Energizer 2015 Annual Report Download - page 30

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Energizer has a long history of innovation within our categories. Since our commercialization of the first dry-cell
battery in 1893 and the first flashlight in 1899, we have been committed to developing and marketing new products to
meet evolving consumer needs and consistently advancing battery technology as the universe of devices powered by
batteries has evolved. Over the past 100+ years we have developed or brought to market:
• the first flashlight;
• the first mercury-free alkaline battery;
• the first mercury-free hearing aid battery;
• Energizer Ultimate Lithium, the world’s longest-lasting AA and AAA battery for high-tech devices; and
• Energizer EcoAdvanced, the world’s first high performance AA battery made with 4% recycled batteries.
Today, Energizer offers batteries using many technologies including lithium, alkaline, carbon zinc, nickel metal
hydride, zinc air, and silver oxide. These products are sold under the Energizer and Eveready brands in the performance,
premium and price segments and include primary, rechargeable, specialty and hearing aid products. In addition, Energizer
has an extensive line of lighting products designed to meet a breadth of consumer needs. We distribute, market, and/or
license lighting products including headlights, lanterns, kid’s lights and area lights. In addition to the Energizer and
Eveready brands, we market our flashlights under the Hard Case, Dolphin, and WeatherReady sub-brands.
Through our global supply chain, global manufacturing footprint and seasoned commercial organization, we seek
to meet diverse customer demands within each of the markets we serve. Energizer distributes its portfolio of batteries and
lighting products through a global sales force and global distributor model. We sell our products in multiple retail and
business-to-business channels, including: mass merchandisers, club, electronics, food, home improvement, dollar store,
auto, drug, hardware, convenience, sporting goods, hobby/craft, e-commerce, office, industrial, medical and catalogue.
In recent years, we have also focused on reducing our costs and improving our cash flow from operations. Our
restructuring efforts and working capital initiative have resulted in substantial cost reductions and improved cash flows.
These initiatives, coupled with our strong product margins over recent years, have significantly contributed to our results
of operations and working capital position.
Energizer manages its business in four geographic reportable segments: North America, Latin America, Europe,
Middle East and Africa (“EMEA”), and Asia Pacific. Our four geographic segments have distinct characteristics that help
Energizer deliver its strategic objectives.
North America. The North America segment, including the United States and Canada, accounts for
approximately 51% of global sales and 60% of segment profit in fiscal year 2015. Sales in the U.S. represent a significant
majority of sales in the North America segment.
The competitive environment in the North America segment has remained intense over the past several years. As
a result, we have experienced distribution gains and losses. At the end of fiscal year 2013, we lost distribution within two
major U.S. retail customers which resulted in market share and net sales declines.
Latin America. The Latin America segment, including Mexico, the Caribbean, Central America and South
America, accounts for approximately 7% of global sales and 5% of segment profit in fiscal year 2015. Sales are
distributed across the modern and traditional classes of trade. While carbon zinc battery sales continue to represent a
sizable portion of the overall market volume, consumption of higher priced alkaline batteries continues to grow. The
Energizer and Eveready dual brand strength allows us to compete effectively by focusing on alkaline and carbon zinc
product solutions under a premium brand and a price brand.