Rayovac 2009 Annual Report Download - page 65

Table of Contents
Index to Financial Statements
Segment Results. As discussed above in Item 1, Business, we manage our business in three reportable segments: (i) Global Batteries & Personal Care,
(ii) Global Pet Supplies; and (iii) Home and Garden Business.
Operating segment profits do not include restructuring and related charges, interest expense, interest income, impairment charges, reorganization
items and income tax expense. Expenses associated with global operations, consisting of research and development, manufacturing management, global
purchasing, quality operations and inbound supply chain are included in the determination of operating segment profits. In addition, certain general and
administrative expenses necessary to reflect the operating segments on a standalone basis have been included in the determination of operating segment
profits. Corporate expenses include primarily general and administrative expenses associated with corporate overhead and global long−term incentive
compensation plans.
All depreciation and amortization included in income from operations is related to operating segments or corporate expense. Costs are allocated to
operating segments or corporate expense according to the function of each cost center. All capital expenditures are related to operating segments. Variable
allocations of assets are not made for segment reporting.
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 12, Segment Results, 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 within North America of $29 million.
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
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