Energizer Holdings, Inc.

Good morning. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to Energizer's first quarter fiscal year 2024 conference call. After the speaker's remarks, there will be a question and answer session. To do so, you will dial star 1 to join the Q&A queue, and if you wish to cancel, you can dial star 2. As a reminder, this call is being recorded. I would now like to turn the conference call over to John Polden, Vice President, Treasurer, and Investor Relations. You may begin your conference.

Good morning, and welcome to Energizer's first quarter fiscal 2024 conference call. Joining me today are Mark Levine, President and Chief Executive Officer, and John Drabek, 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 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 2023. With that, I would like to turn the call over to Mark.

Good morning, everyone, and thank you for joining us on our fiscal 2024 first quarter earnings call. We started the fiscal year with the same priorities as we had in FY23, improving margins, generating free cash flow, and paying down debt. In our first quarter, we delivered on our outlook and made great progress in each of these areas. Gross margin improved. to 39.5% for the quarter as a result of the benefits from Project Momentum. We generated free cash flow of over 21% of net sales and paid down $78 million in debt, solidifying our path to achieve below five times debt to EBITDA by the end of the fiscal year. In addition to the strong execution against our main priorities, we are seeing healthy indicators across our business. including an excellent response to our investments to drive improved consumer engagement without impeding margin improvement, steadily improving category trends, share gains and batteries across key customers and markets around the world, and improving consumer sentiment. When you combine the momentum of our strategic priorities with these trends, we are positioned to deliver both top and bottom line growth over the balance of the year.