Exhibit 99.1
MORGAN STANLEY
NOVEMBER 2012
Forward-Looking Statements
This document 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 future company-wide or segment sales, earnings and earnings per share, investments, initiatives, capital expenditures, product launches, consumer trends, cost savings related to restructuring projects and the timing of such savings, improvements to working capital levels and the timing and savings associated with such improvements, the impact of price increases, advertising and promotional spending, the impact of foreign currency movements, category value and future growth in our businesses. These statements generally can be identified by the use of forward-looking words or phrases such as “outlook,” “assumes,” “will” 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, performance or achievements to differ materially from those expressed in or 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:
General market and economic conditions;
The success of new products and the ability to continually develop new products;
Energizer’s ability to predict category and product consumption trends;
Energizer’s ability to continue planned advertising and other promotional spending;
Energizer’s ability to timely execute its strategic initiatives 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 on Energizer’s relationships with its employees, its major customers and vendors;
Energizer’s ability to maintain and improve market share in the categories in which we operate despite competitive pressure;
Energizer’s 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 offsetting hedges on Energizer’s profitability for the year with any degree of certainty;
The impact of interest and principal repayment of our existing and any future debt;
The impact of legislative or regulatory determinations or changes by federal, state and local, and foreign authorities, including tax authorities;
The impact of currency movements.
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, 2011as supplemented by the Current Report filed on Form 8-K on December 15, 2011.
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.
Market and Industry Data
Unless we indicate otherwise, we base the information concerning our industry contained in this presentation on our general knowledge of and expectations concerning the industry. Our market position and market share is based on our estimates using data from various industry sources and assumptions that we believe to be reasonable based on our knowledge of the industry. We have not independently verified data from industry sources and cannot guarantee its accuracy or completeness. In addition, we believe that data regarding the industry and our market position and market share within such industry provides general guidance but is inherently imprecise.
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. For full reconciliation of non-GAAP financial measures, visit www.energizerholdings.com, Investors, Investor Information, Webcasts and Presentations,
or
http://phx.corporate-ir.net/phoenix.zhtml?c=124138&p=irol-irhome
Agenda
Business Overview
2013 Restructuring Project
Working Capital Initiative
New Compensation Metrics
Financial Summary
Company Profile
2002
Batteries1
100%
Total Sales $1.9 billion
Total Segment $324 million Profit
Categories 1
2012
Feminine Care
4%
Infant Care
4%
Skin Care
9%
Batteries¹
46%
Wet
Shave
37%
$4.6 billion
$871 million
5
Sales by Division
Household Products
46%
Personal Care
54%
Sales by Geography
U.S. 52%
International
48%
Source: Company filings ¹ Represents battery and lighting products
Breadth of Portfolio is Extensive
Household Products
Household & Specialty Batteries
#1 Global
Lighting Products
#1
Personal Care Products
Wet Shave
R & B #2
Prep #1
Tampons #2
Infant Care #1
Sun & Skin Care #1
Note: Market share position based on company estimates
2013
RESTRUCTURING PROJECT
Business Environment
Businesses are under increasing pressure:
Renewed decline in battery category and devices
Increased costs across both Divisions
Increased competition from value brands
Household Division profits declining
Actions going forward:
Reduce production capacity and overheads
Re-focus product line
Bring overhead costs down, enterprise wide
Re-invest part of savings into brands, innovation, and businesses
Device Trends
After seeing signs of a rebound . . ..
Devices (requiring primary batteries) are declining again
Total Devices
2005-4
2006-4
2007-4
2008-4
2009-4
2010-4
2011-4
2012-4
Source: IPSOS 2012 U.S. Device Inventory
US Battery Category Volumes
US Household Battery volumes have softened
US HHB Volume (% Chg vs PY)
3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0%
2005 2006 2007 2008 2009 2010 2011 2012
Source: US All Outlet data based upon AC Nielsen and internal company estimates
ENR Alkaline Shipments
Alkaline shipments have declined significantly since 2007 . . .
4.1 4.0 3.9 3.8 3.7 3.6 3.5 3.4
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
ENR Lithium Shipments
After years of growth, Lithium has steadily declined due to devices . . .
140.0
120.0
100.0
80.0
60.0
40.0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
SG&A % of Sales (vs peer group)
SG&A costs are too high
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
11.4%
12.1%
13.2%
14.6%
15.0%
17.1%
17.5%
19.4%
20.9%
27.0%
CHD PG KMB CLX CL SPB SMG ENR NWL TUP
Based on company year-end filings.
Total Shareholder Returns Are Lagging
From ‘03 to ‘08, ENR was a leader within our Peer Group1 driving Total Shareholder Returns . . .
FY03 – FY08
TSR >
. . . Since then, we have ranked in the bottom of our Peer Group1
FY09 – FY12
EPC >
TSR >
EHP >
1Peer Group Includes: CHD, PG, KMB, CLX, CL, AVP, SMG, NWL, and TUP
2013 Restructuring
Actions:
Rationalize & streamline operations facilities in Household Products
Close Maryville, MO battery manufacturing facility
Close St. Albans, VT battery manufacturing facility
Close Tampoi, Malaysia battery packaging facility
Streamline
Asheboro, NC battery manufacturing and packaging facilities
Walkerton, Canada packaging facility
Lights manufacturing in China
2013 Restructuring
Actions:
Rationalize & streamline operations facilities in Household Products
Consolidate G&A functional support across the organization
Focus Household Products Division product portfolio on core
Move to centrally led and leaner EHP marketing organization
Reduce overhead spending including changes to benefits and other targeted spending reductions
Move to center led procurement organization
2013 Restructuring
Actions:
Targeted annual pre-tax savings of $200 million
25% of savings re-invested in the business to drive long-term growth
Costs of approximately $250 million
Ongoing savings fully realized in Fiscal 2015
Incremental Capital Expenditures of $50 million
WORKING CAPITAL INITIATIVE
Working Capital Initiative
Project Approach:
DSO
DII
DPO
Undertook benchmarking efforts focused on 6 key markets
Identified opportunities in Sun Care, Wet Shave, Alkaline and Lights
Implemented standardized, center-led terms policy across global supplier base
Targeted
400 Basis Point
Reduction
WORKING CAPITAL INITIATIVE
Days
105 95 85 75 65 55 45 35 25
49
48
102
100
37
43
Days Sales Outstanding
Days Inventory
Days Payable Outstanding
22.9%
21.4%
24.0 23.5 23.0 22.5 22.0 21.5 21.0 20.5 20.0
WC % 0f Sales
2011
2012
Source: Energizer internal estimates (Sept 30, 2012)
NEW
COMPENSATION
METRICS
Performance Metrics
FY2013 Annual and Three-year incentive plan metrics
Annual Plan
Cash Based
Adjusted EPS
Adjusted Pre-tax Operating Profit
Cost Savings
Adjusted Net Working Capital as a % of Sales
3-Year Plan
Share Based
Adjusted Return on Invested Capital
Adjusted Cumulative EBITDA
Relative TSR Modifier
Performance Metrics
Short-term incentive plan—Drive Delivery of annual results and major initiatives
Company Goals
Performance Metrics
Multi-Year Restructuring Initiative
Net Working Capital Initiative
Operating results
EPS
Operating Profit
Performance Metrics
Long-term incentive plan—maintain focus on profitable growth and total shareholder return
Grow operating earnings
Through profitable investment
To deliver strong total shareholder returns
Cumulative EBITDA
Return on Invested Capital
Relative TSR
Rewards growth in core operating earnings over 3 yr performance period
Supports focus on cash flow, improved working capital performance, and capital allocation
Incents business performance leading to delivery of relative TSR in excess of peer group
FINANCIAL SUMMARY
Fiscal 2012 Results
Adjusted Diluted Earnings per Share of $6.20
Up 19% versus fiscal 2011
At top end of outlook range
Division Results
Personal Care: segment profit +16.8%, ex-currencies
Household Products: segment profit +3.0%, ex-currencies
Other Factors:
Higher corporate expenses
Favorable effective income tax rate
Positive impact from share repurchases (5.9 million shares)
Fiscal 2013 Outlook
Initial Outlook of $6.75 to $7.00 Adjusted Earnings per Diluted Share
Assumes:
Organic Sales:
EPC – mid-single digit growth
EHP – low-single digit declines (including Hurricane Sandy)
Minimal year-over-year impact from:
Currencies
Commodities
A&P % of sales in line with Fiscal 2012
Tax Rate – 30% to 31%
No additional share repurchases
$25 to $35 million savings from announced 2013 Restructuring Project
Growth vs. prior year concentrated in back half of year
CONCLUDING COMMENTS
Delivering Value to Shareholders
Consistent earnings growth
Successful execution of 2013 Restructuring Project
Ongoing dividend
Opportunistic share repurchases
Continuing communication with investors
Energizer Holdings, Inc.
Regulation G Non-GAAP Reconciliation
Non-GAAP Financial Measures. While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), these presentation slides include non-GAAP measures. These non-GAAP measures, such as historical and forward-looking adjusted diluted earnings per share, which exclude the impact of currencies, the acquisition of ASR including related integration and transaction costs, the costs associated with restructuring, a gain on the sale of a facility closed as a result of restructuring, unusual litigation items, costs associated with the early retirement of debt and early termination of related interest rate swaps, the impact of accounting rules on our Venezuelan operations, prior years' tax accruals and certain other items as outlined in the table below are not in accordance with, nor are they a substitute for, GAAP measures. The Company believes these non-GAAP measures provide a meaningful comparison to the corresponding historical or future 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.
| | | | | | | | |
| | | Fiscal Year Ended
September 30,
| |
| | | 2012
| | | 2011
| |
Diluted EPS—GAAP | | $ | 6.22 | | | $ | 3.72 | |
Impacts, net of tax: Expense/(Income) | | | | | | | | |
Household Products restructuring | | | (0.09 | ) | | | 0.89 | |
Early debt retirement / duplicate interest | | | — | | | | 0.21 | |
Other realignment / integration | | | 0.15 | | | | 0.15 | |
Acquisition inventory valuation | | | — | | | | 0.06 | |
Venezuela devaluation/other impacts | | | — | | | | 0.03 | |
Litigation provision | | | — | | | | — | |
Early termination of interest rate swap | | | 0.02 | | | | — | |
Adjustment to prior years' tax accruals | | | (0.10 | ) | | | 0.14 | |
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Diluted EPS—adjusted (Non-GAAP) | | $ | 6.20 | | | $ | 5.20 | |
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Segment Profit—Personal Care (In millions—Unaudited)
Quarter and Fiscal Year Ended September 30, 2012
| | | | | | | | |
| | | Fiscal Year
| | | %Chg
| |
Segment Profit—FY '11 | | $ | 408.4 | | | | | |
Operations | | | 68.3 | | | | 16.8 | % |
Impact of currency | | | (6.0 | ) | | | -1.5 | % |
Segment Profit—FY '12 | | $ | 470.7 | | | | 15.3 | % |
Segment Profit—Household Products (In millions—Unaudited)
Quarter and Fiscal Year Ended September 30, 2012
| | | | | | | | |
| | | Fiscal Year
| | | %Chg
| |
Segment Profit—FY '11 | | $ | 410.6 | | | | | |
Operations | | | 12.1 | | | | 3.0 | % |
Impact of currency | | | (22.5 | ) | | | -5.5 | % |
Segment Profit—FY '12 | | $ | 400.2 | | | | -2.5 | % |
On a GAAP basis, the Company's initial financial outlook for GAAP diluted earnings per share is in the range of $5.30 to $5.70, inclusive of pre-tax restructuring costs in the range of $120 to $140 million. Our initial outlook range for GAAP diluted earnings per share is somewhat wider due to the complexity of estimating the timing of costs during a significant restructuring program.
