Edgewell Personal Care(EPC) - 2023 Q4 - Annual Report

Acquisition and Market Position - The company completed the acquisition of Billie in fiscal 2022, enhancing its portfolio in the women's shaving category, which includes brands like Schick Intuition and Hydro Silk[36] - The company holds a leading market share position in the U.S. Sun Care category with brands such as Banana Boat and Hawaiian Tropic, and expects to drive growth through product innovation and geographic expansion[38] - The company has more than doubled its international sun care business since acquiring the Banana Boat and Hawaiian Tropic brands in 2008, showcasing successful market expansion efforts[45] - The company is one of the top three manufacturers of feminine care products in North America, with a focus on innovation in brands like Playtex and Stayfree[41] - The global men's skin care market is expected to continue growing, with the company competing through its Bulldog and Jack Black brands, targeting various price points[46] Sales and Distribution - Walmart accounted for approximately 19.4% of the company's net sales in fiscal 2023, indicating a significant reliance on this major retailer[49] - The company markets its products primarily through a direct sales force and e-commerce operations, reflecting a strategic approach to distribution in response to increased online competition[48] Innovation and Intellectual Property - The company has approximately 370 unexpired U.S. patents and 1,187 foreign patents as of September 30, 2023, indicating a strong commitment to innovation and intellectual property protection[55] - The company’s Wet Shave segment is highly competitive, with principal competitors including Procter & Gamble and Bic Group, highlighting the need for continuous innovation[43] Employee and Workplace Culture - As of September 30, 2023, Edgewell had approximately 6,800 employees, with 2,200 based in the United States[68] - The overall positivity score from the June 2023 employee experience survey was 76%, with a 15% increase in employee participation compared to 2022[75] - Edgewell's performance management process includes a '360-degree Values Assessment' to evaluate employee performance based on results and adherence to company values[71] - Edgewell's diversity, equity, and inclusion initiatives are integral to its sustainability strategy, focusing on creating an inclusive culture[74] Sustainability and Environmental Initiatives - Edgewell's Sustainable Care 2030 strategy includes targets such as 100% renewable electricity use and carbon neutrality across global operations[65] - The company aims to reduce the use of virgin petroleum-based plastic content in products and packaging and to use 100% recyclable, compostable, or reusable plastic packaging[65] - The company has made significant progress in sustainable products and packaging, ingredient stewardship, and responsible sourcing, although achieving all goals by 2030 is not guaranteed[66] - The company is subject to various environmental regulations, which may impact operational costs and compliance efforts in different jurisdictions[57] - The company has implemented a multi-year objective for all sites to achieve either OSHA VPP or ISO 45001 certifications for safety and health management[70] Financial Performance and Risk Management - Edgewell's cash flow hedging program related to foreign currency risk was maintained as of September 30, 2023, with high effectiveness in offsetting associated risks[254] - The company is exposed to significant currency rate risks, particularly with the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar[252] - As of September 30, 2023, the company had unrealized pre-tax gains of $4.4 million on forward currency contracts accounted for as cash flow hedges, compared to $11.3 million in 2022[255] - The notional value of open foreign currency contracts as of September 30, 2023, was approximately $105.4 million, with 64 contracts in place[255] - The company recorded gains of $3.0 million from foreign currency derivative contracts not designated as cash flow hedges for fiscal 2023, down from $8.2 million in 2022[258] - As of September 30, 2023, the company had outstanding debt of $122.0 million related to its Revolving Credit Facility and international variable-rate note payable[261] - A one percent increase in applicable interest rates would result in an approximate $1.2 million increase in annual interest expense[261] - There were no open derivative or hedging instruments for future purchases of raw materials or commodities as of September 30, 2023[260]