We expect 2018 Group Net Sales to increase between +1 and +3% on a comparative basis, with all categories contributing to the growth. Major factors affecting sales performance could include continued competitive pressures in Shaver, further inventory reductions from retailers, and continued softness in the Brazilian economy.
Gross Profit will be impacted by an increase in raw material costs, higher depreciation, while we will continue to invest in targeted Brand Support and Operating Expenses. 2018 Normalized Income from Operations will also be impacted by sales performance. Based on these factors we expect Normalized Income from Operations margin to be between 17% and 18%.
We expect about 150 million euros in CAPEX.
Continue to create long-term value by outperforming our markets and growing sales organically low to mid-single digit, thanks to:
• expanded distribution networks in all geographies,
• increased focus on value-added segments in Developed markets,
• enlarged consumer base in Developing markets.
Grow Normalized Income From Operations through increased productivity as we invest in our people, in brand support and in Research and Development focused on quality and innovative new products.
Maintain a strong cash generation to:
• finance strategic bolt-on acquisitions,
• sustain total Shareholders’ remuneration.
"WRITING THE FUTURE, TOGETHER"; a new goal to involve the Group through 2025
Having been committed to sustainable and responsible development since 2004, BIC's sustainable development program, which lies at the heart of the Group's strategy, has gone from strength to strength.
To manage this initiative and ensure the concrete implementation of its commitment, the Group used, between 2008 and 2016, a Sustainable Development Barometer comprised of ten quantified objectives, measurable over three-year periods.
The BIC Group launched a new ambitious and long-term program “Writing the future together” in order to make the most of the transformation opportunities offered by sustainable development. For this, BIC has outlined five major commitments to be met by 2025. These commitments were defined following the analysis of the Group's key challenges; in accordance with the United Nations' sustainable development goals; after internal consultations within the Group’s main departments: categories, continents and functions; and lastly, followed by a co-construction phase of the commitments, with key input from the Leadership Team.
Improve the environmental and/or societal footprint of BIC® products.
=> Deploy a comprehensive eco-design process.
Use 80% renewable electricity.
=> Promoting renewable energy to reduce the Group’s greenhouse gas emissions.
Aim for zero accidents across all BIC operations.
=> Commitment to the safety, health and well-being of all people working on a Group site.
Select and collaborate with its strategic suppliers following a responsible approach.
=> Ensuring safe supplies and searching for innovation and optimization, sources of differentiation.
Improve learning conditions for 250 million children.
=> Strengthening the societal impact of the Group by supporting and enabling quality education.
Governance: a Board of Directors working for the BIC® brand
BIC has the support of a competent Board of Directors that is committed to defining and implementing the Group's strategy and ensuring its functioning. Chaired by Pierre Vareille and composed of 11 members, the Board of Directors is assisted in its work by three specialized committees; the Audit Committee, the Compensation Committee and, since 2017, the Nominations, Governance and CSR Committee.
Diversified and complementary profiles
The Board ensures that its composition, and the one of its committees, remains balanced, particularly in terms of gender representation and skills diversity, making the necessary arrangements to ensure that its duties are performed independently and objectively.
Independent directors make up 40% of the members of the Board of Directors. Qualification as an independent director is established at the time of each appointment in accordance with the criteria set out in the AFEP-MEDEF Code. It is discussed by the the Nominations, Governance and CSR Committee and reviewed annually by the Board of Directors.
The Board of Directors benefits from targeted expertise that matches BIC's activities and strategy needs, notably in the fields of human resources, governance, management and knowledge of developing markets. The strong internationalization of the Board adds to its wealth in terms of skills and experience.
Three committees chaired by independent Directors
Each committee is made up of Directors with skills specifically identified to carry out its missions.
• ensures that the accounting principles applied to the Company’s consolidated and statutory financial statements comply with current standards and are consistently applied;
• ensures that the internal consolidation procedures and controls yield financial statements that fairly represent business results;
• monitors closely the risk management and internal control systems on a regular basis.
Issues recommendations, regularly examines and challenges:
• the compensation policy for the Board of Directors, Chief Executive Officer and the Executive Vice-Presidents;
• procedures for the establishment of compensation and/or benefits for the Chairman of the Board, the Chief Executive Officer and the Executive Vice-Presidents;
• total amount and allocation of Directors’ attendance fees;
• in collaboration with the Audit Committee, performance metrics, and annual assessment of the performance of the Chief Executive Officer and the Executive Vice-Presidents in light of the objectives assigned to them by the Board of Directors;
• Long-Term Incentive Plans for the Company’s Executive Corporate Officers and employees;
• competitiveness of all elements of compensation of the Leadership Team.
• Regularly examines issues concerning the composition of the Board of Directors and proposes the criteria for selecting the members of the Board of Directors, which are based on the desired balance in the composition of the Board of Directors as well as in the skills, availability and ethics of its members;
• Prepares a succession plan for Executive Corporate Officers.
• Discusses the qualification as an Independent Director;
• Ensures that the Board of Directors makes a regular assessment of its operating methods and that of the Committees.
Social, Societal and Environmental Responsibility
• Reviews the report on social, societal and environmental responsibility, the actions taken by the Group and its policy;
• Reviews the progress made against the strategy and commitments taken.
Compensation policy: transparent and exemplary
In addition to the AFEP-MEDEF Code to which the Group refers, the compensation policy for Directors is centered around four principles identical to those applicable for all Group employees: internal equality; the recognition of individual and collective performance, linked to the achievement of key targets that contribute to the business success; competitiveness; and clear communication in relation to compensation policies.