Strong first half 2023 adjusted EPS 2 growth in the prior year (e.g. 11% adjusted EPS Growth) 0% 1H24E 2H24E FY24E CHURCH & DWIGHT ANALYST DAY 2024 31
Slide 32: 2024 Adjusted EPS Growth Breakdown
2024 Adjusted EPS Growth Breakdown (outlook 7-9%) Adjusted EPS Growth (ex-Megalac) 8% to 10% Megalac Impact (1)% Adjusted EPS Growth 7% to 9% Adjusted EPS is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most directly comparable GAAP measures. CHURCH & DWIGHT ANALYST DAY 2024
Slide 33: Net Sales Growth: 10 Year History
Net Sales Growth: 10 Year History 12.3% 9.8% 9.2% 8.1% 10 Year Average: 6.0% 4%-5% 5.1% 6.3% 3.2% 3.6% 2.9% 2.9% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E CHURCH & DWIGHT ANALYST DAY 2024 33
Slide 34: Organic Sales Growth: 10 Year History
Organic Sales Growth: 10 Year History 9.6% 4%-5% 10 Year 5.3% Average: 3.5% 4.3% 4.4% 4.3% 4.2% 3.6% 3.2% 2.7% Evergreen Target: 1.4% 4.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E Organic sales is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most directly comp
Slide 35: Volume Trend Continues to Improve
Volume Trend Continues to Improve 8.1% 5.0% 4.4% 3.4% 3.7% 3.1% 1.0% 1.0% 0.9% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E -5.1% Outlook as of February 2, 2024 CHURCH & DWIGHT ANALYST DAY 2024 35
Slide 36: 2024 Focus On Gross Margin
2024 Focus On Gross Margin Evergreen Target: +25 to +50 bps 50-75 bps 45.5% 45.2% ~80 bps remaining to get back to 2019 GM levels 44.4% 44.1% 43.6% 41.9% 2018 2019 2020 2021 2022 2023 2024E Outlook as of February 2, 2024 CHURCH & DWIGHT ANALYST DAY 2024 36
Slide 37: Gross Margin - 2024 vs. 2023
Gross Margin- 2024 vs. 2023 2023 2024E Price/Volume/Mix +220 bps +90 to +100 bps Manufacturing Costs (240) bps (140) to (130) bps Acquisition +90 bps - Productivity Programs +150 bps +100 to +105 bps Gross Margin Change +220 bps +50 bps to +75 bps CHURCH & DWIGHT ANALYST DAY 2024 37
Slide 38: Manufacturing Cost Inflation Explained
Manufacturing Cost Inflation Explained 130-140 bps of gross margin impact from higher manufacturing costs Other Manufacturing Costs • Depreciation on New Commodities Capacity Oil • New Distribution center Natural Gas 2024E Ethylene • International outsourcing HDPE of supply (capacity PCR driven) Die
Slide 39: 2024 Marketing Spend Target
2024 Marketing Spend Target 11.7% 11.8% 12.1% 11.1% 10.9% 11.0% 11.0% with 4-5% Net Sales 10.0% Growth represents $35MM YOY increase in marketing investment 2018 2019 2020 2021 2022 2023 2024E Outlook as of February 2, 2024 CHURCH & DWIGHT ANALYST DAY 2024 39
Slide 40: 2024 Adjusted SG&A
2024 Adjusted SG&A 14.2% 14.1% 14.7% 13.6% 13.0% Return to leverage in line with Evergreen model while making growth investments behind International and Ecommerce 2019 2020 2021 2022 2023 2024E Note: Adjusted SG&A is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most compara
Slide 41: Consistent Strong Adjusted EPS Growth
Consistent Strong Adjusted EPS Growth 7% to 9% Midpoint $3.42 $3.17 $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% -1.7% 6.7% 2016 2017 2018 2019 2020 2021 2022 2023 2024E Note: Adjusted EPS growth is a non-GAAP measure. Refer to the Appendix for a reconciliation to the mo
Slide 42: Best In Class FCF Conversion
“Best In Class” FCF Conversion 10 Year Average: 119% 129% 131% 126% 126% 125% 123% Elevated Capex 116% 112% 103% 97% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Refer to the Appendix for a reconciliation to the most directly comparable GAAP measures. CHURCH & DWIGHT ANALYST DAY 2024 42
Slide 43: Cash Conversion Cycle: Tight Control Of Working Capital
Cash Conversion Cycle: Tight Control Of Working Capital Drives Cash Conversion Cycle Improvement 52 40 36 34 32 32 27 27 22 22 days 21 19 18 18 14 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CHURCH & DWIGHT ANALYST DAY 2024 43
Slide 44: Strong Balance Sheet
Strong Balance Sheet Credit Rating: Total Debt/Bank EBITDA A3/BBB+ 2.6x 2.2x 1.9x 1.9x 1.6x 2.1x 1.5x 1.4x 1.8x 1.7x 1.6x 1.4x 1.4x 1.2x 0.7x 0.5x 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E Note: Total debt/EBITA is a non-GAAP measure. Refer to the Appendix for
Slide 45: Significant Financial Capacity
Significant Financial Capacity (in $millions) Cash & Cash Equivalents $344 Leverage • 2023 TTM Bank EBITDA = Capacity $4,000 Acquisition $1,350M Power: • Example: Acquisition $4.3B EBITDA multiple of 12x Current Debt Outstanding $2,425 As of 12/31/23 CHURCH & DWIGHT ANALYST DAY 2024 45
Slide 46: 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 CHURCH & DWIGHT ANALYST DAY 2024 46
Slide 47: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 3.8% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 1.8% ~2.0% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $224 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E
Slide 48: 4% Dividend Increase In 2024
4% Dividend Increase In 2024 $1.13 $1.09 $1.05 $1.01 $0.96 $0.91 123 $0.87 $0.76 consecutive years of dividends +119% +7.0% +14.5% +4.6% +5.5% +5.2% +4.0% +4.0% +4.0% +35% 2017 2018 2019 2020 2021 2022 2023 2024 CHURCH & DWIGHT ANALYST DAY 2024 48
Slide 49: U.S. Consumer and New Products Update
U.S. Consumer and New Products Update Barry A. Bruno EVP, Chief Marketing Officer & President, U.S. Consumer 49
Slide 50: U.S. Consumer Business: Confidence In Our Future
U.S. Consumer Business: Confidence In Our Future We Are We Thrive In Leaders In Acquisitions Difficult Have Room Growing Environments Categories To Run 50
Slide 51: Healthy, Growing Categories: 14 Power Brand Prior Look
17 Healthy, Growing Categories: 14 Power Brand “Prior Look” 2019 2020 2021 2022 2023 Laundry Clumping Litter Stain Fighters VMS Gummy Power Flossing Dry Shampoo Alcohol Free Mouthwash Acne Patch Toothache Toothpaste Baking Soda Battery Toothbrush Hair Growth Pregnancy Test Kits Condoms Depilatories
Slide 52: Healthy, Growing Categories: 7 Power Brand New Look
8 Healthy, Growing Categories: 7 Power Brand “New Look” 2019 2020 2021 2022 2023 Laundry Clumping Litter Stain Fighters VMS Gummy Power Flossing Dry Shampoo Alcohol Free Mouthwash Acne Patch 7.0% 9.5% 11.6% 18.2% 16.9% Weighted Avg Combined Category Growth Source: Circana; Total US – MULO; Data thro
Slide 53: We Thrive In Difficult Environments
We Thrive In Difficult Environments 37% Of Our Portfolio Is Value Low Private Label Exposure Weighted Average Private Label Share Of Our Categories 63% Private Label Premium Consistently 16% ~12% 14% 12% 10% 8% 6% 4% 37% Value 2% 0% 2018 2019 2020 2021 2022 2023 Source: L: Circana; Total US – MULO;
Slide 54: TheraBreath & Hero Acquisitions Still Have Room To Run
TheraBreath & Hero Acquisitions Still Have Lots Of Room To Run … Total Points Of Distribution 2.8x 3.7x 2.6x Total Points of Total Points of 2,382 2,228 853 2,257 613 599 Distribution Distribution TDP Change TDP Change -7.8% 3.5% 57.8% -2.3% 204.0% -20.4% vs YA vs YA Source: Circana, Total US – Mult
Slide 55: Household Penetration: Room To Run
Household Penetration: Room To Run … Mouthwash Acne Treatment 2019 63.1% 1.4% 16.3% 0.2% 2020 65.7% 2.7% 19.3% 0.9% 2021 64.2% 3.2% 20.5% 2.8% 2022 61.8% 4.5% 20.3% 4.4% 2023* 63.4% 7.3% 21.9% 6.4% Source: Numerator Insights; *12ME As pf 2023.11.30, CHURCH & DWIGHT ANALYST DAY 2024 55
Slide 56: CHD Power Brand Category Dynamics
Let’s Look At Some CHD Power Brand Category Dynamics 56
Slide 57: Fabric Care
Fabric Care 57
Slide 58: A&H Laundry: All Time Share High Achieved In 2023
A&H Laundry: All Time Share High Achieved In 2023 A&H Liquid Laundry Share Of Market 14.4% All-time Share High! 5.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Circana Total MULO Liquid Laundry, L52 WE12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024
Slide 59: Arm & Hammer Deep Clean
Introducing: Arm & Hammer Our Most Powerful Deep Clean Formula & Our First Entry Into the Mid-Tier Laundry Detergent Segment Launching Nationally In Q1 2024 59
Slide 60: Arm & Hammer Laundry Architecture Good/Better/Best
Arm & Hammer Laundry Architecture Good/Better/Best Good Better Best CHURCH & DWIGHT ANALYST DAY 2024 60
Slide 61: Arm & Hammer Deep Clean
Arm & Hammer Deep Clean 61
Slide 62: Arm & Hammer Power Sheets
Introducing: Arm & Hammer The First Mainstream Power Sheets Brand To Launch Laundry Detergent Sheets #2 Detergent Sheet on Amazon 4.5 Average Star Rating Already Biggest Growth Driver In The Sheet Category Launching Nationally In 2024 62
Slide 63: Arm & Hammer Power Sheets
Arm & Hammer Power Sheets 63
Slide 64: Cat Litter
Cat Litter 64
Slide 65: Cat Litter: Category Consumption
Cat Litter: Category Consumption $ Consumption Change vs. YAG 2023 11.7% 11.8% Category Arm & Hammer Source: Circana, Total US – Multi Outlet, CY 2023 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 65
Slide 66: A&H Litter: All Time Share High Achieved In 2023
A&H Litter: All Time Share High Achieved In 2023 Clumping Litter Dollar Share 24.8% 2019 - 2023 All-time Share High 23.6% 2019 2020 2021 2022 2023 Source: Circana Total MULO + Pet A&H Clumping Litter Sales, L52 WE12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 66
Slide 67: Arm & Hammer HardBall
Introducing: We’re Changing The Arm & Hammer Lightweight Litter HardBall Experience Lightweight Perfected: Ultra-compact strong clumps Nearly 60% lighter than our regular clay litter Plant based 4.2 Average Star Rating* Expanding Nationally In 2024 *Amazon.com 67
Slide 68: HardBall: Lightweight Fair Share Is A $100MM Opportunity
HardBall: Lightweight Fair Share Is A $100MM Opportunity A&H Share Of Clumping Litter Segment 29% 25% 4% A&H Lightweight A&H Total A&H Traditional Share Clumping Share Weight Share Source: Circana: Total US MULO + Pet CY 2023 Ending 12.31.23 CHURCH & DWIGHT ANALYST DAY 2024 68
Slide 69: Arm & Hammer HardBall
Arm & Hammer HardBall 69
Slide 70: Dry Shampoo
eo eee,, e e e Dry Shampoo 70
Slide 71: Batiste Drives Dry Shampoo Category Growth
Batiste Drives Dry Shampoo Category Growth $ Consumption Change vs. YAG 2023 15.6% 16.0% Category Batiste Source: Circana, Total US – Multi Outlet, CY 2023 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 71
Slide 72: Batiste: All Time Share High Achieved in 2023
Batiste: All Time Share High Achieved in 2023 Dry Shampoo Dollar Share 46.3% 2019 - 2023 All-time Share High 37.2% 2019 2020 2021 2022 2023 Source: Circana Total MULO Dry Shampoo, L52 WE12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 72
Slide 73: Batiste Sweat & Touch Activated
Introducing: Batiste Our Next Innovation Sweat & Touch In Dry Shampoo Activated A burst of fragrance with every touch or drop of sweat for up to 24 hours of freshness 4.5 Average Star Rating* Launching Nationally In 2024 *Ulta.com 73
Slide 74: Batiste Sweat & Touch Activated
Batiste Sweat & Touch Activated 74
Slide 75: Vitamins
Vitafusion) Vitamins
Slide 76: Vitafusion Update
Vitafusion Update What once made Vitafusion …is now prevalent unique… in the VMS category Gummy Form Great Taste Wide Assortment Competition has grown from 6 to 60 Gummy VMS competitors CHURCH & DWIGHT ANALYST DAY 2024 76
Slide 77: The Combination Has Resulted In Share Erosion Over Time
The Combination Has Resulted In Share Erosion Over Time 30% Vitafusion Market Share and Category Sales (Adult Gummy) 25% 23.9% 20% 15% 12.3% 10% 5% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 20
Slide 78: The Good News: Consumers & Retailers Still Love Vitafusion
The Good News: Consumers & Retailers Still Love Vitafusion Consumers Still Choosing Us More Than Our Brands Still Have Highest HH Gummy Any Other Gummy Brand In Biggest VMS Penetration Retailers Household Penetration - Gummy VMS 10.9% #1 6.3% 6.0% Vitafusion OLLY Nature Made Source: L-Circana, WE12.
Slide 79: Vitafusion 2024
Vitafusion 2024 Base Formula Upgrades New Displays New Advertising Texture & Flavor Enhancements New Packaging New Forms More pop! at shelf. Simpler for consumers to shop. Soft Chews Goal: Stabilize The Business In 2024 To Return To Growth In 2025 CHURCH & DWIGHT ANALYST DAY 2024 79
Slide 80: Mouthwash
TheraBreath. Mouthwash
Slide 81: TheraBreath Drives Mouthwash Category Growth
TheraBreath Drives Mouthwash Category Growth $ Consumption Change vs. YAG 2023 85.6% 12.8% Category TheraBreath Source: Circana, Total US – Multi Outlet, CY 2023 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 81
Slide 82: TheraBreath: All Time Share High Achieved In 2023
TheraBreath: All Time Share High Achieved In 2023 Mouthwash Dollar Share 13.3% 2019 - 2023 All-time Share High +45% +59% 2.6% 2019 2020 2021 2022 2023 Source: Circana; Total MULO Total Mouthwash, L52 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 82
Slide 83: TheraBreath Deep Clean Alcohol Free
Introducing: TheraBreath Alcohol Free Deep Clean Antiseptic Rinse Antiseptic accounts for 30% of Total Mouth Wash Category Kills 99.9% of Germs No Burn Dentist Formulated Launching Nationally In 2024 83
Slide 84: Acne Treatment
Hero. Acne Treatment
Slide 85: Hero Drives Acne Category Growth
Hero Drives Acne Category Growth $ Consumption Change vs. YAG 2023 72.9% 20.4% Category Hero Source: Circana, Total US – Multi Outlet, CY 2023 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 85
Slide 86: Hero: All Time Share High Achieved In 2023
Hero: All Time Share High Achieved In 2023 Total Acne Dollar Share 18.4% 2019 - 2023 All-time Share High 0.2% 2019 2020 2021 2022 2023 Source: Circana; Total MULO Acne Treatment, L52 WE 12.31.2023 CHURCH & DWIGHT ANALYST DAY 2024 86
Slide 87: Hero Innovation Update
Hero Innovation Update Acne Patches Acne Prone Skin Cleansing New in 2023 Upgraded formula & new pack size Launching Q1 2024 CHURCH & DWIGHT ANALYST DAY 2024 87
Slide 88: Hero Mighty Patch
Hero Mighty Patch 88
Slide 89: Great Momentum + Great NPD: We're Betting Big On 2024
Great Momentum + Great NPD We’re Betting Big On 2024! 89
Slide 90: US Domestic Sales Evergreen Target: +3%
US Domestic Sales Evergreen Target: +3% 3% United States 4% 8% International 5% Specialty Products CHURCH & DWIGHT ANALYST DAY 2024 90
Slide 91: Consumer Domestic Organic Sales Performance
Consumer Domestic Organic Sales Performance 10.7% 5.7% New Evergreen 4.3% 4.0% Target: 3.0% 3.1% 3.6% 3.0% 2.0% 1.4% 0.9% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Organic sales growth is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most directly comparable GAAP meas
Slide 92: Digital Acceleration
Digital Acceleration Surabhi Pokhriyal Chief Digital Growth Officer 92
Slide 93: We're Growing Where Our Consumer Lives - Online
We’re Growing Where Our Consumer “Lives" - Online VISUAL 70% of ALL purchases 81% of US consumers Online, the digital will be ‘Digitally are omnichannel shelf changes Influenced’ by 2027 shoppers by the second! SOURCE: Forrester, WARC, Profitero CHURCH & DWIGHT ANALYST DAY 2024 93
Slide 94: eCommerce Continues To Accelerate For Our Brands
eCommerce Continues To Accelerate For Our Brands % Of Global Church & Dwight Consumer Net Sales 20% 16% 15% 13% 8% 7% 5% 2% 2016 2017 2018 2019 2020 2021 2022 2023 CHURCH & DWIGHT ANALYST DAY 2024 94
Slide 95: Growing Online Share in 6 of 7 Power Brands
Growing Online Share in 6 of 7 Power Brands Record Online Shares Arm & Hammer Laundry, Litter, TheraBreath, Nair, Spinbrush 95
Slide 96: Delivering Media ROI & Leveraging Digital At Scale
Delivering Media ROI & Leveraging Digital At Scale Media ROI trend vs. % of spend on Digital 80% 2019 2020 2021 2022 2023 Media ROI % of Spend on Digital CHURCH & DWIGHT ANALYST DAY 2024 96
Slide 97: Driving Growth
Driving Growth Consumer Executional Connection Excellence 97
Slide 98: Connections With Consumers Through Digital Touchpoints
Connections With Consumers Through Digital Touchpoints CHURCH & DWIGHT ANALYST DAY 2024 98
Slide 99: Leveraging Technology Guided By Human Insight
Leveraging Technology Guided By Human Insight Creating Immersive Developing Content & Copy At Consumer Experiences Scale, Fit For Purpose CHURCH & DWIGHT ANALYST DAY 2024 99
Slide 100: Social & Influencer Connections With Content Fit-For-Platform
Social & Influencer Connections With Content Fit-For-Platform Authentic & Bite Sized One-Click to Cart Thumb Stopping ‘Snacky’ Content CHURCH & DWIGHT ANALYST DAY 2024 100
Slide 101: Insights & Testing Driven Digital-to-Brick & Mortar Launches
Insights & Testing Driven “Digital-to-Brick & Mortar” Launches Consumer Insight Category Insight Audience Testing with AI A/B Test & Scale CHURCH & DWIGHT ANALYST DAY 2024 101
Slide 102: Scale & Accelerate Digital Growth
Scale & Accelerate Digital Growth Online Tech Focus on Sales & Powered Efficiency Share & & Human Profitability Growth Guided 102
Slide 103: International & Specialty Products
International & Specialty Products Michael Read President, Consumer International and Specialty Products 103
Slide 104: International Story
International Story 104
Slide 105: International Organic Sales Evergreen Target: +8%
International Organic Sales Evergreen Target: +8% 3% United States 4% 8% International 5% Specialty Products CHURCH & DWIGHT ANALYST DAY 2024 105
Slide 106: International Sales By GMG & Subsidiaries
International Sales By GMG & 6 Subsidiaries 37% 27% Canada Global Markets 2023 Group 12% International UK Net Sales 8% Mexico ~$1B 7% 3% 6% Australia Germany France CHURCH & DWIGHT ANALYST DAY 2024 106
Slide 107: GMG Continues to be the Fastest Grower
GMG Continues to be the Fastest Grower International sales has tripled GMG has doubled its importance in size since 2009 18% 37% GMG GMG 2009 2023 82% 63% Countries Countries CHURCH & DWIGHT ANALYST DAY 2024 107
Slide 108: Above Evergreen Each Quarter & Full Year
Above Evergreen Each Quarter & Full Year New Evergreen Target of 8%. +11.6% 9.0% 8.5% Evergreen +7.3% Strong growth in all 6 8.0% subsidiaries with +6.1% improving portfolio 6.0% mix. GMG driving double digit growth led by Q1 23 Q2 23 Q3 23 Q4 23 FY 2023 China, APAC and EMEA. CHURCH & DWIGHT ANALYST
Slide 109: International Organic Sales Performance
International Organic Sales Performance New 10.0% Evergreen 9.2% 8.6% Target: 8.5% 8.1% 7.8% 7.8% 8.0% 5.0% 3.3% 2.8% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Organic sales growth is a non-GAAP measure. Refer to the Appendix for a reconciliation to the most directly comparable GAAP measure.
Slide 110: Geographic Expansion: International Runway Ahead
Geographic Expansion….International Runway Ahead % of % of U.S. Domestic International Sales Sales Top 10 CPG Company 41% 59% AVG% Church & Dwight 83% 17% CHURCH & DWIGHT ANALYST DAY 2024 110
Slide 111: Brands Consumers Love That Travel The Globe
Brands Consumers Love That Travel The Globe U.S. Brand Expansion International OTC & Acquisition and Leveraging Personal Care Portfolio Acceleration Innovation CHURCH & DWIGHT ANALYST DAY 2024 111
Slide 112: Three Reasons To Believe
Three Reasons To Believe Disciplined GMG Revenue Digital THERABREATH Portfolio HERO Transformation Management Acceleration Strategy Future Core Acquisition Proofing Capabilities Acceleration Building CHURCH & DWIGHT ANALYST DAY 2024 112
Slide 113: Specialty Products Division
Specialty Products Division 113
Slide 114: SPD Organic Sales Evergreen Target: +5%
SPD Organic Sales Evergreen Target: +5% 3% United States 4% 8% International 5% Specialty Products CHURCH & DWIGHT ANALYST DAY 2024 114
Slide 115: Specialty Products Division
Specialty Products Division 55% 12% Animal Megalac 2023 Nutrition SPD Net Sales ~$321MM 33% Specialty Chemicals CHURCH & DWIGHT ANALYST DAY 2024 115
Slide 116: Specialty Products Division Organic Growth (ex-Megalac)
Specialty Products Division Organic Growth (ex-Megalac) 2.5% -7.9% 2023 2023 ex-Megalac CHURCH & DWIGHT ANALYST DAY 2024 116
Slide 117: Animal & Food Production
Animal & Food Production Delivers Gut Health Solutions & Maximizes Feed Efficiency CHURCH & DWIGHT ANALYST DAY 2024 117
Slide 118: Animal Productivity: Growing International Presence
Animal Productivity: Growing International Presence % International Sales 17% +25% Net Sales Growth vs 2022 <6% 2015 2023 CHURCH & DWIGHT ANALYST DAY 2024 118
Slide 119: How We Run The Company
How We Run The Company Matt Farrell Chairman and Chief Executive Officer 119
Slide 120: 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 121: 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 122: 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 123: Climate Is More Relevant Than Ever, Especially For Younger Consumers
Climate Is More Relevant Than Ever, Especially For Younger Consumers 67% make a sustainable planet their top priority. Datapoints shown for Gen Z Source: Pew Research Center, survey April 20-29, 2021; NCP survey, 2021 123
Slide 124: Church & Dwight's Environmental Heritage
Church & Dwight’s Environmental Heritage 1888 1907 1970s 2017 2018 2021 2023 Company Company Sole sponsor of Partnering 100% of global Commitment Commenced introduces institutes the first Earth Day. with the Arbor electricity to Science projects for pro- use of Day demand offset Based Targets Scienc
Slide 125: 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 CHURCH & DWIGHT ANALYST DAY 2024 125
Slide 126: 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 127: Industry Leading Revenue Per Employee
Industry Leading Revenue Per Employee Revenue per Employee $1,020 (in ‘000s) CHD CLOROX PG Kenvue COLGATE KIMBERLY RECKITT NEWELL EDGEWELL Source: Most recent SEC filings CHURCH & DWIGHT ANALYST DAY 2024 127
Slide 128: Simple Compensation Structure
Simple Compensation Structure Net Revenue Bonuses are tied 100% to business results. Strategic Gross Initiatives Margin Management is required to Expansion be heavily invested in company stock. Cash EPS From Operations CHURCH & DWIGHT ANALYST DAY 2024 128
Slide 129: All Church & Dwight Employees Focus On Gross Margin
All CHURCH & DWIGHT Employees Focus On Gross Margin Gross margin is 20%of all employees’ annual bonus. CHURCH & DWIGHT ANALYST DAY 2024 129
Slide 130: Key Gross Margin Growth Drivers
Key Gross Margin Growth Drivers Good to Supply Chain Great Cost Optimization Optimization Acquisition New Products Synergies CHURCH & DWIGHT ANALYST DAY 2024 130
Slide 131: 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 132: Minimal Capital Investment
Minimal Capital Investment Capital Expenditures as a % of Sales 5.4% 3.8% 3.3% 3.0% 2.8% 2.5% 2.5% 2.3% 2.1% 2.1% 2.0% 1.8% ~2.0% 1.7% 1.4% 1.4% 1.2% $135 $64 $77 $75 $67 $71 $62 $50 $45 $60 $74 $99 $119 $179 $224 $180 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E
Slide 133: 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 134: Long History of Growth Through Acquisitions
Long History of Growth Through Acquisitions Net Sales $5.9 $ Billions $1.5 2004 2005 2006 2008 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. CHURCH & DWIGHT ANALYST DAY 2024 134
Slide 135: We Have Clear Acquisition Criteria
We Have Clear Acquisition Criteria Primarily High growth Asset Leverage Deliver #1 or #2 and high margin light C&D sustainable share brands that are manufacturing, competitive brands fast moving logistics and advantage consumables purchasing 135
Slide 136: 7 Power Brands Today and More to Come
7 Power Brands Today and More to Come $6.5 Net Sales $6.0 $ Billions $5.5 7 $5.0 6 $4.5 $4.0 5 $3.5 $3.0 4 3 $2.5 $2.0 2 $1.5 $1.0 $0.5 $0.0 1 184619981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023 CHURCH & DWIGHT ANALYST DAY 2024 136
Slide 137: A Look Ahead to 2024 - Strong Fundamentals
1 Strong organic growth. A Look AHEAD 2 Meaningful gross margin expansion. to 2024 – 3 Great new product pipeline. Strong 4 Investing in International and E-commerce. Fundamentals 5 Strong cash flow generation to fund future acquisitions. 137
Slide 138: Audience Questions
Audience Questions Matt Farrell Rene Hemsey Chairman and Chief Executive Officer Chief Human Resources Officer Barry Bruno Carlen Hooker Chief Marketing Officer & President, U.S. Chief Commercial Officer Consumer Business Brian Buchert Surabhi Pokhriyal Strategy, M&A and Business Partnerships Chief
Slide 139: 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 140: Reconciliation of Non-GAAP Measures: Organic Sales Growth
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 p
Slide 141: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2023 2022 2021 2000 2019 Adjusted SG&A Reconciliation SG&A - Reported 15.2% 20.8% 11.7% 12.1% 14.4% Brazil Charge 0.0% 0.0% 0.0% 0.0% -0.2% Flaw less Earnout Adjustment 0.0% 0.0% 1.9% 1.9% -0.2% Flaw less I ntangible Asset
Slide 142: Reconciliation of Non-GAAP Measures: Earnings Per Share
RECONCILIATION OF NON-GAAP 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-period performance.
Slide 143: Reported & Adjusted Non-GAAP Reconciliations
REPORTED & ADJUSTED NON-GAAP RECONCILIATIONS For the year ending December 31, 2023 2022 2021 2020 2019 2018 2017 2016 Adjusted EPS Reconciliation EPS - Reported $ 3.05 $ 1.68 $ 3.32 $ 3.12 $ 2.44 $ 2.27 $ 2.90 $ 1.75 Pension Settlement Charge $ - $ - $ - $ - $ - $ - $ 0.12 $ - Brazil Charge $ - $ -
Slide 144: Reconciliation of Non-GAAP Measures: Free Cash Flow
RECONCILIATION OF NON-GAAP 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 determining the amount
Slide 145: Reconciliation of Non-GAAP Measures: Total Debt to Bank EBITDA
RECONCILIATION OF NON-GAAP 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 and interest expense income t
Slide 146: Total Debt to Bank EBITDA, Continued
RECONCILIATION OF NON-GAAP 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, interest expense,
Slide 147: Reconciliation of Non-GAAP Measures (Q4'23)
RECONCILIATION OF NON-GAAP MEASURES (Q4’23) CHURCH & DWIGHT ANALYST DAY 2024 147
Church & Dwight Company — Q4 2023 Earnings Presentation on 6ix