10-KPeriod: FY2020

CHURCH & DWIGHT CO INC /DE/ Annual Report, Year Ended Dec 31, 2020

Filed February 18, 2021For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) demonstrated robust growth in 2020, with net sales increasing by 12.3% to $4.9 billion, driven by strong volume gains across all three segments: Consumer Domestic, Consumer International, and Specialty Products Division. The company also saw a significant improvement in profitability, with operating margin expanding by 170 basis points to 21.0%, and diluted earnings per share rising by 27.9% to $3.12. This performance was supported by increased consumer demand for many of its core products, particularly in the cleaning and personal wellness categories, partly attributed to the COVID-19 pandemic. The company actively managed its capital structure, returning $537.3 million to stockholders through dividends and share repurchases, while also making strategic investments, most notably the acquisition of the ZICAM brand for $512.7 million. Despite some cost pressures, such as higher manufacturing costs and tariffs, CHD effectively leveraged its scale, brand recognition, and productivity programs to offset these impacts and deliver strong financial results. The company maintains a positive outlook, focused on innovation, strategic acquisitions, and global expansion to drive future growth and stockholder value.

Financial Highlights

55 data points
Beta

Revenue

$4.90B

45.2% Gross Margin

Net Income

$785.90M

16.1% Net Margin

EPS (Diluted)

$3.12

Total Assets

$7.41B

Cash & Equivalents

$183.10M

Free Cash Flow

$891.40M

Financial Statements
Beta
Revenue$4.90B
Cost of Revenue$2.68B
Gross Profit$2.21B
R&D Expenses$102.60M
SG&A Expenses$593.30M
Operating Income$1.03B
Interest Expense$61.00M
Net Income$785.90M
EPS (Basic)$3.18
EPS (Diluted)$3.12
Shares Outstanding (Basic)246.80M
Shares Outstanding (Diluted)252.20M

Key Highlights

  • 1Net sales grew by 12.3% to $4.9 billion in 2020, with all three operating segments contributing to this increase.
  • 2Operating margin improved by 170 basis points to 21.0%, reflecting strong cost management and operational efficiencies.
  • 3Diluted earnings per share increased by 27.9% to $3.12, showcasing enhanced profitability.
  • 4The company acquired the ZICAM brand for $512.7 million, strengthening its portfolio in the cold remedy category.
  • 5Cash provided by operations increased by $125.8 million to $990.3 million, demonstrating robust cash generation.
  • 6Church & Dwight returned $537.3 million to stockholders in 2020 through dividends and share repurchases.
  • 7The company's strong cash flow and financial position provide flexibility for future growth initiatives, including potential acquisitions.

Frequently Asked Questions

The primary driver of net sales growth in 2020 was a combination of favorable product volumes across all three segments and favorable pricing/product mix in the Consumer Domestic and Consumer International segments. Increased consumer demand for many of its products, partly influenced by the COVID-19 pandemic, also contributed significantly.

The ZICAM acquisition, completed in December 2020 for $512.7 million, is managed within the Consumer Domestic segment and contributed to the overall sales growth. While specific profit contributions are not detailed separately in the summary, the acquisition is part of the company's strategy to diversify and strengthen its brand portfolio.

Church & Dwight returned a significant amount of capital to shareholders in 2020, totaling $537.3 million through a combination of dividends and share repurchases. The company also recently declared a 5.2% increase in its regular quarterly dividend, signaling confidence in its financial health and future earnings.

Key risks identified include intense competition, reliance on a few large customers like Walmart, potential decreases in product demand due to economic factors or changing consumer preferences, and challenges in managing supply chains and raw material costs. The company also acknowledges risks related to its international operations and the impact of global events like the COVID-19 pandemic.