Energizer Holdings, Inc. · NYSE:ENR
Energizer — Debt Investor Presentation (May 2018)
38 slides from Energizer's debt investor presentation, May 18, 2018
Slide 1: Investor Presentation May 18th, 2018
Exhibit 99.1 Investor Presentation May 18th, 2018
Slide 2: Safe Harbor Statements
Safe Harbor Statements Forward-Looking Statements Unless the context otherwise requires, references in this presentation to “Energizer,” “we,” “our,” and the “Company” refer to Energizer Holdings, Inc., and its subsidiaries. This presentation contains “forward-looking statements” within the meaning
Slide 3: Safe Harbor Statements (cont'd)
Safe Harbor Statements (cont’d) Non-GAAP Financial Measures While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), this presentation includes non- GAAP measures, including, without limitation, Adjusted Gross Margin, Free Cash Flo
Slide 4: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 4
Slide 5: Executive Summary
Executive Summary On January 16, 2018, Energizer Holdings, Inc. (“Energizer” or the “Company”) announced it had entered into a definitive agreement to acquire the Global Battery and Portable Lighting Business (“Spectrum Batteries”) of Spectrum Brands Holdings, Inc. for a purchase price of $2.0bn i
Slide 6: Acquisition Overview
Acquisition Overview Spectrum Batteries produces and markets globally a diversified range of products including alkaline, carbon zinc, hearing aid, watch & electronic, photo and nickel metal hydride rechargeable batteries as well as battery chargers and portable lighting products Spectrum Portfo
Slide 7: Pro Forma Structure
Pro Forma Structure Borrower / USD Notes Issuer Public EUR Notes Issuer Shareholders Guarantor (1) Non-Guarantor $400mm New Revolving Credit Facility $200mm New Term Loan A Energizer $1,150mm New Term Loan B Holdings, Inc. $350mm New USD-denominated Senior Notes $600mm Existing 5.50% Senio
Slide 8: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 8
Slide 9: Energizer At a Glance
Energizer At a Glance Key Financials Brand & Product Overview Key Brands Product Breakdown 100% $1,756mm $389mm Batteries & Auto 12% Lights 11% 75% FY17 Revenue FY17 Adj. EBITDA (1) Premium 50% 77% 25% 3.7% 21.4% 0% Value FY15-17 Average Adj. FY17A % of Net Sales FY15-17 Sales CAGR (1) Household EBI
Slide 10: Since Separation, We Have Created Value by Effectively Executing Our Strategies
Since Separation, We Have Created Value by Effectively Executing Our Strategies A foundation for delivering long-term value to our shareholders, customers and consumers Leading with Innovation Is Key to Our Success Energizer Bunny is now Bigger, Better & Bunnier with innovation across all battery
Slide 11: Energizer Drives Productivity by Focusing on a Balanced Approach to Capital Allocation
Energizer Drives Productivity by Focusing on a Balanced Approach to Capital Allocation Relentless focus on delivering value to Deliver Value shareholders, customers and consumers Selective, Reinvest in Return of Disciplined Pillars to our success Our Business Capital M&A Maximize Free Cash Flow Our
Slide 12: Performance Demonstrates Successful Strategic Execution
Performance Demonstrates Successful Strategic Execution Gross Margin Initiatives Initiatives to Maximize Free Cash Flow FY17 Saw Consistent Record of Adjusted Gross Margin Increased focus on SKUs that drive the most volume and Expansion (1) profitability both domestically and internationally Q1 FY
Slide 13: Successful Track Record of Driving Cost Reductions and Efficiency
Successful Track Record of Driving Cost Reductions and Efficiency 2013 Restructuring Project Manufacturing Highlights Other Energizer has focused on cutting costs and maximizing 16% utilization FY09 FY17 % Δ SG&A 18% Manufacturing Plants 16 9 (44%) COGS 66% Packaging Facilities 4 1 (75%) $218mm+ R
Slide 14: Energizer Growing in eCommerce
Energizer Growing in eCommerce Online Penetration (1) E-Commerce Strategy Going Forward Energizer is the leading U.S. Online Battery Accelerate E-Commerce sales globally via branded manufacturer in the Sales marketplace platforms and with brick and mortar U.S. online battery market omni-channel
Slide 15: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 15
Slide 16: Strategic Merits of the Transaction
Strategic Merits of the Transaction Meets Energizer’s Disciplined Overlapping business model allows Energizer to Acquisition Criteria leverage its core competencies Benefits from Complementary Expanded brands and product portfolio to meet more Businesses customer and consumer needs Increases Presenc
Slide 17: Spectrum Batteries Meets Energizer's Disciplined Acquisition Criteria
Spectrum Batteries Meets Energizer’s Disciplined Acquisition Criteria Branded household products Defensible business models due to brand, technology and distribution Leverage Energizer’s core competencies Similar financial profile Complementary customer, channel and geographic overlap Le
Slide 18: Spectrum Batteries At a Glance
Spectrum Batteries At a Glance Key Financials (1) Brand & Product Overview (1) Key Brands Product Breakdown $866mm $168mm 100% 8% Domestic 23% 75% FY2017 Revenue FY17 Adj. EBITDA (2) 50% 69% 25% 2.2% 19.3% International FY15-17 Average Adj. 0% FY15-17 Sales CAGR FY17A % of Net Sales EBITDA Margin (2
Slide 19: Acquisition Enhances Our Multi-Brand Strategy to Appeal to More Consumers Globally
Acquisition Enhances Our Multi-Brand Strategy to Appeal to More Consumers Globally The Energizer brand The smart, trusted choice challenges and redefines Deliver the best for families everywhere, Deliver the best where energy, technology and inspiring peace of mind as freedom meet to provide batteri
Slide 20: Spectrum Batteries Brings Strength in Energizer's Strategic Focus Areas
Spectrum Batteries Brings Strength in Energizer’s Strategic Focus Areas 1 Leading Hearing Aid Battery Platform in an Attractive Growing Industry Sector Rayovac currently offers the longest lasting hearing aid battery in the market (1) Represents second-largest product category for Spectrum Batte
Slide 21: Estimated Synergies
Estimated Synergies 1 Energizer projects $80 – $100 million in annual synergies to be realized in full over a 3 year period 2 Synergies are expected to be derived from the following key areas: Network optimization SG&A reductions Procurement efficiencies 3 Total one-time costs to achieve ar
Slide 22: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 22
Slide 23: Key Credit Highlights
Key Credit Highlights 1 Broad product portfolio across the U.S., Europe, and Latin America Broadest Product Portfolio with Global Combination enables broader and better solutions for consumers Scale Attractive growth potential in the Hearing Aid business 2 Relentless product innovation, prod
Slide 24: Improved Product and Geographic Diversification
1 Improved Product and Geographic Diversification Status Quo FY17 Pro Forma FY17 Product Categories Product Categories Lights, Auto & Lights, Auto & Other Other 12% 11% Other Specialty Other Specialty 10% Premium 9% 33% Hearing Aid 1% Hearing Aid Premium 6% Carbon Zinc 49% 6% Carbon Zinc 6% Value 9%
Slide 25: Global Brand Presence with Operational Scale
1 Global Brand Presence with Operational Scale Global Reach Manufacturing and Distribution Energizer Spectrum Brands 25
Slide 26: Leading with Innovation Is Key to Our Success
2 Leading with Innovation Is Key to Our Success Our Longest Lasting Patented World’s Longest Lasting Improved cell design and Energizer MAX Ever The World’s #1 Rechargeable Digital Focus Technology and Highest Energy AA formation delivers more power Lasting up to 30% Longer Battery Brand Battery Bat
Slide 27: Battery Market Exhibits Favorable Dynamics
3 Battery Market Exhibits Favorable Dynamics Historically stable, resilient category, with favorable trends for Energizer’s business model and strategy $5.7bn $2.8bn High Household Growth in Specialty (2) Category Category Penetration Category Globally (1) in the U.S. (1) +6.9%+ 79% .vs Year +3.3% A
Slide 28: Industry Track-record of Consistency with Sustained Strength in Branded Batteries
3 Industry Track-record of Consistency with Sustained Strength in Branded Batteries Historical Trends and Future Outlook The battery industry has been stable with improving trends for an extended period of time While other non-edible goods have decelerating value sales growth trends, batteries t
Slide 29: Optimistic About Growth Potential in Industry
3 Optimistic About Growth Potential in Industry Energizer has product offerings in multiple growth segments to capitalize on battery industry trends Devices (1) Volume Sales Mix (2) Number of Devices per HH expected to stabilize for Miniaturization is 8.1% 13.8% Household Devices and increase fo
Slide 30: Highly Experienced Management Team
4 Highly Experienced Management Team Sue Drath Chief Human Resource Alan Hoskins Tim GormanOfficer Mark LaVigne Chief Executive Officer Chief Financial Officer Chief Operating Officer Sue Drath Sue Drath Chief Human Resource Chief Human Resource Officer Officer • 33 years at Energizer; previously CE
Slide 31: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 31
Slide 32: Energizer Historical Financials
Energizer Historical Financials Historical Net Sales Performance Historical Gross Profit Performance ($ in millions) ($ in millions) $1,756 $1,785 $811 $819 $1,632 $1,634 $756 $712 FY15 FY16 FY17 LTM 2Q18 FY15 FY16 FY17 LTM 2Q18 Historical Adjusted EBITDA Performance (1) Historical Capex Spend ($ in
Slide 33: Spectrum Batteries Historical Financials
Spectrum Batteries Historical Financials Historical Net Sales Performance Historical Gross Profit Performance (2) ($ in millions) ($ in millions) ’15-’17 CAGR: 4.3% $841 $866 $878 $830 $277 $285 $262 $277 FY15 FY16 FY17 LTM 2Q18 FY15 FY16 FY17 LTM 2Q18 Historical Adjusted EBITDA (1) Historical Capex
Slide 34: Financial Policy Overview
Financial Policy Overview Management will continue to employ a disciplined approach to capital allocation, prioritizing Focus on deleveraging over the next 3 fiscal years from closing Deleveraging Deleveraging primarily driven by Free Cash Flow generation, including benefits of productivity init
Slide 35: Agenda
Agenda I. Transaction Overview II. Energizer Holdings Update III. Acquisition Rationale IV. Key Credit Highlights V. Financial Overview VI. Appendix 35
Slide 36: Historical Adjusted EBITDA and Free Cash Flow Reconciliation
Historical Adjusted EBITDA and Free Cash Flow Reconciliation Energizer Adjusted EBITDA Reconciliation Spectrum Batteries Adjusted EBITDA Reconciliation ($ in millions) Fiscal Year Ended September 30, ($ in millions) Fiscal Year Ended September 30, 2015 2016 2017 LTM 2Q18 2015 2016 2017 LTM 2Q18 Net
Slide 37: Historical Gross Margin and Adjusted Free Cash Flow Reconciliation
Historical Gross Margin and Adjusted Free Cash Flow Reconciliation Energizer Adusted Gross Margin Reconciliation ($ in millions) Fiscal Year Ended September 30, 2017 Fiscal Year Ended September 30, 2016 Q1 17 Q2 17 Q3 17 Q4 17 2017 Q1 16 Q2 16 Q3 16 Q4 16 2016 Sales $559.6 $359.0 $372.0 $465.1 $1,75
Slide 38: Energizer Holdings, Inc.
Pa, Lnergizer Holdings, Ine.
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