Church & Dwight (CHD) Barclays 17th Annual Global Consumer Staples Conference summary

Strategic growth model and performance

• Raised organic growth target from 3% to 4% annually, with a 10-year average of 4.2%.

• Seven power brands account for 70% of revenues and profits, with $6 billion in sales, 78% domestic and 17% international.

• E-commerce sales grew from 1% in 2015 to 21% today, targeting 30% by decade's end.

• Acquisitions are prioritized, with strict criteria: category leadership, high margins, asset-light, and sustainable advantages.

• Consistent gross margin expansion targeted at 25-50 basis points annually.

Financial outlook and capital allocation

• 2024 outlook: 3.5% reported growth, 4% organic, 100-110 bps gross margin expansion, 8-9% EPS growth.

• Free cash flow conversion averages 119% over 10 years; recent CapEx investments expected to taper.

• Leverage expected at 1.6x by year-end, with capacity for a $5 billion deal while maintaining investment grade.

• Capital allocation priorities: M&A, CapEx, new product development, debt reduction, and shareholder returns.

• CapEx to normalize at 2% of sales as capacity projects conclude.

U.S. and international business trends

• U.S. business consistently delivers 3-4% growth, driven by leading brands in growing categories.

• Power brands like Arm & Hammer, TheraBreath, and Hero are at all-time share highs due to innovation.

• TheraBreath and Hero show significant household penetration growth, with substantial runway remaining.

• International business grows at 8% annually, with recent focus on expanding M&A capabilities outside the U.S.

• Brands like Batiste, Sterimar, and Waterpik are key international growth drivers; recent entry into Japan via OxiClean.