BIC, a world leader in stationery, lighters and shavers, announced solid results in its second quarter and first-half 2021 financial statements, driven by Net Sales growth (26.2%) across all divisions:
- Flame for Life performance boosted by an exceptional start to the year in US Pocket and Utility Lighters, which we don’t expect to repeat in the second half, as well as robust growth in Latin America and the successful integration of Djeep in Europe
- Human Expression result was driven by Digital Writing, while Core Writing Instruments markets remained challenging in Latin America and India
- Blade Excellence fueled by the success of BIC 5-blade and Hybrid shavers despite a challenging competitive environment
BIC also reported strong growth in e-commerce in all regions, including developing markets. BIC’s recent acquisition of Lucky Stationery in Nigeria continues to perform well with H1 2021 Net Sales more than doubling, underpinning BIC’s efficient route-to-market strategy in the region.
H1 2021 HIGHLIGHTS
First Half 2021 Net Sales increased 26.2% at constant currencies. The unfavourable impact of currency fluctuations (–7.2 points) was mainly due to the decrease of the US Dollar and Brazilian Real against the Euro. Excluding the impact of acquisitions and divestitures, growth on a comparative basis was 22.5%.
- Growth was fueled by the Flame for Life division, with a robust performance in Europe, North America, and Latin America. Boosted by a strong start-to-the-year, performance in the US contributed approximately 10 points to H1 Group Net Sales growth on a comparative basis. This was driven by improved market trends in value (total US Lighter market grew 6.2% YTD June) combined with customers’ order calibration during the first four months of the year, in response to unforeseen consumer demand. BIC outperformed the US market in both volume and value, propelled by distribution gains, favorable mix, and increased pricing.
- In Human Expression, Rocketbook continue to show outstanding results, with Net Sales up more than 90% in H1. All online channels contributed to growth, with sales to Amazon driven by the success of June’s Prime day. BIC’s H1 Core Writing Instruments performance was driven by Europe, where total Back-to-School sell-in is expected to grow mid-single digit in 2021. In North America, the lack of product availability resulting from supply chain challenges negatively affected shipments to customers and are expected to impact Back-to-School sell-in.
- The Blade Excellence division performance was fueled by the success of our 3-blade products in Latin America. While the US in-store distribution remained increasingly competitive, particularly in the female 3-blade segment, we continued to grow our 5-blade business in both male and female and outpaced the fast-growing online market.
- E-commerce (excluding Rocketbook) delivered a solid +26% growth compared to the same period last year, fueled by Pure Players channels (+21%) and Omniretailers (+30%). Growth in Latin America, Middle East and Africa, and India was driven by increased distribution and efficient promotional campaigns.
Commenting on the results, Gonzalve Bich, the Chief Executive Officer said,
“Robust top-line growth drove our strong first-half results, getting us back to pre-COVID levels on a comparative basis. A standout was the performance of our Flame for Life division, which grew across all key geographies, particularly in the U.S.
I am also pleased with the growth we are seeing from our recent acquisitions, as well as our robust e-commerce results, and the launch of several innovative and sustainable products into the market.
We expect the balance of the year to be more challenging as we continue to navigate through current worldwide supply chain disruptions and adverse input costs, but we remain focused on what we can control and the pursuit of our transformation journey, which I believe will drive our profitable growth trajectory and create value for all our stakeholders.”
Consistent with our Sustainable Development journey, we launched several innovative products with environmental benefits in H1, including the BIC® Cristal™ Re’New, our first rechargeable metallic Cristal Ball Pen, and the BIC® BAMBOO, our first CO2 neutral labeled shaver with a responsibly sourced bamboo handle. We also started to rollout our new sustainable “SD Hybrid” shaver range in Europe.
We achieved more than 15.0 million euros incremental benefit from our Invent the Future plan in H1, of which approximately 4.0 million euros in direct and indirect procurement. BIC’s raw materials market prices soared 10% in Q2 compared to Q1 2021, the rebound in global consumption prompted a disruption in supply chains worldwide, resulting in a surge in sea freight costs, coupled with increased port to port lead-times. As previously communicated, we expect the current market conditions to weigh on Full Year 2021 margins.
H1 2021 Free Cash Flow before acquisitions and disposals totaled 103.7 million euros, including 30.3 million euros of CAPEX. Net Cash Position was 366.7 million euros, positively impacted by 173.9 million euros of proceeds from our headquarters’ sale.
H1 Gross Profit margin increased by 3.9 points to 51.7% compared to 47.8% in H1 2020. Excluding 2020 under-absorption of fixed costs due to the COVID-19 pandemic, the Gross Profit margin increased by 1.7 points. The improvement was driven by the strong increase in North America Lighter sales, a decrease in Brand Support above Net Sales, and manufacturing and raw material procurement efficiencies. This was partly offset by adverse Forex from Latin American currencies against the US Dollar.
H1 Adjusted EBIT was favorably impacted by operating leverage from Net Sales growth. Freight and Distribution costs were higher as a result of the increase in customer demand.