Clorox and P&G Finalize Agreement on Glad Products Joint Venture; Clorox Summarizes New Strategy to Drive Long-term Growth.

Business Editors

OAKLAND, Calif.--(BUSINESS WIRE)--Nov. 18, 2002

The Clorox Company (NYSE: CLX) (PSE: CLX) today announced that it has finalized a previously announced agreement with Procter & Gamble to establish a joint venture in food and trash bags, containers and wraps under the Glad(R), GladWare(R) and related trademarks. Separately, Clorox summarized its strategic growth plan, which was introduced at a meeting in New York on Nov. 14 with members of the investment community.

Glad Products Joint Venture

As announced on Nov. 14, the joint venture will have exclusive use of a range of current and future patents, trademarks, and other proprietary technologies developed by P&G that can be used to help drive innovation and growth on the well-established Glad business. The agreement is subject to government approval.

Clorox's Long-term Growth Strategy

Driven by innovation and a relentless customer focus, the powerful growth strategy targets total shareholder return in the top third of Clorox's peer group of companies. Key drivers of Clorox's strategy include a strong portfolio of top-tier brands; a robust and sustainable program for reducing costs and reinvesting savings into the business; superior execution in brand building; and a strong, disciplined organization to deliver superior results.

"Growth and solid financial performance depend on careful, disciplined and consistent execution," said Chairman and CEO Craig Sullivan. "We're creating and executing best practices throughout all of our businesses. And we are making systemic improvements to ensure we have the brands, the technology and the organization to deliver the kind of growth and return our shareholders deserve."

Joining Sullivan in introducing key elements of the company's strategy were Jerry Johnston, president and chief operating officer; Karen Rose, chief financial officer; Frank Tataseo, senior vice president -- sales; Wayne Delker, vice president -- research and development; and George Roeth, vice president -- growth and strategy.

A Portfolio of Leading Brands

Johnston reviewed Clorox's portfolio, emphasizing the competitive advantages of its leading U.S. brands, from categories with solid growth potential, to strong synergies among the company's diverse brands -- such as shared cost-saving practices and the leveraging of core technologies across different businesses.

A Robust, Sustainable Cost-Saving Program

Central to the success of Clorox's strategy is its continuing initiative to "Cut Costs Everywhere," Rose said. She noted that, by establishing a Cut Costs Everywhere program office, assigning dedicated senior management resources and setting clear targets, Clorox has embraced the initiative across all levels and functions of the organization. Rose emphasized that Cut Costs Everywhere is really a growth initiative, delivering savings that can be reinvested into the company to fuel growth over the long term.

Key Drivers of Growth

Learning from the success of the Cut Costs Everywhere program, Clorox recently established a growth and strategy office to ensure the company delivers on its growth targets, Roeth said. Staffed with dedicated senior management, the office leads the development of corporate strategy and serves as a center of expertise to the company's business units and functions. Vital growth drivers include investing in brand building, focusing on the customer and increasing product innovation, Roeth said.

Tataseo provided an overview of the company's priority to "Get More Customer Focused," which he described as aligning its organization and extending its capability to grow its customers' businesses with Clorox Company brands.

Delker described how Clorox is enhancing its process for developing new products. The strategy, Delker said, is to continue to drive growth from new products by focusing on four principles: first, gain a better understanding of the consumer; second, add more -- and better -- ideas to the new-product pipeline; third, leverage partnerships, such as the joint venture with P&G, to get the right technology; and finally, bring new products to market with disciplined execution.

Using the Clorox ReadyMop mopping system as a case study, Roeth illustrated how the combination of marketing investment, customer focus and product innovation drives outstanding results. Introduced in fiscal 2002, Clorox ReadyMop achieved the fastest speed-to-retail distribution -- six weeks -- in the company's history. It also holds a leadership position in the convenience mopping systems segment among U.S. food, drug and mass-merchandise retail outlets measured by an independent service.

Financial Goals

Closing the meeting, Sullivan reiterated Clorox's overriding goal to consistently achieve total shareholder return in the top third of its peer group of companies by focusing on top-line growth, margin improvement and capital efficiency. Specific targets, on an average annual basis, include:

-- 3 percent to 5 percent top-line growth, excluding acquisitions;

-- Double-digit earnings growth;

-- Working capital less than 0 percent of sales;

-- Capital spending at approximately 4 percent of sales; and

-- Continuous improvement in return on invested capital, on average, at 100 basis points per year.

"We have a portfolio of brands which provide a solid foundation for organic growth," Sullivan said. "We have significant cost-savings opportunities to fund our growth plans. And we have an experienced and talented organization being supported by a new, disciplined infrastructure. We are absolutely convinced we can drive the growth we need with the appropriate emphasis on innovation, brand building and our heightened focus on the customer. We expect our actions to translate into superior return for our shareholders."

Replay of Meeting Webcast

A webcast replay of the complete meeting will be archived through Nov. 22 on Clorox's Web site at www.clorox.com/investors.

The Clorox Company

The Clorox Company is a leading manufacturer and marketer of consumer products with fiscal year 2002 revenues of $4.1 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Armor All and STP auto care products, Fresh Step and Scoop Away cat litters, Kingsford charcoal briquets, Hidden Valley and K C Masterpiece dressings and sauces, and Glad bags, wraps and containers. With 9,500 employees worldwide, the company manufactures products in 25 countries and markets them in more than 100 countries. Founded in 1980, The Clorox Company Foundation has awarded grants totaling more than $51 million and has made product donations valued at nearly $5 million to nonprofit organizations, schools and colleges. For more information about Clorox, visit the company's Web site at www.clorox.com.

Except for historical information, matters discussed above, including statements about future volume, sales and earnings growth, profitability, costs, cost savings or expectations, are forward-looking statements based on management's estimates, assumptions and projections. Important factors that could cause results to differ materially from management's expectations are described in "Forward-Looking Statements and Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in the company's SEC Form 10-K for the year ended June 30, 2002, as updated from time to time in the company's SEC filings. Those factors include, but are not limited to, general economic and marketplace conditions and events, the company's costs, risks inherent in litigation and international operations, the success of new products, the company's ability to manage and obtain the benefits of joint venture activities, integration of acquisitions, and environmental, regulatory and intellectual property matters.