Energizer Holdings, Inc. · NYSE:ENR
Energizer — Barclays Back-To-School Presentation 2016
49 slides from Energizer's conference presentation, Sep 8, 2016
Slide 1: Energizer Barclays Back-To-School Presentation
Energizer Barclays Back-To-School Presentation September 8, 2016 Brian Hamm, Chief Financial Officer Mark LaVigne, Chief Operating Officer Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Unless the context otherwise requires, references in this presentation to “Energizer,” “we,” “our,” and “the Company” refer to Energizer Holdings, Inc., and its subsidiaries. The following presentation contains “forward looking statements.” Forward-looking statements are not
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures 3 Market, Industry and Financial Data Unless indicated otherwise, our financial data contained in this presentation is based on our internal data, and the information concerning our industry is based on our general knowledge of and expectations concerning the industry. Ou
Slide 4: Strategic Priorities Delivering Long-Term Value: First Year
Energizer Holdings, Inc. Strategic Priorities Delivering Long-Term Value Agenda First Year 4
Slide 5: Financial highlights
Financial highlights Three consecutive quarters of organic sales growth in Fiscal 20161 • Quarter 1 +9.5% • Quarter 2 +0.5% • Quarter 3 +1.2% • YTD thru June 30 +4.4% Focused on key drivers to maximize Free Cash Flow • Profitable share gains • Working capital improved 230 basis points through June 3
Slide 6: Balanced capital allocation
Balanced capital allocation HandStands acquisition • $340 million purchase price, subject to certain adjustments • Adjusted EPS accretion $0.15 to $0.20 per share1 • Free Cash Flow +$20 million1 Returning value to Shareholders since spin $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 Dividend Share Repurcha
Slide 7: Agenda
Agenda Energizer Holdings, Inc. Strategic Priorities Delivering Long-Term Value First Year 7
Slide 8: We are an innovative, global, brand-driven household products company
We are an innovative, global, brand-driven household products company (1) Nielsen Total U.S. xAOC 52 Weeks Ending August 13, 2016. (2) U.S. Auto Fragrance category includes proprietary market analysis of combined NPD & IRI MULO. (3) Value share rank data from Nielsen Global Track, 52-weeks ending Ju
Slide 9: Top tier generator of free cash flow
Top tier generator of free cash flow • Healthy gross margins • Relentless focus on driving productivity gains • Successful reductions in working capital • Low capital expenditure requirements • HandStands has similar cash flow characteristics which are expected to enhance our overall free cash flow
Slide 10: Global leading brands
• Billions of consumers around the world prefer the Energizer and EVEREADY brands and purchase them to meet their power and lighting needs • After 27 years, the Energizer Bunny keeps going and going, generating millions of impressions each year • HandStands acquisition adds leading brands in the aut
Slide 11: Consumers and retailers prefer leading brands
73% 76% Consumers and retailers prefer leading brands (1) U.S.: Nielsen US xAOC HOUSEHOLD BATTERIES 52 Weeks ending 8-13-16 and 52 Weeks ending 12-31-11; Total Batteries, 52 Weeks ending 8-13-16; Global, Nielsen Global Track, Total Batteries, 52 Weeks ending June 2016. *Company estimate. U.S. HOUSEH
Slide 12: Leading positions across battery and lighting portfolio
Energizer has leading positions across its battery and lighting portfolio #1Brand in Portable Lights World’s Made with recycled batteries #1 in Lithium #1 in Rechargeable Now With Recycled Content #2 in Premium #1 in Specialty batteries 1 st 12 Nielsen Global Track 52-weeks ending June 2016 and Ligh
Slide 13: EVEREADY provides quality products at an affordable price
EVEREADY provides a portfolio of quality products at an affordable price Nielsen Global Track, 52-weeks ending June 2016. #2 in Value Alkaline BRAND #1 in Carbon Zinc Powerful second brand in portfolio that appeals to consumers in the value segment across many markets 13
Slide 14: Energizer and EVEREADY brands are #1 or #2 globally
Value share data from Nielsen Global Track, 52-weeks ending June 2016; including all Energizer and Eveready branded batteries. Brand rank excludes Private Label. Energizer and EVEREADY brands are #1 or #2 globally Dual brand portfolio strengthens our market position 23% GB VALUE SHARE IN SELECTED CO
Slide 15: Global battery revenues are balanced across many markets
50% 50% U.S. vs. INTERNATIONAL (percent of net sales TTM June 30, 2016) 77% 23% Global battery revenues are balanced across many markets DEVELOPED vs. DEVELOPING (percent of net sales TTM June 30, 2016) 76% 24% TOP 10 vs. ALL MARKETS (percent of net sales TTM June 30, 2016) U.S. International Develo
Slide 16: Strong battery business fundamentals
Strong battery business fundamentals • Global and U.S. category trends are stable, consistent with our long-term outlook for the category (flat to slightly down) • Promotional frequency and depth have declined in the U.S. in the latest 52 weeks -2.4% -0.6% +0.1% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0%
Slide 17: Our portfolio competes across all consumer segments
P re m iu m P e rf o rm a n c e V a lu e L ig h ts Our brand & product portfolio competes across all consumer segments BROAD PRODUCT PORTFOLIO S p e cialt y ENR GLOBAL SALES BY PRODUCT SEGMENT (% of LTM net sales thru June 2016) • Premium Alkaline • Lithium • Performance Alkaline • Rechargeable • Va
Slide 18: Energizer is well positioned in the battery category
4.8% -2.8% 0.0% 0.9% 46% 14% 28% 12% Premium Performance Price/Value Specialty Segment Value Trend Versus Prior Period EHI Share of Segment 41% 36% 9% 42% Energizer is well positioned in the battery category Nielsen Global Track, World Monthly Markets, 52 Weeks Ending June 2016 Global Category Share
Slide 19: Large and diversified channel and customer base
25% 75% We have a large and diversified channel and customer base BROAD, DIVERSE DISTRIBUTION ENR GLOBAL BATTERY AND LIGHTS SALES BY CUSTOMER (percent of LTM net sales through June 2016) • Top 5 customers are ~25% of sales • No customers in the top 10 are exclusive Top 5 All Other Sporting Goods Onl
Slide 20: Multiple in-store consumer purchase points
Multiple in-store consumer purchase points Our battery products are sold in multiple locations throughout the store 20
Slide 21: Introduction to HandStands
Introduction to HandStands Leading designer and marketer of innovative automotive fragrance products Brand Portfolio Automotive Fragrance (~80% of net sales) Automotive Appearance and other (~20% of net sales) (Eagle One) (1) Excluding transaction and integration costs. Transaction • Transaction clo
Slide 22: Broad portfolio in auto fragrance and appearance
Introduction to HandStands Broad portfolio in auto fragrance and appearance 22
Slide 23: Strong category fundamentals
Strong category fundamentals Strong category growth rates A market leader in the growing auto fragrance category Total # and age of vehicles on the road increasing Track record of leading with consumer-focused innovation Highly attractive financial and free cash flow profile Note: Dollar values
Slide 24: Opportunity to expand HandStands distribution
Other 11% We have an opportunity to expand HandStands distribution into multiple channels and geographies OPPORTUNITY TO EXPAND CHANNEL DISTRIBUTION HANDSTANDS U.S. SALES BY CHANNEL (percent of LTM net sales through June 2016) HANDSTANDS SALES BY GEOGRAPHY (percent of LTM net sales through June 2016
Slide 25: Agenda
Agenda Energizer Holdings, Inc. Strategic Priorities Delivering Long-Term Value First Year 25
Slide 26: Energizer Strategic Priorities
Energizer Strategic Priorities A foundation for delivering long-term value to our shareholders, customers and consumers FOCUS ON MAXIMIZING CASH FLOWS 26
Slide 27: Innovation in battery and lights category
Leading with innovation is key to our success in the battery and lights category Improved Brightness The World’s First AA Battery Made With 4% Recycled Batteries is Now EVEN Longer Lasting The World’s First Rechargeable AA & AAA Batteries Made With 4% Recycled Batteries World’s Longest Lasting and H
Slide 28: Innovation in auto fragrance category
Leading with innovation is key to our success in the auto fragrance category Refresh Your Car® Antibacterial HandStands brings to market the world’s first anti-bacterial cleaner specially formulated to condition and protect a car’s interior surfaces. Refresh Your Car® Mini Diffuser Pairing our prove
Slide 29: Executing effective category fundamentals
We operate with excellence by executing effective category fundamentals EXECUTION VISIBILITY CUSTOMER ENGAGEMENT SHOPPER BASED SOLUTIONS CATEGORY FUNDAMENTALS Best-in-class category execution Value Share of Battery Category Change vs. Year Ago 13 and 52 Week Rolling1 (1) Nielsen Global Track, World
Slide 30: Track record of driving productivity gains
WORKING CAPITAL (from FY’11 – Q3 FY’16, by driver) Track record of driving productivity gains Led to 440 basis points of gross margin improvement through FY’15 Led to 12 percentage point reduction in working capital as a percent of sales Offset dis-synergies from the spin SG&A pre-spin Dis- synergie
Slide 31: Global areas of focus to drive productivity gains
Trade Investment Working Capital Management SG&A Optimization Procurement Integrated Supply Chain 1 2 3 4 5 Global areas of focus to drive productivity gains Global Areas of Focus 31
Slide 32: Global Areas of Focus: Trade Investment
Global Areas of Focus Global areas of focus to drive productivity gains Trade Investment 1 Accomplishments • Established center-led Revenue Management team • Announced price increases in Canada, Russia and several Latin American, Middle East Africa and Asian markets • Frequency and depth of promotio
Slide 33: Global Areas of Focus: Working Capital Management
Global Areas of Focus Global areas of focus to drive productivity gains Working Capital Management 2 Accomplishments • Working Capital % of Sales reduced from 23% to 11% • Driver of leading Free Cash Flow performance Objectives • Improve Days in Inventory through SKU optimization and simplification
Slide 34: Global Areas of Focus: SG&A Optimization
Global Areas of Focus Global areas of focus to drive productivity gains SG&A Optimization 3 Accomplishments • Offset separation dis-synergies • Implemented Zero Based Budgeting • Established cultural mindset of relentless focus on eliminating non-critical/non-strategic costs Objectives • Annual cost
Slide 35: Global Areas of Focus: Procurement
Global Areas of Focus Global areas of focus to drive productivity gains Procurement 4 Accomplishments • >$60 million of savings as part of the 2013 Restructuring • Improved Days Payable Outstanding by 24 days Objectives • Annual cost optimization • Optimize and standardize vendor payment terms 35
Slide 36: Global Areas of Focus: Integrated Supply Chain
Global Areas of Focus Global areas of focus to drive productivity gains Integrated Supply Chain 5 Accomplishments • $86 million of savings as part of the 2013 Restructuring • Reduced the number of battery manufacturing facilities from 14 to 7 Objectives • Annual cost optimization • Partner with our
Slide 37: Agenda
Agenda Energizer Holdings, Inc. Strategic Priorities Delivering Long-Term Value First Year 37
Slide 38: Balanced approach to capital allocation
Balanced approach to capital allocation Maximize Free Cash Flow Reinvest in our Business Return of Capital Selective, Disciplined M&A Deliver Value Our foundation Pillars to our success Relentless focus on delivering value to shareholders, customers and consumers 38
Slide 39: Balanced capital allocation
Balanced capital allocation • Reinvested in the business to drive innovation and productivity gains • Returned $84 million cash to shareholders since spin ̶ $1 per share dividend to be increased to $1.10 per share starting FY ‘17 ̶ $22 million or 600,000 shares repurchased • Executed highly accretiv
Slide 40: Reinvest in business
Reinvest in business • Innovation to drive profitable share gains ̶ Introduced innovation across most of our portfolio • Drive productivity gains ̶ Right-sized our staffing levels in certain manufacturing locations • Information systems ̶ Updated critical IT systems to drive reporting simplification
Slide 41: Dividend and share repurchase delivering shareholder value
0 1 2 3 4 5 6 7 8 Share Authorization on July 1, 2015 Shares Repurchased in FY 16 Remaining on Authorization Dividend and share repurchase are an important part of delivering long-term shareholder value 0% 10% 20% 30% 40% 50% 60% 70% 80% U.S.Cash Flow Adjusted Net Income ~70% ~40% FY 16 FY 17 $1.00
Slide 42: Selective and disciplined approach to M&A
Selective and disciplined approach to M & A Right Business Branded Household Products Defensible business models Leverage Energizer’s core competencies Similar financial profile Right Time Maintaining core business performance is a priority Balance with other integration efforts, initiat
Slide 43: Strong balance sheet and free cash flow
Our strong balance sheet and free cash flow supports our balanced approach to capital allocation Summary Capitalization ($M Pro-Forma) Cash $300 Total Debt $1,050 Projected Free Cash Flow1 >$170 • Substantially all cash is offshore • Credit metrics: – ~3x debt to EBITDA – 75% at fixed rates – ~7.5 y
Slide 44: Long-term financial outlook
Long-term financial outlook (inclusive of HandStands) Growth rate at or above the category Organic Revenue Consistent low single-digit growth Adjusted EBITDA Corporate rate in the range of 30% to 31% Tax Rate (ex unusuals) In the range of $30 million to $35 million Low to mid single-digit growth Fre
Slide 45: Key take-aways
Key take-aways • Strong start to first full year as a stand-alone company • Solid business fundamentals • Executing on our three strategic initiatives • Maximizing free cash flow • Balanced approach to capital allocation to drive long-term shareholder value 45
Slide 46: Q&A
Q&A BRIAN HAMM – CHIEF FINANCIAL OFFICER MARK LAVIGNE – CHIEF OPERATING OFFICER 4 6
Slide 47: Appendix
Appendix 4 7
Slide 48: Net Sales Organic Reconciliation
Net Sales Organic Reconciliation 48 Total Net Sales Net sales - prior year $ 501.3 $ 356.9 $ 374.3 $ 1232.5 Organic 9.5 % 0.5 % 1.2 % 4.4 % Int'l Go-to-Market (1.1) (1.1) (1.4) (1.2) Change in Venezuela results (0.6) % (1.5) % — % (0.7) % Impact of currency (6.7) % (4.3) % (3.4) % (5.0) % Net sales
Slide 49: Revenue Q3 2016 TTM Reconciliation
Revenue- Q3 2016 TTM Reconciliation Net Sales (in billions) Energizer Q3 2016 YTD 1.2$ Energizer Q4 2015 QTD 0.4$ Energizer Q3 2016 TTM 1.6$ HandStands 0.1$ 1.7$
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