This presentation contains both historical and forward-looking statements. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, statements regarding the planned separation of the Household Products and Personal Care businesses, the timing of any such separation, the future earnings and performance of Energizer Holdings or any of its businesses, including the Household Products and Personal Care businesses on a standalone basis if the separation is completed. These statements generally can be identified by the use of forward-looking words or phrases such as "believe," "expect," "expectation," "anticipate," "may," "could," "intend," "belief," "estimate," "plan," "target," "predict," "likely," "will," "should," "forecast," "outlook," or other similar words or phrases. These statements are not guarantees of performance and are inherently subject to known and unknown risks, uncertainties and assumptions that are difficult to predict and could cause our actual results to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or projections will be achieved. The forward-looking statements included in this document are only made as of the date of this document and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: -- Whether the separation of the Household Products and Personal Care businesses is completed, as expected or at all, and the timing of any such separation; -- Whether the conditions to the separation can be satisfied; -- Whether the operational, marketing and strategic benefits of the separation can be achieved; -- Whether the costs and expenses of the separation can be controlled within expectations; -- General market and economic conditions; -- Market trends in the categories in which we operate; -- The success of new products and the ability to continually develop and market new products; -- Our ability to attract, retain and improve distribution with key customers; -- Our ability to continue planned advertising and other promotional spending; -- Our ability to timely execute strategic initiatives, including restructurings, in a manner that will positively impact our financial condition and results of operations and does not disrupt our business operations; -- The impact of strategic initiatives, including restructurings, on our relationships with employees, customers and vendors; -- Our ability to maintain and improve market share in the categories in which we operate despite heightened competitive pressure; -- Our ability to improve operations and realize cost savings; -- The impact of raw material and other commodity costs; -- The impact of foreign currency exchange rates and currency controls, particularly in Venezuela and Argentina, as well as offsetting hedges; -- Goodwill impairment charges resulting from declines in profitability or estimated cash flows related to intangible assets or market valuations for similar assets; -- Our ability to acquire and integrate businesses, and to realize the projected results of acquisitions; -- The impact of advertising and product liability claims and other litigation; -- Compliance with debt covenants as well as the impact of interest and principal repayment of our existing and any future debt; or -- The impact of legislative or regulatory determinations or changes by federal, state and local, and foreign authorities, including taxing authorities. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of any such forward-looking statements. The list of factors above is illustrative, but by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Additional risks and uncertainties include those detailed from time to time in Energizer's publicly filed documents, including its annual report on Form 10-K for the year ended September 30, 2013 and its quarterly report on Form 10-Q for the quarter ended March 31, 2014.
Trademarks and Brands We use “Energizer” and the Energizer logo as our trademarks. Product names and company programs appearing in this presentation are trademarks of Energizer Holdings, Inc. or its subsidiaries. This presentation also may refer to brand names, trademarks, service marks and trade names of other companies and organizations, and these brand names, trademarks, service marks and trade names are the property of their respective owners. Regulation G – Non-GAAP Financial Measures While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), this presentation includes non -GAAP measures. These non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company believes these non-GAAP measures provide a more meaningful comparison to the corresponding reported period and assist investors in performing analysis consistent with financial models developed by research analysts. Investors should consider non-GAAP measures in addition to, not as a substitute for, or superior to, the comparable GAAP measures. A full reconciliation of GAAP to adjusted EPS is provided at the end of the presentation.
Financial update Segment overview – Household Products – Personal Care Separation status
YTD results 2014 Outlook Restructuring Project Working Capital Initiative
Adjusted EPS of $5.45* – in-line with internal expectations Restructuring savings ahead of plan Working capital reductions continue Feminine Care acquisition accretion of $0.36 * Excludes acquisitions, restructuring charges and currency impacts
2013 Enterprise-wide Restructuring – Estimated $300 million in savings • Increased from original estimate of $200 million • Realized $223 million project-to-date • Estimating $135 to $150 million in FY 14 • Ongoing savings fully realized in FY 15 – Estimated $350 million in costs
Targeted 400 basis point reduction = $200 million in savings versus FY 11 baseline by 2014 Achieved 750 basis point reduction thru 6/30/14 Total cash flow generated exceeds $300 million 2011 22.9% 2012 21.4% 2013 18.1% LTM 6/30/14 15.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Working Capital as a % of Sales (average trailing four quarters)
Financial Outlook of $7.00 to $7.25 Adjusted Earnings per Diluted Share (GAAP EPS Outlook of $5.40 to $5.80) Assumes: Organic Sales expected to decline low- to mid-single digits: - EPC – low-single digit decline - EHP – mid- to high-single digit decline Adjusted EPS accretion of $0.35 to $0.40 from the acquisition of Carefree, Stayfree and o.b. A&P as a % of sales in the range of 10.5% to 11.0%, versus 9.8% in prior year $45 to $50 million unfavorable currency impact $135 to $150 million incremental gross savings from 2013 Restructuring Project Tax Rate – 29% to 30%
Household Products Personal Care
Large, installed base of devices in consumer households Important category for retailers Premium brands have over 70%* of total U.S. market Opportunity for growth in developing markets Innovation across full portfolio Source: U.S. Nielsen 52 week ending 8/16/14
Top 5 Devices (% of battery consumption) Remote Controls 7.3% Game Controllers 5.1% Digital Cameras 4.1% Flashlights 3.9% Wireless Mouse 2.9% Source: 2013 TNS US Device Study * 2 Battery Consumption represents Total # Batteries Required per device divided by Total # Batteries Required by all devices Base: All household battery-powered devices
US Sales Dollars 52 weeks Batteries $2.8B Large Scale Profitable Deodorant $2.7B Dishwashing $2.6B Detergent Tooth $2.5B High Household Cleaners Basket Builder Penetration Source: Nielsen xAOC Strategic Planner 52 weeks ending 8/2/14.
Deodorant Dishwashing Tooth Cleaners Batteries Detergent Food/Drug & X X X X Mass Club X X X X Dollar X X X X Home Center X X Convenience X X X X Stores Office X Sporting Goods X Hobby/Craft X Online X X X X
U.S. Household Battery Segment Share Trends - Dollars 80% 71% 60% 40% 29% 20% 0% 2009 2010 2011 2012 2013 2014 Premium Brands Price Brands Source: US Nielsen HOUSEHOLD BATTERIES 52 week ending 8-16-14 Premium Brands = Energizer and Duracell
Global Battery Value Share Global Battery Value Developing Markets All Other Panasonic Energizer Gold Peak 29% Private Label $5.1 Billion Rayovac/Varta Eveready 15% $790 Duracell Million 26% Developing Markets Developed Markets Source: Nielsen Global Track 52 weeks ending June 2014
Last 9X longer than Energizer Max in Energizer Light Fusion digital cameras Technology Vibrant, uniform area light for a variety of tasks NEW! Energizer Max with PowerSeal Plus Protects devices from leakage & Unique Eveready Leading the category single package for in the hands free holds power for traditional trade segment 10 years
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