GROUP PRESENTATION FOR INVESTORS First Quarter 2010
Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
Content Our ambitions for the next 3 to 5 years
Capital ownership
5
Our strengths
6
Strategy
7
2009 Key Figures
2009 Net sales by categories
8
Positions in our 3 core businesses
18
Lighters 2009 Key Figures
31
20
Lighters - Strategy
32
The Stationery Market
21
N°1 branded lighter manufacturer
33
9
The Stationery Market (growth)
22
Towards more value-added products
34
Recognized brands
10
Strategy
23
Lighters in 2010
35
International footprint
11
Quality @ BIC price
24
Child-resistant regulation in Europe
36
Group Key Figures
12
Market Share
25
CAPEX
13
Stationery in 2010
26
Strong balance sheet
14
Return to shareholders
15
Use of cash policy 2010 Group Perspectives
Stationery
Cello Pens Cello Pens key figures
Shavers
Our marketplace
38-40
2009 Key Figures
41
Shavers - Strategy
42
27
16
India’s writing instrument market
28
17
India’s pen market
29
2
Content A comprehensive range of quality products
43
Quality and innovation at a reasonable price
44
Sustainable development
3-blades one-piece market shares
45
Life cycle approach
66
Shavers in 2010
46
Eco-design
67
Long and lasting
68
Eco Label
69
Eco-design: the BIC Easy
70
BIC APP highlights & key figures
59-64
Advertising & Promotional Products
2009 Key Figures
48
A 4th business
49
Not a new category
50
Q1 2010 Results
72-95
The APP industry - history
51
Glossary
96
The APP industry - Organization
52-54
2010 Agenda
97
The APP industry – Size & trends
55-56
Disclaimer
98
The APP industry A cost effective medium
57-58
3
Group Overview
Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
Capital ownership As of 14 April 2010*
Others 36.9%
First Eagle 4.5%
Silchester International Investors 9.9%
*Figures calculated from the latest available information.
Bich Family 43.5%
Fondation de France Treasury stocks 4.6% 0.6%
5
Our strengths
Products
Brand…S
Worldwide leadership
Balance Sheet
N°2 Simple Reliable Inventive At the right Price
*one-piece shavers in major markets (US, Europe, Latin America)
Stationery 10% market share
N°1 Lighters 35% market share
N°2
Shavers 20% market share* of one-piece in USA and Europe
126.2M€ Free Cash Flow after Acquisitions in 2009
305.3 M€ Net Cash Position at the end of 2009 6
Strategy
Support core products Meet consumers’ needs and desires through innovative products Improve our quality & manufacturing efficiency Leverage the
brand
Expand our geographical presence Capitalize on external opportunities and alliances Integrate sustainable development as a key component
7
2009 Net Sales breakdown by category
Advertising & Promotional Products 23%
Consumer Business 77%
Stationery Consumer 31%
Lighters 24%
Shavers 16% Other Products 6%
*: based on the assumption of a full year consolidation of Antalis PP and Norwood PP – non audited
8
Positions in our 4 core businesses Stationery 10% market share*
N°2
Worldwide for consumer stationery products
Lighters 35% market share*
N°1
Worldwide for branded pocket lighters
N°2
of one-piece shavers in major markets (US, Europe, Latin America)
Shavers 20% market share* of one-piece in USA and Europe
Advertising & Promotional Products
*: all market shares are in value
N°1 N°2
in the USA in Europe 9
Recognized brands to leverage
A brand that simplifies people’s lives A well-known brand consumers feel close to A brand that offers good value for money A quality brand
A high level of awareness* (100% in France & Greece, 97% in the UK, 98% in the USA & in Australia, 91% in Brazil, 98% in Mexico, etc.) *: TNS Sofres - 2001
10
Our international footprint Q1 2010 sales breakdown by geography
Europe
Developing Markets
29% 29%
31% 31%
40% 40%
North America 11
EPS
Normalized Income From Operations
NET SALES
Group Key Figures
€1,562.7 m
2004
2004 – 2009 Average Normalized IFO* margin:
16.2%
16.6%
€3.15
2004 – 2009 EPS* CAGR:
3.3%
1.6% -0.6%
+3.6%
€239.6m
4.6%
2004 – 2009 growth average on a comparative basis:
2004
2005
17.5%
2005
3.11
2006
17.9%
2006
2007
2008
2009
17.4%
2007
3.43
3.51
2006
2007
15.1%
15.3%
2008
2009
3.00
3.15
2008
2009
2.15
+7.9% 2004
Free Cash Flow ***
6.6%
6.0%
2005
308.3
€308.3m
2009 FCF / net sales:
178.6
160.3 98.9
128.9
145
2007
2008
20%
*: actual figures *** Cash from operating activities – cash from investing activities / before acquisitions
2004
2005
2006
2009
12
CAPEX In million euros
90* 77
70
83
71 53
2004
2005
*Shelton real estate acquisition (€ 11m)
2006
2007
2008
2009
2010 est.
13
Strong balance sheet Rounded figures in million euros ASSETS
355.7
Tangible assets
EQUITY & LIABILITIES
375.1
255.2 232.0
Intangible assets 305.3
210.6
Net cash position
163.5
Others
199.3
426.6
Working capital*
413.6
2008
1304.3 1172.1
Shareholders’ equity
216.4
2009
Others
2008
* Working capital = Net Inventory + Trade and other receivables – Trade and other payables – Other assets and liabilities
244.2
2009 14
Return to shareholders In million euros
308
179 160 3
129
27**
31
99
63
182
145 13
49
1 58
64 65
86
2004
72
2005
65
49 2006
Free cash flow*
40 2007
Share buyback
Dividend
26 2008
1.9 2009
Acquisition
*: Cash from operating activities – cash from investing activities (before acquisition) **: 2004 exceptional dividend
15
Consistent use of cash policy 2006 PIMACO
Focus on Strategic acquisitions
-Adhesive labels -Brazil
2009
2009
2007
2009
Atchison Products - Promotional products - USA
APP
Cello Pens
- Promotional products - Europe
- Writing Instruments - India
Norwood Promotional Products - USA
Continue to look for strategic acquisitions, although focus will be to succeed in leveraging recent moves In euros
Dividend
Regular dividend per share
0.80
1.15
0.90
1.35
1.35
1.00
1.00
2004
2005
Dividend per share
44% payout*
2006
2007
2008
2009
2009 results
Special Dividend
In million euros
71.6 49.3
39.9
Share Buy-back
25.7 1.9
2004 *: based on ordinary dividend
1.40
in 2009 based on 2003
85.5
1.30
2005
2006
2007
2008
2009 16
2010 Group perspectives
Leverage a more positive economic environment to grow market share in all categories
Consumer Business
Advertising & Promotional Products
Moderate net sales growth on a comparative basis
Continue to strengthen our positions in emerging markets
Slight improvement of normalized IFO margin compared to 2009
In a volatile business environment achieve Norwood Promotional Products integration to be ready for when the industry recovers
BIC APP Normalized IFO margin close to last year reported level
Discipline maintained on profitability and cash generation
17
Our ambitions for the next 3 to 5 years Grow faster than our markets thanks to our Quality & Price positioning
Continue to improve our operational efficiency
Continue to monitor working capital Be ready to seize external growth opportunities through bolt-on and strategic acquisitions, while maintaing a sound balance sheet
Consumer business Advertising & Promotional Products
Annual Organic Growth*
Normalized IFO margin
Between 2% and 4%
Between 15% and 18%
Between 5% et 10%
Between 8% et 12% Comparable to Group level in the long term
*: net sales growth at constant currencies and bolt-on acquisitions
18
Stationery Consumer
Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
2009 Stationery Consumer Key Figures
2009
YoY Change
YoY Change at constant currencies*
Net Sales
509.6
NA
-2.7%
Income from Operations
43.3
NA
Normalized* IFO Margin
9.6%
BIC Group In million euros
* see glossary
20
The consumer stationery market Total worldwide consumer stationery market = 6.2 billion euros in 2008 Key Geographical Markets (breakdown in value)
ROW
Breakdown by main segment (in value)
Europe Correction
India China
18% 18%
21% 21%
7% 7%
Coloring 16% 16%
7% 7%
49% 49% 19% 19%
14% 14%
Japan
Markers 14% 14%
Pens
15% 15%
8% 8%
13% 13%
Pencils
Latin America USA
BIC Estimate & Published Research – 2008 – Manufacturers figures –Pens, pencils, markers, coloring, correction
21
Stationery Consumer - Our marketplace Where will the growth come from? 2006-2007 market trends by geographies (in value) Market growth 14%
12%
China
10%
8% India
Eastern Europe
6%
Latin America
4% Western Europe
2%
-1%
Japan
North America & Oceania
Size in million euros -3%
BIC Estimate & Published Research - 2007
22
Stationery Consumer – Strategy Leverage strength of BIC® brand to grow share in all segments to levels achieved in our Classic Ball Pen core segment Our challenges
1.
Grow in a market flat in mature countries
2.
Answer to the increased competition from low-cost Asian manufacturers with inconsistent quality products
3.
Build awareness of our innovations
4.
Grow in value-added writing instruments
5.
Adapt to the evolution different distribution networks (office product industry and retail channel)
Our strengths
1.
A brand that consumers trust
2.
Clear positioning Quality @ a BIC price Great value for money
3.
Strong positions in key segments
4.
Superior technical know-how to drive quality control and innovation
5.
Global presence following the acquisition of Cello®
6.
Sourcing capacities
23
Stationery Consumer: “Quality @ a BIC price” More than 3m outlets worldwide
Historical and close relationship with the trade
Iconic products
Strong brands
Worldwide leadership positions
Innovation Strong positions in major market segments
Consumer trust for more than 50 years 24 million BIC stationery products bought every day worldwide
24
Stationery Consumer – Positions in major market segments
N°1 in Europe (16% market share)
N°1 in Ball Pen (17% market share)
N°1 in Mechanical Pencils* (14% market share)
N° 2 worldwide with 10% market share N°2 in North America (13% market share)
N°2 in Marking (8% market share)
N°1 in Correction (17% market share)
BIC Estimate & Published Research – 2006 *: together with Newell
N°1 in Latin America (24% market share)
25
BIC Stationery Consumer category in 2010 More for your money…
… more
…
… more innovation
26
Cello Pens
PENS
The leading Indian writing instrument brand
>35% share of the
Appr. 5,000 employees
Indian Pen market
90% unaided
1 bn pens per year
awareness
(2 industrial sites )
The widest distribution network in India
Strong growth - High Profitability Approximately 30% FY07-08 EBIT margin
Cello Pens are distributed nationwide through 731,000 outlets all across India a network of 42 superstockists and 4,200 distributors
Revenue (INR Million) 4,100
2,300
12% 02-03
5
GR CA s e sal s r yea
07-08
27
India’s writing instrument market overview Total writing instruments: ~ INR 28billion (440 million Euros)
Total stationery: ~ INR 90billion (1.4 billion Euros)
Pencils
Pens
Writing Instruments
63% 63% 31% 31%
79% 79%
15% 15% 6% 6%
6% 6% Others Paper and Notebooks
Others
63.6 INR = 1 euro (January 20, 2009) Cello Pens Estimate & Published Research – 2007 – Retail value
Mid to high-single digit annual growth
28
India’s writing instrument market overview: focus on pens Total pen market: ~ INR 22billion Low but increasing per capita pen consumption
Highly fragmented distribution network Modern Retail
cc. 17
General Stores
24% 24%
5% 5% Stationery 25% 25% Shop
cc.3 India
US
Retail price point 12%
16%
10% < 5 INR
Traditional "Mom &Pop" stores
46% 46%
A market leader with market share twice the nearest competitor
Lexi, Flair, Linc, Add Pens, Montex, GM Pens, Luxor, Today’s, Rotomac
37%
PENS
INR 5-10 INR 10-15 > 15 INR
63%
62% 29
Lighters
Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
2009 Lighters Key Figures
2009
YoY Change
YoY Change at constant currencies*
Net Sales
398.9
+5.9%
+5.3%
Income from Operations
127.9
+16.3%
Normalized IFO Margin
34.0%
BIC Group In million euros
* see glossary
31
Lighters – Strategy
Strengthen our position as the only branded lighter with worldwide strengths Accelerate development of value-added lighters
Our challenges
Our strengths
1. Acceleration of the trend of tobacco consumption
1. Our brand
2. Promote the extension and enforcement of mandatory ISO 9994 International safety standards
2. Quality
3. Increase awareness of safety rules among distributors and consumers
4. Our distribution
3. Our safety programs
5. Our technical know-how 32
Lighters: N°1 branded lighter manufacturer Consumer preference
Safety – Quality – Prevention & education
Brand awareness US Disposable Pocket Lighter 86%
BIC
Competitor A
vs. market average
10%
More than 50 automatic quality controls Competitor B
8%
Market leadership Estimated market shares (in value)
> 60%
Integrated distribution network > 60%
• Dedicated Customer Support Teams in
35%
all countries
