Energizer 2015 Annual Report Download - page 17

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products, which could adversely affect our market share and results of operations.
The vast majority of our total revenues are from products bearing proprietary trademarks and brand names. In
addition, we own or license from third parties a number of patents, patent applications and other technology. We rely on
trademark, trade secret, patent and copyright laws to protect our intellectual property rights. There is a risk that we will
not be able to obtain and perfect or maintain our own intellectual property rights or, where appropriate, license intellectual
property rights necessary to support new product introductions. In addition, even if such rights are protected in the United
States, the laws of some other countries in which our products are or may be sold do not protect intellectual property rights
to the same extent as the laws of the United States. We cannot be certain that our intellectual property rights will not be
invalidated, circumvented or challenged in the future, and we could incur significant costs in connection with legal actions
relating to such rights. As patents expire, we could face increased competition, which could negatively impact our
operating results. If other parties infringe on our intellectual property rights, they may dilute the value of our brands in the
marketplace, which could diminish the value that consumers associate with our brands and harm our sales.
Our future financial performance and success are dependent on our ability to execute our business strategy successfully.
Our products are currently marketed and sold through a dedicated commercial organization and exclusive and non-
exclusive third-party distributors and wholesalers. As part of the separation, we increased our use of exclusive and non-
exclusive third-party distributors and wholesalers. We also decreased or eliminated our business operations in certain
countries with large numbers of local and regional low-cost competitors in order to increase our profitability. In addition,
we shifted from a decentralized management structure to a model in which many functions are managed centrally. We
expect that these changes in our business strategy will enable us to reach new retail customers and consumers, and focus
our business operations on more profitable markets. However, the use of distributors in markets where we have
historically maintained a direct presence could adversely impact the reputation of our brands and negatively impact our
results of operations. Despite our efforts, we cannot guarantee that we will be able to efficiently implement our strategy in
a timely manner to exploit potential market opportunities, achieve the goals of our long-term business strategy, or meet
competitive challenges. If we are unable to execute our business strategy successfully, our revenues and marketability
may be adversely affected.
If we pursue strategic acquisitions, divestitures or joint ventures, we may not be able to successfully consummate
favorable transactions or successfully integrate acquired businesses.
From time to time, we may evaluate potential acquisitions, divestitures or joint ventures that would further our
strategic objectives. With respect to acquisitions, we may not be able to identify suitable candidates, consummate a
transaction on terms that are favorable to us, or achieve expected returns and other benefits as a result of integration
challenges. With respect to proposed divestitures of assets or businesses, we may encounter difficulty in finding acquirers
or alternative exit strategies on terms that are favorable to us, which could delay the accomplishment of our strategic
objectives, or our divestiture activities may require us to recognize impairment charges. Companies or operations acquired
or joint ventures created may not be profitable or may not achieve sales levels and profitability that justify the investments
made. Our corporate development activities may present financial and operational risks, including diversion of
management attention from existing core businesses, integrating or separating personnel and financial and other systems,
and may have adverse effects on our existing business relationships with suppliers and customers. Future acquisitions
could also result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities or
amortization expenses related to certain intangible assets, and increased operating expenses, which could adversely affect
our results of operations and financial condition.
Our business involves the potential for product liability and other claims against us, which could affect our results of
operations and financial condition and result in product recalls or withdrawals.
We face exposure to claims arising out of alleged defects in our products, including for property damage, bodily
injury or other adverse effects. We maintain product liability insurance, but this insurance does not cover all types of
claims, particularly claims that do not involve personal injury or property damage or claims that exceed the amount of
insurance coverage. Further, we may not be able to maintain such insurance in sufficient amounts, on desirable terms, or at
all, in the future. In addition to the risk of monetary judgments not covered by insurance, product liability claims could
result in negative publicity that could harm our products’ reputation and in certain cases require a product recall. Product
recalls or product liability claims, and any subsequent remedial actions, could have a material adverse effect on our
business, reputation, brand value, results of operations and financial condition.
We may not be able to attract, retain and develop key personnel.
Our future performance depends in significant part upon the continued service of our executive officers and other
key personnel. The loss of the services of one or more of our executive officers or other key employees could have a
material adverse effect on our business, prospects, financial condition and results of operations. Our success also depends
on our continuing ability to attract, retain and develop highly qualified personnel, including future members of our