As we fear today the approach of a global recession, how do you see the evolution of Bic in the coming months? ?
I see growth for Bic. In 2021, we recorded an increase in turnover of 12.5%, and even 15.9% at constant exchange rates. Bic is a strong brand, whose innovation is based on real needs. We launched new products that outperformed. For example, our Bic EZ Reach lighter [usages utilitaires hors tabac, en format poche] in the United States has already captured a market share of more than 5%, and our teams expect to reach 10% in 2023. Of course, there are headwinds. The health situation is not completely stabilized worldwide. There is also the subject of raw materials which could lead to cost increases in certain segments. And we have to take inflation into account in terms of consumers, fuels, energy… We have to manage all of this while staying true to our reputation for good value for money and continuing to grow.
Do you notice a slowdown in consumption ?
This is the case in some countries, but these are not Bic’s biggest markets. We must be agile and continue to gain market share, reposition ourselves when necessary. Some segments continue to grow around the world, such as coloring, high-performance razors and value-added lighters. In the first quarter, we made progress in all of our businesses and in all of our geographies. The United States, in particular, was driven by the performance of lighters. We also launched last year a BtoB activity, Bic Blade Tech, in the field of razor blades, which enables our partner-customers to benefit from our technology and industrial expertise. This new activity should generate 15 to 20 million euros in turnover this year. In the medium term, it could reach 25% to 30% of Blade Excellence’s turnover. [activité Rasoirs], with margins above the average for this division. Our clients are brands present in segments and geographic areas where Bic does not operate. It’s a way to create more value for every euro of R&D [recherche et développement] invested.
Precisely, what budget do you allocate to R&D ?
We have been investing an average of 2% of turnover per year in research and development for several years. Two years ago, with the implementation of our new organization, we pooled certain activities between our three businesses [Papeterie, Briquets, Rasoirs], for example in the field of plastics processing or assembly. Sustainable development also occupies a significant part of this budget, a movement that has accelerated since 2018. We have set targets for reducing plastic in our packaging by 2025 and in our products by 2030. For any new R&D project, the question arises first of all whether it reduces our environmental footprint, but also whether it meets a real need or a consumer demand. Because we have moved from a model centered on our industrial expertise to a model centered on consumer needs. Sometimes all it takes is a small change to a product to have a big impact.
What are Bic’s growth drivers today? ?
First of all, they are organic and go through industrial investments that allow us to adapt our production capacities to demand. Growth also involves acquisitions, the pace of which we have accelerated since we have made three over the past two years: Djeep, a brand of lighters which gives us a more upmarket positioning, Rocketbook, reusable digital notebooks with a excellent value for money, since they cost less than 40 euros, and Inkbox, leader in temporary tattoos. With the latter, we are creating the market, which we haven’t done for a long time, and we will continue to develop its offer.
What are your ways to fight inflation ?
In the first quarter, the rise in inflation weighed 13 million euros on adjusted operating income, and we expect an impact of around 100 million euros for the full year. We offset this effect primarily through industrial excellence. The fact that we produce 90% of what we sell ourselves is a real asset, especially since we do it as locally as possible. Being local allows us to protect ourselves against exchange rate fluctuations, to avoid overpaying for the transport of goods, but also to reduce our environmental footprint. Eco-design is also a solution, because it allows us to use less and less material without compromising on quality. We should add that we have medium-term contracts with our suppliers, which is fundamental. This is where we see the importance of being a major recognized brand, with a history of several years with its partners. We can also do material substitution and we are working on prices and promotion policies.
Are you having supply issues ?
We have never stopped a factory and we have managed to pass all the stages of the Covid. We had a very good start to the year and have what it takes for the start of the new school year which is coming to Europe and the United States.
Bic’s price had experienced a very good phase between 2008 and 2015. What are your means today to relaunch the stock? ?
We do not comment on the stock market, but you will note that the Bic share is 15 points better than the market since the beginning of the year… Two years ago, we launched the Horizon plan, and I am very satisfied with our results and the momentum for 2022 and 2023 in terms of innovation, commercial and industrial excellence, and the ramping up of skills. For e-commerce, we were behind. We caught up with it by gaining market share: between our Bic.com, Inkbox and Rocketbook platform, online sales now represent 12% of the group’s turnover. We develop factories 4.0 [qui permettent de gagner en efficacité]. Sustainable development becomes concrete in our operations and our products and with consumers. We picked up the pace, with the launch of new products and our arrival in new segments.
We will achieve our medium-term growth trajectory objective of around 5%, in particular by opening up to new businesses. Bic is no longer simply a manufacturer of pens but a facilitator of human expression and creativity through writing, tattooing, coloring and digital. We have also gone from simple pocket lighters to value-added products for all occasions to light a flame (decorated, personalized, EZ Reach model, etc.). They now represent 36% of sales in the Flame For Life division, and we have a target of 50% in 2025. Lighters have also taken the ecological turn, with a circular economy test currently being carried out in Spain and the development a machine for disassembling and recycling Bic lighters. Finally, we launched a BtoB activity, Bic Blade Tech, in order to capitalize on our industrial know-how and our high technology in razors.
The new professions you mention presuppose going through acquisitions ?
Not only that, we have ongoing development projects internally. Bic is a strong brand, known around the world, and we will continue to capitalize on it. We are also going to develop the Inkbox temporary tattoo brand. We are of course open to acquisitions, provided that they are part of a strategy to create value for our shareholders, that they are complementary for our brands and in line with our Horizon strategy. We have developed a dedicated in-house team working on this.
Do you develop employee share ownership? ?
In October 2021, we gave all our employees who do not already benefit from stock options or free share grants five Bic shares. A measure that was very well received. It is a source of personal pride to have all of our employees committed to the success of the Horizon plan.
THE INCONVENIENT QUESTION
Should consumers expect back-to-school price increases? ?
It should be noted that Bic does not set the selling prices to the consumer, it is the distributors. But we strive to ensure the best quality/price ratio, it is a strong anchor of our brand. In France, for example, we estimate that there could be a price increase of around 3% on average for back-to-school supplies across all channels. The prices of certain flagship products should remain stable in mass distribution. We do everything possible to protect purchasing power. In the medium term, however, we will also have to make sure to protect our margins, and we will apply price increases to certain products, in certain geographical areas and on certain channels.