Energizer 2010 Annual Report Download - page 8

Powered by our Energizer® and
Eveready® brands, we are the global leader
in batteries, with leading worldwide
market share. Brands matter in the
battery market, and led by our iconic brand
symbols, such as the Energizer Bunny®
in North America, our brand strength is
at all-time highs. We are rated the number
one long-lasting battery by consumers in
the U.S., and we lead in several other
important measures of brand strength.
We meet consumer needs with a full
portfolio, leveraging our expertise in
multiple battery chemistries, from carbon
zinc to alkaline to lithium to nickel metal
hydride. Carbon zinc batteries continue to
sell well in emerging markets, with nearly
one billion carbon zinc batteries sold
annually. And at the top end of the product
portfolio, we are an innovator and market
leader in lithium and rechargeable
batteries, offering a full range of products,
including the first AA and AAA lithium
batteries in the world.
Throughout its history, Energizer has
been an innovation leader in batteries and
lights. New or improved products in 2010
included miniature batteries for devices
such as hearing aids, an array of LED
flashlights and new battery chargers,
including a new Qi-compliant Energizer®
Inductive Charger for certain smart
phones and other devices with Qi-enabled
built-in rechargeable batteries.
Batteries continue to be a strong
contributor to Energizer’s sales, earnings
and cash flow. The unit sales declines we
experienced during the recession have
moderated. However, we anticipate that
market trends, with an increasing number
of devices using built-in rechargeable
battery systems, will have a long-term
negative impact on the demand for primary
batteries, particularly in developed
economies. This trend, coupled with
aggressive competitive activity in the
U.S. and other markets, could put
additional pressure on segment results
going forward.
Restructuring the Battery Business
In order to combat this trend and improve
our competitive position, our Board of
Directors authorized management to
undertake a multi-year program designed
to accelerate investments in both geo-
graphic and product growth opportunities,
streamline our worldwide manufacturing
operations and improve the efficiency of
our administrative operations. While the
final plan is still being determined, it is
expected to result in pre-tax charges in the
range of $65 million to $85 million over the
next twelve months, with the vast majority
associated with manufacturing capacity
rationalization. The remainder relates to
overhead reductions. By the end of fiscal
2012, annual pre-tax savings, related
primarily to headcount reduction and
manufacturing efficiencies, are expected to
be in the range of $25 million to $35 million.
It is important to keep these changes
in perspective. Batteries are a large and
attractive business now and for the
foreseeable future. Our brand strength,
share leadership, strong international
manufacturing, distribution and sales
organizations, and comprehensive product
line are powerful assets. We have strong
positions in growth areas such as Asia,
Latin America and parts of Central and
Eastern Europe, and our product portfolio
enables us to pursue these growth
prospects. We expect that our battery
business will continue to provide a
platform for the worldwide growth of
all of our businesses.
Personal Care In fiscal 2010, sales for
our Personal Care segment increased
8% to $2.0 billion, and segment profit
increased 7% to $367 million. Increased
sales were driven by higher Wet Shave
sales due to the full-year ownership of
Edge® and Skintimate,
® the launch of
Schick Hydro® and favorable currencies.
Excluding currencies, segment profit was
essentially flat as we supported the Schick
Hydro® launch.
Since the 2003 acquisition of Schick
Wilkinson Sword, our Personal Care
segment has grown through acquisition
and innovation to become a $2.0 billion
business with number one or two market
share positions in wet shave, sun and skin
care, infant care and feminine care.
Innovations have included the
introduction in 2003 of Intuition® for
women and the Quattro® family of
products, the first four-bladed shaving
products for men and women. Over time,
we have added new products to both of
these product families, and together these
brands now account for over $520 million
in annual sales.
With the launch of Schick Hydro,® we
created a powerful new growth platform
in our wet shave business.
6
EN ER GI ZE R HO LD IN GS , IN C. 2010 A NN UA L RE PO RT
I N N O V A T I O N
IT’S LIKE A BLAST OF HYDRATION.
Our new Schick Hydro razor provides a close
shave while leaving skin refreshed.
FREE YOUR SKIN
®
Water-activated gel hydrates
your skin as you shave.
Skin guards smooth your
skin to reduce irritation.
The new Schick Hydro.
TM
A better shave than Mach 3.
It’s like a blast of hydration.
©2010 Energizer. Schick, Schick Hydro and other marks are trademarks of Energizer.
SchickHydro.com
Full contact hydration.
©2010 Energizer. Schick, Schick Hydro and other marks are trademarks of Energizer.
SchickHydro.com
FREE YOUR SKIN
®
Water-activated gel hydrates
your skin as you shave.
Skin guards smooth your
skin to reduce irritation.
The new Schick Hydro.
TM
A better shave than Mach 3.