GE Aerospace

Thanks for coming today. This is the 2025 Analyst Day for Church and Dwight. We got a big crowd with us today. Got the entire management team. We got a couple casualties due to the flu that's going around. So let's begin with the safe harbor statement. I encourage everybody to read that after class. And here's a list of the people who are going to be here today, all the presenters. We've got Shatij Chaba from SVD. We've got Mike Reed from International. We've got Sarebhi Pokhrial for our Chief Digital Officer. You know, it's the Rick and Matt show as usual. We've got Stacey Ramstad, who's our CMO, and Carlos Linares. You haven't heard from Carlos in the past. He leads R&D and innovation for the company. All right, long agenda here. I won't read it to you, so let's kind of jump right in. But I'm going to start with 2025 is the 35th anniversary of Church and Dwight being listed on the New York Stock Exchange. And you can see the chart there. If you adjust for stock splits, it was a buck a share back in 1990. And you can see we're well over $100 today. Here's kind of a fun fact. So if you invested $1,000 in Church and Dwight in 1990 when it was first listed, It would be worth $114,000 today. So that's kind of a mark of a consistent company. And the fellow on the lower left is Dwight Minton. And Dwight Minton became the CEO, I think, in 1969. And he is a descendant of Austin Church. of the Church and Dwight fame. So he's the last family member of the company to be a CEO. And he succeeded his dad, who was CEO before him. So I'm the third non-family member who's CEO of Church and Dwight, and Rick will be the fourth, so fun fact. So let's look back at 2024. As you all know, if you've been following our story, organic sales growth, we beat our algorithm all three businesses, U.S., International, and SPD. We have seven power brands, you know, represent 70% of our revenues and profits, and five of seven increase their market share. Our algorithm for our marketing spend is spent about 11% annually, and we spent over 11 in 2024. Innovation is a big number for us this past year. So if we grew our organic growth 4% on a full year basis, half of that came from new products that we launched in 2024. And that's incremental growth year over year came from new products. And then online sales, you know, we've been a bit of a standout among CPG companies for quite a few years. Our online sales is over 21%. It's 21.4% for total company. What that translates to is if you have $6 billion in sales, we got 1.3 billion of that is ordered online. A few more things. You know, we bought Hero a couple of years ago. That's been a great brand for us. We've expanded that. It's now launched in 40 countries. And now our job is to grow that brand in those 40 countries around the world. Japan, it's a big market, over 100 million consumers. We acquired a terrific distributor of ours in Japan. It's a distributor that drove OxuClean to the number one pre-wash additive in powder in Japan. SBD, you're going to hear from Sateesh Chaba today, and that's now a perennial grower for us. I'm going to hear more about that. We generate a lot of cash as a company. We're $1 billion for 2024. And we got a lot of dough on the balance sheet, almost a billion dollars of cash at year end. And we're all dressed up to buy some businesses going forward. All right, strong performance. This is the 1, 2, 3, 5, and 10-year chart for us. And let's give you an idea of the consistency of this company for many, many years. And it's really a tribute to the culture and to the management team of Church & Dwight. All right, now who we are. Many of you are long-term holders. People who are here today are listening on the phone. So I'm going to run through things that should be very familiar to you. So the way we're split is 77% domestic, 18% international. For a long time, that international number was 17%, almost since I joined the company. So we're starting to grow that one a little faster. Seven power brands that make up 70% of our revenues and profits. And you know we have an evergreen model. So this evergreen model is something that guides our view long-term, not just for the coming year, but three years, five years, ten years. This is what we try to drive, how we try to drive TSR for our shareholders. So you see the 4% organic sales growth. It's 385 domestic international SBD. Our gross margin, 25 to 50 basis points. The bright line for marketing is around 11% of sales. We try to get leverage on SG&A. So we try to grow the top line faster than SG&A grows. And we're trying to expand our operating margins 50 basis points annually. And that translates into 8% EPS growth. So here's the formula. Five things I'm going to cover. One. We've got a balanced and diversified portfolio, right? So we've got pretty much a balance between household and personal care, and SBD is essentially the foundational business for the company. It's where the Arm & Hammer brand first arose. Okay, we're split pretty much 60-40, or I should say two-thirds, one-thirds, between premium and value. Why is that important? It's important because we perform well in just about any economic environment. We don't have a lot of exposure to private labor. You can see that a little bit over 10%. That's been true for many, many years. And e-commerce has been a great story for us. You know, we were probably fourth quartile back in 2016, and now we're first quartile with respect to our performance online. And as I said earlier, half of our growth, organic growth, in 2024 came from new products. And, of course, you know, that is so important to the equity of your brands is new innovation. So that speaks really well for the company. And we've got a lot more coming in 2025. As far as acquisitions go, we're pretty strict about what we're going to buy. Got to be a number one or number two brand. It has to be a gross margin that's at or above the gross margins for the company. We like businesses that are asset light. Prefer to buy a business that is co-manufactured. We don't necessarily have to buy a plant. Number four would be, can we get synergies? We've got a very, very sophisticated supply chain. We can make damn near anything. So consequently, we try to get leverage in manufacturing or logistics. And then finally, it's got to have a long-term competitive advantage, meaning we don't buy something that's just going to be successful for the next two or three years. It's going to be successful five years, ten years out. All right, long history of growth through acquisitions. So if you look at 2004, we were a $1.5 billion company, you can see almost every year we've acquired a business. We don't have every year up there, but just about every year we've acquired something. 2023 and 2024, a bit of a drought. I'd say if you said when have you had a drought before, if you look at 2008, we acquired Orgel. 2012, we acquired the vitamin business. Between then, we bought some small businesses, but I'd say that was the last time we had a drought of a couple of years. Not for lack of trying, though. So now Rick's going to come up and take you through a few more details.

This is probably one of the last times I'm going to go through detailed financials with you guys. Q4, 2024, we ended the year with momentum, right? We had 3.5% reported sales growth. Our outlook was 1.5% to 2.5%. It came in better than we expected. Our share gains for the quarter, 5 of 7, or for the year, 5 of 7 of our brands grew share, right? Those are the important brands that are driving the company. 4.2% organic came in better than we thought, too. 2% to 3% was our outlook. Gross margin came right where we thought it was. We called 110 basis points for the full year. That implied flat for the quarter. And then for EPS, we were up almost 19%. So just really strong ending to the year in the quarter. So for the full year, 4% net sales growth, 4.5% organic sales growth. 3.5 for domestic, 9 for international, and 7 for SPD. So just really broad-based growth across the company, across the divisions, back to 110 basis points of gross margin. You're going to see in a minute we're back to 2019 levels, which is fantastic. Marketing, this is where we spent incrementally. We ended up at 11.4. So we spent significantly more than we originally thought. And this is really just, again, to have momentum as we entered 2025. And then 8.5% EPS growth. And we generated $1.16 billion of cash. You're going to see in a minute, 2025, we think we're going to be right around the same number. So just generating a lot of cash. Our free cash flow conversion is around 115%, and that gives us a lot of optionality. So look ahead. Matt did a great job of saying where we have been and where we are. A lot of things that are great about this company. We have confidence in our future. This is really the outlook for the Evergreen model over the years to come. Matt walked through why that's healthy, why that's doing well. I'm going to walk through in a few minutes how household penetration is a huge opportunity for us in the U.S., right? A thoroughbred hero, of course, these fast-growing businesses. But litter and laundry are doing well, and some other brands are driving growth as well. Mike will come up. He'll talk about the high growth rate the international business has. 8% clip is very impressive. We have high aspirations for that business over the foreseeable future. Innovation, Carlos will come up and he'll talk about how we innovate. We've totally transformed over the last five or ten years how we innovate, going from one vector to more like four or five different vectors. And then Stacey's going to come talk about what we've innovated. So the new products we have, very excited about many of those. Year two as well for some of the big launches we had last year. And then Saravi will talk about our e-commerce growth and being digitally savvy. Our e-com growth, you saw the chart that Matt provided, 2% going to 21%. This is an advantage for us, and we're going to continue to drive that forward, not just domestically, but globally. Focus on domestic and international M&A. M&A is a huge part of this company. So here's a new slide. This is back in the year 2001, or 2000, we had one power brand. It was Arm & Hammer. We were a billion-dollar business. Fast forward 24 years, and Arm & Hammer is around a $2 billion business, right? Mid-single-digit CAGR over 20 years plus. That brand is known and loved by consumers across many categories. It's rare to have a brand that can play in so many different categories. And then that means we have $4 billion of businesses and brands that are not Arm & Hammer. And that ability to identify, acquire, integrate, and grow brands and businesses is a competitive advantage for us. And we're going to keep that and hold that dear, and we're going to continue to do that as well. Okay, moving to the U.S. story. We are hiring a new U.S. president and a new CFO, but today I am the U.S. president as well. So domestically, our algorithm is 3%. The company is four. We do three, eight, and five. We have a long track record of growth organically in the U.S., and we have a lot of confidence in our future. Three and a half percent this year. Why do we have confidence in our future? We're leaders in growing categories. You'll see in a second our categories are largely green. We thrive in difficult environments. Why? Low exposure to private label, but also household and personal care are balanced. And then our acquisitions have room to run. Our seven power brands fuel our growth. You know, Matt showed a slide that said 70% of our sales and profits from those seven brands in those eight categories in 2025, it's closer to 75%. So these brands are driving the company. Here's the snapshot report card on the categories. So again, we're in the right categories. This isn't happenstance. We acquire businesses that get us into categories that we like the attributes of. Weighted average 2.7% growth, largely green in 2024. That's fantastic. And then we're one of very few companies that do this, but here's the scorecard from our brands. This is our share growth. And again, five of seven grew in 2024. So let's go to the individual businesses. Fabricare. Our laundry business is growing at or above category averages, which is great, gaining share. In fact, we're at all-time share highs. You look at the left side of the page, we're at 5% 18 years ago, and today we're at 14.5%. And why is that? Well, one thing that's working really well is our good, better, best strategy for Arm & Hammer laundry detergent. Orange Bottle is our as our value brand. Arm & Hammer with Oxys in the middle, which is our better offering. And then DeepClean's our best offering. Consumers are picking up DeepClean and they're sticking to it. The incrementality rate on DeepClean is very impressive. Stacy's going to talk a little bit more about new products around DeepClean, so stay tuned for that. Cat litter. Cat litter is saying we're growing at or above category rates. This is actually doubly impressive because a competitor was out of stock last year. And so we maintained largely maintained our share despite that, which is which is a great result. Hardball is a big opportunity. This is lightweight litter. And a year ago, we were around a four share. Today, we're around an eight share. a 7.5 share. If we get our fair share of the clumping litter category, that's about a $100 million opportunity. And so we're really encouraged by the progress we've made already on lightweight litter category. Hero and TheraBreath. So Hero is first up. Hero consumption is off the charts. It's 40% growth. It's driving the category. And we're not just talking about the patch. We're talking about total acne growth. So we have the number one share in PATH. We have the number one share in ACME as a larger category. And we have a lot of room to run. Distribution has been fantastic. We have lots of distribution gains. We think there's more as we spread out on shelf. Our TDPs will continue to go up. But more importantly, it's household penetration. 9% household penetration for HERO, 25% for the category. We're going to continue to invest our marketing dollars behind HERO to drive awareness. Similar story for TheraBreath. TheraBreath, 40% plus consumption. It's driving the category. And it's not just the number one non-alcohol mouthwash. It's actually the number two overall mouthwash. All-time share highs for the year, 17.5. But same story as Hero. A lot of room to run here, too, on distribution points. We've made some great gains. We think we're going to spread out even more on shelf in the years to come. You'll hear from Mike about Hero and TheraBreath for International. There's great momentum there as well. So household penetration, we're a 10 share in households for TheraBreath. But look at mouthwash. 65% of households have a mouthwash. And so, again, we're going to invest marketing dollars and innovation behind this category. And as you look at the trend line over a long period of time, that just shows that we're the number two mouthwash, and we've been that way for the last three or four months. And then Batiste. Batiste is a category and a brand that has great growth. Mid to high single digits, and we're gaining share in Batiste as well, hitting all-time share highs. You're going to hear about innovation and even maybe some ad campaigns from Stacey, our CMO. VitaFusion, vitamins, this is a business that has declined a bit, but let's take a step back. Here is the category. The category doubled over the last two or three years. It went from one and a half billion to three billion. It's stabilized and it's flat now for these last three years. What's happening now? We're down a bit. We're down double digits. The good news is the category is starting to inflect. That's a green shoot that's happening. And what are we going to do about it? We brought forward and rapidly, you know, we broke glass in the organization to move innovation at a very fast clip. So we're launching an entirely renovated portfolio. This goes across all of our SKUs in terms of new and improved formula. That's number one. Number two, we're launching our most powerful vitamins ever. This is Power Plus Multivites. Stacey will go into a little bit more detail. And then third, there's a real need for sugar-free in the category. And so many of our variants will be available sugar-free. So these aren't me-too innovations. These are going to be large investments and innovation, and we're going to support that with the marketing that it needs to be supported with. This is our, in my opinion, this is what's going to help drive that business forward. And new products. So with that, I'm going to introduce Stacy, who's our new CMO, and she's going to tell you about what we have on tap for 2025. Thank you.

Hi everyone! How are you? I am so excited to be here and to talk to you about our new products. So we're going to have a little bit of fun, okay? So let's start first with a review of what just happened in 2024. Matt mentioned that our new products drove 50% of our incremental growth for the company. So what you see here are three of our heaviest hitters. So let's talk first about deep clean. When dirt and stink run deep, we want you to clean deeper. And you do this with deep clean. And our consumers absolutely did that in 2024. So deep clean established that best tier category, but also drove incremental growth for the brand. So next up we have Arm & Hammer Power Sheets and this really marries the Arm & Hammer Clean with the convenience as well as the mess-free format of a power sheet. So this allowed us to tap into the fastest-growing segment in laundry. And last, and certainly not least, we had Arm & Hammer Hardball. Arm & Hammer Hardball is our technologically advanced hardball lightweight litter. And so that makes cleaning your litter a breeze. So what I love about this story is one, there is a tremendous amount of runway with these items. So we're going to definitely invest in growing awareness and trial of these items so we can drive incremental growth in 2025. But furthermore, we're going to expand on each of these in 2025. So I'm going to take you through some of that. Okay. All right, but before we get to our first innovation for 2025, let's take a look at the free and clear segment within the laundry category. This is a huge segment. It's $1.3 billion, and it has absolutely been skyrocketing over the last couple of years. Now we already have some products that fit within this space, but we have identified an opportunity to capture an additional over 20 million in incremental opportunity. So I'm going to talk you through how we're going to do just that. All right. So our first new product for 2025 is Arm & Hammer Deep Clean. This is our free and clear detergent. And so, as you would expect, this is catering to the consumer with more of a sensitive skin, and it's certainly free of all of what you would expect. But the real game changer with this item is that we are the only brand with the SkinSafe certification. And this is something that's very meaningful to consumers as it gives them the assurance on product quality and safety. All right. So continuing with that theme, I'd like to introduce you to our Arm & Hammer Power Sheets in a fragrance-free format. So this is what I call uncompromised clean. So this is dermatologist-tested, it's free of dyes and perfumes, but the real breakthrough is that this item has 50% more cleaning than the leading value brand because our consumers do not want to compromise with their product choices. Alright, last but not least, we have Arm & Hammer Plant Power. This is our clumping litter. And what's the scoop? The scoop is this. We are bringing our hardball technology into the natural segment. And this is why this is such a big deal. Consumers who buy natural litter feel that it doesn't do as good of a job to control odors. And that's because many natural litters will use additives and those additives lead to mushy or brittle clumps. So with our hardball technology, we do not use additives in our natural version for superior clumping. So we really think that this is going to do very well in the natural segment. And believe if we were to get our fair share, this could be over $30 million for this product launch. All right? And that would be incremental. So moving on, and Rick stole some of my thunder here, we are going all in on VitaFusion. And we have three new initiatives planned for 2025. And we really are moving at lightning speed to make this happen. We are first going to introduce a new and improved formula. People, this is going to take taste to the next level. So I want you to imagine a burst of flavor, a velvety smooth texture. This is with our innovative heat-resistant formula and softer chew. So not only that, we've also given our multivites a kick with 10% more vitamin A, C, and E. So really excited about this launch. All right, what's up next? We've got VitaFusion Power Plus Multivites. This is our most advanced formula. We have formulated with 100% daily value or more of 10 essential ingredients. This is more than any other gummy in the market. And then we've supercharged our advanced formula for adult multis with calcium. We've given the women's multi a boost of choline. And last but certainly not least, we've given our men's multi a boost of CoQ10. So really excited about getting this item into the marketplace. All right, this is another teaser slide. This is where we're going next. Sugar is the biggest barrier preventing non-users from using gummies. And it's no surprise then to see that sugar-free gummies are really taking off in the last couple of years. So we plan to expand on our sugar-free segment and portfolio of products. So this year we're launching Power C as well as Men's Multi. When you add those two products to our suite of sugar-free items, this is going to represent more than 50%. 60% of VitaFusion sales in a sugar-free variant. Because make no mistake, consumers do not want to compromise. We want to give them that same great update to the taste experience, but in a sugar-free formula. So we know this one's going to go over really well. All right, switching gears. Rick talked about Hero and how much Hero is a key contributor to growth for Church and Dwight. So it's no surprise we're going to continue to innovate for Hero. And specifically, I'd like to introduce you to our Hero Mighty Patch Body Patch. So I may be able to speak for all of you, but body acne is a real pain in the butt. It's also a pain in the chest, in the back, and so forth. So it makes sense that we launch our largest patch. We call it our XXL patch, which is over three times the size of our next biggest patch, which is the surface patch. But again, the real game changer here is the notches that we've built into this patch. And so with these notches, it's for better adherence to your curved body parts. Also, when you move, it adheres to your skin so it stays put exactly where you want it. and still gives you that same absorbing gunk within six to eight hours that we're known for with our Mighty Patch pimple patch. But now we can take care of that back knee and chest knee and so forth. So we're really excited about this item. So the last new product that I have for you, and this is just for the first half of this year, is I'd like to introduce you to Batiste Light Dry Shampoo. Because some days do call for a lighter dry shampoo, like day three and day four. But even more importantly, we know that non-users do not want that white residue or that gritty texture that they can get sometimes from a dry shampoo. So I'm going to say to you that this is a triple threat. Our Batiste Light Dry Shampoo has no white residue, a lighter feel, and a beautiful soft texture. soft fragrance in our mellow melon and matcha zen flavors. So again, consumers don't want to have to compromise. They're going to get the same great superior batiste efficacy, but now in a lighter formula. So I'm really excited about this one. All right. So I feel like I could not be leading marketing for Church and Dwight without showing you a spot or two. So I do have two creative spots that are finished. They're ready to go. So you'll be seeing them first before anybody in the marketplace. And we are launching Batiste Light dry shampoo with these two new spots. So if the people behind the scenes could play the video.