Q2 2024 Energizer Holdings Inc Earnings Call Transcript
Key Points
- Energizer Holdings Inc reported a 13% adjusted earnings growth in the quarter, driven by margin improvement, strong performance in the auto category, and significant gross margin improvement.
- The company successfully paid down over $60 million of debt in the quarter, contributing to a reduced leverage which is expected to be below five times by year-end.
- Project Momentum generated $20 million of savings in the quarter, contributing to a total of nearly $100 million to date, which has been a key factor in margin expansion and earnings growth.
- Energizer Holdings Inc has seen improving category dynamics and distribution gains in the battery sector, with global battery volume growing nearly 3.5% during the period.
- The auto care segment showed robust growth with organic net sales increasing over 2%, and the segment profit expanded by nearly 600 basis points, returning the business to pre-pandemic profitability levels.
- Organic net sales were down 3% and organic revenue down 2.7% for the quarter, with volume improvement and distribution gains offset by planned strategic pricing and promotional investments.
- Battery organic net sales were down roughly 4% in the quarter, although this was consistent with expectations and an improvement from previous quarters.
- The company continues to face a challenging macroeconomic environment, which necessitates careful management and strategic planning to maintain growth and profitability.
- While the company is making significant investments in e-commerce and digital transformation, the upfront costs and ongoing investments represent financial and operational risks.
- Despite overall positive trends, certain product segments like fragrances in auto care were down, indicating variability in performance across different product lines.
Good morning. My name is Rudy, and I'll be your conference operator today. At this time, I would like to welcome everyone to Energizer's Second Quarter Fiscal Year 2024 conference call. (Operator Instructions) As a reminder, this call is being recorded. I would now like to turn the conference over to Jon Poldan, Vice President, Treasurer and Investor Relations. You may begin your conference.
Good morning, and welcome to Energizer's Second Quarter Fiscal 2024 conference call. Joining me today are Mark LaVigne, President and Chief Executive Officer; and John Drabik, Executive Vice President and Chief Financial Officer. A replay of this call will be available on the Investor Relations section of our website, energizerholdings.com.
In addition, a slide deck providing detailed financial results for the quarter is also posted on our website. During the call, we will make forward-looking statements about the Company's future business and financial performance among other
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