Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE DATED FEBRUARY 3, 2017 OF THE CLOROX COMPANY - CLOROX CO /DE/ | clorox3205911-ex991.htm |
| 8-K - CURRENT REPORT - CLOROX CO /DE/ | clorox3205911-8k.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 | FYTD | ||
| Cleaning | 5% | 2% | 5% | 12% | 6% | 13% | 10% | 12% | Q2 increase driven primarily by higher shipments in Home Care, including double-digit growth of Clorox® disinfecting wipes behind expanded club channel distribution and record shipments in several Clorox® branded products including toilet bowl cleaners; as well as higher shipments in Professional Products across cleaning brands, partially offset by Clorox® bleach due to category softness. |
| Household | 1% | 0% | 3% | 7% | 3% | 6% | 11% | 8% | Q2 increase driven primarily by the benefit of the RenewLife acquisition and higher shipments in Charcoal; also reflects continued strength in Glad® premium trash bags. |
| Lifestyle | 8% | 2% | 4% | 5% | 5% | 1% | 5% | 3% | Q2 increase driven primarily by higher shipments in Natural Personal Care behind innovation in Burt’s Bees® lip care and color products; and higher shipments in Hidden Valley® bottled salad dressings behind increased merchandising support. |
| International | 0% | 0% | 4% | 1% | 1% | 4% | 2% | 3% | Q2 increase driven primarily by higher shipments in Canada, reflecting the benefit of RenewLife acquisition and base business growth, partially offset by lower shipments in certain Latin American countries, mainly Argentina. |
| Total Company | 3% | 1% | 4% | 7% | 4% | 8% | 8% | 8% | |
Supplemental Unaudited Condensed Information – Sales Growth
| Reportable Segments |
% Change vs. Prior Year | Major Drivers of Change | |||||||
| FY16 | FY17 | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | FYTD | ||
| Cleaning | 6% | 2% | 5% | 6% | 5% | 7% | 3% | 5% | Q2 variance between volume and sales driven primarily by unfavorable mix related to expanded disinfecting wipes distribution in club channel and higher trade promotion investments. |
| Household | 5% | 1% | 4% | 5% | 4% | 3% | 12% | 7% | Q2 variance between volume and sales was essentially flat. |
| Lifestyle | 7% | 2% | 5% | 4% | 4% | 2% | 4% | 3% | Q2 variance between volume and sales was essentially flat. |
| International | -8% | -7% | -9% | -9% | -8% | 0% | -2% | -1% |
Q2 variance between volume and sales driven primarily by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. |
| Total Company | 3% | 0% | 2% | 3% | 2% | 4% | 5% | 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.
| Driver | Gross Margin Change vs. Prior Year (basis points) | ||||||
| FY16 | FY17 | ||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |
| Cost Savings | +140 | +130 | +120 | +110 | +130 | +140 | +140 |
| Price Changes | +110 | +110 | +100 | +60 | +90 | +70 | +70 |
| Market Movement (commodities) | +100 | +180 | +180 | +90 | +140 | +90 | +10 |
| Manufacturing & Logistics | -120 | -150 | -150 | -120 | -140 | -220 | -210 |
| All other (1) | -10 | -60 | -40 | -160 | -70 | -140 | 0 |
| Change vs prior year | +220 | +210 | +210 | -20 | +150 | -60 | +10 |
| Gross Margin (%) | 45.0% | 44.6% | 45.3% | 45.4% | 45.1% | 44.4% | 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. In Q1 of fiscal year 2017, “All other” includes about -60bps of unfavorable mix and -50bps of unfavorable foreign exchange impact. |
| The Clorox Company |
Supplemental
Information – Balance Sheet
(Unaudited)
As of December 31,
2016
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q2 | Change | Q2 | Change | |||
| FY 2017 | FY 2016 | Days (6) FY 2017 |
Days (6) FY 2016 | |||
| Receivables, net | $514 | $474 | $40 | 32 | 32 | 0 |
| Inventories | $501 | $450 | $51 | 56 | 52 | 4 |
| Accounts payable and Accrued Liabilities (1) | $878 | $858 | $20 | |||
| Total WC (2)(5) | $257 | $242 | NA | |||
| Total WC % net sales (3)(5) | 4.6% | 4.5% | ||||
| Average WC (2)(5) | $181 | $175 | NA | |||
| Average WC % net sales (4)(5) | 3.2% | 3.2% | ||||
| (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. As a result, total working capital and average working capital for fiscal year 2017 are not comparable to corresponding amounts in prior years. | |
| (6) | Days calculations based on a two-point average. |
Supplemental Information – Cash
Flow
(Unaudited)
For the quarter ended December 31, 2016
Capital expenditures for the second quarter were $58 million versus $40 million in the year-ago quarter.
Depreciation and amortization expense for the second quarter was $41 million in both the current and year-ago quarters.
Net cash provided by continuing operations in the second quarter was $101 million, or 7 percent of sales.
| The Clorox Company |
Supplemental Unaudited Condensed Information
Fiscal Year-To-Date Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| Q2 Fiscal YTD 2017 |
Q2 Fiscal YTD 2016 | |||
| Net cash provided by continuing operations – GAAP | $271 | $178 | ||
| Less: Capital expenditures | $117 | $68 | ||
| Free cash flow – non-GAAP (1) | $154 | $110 | ||
| Free cash flow as a percentage of net sales – non-GAAP (1) | 5.4% | 4.0% | ||
| Net sales | $2,849 | $2,735 |
| (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 | |||||||||
| 9/30/15 | 12/31/15 | 3/31/16 | 6/30/16 | 6/30/16 | 9/30/16 | 12/31/16 | |||||||||
| Earnings from continuing operations | $264 | $230 | $237 | $252 | $983 | $264 | $227 | ||||||||
| before income taxes | |||||||||||||||
| Interest income | -$1 | -$2 | -$1 | -$1 | -$5 | -$1 | -$1 | ||||||||
| Interest expense | $23 | $22 | $22 | $21 | $88 | $22 | $22 | ||||||||
| EBIT (1)(3) | $286 | $250 | $258 | $272 | $1,066 | $285 | $248 | ||||||||
| EBIT margin (1)(3) | 20.6% | 18.6% | 18.1% | 17.0% | 18.5% | 19.8% | 17.6% | ||||||||
| Depreciation and amortization | $41 | $41 | $40 | $43 | $165 | $41 | $41 | ||||||||
| EBITDA (2)(3) | $327 | $291 | $298 | $315 | $1,231 | $326 | $289 | ||||||||
| EBITDA margin (2)(3) | 23.5% | 21.6% | 20.9% | 19.7% | 21.4% | 22.6% | 20.6% | ||||||||
| Net sales | $1,390 | $1,345 | $1,426 | $1,600 | $5,761 | $1,443 | $1,406 | ||||||||
| Total debt (4) | $2,218 | $2,287 | $2,219 | $2,312 | $2,312 | $2,407 | $2,549 | ||||||||
| Debt to EBITDA (3)(5) | 1.8 | 1.8 | 1.8 | 1.9 | 1.9 | 2.0 | 2.1 | ||||||||
| (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: 02-03-17 |
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. |