Energizer Holdings, Inc.

to Energizer's second quarter fiscal year 2023 conference call. After the speaker's remarks, there will be a question and answer session. As a reminder, this call is being recorded. I would now like to turn the conference over to John Polden, Vice President, Treasurer and Investor Relations. You may begin your conference. Good morning.

and welcome to Energizer's second quarter fiscal 2023 conference call. Joining me today are Mark Levine, President and Chief Executive Officer, and John Drabik, Executive Vice President and Chief Financial Officer. The replay of this call will be available on the investor relations section of our website, energizerholdings.com. 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, 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 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 estimated market share discussed in this call relates to the categories where we compete and is based on Energizer's internal data, data from industry analysis, and estimates we believe to be reasonable. The battery category information includes both brick and mortar and e-commerce retail sales. 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 2022. With that, I would like to turn the call over to Mark.

Thank you, John. Good morning, everyone, and welcome to our second quarter earnings call. Our second quarter results demonstrate another terrific performance by our team. We delivered organic sales growth across both battery and auto care while improving operating margins. as we remain laser focused on generating growth while maintaining our focus on gross margin. We entered fiscal 2023 with a few key priorities. Restore gross margins across our portfolio, reestablish healthy free cash flow generation, and pay down debt. We have made significant progress against each of these areas this quarter, while also delivering organic top line growth of 2.6%. Our categories are resilient. even in a difficult environment. Our iconic brands and broad portfolio of products allow us to meet consumers where they are. In batteries, global category value is up 2.7% and volume is down 5.5% on a year-over-year basis. When considering the comparison against last year, keep in mind that the category is cycling through price increases which occurred last March. In addition to expected elasticity impacts from pricing, consumers are also shopping cautiously and prioritizing critical categories, such as food, fuel, and utilities. Batteries are an essential product for consumers, and as a result, demand for our products has been resilient, and we expect volume trends to improve in the back half of the year. From a long-term perspective, the category remains meaningfully larger than prior to the pandemic in both volume and value. driven by increased device ownership, usage, and pricing. For example, in the U.S., category value is up over 28% in the 13 weeks ending March, with volumes up almost 9% as compared to pre-pandemic levels. Our performance within the category remains strong as consumers are selecting our brands. As we gain 0.7 share points globally behind robust performance in leading markets such as the U.S., Germany and Canada. In our auto care business, we have started the peak season with solid results. The drivers of category demand, size and age of the car park, along with miles driven, all have positive trends. These underlying factors can