Value Enhancing Shareholder Value Enhancing Shareholder Value Enhancing Shareholder Value Enhanci Energizer Holdings, Inc. 2013 Annual Report Energizer Holdings, Energizer Holdings, Inc. 2013 Annual Report Energizer Holdings, Inc. is a consumer goods company operating globally in the broad categories of personal care and household products. The Personal Care Division offers a diversified range of consumer products in the wet shave, skin care, feminine care and infant care categories with well-established brand names such as Schick® and Wilkinson Sword® men’s and women’s shaving systems and disposable razors; Edge® and Skintimate® shave preparations; Playtex®, Stayfree®, Carefree® and o.b.® feminine care products; Playtex® infant feeding, Diaper Genie® and gloves; Banana Boat® and Hawaiian Tropic® sun care products; and Wet Ones® moist wipes. The Household Products Division offers consumers a broad range of household and specialty batteries and portable lighting products, anchored by the universally recognized Energizer® and Eveready® brands. The company markets its products throughout most of the world. Energizer Holdings, Inc. is traded on the NYSE under the ticker symbol ENR. SEGMENT BREAKDOWN GEOGRAPHICAL NET SALES MIX Fiscal 2013 Fiscal 2013 9% 15% 45% 48% 55% 52% 20% 56% NET SALES SEGMENT PROFIT •Personal Care •Personal Care •US & Canada •Asia •Household Products •Household Products •EMEA •Latin America Financial Highlights YEAR ENDED SEPTEMBER 30, 2013 2012 2011 2010 2009 ($ in millions, except per share data) Diluted EPS – GAAP $ 6.47 $ 6.22 $ 3.72 $ 5.72 $ 4.72 Adjustments, expense (income) Restructuring 1.55 (0.02) 0.89 – 0.39 Net pension/post-retirement curtailment gains (1.07) – – – – Other realignment/integration/acquisition inventory valuation 0.04 0.08 0.21 0.10 0.17 Venezuela devaluation/other 0.10 – 0.03 0.20 – Adjustments to valuation allowance and prior year tax accruals (0.13) (0.10) 0.14 (0.42) 0.02 (a) – 0.02 0.21 – (0.24) Other adjustments $ 6.96 $ 6.20 $ 5.20 $ 5.60 $ 5.06 Diluted EPS – adjusted (Non-GAAP) FREE CASH FLOW(b) $ 750.0 $ 631.6 $ 412.5 $ 652.4 $ 489.2 Operating Cash Flow (90.6) (111.0) (98.0) (108.7) (139.7) Capital Expenditures $ 659.4 $ 520.6 $ 314.5 $ 543.7 $ 349.5 Free cash flow 162% 127% 120% 135% 117% Cash Flow Efficiency In addition to its earnings presented in accordance with generally accepted accounting principles (GAAP) Energizer has presented certain non-GAAP measures in the table above, which it believes are useful to readers in addition to traditional GAAP measures. These measures should be considered as an alternative to, but not superior to or as a substitute for, the comparable GAAP measures. (a) Other adjustments include: Early termination of interest rate swap; early debt retirement/duplicate interest; and a favorable adjustment resulting from a change in the Company’s paid time off (PTO) benefit for the years ended 2012, 2011 and 2009, respectively. (b) Free cash flow is defined as net cash provided by operating activities net of capital expenditures, i.e., additions to property, plant and equipment. The Company views free cash flow as an important indicator of its ability to repay debt, fund growth and return cash to shareholders. Free cash flow is not a measure of the residual cash flow that is available for discretionary expenditures, since the Company has certain non-discretionary obligations, such as debt service, that are not deducted from the measure. Cash Flow Efficiency is defined as free cash flow divided by net earnings. PAGE 1 ENERGIZER HOLDINGS, INC. 2013 ANNUAL REPORT Enhancing Shareholder Value is the common thread that runs through everything we do as a company… from innovating new products and broadening our existing portfolio, to successful restructuring efforts and improving our working capital. Throughout our history, delivering value to our shareholders has been and will continue to be uppermost in our minds as we manage our business. PAGE 2 ENERGIZER HOLDINGS, INC. 2013 ANNUAL REPORT Ward M. Klein Chief Executive Officer To Our Shareholders, FREE CASH FLOW Fiscal 2013 was another very successful year for Energizer Holdings. Adjusted earnings in millions per share hit a record $6.96, increasing 12% over the previous fiscal year. In addition, this marked the second consecutive year of double-digit adjusted earnings per share growth. $659 Furthermore, free cash flow from operations also set a record, totaling $659 million, up 2013 $521 an impressive 27% over the prior-year level. These performance records were achieved in 2012 spite of major challenges such as unprecedented competitive activity, soft category volume $315 dynamics and currency headwinds. 2011 $544 Our continued strong financial performance is attributable, in large part, to our focus 2010 on enhancing shareholder value. We believe four key pillars serve as the foundation for $350 our continued success: 2009 • Investing in Successful Innovation • Broadening our Personal Care Product Portfolio • Optimizing our Cost and Operating Structure DILUTED EARNINGS PER • Maximizing Free Cash Flow SHARE – ADJUSTED (NON-GAAP) Innovation is vital to achieving our mission of delivering solutions to our consumers and $6.96 2013 trade customers better than anyone else. This is perhaps best exemplified by our continued $6.20 expansion and growth of the Schick Hydro® razor and blade shaving platform. Fiscal 2013 2012 saw the continued build-out of this innovation with the introduction of Hydro® disposable $5.20 2011 razors in the U.S. and Western Europe, as well as with the continued rollout of Schick $5.60 Hydro Silk® razors and blades for women. The Hydro® franchise grew more than 20% in 2010 fiscal year 2013, approaching a quarter of a billion dollars in global annual net sales. We $5.06 continue to seek innovation across our portfolio. 2009 Broadening our Personal Care Product Portfolio is achieved through the acquisition of new businesses and strategically entering new categories. On the acquisition front, we entered the Personal Care space in 2003 with our acquisition of Schick Wilkinson Sword. And then in 2008, we more than doubled our presence with the acquisition of Playtex, PAGE 3 ENE RGIZE R HOLDINGS, I NC. 2013 ANNUA L REP O R T Investing in Successful Innovation The successful launch of Schick Hydro® is the most prominent example of investing in successful innovation. Schick Hydro debuted in 2010 and has since been expanded into the women’s systems segment with Schick Hydro Silk® and the disposable segment with Schick Hydro® Disposable. SCHICK HYDRO®AND SCHICK HYDRO SILK® DISPOSABLES Launched February 2013, they offer our best disposable shave for your skin. The Water-Activated Moisturizing Serum hydrates your skin throughout each shave and the five blades with skin guards help protect the skin from irritation. SCHICK HYDRO FRANCHISE GROWTH IN FISCAL 2013 20% PAGE 4 ENERGIZER HOLDINGS, INC. 2013 ANNUAL REPORT Broadening our Personal Care Product Portfolio We entered the Personal Care space in 2003 with our acquisition of Schick Wilkinson Sword and have more than tripled our presence with additional acquisitions in the skin care, feminine care and infant care categories with brands such as Playtex®, Banana Boat®, Hawaiian Tropic®, Edge®, Skintimate® and Wet Ones®. PERSONAL CARE SALES BY SEGMENT in millions 2013 2008 •Wet Shave •Skin Care •Feminine Care 2004 •Infant Care •Other $0 $500 $1,000 $1,500 $2,000 $2,500 PAGE 5 ENE RGIZE R HOLDINGS, I NC. 2013 ANNUA L REP O R T which brought us leading brands in the skin care, feminine care and infant care categories. Next, we continued to broaden our Personal Care business with complementary additions to our wet shave portfolio with the acquisitions of the Edge®/Skintimate® brand shave preps and American Safety Razor in 2009 and 2011, respectively. More recently, we expanded our presence in feminine hygiene through the acquisition of three well-known brands in the U.S., Canada and the Caribbean: Stayfree®, Carefree® and o.b.® products. This acquisition, announced in the latter part of fiscal 2013 and closed in early fiscal 2014, LITTER GENIE® provides a solid complement to our existing Playtex® feminine care business, providing Litter Genie® cat litter disposal system greater scale and synergies in the feminine care space. is the ultimate, hassle-free solution for controlling cat litter odors. Its unique We have also expanded into new categories by leveraging existing technologies. air-tight design helps keep smells in For example, we introduced Litter Genie®, a new waste disposal solution for cat owners even when you open the lid. originating from the Diaper Genie® technology. Litter Genie® addresses the real needs of cat owners, while creating an opportunity for the company to capitalize on a market potential even larger than the current diaper disposal market. SKINTIMATE® New Skintimate Skin Therapy Lotionized Skin Moisturizing Shave Gel Optimizing our cost and operating structure continues to be a focus for the combines a unique organization. We believe that cash realized from cost savings initiatives will provide the moisture-rich lotionized gel with Shea Butter and a financial flexibility needed to invest in our brands and generate bottom-line growth. As special Triple Moisturizing an example, the 2013 Restructuring program has been extremely successful in identifying Complex of Vitamin E, Olive Butter and Sunflower opportunities to eliminate costs and provide meaningful savings. This multi-year program Seed Oil to help replenish skin’s natural moisture is on track to deliver approximately $225 million in savings by the end of fiscal 2015. We and provide unbeatable will continue our effort to identify savings that may be used to invest in our brands and razor protection for a close, comfortable shave generate bottom-line growth. and healthy feeling, smooth skin. Maximizing free cash flow is also critical to ensuring success.