All right. Just about to get started. We all find our seats. Thank you. Good afternoon again. It is my privilege to welcome Clorox back to CAGNY. Joining us today, we have Chief Executive Officer, Linda Rendle, and Chief Financial Officer, Kevin Jacobsen. Please join me in thanking them for their continued support of the conference, including their sponsorship of the break immediately following their presentation. To say the least, it has been a busy few years at Clorox, and I cannot think of a better time to be hearing, excuse me, from Linda and Kevin. We are coming off of fiscal Q2 results that exemplify the company's commitment to rebuilding margins while maintaining top-line growth despite persistent macroeconomic headwinds. Amidst this environment that we hope will continue to settle around us, we can now turn our attention to what Clorox is best known for, growth through value-added innovation that is enabled by consumer intimacy and attractive long-term returns that are underpinned by financial discipline. Linda, with that, I'll turn it over to you to bring it to life for us. Thank you. Thanks, Tim. Good afternoon. Good afternoon. Good afternoon. I know, it's a lot to ask for the good afternoon back. We do have a snack for you after this, as Tim mentioned, maybe we'll re-energize you for that. Let's get started. We really appreciate your interest in Clorox, thank you for joining us. As you might expect, this presentation contains forward-looking statements. I know you take that all as seriously as we do. Let's get started. The focus of our discussion today will be on how our strategy and the execution of that strategy are positioning us, given the strength of our brands, the investments that we're making in our brands to deliver both short-term and long-term results. Specifically, we have leading brands in categories that are in consumers' lives every single day. Those brands have never been stronger, we continue to invest in them. We are taking a comprehensive set of actions to deal with near-term inflationary headwinds and at the same time, investing for the long term. In Q2, we made good progress, we have a ways to go to rebuild earnings, we believe all of the actions that we're taking are setting us up to return to profitable growth to deliver long-term value creation for all of our stakeholders. Let's start with a quick overview of who we are and how we view our competitive moat. We have a diverse portfolio of leading brands in the health and wellness and household essential spaces. We compete in over 100 markets around the world, the vast majority of our sales are in the U.S. Our North Star is maximizing economic profit, we do that with a choiceful and disciplined playbook, focusing on creating leading brands. We like to compete in categories where we can leverage our superior value and innovation and capabilities to be the number 1 or number 2 share brand in that category and deliver strong growth. Importantly, we've been a leader in the ESG space for a number of years, and we further committed to that in our strategy by embedding the way that we manage ESG into our business units. We wanna do that because we can maximize the impact when we think about that holistically. Of course, the bedrock, as I mentioned, of this competitive moat are our brands. Given the environment that we are facing right now, which is difficult, to say the least, it is very important that we can rely on these strong brands and that we continue to invest in them. Here's just a summary of what our portfolio delivers. Over 80% of our portfolio are number one or number two share brands in their categories. We are in 9 out of 10 U.S. households, and our portfolio has never had a higher consumer superiority rating. I know you've heard a lot of people talk about that today, but that is the percentage of our portfolio that consumers deem superior, 76%, and it's never been higher. I'm gonna talk a little bit about that later and what we're doing to continue to support that superiority amongst a lot of the aggressive actions we've had to take, including four rounds of pricing. We're really happy to say, having taken that four rounds of pricing, that we have stable shares. To be clear, we intend to grow market share over the long term, this is really reassuring to see our brands hold up given the level of pricing we've had to take with the inflation we're experiencing. The last number is the three-year CAGR we've delivered from a growth perspective. This is significantly higher than it was pre-pandemic, we've done everything we can to maintain that boost that we got from COVID amongst the broad set of our portfolio, it's resulting in a stronger growth number. What we wanna ensure that we do is keep these brands healthy. We keep that growth momentum going while doing the important work of rebuilding profitability. How we activate this portfolio and where we see our competitive moat is with our strategy, we launched the strategy, it's called IGNITE, in 2019. What we set out to do was to leverage innovation across the four choices that we made, and those choices are very integrated. We wanted to innovate on how we create fuel. We wanna innovate, of course, on consumer experiences. We wanted to innovate on how we work. We knew we needed to be faster, simpler, and more digitally enabled back in 2019, and that is much more the case today, and we'll talk about that as well. We wanted to innovate on how we evolve our portfolio over time. This strategy has served us really well through COVID, and it's continuing to serve us well through an inflationary period that's extraordinary. We've had to lean into some of these choices harder, and we'll talk about that coming up. I said I'd come back to superior value. This is the thing our team obsesses about. Do our brands deliver greater value to the people that we serve than the competition in our categories? That is what we're measuring ourselves against. You can see 76 is actually a record high. We began measuring this about 10 years ago. We were just under 50% of our portfolio as superior. When we came into our IGNITE strategy, we're at 54% superior. Through this pandemic and the investment in our brands, we've grown to 76. The good news is this is fiscal year 22, but this number is actually through calendar year 22. We had already had 3 of our price increases live in market, and we maintained that record high superiority of 76%. This is something that's incredibly important to our team. We must continue to invest in our brands to maintain the superiority. That will give us the ability to continue our top line momentum while rebuilding margins. This is a critical loop. What are those investments that we're making? We're making the things you would typically think we would be making for a company that focuses on superior value. We continue to invest strongly in brand building. We're also holding our team accountable to delivering more from that brand building and increasing their ROI. We are investing in innovation across all of our category. We want bigger innovations. We're going to talk about that as well. Importantly on the bottom, we also have had to invest over the last couple of years in our supply chain just to ensure that we could meet the demand we're experiencing on our business and of course, deliver other things like reliability, reduce costs, et cetera. We've made most of those investments, and we will continue to invest as we need to. Then from a digital and data analytics perspective, when the pandemic hit, we knew we had to do a digital transformation over time, but it became urgent. We made that choice to make that investment 2 years ago. We're at the beginning of that implementation, and we're excited about the capabilities it will unlock for us. How have we performed since we launched our strategy in these areas? In fuel growth, as I've said, we implemented record levels of pricing. Four price increases in the last 12 months. They've gone largely as expected. We're also really proud of the work that we've done on our cost savings program, which has delivered for CLX for many, many years. Cost savings is in our DNA. We went back and looked and said, "What else can we do given the inflationary environment that we're in?" We've made our cost savings program work harder by expanding the areas that we look in using data and technology to get bigger ideas. We had two record quarters in a row in our Q1 and Q2 of cost savings results. On innovate experiences, this is the heartbeat of how we create value for people. We wanted our innovation to do more for people and create more value. We wanted to create big, sticky innovation platforms, which I'll talk about in a minute. Really the reason we wanted to do that, we wanted innovation to have a higher impact. A lot of times you can launch an innovation that's really good in year one and it starts to fall off. We had good examples in the company of where we were able to launch a platform, you know, we have ones dating back 10, 15 years ago, that we could continue to launch new versions of, we could continue to invest in, and that's a very effective and efficient way to do innovation. We've seen a 50% net higher impact, 50% higher net impact from innovation than we did in our previous strategy. We'll talk about this, second bullet point a little bit later in the presentation. We've also achieved an all-time high ROI on our media, and that's driven in part by our personalization capability that we began to build a number of years ago. On reimagined work, this is probably the choice we made in our strategy that we've had to do the most work on over the last few years in terms of going much farther than we had originally anticipated. I'll talk about that a little bit later. This is about our digital transformation. It's about introducing an op model that helps our people maximize their impact in a growth and margin transformation environment, and then all in hopes of getting our SG&A to 13% over time, which we intend to do. On the portfolio, we are pleased with our core. You see we have strong brands. Job number one is keeping them healthy. We are always looking for opportunities outside of that and would make a deal for the right asset at the right price, but we don't feel we have to do that. Importantly, those 4 choices I just covered work together in a system. When we create the right fuel to invest in our brands and our team works as effectively as they can, and we integrate sustainability goals into how we do work, that's what creates magic. I hope I can share some of the innovation examples and other examples we have in our portfolio that show how this strategy comes together to be comprehensive. The other important point here, though, is we are really in a mode of balance. We are having to balance the choices that we make so that we are driving results in the short term. We have a lot of earnings to rebuild. I mean, it is clear, and we've started good progress on that. We have a long way to go. We must make progress in the short term, but we cannot take our eye off the long term. That's why you're going to continue to hear us talk about the strength of the investments, how deeply committed we are to them, because we can't make that trade-off. The other thing that we're balancing is how do we maintain the top-line momentum we've had, so the strongest sales growth that we have on record in a 3-year CAGR, while also rebuilding margins at the same time at the right pace. You're going to hear Kevin and I talk about that we have a lot over the last year, and we'll continue to talk about the balance we make in these choices. Okay, reimagine work. I said this was the place that probably changed the most since we launched our IGNITE strategy in 2019. Back then, we knew we had to be simpler, faster, and more digitally enabled. Then the pandemic hit, and people moved online at a rate we hadn't seen before. We were running a supply chain without the data infrastructure that we needed. We were doing a lot of things manually. We looked at each other and said, "This doesn't feel like a great time to embark on a digital transformation, but we must. We must do the right thing for the long term. We must do the right thing for building the CLX capabilities that we're known for. We had done that in some areas, marketing is a good example, but we didn't have the infrastructure or the capability sitting on top. We made that choice, a very difficult choice, but actually when we look back on it was pretty easy to invest in a $500 million digital transformation that is in process right now. We are going to launch our first region of our ERP later this calendar year. We'll continue then, launching in the U.S. later. The digital capabilities that surround that ERP are in process now, through the remainder of the strategy period. In addition to that, we had talked about with our team, we need to be more agile, we need to be more resilient, and what we recognized in this is we had to do this structurally and through the right processes and tools. We implemented a streamlined operating model just a few months ago. We've implemented the first phase of that, and we have another phase coming up here with our team, at the back half of our fiscal year. That is allowing us to actually codify what we want our people to do. They have to move faster. We have to be leaner. We have to be more responsive and really importantly, closer to the consumer. Not just the marketers, not just the sales folks. Every single person in our company needs to be oriented on what they need. That's how we maintain that 76% value superiority, is by having everyone in our company closer to the consumer, and that's what that op model intends to do. Again, I mentioned this will help us reduce SG&A to 13% of sales over time, and these two initiatives work better to make us a stronger and more resilient company over time. Okay. I'm gonna spend the bulk of our time, not surprisingly, talking about our brands and innovation. In IGNITE, we had set out three big choices in the innovate experiences bucket. The first was we wanted bigger, stickier innovation. The second was we wanted to deliver a frictionless shopping experience with retailers. Part of our brand proposition is how people get it, and they hold our brand accountable for that, and we saw ways, and I'll take you through an example later, where we could advance our share leadership by being first on this. Of course, the bedrock of everything that we do is those brands. In 2019, we said we wanted to be purpose-driven, and we wanted our brands to be more personalized. I'll walk you through how we've done that and what our results are to date. Bigger, stickier innovation. I talked about we had examples in the company where we had launched an initiative or an innovation that was centered on a really big idea. I'm gonna talk about one of those. It's our Glad waste platform that started in 2009. It was such a big idea and such a bigger consumer need space that we were able to leverage many technologies, many different iterations in order to expand on that platform year after year after year, making the marketing work harder, making our distribution work harder, getting retailers on board to where we were going. We wanted to replicate that in every business that we have at Clorox. Everybody was already accountable for a 3-year pipeline. If you're a general manager, you have a 3-year innovation pipeline. Now they're accountable for 3-year innovation pipelines that include platforms. That means they actually have to think farther than 3 years now 'cause they have to be dreaming about what big spaces they can go after. We not only wanted this platform to be bigger, we needed it to be sticky. What we mean by sticky is in year 1 is when you tend to see a big bump from innovation, and then sometimes you end up having it kind of bleed out of the back. We wanted big enough ideas that we could continue to invest in that in year 2 and year 3 were adding incremental volume. I'm gonna walk you through 3 examples of platforms that we have at Clorox, and I'm gonna tell you what's working well, and I'm also gonna share what hasn't worked well and what we've learned from that and how we're embedding that in how we do innovation moving forward. The first one I wanna start with is our retail cleaning business, which from Tim's introduction is probably, you know... There was a lot of news around the Clorox cleaning portfolio during the height of COVID, and the extreme demand that we faced. Consumer behavior has been continuing to evolve. It is still evolving as we normalize. What we know is consumers care more about their health and wellness. They connect that back to cleaning, and we have tons of opportunity with our Clorox and our other cleaning brands to meet them where they are and create better product experiences for them and brand experiences to meet their evolving needs. What we talk about in this platform is it all begins with the idea of starting clean. Let's play the video. Over the last few years, things have built up. Things have gotten messier, dirtier, harder to deal with. That doesn't mean we're stuck like this. We can put a stop to it and begin again. We can start clean, not just with our physical messes, but with our emotional messes too. We can do this in our home as clean increases focus, improves sleep, and reduces stress. For our planet, as we continue to work towards all of our packaging being recyclable, reusable, or compostable. We can do this for each other by helping everyone in our communities to thrive. Better futures made possible when we all start clean. That insight from consumers that they're ready to move past what's been an awful 3 years for many, and they'd love to move past what is an awful thing for many people as they experience significant inflation in their lives, where they have uncertainty about their jobs. What we wanna help them do is have great experiences with our brands that allow them to start clean. We know that when consumers have a clean house, it creates space for them in their mind and their body, and we can do that through our brand communication like we did here, but we can do that very tangibly through innovation. An example of a platform that comes out of this insight is our Clorox Disinfecting Mist, and we talked about this last year. Clorox Disinfecting Mist is the first non-aerosol disinfecting spray that kills 99% of germs on hundreds of surfaces. The cool thing is this combines a very important sustainability element. This is a refill model. Consumers are also able to reduce their plastic waste, and we're able to help reduce our plastic waste and get to our sustainability goals with this launch. People have loved this, who have tried it. It is a modern version of a disinfecting spray in a category that hasn't changed for a really long time. I'm also gonna talk about how that's very difficult and what we learned in that. This is a platform that we are gonna grow, and I'll talk about this in a little bit, for years and years to come. This first iteration has been a success. Now that $25 million sales number, we are not satisfied with that. We expect this launch and this innovation to be much bigger over time as we continue to invest. What we've learned is it is very difficult, we knew this, but we learned it tangibly with this launch. We learned it is very difficult to change consumer behavior even when you have a better product. The people who use it tell you it is, "I love it for all the reasons you tell me it's good," but they're just used to their routine. As we're continuing on our platform launches, we're having to make sure that right at the beginning, we're getting trial, that we're using display in store and online, that we're communicating the right benefits, that we're explaining what's difficult or different to people so that they know why it makes sense to buy the product. The good news, though, is this is in 2 of the top 5 items, new items in the entire home care category, this launch. We're onto something good and very incremental. We see many, many years of iterating on this. In fiscal year 2023, we are launching a free and clear line, which also relates back to consumers' worries. As they've been disinfecting more in their house, they're worried about using chemicals around their pets, around their kids. This has no harsh chemicals, dyes, or fragrances. It gives them that reassurance they can do all the disinfecting they need to keep their family well. They can do it in a safe way. We also launched a Ultra Bathroom Foamer. Using this technology, we have a foaming nozzle. People love foam in the bathroom. There's been little innovation in that segment. We're able to expand this product innovation, which is really a packaging innovation, to go well beyond that initial Disinfecting Mist launch. We have plans in fiscal year 2024 and beyond to take this many other places. That's an example in cleaning. Now I wanna move on to the fun part of the program, which is about cats. This is supposed to relax you. There's science that says watching cat videos, and I know many of you have watched cat videos while sitting at work. Some of you watched the lawyer who had the cat filter on. Come on, you've all seen that one, right? No? Yes, you have. What we knew is during the pandemic, people became closer to their pets. 84% of people said that they became closer to their pets. I became closer to 1 dog. The other dog has been on permanent probation since the pandemic. I don't know if that's really the case. Cats add joy to people's lives, but they also come with a really harsh reality. It's called the litter box. For those of you who own a cat, that chore is one of the most dreaded things in the household. People hate it. Litter manufacturers, including us, have done a great job over time making this better for consumers. We've made it smell better. We've made it lightweight. We've made it not stick to the cat box. We've made it not stick to the cat paws, so they're tracking it all around the house. One thing no litter manufacturer had done was actually reduce the chore itself, have them change the litter box less frequently. Let's look at a video of what we came up to solve that issue. Cats really know how to do less. Be more like your cat. Introducing new Outstretch by Fresh Step, an all-new concentrated litter that lasts 50% longer with microgranules that absorb 50% more, so you can change it less often. Outstretch, it's litter that does more so you can do less. Another cat video. Hope you all feel a little healthier after watching that. People love this litter. They absolutely adore it. Those of you who work on innovation know when a consumer starts playing back to you all the descriptors of how you think about a product and they say it to you know you have a winner. They were telling us, "It's the best litter I've ever used, so I don't have to change my litter boxes often. It's great." The problem was the only people who were giving us that feedback were people who had tried it. Outstretch actually was not a success in the first few months of launch. We thought we had missed the mark. We knew we had great product testing. We knew for people who had tried it was great. We had not gotten the communication right. The team went back very quickly on the insights. They adjusted the plan. They focused more on functional benefits. They revised the advertising. We still have additional changes coming to the packaging coming up here. That has led to a dramatic increase in the performance of this launch, and it's nearly $50 million in sales over the last year as a result, and one of the leading SKUs in our clay clumping portfolio. Incredibly, this is the number we're most excited about, 49% repeat, which is so high. One in two people are repeating on this, and that number continues to grow. That's the takeaway that we have. When you do platform innovation, if you have a good idea, you know, it's really easy sometimes to walk away from things when you've spent money and you're a little nervous. Getting the right insights, moving them fast, and that's part of why our digital transformation is so important. We need our people to have the right insights to be able to move, know when we have a winner, and double down on it. As you would expect, this innovation is a multi-year platform, so we're relaunching with the same insights that we had our unscented version of Outstretch because we think we can improve upon that this year, as well as a refill model in e-commerce that I'll actually speak about in a minute. We have plans for fiscal year 2024 and beyond to build incremental benefits into this category, so they change their litter box less often with incremental benefits that benefits not only the cats, but their pet parents. All right, now let's look at one more example of a platform innovation in another category where we help people deal with their worst messes. Glad with Clorox partnered with Amanza Smith to see if their odor-eliminating bags could keep this open house from smelling like an open dumpster. There's literally a bag right there, and there, and there. We couldn't smell it. It's all stink proof. It's all Glad. Glad is the example I mentioned at the beginning. This has been a platform Glad with since 2009 that we're building on. Our first version of that was Glad with Febreze. That was very successful. We added to that Glad with Gain for all those Gainiacs out there, and that was also successful. We hit the perfect moment in the pandemic when people were staying at home and smelling their garbage more to launch Glad with Clorox. What Clorox does is reassure people about the germ kill, but it really helped us reduce the food and bacterial odor people were experiencing in their garbage. It's also really helpful now as people are trying to stuff those trash bags more from a value perspective when you're not having odors left in the kitchen. This has been a much bigger success than we thought. We've learned on this one, how can you move faster, actually? When something is going better than you expected, how do you make sure you get the right resources there? How do you make sure you up your innovation plan? This is an example of something going better than we thought it would. Our team has had to take those learnings and make sure we accelerated. Well that it's been $120 million of sales in year one, which is well beyond, again, our expectations and very incremental to the category. 45% incremental in the trash category is a very high number with very strong repeats. As you would expect, since we've been growing this platform since 2009, we have additional iterations coming in the future, including a launch of Glad with Pine-Sol, and we have additional launches in fiscal year 2024 and beyond. All right, we have innovation, and of course, the way that we get innovation to market is through our retailers. We wanna deliver better shopping experiences for people. We call them frictionless. A lot of retailers call them frictionless. We had to do some very important work before we could do the work of frictionless, and that is restoring fundamentals at retail. Not only did we have extreme demand fluctuations, I think many of you know we had extreme supply challenges during the height of the pandemic. More than 40% of our portfolio was significantly supply constrained during the height of the pandemic, that led to retail conditions that we weren't happy with. We weren't meeting our service goals with our retailers. Our distribution, some of which we had driven, a lot of which we had driven, went down as we were only able to produce a certain number of SKUs. We had to forego merchandising, which is important to our business because we simply didn't have the supply. Our retailers were fabulous partners during this time, I'll talk about how our relationships have only improved with them, we needed to do the work on the fundamentals before we could take frictionless to the next level, we've done just that. Last quarter, we delivered our highest service level since the pandemic. We still have work to do 'cause we're still experiencing intermittent supply disruptions given the challenges of the global supply chain, but we've made significant progress. That's allowed us to restore distribution where we believe it matters. We don't ever see ourselves going back fully to where we were before, but we've grown total distribution points since fiscal year 2020 by 14%, and nearly all of our businesses are up from a distribution perspective. Then merchandising. The vast majority of our business is sold at full price off the shelf, but merchandising plays a role, like I told you, in innovation, introducing new ideas to consumers. It also matters around key pulse points like back to school. If you take an example on our disinfecting wipes business, we had such a great return to merchandising for back to school. We had the single highest share week in 4 years in this last back to school period, even through the height of the pandemic when Clorox wipes were the hot thing. This has allowed us to strengthen our partnership with retailers. Many of you know Kantar, they do an annual survey where actually retailers rank manufacturers, we have grown significantly over the last couple of years in our ranking, including moving to the number 3 spot in manufacturers under $10 billion. We've improved in every single capability that retailers rate us against. Joint business planning, supply chain, sales team, co-marketing, sustainability, we've improved on every single one of them. That lets us get back to the work of ensuring that we are delivering frictionless shopping experiences for our consumers. This is an example in e-commerce. Our e-commerce business nearly doubled during the pandemic. 10 years ago, many people would have said there's no way litter economics will make sense to ever do that online. This is actually one of our biggest e-commerce penetration businesses. It solves a consumer problem. Who wants to lug a 30-pound box of litter home from the store? They don't. They wanna get this delivered. Chewy.com does an incredible job along with many of other retailers. We partnered with Chewy on innovation, on having the right pack size, the right joint marketing programs. As a result, we're the number one litter on Chewy.com. We've grown our business at a three-year CAGR of 17%. This is an example of what we can do when we have the fundamentals right, and we bring great brands with innovation to retailers who are really focused on their shopper. Another example is in Burt's Bees. Burt's Bees is a really giftable holiday item, and people spend a lot of time thinking about what they're gonna give people during the holidays. We had the opportunity to partner with this woman, Cleo Wade. If you don't know Cleo, she is an American activist, author, and poet. She speaks really deeply to next gen consumers who really wanna make a difference in the world, and she happens to be a huge fan of Burt's Bees. We collaborated with her and Target to put together a holiday program that included special packs, co-marketing, information back that connected people with Cleo and her messaging that really resonates with them. We put a great holiday program together, including huge increases in our social media presence, impressions, et cetera. Importantly for Target, there was a 20% increase in the retail sales during this holiday program off of a big program the year before. Probably even more importantly, given all the supply chain challenges we've been experiencing, the team collaborated so well together, and we had over a 90% sell-through rate of this. This is the type of thing that we wanna bring to retailers, a holistic experience for their shopper, where they can experience our brand well beyond just using a lip balm at home. Finally, as I said, the foundation for having great experiences for consumers is having strong brands, and we've defined that as being purpose-driven and personalized with superior value. Here's our report card on what we've set out to do. We've talked about being 76% of our portfolio being superior. 100% of our major brands have been activated with purpose. We set that as a goal back in fiscal year 19. Why that matters, it's not purpose for purpose sake. It matters because brands with purpose matter more to consumers, and that's how we build superiority is because they care about the idea the brand stands for. We set a goal to know in the U.S. 100 million consumers. The reason we wanna do this is we wanna personalize to them. We wanna give them more personalized experiences, and when they share information with us, we can share a value exchange back with them. We're 75% of the way to that goal, and that has helped enable really incredible progress on our media spending. We already had very strong ROIs on our advertising. We have an all-time high from a media perspective, 45% increased return on investment since before the pandemic, and we've continued to spend strongly behind our brands. This gives us the confidence as we continue to invest in our brands, that we're doing it in a way that's gonna grow both top line and bottom line over time. Okay, I hope those examples help you see how we believe that we're taking the right actions and that we have the right portfolio to both continue our top line momentum and rebuild margins. Kevin? Good afternoon, everyone. Thanks for joining us today. You know, as Linda just said, we're confident our IGNITE strategy positions us very well to deliver strong financial performance as we move forward. And you folks will remember when we launched our IGNITE strategy, our goal is to accelerate the financial performance of the company. While we're confident in our ability to do that going forward, the reality is we've been more challenged recently based on the extreme cost environment we're operating in. I'd say importantly, we believe we're taking all the right actions that allow us to continue to invest in the top-line momentum while taking the actions necessary to rebuild margins. Our commitment is to rebuild those margins back to that pre-pandemic level, and that work is well underway. I'll talk a little bit about that, but before I do, I wanna take a step back and talk about the value we've created for shareholders over very long periods of time. If you look at Clorox over decades, we've created very strong return for our investors. The way we've been able to do this is we concentrate on driving profitable growth in our core portfolio, and we're disciplined in how we deploy our capital. When we do that, we generate very nice cash flow, cash we invest back into the business to strengthen our competitive advantage, and then we return cash to shareholders. Over the last five years, we've returned about $4.7 billion to our shareholders through our share buyback program and our dividends. As we look forward, you should assume we're gonna continue to be disciplined in how we deploy capital. If you think about our capital allocation priorities, for us, what I know, what Linda knows, and we have many of our leaders here, what the leadership at Clorox understands very clearly is how we generate the strongest returns is investing in our base business to create a profitable core portfolio. That's exactly what we've been doing during the IGNITE strategy. If you look at the last three years, we've increased advertising investment levels. As Linda just shared, we're seeing the results of that spending. We have the highest superiority we've ever had. We continue to increase our investment in innovation, and innovation is driving more top and bottom-line results for us. Then we've increased our capital spending. As a result of the increased demand for our products, we've increased our production capacity to keep up with that demand. I think what's important is while we're making these important investments and strengthening our portfolio, we're also investing in the future of the company. Last year, we announced a $500 million investment to fundamentally change our digital capabilities. While that's gonna generate some nice value for us over the balance of our IGNITE strategy, this is really about an investment in the future of the company, setting us up to be competitive well into the future. Folks, while we're making these important investments in the business, because we generate very strong cash flow, we're able to continue to support the dividend. If you look at Clorox, you can see on the slide behind me, over the last 5 years, we've increased the dividend on average about 7% per year, operating in the top third of our peer group. Importantly, we've been able to do that while maintaining a relatively low level of leverage. Our goal at Clorox is debt to EBITDA of 2 - 2.5 times. As you can see, for the most part, during the last 5 years, we've operated at the very low end of that range. Now, more recently, because of the challenging cost environment, we've seen our margins decline last year, and we've seen some compression on profitability, and so our leverage has ticked up a little bit. We fully expect as we rebuild margins, we rebuild profitability, we'll move that back down into our targeted range as we go forward. Folks, I can tell you, if you are disciplined in how you deploy your capital and you focus on investing in your core portfolio, you can generate some very nice returns on invested capital, and that's what we've been able to do. If you look at our ROIC over the last 3 years under IGNITE strategy, we've operated in the top third of our peer group, delivering about a 24% return on average. As we move to our IGNITE strategy, and as Linda and I have both talked about today, our goal is to accelerate the financial performance of this company. The financial goals we've set is to grow top line 3%-5%, expand EBIT margins annually 25 to 50 basis points, and then continue to generate very strong cash flow, which we define as 11%-13% of sales. You can see over the last three years during our IGNITE strategy, we've grown sales about 5% per year on average at the high end of our target. In terms of EBIT margin, we have not delivered on our goal. We have seen margins contract over the last year specifically. Now we believe the actions we're taking to rebuild gross margins, rebuild profitability, we will now return back to growing margins. That starts this year, and we'd expect that to continue as we go forward. If you think about our sales progression, if I think about our performance over our previous strategy period, we generate about 2% sales growth per year on average. When we launched our IGNITE strategy and our goal was to get more value from innovation program, as Linda talked about, as well as creating a more consistent, stable international division, we raised our target to 2%-4%. As a result of the pandemic and the changing consumer behaviors that benefit both our cleaning and disinfecting portfolio, but they also benefit our household essentials portfolio, we further raised our goal to 3%-5%. As you've seen, we're operating at the very high end of that range. And, folks, I can tell you, we are quite pleased with our top line. We clearly have work to do as it relates to rebuilding margins. You know, importantly, as we've said, we are committed to getting back to pre-pandemic levels of gross margin, which for us was about 44%. We believe we're taking all the right actions to put us in a position to do that over time as we move forward. We've taken multiple rounds of pricing, including our most recent round we just took in December. We continue to drive our very well-established cost savings program. Each year, we target delivering 175 basis points of EBITDA margin expansion through cost savings, and this year we'll exceed that goal. We're also working to optimize our supply chain. I can tell you, folks, during the pandemic, we spent tens of millions of dollars trying to create resiliency in our supply chain, trying to manage through the global disruptions we were dealing with. As supply chain disruptions are starting to normalize, we're able to go back and pull those costs out. That work is well underway and is contributing to our margin growth. Then we're driving admin productivity. As Linda mentioned, we launched an operating model change earlier this year, and while that's really being designed to make us a more competitive company, we also expect to save $75 million-$100 million as we implement this set of changes. Our digital transformation, as we continue to drive this initiative, we'll expect to get more admin productivity. Over time, we think we can move closer to 13% of sales. You know, I think the other comment to make here is these are the actions we're taking, and we're starting to see the results of this work. For you folks who follow us, you saw in our most recent quarter, we're starting to see gross margin expansion now. After about 7 quarters of declining to flat gross margins, we're now at a point where we add about 300 basis points. Importantly, we think that's going to continue. We're projecting to continue to build margins through the balance of our fiscal year, and then we fully expect that to continue as we move into our fiscal year 2024. It's a good start. We have a lot more work to do, but we're making progress towards our goal to rebuild margins. Folks, let me end this presentation where Linda started. We believe the investment case in Clorox remains very attractive. We have a portfolio of leading brands that we're going to continue to invest to drive competitive advantage, further building out our competitive moat around our portfolio. We have a business model that generates very strong cash flow, and we're gonna continue to be disciplined in how we deploy that capital. All right, folks, we'd like to thank you for your time today. I do see we have a little bit more time, so Linda will join me, and we'd love to take questions from the audience. Kevin, please. That hand up went by fast, Kevin. That was quick. Yes, he was ready. Okay. Kevin Grundy, Jefferies. Thanks for taking the question. Linda, question for you. Since taking over about 2.5 years ago, I think it's probably a fair characterization that the environment has caused you to be a bit more reactive than proactive than what you might have envisioned. As you begin to see the benefits of the digital transformation, new operating model, a couple questions. One, what do you see as the biggest areas within the portfolio and organization more broadly to unlock value? Two, how will this translate into superior financial performance for shareholders? Thank you. I think, Kevin, you characterized it right. Certainly didn't expect this, but, you know, this is a moment of opportunity, and that's the way that we viewed it as a team. You know, the first opportunity was, of course, just to meet demand in a crazy environment, but the second was, you know, we have full ability now to look at the company and say, "What do we need to do to maximize value over the long term?" That's exactly what we're doing. We've taken the opportunity to invest where we think it matters. When we looked at ourselves and our performance over the pandemic, I mean, great to see the demand increases for our brand, et cetera, but we didn't move as fast as we could have. We didn't have the capabilities we needed to do that. We were gonna say, "Not under our watch. We are gonna fix that, and we're gonna be stronger 'cause we don't think the world is going back to what it was. It's gonna continue to be more volatile." I think we're making the right investments. I think we're taking the right short-term actions. What I'm excited about is, as you saw, we have a great portfolio of brands that consumers love. They love them. How lucky are we that we get to be in 9 out of 10 U.S. households? We take that very seriously. We wanna get more out of the portfolio through innovation, and I think you heard that, and that's what our focus is. It can't just be small innovations on the side. They have to be big innovations that are meaningful, and we have to push ourselves to do that, and I think we can do better. We can be faster at that. We've already started to get faster. We can be more digitally enabled to make that faster and have better insights, and we can get clearer on what we're trying to solve for. We're in process of doing that. If you look at our portfolio, most benefited positively from the pandemic, Kingsford, to cat litter, to food. There's so many trends out there that we can capitalize on, and I feel good about the vast majority of our portfolio. I've talked about places I don't feel as good. VMS is a good example we're continuing to work on that has not been performing to our expectations. Small, but still not where it needs to be. I wanna lean harder into our brands, harder into innovation. That, when we do that, and we take the pricing and cost savings, and we reinvest in those brands, we can create that virtuous cycle again where we return to profitable growth, and we must do that, and we know that's job one. I mean, I heard people say it earlier today, you can't do one. You have to do both. That's where I see the opportunity is. Ultimately, it's a faster-growing, more profitable company. Thank you. Thank you for taking my question. Andrea Teixeira from JPMorgan. On the last earnings call, you commented a little bit on how consumers have been behaving. Of course, you innovated well to keep that innovation and the value to the consumer. Can you comment a little bit on how happened most recently with the additional price increase, if you're still seeing that same trend and the benign environment for that? Conversely, if you're seeing inflation relative to where you were and passing through for the supply chain partners that you have, I understand that you switched from a lot more 50/50 of third parties to a now 20/80 to the historical level. If you can comment on how you're seeing potentially, like, long-stay inflation coming back to that thing. Sure. Well, I'll start with the first, and then you can take the second. As it relates to consumer behavior, what we've been watching really closely as we take our four rounds of pricing is how is the consumer behaving. We felt really good going into those four rounds of pricing given our superior value and the fact that we've been investing strongly in our brands. We have watched consumers begin that value-seeking behavior, but mostly within our own brand. We're seeing them move to value channels, which is not unusual. We've seen that before. We see them trading within our own portfolio, so trading up to larger sizes to get the best cost per use or moving to smaller sizes because they don't have a lot of money out of pocket to spend on a cleaning product that day, for example. That behavior was continuing in the fourth round, and we don't see anything at this point that's different. To be clear, we are still early in that fourth round, and we haven't gone through a full purchase cycle yet, so it's too early to say, is it exactly the same as the first three? That's what we continue to see from consumers and no meaningful trade-down at this point to private label. Andrea, I'd say on the inflationary front, it is still an inflationary environment we're operating in. Just to give folks some perspective of the magnitude of what we're dealing with, if you look at the inflation over the last two years, plus what we're projecting this year, that's about $1.6 billion worth of supply chain inflation. In a typical three-year period for Clorox, we might be $250 million-$300 million. It's that level of cost inflation we're dealing with. Now, last year was the most extreme year, $800 million of supply chain inflation. This year, we're projecting another $400 million. While we're seeing a little bit of deflation in the resin market, I would say that's being offset by just about every other major commodity we purchase. We expect every quarter this year through the balance of our fifth year to be an inflationary environment, but moderating a bit as we move through the year. I think the big question will be: Where do we end up next year? That's work we're doing right now, but where does the commodity environment go next year? It's a little too early for us to call that. Yeah. Jason? Hey, guys. A couple of questions. First, in terms of the long-term EBIT margin expansion, 25- 50 basis points. You fell obviously well below that last couple of years, a substantial drop. This year looks like it's a year where you're gonna exceed the long-term target on a recovery. Should we expect you to be exceeding that for the next couple of years as we recover? Yeah, Jason, I think that's exactly right because our commitment is to rebuild gross margins back to those pre-pandemic levels. Folks, we're about a 44% gross margin when we started back in fiscal year 2019. We ended last year at 36%, so that's 800 basis points we've lost, and we're working to rebuild that. To your point, Jason, as we rebuild that, I'd expect to see accelerated EBIT margin expansion until we get back to a more normalized P&L and then get back to that more normal cadence of 25-50 basis points. That's helpful. Then a quick question on visibility, your visibility into the business. I think one of the traits or one of many of the traits investors used to really love about Clorox is the consistent, predictable, repeatable nature of the business. You did, like, the same result year in, year out. Right. It's been really hard to call the last couple of years. I know the external environment's really volatile. You were calling down. You couldn't find the bottom the last 2 years. Right. Now you're having a hard time kind of finding the top, like, you're missing your margin targets every quarter by hundreds of basis points. Right. What has made the business even, like, so far post the pandemic, why is it still so hard to predict, why is it so volatile relative to your own expectations? Yeah, I can talk about that. Last year, we had several negative revisions. We just fundamentally called the commodity environment wrong last year. If you remember, we started off the year thinking we're gonna have about $300 million worth of cost inflation. You folks may remember the term transitory, and I think we assumed it was transitory as well, and we got behind the curve. We ended up with $800 million worth of supply chain inflation, and I'd say we chased that for a good portion of the year. I think what's different this year is our expectation was about $400 million of supply chain inflation. We're more than halfway through the year, and that still looks right to us. I feel like we've called the cost environment right. We're taking the right pricing actions, and as a result of that, we're delivering, if not exceeding, expectations. There's no question, last year, we just didn't get it right in terms of cost inflation. Jason, I'd add one more thing that's really hard to predict, and every one of our categories had a significant COVID impact. Actually, charcoal was our largest grower if you look at those three years. Getting the consumer right on two levels. One, exactly what curve were they gonna follow in terms of when they were leaving home, different parts of the country, their reaction to COVID across all of our categories has been difficult to predict and now normalization. We're getting better at it, but that has been difficult to predict. That is playing in addition to the inflation. Those two things together have made it more difficult and less predictable. We are getting, again, better, but we wanna get closer to the pin every time. Hey, folks, I apologize. We have just a couple minutes left. Hopefully, we can continue this in our breakout session. Linda, just a couple closing re-remarks. Then we'll take questions in the small room. Okay, a couple closing remarks. First, we have a Hidden Valley. We didn't talk about Hidden Valley today, but if you like ranch, we made it fresh for you today. Today it was made, and it's out there in a fountain. I know. You can't take it with you, though, but you can try it while you're out there during the break. Get recharged with the Hidden Valley fountain. On a more serious note, it's great to see the diversity improving in this room, but I have to make a note that the diversity on this stage is not where it needs to be. There are 5 women out of 69. Not enough people of color and other forms of diversity. I'm hoping each one of us can take note of that, and I know the CEOs on the stage take it very seriously, but we have to improve. I'm so glad again that we're seeing the room improve, but we need more diversity up on the stage in leading companies. I'm proud to be representing a company as a woman, where most of our consumers are women, but we need all more forms of diversity. Finally, just a huge thank you for the time. It's a lot to listen to, and we appreciate your attention. We think we've taken the right set of actions, and we have the right portfolio for us to continue our top-line momentum and rebuild margins, and we appreciate your questions and your attention. Thank you. Thank you. you. We'll have breakout. Thank you, Linda. Really.