10-KPeriod: FY2016

CHURCH & DWIGHT CO INC /DE/ Annual Report, Year Ended Dec 31, 2016

Filed February 24, 2017For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) demonstrated solid performance in its 2016 fiscal year, reporting a 2.9% increase in net sales to $3.5 billion, 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 $1.75, 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 million 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.

Financial Highlights

55 data points
Beta

Revenue

$3.49B

45.5% Gross Margin

Net Income

$459.00M

13.1% Net Margin

EPS (Diluted)

$1.75

Total Assets

$4.35B

Cash & Equivalents

$187.80M

Free Cash Flow

$605.50M

Financial Statements
Beta
Revenue$3.49B
Cost of Revenue$1.90B
Gross Profit$1.59B
R&D Expenses$63.20M
SG&A Expenses$439.20M
Operating Income$724.20M
Interest Expense$27.70M
Net Income$459.00M
EPS (Basic)$1.78
EPS (Diluted)$1.75
Shares Outstanding (Basic)257.60M
Shares Outstanding (Diluted)262.10M

Key Highlights

  • 1Net sales increased by 2.9% to $3.5 billion in fiscal year 2016, driven by volume growth in Consumer Domestic and International segments.
  • 2Gross margin improved by 100 basis points to 45.5% due to lower manufacturing and commodity costs.
  • 3Diluted earnings per share (EPS) increased by 14.0% to $1.75.
  • 4Operating cash flow increased by approximately $49 million to $655 million, indicating strong operational performance.
  • 5The company completed two strategic acquisitions: TOPPIK (hair building fibers) and ANUSOL/RECTINOL (hemorrhoid care).
  • 6Shareholder returns were significant, with $400 million in share repurchases and $183 million in dividends paid.
  • 7The 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.

Frequently Asked Questions

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.

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.

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.

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.