Research, Charts & Company Announcements
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.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
Positive momentum on trading and cash
10 Jan 17
Trading for the four months to end December continued the positive trend of the first two to October. We understand that both constant currency trading and exchange rates have been favourable. Cash has also grown encouragingly, reflecting net receipts from the strong sales in late FY16 as well as early FY17. Recent softness in the shares represents excellent medium-term value for a niche market leader with positive growth.
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.