Energizer 2012 Annual Report Download - page 20

and incorporated herein by reference. This information will also appear in the Energizer Holdings, Inc. 2012 Annual Report.
Item 1A. Risk Factors.
The following risks and uncertainties could materially adversely affect our business, results of operations, consolidated
financial condition and cash flows. Energizer may amend or supplement the risk factors described below from time to time in
other reports it files with the SEC.
Energizer faces risks associated with global economic conditions.
Unfavorable global economic conditions, increased unemployment levels and uncertainty about future economic prospects
could reduce consumer demand for our products as a result of a reduction in discretionary spending or a shift of purchasing
patterns to lower-cost options such as private label or price brands. Similarly, our retailer customers could reduce their
inventories, shift to different products or require us to lower our prices. Declining financial performance by certain of our
retailer customers could impact their ability to pay us on a timely basis, or at all. These general risks remain heightened as
global economic conditions continue to deteriorate and the recovery in most developed markets remains sluggish. Worsening
economic conditions could harm our sales and profitability. Additionally, disruptions in credit markets could reduce our access
to debt and equity capital markets, negatively affecting our ability to implement our business plan and strategy.
If Energizer cannot continue to develop new products in a timely manner, and at favorable margins, it may not be able to
compete effectively.
The battery and portable lighting products, wet shave, skin care, feminine care and infant care industries have been notable
for the pace of innovations in product life, product design and applied technology, and our success depends on future
innovations. The successful development and introduction of new products, such as Schick Hydro Silk and Schick Hydro 5
Power Select, faces the uncertainty of retail and consumer acceptance and reaction from competitors, as well as the possibility
of reducing the sales of our existing products. There can be no assurance that our investments in research and development will
lead to innovation and that we can recover the costs of such investments, that our customers or end consumers will purchase
our new products or that our competitors will not introduce new or enhanced products that significantly outperform Energizer's,
or develop manufacturing technology which permits them to manufacture at a lower cost relative to ours. If we fail to develop
and launch successful new products, or fail to reduce our cost structure to a competitive level, we may be unable to grow our
business and compete successfully.
Competition in Energizer's industries may hinder our ability to execute our business strategy, achieve profitability, or
maintain relationships with existing customers.
The categories in which Energizer operates, including battery and portable lighting products, wet shave, skin care, feminine
care and infant care, are mature and 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. Because of the highly competitive
environment in which we operate as well as increasing retailer concentration, our retailer customers frequently seek to obtain
pricing concessions or better trade terms, resulting in either reduction of our margins, or our relative disadvantage to lower cost
competitors. 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, including:
• our primary competitor in batteries, wet shave and feminine care products, The Procter & Gamble Company, and most
of our other competitors, have substantially greater financial, marketing, research and development and other
resources and greater market share in certain segments than Energizer does, as well as significant scale and negotiating
leverage with retailers and suppliers;
• our competitors may have lower production, sales and distribution costs, and higher profit margins, than Energizer,
which may enable them to offer aggressive retail discounts and other promotional incentives;
• our competitors may be able to obtain exclusive distribution rights at particular retailers, or favorable in-store
placement; and
• we may lose market share to private label brands sold by retail chains, which are typically sold at lower prices than our
products.
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