Edgewell Personal Care Company · NYSE:EPC
Edgewell Personal Care — Investor Day (June 2015)
115 slides from Edgewell Personal Care's investor day presentation, Jun 2, 2015
Slide 1: Investor Kickoff Event
INVESTOR KICKOFF EVENT 9:00 a.m. – 11:30 a.m. 1:00 p.m. – 3:30 p.m. Edgewell Management Energizer Management Ward Klein, Executive Chairman of the Board Pat Mulcahy, Chairman of the Board David Hatfield, CEO Alan Hoskins, CEO Al Robertson, CMO Mark LaVigne, COO Dave VerNooy, VP Operations and RD&E B
Slide 2: Edgewell Personal Care Investor Kickoff 2015
Edgewell Personal Care Investor Kickoff 2015 June 2, 2015
Slide 3: Agenda
Edgewell Investor Kickoff 2015 AGENDA • Ward Klein, Executive Chairman Historical Perspective • David Hatfield, CEO Strategic Overview and Business Priorities • Al Robertson, CMO Portfolio Strategies and Categories • Dave VerNooy, VP Operations and RD&E Innovation and Productivity Drivers • Sandy Sh
Slide 4: Presentation of Information; Forward-Looking Statements
Presentation of Information; Forward-Looking Statements Unless the context otherwise requires, references in this presentation to “Edgewell,” “Personal Care,” “we,” “our,” and “the Company” refer to the Personal Care business of Energizer Holdings, Inc. , a Missouri corporation, and its consolidated
Slide 5: Presentation of Information; Forward-Looking Statements
Presentation of Information; Forward-Looking Statements Market and Industry Data Unless indicated otherwise, the information concerning our industry contained in this presentation is based on our general knowledge of and expectations concerning the industry. Our market position, market share and ind
Slide 6: Edgewell Investor Day 2015 - Ward Klein
Edgewell Investor Day 2015 Ward Klein Executive Chairman of the Board
Slide 7: Energizer Holdings: A Legacy of Value Creation
Energizer Holdings: A Legacy of Value Creation Clear Financial Strategy • Optimize Battery Business Performance • Make Opportunistic Acquisitions • Generate Strong Cash Flow • Return Cash To Shareholders 2000 2003 2014 • Energizer Holdings Spun off • Energizer Personal Care • Announced the Spin Off
Slide 8: Energizer Financial Results Reflect the Growth of the Personal Care Segment
Energizer Financial Results Reflect the Growth of the Personal Care Segment 5 Total ENR CAGR* Net Sales $4.4 billion 4.5 4 Net Sales 6.2% 3.5 Segment Profit 5.6% Billions 3 2.5 $2.2 billion $1.9 billion 2 Adjusted EPS** 11.0% 1.5 1 0.5 TSR 12.9% 0 * (2000 – 2014) 2000 2003 2014 Energizer Edgewell 57
Slide 9: A Personal Care Business Built on Strong Brands and Strong Categories
A Personal Care Business Built on Strong Brands and Strong Categories Optimization Growth and Scale 3000 Building a Foundation 2000 1000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Sales ($m)
Slide 10: Generating Substantial Profit and Free Cash Flow
Generating Substantial Profit and Free Cash Flow >100% FCF Efficiency* 600 500 Segment Profit ($m) 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *Free cash flow is defined as net cash provided by operating activities net of capital expenditures, i.e. additions to prop
Slide 11: Delivering Superior Performance For Shareholders
Delivering Superior Performance For Shareholders 700% Total TSR (April 2000 - April 2015) 600% 500% 2x HPPC Peers 6.7 x S&P 500 400% 300% 200% 100% 0% S&P 500 HPPC PEERS Over $3 billion in Cash Returned to Shareholders Source: Bloomberg as of 01-May-2015 Note: HPPC Peers includes Clorox, P&G, Kimber
Slide 12: Setting the Stage for a Strong Standalone Personal Care Company
Setting the Stage for a Strong Standalone Personal Care Company
Slide 13: Business Strategy and Priorities - David Hatfield
Edgewell Investor Day 2015 Business Strategy and Priorities David Hatfield Chief Executive Officer
Slide 14: Goals For The Day
Goals For The Day 1. Meet Our 4. Understand Team Our Financial 2. Understand Algorithm and Our Strategy Value Drivers 3. Gain greater Insight into Our Categories and Products
Slide 15: Meet Our Team
Meet Our Team Ward M. Klein David P. Hatfield Al Robertson David VerNooy Sandy Sheldon Executive Chairman Chief Executive Chief Marketing VP, Global Chief Financial Officer Operations Officer of the Board Officer & RDE Manish Shanbhag John Hill Colin Hutchison Peter J. Conrad Chief Legal Officer VP,
Slide 16: Edgewell Personal Care: Who We Are
Edgewell Personal Care: Who We Are Attractive Categories 7% • Respond to innovation • Brands, category management matter 16% • Attractive margins • Growing 61% 16% A Decade of Strong Performance • Sales 11.6% (CAGR) • Gross Margin 9.5% (CAGR) Wet Shave Feminine Care • Segment Profit 21.8% (CAGR) Sun
Slide 17: We Have Strong Brands and Competitive Positions
We Have Strong Brands and Competitive Positions CATEGORY BRANDS KEY GEOGRAPHIES RANK Wet Shave US, Canada, Japan, #2 Germany Globally Sun & Skin Care US, Mexico, Australia #1 Sun Feminine Care1 US and Canada #2, #3 Infant Care US and Canada #1 1 #2 market share position of total tampons and #2 or #3
Slide 18: Edgewell Personal Care: Where We Are
Edgewell Personal Care: Where We Are 2014 Sales 7% Total Personal Care International Performance 13% • +4.4%* Total Int. Growth (CAGR 2008- 19% 61% 2014) • 2X Sales in Int. Sun Care Since 2008 • +9%** Total Developing Markets Growth US & Canada EMEA Asia Latin America • +7% Developing Markets Shave
Slide 19: Edgewell Personal Care: A Challenger Company
Edgewell Personal Care: “A Challenger Company” VIDEO
Slide 20: A Challenger Company
Edgewell Personal Care: “A Challenger Company” CHALLENGE The Market Leader, for the Benefit of Consumers and Customers
Slide 21: A Challenger Company
Edgewell Personal Care: “A Challenger Company” CHALLENGE CHALLENGE CHALLENGE The Market Leader, The Status Quo, for the Benefit of Category Conventions, to Innovate in Ways Consumers Blaze Our Own Trail Large and Small and Customers
Slide 22: Our Challenger Role Informs Our Vision and Mission
Our Challenger Role, and Our Challenger Culture, Informs Our Vision and Mission We will be the trailblazing personal care company, VISION leveraging our colleagues’ creativity and passion to challenge convention and drive growth We will win through focus, insightful innovation and MISSION agility, d
Slide 23: Leverage Our Creativity and Passion to Drive Edgewell
Leverage Our Creativity and Passion to Drive Edgewell to a Higher Level of Performance We will be the trailblazing personal care company, VISION leveraging our colleagues’ creativity and passion to challenge convention and drive growth We will win through focus, insightful innovation and MISSION agi
Slide 24: Leverage Our Renewed Focus to Drive All Facets of the Business
Leverage Our Renewed Focus to Drive All Facets of the Business We will be the trailblazing personal care company, VISION leveraging our colleagues’ creativity and passion to challenge convention and drive growth We will win through focus, insightful innovation and MISSION agility, delivering better
Slide 25: Focused Commercial Footprint
Focused Commercial Footprint Transition and Leverage New Go to Market Structure Edgewell’s Direct to Customer Markets Edgewell Go To Market Structure • 20 markets • 90% of today’s revenue • Strong brands in core markets Emerging / Distributor Market • 30+ Markets • Shifting away from legacy, battery
Slide 26: Driving Increased Effectiveness/Efficiency in Distributor Markets
Driving Increased Effectiveness/Efficiency in Distributor Markets KEY CHANGES AFTER SEPARATION 1 Food / Grocery Mass. Merch. Drug / Pharmacy Kiosks Other Traditional Trade Increase Focus on the Right Channels 2 Category Mgmt. Promotion Expertise Shopper Activation Account Mgmt. Product Visibility En
Slide 27: Edgewell's Strategic Value Drivers
1 Accelerate Top Line Growth 2 Systematic Cost Reduction Edgewell’s Strategic Value 3 Substantial Free Cash Flow Generation Drivers 4 Disciplined Approach to Acquisitions 5 Leverage the Power of EPC’s Colleagues
Slide 28: Business Priority: Return to Growth in North America
Business Priority: Return to Growth in 1 Accelerate Top Line Growth North America CURRENT SITUATION STRATEGIC PRIORITIES • Overall category slowdown • Re-investment in A&P and since 2012 marketing spend • Intense competitive • Maintain strong innovation environment since 2012 roadmap • Customer plan
Slide 29: Business Priority: Continue International Expansion
Business Priority: 1 Accelerate Top Line Growth Continue International Expansion CURRENT SITUATION STRATEGIC PRIORITIES • Solid history of growth • Execute organizational changes, build distributor management – International 2008-2014 CAGR capabilities 4.4%* • Grow Wet Shave mid-single digits • Curr
Slide 30: Business Priority: Segment Share Improvement
Business Priority: 1 Accelerate Top Line Growth Segment Share Improvement STRATEGIC PRIORITIES • Grow share in Wet Shave • Accelerate growth in Sun Care • Maintain Feminine Care sales and grow profitability • Stabilize Infant Care
Slide 31: Edgewell's Shareholder Value Drivers
1 Accelerate Top Line Growth 2 Systematic Cost Reduction Edgewell’s Shareholder 3 Substantial Free Cash Flow Generation Value Drivers 4 Disciplined Approach to Acquisitions 5 Leverage the Power of EPC’s Colleagues
Slide 32: Portfolio Strategies and Categories - Al Robertson
Edgewell Investor Day 2015 Portfolio Strategies and Categories Al Robertson Chief Marketing Officer
Slide 33: Wet Shave
WET SHAVE
Slide 34: Razors & Blades Category is Attractive
Razors & Blades Category is Attractive High Margins High Barriers to Entry International Growth Opportunities
Slide 35: Wet Shave's Projected Category Growth is Driven by International Markets
Wet Shave’s Projected Category Growth is Driven by International Markets $25 Global Wet Shave* Retail Sales U.S. Wet Shave* Retail Sales 2014: $19 Billion 2014: $4 Billion $20 $4.5 $4.0 $15 $3.5 US$Billions $3.0 US$Billions $2.5 $10 $2.0 $1.5 $5 $1.0 $0.5 $0 $0.0 2011 2012 2013 2014 2015 2016 2017 2
Slide 36: U.S. Men's System Category Softness Driven by Channel Shifting
U.S. Men’s System Category Softness in Measured Channels is Primarily Driven by Channel Shifting to Non-Measured Outlets US Men’s Systems Retail Sales 1800 1,637 All-Outlet 3-Year CAGR: -1.1% 1,584 1600 1400 1,429 1200 US$ Billions 1000 1,286 800 600 400 200 0 01/12-01/13 01/13-01/14 01/14-01/15 XAO
Slide 37: Men's System Category Softness Driven by Three Macro Trends
Beyond Channel Shifting, Men’s System Category Softness is Driven by Three Macro Trends Extended Decreased Declining Weekly Blade Usage Frequency Penetration • Improved technology • Loss of -0.8 shave/ • Systems share of week vs. ’03 requirements -12% vs. ’03 • Longevity communication • Acceptance o
Slide 38: Edgewell Achieved +6% Topline CAGR on Wet Shave Over 10 Years
Edgewell Achieved +6% Topline CAGR on Wet Shave Over the Past 10 Years Net Sales* (US$Millions) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 Men's System Women's System Disposables Shave Prep PBG * Net Sales excludes manicure sales
Slide 39: Edgewell Wet Shave will Grow Through Strategies
Edgewell Wet Shave will Grow Through 4 Strategies Meaningful Continue Investment in Drive Leverage Full International Growth Innovation Portfolio Expansion Brands
Slide 40: Innovation Drives Growth Across Portfolio in 2015
Innovation Drives Growth Meaningful Investment in Growth Drive Innovation Leverage Full Portfolio Continue International Across Portfolio in 2015 Expansion Brands Revitalizing The only 2-in-1 Our best X3 Intuition with razor and trimmer performance ever citrus infused scent
Slide 41: Hydro Innovation Continues to Drive Growth
Hydro Innovation Continues Meaningful Investment in Growth Drive Innovation Leverage Full Portfolio Continue International to Drive Growth Expansion Brands Hydro Franchise Retail Sales (US$ Millions) $450 $400 $400 $375 $350 $308 $300 Disposables $250 Women's $200 Men's $150 $100 $50 $- 12 Months en
Slide 42: Full Portfolio of Brands and Private Label Meet Needs Across All Consumer Segments
Full Portfolio of Brands and Private Label Meaningful Investment in Growth Drove Innovation Leverage Full Portfolio Continue International Expansion Meet Needs Across All Consumer Segments Brands Great Expectations Consumer Segment Pragmatic Performer Consumer Segment Inexpensive & Easy Price Consum
Slide 43: Strong Sales Growth Achieved Through Consumer Segmentation
Strong Sales Growth Achieved Through Meaningful Investment in Growth Drove Innovation Leverage Full Portfolio Continue International Expansion Consumer Segmentation Brands Women’s Systems Global Net Sales (US$ Millions) $350 $300 $250 $200 $150 $100 $50 $- FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY
Slide 44: Ultimate Challenger in Women's System
Meaningful Continue Investment Drove Leverage Full Ultimate Challenger in Women’s System in Growth Brands Innovation Portfolio International Expansion Segment Market via First-To-Market Compelling Insight Well-Differentiated Innovation and Communication Portfolio • Quattro For • Intuition: all-in-on
Slide 45: Grow Market Share in Disposables
Meaningful Continue Investment Leverage Full Grow Market Share in Disposables Drove International in Growth Innovation Portfolio Expansion Brands Leverage Improve Price Build Xtreme 3 Branded and Competitiveness Brand Equity Private Label Synergies GROW MARKET SHARE
Slide 46: Private Label Leverage
Meaningful Continue Private Label Leverage Investment Drove Leverage Full International in Growth Innovation Portfolio Expansion Brands R&D Expertise & Quality Global Manufacturing Scale Category Management: trade up at every tier Capitalize upon growth in all sales channels through a combination of
Slide 47: Our Wet Shave Business is Geographically Diversified
Our Wet Shave Business is Meaningful Investment in Growth Drove Innovation Leverage Full Portfolio Continue International Expansion Geographically Diversified Brands F2014 Net Sales: $1.6 Billion 8% 19% 45% 28% North America Europe Asia LatAm
Slide 48: Future Growth Opportunities
Future Growth Opportunities Accelerate developing market growth Leverage Private Label to drive total portfolio Launch market disruptive innovation
Slide 49: Sun Care
PERSONAL CARE SUN CARE Playtex Carefree Sieifiee oe» ME
Slide 50: Sun Care Category Characteristics
Sun Care Category Characteristics Global Growth On Trend: Skin Care Expanded Penetration: Education
Slide 51: Global Sun Care Category Enjoys Continued Growth Driven by Latin America & Asia
Global Sun Care Category Enjoys Continued Growth Driven by Latin America & Asia 14 Global Sun Care Retail Sales 12.3 11.8 12 11.1 11.4 10.7 10.3 9.8 10 9.3 US$Billions 8 6 4 2 - 2011 2012 2013 2014 2015 2016 2017 2018 North America EU & MEA APAC LatAm Total Markets Source: 2014 Euromonitor
Slide 52: Topline Growth Driven by Hawaiian Tropic and Banana Boat
We have Achieved Topline Growth Driven by both Hawaiian Tropic and Banana Boat 350 300 Net Sales (US$Millions) 250 Hawaiian Tropic Banana Boat 200 150 100 50 - F2008 F2009 F2010 F2011 F2012 F2013 F2014
Slide 53: We Have Doubled our International Sun Care Business since Acquisition
We have Doubled our International FY08-FY14 CAGR LatAm 13.8% Sun Care Business since Acquisition EMEA 12.7% Asia Pacific 19.7% 140 Total Int’l 15.3% International Sun Care Net Sales 120 US$Millions 100 80 60 40 20 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Slide 54: We Have Growth Opportunities in Sun Care
We Have Growth Opportunities in Sun Care F2014 Net Sales 29% 71% North America International
Slide 55: Sun Care Competitive Advantages
Sun Care Competitive Advantages Category Leader in Depth of Sun Care North America, Expertise Mexico & Australia Balanced Sun Care Portfolio
Slide 56: Sun Care Strategic Priorities
Sun Care Strategic Priorities Build Drive Visibility Category International Differentiated Innovation In-Store Management Growth Equity
Slide 57: Future Opportunities
Future Opportunities Extend iconic brand equities Launch market- disruptive innovation Drive international growth
Slide 58: Feminine Care
FEMININE CARE
Slide 59: Feminine Care Category Characteristics
Feminine Care Category Characteristics Meaningful Scale Predictable Sales High Barriers to Entry
Slide 60: Leveraging Our Strengths in Feminine Care
Leveraging Our Strengths in Feminine Care Portfolio of well- One of the Top 3 known brands that Manufacturers in address North America complementary consumer needs Unique, competitive product technologies
Slide 61: We Compete in all Market Segments - Pads, Liners & Tampons
We Compete in all Market Segments – Pads, Liners & Tampons U.S. Fem Care Category $3 2.7 2.8 2.6 2.6 2.7 2.7 2.7 2.6 $2 $Billions $1 $0 2011 2012 2013 2014 2015 2016 2017 2018 Tampons Pads Liners Source: 2011-2014 Nielsen; 2015-2018 Edgewell Projections
Slide 62: Pads & Liners Acquisition Unlocks Full Category Scale
Pads & Liners Acquisition Unlocks Full Category Scale Edgewell Fem Care Sales ($M) 450 400 350 300 $Millions 250 200 150 100 50 0 F2013 F2014 Tampons Pads Liners
Slide 63: 2015 Innovation Leverages Newly Acquired Pads & Liners Technology
2015 Innovation Leverages Newly Acquired Pads & Liners Technology Playtex Sport Tampons + Playtex Sport Pads & Liners Pads & Liners Combination Packs
Slide 64: The Playtex Brand has Strong Equity
The Playtex Brand has Strong Equity Base: Aware of Brand 1,001 1,693 2,190 A B C Makes products that protect against leakage 77 74 75 Is a high quality brand 77 C 76 c 73 Makes products that are comfortable to wear 76 BC 71 73 Is a company that understands my needs 72 BC 67 68 Is a brand for someone
Slide 65: Future Opportunities
Future Opportunities Introduce step-change innovation Unlock Carefree growth via investment & expansion Expand Playtex Sport portfolio to pads and liners
Slide 66: Infant Care
PERSONAL CARE INFANT CARE Playtex Carefree Sieifiee oe» ME
Slide 67: Leveraging Our Strengths in Infant Care
Leveraging Our Strengths in Infant Care Strong Category and Iconic Brands Consumer Insight Capabilities Leader in Diaper Disposal
Slide 68: Key Strategies to Turnaround Infant Care
Key Strategies to Turnaround Infant New Structure Focus on the Core Re-invigorate Innovation
Slide 69: Edgewell Growth Strategies
Edgewell Growth Strategies Meaningful Continue Investment in Drive Leverage Full International Growth Innovation Portfolio Expansion Brands
Slide 70: Innovation and Productivity Drivers - Dave VerNooy
Edgewell Investor Day 2015 Innovation and Productivity Drivers Dave VerNooy Vice President, Global Operations & RDE
Slide 71: Sustained Innovation Fueled by R&D
Sustained Innovation Fueled by R&D Personal Care R&D Spend R&D = 304 Colleagues $68.9 $70.5 $69.1 $69.5 Major Locations: Milford/Shelton, CT Allendale, NJ Additional Locations: Solingen, Germany 2011 2012 2013 2014 Guangzhou, China Dover, DE 2014 R&D spend = 2.7% of Net sales Ormond Beach, FL
Slide 72: Innovation Comes In Many Flavors
Innovation Comes In Many Flavors Innovation Range Time to Market New Offering From Existing Technology Short Term Upgraded Technology with Existing Platform Medium Term Leverage New Innovation Platforms Long Term
Slide 73: Innovation: Leveraging Existing
Innovation: Leveraging Existing Leveraging ‘existing technologies’ to Provide New Consumer Offerings Pads Combo Liners 16ct Long 18ct Regular 36ct Regular 32ct Combo Pad 48ct Combo Liner 54ct Regular 20ct Launched in 2015 Playtex Sport Pads, Liners and Combo packs are expected to drive meaningful gr
Slide 74: Innovation: Refresh
Innovation: Refresh Refresh Our Portfolios With Upgraded Technologies that Support Category Growth The only facial sunscreen Sunscreen that goes beyond, with hydrating ribbons stays on in 7 conditions Unique Claims and Benefits: • 12 hours of moisture! • Won’t clog pores Unique Claims and Benefits:
Slide 75: Innovation: Leveraging New
Innovation: Leveraging “New” Leveraging New Platforms, such as Hydro Disposables New claims and benefit messaging Female Build on unique product capabilities Trimmers
Slide 76: Innovation: Capitalizing on Unique Capabilities
Innovation: Capitalizing on Unique Capabilities We are uniquely positioned to apply branded shaving knowledge and technology to our Private Label Shaving portfolio
Slide 77: Operational Productivity: A Key Element Of Our Model
Operational Productivity: A Key Element Of Our Model Suppliers $2.6 B Net Sales Manufacturing Engineering Plants Cost Improvement Source Programs Product Design $1.3 B Manufacture Distribute Equipment Design 2014 Comprehensive Productivity Strategies We made: 9 Billion Blades per year 1 Billion Tamp
Slide 78: Technology & Automation Application
Technology & Automation Application Headcount in 10 shave cartridge assembly cells reduced by over 500, with automation projects averaging less than 2 year paybacks.
Slide 79: Optimizing Global Sourcing Footprint
Optimizing Global Sourcing Footprint Manufacturing Realignment 1) Focus on Advanced Processes & Automation Development => High Technology Plants 2) Shift production activity => Lower Cost Plants 3) Close Redundant / Excess Capacity x Montreal Germany Czech Rep Ohio Connecticut Tennessee Delaware Chi
Slide 80: Global Footprint Rationalization
Global Footprint Rationalization • Plant Consolidation in Femcare, closing Montreal Plant – Completed by early 2017 – Relocates 24 production lines; decommissions 36 production lines – Estimated $20-25M annualized run rate savings CONSOLIDATING TO MONTREAL DOVER
Slide 81: Asset Optimization
Asset Optimization Liquid Fill Insource / Outsource Optimization 55,000 Ormond Beach - Volume & Conversion COGS* Trend $0.550 50,000 $0.500 45,000 $0.450 40,000 $0.400 35,000 $0.350 30,000 2012 to 2015 $0.300 Volume up 16% Conversion COGS down 9% 25,000 $0.250 20,000 $0.200 2012 2013 2014 2015 Volum
Slide 82: Driving Productivity: More to Come
Driving Productivity: More to Come • Demonstrated History of Delivering Productivity Savings • Process, Resources, and Focus In Place to Capture Future Opportunity Target = Gross Productivity Savings of 3% Annually
Slide 83: Financial Model - Sandy Sheldon
Edgewell Investor Day 2015 Financial Model Sandy Sheldon Chief Financial Officer
Slide 84: Edgewell: A Compelling Value Proposition
Edgewell: A Compelling Value Proposition A Strong Foundation On-going Value Drivers • Strong brands in growing categories • Unique “Challenger” position • A culture dedicated to innovation, productivity, and value creation • Diverse geographic footprint • History of strong profit growth and cash flo
Slide 85: Long Term Algorithm Beyond 2016
Edgewell – Long Term Algorithm Beyond 2016 Long-Term Goal Sales* 2-3% Operating Margin 50 Basis Point Improvement/Year Diluted EPS - Adjusted High Single Digit Growth Free Cash Flow Conversion Rate** 100%+ * Excludes M&A and currency **Free cash flow is defined as net cash provided by operating acti
Slide 86: Long Term Algorithm: Organic Sales Growth Trends
Long Term Algorithm: Sales Organic* Sales Growth Trends 5% 4.5% 4% 3.1% Long Term 3.0% 3.0% 3.1% CAGR ‘08 – ‘12 Objective 2-3% 3% 1.8% 2% **1.9% CAGR ‘08 – ‘14 1% 0% 0.2% -1% -1.5% -2% FY08 FY09 FY10 FY11 FY12 FY13 FY14 Long term Objective * Organic growth rates exclude currency impacts and M&A ** 1
Slide 87: Achieving Our Long Term Objective: Geographic Trends
Achieving Our Long Term Objective: Sales Geographic Trends Return to Top Line Growth in North America • Re-investment in A&P and marketing spend • Strong innovation roadmap Flat +4.4% CAGR ‘08 – ‘14 CAGR ‘08 – ‘14 • Leverage full portfolio International +2% North 39% +5% • Stabilize Infant America C
Slide 88: Achieving Our Long Term Sales Growth Objective By Segment
Achieving Our Long Term Sales Growth Objective By Segment • Grow Share in Wet Shave 7% – Innovation and continued growth in Hydro 16% – Private Brand Growth – Invest in Disposables – Pricing and trade up 16% 61% – Legacy brand offset/impact • Accelerate Growth in Sun • Leverage Innovation and full p
Slide 89: Achieving Long Term Sales Growth Through Investment
Achieving Our Long Term Sales Growth Objective Through Investment A&P* Historical Trends • Brands Matter in Our Categories 14.2% • Focus Spend Against Brands 13.7% 12.8% offering the greatest ROI • Move with Speed and Agility – Optimize and right size based on market conditions – Closely monitor eff
Slide 90: A Track Record of Strong Profit Growth and Margin Expansion
A Track Record of Strong Profit Growth Operating Margin Expansion and Margin Expansion Operating Margin* Hydro launch investment • Track Record of Profit Margin 19.0% 19.4% 20.3% Improvement 17.9% 16.7% • Key Areas of Focus: – Price and mix due to innovation and trade up – Operational productivity –
Slide 91: Systematic Cost Reduction: A Part Of Our Culture
Systematic Cost Reduction: Operating Margin Expansion A Part Of Our Culture SG&A* as a % of net sales • Track Record of Managing SG&A Costs • 2013 Restructuring Helped Drive 15.5% 14.7% 14.8% 14.1% Recent Reduction to 12.5% 12.5% • Drivers: – Year over year savings goals – Leverage from acquisitions
Slide 92: Managing SG&A Through Transition
Operating Margin Managing SG&A Through Transition Expansion Overcoming Dis-synergies • Base Corporate Expenses – Share of EHI Corporate Expenses Base Corp Exp $70 - $75 – Includes costs not previously allocated to PC segment but incurred by EHI • Dis-synergy Examples – International and Regional Hea
Slide 93: Continuing to Fuel Growth Through Operating Margin Expansion
Continuing to Fuel Our Growth Through Operating Margin Expansion Disciplined Cost Management COGS/Supply Chain Commercial SG&A • Advanced Technology and • Trade Spend Productivity • Outsource Non-core Automation Deployment • Brand Investment Transactional Activities Areas of Focus • Global Footprint
Slide 94: Restructuring Savings: More to Come
Operating Margin Restructuring Savings: More to Come Expansion 2013 2013 Going Forward: Restructuring Restructuring Continued focus thru 3rd Quarter Q4 2015 – FY2017 on systematic cost reduction • EHI: $300M cost, EPC only EPC only $315 savings • Projected $40 - $50M in • Optimize Global • EPC: $85M
Slide 95: Improving Working Capital: More to Come
Improving Working Capital: Balance Sheet and Cash More to Come Actions 22.9% 17.5% - 18% • WC % / Sales Increase in 2015 due to Inventory Build for Plant Consolidation 16.6% – Increase of $30 - $40m • Going Forward: – DII • Ongoing footprint changes • Inventory optimization and reduction initiatives
Slide 96: Strong Balance Sheet
Strong Balance Sheet Balance Sheet and Cash Projected Capitalization ($B) Pro Forma • Ample liquidity Cash $0.7 • No debt maturities until 2020 Debt* $1.5 • Expect to maintain balance sheet flexibility to pursue strategic plan Net Debt $0.8 • Debt/EBITDA ~ 3 5 Year Revolving Credit $0.6 Facility** *
Slide 97: Priorities for Free Cash Flow
Priorities for Free Cash Flow Balance Sheet and Cash Invest In The Business To Drive Top-line Growth Disciplined M&A To Grow And Expand Portfolio Return of Capital to Shareholders Through Buyback
Slide 98: Generating Profitable Growth Through Capital Expenditures
Generating Profitable Growth Balance Sheet and Cash Through Capital Expenditures Capital Spending Trends ($M) ~$70 • 2015: $58 – Operational productivity $54 initiatives $43 • Looking Forward: – Continue balance across new product and productivity projects – 2% - 3% of sales 2012 2013 2014 2015 2013
Slide 99: Disciplined M&A To Grow And Expand Portfolio
Disciplined M&A To Grow And Expand Portfolio Expand Attractive Strong Value Personal Care Category Competitive Accretive Portfolio Dynamics Position • Stay Close to • Fast Moving / • #1 or #2 in • EPS Accretive the Core Consumable Industry Within 1-2 Years • Strengthen • Category Growth • Potential
Slide 100: Return of Capital to Shareholders
Return of Capital to Shareholders Successful History Future Opportunity Energizer Holdings: Successful Edgewell Will Build on this History of Opportunistic Share Legacy of Opportunistic Share Repurchase Repurchase – 57m shares repurchased at – Energizer Holdings Board of weighted average cost of Dir
Slide 101: 2015 Financial Reporting Considerations
2015 Financial Reporting Considerations FY 2015 4Q 2015 Will reflect a blend Personal Care Proforma Income Statements (EPC) and Household (ENR) and Balance Sheets for Financials – 2012 – 2014 and YTD 2015 – Q1-Q3 will reflect Household as “Discontinued Operations” – Removes discontinued operations a
Slide 102: Edgewell Full Year 2016 Financial Considerations
Edgewell – Full Year 2016 Financial Considerations FY 2016 Financial results for first full year as a standalone are anticipated to be below the long term growth algorithm targets FY16 Results will include impacts from: – Changes in the Go to Market Footprint – Incremental operating costs and dis-sy
Slide 103: Anticipated Adjustments to Net Sales
Anticipated Adjustments to Net Sales Excludes: • Year over year Operational changes Net Sales ($M) • Impact from Go-To-Market Changes $2,612 $2,537 $30 $45 $2,387 $150 FY14 Venezuela Industrial Adj. FY14 Currency New FY15 Base Source: Company Estimates
Slide 104: Adjustments to EBITDA Base also anticipated
Adjustments to EBITDA Base also anticipated Excludes: • Year over year operational changes Adjusted - EBITDA* ($M) • Impact of dis-synergies beginning in $612 4Q15 and carrying over to FY16 • Spin-off and restructuring costs $530 $73 $9 $471 $59 FY14 Corp Expense** Venezuela/Ind Adj. 2014 Currency N
Slide 105: Edgewell - Positioned For Growth
Edgewell – Positioned For Growth • While FY16 Will be a Transition Year, We Will Return to Our Strong Track Record of Profitable Growth and Cash Generation 1 Accelerate Top Line Growth Edgewell’s 2 Systematic Cost Reduction Strategic 3 Substantial Free Cash Flow Generation Value Drivers 4 Discipline
Slide 106: Edgewell - Positioned For Growth
Edgewell – Positioned For Growth • While FY16 Will be a Transition Year, We Will Return to Our Strong Track Record of Profitable Growth and Cash Generation Edgewell’s Strategic Value Drivers
Slide 107: Edgewell Personal Care Q&A
Edgewell Personal Care Q&A Investor Kickoff 2015 June 2, 2015
Slide 108: Appendix
APPENDIX PEdgewell
Slide 109: Company Contacts
Company Contacts Sandy Sheldon Chief Financial Officer [email protected] Chris Gough VP, Investor Relations [email protected] (203) 944-5706
Slide 110: Upcoming Financial Disclosures
Upcoming Financial Disclosures • July 2015 – 8K – Income statement and balance sheet pro-formas adjusted to remove discontinued operations and expenses related to spin – Income statements for: six months-ended 3/31/2015, year ended 9/30/2014,year ended 9/30/2013,year ended 9/30/2012 • August 2015 -
Slide 111: Upcoming Financial Disclosures
Upcoming Financial Disclosures • November 2015 – Fiscal 2015 10-K – The consolidated income statement will be adjusted to reflect EHP as discontinued operations for all years (2013, 2014 & 2015) – The consolidated balance sheet as of 9/30/2015 will exclude EHP balances, but the 9/30/2014 balances wi
Slide 112: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Financial Measures. While the Company reports financial results in accordance with accounting principles generally accepted in the U.S. (“GAAP”), this discussion includes non-GAAP measures. These non-GAAP measures, such as adjusted net earnings per diluted share, th
Slide 113: Adjusted EBITDA Reconciliation ($M)
Adjusted EBITDA Reconciliation ($M) FY 2014 Personal Care segment profit $ 531 Personal Care depreciation and amortization 81 (a) For purposes of this presentation, we have Adjusted EBITDA (a) $ 612 defined Adjusted EBITDA as segment profit excluding depreciation and amortization. Net earnings $ 356
Slide 114: Adjusted Diluted EPS Reconciliation
Adjusted Diluted EPS Reconciliation For the Year Ended For the Year Ended September 30, 2014 September 30, 2000 Diluted EPS - GAAP $ 5.69 Diluted EPS - GAAP ** $ 1.88 Impacts, net of tax: expense / (income) Net gain from discontinued operations (0.01) 2013 restructuring and related costs 1.12 Histor
Slide 115: Edgewell Personal Care Investor Kickoff 2015
Edgewell Personal Care Investor Kickoff 2015 June 2, 2015
Edgewell Personal Care Company — Investor Day (June 2015) on 6ix