Energizer 2010 Annual Report Download - page 62

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Exhibit 13
ENERGIZER HOLDINGS, INC.
(Dollars in millions, except per share and percentage data)
52
Net sales for fiscal 2009 were $1,890.3, an increase of $33.6, or 2%, including the impact of
approximately $80 of unfavorable currencies, as compared to fiscal 2008. Excluding the
impact of unfavorable currencies, sales increased approximately 6% due to the shave
preparation acquisition, which added $57, or 3%, and higher sales of Wet Shave, Infant Care
and Skin Care products partially offset by lower sales of Feminine Care. Wet Shave sales
increased 3%, excluding the acquisition and currencies, driven by the launch of Quattro for
Women Trimmer in the second quarter, and higher disposable and Quattro men’s systems
sales, partially offset by ongoing declines in legacy razor system products. Infant Care sales
increased 7% driven by Diaper Genie, cups and soothing products. Skin Care sales increased
4% on higher sales of Wet Ones due to consumption driven by H1N1, and higher sales for sun
care primarily in international markets. Feminine Care sales decreased 2% as higher sales of
Playtex Sport were offset by lower sales of Gentle Glide, due, in part, to increased competitive
activity.
Segment profit for the fiscal year 2009 was $341.1, an increase of $18.6 or 6%, inclusive of
unfavorable currency of approximately $20, as compared to fiscal 2008. Excluding currencies,
segment profit grew approximately $39 or 12% due to incremental Playtex synergies of
approximately $32, lower A&P of approximately $17, and the inclusion of the shave preparation
acquisition, which added $4, partially offset by higher product costs and unfavorable product
mix.
Looking forward, based on current market conditions and costs, we expect the costs of
commodities and raw materials in fiscal 2011 for the Personal Care business will be flat to
slightly unfavorable as compared to the average costs paid in fiscal 2010.
In regards to the impact of foreign currencies and based on current market rates, we expect
currencies to be modestly favorable for fiscal 2011 compared to the average exchange rates
for fiscal 2010. This outlook is subject to considerable variation as market conditions change
during the year. While the Company utilizes certain hedging techniques, the percentage of
coverage for each currency will only partially hedge exchange rate variability.
As noted in the advertising and promotion discussion above, we expect A&P expense to
increase in fiscal 2011 due to the launch of Schick Hydro in key markets in Europe and Japan,
and the continued support of this new product launch in North America. While we incurred
launch related A&P spending in fiscal 2010, this spending occurred primarily in the back half of
the fiscal year. In 2011, higher comparative A&P expense for Personal Care is likely to occur
in the first half of the fiscal year in support of the fiscal 2011 launch initiatives. A&P spending is
subject to change in any given fiscal year due to the overall competitive and economic
environment, changes in strategic brand support objectives and shifts in the size and types of
promotional campaigns.