Goldman Sachs Conference

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1 Goldman Sachs Conference Presentation by: Jim Craigie, Chairman & CEO Matt Farrell, EVP & CFO May 12, 2011

2 Safe Harbor Statement This presentation contains forward-looking statements relating, among others, to sales and earnings growth, including growth for the laundry detergent business, cash flow, margin improvement, marketing spending, new product introductions, contribution to revenue, growth and gross margin expansion by the new laundry detergent manufacturing plant and warehouse facility, capital expenditures and cash transition expenses related to the new facility, forecasted organic sales growth and earnings per share growth, the Company s focus on targeted marketing and new product introductions and investment in a global information systems project. These statements represent the intentions, plans, expectations and beliefs of the Company, and are subject to risks, uncertainties and other factors, many of which are outside the Company s control and could cause actual results to differ materially from such forward-looking statements. The uncertainties include assumptions as to market growth and consumer demand (including the effect of political and economic events on consumer demand), retailer actions in response to changes in consumer demand and the economy, raw material and energy prices, the financial condition of major customers and vendors, interest rate and foreign currency exchange rate fluctuations and changes in marketing and promotional spending. With regard to the new product introductions referred to generally in this release, there is particular uncertainty relating to trade, competitive and consumer reactions. Other factors that could materially affect actual results include the outcome of contingencies, including litigation, pending regulatory proceedings, environmental matters and the acquisition or divestiture of assets. For a description of additional factors that could cause actual results to differ materially from the forward looking statements, please see the Company s quarterly and annual reports filed with the SEC, including information in the Company s annual report on Form 10-K in Item 1A, Risk Factors. 2

3 Agenda 1. Top 10 TSR Drivers Jim Craigie 2. Q&A Jim Craigie Matt Farrell 3

4 Top 10 TSR Drivers 1. Recession Resistant Product Portfolio 4

5 Our Unique Product Portfolio Has Both Value and Premium Products 5

6 Our Value Brands Thrive in a Recessionary Economy 6

7 Our Value Brands Offer Significant Savings Tide Gain Cheer Wisk all Cost Per Load - Index vs. Tide 150 oz. 150 oz Era Purex Arm & Hammer Sun XTRA

8 Top 10 TSR Drivers 2. Build Power Brands 8

9 We Have Over 80 Brands, But Our 8 Power Brands Generate... 80% = of Sales & Profits 9

10 Our Power Brands are Market Leaders Arm & Hammer Trojan OxiClean A&H brands are in 86% of households in America #1 Condom Brand #1 Laundry Additive Brand Spinbrush #1 Battery Powered Toothbrush Brand First Response Nair Orajel #1 Pregnancy Kit Brand #1 Depilatory Brand #1 Oral Care Pain Relief Brand XTRA #1 Extreme Value Laundry Detergent 10

CHD Power Brands Beat Category Growth 26 Out of 32 Times from 2007-2010 2007 2008 2009 2010 CHD CHD CHD CHD AH Liquid XTRA

11 CHD Power Brands Beat Category Growth 26 Out of 32 Times from CHD CHD CHD CHD AH Liquid XTRA OXICLEAN FIRST RESPONSE (PTK) NAIR TROJAN SPINBRUSH ORAJEL (toothache) Source: Nielsen All Outlet YE 2007, 2008, 2009, 2010 *FDMx 11

12 Top 10 TSR Drivers 3. Ferociously Defend Our Brands 12

13 Ferociously Defend our Brands 13

14 OxiClean Case Study CHD Acquired OxiClean in #1 Laundry Additive - 27% Market Share C 14

15 In 3 ½ Years, CHD Increased OxiClean s Market Leadership to 38% Stain Fighters Share 38.0% 27.0% Nielsen FDMxWM, Dollar Share of Stain Fighters 15

16 We Did This Through Innovative Forms, New Products, and Claims Increased Pretreat support Premium Pretreat line extension Increased Liquid support Versatility emphasis See it Work before your eyes The Best in Stain Removal Cleaner, Whiter, Brighter Gets tough stains out all around the home 16

And Increased Marketing Spending 400% 500 450 400 350 300 250 200 150 100 50 0 Annual

17 And Increased Marketing Spending 400% Annual Marketing Index Source: First Response Actual Yearly Marketing Spending 17 17

18 In Mid-2009, the #1 Laundry Brand Entered the Category 18

19 CHD Ferociously Defended OxiClean With Innovative New Products: More Power In Every Drop! Seeks out stains in your wash! Clings to and breaks down stains 19

20 Despite the Untimely Death of OxiClean s Famous Pitchman 20

21 OxiClean is Still #1 2x the Closest Competitor Market Share Change OxiClean P&G Reckitt SC Johnson Market share is Nielsen 52-week 12/25/10 All-Outlet 21

22 Top 10 TSR Drivers 4. Driving International Growth 22

23 CHD Geographic Mix Transformation CHD has transformed from almost totally a U.S. business to more of a global player INTERNATIONAL - 2% INTERNATIONAL - 19% 23

24 2010 Was a Stellar Year for International 2010 vs Net Sales +7% Gross Profit +10% Operating Profit +25% 24

25 Capping 5 Stellar Years of Strong Growth 2005 vs CAGR Net Sales +7% Gross Profit +8% Operating Profit +18% 25

26 Key Drivers of Continued Strong Growth Increase scale in our subsidiary companies by: Expanding corporate power brands Focus resources on corporate and international power brands Leveraging one company strengths across all functions Enter new markets by: Driving export growth Acquisition 26

27 Top 10 TSR Drivers 5. Expanding Gross Margin 27

28 CHD Gross Margin Expanded 1,560 bps. 44.8% 44.7% 36.7% 39.1% 40.5% 29.1% 30.0%

Gross Margin Growth Driven by 4 Key Factors Actions Good to Great Cost Optimization Program Examples Reformulation, reduce packaging, reduce SKU s, laundry compaction,

29 Gross Margin Growth Driven by 4 Key Factors Actions Good to Great Cost Optimization Program Examples Reformulation, reduce packaging, reduce SKU s, laundry compaction, hedges Supply Chain Restructuring Acquisition Synergies New Laundry Plant Acquire higher margin brands and implement cost synergies Price / Mix Launch higher margin new products 29

30 New Laundry Plant Built in 2009 The Davies Plant; York, Pennsylvania 30

31 Top 10 TSR Drivers 6. Superior Overhead Management 31

2001 2010 SG&A Increased 190 bps Due to International Expansion and Stock Option

32 SG&A Increased 190 bps Due to International Expansion and Stock Option Expense 11.6% 11.1% 13.9% 13.7% 13.9% 14.1% 13.5%

33 However, Striving for Best in Class Performance 14.2% % 15.0%* 15.5% % 17.1% % 20.2% % Reckitt C&D Clorox Colgate P&G * Increased 1.5% to make expenses from Marketing to SG&A for Apples-to-Apples comparison. Adjusted to be comparable. 33

34 While Revenues Have Increased $0.9 Billion, or 53% since 2004, Headcount Has Declined 5% Revenue $1.7B $2.6B # Employees 3,800 3,600 EPS $1.36 $

35 Resulting in Highest Revenue Per Employee of Any Major CPG Company Employees Revenue (MM) Revenue Per Employee Church & Dwight 3,600 $2,589 $719,222 Clorox 8,300 $5,500 $662,651 Proctor & Gamble 127,000 $78,900 $621,260 Reckitt 24,900 $11,928 $479,024 Colgate 38,100 $15,327 $402,283 Unilever 163,000 $61,231 $375,649 Kimberly Clark 56,000 $19,115 $341,339 Energizer 15,600 $4,250 $272,436 Avon 41,000 $10,383 $253,244 Numbers taken from last Annual Report for each company

36 Top 10 TSR Drivers 7. Expert Management Team 36

37 We Believe in Leadership Expertise and Longevity Versus Cross-Functional Experiences and Management Turnover The average tenure of our Strategic Business Unit Leaders (SBUs) in the current role is 7 years. The average experience of our SBU leaders in the CPG industry is 24 years. 37

38 Top 10 TSR Drivers 8. Proven Track Record on Acquisitions 38

39 We Have Tight Acquisition Guidelines to Ensure Accretive Acquisitions Primarily #1 or #2 Share Brands Higher Growth, Higher Margin Brands Asset Light Leverage CHD Capital Base in Manufacturing, Logistics and Purchasing Deliver Sustainable Competitive Advantage 39

Proven Track Record on Acquisitions Has Been a

ARMKEL JV (50%) SPINBRUSH ORANGE GLO $2,221

$2,589 $1,462 $1,737 $1,946 $691 $960 $1,047

40 Proven Track Record on Acquisitions Has Been a Key Driver of CHD Growth CHURCH & DWIGHT REVENUE DEVELOPMENT PAST 10 YEARS USA DETERGENTS CARTER- WALLACE UNILEVER ORAL CARE ARMKEL JV (50%) SPINBRUSH ORANGE GLO $2,221 ORAJEL SIMPLY SALINE FELINE PINE $2,404 $2,521 $2,589 $1,462 $1,737 $1,946 $691 $960 $1,047 $1,

41 7 of 8 Power Brands Acquired Since 2000 YEAR ACQUIRED Arm & Hammer $1 Billion Brand --- Trojan #1 Condom Brand 2001 OxiClean #1 Laundry Additive Brand 2006 Spinbrush #1 Battery Powered Toothbrush Brand 2005 First Response #1 Pregnancy Kit Brand 2001 Nair #1 Depilatory Brand 2001 Orajel #1 Oral Care Pain Relief Brand 2008 XTRA #1 Extremely Value Laundry Detergent

42 We Integrate Acquisitions Quickly and Build Them Into Power Brands $ Share Brand Position in Category Pre-acquisition 2010 Pre-acquisition 2010 Trojan #1 #1 First Response #3 #1 Nair #2 #2 Spinbrush #2 #1 OxiClean #1 #1 Orajel Toothache #1 #1 Nielsen FDMx 52 Week Dollar Share for 2005 and Later IRI FDMx Prior to 2005 Nair: Depilatories, Wax and Bleach 42

43 Top 10 TSR Drivers 9. Best in Class Free Cash Flow Conversion 43

2001 2010 Cash Flow Has Increased 398% to $375MM $375MM $339MM $289MM $200MM $152MM $75MM $86MM $MM 2001 2003 2005 2007 2008

44 Cash Flow Has Increased 398% to $375MM $375MM $339MM $289MM $200MM $152MM $75MM $86MM $MM % NI 105.9% NI 124.0% NI 118.3% NI 143.9% NI 136.2% NI 131% NI * Excludes York plant and Abbott settlement. 44

45 Best in Class FCF Conversion 5 Year Avg. FCF % Net Income Church & Dwight 128% Estée Lauder Clorox Energizer Holdings Colgate-Palmolive Consumer Staples Procter & Gamble 109% 107% 103% 100% 95% 90% Avon Products 78% 0% 20% 40% 60% 80% 100% 120% 140% Source UBS Factset 45

46 Top 10 TSR Drivers 10. TSR Junkies 46

47 An Incredible Decade of Growth Has Transformed CHD Net revenues have more than tripled to $2.6 billion. Gross margins have increased 1,560 bps to 44.7% NR. Marketing spending has increased 530 bps to 13.1% NR. SG&A has decreased 190 bps to 13.5% NR. Operating Income has increased 840 bps to 18.1% NR. EPS has increased 330% from $0.92 to $3.96. Cash flow has increased 398% to $375MM, 131% of net income. Market Cap has grown from less than $2 billion to $5 billion. 47

48 And Delivered Outstanding Returns to Our Shareholders 48

49 Top 10 TSR Drivers Recap 1. Recession Resistant Product Portfolio 2. Build Power Brands 3. Ferociously Defend Our Brands 4. Driving International Growth 5. Expanding Gross Margin 6. Superior Overhead Management 7. Expert Management Team 8. Proven Track Record on Acquisitions 9. Best in Class Free Cash Flow Conversion 10. TSR Junkies 49

50 2011 Guidance 2011 May Guidance Organic Sales +3-4% Gross Margin bps Marketing bps EPS $4.35 $4.40 (+10-11%) Dividend 2% 50

51 Headed for 10 for 20 Club: Still Time to Get on Board 51

52 Agenda 1. Top 10 TSR Drivers Jim Craigie 2. Q&A Jim Craigie Matt Farrell 52

Safe Harbor Statement

Safe Harbor Statement 2 Agenda WHO WE ARE CATEGORY TRENDS HOW WE DELIVER HOW WE RUN THE COMPANY FINANCIALS Q&A 3 Agenda WHO WE ARE CATEGORY TRENDS HOW WE DELIVER HOW WE RUN THE COMPANY FINANCIALS Q&A 4