Top Companies Report

12. Clorox

July 1, 2015

Oakland, CA

Sales: $2.6 billion for household, personal care and industrial and institutional products. Corporate sales: $5.6 billion, for the year ended June 30, 2014.

Key Personnel: Donald R. Knauss, executive chairman; Benno Dorer, chief executive officer; James Foster, executive vice president, product supply, enterprise performance and IT; Jacqueline P. Kane executive vice president, human resources and corporate affairs; Stephen M. Robb, executive vice president, chief financial officer; Frank A. Tataseo, executive vice president, new business development; Nick Vlahos, executive vice president and chief operating officer, household, lifestyle and core global functions; Dawn Willoughby, executive vice president and chief operating officer, cleaning, international and professional products; Michael Costello, senior vice president, international division; Denise A. Garner, senior vice president, chief innovation officer; Matt Laszlo, senior vice president, chief customer officer; Eric Reynolds, senior vice president, chief marketing officer.

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

New Products: Clorox Pump’N Clean Kitchen & Dish Cleaner and Clorox Pump’N Clean Bathroom & Multi-Purpose; Clorox ScrubSingles bathroom pads; Clorox Triple Action Dust Wipes; Clorox Thick Cling Cleaning Bleach; Clorox 2 Oxi Max Stain and Odor Remover; Clorox Oxi Max Radiant White laundry stain remover; Clorox 2 Darks & Denim Color Protector & Stain Remover.

Comments: Corporate sales were relatively flat last year.  Volume was flat too, as higher shipments of cleaning and liquid bleach (among other products) was offset by lower shipments due to heightened competitive activity in the disinfecting wipes category, including the distribution loss of Clorox disinfecting wipes at a major club customer.

More specifically, cleaning product sales were flat at $1.77 billion. A slight (1%) decline in volume in the cleaning segment were partially offset by higher shipments of cleaning and healthcare products in the professional products business, and higher shipments of Clorox liquid bleach driven by product innovation.

Clorox’s lifestyle business segment got a lift from new lip and face care products from Burt’s Bees (which accounts for 4% of corporate sales).

International sales fell 4% and volume declined 2%.

In fiscal year 2014, Clorox introduced its 2020 Strategy, a strategic growth plan that provides a roadmap for the company to reach the highest value opportunities for long-term, profitable growth and strong stockholder returns through the year 2020. The long-term financial goals reflected in the company’s 2020 Strategy include annual net sales growth of 3-5%, market share growth, annual EBIT margin growth between 25-50 basis points and annual free cash flow as a percentage of net sales of about 10-12%, which Clorox anticipates using to invest in the business, maintain debt leverage within its target range and return excess cash to stockholders. That four-point Clorox’s 2020 Strategy is clear:
  • Engage employees;
  • Innovate every day;
  • Expand our brands; and
  • Fund growth
At the same time, the company says it will continue to implement its “3D” demand-creation model of “Desire, Decide and Delight” capabilities to ensure more targeted messaging for consumers that reinforces the value proposition of its brands, including marketing communications that drive consumer desire, in-store promotions that compel purchase decisions at the point of decide, and superior products that delight consumers.

It’s still early in the process, but Clorox has a ways to go to accomplish all of its goals. For the nine months ended March 31, 2015, corporate sales fell 2% to nearly $4.1 billion. However, cleaning product volume and sales rose 1% during the period to nearly $1.36 billion, helped along by higher shipments of Clorox toilet bowl cleaner. The professional products division also grew volume, which was driven, in part, by Ebola and Enterovirus concerns. The increase was partially offset by lower shipments of Clorox liquid bleach in laundry, due mainly to category softness and continuing competitive activity.

The company reported higher shipments of Burt’s Bees natural personal care products, due to innovation and distribution gain in lip and face care products.
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