Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bic (BICEF, Financial) upgraded its full-year adjusted EBIT margin outlook for 2024, demonstrating strong financial performance.
- The company saw a strong sequential improvement in North America net sales, particularly in the US lighter business.
- Bic (BICEF) gained market share during the back-to-school season in key geographies, despite challenging market conditions.
- The Blade Excellence division achieved a significant adjusted EBIT margin of 28% in Q3, driven by positive pricing and mix.
- The company reported a strong free cash flow generation of EUR196 million for the first nine months of 2024.
Negative Points
- The challenging consumer environment negatively impacted overall market trends, affecting Bic (BICEF)'s growth in Q3.
- The skin, creative, and digital writing businesses underperformed, contributing to a decline in the human expression division.
- Market trends during the back-to-school season were challenging, leading to lower replenishment orders from retailers.
- The US lighter market remains difficult, with a 5.1% decline in value year-to-date, despite some stabilization.
- Currency fluctuations had a negative impact on net sales, contributing to a 3.7% decrease in reported net sales for Q3.
Q & A Highlights
Q: Given that you will likely achieve your 2025 targets a year ahead, what kind of margin territory can we expect for 2025, and what will be the main margin enhancers? Also, how is your marketing strategy evolving, and what growth trajectory can we expect for Q4 in the Human Expression division?
A: Our guidance is approaching a 15.5% margin, not necessarily hitting it. We will provide any updates for 2025 targets at year-end. For Q4, we expect continued improvement in North America and growth in Brazil, Europe, and the Middle East and Africa, particularly during back-to-school seasons. Regarding marketing, we've pivoted to more impactful and edgy campaigns, focusing on launch years and consolidating years to optimize brand support.
Q: Can you comment on the impact of Bic Blade Tech on the adjusted EBIT margin and the energy cost savings in the Shaver division in Greece? Also, do you see signs of stabilization in the US lighter market?
A: Bic Blade Tech was not a significant contributor to the Q3 margin. The Blade Excellence margin was high due to favorable gross profit margin drivers and lower brand support. Energy cost savings in Greece contributed but were not major drivers. In the US lighter market, we saw improvement in the non-measured market and stabilization of decline in the measured market, with expected sequential improvement in Q4.
Q: How did you manage to gain market share while decreasing brand support by 100 basis points?
A: We've evolved our marketing strategy to be more impactful and closer to the consumer, with cyclical levels of investment based on launch years. This approach allows us to gain awareness and drive repeat purchases effectively, even with reduced brand support.
Q: What are the main elements driving growth in the Human Expression division for Q4?
A: Growth in Q4 will be driven by continued improvement in North America and strong performance in Brazil and the Middle East and Africa, particularly during back-to-school seasons in these regions.
Q: Could you provide more details on the sequential improvement in the US lighter market?
A: In Q3, we saw improvement in the non-measured market, positively impacting our performance. The measured market showed stabilization of decline, and we expect further sequential improvement in Q4, although the market remains challenging.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
