Princeton, NJ
609.683.5900
www.churchdwight.com
Sales: $2.2 billion for household, personal care and oral care products.
Corporate sales: $2.7 billion. Net income: $310 million.

Corporate sales rose 6% and net income was up 14%. Consumer domestic sales rose nearly 5% last year, driven by sales of Arm & Hammer liquid and powder laundry detergent and Xtra liquid laundry detergent. But the gains were tempered by lower sales of Oxiclean laundry additive and Arm & Hammer Dental Care and other toothpaste products.

A year ago, Church & Dwight acquired Batiste dry shampoo from Vivalis, Ltd. for $64.8 million. Batiste’s annual sales were $20 million. That purchase helped push international sales up 14.7%. Gains were led by Canada, Australia and Mexico.

For the first quarter of 2012, Church & Dwight’s sales increased 7.5% to $690.6 million. Organic sales increased 8.4% driven by 10.5% volume growth offset by 2.1% unfavorable product mix and pricing. Net income jumped 14% to $95.8 million.

“We had an excellent first quarter and are off to a great start,” said James R. Craigie at a Goldman Sachs Consumer Products Symposium in May. “The environment is tough, with weak consumer spending, high commodity pricing and retailers struggling.”

That makes it tough for Church & Dwight and every consumer products company to improve gross margin. Despite the difficult times, Craigie expects 2012 sales to rise 3-4% and to get gross margin growing again. That’s because C&D has several advantages over its competitors.

For starters, the company has a roster of recession-resistant brands. In fact, 40% of the company’s product portfolio is value-based. Consumers who traded down during the recession have no interest in trading back up.

“They learned that the value products have quality,” Craigie insisted. “In our study, 75-80% of people who traded down are not going back. They don’t need to. They don’t perceive a difference.”

Another C&D advantage is its people. Unlike many multinationals, Craigie doesn’t move executives around. His team remains focused on the task at hand and can draw from years of experience in certain categories. In time, it becomes easier for them to do their jobs and that enables these executives to assume greater responsibilities without having to add payroll.

“They know their business and the know when a competitor makes a mistake.”

Along those lines, Craigie noted that of C&D’s 80 brands, eight of them are power brands and of those, seven were acquired during the past 10 years.

“We love acquisitions and are very good at it,” he insisted. “It’s a key part of our growth.”

Princeton, NJ

609.683.5900

www.churchdwight.com

Sales: $2.1 billion

Sales:

$2.1 billion for household, personal care and oral care products. Corporate sales: $2.5 billion. Net income: $270 million.

ScrubFree from Church & Dwight

Princeton, NJ
609.683.5900
www.churchdwight.com
Sales: $2.3 billion

Sales:
$2.3 billion for household, personal care and oral care products. Corporate sales: $2.5 billion. Net income: $249 million

Corporate sales rose 4% and organic sales increased 5% over the previous year driven by 7% growth in the consumer products business. Company executives credit the growth to the success of eight “power brands,” which include Arm & Hammer, OxiClean, Spinbrush, Nair, Orajel and Xtra. At the same time, the company noted that three initiatives enabled C&D to thrive during the downturn. These include:
• An aggressive cost savings program that has been in place for several years. During that time, the company has delivered 570 basis points of gross margin improvement, excluding restructuring charges.
• Multi-channel distribution. The company was able to weather the economic downturn as it plays in both the premium (60% of revenue) and value (40%) channels.
• Relationship building. The sales and marketing teams did an outstanding job in developing stronger relationships with key retailers and consumers.

In other moves, the company completed construction of its new integrated laundry detergent manufacturing plant and distribution center in York County, PA and closed its North Brunswick, NJ complex. The new facility began production ahead of schedule during the third quarter. Elsewhere, C&D sold several non-core brands, increased marketing spending to drive trial and loyalty, and continued to focus on a wide variety of supply chain initiatives to expand gross margin.

Of course, new products are the lifeblood of any consumer products company, and new launches from C&D between 2007 and 2009 accounted for 15% of sales last year. To keep the momentum going, C&D has introduced several new products this year including Arm & Hammer Plus OxiClean Power Gels laundry detergents, OxiClean MaxForce stain fighters, Kaboom Foamtastic household cleaning products and line extensions to the Nair Shower Power platform.

The strong results continued into 2010, as first quarter sales rose 9.2% to more than $634 million. The gains were credited to higher sales of A&H liquid laundry detergent, Super Scoop cat litter, Nair, Orajel, Aim toothpaste and Kaboom bathroom cleaner, all of which were partially offset by lower sales of Xtra liquid laundry detergent.

Looking ahead, chairman James R. Craigie is optimistic about the remainder of the year.

“We are launching our best new product lineup ever in 2010 and the customer response has been excellent with distribution gains across almost every key category,” he noted. “We expect to deliver organic sales growth of approximately 4-5% in 2010 based on our strong pipeline of innovative new products supported by effective marketing programs.”

Princeton, NJ
800.952.5080

www.churchdwight.com

Sales: $1.9 billion

Sales: $1.9 billion for household and personal care products. Corporate sales: $2.4 billion. Net income: $195 million.

Church & Dwight has made the most of its OxiClean acquistion.

Corporate sales rose 9% to a record $2.4 billion. Consumer domestic sales were up 9.8% on strong sales of Xtra liquid laundry detergent, Arm & Hammer liquid and powder laundry detergents and Oxiclean. Sales also got a boost from a fourth quarter price increase on A&H and Xtra liquid laundry detergents, oral care products and Oxiclean powder. These gains were partially offset by lower sales of Kaboom household cleaner, certain toothpaste brands and antiperspirants. During the year, Church & Dwight acquired the Del Pharmaceuticals business from Coty for $380 million. The business had sales of $100 million in 2007, with Orajel accounting for 70% of sales.

This year and for the future, Church & Dwight is counting on eight power brands—including Arm & Hammer, Oxiclean, Spinbrush, Nair, Orajel and Xtra—to power growth. These household and personal care brands, along with Trojan condoms and First Response pregnancy tests, account for 80% of the company’s sales.

Unlike many other companies, the strong results continued in the new year for Church & Dwight. For the first quarter of 2009, sales increased 5% to $580.9 million. The increase was primarily driven by the recently acquired businesses from Coty and higher sales of Xtra liquid laundry detergent, Arm & Hammer liquid laundry detergent, Oxiclean laundry additive and Arm & Hammer powder laundry detergent. This was offset by lower sales of household cleaners and certain personal care brands.

Last year, new products added $150 million in sales. To keep the momentum in 2009, Church & Dwight was expected to launch more than 20 products including a new Spinbrush, Arm & Hammer Total 2-in-1 Wet Dryer Cloths and Arm & Hammer Plus Oxiclean.

On the new product front, James R. Craigie, chairman and chief executive officer, commented, “We will continue to introduce a steady pipeline of new and improved products in 2009 to drive solid organic growth. Specifically, we will introduce over 20 new products in 2009. These products will be largely focused on our eight power brands and will have a strong value orientation.”

In discussing its first quarter results, management said the company is on track for the fourth quarter opening of its integrated laundry detergent manufacturing plant and distribution center in York County, PA. Church & Dwight will spend $100 million in 2009 and $20 million in 2010, for a total of $170 million in capital expenditures and cash transition expenses from 2008 to 2010 on the project. The new facility is expected to be a significant contributor to gross margin expansion in 2010. With the opening of the new facility, Church & Dwight will close its North Brunswick, NJ complex.

Princeton, NJ
609.683.5900
www.churchdwight.com
Sales: $1.8 billion

Sales:

$1.8 billion for household and personal care products. Corporate sales: $2.2 billion. Net income: $169 million.

Corporate sales rose 14% and net income was up 22%. The increase in sales was attributed to the business acquired in the OGI acquisition, which occurred in August 2006, and the Spinbrush toothbrush business, which collectively accounted for approximately 8% of the increase.

For the first quarter of 2008, corporate sales rose 7.5% to nearly $553 million and net income was up 23% to $56.2 million.

“We are very pleased with our solid first quarter results, which reflected strong organic revenue growth and improved gross margin,” said James R. Craigie, chairman, president and chief executive officer. “The organic revenue growth was driven by new products, increased marketing spending and pricing actions. The improved gross margin reflects aggressive cost reduction programs, pricing and acquisition synergies that more than offset significantly higher commodity and energy costs.”

New Product Activity

As it adds new businesses, Church & Dwight remains focused on new product development. In oral and skin care, the company expanded its Nair depilatory product line with Nair Shower Power, a convenient way to remove hair in the shower, and Nair Soothing Wax strips.

Also new is SpinBrush Swirl, a value-oriented product which is designed to encourage manual brush users to “trade up” into the battery-powered toothbrush category. Two new oral care products were launched under the Arm & Hammer name: Arm & Hammer Age Defying toothpaste, to protect and rebuild enamel; and Arm & Hammer Whitening Booster, an additive used with any toothpaste for convenient whitening.

In household products, the company expanded the distribution of its recently launched Arm & Hammer Laundry Detergent with OxiClean stain fighters in both powdered and liquid form.

Church & Dwight also introduced Arm & Hammer Essentials Free liquid laundry detergent made from environmentally-sensible plant-based soaps to address the needs of consumers with sensitive skin.

A Del of a Purchase

Church & Dwight continues to expand its portfolio of household and personal care products. In April, the company agreed to acquire the Del Pharmaceuticals business from Coty for $380 million. Del Pharmaceuticals had sales of $100 million last year, with Orajel oral analgesic accounting for 70% of sales.

“Orajel is a great addition to our existing portfolio and provides access to a fast-growing segment of the attractive premium oral care category,” said Mr. Craigie. “Orajel also brings to our company a powerful franchise that has developed great consumer loyalty.”

According to Mr. Craigie, the Orajel acquisition is consistent with Church & Dwight’s strategy of adding No. 1 or 2 brands in high growth areas with gross margins that are accretive to the company.

Last month, Church & Dwight Co. said it would construct an integrated laundry detergent manufacturing plant and distribution center in York County, PA. Construction will begin in September and the site is scheduled to be operational by the end of 2009. In conjunction with the opening of the new facility, the company will close its existing laundry detergent manufacturing plant and distribution buildings in North Brunswick, NJ.

“Our strategically important fabric care business has grown substantially over the past 10 years, both organically and through acquisitions such as the Orange Glo International, Inc. brands acquired in 2006,” said Mr. Craigie. “This new site will allow us to continue to grow our fabric care business in a facility that can handle the current and anticipated additional base volume growth for our core businesses, support future potential acquisitions and position our business to be among the industry leaders in low-cost production and distribution in the future. Since our fabric care business is our largest business, this initiative will play a key role in helping to drive our long-term goals for revenue growth and gross margin expansion.”

According to Mr. Craigie, the new 232-acre site has 1.1 million sq. ft. of building space with the ability to expand to meet future business needs. It is designed to significantly reduce production and distribution center costs, and is expected to support the company’s annual goal of expanding gross margin by approximately 100 basis points.