Energizer 2010 Annual Report Download - page 26

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ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
16
and line extensions and to sustain existing products is affected by whether we can:
• develop and fund research and technological innovations,
• receive and maintain necessary intellectual property protections,
• obtain governmental approvals and registrations,
• comply with governmental regulations, and
• anticipate consumer needs and preferences successfully.
The failure to develop and launch successful new products could hinder the growth of our
businesses and any delay in the development or launch of a new product could also
compromise our competitive position. If competitors introduce new or enhanced products that
significantly outperform Energizer’s, or if they develop or apply manufacturing technology which
permits them to manufacture at a significantly lower cost relative to ours, we may be unable to
compete successfully in the market segments affected by these changes.
Competition in Energizer’s industries may hinder our ability to execute our business
strategy, achieve profitability, or maintain relationships with existing customers.
The industries in which Energizer operates, including battery, portable lighting products, wet
shave, skin care, feminine care and infant care, are highly competitive, both in the United
States and on a global basis, as a limited number of large manufacturers compete for
consumer acceptance and limited retail shelf space.
As product placement, facings and shelf-space are at the sole discretion of our retailer
customers, and often impacted by competitive activity, the visibility and availability of our full
portfolio of products can be limited. Our retailer customers have increasingly sought to obtain
pricing concessions or better trade terms, and because of the highly competitive environment in
which we operate as well as increasing retailer concentration, their efforts can be successful,
resulting in either reduction of our margins, or our relative disadvantage to lower cost
competitors. Competitors may also be able to obtain exclusive distribution at particular retailers,
or favorable in-store placement, resulting in a negative impact on our sales.
Competition is based upon brand perceptions, product performance and innovation, customer
service and price. Energizer’s ability to compete effectively may be affected by a number of
factors:
• Energizer’s primary competitor in batteries, wet shave and feminine care products, The
Procter & Gamble Company, has substantially greater financial, marketing and other
resources and greater market share in certain segments than Energizer does, as well
as significant scale and negotiating leverage with retailers;
• Energizer’s competitors may have lower production, sales and distribution costs, and
higher profit margins, than Energizer, which may enable them to compete more
aggressively in offering retail discounts and other promotional incentives;
• loss of key retailer customers to competitors may erode Energizer’s market share; and