Energizer 2009 Annual Report Download - page 13

ENERGIZER HOLDINGS INC. 2009 ANNUAL REPORT PAGE 11
Energizer is well positioned to meet the needs of customer and con-
sumer demands for household and specialty batteries and portable
lighting products, leveraging category expertise, retail understanding
and its broad portfolio of products to give Energizer a strong presence
across the retail channels. We believe we have a leading market share
presence in most of the major markets in which we choose to compete.
We believe we have been able to either hold or gain share in many of our
key markets over the past three years due to our diversified portfolio of
products, which meet a broad spectrum of consumer needs.
Personal Care
The Personal Care division includes Wet Shave products sold under
the Schick, Wilkinson Sword, Edge and Skintimate brand names,
Skin Care products sold under the Banana Boat, Hawaiian Tropic,
Wet Ones and Playtex brand names, and Feminine Care and Infant
Care products sold under the Playtex and Diaper Genie brand names.
We manufacture and distribute Schick and Wilkinson Sword razor sys-
tems, composed of razor handles and refillable blades, and disposable
shave products for men and women. We market our wet shave prod-
ucts in more than 140 countries worldwide. Its primary markets are the
U.S., Canada, Japan and the larger countries of Western Europe. SWS
estimates its overall share of the wet shave category for these major
markets at approximately 20% in 2009, 2008 and 2007. We currently
maintain the #2 global market share position in wet shaving. Category
blade unit consumption has been relatively flat for a number of years.
However, product innovations and corresponding increased per unit
prices have accounted for category growth. The category is extremely
competitive with competitors vying for consumer loyalty and retail
shelf space.
On June 5, 2009 we completed the acquisition of the Edge and Skin-
timate shave preparation brands from SCJ. This added U.S. market
leading shave preparation products to our wet shave portfolio.
SWS has gained recognition for its innovation and development of new
products designed to improve the shaving experience, including the
introduction of the Intuition women’s system in 2003, a unique system
incorporating a three-bladed razor surrounded by a skin conditioning
solid which lathers, shaves and provides extra moisture in one step.
In 2003, SWS introduced the Quattro men’s shaving system, the first
four blade razor system for men. Since then, SWS has continued to
introduce a number of extensions and improvements to these
flagship systems.
In 2007, Energizer acquired Playtex Products, Inc., a leading North
American manufacturer and marketer in the skin, feminine and infant
care product categories, with a diversified portfolio of well-recognized
branded consumer products.
In skin care, we market sun care products under the Banana Boat and
Hawaiian Tropic brands. We believe these brands, on a combined basis,
hold a leading market share position in the U.S. sun care category. The
sun care category in the U.S. is segmented by product type such as
general protection, tanning and babies; as well as by method of
application such as lotions and sprays. Playtex competes across this
full spectrum of sun care products. We also offer Wet Ones, the leader
in the U.S. portable hand wipes category, and Playtex household
gloves, the branded household glove leader in the U.S.
In feminine care, we believe Playtex is the second largest selling
tampon brand overall in the U.S. We offer plastic applicator tampons
under the Playtex Gentle Glide and Playtex Sport brands, and Playtex
Personal Cleansing Cloths, a pre-moistened wipe for feminine hygiene.
In infant care, we market a broad range of products including bottles,
cups, and a full line of mealtime products including plates, utensils
and placemats under the Playtex brand name. We also offer a line of
pacifiers, including the Ortho-Pro and Binky pacifiers. We believe our
Playtex Diaper Genie brand of diaper disposal systems leads the U.S.
diaper pail category. The Diaper Genie brand consists of the diaper pail
unit and refill liners. The refill liners individually seal diapers in an odor-
proof plastic film.
Foreign Currency
A significant portion of our product cost is more closely tied to the U.S.
dollar and, to a lesser extent, the Euro, than to the local currencies in
which the product is sold. As such, a weakening of currencies relative
to the U.S. dollar and, to a lesser extent, the Euro, results in margin
declines unless mitigated through pricing actions, which are not always
available due to the competitive and economic environment. Conversely,
strengthening of currencies relative to the U.S. dollar and, to a lesser
extent, the Euro can improve margins. This margin impact coupled with
the translation of foreign operating results to the U.S. dollar, our financial
reporting currency, has an impact on reported operating profit. In 2009,
the U.S. dollar strengthened considerably during our first fiscal quarter
versus most foreign currencies due to the global economic crisis. We
estimate that operating profit for fiscal 2009 was negatively impacted
by approximately $120 as compared to fiscal 2008 from unfavorable
currency movements. Changes in the value of local currencies in relation
to the U.S. dollar, and, to a lesser extent, the Euro will continue to impact
reported sales and segment profitability in the future, and we cannot
predict the direction or magnitude of future changes.
FINANCIAL RESULTS
For the year ended September 30, 2009, net earnings were $297.8, or
$4.72 per diluted share, compared to net earnings of $329.3, or $5.59
per diluted share, in 2008 and $321.4, or $5.51 per diluted share in
2007. The higher average shares outstanding, 63.1 million in 2009 as
compared to 58.9 million in 2008, as a result of the common stock
issuance in May 2009 reduced diluted earnings per share by $0.34
for the year ended September 30, 2009 as compared to fiscal 2008.
Included in the current year results are:
■ Charges:
- $33.2, after-tax, or $0.53 per diluted share, related to the
Company’s voluntary enhanced retirement option (VERO) and
reduction in force (RIF) programs, and other business realignment
and integration charges;