Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE DATED AUGUST 3, 2017 OF THE CLOROX COMPANY - CLOROX CO /DE/ | clorox3293981-ex991.htm |
| 8-K - CURRENT REPORT - CLOROX CO /DE/ | clorox3293981-8k.htm |
The Clorox Company
Supplemental Unaudited Condensed Information – Volume Growth
| Reportable Segments | % Change vs. Prior Year | |||||||||||
| FY16 | FY17 | Major Drivers of Change | ||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |||
| Cleaning | 5% | 2% | 5% | 12% | 6% | 13% | 10% | 13% | 4% | 10% | Q4 increase driven primarily by higher shipments in Home Care, including Clorox® disinfecting wipes behind strength of a number of customers and new ScentivaTM wipes and sprays, as well as higher shipments in Professional Products mainly across cleaning products; partially offset by lower shipments in Laundry primarily due to category softness. | |
| Household | 1% | 0% | 3% | 7% | 3% | 6% | 11% | 9% | 5% | 8% | Q4 increase driven primarily by the benefit of the RenewLife acquisition, higher shipments in Cat Litter supported by increased merchandising activity and higher shipments of Glad® premium trash bags. | |
| Lifestyle | 8% | 2% | 4% | 5% | 5% | 1% | 5% | -1% | -1% | 1% | Q4 decrease driven primarily by lower shipments of KC Masterpiece® barbecue sauces, partially offset by higher shipments in the Burt’s Bees Natural Personal Care business, which grew double-digits in the year-ago quarter. | |
| International | 0% | 0% | 4% | 1% | 1% | 4% | 2% | -2% | 1% | 1% | Q4 increase driven primarily by higher shipments in Asia and Europe, partially offset by lower shipments in certain Latin American countries, mainly Argentina. | |
| Total Company | 3% | 1% | 4% | 7% | 4% | 8% | 8% | 7% | 3% | 6% | ||
Supplemental Unaudited Condensed Information – Sales Growth
| Reportable Segments | % Change vs. Prior Year | ||||||||||
| FY16 | FY17 | Major Drivers of Change | |||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||
| Cleaning | 6% | 2% | 5% | 6% | 5% | 7% | 3% | 7% | 2% | 5% | Q4 variance between volume and sales driven primarily by unfavorable mix and higher trade promotion spending to drive awareness and trial of new products. |
| Household | 5% | 1% | 4% | 5% | 4% | 3% | 12% | 4% | 4% | 5% | Q4 variance between volume and sales driven primarily by unfavorable mix. |
| Lifestyle | 7% | 2% | 5% | 4% | 4% | 2% | 4% | -3% | 2% | 1% | Q4 variance between volume and sales driven primarily by favorable mix and lower trade promotion spending. |
| International | -8% | -7% | -9% | -9% | -8% | 0% | -2% | 3% | 5% | 1% | Q4 variance between volume and sales largely due to the benefit of price increases, partially offset by unfavorable foreign currency exchange rates. |
| Total Company | 3% | 0% | 2% | 3% | 2% | 4% | 5% | 4% | 3% | 4% | |
The Clorox Company
Supplemental Unaudited Condensed Information – Gross Margin Drivers
The table below provides details on the drivers of gross margin change versus the prior year.
| Gross Margin Change vs. Prior Year (basis points) | ||||||||||
| Driver | FY16 | FY17 | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |
| Cost Savings | +140 | +130 | +120 | +110 | +130 | +140 | +140 | +150 | +150 | +150 |
| Price Changes | +110 | +110 | +100 | +60 | +90 | +70 | +70 | +60 | +50 | +60 |
| Market Movement (commodities) | +100 | +180 | +180 | +90 | +140 | +90 | +10 | -70 | -90 | -20 |
| Manufacturing & Logistics | -120 | -150 | -150 | -120 | -140 | -220 | -210 | -130 | -130 | -170 |
| All other(1) | -10 | -60 | -40 | -160 | -70 | -140 | 0 | -140 | +50 | -60 |
| Change vs prior year | +220 | +210 | +210 | -20 | +150 | -60 | +10 | -130 | +30 | -40 |
| Gross Margin (%) | 45.0% | 44.6% | 45.3% | 45.4% | 45.1% | 44.4% | 44.7% | 44.0% | 45.7% | 44.7% |
|
(1) |
In Q4 of fiscal year
2016, “All other” includes about -60bps of unfavorable mix, -50bps related
to acquisition of the RenewLife business in May 2016 primarily due to
one-time integration costs, and -40bps of higher trade promotion spending. |
The Clorox Company
Supplemental Unaudited Condensed Information – Balance Sheet
As of June 30, 2017
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q4 | Change | Q4 | Change | |||
| FY 2017 | FY 2016 | Days(6) FY 2017 |
Days(6) FY 2016 | |||
| Receivables, net | $565 | $569 | ($4) | 31 | 31 | 0 |
| Inventories, net | $459 | $443 | $16 | 49 | 47 | 2 |
| Accounts payable and Accrued Liabilities(1) | $1,005 | $1,035 | ($30) | |||
| Total WC(2)(5) | $91 | $49 | $42 | |||
| Total WC % net sales(3)(5) | 1.4% | 0.8% | ||||
| Average WC(2)(5) | $158 | $135 | $23 | |||
| Average WC % net sales(4)(5) | 2.4% | 2.1% | ||||
| (1) | Accounts payable and accrued liabilities were combined into one financial statement line as of June 30, 2016. The change has been retrospectively applied to all periods presented. |
| (2) | Working capital (WC) is defined in this context as current assets minus current liabilities excluding cash and short-term debt, based on end of period balances. Average working capital represents a two-point average of working capital. |
| (3) | Represents working capital at the end of the period divided by (net sales for current quarter x 4). |
| (4) | Represents a two-point average of working capital divided by (net sales for current quarter x 4). |
| (5) | In June 2016, the Company prospectively adopted ASU No. 2015-17 "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes" requiring all deferred tax assets and liabilities to be classified as noncurrent. |
| (6) | Days calculations based on a two-point average. |
Supplemental Unaudited Condensed Information – Cash Flow
For the quarter and year ended June 30, 2017
Capital expenditures for the fourth quarter were $70 million versus $59 million in the year-ago quarter. (Fiscal year 2017 = $231 million)
Depreciation and amortization expense for the fourth quarter was $42 million versus $43 million in the year-ago quarter. (Fiscal year 2017 = $163 million)
Net cash provided by continuing operations in the fourth quarter was $388 million, or 23.6% of net sales. (Fiscal year 2017 = $871 million or 14.6% of net sales)
The Clorox Company
Supplemental Unaudited Condensed Information – Free Cash Flow
Fiscal Year Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| Fiscal Year 2017 |
Fiscal YTD 2016 |
||||||
| Net cash provided by continuing operations – GAAP | $871 | $768 | |||||
| Less: Capital expenditures | $231 | $172 | |||||
| Free cash flow – non-GAAP(1) | $640 | $596 | |||||
|
Free cash flow as a percentage of net sales – non-GAAP(1) |
10.7% | 10.3% | |||||
| Net sales | $5,973 | $5,761 |
| (1) | In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management uses free cash flow and free cash flow as a percentage of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and share repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. |
The Clorox Company
Supplemental Unaudited Reconciliation of Earnings From Continuing Operations Before Income Taxes to EBIT(1)(3) and EBITDA(2)(3)
Dollars in millions and percentages based on rounded numbers
| FY 2016 | FY 2017 | ||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||
| 9/30/15 | 12/31/15 | 3/31/16 | 6/30/16 | 6/30/16 | 9/30/16 | 12/31/16 | 3/31/17 | 6/30/17 | 6/30/17 | ||||||||||||
| Earnings from continuing operations before income taxes | $264 | $230 | $237 | $252 | $983 | $264 | $227 | $247 | $295 | $1,033 | |||||||||||
| Interest income | -$1 | -$2 | -$1 | -$1 | -$5 | -$1 | -$1 | -$1 | -$1 | -$4 | |||||||||||
| Interest expense | $23 | $22 | $22 | $21 | $88 | $22 | $22 | $22 | $22 | $88 | |||||||||||
| EBIT(1)(3) | $286 | $250 | $258 | $272 | $1,066 | $285 | $248 | $268 | $316 | $1,117 | |||||||||||
| EBIT margin(1)(3) | 20.6% | 18.6% | 18.1% | 17.0% | 18.5% | 19.8% | 17.6% | 18.1% | 19.2% | 18.7% | |||||||||||
| Depreciation and amortization | $41 | $41 | $40 | $43 | $165 | $41 | $41 | $39 | $42 | $163 | |||||||||||
| EBITDA(2)(3) | $327 | $291 | $298 | $315 | $1,231 | $326 | $289 | $307 | $358 | $1,280 | |||||||||||
| EBITDA margin(2)(3) | 23.5% | 21.6% | 20.9% | 19.7% | 21.4% | 22.6% | 20.6% | 20.8% | 21.7% | 21.4% | |||||||||||
| Net sales | $1,390 | $1,345 | $1,426 | $ 1,600 | $ 5,761 | $1,443 | $1,406 | $1,477 | $1,647 | $5,973 | |||||||||||
| Total debt(4) | $2,218 | $2,287 | $2,219 | $2,312 | $2,312 | $2,407 | $2,549 | $2,440 | $2,195 | $2,195 | |||||||||||
| Debt to EBITDA(3)(5) | 1.8 | 1.8 | 1.8 | 1.9 | 1.9 | 2.0 | 2.1 | 2.0 | 1.7 | 1.7 | |||||||||||
| (1) | EBIT (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT to net sales. |
| (2) | EBITDA (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is the ratio of EBITDA to net sales. |
| (3) | In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes the presentation of EBIT, EBIT margin, EBITDA, EBITDA margin and debt to EBITDA provides additional useful information to investors about current trends in the business. |
| (4) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Cost”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted this standard in the first quarter of fiscal year 2017 and retrospectively applied the standard to all periods presented. |
| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. |
The Clorox Company
Updated: 08-03-17
U.S. Retail Pricing Actions in Last 5 Calendar Years (CY2013 - CY2017)
| Brand / Product | Average Price Change | Effective Date |
| Home Care | ||
| Clorox
Clean-Up®, Formula 409®, and Clorox® Disinfecting Bathroom spray cleaners |
+5% | March 2013 |
| Green Works® cleaners | +21% | July 2014 |
| Laundry | ||
| Clorox® liquid bleach | +7% | February 2015 |
| Glad | ||
| Glad® trash bags | +6% | March 2014 |
| Glad® ClingWrap | +5% | March 2014 |
| Glad® trash bags | +6% | November 2014 |
| Glad® wraps | +5% | January 2015 |
| Natural Personal Care | ||
| Burt’s Bees® lip balm | +10% | July 2013 |
Notes: | ||
| · | Individual SKUs vary within the range. | |
| · | This communication reflects pricing actions on primary items, and does not reflect pricing actions on our Professional Products business. |