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Energizer Holds Steady Amid Financial Volatility: A Strategic Insight

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Lauren Miller

May 7, 2024 - 10:50 am

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Energizer Holdings Reports Steady Financial Performance Amidst Market Challenges

ST. LOUIS, May 7, 2024 /PRNewswire/ -- Energizer Holdings, Inc. (NYSE: ENR) has declared its financial outcomes for the second fiscal quarter ending on March 31, 2024. Despite a decrease in overall net sales and organic net sales compared to the prior year, the company’s diligence in executing its financial strategy was apparent.

Financial Health and Improvement Strategies

The second quarter of fiscal 2024 showed net sales of $663.3 million, which indicated a decrease of 3.0%. This aligns with Energizer’s stipulated financial forecast, underscoring the predictability and consistency of its financial trajectory even in challenging market conditions.

While net sales showed a slight decline, the Auto Care segment exhibited a commendable 2.3% increase driven by organic growth. This segment’s resilience and expansion reflect the brand’s strong market presence and offensive business strategies.

Moreover, gross margin exhibited a marked improvement, expanding by 120 basis points over the prior year and up to 260 basis points on an adjusted basis. This feat was accomplished by enhancing operational efficiency and reducing input costs. Prices for commodities showed a downtrend and ocean freights became less expensive, contributing to a healthier gross margin.

The earnings per share stood at $0.45, with the Adjusted Earnings per share reaching $0.72, a 13% rise over the prior year on an adjusted basis. These values paint a picture of Energizer's ability to maintain profitability in relative terms and its success in driving earnings growth despite a sales downturn.

Regarding operational cash flows, the company reported a year-to-date figure of $214.9 million and free cash flow constituting 11.8% of net sales. Energizer made significant strides in debt reduction, paying down $141 million in the first half of the fiscal year. This proactive approach to managing liabilities strengthens the company’s financial foundation.

Furthermore, Energizer reaffirmed its fiscal year outlook for Net sales, Adjusted Earnings per share, and Adjusted EBITDA, reflecting confidence in its strategic initiatives and adherence to financial projections.

Strategic Outcomes and Future Projections

Mark LaVigne, CEO of Energizer, echoed confidence in the company’s performance, pointing to the betterment in battery sales, growth in auto care businesses, and strategic priorities underway. He assured stakeholders of the company’s return to organic growth in the latter half of the year, coupled with meeting full-year outlook expectations.

In terms of projections, Energizer anticipates fiscal 2024 to mirror its organic revenue expectations of being flat to a slight decrease in low single digits. Subsequently, Adjusted EBITDA is projected to be between $600 million to $620 million and Adjusted earnings per share are expected to range from $3.10 to $3.30. For the third fiscal quarter, organic revenue is predicted to be up by 1%, and the Adjusted EPS is envisaged to be between $0.62 and $0.68.

Energizer highlighted the progress in its Project Momentum, which is anticipated to culminate in total savings of $160 to $180 million. The cash costs involved in achieving these savings are projected to be between $140 and $150 million. For fiscal 2024, savings due to Project Momentum are expected to be in the range of $55 to $65 million, with one-time cash costs to achieve resting between $60 and $70 million.

Engagement with Investors

Energizer also scheduled an investor conference call to discuss these earnings and recent business trends further. Interested parties were invited to access a live webcast of the conference call through Energizer's website at www.energizerholdings.com, under the “Investors” and “Events and Presentations” tabs. The replay of the webcast would be made available on the same site under “Past Events.”

Conclusion

While the markets continue to pose challenges, Energizer's second fiscal quarter results exhibit a company in command of its financial destiny. Through tactical adjustments, operational efficacy, and strategic focus, Energizer upholds its financial health and provides reassurance of sustained growth and profitability for the future.

For more information regarding the financial results and to access additional materials, including the GAAP and Non-GAAP reconciliations, please visit Energizer's Financial Information Page. Additionally, interested parties may review the investor conference call that was held at Energizer's Webinar.

About Energizer Holdings, Inc.

Energizer Holdings, Inc. (NYSE: ENR), headquartered in St. Louis, Missouri, is a global leader in the manufacturing of batteries, portable lighting products, and auto care solutions. The company holds an extensive portfolio of household brands, such as Energizer®, Rayovac®, and Armor All®, and is known for innovation, reliability, and providing sustainable solutions for customers around the world.