Energizer Holdings, Inc. announced results for the fourth fiscal quarter ended September 30, 2012. Net earnings for the quarter were $117 million, or $1.84 per diluted share, as compared to net earnings of $45.8 million, or $0.67 per diluted share, in the fourth fiscal quarter of 2011.
"We are pleased to report adjusted diluted earnings per share of $6.20 for fiscal 2012, which were at the top end of our outlook," said Ward Klein, Energizer’s CEO. "We remain pleased with our Hydro launches across the men's and women's segments and gained share in branded razors and blades during fiscal 2012. Even with significant competitive pressures, our personal care segment delivered solid profit growth with sustained sales. Despite declining global battery trends, our household products division delivered increased segment profit, excluding the impact of currencies, behind cost savings actions and targeted price increases. In addition, we continued to make progress in our working capital initiative, lowering our working capital as a percent of sales by 150 basis points in fiscal 2012.
"In a separate release today, we provided the details of our multi-year restructuring program. This initiative represents a significant and necessary change to our overall cost structure and organization and is expected to improve cash flow in household products while supporting growth in our personal care division," Klein continued. "We expect that the annualized, pre-tax savings will be approximately $200 million and should be fully realized in fiscal 2015. We anticipate approximately 25% of these savings will be invested in our brands and innovation pipeline resulting in a net, pre-tax earnings impact of approximately $150 million.
"For fiscal 2013, our initial financial outlook range for adjusted diluted earnings per share is $6.75 to $7.00, including estimated net cost savings from our restructuring efforts in fiscal 2013, but excluding restructuring costs. This represents growth in adjusted diluted earnings per share over fiscal 2012 of 9% to 13%,” Klein concluded.
For the fourth fiscal quarter, organic sales declined 1.5% due primarily to the negative impact in household products from decreased shelf space and reduced hurricane volume in the U.S., and continued global battery category volume softness. For the year, organic sales were down 1.2% due to lower household products net sales for the reasons noted above, which offset a slight increase in personal care sales.
Specifically in the company’s personal care division, sales were at $590.1 million for the quarter, a decrease of 2.5% from the same period the previous year. Organic sales were essentially flat due to a number of offsetting factors including:
- wet shave net sales decreased 2.4% on a reported basis, and increased 1.3% excluding the impact of unfavorable currencies, despite intense competitive activities. Increased sales of Schick Hydro and Hydro Silk were partially offset by lower sales of legacy men's and women's systems and disposables;
- net sales in skin care increased significantly, approximately 11%, and 13% excluding unfavorable currencies, due to higher sales across all areas including growth in international markets; and
- net sales in infant care decreased approximately 7% due to category softness, heightened competitive activity and higher promotional and trade support behind bottles.
Net sales for the fiscal year ended September 30, 2012 increased 1.2% on a reported basis, which includes a full twelve months for ASR in fiscal 2012 as compared to only ten months in fiscal 2011, due to the timing of the acquisition. On an organic basis, net sales increased 0.6% due to:
- net sales in wet shave, inclusive of the ASR impact, increased 3% on a reported basis and 5% excluding the impact of unfavorable currencies. This growth was driven by increased sales of Schick Hydro and the launches of Schick Hydro 5 Power Select and Hydro Silk women's systems offset by lower sales of legacy branded men's and women's systems; and
- net sales in skin care increased approximately 1% primarily on higher sales of sun care in international markets.
Segment profit for the quarter was $109.5 million, up 40.4% including the unfavorable impact of currencies. Operationally, segment profit increased $36.5 million, or 46.8%, due to lower planned A&P spending in the quarter as the Schick Hydro launch cycle matured.
The company's initial financial outlook for adjusted, diluted earnings per share is $6.75 to $7.00. This outlook includes estimated net pre-tax restructuring savings of $25–35 million for fiscal 2013 and does not include any share repurchases during the fiscal year. Overall, the company expects low-single digit sales growth in fiscal 2013. Within personal care, it expects mid-single digit sales growth driven by innovation across its categories, especially in wet shave and skin care.