Energizer 2008 Annual Report Download - page 5

ENERGIZER HOLDINGS, INC. 2008 Annual Report 3
40 percent of profit. We have a similar geographic balance, with 49 percent of sales and 57 percent of
profits currently generated outside the United States. Global in scope, we maintain commercial and
production operations in 49 countries and sell our products in over 180 countries around the world.
HOUSEHOLD PRODUCTS
The Household Products Division faced significant challenges during the year. In particular, historically high
prices for raw materials including zinc, nickel and manganese ore, which translated into increased costs
totaling approximately $60 million for fiscal 2008. In addition, we experienced lower volumes due primarily
to global economic sluggishness that has impacted battery sales throughout most of the developed world.
These impacts were partially offset with price increases, improved product mix from our performance batter-
ies, controlled promotional spending and cost reductions from our continuous improvement program based
on LEAN concepts. Identifying and eliminating non-value added activities in our battery group, we improved
productivity 45 percent over the last four years – with batteries produced per operations associate climbing
from 1.1 million to 1.5 million. Based on that success, we are continuing to roll out this behavioral philosophy
to other areas of the company.
Today, Energizer is uniquely positioned to meet the growing demand for portable power with the
industry’s most comprehensive portfolio of battery technology – designed to let consumers select the right
battery that not only fits the device but also their lifestyle. Using this broad portfolio, we successfully employ
a trade-up strategy to drive top-line growth. In less developed world markets, we encourage trade-up from
price batteries to premium batteries; in more developed markets, where growth of high-tech devices is
particularly strong, consumers are increasingly trading-up from premium batteries to performance batteries.
This shift is clearly reflected in our sales – performance batteries accounted for 57 percent of the division’s
net sales growth over the last three years and premium batteries generated 34 percent of growth, while less
profitable price batteries declined 8 percent. We have achieved similar success via trade-up in lighting
products, with that business accounting for 11 percent of net sales growth over the same period.
Performance batteries. Sales of performance batteries grew 19 percent last year, driven by our continued
leadership in lithium and rechargeables, which best address the high-drain power needs of high-tech devices.
Sales of lithium batteries continue to grow in excess of 25 percent per year, led by our original Energizer®
Ultimate Lithium, the world’s longest-lasting AA and AAA batteries in high-tech devices – enhanced to now
last up to eight times longer in digital cameras compared to Energizer® Max®*. Employing a new segmented
approach to lithium, we recently launched Energizer® Advanced Lithium as a lower-cost option designed to
introduce consumers to lithium technology and performance.
To meet this accelerating demand, we doubled the production capacity at our Vermont lithium plant
twice since 2004, but have now outgrown that facility. During the year, we began construction of a second
lithium manufacturing site in Singapore, where we have had a production presence for many decades.
*Results vary by camera.
U.S. Market Share Position
Latest 52-week data
Subcategories
Household Batteries
Specialty Batteries
Lighting Products
Men’s Shaving Systems
Women’s Shaving Systems
Disposable Shavers
Sun Care
Hands and Face Towelettes
Household Gloves
Tampons
Bottles and Cups
Disposable Diaper Systems
BATTERIES & LIGHTING
WET SHAVE
SKIN CARE
FEMININE CARE
INFANT CARE 2
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