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  "docSlug": "8b6a62f49fba",
  "documentTitle": "Church & Dwight Co., Inc. (CHD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-09-05 00:00:00",
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  "pageNumber": 23,
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  "slideType": "expose_contradiction",
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  "notes": "Includes a direct quote from a CFO conference to contrast with the historical data trend.",
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      "kind": "chart",
      "text": "Cash Conversion Cycle trend from 2014 to 2019",
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      "kind": "paragraph",
      "text": "There's more evidence of cash flow strain by looking at CHD's cash conversion cycle (it defines as DSO + DIO – DPO). After steadily improving from 2014 to 2017, the metric worsened in 2018 from 17 to 24 days. Nonetheless, the CFO touts that it has a 3 – 4 year plan to drive working capital to zero. Good luck: according to our research, former employees describe this goal as a stretch.",
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      "kind": "quote",
      "text": "And speaking of cash or free cash flow conversion right, free cash flow divided by net income was 124%. If you look back at our track record, we've averaged over 120% for quite some time. Other peers averaged around 90% and many companies target at 100%. This is a big difference between Church & Dwight and the rest of the peer group. And how do we do that? Well, partly it's because of working capital management. Over the last 10 years, we've gone from 52 days cash conversion cycle to around 20 days cash conversion cycle. And we have plans just like our productivity program, where we have a three-year pipeline, we do the same thing for working capital. So, we have a three-year plan, four-year plan to get down to zero over time.",
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      "text": "Source: CHD",
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      "text": "Worsening Cash Conversion",
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      "evidence": "The document extensively details the problems with CHD, including rising debt, low-quality EBITDA, worrisome strategy shifts, and concerning CEO history.",
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      "evidence": "The overall thesis implies that failing to act on Spruce Point's analysis could lead to significant financial losses for investors holding onto CHD stock.",
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      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
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