SHAREHOLDERS’ LETTER N°40
BIC Group’s Shareholders' Letter of November 2017.
EDITORIAL
Dear shareholders…
2017 is a challenging year in many of our markets.
At the end of September, we had to revise our annual growth outlook due to a lower than expected performance in U.S. Lighters and Shavers and a stronger than expected softness in Latin America, mainly in Brazil where we have to face customer inventory reduction in all three categories. 2017 Full Year Net Sales organic growth is expected to be slightly below 2%. The Group confirmed its Normalized Income From Operations margin outlook of less than 100 basis points decline as a result of adjustments in Brand Support investments and Operating Expenses for the balance of the year.
On October 25, 2017, we published our Nine month 2017 results: Net Sales were solid in Europe across our three categories, driven by our momentum in Eastern European countries. North America’s performance reflects unprecedented market disruption in the U.S. Wet Shave category as well as customer inventory reductions in Lighters. Our softness in Developing Markets is mostly due to Brazil.
In this increasingly volatile market environment, we remain committed to managing our business on a long-term basis and leveraging BIC’s core strengths: strong manufacturing skills, high-quality products sold at the right price, recognized Brands and ingenious teams. While managing short-term headwinds by adjusting Brand Support Investments and Operating Expenses, we continue to set the course for the future, investing in R&D to accelerate the pace of new product launches.
Bruno Bich, Chairman and CEO
2017 NINE MONTHS PERFORMANCE
Nine months 2017
(1) 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.
Nine months 2017 on a comparative basis(1) (in %)
(1) 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.
In % of Net Sales
(2) Normalized: means excluding non-recurring items (for more information, please refer to the Third Quarter & Nine Months 2017 Results press release).
(3) Excluding the special bonus awarded to employees who were not granted shares under BIC performance share plan.
BIC TO INVEST APPROXIMATELY 28 MILLION EUROS IN A NEW WRITING INSTRUMENTS FACILITY IN INDIA
BIC’s Indian subsidiary BIC Cello (India), has acquired land and building for the construction of a new writing instrument facility in Vapi (Gujarat state).
Total investment in this project is estimated at around 28 million euros (i.e. INR 210 crore) through December 2018 including the purchase of land and building for approximately 18 million euros in 2017. This investment will enhance the Group’s manufacturing footprint in India, and enable it to meet consumer demand more effectively in this rapidly-growing market.
This new facility is expected to be operational by the end of 2018.
NEW BIC BRAND SHOP ON AMAZON.FR
In France, BIC has launched a "shop in shop" within the online shopping website, Amazon. This new BIC boutique has been created as part of a back-to-school communication campaign on Amazon, and aims at showcasing product offers and providing dynamic end-user navigation. It offers online sales products of course, but also information about the brand and its products. This BIC branded boutique reinforces the brand’s visibility on Amazon.
BIC SHAVE CLUB®: FOR MEN WHO ARE NOT SHEEP!
On 11 October, the BIC Shave Club® unveiled three films as part of its new digital communication campaign, made in partnership with the agency Hungry & Foolish. Each of the 20-second videos provide a humorous take on the benefits of the BIC Shave Club® and its new razors.
The slogan of the campaign, "for men who are not sheep," makes men aware that they pay far too much for their expensive razor blades and introduces them to the BIC shave Club® and its subscription offer of only 4 euros the first month instead of 9 euros.
The BIC Shave Club® online subscription is a simple, flexible and commitment-free service: it only takes a few clicks to receive a high-performing refillable razor at home, then receive monthly or bi-monthly the replacement blade.
Launch of BIC Shave Club® soon to come to the UK.
BIC BACK TO SCHOOL IN THE WORLD
During the back-to-school period, BIC focuses on store visibility.
a bus-shaped display has been installed in modern mass market retailers. This display has also been used in France, Morocco, the Netherlands.
BIC set up areas for children in hypermarkets across the country, where they could play on a magnetic board imagining the world of tomorrow and have their photos taken by cut-outs that feature messages like “When I grow-up I will change the world.”
BIC and Virgin marked the occasion with a storefront dedicated to BIC.
the team had installed a bus-shaped display and organized a competition game.
9000 children have had fun in an amusement park where Bic had installed activities around the BIC ® Evolution ® Pencil.
the BIC teams launched master classes in biggest retail chain dedicated to kids goods with BIC coloring and face painting. Massive TV support took a place with commercials featuring BIC® Evolution® coloring and graphite pencils.
THE BIC CORPORATE FOUNDATION
BIC’s commitment to social progress and the universal access to education is nothing new. An enduring tradition at BIC around the world, subsidiaries and employees support the causes they believe in, year after year, in the form of product donation, financial contributions and volunteer work.
Today, BIC takes that philosophy a step further with the launch of the BIC Corporate Foundation for Education, whose vocation will be to make BIC’s actions more intelligible and to endow them with greater means.
BIC Corporate Foundation will be engaged in the fight against scholastic failure and in providing access for women and girls to education. It will encourage projects that develop entrepreneurial spirit and personal initiative. It will also support environmental education projects.
UBICUITY™: THE "WRITE" KIND OF BENCH™
In partnership with Plas Eco, BIC presents Ubicuity™, a range of outdoor furniture made from recycled pens. Taking a step forward in the writing instruments collection program, which was launched in March 2011 with TerraCycle, BIC is starting a new chapter to enter the circular economy. In partnership with Plas Eco, a French company that specializes in the design, manufacture and supply of outdoor furniture, BIC has initiated the first range of outdoor furniture made in France from recycled pens.
BIC aims to implement a durable recycling chain with objectives like funding the extension of the collection program for discarded pens and showing citizens and pupils what is concretely possible when sorting out waste (organizing the collection of discarded pens at the very place where they are used.)
Discover Ubicuity™ range on sale at www.plaseco.fr
#BIC TEMPTATIONS: CROWDSOURCED SOCIAL VIDEO CAMPAIGN
BIC® is launching its first crowdsourced social video campaign #BICTemptations highlighting young people’s ingenious & funny ways to protect their BIC® 4 Colours™ ball pens from being stolen.
BIC chose to launch a video contest, and eYeka’s community - specializes in crowdsourcing content - submitted many hilarious and creative videos.
Seven videos, made by creatives from five different countries, were chosen to be featured in the campaign that ran from 29 August to 10 October to digitally support the back-to-school period.
The campaign rolled out in Italy, Spain, the UK and Germany, both on the My Bic Pen Facebook page and the Bic Group YouTube channel.
BIC LAUNCHES NEW STAR WARS™ STATIONERY RANGE
BIC is launching a new Star Wars™ stationery product range featuring the famous characters of the Star Wars™ saga. BIC® Star Wars™ range – including ball pens, graphite pencils, glue sticks and correction tapes - is available in stores in several countries.
Available in some European countries, in the Middle East and in North America.
EXHIBITION IN REDON “FROM FLAMINAIRE TO BIC, 70 YEARS OF LIGHTER HISTORY”
In 1972, BIC took control of the Flaminaire, a company that was established in 1947, and launched the first BIC® lighter with adjustable flame. Organized on the occasion of the European Heritage Days on 16 and 17 September, the exhibition "Redon, capital of the lighter: from Flaminaire to BIC, 70 years of lighter history" traced the history of lighter production in this site of Redon (Brittany, France).
The exhibition was located in the cloister of the Saint-Sauveur abbey. It welcomed more than 1,500 visitors who could discover the industrial history of the site, through the two brands’ models of lighters, their manufacturing process and the advertisements that accompanied their launch.
BIC® DESIGN ON FIRE OCEANIA – 2017 CAMPAIGN
The Oceania “Design on Fire” campaign launched earlier in 2017 and proved just how iconic BIC® lighters are in the Oceania region with huge engagement from consumers.
The winner of the competition won the right to create a series of designs that will be featured on 500,000 limited BIC® lighters and in-store displays and can be found throughout Australia and New Zealand beginning in November 2017.
COMPANY’S DETAILS
• Limited company Capital: 181,542,184.24 euros
• Divided into 47,524,132 shares of common stock, par value 3.82 euros
LISTED ON: EURONEXT PARIS
ISIN : FR0000120966
Mnemonic: BB
Continuous quotation 552.008.443 registered in Nanterre, France
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