Energizer Holdings, Inc. · NYSE:ENR
Energizer — Merger or Acquisition (November 2018)
22 slides from Energizer's merger presentation, Nov 26, 2018
Slide 1: Energizer Acquisition Update
Exhibit 99.1 Energizer Acquisition Update November 26, 2018 Exhibit 99.1 Energizer Acquisition Update November 26, 2018
Slide 2: Safe Harbor Statements
19 Safe Harbor Statements 157 235 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements about the expected benefits of the proposed transaction, the manne
Slide 3: Safe Harbor Statements (Con't)
19 Safe Harbor Statements (Con’t) 157 235 Non-GAAP Financial Measures While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), this presentation 245 includes non-GAAP measures, including, without limitation, free cash flow, adjuste
Slide 4: Safe Harbor Statements (Con't)
19 Safe Harbor Statements (Con’t) 157 235 Presentation of Financial Information The pro forma financial information set forth herein has not been prepared in accordance with Article 11 of Regulation S-X, but rather represents a simple combination of Energizer’s and Spectrum Brands’ Battery and Porta
Slide 5: Transaction Headlines
19 157 Transaction Headlines 235 — Our core remains rock solid and we are making these acquisitions at a time 245 of strength 145 30 — Spectrum Battery acquisition strengthens our core business 186 152 — Spectrum Auto Care acquisition transforms our existing Auto Care business 34 unit 18 — Significa
Slide 6: Since Separation Energizer Has Created Value by Effectively Executing Its Strategies
19 Since Separation Energizer Has Created 157 235 Value by Effectively Executing Its Strategies A foundation for delivering long-term value to shareholders, customers and consumers 245 145 Leading with Innovation is Key to Success 30 — Energizer Bunny is now Bigger, Better & Bunnier — Innovation acr
Slide 7: Building Off of a Strong Foundation in the Core Business
19 Building Off of a Strong Foundation in the 157 235 Core Business — Delivered strong organic revenue and FY2015A-2018A CAGR 245 Adjusted EBITDA growth the past 145 three years 30 4.9% — Energizer is well positioned to continue benefiting from the favorable trends in 2.8% the battery category – min
Slide 8: Acquisition of Spectrum's Battery Business Bolsters Our Core
Acquisition of Spectrum’s Battery Business 1 Bolsters Our Core Strategic Rationale Strategic Rationale T Tr ransactio ansaction Summary n Summary ($mm) ($mm) — Broadens portfolio into value segment, Key Brands with opportunity to invest in and grow the (NA, LATAM & APAC) VARTA brand 2 Net Sales $510
Slide 9: Acquisition of Spectrum's Global Auto Care Business Transforms Our Auto Care Business Unit
19 Acquisition of Spectrum’s Global Auto Care 157 Business Transforms Our Auto Care Business Unit 235 Opportunistically acquired without an auction, leveraging existing relationship with Spectrum 245 Strategic Rationale Transaction Summary ($mm) 145 — Attractive growth category with scale – $2.8bn U
Slide 10: Pro Forma Business Mix Demonstrates Our Progress Towards Becoming a Diversified Global Household Products Leader
1 19 Pro Forma Business Mix Demonstrates Our Progress Towards 157 Becoming a Diversified Global Household Products Leader 235 FY2018 Energizer Net Sales by Product 245 Status Quo Pro Forma 145 30 Auto Hearing Aid Hearing Aid 5% 1% 6% Lights and Auto Other 20% Specialty 15% Batteries 186 61% 152 Batt
Slide 11: Pro Forma Financials – Key Highlights
19 1 157 Pro Forma Financials – Key Highlights 235 — Acquisitions create opportunities to realize incremental revenue growth in addition to stated cost 245 synergies of $70mm-80mm expected 145 30 — Margin accretive with expected realization of synergies – Adjusted EBITDA margin improvement of ~300bp
Slide 12: Pro Forma Financials – Key Metrics
19 1 157 Pro Forma Financials – Key Metrics 235 Net Sales 245 ($ in Millions) 145 $2,778 30 $1,797 186 152 34 FY2018A FY2018PF 18 2,3 2,3 Adjusted EBITDA Adjusted Free Cash Flow 95 174 ($ in Millions) ($ in Millions) $658 $340 $238 $399 144 33 34 FY2018A FY2018PF FY2018A FY2018PF 124 Margin 22% ~24%
Slide 13: Pro Forma Energizer Comparison
19 1 157 Pro Forma Energizer Comparison 235 PF Spectrum PF Spectrum Battery PF Spectrum Battery Ex. Divestiture + 245 2 3 4 (Original Transaction) Battery Ex. Divestiture Spectrum Auto Care 145 ($ in Millions) (3/31/2018) (9/30/2018) (9/30/2018) 30 Net Sales $2,663 $2,312 $2,778 Adjusted EBITDA $622
Slide 14: Order of Transactions and Sources & Uses
Order of Transactions and Sources & Uses Transaction Expected Closing Sources & Uses Sources $ % Cash on Hand $332 12% New Term Loan B 1,000 36% New Term Loan A 200 7% 6.375% Senior Notes Due 2026 500 18% 4.375% EUR Senior Notes Due 2026 770 27% Full Spectrum Battery Beginning of Total Sources $2,80
Slide 15: Anticipated Key Milestones
19 157 Anticipated Key Milestones 235 — Merger notification on Form CO filed with 245 — Spectrum Battery European Commission acquisition expected to 145 (“EC”) – Oct. 19, 2018 close – Beginning of Q1 30 — Sale of Europe based CY 2019 — Remedy Proposal on Battery Varta Consumer Battery Form RM filed
Slide 16: Pro Forma Total Leverage Over Time
19 1 157 Pro Forma Total Leverage Over Time 235 245 Gross Debt to Adjusted EBITDA — Expected pro forma 145 adjusted free cash flow of 30 ~$340mm (including full run-rate synergies) supports significant annual 4.7x 186 debt pay down 152 34 — Expect leverage level of ~3x by FY2022E given debt 3.1x ~3x
Slide 17: Integration Planning Well Underway
19 157 Integration Planning Well Underway 235 — Spectrum Battery integration in 245 advanced stages – planning 145 30 started when deal announced in Jan 2018 — Disciplined planning is expected 186 — Single seller creates shared to lead to strong execution by: 152 34 integration activities (e.g. gove
Slide 18: Appendix
19 157 235 245 145 30 186 152 34 Appendix 18 95 174 144 33 34 124 175 40 19 157 235 245 145 30 186 152 34 Appendix 18 95 174 144 33 34 124 175 40
Slide 19: Pro Forma Reconciliations
19 1 Pro Forma Reconciliations 157 235 FY 2018 Net Sales 245 145 Energizer $ 1,797 30 Spectrum's Battery Business 515 Spectrum's Auto Care Business 466 Pro Forma FY2018 Net Sales $ 2,778 186 152 FY 2018 Adjusted 34 EBITDA 2 Energizer $ 399 Spectrum's Battery Business 85 Spectrum's Auto Care Business
Slide 20: Energizer Non-GAAP Reconciliations
19 157 Energizer Non-GAAP Reconciliations 235 EBITDA and Adjusted EBITDA. EBITDA is defined as earnings from continuing operations before income tax expense, interest and depreciation and amortization. Adjusted EBITDA further excludes the impact of the costs 245 related to acquisition and integratio
Slide 21: Energizer FY 2018 Non-GAAP Reconciliations
19 157 Energizer FY 2018 Non-GAAP Reconciliations 235 245 Free Cash Flow. Free Cash Flow is defined as net cash provided by operating activities reduced 145 by capital expenditures, net of the proceeds from asset sales. 30 Adjusted Free Cash Flow is defined as Free Cash Flow excluding the cash payme
Slide 22: Slide 22
Energizer Holdings — Merger or Acquisition (November 2018) on 6ix