Energizer Holdings, Inc. · NYSE:ENR
Energizer — Morgan Stanley conference November 2012
30 slides from Energizer's conference presentation, Nov 13, 2012
Slide 1: Morgan Stanley November 2012
MORGAN STANLEY NOVEMBER 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document contains both historical and forward-looking statements. Forward-looking statements are not based on historical facts but instead reflect our expectations, estimates or projections concerning future results or events, including, without limitation, statements
Slide 3: Trademarks and Brands
Trademarks and Brands We use “Energizer” and the Energizer logo as our trademarks. Product names and company programs appearing in this presentation are trademarks of Energizer Holdings, Inc. or its subsidiaries. This presentation also may refer to brand names, trademarks, service marks and trade na
Slide 4: Agenda
Agenda Business Overview 2013 Restructuring Project Working Capital Initiative New Compensation Metrics Financial Summary
Slide 5: Company Profile
Company Profile 2002 Batteries1 100% Total Sales $1.9 billion Total Segment $324 million Profit Categories 1 2012 Feminine Care 4% Infant Care 4% Skin Care 9% Batteries¹ 46% Wet Shave 37% $4.6 billion $871 million Sales by Division Household Products 46% Personal Care 54% Sales by Geography U.S. 52%
Slide 6: Breadth of Portfolio is Extensive
Breadth of Portfolio is Extensive Household Products Household & Specialty Batteries #1 Global Lighting Products #1 Personal Care Products Wet Shave R & B #2 Prep #1 Tampons #2 Infant Care #1 Sun & Skin Care #1 Note: Market share position based on company estimates
Slide 7: 2013 Restructuring Project
PP». Lnergizer 2013 RESTRUCTURING PROJECT
Slide 8: Business Environment
Business Environment Businesses are under increasing pressure: Renewed decline in battery category and devices Increased costs across both Divisions Increased competition from value brands Household Division profits declining Actions going forward: Reduce production capacity and overheads Re-focus p
Slide 9: Device Trends
Device Trends After seeing signs of a rebound . . .. Devices (requiring primary batteries) are declining again Total Devices 2005-4 2006-4 2007-4 2008-4 2009-4 2010-4 2011-4 2012-4 Source: IPSOS 2012 U.S. Device Inventory
Slide 10: US Battery Category Volumes
US Battery Category Volumes US Household Battery volumes have softened US HHB Volume (% Chg vs PY) 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% 2005 2006 2007 2008 2009 2010 2011 2012 Source: US All Outlet data based upon AC Nielsen and internal company estimates
Slide 11: ENR Alkaline Shipments
ENR Alkaline Shipments Alkaline shipments have declined significantly since 2007 . . . 4.1 4.0 3.9 3.8 3.7 3.6 3.5 3.4 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Slide 12: ENR Lithium Shipments
ENR Lithium Shipments After years of growth, Lithium has steadily declined due to devices . . . 140.0 120.0 100.0 80.0 60.0 40.0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Slide 13: SG&A % of Sales (vs peer group)
SG&A % of Sales (vs peer group) SG&A costs are too high 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 11.4% 12.1% 13.2% 14.6% 15.0% 17.1% 17.5% 19.4% 20.9% 27.0% CHD PG KMB CLX CL SPB SMG ENR NWL TUP Based on company year-end filings.
Slide 14: Total Shareholder Returns Are Lagging
Total Shareholder Returns Are Lagging From ‘03 to ‘08, ENR was a leader within our Peer Group1 driving Total Shareholder Returns . . . FY03 – FY08 TSR > . . . Since then, we have ranked in the bottom of our Peer Group1 FY09 – FY12 EPC > TSR > EHP > 1Peer Group Includes: CHD, PG, KMB, CLX, CL, AVP, S
Slide 15: 2013 Restructuring
2013 Restructuring Actions: Rationalize & streamline operations facilities in Household Products Close Maryville, MO battery manufacturing facility Close St. Albans, VT battery manufacturing facility Close Tampoi, Malaysia battery packaging facility Streamline Asheboro, NC battery manufacturing and
Slide 16: 2013 Restructuring
2013 Restructuring Actions: Rationalize & streamline operations facilities in Household Products Consolidate G&A functional support across the organization Focus Household Products Division product portfolio on core Move to centrally led and leaner EHP marketing organization Reduce overhead spending
Slide 17: 2013 Restructuring
2013 Restructuring Actions: Targeted annual pre-tax savings of $200 million 25% of savings re-invested in the business to drive long-term growth Costs of approximately $250 million Ongoing savings fully realized in Fiscal 2015 Incremental Capital Expenditures of $50 million
Slide 18: Working Capital Initiative
>, Lnergizer Holdings, Inc. WORKING CAPITAL INITIATIVE
Slide 19: Working Capital Initiative
Working Capital Initiative Project Approach: DSO DII DPO Undertook benchmarking efforts focused on 6 key markets Identified opportunities in Sun Care, Wet Shave, Alkaline and Lights Implemented standardized, center-led terms policy across global supplier base Targeted 400 Basis Point Reduction
Slide 20: Working Capital Initiative
WORKING CAPITAL INITIATIVE Days 105 95 85 75 65 55 45 35 25 Days Sales Outstanding Days Inventory Days Payable Outstanding 22.9% 21.4% 24.0 23.5 23.0 22.5 22.0 21.5 21.0 20.5 20.0 WC % 0f Sales 2011 2012 Source: Energizer internal estimates (Sept 30, 2012)
Slide 21: New Compensation Metrics
PP». Lnergizer NEW COMPENSATION METRICS
Slide 22: Performance Metrics
Performance Metrics FY2013 Annual and Three-year incentive plan metrics Annual Plan Cash Based Adjusted EPS Adjusted Pre-tax Operating Profit Cost Savings Adjusted Net Working Capital as a % of Sales 3-Year Plan Share Based Adjusted Return on Invested Capital Adjusted Cumulative EBITDA Relative TSR
Slide 23: Performance Metrics
Performance Metrics Short-term incentive plan—Drive Delivery of annual results and major initiatives Company Goals Performance Metrics Multi-Year Restructuring Initiative Net Working Capital Initiative Operating results EPS Operating Profit
Slide 24: Performance Metrics
Performance Metrics Long-term incentive plan—maintain focus on profitable growth and total shareholder return Grow operating earnings Through profitable investment To deliver strong total shareholder returns Cumulative EBITDA Return on Invested Capital Relative TSR Rewards growth in core operating e
Slide 25: Financial Summary
a Energizer Holdings, Inc. FINANCIAL SUMMARY
Slide 26: Fiscal 2012 Results
Fiscal 2012 Results Adjusted Diluted Earnings per Share of $6.20 Up 19% versus fiscal 2011 At top end of outlook range Division Results Personal Care: segment profit +16.8%, ex-currencies Household Products: segment profit +3.0%, ex-currencies Other Factors: Higher corporate expenses Favorable effec
Slide 27: Fiscal 2013 Outlook
Fiscal 2013 Outlook Initial Outlook of $6.75 to $7.00 Adjusted Earnings per Diluted Share Assumes: Organic Sales: EPC – mid-single digit growth EHP – low-single digit declines (including Hurricane Sandy) Minimal year-over-year impact from: Currencies Commodities A&P % of sales in line with Fiscal 20
Slide 28: Concluding Comments
@ Energizer Holdings, Inc. CONCLUDING COMMENTS
Slide 29: Delivering Value to Shareholders
Delivering Value to Shareholders Consistent earnings growth Successful execution of 2013 Restructuring Project Ongoing dividend Opportunistic share repurchases Continuing communication with investors
Slide 30: Regulation G Non-GAAP Reconciliation
Energizer Holdings, Inc. Regulation G Non-GAAP Reconciliation Non-GAAP Financial Measures. While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), these presentation slides include non-GAAP measures. These non-GAAP measures, such
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