BIC FOURTH QUARTER & FULL YEAR 2022 RESULTS
Clichy, France – February 14, 2023
BIC FOURTH QUARTER & FULL YEAR 2022 RESULTS
Company’s Horizon Plan Accelerates Global Growth In All Divisions,
Delivers Another Outstanding Net Sales Performance in 2022
FY22 Net Sales growth of +13.8% at constant currencies surpasses guidance, with double-digit growth in all three divisions and across all key markets:
- Human Expression: Double-digit growth boosted by commercial excellence across Europe, North America and Latin America, as well as a strong recovery in Developing Markets (Brazil and India).
- Flame For Life: Distribution gains and Innovation driving robust growth in all key countries, including +17% growth in added-value products in line with Horizon Plan strategy.
- Blade Excellence: Market share gains in all regions driven by premium and new products. Successful expansion of BIC Blade-Tech contributing to 15% of the division’s Net Sales growth.
- Market share increased or maintained in almost all key countries through strong commercial execution and enhanced consumer-centricity.
Adjusted EBIT growth of +11.4% driven by company’s resilience to external headwinds - Total input cost inflation was more than offset by volume increases, price adjustments, and cost savings.
Solid Operating Cash Flow (+428.0M€) - continued delivery of our Free Cash Flow target of over 200M€
Another excellent year of adjusted EPS growth, up +19.3% versus last year. Adjusted EPS: 5.12 euros
Sustained Shareholder Remuneration, consistent with Horizon plan use of cash policy
- 111 million euros proposed Ordinary Dividend for 2022 fiscal year, paid in May 20231 : 2.56 euros per share, up 19.1% vs. 2021
- Up to 100 million euros of Share Buyback program to be executed in 2023
| FY 2022 Net Sales 2,233.9M€ +13.8% at constant currencies | FY 2022 EBIT 303.5M€ FY 2022 adjusted EBIT 311.7M€ | FY 2022 adjusted EBIT margin 14.0% |
| FY 2022 Net Income 208.9M€ FY 2022 EPS 4.75€ | Free Cash Flow 203.7M€ | Net Cash Position (end of December) 359.9M€ |
“Driven by our Horizon strategic plan, growing Net Sales high-single to double-digits in all divisions, we executed another year of outstanding top line performance and achieved our Free Cash Flow target. Market share gains in key regions and a continuous flow of premium product innovations, demonstrate our ability to maintain commercial excellence despite strong inflation and recessionary pressures. This momentum strengthens our position and relevance as both a value and valued consumer brand. We also made tremendous progress against our sustainability goals throughout 2022, primarily in eco-friendly consumer packaging and recycled plastics use in our products. I am confident that, in 2023, we will remain resilient, growing Net Sales 5% to 7% at constant currencies, while increasing our margin, as we pursue our long-term goals for accelerated profitable growth.” said CEO, Gonzalve Bich.
2023 Outlook (based on current market assumptions1F2)
Full Year 2023 Net Sales are expected to grow between +5% and +7% at constant currencies driven by price, mix and volumes. We expect to improve 2023 adjusted EBIT and adjusted EBIT margin, with a growing Gross Profit margin, partially offset by continued investments in our Operations and Brand support, aimed at driving our Horizon ambition of delivering long-term profitable growth. Free Cash Flow is expected to be above 200 million euros in 2023, for the fifth year in a row.
FY 2022 KEY MILESTONES
| Innovation and New Products | [January] Launch of the Intensity Color Change in key geographies, a new writing Felt Pen that turns the simple act of writing into an opportunity for creative self-expression. [February] US launch of BIC Soleil Escape, a new women’s razor offering a unique sensorial experience that taps into the proliferation of the self-care movement. [April] Launch of BIC Click Soleil 5, a shaver for women with a new handle featuring more than 40% recycled material developed by Avient. [July] Launch of BIC Ecolutions Lighter in the US and France, designed and manufactured with a 16% lower environmental impact compared to the classic BIC Maxi. [November] Launch of BIC EasyRinse, a new razor for men and women featuring a first-of-its-kind blade design and patented anti-clog technology, available online in the US. |
| Acquisitions and Disposals | [January] Acquisition of Inkbox, the leading brand of high quality semi‐permanent tattoos [August] Acquisition of Tattly, a leading decal brand, diversifying BIC’s offering in the rapidly growing Skin Creative market. [September] Acquisition of AMI (Advanced Magnetic Interaction), strengthening BIC's R&D capabilities in Digital Expression. |
| Corporate Responsibility and Sustainability | [May] Greenhouse Gas (GHG) emission reduction targets for 2030 announced. [June] Headquarters in Clichy (France) relocated to a certified BREEAM (Building Research Establishment Environmental Assessment Method) facility. [December] A- leadership 2022 CDP score on Climate Change confirmed. [December] Completion of BIC's second ESG Impact Share Buyback Program, with a portion of funds allocated to J‐PAL and the BIC Corporate Foundation. [December] BIC reached more than 70% use of reusable, compostable or recyclable plastic in its consumer packaging, and is on track to achieve its goal of 100% by the end of 2025. |
| Governance | [May] Election of Nikos Koumettis to BIC’s Board of Directors and as BIC’s Non-Executive Chair of the Board. Renewal of Gonzalve Bich’s mandate as Director and CEO. |
Strong growth in all divisions
FY 2022 Group Net Sales increased 11.0% on a comparative basis, 13.8% at constant currencies, with all divisions and regions contributing to growth. Main drivers included volume increase, favorable mix, and the successful implementation of price increases in almost all regions as expected.
- Human Expression Net Sales grew 16.9% at constant currencies, driven by high-single to double-digit in all key regions driven by both classic and premium segments as expected, including the Ball Pen, Gel, and Intensity ranges. Net Sales for products coming from Creative and Digital Expression increased more than 40% since 2019, a year before we launched Horizon Plan. Solid commercial execution, both offline and online across the globe, led to robust Back-to-School seasons in both hemispheres, backed by improved in-store visibility and consumer-driven promotions. We successfully gained market share in key countries (notably France +1.6 pts, UK +2.1 pts and the US +0.6 pts), capitalizing on our value positioning, a proof point of consumer trust, whether be it core writing instruments or added-value products. Our Gel products more than doubled in sales in the last 5 years and we outperformed the market ahead of our peers in the US in 2022. Brazil, India and African countries have successfully surpassed their pre-pandemic level and achieved high-double-digit growth, as well as increasing e-commerce performances.
- In Flame for Life, Net Sales grew 11.2% at constant currencies. Proof of our ability to address consumer demand for all flame occasions, innovative and premium products such as BIC EZ Reach in the US, Djeep in Europe, and Decorated and Utility lighters in Latin America, successfully contributed to Net Sales growth. As a result, added-value Lighters accounted for 38% of the division’s 2022 Net Sales, up 2 pts year-on-year. Growth in all key regions was driven by distribution gains in both traditional and modern mass channels, solid promotional activities, and favorable price mix, paving the way towards a more value-driven model. In the US, BIC EZ Reach utility pocket lighter continued to be incremental to the overall category and reached 5.4% of the Pocket lighter market, driven by accelerated distribution in all channels of trade and impactful advertising campaigns, which will be pursued throughout 2023. BIC EZ Reach is well on track to reach its objective of 10% market value share in 2025.
- In Blade Excellence, BIC outperformed in all key markets (US, Europe, and Latin America), boosted by solid commercial execution and the success of the 3 to 5 blade and Hybrid ranges, a proof point of our goal to lean towards premiumization. Net Sales grew 14.6% at constant currencies, boosted by premium and innovative new products around the globe, such as BIC Soleil Escape in the US, BIC Soleil Click 5 in Europe, and BIC Hybrid Comfort 3 in Brazil. As a result, added value-products (3, 5 blades and Hybrid) grew +17% in the last 5 years. Our B2B business, BIC Blade-Tech, ramped up successfully during the year, contributing 15% towards the total Blade Excellence Net Sales growth.
Input cost inflation and investment in growth, partially offset by favorable pricing and Net Sales operating leverage
FY 2022 Gross Profit margin decreased by 2.5 points to 48.3% as reported, and by 2.8 points excluding Inkbox. Input cost inflation (-5.7 pts) and unfavorable FX (-0.8 pts), mainly EUR/USD hedging rate (-1.1 pts), were partially offset by favorable fixed cost absorption (+1.5 pts), pricing (+2.1 pts), and the positive contribution of Inkbox (+0.3 pts). FY 2022 Adjusted EBIT margin was 14.0%, a decrease of 1.3 pts compared to FY 2021 as reported and 0.6 pts excluding the impact from 2022 acquisitions. Net Sales operating leverage (+4.3 pts) was more than offset by Gross Profit margin decrease (-2.8 pts), the increase in Brand Support (-0.8 pts), OPEX and others (-1.3 pts), and the negative impact from 2022 acquisitions (-0.7 pts).
Total input cost inflation (including raw material, sea and air freight costs and electricity prices) weighed 105 million euros on FY 2022 adjusted EBIT. The Full Year impact was more than offset by volume increases, price adjustments, and cost savings. As a result, FY 2022 Adjusted EBIT was 311.7 million euros, a 11.4% increase versus prior year.
FY Net Cash from Operating Activities reached 300.0 million euros, fueled by solid business performance. The -29.2 million euros change in Working Capital was driven by an increase in Inventory levels (-74.7M€, of which 45M€ of input cost inflation), partly offset by efficient cash collection of Trade Receivables and increase in Trade Payables.
FY 2022 Free Cash Flow before acquisitions and disposals was 203.7 million euros. Net Cash position at the end of December was 359.9 million euros and included 73.8 million euros paid for the acquisitions, mainly Inkbox.
horizon plan in full swing
The execution of BIC's Horizon strategic plan contributed significantly to full year performance.
Consumer-centricity and Innovation
In 2022, BIC strengthened its portfolio in each category with innovative, consumer-centric, and environmentally friendly products, in line with its Horizon ambitions. In Human Expression, the new Intensity Color Change, a Writing Felt Pen, was launched in most geographies, contributing to Net Sales growth in Europe and Latin America. Following BIC EZ Reach, the Lighter portfolio expanded in 2022 with the BIC Ecolutions Lighter launch in the US and France, a unique lighter designed with -30% CO2 emissions3 compared to the classic BIC Maxi. In Blade Excellence, the new women’s razor BIC Soleil Escape offering a sensorial experience and launched in the US, was an instant success in its first year, becoming the #1 product in the Women Disposables category. This was followed by the launch of the BIC Click Soleil 5 in April, a women’s razor with a handle made from 40% recycled material developed by Avient. Finally, BIC EasyRinse, a new razor for men and women featuring a first-of-its-kind reverse blade design and patented anti-clog technology, was launched online in Q4 in the US and is already showing promising results with an average star rating 4.7/5. BIC EasyRinse will gradually be deployed in stores throughout 2023.
E-commerce
Continued focus on growing digital commerce through exceptional content and an enhanced omnichannel experience increased online sales by 10.2% in 2022, with double digit growth in all regions and divisions. Core e-commerce sales were driven by the Omni retailer channel (close to +30% growth) and Developing Markets, with outstanding performance in the Middle East and Africa, as well as Latin America. BIC successfully outperformed its key markets online in the US (Stationery +1.1 pts in value and Shavers +1.4 pts in value), and in Europe in Stationery (UK +2.9 pts in value and Germany +1.0 pts in value). The Company’s core DTC business () also showed promising growth, notably in France fueled by the successful BIC 4 Color collections and limited editions.
Revenue Growth Management (RGM)
RGM capabilities delivered solid results in 2022. With a laser-focus on simplifying the entire product portfolio, Net Sales per SKU Growth climbed to 28% with progress in all three divisions, alongside a net SKU reduction of 11.7% for a total of 4,796 SKUs in 2022. This progress was led by efforts in the key markets of France and the US to simplify the Human Expression category and improve the in-store shopper experience.
NEW BUSINESSES AND EXTERNAL GROWTH
BIC Blade-Tech successfully ramped up during the year, with three contracts signed. The B2B business contributed 15% to the Blade Excellence division’s growth.
In line with the Horizon Plan strategy to pivot the Stationery business towards Human Expression and expand Total Addressable Markets, BIC acquired Tattly in August, a small, high-quality US based Decal company. Tattly diversifies BIC's offering in the fast-growing Skin Creative market, adding a leading Decal Brand to BIC's BodyMark temporary tattoo marker and the Inkbox semi-permanent Tattoo lines of business. Lastly, BIC acquired AMI (Advanced Magnetic Interaction) in September, strengthening the Company’s R&D capabilities in Digital Expression, and accelerating the deployment of AMI's patented technology, notably through B2B activity in Digital Creative and Consumer Electronics applications.
PATH TO SUSTAINABILITY
Throughout 2022, BIC continued on its path towards creating a more sustainable future, a crucial piece of the Horizon Plan. In May 2022, Greenhouse Gas (GHG) emission reduction targets for 20304 were announced, making GHG emissions reduction a key component of BIC's long-term strategy. As well, several innovative and more sustainable consumer-centric products were introduced, including the BIC Click Soleil 5 shaver and the BIC Ecolutions lighter. At the end of December 2022, BIC successfully reached the use of 70% reusable, compostable or recyclable plastic in its Consumer packaging, and is on track to achieve its 100% goal in 2025.
Sustained Shareholder Remuneration, consistent with Horizon plan use of cash policy
In line with the Horizon Plan’s Capital Allocation Policy, the Board will propose a 2.56 euros per share Ordinary Dividend to the next AGM, a 50% payout ratio, and an increase of 19.1% compared to 2021. In addition to the Ordinary Dividend, we will execute a share buyback program of up to 100 million euros throughout 2023.
Governance
In May 2022, the Board of Directors appointed Nikos Koumettis as non-Executive Chair of the Board and renewed the mandate of Chief Executive Officer of Gonzalve Bich.
Key Operational Figures
Group Financial figures
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| Group Net Sales | 436.8 | 526.7 | 1,831.9 | 2,233.9 |
| Change as reported | +6.5% | +20.6% | +12.5% | +21.9% |
| Change on a comparative basis | +0.5% | +9.1% | +12.2% | +11.0% |
| Change on a constant currency basis | +4.1% | +13.7% | +15.9% | +13.8% |
| EBIT Margin | 8.5% | 7.9% | 24.7% | 13.6% |
| Adjusted EBIT Margin | 7.1% | 8.2% | 15.3% | 14.0% |
| EPS (in euros) | 0.60 | 0.52 | 7.02 | 4.75 |
| Adjusted EPS (in euros) | 0.48 | 0.57 | 4.29 | 5.12 |
| Free Cash Flow before acquisitions and disposals | (26.6) | 53.0 | 205.7 | 203.7 |
| Net Cash Position | 400.1 | 359.9 | 400.1 | 359.9 |
Key Group non-financial Figures
| FY 2021 | FY 2022 | |
| GHG Emissions (Scope 1, 2 - tCO2eq) – Market-based GHG Emissions (Scope 3 - tCO2eq) | 35,310 805,000 | 40,244 800,075 |
| % Renewable Electricity | 79% | 76% |
| % of recycled or alternative materials in BIC® products % of reusable, recyclable, or compostable plastic in packaging | 4.0% 59.6% | 5.70% 70% |
| Workplace accidents | 58 accidents 40 sites with zero-accident | 70 accidents 50 sites with zero-accident |
| Improved Children Learning Conditions | 158 million (cumulative) | 187 million (cumulative) |
Human Expression
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| Volumes in million units | - | - | 5,839.3 | 6,523.9 |
| % Change | - | - | +19.5% | +11.7% |
| Net Sales | 153.1 | 175.6 | 683.8 | 838.8 |
| Change as reported | +27.0% | +14.7% | +18.8% | +22.7% |
| Change on a comparative basis | +14.2% | +2.5% | +13.6% | +11.8% |
| Change at constant currency | +24.5% | +11.4% | +21.3% | +16.9% |
| Adjusted EBIT | (3.5) | (8.9) | 36.8 | 25.4 |
| Adjusted EBIT Margin | (2.3) % | (5.1) % | 5.4% | 3.0% |
Flame For Life
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| Volumes in million units | - | - | 1,570.8 | 1,647.4 |
| % Change | - | - | +12.7% | +4.9% |
| Net Sales | 180.4 | 219.6 | 718.5 | 871.6 |
| Change as reported | +0.9% | +21.7% | +16.2% | +21.3% |
| Change on a comparative basis | (2.3) % | +10.9% | +18.2% | +10.1% |
| Change at constant currency | (1.6) % | +12.3% | +20.3% | +11.2% |
| Adjusted EBIT | 56.0 | 63.8 | 270.2 | 305.5 |
| Adjusted EBIT Margin | 31.0% | 29.1% | 37.6% | 35.0% |
Blade Excellence
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| Volumes in million units | - | - | 2,320.3 | 2,350.9 |
| % Change | - | - | +2.8% | +1.3% |
| Net Sales | 96.2 | 124.0 | 401.2 | 497.0 |
| Change as reported | (4.4) % | +28.9% | (0.7) % | +23.9% |
| Change on a comparative basis | (7.3) % | +16.4% | +2.5% | +12.7% |
| Change at constant currency | (6.6) % | +20.6% | +3.0% | +14.6% |
| Adjusted EBIT | 6.5 | 10.1 | 57.4 | 66.6 |
| Adjusted EBIT Margin | 6.8% | 8.1% | 14.3% | 13.4% |
NET SALES, EARNINGS BEFORE INTEREST AND TAXES (EBIT), AND ADJUSTED EBIT
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| Net Sales | 436.8 | 526.7 | 1,831.9 | 2,233.9 |
| Gross Profit | 214.0 | 243.2 | 930.8 | 1,078.0 |
| Gross Profit margin | 49.0% | 46.2% | 50.8% | 48.3% |
| EBITDA | 79.1 | 72.4 | 549.3 | 404.5 |
| EBIT | 36.9 | 41.6 | 452.0 | 303.5 |
| EBIT margin | 8.5% | 7.9% | 24.7% | 13.6% |
| Non-recurring items (see details in appendix) | (5.7) | 1.6 | (172.2) | 8.2 |
| Adjusted EBIT | 31.2 | 43.2 | 279.8 | 311.7 |
| Adjusted EBIT margin | 7.1% | 8.2% | 15.3% | 14.0% |
FY 2022 Gross Profit margin decreased by 2.5 points to 48.3% as reported, and by 2.8 points excluding Inkbox. Input cost inflation (- 5.7 pts) and unfavorable FX (-0.8 pts), mainly EUR/USD hedging rate (-1.1 pts), were partially offset by favorable fixed cost absorption (+1.5 pts), pricing (+2.1 pts), and the positive contribution of Inkbox (+0.3 pts). FY 2022 Adjusted EBIT margin was 14.0%, a decrease of 1.3 pts compared to FY 2021 as reported and 0.6 pts excluding the impact from recent acquisitions. Net Sales operating leverage (+4.3 pts) was more than offset by the increase in Brand Support (-0.8 pts), OPEX and others (-1.3 pts), and the negative impact from 2022 acquisitions (-0.7 pts).
Q4 Gross Profit margin decreased by 2.8 pts at 46.2% as reported and by 2.9 points excluding Inkbox, notably driven by input cost inflation (26 million euros) partially offset by price increases. Q4 adjusted EBIT margin increased by 1.1 pts notably driven by Net Sales Operating leverage and positive favorable impact from lower distribution costs.
Total input cost inflation (including raw material, sea and air freight costs and electricity prices) weighed 105 million euros on FY 2022 adjusted EBIT. The Full Year impact was more than offset by volume increases, price adjustments, and cost savings. As a result, FY 2022 Adjusted EBIT was 311.7 million euros, a 11.4% increase versus prior year.
- The Human Expression division's FY 2022 adjusted EBIT margin was 3.0% compared to 5.4% in FY 2021. The decrease was driven by input cost inflation and the impact of 2022 acquisitions and investments in Brand Support, partly offset by Net Sales operating leverage and favorable fixed cost absorption. Q4 adjusted EBIT margin was -5.1% compared to -2.3% due to higher manufacturing costs and investments in Brand Support.
- Flame for Life Division's FY 2022 adjusted EBIT margin was 35.0% compared to 37.6% in FY 2021, due to higher input cost inflation and an increase in Brand Support driven by the BIC EZ Reach advertising campaign in the US. This was partially offset by Net Sales operating leverage and favorable fixed cost absorption. Q4 2022 adjusted EBIT margin was 29.1% compared to 31.0% in Q4 2021 due to input cost inflation, less favorable fixed cost absorption, partly offset by lower Brand Support investments.
- Blade Excellence Division's FY 2022 adjusted EBIT margin was 13.4% compared to 14.3% in FY 2021, driven by input cost inflation. This was partly offset by Net Sales operating leverage, and the positive contribution from BIC Blade-Tech B2B business. Q4 2022 adjusted EBIT margin was 8.1% compared to 6.8% in Q4 2021 driven by strong Net Sales operating leverage and lower Brand Support, partially offset by higher raw materials and electricity costs and unfavorable fixed cost absorption.
| Key components of the change in Adjusted EBIT margin | Q1 2022 vs. Q1 2021 | Q2 2022 vs. Q2 2021 | Q3 2022 vs. Q3 2021 | Q4 2022 vs. Q4 2021 | FY 2022 vs. FY 2021 |
| (in points) | |||||
| · Change in Gross Profit | +0.2 | (3.9) | (3.4) | (2.8) | (2.5) |
| · Brand Support5 | (0.5) | (1.8) | (0.8) | +0.2 | (0.7) |
| · OPEX and other expenses5 | +5.4 | +1.3 | (1.7) | +3.7 | +1.9 |
| Total change in Adjusted EBIT margin | +5.1 | (4.4) | (5.9) | +1.1 | (1.3) |
NET INCOME AND EPS
| in million euros | Q4 2021 | Q4 2022 | FY 2021 | FY 2022 |
| EBIT | 36.9 | 41.6 | 452.0 | 303.5 |
| Finance revenues/costs | 0.5 | (9.5) | (4.2) | (12.9) |
| Income before Tax | 37.4 | 32.1 | 447.8 | 290.6 |
| Net Income Group share | 26.7 | 22.7 | 314.2 | 208.9 |
| Adjusted Net Income Group Share6 | 21.5 | 25.1 | 191.7 | 225.2 |
| Adjusted EPS Group Share (in euros) | 0.48 | 0.57 | 4.29 | 5.12 |
| EPS Group Share (in euros) | 0.60 | 0.52 | 7.02 | 4.75 |
FY 2022 finance revenues/costs decrease is mainly due Argentina hyperinflation impact in Q4 2022. Net Income Group share stood at 208.9 million euros versus 314.2 million euros last year, due to the sale of BIC’s Clichy headquarters (France) in 2021.
FY 2022 effective tax rate was 28.1% vs. 29.8% in 2021.
NET CASH POSITION
| CHANG |