BIC : First Quarter 2015 Results

BIC Group - Press Release
Clichy - 22 April 2015

 Net Sales: 510.8 million euros, up 17.6% as reported and +6.8% on a comparative basis*

• Consumer business up 7.4% on a comparative basis
• BIC Graphic up 2.4% on a comparative basis
  • Normalized* IFO: 101.8 million euros, up 39.4%
• Normalized IFO margin: 19.9% (vs. 16.8% for Q1 2014)
  • Net Income Group Share: 77.2 million euros, up 54.2%
• EPS Group Share: 1.64 euros, up 53.3%

Commenting on BIC Group results, Mario Guevara, Chief Executive Officer, said: "We delivered good Q1 2015 results, with solid sales performance across all geographies and an improvement in profitability.

Our consumer business posted robust organic growth in Lighters and Shavers, benefiting from distribution gains and new product launches. BIC Graphic confirmed positive sales momentum in an ever changing environment.

These first three months reinforce our confidence to achieve our full year 2015 objectives."

In 2015, we expect Group Net Sales to grow between 4% and 5% on a comparative basis.
Excluding major currency fluctuations, Consumer Business Normalized IFO margin is expected to be consistent with 2014's. BIC Graphic Normalized IFO margin is expected to improve.

Unaudited figures
* See glossary page 11

*: restated from IFRIC 21

For the first quarter 2015, Net Sales were 510.8 million euros up 17.6% as reported, +6.2% at constant currency, and +6.8% on a comparative basis. The strong positive impact of currency fluctuations (+11.4%) is mainly due to the strength of the USD versus the EUR.

• Consumer business grew 7.4% on a comparative basis with a good performance across all geographies (Europe +8.0%, North America +11.0%, Developing Markets +3.9%).
• BIC Graphic Net Sales increased 2.4% on a comparative basis.

Q1 2015 Gross Profit margin increased 2.3 points to 51.4% of sales versus 49.1% in 2014, benefiting from favorable FX and raw material impacts.

Q1 2015 Normalized IFO was 101.8 million euros (19.9% normalized IFO margin). Consumer business normalized IFO margin was 23.6%, an increase of 3.5 points notably driven by higher Gross Profit. BIC Graphic normalized IFO margin increased 0.5 point to -6.7%.

The key components of the change in Normalized IFO margin were:

Non-recurring items

Income before tax increased 48.1% as reported to 110.3 million euros. Net finance revenue increased to 12.7 million euros compared to 1.5 million euros in 2014 due to the favorable revaluation of financial assets denominated in USD.

Net income Group Share was 77.2 million euros, a 54.2% increase as reported. The tax rate was 30.0%.

EPS Group share is 1.64 euros compared to 1.07 euros in Q1 2014, up 53.3%. Normalized EPS Group share increased 58.9% to 1.70 euros compared to 1.07 euros in Q1 2014.

At the end of March 2015, the net cash position was 398.2 million euros of which -87.3 million euros of Cello Pens put option valuation.

Evolution of Net Cash Position (in million euros)

The net cash from operating activities was +87.2 million euros with +142.3 million euros in cash flow from operations and a change in working capital of -55.1 million euros impacted by the increase in inventories in line with expected sales activity for the balance of the year.

• 2.85 euros ordinary dividend per share will be proposed at the Annual Shareholders' Meeting on May 6 2015.

CONSUMER CATEGORIES

Stationery

Q1 2015 Stationery Net Sales increased 9.1% as reported and +1.8% on a comparative basis.

Developed markets  

• In Europe, Net Sales continued with the strong positive trend (high-single digit growth), driven by both Western and Eastern Europe.
• In North America, BIC maintained market share in an environment where Net Sales were slightly down due to the slow start in the Office Super Stores (market concentration driving store closing and stock rationalization) while our performance was good in other distribution channels.

Developing Markets

Q1 2015 Net Sales decreased low-single digit on a comparative basis.

• Latin America ended the quarter with double-digit growth. Back-to-school was good in the Southern hemisphere, with strong results and market share gains in Brazil.
• The decrease in Net Sales in the Middle-East and Africa was due to seasonal factors (very high comparative basis), while fundamentals remain positive.
• In India, the transition period continues to be challenging. Cello Pens Net Sales declined, due mainly to manufacturing bottlenecks which negatively impacted the fulfillment of customer orders.

Q1 2015 Stationery normalized IFO margin was 13.6% compared to 10.8% in 2014, as a result of favorable fixed costs absorption as well as positive effect of raw materials and FX on Gross Profit.

Lighters

Q1 2015 Lighters Net Sales increased 22.3% as reported and +9.7% on a comparative basis.

Developed markets

• In Europe, Net Sales increased high-single digit. The growth was driven by distribution gains in Western Europe and a strong performance in Eastern Europe.
• In North America, Net Sales increased low-double digit, reflecting both market share gains and buy-in ahead of price adjustment implemented as of April 1, 2015.

Developing Markets

Q1 2015 Net Sales increased high-single digit.

• In Latin America, Net Sales grew mid-single digit, with good performance in Mexico.
• The Middle-East, Africa and Asia performance was notably impelled by distribution gains in Asia (convenient store channel).

Q1 2015 Lighters Normalized IFO was 37.6% compared to 36.6% in 2014. This improvement is due to strong Net Sales growth and positive raw material impact.

Shavers

Q1 2015 Shavers Net Sales increased 26.5% as reported and +14.7% on a comparative basis.

Net sales increased double-digit in all our geographies.

Developed markets

• In Europe, Net Sales growth was driven by the sustained success of our core products such as BIC^® 3 in France and BIC^® Miss Soleil^® in Eastern Europe and by our new shaver for men, BIC^® Flex 3 Comfort.
• In North America, we continue to outperform both US and Canadian disposable markets. The solid Q1 sell-in performance benefited from the launch of new products - BIC^® Flex 5 for men and BIC^® Simply Soleil^® Click for women - and the growth of our core products (BIC^® Soleil and BIC^® Hybrid 3).

Developing Markets

In Latin America, the performance was driven by the success of the BIC^® Soleil^® and BIC^® 3 shavers. We also registered good momentum in the Middle-East and Africa thanks to our single, twin and triple-blade products.

Q1 2015 Shavers normalized IFO margin was 21.3% compared to 17.4% in 2014. The increase in margin was driven by strong Net Sales growth and lower brand support compared to last year.

Other Consumer Products

Q1 2015 Other Consumer Products Net Sales increased 4.1% as reported and decreased 1.6% on a comparative basis. BIC Sport Net Sales grew double-digit on a comparative basis.

Other Consumer Products Q1 2015 Normalized IFO was -0.7 million euros, including expenses related to the portable Fuel Cell project (sold in early April 2015) of 1.1 million euros compared to 2.2 million euros in 2014.

BIC GRAPHIC

Q1 2015 BIC Graphic Net Sales increased 18.3% as reported and 2.4% on a comparative basis.

BIC Graphic confirmed its sales recovery. In Europe, Q1 Net Sales were driven by an increase in writing instrument sales and new product launches. North America was weaker due to a poor end of season performance in the Calendar business while Hard Goods performed in line with expectations. Developing Markets continued to grow.

             
Q1 2015 Normalized IFO margin was -6.7% compared to -7.2% in 2014, notably reflecting an improvement in Gross Profit.

FUEL CELL

On April 7, BIC Group announced that following the binding agreement signed on February 27, 2015, BIC's Portable Fuel Cell Technology has been sold to Intelligent Energy for 13 million U.S. dollars (approx. 12.0 million euros^[1]) at closing and 2 million U.S. dollars (approx. 1.8 million euros¹) in an escrow account at closing to be paid once transition services are completed. The transaction includes all assets (patents and related technology and know-how). The agreement includes a potential earn out up to 7 million U.S. dollars (approx. 6.5 million euros¹).

No share buy-back in Q1 2015.

As of March 31, 2015, the total number of issued shares of SOCIÉTÉ BIC is 48,051,695 shares, representing:

• 69,576,188 voting rights,
• 68,801,589 voting rights excluding shares without voting rights.

Total number of treasury shares held at the end of March 2015: 774,599.

• At constant currencies: Constant currency figures are calculated by translating the current year figures at prior year monthly average exchange rates.
   
• Comparative basis: at constant currencies and constant perimeter. Figures at constant perimeter exclude the impacts of acquisitions and/or disposals that occurred during the current year and/or during the previous year, until their anniversary date. All Net Sales category comments are made on a comparative basis.
   
• Normalized IFO: normalized means excluding non-recurring items.

*        *
*

SOCIETE BIC consolidated and statutory financial statements as of March 31, 2015 have been closed by the Board of Directors on April 21, 2015. A presentation related to this announcement is also available on BIC website (www.bicworld.com).

This document contains forward-looking statements. Although BIC believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. A description of the risks borne by BIC appears in the section, "Risk factors" in BIC's 2014 Registration Document filed with the French financial markets authority (AMF) on March 20 2015.

For more information, please consult the corporate website: www.bicworld.com

BIC is a world leader in stationery, lighters, shavers and promotional products. For more than 60 years, BIC has honored the tradition of providing high-quality, affordable products to consumers everywhere. Through this unwavering dedication, BIC has become one of the most recognized brands in the world. BIC products are sold in more than 160 countries around the world. In 2014, BIC recorded Net Sales of 1,979.1 million euros. The Company is listed on "Euronext Paris" and is part of the SBF120 and CAC Mid 60 indexes. BIC is also part of the following SRI indexes: Carbon Disclosure Leadership Index (CDLI), FTSE4Good Europe, Euronext Vigeo Europe 120, Ethibel Sustainability Excellence Europe, STOXX ESG Leaders and Gaia Index.