Energizer 2012 Annual Report Download - page 21

Loss of reputation of our leading brands or failure of our marketing plans could have an adverse effect on our business.
We depend on the continuing reputation and success of our brands, particularly the Energizer,Eveready, Schick,Wilkinson
Sword,Edge,Skintimate,Playtex,Diaper Genie,Wet Ones,Banana Boat and Hawaiian Tropic brands. Our operating results
could be adversely affected if one of our leading brands suffers damage to its reputation due to real or perceived quality issues.
Further, the success of these brands can suffer if our marketing plans or new product offerings do not have the desired impact
on our brand's image or ability to attract consumers. Additionally, claims made in our marketing campaigns may become
subject to litigation alleging false advertising, which if successful could cause us to alter our marketing plans that may
materially and adversely affect sales, or result in the imposition of significant damages against us.
Loss of any of our principal customers could significantly decrease our sales and profitability.
Wal-Mart, together with its subsidiaries, is our largest customer, accounting for approximately 20% of net sales in fiscal
2012. Generally, sales to our top customers are made pursuant to purchase orders and we do not have supply agreements or
guarantees of minimum purchases from them. As a result, these customers may cancel their purchase orders or reschedule or
decrease their level of purchases from us at any time. The loss or a substantial decrease in the volume of purchases by any of
our top customers would harm our sales and profitability. Additionally, increasing retailer customer concentration could result
in reduced sales outlets for our products, greater negotiating pressures and pricing requirements on Energizer.
The performance of the primary battery product category may be impacted by further changes in technology and device
trends, which could impair Energizer's operating results and growth prospects.
We believe an increasing number of devices are using built-in rechargeable battery systems, particularly in developed
markets, leading to a declining volume trend in the battery category, which we expect will continue. This has and will likely
continue to have a negative impact on the demand for primary batteries. This trend has and will continue to put additional
pressure on segment results going forward. Development and commercialization of new battery or device technologies not
available to Energizer could also negatively impact our results and prospects.
We face risks arising from the restructuring of our operations and uncertainty with respect to our ability to achieve the
estimated cost savings.
In November 2012, we announced a restructuring plan, which entails, among other things:
• reducing our global workforce by more than 10%;
• the closing and streamlining of operations facilities in the Household Products division;
• streamlining our Household Product division product portfolio;
• reducing overhead spending; and
• creating a center-led purchasing function.
We expect to incur significant charges related the Restructuring Plan which will harm our profitability in the periods incurred. If
we incur unexpected charges related to the restructuring, or in connection with any potential future restructuring program, our
financial condition and results of operations may suffer further.
Execution of the restructuring plan, or any potential future restructuring program, presents a number of significant risks,
including:
• actual or perceived disruption of service or reduction in service standards to customers;
• the failure to preserve adequate internal controls as we restructure our general and administrative functions;
• the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve
conflicts that may arise;
• diversion of management attention from ongoing business activities; and
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