Energizer Holdings, Inc. · NYSE:ENR
Energizer — Investor Day (December 2012)
82 slides from Energizer's investor day presentation, Dec 12, 2012
Slide 1: Energizer Holdings, Inc.
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Slide 2: Ward Klein, Chief Executive Officer
WARD KLEIN Chief Executive Officer
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: Corporate Evolution
Corporate Evolution Diversification Off A Stable Battery Platform
Slide 5: Household Products Segment EBITDA
Household Products Segment EBITDA Household Products Segment EBITDA ($ in millions)
Slide 6: Battery Category Volumes
Battery Category Volumes Battery Category Volumes
Slide 7: Company Profile
Company Profile Total Sales $1.7 billion Total Segment $339 million Profit Categories 1 $4.6 billion $871 million 5 2002 2012 Sales by Division Sales by Geography Company Profile Source: Company filings ¹ Represents battery and lighting products Batteries ¹ 46% Skin Care 9% Batteries ¹ 100% Feminine
Slide 8: Breadth of Portfolio is Extensive
Breadth of Portfolio is Extensive Lighting Products #1 Household & Specialty Batteries #1 Global Wet Shave R & B #2 Prep #1 Tampons #2 Infant Care #1 Sun & Skin Care #1 Household Products Personal Care Products Breadth of Portfolio is Extensive Lighting Products #1 Household & Specialty Batteries #1
Slide 9: Energizer Holdings Performance
Energizer Holdings Performance Energizer Holdings Performance CAGR 9% CAGR 8% CAGR 11% CAGR 9% FY02 FY12 $0 $1,000 $2,000 $3,000 $4,000 $5,000 Net Sales $0 $100 $200 $300 $400 $500 Net Earnings $0 $200 $400 $600 $800 $1,000 EBITDA $0 $2 $4 $6 $8 EPS
Slide 10: Presenters
Presenters Presenters Brian Hamm David Hatfield Alan Hoskins Ward Klein Al Robertson Dan Sescleifer
Slide 11: Agenda
AGENDA AGENDA Household Products – Alan Hoskins 2013 Restructuring – Brian Hamm Break Personal Care – David Hatfield Innovation – Al Robertson Financial Highlights – Dan Sescleifer Q & A
Slide 12: Alan Hoskins
ALAN HOSKINS ALAN HOSKINS President and Chief Executive Officer Energizer Household Products
Slide 13: Business Environment
BUSINESS ENVIRONMENT BUSINESS ENVIRONMENT Category is under increasing pressure: Renewed decline in battery category and devices Increased costs Increased competition
Slide 14: Device Trends
DEVICE TRENDS DEVICE TRENDS After seeing signs of a rebound . . . Devices (requiring primary batteries) are declining again Source: IPSOS 2012 U.S. Device Inventory Rolling 8 waves over time Total Devices
Slide 15: Household Battery volumes have softened
US Household Battery volumes have softened . . . Source: US All Outlet data based upon AC Nielsen and internal company estimates 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% - - - - - - 2005 2006 2007 2008 2009 2010 2011 2012 US HHB Volume (% Chg vs PY) US BATTERY CATEGORY VOLUMES
Slide 16: Energizer Household Products
ENERGIZER HOUSEHOLD PRODUCTS ENERGIZER HOUSEHOLD PRODUCTS Mission: Outperform the competition in batteries, delivering significant cash to the corporation, and ultimately contributing to the collective success of EHI Role in EHI portfolio: Stabilize Profitability and Generate Cash
Slide 17: Short Term Drivers
SHORT TERM DRIVERS SHORT TERM DRIVERS Restructuring enables changes to the way we operate, stabilizing profitability and driving greater cash flow – Rationalize and streamline operations facilities – Re-focus on core product line, markets and customers – Bring overhead costs down, division-wide – Ce
Slide 18: Longer Term Drivers
LONGER TERM DRIVERS LONGER TERM DRIVERS Continue to drive cost leadership across the business Win in Battery Leverage dual brands and broad product portfolio Introduce innovative brand news and maintain product support Focus on category fundamentals Energizer remains committed to our brands and the
Slide 19: Two Brand Advantage
TWO BRAND ADVANTAGE Strong brands capable of driving growth through Trade up & User Base Expansion TWO BRAND ADVANTAGE
Slide 20: Recognizable Icons and Effective Campaign That Resonates With Consumers
RECOGNIZABLE ICONS AND EFFECTIVE CAMPAIGN THAT RESONATES WITH CONSUMERS RECOGNIZABLE ICONS AND EFFECTIVE CAMPAIGN THAT RESONATES WITH CONSUMERS
Slide 21: Breadth of Household Products Portfolio is Extensive
Lighting Products #1 in U.S. Household & Specialty Batteries #1 Global BREADTH OF HOUSEHOLD PRODUCTS PORTFOLIO IS EXTENSIVE Note: Market share position based on company estimates BREADTH OF HOUSEHOLD PRODUCTS PORTFOLIO IS EXTENSIVE Specialty Batteries
Slide 22: Product and Marketing Innovation
PRODUCT AND MARKETING INNOVATION PRODUCT AND MARKETING INNOVATION Innovative improvements on Max AA & AAA – New internal shape – Stronger lock – Better barrier New communication – Strongest message ever tested on Max alkaline – Continuing the conversation of quality with our consumers Energizer Powe
Slide 23: Product and Marketing Innovation
PRODUCT AND MARKETING INNOVATION FPO PRODUCT AND MARKETING INNOVATION Innovative new packaging – Made from more durable and flexible materials – Tested for Child Resistance* – Anti-pilferage – Allows for easy storage of unused batteries Warning Sticker to be added – Applied to the back of Coin Lithi
Slide 24: Product and Marketing Innovation
PRODUCT AND MARKETING INNOVATION PRODUCT AND MARKETING INNOVATION Current 4LED Current 6LED Current 7LED • Contemporary design, new colors • Sleeker, thinner and lighter • New easy push button switch • +25% LUMENS
Slide 25: Why We Believe We Can Win
WHY WE BELIEVE WE CAN WIN WHY WE BELIEVE WE CAN WIN Large profitable Division that generates significant cash Leading share positions around the world Comprehensive battery and portable lights portfolio Two world class brands: Energizer & Eveready Distribution potential into new customers and market
Slide 26: Brian K. Hamm
BRIAN K. HAMM BRIAN K. HAMM Vice President Global Business Transformation
Slide 27: Project Headlines
Project Headlines Project Headlines $200M estimated savings . . . $25M to $35M in FY13 10% reduction in force Actions completed by end of FY14 . . . run rate savings in FY15 Re-investment up to 25% of realized savings to fund brand building and accelerate innovation Incremental $50M capital investme
Slide 28: Process
Process Process Assessment Phase (July – November) • Scope: Enterprise wide • External consultant assistance • Benchmarking • Battery Category trends • Role of Divisions Implementation (November – FY14) • Business Transformation Office • Assigned Accountable Executives • External consultant assistan
Slide 29: SG&A % of Sales (vs peer group)
SG&A % of Sales (vs peer group) SG&A % of Sales (vs peer group) SG&A costs are too high Based on company year-end filings. 11.4% 12.1% 13.2% 14.6% 15.0% 17.1% 17.5% 19.4% 20.9% 27.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% CHD PG KMB CLX CL SPB SMG ENR NWL TUP
Slide 30: SG&A % of Sales by Area
SG&A % of Sales by Area SG&A % of Sales by Area * Pro-forma: Corporate overhead costs allocated by Area based upon % of Sales Low to Mid Teens% (North America) High 20’s% (Latin America) High 20’s% (Europe) Low 20’s% (Asia)
Slide 31: Breakout of $200M Savings
Breakout of $200M Savings Breakout of $200M Savings Plant Closings and Streamline $50M - $60M Other Reductions in Force Procurement Benefit Plan Changes and Other reductions Total $10M - $15M $50M - $60M $65M - $85M $200M
Slide 32: Plant Closings and Streamline
Plant Closings and Streamline Plant Closings and Streamline Tampoi, Malaysia packaging facility (by 3/31/13) St. Albans, VT battery and lights facility (by 9/30/13) Maryville, MO battery facility (by 12/31/13) Asheboro, NC battery facility (by 6/30/13) Walkerton, Canada packaging facility (by 12/31/
Slide 33: Reduction in Force
Reduction in Force Reduction in Force Including plant closures, expected to reduce the global workforce by more than 10%, or 1,500 colleagues Reductions across globe through consolidation of functional support and eliminating layers within the organization Timing will vary based upon several factors
Slide 34: Procurement
Procurement Procurement Establish center-led procurement function Drive savings through . . . – Leveraging enterprise-wide scale more effectively – Working closely with suppliers to identify and eliminate waste – Simplification and standardization Savings to be realized throughout FY13 – FY15
Slide 35: Benefit Plan Changes and Other Reductions
Benefit Plan Changes and Other Reductions Benefit Plan Changes and Other Reductions Benefit Plan Changes – Freeze U.S. Deferred Compensation program (effective January 1, 2013) – Freeze U.S. Defined Benefit Plan and enhance existing Defined Contribution Plan (effective January 1, 2014) – Termination
Slide 36: Recap
Recap Recap Gross Margin savings Overhead savings* Gross savings Investment spending Pre-tax savings Estimated Restructuring Charge Cash Non-Cash Incremental Capital Investment * Overhead defined as SG&A, A&P and R&D $110 $200 (50) $150 ($250) (175) (75) $50 Estimated Amounts
Slide 37: Energizer Holdings, Inc.
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Slide 38: David Hatfield
DAVID HATFIELD President and CEO, Energizer Personal Care
Slide 39: Energizer Personal Care
Energizer Personal Care Mission: Satisfy Consumers and Customers better than anyone through Insight, Innovation and Execution Role in EHI portfolio: Generate Topline Growth
Slide 40: EPC Growth
EPC Growth 0.0 0.5 1.0 1.5 2.0 2.5 3.0 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 Net Sales
Slide 41: Organic EPC Growth
Organic EPC Growth 3.0% 3.0% 3.1% 4.5% 0.6% SWS SWS PYX SWS PYX Edge SWS PYX Edge SWS PYX Edge ASR Partial year due to timing of acquisition Excludes revenue contribution from acquisitions as disclosed in public filings: $771.7 from Playtex in FY2008, approximately $57 from Edge/Skintimate in the se
Slide 42: EPC Growth Drivers
EPC Growth Drivers EPC Growth Drivers Challenge to Win in Wet Shave – Premium segment – Value segment – Shave Prep Developing market growth: Shave and Sun Care Innovation…across the portfolio
Slide 43: Challenge to Win in Wet Shave
Challenge to Win in Wet Shave Challenge to Win in Wet Shave Shave Prep EPC Manual Shave % EPC Shave Preps Buyers Cross-Purchasing 2008 2009 2010 2011
Slide 44: Developing Markets Growth
Developing Markets Growth Developing Markets Growth 25.5% Developing Markets Growth ‘08 to ’12 (Asia + Latin America) 9.1% 11.9% 0% 5% 10% 15% 20% 25% Shave Sun EPC
Slide 45: Innovation across the portfolio
Innovation across the portfolio Innovation across the portfolio
Slide 46: Al Robertson
AL ROBERTSON AL ROBERTSON General Manager and Chief Marketing Officer Energizer Personal Care
Slide 47: Innovation Across All Product Categories
Innovation Across All Product Categories Innovation Across All Product Categories Wet Shave Sun Care Feminine Care Infant Care Skin Care New Categories
Slide 48: In 2013 the #1 brand in men's shave gel will become a razor
In 2013…. the #1 brand in men’s shave gel… In 2013…. the #1 brand in men’s shave gel… will become a razor
Slide 49: Energizer Personal Care
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Slide 50: The leading triple blade disposable
The leading triple blade disposable… The leading triple blade disposable… will grow behind regionally- specific innovation
Slide 51: Latin America Xtreme3 Black
Latin America Xtreme3 Black Latin America Xtreme3 Black
Slide 52: Europe Xtreme3 Ultimate
Europe Xtreme3 Ultimate Europe Xtreme3 Ultimate
Slide 53: We will bring the world's latest razor technology
We will bring the world’s latest razor technology… We will bring the world’s latest razor technology… into the disposable category
Slide 54: Hydro Male Disposable
Hydro Male Disposable Hydro Male Disposable • Premium price • Hydro technology
Slide 55: Hydro Silk Female Disposable
Hydro Silk Female Disposable • Premium price • Hydro technology Hydro Silk Female Disposable
Slide 56: We will further differentiate the most unique brand in the razor category
We will further differentiate the most unique brand in the razor category We will further differentiate the most unique brand in the razor category
Slide 57: Intuition Pure Nourishment
Intuition Pure Nourishment Intuition Pure Nourishment
Slide 58: We will add value to the sun care category
We will add value to the sun care category… We will add value to the sun care category… with break-through innovation
Slide 59: Banana Boat Protect & Hydrate
Banana Boat Protect & Hydrate Banana Boat Protect & Hydrate • 2-in-1 sunscreen • UVA/UVB protection & moisturization • Ribbons technology • Premium pricing
Slide 60: Banana Boat Cool Zone Lotions
Banana Boat Cool Zone Lotions Banana Boat Cool Zone Lotions • Instant Cooling technology • Premium pricing
Slide 61: Hawaiian Tropic Silk Hydration Continuous Sprays
Hawaiian Tropic Silk Hydration Continuous Sprays Hawaiian Tropic Silk Hydration Continuous Sprays • 12-hour moisturization
Slide 62: Hawaiian Tropic Silk Hydration After Sun
Hawaiian Tropic Silk Hydration After Sun Hawaiian Tropic Silk Hydration After Sun • The only after-sun lotion with ultra hydration plus soothing aloe gel ribbons • 24-moisturization
Slide 63: We will build our feminine care growth in 2013
We will build our feminine care growth in 2013… We will build our feminine care growth in 2013… with new Gentle Glide 36 0 o
Slide 64: Feminine Care Playtex Gentle Glide 360
Feminine Care Playtex Gentle Glide 360° Feminine Care Playtex Gentle Glide 360° • Triple-layer product • New applicator color & wrapper
Slide 65: We are bringing innovation to infant care
We are bringing innovation… We are bringing innovation… to wake up a sleepy infant care category
Slide 66: Infant Care Bottles Accessories
Infant Care Bottles Accessories Infant Care Bottles Accessories
Slide 67: Infant Care Diaper Genie Accessories
Infant Care Diaper Genie Accessories Infant Care Diaper Genie Accessories
Slide 68: We are extending the #1 brand in hand wipes
We are extending the #1 brand in hand wipes… We are extending the #1 brand in hand wipes… through innovative formats & sizes
Slide 69: Skin Care
SKIN CARE TRIAL & TRAVEL KIDS FRESH SCENT INFANT SENSITIVE SKIN
Slide 70: Skin Care
SKIN CARE Sensitive Burst Red Balloons Citrus Mod BIG ONES CANISTERS LIMITED EDITION CANISTERS
Slide 71: Applying our unique diaper genie technology to a new category
We are applying our unique diaper genie technology… We are applying our unique diaper genie technology… to an entirely new category
Slide 72: Pet Care Litter Genie
Pet Care Litter Genie Patent protected technology Large, underserved market
Slide 73: Large Market Potential: Cat Ownership Is Widespread & Growing
Large Market Potential Cat Ownership Is Widespread & Growing Large Market Potential Cat Ownership Is Widespread & Growing Source: Nielsen ~35% of US households. BASES research Approximately 40 MM cat-owning households¹ 90% have a litter box² Litter box odors are the most common problem among cat own
Slide 74: Energizer Personal Care will bring innovation to every category
IN 2013, ENERGIZER PERSONAL CARE WILL BRING INNOVATION… TO EVERY CATEGORY WE COMPETE IN
Slide 75: Stay tuned, more news soon
AND STAY TUNED… WE WILL HAVE MORE NEWS SOON.
Slide 76: Dan Sescleifer
DAN SESCLEIFER DAN SESCLEIFER Executive Vice President and Chief Financial Officer
Slide 77: Strong Cash Flow Generation
Strong Cash Flow Generation Strong Cash Flow Generation High free cash flow productivity throughout our history => generally exceeding 100% Working capital reduction opportunities identified and on target => $200 million Modest capital spending requirements => annual run-rate of approximately $100 m
Slide 78: Solid Financial Foundation
Solid Financial Foundation Solid Financial Foundation Investment grade credit Manageable Debt/EBITDA ratio Access to varied sources of liquidity Long term public debt at historically favorable rates Over 90% of debt structure fixed at around a 5% average rate Favorable average life and manageable de
Slide 79: Commitment to Delivering Cash to Shareholders
Commitment to Delivering Cash to Shareholders Commitment to Delivering Cash to Shareholders Meaningful share repurchases throughout our history Initiation of a dividend – 25% payout of 2012 net earnings – 40% payout of current domestic free cash flow In 2011-12, 84% of free cash flow returned to sha
Slide 80: 2013 Financial Outlook
2013 Financial Outlook 2013 Financial Outlook Adjusted earnings per share of $6.75 - 7.00 Household Products focus on profit stabilization and cash flow generation Personal Care set to deliver mid-single-digit organic sales growth, driven by innovation 2013 Restructuring Project underway, although m
Slide 81: Energizer Holdings, Inc.
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Slide 82: Regulation G Non-GAAP Reconciliation
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 as historical and forward