(AOF) – Bic published its 9-month turnover, at 1.7 billion euros, up 7.1% at constant exchange rates. Growth was driven by sales in Europe, the Middle East, Africa and Latin America. Over this same period, the gross margin stood at 50.4%, an increase of 1.5 points. Ebitda stands at 320.5 million euros compared to 332.1 million euros a year earlier in the same period. The group’s share of net income stood at 181.4 million euros compared to 186.2 million euros a year earlier.
On the outlook side, the group forecasts that revenue growth for the 2023 financial year should be between 5% and 7% at constant exchange rates thanks to the combined effect of price increases and mix improvement.
“We expect to improve fiscal 2023 adjusted operating income and adjusted operating margin, as well as gross margin, trends which will however be partially offset by continued operating investments and support to the brand, to achieve our ambition as part of the Horizon plan and support long-term profitable growth. The generation of net free cash flow should exceed 200 million euros, for the fifth consecutive year”, details the Bic group in a press release.
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Key points
– World number one in lighters with 55% market share, world number two in pens with 8% of the market and world number two in razors with 23% of the market, created in 1944;
– Defensive positioning with a range of quality products at the best prices, sales of €2.2 billion, divided between pens (38%), lighters (33%) and razors;
– 26% of sales made in emerging countries (mainly in Latin America, Brazil being the group’s 2nd market), behind North America (43%) and Europe (31%);
– Business model combining innovation capacity and industrial integration strategy (91% of Bic objects produced in its factories), resulting in an operating margin higher than that of competitors;
– Capital locked by the founding Bich family (46% of the capital and 60.1% of the voting rights), Nikos Koumettis chairing the board of directors of 12 members, Gonzalve Bich being general manager;
– Solid balance sheet with €1.8 billion in equity compared to €937 million in gross debt and a net cash position of €360 million.
Challenges
– Horizon 2025 strategic plan:
– annual growth greater than 5% for both stationery (Human expression), lighters (Flame for life) and razors (Blade excellence),
– industrial efficiency with €50 million in cumulative cost savings and generation of annual cash flows above €200 million by 2022;
– Innovation strategy financed at 1.1% of turnover for a range of “sustainable” and safe products:
– innovation ecosystem: Internal innovation lab focused on data (discovery of new technologies that can be integrated into the group’s projects, partnership with Plug&Play, Data-Driven Invention Lab using consumer data, new Partnerships and new Business division,
– 110 patents filed in 2022,
– 9% of revenues from products launched less than 5 years ago;
– 2025 environmental strategy “writing the future together”:
– 2030 vs 2019 objectives: 100% renewable energy (76% in 2022) and 50% reduction in CO2 emissions for scope 1, 100% for scope 2 and 5% for scope 3 (suppliers) ,
– eco-circularity with 100% recyclable packaging (70% in 2022) and the offer of “sustainable” products with recycled or alternative plastics, refillable pens and razors made from recycled materials,
– environmental impact share buyback program;
– Expansion of markets via the subcontracting of high-precision blades for other brands (3 contracts in 2022) or tattoos with the American Tattly;
– Rationalization of the portfolio by reducing references by almost 12%;
– Strengthening the weight of e-commerce, to 10.2% of total sales
and continued market gains
.
Challenges
– Strong competition, particularly from Asia, in lighters (50% of the global market);
– Diversity of margins between branches, with lighters remaining the most profitable (35% operating margin compared to 13% for blades and 3% for pens);
-Faced with inflation in the costs of plastic materials, freight and energy, of €105 million in 2022, creation of strategic stocks, long-term contracts with suppliers and expansion of their number, increased use of recycled plastics, increase in prices and volumes but slightly negative impact on the margin;
– After a 13.8% increase in turnover, 2023 objective of 6 to 7% growth in sales and an improvement in the operating margin;
– Dividend up 11.9% to €2.56 and share repurchase of €100 million.
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Cleaning, hygiene and beauty products: how to reverse the balance of power between producers and distributors
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