Rayovac 2008 Annual Report Download - page 44

Table of Contents
Index to Financial Statements
Global strategic initiatives and financial objectives for each reportable segment are determined at the corporate level. Each reportable segment is
responsible for implementing defined strategic initiatives and achieving certain financial objectives and has a general manager responsible for the sales and
marketing initiatives and financial results for product lines within that segment. Financial information pertaining to our reportable segments is contained in Note
13, Segment Information, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Global Batteries & Personal Care
2008 2007
(in millions)
Net sales to external customers $ 1,494 $ 1,431
Segment profit $ 163 $ 144
Segment profit as a % of net sales 10.9% 10.0%
Assets as of September 30, $ 1,183 $ 1,377
Segment net sales to external customers in Fiscal 2008 increased $63 million to $1,494 million from $1,431 million during Fiscal 2007, representing a 4%
increase. Favorable foreign currency exchange translation impacted net sales in Fiscal 2008 by approximately $88 million in comparison to Fiscal 2007. Battery
sales for Fiscal 2008 increased to $916 million when compared to Fiscal 2007 sales of $881 million, principally due a positive foreign currency impact of $61
million and increases in North America of $15 million, which were driven by an increase in market share, as consumers opt for our value proposition during the
weakening economic conditions in the U.S. These increases were partially offset by decreases in Latin America and Europe of $9 million and $32 million,
respectively. The decrease in Latin American battery sales was primarily due to zinc carbon shortfalls in Mexico, Central America and Colombia. The decrease
in European battery sales was the result of our continued efforts to exit from unprofitable or marginally profitable private label battery sales, as well as certain
second tier branded battery sales. We are continuing our efforts to promote profitable growth and therefore, expect to continue to exit certain low margin
business as appropriate to create a more favorable mix of branded versus private label products. Net sales of electric shaving and grooming products in Fiscal
2008 decreased by $21 million, or 8%, primarily as a result of declines in North America of $29. These declines were partially offset by a positive foreign
currency impact of $9 million. Electric personal care sales increased by $44 million, an increase of 24% over Fiscal 2007. Favorable foreign exchange translation
impacted net sales by approximately $14 million coupled with strong worldwide growth in our women’s hair care products. We saw double digit sales growth of
our electric personal care products in all geographic regions, particularly in North America with 28% growth, when compared to Fiscal 2007. Net sales of
portable lighting products for Fiscal 2008 increased to $100 million as compared to sales of $95 million for Fiscal 2007. The sales increase was driven by a $5
million increase in North America associated with sales gains from new product launches coupled with favorable foreign exchange translation of $4 million that
was tempered by decreases in Latin America and Europe due to declining market demand.
Segment profitability in Fiscal 2008 increased to $163 million from $144 million in Fiscal 2007. Segment profitability as a percentage of net sales
increased to 10.9% in Fiscal 2008 as compared with 10.0% in Fiscal 2007. The segment profitability during Fiscal 2008 was primarily the result of cost savings
from our global realignment announced in January 2007. See “Restructuring and Related Charges” below, as well as Note 16, Restructuring and Related
Charges, of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information regarding our restructuring and
related charges.
Segment assets at September 30, 2008 decreased to $1,183 million from $1,377 million at September 30, 2007. The decrease is primarily attributable to
the impact of foreign currency translation coupled with the impairment of goodwill and certain trade name intangible assets, a non-cash charge, in Fiscal 2008.
See “Goodwill and Intangibles Impairment” below as well Note 2(i), Significant Accounting Policies and Practices—Intangible Assets, of Notes to Consolidated
Financial Statements included in this Annual Report on Form 10-K
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008