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Clichy, Hauts-de-Seine, France, 2008/08/06 - BIC Group 1st Half 2008 net sales were 700.5 million euros, compared to 729.0 million euros in 2007, down -3.9% as reported and up +2.7% at constant currencies.
Foreign currency fluctuations had a negative impact of -6.6%, of which -5.0% was due to the decrease of the US dollar.
2nd Quarter net sales were 392.4 million euros, compared to 398.6 million euros in 2007, down -1.6% as reported and up +5.8% at constant currencies.
The 1st Half gross margin decreased -0.3 points to 49.0% of sales versus 49.3% in the 1st Half of 2007 with -0.6 points from foreign exchange. Price increases more than offset the impact of raw materials.
The 1st Half income from operations (IFO) decreased -19.6% as reported to 101.1 million euros and -13.4% at constant currencies, as a result of continued brand investment in all categories. The 1st Half 2008 IFO margin was 14.4% compared to 17.2% in the 1st Half of 2007.
In the 2nd Quarter, income from operations included the cost of 3.7 million euros related to the July 2008 closing of the Stypen stationery factory in France. Excluding this exceptional charge, the 1st Half 2008 IFO margin would have been 14.9%.
Income before tax decreased -19.0% as reported to 106.3 million euros. Finance revenues decreased -0.4 million euros and the 1st Half 2008 tax rate was consistent compared to the 1st Half of 2007 (33.6%).
1st Half 2008 Group net income was 70.6 million euros, a -18.5% decrease. Earnings per share (EPS) reached 1.45 euros in the 1st Half of 2008, compared to 1.76 euros in 1st Half of 2007, down -17.6%.
After the repurchase of shares and the payment of dividend, as of June 30, 2008, closing cash and cash equivalents were 79 million euros, compared to 199 million euros as of December 31, 2007 and 124 million euros as of June 30, 2007. The decrease in cash generation compared to the 1st Half of 2007 was due to lower income before tax (106.3 million euros in the 1st Half 2008 compared to 131.3 million euros in the 1st
Half 2007), higher capital expenditures (43 million euros in the 1st Half 2008 compared to 32 million euros in the 1st Half 2007) and an increase in the share repurchase program (17.3 million euros in the 1st Half 2008 compared to 3.3 million euros in the 1st Half 2007).
2nd Quarter Stationery net sales decreased -2.9% as reported and increased +4.7% at constant currencies.
1st Half net sales decreased -5.4% as reported and increased +1.7% at constant currencies.
The consumer business experienced high-single digit growth during the 2nd Quarter. For the 1st Half, sales grew mid-single digit.
Europe registered good 2008 back-to-school shipments, benefiting from the success of our new products such as Easy Clic™ fountain pen and Cristal® Clic. Latin America continued to perform well.
Despite a slight improvement during the 2nd Quarter, North America trends remained uncertain, although 1st Half year net sales increased slightly. In a difficult economic environment, we continued to be impacted by the slowdown of the office superstore retail channel.
Our promotional imprinted business (BIC Graphic) remained soft, with many customers putting their promotional expenses on hold. BIC Graphic USA continued to be impacted by the slowdown of the writing instrument segment. BIC Graphic Europe 1st Half sales decreased compared to last year.
The Stationery IFO margin reached 13.8% in the 1st Half of 2008, compared to 15.7% in the 1st Half of 2007, due to the decrease of the BIC Graphic IFO margin and the exceptional charge of 3.7 million euros related to the closing of the Stypen facility. Excluding this exceptional charge, the 1st Half IFO margin would have reached 14.9%
2nd Quarter Shaver net sales decreased -6.0% as reported and were up +1.0% at constant currencies. 1st Half 2008 net sales decreased -6.1% as reported, and increased +0.4% at constant currencies.
We faced an acceleration of new product launches in a market trending flat in the US and in key European countries since the beginning of 2008 (one-piece and refillable).
1st Half 2008 net sales were impacted by a negative base effect as the 1st Half of 2007 benefited from a strong “pipe-line” effect (in the 1st Half of 2007, sales at constant currencies were up +13%).
Our triple-blade portfolio accounted for 43% of our total one-piece shaver sales at the end of June 2008, compared to 41% a year ago.
Sales to the trade of the BIC® Soleil® System in Continental Europe and Canada and the BIC® Soleil® Shimmer in the US and in the UK proceeded according to our plan for this year. Despite a continued high level of competition (notably in refills), BIC® Soleil® System market share in the US at the end of June 2008 was in line with initial objectives (5% to 10% market share 24 months after the March 2007 launch).
The low 1st Half IFO margin of 0.1% was due to the support of the BIC® Soleil® brand in the US, the launch of BIC® Comfort 3 Action in Latin America and the negative impact of the USD/EUR exchange rate.
BIC (bicworld.com) is a world leader in stationery, lighters and shavers. For more than 50 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 2007, BIC recorded net sales of 1,456.1 million euros. The Company
is listed on “Euronext Paris”, the SBF120 and CAC Mid 100 indexes. BIC is also part of the FTSE4Good Europe Index.
Investor Relations contacts: +33 1 45 19 52 26
Sophie Palliez-Capian, sophie.palliez[.]bicworld.com / Carole Richon, carole.richon[.]bicworld.com.