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BIC GROUP - PRESS RELEASE CLICHY - 26 OCTOBER 2016 THIRD QUARTER AND NINE MONTHS 2016 RESULTS
  • Nine months Net Sales: 1,692.9 million euros, up 0.6% as reported and up 4.9% on a constant currency basis1

    • Consumer business up 5.0% on a constant currency basis

    • BIC Graphic net sales up 4.1% on a constant currency basis

  • Nine months Normalized1 IFO: 313.1 million euros - Normalized1 IFO margin: 18.5%

    • EXCLUDING THE IMPACT OF THE SPECIAL EMPLOYEE BONUS2

      • Normalized1 IFO: 324.5 million euros, down 5.5%

      • Normalized1 IFO margin: 19.2%

  • Nine months Net Income Group Share: 213.7 million euros, down 15.5%

    • EPS Group Share: 4.55 euros, down 15.1%

  • Third Quarter Net Sales: 559.6 million euros, up 2.1% as reported and up 3.8% on a constant currency basis1 Q3 Normalized1 IFO: 105.2 million euros - Normalized1 IFO margin: 18.8%

  • Net cash position at the end of September 2016: 208.1 million euros

Q3 AND 9M 2016 KEY OPERATIONAL FIGURES

Net Sales growth on a constant currency basis1

Normalized1 IFO margin

Normalized IFO margin excluding the impact of the special employee bonus2

Q3

9M

Q3

9M

Q3

9M

GROUP

+3.8%

+4.9%

18.8%

18.5%

18.8%

19.2%

CONSUMER BUSINESS

+3.2%

+5.0%

20.6%

21.2%

20.6%

21.8%

  • Stationery

+2.4%

+4.6%

3.9%

10.3%

3.9%

10.8%

  • Lighters

+6.5%

+5.7%

41.7%

40.1%

41.7%

40.6%

  • Shavers

+1.4%

+7.1%

19.8 %

14.7%

19.8%

15.4%

BIC GRAPHIC

+7.2%

+4.1%

8.2%

-0.2%

8.2%

1.2%

Commenting on BIC Group's results for the first nine months of 2016, Bruno Bich, Chairman and Chief Executive Officer, said: "The strength of our "High Quality and Value" positioning and increased investment in R&D, innovation and the brand, supported by the engagement of BIC teams around the world continued to fuel our growth across all categories and geographies. Year-to-date results reinforce our confidence that we will achieve our 2016 objectives."

FULL YEAR 2016 OUTLOOK

For 2016 as a whole, we expect to deliver mid-single digit growth in Net Sales on a comparative basis. Excluding major macro-economic disruptions or currency fluctuations, Normalized IFO margin2 should decline by between 100 and 150 basis points as a result of accelerated Brand Support and R&D investment aimed at fueling profitable medium- and long- term growth while we expect to maintain a strong Net Cash from operating activities.

Unaudited figures

1 See glossary on page 11

2 Excluding the special bonus awarded to employees who were not granted shares under our performance share plan.

KEY FIGURES (in million euros)

Q3 2016 vs. Q3 2015

9M 2016 vs. 9M 2015

Q3 2015

Q3 2016

As reported

Constant currency

basis

9M 2015

9M 2016

As reported

Constant currency

basis

GROUP

Net Sales

548.3

559.6

+2.1%

+3.8%

1,682.3

1,692.9

+0.6%

+4.9%

Gross Profit

272.8

287.1

+0.9%

842.6

845.9

-8.8%

Normalized Income From Operations

104.2

105.2

343.4

313.1

Normalized IFO margin

19.0%

18.8%

-0.2%

20.4%

18.5%

-11.0%

Normalized IFO margin excluding the special employee bonus

19.0%

18.8%

20.4%

19.2%

Income From Operations

104.2

104.0

345.7

307.7

IFO margin

19.0%

18.6%

-3.6%

20.5%

18.2%

-15.5%

Net Income Group Share

76.3

73.6

252.9

213.7

Earnings Per Share Group Share

(in euros)

1.62

1.57

-3.1%

5.36

4.55

-15.1%

STATIONERY

Net Sales

184.3

184.4

+0.1%

+2.4%

574.6

571.1

-0.6%

+4.6%

IFO

19.2

7.2

79.7

57.1

IFO margin

10.4%

3.9%

13.9%

10.0%

Normalized IFO margin

10.4%

3.9%

14.0%

10.3%

Normalized IFO margin excluding the special employee bonus

10.4%

3.9%

14.0%

10.8%

LIGHTERS

Net Sales

158.8

167.6

+5.6%

+6.5%

500.7

508.5

+1.5%

+5.7%

IFO

63.2

68.9

199.8

201.6

IFO margin

39.8%

41.1%

39.9%

39.6%

Normalized IFO margin

39.8%

41.7%

39.7%

40.1%

Normalized IFO margin excluding the special employee bonus

39.8%

41.7%

39.7%

40.6%

SHAVERS

Net Sales

113.0

111.8

-1.1%

+1.4%

343.2

349.7

+1.9%

+7.1%

IFO

19.2

22.2

64.0

50.2

IFO margin

17.0%

19.8%

18.6%

14.4%

Normalized IFO margin

17.0%

19.8%

19.1%

14.7%

Normalized IFO margin excluding the special employee bonus

17.0%

19.8%

19.1%

15.4%

OTHER PRODUCTS

Net Sales

13.9

12.5

-10.0%

-9.5%

53.0

46.9

-11.6%

-10.6%

TOTAL CONSUMER BUSINESS

Net Sales

470.0

476.3

+1.3%

+3.2%

1,471.5

1,476.0

+0.3%

+5.0%

IFO

99.8

97.3

346.1

308.5

IFO margin

21.2%

20.4%

23.5%

20.9%

Normalized IFO margin

21.2%

20.6%

23.5%

21.2%

Normalized IFO margin excluding the special employee bonus

21.2%

20.6%

23.5%

21.8%

BIC GRAPHIC

Net Sales

78.3

83.3

+6.3%

+7.2%

210.8

216.9

+2.9%

+4.1%

IFO

4.3

6.7

-0.4

-0.8

IFO margin

5.6%

8.1%

-0.2%

-0.4%

Normalized IFO margin

5.6%

8.2%

-0.9%

-0.2%

Normalized IFO margin excluding the special employee bonus

5.6%

8.2%

-0.9%

1.2%

GROUP OPERATIONAL TRENDS

NET SALES

9M 2016 Net Sales were 1,692.9 million euros, up 0.6% as reported and up 4.9% on a constant currency basis. The strong negative impact of currency fluctuations (-4.3%) was mainly due to the depreciation of Latin American currencies against the euro.

  • Consumer business grew 5.0% on a constant currency basis (Europe +7.7%, North America +1.8%, Developing Markets +7.0%).

  • BIC Graphic Net Sales increased by 4.1% on a constant currency basis.

    INCOME FROM OPERATIONS AND NORMALIZED INCOME FROM OPERATIONS

    9M 2016 Gross Profit margin came in at 50.0%, compared to 50.1% for 9M 2015. Excluding the impact of the special employee bonus, Gross Profit margin would have been 50.4%. Q3 2016 Gross Profit margin was 51.3% compared to 49.8% in Q3 2015.

    9M 2016 Normalized IFO was 313.1 million euros (i.e., a Normalized IFO margin of 18.5% or 19.2% excluding the impact of the special employee bonus). Q3 2016 Normalized IFO was 105.2 million euros.

  • Consumer business Normalized IFO margin stood at 21.2% for 9M 2016, a decline of 2.3 points on 9M 2015 (down

    1.7 points excluding the impact of the special employee bonus), attributable to increased investment in brand support and research and development. Q3 2016 Normalized IFO margin was 20.6% compared to 21.2% in Q3 2015.

  • BIC Graphic Normalized IFO margin improved by 0.7 points for 9M 2016 to a negative 0.2% (if the impact of the special employee bonus is excluded, it actually increased by 2.1 points to a positive 1.2%). Q3 2016 Normalized IFO margin was 8.2%, compared to 5.6% in Q3 2015.

KEY COMPONENTS OF THE CHANGE IN NORMALIZED IFO MARGIN

(in % points)

9M 2015

vs. 9M 2014

H1 2016

vs. H1 2015

Q3 2016

vs. Q3 2015

9M 2016

vs. 9M 2015

+0.9

-0.1

+1.9

+0.5

-0.1

-0.8

-1.4

-1.0

o Of which, promotions and investments related to consumer and business development support accounted for in Gross Profit Margin

-0.2

-0.1

-0.4

-0.2

o Of which, advertising, consumer and trade support

+0.1

-0.7

-1.0

-0.8

  • OPEX and other expenses

+0.5

-0.8

-0.7

-0.7

Total change in Normalized IFO margin excluding the special employee bonus

+1.3

-1.7

-0.2

-1.2

Special employee bonus

-

-1.1

-

-0.7

  • Of which impact on Gross Profit

-

-0.7

-

-0.4

  • Of which impact on OPEX

-

-0.4

-

-0.3

Total change in Normalized IFO margin

+1.3

-2.8

-0.2

-1.9

NON-RECURRING ITEMS

H1

Q3

9M

(in million euros)

2015

2016

2015

2016

2015

2016

Income From Operations

241.5

203.7

104.2

104.0

345.7

307.7

IFO margin

21.3%

18.0%

19.0%

18.6%

20.5%

18.2%

Restructuring costs

+4.5

+4.2

-

+1.2

+4.5

+5.4

Divestment of Fuel Cell business (net of restructuring costs)

-2.2

-

-

-

-2.2

-

Impact of lump sum election for terminated vested pension participants in the U.S.

-4.6

-

-

-

-4.6

-

Normalized IFO

239.2

207.9

104.2

105.2

343.4

313.1

Normalized IFO margin

21.1%

18.3%

19.0%

18.8%

20.4%

18.5%

Special employee bonus

-

+11.4

-

-

-

+11.4

Normalized IFO excluding the special employee bonus

239.2

219.3

104.2

105.2

343.4

324.5

Normalized IFO margin excluding the special employee bonus

21.1%

19.4%

19.0%

18.8%

20.4%

19.2%

3 Gross Profit margin excluding promotions and investments related to consumer and business development support.

4 Total Brand Support: consumer and business development support + advertising, consumer and trade support.

NET INCOME AND EPS

Income before tax fell back to 305.4 million euros, compared to 363.6 million euros for 9M 2015. Net finance revenue decreased to a negative 2.2 million euros (compared to a positive amount of 17.9 million euros for 9M 2015) due to unfavorable 9M 2016 fair value adjustments to U.S. dollar denominated financial assets when compared to December 2015 (fair value adjustments booked in 9M 2015 were favorable). In Q3 2016, net finance revenue decreased to a positive

  1. million euros down from a positive 6.1 million euros in Q3 2015.

    Net income Group Share was 213.7 million euros in 9M 2016, a 15.5% drop as reported. Q3 2016 net income Group Share was 73.6 million euros, down by 3.6% on a reported basis. The effective tax rate in 9M 2016 was 30.0%.

    EPS Group Share was 4.55 euros compared to 5.36 euros in 9M 2015, down by 15.1%. Normalized EPS Group Share decreased by 13.1% period on period, from 5.33 euros in 9M 2015 to 4.63 euros for the first nine months of 2016. EPS Group Share in Q3 2016 was 1.57 euros compared to 1.62 euros in Q3 2015, i.e., a 3.1% drop.

    NET CASH POSITION

    At the end of September 2016, the Group's net cash position stood at 208.1 million euros.

    CHANGE IN NET CASH POSITION

    (in million euros)

    2015

    2016

    NET CASH POSITION (BEGINNING OF THE PERIOD - DECEMBER)

    320.2

    448.0

    +265.1

    +218.3

    o Of which operating cash flow

    +345.7

    +297.4

    o Of which change in working capital and others

    -80.6

    -79.1

    -76.1

    -120.6

    -134.8

    -277.0

    -26.3

    -62.3

    +8.9

    +1.5

    +14.0

    -

    -10.7

    +0.2

    NET CASH POSITION (END OF THE PERIOD - SEPTEMBER)

    360.3

    208.1

    • Net cash from operating activities

    • CAPEX

    • Dividend payment

    • Share buyback program

    • Net cash from the exercise of stock options and the liquidity contract

    • Proceeds from sale of Fuel Cell assets

    • Other items

    Net cash from operating activities was +218.3 million euros with +297.4 million euros generated in operating cash flow. The negative 79.1 million euros change in working capital and other items was mainly related to seasonal fluctuations in trade receivables. Net cash was also negatively impacted by increased investments in CAPEX as well as dividend payment (including the special dividend) and share buybacks.

    SHAREHOLDERS' REMUNERATION

    • Ordinary dividend of 3.40 euros per share and special dividend of 2.50 euros per share paid in June 2016.

    • 62.3 million euros in share buy-backs at the end of September 2016 (499,046 shares purchased at an average price of 124.76 euros).

BIC SA published this content on 26 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 October 2016 05:26:02 UTC.

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