Energizer Holdings, Inc. · NYSE:ENR
Energizer — Energizer SpinCo — Investor Presentation (June 2015)
101 slides from Energizer's investor presentation, Jun 2, 2015
Slide 1: The New Energizer
The New Energizer PAT MULCAHY Chairman of the Board
Slide 2: Presentation of Information; Forward-Looking Statements
Presentation of Information; Forward-Looking Statements Unless the context otherwise requires, references in this presentation to “Energizer,” “New Energizer,” “we,” “our,” and “the Company” refer to Energizer SpinCo, Inc., a Missouri corporation, and its subsidiaries. Unless the context otherwise r
Slide 3: Energizer Holdings, Inc. has a strong legacy of shareholder value creation
Energizer Holdings, Inc. has a strong legacy of shareholder value creation Since spin off from Ralston Purina in March 2000, Energizer Holdings, Inc. has: Distributed $317 million to shareholders via quarterly dividends Repurchased $2.8 billion in stock opportunistically (57 million shares at an ave
Slide 4: We expect the separation to drive long-term value for our shareholders
We expect the separation to drive long-term value for our shareholders Focus on Distinct Commercial Opportunities Creation of Independent Equity Currencies Management Focus and Separate Capital Structures Allocation of Financial Resources Targeted Investment Opportunity Unlocking Full Shareholder Va
Slide 5: We have a strong Board of Directors with the right blend of continuity, fresh perspective and independence
We have a strong Board of Directors with the right blend of continuity, fresh perspective and independence Six current Energizer Holdings, Inc. members Pat Mulcahy Chairman of the Board Bill Armstrong Jim Johnson John Klein Pat McGinnis John Roberts Three new independent members that bring fresh per
Slide 6: We have a seasoned executive team with a wealth of diverse experience
We have a seasoned executive team with a wealth of diverse experience to guide the new company Alan Hoskins, CEO 33 years at Energizer CEO of the battery business since 2011 Previously led North America and Asia-Pacific divisions Global sales, marketing and operational experience Mark LaVigne, COO 1
Slide 7: Our agenda for today
Our agenda for today Alan Hoskins New Energizer’s Value Proposition Energizer’s Brands and Global Leadership Position Enhancing Value Across Our Chosen Categories and Channels Mark LaVigne Driving Momentum Across Our Operations and Organization Brian Hamm Delivering Total Shareholder Return
Slide 8: The New Energizer
The New Energizer ALAN HOSKINS Chief Executive Officer
Slide 9: Our agenda for today
Our agenda for today Who We Are New Energizer’s Value Proposition Our Brands and Global Leadership Position Why We’ll Win Lead with Innovation Operate with Excellence Drive Productivity Gains How We’ll Deliver Long-Term Value Focused on Free Cash Flow Committed to Returning Cash to Shareholders Dedi
Slide 10: We are an innovative, brand-driven Household Products company
We are an innovative, brand-driven Household Products company Revenue ~ U.S. Value Share 2014 5,200 33% 15% $1.8Billion customers served, in a consolidated in a highly fragmented reaching balanced between U.S. and global markets battery industry lighting products industry BILLIONS of Free Cash Flow
Slide 11: Talented and deep management team ready to execute
Talented and deep management team ready to execute Alan Hoskins CEO Sue Drath Chief Human Resource Officer 23 years in human resources Brian Hamm Chief Financial Officer 17 years in consumer products, previously Chief Accounting Officer Mark LaVigne Chief Operating Officer 15 years as a strategic ad
Slide 12: New Energizer has a compelling value proposition
New Energizer has a compelling value proposition Driving results for our shareholders, customers and consumers Powerful dual brand portfolio Global scale and leadership position Deep Board and management team expertise Track record of cost savings and productivity gains Top-tier free cash flow perfo
Slide 13: Our business is built on two iconic brands
Our business is built on two iconic brands Billions of consumers around the world prefer the Energizer and Eveready brands and purchase them to meet their power and lighting needs After 26 years, the Energizer Bunny keeps going and going, generating millions of impressions each year Source: Nielsen
Slide 14: Consumers prefer branded products in our categories
Consumers prefer branded products in our categories Reinforces the need to invest behind our brands to drive category value U.S. HOUSEHOLD BATTERY CATEGORY (share in US $) Premium Brands (incl. Performance) Price Brands Private Label Batteries account for about 3B $ in US retail sales(1) annually, w
Slide 15: Our broad portfolio of products is uniquely positioned
Our broad portfolio of products is uniquely positioned ESTABLISHED BROAD PRODUCT PORTFOLIO ENR SALES BY PRODUCT SEGMENT (percent of net sales in 2014) 16% 17% 50% Premium 17% Performance Value/Price Specialty & Lights Brand & product portfolio competes across all consumer segments Premium • Premium
Slide 16: Energizer products provide an un-matched consumer experience
Energizer products provide an un-matched consumer experience across its battery and lighting portfolio #2 in Portable Lights #1 in Rechargeable #1in Lithium in the growing # segment of 1specialty batteries World’s st 1in Recycled #2 in Premium Source: Nielsen Global Track 52-weeks ending March 2015
Slide 17: Eveready provides a portfolio of quality products families can trust
Eveready provides a portfolio of quality products families can trust at an affordable price #2 in Value Alkaline Powerful second brand in portfolio that appeals to consumers across many segments #1 in Carbon Zinc Source: Nielsen Global Track, 52-weeks ending March 2015.
Slide 18: Energizer and Eveready brands are #1 or #2 globally
Energizer and Eveready brands are #1 or #2 globally Dual brand portfolio strengthens our market position VALUE SHARE IN SELECTED COUNTRIES Our products are sold in more than markets around the world CAN USA MEX COL ARG GB ITA FRA EGP GRE SING KOR HK MAL AUS NZ Source: Combined value share data from
Slide 19: Our revenues are balanced across markets
Our revenues are balanced across markets NORTH AMERICA vs. INTERNATIONAL (percent of net sales in 2014) 51% 49% North America International DEVELOPED vs. DEVELOPING (percent of net sales in 2014) 75% 25% Developed Developing TOP 10 vs. ALL MARKETS (percent of net sales in 2014) 28% 72% Top 10 All Ot
Slide 20: Category volume trends have recently stabilized
Category volume trends have recently stabilized As the number of devices and replacement frequency has flattened VOLUME TRENDS ARE DRIVEN BY THESE EXTERNAL FACTORS Demographics Devices Disasters
Slide 21: Category volumes and value trends are improving in latest week data
Category volumes and value trends are improving in latest 12 week data GLOBAL HOUSEHOLD BATTERY CATEGORY VOLUME (percent change) 1.7% -1.4% Latest 52 weeks Latest 12 weeks GLOBAL HOUSEHOLD BATTERY CATEGORY VALUE (percent change) 1.5% -1.8% Latest 52 weeks Latest 12 weeks Source: Nielsen Global Track
Slide 22: There are more than billion devices in U.S. consumer homes
There are more than 1 billion devices in U.S. consumer homes Large installed base that requires regular battery replenishment Toys, Games 18% Remote Controls 13% Flashlights 7% Smoke Alarms, Clocks 5% Digital Cameras 4% Top 20 Devices Wireless Mouse 3% Account for about Health** 3% 55% Radio 2% of b
Slide 23: New devices that use primary batteries are emerging
New devices that use primary batteries are emerging Further opportunities for our categories EMERGING DEVICE CATEGORIES
Slide 24: Our agenda for today
Our agenda for today Who We Are Why We’ll Win How We’ll Deliver Long-Term Value New Energizer’s Value Proposition Our Brands and Global Leadership Position Lead with Innovation Operate with Excellence Drive Productivity Gains Focused on Free Cash Flow Committed to Returning Cash to Shareholders Dedi
Slide 25: We’re a global household products company with a unified direction
We’re a global household products company with a unified direction … Mission Strategic Priorities Connect our brands, our Lead Operate Drive people and the with with Productivity products we offer to the world Innovation Excellence Gains better than anyone else Focus on maximizing cash flows, and Ob
Slide 26: … and financial objectives aligned with our business strategies
… and financial objectives aligned with our business strategies Topline Grow ahead of the category Margins Maintain or Improve SG&A % of Sales Maintain or Improve EBITDA Low single digit growth Working Capital 11% to 13% of sales Free Cash Flow 10% to 12% of sales How we manage our business will tie
Slide 27: Energizer has a clear strategy to drive value creation
Energizer has a clear strategy to drive value creation WHERE WE’LL PLAY Customers Markets Categories HOW WE’LL WIN Achieve leading distribution Drive top-tier consumer preference and conversion Relentlessly focus on cost savings and productivity gains Operate with excellence Build a team for long-te
Slide 28: We’re a global household products company with a unified direction
We’re a global household products company with a unified direction Mission Connect our brands, our people and the products we offer to the world better than anyone else Lead with Innovation Strategic Priorities Operate Drive with Productivity Excellence Gains Objective Focus on maximizing cash flows
Slide 29: Our mandate for winning in power and light
Our mandate for winning in power and light Giving consumers a better overall performance BATTERIES LIGHTS Long AND RESPONSIBILITY Lasting RELIABILITY QUALITY Bright AND LONG LASTING QUALITY DURABLE USER FRIENDLY
Slide 30: Through consumer insights, we identify needs and bring innovative solutions
Through consumer insights, we identify needs and bring innovative solutions to our categories better than anyone Max Long Lasting AND In Device Leakage Protection EcoAdvanced Our Longest Lasting AND World’s 1st Battery Made With Recycled Batteries Lithium The world’s longest-lasting AA and AAA batte
Slide 31: We’ve extended our powerful brands through strategic licensing partnerships
We’ve extended our powerful brands through strategic licensing partnerships to broader categories Lighting Batteries Connecting Charging Solar Bulbs Automotive Automotive Cables Household Batteries Chargers/Inverters Photo Accessories & Batteries Gaming Chargers USB Chargers Gas-Powered Generators P
Slide 32: Investing in innovation maximizes category value
Investing in innovation maximizes category value Drives our topline performance and improves our brand equity GLOBAL ADVERTISING & PROMOTION SPEND (as percent of sales) 6.6% 6.3% 5.3% 2012 2013 2014 ENR GLOBAL VALUE SHARE +1.2 +0.5 Last 52 weeks Last 12 weeks ENR U.S. VALUE SHARE +1.6 +1.3 Last 52 w
Slide 33: We’re a global household products company with a unified direction
We’re a global household products company with a unified direction Mission Strategic Priorities Connect our brands, our Lead Operate Drive people and the with with Productivity products we offer to the world Innovation Excellence Gains better than anyone else Focus on maximizing cash flows, and Obje
Slide 34: We create value for our channel partners
We create value for our channel partners PROFITABLE LARGE-SCALE HIGH BASKET HOUSEHOLD BUILDER PENET RAT ION Battery category is one of the largest and most profitable at retailers. Batteries can be found in more than 80% of all U.S. households. Batteries provide healthy margins and are a basket buil
Slide 35: We have a large and diversified channel/customer base
Source: Form 10 and internal data. We have a large and diversified channel/customer base Our products are delivered across retail trade channels BROAD, DIVERSE DISTRIBUTION Sporting DIY Goods Military Traditional Online Trade Food/ Hobby/ Drug/ Craft Energizer Mass Con- Club venience Office Dollar H
Slide 36: We will continue to invest and deliver best-in-class category execution
We will continue to invest and deliver best-in-class category execution Our products are sold in multiple locations throughout the store Best-in-class category execution CUSTOMER ENGAGEMENT EXECUTION VISIBILITY SHOPPER BASED CATEGORY SOLUTIONS FUNDAMENTALS
Slide 37: We’re a global household products company with a unified direction
We’re a global household products company with a unified direction Mission Connect our brands, our people and the products we offer to the world better than anyone else Lead with Innovation Strategic Priorities Operate with Excellence Drive Productivity Gains Focus on maximizing cash flows, and Obje
Slide 38: We’ve significantly reduced our working capital needs, improving cash flow
We’ve significantly reduced our working capital needs, improving cash flow WORKING CAPITAL (as percent of sales, average trailing four quarters) 2011 22.9% 2012 20.0% Freed up 2013 15.8% ~ $ 185 2014 12.7% million in cash flow from 2011-2014 Reduced working capital requirements by 10.2 percentage po
Slide 39: Our efforts to date have led to significant cost savings
Our efforts to date have led to significant cost savings Household Products’ cumulative restructuring savings ~ $185 million >$210 million through FY2014 through 3/31/15 Source: internal data.
Slide 40: These restructuring efforts have helped enhance our healthy margins
These restructuring efforts have helped enhance our healthy margins HOUSEHOLD PRODUCTS GROSS MARGIN (as percent of sales) +430 46.2% basis points 41.9% + 200 bps + 90 bps 2011 2012 2013 2014 Adjusted manufacturing footprint to reduce duplication Streamlined global supply chain Created center-led pur
Slide 41: Global areas of focus to drive productivity gains
Global areas of focus to drive productivity gains Trade investment Working capital management Global Areas of Focus 3 SG&A optimization Procurement Integrated supply chain
Slide 42: Our agenda for today
Our agenda for today • New Energizer’s Value Proposition Who We Are • Our Brands and Global Leadership Position • Lead with Innovation Why We’ll Win Operate with Excellence • Drive Productivity Gains • Focused on Free Cash Flow How We’ll Deliver • Committed to Returning Cash to Shareholders Long-Ter
Slide 43: Our efforts to date have made us a leading cash flow generator
Our efforts to date have made us a leading cash flow generator HOUSEHOLD PRODUCTS FREE CASH FLOW (as percent of sales, prior fiscal three-year average) Peer 1 14.0 EHP* 12.6 Peer 2 10.4 Peer 3 9.8 Peer 4 7.4 Peer 5 7.2 Peer 6 6.3 Peer 7 6.2 Peer 8 5.2 Healthy gross margins Successful reductions in w
Slide 44: We will be prudent stewards of capital
We will be prudent stewards of capital Disciplined approach to capital allocation Deliver VALUE Selective, Reinvest in Return of Disciplined our business capital M&A Maximize Free Cash Flow Relentless focus on delivering value to shareholders, customers and consumers Pillars to our success Our found
Slide 45: Our key takeaways
Our key takeaways Execute our game plan Build for long-term success Deliver long-term value to shareholders, customers and consumers Lead with innovation Operate with excellence Drive productivity gains First fiscal year is a year of transition Remain focused on maximizing cash flow Reinvest in the
Slide 46: Why we’re excited to be a part of the new Energizer
Why we’re excited to be a part of the new Energizer
Slide 47: The New Energizer
The New Energizer MARK LAVIGNE Chief Operating Officer
Slide 48: We’re building upon our rich legacy to craft the next chapter as a standalone company
We’re building upon our rich legacy to craft the next chapter as a standalone company Proactive in improving the way we operate and how we perform Leverage the separation as a catalyst to better prepare our business to win Provide clear focus and solid foundation to achieve our goals
Slide 49: We’re focused on profitable share growth by winning in key markets
We’re focused on profitable share growth by winning in key markets and with key customers SEGMENT NET SALES (% of FY14 net sales) 1.8 $ Billion 19% 49% 23% 9% North America Latin America Europe, Middle East, Asia-Pacific (LATAM) Africa (EMEA) Half of our sales are generated outside North America Foc
Slide 50: We’re also re-aligning the new organization to best serve our markets
We’re also re-aligning the new organization to best serve our markets based on size and scale FY14 SEGMENT PROFIT MARGIN NORTH AMERICA 29% ASIA-PACIFIC 28% EMEA 15% LATAM 16% DRIVERS • Scale • Premium brands • Modern Trade • Dual brands • Significant share • Private label penetration • Complexity •
Slide 51: Our operations will enable and reinforce long-term, sustainable shareholder value creation
Our operations will enable and reinforce long-term, sustainable shareholder value creation FROM TO Where • Optimize battery performance • Concentrate on the core We • Diversify into faster-growing • Focus on priority categories, markets Focus personal care categories and customers • De-centralized b
Slide 52: Three-step process to deliver results
Three-step process to deliver results STRUCTURAL RESET 1 Establishing the right operating platform for the New Energizer SUPERIOR PERFORMANCE 2 High-impact initiatives to enable efficient operations and continuous productivity gains READINESS TO WIN 3 Winning mindset and high-performing company cult
Slide 53: Three-step process to deliver results
Three-step process to deliver results STRUCTURAL RESET • Commercial model transformation 1 Establishing the right operating platform • Efficient service delivery model for the New Energizer • Integrated supply chain model • Balancing internal / external manufacturing SUPERIOR PERFORMANCE 2 High-impa
Slide 54: We’re adjusting commercial footprint to streamline operations
We’re adjusting commercial footprint to streamline operations; prioritize markets and customers What actions were taken Why What does it mean • Shifted to a geographical hub • Align structure with our • Prioritize certain markets structure new scale and customers • Transitioned select markets to a •
Slide 55: We’re adopting a differentiated commercial approach
We’re adopting a differentiated commercial approach 1 COMMERCIAL MARKET CONDITIONS & APPROACH COMPETITIVE POSITION • Improved focus • Largest markets Lead • Leading share position, high brand relevance on major Invest and grow • Concentrated retail landscape markets and MARKETS >90% • Mid-size marke
Slide 56: We optimized our structure by right-sizing and rolling up resources
We optimized our structure by right-sizing and rolling up resources previously embedded in each market PRE-SPIN MODEL Corporate / Executive Leadership Regional Functional Leadership Leadership Market Execution Market Market Market Market Function Function Function Function POST-SPIN MODEL Corporate
Slide 57: We’re using shared services and centralization
We’re using shared services and centralization to drive productivity across all enabling functions 1 IMPROVEMENT Adopted center-led model to drive efficiencies and accelerate decision-making Moved support functions to shared services to create leverage-able scale CHANGES • Globally integrated market
Slide 58: Since 2011, we’ve optimized our overall manufacturing footprint
Since 2011, we’ve optimized our overall manufacturing footprint and end-to-end supply chain PRE-RESTRUCTURING 14 4 41 ~6,100 Manufacturing Internal Distribution Manufacturing plants Packaging centers Colleagues* facilities TODAY 7 2 30 ~3,800 Manufacturing Internal Distribution Manufacturing plants
Slide 59: We’re striving to provide the best product availability at the lowest possible cost
We’re striving to provide the best product availability at the lowest possible cost COST OF GOODS SOLD (% of FY14 net sales) $990 Million 62% 38% Finished goods, packaging Labor & benefits, overhead, and and consumable costs other indirect costs SUPPLY CHAIN IMPERATIVES Drive productivity with conti
Slide 60: We have a global manufacturing footprint
We have a global manufacturing footprint that offers scale, drives lower cost and offers flexibility Westlake, OH Bennington, VT St. Louis, MO Shenzhen, China (2) Asheboro, NC Egypt Singapore Indonesia Global Headquarters R&D Manufacturing
Slide 61: Post separation, we’ll operate under a center-led integrated supply chain model
Post separation, we’ll operate under a center-led integrated supply chain model CHIEF SUPPLY CHAIN OFFICER Global Sales & Procurement Manufacturing Supply Chain Operations Planning Centers of Excellence / Business Services Empowered & Disciplined Flexible & Operating with Accountable Standardized Pr
Slide 62: We’re evolving our manufacturing strategy
We’re evolving our manufacturing strategy to balance internal capabilities with targeted outsourcing KEY TAKEWAYS 1 Significant progress made since 2011 2 Continue to proactively optimize our structure to align with business needs 3 Maintain good balance through a mix of internal and sourced manufac
Slide 63: Three-step process to deliver results
Three-step process to deliver results STRUCTURAL RESET 1 Establishing the right operating platform for the New Energizer • Trade investment SUPERIOR PERFORMANCE • Working capital management 2 High-impact initiatives to enable efficient • SG&A optimization operations and continuous productivity gains
Slide 64: New approach to trade investment
New approach to trade investment to optimize topline performance It’s our continuing journey Ownership Visibility • Revenue management • Trade promotion • Clear ownership / management tool accountability of pricing • Post-event analysis – building Profitable ROI-based best practices Share Process Ex
Slide 65: We’ll continue to focus on cost reduction and margin improvement
We’ll continue to focus on cost reduction and margin improvement Relentless pursuit of lower COGS enabled by: • Adopting lean manufacturing practices globally • Eliminating non-value added activities • Streamlining manufacturing overheads • Increasing asset utilization through improved balance of in
Slide 66: We’ll maintain disciplined approach with SG&A
We’ll maintain disciplined approach with SG&A with further optimization possible SG&A % SALES(1) (latest fiscal year ended) 35% 30% 25% 20% 15% 10% 5% 0% Peer Peer Peer EHP Peer Peer Peer Peer Peer 1 2 3 4 5 6 7 8 Zero-based budgeting Functional and geographic benchmarking Internal staffing where ex
Slide 67: Significant progress in improving working capital
Significant progress in improving working capital to date … further upside available in DII DSO DAYS DPO DAYS DII DAYS • Standardized credit terms • Standardized payment terms • Higher due to manufacturing for all suppliers footprint changes/time on water • Applied supply chain • Battery aging proce
Slide 68: Three-step process to deliver results
Three-step process to deliver results STRUCTURAL RESET 1 Establishing the right operating platform for the New Energizer SUPERIOR PERFORMANCE 2 High-impact initiatives to enable efficient operations and continuous productivity gains READINESS TO WIN • Ready to operate independently 3 Winning mindset
Slide 69: We are ready to operate independently
We are ready to operate independently 3 Clarity of purpose and objectives • Focused goal of maximizing free cash flow • Management committed to driving value • Enhanced operating model Business realigned for success given • Lower complexity and efficiency gains reduced scale resulting from spin • Ri
Slide 70: Executive compensation aligned with shareholders’ interest
Executive compensation aligned with shareholders’ interest and long-term financial goals ANNUAL TARGETS LONG-TERM TARGETS Net Gross Sales Margin • Attract, retain and EPS engage talent • Establish owner Drive mindset throughout the organization Value • Cultivate a direct, Free decisive and Free tran
Slide 71: Key takeaways
Key takeaways Many accomplishments Leveraged the separation as a catalyst to in the past year better prepare our business to win Have been and Constantly improving the way we operate will continue to be proactive and our business performance We will attain our goals Our focus is clear and the founda
Slide 72: The New Energizer
The New Energizer BRIAN HAMM Chief Financial Officer
Slide 73: The creation of a new Energizer
The creation of a new Energizer Tax-free spin to shareholders; begin trading independently on July 1 1-for-1 ratio: receive 1 new ENR share for every 1 parent co share held Retain Energizer Holdings, Inc. name and ENR ticker symbol “When-issued” trading expected to begin in mid-June New Energizer to
Slide 74: Our agenda for today
Our agenda for today Track record of delivering cost savings Transition period as we separate Driving value as a standalone company Our capital structure and allocation strategies
Slide 75: Our agenda for today
Our agenda for today Track record of delivering cost savings Transition period as we separate Driving value as a standalone company Our capital structure and allocation strategies
Slide 76: Our track record of delivering cost savings provides a strong foundation
Our track record of delivering cost savings provides a strong foundation RESTRUCTURING WORKING CAPITAL FREE CASH FLOW (through 3/31/15, by category) (from FY11-FY14, by driver) (from FY12-FY14) ~ ~ > $210M of cost savings $185M cash flow improvement $750M cumulative free cash flow 16% 15.5% 48% 11.8
Slide 77: We’re aiming to offset our share of spin-related dis-synergies
We’re aiming to offset our share of spin-related dis-synergies Parent Co. dis-synergies of $65 - $85 million. New Energizer expected to incur roughly one half of total. Aiming to offset dis-synergies in 3-to-4 quarters post spin via these focus areas: COMMERCIAL SHARED SERVICE CENTERS OUTSOURCING NO
Slide 78: Additional cost saving opportunities will further enhance our cash flow
Additional cost saving opportunities will further enhance our cash flow Trade Investment Integrated ? Revenue management team Supply Chain Our goal is to SG&A ? Installing trade promotion ? Internal manufacturing deliver management solution vs. sourcing Optimization ? Disciplined pricing ? Capacity
Slide 79: Our agenda for today
Our agenda for today Track record of delivering cost savings Transition period as we separate Driving value as a standalone company Our capital structure and allocation strategies
Slide 80: We’re committed to providing relevant data in the interim
We’re committed to providing relevant data in the interim, and expect normalized reporting starting with Q4/FY15 August 2015 November 2015 FISCAL THIRD QUARTER FISCAL FOURTH QUARTER RESULTS / FULL YEAR 2015 RESULTS • Earnings release focused on • Fourth quarter will include net sales, segment profit
Slide 81: Topline adjustments anticipated
Topline adjustments anticipated ADJUSTED ANNUALIZED NET SALES BASE NORMAL VARIABILITY DUE TO $1.8B • Storms • Timing of holiday shipments • Distribution gains and losses ($95-$100M) ~$1.6B ($21M) • New product launches ($45-50M) INCREMENTAL ADJUSTMENTS FOR • Currency • Venezuela deconsolidation • Go
Slide 82: EBITDA base will also be reset
EBITDA base will also be reset ADJUSTED ANNUALIZED EBITDA* BASE $392M +$0-$5M $310-$325M ($55-$60M) ($9M) ($10-$15M) LTM EBITDA Currency Venezuela Corporate Go- To- Market Adj. Base 3/31/15 Costs Changes Gross margin negatively impacted 300-400 basis points due to currency, Venezuela and go-to- mark
Slide 83: Capital expenditures for standalone household products to remain relatively modest
Capital expenditures for standalone household products to remain relatively modest DIVISIONAL CAPITAL SPENDING CAPITAL SPENDING OUTLOOK ($ in millions, excludes corporate and IT) (percent of total, includes corporate and IT) $38 20% $35- $45 $32 Million $28 65% 15% $18 Maintenance Efficiency Product
Slide 84: Our agenda for today
Our agenda for today Track record of delivering cost savings Transition period as we separate Driving value as a standalone company Our capital structure and allocation policies
Slide 85: We’re executing on our financial goals
We’re executing on our financial goals EBITDA / Free Cash Flow • Expand gross margins • Proactively reduce SG&A costs • Improve cash conversion cycle Margin Expansion / reduce working capital Revenue • Grow share profitably • Efficiently spend capital • Leverage center-led • Bring innovation procure
Slide 86: We’re confident in our ability to achieve long-term financial targets
We’re confident in our ability to achieve long-term financial targets METRIC LONG-TERM TARGET Revenue Revenue growth rate at or above category EBITDA Consistent low single digit growth Tax Rate Corporate rate now in the range of 31% to 33% Capital Expenditures In the range of $35 million to $45 mill
Slide 87: Our agenda for today
Our agenda for today Track record of delivering cost savings Transition period as we separate Driving value as a standalone company Our capital structure and allocation strategies
Slide 88: Our strong balance sheet supports growth and return of capital
Our strong balance sheet supports growth and return of capital Summary Capitalization ($M Pro-Forma) Cash (minimum) $300 Total Debt $1,020 Availability under $230 $250M Revolver $300 million (minimum) in offshore cash Revolver capacity provides incremental financial flexibility Annual cash flow gene
Slide 89: Flexible capital structure ensures low borrowing costs with no near-term maturities
Flexible capital structure ensures low borrowing costs with no near-term maturities DEBT MATURITY LADDER (notional amounts) $600M Unsecured Notes $400M Term Loan B $250M Revolver 2025(1) • Availability under revolver to provide liquidity • Covenant-lite Term Loan B • Unsecured notes provide attracti
Slide 90: We will pursue a prudent capital allocation policy
We will pursue a prudent capital allocation policy to drive long-term shareholder value Reinvest in Dividend and Selective / the Business Opportunistic Disciplined Share (Including Productivity M&A Improvements) Repurchases
Slide 91: We’re taking the right steps to reinvest in the business
We’re taking the right steps to reinvest in the business to drive long-term shareholder value Support Drive Further Invest in Systems/ Revenue Cost Savings Processes/People ? R&D and A&P spend to ? Reduce manufacturing ? Trade promotion support innovation costs management tool ? Maintain and grow ?
Slide 92: Meaningful return of capital to shareholders remains a top priority
Meaningful return of capital to shareholders remains a top priority for new Energizer DIVIDEND PAYOUT DIVIDEND SHARE REPURCHASE ~45% • $1/share annually ~75% • Intend to • Represents a material opportunistically increase from parent repurchase shares 51% ~27% • Focus on maximizing Historically creat
Slide 93: When evaluating M&A, we’ll be selective and disciplined
When evaluating M&A, we’ll be selective and disciplined in our approach Prior Parent Criteria New ENR Criteria • Fast moving consumable goods • Household products or adjacent categories where we can compete and • Household/personal care preferred generate superior returns • Strong brands • Different
Slide 94: Key takeaways for New Energizer
Key takeaways for New Energizer Strong and • Cash and revolver provide adequate liquidity Flexible • Strong credit rating Balance Sheet • Long-dated maturity profile Attractive • Track record of taking out costs Cash Flow • Additional productivity improvement initiatives launched Generation • Top-ti
Slide 95: Q&A
Q&A ALAN HOSKINS MARK LAVIGNE BRIAN HAMM
Slide 96: Appendix
2». Energizer Holdings, Inc. 2 a CC) Appendix
Slide 97: Company Contacts
Company Contacts BRIAN HAMM Energizer’s Chief Financial Officer Briank.Hamm@energizer.com JENNIFER BEATTY, CFA Energizer’s Vice President – Investor Relations Jennifer.Beatty@energizer.com (314) 985-1849
Slide 98: Net sales reconciliation by segment
LTM 3/31/15 % Chg 2014 % Chg 2013 % Chg 2012 Net Sales North America Net sales - prior year $934.8 $1,041.9 $1,103.4 $1,133.3 Organic ($59.3) -6.3% ($127.2) -12.2% ($61.0) -5.6% ($27.9) Impact of currency ($5.9) -0.6% ($5.5) -0.5% ($0.5) 0.0% ($2.0) Net sales - current year $869.6 -7.0% $909.2 -12.7
Slide 99: Segment profit by region
2014 % Chg 2013 % Chg 2012 North America Segment Profit Segment Profit - prior year $307.1 $302.9 $288.2 Operations ($39.2) -12.8% $4.5 1.5% $16.1 Impact of currency ($4.0) -1.3% ($0.3) -0.1% ($1.4) Segment Profit - current year $263.9 -14.1% $307.1 1.4% $302.9 % of Sales 29.0% 29.5% 27.5% Latin Ame
Slide 100: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation LTM 3/31/15 2014 2013 2012 Net Income $75.3 $157.3 $114.9 $187.0 Income Taxes $51.1 $57.9 $47.1 $70.6 EARNINGS BEFORE TAXES $126.4 $215.2 $162.0 $257.6 Interest $50.4 $52.7 $68.1 $68.9 Depreciation & Amortization $46.6 $42.2 $55.9 $56.8 EBITDA (a) $223.4 $31
Slide 101: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 3 Year 3 Year 2014 2013 2012 Total Average Revenue $1,840.4 $2,012.2 $2,087.7 $1,980.1 Operating Cash Flow $219.9 $329.5 $285.3 $278.2 Capital Expenditures ($28.4) ($17.8) ($38.1) ($28.1) Free Cash Flow (a) $191.5 $311.7 $247.2 $750.4 $250.1 % of Sales 10.4% 15.5% 11.8%