ENR - Earnings call transcript Q1 2021 | Energizer Holdings, Inc.

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Operator

Good day and welcome to the Energizer Holdings, Inc.

First Quarter Fiscal Year 2021 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation there will be an opportunity to ask questions. Instructions]. [Operator event this being is note recorded. Please now Jackie Burwitz, would like to to over conference the Vice turn I President, Relations. Investor ahead. go Please

Jackie Burwitz

Good Energizer’s call. to morning fiscal and conference XXXX first quarter welcome

Executive Joining are of Investor Officer; John will replay Controller me Drabik, Relations be our A Gorman, Chief Officer. this Mark Chief section and Accounting today and of Chief Officer; LaVigne, available Financial energizerholdings.com. Tim website call the on

our is website. providing deck detailed results also slide posted quarter on a addition In for financial the

from During will financial the among not with we differ expectations to today’s are included differ We we from to the statements. future other company’s presentation ongoing statements. resulting management’s in forward-looking those subject these on slides the to statements are cause about undertake call risk reports update COVID-XX from that statements results forward-looking could make including filed which and These actual do business current Factors performance and and are in based the these uncertainties SEC. statements and actual matters. pandemic materially cause to materially results these the

as to is refer in issued on Information believe non-GAAP our presentation measures a our and we data. press on measures, based concerning Energizer’s of industry our financial we available which on is also and measures market our this discussed estimates internal call comparable share where earlier Data categories reasonable. GAAP and financial relates to compete today non-GAAP release to markets analysis We be from reconciliation to shown website.

in noted, all prior Energizer’s XXXX. to the year due With call I included external turn like category fiscal the quarter to the period of and to that fiscal to year the restatement data year all e-commerce not regarding over is overview quarter our same to Mark. to and comments This database. would relate comparisons Unless otherwise pertain a in

Mark S. LaVigne

execution our share be expanded pleased good elevated to this reflects strong performance led which earnings everyone. as here I morning first growth. and morning and quarter am to Jackie demand, improved to results Thanks distribution,

with challenges team each to ongoing the moved and focus operating has this Our while speed in address continuing on safe. keeping other environment to healthy of

talk the pandemic and story, to a while we with the I with remain main operating as into moment, will subsides. success we our driving positioned the is Leading to business the keys innovation, ensure demand focused driven in productivity are about both on the As are well now excellence, and pandemic that our future. strategies

refinance We we than and costs around of improving did delivered with quarter, adjusted of our line debt, will result meet portion to growth This categories which interest to battery in strong in XX%. resulting Looking XX.X%, while we EBITDA XX% and strong and with of adjusted XX% adjusted to able quarter. of incremental up XX% of earnings reduced and growth forward. low able as momentum sales margin gross globally. in we growth We across at were the XX.X% results top line demand incurring of the up sales care maintained lower markets for the the auto world, margins a interest share last growth combination per were expense advantage top rates take going of also significantly resulted our organic

results more the per well earnings to we of lower few quarter, new outlook start expenses for interest full $X.XX. on will to view our the full as are Tim the the With adjusted year share a are for detail for minutes, range In year. We a the as $X.XX provide year. our a to off solid increasing to fiscal refinancing, due for the

to trends category Let where start we strong demand. with see continue me consumer

than the markets, was do U.S. of including increased external devices gain X.X changes category in Consumers auto well With activities. and earlier, a category mentioned category disinfecting, database number immediate X.X% their share consumer up due of we an Energizer care, as increased include cleaning faster and in for own, on not have as purchasing see driven batteries category of XX% to France, than use. well it quarter by devices. With is Canada, yourself an and distribution value the consumers as an including the of does points, UK. our increase e-commerce a more those they in focus to the as growing continue grew gains international result battery the in this U.S. data Jackie Korea, restatement. and As behavior, Globally, usage as

needs disinfected. rolling and are as Disinfectant During consumers consumers an care and quarter, in did cars note out the of Energizer’s home than In our recently strengthening pipeline. see markets. on meeting ever We non-measured channels, we we international innovation quarter, and e-commerce, the their during auto including keeping by All care, growth Of Armor the clean share center, product flat. auto launched are focused more was strong

and e-commerce leadership consumption care. We date attractive at to and innovative also is prior quarter, continue on performance we disinfecting, this is portfolio solid our odor versus expected see an periods. to our e-commerce, looking addition a R&D formulations acquired enhance business, to have well, cleaning, primarily our The formulations data household in we eliminating sales commercialized which auto In to robust based of extremely disinfectants. pipeline small acquired has don't we've

continue in Our future story. in to meet for investments successfully efficiently, If also are into to very the we a will our back, off positioning main we the environment navigate to order categories are step emerge to And has undertaking focus this operating lead driven complicated to the period the demand and us this initiatives be demand the be and poised elevated ongoing future. our pandemic future. in from been priority and well a foreseeable take while will paying for growth

core also we to completion are our acquisitions, undertaking nearing including the initiatives we are several As bolt-on modernize integration efforts, capabilities. of our recent operational

of Despite scheduled for an initiatives. completion this year, these provide have of battery integration past a are and and Let acquisition the XXXX. $XX to remain deliver on million care for million update realized by our end and on activities $XXX total the auto continued million in $XX moment and million the the more track first than we challenges synergies. me in synergies to in quarter $XX to XXXX take to we achieve In

quarter an meet efficiencies We closed of enable to the also in will during acquisition our further the and on ability future. contributed significantly strong which battery to Indonesian the the demand plant,

a we organization ensure in a core have must the shifts in meet consumer we In addition the digitally order activities, our have to demands launched the the shown more pandemic can advanced significant changing to operating as environment. related clearly to we become modernize integration projects rapidly several of very

global customers organization which end-to-end by our transforming connections and will We agility within greater closer supply moving an are category consumers. and to create to each product structure, category

and The to to to important product investing planning expected better take were our business planning demand, opportunities especially COVID able end provide equipped already off of continue opportunities tools disruption. navigate elevated be be demand predictive is the to in enhancing result also These also than and advantage our across will to batteries while in are project to our more supply continued the on to are organization will in We near-term lower that business. ability efforts with related a today's which better are supply the insight as costs. medium-term meet analytics for environment. needed This meet paying we capitalize in

can in events real We to and enable our shifting more mix project, most will are and connect macroeconomic shifts near better and detect data as products. to and more drive advanced with us more growth as consumers time analytics such recent our data from understand investing and drive business. the in ability smaller to will with insights from behavior well and or enhance respond Armed our in marketing also operate in commercial and the markets business effectively This capabilities, other will which impacts business. costs the consumer as also our effectively ones, and teams

while growth. will seen ensuring equally in We cost model us believe being we in the initiatives to are have opportunities future We to do invest committed allow have flexibility to lower committed drive you us the efficient to from both. past these to operating the

Tim, I to we I on the also are future. over to wanted how provide thinking turn some perspective about it Before

us strategic leading with of as remain will priorities we served operating they the and Our well navigated innovation, pandemic forward. has with and driving going productivity excellence, critical

reminded insight that was us provided as However, resilient, consumer pandemic are XXXX significant dynamic do. what emerge disruptions. heart at more it behavior to we stronger, and that that of will the The drove company. also Fundamentally, consumers enable Energizer a

information different the and categories ways. to changed, their trusted brands changes and how they how in and consume new routines As shop. engaged in they gravitated accelerated They and habits ultimately with our they

meet value Our can for at us success with focused, the powerhouse our going. where keys by we the ensuring brands our there Remaining the and brands, enable create our to partners marketplace consumer in retail consumer of our to speed we they consumers are adapt ensuring are the investing combined insights, to are in future.

Tim. that, attributes best to outlook on our efforts, more a initiatives. performance for Tim, large allocation, our refinancing things scale quarter, to who small year. financial now I fiscal about the and with of mentality leverage focus the provide the the unleashed With a where of will We critical are details over teams our organization for startup will will turn including capital

Timothy W. Gorman

good Thanks, Mark everyone. morning, and

In website available the provided our morning, deck earnings addition on as some also financial to additional release mentioned highlighting this slide Jackie metrics. we is a key

strong per of deeper than and share controls free topline, of and revenue As and and XX%. international organic of Americas auto Mark cost coupled $XX adjusted up more indicated, our grew than tailwinds, a cash segments our organically adjusted batteries earnings in with XX.X%, care the of flow look more both adjusted with currency $XXX favorable at XX% Taking million, $X.XX, XX% resulted growth up million. EBITDA

continue As in which categories the experience mentioned, we demand. elevated compete to Mark

distribution In quarters. sales benefited organic that also from our between began shipments well of last as addition, as gains shifting summer, some growth

and costs quarter million consistent from in the X.X%. margin, although the by mix, equipment with and necessary elevated as volumes, benefited freight, million, of and the margin End costs, these with approximately and tariffs fines year, first product improvement last decreased prior and air largely seeing points versus decline XXX off the is the we quarter. quarter basis this to gross penalties, versus year channel Finally, to resulted commodity impacts to gross margin was associated market. synergies are favorable global first the this currency as higher trends represented sales exchange a XX.X%, Gross from related $XX demand. sustained year rates. organic prior increased increased growth operating well costs, inflationary offsetting of of primarily the Adjusted meet Partially $XX COVID personal to incremental transportation customer sequential impacted cost protection

As will airfreight we believe first incremental penalties the we costs the significantly over the COVID remainder the quarter, diminish. exit from and fines and year of

tariffs, year, in prior items companies, X%. growth and additional as A&P the million impact the the included we the other in on pressures a total many remainder commodities, Consistent current strong cost quarter. or we X.X% dollar like However, primarily from absolute was net continue outlook. experienced line us year, anticipate due transportation $X in over with to up in X.X% percent and have versus support we priorities, increased of our our to these an sales the of A&P top to brands to our basis invest A&P with

in net $X.X offset SG&A primarily partially of sales by XX.X% driven absolute timing Excluding million, the quarter. This acquisition and the of the elevated in million associated to top with XX.X% was SG&A experienced current integration the in and percent overheads by travel to prior adjusted sales sales part was line expense dollar versus and cost, synergies an On a due COVID. $X of basis, due costs, the growth higher as year. increased lower

Mark million we the goods and of $XX $X with of synergies in realized quarter mentioned, As million sold $XX cost SG&A. million in in

completed we full auto of realize $XX In recognized to the excess nearly on incremental battery we million care to of $XX end year, realize million million to synergies. we total, by track the expect continue the $XX to remain and acquisitions $XXX of fiscal and million in For since have XXXX.

with debt over loan. billion new about markets in on existing rates, accommodating interest took debt annualized secured also million, term interest remainder we all a our of advantage anticipate of realized XXXX roughly fiscal unsecured with savings to our short-term and refinance Based million the XXXX. $X.X bonds the of to new We $XX $XX be

structure. flexibility certain debt capital additional We covenants agreement, also in amended will credit our which capacity create in our and

the of approximately to refinancing with cash quarterly million, of mentioned core cost balanced activities, planning debt our and activity, excluding approach our business, was fixed debt earlier in acquisitions. improved by to debt innovation, at the shares rates find business we million XXX,XXX down brand our capital $XX of $XX two quarter dividend excluding during XX.XX for net through an the of quarter performance bolt-on nearly credit down debt the debt through representing $XX shareholder drive price the million, investing to XX% building EBITDA [ph], a all projects of repurchasing and cost X.X%. of delivering million, $X.X paying in was and out the the quarter, activities. At we and modernize our Our EBITDA $XX of refinancing of to end X.X average finally of to the times, reflecting continue and And returns at total end finally, now drive billion, an approximately pay allocation

million result interest of part at undertook As be of range growth today, be also our particular like to be our look upper December, Adjusted continued X% are Beginning gross metrics; remains million the large Adjusted America second due stock. provided driven the $XXX in million as the the following to the in upper is from Adjusted at $XXX for the and is to our the to we demand million rebuild a sales XXXX through the provide more net $X.XX. the is we expense reminder growth previously a see of expected of capital line $X.XX strong flow $XXX to and year-over-year net start In in to year-over-year of previously of to of margin impacts. on impacts favorable sales and continue point end as our with have provided battery declines both share requirements, updating to to year elevated auto see expected and essentially cash rate products we elevated range for first XXXX. range those EBITDA to elevated we seen key demand you of and safety to $XXX to COVID. free quarterly of is fiscal outlook demand. in until phasing growth battery X%, demands, currency refinancing savings due flat now per expect the unchanged we organic quarter a XXXX, expected basis be in would a to by of level sales quarter care we North outlook. in end the full our in to we inventory of working XXXX earnings to regarding at for in which lap likely net expected will in remainder approach late normalized I

we will this margin better consistent The in rates, our them of expect to and year. quarter expect towards gross expected synergies, care. occur foreign With end lower of this late remain timing We COVID respect due begin battery in the rate the in was to of quarter of the order in costs, third currencies. to expectations second impact the favorable the gross the quarter than margin realization the and than throughout to

pandemic we remains components over fiscal year a respect and and year, While our commodities, great factor and to balance are the currencies, uncertainty costs. macro the there of with for deal including increasing the outlook impacts, the of of transportation full related

quarter, our us past confident increased incremental to chains long-term continuing focus than and [ph] categories COVID continue of to execution, the refinancing strong organic balanced remain and and finally costs the surety that geographies, improve debt first priorities improving include accommodative half debt deliver addressed the expanded growth months with capacity, that portfolio to of over the have have end value. across will allow actions with to more items by all that within allocation our seven We significantly and our supply control our approach the strategic are on shareholder due we and reducing We our capital continued distribution markets. drive taken to

to it for some turn over I remarks. closing Mark like Now, to back would

Mark S. LaVigne

on Thanks, demands In we the of pandemic capabilities period. uncertain a we the the while will very today Tim. post operating meeting focus of the to succeed need will environment, building in midst

the is testament Our the to world operating the our our the consumers shift, in of will that around performance deliver With call questions. colleagues first and a this I to quarter efforts during need make, open the that, time. for products

Operator

Instructions]. [Operator

RBC with Nik Markets. comes question from Please first go The ahead. Modi Capital

Nik Modi

Thank you. Good morning, everyone.

So are and between price the would mix. about the like balance volume the is thinking question you line doing. -- question look is top really The what hey, and how

One of promotions of seen last general been what's we've is this nine kind or eight months. resetting the generally given on things the of going

batteries And category. so historically seeing curious very promoted I'm been highly you're a evolve, given how the category just have

So of e-commerce just incremental kind could there? a environment of of of wanted kind on I they been thinking things bigger category, picture lot hoping consumption of on sales and are? distribution Thanks. has stay us important you And really your much an And just if update the how part impulse this to story. over the was way give given how such been new question get a an driving about it's some gains, context then nature within driving you're just

Mark S. LaVigne

that demand lower capture that with do. in with were improving costs, saw upside to in gross to we successful And the and margins. in mean, we were we we questions start growth. of do wanted started we there. what the top we line lot -- just execute a and there's QX Nik, really said Hey I'll incremental quarter with we we that, I to the going were able

executional soft was March QX. to expecting to then in comp a growth QX against were year. we half from ago, year really back up we're do So strong We QX to we we elevated organic into expecting mean, QX, as be comps from you going again, when get And pandemic QX. last and and foundation were just a I a is able when it but that. wanted hit were and the to get the of into the back

We phasing the So to to with in this that auto. the of we're economic A sure make on I continue said continue is There's year play vaccine consistent weather out the lot out, and to to provided new going we've to do the I to range But back the updated roughly monitor ways those. that there's November. phasing that the described. what half we're expect we of it still roll were uncertainty we going we the going analyze impact, with impact in still high we're the because of start We're mean, strong November. outlook virus. we to the of back expected the for. ready on the what the -- did, line in to in focused just year. executing with end ultimately, We

As distribution a through that from that started continued XXXX. you balance part in really elevated our experiencing of to both demand we're I fiscal gains gains demand be pandemic, of mean, of from distribution the spring mentioned, year the higher also but key continues the story. to last roll out the

our later of coming excited in the great on standpoint where e-commerce. to distribution new we're which about planogram some year. play to balance the from and We going about that's have feel to in going major the positioned will additional That gains most be over of distribution retailers of be includes continue XXXX. We out a

great not across well, and emphasize success We only that. auto on in also continue digital batteries, board in but the having lights care as commerce to

prepared was heard restatement. in remarks, database As there you the a

look to be previous sort withholding because take on strong in that before just really we sure They communicating a wanted as e-commerce results as been externally. that internal competitive of information hard at they on strong. we're that to our make But So are category we quarters. continue have

consumers environment of as And this shopping expect lot you more a online. would and are as more so in new momentum,

Nik Modi

Helpful, thanks Mark.

Mark S. LaVigne

Nik. Thanks

Operator

The ahead. next Nicholson Please question comes go Citi. from Wendy with

Wendy Nicholson

morning. good Hi,

of perspective, even as really are you from to have been beginning and some up I just to mean, first your see follow starts if wonder maybe Just at gains what thing I is kick anticipating but that, distribution back a huge, or either of point to would competitive a Duracell you've sort that aggressive, at for a you or more to starting contracts with any you able big got and see perspective whatever renewal, promotional gets point retailers, which from are be renew that, keep up is to intact? wow, any might coming negotiation you there a not say,

Mark S. LaVigne

I Well, competitor. been always a has Duracell would strong say

been has with out able not gain promotional distribution We years, on just flat. one the the investing focusing in that's well. seeing behind play of brands. probably over been I question out We're innovation last is and latest and answer by have promotional the from significant Nik couple environment fundamentals to my of as left XX environment this and The for weeks it

seen largest are and we is competitor same our We've and So promotional distribution And well. with brands. environment. benign investing stable, done you've the we've a seeing had what as with their in success emphasized innovation they've

that expect competitive biggest in and And environment to U.S. us as would a world. for continue -- the healthy competitive to the around well both as I our be competitor, so

no nothing seeing. change nothing, that we're So unusual and

Wendy Nicholson

in that's awesome the at enough, huge if Fair Tim savings. thinking? all actually you just further, Thanks. thought does the of just more But of refinancing, does in buying thought your sheet. capital on of That's follow-up, on process, even it it balance flexibility a debt does terms raising sort I or how for dividend back give on that the your allocation stock terms impact and can impact

Timothy W. Gorman

in process change around capital allocation. our thought no really Wendy,

we to balanced approach forward. move So as we'll continue maintain a

Wendy Nicholson

so Thanks much. Perfect.

Mark S. LaVigne

Wendy. Thanks

Operator

ahead. comes question next with Securities. from Bill Please Truist The Chappell go

Bill Chappell

Thanks. Good morning.

Mark S. LaVigne

Good morning Bill.

Bill Chappell

pantry they've consuming said months. that, as fast been for is loading, been you year of I past But buying. comp. There how a rest you've XX certainly as it's stock a up first what the batteries major as I and people initial the comparisons, I at cadence guess the look mean, understand I have of discussing past just the question, the the mean, their tough been hasn't least

devices, expect at kind or to their load do declines, everybody once why all, stop head initial year-over-year the expect pantry back unless kind and you you using if past April? of get So of of why early meaningful year-over-year March, would declines we

Mark S. LaVigne

think the of built into that just it's year, I half the the Bill. uncertainty back

was elevated in of settle the sort it into think period then demand. I surge March-April and did an time initial you

going think would were may that what be what pandemic. lower QX our than may demand still QX than the rates higher it to saw be relatively it's I throughout than base expect. But we growth before you be and what

work I think So I that's to look end demand what the not in big state a consumers what they in habits from as have is categories. as you're do are routines question folks may that be and like hear the us doing but of from that, the they is our we home, the of doing future, like pandemic today. are think adopted lot expect over the in many we And that batteries which that much seeing

side, settles we a battery unknown where and on from it's all be think of into it. where a back today. I just of but standpoint pre-pandemic the demand reversion And It's it in the where uncertainty with built So likely are were in. there some may somewhere question between that's the we

there where transition through state. have for. things then one demand what And QX there's preparing get that's And transition we I pre-pandemic. end I we today you beyond also do is QX But of cycle to that may how some think end we we're elevated to that's the be of saw where and what the state that to state. are the to end the in think

the about We we end think enough QX and X%. result, are that just changing data we analyzing need. multiple in the of just range X% in comes a we We're terms QX, for our to That's we ready have with to points to as scenario do different certainty of our the any why of just don't that scenarios. way. that it outlook called high But

Bill Chappell

off just was then I Got guess to know market little kind it. And of the and of the have care, And of been up maybe efforts your do your know season, in in ticking in business, flat. of it's category don't -- auto tick can lot surprised you I some but the to addition retailers similar because share as follow-up, to know third but share would gain you there of on the whole spring a up you a that resets to as mean, the to I share if see ownership I us year we I start expect front the tell second move just season, we to summer? the what

Mark S. LaVigne

that. We expect would

the to We those that's business. that, piece set disinfectants mentioned going additional mean, established. really pieces we've February, seasonality as innovation bit do coming I have to there innovation market. one which the March some exciting of timeframe be as are little going spring also with but resets of of are in to be are to It has a

into obviously it the as big doesn't a in of the part year, category season. overall for as of summer refrigerants you the does us in as part this As get play much

of the for we season. the would caught And you biggest sub-segment to that the as growth get one, that is yes, share share. spring in happen seasonality of up Most some important So appearance. us in expect the

Bill Chappell

Great, thanks so much.

Mark S. LaVigne

Thanks Bill.

Operator

Mohsenian Morgan Stanley. question with from ahead. next The Please comes go Dara

Dara Mohsenian

Hey, guys.

question. So first, just a detailed

at you raise lower If the in by in guidance, interest look top the than earnings less of guidance on be implied it's guidance. increase expense EBITDA will your what actually the

ahead pressure as then real would the you of costs some clarity balance further pricing and we if be expecting few the So the to And some some look just here is, a be tax thoughts understand the year, of we how of rate, at it's was to any the talk here, but there offset you're sort at helpful? offset of I over the what on the year, I commodity the commodity point, just what end to in about there particularly out question could as towards assume those taking any potential items, at are look fiscal positive and you next want can potential risk point this quarters?

Mark S. LaVigne

Tim. ahead Go

Timothy W. Gorman

we're Dara, of about roughly year. commodities on so the hedged balance Yes, for XX% the

first reflect the we question, that that outlook On interest the the out. on provided called benefit does we the

million And have does of pressures exist opportunity our the to so have roughly the the start invest given A&P we strong $XX do the outlook business. embedded the that that's cost in reflect or $X.XX. that back that some We about within have balance year additional the some we in investment in and

So hold and together. have the the provide year we components for outlook we that the all

Mark S. LaVigne

the We monitor may you've our us competitive question you've us of to in in opportunity that, And pipeline, in it this we'll pricing. drive the the also talk for factor past. is a on heard of opportunities be all backdrop the -- certainly innovation pandemic, the commodities, the look to environment always pricing Also, pricing opportunities over fiscal year, heard environment, try an with through. say, we'll of to there's that take Dara, future. if But of the do and continue that. analyze to And as about we'll in tough the there the currency, things backdrop balance

Dara Mohsenian

the a you where typical Thanks. year this year And that's versus of any sort on terms commodity fiscal as commodity thoughts the move through fiscal the basic great, helpful. in Okay, inflation ends or just of up pressure? year

Mark S. LaVigne

globally. think I up other You pressure opens seeing everyone like as some demand is companies, know,

where So, the zinc we're most steel. and pressure of on seeing is

And so provided. we that the that's factored outlook into

Dara Mohsenian

thanks. Great,

Operator

Please next comes ahead. Kevin go with Grundy from The Jefferies. question

Kevin Grundy

spend think the spent priorities a organization's -- time in think is morning, think Good should OPEX, something of level where currently some going in where sort the of those we and spend incremental analytics, marketing, which to about greater How this about is where of systems, P&L, up? follow be about Mark, the leaning investing it be capabilities, how advertising maybe is relative just analytic you I a on how behind be may on quarter. through investors to should etcetera. investment, to on some investments, thanks. moment the Thanks. of we is then should spend guys. and the will Great, Congrats flowing reallocation and going you the already

Mark S. LaVigne

lot underway. tools and sure already it's our create projects the and more supply seamless And them. about in than time are years. going to meaningful we're also that much the the it systems the scoped XXXX in modernizing to time are many have commerce me, the front make we it more across effective We've just with we the organization which and and than a everything to effectively. behind the team. where operations understands just a and supply process. balance we so in we end-to-end do that having on handoffs in eliminate by flows procurement has demand that access way data we sure provided built give real outlook be Feb Kevin, team, we into doing they and in certainly chain communication, a past. that to system real able have of operate for invested making and chain connection just is to seamlessly the in undertake to digital have But that through a better This [ph] that's organization the there digital the They're it's is more that an Excuse

All just to the to take with that's there. and us of create of intensive allows make insights, And want advantage out run faster. capital better process, us to it the allows business. out It us management, make we the allows sure we just working of that similarly forecasting take steps business less technology just to labor our decisions and

sure really to which are of really it's took So digital a hold modernize you with can host really behind it as there's front organization. things making facing a going digital whole do commerce. your that But

little You as with consumer becoming digital asked previous advertising. about digital mediums traditional connecting you the more as would We advertising, year bit we question a expect well. continue But, important. in more on the still did year to more is than digitally spend we spend a every and

You drive and And need we're to we well growth And future does able into personalize target foundation can messages sustainable in investing what sure those what to and more. the to make your consumers that more do more really to more it. future. that a is be that's and

Kevin Grundy

makes know batteries. follow-up, to a squeeze long-term question one. if this Got answer, difficult Mark, but sense. I it, I another that demand in Quick is can for

low believe, growth company So ago, about was down it's years closing and post about trends outlook and three ago. optimism hard cited potential. years around it single but spin, six was the stable The improving and to

So it to modestly. moved up flat to

trying a differences a the up potentially the world as then it any global have period As to updated all post category see on we through regional of consider But, and sit you. chain thoughts just and vaccine how you know here that. to I'll on? and U.S. today related demand, both across and pass keep costs to you been categories, respect Thank I and demand to your I the with wanted with of guys kind supply we get

Mark S. LaVigne

time Consumers causes is they it it's flat deal seen to question. devices in and In unlike acting batteries, for pandemic the incredible therefore that we are using a It and They a the are couple positive. extended one our rates of you've daily their about spending middle we've seen devices, consumers. slightly is Novembers lives. those outlook a change the updated for think for which long-term -- home, we they an great more Yeah, batteries to increasing of increased at really we differently more ago are anything those duration. buy out great demand are obviously, more of have and buying

don't what impact All it sound prudent long-term on of category. positive think I we're those based for today. experiencing are on call would the to and be us a battery But trajectory

demand. like, our habits settle should the impact where Certainly, lot for have a the transition see habits what consumers consumer they on of is continue, during this their looks and world I picked category routines. the battery a consumers, positive up I their vaccine think post feeling we a the from to in globally need going and But that are pandemic period. to believe there's

those I just want believe any question can that, about the we just sure that and long-term a handle we're get that but that also then But I on once have -- make for category. the for on long-term holds, We a out. hypothesis outlook magnitude standpoint from It's plays of scenario to that pandemic internal positive an should battery you ready impact the category. we can our update assure

Kevin Grundy

enough. guys. fair Thanks luck. Yep, Good

Operator

Morgan. question muted? muted connection. Andrea, you lost we've go I or Please J.P. are comes Andrea’s ahead. Andrea with next The she's Teixeira believe from

Jackie Burwitz

We if can Andrea, to back move logs next circle the we'll to in. back one, she

Operator

ahead. from Faiza comes Please question Deutsche go with next Alwy The Bank. Okay.

Faiza Alwy

morning. hi. Good Yes,

be? for So, first to which X%. And clarify X% that to higher does I and include Is outlook end sorry us acquisitions, impact I just am those sales, I just in help how does could if of it net wanted I detailed or big the missed the think out if that of FX? organic acquisitions include you're frame very acquisition release. might sort press saying you your

Timothy W. Gorman

acquisitions and inclusive tailwinds. of currency is It the Faiza. Thanks

basis look you at relative those, XXX acquisitions, about if So points it QX. was to of both in

the that a likewise the use do You a we tailwind year, proxy to can balance expect the and for as the of then over of balance be year. currencies

Faiza Alwy

just, And the about I great. international a your for outlook little Okay, to then talk bit business. wanted

replenishment, of and about specifically year, retailer So, trends markets, you of seeing sort how care? both business in Was it for lagged significantly for up you was the there for that growth like, the do of underlying had are year, rest were emerging you auto maybe batteries quarter. sort this I significant and about -- and had thinking it think in batteries all demand think how there

Timothy W. Gorman

business. I of international markets a way. meaningful mean, saw up, more back you what the is benefit the in the opening For again

across and in So distributor all international markets all of saw segments strong growth the growth. developed our showing developing we with

to I continue. think that we expect would

disruption forward some BREXIT January You year. the lockdowns. well. as last -- of don't our also into well because did the lockdowns pull are think February in And with more of little the that they bit of there January, markets We of on impact seeing probably from as as like some those restrictive was will a business in some have December

So continue in QX and I the trends would to much think expect likely. QX to we see

on going obviously between get of what to start comps So in terms Americas growth, the to QX, into saw QX we and in international then you're segment. differentiating

the less auto growth in healthy a Americas smaller would expect and business I QX in so impacted auto but perspective. base rates care, seeing to negatively care. than from And in battery you'll the comp On what we're QX see be

growth you've business. heard XXXX see As It's international us. great in, start, is an we the expect past, for the in would opportunity a talk about international exciting auto I growth for think us in care the and nice in off to to care auto

Faiza Alwy

then just clarification outlook. And Okay, another the on great. sales

high of low you're Is end. effectively? given think and the auto the the that, batteries talked upside the high to now at X being about think we I previously X end, end had you the about being batteries at that and is from should how at care there coming

Timothy W. Gorman

driven really by That's It's demand being batteries. in right. strong the

end the headed So the range. where low we the moving are end the range at it's of towards high now of

Faiza Alwy

you it. Thank Got so much.

Operator

with Tong ahead. next The Olivia question of comes from America. go Please Bank

Olivia Tong

about visibility helping, up go cadence pricing question are because like COVID Thank year but bit on is everyone. a of on you should could happen, more for clearly you. is right My some gross costs for little It challenging logistics bit if costs we've now. the also related synergies sounds seen the and the to margin, commodities talk obviously a

like fiscal sounds worse wanted for to be certainly just you're and expectation a XXXX, the there? for prior color hinting so should bit margin I if gross little give can flat more you So, that Thank see the you.

Mark S. LaVigne

change outlook that the we gross the would to indicated year. November, gave that didn't balance ago. be versus year. for of So outlook for outlook When a holding in full flat year the Olivia, we margin We're the our same we

relative well that talked synergies. Offsetting costs have commodities as we pressures right, QX, in that to tariffs benefits QX and lapping we the the occurred as and COVID and the costs. about that is You're do transportation of cost

the companies. well. that November as And seeing in then you're we called across think out impact I we the also of that number have mix

lapping the those year. balance the and of COVID so are And the expect over two that the of benefits offsetting benefits the cost synergy factors we

Olivia Tong

you. in of Thank specific this a Got to your is talk considering And care? well bit little channels disinfectant you then that you the or as auto-related can you remarks, acquisition on household it, plan it. about you auto and leveraging prepared mentioned are expansion how outside

Mark S. LaVigne

That with about have disinfectant, acquisition. degreasers, there's expertise in excited a generate to range the but business, provides some expected in the companies. the and that was retailers is cleaners, care other which innovation technology a I nice of odor which really they company, addition million where auto X licensing household EBITDA have. also portfolio major a it and CPG formulation their They through million an existing was arrangement as X formulations really the to that great We're they on disinfectant roughly elimination, and Olivia. was focus mean, Thanks technology a that primary they pipeline. commercialize to had that

counterparties we that help part continue to further and licensing drive that will we business that to additional drive expect business. so to that them of And

their taking technology, infusing into portfolio, it really and future. opportunities care a and of auto the is interest But shape us Our helping in exciting lot there. that our lead

in is on licensing making helping we core right portfolio is, sure arrangement in with and them invest now our auto focus also which that then care. Our business, retailers. and their lean But

Olivia Tong

you. Thank it. Got

Operator

from comes Please ahead. J.P. with question Morgan. next The go Andrea Teixeira

Andrea Teixeira

apologies hope and you before. now. Thank I hear can you me

synergies. a and -- So auto then follow-up synergies for Mark on clarification the care a I on the the for outlook have

bridge, care? earlier the then thinking you the understand outlook how should in you. an cycle, I'm forward an a the And can on the been for First, how margin be synergy and we good components? COGS the had negative us we've batteries, thinking idea going this has if thinking mostly, upside be all we innovation, of obviously should pretty Thank you how potentially the like within then give auto changes from of I that gave, batteries on that on the question, but you're more help I outcome of synergies, going coming side, with us the you to color appreciate going think so care think auto made I

Mark S. LaVigne

that, cover first over for one part the to can Andrea. I turn Tim the of and it second

care they magnitude from auto an of say of comps. beginning perspective pandemic I into top-line mean, comp care different yourself a But favorable But easier QX, the had last from the further well then the phasing year, an battery that get more our increase elevated demand very activities. the and as think also, I really and do as orders have cleaning time at weather had QX you period. March, it of has with similar. but tough would auto I also you in it's April business. just summer, given looks the percentages

the So we on for and batteries QX-QX would auto phasing period, did time the care why that expect we've is we both guidance top provided a tough times in which the line.

Timothy W. Gorman

COGS Yeah, million realized of and $XX million, QX $XX was in and that on $X in was synergies we in million SG&A.

million Over that the composition. same the XX year be of million XX to balance roughly will the remaining

So two in SG&A. roughly in thirds COGS and the balance

Andrea Teixeira

helpful, you. That’s thank

Operator

with Jason Sachs. Goldman next comes English from question Please go The ahead.

Jason English

Hey morning. guys, good

Just housekeeping of questions quick a here. couple

got First, you working you've working capital, there? release, happening in the what's that you I referenced pre-cash expense higher capital press can mentioned think -- interest but explain you holding steady,

Timothy W. Gorman

is Yeah, the with demand elevated had. we've that this Jason

of investment an to safety in make inventory to We get levels expecting normal are kind to back levels. snuck our

what anticipated range of free in the why that's flow balance and cash the And in we where that's it the we're have November. year holding was so

Jason English

Okay.

related $X COVID you benefits. that SG&A I cost on up SG&A, then think million And you to SG&A That What's of XX% underlying $X.X causing in inflate in SG&A. have quarter, then also Okay. relief your an year-on-year, this is referenced those excluding much? and synergies million basis implies so

Timothy W. Gorman

there's components. variety Yeah, of a so

timing then higher also look SG&A. differences year-over-year, we're that and look seeing at as incurred, if growth just inflationary The the seeing We're there's cost first being the line of being quarter-over-quarter. top is you pressures some normal you timing driving

is for with -- the we in the provided full October what in in consistent outlook outlook provided in SG&A we line that November the year So November. with

Jason English

Okay. I Thanks a pass it will on. and lot

Operator

Ottenstein Evercore. ahead. question comes next go from The Rob with Please

Robert Ottenstein

thank Great, very you much.

you're obviously, think you distribution sort batteries, First internationally? talk retailer. the entering, in prominent Can Sam's distribution U.S. in on auto give magnitude who more little bit of very and Club us little maybe in entered question, a please or you important bit year last I both and gains in can detail the batteries the the the of and about size terms you a gains, mid of for

Mark S. LaVigne

expand directional also expand losses in it's a wins we like to in last as of to couple to distribution both our were some of space that get to jump care. been care as able auto number number the because channels. out favorable of speak is able also were digital sort that's true, more this distribution provide out our make as measured distribution, batteries Obviously a there. and online auto were specific team as to from And And international center. we distribution but care in were that can improve major are We business headway retailers has enter we unmeasured you of able places. broadly well expanded or great the distribution able distribution in continue. retailer year of commerce of growing to and it but in universe to expect We over retailers In online. then developments, unmeasured club Same speaking, And our and both we into able to would home get true don't auto in there. and customer in different comes or markets balance well. we were XXXX, I play to and able Well, terms a saw

get you but better to distribution, major retailers in in U.S., many in You UK, that and the distribution just similar very have markets size were distribution like do able don't that the scale gains we the market. the of in expanded

Timothy W. Gorman

care Rob, that organic that had of distribution this is we've called between out the quarter. battery combined And the we auto about growth X.X% driving and

Robert Ottenstein

thought with I would Is read you. try that last you mitigate that and anything tools do mix package any your point you Thank can a other revenue that quarter And headwind is or to second, and still channel things XX a mix Terrific. current margins. basis mentioned that? think there then to of management that about you be to

Mark S. LaVigne

continuing in mix bit the are seeing more standpoint pressure terms we elevated of with little Rob, shopping. a are demand where a from consumers

standpoint. both as I as You're that mean, revenue a we're at to on. managing are looking package a well standpoint going that mix spot the from things be

foremost we're surety we are look longer that for term tactics other of moving mitigation on working first teams can was supply So and to employ. and

Robert Ottenstein

you Thank very Terrific. much.

Mark S. LaVigne

you. Thank

Operator

The next from question Raddell comes William with Please go Bank [ph] ahead. of America.

Unidentified Analyst

ones. just two Good have quick morning. I

The have been first one, sales strong. really toy

categories to I that think categories the for do specifically? the that's much of the you guys, how is important is sense sales to experienced device of which you've you of one that have one due a category growth --

Mark S. LaVigne

home decompose to consumers that universe health device in It's to their level. it we hard mean, more I home trends. lot hygiene trends, what devices, that have office at see home, trends, it's the of in continue they can buy related a home if to

devices it's toys, is obviously from those surveys how Novembers and we a Day seeing broken provided of the it gaming we as well. in home two a our related sort deck plays to But are if you the where can provided There ago and page down. that that Investor we send helpful. to in Certainly haven't increase role device items. those in controllers You're internal

Unidentified Analyst

search that. can for I Okay,

year wait to you're going still that now integrating you're M&A you be given is, additional five this through Are point the will times year. one for auto before the integration other continue is above to to where The this acquisition through additional you still evaluating opportunities get at opportunities? the looking or leverage care

Mark S. LaVigne

are we think at opportunities. I always looking

plate I and lens an the and organizational to two on was were an last put do think of able acquisition. they that. we're any can we important. bolt-on from make they take an we manageable same future whether mean, opportunities We're manageable are strategically levels also a we debt the I doing from through. and are leverage organizational debt within sure handle its acquisitions levels when were organization sure we was lenses it what always to manageable standpoint, these has that make from deals mindful were mindful standpoint. all quarter the manageable of It we Those on would that standpoint,

Unidentified Analyst

commentary. from That's you. Thank me. all helpful Great,

Operator

The next with Please Carla Morgan. JP from question comes go Casella ahead.

Carla Casella

more little the capital your working on on thoughts Hi, clarification for year. bit just a

but coming, you the to you all changed at do also terms those -- days revert and So the payable you did go you normal your as expect rebuild have year? to we you've through more mentioned that have inventory

Mark S. LaVigne

capital, so but our haven't noticeable working terms cycles. changed we all receivable accounts haven't seen and We changes to continue payable, manage accounts including on and components teams of payment any

Carla Casella

Can any to running was Okay, bit on us this then that great. timing come versus little you below quarter give in a And CAPEX one you're rate and the your guiding the also cash another? for year. special flow, quarter for projects a that sense would

Mark S. LaVigne

the year, look in and line I'll of of our terms call over significant we No that amount QX -- with the year was expectations. in the the cadence of full balance amount,

Carla Casella

Okay, and I see much prices gas do business the recent given the impact on had question auto of the increase you in stresses? state one care some with see side, we kinds restrictions, on when those sell-through of

Mark S. LaVigne

that, keep general can flying. for is see of I of from right as going to think there's extent an are method going a driven. can. you preferred just that to the including, that lot increased the more that number opposed of to and of seeing travel counterbalances I And key many prices people terms miles impact. in driving mean, But you You driving travel. to right driver be more are in people miles now And to as now

So an the takes increasing, people ultimately gas is it have can off miles but the road. prices impact if driven elevated

Carla Casella

you. Thank

Operator

back question-and-answer conference turn This for session. concludes Mark LaVigne any like to the to I remarks. over the closing would

Mark S. LaVigne

for us and your Thanks in joining Energizer. today interest

Operator

concluded. now presentation. The today's attending you for conference has Thank

disconnect. You may now

Energizer (ENR) 8 Feb 212021 Q1 Earnings call transcript