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

Strategic growth model and performance

• Targets 4% annual organic growth, with 3% domestic, 8% international, and 5% specialty products contributions.

• Raised organic growth target from 3% to 4% based on 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 have grown from 1% in 2015 to 21% today, expected to reach 30% by decade's end.

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

Innovation, portfolio, and acquisitions

• Balanced portfolio: 37% value, 63% premium, enabling resilience in varied economic climates.

• Low private label exposure and strong online presence support stability.

• New product launches include Deep Clean detergent, Hardball lightweight litter, Batiste Touch and Sweat, Power Sheets, and TheraBreath antiseptic mouthwash.

• Acquisition criteria: category leadership, growth above 4%, high margins, asset-light, synergy potential, and long-term sustainability.

• Actively seeking acquisitions, with significant financial capacity for deals up to $5 billion.

Financial outlook and capital allocation

• 2024 outlook: 3.5% reported growth, 4% organic, 100-110 bps gross margin expansion, 8-9% EPS growth, and over $1 billion in cash from operations.

• Free cash flow conversion averages 119% over 10 years; recent investments have temporarily reduced this but are expected to normalize.

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

• CapEx expected to return to 2% of sales as capacity projects conclude.