Leadership - A Message from Bruno Bich & Mario Guevara

A Message from Bruno Bich, Chairman of the Board & Mario Guevara, CEO

Mario Guevara CEO and Bruno Bich Chairman of the Board

Mario GuevaraCEO Bruno BichChairman of the Board

Despite a very difficult year, how did you manage to stabilize BIC 2009 sales?

Bruno Bich: First of all, it is due to the intrinsic quality of our products, designed to perform as efficiently as possible and sold at the right price. Second, it is the result of the work of our teams, of their deep knowledge of our distribution channels and of their tenacity in the face of a particularly difficult economic environment.

Mario Guevara: During the sharp 2009 economic downturn, the unwavering confidence that consumers had in the BIC® brand, combined with the reliability of our products, was unquestionably decisive in delivering our good results. Moreover, we continued to offer our line of classic products, which have steadily improved over time, in addition to new products with useful technological innovations and real added value.

And how do you explain your good 2009 financial performance?

Bruno Bich: It is the result not only of our historically rigorous financial discipline, but also of our in-depth understanding of our markets and our Company, which helps us make the best decisions possible in each specific situation.

Mario Guevara: Our teams around the globe were especially diligent and demonstrated outstanding professionalism. BIC won market share, but not at the expense of its profitability and financial health. Our operating margin was preserved, while our balance sheet remained solid and we continued to improve our fundamentals by lowering our working capital requirement, which allowed us to boost our cash position by 45%.

A big portion of your growth came from strong results in developing countries. Do you intend to continue to develop in these areas?

Mario Guevara: In 2009, about 30% of our sales were in developing countries. For example, sales rose 9.3% at constant currencies in Latin America. This strong performance offset the negative impact of the downturn, which was felt in more mature markets.

Bruno Bich: International development has always been part of our strategy and no doubt, the highest economic market growth in the coming years will come from the developing countries. We already have a strong presence in Latin America and Africa, and we want to grow in Asia. India remains a strategic marketplace, and in spite of difficulties, we intend to ensure the implementation of the agreement signed in January 2009 with Cello Pens.

Despite the downturn, how were you able to successfully complete major Merger & Acquisition operations, as well as increase shareholder returns?

Mario Guevara: It was once more our rigorous financial discipline and the historic strength of our balance sheet that empowered us to know when and where to invest. In 2009, we acquired Antalis Promotional Products and Norwood Promotional Products, two companies specializing in advertising and promotional products. These two acquisitions have made us number one in the U.S. and number two in Europe, in an industry with real growth potential.

Bruno Bich: We have a consistent policy regarding our usage of cash. First we invest in our Company to prepare for the future. Second, if possible, we accomplish strategic or bolt-on acquisitions, as was the case in 2009. We then have a policy of regular shareholder remuneration which results in our proposing the payment of a 2009 ordinary dividend of €1.40, up 3.7%. Finally, when our cash position allows it, we increase our shareholder remuneration through share buyback programs or a special dividend. For 2009, we will propose the payment of an extraordinary dividend of €1.00 per share.