Energizer 2007 Annual Report Download - page 9

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Energizer Holdings, Inc. 2007 Annual Report
Operational Performance
For fiscal 2007, our Batteries and Lighting Products
segment accounted for 71 percent of company sales
and 75 percent of profits, while our Razors and Blades
segment contributed 29 percent of sales and 25
percent of profits. With commercial and production
operations in 49 countries and distribution in another
131 countries, we market our products throughout
most of the world. Currently, 54 percent of sales and
68 percent of profits are generated outside the
United States.
Batteries and lighting products. Total battery
sales increased 11 percent last year boosted by sales
increases across all major product groups. Perform-
ance battery sales climbed over 20 percent, fueled by
our leadership in lithium and rechargeables which best
address the high-drain needs of today’s digital devices.
At year-end, our share of the U.S. battery market
reached 39 percent.
Battery margins continue to feel the impact of
higher raw material costs, particularly the price of zinc
and other metals. In the first quarter of fiscal 2007, the
spot price of zinc reached $2.10 – a four-fold increase
in 24 months. Although zinc prices moderated some-
what by year-end, higher commodity costs added $90.1
million to the cost of goods in fiscal 2007, partially
offset by battery price increases in U.S. and selected
international markets, plus forward buying on zinc
to lock in below spot rates.
With our universally recognized Energizer®and
Eveready®brands, we offer the broadest range of
portable power solutions and a comprehensive prod-
uct portfolio that spans three distinct segments of the
overall battery category – household batteries, specialty
batteries and battery-powered lighting products.
Household batteries, our primary segment, includes
performance products such as Energizer®e2®Lithium®
batteries, Energizer®e2®Titanium Technology®alka-
line batteries, top-selling Energizer®Rechargeable®
batteries and chargers, and the Energizer®Energi To
Go®family of products; as well as premium batteries
led by our Energizer®MAX®flagship alkaline brand
and price batteries with Eveready®carbon zinc and
Eveready®Gold®alkaline batteries.
Razors and blades. Driven by double-digit growth
of our Quattro®and Intuition®platforms and line of
disposables, sales for the Razors and Blades segment
increased a healthy 6 percent last year. At year-end, our
share of the wet shave category was 19.6 percent in our
eight major markets.
With the successful introduction of the Quattro®
Disposable last year and upcoming launch of the next-
generation Quattro®Titanium and Quattro®Titanium
Trimmer, we anticipate continued growth for our SWS
franchise, particularly in international markets where
fiscal 2007 sales increased 5 percent, excluding cur-
rency impacts.
We compete aggressively in all three segments of
the global wet shave category – men’s shaving systems
with advanced Schick®Quattro®, the world’s first four-
bladed razor, and Xtreme3®and Protector®; women’s
shaving systems with Schick®Intuition®and Intuition
Plus®, the only razor that lathers, shaves and moistur-
izes simultaneously in one easy step, and Quattro®For
Women®, Silk Effects®Plus and Lady Protector®; and
disposables with the Quattro®Disposable in versions
for both men and women, introduced in early 2007 in
the United States, and Schick®Xtreme3®and Schick®
ST®Slim Twin®.
Consumer Sampling
Quattro®Disposable, the world’s first premium four-blade disposable
razor, was introduced in February 2007 in versions for both men and
women. Consumer trial is a key component of new product launches,
and throughout the year, we used aggressive sampling including in-store,
on-campus and direct to consumer initiatives to successfully establish
a loyal user base.