ENERGIZER HOLDINGS, INC. Q2 FY2025 earnings call

• Q2 was a solid quarter with organic sales up nearly 1.5%, adjusted gross margin at 40.8% (30 basis points increase), and adjusted EPS $0.67 at upper end of guided range. - Worked on in-region production, strategic acquisitions in Indonesia, Belgium, and Poland. - Digital transformation improved data visibility and efficiency, aiding in streamlining processes. - Mitigated tariff impacts in 2025 through sourcing shifts, pricing, and inventory management.

Battery business grew 3% organically in Q2, contributing to organic revenue growth. Auto Care's appearance business had 5.5% organic growth driven by Podium Series launch, but auto business declined ~2.5% organically due to shift in refrigerant shipment timing. Battery business accounted for a significant portion of organic growth, while auto's decline was due to timing of refrigerant shipments.

• For Q3, expected reported and organic net sales in range of flat to down 2%, gross margin roughly flat, adjusted EPS $0.55 to $0.65. - Full year 2025 expected reported and organic net sales in range of flat to up 2%, gross margin 50 basis points, adjusted EPS $3.30 to $3.50. - Free cash flow expected 6% to 8% of net sales, debt paydown ~$100 million.

• Tariff uncertainty with exposure to China tariffs and reciprocal tariffs, needing continued mitigation. - Weakened consumer confidence and spending impacting demand for certain categories, affecting revenue projections.

Q: Please run through the mitigation impacts again regarding tariffs?

A: Tariffs in place (steel/aluminum, China IEPA) were neutralized via sourcing shifts, pricing, and inventory. For announced but not yet active tariffs (reciprocal tariffs), plan to reduce China exposure from ~5% to 2-3% via alternative sourcing, and rebalance network for other countries.

Q: Any evaluation of device market impact on forecast?

A: Consumers likely react to higher device prices, but devices using batteries will continue to use them. We're in contact with OEM partners, and consumer pullback is factored into the outlook.

Q: Any retailer destocking seen?

A: Slight uptick in retailer inventory due to softer POS sales, but mitigated in forecast.

Q: Comment on APS acquisition?

A: Closed acquisition, provides scale in European business, manufacturing facility in Poland, brand transition from Panasonic to Energizer over next 8 months.

Q: Impact on competitors and private label?

A: Main competitors in similar position. Private label portion of category has mix of manufacturing in US/low tariff vs China; teams chasing opportunities to augment private label with value brands.

Q: Battery category promotion environment?

A: Relatively benign promotional environment, volume growth softening slightly, but depth flat year over year.

Q: Fiscal 2026 tariff mitigation?

A: Expect to offset most tariff impact over next 12 months, but exact numbers dependent on rates/volumes.

Q: Free cash flow and debt paydown?

A: Free cash flow expected 6%-8% of net sales, debt paydown ~$100 million. Long-term leverage target to get to 4 times and below.

Q: Impact of de minimis repeal on company?

A: Need to work through distribution changes from tariffs to assess impact.