Church & Dwight Co., Inc. (CHD) Earnings Call Transcript & Summary

Good morning, everybody. Thanks for coming today. This is the 2025 Analyst Day for Church & Dwight. We got a big crowd with us today. We got the entire management team. We got a couple of casualties due to the flu that's going around. So let's begin with the safe harbor statement. I encourage everybody to read that after class. And I'm going to -- here's the list of the people who are going to be here today. I'll present -- it's got Sateesh Chava from SPD, you've got Mike Reed from International; got Surabhi Pokhriyal for our Chief Digital Officer, it's the Rick and Matt show as usual. We've got Stacy Ramstad, who is our CMO; and Carlos Linares, he haven't heard from Carlos in the past, he is R&D and innovation for the company. All right. Long agenda here. I won't read it to. So let's kind of jump right in. But I'm going to start with, 2025 is the 34th anniversary -- 35th anniversary of Church & Dwight being listed on the New York Stock Exchange. And you can see the chart there, if you adjust for stock splits, it was a butter share back in 1990. And you can see we're well over $100 today. Here's kind of a fun fact. So if you invested $1,000 in Church & Dwight, 1990 when it was first listed, it'd be worth $114,000 today. So that's kind of a mark of a consistent company. And the fell on the lower left is the Dwight Minton. And Dwight Minton, he came the CEO, I think in 1969. And he is the descendant of Austin Church of the Church & Dwight fame. So he's the last family member of the company to take -- to be a CEO. And he succeeded his dad who was CEO before him. So I'm the third nonfamily member who's CEO of Church & Dwight, and Rick will be the fourth, so fun fact. So let's look back at 2024. As you all know, if you've been following our story, organic sales growth. We beat our algorithm, all three businesses: U.S., international and SPD. We have 7 power brands represent 70% of our revenues and profits and 5 or 7 increased their market share. Our algorithm for our marketing spend is spend about 11% annually, and we spent over 11% in 2024. Innovation is a big number for us this past year. So if we grew our organic growth 4% on a full year basis, half of that came from new products that we launched in 2024, and that's incremental growth year-over-year came from new products. And then online sales, you've been a bit of a standout among CPG companies for quite a few years. Our online sales over 21%, it's 21.4% for total company. What that translates to is if you have $6 billion in sales, we got $1.3 billion of that is order online. A few more things. We bought Hero a couple of years ago. That's been a great brand for us. We've expanded now launched in 40 countries. And now our job is to grow that brand in those 40 countries around the world. Japan is a big market, over 100 million consumers. We acquired a terrific distributor of ours. And Japan is a distributor that drove OxiClean to the #1 prewash additive and powder in Japan. SPD and you'll hear from Sateesh Chava today. And that's now a perennial grower for us. I'm going to hear more about that. We generate a lot of cash as a company, over $1.1 billion for 2024. And we had a lot of debt on the balance sheet, almost $1 billion of cash at year-end. And we're all dressed up to buy some businesses going forward. All right, strong performance. This is the 1-, 2-, 3-, 5- and 10-year chart for us. And just to give you an idea of the consistency of this company for many, many years, and it's really attributed to the culture and to the management team of Church & Dwight. We are. Many of you are long-term holders, people who are here today are listening on the phone. So I'm going to run through things that should be very familiar to you. So the way we're split is 77% domestic, 18% international. For a long time, that international number was 17%, almost since I joined the company. So we're starting to grow that one a little faster. 7 power brands, that make up 70% of our revenues and profits. And you know we have an evergreen model. So this evergreen model is something that guides our view long term, not just for the coming year, but 3 years, 5 years, 10 years. This is what we're trying to drive -- how we try to drive TSR for our shareholders. So you see the 4% organic sales growth, it's 3, 8, 5 domestic, international, SPD. Our gross margin, 25 to 50 basis points. The bright line for marketing is around 11% of sales. We try to get leverage on SG&A. So we try to grow the top line faster than SG&A grows. And we're trying to expand our operating margins 50 basis points annually. And that translates into 8% EPS growth. So here is the formula. Five things I'm going to cover. One, we got a balanced and diversified portfolio, right? So we got pretty much balanced between household and personal care. And SPD is essentially a foundational business for the company. It's where the ARM & HAMMER brand first arose. Okay. We're split pretty much 60-40 or I should say, 2/3, 1/3 between premium and value. Why is that important? It's important because we performed well in just about any economic environment. We don't have a lot of exposure to private label. You can see that a little bit over 10%. That's been true for many, many years. And e-commerce has been a great story for us. We were probably fourth quartile back in 2016, and now we're first quartile with respect to our performance online. And as I said earlier, half of our growth -- organic growth in 2024 came from new products. And of course, that is so important to the equity of your brands is new innovation. So that speaks really well for the company. And we got a lot more common in 2025. As far as acquisitions go, we're pretty strict about what we're going to buy, got to be a #1 or #2 brand. It has to be a gross margin that's at or above the gross margins for the company. We like businesses that are asset light, prefer to buy a business that is co-manufactured that we don't necessarily have to buy a plant. Number 4 would be, can we get synergies. We've got a very, very sophisticated supply chain to make damn or anything. So consequently, we try to get leverage in manufacturing or logistics. And then finally, it's got to have a long-term competitive advantage, meaning we don't buy something that's just going to be successful for the next 2 or 3 years. It's going to be successful 5 years, 10 years out. All right. Long history of growth through acquisitions. So if you look at 2004, we were a $1.5 billion company, you can see almost every year, we've acquired a business. We don't have every year up there, but just every year we've acquired something. 2023 and 2024, a bit of a drought. I'd say, if you said when have you had a drought before. If you look at 2008, we acquired Orajel. 2012, we acquired the vitamin business. Between them, we bought some small businesses. But I would say that was the time -- last time when we had a drought of a couple of years, not for lack of trying, though. So now Rick is going to come up and take you through a few more details.

All right. So this is probably one of the last times. I'm going to go through detailed financials with you guys. Okay. Q4 2024, we ended the year with momentum, right? We had 3.5% reported sales growth. Our outlook was 1.5% to 2.5%. It came in better than we expected. Our share gains for the quarter, [ 5 of 7 ] for the year, [ 5 of 7 ] of our brands per share, right? Those are the important brands that are driving the company. 4.2% organic came in better than we thought 2, 2% to 3% was our outlook. Gross margin came right where we thought it was. We called 110 basis points for the full year. That implied flat for the quarter. And then for EPS, we were up almost 19%. So just really strong ending to the year in the quarter. So for the full year, 4% net sales growth, 4.5% organic sales growth, 3.5% for domestic, 9% for international and 7% for SPD. So just really broad-based growth across the company, across the divisions, back to 110 points of gross margin, you're going to see in a minute, we're back to 2019 levels, which is fantastic. Marketing, this is where we spent incrementally. We ended up at 11.4 So we spent significantly more than we originally thought. And this is really just again to have momentum as we entered in 2025. And then 8.5% EPS growth, and we generated $1.16 billion of cash. You're going to see in a minute. 2025, we think we're going to be right around the same number. So just generating a lot of cash. Our free cash flow conversion is around 115%, and that gives us a lot of optionality. So look ahead. Matt did a great job of saying where we have been and where we are, a lot of things that are great about this company. We have confidence in our future, okay? This is really the outlook for the Evergreen model over the years to come. Matt walked through why that's healthy, why that's doing well. I'm going to walk through in a few minutes how household penetration is a huge opportunity for us in the U.S., right? THERABREATH house, THERABREATH Hero, of course, these fast-growing businesses. But litter and laundry are doing well. Some other brands are driving growth as well. Mike will come up. He'll talk about the high growth rate that international business has. 8% clip is very impressive. We have high aspirations for that business over the foreseeable future. Innovation, Carlos will come and we'll talk about how we innovate. We've totally transformed over the last 5 or 10 years, how we innovate, going from one vector to more like 4 or 5 different vectors. And then Stacy is going to come talk about what we've innovated. And so the new products we have very excited about many of those year 2 as well for some of the big launches we had last year. And then Surabh will talk about our e-commerce growth and being digitally savvy. Our e-com growth, you saw the chart that Matt provided, 2% going to 21%. This is an advantage for us, and we're going to continue to drive that forward, not just domestically but globally. Focus on domestic and international M&A. M&A is a huge part of this company. So here's a new slide. This is back in the year 2001 or 2000, and we had one power brand. It was ARM & HAMMER. We were $1 billion business. Fast-forward 24 years, and we're ARM & HAMMER is around a $2 billion business, right? Mid-single-digit CAGR over 20 years plus. That brand is known and loved by consumers across many categories. It's rare to have a brand that can play in so many different categories. And then that means we have $4 billion of businesses and brands that are not ARM & HAMMER. And that ability to identify, acquire, integrate and grow brands and businesses is a competitive advantage for us. And we're going to keep that and hold that dear, and we're going to continue to do that as well. Okay. Moving to the U.S. story. We are hiring a new U.S. President and a new CFO, but today, I am the U.S. President as well. So domestically, our algorithm is 3%, right? The company is 4, we do 3, 8 and 5. Okay. We have a long track record of growth organically in the U.S., and we have a lot of confidence in our future. 3.5% this year. Why do we have confidence in our future? We're leaders in growing categories. You'll see in a second. Our categories are largely green. We thrive in difficult environments. Why? Private -- low exposure to private label, but also household and personal care are balanced. And then our acquisitions have room to run. Our 7 power brands fuel our growth. Match a slide that said 70% of our sales and profits from those 7 brands in those 8 categories in 2025, it's closer to 75%. So these brands are driving the company. Here's the snapshot report card on the categories. So again, we're in the right categories. This isn't happenstance. We acquire businesses that get us into categories that we like the attributes of. Weighted average, 2.7% growth, largely [indiscernible] in 2024. That's fantastic. And then we're one of very few companies that do this, but here's the scorecard from our brands. This is our share growth. And again, 5 of 7 grew in 2024. So let's go to the individual businesses, Fabric Care. Our laundry business is growing at or above category averages, which is great, gaining share. In fact, we're at all-time share highs. If you look at the left side of the page, we're 5% 18 years ago. And today, we're at 14.5%. And why is that? Well, one thing that's working really well is our good, better, best strategy for ARM & HAMMER laundry detergent. And Orange model is our value brand. ARM & HAMMER with Oxy in the middle, which is our better offering. And then Deep Clean is our best offering, right? Consumers are picking up Deep Clean and they're sticking to it. The incrementality rate on a engines very impressive. Stacey is going to talk a little bit more about new products around Deep Clean, so stay tuned for that. Cat Litter. Cat Litter is same. We're growing at or above category rates. This is actually doubly impressive because a competitor was out of stock last year. And so we maintained -- largely maintained our share despite that, which is a great result. Hardball is a big opportunity. This is a lightweight litter. And a year ago, we were around 4 share. Today, we're around an 8 share, 7.5% share. If we get our fair share of the clumping litter category, that's about $100 million opportunity. And so we're really encouraged by the progress we've made already, on lightweight litter category. Hero and THERABREATH. So Hero is -- first up Hero, the consumption is up the charts. It's 40% growth. It's driving the category. And we're not just talking about -- we are talking about total acne. So we have the #1 share in patch. We had the #1 share in acne as a larger category. We have a lot of room to run. Distribution has been fantastic. We have lots of distribution gains. We think there's more as we spread out on shelf, our TDPs will continue to go up. But more importantly, it's household penetration. 9% household penetration for Hero, 25% for the category. We're going to continue to invest our marketing dollars behind Hero to drive awareness. Similar story for THERABREATH. THERABREATH, 40%-plus consumption. It's driving the category. And it's not just the #1 nonalcohol-mouth wash, it's actually the #2 overall mouthwash. All-time share highs, for the year, 17.5%, but same story is Hero. We have a lot of room to run here to on distribution points. We've made some great gains. We think we're going to spread out even more on shelf in the years to come. You'll hear from Mike about Hero and THERABREATH for international. There's great momentum there as well. So household penetration, we're a 10 share in households for THERABREATH, but look at mouthwash. 65% of households have a mouthwash. And so again, we're going to invest marketing dollars and innovation behind this category. And as you look at the trend line over a long period of time, that just shows that we're the #2 mouthwash and we've been the way for the last 3 or 4 months. And then BATISTE. BATISTE is a category and a brand that is -- has great growth, mid- to high- single digits, and we're gaining share in BATISTE as well, hit an all-time share highs. You're going to hear innovation and even maybe some ad campaigns from Stacey, our CMO. VITAFUSION vitamins, this is a business that has declined a bit. But let's take a step back is the category. The category doubled over the last 2 or 3 years, went from $1.5 billion to $3 billion. It's stabilized and is flat now for these last 3 years. What's happening now? We're down a bit. We're down double digits. The good news is the category is starting to inflect, right? That's a green shoot that's happening. And what are we going to do about it? We brought forward and rapidly, we broke glass in the organization, to move innovation at a very fast clip. So we're launching an entirely renovated portfolio. This goes across all of our SKUs in terms of new and improved formula, that's number one. Number two, we're launching our most powerful vitamins ever. This is Power Plus multibites. Stacey will go into a little bit more detail. And then third, there's a real need for sugar free in the category. And so many of our variants will be available sugar-free. So those are -- these aren't me-too innovations. These are going to be large investments and innovation, and we're going to support that with the marketing that it needs to be supported with. This is our -- in my opinion, this is what's going to help drive that business forward. And new products. So with that, I'm going to introduce Stacey, who is our new CMO, and she's going to tell you about what we have on tap for 2025.

Hi, everyone. How are you? I am so excited to be here and to talk to you about our new products. So we're going to have a little bit of fun, okay? So let's start first with a review of what just happened in 2024. Matt mentioned that our new products drove 50% of our incremental growth for the company. So the -- what you see here are three of our heaviest hitters. So let's talk first about Deep Clean, Win dirt and stink run deep. We want you to clean deeper, and you do this with Deep Clean, and our consumers absolutely did that in 2024. So Deep Clean established that best tier category but also drove incremental growth for the brand. So next up, we have ARM & HAMMER Power Sheets. And this really marries the ARM & HAMMER clean with the convenience, as well as the mass pre-format of a Power Sheets. So this allowed us to tap into the fastest-growing segment in laundry. And last and certainly not least, we had ARM & HAMMER Hardball. ARM & HAMMER hardball is our technologically advanced hard ball lightweight litter. And so that makes cleaning your litter of breeze. So what I love about this story is, one, there is a tremendous amount of runway with these items. So we're going to definitely invest in growing awareness and trial of these items, so we can drive incremental growth in 2025. But furthermore, we're going to expand on each of these in 2025. So I'm going to take you through some of that, okay? All right. But before we get to our first innovation for 2025, let's take a look at the free and clear segment within the laundry category. This is a huge segment. It's $1.3 billion, and it has absolutely been skyrocketing over the last couple of years. Now we already have some products that fit within this space. But we have identified an opportunity to capture an additional over $20 million in incremental opportunity. So I'm going to talk you through how we're going to do just -- that. All right. So our first new product for 2025 is ARM & HAMMER Deep Clean. This is our free and clear detergent. And so as you would expect, this is catering to the consumer with more of a sensitive skin, and it's certainly free of all of what you would expect. But the real game changer with this item is that we are the only brand with the Skin Safe certification. And this is something that's very meaningful to consumers as it gives them the assurance on product quality and safety. All right. So continuing with that theme, I'd like to introduce you to our ARM & HAMMER Power Sheets in a fragrance-free format. So this is what I call uncompromised clean. So this is dermatologists tested, it's free of dyes and perfumes. But the real breakthrough is that this item has 50% more cleaning than the leading value brand, because our consumers do not want to compromise their product choices. All right. Last but not least, we have ARM & HAMMER Plant Power. This is our clumping litter. And what's the SCOOP. The SCOOP is this. We are bringing our hard ball technology into the natural segment. And this is why this is such a big deal. Consumers who buy natural, feel that it doesn't do as good of a job to control odors. And that's because many natural litters will use additives. And those additives lead to mushy or brittle clumps. So with our hardball technology, we do not use additives in our natural version for superior clumping. So we really think that this is going to do very well in the natural segment. And I believe if we were to get our fair share, this could be over $30 million for this product launch. All right, and that would be incremental. So moving on and Rick some of my thunder here, we are going all in on VITAFUSION, and we have three new initiatives plan for 2025. And we really are moving at lightning speed to make this happen. We are first going to introduce a new and improved formula. People, this is going to take taste to the next level. So I want you to imagine a burst of flavor, a velvety smooth texture, this is with our innovative heat-resistant formula and softer chew. So not only that, we've also given our multibyte kick with 10% more vitamin A, C and E. So really excited about this launch. All right. What's up next? We've got VITAFUSION Power Plus multi-bit. This is our most advanced formula. We have formulated with 100% daily value or more of 10 essential ingredients. This is more than any other gummy in the market. And then we've supercharged our advanced formula for adult multis with calcium. We've given the women's multi a boost of choline. And last but certainly not least, we've given our men's multi boost of CoQ10. So really excited about getting this item into the marketplace. All right. This is another teaser slide. This is where we're going next. Sugar is the biggest barrier preventing non-users from using gummies. And it's no surprise then to see that sugar-free gummies are really taking off in the last couple of years. So we plan to expand on our sugar-free segment and portfolio of products. So this year, we're launching Power as well as men's multi. When you add those two products to our suite of sugar-free items, this is going to represent more than 60% of VITAFUSION sales in a sugar-free variant. Because male mistake, consumers do not want to compromise. We want to give them that same grade update to the taste experience, but in a sugar-free formula. So we know this one is going to go over really well. All right. Switching gears. Rick talked about Hero and how much Hero is a key contributor to growth for Church & Dwight. So it's no surprise. We're going to continue to innovate for Hero. And specifically, I'd like to introduce you to our Hero Mighty patch, body patch. So I may be able to speak to all of you, but body acne is a real pain in the b***. It's also a pain in the chest in the back and so forth. So it makes sense that we launch our largest patch. We call it our LL patch, which is over 3x the size of our next biggest patch, which is the surface patch. But again, the real game changer here is the notches that we've built into this patch. And so with these notches, it's for better adherence to your curved body parts. Also when you move, it adheres to your skin. So it stays put exactly where you want it, and still gives you that same absorbing gunk within 6 to 8 hours are known for with our Midypatch, pimple patch. But now we can take care of that back knee and chest knee and so forth. So we're really excited about this item. So the last new product that I have for you, and this is just for the first half of this year is I'd like to introduce you to BATISTE light dry shampoo. Because some days do call for a lighter dry shampoo like day 3 and day 4, but even more importantly, we know that nonusers do not want white residue or that griddy texture that they can get sometimes from a dry shampoo. So I'm going to say to you that this is a triple threat. Our BATISTE light dry shampoo has no white residue, a lighter feel and a beautiful soft, soft fragrance in our Mellow Melon and Matcha and flavors. So again, consumers don't want to have to compromise. They're going to get the same great superior BATISTE efficacy, but now in a lighter formula. So I'm really excited about this one. All right. So I feel like I could not be leading marketing for Church & Dwight without showing you a spot or two. So I do have two creative spots that are finished, they're ready to go. So you'll be seeing them first before anybody in the marketplace and we are launching BATISTE light dry shampoo with these two new spots. So if the people behind the scenes could play the video. [Presentation]

All right. So I'm going to leave you with this. This was just your teaser for 2025. This is what's launching in the first half of the year. Guys, we have more coming in the back half of the year. And so if I were you might be asking, so what's behind the magic that makes innovation, this innovation? And that, I'm going to say, is my intro for Carlos Linares, who's going to -- who heads up our R&D, and he's going to walk you through just exactly how this innovation comes to you all in the marketplace. So thank you. That's all I've got for you.

Okay. Thanks, Stacey. So a tough act to follow is the marketing and the ads. All right. Yes. So I'm here to talk to you a little bit about how we think about innovation and how we've kind of transformed innovation. And just a quick thing about myself, we haven't been in these forms. But -- so I've been doing R&D innovation for now close to 40 years. A big company, 20 years, Proctor, J&J and then the midsized companies in both Beauty + Home. So I came to Jurgen Day about 7.5 years ago, attracted by the brands, the culture and really kind of an invitation to innovate differently. So my kind of key message is to you, as I go through this is, we have transformed how we innovate at Church & Dwight, I'll show you some of that. And it's also a unique approach that we've developed for Church & Dwight. So it is not a smaller version of what you may hear from some of our bigger competitors. It is unique and that's why we think it's sustainable. So let me first talk about what are we doing to create differently? So Rick mentioned this before, we've gone from one innovation source in a sense to 5. And not only are they additive -- really, the challenge here is how do you make them complementary and not competing. And I think that's part of what we do differently at Church & Dwight. So let me kind of give you a couple of different levels of why this complementary connection is very different for us. So when I joined the company, you kind of look at our portfolio and it continues to grow a lot of brands, all diverse brands, a lot of diverse categories. And yet, we're very proud of our revenue per employee. So that's a challenge when you look across the organization. So over time, we looked at it and the highs, how do you flip that model into an advantage into the strength. So our advantage today is we really want to connect a lot of these diverse dots, would you really lead to innovation, better than others do and be in ways that others can't because we know -- personally, I know what the big companies can and can't do, and they really can't break the silos the way that we can because of our size and our culture. So let me give you a kind of a very concrete example. Last year, we introduced BATISTE, sweat activated. And how do we get there? So if you go across brands and our categories, odor control, odor reduction is a common consumer need, right, whether it be oral care, laundry, women's health, deodorants, you name it. That's a very common need. So rather than attack that individually by R&D department in a sense. We create these platform teams that go across and to rather create scale. So the idea is, hey, if you're looking at odor, talk to each other across the organization, and connect those dots better than others. And when we go talk to the outside world and our partners, we go to them as a company, not as an individual business unit. So BATISTE to a partner to identify some things from technologies that were really existing in other categories. And we were the first to bring them over into hair care. Others could have, but they never did because they're not really talking to each other, right? They're very vertical in how they do it. So that's kind of a bit of our with connecting these diverse competencies. And if you elevate that to these five innovation sources, it's kind of the same story. Other people could do this, but in most companies, they've got one kind of dominant work stream for innovation. We've got these and not really competing with complementary. So today, kind of end result is more than 50% of our pipeline is coming from these new innovation sources. So not only we are adding in terms of the contribution for the total pipeline, is actually now much better than it ever was before. So kind of -- once you have a great robust pipeline in a sense, now it's about making choices. So this is our other unique way of looking at our Innovent across our categories, which is this very simple grid around science-based innovation versus business growth. But this is really driving our behavior when we have a good strong portfolio is how do you make them bigger, kind of the are so whether it be choosing where do we make the marketing investments, where do we leverage these across different channels, or what do we leverage across international? It's all about creating the once you find something that you really, really like. So when you step back today, our innovation portfolio is more balanced than it's ever been before across all the types of innovation transformational innovations, which are what we call our blue box, it's the upper right-hand side. Stacey mentioned a few of those. We're very proud of all of those are there, sheets in particular. I've never seen a product where from early development all the way to long, consumers love them all the way through. We've never had a negative reaction to that product. It's really intuitive and loved. And we have got more coming. So Unfortunately, we're here at the beginning of the year. There are some things that we'll reveal later on in the year because it's too soon, but we've got a very strong pipeline coming. And the last thing is we've got bigger bets, and that's just kind of the top of this grid here. We've got a lot of products. Stacey has mentioned a few of these. I'm not going to go through the list, and then Mike is going to talk a couple of the a portfolio, too. Okay. Let's just talk results. So basically, if you look at all these together, We have now increased and accelerated our incremental net sales from historically was 1% to 1.5% to 1.5% to 2%. And our metric for innovation is in INS, right, incremental net sales. So it is not -- other people measure it differently. This is not gross sales. This is not -- this is post cannibalization. So we're not just looking at replacing our products. Every time we look at innovation, we're looking at, how does it grow and how does it add to the company's growth. That's why, as Rick and Matt mentioned last year, we were contributing half of the growth was pure incremental growth from innovation. And if you step back and say, okay, when we kind of started this in 2017 or so versus today, given the size of the company, that change from 1%, 1.5% to 2% is really almost a 4x in incremental dollars every year, right, because the company has grown to the towns become bigger every year. As we drive that, we're looking at 4x what it was 7 years ago. So -- and it's also -- it's working, but it's also sustainable, right? We think 2024 is our best ever, 2025 is continue momentum, you said you've heard a couple of these. But we truly believe that the model because of the way it's working for us, we think this is going to continue to contribute long term. And then one last piece to cover before I hand it over to Mike. Kind of our global footprint. We've got global -- 7 global centers, 4 of which are outside of the U.S. And you have very clear responsibilities. We have no overlap with too lean to have overlapped within our categories. So you see the big flags there are our 7 global centers. And then we also have 6 regional sites, which are kind of smaller ones. And this is really more about putting the basic, whether it be technical folks or regulatory folks to help Mike and his team grow across -- around the world. The next thing kind of back to that connected story, all of these folks now if you look at typical R&D product, packaging development and so forth, regulatory people feeding the global structure, our plants, quality people and our innovation folks for marketing, they're all under one roof, they're one R&D organization. So that's why for us, that power of that connected team, the other thing that probably the big guys can do they're much more vertical. The smaller guys don't have that luxury either. So it's another one of its advantages. Everybody is now marching towards a really coming innovative engine, to be honest. So as we look at this, we feel -- we've transformed R&D and innovation. But given where we're at today, we really feel confident that we're going to continue to do that going forward. And with that, I'm going to just Mike [indiscernible] heading up our international team.

Good afternoon. My name is Michael Read. I lead our consumer international division as well as our specialty products group. And I'm delighted to have Shitij Chabba with us here today. So he will take us through the SPD business in a few moments, so I'll focus on the international story. As you know, our evergreen model for international is 8% organic growth per year. And just to ground everyone, we're about $1.1 billion in size. We operate kind of in 2 parts, but just under 2/3 of our business is through our subsidiary markets. We have 6 subs that we run Canada, U.K., France, Mexico, Germany and Australia. The rest -- the 37% we run through our GMG business. It’s our Global Markets group. And we operate [ in ] over 100 countries, and we work through almost 400 valued distributor partners around the globe. And we support that with 5 regional offices, one in Shanghai, one in Singapore, one in Mumbai, London and Panama. And those offices continue to grow and add resources in order to support the growth that we've got in respective regions. 2024 is an outstanding year and certainly capped off with a great Q4. Our submarkets grew almost 5%, and our GMG business grew 19%. I'd point to a few things. Certainly, over the last couple of years, we've had increasingly better service levels. That's one key part of it. But more importantly is we've had really consistent growth across the market, strong portfolio management, and we've really leveraged some of our new acquisitions, particularly here on THERABREATH. They've been really strong drivers for us. Most importantly, if you look back a couple of years, but throughout the year, we've had really consistent growth across the quarter. So we're seeing broad-based growth across brands, across markets and across quarters. So just again, just to reinforce the momentum and the confidence we have in our plan and our strategy, we've seen some really constant growth, and we see that continuing moving forward. If you look back over the course of the last 10 years, we had a little blip, certainly during kind of COVID and some of those kind of tougher years. But kind of ex that, we've had really strong, consistent growth for a very long period of time, and we now have elevated our evergreen model to 8%, which we're really confident in. This came up earlier on. We have -- about 18% of our business is international, and that's still a front versus many of our competitors that have been on their international journey a lot longer than we have as a company. So this really gives us the -- kind of the opportunity and the momentum to keep on. There's a lot of runway, both from a geographic point of view and also from a brand expansion point of view. So we see this not as a bad thing, but actually as a real opportunity for us to grow, and we're growing at a really fast clip. I think most notably is our brand portfolio travels extremely well. And we leverage kind of 3 parts. One is we do leverage our U.S. power brands like ARM & HAMMER, OXICLEAN, VITAFUSION, et cetera, those performed strongly across the globe in their respective categories. We also have a unique set of brands that are either internationally only or largely been built out of international. They're mostly OTC and personal care brands like BATISTE, [ THERABREATH ], FEMFRESH, Gravol, et cetera. Those are really high-performing brands in many, many markets. And I think we're doing an increasingly good job of accelerating our acquisitions and getting them to market quicker and having them be a bigger part of our growth story, Hero and THERABREATH certainly are the 2 notable ones there. Speaking of Hero, so the last time when we were here, we talked about kind of how quickly we're going to roll out Hero to over 40 countries. In 2023, we moved to 12 pretty quickly where we could get registrations. We've moved to over 40% in 2024. We'll be in over 50 early in 2025. So this is the fastest we've rolled out a brand that we've acquired from a U.S. business and taken it globally. And that will become the blueprint and the playbook for us on future acquisitions, but a really great job of getting this to market really quick. We're seeing really strong success as a result. STERIMAR, which we haven't talked a lot about in the past is one of our biggest brands internationally. It's in over 90 countries. This year, we're celebrating our 50th industry, but really high CAGR growth for us. We have a very strong portfolio within the natural nasal hygiene space. This is a really important brand internationally that continues to grow and is a really important part of our portfolio. That's a little bit different than what you'll hear from the U.S. domestic team. Stacey touched on the importance of innovation in BATISTE. We've certainly benefited that on our active SKUs with sweat and touch activated. They've been really incremental additions to our international portfolio, BATISTE is the world's largest dry shampoo brand, widely distributed and a really strong grower for us. But innovation is a critical part of that and we're seeing some really strong results in all our key markets. OXICLEAN has been a really great driver for us and a focus and it's not available in a lot of markets yet, but we'll continue to grow in terms of market expansion. But a 20% growth last year, and that's increasing our CAGR over the last few years. We are the #1 powder brand in both Canada and Japan. And we've since just launched into the liquid segment in our Japanese market. So really exciting opportunity for OXICLEAN to continue that momentum. It's got a long runway ahead. And then finally, from a brand point of view, I just touch on Power Sheets. So we don't have liquid laundry in many of the markets around the world, but Power Sheets is something we have pushed into. It certainly gives us an opportunity to establish a new segment in many of the world's geographies. We got into 12 marks in 2024. We're going to be in more than 25 by the end of 2025. We're already #1 on Amazon in Mexico, and there's really good momentum where we've got distribution. So this will continue to be a focus, and we'll learn to see what we can do. We'll also pick up a good amount of the innovation pipeline from the U.S. market as well. So really great opportunity just to lift and shift and see we can get some momentum in a category. We really haven't played in traditionally on a global scale. So we've got lots of things that we invested in and lots of confidence in where we're growing as a brand or as a division rather. What I would point to is there are a few things here. It’s not an exhaustive list, but I think they're notable ones. In the middle of this year, we made an acquisition of a longtime valued partner in Japan, which is the graphical team. We see Japan scaling up over the next number of years as we add additional brands to the portfolio. We've implemented a major global ERP system. So it's easier for us to kind of work with on a global basis. And as we grow, our partners can grow with us. We widened our regulatory and IT infrastructure quite significantly, and that is -- kind of lines up with the regional offices we have around the globe. We've expanded our offices in Panama and Singapore as the team's widened and as the business grows. We touched a little bit on here on THERABREATH, really strong acquisitions for us. I think I would add just leveraging NPD from other markets, those 2 things combined have been a really big part of the growth story. And lastly, and Matt and Rick touched on it earlier, we are -- we have put resources from an M&A perspective in both Europe and APAC in order to start to get into the deal flow so we can let international acquisitions, that would be in addition to leveraging any acquisitions we make from a U.S. perspective. So this is, as I say, not an exhaustive list, but a lot of investment, a lot of support going into international growth, and it's certainly responding. We have a long runway ahead. So with that, I will pass over to Surabhi Pokhriyal. Thank you.

Thank you, Mike. Good seeing you all today. Introduction, Surabhi Pokhriyal. I lead all things digital, e-commerce, media and optimization for Church & Dwight. I'm super excited to represent our mighty batch of digital growth team at Church & Dwight. So this is the mighty batch I speak about. This is from our off-site where we were growing where the U.S. Olympics team rose. That just tells you the kind of caliber we have, not in rowing, but in digital for sure, and we row all in the North Star direction of accelerating e-commerce and media for the organization. This is truly industry's best-of-breed talent that we have acquired in the company in recent years. Let's talk business. Matt and Rick both alluded to the percentage of our business that is from e-commerce today. It is 21-point-something percent, way up head, shoulders and torso from a lot of our competitors. We are, if not the top 10 style top quartile for sure, in all of CPG in terms of e-commerce. I do want to remind that we are not in the business of calculating how much of our business is from e-commerce. We just are present wherever our consumer is present. And especially after COVID, the convenience of buying online, right, whether it is your 2 a.m. melatonin you need with your last miler or your Cat Litter box that needs to be delivered at your front step, the consumer just loves convenience, and we are riding that wave and making sure our products show up wherever they need to show up. So this is that incredible trajectory. As you look at earnings from our retailers even, you will notice a lot of them have started publicly speaking to the amount of growth they see from e-commerce. So you can connect the dots there of where the retailers are getting bulk of their business and where manufacturers like us are making sure we are getting a lot of our business as well. Let's talk share. So we have 7 power brands that you know of. Four out of the 7 power brands have done incredibly well in 2024, where we are not just maintaining but growing share. I speak to the biggest one in particular, ARM & HAMMER Laundry. Laundry is a big part of our Titanic. It contributes a ton to the growth of the organization. So we won online share, not just in liquid laundry, but sheets, unit dose and set boosters. And that speaks a lot, right, because laundry is typically considered a category that is meant to succeed in brick-and-mortar. But how we manage here today, and just to qualify, online share does not just mean Amazon share for us, right? It means the target.com, walmart.com, kroger.com, all of that combined is where we are winning in all of these 4 brands. Aside from the 4 of 7 brands where we are winning in share, 70% of our -- of the brands that contribute to 70% of the sales, we are winning in each of them in terms of online share, some notable ones being Zicam and Nair. THERABREATH, of course, you know how phenomenal THERABREATH and Hero have been to our story. Hero has been a digitally native brand, so it's doing much more successful, being much more successful as we gain bigger and bigger brick-and-mortar distribution. I'll class -- start this section just by regrounding us in terms of what our approach is, right? Like I said, we are here in this era of connecting content and commerce. You will note a lot of retailers trying are to steam into -- trying to be more social and community builders for the community, for the consumers at large. But a lot of social channels also have aspiration to be retailers. So the lines are blurring between where is content shown and where is commerce happening. And we want to stay at the intersection of both commerce and content, so that's our priority one. Second, everyone's buzzing AI, I'm surprised I'm the first one on stage speak about AI, but I'm sure you are also following a lot of news on this. We want to look at AI, which is not a hammer looking for a nail, but which is clear in terms of what's the business problem or context we are solving and how can AI enable us do that. I'll share a couple of examples, especially in marketing creative. And as you walk the halls, I welcome you guys to have more conversation on that. Lastly, in terms of e-commerce global footprint, Mike spoke clearly, how we are just 18% of our company's business comes from global today, little bit behind where our competition is. And there's a ton of aspiration we have, especially in expanding with respect to e-commerce. I'll share a couple of examples of how our new launches are doing amazingly well in every market that we launched. Speaking to our first pillar with respect to content and commerce, right? You are super familiar how social has become what I call the third shelf of discovery, right? There's a physical shelf in store. There is a digital shelf that you go online and try to shop. And social is, sometimes you're not even trying to shop, but you do a lot of serendipitous 2 a.m. kind of shopping on social. So we are there at that moment of truth where the consumer discovers us while she's doing the endless scroll. We are super intentional about making sure we partner with both micro and key opinion leaders, influencers, who impact how consumers make their decisions today. You see a couple of examples here, be it the Alix Earle, it girl; or Suni Lee , the Olympic gymnast and a lot of live streaming shopping that we have been doing in China for years now. The notable thing to see here is, not just that 10 -- over 10 of our brands have the highest number of video views on TikTok across all categories we operate in, but it's not just about views and followership. A lot of our content has industry-leading engagement rate. And what engagement rate means is our -- the consumers are not just liking and following brands. They are commenting on our posts. They are sharing our posts. They're interacting and building community with us. So that's super meaningful for us because that's the long-term loyalty and intimacy that we want to create with our consumers. Second, we are super careful that we don't want to leave media as a dead end, right? We want to make sure that once the consumer is inspired by seeing an ad spot either on TV or TikTok, there's an ability for them to shop our products. So we are making sure that over 90% of every media that you see, be it YouTube, TikTok, Instagram or anywhere else, we will lead you to a cart in 1 to 2 clicks if you have the desire to shop our products. This is an example of one of the AI initiatives we are leading. You know there's the concept of aspect ratio, right? You can shop on your 6-inch mobile phone, but you can also shop on your 60-inch television. AI is helping us make sure that creative is conducted in a way that there is less human touch involved and making sure that creative is valid both for the 6-inch screen and the 60-inch screen. So you'll see a couple of snippets here both for ARM & HAMMER. And our partners like TikTok and Google make sure that it grade us to tell us how we are performing with respect to their expectations on showing up creative really well. So AI is super important, not just in terms of showing up well on social creative, we also know that as the consumers shop for us online, you spend no more than 5 seconds in our kind of, what I call, low consideration categories. So if you land on Amazon or walmart.com page, we have to make sure that the 5 seconds you spend looking for ARM & HAMMER laundry sheets, we make the right first impression on you that you are inspired to add us to the cart. So look at these examples, the score at the bottom left goes from 18.5 to 87.4. All that means is this is AI helping us do eyeball tracking on look-a-like audiences to make sure that creative we put out has the maximum eyeballs on it in that 5-second time on the retailer PDP. And this has done wonders for us because the more the creative is sticky, the higher chances are that the consumer converts and buys a product. Finally, speaking to the global footprint, Mike spoke eloquently toward THERABREATH, Mighty Patch, Hero and Power Sheets have done a lot for us. These are what I call category disruptors and even category creators. We launched them in markets where there were no sheets existed and no acne patch has existed. And within 6 to 12 months, they ranked #1 spot in several online retailers. THERABREATH, in particular, you'll notice an interesting retailer here. Not many might be familiar, but Olive Young in Korea is the #1 beauty retailer where THERABREATH quickly garnered a spot 1. Similarly, Mighty Patch, across France, Germany, Mexico became #1 really, really quickly. So our products travel well, literally, quite literally. Finally, I'll wrap it up by saying our pace of growth on digital has been quite phenomenal, industry-leading truly, but we are very focused on being clear about where to play and how to win on that. We have industry-leading e-commerce growth, but we are, in aspiration and in true form, making it as profitable as we can. So we are very choiceful about what we sell online, when we sell online and where we sell online. We have unprecedented online market share today, and we are on track to keep growing it. We are also super conscious about best ROI on our media spend. I may not have mentioned, but about 82% of our marketing dollars today are digital media, which is why you see all the media there and we struggle to give you TV -- print spot that we used to have back in the past. So we have to print them especially for these kind of events. So we have to make sure that our retail -- our media dollars stretch the highest, so the return on investment of that is super critical for us. In terms of category leadership and digital penetration, like I said, having rapid market launches like we did for Hero, THERABREATH and Sheets is critical. And launching them online first gives us early dibs into what the consumer is feeling and gives us an opportunity to tweak them as needed as we do broader brick-and-mortar launches in those markets. We'll do a lot more on AI and technology, both in MarTech and AdTech and we lean on both large and small third-party technology partnerships, and that's one big area of impetus for us in the coming years. I'll close by saying the best way to predict the future is to create it and we are hard at it. Along those lines, there's a big business pivot we have in Specialty Products division, and I welcome Shitij Chabba to share more on that turnaround story. Thank you.

Good afternoon, everyone. My name is Shitij. I'm the leader for our Specialty Products division. It's really my honor and excitement to share with you the B2B arm of the company. Because for many of you, it may be a question, why does a CPG company even have SPD? And I want to show you what we are doing and how we are contributing to the growth of the company and how we'll keep growing and be a growth accelerator for the overall organization. As you all know, our evergreen growth model target is 5%. So let's see how we did last year. Last year as a division, we delivered over $300 million in revenue. It split 60% on our animal nutrition business and roughly 40% under our specialty chemicals division. But let's take a moment to look under the hood, what really is SPD, Specialty Products division. Specialty Products division has 3 businesses. The largest business we have is animal nutrition. I can ask you around why -- how do Church & Dwight into animal nutrition. It's very, very simple. We sell ARM & HAMMER. Hopefully, all of you are users of our ARM & HAMMER, which is baking soda, you see samples here. Chemically, that's sodium bicarbonate. That same sodium bicarbonate, the company started feeding, many, many decades ago, to dairy cows. It helps with food digestion as well as better milk production. That's how we entered the world of animal nutrition. Now you fast forward, we are manufacturing both feed supplements, marketing and selling, but also pre- and probiotics. Now there are lots of companies that say they sell probiotics. So what's special about us? We are truly unique. What we do, you can buy -- if you're running a dairy operations or a poultry farm, you can buy probiotics, everybody will ship you, in a bag, and that’s their probiotics sample. But what we do -- we go to your operation. Let's say you're running a dairy farm. We'll come to your operation. We collect samples. We send those samples to our lab in Wisconsin, where our scientists analyze those samples, right against our library of probiotics. We have over 82,000 probiotic strains. And then we match that for your unique need and create a truly customized solution, and we sell that under our CERTILLUS brand. It's a great product that we are very, very proud of, and you're going to see more about it. Our second biggest business is performance product. This truly is the core of the company. Performance product is where we sell, again, ARM & HAMMER sodium bicarbonate. Remember the same baking soda I talked about. It's -- where are we selling it? Instead of selling in the half-pound bag or a pound bag that you buy or you may buy at large box chains mid-5 pound, we sell at 50-pound bags, like you see on the screen here, or maybe up to 1,000 kilo tote. We are selling it for large B2B application, industrial, pool, but even life-saving application like hemodialysis. So it's truly amazing what sodium bicarbonate can do and the number of applications it has. The third business that you may not have heard a lot about is our B2B business. This is where we take all the amazing brand the company has, Church & Dwight. We customize their packaging, and we sell them for commercial and professional applications in different channels, from [ Jansen ], food services, hospitality. It's small, but I'm confident this business is poised for growth and you'll hear a lot more about, not just today but in coming years from now. So SPD, I joined the company roughly 2 years back. And when I came and I analyze the results, as you can see, we have had inconsistent performance. So one of the very first thing we did as a leadership team, we looked at it and we said, what's our strategy going forward. We created a new vision for SPD and we launched a new strategy called SPD reimagine. So I'm very excited to say that if you look at our results from last year after launching the strategy, we had an amazing turnaround. We went from negative 8% in 2023 to plus 7% organic sales growth in 2024. Now how did we do that? As I said, we have an amazing group. We have a very talented team of individuals. But we did core pillars in our strategy. First, we divested the nonstrategic noncore assets. I think you’ve heard about we shut down our MEGALAC, which was a `dairy supplement business in Q1. We exited our food safety business in Q2. And what did that do? That allowed us to focus on portfolio optimization. Simply put, across the 3 businesses, we could focus on brands that drive profitability and channels where we can do more higher profitable growth, and that really helped us. Then next, we shifted, just like the broader company you heard from Mike, international. International is a huge growth opportunity for SPD. And we are focusing on key countries, both in Eurasia, as well as Latin America. Last year, actually, we hired a new sales leader, both for our Latin America business and for our Eurasia business. So we're very excited, the results we are seeing from that. And then we invested in marketing and innovation acceleration. And you'll say, what did you invest? Again, when I joined, I was very surprised to see that we are part of a CPG company, and we had no in-house marketing, right, you heard from Stacey, our CMO. So just like marketing is core for CPG, it's essential for B2B business also, from both the right brand messaging, brand positioning and doing the omnichannel marketing, because the B2B customers are everywhere, just like we are. And what did that do? It’s a -- here's a great example I'm excited to share. We launched our CERTILLUS, remember the probiotic I talked about, the customer’s probiotic. We launched 2 new products last year, called them HatchWell and MoveWell. So what are these products? So we have, as I said, over 80,000 strains of probiotics. Our scientists and our technical service team identified one of our poultry operators are having issues where the poultry chicken, they were dealing with mobility issues. The Chicken couldn’t walk to get the water and the food, where it is. And guess what this was called. Before our marketing team, this product was called CERTILLUS Enterococcus cecorum something. You all need to be a PhD to understand what this product is. And this is where we rebranded it and we said, well, what does it do? MoveWell, even I get it. When you hear the word MoveWell, it's your chicken can move well. It can have a better quality of life and our production partners, they have higher productivity. These products, HatchWell and MoveWell have been great success for us. And we're seeing a lot of engagement from our customers that is helping us grow again with our innovation accelerations and our portfolio optimization. International. International, we have a huge runway of growth. Last year, we grew 7% and now international represents 28% of our sales in our animal nutrition business. What we have gained, we are continuing our product registration for our pre and probiotics. So CERTILLUS, CELMANAX, A-MAX, our brands. And just last year alone, we added 15 new countries. So we're rapidly expanding where we're going to enter with these countries and keep growing, hopefully, much stronger than the average market growth rate. So to summarize, I'm very excited. Hopefully, you can hear that, that SPD is going to be, as Matt said, perennial growth driver. We're going to keep driving 5% based on these pillars. We're focusing on the right brands that will drive the portfolio optimization. International is a key, and we're excited about the growth we are seeing there and building on the whole strong marketing team that we have created and innovation acceleration. So it's going to really lead the way. With that, I'll pass it back to our CEO, Matt Farrell.

Okay. Thank you, Shitij. Hey, many of you know, I've been with the company for 18 years. And the one thing that's remarkable about Church & Dwight is its consistency, and maybe you wonder, how does that actually happen? And what we're known for is execution. And what that means is we do what we say we're going to do. That's the difference between a company that's consistently successful and one that is not. So you come to -- there's lots of analogies between the sports and business. I know people roll their eyes when they hear them. Well, one thing that is true is that the teams that have the best players win. So when you're investing, you're investing in people. This Analyst Day, it's the one time of year you get a peek under the hood. You see some of the leaders of the company, and they come up and kind of talk. I have the pleasure of working with these people every day. We have exceptional leadership in this company. These are understated people, low ego, massive technical skill. And it's not just at the top, it's throughout our plants, it's in our laboratories, it's in our sales offices. It's throughout the company. And a lot of companies will say things like that and you’d kind of -- you’d be checking your watch, you're looking at your phone. But if you're trying to figure out why is this company so successful for so long, that's it. It's the culture of this company, the kind of people we attract, the kind of people we recruit to the company. And many of you know, I'm going to be leaving here in April 1, April Fool's Day. And -- but this company is in such great shape starting at the top with Rick and the management team that you're seeing here today and the strength that we have throughout the company. So it's a good time for me to walk off the field. So I want to move on to how we run the company. If you've owned our stock for a long time, you can check your for now. But we have 5 operating principles, right? You've heard this before. And that's the thing about Church & Dwight. Many of the things you hear from us, you've heard last year, the year before, you hear it down here, the stock exchange, you hear it at CAGNY. That's because we have an operating model and we stick to it and we execute it. Again, back to do you do what you say you're going to do. It's a personal commitment that we feel that -- to the company and to each other. We said this is what we're going to pull off this coming year. So you heard a lot about our brands, about leveraging our brands. We've got great brands around the world. Second thing is friend of the environment. A little bit about that. That's very important to -- not just to our employees, but it's also important to our consumers. It's important to our retailers. And we have a long heritage, and we're really proud of -- starting back in the 19th century. You've heard me talk about bird cards before. I'm going to show them in a minute, but I always take a little bit of time to talk about our heritage here. If you look at early 20th century, we were using recycled paper. We were the first to take phosphates out of liquid laundry detergent. We've been planting trees since 2017. We planted millions of trees that takes CO2 out of the atmosphere. And you remember all that from fifth grade, right, photosynthesis. 100% of our global electricity is offset by green energy. And then we started --we signed up for science based targets so we have these projects to take CO2 out of the atmosphere because we use a lot of CO2 when we're making baking soda. There's one of those bird cards that we used to put in our yellow boxes. And if you -- I don't know if you can read it well, but it says, “Useful birds of America,” and at the very bottom, it says, “For the good of all, do not destroy the birds.” And for those of you who are interested, you can still buy these. These are the original bird cards. They’re available on eBay. So buy now. No, this is an advertisement for eBay. I just want to tell you, I know some of -- many of you are very enthusiastic about the ARM & HAMMER brand. This is something you might want to look into. All right. ESG, everybody gets measured on ESG. You can see we got great scores, consistently, '22, '23, '24. Third thing to talk about is leverage people. We have a really lean shop. We've always had a really lean shop. Why is that important? It's because it forces you to prioritize. We want to work on the stuff that matters. So consequently, we have the highest revenue per employee of any of our peer group. So we got $6 billion in sales. We got 5,500 employees. So we got over $1 million of sales per employee. And as Surabhi took us through, we're world-class, when it comes to e-commerce. And we got there because we put our minds to it. We knew we were bottoming a barrel in 2016 and now we're head of the pack. We really believe in a simple compensation structure, so everybody kind of knows where they are at all times. We don't get involved with EVA or some of the other -- these complicated esoteric measurements, just straight up. Net revenue, gross margin, cash, EPS and strategic initiatives, 20% each. And it's unusual for a company to have gross margin as part of incentive comp. What that does is promote financial literacy. When it's going to hit your pocket book, you're going to say, hey, what is gross margin, how do I get it. And that's just going to galvanize us as a company. And the ways we get it, good to great. We like to joke within the company. This is the book everybody has heard of, but nobody's read, but that is the name of our continuous improvement program. Supply chain is a bedrock, when it comes to finding ways to save money. New products, we try to launch new products that have higher gross margin than the ones they're replacing. And then when we buy a business, we try to find a way to grow or expand their gross margins as well. Now you've heard us talk about being asset-light. That's very, very true. We want to buy businesses that don't have plants. But for a long period of time, our average CapEx, as a percentage of sales, is 2%. And the other thing to keep in mind, too, is about -- is close to 30% of our finished products right now are made by third parties. So that also helps continue to be asset light. And finally, leverage acquisitions. You do those first 4 right, you get good returns. If you're good at acquisitions, which we are, which Rick took you through earlier, we're good at identifying, targeting, acquiring and integrating. And you can blow it on any one of those 3. We pay too much, we don't integrate it, a disaster can happen. All right. You've seen this slide before, long history, a bit of a drought '23, '24, but not for lack of trying, and now Rick's going to come up and take you through the 2025 outlook .

All right. So let's turn to 2025 outlook. We announced today that we're going to have a top line expectation of 3% to 4% organic, 25 basis points for gross margin expansion. You'll hear we have a little bit higher than historical inflation, more, like, 3% versus 2%. Marketing 11% plus, probably in the range of 11% to 11.4%. So it's incremental because we're driving share gains, leverage SG&A and 7% to 8% EPS growth. And we expect to generate, again, $1.1 billion or so of cash flow, CFO. So we have a long track record of this growth, 2.5% to 3.5% is our outlook. But if you look at the track record, it's 6%. Why is that? It's M&A. We historically also do M&A. Organically, expectations 3% or 4%, 10-year average is 4%. And that 3% to 4% is largely volume driven, and that's been the case for, not just 1 year or 2 years, but for over a decade. It's our history. It's volume-driven growth. I mentioned this earlier, gross margin expansion in 2025, 25 basis points. It gets us right back to 2019 levels. We believe we have more room to run as we have this productivity program that's a muscle, similar to how Carlos described the NPD innovation process. We have -- it's analogous to how we do productivity. And we also have some fast-growing acquisitions that have higher than corporate margins. Speaking of margin, I'll talk about 2025 really quick. Volume and mix largely give you a little of a benefit of 30 basis points is our expectation, a drag of 150 basis points and then offset, by a large degree, to productivity. That's what gets us to the 25 of expansion. And costs, I mentioned this earlier, but it's probably 40% or so from a commodity-based perspective, and that's ethylene and resins are up and natural gas is up. But more so, it's also depreciation for new capacity. It's putting in new 3PL in the Northeast. It's other higher cost for our partners, co-packers, as Matt mentioned. Marketing spend, 11% plus, is the expectation in 2025. And then SG&A is leverage. Leverage while making events to for what matters in terms of building capabilities, e-com, international. And then we've had a long track record of high single-digit or even double-digit EPS growth, and we expect 7% to 9% -- or 7% to 8% in 2025. And we put this in the release as well. There is some phasing, right? We're supporting some innovation with marketing in the front of the year. We have a little bit higher revenue growth in the back part of the year. And so that's why there's a little bit more phasing of EPS growth in the second half. This is my favorite slide as a CFO and it's probably still going to be one of the favorite slides in the future. And why is that? It enables us to do a lot of things. 115% free cash flow conversion means we can go do capital allocation, right? Cash flow matters more than most. And we get there a few different ways, but one of the ways we get there is we have a strong, tight way we manage working capital. We've gone from 52 days down into the 20s. We expect this to further improve as we look forward. And our balance sheet has never been stronger, 1.5x debt to EBITDA. And that means we have -- this is the highest number we've ever had on this page, too, over $6 billion of firepower. This is dry powder do M&A. This is fantastic. And this leads to what is our use of free cash flow. What's our capital allocation? Well, number one is M&A. Just because we haven't done a deal in the last 12 months or 24 months doesn't mean we're not in really hard at looking at deals. And I would tell you that the ELT spends a lot of their time looking for the right deal. We think the number one value-creating opportunity is looking for the next business or brand to buy, but we're going to be picky and fussy as we go through that process. Number two is CapEx, number three is NPD, number four is debt reduction, although that's hard to do when you've prepaid all your debt. And so now we just have fixed debt. And so we're waiting for a great acquisition to go borrow some more one day and then return cash to shareholders. Matt covered this. This is -- we're not a capital-intensive company. This matters when you look at free cash flow conversion. And then finally, dividend increase, a long track record. I don't know what's longer than long, but 124 years is decades, a century or more of paying a dividend, credibility, consistency. That's what Church & Dwight is known for. Now before I ask everybody to come up, I do want to acknowledge that we have a huge amount of confidence in our future, okay? And you heard it from each person today, whether it was Mike on international, Surabhi on digital, I talked to the U.S. business, I talked about our outlook for M&A. And the nuance there is just not in the U.S. We're looking at M&A both domestically and international. A year ago, when Brian was here who happens to be sick today, we told you that his team increased by 300%, right? So he went from 1 person to 4 people. So we have people in Europe. We have people in Singapore and Asia. So the focus on M&A is alive and well. I also want to acknowledge Matt. And Matt has been here for 18 years, right? And we just did a quick -- a montage of New York Stock Exchange. He embodies the culture of this company, okay? We are where we are because of Matt Farrell to a large degree. Like, you just heard him talk about people, you just talked -- heard him talk about leadership. We are unique and different and Matt is a big reason why. Here's a quick look back. So management company back in 2006, a $2 billion revenue company. Now it's a $6 billion company. Market cap was $3 billion. Now we're $26 billion. But more than that, he's added capabilities, right? Capabilities like e-comm, like pricing, things that we do that we take for granted. One of the great things about our culture, we're not insular. If there's something that we see that we think we can go after. We're going to run as fast as we can with speed and urgency in order to execute it. A lot of that, again, Matt certainly did that. So with that, I'll invite everybody else up, and we'll take questions.

All right. Why don’t we start with Rupesh. Do we have microphones, Joe? Here we go, all right.

Okay. So maybe just starting with the vitamin business, a lot of enthusiasm on the innovation. And I know -- I think, you ended the year with a double-digit decline. So how are you thinking about the vitamin business from the sales perspective this year?

Yes. So the vitamin business is one where -- look, like I said in the comments, we really did break glass. We're moving with -- these aren't little I innovations, these are big I innovations in our opinion. So we're going to put the whole full force of the company behind that to long them the right way. Our new CMO, Stacey's right -- working with our leader, Bruce, to really make sure that we're telling the consumer the real core benefit again. So look, it’s -- do we think the business is likely going to decline a little bit for a little longer? Yes, we do. But what we want to see is an inflection point. And these innovations are going to help give us that confidence for an inflection point.

Great. And then maybe my one follow-up question. Just on Hero. So you're in 40 countries in 50 countries. Just curious if anything surprised you? And then as you look at consumption growth within international markets, like, how that's trending versus your expectation?

I would just say Hero has been a fantastic brand in the U.S. And as Mike alluded to, he -- to go out, it usually takes us 2 years, 2 to 3 years to roll out a brand from the U.S. acquisition to our international subs and distributors. But to do this within such a short time to be in 40 countries, it's fantastic. Mike, do you want to talk about some of the opportunities?

Yes. I'd say what we saw in the U.S. and what we're seeing internationally is the same story. So what I would say is early on, we got into most of our subsidiary markets, not all of them, depending on registration timing. But those markets that we've entered, we're already in #1 positions, in patches, really quickly, in some cases, already #1 in acne. And that's just with the sort of the core suite of introductory SKUs. We haven't even tapped into the innovation pipeline yet. So many of the 40 countries that we've talked about, are those are really early days. We're seeing really strong excitement and really good takeaway off shelf. So the consumption rate is where we expect it to be actually much further than that, and that's before we've introduced NPD.

I would tell you a quick story, Rupesh. I've been traveling on a lot with Mike, and we have brand camps all over the world. And we have one in Vietnam. We had one in South America, I think in the Dominican, Punta Cana, yes. And the distributor for South Africa was there, and he was one of the first to launch. And he was giving just case studies, after case studies on Hero to all these other countries because it was -- he represents many other companies as well, #1 SKU by far, across all the companies that it represents. So I think that little microcosm is going to play itself out in many countries. Yes, Dara?

So Rick, Matt spent a lot of time talking about how the organization is in a great place, but there's always a chance under new leadership to refocus in specific areas or emphasize different areas. I'm just curious, any initial thoughts under your leadership as to maybe where you'll double down on or areas you emphasize more? And then also just a specific question on the VITAFUSION side, given all this great innovation versus a tough couple of years, do you expect to gain shelf space this year at retail? When does that sort of play out in terms of how you think about shelf space for the brand?

Yes. So I'll take the second one first, and then if Carlen has anything to add as well. Look, that -- when the business is in decline, you're not going to go gain shelf space, right? So we got to make sure we have inflection points, and then we can go to the sell-in. We got to show the retailer our strategy, right? And then we can go ask for more shelf space. But -- so I don't expect to gain any more shelf space in vitamins. Anything you would add?

[indiscernible] We're definitely at an inflection point. So we've got to get the credibility, build that back up. We’ve got some great relationships with the retailers. So they're in it for the long game with us, so.

Yes. So what would I do -- what would I double down on or maybe different? Look, our strategy is working extremely well. We have a long track record of just fantastic growth in building capabilities, M&A, everything. Two or 3 things come to mind. This is iterative. But I would say not because it's me, but because it's the right time, our international investment and our international growth. I thought Mike did a great job showing how we have these big aspirations, and we are under-indexed to the peer group. So that's one. We're going to continue down that path. Number two, I would say, there are bigger bets. Carlen just walked you through how we innovate and Stacey talked about what we innovate. There are bigger bets to be made on innovation. Like, too often, I think companies of our size and bigger don't put enough ships behind what -- when we believe there's a needle-moving innovation, we should get behind it in a bigger way. So we're going to try that a few times, right? And then maybe third is there are a handful of brands that we own. We own 80 brands. There's a handful of brands in my opinion, and then we're going to work through this as a team on which ones they are, that they could be bigger. But they are poised for more success. But stay tuned on that one. Yes, Andrea?

Congrats for you, again, on the new chapter. So just thinking of like the appropriate -- like a lot of has been, in CPG, thought about the appropriate level of investment. And given that you are correctly branching out to more categories or in a way, a lot of more international, is 11% appropriate as it was in the evergreen model up until the level that you are now? And then I have a question on M&A. What is the -- what are the capabilities that you want? Capabilities or categories that would rather have developed by externally or internally?

Yes. So on the marketing investment, I care less about 11% or 11.2% or 11.4%. I care the most about how our shares are doing. Shares are the marketing investments in the input, the scorecard is how our shares are doing. If you look back at our track record, it happens to be that we've spent between 10.5%, 11.5% more often than not, and our shares are healthy and gaining more often than not. So my scorecard is shares, I think 11.4% how we ended the year, 11% to 11.5%. All those numbers are interesting, but it's healthy. Some brands, we spend in the 20s. Some brands, we spend 5%, but it kind of matters for that brand, either it's a household, personal care, it's different. So that's that one. M&A, M&A, Andrea, we don't ever go look at a category. That's just not how we work, right? We can only buy what's for sale. And so we become -- this is the team that becomes rapid experts when we go find a deal to look at. And we've probably spent hundreds of this team's time, hundreds of hours on due diligence this year. And more often that we're walking away because of a category dynamic that we learned about, high exposure to private label or a company has a claim that they can make that is only a matter of time before they get in trouble for making that claim. And so we go do all that research after the fact. Capability building. I really like, as an example, what Hero did for us, Hero’s digital prowess in terms of content creation, their speed and urgency to go test and bring innovation. But I don't know if Surabhi or Carlos, if you guys want to talk about, like, Hero capability or what acquisitions could do for us in capabilities?

I'll add to what Rick was saying, right? Just a small anecdote. The average age of the Hero employee when we acquired them was between 25 to 28, that just tells you the amount of time and the amount of energy and the amount of background expertise they have that is more social and digitally savvy than the typical talent we had. So that's the kind of injection of talent we had through Hero, and we percolated that through the ecosystem. And similarly, we have similar things on GNPI, that Carlen speak on.

Yes. Well, very quickly on the Hero one, I mean, I think every acquisition teaches you something. And certainly from the speed, the innovation and the partnership, they've got very strong partners outside that took them a very long time to get there, and we've continued to leverage it. So we maintain that for the acquisition and that we leverage it across other brands as appropriate.

I want to add something to that. I was at a party on Brooklyn last night. And Hero has a little party in June, and one in January, so summer and winter. And I think one of the things we've learned on credit to Stacey, who managed the Hero integration. One of the things we learned over the last few years is how do you interact and integrate a business with a very different culture in Church & Dwight with startup that's almost a virtual business with really world-class digital marketers. How do you preserve that. And 2 of the 3 founders were there last night, too, and Andy. And they helped us preserve the magic. And I think a lot of companies struggle with doing that. So we learned a lot from that over the last few years. And I think that positions us well then in the future to also acquire startups.

Chris?

Can I just ask about category growth going into 2025? I think sitting here a year ago, you established 4% evergreen target. The outlook for this year, 3% to 4%. What are you embedding from a category growth perspective? Is that a little bit different from how you saw the world a year ago? I would assume, yes. You also talked about dry powder to respond to competitive activity, I think, over the summer, going into the back half of the year. So just in the context of this category growth dynamic, the outlook for '25, what you had said about competitive activity, but we haven't really heard about that. How do all these things fit together, in your view, over the next 12 months and, I guess, sanctity of 4% and how flexible that is?

That’s a good question. Rewind the clock a year ago, remember, we said January through May categories, it's not us. Categories were growing 4.5%, right? That's kind of a different window from where we are right now, . But categories were off and running. Then in the summer, we said categories, in general, were growing closer to 2.5%. That's what happened for the balance of the year, 2.5%. And you just saw the category slide that I put up, and overall categories grew 2.7%. I would say our fundamental baseline of understanding is categories are going to grow around that 2.5% growth rate next year. And we're going to continue to take share, and that's how we get to a range of whatever it is. It could be better, it could be worse, but that's why we gave you a range of 3% to 4%. From a promotional perspective, I would say actually, laundry is a good example, but laundry is pretty consistent as you look sequentially, a bit. Litter’s up a little bit. Litter’s driven by a competitor who's still trying to get some of their share back. I'm happy to say that we kept over 50% of our share a year ago when that issue happened for them. So really happy where we ended up. So promotional levels are back to normal is what I would say from the pre-COVID perspective and all that mixes in. That's why we gave you a range 3% to 4%. And if categories do better, we'll do better. If our shares do better, we could do well also. Anything you'd add?

Yes. I'm sort of the old man, the macro environmental guy. So when we look at the U.S. consumer, we may have a different point of view than maybe some of the larger peers. And we don't think anything's changed. We think that prices on shelf are high. Wages have not kept up with price increases. And that's not just CPG, it's food, beverage. We're all reading about the cost of rent, cost of insurance going up. We ready in the last couple of days that consumer confidence has declined a little bit. And interest rate is still high. So we'd say if things really haven't changed from our point of view earlier in 2024, and we said, "Hey, we see an inflection. We think things are turning down a bit." And we think all those arrows and things that we considered when we said that are still in place. So that's why we said, hey, this makes sense to call 3% to 4% top line for '25.

Peter?

Maybe just to follow up on that, just kind of the phasing of the growth, right? So 1Q, 2% organic sales growth, pretty decent step down from what you just delivered in the fourth quarter, and the data that we can see doesn't look like that's kind of playing out. So what's really driving that? Are you just being conservative? Is there something we can't see. And then just kind of a following up to this point just on the phasing, right given the 2% start, 3% to 4% for the year, what kind of gets better from 1Q? Or are you assuming the category kind of re-accelerates as you kind of cycle easier comparisons? Or is there something else that's driving that?

Yes. I would probably simplify to say there are 2 things. One is our International business, the GMG piece is a little lumpy sometimes it's -- historically speaking, but it's going to be a little bit lighter in Q1. It will be a little bit heavier in other quarters. I would also say there were some club promotions that move around between Q1, 2 and 3. So that stuff is kind of normal. It's all an untracked channel. So you're not going to see as much, but that's a simple answer. Ana?