Energizer (ENR) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 results met or exceeded guidance, with organic net sales within range, strong free cash flow of $339M (11.7% of net sales), and $200M in debt reduction, lowering net leverage to 4.9x.

• Adjusted gross margin improved by 190 bps year-over-year, reaching 40.9% for the year and 42.2% in Q4, supporting robust adjusted EPS growth.

• Project Momentum delivered $90M in annual savings in 2024, supporting reinvestment in growth and margin expansion.

• Strategic focus on expanding distribution, accelerating e-commerce (15% growth in 2024), and innovation in batteries and auto care.

• Adjusted EPS for FY24 was $3.32, up 7% year-over-year and above guidance.

Financial highlights

• FY24 organic net sales declined 2.2% year-over-year, but Q4 saw slight growth with improved category trends and new distribution.

• Adjusted EBITDA grew 2.5% to $612.4M for the year, within guidance; adjusted EPS up 7.4% to $3.32.

• Adjusted SG&A rose to 15.3% of sales in Q4, mainly due to digital transformation, travel, and wage increases.

• Interest expense decreased by $3.8M due to lower debt and rates.

• Free cash flow for FY24 was $339M, representing 11.7% of net sales.

Outlook and guidance

• Fiscal 2025 guidance: 1%-2% organic sales growth, adjusted EBITDA of $625M-$645M, adjusted EPS of $3.45-$3.65, and free cash flow at 8%-10% of sales.

• Project Momentum to conclude in 2025, with total program savings projected at $180M-$200M.

• Expect to pay down $150M-$200M in debt in 2025, reducing interest expense by $8M-$10M; net leverage expected to decrease to ~4.5x.

• Capex projected at $80M-$97.9M, focused on operations, digital enablement, and sustainability.

• Q1 2025: organic net sales up 2%-3%, aided by hurricane-related demand; reported revenue up 1%-2%.