| 
|
| The Clorox Company | |
Supplemental Unaudited Condensed Information –Volume Growth
| Reportable Segments | % Change vs. Prior Year | |
| FY17 | FY18 | Major Drivers of Change |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | 13% | 10% | 13% | 4% | 10% | 5% | Q1 increase driven primarily by higher shipments of several Clorox®-branded products in Home Care, including record shipments of Clorox® disinfecting wipes behind back-to-school merchandising support and the ScentivaTM wipes and sprays innovation; also reflected incremental shipments of bleach and cleaning products related to hurricane recovery which were almost fully offset by impact from the Aplicare divestiture in late August 2017. |
| Household | 6% | 11% | 9% | 5% | 8% | 7% | Q1 increase driven by higher shipments across all businesses, particularly in Cat Litter behind increased merchandising activity to support product innovation; and in Bags and Wraps from higher shipments of Glad® premium trash bags. |
| Lifestyle | 1% | 5% | -1% | -1% | 1% | 2% | Q1 increase driven primarily by higher shipments in Burt’s Bees Natural Personal Care behind the launch of natural cosmetics and expanded club channel distribution of lip care products; as well as higher shipments in Dressings and Sauces behind increased merchandising support to bottled Hidden Valley® ranch products, partially offset by lower shipments in Water Filtration due to lower merchandising activity. |
| International | 4% | 2% | -2% | 1% | 1% | -2% | Q1 decrease driven primarily by lower shipments in Argentina. |
| Total Company | 8% | 8% | 7% | 3% | 6% | 4% | |
Supplemental Unaudited Condensed Information –Sales Growth
| Reportable Segments | % Change vs. Prior Year | |
| FY17 | FY18 | Major Drivers of Change |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | 7% | 3% | 7% | 2% | 5% | 5% | Q1 volume and sales growth were about the same. |
| Household | 3% | 12% | 4% | 4% | 5% | 5% | Q1 variance between volume and sales driven primarily by unfavorable mix. |
| Lifestyle | 2% | 4% | -3% | 2% | 1% | 4% | Q1 variance between volume and sales driven primarily by favorable mix and lower trade promotion spending. |
| International | 0% | -2% | 3% | 5% | 1% | 1% | Q1 variance between volume and sales driven primarily by the benefit of price increases, partially offset by unfavorable mix. |
| Total Company | 4% | 5% | 4% | 3% | 4% | 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.
| Gross Margin Change vs. Prior Year (basis points) |
| Driver | FY17 | FY18 |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 |
| Cost Savings | +140 | +140 | +150 | +150 | +150 | +160 |
| Price Changes | +70 | +70 | +60 | +50 | +60 | +40 |
| Market Movement (commodities) | +90 | +10 | -70 | -90 | -20 | -90 |
| Manufacturing & Logistics | -220 | -210 | -130 | -130 | -170 | -80 |
| All other (1) | -140 | 0 | -140 | +50 | -60 | +20 |
| Change vs prior year | -60 | +10 | -130 | +30 | -40 | +50 |
| Gross Margin (%) | 44.4% | 44.7% | 44.0% | 45.7% | 44.7% | 44.9% |
| (1) | | In Q1 of fiscal year 2017, “All other” includes about -60bps of unfavorable mix and -50bps of unfavorable foreign exchange impact.
In Q3 of fiscal year 2017, “All other” includes about -100bps of unfavorable mix (negative mix in charcoal business and strong sales in club channel across multiple businesses) and -60bps of higher trade promotion spending. |
|
|
| The Clorox Company | |
Supplemental Unaudited Condensed Information –Balance Sheet
As of September 30, 2017
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| | Q1 | Change | Q1 | Change |
| | FY 2018 | FY 2017 | Days(4)
FY 2018 | Days(4)
FY 2017 |
| Receivables, net | $531 | $494 | $37 | 33 | 33 | 0 |
| Inventories, net | $462 | $465 | ($3) | 50 | 51 | -1 |
| Accounts payable and Accrued Liabilities | $912 | $874 | $38 | | | |
| Total WC (1) | $89 | $104 | ($15) | | | |
| Total WC % net sales (2) | 1.5% | 1.8% | | | | |
| Average WC (1) | $90 | $77 | $13 | | | |
| Average WC % net sales (3) | 1.5% | 1.3% | | | | |
| (1) | | 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. |
| (2) | | Represents working capital at the end of the period divided by (net sales for current quarter x 4). |
| (3) | | Represents a two-point average of working capital divided by (net sales for current quarter x 4). |
| (4) | | Days calculations based on a two-point average. |
Supplemental Unaudited Condensed Information –Cash Flow
For the quarter ended September 30, 2017
Capital expenditures for the first quarter were $49 million versus $59 million in the year-ago quarter.
Depreciation and amortization expense for the first quarter was $40 million versus $41 million in the year-ago quarter.
Net cash provided by continuing operations in the first quarter was $257 million, or 17.1% of net sales.
|
|
| The Clorox Company | |
Supplemental Unaudited Condensed Information –Free Cash Flow
Fiscal Year Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| | | Q1
Fiscal
Year
2018 | | | | Q1
Fiscal
Year
2017 | |
| Net cash provided by continuing operations – GAAP | | $257 | | | | $170 | |
| Less: Capital expenditures | | $49 | | | | $59 | |
| Free cash flow – non-GAAP(1) | | $208 | | | | $111 | |
Free cash flow as a percentage of net sales – non-GAAP(1) | | 13.9% | | | | 7.7% | |
| Net sales | | $1,500 | | | | $1,443 | |
| (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 2017 | | FY 2018 |
| | | |
| | Q1
| | Q2 | | Q3 | | Q4 | | FY | | Q1 |
| | 9/30/16 | | 12/31/16 | | 3/31/17 | | 6/30/17 | | 6/30/17 | | 9/30/17 |
| Earnings from continuing operations | | $264 | | $227 | | $247 | | $295 | | $1,033 | | $279 |
| before income taxes | | | | | | | | | | | | |
| Interest income | | -$1 | | -$1 | | -$1 | | -$1 | | -$4 | | -$1 |
| Interest expense | | $22 | | $22 | | $22 | | $22 | | $88 | | $21 |
| EBIT(1)(3) | | $285 | | $248 | | $268 | | $316 | | $1,117 | | $299 |
| EBIT margin(1)(3) | | 19.8% | | 17.6% | | 18.1% | | 19.2% | | 18.7% | | 19.9% |
| Depreciation and amortization | | $41 | | $41 | | $39 | | $42 | | $163 | | $40 |
| EBITDA(2)(3) | | $326 | | $289 | | $307 | | $358 | | $1,280 | | $339 |
| EBITDA margin(2)(3) | | 22.6% | | 20.6% | | 20.8% | | 21.7% | | 21.4% | | 22.6% |
| Net sales | | $1,443 | | $1,406 | | $1,477 | | $1,647 | | $5,973 | | $1,500 |
| | | | | | | | | | | | | |
| Total debt(4) | | $2,407 | | $2,549 | | $2,440 | | $2,195 | | $2,195 | | $2,200 |
| Debt to EBITDA(3)(5) | | 2.0 | | 2.1 | | 2.0 | | 1.7 | | 1.7 | | 1.7 |
| (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 useful additional information to investors about trends in the company's operations and are useful for period-over-period comparisons. |
| | |
| (4) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt and long-term debt. Current maturities of long-term debt and long-term debt are carried at face value net of unamortized discounts, premiums and debt issuance costs. |
| | |
| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. |
|
|
The Clorox Company
Updated: 11-01-17 | |
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. |
