Energizer Holdings, Inc. · NYSE:ENR
Energizer — Q4 2018 Earnings Presentation
26 slides from Energizer's earnings presentation, Nov 15, 2018
Slide 1: Energizer Investor Call November 15, 2018
Energizer Investor Call November 15, 2018 Exhibit 99.3
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This press release 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 manner in wh
Slide 3: Agenda
Agenda Financial Highlights for the Fourth Quarter and Fiscal 2018 and Outlook for Fiscal 2019 Transformational M & A Update on Spectrum Battery transaction Announcement of Spectrum Global Auto Care acquisition Combined Entity Detailed Review of Fourth Quarter and Fiscal 2018 Results Fiscal 2019 Out
Slide 4: Financial Highlights: Adjusted Earnings Per Share
Financial Highlights Adjusted Earnings Per Share
Slide 5: Spectrum Battery Acquisition: Original Transaction vs Proposed Transaction
$2 Billion Cash + Debt financing Cash + Debt financing Portfolio diversification Geographic expansion Operational synergies of $55-65 million Rayovac’s and Varta’s global business except as set forth in the remedies by Energizer which includes the divesting of the Europe-based Varta retail consumer
Slide 6: Spectrum Brands' Global Auto Care Overview
Spectrum Brands’ Global Auto Care Overview The acquisition of Spectrum’s Global Auto Care creates scale for Energizer’s Global Auto Care platform Strong financial profile and robust free cash flow performance Last twelve months ended June 30, 2018 - Net Sales of $465mm Last twelve months ended June
Slide 7: Spectrum Brands' Global Auto Care Business Represents a Compelling Opportunity
Spectrum Brands’ Global Auto Care Business Represents a Compelling Opportunity Spectrum Global Auto Care Creates Scale and Strength Operational Enhancements Financial Benefits Expands portfolio of iconic brands and creates a second platform in our auto care segment to drive future growth and expansi
Slide 8: Successful Track Record of Execution
Successful Track Record of Execution Two restructuring programs and continuous improvement initiatives Spin-off from parent company in 2015 Two auto care business integrations since separation 8 Focus on Maximizing Cash Flows Lead with Innovation Operate with Excellence Drive Productivity
Slide 9: Global Auto Care Meets Energizer's Strategic Acquisition Criteria
Spectrum Brands’ Global Auto Care Business Meets Energizer’s Strategic Acquisition Criteria 6 Criteria Global Auto Care Commentary Similar Financial Profile (stable margins, strong FCF) Gross Margin percent in the mid 30’s Adjusted EBITDA% margins in the low 20’s Incremental adjusted Free Cash Flow
Slide 10: Spectrum Battery Acquisition: Original Transaction vs Proposed Transaction
$2 Billion Cash + Debt financing Cash + Debt financing Portfolio diversification Geographic expansion Operational synergies of $55-65 million Rayovac’s and Varta’s global business except as set forth in the remedies by Energizer which includes the divesting of the Europe-based Varta retail consumer
Slide 11: Global Auto Care Transaction Highlights
Global Auto Care Transaction Highlights Source: Energizer Internal Financials and Spectrum Brands. Purchase Price $1.25 Billion Overview Represents 10.5X based on current adjusted EBITDA run-rate, inclusive of synergies and operational improvements Value Creation Transaction is expected to be immedi
Slide 12: Spectrum Equity Key Terms
Spectrum Equity Key Terms Shareholder voting agreement A standstill for 24 months A lockup for 12 months Can be registered after 12 months with certain restrictions on transfer Right for Energizer to redeem the shares after 18 months subject to the terms of the agreement
Slide 13: Pro-Forma Combined Financials
Pro-Forma Combined Financials 13 Sales Adjusted EBITDA1 Adjusted Free Cash Flow1 ~53% Increase ~68% Increase ~43% Increase Source: Energizer Internal Financials and Spectrum Brands. 1 See non-GAAP Reconciliations in the Appendix
Slide 14: Energizer Results and Outlook
Energizer Results and Outlook Fourth Quarter Fiscal 2018 Results Category Performance Category Outlook Fiscal 2019 Outlook
Slide 15: Fourth Quarter 2018 Financial Headlines
Fourth Quarter 2018 Financial Headlines Adjusted EPS of $0.83 versus prior year of $0.54, up 54% Down 60 bps – driven by lower year-over-year hurricane activity, excluding hurricane +230 bps Organic Revenue 45.5% down 50 bps – primarily driven by unfavorable currency impacts Gross Margin 7.0% of net
Slide 16: Battery Trends: Global Battery Category Trends
Battery Trends Global Battery Category Trends 13 Weeks ending August 2018 Global EHI Value Share 13 Weeks ending August 2018 US eCommerce EHI Value Share 13 Weeks ending August 2018 +1.6% +0.8pts +6.6pts Source: Nielsen Global Track Complete World Monthly updated through August 2018; US eCommerce So
Slide 17: Battery Growth Will Come From the Evolution of Devices & Technology
Devices are becoming smaller and more efficient, requiring smaller batteries Emerging technologies, such as the Internet of Things, will continue to drive growth in the number of battery-powered devices Device trends have stabilized, with a broad range of devices creating demand diversification. Bat
Slide 18: Fourth Quarter 2018 Financial Headlines
Fourth Quarter 2018 Financial Headlines Adjusted EPS of $0.83 versus prior year of $0.54, up 54% Down 60 bps – driven by lower year-over-year hurricane activity, excluding hurricane +230 bps Organic Revenue 45.5% down 50 bps – primarily driven by unfavorable currency impacts Gross Margin 7.0% of net
Slide 19: Fiscal 2019 Outlook
SG&A as a percent of net sales is expected to decline 20 to 50 bps Fiscal 2019 – Outlook Current Energizer Business Net Sales on a reported basis are expected to be up low single digits: Organic net sales up low single digits Nu Finish acquisition contributes 30 to 40 bps Argentina is expected to be
Slide 20: Q & A
Q & A
Slide 21: Appendix
Po Appendix
Slide 22: Non-GAAP Financial Measures
2 Non-GAAP Financial Measures 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, free cash flow, EBITDA and Adjusted EBI
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Diluted shares are in millions FY2018 FY2017 Q4 Total Q4 Total GAAP Earnings Per Share $ 0.02 $ 1.52 $ 0.55 $ 3.22 Adjustments Expense (Income): Acquisition and integration costs 0.50 1.00 (0.01) 0.06 Acquisition withholding tax - 0.10 - - Settlement loss on Canadian pension
Slide 24: Non-GAAP Reconciliations (Cont.)
Non-GAAP Reconciliations (Cont.) All amounts in millions
Slide 25: Non-GAAP Reconciliations (Cont.): Non-GAAP Outlook
Non-GAAP Reconciliations (Cont.) All amounts in millions Non-GAAP Outlook. For our fiscal year 2019 outlook, the Company is unable to provide reconciliation to the full year Adjusted EPS range of $3.40 to $3.50 and Adjusted Free Cash flow of approximately $238 million to comparable GAAP measures due
Slide 26: Slide 26