01—Abstract
Summary
Summary of the 10-K filed February 24, 2017. Cited figures are marked; the original filing is the authoritative source.
Church & Dwight Co., Inc. (CHD) demonstrated solid performance in its 2016 fiscal year, reporting a 2.9% increase in net sales to $3.5 billiona, driven by growth in its Consumer Domestic and Consumer International segments.
This growth was supported by strategic acquisitions, including TOPPIK and ANUSOL/RECTINOL, which expanded the company's brand portfolio and market reach. The company also reported an improvement in gross margin to 45.5% and a 14% increase in diluted EPS to $1.75b, reflecting effective cost management and favorable commodity costs. Financially, CHD maintained a strong balance sheet, with operating cash flow increasing by approximately $49 million to $655 million.
The company also returned significant value to shareholders through $400 millionc in share repurchases and $183 million in dividends. Looking ahead, the company highlighted its commitment to innovation, cost control, and strategic acquisitions as key drivers for continued growth and profitability in a competitive market. The company's diversified portfolio, spanning household and personal care products, along with its strong brand recognition, positions it well for sustained performance.
02—Key points
Key Highlights
- Net sales increased by 2.9% to $3.5 billion in fiscal year 2016, driven by volume growth in Consumer Domestic and International segments.
- Gross margin improved by 100 basis points to 45.5% due to lower manufacturing and commodity costs.
- Diluted earnings per share (EPS) increased by 14.0% to $1.75.
- Operating cash flow increased by approximately $49 million to $655 million, indicating strong operational performance.
- The company completed two strategic acquisitions: TOPPIK (hair building fibers) and ANUSOL/RECTINOL (hemorrhoid care).
- Shareholder returns were significant, with $400 million in share repurchases and $183 million in dividends paid.
- The company maintains a strong focus on its ten 'power brands', including ARM & HAMMER, OXICLEAN, TROJAN, and VITAFUSION, which are key drivers of its consumer business.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Church & Dwight Co Inc kept $0.13.
- Revenue$3.49B100.0%
- Cost of revenue−$1.90B54.5%
- Gross profit$1.59B45.5%
- Operating costs−$866.4M24.8%
- Operating income$724.2M20.7%
- Interest, other & tax−$265.2M7.6%
- Net income$459.0M13.1%
Where FY2016 revenue went
$3.49B- Cost of revenue: $1.90B, 54% of revenue
- Net income: $459.0M, 13% of revenue
- SG&A: $439.2M, 13% of revenue
- R&D: $63.2M, 1.8% of revenue
- Other operating costs: $364.0M, 10% of revenue
- Interest, other & tax: $265.2M, 7.6% of revenue
Kept 13% as net incomeR&D $63.2M · 1.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 24, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $3.49B$3.39B | +2.9% |
| Cost of Revenue | $1.90B$1.88B | +1.0% |
| Gross Profit | $1.59B$1.51B | +5.2% |
| R&D Expenses | $63.20M$64.70M | −2.3% |
| SG&A Expenses | $439.20M$420.10M | +4.5% |
| Operating Income | $724.20M$674.20M | +7.4% |
| Interest Expense | $27.70M$30.50M | −9.2% |
| Net Income | $459.00M$410.40M | +11.8% |
| EPS (Basic) | $1.78$1.57 | +13.4% |
| EPS (Diluted) | $1.75$1.54 | +13.6% |
| Shares Outstanding (Basic) | 257.60M262.20M | −1.8% |
| Shares Outstanding (Diluted) | 262.10M267.20M | −1.9% |
05—Questions
Frequently Asked Questions
What were the main drivers of Church & Dwight's sales growth in 2016?
Sales growth in 2016 was primarily driven by volume increases in the Consumer Domestic and Consumer International segments. This was further supported by the acquisition of TOPPIK and ANUSOL/RECTINOL businesses, which expanded the company's product offerings and market presence.
How did the company manage its costs and margins in 2016?
Church & Dwight improved its gross margin by 100 basis points to 45.5%. This improvement was attributed to lower manufacturing and commodity costs, along with the positive impact of higher-margin acquired businesses. The company also managed marketing expenses effectively, with a slight decrease as a percentage of net sales.
What is the company's strategy for future growth?
Church & Dwight plans to continue pursuing growth through several key initiatives: maintaining competitive marketing and trade spending, tightly controlling costs, developing and launching innovative products, pursuing strategic acquisitions, and expanding its global reach. The company also aims to maintain a balanced portfolio of premium and value brands.
What is the significance of Wal-Mart to Church & Dwight's sales?
Wal-Mart is a crucial customer for Church & Dwight, representing approximately 24% of the company's consolidated net sales in 2016. The company's top three customers accounted for about 35% of net sales, highlighting a significant concentration of revenue from a few key retailers.
06—Continue