BIC: SECOND QUARTER & FIRST HALF 2020 RESULTS
SECOND QUARTER & FIRST HALF 2020
RESULTS
Clichy, France, July 29th, 2020
- Weak underlying market trends worsened by an uneven COVID-19
epidemic impact
- Developing countries deeply hit by the extended quarantine
periods and frozen supply chains
- Superstores and Office Supply channels heavily impacted by
school closures and limited business activity in Mature
Markets
- Improved short-term resilience thanks to prudent management of
Operating Expenses
- Sustained Cash Flow Generation
- “BIC 2022 – Invent the Future” transformation plan on track to
deliver 50 million euros annualized savings by the end of 2022
Key figures in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Group Net Sales |
544.8 |
418.9 |
960.2 |
775.8 |
Change as reported |
+0.2% |
(23.1)% |
+0.1% |
(19.2)% |
Change on a comparative basis |
(1.3)% |
(21.5)% |
(1.6)% |
(18.2)% |
Normalized Income From Operations1 |
98.5 |
67.5 |
153.1 |
92.9 |
Normalized IFO margin |
18.1% |
16.1% |
15.9% |
12.0% |
Net Income Group Share |
50.3 |
(3.0) |
89.6 |
22.1 |
EPS (in euros) |
1.11 |
(0.07) |
1.99 |
0.49 |
Normalized EPS (in Euros) |
1.55 |
1.27 |
2.43 |
1.87 |
Net Cash from operating activities |
49.4 |
50.8 |
79.6 |
85.7 |
Net Cash Position |
(11.0) |
41.5 |
(11.0) |
41.5 |
"Our First Half results reflect our ability to adapt quickly to
the evolution of our environment. Despite market headwinds and
other challenges, I am proud of how the organization has focused on
both the health and safety of our team members and partners
while ensuring business continuity. We have actively engaged
with customers to offer uninterrupted access to quality and
affordable products while focusing on protecting operating cash
flow.I am convinced that the current environment can be an
opportunity to accelerate our transformation. We are making
progress in the implementation of our new Operating Model, making
choices to improve our short-term resilience and promptly seizing
growth opportunities, including through targeted acquisitions like
that of Djeep in the Lighter category. We continue to work through
other important points of our Operating Model and choices that will
define our long-term potential on a go-forward basis. We are
determined to be among the companies that will emerge from this
crisis bolder, stronger, and more sustainable."
Gonzalve Bich, Chief Executive
Officer
OPERATIONAL TRENDS AND UPDATE
ON COVID-19 PANDEMIC IMPACT
H1 2020 Net Sales totaled 775.8
million euros, down 18.2% on a comparative basis. While our
categories' underlying trends remained challenging, overall
performance was significantly hampered by the rapid spread of the
COVID-19 pandemic. The total impact of the outbreak on H1 Net Sales
on a comparative basis was between 11 and 12 pts.
- Since the beginning of the epidemic, the health and
safety of our team members, customers, suppliers, and consumers has
been an utmost priority, and we complied with governments
and local authorities guidelines everywhere. As part of our
Corporate Responsibility, we contributed to the fight against the
coronavirus through meaningful product donations and the
manufacturing of personal protective equipment for health workers.
- In Latin America, India, and Africa, where traditional
multilayered channels are ultra-dominant, in our categories, the
impact of the pandemic has been severe. The economic
situation in India remains critical due to a sharp
decline in consumer confidence and spending, as the peak of the 1st
wave is yet to pass. In Europe and North America,
while mobility restrictions have started to ease,
superstores and office suppliers, as well as convenience
stores, remain pressured by the closures of schools and
the reduced store traffic.
- Focusing on commercial execution, we maintained or
gained market share across our three categories and in
almost all geographies. BIC E-Commerce Net
Sales increased by 14%. The strong
performance in pure e-commerce merchants and market places was
diluted by that of the Office Channels and B2B business. Adapting
to changing consumers' shopping habits, we have further accelerated
the shift of our Brand Support investment to
Digital, with more than 80% of our H1 promotional and
advertising spending was on-line, across all geographies.
- The U.S. Pocket Lighter market showed some
positive momentum in Q2 but remained under pressure from lower
convenience store foot-traffic. The growth in Utility
Lighters was boosted by increased at‐home cooking and grilling. The
H1 performance in North America was affected by convenience
stores adapting to less in-store traffic and shifting to
hygiene and grocery products, reducing inventories in other product
categories. The total impact on H1 Net Sales on a comparative
basis was approximately –2 points.
- In this unprecedented environment, we focused on
improving short-term resilience and strengthening operational Cash
Flow generation. We prudently managed Operating Expenses
and selectively reduced CAPEX by 30% equal to 31.2 million euros.
We shut down our Stationery factory in Ecuador thereby reinforcing
our industrial efficiency in Latin American.
- Evolving our Operating Model, we strengthened
our Lighters Business Model with the acquisition of
Djeep, which will allow us to accelerate our sleeve
strategy and access to higher price-points segments.
We also continued to reinforce our
organization with targeted recruitments in growing sectors and
channels of expertise to help anticipate and answer rapidly to
changing consumer needs.
- Recognizing the positive benefits that remote working brings,
we are implementing remote working guidelines
across the world. This move allows us to protect and grow
productivity and lower corporate real estate while improving
employee satisfaction and reducing our overall carbon footprint. A
review of our worldwide labor resources and facilities' footprint
will be launched and should be completed during the second half of
this year.
- At the end of June 2020, the Net Cash position stood at
41.5 million euros. We performed an in-depth review of our
financing capacities, and we are working on setting up additional
lines of credit with our primary banking partners to strengthen
financing capability.
SECOND HALF AND FULL-YEAR 2020
TRENDS
Although we expect a gradual recovery during the Second
Half, visibility on market trends and Full Year performance remains
low. For the balance of the year, most of the risks
associated with the pandemic will remain:
- Lower consumer spending and in-store traffic will affect our
three categories.
- Timing, roll-out, and conditions of the re-opening of schools
and universities in the Northern hemisphere remain uncertain and
could jeopardize the success of the Back-to-School season. Pre-
Back-to-School plans for the Southern hemisphere may model those of
the North and affect retailer plans.
- Slow rebound in business activity will dilute the Office
Superstore and Office Supplier channels.
- The lack of improvement of Indian and Latin American economies
will continue to impact our performance in these regions.
In this challenging environment, we will continue to
focus on protecting Operating Cash Flow generation, and we
are on track to achieving the actions announced in May to mitigate
the impact of the crisis by:
- managing Operating Expenses by investing at the right levels
and in the right places. The negative impact of Net Sales decrease
on Normalized Income From Operations margin will be partially
offset by 15 to 20 million euros Operating Expenses reduction,
- decreasing inventory levels by approximately 15 to 30 million
euros vs. the end of 2019. The coming Back-to-School season will be
determinant in achieving this goal,
- reducing 2020 CAPEX to around 80 million euros
INCOME FROM OPERATIONS AND
NORMALIZED INCOME FROM OPERATIONS
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
544.8 |
418.9 |
960.2 |
775.8 |
|
|
|
|
|
Gross Profit |
267.3 |
188.8 |
478.5 |
371.2 |
Gross Profit margin |
49.1% |
45.1% |
49.8% |
47.8% |
Income From Operations |
71.4 |
1.0 |
126.1 |
24.0 |
IFO margin |
13.1% |
0.2% |
13.1% |
3.1% |
Non-recurring items |
27.0 |
66.5 |
27.0 |
68.9 |
Normalized IFO |
98.5 |
67.5 |
153.1 |
92.9 |
Normalized IFO margin |
18.1% |
16.1% |
15.9% |
12.0% |
H1 2020 Gross Profit margin decreased by 2.0 pts at
47.8% compared to 49.8% in H1 2019. Excluding
under absorption of fixed costs due to the COVID-19 pandemic, the
Gross Profit margin increased by 0.2 pts. The slight
increase is driven by favorable Forex, and a decrease in Raw
Materials costs partly offset by unfavorable manufacturing cost
absorption (non-COVID-19 related) and an increase in Brand Support
above Net Sales.
H1 2020 Normalized IFO margin
was impacted by the increase in Operating Expenses and other
expenses (as a percentage of Net Sales) resulting from the sharp
decline in Net Sales and the costs of the implementation of the new
organization.
Key components of the change in Normalized IFO
margin in points |
Q1 2020vs. Q1 2019 |
Q2 2020vs. Q2 2019 |
H1 2020 vs. H1 2019 |
·Change in Gross Profit2 |
+0.2 |
+0.1 |
+0.2 |
·Brand Support |
(0.2) |
+1.1 |
+0.5 |
·OPEX and other expenses2 |
(6.0) |
(3.2) |
(4.6) |
Total change in Normalized IFO margin |
(6.0) |
(2.0) |
(3.9) |
H1 2020 non-recurring items
included:
- 17.2 million euros in Cost of Goods (13.3 million euros
unfavorable manufacturing cost absorption resulting from plant
closures and lower product demand due to the COVID-19, and 3.9
million euros direct expenses related to additional employees
protection implemented to fight against the spread of the
coronavirus (cleaning, masks, sanitizers),
- 7.9 million euros of restructuring costs (of which
transformation plan and BIC Ecuador factory closure are among the
main drivers),
- 2.1 million euros in Operating Expenses and other expenses,
mostly commercial force under-activity, due to the COVID-19
- 41.7 million euros related to Cello impairment on property,
plant & equipment, and trademark. This impairment is due to the
lower than anticipated sales resulting from lockdown, and to lower
volumes than initially expected, impacting the planned cost
efficiencies. As the goodwill was fully impaired, the impairment
was allocated on property, plant & equipment, and
trademark.
NET INCOME AND
EPS
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
IFO |
71.4 |
1.0 |
126.1 |
24.0 |
Finance revenue/costs |
(2.4) |
(1.9) |
(1.7) |
9.9 |
Income before Tax |
69.0 |
(0.9) |
124.4 |
33.9 |
Net Income Group share |
50.3 |
(3.0) |
89.6 |
22.1 |
EPS Group Share (in euro) |
1.11 |
(0.07) |
1.99 |
0.49 |
Normalized Net Income Group Share3 |
69.1 |
57.0 |
108.4 |
84.0 |
Normalized EPS Group Share (in euro) |
1.55 |
1.27 |
2.43 |
1.87 |
H1 2020 finance revenue increase is due to the
higher favorable impact of the fair value adjustments to financial
assets denominated in USD compared to December 2019 (versus BRL and
MXN).
H1 2020 Income before tax totaled 33.9 million
euros, compared to 124.4 million euros in H1 2019.
H1 2020 Net Income Group Share
totaled to 22.1 million euros as reported, compared to 89.6
million euros in H1 2019. H1 2020
Normalized Net Income Group share,
excluding non-recurring items and Argentina hyperinflationary
accounting (IAS 29), was 84.0 million euros compared to 108.4
million euros last year. The effective tax rate was 34.8%. The
effective tax rate excluding Cello impairment was 28%.
H1 2020 EPS Group share was 0.49 euros, down
75%, compared to 1.99 euros in H1 2019. Normalized H1 2020
EPS Group share decreased by 23% to 1.87 euros, compared
to 2.43 euros last year.
NET CASH POSITION
CHANGE IN NET CASH POSITION in million euros |
2019 |
2020 |
Net Cash position (beginning of period –
December) |
161.5 |
146.9 |
Net cash from operating activities |
+79.6 |
+85.7 |
- Of which operating cash flow |
+164.7 |
+95.6 |
- Of which change in working capital and others |
(85.1) |
(9.9) |
CAPEX4 |
(45.1) |
(31.2) |
Dividend payment |
(155.2) |
(110.2) |
Share buyback program |
(39.2) |
(7.4) |
Net Cash from the liquidity contract |
(0.8) |
- |
Haco Industries Ltd acquisition |
(1.8) |
(2.7) |
Other items |
(10.0) |
(39.6) |
Net Cash position (end of period – June) |
(11.0) |
41.5 |
At the end of June 2020, the Group's Net Cash
position stood at 41.5 million euros. Net Cash from
operating activities was +85.7 million euros, of which
+95.6 million euros in operating cash flow. The negative 9.9
million euros change in working capital, and others was mostly
driven by inventory increase when compared to December 2019 due to
the sharp decrease in Net Sales and the seasonality of Back to
School.
SHAREHOLDERS' REMUNERATION
- Ordinary dividend of 2.45 euros per share paid in June
2020.
- 7.4 million euros in share buy-backs by Société BIC at the end
of June 2020 (136,383 shares purchased at an average price of
53.90 euros). The Group has suspended its share buy-back
program in April 2020.
OPERATIONAL TRENDS BY
CATEGORY (with 2019 figures restated for unallocated
costs)
STATIONERY
Stationery H1 2020 Net Sales totaled 293.9 million
euros, down 26.5% on a comparative basis. Q2 2020 Net
Sales declined 33.2% on a comparative basis.
H1 2020 Stationery Normalized IFO margin was
6.5% compared to 11.0% in 2019, impacted by the sharp decline in
Net Sales and unfavorable fixed costs absorption. This was
partially offset by favorable Forex, lower Raw Material costs, and
a decrease in Brand support.
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
252.5 |
166.9 |
400.8 |
293.9 |
Change as reported vs. prior year |
+1.2% |
(33.9)% |
(0.1)% |
(26.7)% |
Change on a comparative basis vs. LY |
(2.3)% |
(33.2)% |
(3.6)% |
(26.5)% |
Normalized Income From Operations |
37.6 |
18.2 |
44.0 |
19.0 |
Normalized IFO margin |
14.9% |
10.9% |
11.0% |
6.5% |
Income From Operations |
37.6 |
(35.7) |
44.0 |
(34.9) |
Income From Operations Margin |
14.9% |
(21.4)% |
11.0% |
(11.9)% |
Amongst BIC's categories, Stationery was the most affected by
the COVID-19 epidemic.
The most heavily disrupted channels were the Superstores and
Office Suppliers, as well as our European imprinted product
business BIC Graphic, which was a result of school closures, and
reduced business activity. In Europe and North
America, overall Stationery markets were down high-single
digit in value, with a shift towards value
products due to lower household real income and increased
unemployment rates. Thanks to active partnerships with large
retailers, Back-to-School orders were in-line with
last year's level, with a negative phasing impact in shipments from
June to July due to some product unavailability.
Highly dependent on Convenience and Traditional stores,
Latin America, India, and the Middle East and Africa suffered from
extended quarantine periods and disrupted supply
chains.
Despite a solid start to the year, Brazil's performance was
impacted by the closure of large customers' stores due to COVID-19.
In Mexico, sell-in continued to suffer from a higher level of
promotional activities in a competitive environment.
India's domestic sales decreased high-double-digit. The
continued poor performance of Cello's domestic sales was compounded
by two months of complete containment of the population and the
closure of our factories.
LIGHTERS
Lighters H1 2020 Net Sales were 268.2
million euros down 14.7% on a comparative basis.
Second Quarter 2020 Net Sales were down 11.2 % on
a comparative basis.
H1 2020 Normalized IFO margin for Lighters was
32.5% compared to 35.3% in 2019, impacted by the sharp decline in
Net Sales, partially offset by lower Brand Support compared to the
same period last year.
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
169.9 |
147.3 |
319.7 |
268.2 |
Change as reported vs. prior year |
+3.0% |
(13.3)% |
+0.6% |
(16.1)% |
Change on a comparative basis vs. LY |
(0.1)% |
(11.2)% |
(2.7)% |
(14.7)% |
Normalized Income From Operations |
61.8 |
52.5 |
113.0 |
87.3 |
Normalized IFO margin |
36.4% |
35.7% |
35.3% |
32.5% |
Income From Operations |
61.8 |
49.5 |
113.0 |
84.0 |
Income From Operations Margin |
36.4% |
33.6% |
35.3% |
31.3% |
In our major markets, the Lighter category performance
was highly impacted by limited in-store traffic and the closure of
Tobacco chains and Convenience Stores, partially offset by
commercial execution and distribution gains in Modern Mass
Market.
In the U.S., the Pocket Lighter market was down 3.1% in volume
and 1.8% in value at the end of June5. The last weeks' sell-out
showed an improvement, with improved in-store foot traffic.
The First Half performance in North America was due to
convenience stores adapting to their business reality of less foot
traffic and increasing demand for hygiene and grocery products,
therefore reducing inventories in other product categories, such as
Lighters.
SHAVERS
Shavers H1 2020 Net Sales totaled 200.7
million euros and decreased by 8.8% on a
comparative basis. Q2 2020 Net Sales
decreased by 11.5% on a comparative
basis.
H1 2020 Normalized IFO margin for
Shavers improved to 10.9% compared to 9.6% in 2019. The
increase in Gross Profit margin (due to positive impacts from
Forex, lower Raw Material costs) and favorable Brand support, were
partially offset by the decrease in Net Sales.
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
115.5 |
98.6 |
224.5 |
200.7 |
Change as reported vs. prior year |
+1.8% |
(14.6)% |
+6.7% |
(10.6)% |
Change on a comparative basis vs. prior year |
(0.7)% |
(11.5)% |
+4.2% |
(8.8)% |
Normalized Income From Operations |
10.5 |
14.3 |
21.5 |
21.9 |
Normalized IFO margin |
9.1% |
14.5% |
9.6% |
10.9% |
Income From Operations |
10.5 |
9.8 |
21.5 |
17.3 |
Income From Operations Margin |
9.1% |
10.0% |
9.6% |
8.6% |
The Shaver category continued to
be impacted by evolving consumer
habits, compounded during the
quarantines by changes in personal routines and
regimes. Yet, we gained share in all
regions, thanks to our strong value proposition, and the
success of new product launches.
In Europe, we outperformed a declining market,
thanks to a strong performance in the U.K, driven by both the
female and the male segments. In the U.S., the
one-piece market continued to decline (-5.0% in value6), with an
acceleration over the second Quarter. We gained 1.5 pts in
value share, with a strong performance in the female and
the male segments (+1.6 pts and +1.3 pts value share gain
respectively) thanks to the continued success of new products,
including the BIC Soleil Sensitive Advanced. Us, our gender-neutral
refillable shaver displayed promising results, with a strong start
at Dollar General and increasing distribution both in-store and
on-line. In Latin America, our performance was
impacted by a high level of customers' inventories at the start of
the year in Mexico, partially offset by distribution gains in
Argentina.
OTHER PRODUCTS
H1 2020 Net Sales of Other Products totaled 13.1 million euros
and decreased by 13.4% on a comparative basis. Q2 2020 Net Sales
decreased by 11.2% on a comparative basis.
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
6.9 |
6.1 |
15.2 |
13.1 |
Change as reported |
(56.3)% |
(12.3)% |
(48.7)% |
(14.1)% |
Change on a comparative basis |
(4.3)% |
(11.2)% |
(4.9)% |
(13.4)% |
Normalized Income From Operations |
(0.8) |
(0.2) |
(2.1) |
(1.1) |
Income From Operations |
(0.8) |
(2.6) |
(2.1) |
(3.5) |
UNALLOCATED COSTS
H1 2020 unallocated costs relate to Corporate headquarters costs
and restructuring costs. The decrease in Normalized Income From
Operations is due to the costs of the new organization.
in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Normalized Income From Operations |
(10.6) |
(17.2) |
(23.2) |
(34.2) |
Income From Operations |
(37.6) |
(20.1) |
(50.2) |
(38.9) |
MISCELLANEOUS
EVENTS
On May 20th, BIC announced five actions
to improve the Group's short-term resilience in the
context of the COVID-19 crisis and to strengthen its "BIC 2022 -
Invent the Future" transformation plan to accelerate long-term
growth:
- Managing OPEX by investing at the right levels
and in the right places:
- In 2020, the negative impact of Net Sales
decrease on Normalized Income From Operations margin will be
partially offset by 15 to 20 million euros OPEX
reduction.
- Protecting Cash Flow by managing CAPEX and
reducing inventory levels:
- 2020 inventories are expected to decrease by approximately 15
to 30 million euros vs. the end of 2019. The coming Back-to-School
season will be determinant in achieving this goal.
- 2020 CAPEX will be reduced to around 80 million euros
- Launching innovation with several new product
introductions with the new multipurpose pocket lighter BIC®
EZ-Reach in the U.S. in the second half of the year, and the
refillable BIC® Cristal® with a metal barrel by the end of the
year.
- Scaling Operations by reducing complexity and
driving process efficiency and speed:
- "BIC 2022 – Invent the Future" plan will be strengthened with a
total of 50 million euros in annualized savings by the end of
2022.
- Driving growth by leveraging new commercial
capabilities and reinforcing existing businesses through targeted
acquisitions:
- E-commerce Net Sales are expected to grow by approximately 20%
in 2020.
On June 8th, BIC shut down its Writing
Instrument factory in Ecuador, while maintaining
commercial, distribution, and packaging activities. This strategic
business decision aimed at consolidating BIC's global manufacturing
footprint.
On June 16th, BIC announced the acquisition of
quality lighters' manufacturer
Djeep for 40 million euros and a deferred consideration
based on Djeep's future sales growth. Djeep's strong positioning on
the decorated and personalized lighter market segment will
strengthen BIC's position in the pocket lighters market and will
offer substantial growth opportunities in Europe and North America.
The closing was signed on 1st July 2020.
On July 1st, BIC obtained from the U.S.
International Trade Commission a General Exclusion Order that
prevents the importation into the USA of all lighters imitating BIC
lighters' iconic appearance. This decision is an important
milestone to halt the importation of non-compliant, knock-off
lighters into the U.S. market.
On July 24th, BIC announced it received
notification of the closure by the European Commission of the
infringement procedure it initiated in 2012 against the
Netherlands, and the complaints filed in 2018 against France and
Germany for failing to perform effective surveillance of the safety
lighter. These proceedings aimed at remedying the fact that
two-thirds of lighter models in Europe, a large proportion of which
are imported, did not comply with the safety standards, resulting
in tens of thousands of severe accidents every year. Product
Quality and safety are an absolute priority for BIC. The Group is
disappointed by the European Commission's decision, but we
nonetheless remain a demanding and vigilant partner of European and
national institutions to ensure the safety of consumers in
Europe.
APPENDIX (with 2019
figures restated for unallocated costs)
NET SALES BY GEOGRAPHYin million euros |
Q2 2019 |
Q2 2020 |
% As reported |
% On a Comparative basis |
H1 2019 |
H1 2020 |
% As reported |
% On a Comparative basis |
Group |
544.8 |
418.9 |
(23.1)% |
(21.5)% |
960.2 |
775.8 |
(19.2)% |
(18.2)% |
Europe |
167.9 |
138.6 |
(17.4)% |
(16.6)% |
290.7 |
257.7 |
(11.4)% |
(10.9)% |
North America |
227.5 |
202.8 |
(10.8)% |
(12.3)% |
389.3 |
343.2 |
(11.8)% |
(13.6)% |
Latin America |
86.9 |
39.4 |
(54.6)% |
(46.1)% |
165.8 |
94.0 |
(43.3)% |
(36.9)% |
Middle East and Africa |
24.8 |
18.9 |
(23.9)% |
(22.8)% |
47.1 |
39.0 |
(17.3)% |
(18.4)% |
Asia and Oceania (including India) |
37.7 |
19.1 |
(49.2)% |
(45.6)% |
67.3 |
41.9 |
(37.7)% |
(34.1)% |
SECOND QUARTER NET SALES BY CATEGORY in million
euros |
Q2 2019 |
Q2 2020 |
Change as reported |
F.X. impact7(in pts) |
Change in Perimeter8(in pts) |
Argentina impact9(in pts) |
Change on a Comparativebasis |
Group |
544.8 |
418.9 |
(23.1)% |
(1.5) |
(0.1) |
0.0 |
(21.5)% |
Stationery |
252.5 |
166.9 |
(33.9)% |
(0.8) |
0.1 |
(0.0) |
(33.2)% |
Lighters |
169.9 |
147.3 |
(13.3)% |
(1.7) |
(0.3) |
(0.1) |
(11.2)% |
Shavers |
115.5 |
98.6 |
(14.6)% |
(2.9) |
(0.3) |
0.1 |
(11.5)% |
Other Products |
6.9 |
6.1 |
(12.3)% |
(0.8) |
(0.3) |
0.0 |
(11.2)% |
FIRST HALF NET SALES BY CATEGORY in million
euros |
H1 2019 |
H1 2020 |
Change as reported |
F.X. impact7(in pts) |
Change in Perimeter8(in pts) |
Argentina impact9(in pts) |
Change on a Comparativebasis |
Group |
960.2 |
775.8 |
(19.2)% |
(1.0) |
(0.1) |
0.1 |
(18.2)% |
Stationery |
400.8 |
293.9 |
(26.7)% |
(0.5) |
0.2 |
0.1 |
(26.5)% |
Lighters |
319.7 |
268.2 |
(16.1)% |
(1.0) |
(0.3) |
(0.1) |
(14.7)% |
Shavers |
224.5 |
200.7 |
(10.6)% |
(1.8) |
(0.2) |
0.2 |
(8.8)% |
Other Products |
15.2 |
13.1 |
(14.1)% |
(0.6) |
(0.1) |
0.0 |
(13.4)% |
IMPACT OF CHANGE IN PERIMETER AND CURRENCY FLUCTUATIONS ON
NET SALES (EXCLUDES ARS)
(in %) |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Perimeter |
(1.0) |
(0.1) |
(0.7) |
(0.1) |
Currencies |
+2.4 |
(1.5) |
+2.4 |
(1.0) |
Of which USD |
+2.0 |
+0.7 |
+2.4 |
+0.8 |
Of which BRL |
(0.1) |
(1.1) |
(0.3) |
(1.1) |
Of which MXN |
+0.5 |
(0.4) |
+0.4 |
(0.3) |
Of which AUD |
- |
(0.1) |
- |
(0.1) |
Of which ZAR |
(0.1) |
(0.1) |
(0.1) |
(0.1) |
Of which RUB and UAH |
+0.1 |
(0.1) |
- |
(0.1) |
INCOME FROM OPERATIONS BY CATEGORY in million
euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Group |
71.4 |
1.0 |
126.1 |
24.0 |
Margin |
13.1% |
0.2% |
13.1% |
3.1% |
Stationery |
37.6 |
(35.7) |
44.0 |
(34.9) |
Margin |
14.9% |
(21.4)% |
11.0% |
(11.9)% |
Lighters |
61.8 |
49.5 |
113.0 |
84.0 |
Margin |
36.4% |
33.6% |
35.3% |
31.3% |
Shavers |
10.5 |
9.8 |
21.5 |
17.3 |
Margin |
9.1% |
10.0% |
9.6% |
8.6% |
Other Products |
(0.8) |
(2.6) |
(2.1) |
(3.5) |
Unallocated costs |
(37.6) |
(20.1) |
(50.2) |
(38.9) |
NORMALIZED INCOME FROM OPERATIONS BY CATEGORY in
million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Group |
98.5 |
67.5 |
153.1 |
92.9 |
Margin |
18.1% |
16.1% |
15.9% |
12.0% |
Stationery |
37.6 |
18.2 |
44.0 |
19.0 |
Margin |
14.9% |
10.9% |
11.0% |
6.5% |
Lighters |
61.8 |
52.5 |
113.0 |
87.3 |
Margin |
36.4% |
35.7% |
35.3% |
32.5% |
Shavers |
10.5 |
14.3 |
21.5 |
21.9 |
Margin |
9.1% |
14.5% |
9.6% |
10.9% |
Other Products |
(0.8) |
(0.2) |
(2.1) |
(1.1) |
Unallocated costs |
(10.6) |
(17.2) |
(23.2) |
(34.2) |
CONDENSED PROFIT AND LOSS in million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Net Sales |
544.8 |
418.9 |
960.2 |
775.8 |
Cost of goods |
277.5 |
230.1 |
481.7 |
404.6 |
Gross profit |
267.3 |
188.8 |
478.5 |
371.2 |
Administrative & other operating expenses |
195.9 |
187.8 |
352.4 |
347.2 |
Income from Operations |
71.4 |
1.0 |
126.1 |
24.0 |
Finance revenue/(costs) |
(2.4) |
(1.9) |
(1.7) |
9.9 |
Income before tax |
69.0 |
(0.9) |
124.4 |
33.9 |
Income tax expense |
(18.8) |
(2.1) |
(34.8) |
(11.8) |
Net Income Group Share |
50.3 |
(3.0) |
89.6 |
22.1 |
Earnings per Share Group Share (in euros) |
1.11 |
(0.07) |
1.99 |
0.49 |
Average number of shares outstanding (net of treasury shares) |
45,120,558 |
44,967,891 |
45,120,558 |
44,967,891 |
BALANCE SHEETin million euros |
June 30, 2019 |
December 31, 2019 |
June 30, 2020 |
- Goodwill and intangible assets |
288.6 |
257.7 |
238.7 |
- Property, plant & equipment |
698.9 |
713.5 |
637.9 |
- Investment properties |
1.7 |
1.7 |
1.6 |
- Other non-current assets |
170.8 |
176.3 |
166.2 |
Non-current assets |
1,160.0 |
1,149.2 |
1,044.4 |
- Inventories |
494.8 |
455.6 |
484.9 |
- Trade and other receivables |
639.6 |
545.6 |
517.1 |
- Other current assets |
51.2 |
36.5 |
34.2 |
- Other current financial assets and derivative
instruments |
12.4 |
6.7 |
4.5 |
- Cash and cash equivalents |
182.3 |
198.6 |
201.2 |
Current assets |
1,380.3 |
1,243.0 |
1,241.9 |
TOTAL ASSETS |
2,540.3 |
2,392.2 |
2,286.3 |
Shareholders’ equity |
1,528.4 |
1,608.1 |
1,387.2 |
- Non-current borrowings |
32.3 |
32.3 |
32.3 |
- Other non-current liabilities |
282.9 |
263.3 |
262.7 |
Non-current liabilities |
315.2 |
295.6 |
295.0 |
- Trade and other payables |
151.0 |
126.4 |
140.0 |
- Current borrowings |
213.7 |
65.5 |
169.0 |
- Other current liabilities |
331.9 |
296.5 |
295.1 |
Current liabilities |
696.7 |
488.5 |
604.1 |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY |
2,540.3 |
2,392.2 |
2,286.3 |
WORKING CAPITAL in million euros |
H1 2019 |
H1 2020 |
Total Working Capital |
736.1 |
648.3 |
Of which, inventories |
494.8 |
484.9 |
Of which, trade and other receivables |
639.6 |
517.1 |
Of which, Trade and other payables |
(151.0) |
(140.0) |
CASH FLOW STATEMENTin million euros |
H1 2019 |
H1 2020 |
Net income Group share |
89.6 |
22.1 |
- Argentina hyperinflationary accounting (IAS29) |
1.5 |
0.8 |
- Amortization and provisions |
102.5 |
111.3 |
- (Gain)/Loss from disposal of fixed assets |
0.2 |
0.1 |
- Others |
(29.1) |
(38.7) |
CASH FLOW FROM OPERATIONS |
164.7 |
95.6 |
- (Increase)/decrease in net current working capital |
(106.3) |
(31.2) |
- Others |
21.2 |
21.3 |
NET CASH FROM OPERATING ACTIVITIES (A) |
79.6 |
85.7 |
- Capital expenditures10 |
(47.5) |
(43.8) |
- (Purchase)/Sale of other current financial assets |
3.6 |
3.9 |
- Haco Industries Ltd acquisition |
(1.8) |
(2.7) |
- Others |
0.1 |
0.4 |
NET CASH FROM INVESTING ACTIVITIES (B) |
(45.6) |
(42.2) |
- Dividends paid |
(155.2) |
(110.2) |
- Borrowings/(Repayments)/(Loans) |
103.8 |
105.0 |
- Share buy-back program |
(40.0) |
(7.4) |
- Others |
(9.4) |
(8.4) |
NET CASH FROM FINANCING ACTIVITIES (C) |
(100.8) |
(21.0) |
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS NET
OF BANK OVERDRAFTS (A+B+C) |
(66.7) |
22.5 |
OPENING CASH AND CASH EQUIVALENTS NET OF BANK
OVERDRAFTS |
149.8 |
146.8 |
- Net increase / decrease in cash and cash equivalents net of
bank overdrafts (A+B+C) |
(66.7) |
22.5 |
- Exchange difference |
1.6 |
(18.9) |
CLOSING CASH AND CASH EQUIVALENTS NET OF BANK
OVERDRAFTS |
84.6 |
150.4 |
RECONCILIATION WITH
ALTERNATIVE PERFORMANCE MEASURES
NORMALIZED IFO RECONCILIATIONin
million euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
Income from Operations |
71.4 |
1.0 |
126.1 |
24.0 |
Restructuring costs of which Transformation plan in 2019 and 2020,
and Ecuador factory closure on Q2 2020 |
27.0 |
5.5 |
27.0 |
7.9 |
Cello impairment |
- |
41.7 |
- |
41.7 |
Some Expenses related to the COVID-19 epidemic mainly under
absorption of fixed costs |
- |
19.3 |
- |
19.3 |
Normalized IFO |
98.5 |
67.5 |
153.1 |
92.9 |
NORMALIZED EPS RECONCILATION in euros |
Q2 2019 |
Q2 2020 |
H1 2019 |
H1 2020 |
EPS |
1.11 |
(0.07) |
1.99 |
0.49 |
Restructuring costs of which transformation plan, and Ecuador
factory closure |
+0.41 |
+0.09 |
+0.41 |
+0.12 |
Cello impairment |
- |
+0.93 |
- |
+0.93 |
Some Expenses related to the COVID-19 epidemic mainly under
absorption of fixed costs |
- |
+0.31 |
- |
+0.31 |
Argentina hyperinflationary accounting (IAS29) |
+0.03 |
+0.01 |
+0.03 |
+0.02 |
Normalized EPS |
1.55 |
1.27 |
2.43 |
1.87 |
Net cash reconciliation in million euros |
December 31, 2019 |
June 30, 2020 |
Cash and cash equivalents (1) |
+198.6 |
+201.2 |
Other
current financial assets (2)11 |
+4.1 |
0.0 |
Current borrowings (3)12 |
(52.8) |
(156.8) |
Non-current borrowings (4) 12 |
(2.9) |
(2.8) |
NET CASH POSITION (1) + (2) - (3) - (4) |
146.9 |
41.5 |
SHARE BUYBACK
PROGRAM
Share buy-back program – Societe BIC |
Number of sharesacquired |
Average weighted price (in €) |
Amount(in M€) |
February 2020 |
48,818 |
56.53 |
2.8 |
March 2020 |
87,565 |
52.44 |
4.6 |
April 2020 |
- |
- |
- |
May 2020 |
- |
- |
- |
June 2020 |
- |
- |
- |
Total |
136,383 |
53.90 |
7.4 |
CAPITAL AND VOTING
RIGHTS
As of June 30, 2020, the total number of issued
shares of SOCIÉTÉ BIC was 45,532,240 shares, representing:
- 66,992,235 voting rights,
- 66,440,239 voting rights, excluding shares without voting
rights.
Total number of treasury shares at the end of
June 2020: 551,996.
GLOSSARY
- Constant currency basis: constant currency
figures are calculated by translating the current year figures at
prior year monthly average exchange rates.
- Organic change or 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. Organic change excludes Argentina Net
Sales for both 2019 and 2020.
- Gross profit: the margin that the Group
realizes after deducting its manufacturing costs.
- Normalized IFO: normalized means excluding
non-recurring items.
- Normalized IFO margin: Normalized IFO as a
percentage of Net Sales.
- Net Cash from operating activities: Cash
generated from principal 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 (except financial liabilities following IFRS 16
implementation.
- Unallocated costs:
- net costs [balance of income and expenses] of Corporate
headquarters including I.T., finance, legal and H.R. costs, and of
future shared services center.
- other net costs that can't be allocated to Categories, notably
restructuring costs, gains or losses on assets' divestiture, etc.
Major unallocated items will be separately identified and
disclosed.
SOCIETE BIC consolidated financial
statements as of June 30, 2020, were approved by the Board of
Directors on July 28, 2020. Half-Year 2020 Consolidated Financial
Statements and the presentation related to this announcement are
available on BIC’s website (at www.bicworld.com). The Group
statutory auditors limited review procedures have been
substantially completed. Their review report will be issued upon
completion of the procedures required for the filing of the
management half-year report.Consistent with French law, BIC will
file its First Half 2020 financial report along with the auditor’s
report before 30th September 2020. The filing is pending the
conclusion of BIC’s review of certain of its commercial
processes. Based on our assessment to date, the impact of a
potential non-compliance with the Company’s processes would not
exceed 1M€. 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, "Risks Management" in BIC's 2019 Universal
Registration Document filed with the French financial markets
authority (AMF) on March 31, 2020.
ABOUT BIC
BIC is a world leader in stationery, lighters, and shavers. For
more than 75 years, the Company 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 and is a trademark registered
worldwide. Today, BIC products are sold in more than 160 countries
around the world and feature iconic brands such as Cello®, Conté®,
BIC FlexTM, Lucky Stationery, Made For YOUTM, Soleil®, Tipp-Ex®,
Wite-Out® and more. In 2019, BIC Net Sales were 1,949.4 million
euros. The Company is listed on "Euronext Paris," is part of the
SBF120 and CAC Mid 60 indexes and is recognized for its commitment
to sustainable development and education. It received an A-
Leadership score from CDP. For more, visit www.bicworld.com or
follow us on LinkedIn, Instagram, Twitter, or YouTube.
CONTACTS
Sophie Palliez-Capian – V.P., Corporate Stakeholder
Engagement |
Investor Relations Contact: |
Press Contacts |
Sophie Palliez-Capian + 33 6 87 89 33
51sophie.palliez@bicworld.com |
Albane de
La Tour d’Artaise + 33 7 85 88 19 48
Albane.DeLaTourDArtaise@bicworld.com |
|
Isabelle de Segonzac : + 33 6 89 87 61 39 isegonzac@image7.fr |
2020 AGENDA – ALL DATES TO BE CONFIRMED
Third Quarter 2020 results |
October 28, 2020 |
Conference call and Webcast |
Full Year 2020 Results |
17 February 2021 |
Meeting and webcast |
1 See glossary
2 Excluding under absorption of fixed
costs due to Covid-19 pandemic for the Gross Profit and
excluding restructuring costs, Cello impairment
and non-recurring items mostly commercial force underactivity for
the OPEX and other expenses
3 Excluding non-recurring items & Argentina
hyperinflationary accounting for 2019 and 2020
4 Excluding-12.6 million euros in H1 2020 and -2.6 million euros
in H1 2019 related to assets payable change
5 IRI – Period ending 28 JUNE 2020
6 IRI – Period ending YTD June – in value
7 Forex impact excluding Argentinian Peso (ARS)
8 Lucky Stationary Ltd acquisition in Nigeria, closure of Shaver
and Stationery offices in China, closure of BIC Graphic Oceania
9 See glossary
10 Including -12.6 million euros in H1 2020 and -2.6 million
euros in H1 2019 related to assets payable change
11 In the balance sheet at December 31, 2019, the line “Other
current financial assets and derivative instruments” also includes
€2.7m worth of derivative instruments and €4.5m at June
30,2020.
12 Excluding financial liabilities following IFRS16
implementation
- BIC_H1 2020_Results_PressRelease-29JUL20
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