Church & Dwight Corporate
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Safe Harbor Statement 2 01. WHO WE ARE 02. CATEGORY TRENDS 03. HOW WE DELIVER 04. HOW WE RUN THE COMPANY 05. FINANCIALS 3 01. WHO WE ARE 4 Started with Arm & Hammer Baking Soda 5 $3.5 Billion Diversified CPG Company 6 10 Power Brands 7 These 10 Brands Drive Our Results of sales and profits are represented by these 80% 10 power brands. 8 We Are a Serial Acquirer Acquired 2001 Acquired 2001 Acquired 2001 Acquired 2001 Acquired 2005 #1 Extreme Value Laundry #1 Battery Powered #1 Condom Detergent #1 Pregnancy Kit #1 Depilatory Toothbrush Acquired 2006 Acquired 2008 Acquired 2011 Acquired 2012 #1 Laundry #1 Oral Care #1 Adult & Kids Additive Pain Relief #1 Dry Shampoo Gummy Vitamin 9 Long History of Growth Through Acquisitions Net sales in billions $3.5 $1.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: Trojan, Nair and First Response acquired in two parts – 2001 and 2004. 10 We Have Clear Acquisition Criteria Primarily #1 Higher growth, Asset Light Leverage CHD Deliver or #2 share higher margin capital base in sustainable brands brands manufacturing, competitive logistics and advantage purchasing 11 Church & Dwight Is An Acquisition Platform BBB+ Revenue Operational Excellent Access to Growth Efficiencies Integration Capital Track Record 12 We Are Primarily a U.S. Company 82% of Church & Dwight is based in the United States. 13 Our Portfolio Is Balanced & Diversified A well-balanced portfolio of household and personal care. Household 48% Personal Care Specialty 44% Products 8% 14 We Operate in the Land of Giants 2016 Net Sales ($ billions) $65.3 $55.5 $18.2 $15.2 $12.2 $5.8 $3.5 P&G Unilever Kimberly Clark Colgate Reckitt Clorox Church & Dwight Source: 2016 SEC Filings and Corporate Websites 15 Deliver Outstanding Returns to Our Shareholders 2,800% 2,450% 2,450% 2,100% 1,750% 1,400% 1,050% Indexed Total Return Total Indexed 700% 562% 350% 325% 0% 1/97 5/00 9/03 1/07 5/10 9/13 1/17 Source: Market data as of 30-Jan-2017. ¹ Peers include Clorox, Colgate, Edgewell Personal Care, Energizer, Kimberly Clark , Newell Rubbermaid, Procter & Gamble, Reckitt Benckiser and Unilever. 16 02. CATEGORY TRENDS 17 Unit Dose Driving Laundry Category Growth Laundry Detergent is ~25% of Global Net Sales 25% Net Sales: Laundry $3.5B Detergent: ~25% 19 U.S. Unit Dose Category Trend 2013 2014 2015 2016 2016 2017 Q1 Q2 Q3 Q4 YTD 57.4% 30.6% 26.4% 18.9% 21.3% 21.2% 19.2% 15.8% 14.5% Unit Dose Source: Nielsen Total U.S. AOC 20 Unit Dose Increases YOY to 16% of Total Laundry Category 2015 2016 75% 11% 89%74% 10% Powder Liquid Powder AllLiquid Other 14% 16% Unit Dose Unit Dose Source: Nielsen Total U.S. AOC 21 Arm & Hammer Unit Dose Trends 2013 2014 2015 2016 2017 YTD 35.3% 29.1% 19.7% -2.4% -29.8% Source: Nielsen Total U.S. AOC 22 Unit Dose Market Share Unit Dose Market Share 2015 2016 2017 YTD Procter & Gamble 81.0 80.6 80.9 3.7 4.0 3.8 Sun Products 9.3 10.8 10.6 Henkel 2.8 1.6 1.5 Source: Nielsen Total U.S. AOC 23 Innovation Continues to Drive Cat Litter Growth Litter Category Growth Trend 8.1% 8.1% 6.4% 4.4% 2.7% Clumping Litter 2013 2014 2015 2016 2017 YTD Source: Nielsen Total U.S. AOC 25 We Have Grown Through Innovation Driven by Consumer Insights 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Retail Sales Source: Neilson Retail Sales for 2011 – 2016 26 Adult Conversion to Gummies Continues to Drive Category Growth Adult Gummy Vitamin Category Continues to Grow 48.1% 35.1% 24.4% 18.6% 16.8% Adult Gummy 2013 2014 2015 2016 2017 YTD Source: Nielsen Total U.S. AOC 28 Adult Gummy Form Continues Strong Growth 2012 2016 97% 89% All Other All Other 3% 11% Gummy Gummy Source: Nielsen Total U.S. AOC 29 Adults Consume a Considerable Amount of Vitamins 68% of U.S. adults take a dietary supplement of those, 3 out of 4 take a multivitamin Source: Nielsen Total U.S. AOC 30 vitafusion is the #1 Adult Gummy Vitamin Church & Dwight is number1 in gummy vitamins Source: Nielsen Total U.S. AOC 31 The Condom Category is Beginning to Shift to Online 32 Measured Channel Growth 2013 2014 2015 2016 2017 YTD Condoms 0.0% -1.4% -1.5% -2.6% -3.3% Source: Nielsen Total U.S. AOC 33 Unmeasured Online Channel Growth 34 Dry Shampoo is the Fastest Growing Segment of Haircare U.S. Dry Shampoo Category Continues to Grow 2012 2016 $32MM $115MM Source: Nielsen Total U.S. AOC 36 U.S. Dry Shampoo Category Continues to Grow 53.8% 37.0% 34.4% 33.7% 28.4% Dry Shampoo 2013 2014 2015 2016 2017 YTD Source: Nielsen Total U.S. AOC 37 Dry Shampoo Growth is Ahead of Us #1 Dry Shampoo in the U.S. and the U.K. U.S. Population: 324 million U.K. Population: 65 million Retail Category: $115 million Retail Category: $63 million Source: Nielsen 12/19/16 38 Significant Growth Opportunity in the Dry Shampoo Category There are 125 million women 18+ in the U.S. 66% of women don’t wash their hair every day. 13% of women 18+ use dry shampoo. Source: MRI Doublebase 2016*, ^Mintel 2013, ~Lightspeed GMI/Mintel January 2016 39 03. HOW WE DELIVER 40 TSR Drivers Deliver Results 1. Diversified Product Portfolio 2. Build Power Brand Shares 3. Drive International Growth 4. Focus on Gross Margin 5. Growth Through Acquisitions 6. “Best in Class” Free Cash Flow Conversion 7. Superior Overhead Management 8. Simple Incentive Compensation 41 Diversified Product 1 Portfolio 42 Diversified Product Portfolio Our Unique Product Portfolio Has Both Value and Premium Products Premium: 60% Value: 40% 43 Build Power Brand 2 Shares 44 Build Power Brand Shares Consistent Share Growth Formula Innovative Increased Increased Share Growth on New Products Marketing Distribution Power Brands Spending 45 Innovative New Products Increased Increased Share Growth on Marketing Distribution Power Brands Innovative Spending New Products 46 2017 ARM & HAMMER Launch OxiClean™ Stain Fighters Fresh Scent Booster Deep Cleaning Liquid Detergent ARM & HAMMER 3-IN-1 Power Paks Baking soda freshness with OxiClean stain fighters. 47 2017 LITTER Launches SLIDE Easy Clean-Up Clumping Litter 48 The Consumer Spoke and We Listened “Not satisfied with odor control of my current litter.” Source: Accupoll concept studies 49 The Consumer Spoke and We Listened “I didn’t realize scooping was not enough to control bacterial odors.” Source: Accupoll concept studies 50 The Consumer Spoke and We Listened “Cleaning the litter box is a nightmare.” Source: Accupoll concept studies 51 2017 Litter Innovation – “Slide” SLIDES right out DOESN’T NO STICK to SCRUBBING pan 52 53 2017 VITAMIN Launches VITAFUSION ENERGY L’IL CRITTERS Supports energy productions Twisted Fruits & Fruit ‘n Honey 54 2017 VITAMIN Launches vitafusion Simply Good Made with real honey and real fruit juice . 55 2017 TROJAN Launches TROJAN CONDOMS TROJAN LUBRICANTS TROJAN VIBRATIONS XOXO Chain Reaction power wand Softouch low odor thin condoms Sensations Keep Changing for Non-Stop Thrills Multi-speed Vibrating Massager 56 2017 TROJAN Innovation – “XOXO” SOFTOUCH THIN ALOE INFUSED lubricant 57 Condoms are Not Just Purchased by Men 1 in 3 condom purchases are by women. 58 XOXO Launches New Advertising Campaign #trustyourself 59 The First Time on Network Television 60 2017 DRY SHAMPOO Launches clean & light vibrant & fruity bare neon Same formulation, but with On-trend fragrance “barely there” fragrance profile bursting with that won’t compete with juicy pomegranate & perfume. jasmine. 61 62 2017 OXICLEAN LAUNDRY DETERGENT Restage OxiClean New claims, new packaging, new formula. 63 Increased Marketing Spending Innovative New Increased Share Growth on Products Increased Distribution Power Brands Marketing Spending 64 CHD is 18th Largest U.S. Advertiser 12. Glaxo SmithKline 18. Church & Dwight 20. Clorox 22. Kimberly-Clark 23. S.C. Johnson 26. Campbell Soup 29. Colgate-Palmolive Source: Kantar, Oct 15 – Sept 16 65 Marketing % of Net Revenue Marketing support over recent years has been steady. 14% 13% 12% 11% 2013 2014 2015 2016 66 Dollars Continue to Shift to Digital 2011 2016 TV / Radio / Print: TV / Radio / Print: 72% 87% Digital: 13% Digital: 28% 67 E-Commerce Growth 68 E-Commerce Expanding Around the World 30% 16% 10% 7% 7% 8% 3% Mexico France Australia U.S. Canada UK China 69 Online % Change YOY Pet Care 47% Beauty Care 38% Household Care 23% Personal Care 15% Source: The Nielsen Company 70 Church & Dwight Online Sales ~3% 2% 1% <1% 2014 2015 2016 2017E 71 Church & Dwight’s Largest Online Growers YOY 2015 vs. 2016 A&H LIQUID DETERGENT 445% CLUMPING LITTER 291% REPHRESH 112% VITAFUSION 98% CONDOMS 91% 72 Increased Distribution Innovative New Increased Share Growth on Products Marketing Spending Increased Power Brands Distribution 73 Sustainable Distribution Gains Change in Measured Distribution Channels 2013 Index vs. 2016 A&H Liquid Detergent 114 A&H Clumping Litter 140 Trojan Condoms 95 First Response 109 XTRA Liquid Detergent 93 Nair Depilatory/Wax/Bleach 112 Spinbrush Toothbrushes 126 OxiClean Stainfighter 117 Vitamins 134 Batiste 314 Source: Nielsen Total U.S. AOC 74 Share Growth on Power Brands Innovative New Increased Increased Products Marketing Distribution Spending Share Growth on Power Brands 75 Measured Channels - Church & Dwight Report Card Power Brands have met or exceeded category growth two out of three times over the last five years.