Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE DATED AUGUST 2, 2018 OF THE CLOROX COMPANY - CLOROX CO /DE/ | clorox3454351-ex991.htm |
| 8-K - CURRENT REPORT - CLOROX CO /DE/ | clorox3454351-8k.htm |
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The Clorox Company |
Supplemental Unaudited Condensed Information – Volume Growth
| Reportable Segments |
% Change vs. Prior Year |
Major Drivers of Change | |||||||||
| FY17 | FY18 | ||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||
| Cleaning | 13% | 10% | 13% | 4% | 10% | 5% | 2% | 4% | 2% | 3% |
Q4 increase driven primarily by higher shipments in Home Care, reflecting record quarter shipments of Clorox® disinfecting wipes behind back-to-school merchandising support and continued strength of Clorox® ScentivaTM platform with the launch of bathroom products. |
| Household | 6% | 11% | 9% | 5% | 8% | 7% | 0% | 3% | 0% | 2% |
Q4 flat in volume driven primarily by lower shipments in Charcoal due to poor weather continuing in April and lower merchandising levels at several retailers, mostly offset by higher shipments in Cat Litter behind Fresh Step® Clean PawsTM innovation and increased merchandising support in club channel. |
| Lifestyle | 1% | 5% | -1% | -1% | 1% | 2% | 3% | 0% | 27% | 8% |
Q4 increase driven primarily by the benefit of Nutranext acquisition. |
| International | 4% | 2% | -2% | 1% | 1% | -2% | 0% | 3% | -1% | 0% |
Q4 decrease driven primarily by lower shipments in Europe. |
| Total Company | 8% | 8% | 7% | 3% | 6% | 4% | 1% | 3% | 5% | 3% | |
Supplemental Unaudited Condensed Information – Sales Growth
| Reportable Segments |
% Change vs. Prior Year |
Major Drivers of Variance between Volume and Sales | |||||||||
| FY17 | FY18 | ||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||
| Cleaning | 7% | 3% | 7% | 2% | 5% | 5% | 1% | 3% | 3% | 3% |
Q4 variance between volume and sales driven primarily by the benefit of price increases and lower trade promotion spending partially offset by unfavorable mix. |
| Household | 3% | 12% | 4% | 4% | 5% | 5% | -3% | 1% | -3% | 0% | Q4 variance between volume and sales driven primarily by unfavorable mix and a price decrease in a portion of the Glad® trash portfolio. |
| Lifestyle | 2% | 4% | -3% | 2% | 1% | 4% | 3% | 2% | 21% | 8% | Q4 variance between volume and sales driven primarily by the unfavorable mix with the Nutranext acquisition. |
| International | 0% | -2% | 3% | 5% | 1% | 1% | 4% | 4% | -2% | 2% |
Q4 variance between volume and sales driven primarily by unfavorable foreign currency exchange rates and unfavorable mix partially offset by the benefit of price increases. |
| Total Company | 4% | 5% | 4% | 3% | 4% | 4% | 1% | 3% | 3% | 3% | |
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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 | FY17 | FY18 | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |
| Cost Savings | +140 | +140 | +150 | +150 | +150 | +160 | +170 | +140 | +120 | +140 |
| Price Changes | +70 | +70 | +60 | +50 | +60 | +40 | +30 | +50 | +50 | +40 |
| Market Movement (commodities) | +90 | +10 | -70 | -90 | -20 | -90 | -110 | -160 | -130 | -130 |
| Manufacturing & Logistics | -220 | -210 | -130 | -130 | -170 | -80 | -240 | -220 | -110 | -160 |
| All other (1) | -140 | 0 | -140 | +50 | -60 | +20 | -20 | +70 | -100 | +10 |
| Change vs prior year | -60 | +10 | -130 | +30 | -40 | +50 | -170 | -120 | -170 | -100 |
| Gross Margin (%) | 44.4% | 44.7% | 44.0% | 45.7% | 44.7% | 44.9% | 43.0% | 42.8% | 44.0% | 43.7% |
| (1) |
In Q1 of fiscal year 2017, “All other” includes about -60bps of unfavorable mix and -50bps of unfavorable foreign exchange impact. |
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In Q3 of fiscal year 2017, “All other” includes about -100bps of unfavorable mix (negative mix in charcoal business and strong sales in club channel across multiple businesses) and -60bps of higher trade promotion spending. | |
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In Q4 of fiscal year 2018, “All other” includes about -60bps of negative impact from costs related to the Nutranext acquisition. |
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The Clorox Company |
Supplemental Unaudited Condensed Information – Balance Sheet
As of June 30, 2018
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q4 | Change | Q4 | Change | |||
| FY 2018 | FY 2017 | Days (4) | Days (4) | |||
| ($ millions) | ($ millions) | FY 2018 | FY 2017 | |||
| Receivables, net | $600 | $565 | $35 | 32 | 31 | 1 |
| Inventories, net | $506 | $459 | $47 | 48 | 49 | -1 |
| Accounts payable and Accrued Liabilities | $1,001 | $1,005 | -$4 | |||
| Total WC (1) | $179 | $91 | $88 | |||
| Total WC % of net sales (2) | 2.6% | 1.4% | ||||
| Average WC (1) | $216 | $158 | $58 | |||
| Average WC % of net sales (3) | 3.2% | 2.4% | ||||
| (1) | 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. |
| (2) | Represents working capital at the end of the period divided by (net sales for current quarter x 4). |
| (3) | Represents a two-point average of working capital divided by (net sales for current quarter x 4). |
| (4) | Days calculations based on a two-point average. |
Supplemental Unaudited Condensed Information – Cash Flow
For the quarter and fiscal year ended June 30, 2018
Capital expenditures for the fourth quarter were $68 million versus $70 million in the year-ago quarter. (Fiscal year 2018 = $194 million)
Depreciation and amortization expense for the fourth quarter was $45 million versus $42 million in the year-ago quarter. (Fiscal year 2018 = $166 million)
Net cash provided by continuing operations in the fourth quarter was $400 million, or 23.7% of net sales. (Fiscal year 2018 = $974 million, or 15.9% of net sales)
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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 | Fiscal | |||
| Year | Year | |||
| 2018 | 2017 | |||
| Net cash provided by continuing operations – GAAP | $974 | $871 | ||
| Less: Capital expenditures | $194 | $231 | ||
| Free cash flow – non-GAAP (1) | $780 | $640 | ||
| Free cash flow as a percentage of net sales – non-GAAP (1) | 12.7% | 10.7% | ||
| Net sales | $6,124 | $5,973 |
| (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. |
| These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP. | |
|
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 2017 | FY 2018 | |||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |||||||||||
| 9/30/16 | 12/31/16 | 3/31/17 | 6/30/17 | 6/30/17 | 9/30/17 | 12/31/17 | 3/31/18 | 6/30/18 | 6/30/18 | |||||||||||
| Earnings from continuing operations before income taxes | $264 | $227 | $247 | $295 | $1,033 | $279 | $227 | $242 | $306 | $1,054 | ||||||||||
| Interest income | -$1 | -$1 | -$1 | -$1 | -$4 | -$1 | -$2 | -$1 | -$2 | -$6 | ||||||||||
| Interest expense | $22 | $22 | $22 | $22 | $88 | $21 | $20 | $20 | $24 | $85 | ||||||||||
| EBIT (1)(3) | $285 | $248 | $268 | $316 | $1,117 | $299 | $245 | $261 | $328 | $1,133 | ||||||||||
| EBIT margin (1)(3) | 19.8% | 17.6% | $18.1% | 19.2% | 18.7% | 19.9% | 17.3% | 17.2% | 19.4% | 18.5% | ||||||||||
| Depreciation and amortization | $41 | $41 | $39 | $42 | $163 | $40 | $41 | $40 | $45 | $166 | ||||||||||
| EBITDA (2)(3) | $326 | $289 | $307 | $358 | $1,280 | $339 | $286 | $301 | $373 | $1,299 | ||||||||||
| EBITDA margin (2)(3) | 22.6% | 20.6% | 20.8% | 21.7% | 21.4% | 22.6% | 20.2% | 19.8% | 22.1% | 21.2% | ||||||||||
| Net sales | $1,443 | $1,406 | $1,477 | $1,647 | $5,973 | $1,500 | $1,416 | $1,517 | $1,691 | $6,124 | ||||||||||
| Total debt (4) | $2,407 | $2,549 | $2,440 | $2,195 | $2,195 | $2,200 | $2,283 | $2,855 | $2,483 | $2,483 | ||||||||||
| Debt to EBITDA(3)(5) | 2.0 | 2.1 | 2.0 | 1.7 | 1.7 | 1.7 | 1.8 | 2.2 | 1.9 | 1.9 | ||||||||||
| (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 useful additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. |
| These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP. | |
| (4) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt and long-term debt. Current maturities of long-term debt and long-term debt are carried at face value net of unamortized discounts, premiums and debt issuance costs. |
| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. |