Energizer 2009 Annual Report Download - page 3

ENERGIZER HOLDINGS INC. 2009 ANNUAL REPORT PAGE 1
Initially, the challenges we confronted in this unusual macro-
economic environment were external to the categories in which
we operate – beginning with the dramatic weakening of most
foreign currencies versus the U.S. dollar. Specifically, two months
into our fiscal year, we faced a $125 million to $140 million
projected segment profit shortfall versus our plan, just due
to currencies.
Then, as the economy stalled and same-store sales
declined particularly in the U.S. market, retailers responded with
significant reductions in inventories that impacted categories like
batteries especially hard. As retailers curtailed their inventories,
consumers did the same by reducing their inventories of batteries
in home pantries.
Faced with these unprecedented challenges, we weathered
the storm by maintaining our focus – executing our strategies,
strengthening our balance sheet, fueling product innovation
and connecting with consumers. We emerged at year-end well
positioned and with our growth platforms intact to continue
capitalizing on the opportunities before us in the coming year
and beyond.
Focus on Financial Performance
For the fiscal year ended September 30, 2009, net earnings
for Energizer Holdings were $297.8 million compared to
$329.3 million the previous year, and earnings per diluted share
were $4.72 compared to $5.59 the year before. Net sales for
the fiscal year decreased $331.2 million, or 8 percent, to
$3,999.8 million; on a constant currency basis, sales decreased
$107 million, or 2 percent. Lower sales and earnings are the result
of declining battery volumes, unfavorable currencies across all
businesses and a globally weak consumer environment.
To mitigate the impact of the recession and difficult retail cli-
mate throughout the year, we exercised a number of initiatives to
control overheads, reduce advertising and promotional spending,
and manage our business for strong cash flow. We restructured
TO OUR SHAREHOLDERS
Fiscal 2009 was a challenging year
for Energizer as the global economic
environment negatively impacted our
financial performance. In addition to
the global recession, the severe crisis
experienced in the credit markets
caused us to take unprecedented
actions to shore up our balance
sheet to protect our favorable debt
structure. Given the quality of our
products, the strength of our brands
and the close connections we have
with consumers and retailers around
the globe, we felt it prudent to take
aggressive action to reduce discre-
tionary spending and pay down debt
to ensure we remain well positioned
for long-term growth.
WARD M. KLEIN, Chief Executive Officer