Energizer (US:ENR)2021-05-10 17:57Financial Data and Key Metrics Changes - The company reported organic sales growth of 12.7%, with adjusted earnings per share of $0.77, more than double the prior year [8][9][25] - Adjusted EBITDA for the quarter was $148 million, up 20% compared to the prior year [25] - The adjusted gross margin decreased by 110 basis points to 40.5%, primarily due to increased operating costs from tariffs, transportation, and product input costs [27][28] Business Line Data and Key Metrics Changes - The Americas segment showed organic growth of nearly 16%, while the International segment grew by 6% [26] - The Battery and Auto Care businesses benefited from elevated demand and distribution gains, with Auto Care experiencing a healthy category growth of 7.4% [14][26] Market Data and Key Metrics Changes - In the U.S., the battery category experienced a 13.9% decline year-over-year in the most recent four weeks, but was up 14.1% when compared to pre-pandemic levels [12][13] - Internationally, the battery category saw growth, with France up nearly 11%, Australia up 7%, and Germany up 18.5% [84] Company Strategy and Development Direction - The company is focused on managing costs and pricing strategies to offset inflationary pressures, with a goal of delivering over $120 million in synergies by the end of fiscal 2021 [21][34] - There is an emphasis on innovation and brand building, particularly in the Auto Care segment, with a strong innovation pipeline and increased production capabilities [22][61] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued inflationary pressures and has initiated productivity and revenue management efforts to mitigate these costs [18][19] - The company is optimistic about the battery category's long-term growth potential, citing increased device usage and consumer habits that are likely to persist post-pandemic [49][50] Other Important Information - The company has increased its full fiscal year outlook, expecting net sales growth of 5% to 7% and adjusted earnings per share in the range of $3.30 to $3.50 [10][34] - E-commerce sales have increased by 70% across the combined portfolio, reflecting successful investments and focus in this area [16][78] Q&A Session Summary Question: Can you elaborate on gross margin and commodity outlook? - Management indicated they are fully hedged for commodities for the rest of fiscal 2021 and about 25% hedged for fiscal 2022, with ongoing efforts to manage costs and pricing [44][42] Question: What are the assumptions for battery category growth in the back half of the fiscal year? - Management expects tough comparisons due to elevated demand but believes consumer habits will sustain higher battery usage [48][49] Question: Can you provide details on pricing actions in AutoCare versus batteries? - Price increases in AutoCare were broad-based to offset inflationary pressures, while battery pricing actions will be considered based on a thorough analysis of costs and market dynamics [54][95] Question: How is the company addressing cost synergies and productivity? - The company continues to focus on continuous improvement and has exceeded synergy expectations, with further opportunities identified in the global product supply chain [76][77] Question: What is the outlook for e-commerce growth and market share? - E-commerce growth is robust, with the company maintaining its market share against competitors, although precise data is currently limited [78][80]