Church & Dwight (CHD) 2024 dbAccess Global Consumer Conference summary

Strategic Overview and Growth Model

• Maintains an Evergreen Model targeting 4% organic top-line and 8% bottom-line growth, with recent years trending above these targets.

• Focuses on seven power brands representing over 70% of revenues and profits, with ongoing plans for further brand acquisitions.

• Balanced portfolio: 49% personal care, 46% household, 5% specialty products, with 78% domestic and 17% international sales.

• Consistent gross margin around 45%, with personal care margins higher than household.

• Serial acquirer, with all major brands except one acquired since 2000 and net sales rising from $1.5B in 2004 to $5.9B in 2023.

Financial Performance and Outlook

• 2024 outlook projects 4%-5% organic and reported revenue growth, 8%-9% adjusted EPS growth, and cash from operations over $1.05 billion.

• Gross margin expected to expand by 75 basis points in 2024, targeting a return to 2019 levels.

• Marketing spend targeted at ~11% of sales, with SG&A flat as investments are made in e-commerce, international, and analytics.

• Free cash flow conversion averages 118% over five years, supporting strong valuation.

• Capital allocation prioritizes M&A, CapEx for growth, new product development, debt reduction, and shareholder returns.

Competitive Advantages and Innovation

• Maintains a 40-60 value-to-premium product split, with low private label exposure (~12%) in key categories.

• E-commerce sales have grown from 2% in 2016 to 20% currently, targeting 30% by decade's end.

• Largest year of innovation, contributing 2% incremental net sales, with strong performance in laundry, oral care, dry shampoo, and acne treatment.

• Clear acquisition criteria: seeks #1 or #2 brands in high-growth, high-margin, asset-light categories.

• Recent acquisitions TheraBreath and Hero have achieved all-time share highs in Q1 2024 and have significant runway for further growth.