Energizer Holdings, Inc. Q4 FY2021 Earnings Call

Good morning. My name is Betsy, and I will be your conference operator today. I would like to welcome everyone to Energizer's Fourth Quarter and Fiscal Year 2021 Conference Call. As a reminder, this call is being recorded. I would now like to turn the conference call over to Jackie Burwitz, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us. During the call, we will discuss our results for the fourth quarter and fiscal 2021 as well as our outlook for fiscal 2022. Joining me today on the call are Mark LaVigne, President and Chief Executive Officer; and John Drabik, 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 matters. These statements are based on management's current expectations and are subject to risks and uncertainties, including those resulting from the ongoing COVID-19 pandemic, which may cause actual results to differ materially from these statements. We do not undertake to update these forward-looking statements. Other factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in reports we file with the SEC. We also refer, in our presentation, to non-GAAP financial measures. A reconciliation of non-GAAP financial measures to comparable GAAP measures is shown in our press release issued earlier today, which is available on our website. Information concerning our categories and market share discussed on this call relates to markets where we compete and is based on Energizer's internal data, data from industry analysis, and estimates we believe to be reasonable. Unless otherwise noted, all comments regarding the quarter and year pertain to Energizer's fiscal year and all comparisons to prior year relate to the same period in fiscal 2020. With that, I would like to turn the call over to Mark.

Thanks, Jackie, and good morning, everyone. Despite operating in what remains an incredibly volatile environment, we delivered on our previously provided 2021 outlook for net sales, synergies, adjusted earnings per share, and adjusted EBITDA. 2021 was our sixth consecutive year of organic revenue growth behind elevated demand and distribution gains. This top line growth, combined with synergies we achieved from the Spectrum acquisitions and interest expense savings, translated into strong adjusted EPS and EBITDA growth. In a few moments, John will provide details on the fourth quarter and full year. However, before he does, some key headlines from our fiscal 2021 performance. For the first time, our company exceeded $3 billion in net sales. We also maintained top line momentum with organic sales growth of 7.3%, including growth of nearly 17% in our Auto Care business. Our Battery and Auto Care businesses benefited from elevated demand and distribution gains in North America. Auto Care further benefited from the expansion in our international markets, reaching $100 million in sales in those markets for the full year. We also delivered synergies of $62 million for the year, resulting in total synergies from the Spectrum acquisitions in excess of $130 million, 30% higher than our initial estimate. And we continue to invest in our brands, resulting in strong brand preference globally. With more consumers selecting our battery brands, we gained 2.2 share points in the last 12 months. This performance is a tribute to our team and their resiliency. Since the beginning of the pandemic, we have consistently adapted in real time to ensure business continuity and repositioned Energizer for the future. The hard work of our global colleagues to produce and deliver products to our customers and consumers in a time of heightened demand and significant disruption has been impressive to witness on a daily basis. In a moment, I will provide headlines for our 2022 outlook. However, before I do, I want to provide an update on a few key topics that will set the stage for the future. First, our categories remain healthy and are showing solid growth when compared to pre-pandemic levels. And we expect the consumer behaviors supporting that demand will continue for the foreseeable future. Specifically, in Batteries, there are two drivers. Devices owned per household are up mid-single digits in the U.S., and there is an increase in the amount of time those devices are being used. Consequently, consumers are using more batteries, which has resulted in new buying patterns versus a year ago, including increased purchase frequency and spending per trip. As a result, on a two-year stack basis without e-commerce, the Global Battery category has grown by 2.9% in value and 3.7% in volume. In the near term, we will see the category decline as it did in the three months ending August 2021, where it was down 6.9% in value and 5.3% in volume due to comparing elevated demand from a year ago. However, as we look to the long term, we anticipate the category to experience flat to low single-digit growth, albeit on a higher base as the category has increased in size due to consumers' behavior during the pandemic. Within the category, our iconic brands remain well positioned. Our brands outpaced the category, resulting in a 2.2 share point gain versus last year as we increased distribution in the U.S. and internationally, with share gains in those markets representing 70% of our total Battery revenues. Turning to the Auto Care category. Over the last five years, the Auto Care category has shown consistent growth, a trend that continued in the latest 13 weeks with category value up 3.5% versus a year ago and 16.3% versus 2019. The growth is being driven by consumers continuing to engage in do-it-yourself behaviors established during the pandemic, including higher levels of cleaning and renewed interest in car care as a hobby. A higher number of cars in the car park and an increase in the age of vehicles due to the shortage of new vehicles and a recovery in miles driven given the increase in personal travel. All of this increased U.S. household penetration to nearly 75%, with the resulting buy rate up 20% as consumers are buying the category more frequently and spending more per trip. As we look ahead, we anticipate the Auto Care category will settle in at low single-digit growth once it has cycled through the COVID-related demand. In the U.S., we continue to be the market leader in this large and growing category, driven by our Armor All brand, which continues to have positive momentum due to the strength of our innovation and brand-building activities. As I mentioned earlier, our efforts to leverage our geographic footprint and expand our Auto Care brands internationally are proving successful. While the categories are showing resilience, the macro environment in which we are operating is volatile, which leads me to the next important topic around operating costs. Costs related to commodities, transportation, and labor continue to rise. We saw a significant escalation in these costs during the fourth quarter, and we expect these headwinds to continue throughout 2022, resulting in over $140 million of increased input costs versus 2021. In order to mitigate the impact of these costs, we have executed or planned pricing against roughly 85% of our business. In addition to raising prices to cover input cost inflation, we have also strategically redefined our battery pricing architecture to reestablish relative value across pack sizes, resulting in a progressive rate increase on larger pack sizes. Currently, we are exploring the opportunity for additional pricing across our business. We expect these pricing actions, improved mix management, and cost reduction initiatives to partially offset the impact on our gross margin rate. As you all know, in addition to the challenges companies are experiencing related to increased costs, the global supply chain network is under pressure from increased demand and pandemic-related disruption. Earlier this year, we made the decision to proactively build inventory to ensure we had product for the peak battery selling season and upcoming Auto Care resets. The change is in response to both the potential for supply disruption we have seen in recent quarters and the higher level of in-transit inventory versus historical levels due to shipping delays and port congestion. As such, our inventory at the end of fiscal 21 was up 42% versus the prior year. This action has given us flexibility to avoid disruption and ensure we service our customers as reliably as possible in this environment. With that backdrop, I'll turn to a high-level overview of our 2022 outlook. The two headwinds I mentioned earlier, the decline in demand to more normalized levels and inflationary cost trends have impacted our outlook. In fiscal 2022, organic sales will be roughly flat with Auto Care growth and pricing actions across our businesses, offset by volume declines in Battery as we compare prior year elevated demand in the first half of the year. Despite our cost reduction initiatives and pricing actions, we expect to see gross margin rate erode given the escalating costs resulting in year-over-year declines in EBITDA and EPS. Given the macro environment, we are proactively exploring additional options to reduce our costs, enhance our mix as well as evaluate additional pricing to further offset these cost headwinds. Now let me turn the call over to John to provide additional details about our financial performance and outlook.

Good morning, everyone. I will provide a more detailed summary of the quarterly financial results and then the highlights for fiscal 2021 before turning to our 2022 outlook. As a reminder, we have posted a slide deck highlighting our key financial metrics on our website. For the quarter, reported revenue grew 40 basis points with organic revenue down less than 1% versus the 6% organic growth in the prior year quarter. Robust demand and distribution gains in Auto Care delivered 11.5% growth in the quarter, which offset the expected decline in battery. We expect these difficult comparisons in batteries to continue for the first half of 2022. Adjusted gross margin decreased 70 basis points to 37.7%. The combination of $9 million in synergy benefits and the elimination of $19 million of COVID-related costs from the prior year did not fully offset inflationary cost pressures related to commodities, transportation, and labor. In addition, category mix impacted our gross margin as our lower-margin Auto Care business achieved significant growth relative to Battery in the quarter. Excluding acquisition and integration costs, SG&A as a percent of net sales was 14.3% versus 15.6% in the prior year. The absolute dollar decrease of $9.4 million was driven primarily by a reduction in compensation costs. In the quarter, we realized $9 million in synergies, bringing the total for 2021 to $62 million. We have delivered over $130 million of synergies related to our Battery and Auto Care acquisitions, well exceeding our initial targets. Interest expense was $13.4 million lower than the prior year quarter, as we are benefiting from significant refinancing activity over the past 18 months. During the fourth quarter, we entered into a $75 million accelerated share repurchase program. Approximately 1.5 million shares were delivered in fiscal 2021, and we expect another 400,000 shares to be delivered in the first quarter of fiscal 22, bringing the total number of shares repurchased under the ASR program to approximately 1.9 million. Now turning to the highlights for fiscal 2021. As Mark mentioned, we delivered our full year 2021 outlook for revenue, adjusted EBITDA, and adjusted EPS. Net sales grew 10.1%, including organic sales up 7.3% as we experienced robust growth in both the Americas and International and across all three product categories, Batteries, Auto Care, and Lighting products. Adjusted gross margin was down 100 basis points as higher input costs were partially offset by synergies and the reduction of COVID-related costs incurred in 2020. Interest expense benefiting from significant refinancing activity decreased $33 million. Adjusted earnings per share increased 51% to $3.48 as higher sales, synergies, and lower interest expense more than offset the higher input costs and adjusted EBITDA increased 10%. At the end of 2021, our net debt was approximately $3.2 billion or 5.1x net debt to credit-defined EBITDA, with nearly 85% at fixed interest rates, no near-term maturities, and an all-in cost of debt below 4%. Our adjusted free cash flow for 2021 was $203.5 million. The decline versus the prior year primarily reflects working capital investments as we proactively invested in incremental inventory, given the continued volatility in the global supply network and uncertainty around product sourcing, transportation, and labor availability. Now turning to our fiscal 2022 outlook. As Mark discussed, our categories remain healthy and are showing solid growth when compared to pre-pandemic levels. As we enter fiscal 2022, we are benefiting from significant pricing actions. However, input costs continue to rise. The outlook we are providing for next year reflects pricing actions that we have executed or planned as well as the assumption that our input costs remain at current levels for the full year. Organic revenue is expected to be roughly flat with Auto Care growth and pricing actions across 85% of our businesses, offset by declines in Battery as we compare prior year elevated demand in the first two fiscal quarters. We also expect reported revenue will be negatively impacted by foreign currency headwinds of $20 million to $25 million at current rates. As we have talked about for the last couple of quarters, input costs, including raw materials, labor, and transportation costs are rising rapidly, and supply chain networks continue to be stressed. Last quarter, I highlighted the potential for an additional 100 basis points of gross margin headwinds in 2022 if input costs did not improve. And as of today, the trends have worsened. While we expect the absolute dollar amount of these rising costs to be offset by the pricing actions and cost reduction efforts that our team has undertaken, we now project gross margin headwinds of approximately 150 basis points based on current rates and assumptions. These inflationary cost pressures, combined with the anticipated volume declines in Battery in the first half of the year, are expected to result in adjusted earnings per share in the range of $3 to $3.30 and adjusted EBITDA in the range of $560 million to $590 million. As we look at our capital allocation priorities during this volatile macro environment, we will continue to invest in our businesses and brands for the long term while returning cash to shareholders and paying down debt. Now I would like to turn the call back over to Mark for closing remarks.

Thanks, John. While 2021 was a solid year for Energizer and one that we are proud of, our focus today is on moving forward and working to further mitigate the cost headwinds we are facing while ensuring our products are available to consumers around the world. With that, I will open the call for questions.

The first question comes from Kevin Grundy with Jefferies.

I wanted to discuss gross margin and the current opportunity for additional pricing. Mark, I understand a decision was made to wait until after the holiday period to implement some pricing increases. Were there considerations to move faster and increase prices more significantly to offset some of these challenges? Could you also share your expectations regarding Duracell's competitive response? Additionally, John, could you provide insights into your outlook on commodity costs? I have a quick follow-up after that.

Sure, Kevin. I'll get started with that one. I think as we've talked about before, we were proactive in taking pricing last year. I would say the comment we made in the prepared remarks was around 85% of our business as pricing actions that we've already been working on against it. I would say 65% of those have been fully executed and are representative in the marketplace. The 20% are further along, and we'll be rolling out as we get through '22. That 85% is included in the outlook that we provided today. To your point, Kevin, we're continuing to look at the remaining 15% for other pricing opportunities there. Is there the need to go back on the 85% for additional rounds of pricing? That's something that we continue to look at on an ongoing basis. You are seeing in terms of battery pricing, you are seeing shelf price go up. You're seeing it across the category, not just with Energizer, but you're seeing with competitors in private label as well. I'll leave any pricing outside of Energizer's pricing to be spoken to by competitors and retailers. But that's what we're seeing in the marketplace. So that's an encouraging sign that you're seeing the categories overall increase. And then, John, maybe in terms of the gross margin and commodity input.

Yes, Kevin, I can start by saying that September was a very volatile month as we wrapped up the year. We noticed an acceleration in some negative trends. As we move into 2022, we now anticipate that commodities will be about 100 basis points worse than we expected when we provided our outlook in August. Additionally, freight has also deteriorated by around 100 basis points in relation to our profit and loss. We plan to offset that absolute dollar impact through pricing and cost-saving measures. However, we are now expecting total margin erosion of about 150 basis points compared to the initial 100 we had projected. Looking at the overall impact for 2022, we anticipate cost pressures to exceed 300 basis points from material and manufacturing inflation, approximately 150 basis points due to transportation costs, and 40 basis points related to labor. To clarify, the material and inflation costs are slightly over 300 basis points, bringing the total close to 500 basis points.

Okay. Just a quick follow-up. The EBITDA margin guidance implies about 19%. It seems like the gross margin commentary you guys have provided, then the cost pressure there, the erosion in gross margin basically sort of flows through with little offset from SG&A and marketing spend. Please just confirm if that's correct, number one. Number two, just how you're thinking about those areas, efficiency within SG&A and current marketing spend levels? And then I'll pass it on.

Yes, Kevin, the impact will indeed be reflected in the P&L. We anticipate marketing expenses to remain between 5% and 6%, likely on the lower end of that range. As for SG&A, we expect a slight increase as we move into 2022. This is mainly due to several cost-saving measures we've implemented to counter inflationary pressures. Additionally, over the past few years, we've invested significantly in integration and technology, and we're beginning to see some of that depreciation reflected in the SG&A line.

The next question comes from Lauren Lieberman with Barclays.

I was curious, taking a longer-term view. I know, Mark, one of the things you've talked about is the objective to rebuild gross margin. So if we look beyond '22, how do you think about kind of the structural profitability of the business? Not asking you to project what happens with some of these material costs and so on. But as you think about building blocks or the ability to rebuild margins, what are the key building blocks to be able to get there?

Lauren, I think in the near term, when we've seen the inflationary environment that we've seen initially, our focus on making sure that we're dollar hold and then over time, where there's rate erosion, we consider that to be a medium, long-term effort to continue to improve margin rate overall. I think as the teams are digging into, if there's going to be opportunities as we get into a more normal operating environment to continue to drive efficiencies and cost savings. So I would say we've accomplished what we needed to for purposes of fiscal '22 by making sure that we recoup dollars as it relates to inflation. But longer term, there's additional opportunities for us to continue to drive efficiency that we're going to go after as soon as the operating environment permits it.

That's great. Regarding the intentional inventory build for the fourth quarter, I'd like to know your thoughts on inventory for 2022. Will you aim to maintain a higher inventory level than usual, or do you believe it will decrease as logistics become more predictable next year?

Yes, Lauren, we are definitely being cautious as we approach 2022. We have built up our inventory for a few reasons. First, overall costs are higher, which has increased the cost of the inventory we are carrying. Second, there is more product on the water and imports due to supply chain issues that we are currently facing. Lastly, we have also built safety stock and work in progress. I would categorize these three factors as roughly equal contributors to the $200 million inventory increase. As we move into 2022, our aim is to reduce that inventory, but we will be mindful of the current operating environment while making those plans.

The next question comes from Bill Chappell with Truist Securities.

Just maybe I'm oversimplifying the cost pressures. But I mean is it fair to say, I mean, you have priced 85% of your portfolio but the costs have kind of crept up further over the past 2, 3 months? And while you're going to pass on additional prices, the peak season for batteries is in the next few months. And so you won't, in this fiscal year, be able to fully kind of capture it. Is that the best way to look at it?

I think over the long run, we look at this longer than just quarter-to-quarter, but that's fair. I think costs have crept up more than they were at the time we announced our battery price increase back in the summer. And that will go back into the equation that we look at in terms of, is there a rationale to take additional pricing in any parts of our portfolio? But your point is right, which is we're in the midst of the peak season for batteries. And so any pricing that we've taken will have to be sufficient for now.

Okay. Regarding the supply chain issues, are you focusing on freight and ports primarily in relation to Auto Care? I thought most of your batteries, at least in the U.S., are manufactured domestically. I'm just trying to clarify if that's the main issue or if there are other concerns that I'm not aware of.

I would say that supply chain congestion impacts both of our businesses. We import products for our Battery business as well as Auto Care. Therefore, container rates, availability of ocean freight, and their costs all factor into both businesses. Additionally, over-the-road transportation, rail transportation, packaging capacity, and the availability of certain raw materials also play a role. I believe it affects our batteries as significantly as it does Auto Care. Our teams have done an excellent job positioning us much better this year than we were last peak season for batteries. We feel confident about our current situation. While our inventory levels are higher than we would prefer, I think that was a wise decision made earlier in the year. As we move into next year, we will prudently work to reduce those levels over time.

The next question comes from Andrea Teixeira with JPMorgan.

So I was hoping you did announce the 85%, and I appreciate, Mark, that obviously you can't take pricing in the peak season. But just curious, the other 15%, what are you embedding into the fiscal '22? Is that a function of price letters that you believe are appropriate? Or those are the items that are not being pressured as much as before? And just also a follow-up on a clarification of your guidance. So the 150 basis points implied gross margin reduction for fiscal '22. Is that including, as you said, including spot prices and some assumptions? So can you clarify if that's mostly spot prices? Or are you also assuming some decline in the back end of the fiscal?

Andrea, I'll get started, and then I'll kick it over to John for kind of the assumptions built into the cost pressures. Your question on pricing, the pricing on 85% of the portfolio that has either been executed or is it advanced planning or execution is embedded in the guidance that we provided. Pricing on the remaining 15% as well as additional pricing on the 85% has not been included. I would say we went after the largest margin pools in the largest geographies first. We also went after the areas that were getting impacted the most in our pricing approach. But we'll continue to mine the rest of the portfolio on the 15% and then double back on the remaining portion to see if there's any additional pricing we can take. In the event that we do take pricing on that part of the portfolio, it would be in addition to what's provided in the outlook. And John, on the gross margin?

Yes. And Andrea, on the gross margin, we updated our plans to the current spot rates, and then we assume that those stay consistent through the entirety of '22. So there's no improvement or worsening anticipated in our plan for the year.

The next question comes from Nik Modi with RBC Capital Markets.

If I could just follow up on that last question and then I'll ask my other questions. But just when you think about your cost basket and think about some of the geopolitical macro dynamics that are at play, I mean, where would your bias be in terms of where some of these costs are going to head as we move forward? Because obviously, using spot is fine because it's hard to forecast these things. But just wanted to get a sense on the underlying drivers of some of these cost increases. And do you think that some of those issues will kind of subside as we get into the year? And then the broader question is just online, Mark, if you can provide any context on kind of how the business is doing online. It seems like consumers are very sticky in this category right now or generally across all of CPG. So just wanted to get an understanding of how much visibility you have in terms of the business there.

Yes. Nik, I'll get started, and I'll have John layer in any additional color on this one. I think in terms of the way we approached our assumptions going into the year from a geopolitical just macro environment is we just decided we were going to assume that the current environment persists through '22. To John's point, no improvement, no worsening. And felt like trying to get overly predictive on either one of those was going to be counterproductive given the frequency and the speed with which things change. On e-commerce, we continue to see consumers migrate to e-commerce, no surprise there coming out of the pandemic. It is sticky. And so consumers are going back there frequently for purchases, robust growth rates. On the Battery side, we continue to be the branded cheerleader. We've mentioned previously, we're no longer providing overall category information, but we're confident we're the branded cheerleader in that space. In Auto Care, we're making great inroads with our Auto Care portfolio. A lot of emphasis for us on appearance where we're showing healthy growth rates and continuing to drive that business, which is embedded in the overall growth rate with Auto Care, which was, as you know, up 17% for the year. So that we couldn't be happier with the way the Auto Care business is performing.

The next question comes from Wendy Nicholson with Citigroup.

And that was actually a perfect lead-in to my question, which was just on the Auto Care business. The 17% growth, obviously, we've heard a lot about how people didn't go on normal vacations this year, they drove places, etc. So there's been a spike in sort of everything auto-related, but your business has been especially strong. I guess as you look into next summer, which I know is a lifetime away, but can you talk about, number one, kind of any plans you have to sustain that growth? Do you think there's incremental distribution opportunity? Is there a particular innovation that's coming out just because that's going to obviously be a tougher comp as you look into, I guess, it's the back half of your fiscal year?

Sure, Wendy. That business is performing very well for us. Looking at the overall performance across the four categories we engage in, it increased by 3.5% for the three months ending in October, indicating ongoing strength within those categories. Over the two-year period, we have seen a 16% increase, showcasing robust growth. We will continue our approach of investing in innovation and brand-building initiatives. In the U.S., despite being a fairly mature market in terms of distribution, we have managed to gain additional distribution in club and home centers, contributing to the positive growth you've observed in our business. As we progress through this year and into next, we anticipate significant growth from our international Auto Care strategy, which is off to a strong start. We expect year-over-year growth in Auto Care based on our 2022 outlook, and we will maintain our current momentum. We are observing consumer behavior, noting an increase in household penetration and continued engagement in do-it-yourself activities. We will monitor these trends to assess which behaviors are lasting and which may return to pre-pandemic norms. However, we feel very optimistic about this business, especially with the potential for accelerated growth through our international platform.

That sounds great. And then I actually had a follow-up, and I might have totally misheard it, so I apologize if that's the case. But I think when you were talking about pricing, you talked about doing something different with either your large packs. This is on the Battery side. Did I hear something different? Because I'm just curious if there's maybe more price pack architecture thinking creeping into the Battery category and just kind of what you're seeing competitively if you're doing anything maybe different than the other branded guys.

You did not hear that wrong, Wendy. In fact, as we were going into pricing with the Battery business back in the summer, we decided to take a look at some of the price pack disparity and attempted to address that through a progressive price increase. So as pack sizes got larger, we took a larger price increase to help reset some of the disparity that was existing within our business and the category. And so you're seeing right now pricing on shelf and I'll just speak in general terms, in the 48-10 packs, up roughly 7% on shelf pricing. Pack sizes around 16, 20, 24, it's roughly between 10% and 12%. So what we're trying to do is address that value equation. And if you recall, early on in the pandemic, we were seeing some gross margin erosion from pack size trade-up, and we're just trying to address that through our pricing actions as well as encouraging retailers who ultimately set shelf prices to follow suit. In terms of what competition will do, I'll defer to them in terms of how they want to approach it, but that's the way we're approaching the category.

The next question comes from Rob Ottenstein with Evercore.

I was wondering for starters if you can remind us on the Battery side about roughly how much or what percentage of your volume is sold on promotion? And to what degree over the next 12 months the promotional calendar is locked in? And is there any kind of flexibility that you can build into the promotional calendar given the margin pressures?

I'll readdress that question. Generally, what we're doing involves both full price displays and promotional pricing. Given the current demand environment, we're carefully evaluating pricing promotions and will aim to reduce them where possible. You can expect us to continue analyzing trade investment spending to achieve optimization. Some data may categorize full price displays as promotional items, even though they do not involve any price reductions.

The next question comes from William Reuter with Bank of America.

I just have one. Given the volatility in the market, would you continue to pursue M&A? The last couple of times, this question has been asked. You guys have said you'd still be active. But given the situation, which is so dynamic, I was wondering if that should change your thought process there.

We are currently focusing on reducing our debt levels, as we see it as a priority. While we will keep our options open for capital allocation, including dividends, share buybacks, and debt repayment, we are particularly emphasizing debt reduction to lower our leverage. We will continue to explore mergers and acquisitions, but our criteria for pursuing M&A will be quite stringent. For the foreseeable future, our main focus will be on paying down debt, while still considering M&A opportunities as they arise.

The next question comes from Carla Casella with JPMorgan.

I know you've seen a couple of questions in terms of just the auto care and promotion. But if we look back at last year, it was pretty choppy in the first half. I'm wondering if there are any major changes in the seasonality or timing for this year? Or would we revert back to more of a 2019 cadence? Or is it last year a good cadence to look at?

I think from an overall cadence perspective, I wouldn't think there's not any material deviations from last year.

Okay. So not like shipments moving from 1Q into 2Q or vice versa, which I think is what happened last year or something like that?

I think we saw AC kind of move around in the second and third quarter last year. It should be a pretty normal pattern.

This concludes our question-and-answer session. I would like to turn the conference back over to Mark LaVigne for any closing remarks.

Thank you all once again for joining our call today and your ongoing interest in Energizer. Hope everyone has a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.