(AOF) – Bic recorded a net profit, group share, of 45.1 million euros in the fourth quarter compared to 12.4 million euros a year earlier. The adjusted operating margin stood at 13.8% compared to 8.2% in the fourth quarter of 2022. It increased by 70 basis points over the year to 14.7%. The quarterly turnover of the manufacturer of lighters, razors, pens and promotional items fell 0.1% to 526.1 million euros. However, it increased by 2.4% on a comparable basis.
Bic announces that shareholder remuneration has been maintained. An ordinary dividend of 120 million euros was proposed for the 2023 financial year, to be paid on June 12, 2024, or 2.85 euros per share, an increase of 11.3%. An extraordinary dividend of 1.42 euros per share will be paid on September 18, 2024. Up to 40 million euros are allocated to the share buyback program, planned for 2024.
This year, the maker of lighters, razors, pens and promotional items anticipates a slight improvement in adjusted operating margin, “thanks to positive leverage on operating costs.” Revenue growth in 2024 is expected to be between 5% and 7% at constant exchange rates thanks to the effect of volumes, price and mix. Net free cash flow generation is expected to be above €220 million.
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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.
Learn more about the Consumer Goods sector
In France, financial aid aimed at encouraging consumers to repair rather than throw away objects now also applies to clothing and shoes.
The principle remains the same for clothing and shoes as for the selection of electronic products: the consumer must go to an approved repairer to benefit from assistance which cannot exceed 60% of the cost of the repair. The approved organization, “Refashion”, aims to increase the number of repairs by 35% by 2028. The Repair Fund, fueled by “eco-contributions” from brands, finances the operation. However, the question is whether this bonus will have to face the same difficulties as that for household appliances, which has not met with the expected success, in particular due to complex labeling procedures.