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BIC : First Quarter 2017 Results

04/26/2017 | 01:26am EDT

BIC Group - Press Release
Clichy - 26 April 2017

First Quarter 2017 Results
 (Accounted for and presented in accordance with IFRS 5, with BIC Graphic no longer considered as a separate category or reporting segment [1])

Weakness of U.S. Stationery and Shavers markets impacting quarterly Net Sales  
Full Year 2017 outlook maintained

·         Net Sales: 469.2 million euros, stable as reported and down 4.1% on a constant currency basis[2]

·         Normalized2 IFO: 81.3 million euros

o   Normalized2 IFO margin: 17.3%

·         Net Income Group Share: 49.7 million euros, down 2.7%

o   EPS Group Share: 1.06 euros, down 1.9%

·         Net cash position: 206.2 million euros

Q1 2017 Key operational figures
  Change in Net Sales on a constant currency basis2 Normalized2 IFO margin
Group -4.1% 17.3%
Stationery -5.1% 3.6%
Lighters -0.5% 37.4%
Shavers -7.7% 12.6%

Commenting on the Q1 2017 results, Bruno Bich, Chairman and Chief Executive Officer, said: "Q1 2017 Net Sales declined by 4.1% on a constant currency basis, weakened by both Stationery and Shavers in North America.

With the launch of BIC® Gel-ocity Quick Dry Gel Pen in the U.S., additional distribution gains in Developing Markets and the continued solid performance of our shaver business in Eastern Europe and Latin America, Full Year 2017 organic Net Sales should grow mid-single digit, in line with our objectives.

As planned, we will continue to invest in R&D, CAPEX and Brand Support to fuel medium and long term profitable growth. The total impact of these investments on Normalized Income From Operations margin will be approximately -100 basis points."


Unaudited figures



Key figures (in million euros) Q1 2016 Q1 2017 Change as reported Change on a constant currency basis
Group        
Net Sales 469.3 469.2 +0.0% -4.1%
Gross Profit 236.8 245.7    
Normalized Income From operations 81.4 81.3 -0.1%  
Normalized IFO margin 17.3% 17.3%    
Income From Operations 81.4 74.3 -8.8%  
IFO margin 17.3% 15.8%    
Net Income Group Share 51.0 49.7 -2.7%  
Earnings Per Share Group Share (in euros) 1.08 1.06 -1.9%  
Stationery        
Net Sales 167.1 163.4 -2.2% -5.1%
IFO 8.6 0.4    
IFO margin 5.2% 0.3%    
Normalized IFO margin 5.2% 3.6%    
Lighters        
Net Sales 163.6 171.3 4.7% -0.5%
IFO 62.1 63.9    
IFO margin 38.0% 37.3%    
Normalized IFO margin 38.0% 37.4%    
Shavers        
Net Sales 117.8 114.4 -2.9% -7.7%
IFO 12.6 14.3    
IFO margin 10.7% 12.5%    
Normalized IFO margin 10.7% 12.6%    
Other Products        
Net Sales 20.8 20.1 -3.2% -4.2%
IFO -1.9 -4.3    
Normalized IFO -1.9 -3.0    

Group operational trends


Net Sales

Q1 2017 Net Sales were 469.2 million euros, stable as reported and down 4.1% on a constant currency basis. The favorable impact of currency fluctuations (+4.1%) was mainly due to the appreciation of the U.S. dollar and Brazilian real against the euro. Europe grew by 2.4% while North America and Developing markets declined by 9.2% and 3.4%, respectively, on a constant currency basis.

Income From Operations and Normalized Income From Operations

Q1 2017 Gross Profit margin was 52.4%, compared to 50.5% in Q1 2016.

Q1 2017 Normalized IFO was 81.3 million euros.

Key components of the change in Normalized IFO margin
 (in points)
Q1 2016
vs. Q1 2015
Q1 2017
vs. Q1 2016
  • Change in cost of production[3]
     -1.4      +0.8
  • Total Brand Support[4]
-0.9 -0.8
  • Of which, promotions and investments related to consumer and business development support accounted for in Gross Profit Margin
-0.4 -0.1
  • Of which, advertising, consumer and trade support
-0.5 -0.7
  • OPEX and other expenses
-1.4 -1.9
Total change in Normalized IFO margin -3.7 -1.9
Special employee bonus -1.9 +1.9
  • Of which impact on Gross Profit
-1.2 +1.2
  • Of which impact on OPEX
-0.7 +0.7
Total change in Normalized IFO margin -5.6 0.0

Non-recurring items
(in million euros)
Q1 2016 Q1 2017
Income From Operations 81.4 74.3
As % of Net Sales 17.3% 15.8%
Restructuring costs related primarily to BIC Graphic - 7.0
Normalized IFO 81.4 81.3
As % of Net Sales 17.3% 17.3%
Special employee bonus 8.8 -
Normalized IFO excluding the special employee bonus 90.2 81.3
As % of net sales 19.2 % 17.3%

Net Income and EPS

Income before tax fell back to 75.0 million euros, compared to 79.4 million euros in Q1 2016. Net finance revenue increased to a positive 0.7 million euros compared to a negative 2.0 million euros in Q1 2016. Q1 2016 was negatively impacted by fair value adjustments to financial assets denominated in USD when compared to December 2015.

Net income Group Share was 49.7 million euros, a 2.7% drop as reported. The effective tax rate was 30.0%.

EPS Group share were 1.06 euros compared to 1.08 euros in Q1 2016, i.e., down by 1.9%. Normalized EPS Group share increased 9.3% to 1.18 euros, compared to 1.08 euros in Q1 2016.


Net cash position

At the end of March 2017, the Group's net cash position stood at 206.2 million euros.

Change in net cash position
(in million euros)
2016 2017
Net Cash position (beginning of December) 448.0 222.2
  • Net cash from operating activities
+16.1 +25.9
  • Of which operating cash flow
+79.9 +81.1
  • Of which change in working capital and others
-63.8 -55.2
  • CAPEX
-33.3 -31.5
  • Share buyback program
-30.0 -9.4
  • Net cash from the exercise of stock options and the liquidity contract
-0.3 +0.2
  • Others
-13.4 -1.2
Net Cash position (end of march) 387.1 206.2

Net cash from operating activities was +25.9 million euros, with +81.1 million euros in operating cash flow. The negative change in working capital of 55.2 million euros was mainly driven by the increase in inventories compared to December 2016 to meet forecast sales activity for the rest of the year. Net cash was also impacted by investments in CAPEX as well as share buybacks.

Shareholders' remuneration

  • An ordinary dividend of 3.45 euros per share will be proposed at the Annual Shareholders' Meeting on May 10, 2017.
  • 9.4 million euros in share buy-backs at the end of March 2017 (80,577 shares purchased at an average price of 116.21 euros).

Operational trends by category


Stationery

Stationery Q1 2017 Net Sales decreased by 2.2% as reported and by -5.1% on a constant currency basis.

Developed markets 

  • In Europe, the increase in Net Sales was in the low single digits, continuing the strong momentum of 2016, with good performances in France and in Eastern European countries.
  • In North America, where prior-period Q1 2016 comparables were very high, Net Sales registered a double-digit decrease in a challenging U.S. Stationery market, especially in the Mass Market channel.

Developing Markets
In Q1 2017 the decline in Net Sales was in the high single-digits.

  • In Latin America, we recorded a high-single digit decline after a strong Q4 2016. However, in Brazil, the Back-To-School sell-out has been strong with further market share gains.
  • In the Middle-East and Africa, sales decreased mainly due to a timing impact. South Africa enjoyed a very good back-to-school season with market share gains.
  • Cello Pens Domestic Sales increased mid-single digit, thanks to our Champions brands strategy, notably in Ball Pen with Cello ButterflowTM.

Q1 2017 Normalized IFO margin for Stationery was 3.6% compared to 5.2% in Q1 2016 (7.3% excluding the impact of the special employee bonus), due to higher Research and Development and Brand Support investments.

Lighters

Q1 2017 Net Sales of Lighters increased by 4.7% as reported but decreased by 0.5% on a constant currency basis.

Developed markets

  • Europe delivered mid-single-digit growth in Net Sales driven notably by a good performance in Eastern Europe, thanks to distribution gains.
  • North America registered a low-single-digit decline when compared to a strong Q4 2016. We gained market share in the U.S.

Developing Markets

In Q1 2017, growth in Net Sales was in the low single-digits.

  • In Latin America, we delivered low-single-digit growth with a strong performance in Mexico and distribution gains in Brazil.
  • In the Middle-East and Africa, Net Sales benefited from double digit growth mainly driven by distribution gains.

Q1 2017 Normalized IFO margin for Lighters was 37.4% compared to 38.0% in Q1 2016 (39.5% excluding the impact of the special employee bonus), due to lower Gross Profit and higher operating expenses.


Shavers

Q1 2017 Net Sales of Shavers decreased by 2.9% as reported and by -7.7% on a constant currency basis.

Developed markets

  • In Europe, Net Sales growth was in the low-single-digits, driven by the continued good performance in Eastern Europe. We benefited from the success of products such as the BIC® 3 and BIC® Miss Soleil® shavers as well as the Hybrid range.
  • In North America, we registered a double-digit decline in Net Sales. At the end of March 2017, the total U.S wet shave market[5] declined by 9.2% (-7.4% for the one-piece segment), reflecting a phasing impact on promotional activity, price adjustments from some competitors and good performances by Private Labels. BIC market share in one-piece was 27.6%, a 1.5-point drop compared to a 29.1% record market share in Q1 2016. The launch of the BIC® Hybrid 5 shaver strengthened our no. 1 position in the 5-blades disposable shaver segment (32.8% market share in value terms, up 5.7 points compared to Q1 2016), confirming the relevance of our "great value for money" positioning strategy.

Developing Markets
Net Sales were stable.

  • In Latin America, high-single growth in Net Sales was driven by a good performance in Brazil, underpinned by the launch of the BIC® Flex 3 shaver and the BIC® Soleil® range.
  • In the Middle-East and Africa, we registered a double-digit decrease mainly due to a timing impact (i.e., orders shifted from Q1 to Q2 2017).

Q1 2017 Normalized IFO margin for Shavers was 12.6% compared to 10.7% in Q1 2016 (12.9% excluding the impact of the special employee bonus). The margin change is mainly impacted by the decline in North America Net Sales, higher operating expenses (which includes the continued investments in R&D) which was partially offset by lower Brand Support compared to Q1 2016.

Other Products

Q1 2017 Net Sales of Other Products decreased by 3.2% as reported and by -4.2% on a constant currency basis.

BIC Sport registered a mid-single-digit decrease in its Net Sales on a constant currency basis.

Q1 2017 Normalized IFO for Other Products was negative 3.0 million euros, compared to negative 1.9 million euros in Q1 2016.

Full Year 2017 Outlook

Full Year 2017 organic Net Sales should grow mid-single digit. To enhance long-term growth, we plan another year of selected investments in R&D, CAPEX and Brand Support. The total impact of these investments on Normalized Income From Operations margin will be approximately -100 basis points compared to 2016, excluding major currency fluctuations.



BIC Group change in net sales by geography
(in million euros)
Q1 2017 vs Q1 2016
  Q1 2016 Q1 2017 As reported Constant currency basis
Group        
Net Sales 469.3 469.2 +0.0% -4.1%
Europe        
Net Sales 126.6 129.5 +2.3% +2.4%
North America        
Net Sales 188.0 177.5 -5.6% -9.2%
Developing Markets        
Net Sales 154.8 162.1 +4.7% -3.4%
         

Impact of change in perimeter and currency fluctuations on net sales
(in %)
Q1 2016 Q1 2017
Perimeter - -
Currencies -5.6 +4.1
Of which USD +0.9 +1.3
Of which BRL -2.4 +2.1
Of which ARS -1.6 -0.1
Of which INR -0.3 +0.2
Of which MXN -0.9 -0.4
Of which ZAR -0.4 +0.4
Of which Russia and Ukraine -0.2 +0.3

IFO and Normalized IFO by category
(in million euros)
Q1 2016 Q1 2017
Group    
Income From Operations 81.4 74.3
Normalized Income From operations 81.4 81.3
Stationery    
Income From Operations 8.6 0.4
Normalized Income From operations 8.6 5.9
Lighters    
Income From Operations 62.1 63.9
Normalized Income From operations 62.1 64.1
Shavers    
Income From Operations 12.6 14.3
Normalized Income From operations 12.6 14.4
Other Products    
Income From Operations -1.9 -4.3
Normalized Income From operations -1.9 -3.0



Condensed profit and loss account
(in million euros)
Q1 2016 Q1 2017 Change as reported Change on a constant currency basis
Net sales 469.3 469.2 +0.0% -4.1%
Cost of goods 232.5 223.5    
Gross Profit 236.8 245.7 +3.8%  
Administrative & other operating expenses 155.4 171.4    
Income from operations 81.4 74.3 -8.8%  
Finance revenue/costs -2.0 0.7    
Income before tax 79.4 75.0 -5.5%  
Income tax expense -23.9 -22.5    
Net Income From Continuing Operations 55.5 52.5    
Net Income From Discontinued Operations -4.5 -2.8    
Net Income Group Share 51.0 49.7 -2.7%  
Earnings Per Share From Continuing Operations (in euros) 1.18 1.12    
Earnings Per Share From Discontinued Operations (in euros) -0.10 -0.06    
Earnings per share Group share (in euros) 1.08 1.06 -1.9%  
Average number of shares outstanding net of treasury shares 47,107,818 46,685,992    

Condensed balance sheet
(in million euros)
Mar. 31, 2016 Mar. 31, 2017
Assets    
Non-current assets 1,120.1 1,169.0
Current assets 1,416.1 1,314.8
  • Of which cash & cash equivalents
312.1 251.8
Assets Held For Sale   125.8
TOTAL ASSETS 2,536.2 2,609.6
Liabilities & shareholders' equity    
Shareholders' equity 1,847.2 1,857.5
Non-current liabilities 304.2 301.6
Current liabilities 384.8 415.7
Liabilities Held For Sale   34.8
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 2,536.2 2,609.6

Share buy-back program Number of shares
acquired
Average weighted price in € Amount
in M€
February 2017 38,433 117.49 4.5
March 2017 42,144 115.05 4.9
Total 80,577 116.21 9.4

Capital and voting rights, March 31, 2017

As of March 31, 2017, the total number of issued shares of SOCIÉTÉ BIC was 47,570,106 shares, representing:

  • 69,181,960 voting rights,
  • 68,319,562 voting rights excluding shares without voting rights.

Total number of treasury shares held at the end of March 2017: 862,398.


Glossary



  • Constant currency basis: 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 as detailed on page 3.
  • Normalized IFO margin: Normalized IFO as percentage of Net Sales.
  • Net cash from operating activities: principal revenue-generating activities of the entity and other activities that are not investing or financing activities.
  • Net cash position: Cash and cash equivalents + Other current financial assets - Current borrowings - Non-current borrowings.

*          *
*
SOCIETE BIC consolidated and statutory financial statements as of March 31, 2017, were approved by the Board of Directors on April 25, 2017. A presentation related to this announcement is also available on the 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 2016 Registration Document filed with the French financial markets authority (AMF) on March 22, 2017.

Contacts



Investor Relations: +33 1 45 19 52 26 Press Contacts
Sophie Palliez-Capian
sophie.palliez@bicworld.com
Albane de La Tour d'Artaise albane.delatourdartaise@bicworld.com
Katy Bettach
katy.bettach@bicworld.com
Priscille Reneaume : +33 1 53 70 74 70
preneaume@image7.fr

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

2017 Agenda (all dates to be confirmed)


2017 AGM 10 May 2017 Meeting - BIC Headquarters
2nd Quarter and 1st Half 2017 results 3 August 2017 Conference call
3rd Quarter 2017 results 25 October 2017 Conference call

About BIC

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 2016, BIC recorded Net Sales of 2,025.8 million euros. The Company is listed on "Euronext Paris" and is part of the SBF120, CAC Mid 60 and Family Business indexes. BIC is also part of the following Socially Responsible Investment indexes:  CDP's Climate A List, CDP's Supplier Climate A List, CDP Supplier Engagement Leader Board, FTSE4Good indexes, Ethibel Sustainability Index (ESI) Excellence Europe, Euronext Vigeo - Eurozone 120, Euronext Vigeo - Europe 120, Stoxx Global ESG Leaders Index.



[1] On February 7, 2017, BIC Group announced the status of the strategic alternatives review initiated in February 2016 for BIC Graphic. The Group mentioned that discussions regarding BIC Graphic North America and the Asia sourcing operations were still ongoing. Consequently, as from December 31, 2016 these activities are accounted for and presented in accordance with IFRS 5. BIC Graphic is thus no longer considered as a separate category or reporting segment. The activities of BIC Graphic Europe and Developing Markets are now accounted for and presented in Stationery and Other products categories.

[2] See glossary page 9

[3] Gross Profit margin excluding promotions and investments related to consumer and business development support.

[4] Total Brand Support:  consumer and business development Support + advertising, consumer and trade support.

[5] Source: IRI total market YTD 13 weeks ending 02-APRIL-2017 - in value terms




This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: BIC via Globenewswire

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