Société Bic — Interim / Quarterly Report 2015

Apr 22, 2015

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BIC GROUP – FIRST QUARTER 2015 RESULTS

Net Sales: 510.8 million euros, up 17.6% as reported and +6.8% on a comparative basis*

• o Consumer business up 7.4% on a comparative basis
• o BIC Graphic up 2.4% on a comparative basis
• Normalized* IFO: 101.8 million euros, up 39.4%
• o Normalized IFO margin: 19.9% (vs. 16.8% for Q1 2014)
• Net Income Group Share: 77.2 million euros, up 54.2%
• o EPS Group Share: 1.64 euros, up 53.3%

Q1 2015 Key operational figures

	Net Sales growth on a comparative basis*	Normalized IFO margin*
Group	+6.8%	19.9%
Consumer business	+7.4%	23.6%
 Stationery	+1.8%	13.6%
 Lighters	+9.7%	37.6%
 Shavers	+14.7%	21.3%
BIC Graphic	+2.4%	-6.7%

Commenting on BIC Group results, Mario Guevara, Chief Executive Officer, said: "We delivered good Q1 2015 results, with solid sales performance across all geographies and an improvement in profitability.

Our consumer business posted robust organic growth in Lighters and Shavers, benefiting from distribution gains and new product launches. BIC Graphic confirmed positive sales momentum in an ever changing environment.

These first three months reinforce our confidence to achieve our full year 2015 objectives."

Full Year 2015 Outlook

In 2015, we expect Group Net Sales to grow between 4% and 5% on a comparative basis. Excluding major currency fluctuations, Consumer Business Normalized IFO margin is expected to be consistent with 2014's. BIC Graphic Normalized IFO margin is expected to improve.

Unaudited figures

* See glossary page 11

	FIRST QUARTER
In million euros See glossary page 11	2014*	2015	Change as reported	Change at constant currency	Change at comp. basis
		GROUP
Net Sales	434.2	510.8	+17.6%	+6.2%	+6.8%
Gross Profit	213.3	262.3	+23.0%
Normalized Income From Operations	73.0	101.8	+39.4%
Normalized IFO margin	16.8%	19.9%
Income From Operations	72.9	97.6	+33.7%
IFO margin	16.8%	19.1%
Net Income Group Share	50.1	77.2	+54.2%
Earnings Per Share Group Share (in euros)	1.07	1.64	+53.3%
		BY CATEGORY
Stationery
Net Sales	144.0	157.1	+9.1%	-0.2%	+1.8%
IFO	15.6	19.8
IFO margin	10.8%	12.6%
Normalized IFO margin	10.8%	13.6%
Lighters
Net Sales	133.6	163.5	+22.3%	+9.7%	+9.7%
IFO	48.9	61.0
IFO margin	36.6%	37.3%
Normalized IFO margin	36.6%	37.6%
Shavers
Net Sales IFO	88.9 15.5	112.4 21.4	+26.5%	+14.7%	+14.7%
IFO margin	17.4%	19.0%
Normalized IFO margin	17.4%	21.3%
Other Products
Net Sales	16.1	16.8	+4.1%	-1.6%	-1.6%
Total Consumer business
Net Sales	382.6	449.7	+17.6%	+6.7%	+7.4%
IFO	76.7	101.7
IFO margin	20.1%	22.6%
Normalized IFO margin	20.1%	23.6%
BIC Graphic
Net Sales	51.7	61.1	+18.3%	+2.4%	+2.4%
IFO	-3.8	-4.1
IFO margin	-7.3%	-6.7%
Normalized IFO margin	-7.2%	-6.7%

*: restated from IFRIC 21

GROUP OPERATIONAL TRENDS

Net Sales

For the first quarter 2015, Net Sales were 510.8 million euros up 17.6% as reported, +6.2% at constant currency, and +6.8% on a comparative basis. The strong positive impact of currency fluctuations (+11.4%) is mainly due to the strength of the USD versus the EUR.

• Consumer business grew 7.4% on a comparative basis with a good performance across all geographies (Europe +8.0%, North America +11.0%, Developing Markets +3.9%).
• BIC Graphic Net Sales increased 2.4% on a comparative basis.

Gross Profit margin

Q1 2015 Gross Profit margin increased 2.3 points to 51.4% of sales versus 49.1% in 2014, benefiting from favorable FX and raw material impacts.

Income From Operations and Normalized Income From Operations

Q1 2015 Normalized IFO was 101.8 million euros (19.9% normalized IFO margin). Consumer business normalized IFO margin was 23.6%, an increase of 3.5 points notably driven by higher Gross Profit. BIC Graphic normalized IFO margin increased 0.5 point to -6.7%.

The key components of the change in Normalized IFO margin were:

In points	Q1 2014 vs. 2013	Q1 2015 vs. 2014
 Change in Gross Profit margin	+1.5	+2.3
 Brand support	+0.6	+0.2
 OPEX and other expenses	-0.3	+0.6
Cello Pens consolidation impact on Normalized IFO	+0.2	-
Total impact	+2.0	+3.1

Non-recurring items

In million euros	Q1 2014	Q1 2015
Income From Operations	72.9	97.6
As % of Net Sales	16.8%	19.1%
Restructuring costs related primarily to distribution reorganization in the Middle East and Africa regions	+0.1	+4.2
Normalized IFO	73.0	101.8
As % of Net Sales	16.8%	19.9%

Full Year Net Income and EPS

Income before tax increased 48.1% as reported to 110.3 million euros. Net finance revenue increased to 12.7 million euros compared to 1.5 million euros in 2014 due to the favorable revaluation of financial assets denominated in USD.

Net income Group Share was 77.2 million euros, a 54.2% increase as reported. The tax rate was 30.0%.

EPS Group share is 1.64 euros compared to 1.07 euros in Q1 2014, up 53.3%. Normalized EPS Group share increased 58.9% to 1.70 euros compared to 1.07 euros in Q1 2014.

Net cash position

At the end of March 2015, the net cash position was 398.2 million euros of which -87.3 million euros of Cello Pens put option valuation.

	2014	2015
Net Cash position at the beginning of the period (December)	196.7	320.2
 Net cash from operating activities	+38.3	+87.2
Of which operating cash flow o	+78.2	+142.3
Of which change in working capital and others o	-39.9	-55.1
CAPEX 	-22.0	-23.7
Cash received from the exercise of stock options  and liquidity contract	+8.8	+6.2
Others 	+4.3	+8.3
Net Cash position at the end of the period (March)	226.1	398.2

Evolution of Net Cash Position (in million euros)

The net cash from operating activities was +87.2 million euros with +142.3 million euros in cash flow from operations and a change in working capital of -55.1 million euros impacted by the increase in inventories in line with expected sales activity for the balance of the year.

Shareholders' remuneration

2.85 euros ordinary dividend per share will be proposed at the Annual Shareholders' Meeting on May 6 2015.

CONSUMER CATEGORIES

Stationery

Q1 2015 Stationery Net Sales increased 9.1% as reported and +1.8% on a comparative basis.

Developed markets

• In Europe, Net Sales continued with the strong positive trend (high-single digit growth), driven by both Western and Eastern Europe.
• In North America, BIC maintained market share in an environment where Net Sales were slightly down due to the slow start in the Office Super Stores (market concentration driving store closing and stock rationalization) while our performance was good in other distribution channels.

Developing Markets

Q1 2015 Net Sales decreased low-single digit on a comparative basis.

• Latin America ended the quarter with double-digit growth. Back-to-school was good in the Southern hemisphere, with strong results and market share gains in Brazil.
• The decrease in Net Sales in the Middle-East and Africa was due to seasonal factors (very high comparative basis), while fundamentals remain positive.
• In India, the transition period continues to be challenging. Cello Pens Net Sales declined, due mainly to manufacturing bottlenecks which negatively impacted the fulfillment of customer orders.

Q1 2015 Stationery normalized IFO margin was 13.6% compared to 10.8% in 2014, as a result of favorable fixed costs absorption as well as positive effect of raw materials and FX on Gross Profit.

Lighters

Q1 2015 Lighters Net Sales increased 22.3% as reported and +9.7% on a comparative basis.

Developed markets

• In Europe, Net Sales increased high-single digit. The growth was driven by distribution gains in Western Europe and a strong performance in Eastern Europe.
• In North America, Net Sales increased low-double digit, reflecting both market share gains and buy-in ahead of price adjustment implemented as of April 1, 2015.

Developing Markets

Q1 2015 Net Sales increased high-single digit.

• In Latin America, Net Sales grew mid-single digit, with good performance in Mexico.
• The Middle-East, Africa and Asia performance was notably impelled by distribution gains in Asia (convenient store channel).

Q1 2015 Lighters Normalized IFO was 37.6% compared to 36.6% in 2014. This improvement is due to strong Net Sales growth and positive raw material impact.

Shavers

Q1 2015 Shavers Net Sales increased 26.5% as reported and +14.7% on a comparative basis.

Net sales increased double-digit in all our geographies.

Developed markets

• In Europe, Net Sales growth was driven by the sustained success of our core products such as BIC® 3 in France and BIC® Miss Soleil® in Eastern Europe and by our new shaver for men, BIC® Flex 3 Comfort.
• In North America, we continue to outperform both US and Canadian disposable markets. The solid Q1 sell-in performance benefited from the launch of new products – BIC® Flex 5 for men and BIC® Simply Soleil® Click for women – and the growth of our core products (BIC® Soleil and BIC® Hybrid 3).

Developing Markets

In Latin America, the performance was driven by the success of the BIC® Soleil® and BIC® 3 shavers. We also registered good momentum in the Middle-East and Africa thanks to our single, twin and triple-blade products.

Q1 2015 Shavers normalized IFO margin was 21.3% compared to 17.4% in 2014. The increase in margin was driven by strong Net Sales growth and lower brand support compared to last year.

Other Consumer Products

Q1 2015 Other Consumer Products Net Sales increased 4.1% as reported and decreased 1.6% on a comparative basis. BIC Sport Net Sales grew double-digit on a comparative basis.

Other Consumer Products Q1 2015 Normalized IFO was -0.7 million euros, including expenses related to the portable Fuel Cell project (sold in early April 2015) of 1.1 million euros compared to 2.2 million euros in 2014.

BIC GRAPHIC

Q1 2015 BIC Graphic Net Sales increased 18.3% as reported and 2.4% on a comparative basis.

BIC Graphic confirmed its sales recovery. In Europe, Q1 Net Sales were driven by an increase in writing instrument sales and new product launches. North America was weaker due to a poor end of season performance in the Calendar business while Hard Goods performed in line with expectations. Developing Markets continued to grow.

Q1 2015 Normalized IFO margin was -6.7% compared to -7.2% in 2014, notably reflecting an improvement in Gross Profit.

ACQUISITION - CAPEX - MISCELLANEOUS

FUEL CELL

On April 7, BIC Group announced that following the binding agreement signed on February 27, 2015, BIC's Portable Fuel Cell Technology has been sold to Intelligent Energy for 13 million U.S. dollars (approx. 12.0 million euros¹ ) at closing and 2 million U.S. dollars (approx. 1.8 million euros¹ ) in an escrow account at closing to be paid once transition services are completed. The transaction includes all assets (patents and related technology and know-how). The agreement includes a potential earn out up to 7 million U.S. dollars (approx. 6.5 million euros¹ ).

¹ 1.0830 USD = 1 EUR ECB reference rate at 02-APR-2015

BIC GROUP NET SALES CHANGE BY GEOGRAPHY

In million euros	Q1 2014	Q1 2015	Change
Total Group Net Sales	434.2	510.8
As reported			+17.6%
On a comparative basis			+6.8%
1 – Europe	111.4	117.6
As reported			+5.5%
On a comparative basis			+7.3%
2 – North America	169.4	220.9
As reported			+30.4%
On a comparative basis			+8.1%
3 – Developing Markets	153.4	172.3
As reported			+12.3%
On a comparative basis			+5.2%

IMPACT OF CHANGE IN PERIMETER AND CURRENCY FLUCTUATIONS

in %	Q1 2014	Q1 2015
Perimeter	+5.0	-0.6
Currencies	-8.2	+11.4
Of which USD	-1.5	+9.2
Of which BRL	-2.2	+0.1
Of which ARS	-2.0	+0.2
Of which INR	-	+0.9
Of which MXN	-0.4	+0.5
Of which Russia and Ukraine	-0.2	-0.5

IFO AND NORMALIZED IFO BY CATEGORY

		Income From Operations		Normalized Income From Operations
In million euros	Q1 2014	Q1 2015	Q1 2014	Q1 2015
Group	72.9	97.6	73.0	101.8
Consumer	76.7	101.7	76.7	106.0
Stationery	15.6	19.8	15.6	21.3
Lighters	48.9	61.0	48.9	61.4
Shavers	15.5	21.4	15.5	23.9
Others	-3.2	-0.5	-3.2	-0.7
BIC Graphic	-3.8	-4.1	-3.7	-4.1

In million euros	Q1 20141	Q1 2015	Change as reported	Change on a comp. basis
NET SALES	434.2	510.8	+17.6%	+6.8%
Cost of goods	220.9	248.5
GROSS PROFIT	213.3	262.3	+23.0%
Administrative & other operating expenses	140.4	164.7
INCOME FROM OPERATIONS (IFO)	72.9	97.6	+33.7%
Finance revenue/costs	+1.5	+12.7
INCOME BEFORE TAX	74.5	110.3	+48.1%
Income tax	-22.6	-33.1
Income from associates	-	-
GROUP NET INCOME	51.9	77.2	+48.8%
Non-controlling interest	-1.8	-
Net Income Group Share	50.1	77.2	+54.2%
EPS Group Share (in euros)	1.07	1.64	+53.3%
Total weighted number of shares outstanding adjusted for treasury shares	46,940,152	47,180,664

¹ Restated in accordance with IFRIC 21

CONDENSED BALANCE SHEET

In million euros
ASSETS	Mar. 20141	Mar. 2015
Non-current assets Current assets Of which cash & cash equivalents	1,003.7 1,296.9 276.3	1,146.3 1,548.8 443.7
TOTAL ASSETS	2,300.7	2,695.1
LIABILITIES & SHAREHOLDERS' EQUITY	Mar. 2014	Mar. 2015
Shareholders' equity Non-current liabilities Current liabilities	1,541.4 362.0 397.3	1,795.3 457.1 442.7
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	2,300.7	2,695.1

SHARE BUY-BACK PROGRAM

No share buy-back in Q1 2015.

CAPITAL AND VOTING RIGHTS, MARCH 31, 2015

As of March 31, 2015, the total number of issued shares of SOCIÉTÉ BIC is 48,051,695 shares, representing:

• 69,576,188 voting rights,
• 68,801,589 voting rights excluding shares without voting rights.

Total number of treasury shares held at the end of March 2015: 774,599.

1 Restated in accordance with IFRIC 21 and the Cello Pens goodwill finalization

GLOSSARY

• At constant currencies: Constant currency figures are calculated by translating the current year figures at prior year monthly average exchange rates.
• 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. All Net Sales category comments are made on a comparative basis.
• Normalized IFO: normalized means excluding non-recurring items.

SOCIETE BIC consolidated and statutory financial statements as of March 31, 2015 have been closed by the Board of Directors on April 21, 2015. A presentation related to this announcement is also available on BIC website (www.bicworld.com).

* * *

This document contains forward-looking statements. Although BIC believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. A description of the risks borne by BIC appears in the section, "Risk factors" in BIC's 2014 Registration Document filed with the French financial markets authority (AMF) on March 20 2015.

Contacts

Investor Relations: +33 1 45 19 52 26	Press Contacts
Sophie Palliez-Capian	Albane de La Tour d'Artaise
sophie.palliez@bicworld.com	albane.deLaTourDArtaise@bicworld.com
Marion Claës	Priscille Reneaume : +33 1 53 70 74 70
marion.claes@bicworld.com	preneaume@image7.fr
	Isabelle de Segonzac : +33 1 53 70 74 70 isegonzac@image7.fr

For more information, please consult the corporate website: www.bicworld.com

	2015 Agenda (all dates to be confirmed)
--	-----------------------------------------	--

2015 AGM	06 May 2015	Meeting – BIC Headquarters
2nd Quarter and 1st Half 2015 results	30 July 2015	Conference call
3rd Quarter 2015 results	21 October 2015	Conference call
FY 2015 results	17 February 2016	Meeting – BIC Headquarters

About BIC

BIC is a world leader in stationery, lighters, shavers and promotional products. For more than 60 years, BIC has honored the tradition of providing high-quality, affordable products to consumers everywhere. Through this unwavering dedication, BIC has become one of the most recognized brands in the world. BIC products are sold in more than 160 countries around the world. In 2014, BIC recorded Net Sales of 1,979.1 million euros. The Company is listed on "Euronext Paris" and is part of the SBF120 and CAC Mid 60 indexes. BIC is also part of the following SRI indexes: Carbon Disclosure Leadership Index (CDLI), FTSE4Good Europe, Euronext Vigeo Europe 120, Ethibel Sustainability Excellence Europe, STOXX ESG Leaders and Gaia Index.