Workflow
Church & Dwight(CHD) - 2023 Q4 - Annual Report
CHDChurch & Dwight(CHD)2024-02-14 16:00
Transcript
Slide

Financial Performance - In 2023, net sales increased by 9.2% to 5,867.9millioncomparedto5,867.9 million compared to 5,375.6 million in 2022[38] - Gross profit for 2023 was 2,588.5million,representingagrossmarginof44.12,588.5 million, representing a gross margin of 44.1%, an increase of 220 basis points from 41.9% in 2022[38] - Selling, General & Administrative (SG&A) expenses decreased by 20.3% to 889.8 million, with SG&A as a percentage of net sales dropping to 15.2% from 20.8% in 2022[41] - Income from operations rose by 76.9% to 1,057.4million,resultinginanoperatingmarginof18.01,057.4 million, resulting in an operating margin of 18.0%, up 690 basis points from 11.1% in 2022[38] - Diluted net income per share increased by 81.5% to 3.05, compared to 1.68in2022[38]−Netcashprovidedbyoperatingactivitieswas1.68 in 2022[38] - Net cash provided by operating activities was 1,030.6 million in 2023, up from 885.2millionin2022[123]−Thecompanyreportedanetincomeof885.2 million in 2022[123] - The company reported a net income of 755.6 million in 2023, compared to 413.9millionin2022[123]SalesPerformance−ConsumerDomesticsegmentnetsalesgrewby10.7413.9 million in 2022[123] Sales Performance - Consumer Domestic segment net sales grew by 10.7% to 4,571.2 million in 2023, up from 4,131.0millionin2022[47]−TheConsumerInternationalsegmentsawanetsalesincreaseof8.94,131.0 million in 2022[47] - The Consumer International segment saw a net sales increase of 8.9%, attributed to a 3.4% increase in product volumes sold and a 5.1% increase in pricing/product mix[72] - Net sales for Consumer Domestic increased by 10.7% as of December 31, 2023, driven by a 1.0% increase in product volumes sold and a 4.7% increase in pricing/product mix[101] - The Specialty Products Division (SPD) saw a decline in net sales, primarily due to reduced sales of the MEGALAC dairy supplement, leading to an exit from this business segment in Q1 2024[27] Expenses and Costs - Cost of sales for the year ended December 31, 2023, was 3.4 billion, an increase of 36% from 2.5billionin2022[138]−Selling,generalandadministrativeexpensestotaled2.5 billion in 2022[138] - Selling, general and administrative expenses totaled 64.9 million in 2023, up from 32.6millionin2022,representinga9932.6 million in 2022, representing a 99% increase[138] - Research and development expenses were 122.4 million in 2023, compared to 110.0millionin2022,reflectinganincreaseof11.5110.0 million in 2022, reflecting an increase of 11.5%[165] Cash Flow and Dividends - Cash dividends per share increased to 1.09 in 2023, up from 1.05in2022[93]−Cashandcashequivalentsattheendoftheperiodincreasedto1.05 in 2022[93] - Cash and cash equivalents at the end of the period increased to 344.5 million in 2023 from 270.3millionin2022[123]DebtandFinancing−Thecompanyrepaid270.3 million in 2022[123] Debt and Financing - The company repaid 200.0 million of the Term Loan in 2023, with an additional 100.0millionrepaymentplannedforJanuary2024[76]−Thecompanyhasatermloanfacilityof100.0 million repayment planned for January 2024[76] - The company has a term loan facility of 400.0 million due on December 22, 2024, with the interest rate linked to the Secured Overnight Financing Rate (SOFR)[104] Market and Competitive Landscape - The vitamin category is facing increased competition, with over 60 significant competitors, leading to a potential impairment risk for the VITAFUSION and LIL' CRITTERS trade name, which has a carrying value of 281.3million[58]−Thecompanycompetesinhighlyinnovativehouseholdandpersonalcarecategories,whichrequiresignificantadvertisingandpromotion[214]−Thespecialtychemicalsbusinessfacesintensecompetitioninfluencedbycapacityutilizationandrawmaterialcosts[215]StrategicFocusandFuturePlans−Thecompanycontinuestofocusonnewproductintroductionsandincreasedmarketingspendingtoaddresssalespressuresinkeyproductcategories[28]−Thecompanyplanstocontinuefocusingonmarketexpansionandnewproductdevelopmenttodrivefuturegrowth[126]−Thecompanyanticipatescapitalexpendituresofapproximately281.3 million[58] - The company competes in highly innovative household and personal care categories, which require significant advertising and promotion[214] - The specialty chemicals business faces intense competition influenced by capacity utilization and raw material costs[215] Strategic Focus and Future Plans - The company continues to focus on new product introductions and increased marketing spending to address sales pressures in key product categories[28] - The company plans to continue focusing on market expansion and new product development to drive future growth[126] - The company anticipates capital expenditures of approximately 180.0 million in 2024, primarily for manufacturing capacity investments[78] Segment Information - The company operates in three segments: Consumer Domestic, Consumer International, and Specialty Products Division, focusing on various personal care and household products[156] - The SPD segment accounted for approximately 5% of the company's consolidated net sales in 2023[209] Environmental and Social Responsibility - The Company has a focus on minimizing environmental impact, including increased renewable energy usage and reduced water consumption[198] - The Company emphasizes employee safety and wellness as top priorities, with policies designed to ensure compliance with OSHA standards[199] - The Company has received recognition for its progress in key areas of Environmental, Social, and Governance (ESG) from various third parties[200]