(BFM Bourse) – The manufacturer of stationery, lighters and razors is taking a hit on the Paris Stock Exchange after results below expectations for the year 2022. This year, the outlook is not good fixed, Bic anticipates a slowdown in the growth of its turnover.
The maker of stationery, lighters and razors plunged 8% after announcing results below expectations. On the Paris Stock Exchange, the title returns to contact with 60 euros, i.e. at the lowest of the year.
The operators are turning away from the file while the group has indicated that its growth in 2023 will be less flamboyant than last year. This slowdown expected by Bic overshadowed the rest of the outlook presented by the company, namely an improvement in adjusted operating income as well as adjusted operating margin in 2023.
This anticipated improvement in profitability could have cheered investors up in an inflationary environment. Especially since in 2022, increases in brand support costs and expenses have weighed on the operating margin. But this is not the analysis of investors.
Results below expectations
In 2022, Bic’s adjusted operating income stood at 311.7 million euros, up 11.4% year on year, illustrating “the group’s resilience in the face of headwinds”. If we detach ourselves from these elements of language, the indicator came out below the expectations of analysts who for their part forecast an adjusted operating profit of 322 million euros.
Another point of disappointment in this publication is the adjusted operating margin, which contracted by 1.3 points to 14% compared to the 15.3% posted a year earlier. Bic explains this erosion of the margin by an increase in brand support expenses, investments in recently acquired companies and a surge in energy prices.
A little lower in the accounts, net profit is down 33.5% to 208.9 million euros compared to 2021. A fall in sham, the sale of the headquarters last year had shows an exceptional capital gain of 168 million euros. Restated for this sale, adjusted net income increased by 17.5% to 225.2 million euros after 191.7 million euros in 2022. Adjusted net earnings per share jumped 19.3% to stand at 5.12 euros after 4.29 euros last year.
A solid year commercially
Commercially, Bic had a solid year. Turnover stands at 2.23 billion euros, up 13.8% at constant exchange rates compared to 2022. The pace of growth printed in 2022 “exceeds” the objectives set by management in October . It then provided for a growth target for 2022 turnover at constant exchange rates in a range between 11% and 13% against “between 10% and 12%”, previously.
Bic saw double-digit business growth across all three divisions in all of its major markets. The “Human Expression” writing instruments division experienced a 16.9% increase in sales, thanks to high single-digit and double-digit growth in all the key regions where the group operates. Growth was also driven by lighters (“Flame For Life” division) and the razor division, or “Blade Excellence”, both driven by the introduction to the catalog of value-added ranges and new products.
For 2023, however, Bic expects a slowdown in growth. The company is targeting revenue growth of between +5% and +7% at constant exchange rates, thanks to the combined effect of price and volume increases.
It also expects to improve adjusted operating income and adjusted operating margin in fiscal 2023. Gross margin, however, will be partially offset by continued operational investments and brand support. Bic also aims to generate net free cash flow above 200 million euros, for the fifth consecutive year.
Sabrina Sadgui – ©2023 BFM Bourse
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