OAKLAND, Calif., Oct. 5, 2017 /PRNewswire/ -- At today's
Clorox Analyst Day event and live webcast, senior leaders shared
highlights of the company's progress against its 2020 Strategy and
the evolution of key strategic elements the company is emphasizing
to drive good growth – growth that's profitable, sustainable and
responsible.
"Our 2020 Strategy continues to deliver strong results for our
shareholders," said Chairman and CEO Benno
Dorer. "In each of the last three fiscal years, we've
consistently delivered sales and earnings growth in an environment
where growth is hard to come by."
"We're emphasizing key strategy areas that we believe will help
us continue to drive results for our shareholders over the long
term. Notably, superior consumer value is the centerpiece of our
strategy, and it starts with differentiated products and brands
that consumers love. From building strong brands and driving cost
savings to reinforcing a culture of growth, everyone at Clorox
plays a role in contributing to superior consumer value."
To accomplish its 2020 goals, Clorox will lean into the
following key elements of its 2020 Strategy:
Drive superior value behind strong brand investment,
innovation and technology transformation.
Consumer value is paramount. In today's rapidly changing world
where consumers are in charge, Clorox continues to prioritize
strong investment in its brand-building programs to optimize the
value equation of brand perception, product experience and
price.
Investing In Brand Purpose
Jon Balousek, senior vice
president and general manager – Household and Lifestyle Division,
talked about how the company's brand investments include a focus on
establishing a clear brand point of view that reflects an
aspirational purpose beyond product functionality. For example, the
Clorox® brand's purpose is to "champion a cleaner world
where people thrive," because clean is a powerful idea that enables
new possibilities in life. Balousek shared the brand's new "Clean
Matters" video, which brings to life the campaign tagline of "clean
is the beginning, what comes next is everything." Whether it's
welcoming a new baby home or getting the car ready for a prom date,
the idea of clean isn't just about clean surfaces; it's about
setting the stage for something new. The Clean Matters campaign
launched in late September during the fall premiere of NBC's "The
Voice," and will extend to cinema, TV and digital channels.
"Building brands with purpose is essential to driving superior
consumer value," Balousek said. "Enabled by new creative agencies
and a modernized organizational structure integrating teams from
marketing, sales and innovation, we're pushing the boundaries of
our brand-building programs. People don't just buy products; they
buy brands that are human-centric, purpose-driven and that engage
with consumers in a meaningful way."
Creating Superior Product Experiences Through
Innovation
Innovation continues to be the lifeblood of Clorox's 2020
Strategy, creating superior product experiences that delight
consumers, power brand leadership, and support the company's
product categories. Chief Innovation Officer Denise Garner noted the company's strong track
record in innovation, showing that in each of the last 10 fiscal
years, Clorox delivered about 3 points of annual incremental sales
growth from new products. She also highlighted recent, successful
product introductions across the company's global portfolio,
including Clorox® Scentiva® wipes and sprays,
Clorox Healthcare® Fuzion® cleaner
disinfectant, Clorox® Power Gel, Fresh Step®
with Febreze™ cat litter, Burt's Bees® lipsticks and
flavored lip balm, Brita® Stream™ pitchers, Hidden
Valley® Simply Ranch® dressings and
Kingsford® long-burning charcoal.
Garner expressed confidence in the company's innovation pipeline
through fiscal year 2018 and beyond. In late September, the company
introduced Clorox® bleach with CloroMax™ patented
technology, a new formula offering the same whitening and
disinfecting benefits as the previous Clorox® bleach,
while creating a protective shield on hard surfaces that repels
stains to make cleaning quicker and easier. The company also
introduced Burt's Bees® cosmetics, building on the
brand's success in lip color and extending its natural proposition
into a new category. The Burt's Bees team created its natural
cosmetics line with the help of leading makeup artists and trend
experts. The development of product formulas and packaging was also
guided by the brand's high natural standards and sustainability
principles.
"Innovation differentiates our products and brands, which is
critical to delivering superior consumer value," said Garner.
"We're building on our momentum with a solid pipeline of new
products and enhancing our innovation processes to increase speed
to market. We're pleased with our continued progress, including
delivering innovation that has consistently led to incremental
sales and reducing our average time to market by about 40
percent."
Clorox has made significant investments to support innovation
for the long term, including a consumer learning center to ensure
product development is grounded in strong insights; an innovation
center that fosters internal collaboration across multiple
functions involved in discovery, design and commercialization; and
a pilot plant to rapidly test new products and manufacturing
processes.
Taking a Strategic Approach to Pricing
An important dimension of consumer value is a product's price.
Chief Customer Officer Matt Laszlo
discussed the company's strategic approach of offering products at
the right value and leveraging the pricing power of the company's
value-advantaged brands. He pointed to a price increase on
Clorox® disinfecting wipes, which will take effect
November 2017. Laszlo said, "The
price adjustment on Clorox® disinfecting wipes reflects
its category leadership, superior value as well as cost increases
over the last few years." Laszlo also explained that strategic
pricing could selectively include price rollbacks. For example, the
company is lowering prices on a part of the Glad®
portfolio to address an expanded price gap versus the competition,
with the goal to support the long-term health of the category and
fuel a strong Glad® innovation pipeline.
Leveraging Value to Win at Shelf
Laszlo addressed the change taking place in the retail
environment, pointing to the growth of e-commerce, elevated
promotional activity in light of the emergence of hard discounters
and competition from store brands as well as retailer
consolidation. He reinforced Clorox's history of retail success
through its focus on establishing strategic partnerships with its
retail customers and evolving its world-class capabilities to meet
the needs of retailers and consumers.
"We have a long history of growing with all our retailer
partners," Laszlo said. "We have leading brands that provide
superior consumer value and help grow our categories. From consumer
insights, shopper marketing and category management to retail
operations and supply chain, we have world-class capabilities that
deliver value to our partners. Importantly, we're constantly
adapting these capabilities to win with emerging retailers and in a
digital world."
Clorox's leadership in digital has led to strong performance in
e-commerce, which now represents about 4 percent of total company
sales. In the last two fiscal years, the company's e-commerce sales
increased nearly 40 percent annually. "We're tracking ahead of our
sales target and closing in on our 2020 aspiration of $500 million from e-commerce sales," Laszlo
said.
Technology Transformation
Clorox continues to build competitive advantage through strong
technology investments that are transforming the company's
go-to-market model. Chief Marketing Officer Eric Reynolds discussed Clorox's vision to build
on its industry leadership in technology-enabled consumer
engagement. The company's use of data, technology and analytics has
led to more targeted, personalized and real-time engagement,
resulting in significant improvement in the ROI of digital
marketing. In fact, the company has seen a 44 percent ROI
improvement across its cleaning brands, particularly from
investments in search and its data management platform to improve
the targeting of its digital media. Reynolds showed a
Clorox® Clean-Up® campaign that delivered 4.5
times the return on investment from targeting male millennials with
banner ads about "date night," with the message that the product
delivers "an invite-her-in" kind of clean.
He also pointed to a Burt's Bees® lip balm campaign
that delivered strong ROI. The Burt's Bees team linked the brand's
digital media purchases to weather conditions, specifically based
on the Wetbulb Global Temperature index, which measures humidity as
well as wind speed and direction. According to Reynolds, Clorox's
Data Science team discovered that this index influences about 80
percent of lip balm purchases.
"In the digital world, we have the ability to take a
test-and-learn approach to our programs, generating real-time data
and consumer insights that inform our marketing investments,"
Reynolds said. "Seeing improvement in ROI and consumer engagement
gives us confidence to continue investing strongly in digital."
Clorox continues to be a leader in the consumer packaged goods
industry in the transformation of digital marketing. For fiscal
year 2018, the company is projecting that more than 50 percent of
working media spending will be directed to digital channels.
Moving forward, Reynolds reinforced Clorox's focus on extending
technology transformation further into other areas of the company,
including its supply chain and R&D, to create operational
efficiencies and digitally enabled innovation. In closing, Reynolds
highlighted the next frontier of consumer experience, which calls
for reimagining seamless and cohesive experiences beyond
advertising and product use.
"Delivering superior consumer experiences is imperative to
offering superior consumer value," Reynolds said. "Clorox is taking
a human-centric view in integrating brand and product interactions
to deliver meaningful and more personalized engagement along
different points of consumers' lives to help them meet their
goals."
Accelerate portfolio momentum in and around the core.
Clorox considers its global portfolio of leading brands to be a
competitive advantage and maximizes its contribution to profitable
growth by optimizing investments between "growth brands" and "fuel
brands." For example, the Burt's Bees® brand has high
growth potential globally, and the company will continue to drive
trial and awareness behind core products like lip balm and invest
in product innovation. Meanwhile, Charcoal, which includes the
Kingsford® and Match Light® brands, is a
steady business focused on delivering growth that's more profitable
so resources can be shifted to fund investments in growth brands
like Burt's Bees. Clorox bleach is another business that's focused
on delivering profitability to support growth brands. Linda Rendle, senior vice president and general
manager – Cleaning Division, showed that over the years, the Clorox
bleach business has steadily expanded gross margin, which then
enabled strong demand-building investments in the
Clorox® equity, particularly Clorox® home
care products. Notably, the company was able to develop the
Clorox® Scentiva® platform – beginning with
wipes and sprays – which delivered consumer-noticeable
differentiation through scents that were designed in collaboration
with high-end fragrance houses. The strength of the
Clorox® equity is evident in its increase in household
penetration. Today, Clorox®-branded products are in
about 65 percent of U.S. households, an increase of 5 million
households in the last three years.1
Rendle also emphasized the company's focus on long-term gross
margin expansion as a means to fuel profitable and sustainable
growth, including delivering strong cost savings; ensuring pricing,
mix and demand optimization; and developing margin-accretive
innovation. Rendle pointed out that gross margin is now a metric in
Clorox's short-term incentive program. "Long-term gross margin is a
top priority, and everyone at Clorox knows they play a role in
achieving that goal," she said.
Fuel growth by reducing waste in our work, products and
supply chain.
Clorox is continually identifying ways to reduce waste in every
aspect of its business so that savings can be reinvested to fuel
growth. Chief Operating Officer Dawn
Willoughby reinforced Clorox's track record in delivering
strong cost savings through increasing productivity and driving
agility across its operations. In each of the last 10 fiscal years,
Clorox has delivered more than $100
million in annual cost savings.
"Delivering strong cost savings is in our DNA," Willoughby said.
"Our focus on cutting waste in our work, driving our sustainability
initiatives and implementing lean management principles is helping
us generate savings to reinvest in profitable growth."
Willoughby turned to the International business' Go Lean strategy as a good example of driving
cost savings from productivity programs to improve its long-term
profitability. The International team's efforts paid off, with
their recent delivery of several consecutive quarters of sales and
profit growth.
Moving forward, while the International business will continue
to execute against its Go Lean
strategy, it will also invest in select profitable growth
opportunities, including driving the Laundry Additives business and
continuing to expand the Burt's Bees and RenewLife businesses
globally.
"International continues to play a strategic role in our
portfolio," Willoughby said. "With our leading brands, strong
capabilities and emphasis on long-term margin improvement, we are
optimistic about the future prospects of this business."
Engage our people as business owners.
Clorox's global workforce drives the company's 2020 Strategy and
is the key to delivering good growth. Chief People Officer
Kirsten Marriner discussed Clorox's
People strategy, which includes a focus on inclusion and diversity
as well as growth culture.
Marriner stated, "We recognize the business value of having a
workforce made up of different backgrounds, thinking styles,
perspectives and experiences." She referenced Clorox's track record
in inclusion and diversity, highlighting recognitions from external
organizations, including another 100 percent score from the Human
Rights Campaign for Clorox's LGBT workplace practices and the
company's No. 7 ranking on Diversity MBA magazine's list of the 50
best employers for women and diverse managers. She noted that
female leaders make up 36 percent of Clorox Executive Committee
members. Female and minority leaders each make up 33 percent of the
company's board of directors, which is above Fortune 500 company
averages for these categories.2
Marriner then discussed the broad impact of growth culture on
how Clorox people drive the 2020 Strategy. From the execution of
brand purpose and innovation to the implementation of technology
transformation and lean management principles, Clorox's growth
culture focuses on decisiveness, accountability and
empowerment.
"Growth culture plays an important role in how we propel our
business," Marriner said. "We want Clorox people at all levels
across the company to be empowered to innovate and take smart risks
in our pursuit of good growth."
Finally, Marriner reinforced the company's pride in achieving
high levels of employee engagement. Clorox's current engagement
score of 88 percent is higher than both the fast-moving consumer
goods industry norm and the global high-performance
norm.3
"Employee engagement is extremely important to the Clorox
management team as there's a strong correlation between engagement
and long-term financial performance," she said.
Focus on Long-Term Shareholder Value
Chief Financial Officer Steve
Robb reinforced the company's confidence in its 2020
Strategy to continue creating shareholder value over the long
term.
"Consistent sales and earnings growth is translating into strong
shareholder return," Robb said. In the last three fiscal years,
Clorox delivered total shareholder return4 of 58
percent, compared to 37 percent for its peer group5 and
31 percent for the S&P 500. Robb pointed to the company's long
history of healthy dividend growth, with dividend increases every
year since 1977. In May 2017, Clorox
announced a 5 percent increase in its dividend.
Robb noted that Clorox's strong track record of generating
healthy cash flows also contributes to shareholder return. In
fiscal year 2017, net cash provided by continuing operations came
in at $871 million, an increase of 13
percent compared to fiscal year 2016. "Generating healthy cash
flows gives us the financial flexibility to deliver against our
priorities of reinvesting in our business, with a focus on keeping
our core healthy; maintaining our debt leverage at or below our
target range; and returning cash to shareholders through dividends
and share repurchases."
Continued Confidence in Clorox's 2020 Strategy
In closing, Dorer said, "We feel very good about the progress
we've made against our 2020 Strategy. Significant investments in
innovation, technology and sustainability are helping us win with
consumers. Looking across our entire portfolio, the company's
products are now in 90 percent of U.S. households.6 Over
the last few years, our strong investments have led to the majority
of our brands being perceived as offering superior value."
"We're especially proud that we delivered our results based on
the principle of winning the right way, through our commitment to
good growth," Dorer added. "It's important for us to continue
driving progress against our corporate responsibility goals, which
we believe contribute to sustainable value creation."
In 2017, Clorox was recognized by a number of external
organizations for its corporate responsibility performance. The
company received a Safer Choice
Partner of the Year Award from the U.S. Environmental
Protection Agency and was included in CR Magazine's 2017 Best
Corporate Citizens list.
A replay of the Clorox Analyst Day webcast and presentations are
available at Clorox Investor Events and Presentations.
The Clorox Company
The Clorox Company (NYSE: CLX) is a leading
multinational manufacturer and marketer of consumer and
professional products with approximately 8,100 employees worldwide
and fiscal year 2017 sales of $6 billion. Clorox markets some
of the most trusted and recognized consumer brand names, including
its namesake bleach and cleaning products;
Pine-Sol® cleaners; Liquid
Plumr® clog removers; Poett® home
care products; Fresh Step® cat litter;
Glad® bags, wraps and containers;
Kingsford® charcoal; Hidden
Valley® dressings and sauces;
Brita® water-filtration products; Burt's
Bees® natural personal care products; and
RenewLife® digestive health products. The company
also markets brands for professional services, including Clorox
Healthcare® and Clorox Commercial Solutions®. More than
80 percent of the company's sales are generated from brands that
hold the No. 1 or No. 2 market share positions in their
categories.
Clorox is a signatory of the United Nations Global Compact, a
community of global leaders committed to sustainability. The
company also has been broadly recognized for its corporate
responsibility efforts, most notably receiving a Safer Choice
Partner of the Year Award in 2016 and 2017 from the U.S.
Environmental Protection Agency as well as being named to CR
Magazine's 2017 Best Corporate Citizens list and included in
the 2016 Newsweek Green Rankings. The Clorox
Company and its foundations contributed
about $11 million in combined cash grants,
product donations and cause marketing in fiscal
year 2017. For more information, visit TheCloroxCompany.com,
including the Good Growth blog, and follow the company on
Twitter at @CloroxCo.
CLX-F
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and such forward-looking statements involve risks and
uncertainties. Except for historical information, statements about
future volumes, sales, foreign currencies, costs, cost savings,
margins, earnings, earnings per share, diluted earnings per share,
foreign currency exchange rates, cash flows, plans, objectives,
expectations, growth, or profitability are forward-looking
statements based on management's estimates, beliefs, assumptions
and projections. Words such as "could," "may," "expects,"
"anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," "predicts" and variations on such
words, and similar expressions that reflect our current views with
respect to future events and operational, economic and financial
performance, are intended to identify such forward-looking
statements. These forward-looking statements are only predictions,
subject to risks and uncertainties, and actual results could differ
materially from those discussed. Important factors that could
affect performance and cause results to differ materially from
management's expectations are described in the sections entitled
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30,
2017, as updated from time to time in the
Company's SEC filings. These factors include, but are not
limited to: intense competition in the Company's markets;
volatility and increases in commodity costs such as resin, sodium
hypochlorite and agricultural commodities, and increases in energy,
transportation or other costs; the ability of the Company to drive
sales growth, increase price and market share, grow its product
categories and manage favorable product and geographic mix;
dependence on key customers and risks related to customer
consolidation and ordering patterns; the impact of increase in
sales of consumer products through alternative retail channels;
risks related to reliance on information technology systems,
including potential security breaches, cyber-attacks, privacy
breaches or data breaches that result in the unauthorized
disclosure of consumer, customer, employee or Company information,
or service interruptions; lower revenue or increased costs
resulting from government actions and regulations; the ability of
the Company to successfully manage global political, legal, tax and
regulatory risks, including changes in regulatory or administrative
activity; risks relating to acquisitions, new ventures and
divestitures, and associated costs, including the potential for
asset impairment charges related to, among others, intangible
assets and goodwill; worldwide, regional and local economic and
financial market conditions; risks related to international
operations and international trade, including political
instability; government-imposed price controls or other
regulations; foreign currency exchange rate controls, including
periodic changes in such controls, fluctuations and devaluations;
changes in trade, tax or U.S. immigration policies, labor claims,
labor unrest and inflationary pressures, particularly
in Argentina; potential negative impact and liabilities from
the use, storage and transportation of chlorine in certain
international markets where chlorine is used in the production of
bleach; and the possibility of nationalization, expropriation of
assets or other government action; the ability of the Company to
innovate and to develop and introduce commercially successful
products; the ability of the Company to implement and generate cost
savings and efficiencies; the success of the Company's business
strategies; the Company's ability to maintain its business
reputation and the reputation of its brands; risks related to the
potential increase in the Company's purchase price for
The Procter & Gamble Company's (P&G) interest in
the Glad® business and the impact from the decision
on whether or not to extend the term of the related agreement with
P&G; supply disruptions and other risks inherent in reliance on
a limited base of suppliers; the impact of product liability
claims, labor claims and other legal or tax proceedings, including
in foreign jurisdictions; the Company's ability to attract and
retain key personnel; environmental matters, including costs
associated with the remediation and monitoring of past
contamination, and possible increases in costs resulting from
actions by relevant regulators, and the handling and/or
transportation of hazardous substances; the impact of natural
disasters, terrorism and other events beyond the Company's control;
the Company's ability to maximize, assert and defend its
intellectual property rights; any infringement or claimed
infringement by the Company of third-party intellectual property
rights; the effect of the Company's indebtedness and credit rating
on its business operations and financial results; the Company's
ability to pay and declare dividends or repurchase its stock in the
future; the Company's ability to maintain an effective system of
internal controls; uncertainties relating to tax positions, tax
disputes and changes in the Company's tax rate; the accuracy of the
Company's estimates and assumptions on which its financial
projections are based; risks related to the Company's
discontinuation of operations in Venezuela; and the impacts of
potential stockholder activism.
The Company's forward-looking statements in this press release
are based on management's current views, beliefs and assumptions
regarding future events and speak only as of the date when made.
The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by the
federal securities laws.
1 Source: IRI Panel Data, Total U.S. All
Outlets, NBD Weighted, 52 weeks ending June
25, 2017.
2 "Missing Pieces Report: The 2016 Board Diversity
Census of Women and Minorities on Fortune 500 Boards," Deloitte and
the Alliance for Board Diversity, 2017. Fortune 500 company average
of minority board members: 14%; Fortune 500 company average for
female board members: 20%.
3 The Willis Towers Watson global high-performance
norm is based on responses from 142,506 employees of 26 companies.
Companies qualify for the norm by meeting two criteria: 1) superior
financial performance, defined by a net profit margin and/or return
on invested capital that exceeds industry averages; and 2) superior
human resources practices, defined by employee opinion scores near
the top among the most financially successful companies surveyed by
Willis Towers Watson.
4 Clorox's total shareholder return in the last 3
fiscal years ending June 30, 2017, is
a combination of stock appreciation and dividend payments.
5 Peer Group: 16 consumer packaged goods companies,
excluding Clorox, for benchmarking purposes.
6 IRI Panel Data, Total U.S. All Outlet, NBD
weighted, 52 weeks ending June 25,
2017.
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SOURCE The Clorox Company