Church & Dwight (CHD) 1 Feb 202019 Q4 Earnings call transcript

Okay, gang.

We’re going to get going now.

Okay. Thank you all for coming today and thanks, everyone, who is dialing in from office or home. I’m going to begin with the Safe Harbor statement. read your to everybody recommend that leisure. at I General today we Head U.S. legal have who Cugine; International is who CMO, questions; runs management, Supply us with our Steve CFO; Products, our Say Rick our Dierker, have Rick who from Britta Chain; Global and New if Wood, our Counsel, you and Spann, any of runs Bomhard; Paul Sales.

All right.

you a here’s short right So to – going now. give I’m story

other posted or to to juggernaut consecutive for really X% The XX grew We pay company held So XXX you of share. out the This the second company. slides. a International to the be grew a organic don’t year year. growth organic continues and terrific posted XX and have brands U.S. X%. had of our power attention our organic is X.X% sales sales growth that

And from time, quarter as Products it year, two Specialty the the And sign after down turned in the finally, positive encouraging And we growth had another quarter. the to reason turned that record the domestic we became organic returned we QX volumes had cash XXXX. healthy. because ended dairy positive And years. an market XXXX. in Last business was up is is fourth operations

looking now XXXX. ahead So to

growth And EPS organic with X% our that calling the we’re CPG. that is business. X% and private tier growth, in to label consistent We’re low-margin Evergreen X.X% net is of gummy exiting calling top model, and

we three, very focus Number as Evergreen that an performance. we I drives and employees. on & Number in that’s why to execute consumer Dwight have an Church to what two, cash. our is model a one, standout for are the our familiar ability Number minute shareholders Now a we space. our with want recap have

We deliver line line and growth top meaningful bottom year-after-year.

underappreciated highest sales with metric. very employee stat a have company and an that of is lean per our of employee peers, sales the per We any

We are becoming many savvy. categories innovators product and offerings across year-after-year with new we’re digitally

and that X% much X%. we thinning online, it The led included women’s hair hair choices us good dry in pickup shampoo, higher of store. Those to be it’d our buy acquisitions. made we to include water not when are choices But does today removal, comes have flossers solutions. online gummy If vitamins, than sales that, and

in So we Church & invest believe to no Dwight. CPG there’s place better than

here’s record. So our track

Let’s go slide. next to the

Here we are.

look a that’s at look And we So our XXXX last TSR of shareholders. delivered you our returns on was years, if top that plus XX and X.X%, XXXX, five to three, XX%. and double-digit at

to on move Let’s the the formal program. of part

So about who up to we’re story. we’re on an about innovation you how are and to about talk to brand. tell Britta then and to and And talk update Rick we of and the international, them we is up the and egg going animal financials. – and the Steve company, I’ll back run with kind come end going come ham and productivity consistent winning. are, come for going master going is also Britta give you I why

All first, are. right, we who

at for And – talk Evergreen well, as the the long-term not top is model. let’s growth years, average of going X% So sales hearts X% it green XX And This the line, employees, X you? our shareholders you all about well, last business bottom has in our been organic of you but X.X%. only our line. say, how’s in if look

long-term that and U.S., that X% of X% where’s Products. one international from algorithm. always from? in this it’s market the is coming X% Well, any hit We but Specialty X% don’t kind the the So year,

profits. the for and is part consumer have brands? we those XX revenues of portfolio. power have A power We your or And brands lots what account and say, you brands. half XX products than of very And little more house. of bit Well, If have are – we well-balanced lots brands. our XX%

XX%; you Products personal X%. of can at household, The those see you balloons are home, For and at those going just couple Specialty XX%; care, of off.

is that, Now in in And it’s perform XX% economy. a is we a portfolio, premium diversified means and That value. for runway of have lot XX% any virtually we well international.

still been of XX% said, last as So I’ve has the international juggernaut, company. only a for the five years,

So to go we’ve way there. a long got

do in the the operate we of And giants. land

sales, are us in we gives competitors significantly You than we all advantage. of larger think this have can see, $X.X are. billion We an our

quick So of fast, we’re acquisitions. can can make better. X,XXX communication you to – a fast, we’re adapt easier, employees, can When X,XXX have history is change you move And only your you have long decisions, we you nimble. and

added almost from since that And XX a sales over years, of last billion criteria. very XXXX the lot acquisitions. have We’ve in and $X specific we came acquisition

We for brand they look two to to chain asset-light. going or that has share, supply have need sustainable a our leverage able be footprint competitive only to needs We’re to be number a high-growth, high-margin, and must one number advantage.

XX, since the XX only we’ve power XXXX, year And year XXXX, our the out years, the over big we brand of & so was XX XX the ARM last had acquired HAMMER. In brands.

we So brands the what XX house around is say today, XX tomorrow.

right exposure five a know private One, we three, high have We we to winning? to we are shares; two, label. we’re how the reasons. categories; why grow have don’t Now in

are on We’re online trend. we and growing

So let’s the look categories. at

So categories weighted general, X%. categories’ if the grow four you in our over average the look at years, last

of the is growth So the X%. organic for company’s long-term underpinning this

share, is card. report As our far as growing this

doing. you You don’t card CPG we’re year, many this companies. tell get report for but every we how

brands, we So time generally green. lots questions XX for see first And we get major laundry can the the of for maintain out category. of this And you year our we’re XX, about share. our growth XX

what’s laundry? we’ve over had of So laundry. three in the share in years, basis long-term So the XXX trend points last

winner was and Henkel has The & Gamble struggled. other Procter

you quarter-to-quarter, go questions from Now, know, we channels. have on some as you’ll non-measured

are if even significantly how XX%, electric be represented right, for electric and XX%, non-measured a you’ll of categories. our channels see flossing, big going the less are for women’s these than hair to all you our you go to XX% thinning But of XX%. more give of on our sense me some – Let recent categories Nielsen. power far some categories, Most grooming

So in mind forward. something going to bear

private can weighted low exposure. stable lines see exposure chart, our the of of Only average label and label can to only five have label. private we’re it’s have you share categories growing The private We that relatively from our for you see on XX%. online. is And as categories

we Amazon, in Today, were in fourth be XXXX, on of – hit products we first the a sales. quartile. came online retailer. are to goal have is to and number X% in and one we Back course, we have our Amazon. We when of quartile XXXX, number over of X% online products And XXXX it lots one goal

on Okay, trend.

acquired on So think it’s we we’re of all Take a while and through business we’re trend. XXXX. four BATISTE, we our in brands

So million dry convenient in in solution between women This sales to shampoos. a business XXXX. wet with shampoo was $XX was a

what If in of kind the you have U.S.? runway you do look at

and the the in of XXX wash million don’t are use dry Well, of every over XXX shampoo. hair today U.S., their them women of age them XX% day there million Two-thirds XX. – women

it’s penetration, only look X.X% in if you at Now, the U.S. household

is big it where The out, it market, well, trying the in mature figure We how at the that’s U.S. shampoo the that’s be most look originated. So why could UK to dry we’re UK.

the UK $XXX is double the U.S. to the compare we comparison if the shampoo million to with is, So we see retail U.S. will can middle million the $XXX that And at by from where dry in in innings. where is time. over market

ahead runway being lot So number us. the shampoo means, dry one of of have we a

So next women’s electric hair up removal. is

So we in electric number FLAWLESS. bought women’s hair the one remover

face, whole these body. remove So are so I’ll brow, and leg – to left to tools go right,

of ways lot less look looking the this here runway at convenient for And household to So U.S. the hair. it’s X% you the only world, women so a than for and X% remove of business. are penetration, in if rest

water up Next is flossers.

number have We and the by the recommended pulse ADA. power

do they water are XX% floss people So are flossers flossers. We knows, easiest of can And even Everybody consumers discovering story hands. show flossing. what’s of the to a Water should. though the the solution don’t everyday, there?

Again, just in XX% high that penetration. toothbrushes. X%. look we penetration household electric you for not in look but go X% example, it’s the you the Europe, if as U.S. for at – at at as then bad, XX% look to And if think could only

with getting flossers ahead of the just on a we’re lot water started Again, got of outside lots So trend, us. U.S. runway –

Next up is gummy vitamins.

if form was You form well. the when X% know The and than the go more story And you of capsules. to back we appealing the business, gummy the category. adult gummy bought pills is pretty

billion from XXXX today, it’s to at the XXXX of grow. from XXXX, million And of to $XXX $X.X category, grew to look if size runway. Now you the it continues lots just XX%. It

And finally, solutions. then thinning hair is

XX% one fiber have number We hair XX. men all it’s thinning supplement. people’s by number have hair We the loss mind. and noticeable know of of the hair age one women the and on

great So to we have solutions that.

going I’m to master Britta talk about to bring up brand. now the And

HAMMER everyone. than million far our might & remember, Okay. It’s you is dollar a ARM sorry, brands. by Hello, billion, more So biggest [indiscernible] – brand.

our might really to year last you You more So in iconic important campaign year, to Power this we And institution. remember presented us. from

you Now, pretty I most are skeptical. of know

Is little boss. share a I working? don’t first. a this So couple results my why You’re thought, bit really I like of

buying XX that’s to ambition room who months, seven X.X buying XX are in out it picture And out of households & added ARM and households & currently X%. HAMMER. seeing campaign households three the an increase ARM launched & my HAMMER. actually, have of is we is buying Since is is we’ve four ARM this nearly representative, of actually And actually you’re HAMMER, this now if million

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what more. you it brand More people if about health? spending buying it, great is a sign for So think and

is very ARM right? HAMMER & clear growing I So think that’s and that wonderfully, healthy very answer

for some And want we those & have one you categories. you single have And think HAMMER of ARM we for saw And & our of who those you There it to every go. our got last just to and year, who seen cuter. about a you I ARM want how cats, of HAMMER. brands I that they note of of we might couple communicate show

a have look the just cats. So at

[Commercials]

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we You break through. seen recently it’s might our at this & HAMMER a last campaign, the one of dental very launched not to campaign year, just end because hard have ARM very

that illustrates you A, you also commercial no is how different category. this hope, might works dental it in I campaign see; what normal So appreciate secondly, and matter a to it

one. look let’s at So that

[Commercials]

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[Commercials]

is to the what’s important broad single campaign with can billion driving we still X every together all of & different but overall what This brands. of and do the ARM what’s insight, HAMMER playing on spectrum those consumer bringing a it and the categories,

pretty unique. So that’s I think

detergent. CLEAN actually not here or new and Well, of your all wheel & sitting powerful. clean, it’s on SIMPLE a something much new. it’s rear but standing as I’m tables, it’s it’s laundry talk it’s our simple, smart But about It’s to too

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are consumers that’s there, in in better what’s not So what or asking. there? what’s Because

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the bottles, planting our will about the we for partnership with air we’ll talk you this Day actually help trees on iteration water. back laundry next label, where of So cleaner Foundation, Arbor and see which

very one is now about so to we’re reassure have the it. course, of And, how label which and graces Green-e, a is wonder recycle, a tell we’re how as Safer important lot as renewable you This using we endorsement, fully our of in that leading will is XXX% the also partners electricity. labels product this to which certified of recyclable. being elected the And is says consumers also And which Choice, consumers. also bottle we it’s of

let’s So have…

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noticed. you hope I

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and coming Dollar have General. massive soon, stores in executions We

back? I do if can go you can Wait, quick, too that. was that Sorry,

So talked order not ship want CLEAN developed actually And are as & about because trends, Matt what to the sustainability lots other in which and online, shopping, do else besides There’s bottles. lots and online it’s consumers difficult convenience. that’s laundry more big SIMPLE? about people area, of

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trend prefer fully So, on on who again, and a sustainability e-commerce. to available shopping consumers

HAMMER. ARM I’ve talked about lot a &

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So get want as now we’re season, winter take note, a in you might to one of those.

insights it hand share to going Matt, I that, with over And who is hair care. on to

Obviously, expert All dry shampoo. right. the I’m on

dryer. you’re So might okay, can if of my an somebody hair hair up you and aerosol shampoo, that dry with that’s make pick normal

with So we’re women what’s Batiste we launch “Okay, appeal “Hey, hair?” said, we normal said, So Foam. to Waterless to going to going Cleansing dry to

in we’re now. into and So different refreshes right we dries your this hair seconds, that is something variants rub and four have you hair launching your XX and

WATERPIK. now And

us hear business, WATERPIK water-jet in WATERPIK, technology. experts we’re talk often that about Well, You also water flossers.

almost around technology XX has So years. been for that

we’re with And here millions a Americans into. is the now so WATERPIK showerhead. discuss doctors, that it’s of that, the brand-new, their out look something with folks insight FDA-registered massage And first-known coming

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removal. look little convenient Okay, focused earlier. about hair are bit – a on FLAWLESS are I talked Women

anywhere, So waterless, whole NU anytime. is product hair body removal RAZOR. This FLAWLESS called from new

got part we’ve on lot the in of and Now, of floss, analysts interest FLAWLESS shareholders. a

TV a wet It’s of four So traffic because happened has As retailers. little lot traffic times As is update shave major let’s TV. reset through One right give on aisle bit the in On that’s the the the and that important? from aisle, is that. retailer happening of in wet already in the On a Why shave Seen now, Seen

press recall, RAZOR we’re think expect launch, if two POS we So of good retailer, you be to read in up the XXXX up underpinning to is we what and our it XX% in right NU the that as with coming that’s launching XXXX. for know FLAWLESS And going major now to up release retailer. going is year. wins after kind the part the consumption that, to this well sales and one major just be wherein distribution point be as total of and We this for the weeks, one is is the in shape X%, we XX% for have

right. All

up Next of rate toothpastes the are XX times the toothpaste is category. growing natural

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men, to is is for partner it. wants up, Next wait TROJAN this condoms, Men ensure their satisfied.

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[Commercials]

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All right. VMS, so vitamin.

XXXX, a of vitamins. coming lots we pace are picked for line up addressing lot more states. have of And in innovation We really we’ve extensions need and

six new through XXXX. XXXX. in today. more tuned. coming in stay look and you have items innovation We’ve We run had we so we XXXX more new of XXXX, And If many categories, coming in XXXX in XX at got a kind Too averaged XX items to other year.

the those about hear in later You’ll year.

you up Come story. next fabulous is to Steve up, on our international And tell Steve.

Matt. you, Thank

right. All

Excellent.

you the with fabulous be So I’m pleased story. share international to to here growth

In in We $XXX is XXXX million delivered talked So, target at million Evergreen about, in sales. $XXX for finished as XXXX, X% we already year. international the per Matt sales.

is we’ve firmly isn’t There existing markets in scale. note market where subsidiary not or that, can’t that with reach through ourselves today a here business. The GMG believe we reached our important and we’re our that global we through

I more organic about the from the growth than size to think tripled X%. is even impressive we business rate the roughly X% that of

So larger significant, growth the business the rate. tripling

This but an here. show is year, information important we new that there’s some every chart

business. of is XX% Our total Group Markets the Global now

Canada, the largest within the For Australia. Mexico, and by business, segment is followed first it international the Europe, three countries, time,

we an have We our of well grown momentum hit X%. delivering X.X%, we with and Evergreen XX.X%. In historically above the target year, year outstanding XXXX, leave

wind we So back. the our at feel

down more detail. a little that break in Let’s

markets subsidiary our GMG and a X.X% Our delivered business, XX.X%. whopping

are developed subsidiaries Our largely markets. in

developed in markets X.X% So outstanding is really performance.

Our brands they healthy, GMG emerging or be in whether or our markets subsidiary markets. are in

So of both we’re performance excited about these of the businesses.

lot certainly of engine and for growth GMG XXXX, CAGR our by XX% start for is division lifecycle. business of of our XXs strategy has this XXXX, for delivered company. an initiated in did we Since international, The XX.X%, the driven it’s And core business the And throughout brands. growth when there. the we again, its new

BATISTE, So STERIMAR, driving VMS, now WATERPIK, we’re ARM FEMFRESH FLAWLESS. & HAMMER, OXICLEAN, and

invest world. capabilities around to building in the continue We

year Asia know, you in investments up I’ve then and here that we’ve been Southeast talking China. made the in year As about out, talk about

China, We for continue in us investments Central in make America. fast-growing to in and Asia, Germany, incremental market Southeast Europe

to market-by-markets, content they’re brands consumers, to give opportunity localize so because we differently the taken need We’ve to that the relevant. show up these

markets. company. feel We’re about also decision-making true the this is for investing, speed differentiator year international these year because very last That particularly dynamic is we technology, of in Matt in and a talked

distributor in much share we case innovation, our our regulatory sure We GMG affairs. That partners as provide studies. studies. as lot them want to case We make do. markets and know a invest training We particular in that

that our think unique to an are of is they & So and Church we extension Dwight. family,

a brands. committed We have for absolutely X% forward. growth moving to our runway believe existing we So organic we’re

WATERPIK, FLAWLESS. our We ability have acquired to demonstrated brands, grow now

to to only continue not make commitment markets new GMG fast-growing global that have group post year to commitment. a continue first operating out. we’re made that and growth is double-digit in and Our going we the scaled we’re margin business that think And organic can will we a to we feel investments going expand Because but we year for growth, in leverage. we time,

going going XXXX another on the incremental Evergreen to XX expansion. that of of that is take – around from operating investments a any XXXX. We’re margin big capabilities our step And change that growth part world. to ensure of is to make we to deliver we’re target bps And to have of top the

built the growth. the We’ve So strategies in that Two, one, team that we several here consumers we demonstrated around that. outstanding right is the of we world are know we management love around summary, are a them have have that, and for brands today. world. Three,

Church say international And you. lot we I them, thank products. starting. markets of Dwight’s just feel in to there that So & But is for runway we’re a

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algorithm we feel So good long-term about of our X%.

our We products. ARM have prebiotics, probiotics, across brand. & all of HAMMER the The goes brand trusted

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also revenue per where is I’d is in just that the people interesting. statistic Now This is mention a This highly matter. place people productive employee.

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and taking we savvy, like risks. digitally embrace we diversity We’re

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get margin? me.” annual because that’s focus We it we gross what’s like, can affects on how also ask it, everyone’s bonus. you bonus, gross in XX% of it’s “Hey, when margin. your questions And And And

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simple very structure. have compensation We

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on metric from we we long free within incentive a cash still uncommon, gross program. compensation are. operations, as side, right junkies is And as cash the and On focus which flow margin, we’ve described ourselves

talk Rick I’m now. about up right. going bring All to financials

afternoon. Thanks, right. Matt. All Good

we’re to So going three things. go through

the results full-year through for then go the outlook. for through to go We’re XXXX the going the quarter, and

– expansion And dollars SG&A of EPS percent, We model, always is then basis just we’ll before sales with and basis do margin growth. with operating X% start of because do. points flat on and that, growth, net for as expansion, the Evergreen points a XX growth. we XX leverage X% revenue drill we we And get that X% gross growth then EPS growth. margin to typically higher marketing down X% we line top organic and

the backdrop. that’s So

So release how you growth. first time organic great. growth, XX.X% the organic did for Domestic and this was which in quarters SPD revenue we heard from already, do? in eight is X.X%, In the morning, QX, positive saw Matt X.X% with was you international

points detail Adjusted gross that basis walk margin the points. XXX up. was in a XXX up basis minute. of was through Marketing I’ll

So that’s rate in had we’ve highest spend XXXX. the

$XX very because increase. of the more acquisition. Just It’s a million was significant year-over-year. SG&A up largely

agreement TSA with as amortization the well as that Our deal.

Adjusted $X.XX the EPS outlook. was $X.XX versus

revenue ago, the and very even X.X% quarter a a on was strong versus basis, So, year strong very strong, it X.X%. was

stacked basis, X.X%. on So a

page, first your X.X%, across eyes run year. the X.X% quarter, X.X% second, the X.X% in then and X.X% the you the If in for

in fantastic. X% like of So I has it, that’s front said, a X.X% for full-year, the domestic

and year. power the number during Internationally, XX from was As great brands grew heard said, of X% Britta SPD X%. a Steve, is XX just share then minus

And up up our up that’s than points, Marketing XXX was adjusted I gross reasons also quarter. through in was margin I’ll about then the go talked for same the detail other basis margin outlook. the SG&A in slide. Gross XX was greater basis points.

conversion XXX%, and result, and cash operations have which XX% cash free that. working leads EPS was million, higher earnings on which we up improved up to slide flow $X.XX to from $XXX up a and a capital, year-over-year, is X% industry-leading, of just fantastic was to cash

for in are So puts gross plus points, In the XX higher just basis year. bit as Inflation for It’s earlier price, walk – to the whole benefit through you has the the from as margin, takes. we that’s well volumes. basis the consistent is so year. get points. a to quarter, continue point been that and QX, the moderated really XX since up pretty XXX programs a little Productivity drag basis

acquisition, acquisition, is slightly so two gross in there’s a FLAWLESS, of they the higher because from parts basis company. basis then XX points margin And XX owning have the points

is took October. the period marketing, revenue profit, that’s that sales May in other one minus COGS, we Remember points basis of XX net the The acquisition through marketing accounting. from minus line

so And no there it’s a is offset, margin. pure when

XXX expansion gross So basis is basis points. on would a XXX basis, comparable reported on then margin it And basis be point. a

quarter. and basis is the many plus expansion that’s same margin full-year, the And comparable XX So apply things for points. gross of the

year. just gross times So a I the throughout year. raised think, margin, fantastic We three

on XXXX. So to

growth, sales plus up for and is that’s Domestic X% is this a X.X% reported basis for is outlook impact. points. than margin So X%, year Gross FLAWLESS SPD organic that’s the larger division. XX the X.X% for international our X%,

FLAWLESS If or basis we’re accounting, XXXX comparable you with the the make up exclude XX excluding if you points apples-to-apples.

by XX we’re up to going margin as is and launches points, on we’re basis a basis investing points. table XX up as points see basis behind is well but XX SG&A, reported Again, big these Marketing operating XX leverage basis on FLAWLESS. up behind apples-to-apples, basis brands points. you incrementally and these the today,

it’s EPS XX%. income to $XXX effective X% from What we was of growth. XX% from X%, effective XXXX, rate is tax for range The below and rate for ops it largely does It XX%, XX%. The the our mean? means that and then XXXX X% is mid-point cash million. XXXX, growth tax think EPS is all for was is slightly operating

a year So, record a year. new about next have as for Matt would this as we talked record,

Okay.

here X% some a X% our plus X% drag. outlook. Tariffs start are FLAWLESS. with model, is We the accretion minus X% So details Evergreen for on

the that’s about on We’re of new to the for hit business X% showerhead guys EPS. getting with the Marketing our of XB tune saw investments drag FLAWLESS hitting the page. on launch, points a tariffs earlier basis a and XX you

how get of that’s and so the we to And X%. X% X% mid-point to

drives company. for a cash We hallmark long valuation. Gross margin flow cash focused on this long, gross margin, it’s in drives a is Matt time, said, flow, everyone’s margin Gross of bonus. as

we’re point XXXX. So going we nicely XXXX inflection XX.X% and had XXXX, improve in in to in to continue we an of recovered

So of from as continues the be across the points Board Inflation drag XXX are pretty as get largely continue a point, well to much in benefits as higher we Plus XXXX, price some carryover here a volume. perspective. from details. basis basis XX that’s and to commodity

flat to I slightly up. up, commodities would say, were

digits, high, an digits, up mid is is single significantly. ethylene as you, have up HDPE for examples clay resin up single which is PCR, Some we flat. high example, resin is

So we in inflation, some well. headwinds on have number that tariffs that are in is – as

done basis chain. apples-to-apples that. kind then on how points, plus basis points, comparable. basis on is shows up We’ve programs say basis margin reported acquisition the the it’s very, just supply a you XXX great XX of again you work some And when Productivity XX making that consistent but getting very gross plus points with are

expectations In earlier, no organic X.X%, a XX-year which XXXX the fantastic. trend, this showed our X.X% was sales slide XXXX since are that Matt XXXX, time outlook. we first growth, had different. is

to of private again, getting that little label label OXICLEAN a that, the And we’re so on proud promotion. private and of say doing despite vitamins bit out we’re pullback high and laundry

Okay.

I important So was get for volume, how is growth there, our growth growth is average right? revenue we just volume revenue years, XX around last X%. X.X%, organic as on organic as the mean, So

can up. we price volume of went kind mix that on and inflected the right, and see XXXX went graph down, You in

come revenue our volume XXXX, mix. up points. And is organic from to for basis Then outlook growth, again versus about spend X.X% price marketing is XX-XX going XX

top the within CPG. XX of one We’re advertisers

to of use we our put amount just So for significant we have here that brands. firepower a

But up strip SG&A, years. And it gone when you very reported out then flattish. it’s looks the a actually like the acquisition, last basis, it’s for few amortization, on

is no of and going really just be different. proud XXXX we’re to So this

in digits growth, leverage XXXX. high expect XXXX double and single-digit, adjusted to had high reform EPS with SG&A and We’ve tax consistent single-digit XXXX. improve so and again, We in strong

is our is X%, to the X% X%, mid-point is to X%. So X% range peer average about

cash and net free Dwight my free income, spend best-in-class lot that’s target on flow XX%, peer of cash XXXX XXX% conversion. of drives because cash is lot was a a conversion, we flow XX%. average This time was believe flow We & Church in favorite value this, by the companies Slide, cash free flow divided

is you. a for slide Here new

XXXX, Here’s XXX% finished XXX% in and XXXX. in XXXX, in out what time. history XXX% is XXX% XXXX over in in XXXX, just our we XXX%

XXXX Our XXX%. for is outlook

the we peer believe our is to apart So to just us this XXs, XXs sets from in XXX. play or what close group

couple do do we do how ways. a that? we different of And strong cash Well, it One earnings. is really

gone in is in conversion way We’ve one down working XXXX. capital, in improvement to second XXXX days cash our all the days from XX XX The cycle.

you two out doing at how we’re this That’s to last done, zero. still the we’ve really trying moving the good get acquisitions to If strip a working it shows in you needle capital, down goal.

days out, strip – those today. two we’ve So gone at seven if we’re you

Chinese Our baseline these changes, new a have we’ve two supply businesses that because added chain.

off and that that in to working XXXX. we’ll different going improvement But at So see and we XXXX had continue start expect now capital you’re to in through number. we XX no great work we

And we the have strong X.X we expect ended balance about to XXXX less be the end a year, levered, times X of sheet. very times, than We X.X by times.

year, the do levered you’re When the deals. times end We right? X.X have you the by ability financial to of significant capacity, have

debt dividends been number Number Number cash is number M&A, and for many Number or is Our M&A. cash five CapEx TSR-accretive the the reduction we’re one is this then years. to TSR-accretive four use prioritized is is organic buybacks. number two that’s is but where has uses and three for year. going of free two, flow NPD, for same growth,

capital-intensive a company. not We’re

year still than up and bumping We’re X% $XX about less that’s of sales. million next

is in have This here paying slide And XXXX, years is a new increase consecutively We dividend a a for it’s dividend X.X%. then you. XXX great

average dividend rate and Over three X% in set. that’s top years, group was all for peer our the last tier our growth the annual the peer of of

and that, any with invite answer And we’ll I’ll questions. up so the management team

are even here yet. not hands the up, all hands up Well,

Nik. Okay,

someone than finally I me. beat taller

guess, two I know, years margin don’t ago, compaction maybe questions. a I it deal years & a was perspective. was for ago, big XX So Church pretty remember, seven from I Dwight

I product means costs So perspective about and hoping was what think from launch to and on how the shipping you that? just packaging new costs that you and get some for

FLAWLESS, aspect. there’s between of the And know is, Seen then kind the I the merchandising it right comes second As to when on and TV conflict

to longer-term, thinking is in-store and just product you migrate execution, so have and a really have digital plan like don’t comp, display because there merchandising, online to activity. that And you this guys completely where a

So the there? just clarity get long-term some plan was – on to hoping

a the completely FLAWLESS in Because the store. brand plan not aisle on shave attractive lot and I’ll the place. take migrated from wet that very that system Yes, one Well, part of As first. stores, for Seen into of I mean completely vacate TV in a it’s and

now. retailers major bought have that’s to is brand wet this behind by automotive. it, is we legs if going belongs major when long-term So one at you And look But getting and it a to at no, said we shave retailer it right one aisle.

So over you’re to It’s see happening happening. right time, XXXX. that’s what going now in

was Your compaction. about other question

argue ago, many, drove not on right right So for that pods. when horizon one would is now, compaction the that’s of that there one the compaction now major mean, retailer I happen, many that industry. the is years form biggest

I now. Were be enough but clear if for liquid pods is plateaus, possible horizon then to, point at a – it product… on some right about detergent, question it’s that go pods laundry compaction that So back think, we some point may the that asking new would at you major

Yes.

what that have we and …that Britta insight I’ll one was online. that. take the let at around a swing

So in it’s of ambition you’re the I think said trade, the So showed, talking e-commerce to because grow on online and play, an product I about specific you’ve I’ve shopping And a because we’ve that, of class resolution that’s the right? distribution, and of currently, there seeing happens. I seen phenomenal that’s think where results. for product mass consumers And why class loan not a developed we’re there. go this is not all trade, that that’s our lot good and

you. Thank Great.

Bill? Okay.

seems is it’s pods. Can it maybe the Tide plans, & coming in SIMPLE. there initial more out, pod and with Yes. us launch. shelf cannibalistic – How also, not of Sticking guess a you Simply Tide I on first CLEAN version I the the give space? incremental form that coming the laundry be? you at this is on Well, to little on a side, it mean expect And you maybe do then Is color.

as So seeing So standpoint, core out big of with pods that what to it’s this of Do the the to also as interact looks you where how you is, in a this the you thought from level maybe and your threat? both the category around like then any pod more color see just brand shelf the expect space start launch? behind important? not competitive not are and

Yes.

you launch will & CLEAN be So SIMPLE, one brand, to incremental some point, product you’re but will to there Paul this us HAMMER new CLEAN category. and a & well cannibalization. but be comment some ARM to we I’ll have it whenever think net, under let – going some cannibalization, laundry But at liquid the in as the

CLEAN respect CLEAN & well As Absolutely. SIMPLE, a some retailer plans far the move as, Bill, I’ll are SIMPLE with & & be it to what as we for we pods going to might Paul wouldn’t happen? disclose CLEAN as our platform. into to comment SIMPLE. let reception Could

are guarded a is going tell that consumers in where the be other are of little launch, trends display every interesting as you things very to the just with absolutely. get than one is, though, other to it cannibalization front, the message, what different would on health one in you’re a makes story this in the I your the incrementality, I’ll little avoid This different for the story a for and store. have more Yes. going competitive marketing everything looking you I’m timing, have the to what But space, wellness question. just on, the reasons space, Britta the us showed pitching in incremental and space, we

you I couple happening one firsthand. out But want next it’s what you, doing. and This the give you others loved now, are show is as tell retail, little retail would speak get don’t to away resets, of you so a right with to I’d weeks to we the to encourage different. I have a

has I the we our isn’t This some would from consumer bottle. got & is going to yellow in, marketing you CLEAN buying it buying another the you you’re grid the behind shelf at today. set is the attention on insights front, tell today this maybe also it. looking believe on going just SIMPLE, bring This get not within to

today. shopper a saw just You to special. it In of is doing we’re little retailer with be fraction going marketing the

love you I’m I’m vocabulary on going more my but talk to one. excited, So to this to here, temper

Rupesh? Okay.

of just guess, QX. it driving inventory I velocity, to And a expect adjustments? to distribution do my the seems also just with shortfall first So FLAWLESS, get the just you drove wanted just look get sense growth, to like as a sense, question in year, any want contributor. what you curious the this all And is then,

Yes.

fourth the year-over-year. we So were quarter, in down

bought issue of So the business, large million a & by know higher retailer, delayed we we disclosed. had business was couple Bath $XXX Beyond We it with year. also be XXXX. and million was Bed into in in We thought the $XXX XXXX. launch one would XXXX, things the end we of a it why an We ��

consumption as quarter. was down consumption as goes, the Now far in significantly fourth the

measured the because to by but channels channels, to this the distribution, to launch for in the we’re And We second that XX%. measured quarter, consumption continue, category we this and in expect get time we also in expect less first in the new recover to start new quarter. is – the than

going channels QX, it’s to start you’ll see year-over-year we from think measured And But to in build increase. a and QX. QX

as us of a starting of a the think NU the result ahead lot of I is So growth in RAZOR. QX

basis points that. to growth of for the points From And basis the slightly for to second-half right, XX from we’re would XXX In QX, an calling tailwind to you be that’s but XX XX think tailwinds Yes. basis it the add for full-year just we and flat get and perspective, will FLAWLESS. how down, organic pretty points in I organic. much basis points – to

then… And great. Okay,

you Do have Rupesh? another one,

one. quick One Yes.

guidance, your what for environment? in just So promotional assuming are the you

Okay.

laundry litter about it’s as and and talking of of tame household, the on pretty say house not I’ll environment So environment, promotional category litter as a and is we’ve the as litter. we when about household side environment. quarter, personal you the know talking promotional many first. And every the we’re The talked take generally far care. about the about promotional right now

sequentially, look no story is year-over-year, you much flattish was there if pretty it there. even So at and

think So litter. it’s steady as in you go we

think I it’s increases, keep to fought increased are got price the category you one the suppliers that, hard that, to want that these hard the litter going back consumers. the deal is in that mind unlikely to in to

wouldn’t in expect So XXXX. that to I change

category deal. And Henkel big Laundry, sold the year, on up, Procter kind suppliers same -- XX% QX void from pardon XX% be to was on quarter story. the both And higher, lowest would the of it filled QX. But our laundry, Church XX%. sold little liquid & was was mean, sequentially And Dwight space. in QX it and me, bit promotional I was deal. QX, the down two of

to XXXX. We that expect in continue

Okay.

Your next. Yes.

you. Thank Okay.

on organic the like growth, is X.X% and Just now you’re you out said the of sorry, exiting vitamin. – that

going to So be that faster. I’m it – the assuming or vitamin actually growing to business in growth private label, is more – was that was growth dilutive your

space or on X%, to not X.X% more is relative that is So needle? – small move make a to continuing like a the is –

a take I’ll Yes. and in. at Yes. Rick jump swing can then this

for XXXX. it call we So X.X%

accelerate second-half Our hey, going company by XX as because We’ve the rate run a XXXX is to X.X%. X% of that’s from in of points, basis X%. FLAWLESS said, to

on reasons. in OXICLEAN promotions. back to go number vitamins label for other private exiting we’re XXX two, have One, pull we basis continuing So way points two and

share Now of is with that vitamin XXX basis the lion’s the that points, business.

in vitamins. over stepped couple the up have We of our last innovation years

we launches new back had saw XXXX, XX new XXXX, like going XX you the we have that you from – had see launches. earlier, – next a new six XXXX Slide we’re if year, we went and and to had If you’ll launches XXXX to

but exit came fine. So think and this right the our with the into is margin it company time we and – it’s acquisition lower the it’s private label, to

just wasn’t vitamins, declining the was would like company. private or that, flattish, wasn’t I We it that felt for Yes. the anything that. for add, label choice that business the business right just strategic

So out we of proactively to decided get it.

or I end that’s is business exiting, is I If that not? assuming accretive think on that to right – to And that margins,

think maybe scale of of size you stuff. that one-third the and that of sense we’re we give XXX a where private those business, that is for is the you – the points if things, when saying basis going about and two of it, two-thirds right, – is laundry the It’s down label if

So, any impact minimal. margin on is pretty

on Bill’s the or innovation might that – meantime you’re at a & I like, in on up price point? is margin accretive following point CLEAN what question, is the this have And you if positioning that the may, SIMPLE,

Hey, Paul, to do you at price take want a swing the points?

Yes.

in So points, the our going price this be existing to line is right lineup. with

the efficacy about as up our And to that a them and talking that’s big retailers was it well. that will for really it going be show equal, Britta that’s as really shelf how with resonated line-priced. message being just So it was

for at but we a from say then cost brand Year it’s average. of And wouldn’t basis, have, drive margin much, course, we one really to volume incrementality.

Joe? Okay.

Thanks.

sounds quarter, fourth into headwind on it in it a color about in it driving and and marketing the increase you EPS are growth new promo X brands get What’s bigger what is the on and you’re XXXX. big to looking wanted obviously Just shifting the marketing? more launches point spend, behind bit of increase? Is like away from a a for in particular dollars going

Is the question with quarter? respect to fourth

Fourth quarter and XXXX as well?

margin. are well and fourth line see what Well, and could was quarter, gross coming doing Okay. we on we top

a and places we have SG&A. We call in reinvest in to chance invested both marketing SG&A. that we all So in

money – year. into the That that able on a of lot obviously, helps the always behind going new So throw we’re and brands. to you

XX your As points question about uptick? basis XXXX, is the

that point headwind EPS of launches? to so X from More Yes. you’re expecting the that

does you if really way. way. big right. X% NU The points for launches, EPS really talk in a get XX one FLAWLESS big a basis that the maybe, in want the on to table, about. behind get we’ll drag And RAZOR represent it’s then and for that new The The the Britta, behind

Yes.

we a saw. So exciting as couple product, you of have

hair as seen, type. So, penetration huge and a for is new we there BATISTE foam, it’s are a household leader opportunity, example, also you’ve category

particularly going educating a money and we’re some hair. new on consumers way, dry with to women spend curly about So

maybe showed internationally, thought more one in household the versus found had, is, it’s WATERPIK U.S. to just you And we and very advertising. penetration for responsive I that I of we

now out going Canada rolling in Europe so start that And Australia. and and we’re to

marketing investment happening well. that is as So globally

cost among year for one big. increase What’s margin international just pretty savings Is is programs? driving Steve. this sales coming that for leverage things And The other or in operating from that?

Yes.

in we’ve that We So going couple we’re I a in some We next the like recover. I going that is that’s top some would mix investments repeat feel of think well. we’re that things. a not made expense there’s part large of as not say, again to year. that, of on to had and year there

Okay. Thanks.

Okay. Steve?

Okay. owner ago? I said prompted does have do on Steve. year organic earlier the that question. given a impact you what any quarter, But in a would for Rick didn’t question first Why FLAWLESS it of regardless it another something have

The reported I the doesn’t. XX basis trying on points QX, down. to for a is flat a it organic be in you full-year. give that that basis It to was could sense impact

second-half, the All that’s of basis in XXX points. around

whether you maybe you by internationally, three, And maybe category? the expect Evergreen’s toward we inhibit going on deceleration about then could as of commitments by on kind order, you down you brand, it level? top forward does evergreen, growth And you should as have on, growth to or some or margin press with expansion by as rank you could six-ish perfect. back that a the think then your Okay, ability get have lot initiatives that but think geography been or an

we’ve each product our less in getting for feel spent regions, have kind saw over see in accelerating Because last we with in as own one that the right level we slotting, we into couple China that the we years, staffing XXXX, continuing on investments. see we into of requirement think you as and built a market. big really again of China No, money mean was of team business investment confident, I the we XXXX, plus the

can us nicely whether has So and lot Latin we’ve America, a of which think that, reap for think P&L. all feel, China now strong Asia-Pac, in would Southeast continued deliver going we so the without benefits in repeating. can And on why – because very past. we investments we the that continue growing we get growth that’s we be the That’s margin, in leverage organic be been would it to just the operating made investments to those of confident Asia, it or we’re whether of

SG&A, going sure. to marketing for to and So that that get get on we’re we’re going on

mean about the I is investment you are about... It anywhere, more emerging growth excited markets skewed

and in we fast year, Asia growth growing. You smaller thing, as in know well. here. runs this our it’s is made Latin EMEA a He business had Southeast We expect very is us, investments for funny China Latin growth growth he America strong in we but [indiscernible] and those and strong say would America. we saw strong in China, and XXXX GMG in

growing Asia, particular, see just fast. because engine in but growth we is for company, long-term we’re and real the still young small,

this side to table, Swing Kevin? the Okay. of

as a international All well. Grundy, I question on Kevin had Jefferies. right.

works it So out.

Steve, and you off you deceleration the where guys sort outstanding. presence there, years outlook in in just which have haven’t the the done connecting for a dots and given of to five past So is to don’t implied now X% pick international But diminish the want up X%, I why left that a in China. in region you the

trying how broadly, you to on the chime connect in maybe, your Matt, that M&A role business. to dots just And I’m and longer- see international So can the growing and that. you with potentially then more

and an point? about the from model? do to a you from that moving markets and do like certain tipping capital Thanks. them the consider How implications perspective, think potentially export you a planning income statement of subsidiary balance lastly, And What’s sort perspective? when model sheet from from

that. remember try all I’ll Okay. to

the Let’s current off with year. start

annually. So, we have of X% algorithm an

to year-after-year-after-year. So if that, international we you out what look can back we always the And of Steve sustain park. in go at is hitting has doing X% been

company for so, our that’s but not And you’re now plan out skis. going way X%, we’re a we get sad big year, this it’s to you not a might over got say because

that a So we’re that look our at deceleration, we view think got consistently XXXX. as a We now for delivering don’t plan we as we above algorithm. strong

about You question asked the international.

done international few a internationally have the – we So some is was past brand. M&A over an years. Viviscal

ANUSOL as from international We some brand had well. bought WATERPIK the Our J&J.

a And so we’re putting a lot lot of of traction. effort behind get and those we

markets. a So taking job, done Steve those two great and his to gang have international

we’re had into acquire, it. and So you things as for continually we’re buy. fussy our you question. we what the one scanning that know, a put But though, we’re can pretty we third can infrastructure to going and leverage third And about

Yes, when it direct? does to go tip

Yes.

in can – go I’ll Okay, done Steve what say we’ve Germany.

Yes.

leverage. can really all So look markets we it go is at we SG&A and where about direct

environment. retail it’s in the is quite And concentrated how Germany, So concentrated.

returns, were to go spending two here, manage P&L, we so buddies imagine. they’re about as My and disciplined get down can able you So, we and Germany direct fast. returns that pretty in

a need really sales X to to SG&A terms you So like relationship XX in growth. of investment

the that are to so make where highly it a And and takes markets happen. retail more young environment, SG&A lot fragmented a from

evergreen as target. So to required we shift And the those export our not from market. make see hit we but calls is subsidiary to we’ll what fit, us, have for for to market need economic model an to a underlying that us we know

All Same Jason. table, Okay. right.

different you. thank Good for questions. very topics afternoon, and Two

we also any sticking us but of tariffs international, supply be status chain not should whether or the and terms not as or related with – a you on of WATERPIK Can chain whether it’d I’m on update on is that well? risk manufacturing angle. whether manufactured First, of in supply and considering sure to the the supply cognizant of we coronavirus where FLAWLESS be be should your

capacity why was chose to years private from the on risk help presumably to imagine side other risk? of industry is assuming money private ago time label. exit, And is been also a I then capacity, add of a think maybe have because you on there you’re branded to, bps when longer it. that your good the XXX label the not may would Second how some five If of, of there side? exit tethered that size no suck reason risk lot to actually any is of that’s a case that, and Could to out drag, much it that is the you there of spending

start China. with I’ll

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is China bps are And if good? want the of you know, else private-label from in or about chain XXX So say XX vitamins. I bps anything Rick, the supply you to don’t

covered Yes. Matt much it. pretty

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Okay. All right.

Okay.

while. hand waving a been your You’ve for

your categories talk laundry fiscal then ‘XX of to Wanted for state and also different expectations Matt. and in price litter, cat volume competition about versus two Thanks, and just mix? between

first hear of part it. couldn’t the very I

cat competition. litter, state and the Laundry of

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who ARM the over is we the competitive last win ARM have also who the is You that three you categories. And over positioning we of continue years advertised, but dynamics laundry And from is brand, brand struggling. we a that’s winning years, have and the last an billion which go unfair value of We across a because if HAMMER. saw in in the think Sun and distribution. is done job chart advantage & product couple actually $X all to & we’ve against our HAMMER wonderful detergent,

far long-term the litter category, supplier we the we been aim that In laundry point. number that many, to is in be a time plan we detergent many the bode as innovation innovator got of have the some and and growing So as share future. function category going And two a of for at to that is years. us over we’ve think litter for in well

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And advertise category? what’s this Matt, we Oxi just about the talk me want you how done if Laundry to and additives

do You that. can

in Laundry share, since XX Well, but brush in we’ve bit OXICLEAN little sometimes down we myopically in we didn’t additive and from a a to broader share we launched just additives. a say share XX laundry, take gone look is Oxi really at,

happy So megabrand. with we’re our really OXICLEAN

I hope everybody paid attention to that.

and back work go you didn’t because laundry we’re if sad OXICLEAN into and No. So it out. wow, launched premium detergent say,

a laundry, launched had share XX% XX% it we went from in XX% fighters, we when So in over market stain liquid to OXICLEAN today.

lot that more so effort we’re money today. all paid off, and making a So

that So well. is brand alive and

Can I add something.

see… you So

good. is This here. on pile Let’s

Sorry?

Let’s pile on.

brand. that love I well, Yes,

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is positive that continue very strong a brand confident, we very I’m OXICLEAN So very, grow. to and

for looks like talking right. at be to All looking Hey, forward great everybody you to It want today. Okay. coming I to of We quarter. the end done. thank had we the might questions and first