Energizer 2014 Annual Report Download - page 4

• Intensify its focus on its distinct commercial priorities;
• Allocate its own resources to meet the needs of its
business;
• Pursue distinct capital structures and capital allocation
strategies; and
• Provide a clear investment thesis and visibility to attract
a long-term investor base suited to each business.
This separation is a complicated undertaking, but we believe that
we have strong, passionate and experienced management teams
and well-planned business strategies for the future Household
Products and Personal Care businesses.
HOUSEHOLD PRODUCTS
Our Household Products business was the foundation for today’s
Energizer Holdings. Since 2000, the Household Products team
has done an excellent job keeping a passionate focus on the
needs of the retail customers and consumers.
As a separate company, the experienced management team will
be solely focused on the battery and lighting businesses and
plans to leverage its leading brands to generate signicant free
cash ow. This will enable it to continue investing in innovation
for consumers around the world to ensure that it remains a
leading and ever-evolving business with strong market positions
in its categories.
Alan Hoskins will be leading this new company as Chief Executive
Ofcer of Energizer Household Products. Alan has been with
us for over 30 years and his experience in the business is
unmatched. With a solid leadership team around him represented
by industry veterans and some of the best minds in the business,
we believe Household Products has a bright future and is more
than ready to stand on its own.
PERSONAL CARE
Beginning with our Schick Wilkinson Sword acquisition in 2003, we
have successfully created a Personal Care portfolio with more than
$2.6 billion in revenues. This dramatic growth of the original Schick
Wilkinson Sword base has been achieved through a combination of
strong organic growth like Hydro®, Quattro® and Intuition® razors,
as well as strategic acquisitions such as Playtex®, Edge® and
Skintimate, and American Safety Razor. More recently, we
expanded our presence in feminine hygiene in the U.S., Canada
and the Caribbean through the acquisition of Stayfree®, Carefree®
and o.b.® brands. This acquisition added key feminine hygiene
products to our tampon business resulting in a third, substantial
segment for Personal Care.
Personal Care has strong positions in large developed markets,
holding the number one or two positions in most of its markets.
The business plans to continue to expand its international
footprint and enter new markets in an effort to quickly capture
market share thanks to the brand equity it has built and maintained
over the years. In addition, Personal Care’s track record of investing
in innovative products that have been quickly embraced by
consumers is expected to be a major driver for the business.
Under the leadership of David Hateld, Personal Care has grown
tremendously. I know in his new position as Chief Executive
Ofcer of Energizer Personal Care, he will continue to drive the
business with the same passion he has shown since he joined
the Energizer team in 1988. David has assembled a remarkable
leadership team that we believe will help guide the business
and accelerate growth across all categories.
FOCUSED ON THE FUTURE
As I noted, scal 2014 has been a transformative year for Energizer
Holdings. Our job now, for both the management team and our
colleagues around the world, is to focus on the business at hand
while positioning both new companies for bright, successful futures.
Since 2000 we have been good stewards. Notably, since we rst
started trading on April, 1, 2000, our total shareholder return has
been 12.5 percent contrasted with four percent for the S&P 500
over the same time period. Be assured we will continue to invest
in both companies as they prepare to go their separate ways.
LOOKING TO FISCAL 2015
We plan to complete the separation by July 1, 2015. As a result,
we are providing guidance for key metrics for the nine months
ending June 30, 2015, rather than a full scal year. Regarding
top-line organic sales, we are anticipating at results as a
consolidated company. We expect Personal Care organic sales
gains in the low single digits, while we expect Household Products
organic sales declines to be low single digits, in line with the
category. We expect gross margin to remain stable, as cost
savings continue to benet from our highly successful
restructuring program. In addition, our A&P spending as a percent
of sales is expected to increase as we continue to support our
brands and invest in innovation. In summary: for the nine-month
period prior to separation, we expect strong operational
performance from both businesses, as they position themselves
for successful futures.
To our colleagues around the world, I want to say a special thank
you. It’s because of them that we have been able to achieve
so much since becoming an independent company in 2000.
They have kept going despite the stress of running the day-to-day
operations while making measurable progress on all our
corporate initiatives and preparing the company for separation.
To our management teams who are moving into new positions
and have played a key role in building the combined business,
thank you. It is truly gratifying to see such talented and passionate
individuals ready to take the reins and help continue the Energizer
Holdings legacy of growth, innovation and shareholder value.
To our investors, thank you for the condence you have shown
in us over the years and that you continue to demonstrate as we
look to create additional value and bring two successful public
companies to the market.
Ward M. Klein
Chief Executive Ocer, Energizer Holdings, Inc.
November 18, 2014
ENERGIZER HOLDINGS, INC. 2014 ANNUAL REPORT
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