Energizer 2007 Annual Report Download - page 6

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Energizer Holdings, Inc. 2007 Annual Report
for an increasingly mobile, techno-centric population
and the proliferation of electronic gadgets that drives
their lives. Our Energizer®e2®Lithium®cells deliver
the stable, long-lasting power preferred by today’s high-
drain digital devices. Our compact, lithium-powered
Energi To Go®chargers deliver on-the-go hybrid power
to cell phones and iPod®devices. Our top-selling
rechargeable batteries and innovative chargers are
designed specifically to match consumers’ busy
lifestyles. And we are in the forefront of bringing effi-
cient LED technology to portable lighting products.
In our wet shave business, we continue to build on
our successful Schick®Quattro®and Intuition®systems
with innovative extensions like the Quattro®Dispos-
able, the world’s first premium four-blade disposable
razor; the upcoming Quattro®Titanium Trimmer, the
only razor that shaves, edges and trims; and advanced
Intuition Plus®with an improved ergonomic handle
and pivoting head.
Playtex Acquisition
Consistent with our long-term strategy and our priorities
for the use of cash flow, we acquired Playtex Products,
Inc. effective October 1, 2007 for approximately $1.9
billion, of which $1.6 billion was financed with new
debt. For the 12 months ended September 30, 2007,
Playtex generated total pro forma sales of $773 million,
approximately 92 percent of which are generated in
North America. Playtex is a leading consumer products
company with a portfolio of well-known brands, most
with No. 1 or No. 2 market positions, in three categories
– skin care, feminine care and infant care.
Fit with Energizer. We view Playtex as a terrific fit with
Energizer’s culture, businesses and growth strategies.
Playtex has strong brands in stable or growing personal
care categories adjacent to categories where we currently
compete, with particular strengths and opportunities
with the target audience of female consumers. Its prod-
ucts enjoy healthy margins with strong, predictable cash
flows similar to our existing household and personal
grooming products. We share similar customers and dis-
tribution channels in the United States and Canada. And
we are adding a strong, seasoned management team and
skilled colleagues. We believe Playtex will add significant
value to Energizer, innovating in the categories in which
it competes, selectively expanding into global markets
using our distribution network, and achieving synergistic
savings as we integrate our businesses.
With the addition of Playtex, Energizer has a more
diversified portfolio of branded products and greater
scale in the personal care category, now more evenly
balanced with our household goods business. As such,
we are restructuring the company into the Household
Products Division (Energizer®and Eveready®) and the
Personal Care Division (Schick-Wilkinson Sword and
Playtex Products), and going forward, we will report
business and financial results in those two segments.
Share Repurchase
In returning cash to shareholders, we continue to favor
opportunistic share repurchase over dividends, giving
us greater operating and financial flexibility. During
fiscal 2007, the company bought back 0.8 million
shares of its common stock for $53 million. Since our
2000 spin-off, we have repurchased 48 percent of the
original shares outstanding – a total of 46.2 million
shares for $2.0 billion at an average price of $42.72,
well below current market prices. Near term, however,
our priority is debt repayment, which increased as a
result of the acquisition of Playtex Products.
Stock Price Performance
OCT 01 OCT 02 OCT 03 OCT 04 OCT 05 OCT 06 OCT 07
The cumulative total return
on $100 invested in Energizer
Holdings, Inc. from the first
day of trading on April 3, 2000
($21.25 per share closing stock
price) through September 28,
2007 ($110.85 per share closing
stock price) reached 422 percent
versus 80 percent for the S&P
MidCap 400 Index.
Energizer
S&P MidCap 400
$500
$400
$300
$200
$100
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