Top Companies Report

13. Clorox

July 10, 2013

Oakland, CA
510.271.7000
www.thecloroxcompany.com

Sales: $2.7 billion for household, personal care and industrial and institutional products. Corporate sales: $5.5 billion. Net income: $543 million for the year ended June 30, 2012.

Key Personnel: Donald R. Knauss, chairman and chief executive officer; Benno Dorer, executive vice president and chief operating officer, cleaning, international and corporate strategy; George C. Roeth, executive vice president and chief operating officer, household and lifestyle.

Major Products: Clorox, Formula 409, Liquid-Plumr, Pine Sol, Green Works cleaning products; Burt’s Bees personal care products.

New Products: Güd natural personal care, Clorox Concentrated Bleach, Clorox Gentle Bleach, Clorox Ready-Use Pre-Diluted Bleach, Burt’s Bees Intense Hydration Line.

Comments: Clorox is celebrating its 100th anniversary this year. The company got its start back on May 5, 1913 when five disparate entrepreneurs, Archibald Taft, a banker; Edward Hughes, a purveyor of wood and coal; Charles Husband, a bookkeeper; Rufus Myers, a lawyer; and William Hussey, a miner, invested $100 a piece to set up the first commercial-scale liquid bleach factory in the US, located on the east side of San Francisco Bay.

Back then, the company was known as the Electro-Alkaline Company and the name of the original bleach product, Clorox, was derived from its two main ingredients chlorine and sodium hydroxide. When the company went public in 1928, it changed its name to the Clorox Chemical Company. In 1957, it was acquired by Procter & Gamble, which renamed its new subsidiary, The Clorox Company. However, rivals, along with the Federal Trade Commission, challenged the acquisition. After a 10-year battle, the US Supreme Court ruled that P&G must divest Clorox, which became an independent company on Jan. 1, 1969. Since then the company has aggressively expanded beyond its cleaning roots, with products such as Kingsford charcoal, Hidden Valley Ranch salad dressing and Brita water filters. As a result, household cleaning no longer accounts for even 50% of corporate sales.

“One hundred years ago, five men invested $500 to start a business here in Oakland, California, with the vision of fulfilling their American dream through a bottle of bleach,” said chairman and CEO Don Knauss. “Clorox has come a long way since then. Today, we share the same innovative and tenacious spirit of our founders in pursuing growth opportunities for our business and in ensuring the care and quality that goes into every product.”

In recent years, the company has sought to move into higher margin sectors by acquiring Burt’s Bees, selling its auto care business and entering health care through the acquisition of Cal Tech, Aplicare and HealthLink. The company believes sales of Burt’s Bees will grow more than 10% in fiscal 2013, which ended June 30.

In fiscal 2012, sales rose 5% and volume increased 2% driven by higher shipments in the professional products business, primarily due to the acquisition of HealthLink and Aplicare in the healthcare sector. Other reasons for the growth were higher shipments of Clorox disinfecting wipes and Burt’s Bees natural personal care products along with the launch of güd natural personal care products. On the downside, the company reported lower shipments of Pine-Sol cleaner due to price increases.

Within the cleaning sector, sales rose 5% to nearly $1.7 billion. Lifestyle sales rose 6% and international sales were up 4%.

Looking ahead, the company hopes to double Clorox Professional’s sales to $500 million in five years by improving its surface disinfection business through the Caltech acquisition and expanding into hand care and the physician’s channel via the HealthLink acquisition.

For the nine months, sales rose more than 3% to just under $4.1 billion. Sales of household cleaning products rose 8% to more than $1.3 billion.

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