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Research Tree provides access to ongoing research coverage, media content and regulatory news on SOCIETE BIC SA. We currently have 6 research reports from 1 professional analysts.
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SOCIETE BIC SA
SOCIETE BIC SA
Stiff competition in North America hinders growth
17 Nov 16
Bic released Q3 FY16 results below our estimates as well as market consensus. The revenue at CER came in at +3.8% (vs AV’s estimate: +4.9%), on the back of a sluggish performance in the consumers business (+3.2% vs AV’s estimate: +5.5%; accounts for c.85% of Q3 16 revenue). Within the segment, the biggest disappointment was the shavers business (+1.4% vs AV’s estimate: +8.5%; accounts for c.20% of Q3 16 revenue), pinned down by a 4.6% decline in the US wet shave industry (5.8% decline in the one-piece segment; ytd September 2016). Revenue growth in the stationary business also slowed to +2.4% (vs AV’s estimate: +4.0%; accounts for c.33% of Q3 16 revenue) as intense competition depressed growth in the North American region (low single-digit during the quarter). However, the lighters business showed consistent performance (+6.5% vs AV’s estimate: +6.0%; accounts for c.30% of Q3 16 revenue), driven by robust growth in Western Europe (largely due to increased brand support in Germany and Austria) and Eastern Europe (gains from a better distribution network). Revenue gained momentum in the Bic Graphic segment (+7.2% vs AV’s estimate: +1.0%; accounts for 15% of Q3 16 revenue), helped by favourable timing in the calendar business (benefiting from early shipments compared to last year). Geographically, sales grew 9.2% in the developing markets (vs Q3 15: +9.0%; accounts for c.28% of Q3 16 revenue), followed by Europe (+2.6% vs Q3 15: +3.5%; accounts for c.24% of Q3 16 revenue) and North America (+1.3% vs Q3 15: +2.9%; accounts for c.48% of Q3 16 revenue). Total revenue increased by 2.1% (vs AV’s estimate: +3.9%) on the back of FX headwinds (-1.7% vs AV’s estimate: -1.0%; depreciation of LatAm currencies against the euro). The operating margin came in at 18.6% (vs AV’s estimate: 18.9%), mainly due to the higher than expected investment in brand support/R&D in the stationery business (3.9% vs AV’s estimate: 8.7%). Moreover, the unfavourable fair value adjustments of US dollar-denominated financial assets lowered the net finance income (€1.2m vs AV’s estimate: €2.9m), further depressing the EPS by 3.1% (vs AV’s estimate: +2.5%). Management has maintained its FY16 guidance at mid single-digit revenue growth at CER and a 100-150bp decline in the operating profit.
Disappointing results but business model remains strong
30 Sep 16
Bic posted disappointing H1 FY16 results vs our estimates and slightly below market consensus. In Q2 16, net revenue increased by 4.2% at CER (vs Q2 15: +5.2%), largely due to a slowdown in the consumer business (+4.7% vs Q2 15: +5.6%; accounts for c.89% of group revenue). Within the segment, the growth in the lighters business decelerated to +5.4% (vs Q2 15: +9.3%; accounts for c.29% of group revenue), on the back of the high prior year comparable in North America (Q2 15 benefited as customers bought ahead of price adjustments). While the shavers business showcased consistent performance (+9.0% vs Q2 15: +9.5%; accounts for c.20% of group revenue) driven by the success of its value-added products in Europe and North America, the positive momentum continued in the Stationery division (+4.0% vs Q2 15: +2.5%; accounts for 37% of Q2 16 sales) led by a strong back-to-school season across geographies. Growth once again slumped in the Bic Graphic segment (+0.3% vs Q2 15: +1.8%; accounts for c.11% of Q2 16 sales). Geographically, sales grew 8.7% in Europe (vs Q1 15: +5.0%; accounts for c.28% of group revenue) followed by developing markets (+3.3% vs Q2 15: +8.0%; accounts for c.25% of group revenue) and North America (+2.3% vs Q2 15: +4.9%; accounts for c.47% of group revenue). The total reported revenue slumped by -1.1% (vs Q2 15: +16.6%; our estimate: +7.3%) due to strong currency headwinds (-5.3% vs Q2 15: +11.4%; particularly due to the depreciation of Latin American currencies against the euro). In H1 16, the reported revenue was flat (-0.1% vs H1 15: +17.1%; our estimate: +4.6%) while the underlying operating margin (excluding the impact of the special employee bonus) weakened to 19.4% (vs H1 15: 21.1%), largely attributable to the planned investment in brand support and R&D in the shavers (margin down to 13.4% vs H1 15: 20.2%) and stationery businesses (margin down to 14.1% vs H1 15: 15.7%). Furthermore, the unfavourable fair value adjustments of US dollar denominated financial assets in H1 16 led to a net finance expense of -€3.4m (vs H1 15: +€11.8m), lowering the EPS by 20.3% (vs H1 15: +29.4%; our estimate: -10.9%). Management has maintained its FY16 guidance of mid single-digit growth in sales (on a comparable basis) and a 100-150bp decline in underlying operating profit due to accelerated brand support and R&D investments.
Decreasing operating margin due to investments in R&D and brand support
28 Apr 16
Q1 sales grew 6.9% at CER and 1.3% as reported. Normalised income from operation decreased by 25%, including the impact of the special employee bonus and by 13.9% excluding this impact. The net cash position was €387.1m, compared to €448m at end FY15.
High margins and increased investment
19 Feb 16
# Q4 sales rose 7.3% lfl (+8.9% reported, respectively +6.2% and +13.3% in FY15). Q4 normalised operating income decreased slightly (-2.3% but + 16.7% in FY15). FY15 net cash from operating activities grew by 5.2%. a €3.4 ordinary dividend (+19%) and a €2.5 exceptional dividend was proposed. # Mario Guevara, CEO for 10 years and in the group for 25 years, is to retire after the next AGM. Bruno Bich will assume both Chairman and CEO functions until he finds a CEO successor.
Operating margin improvement in the first nine months
22 Oct 15
Q3 sales rose 4.8% lfl (+10.4% reported and respectively +5.8% and +14.8% for 9 months). The normalised operating income grew slightly less rapidly (+10%) and the group’s net income by 14.6%. Net cash flow from operations increased by 7.9% over the first nine months.
Civil: No Reflation here, only a Race to the Bottom
05 Dec 16
The strengthening of the US dollar since the election of Trump is adding to the headwinds in the airline industry: over-capacity and falling yields. The airline industry, which is expected to generate $8bn of free cashflow in 2016 on $600bn of capital employed, needs to spend $120bn annually to maintain current delivery rates. Deferrals and down-gauging is now spreading to narrow-bodies as more and more airlines review their capex plans. We expect acceleration of seat densification as airlines look to sweat their existing fleets. We now expect deliveries to fall by 5% over 2015-18 as opposed to our previous forecast of flat growth. Aftermarket may also suffer as seat densification helps cut number of flights. This leads to reduction in our EPS forecasts for key Civil Aerospace names: Rolls-Royce, Meggitt, GKN and Senior.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
N+1 Singer - MJ Gleeson - Strong demand underpins full year expectations
08 Dec 16
A positive AGM statement confirms strong demand at Gleeson Homes (queues forming at new sites) and progress on all key metrics. Net reservations are up 20% and the division is now active on 50 sites, up from 48 at the year end. The land pipeline has extended further and now stands at 9,310 plots, providing visibility for many years. A new regional office is planned for Nottingham, in line with the strategy to replicate the unique Gleeson model in adjacent regions. Gleeson Strategic Land also continues to experience strong demand and will have another good year. Full year guidance is reiterated with growth expected to accelerate in H2. Gleeson is in excellent shape with a very positive medium term growth outlook, which, in our view, is not reflected in the current share price.
Short term blip provides an attractive entry point
04 Aug 16
Portmeirion Group has reported their interim results this morning which are inline with our revised estimates. The company has had a mixed first half year but should be well positioned to rectify underlying issues in South Korea and India and hit our full-year numbers. The recent profit warning should be viewed as a blip and should not overshadow the company’s fantastic track record.