BIC in 2011
GROUP PRESENTATION FOR INVESTORS
March 2011
Agenda (1/2)
Cello Pens
28
4
India's writing instrument market overview
29
History and definition
53
BIC Today
5
India's pen market
30
A large and growing business
54
Markets and categories
6
A cost effective advertising medium
56
International footprint
7
The Pocket Lighter market
A structured BUT fragmented industry
58
Capital Ownership
8
Overview of safety regulation around the world 36
BIC APP
62
Strategic assets
9
63
10
38
BIC APP Highlights and key figures
Key Strengths
Long term view of safety regulation impact on lighter sales
2010 Key Figures
66
11
2010 Key Figures
39
BIC APP Today
67
Use of cash policy
12
Strategy
40
Return to shareholders
13
N°1 branded lighter manufacturer
41
2011 Group perspectives
14
Toward more value-added products
42
Measure…
69
BIC in 2011
15
Lighter category in 2011
43
… to eco-design
70
Ambitions for the next 3 to 5 years
18
French Ecolabel NF Environnement
71
An exemple of ecodesign
72
Glossay
73
2011 Agenda
74
Contact
75
Group Overview History
Manufacturing network
Stationery The consumer stationery market
20
2010 Key Figures
23
Strategy
24
"Quality @ a BIC price"
25
BIC positions in major market segments
26
Stationery category in 2011
27
Lighters 32
Shavers The shaver market
45
2010 Key Figures
47
Strategy
48
Quality and innovation at a reasonable price
49
3&4 Blades one-piece Market shares
50
Shaver category in 2011
51
Advertising & Promotional Products
Sustainable Development
2
Group Overview
History at a glance
1950…Marcel Bich launches the BIC® Cristal, the first high quality ballpoint pen at an affordable price.
1954…The group starts its international expansion in Europe (Italy, UK, …), Latin America (Brazil) and North America (USA)
1969…first step in Advertising & Promotional Writing Instrument (BIC Graphic) 1973 : First BIC lighter 1974 : First BIC one piece shaver ®
®
Since the beginning, on-going product development (correction, luxury fountain pen, school fountain pen, imprinted promotional bags, …) and geographical expansion (Latin America, Eastern and Central Europe, …)
4
2010 Normalized Income From Operations
9,313 employees 22 factories on 4 continents
2010 NET SALES
BIC today
Every day,
24 million BIC stationery products 5 million BIC lighters 10 million BIC shavers 5 million BIC Advertising and
€1,831.5 m
2005 – 2010 growth average on a comparative basis: +4.8%
€314.9
2005 – 2010 Average Normalized IFO* margin: 16.0%
€4.29
2005 – 2010 EPS* CAGR: +5.5%
®
2010 EPS
®
®
Promotional Products are bought in
160 countries
2010Free Cash Flow
®
€205.0m
2010 FCF / net sales: 11.2%
5
Markets
FY 2010 sales breakdown by categories
FY 2010 sales breakdown by markets
Other consumer Products
Advertising & Promotion
Advertising & Promotional Products
One-piece shavers
N°2 in Europe & USA
20%
80%
5% 17%
26%
Consumer Goods
N°2 worldwide
20% 20%
32%
Lighters Stationery
N°1 worldwide
N°2 worldwide
6
International footprint 2010 sales breakdown by geography 1950 : France Europe Developing Markets
1954 : Italy 1956 : Brazil 1957 : “Sterling” zone (UK, Australia…)
29% 29%
29% 29%
1958 : USA, Africa, Middle East 1959 : Scandinavian countries 1965 : Japan, Mexico
42% 42%
1995 : Eastern and Central Europe 1997 : Expansion in Asia
North America
2009 : India (partnership with Cello)
7
Capital ownership As of February 15, 2011*
Bich Family 42,7% (55% voting rights)
Public 39,6%
First Eagle LLC 2,9%
Fondation de France 3,3%
Silchester Blackrock International Treasury stocks Investors 5,0% 1,0% 5,5%
*Figures calculated from the latest available information.
8
Strategic assets Quality and Value product positioning A large and diversified product portfolio aimed at answering consumers’ needs: Innovation: 21% of net sales through new products in 2010 Recognised brands o Historical international footprint o Present in more than 160 countries o 29% of 2010 net sales in developing countries An international, complete and solid distribution network On-going and sustained productivity improvement policy. A solid balance sheet and a clear use of cash strategy
9
Key strengths
Products
Brand…S
Worldwide leadership
N°2 Simple Reliable Inventive At the right Price
Stationery cc.10% market share
N°1 Lighters 43% market share**
222.4€ Free Cash Flow after Acquisitions in 2010
N°2
Shavers 20% market share* of one-piece in USA and Europe
N°2 *one-piece shavers in major markets (US, Europe, Latin America) **: Outside Asia
Balance Sheet
Advertising & Promotional Products
397.1 M€ Net Cash Position at the end of 2010 10
Manufacturing network
11
Use of cash policy 2006
1 Focus on Strategic acquisitions
2009
2009
APP
Cello Pens
- Promotional products - Europe
- Writing Instruments - India
Norwood Promotional Products - USA
2007
PIMACO
2009
Atchison Products - Promotional products - USA
-Adhesive labels -Brazil
Continue to look for strategic acquisitions, although focus will be to succeed in leveraging recent moves
2
In euros
1,90 1,30
Dividend
Regular dividend per share
1,40
1,35
0,90 1,00
44% payout*
1,00
in 2010 based on 2004
2005
2006
Dividend per share
3
1,35
1,15
2007
2008
2009
2010
2010 results
Special Dividend
In million euros
71,6 49,3
39,9
Share Buy-back
25,7 1,9
2005 *: based on ordinary dividend
42
2006
2007
2008
2009
2010 12
Return to shareholders
In million euros
Free cash flow*
Share buyback
Ordinary dividend
Exceptional dividend
Acquisition
182
308
3 27 31
63
1
13 49
43 161
160
58 129 86
71
49
1
179 64
145 66
99 72
68 49
40
26 2
2003
2004
2005
2006
2007
2008
2009
*: Cash from operating activities – cash from investing activities (before acquisition) 13
2011 Group perspectives
Stationery
No significant recovery anticipated for 2011 in developed markets, with on- going negative impact of the high level on unemployment rates on Office Products Channel
Consumer Business
Continued strong growth in developing markets
Lighters
Flat to slight decline in mature markets (evolution of cigarette consumption and regulation) Continued growth in developing markets
Low-single digit growth is anticipated in developed markets
Shavers
Strong brand support activity likely to continue in the refillable segment (tough competition between Gillette and Energizer) In the one-piece segment, no major new competitive launches have been announced, suggesting promotional pressure may be the main focus for the next year
Strong growth in developing countries Consumer trade-up to 3-blade products is expected to continue
Advertising & Promotional Products
As in 2010, sales performance of the Advertising and Promotional Products industry in North America and Europe will be notably impacted by the level of visibility companies will have on global economic trends 14
BIC in 2011 BIC APP integration plan on track Benefits from the 2009 restructuring Increase in brand support Enhanced positions in fast growing markets Market shares gained in all consumer business categories
Leverage 2010 achievements… 15
BIC in 2011
…to continue to grow in fast growing markets…
Eastern Europe
Latin America
Africa
2% of total net sales in 2010
MiddleEast
Oceania & Asia
“Developing markets” 29% of total net sales in 2010 16
BIC in 2011
…and generate profitable growth Consumer Business • Continue to strengthen our position through distribution and market share gains • Successfully launch innovative new products
Advertising and Promotional Business • Finalize BIC APP integration • Deliver improved normalized IFO margin despite low sales growth
Protect Gross margin from raw material prices volatility (improvement of manufacturing efficiency and reasonable targeted prices adjustments when appropriates)
Invest in innovation and brand support
17
Ambitions for the next 3 to 5 years Grow faster than our markets thanks to our Quality & Price positioning
Continue to improve our operational efficiency
Continue to monitor working capital Be ready to seize external growth opportunities through bolt-on and strategic acquisitions, while maintaining a sound balance sheet
Annual Organic Growth*
Normalized IFO margin
Consumer business
Between 2% and 4%
Between 15% and 18%
Advertising & Promotional Products
Between 5% et 10%
Between 8% et 12%
*: net sales growth at constant currencies and bolt-on acquisitions
18
Stationery Consumer
The consumer stationery market (1/3) Total worldwide consumer stationery market = 6.7 billion Euros in 2009 Key Geographical Markets (breakdown in value)
Glue
Rest of the World Europe India
Breakdown by main segment (in value)
13% 13%
Correction
Coloring
18% 18%
2% 7% 7%2% 14% 14%
7% 7%
China 20% 20%
Markers 14% 14%
Japan
6% 6%
56% 56%
16% 16%
22% 22%
6% 6%
USA
South and Latin America
All market shares are based on 2009 estimated suppliers net sales figures
Mechanical Pencils
Pens (Ball Pens: 24% / Rollers: 5%)
20
The consumer stationery market (2/3) 2006-2007 market trends by geographies (in value) Market growth
14%
12%
China
10%
8% India
Eastern Europe
6%
Latin America
4% Western Europe
2%
-1%
Japan
North America & Oceania Size in million euros
-3%
BIC Estimate & Published Research - 2007
21
The consumer stationery market (3/3) Total worldwide consumer stationery market = 6.7 billion Euros in 2009 Breakdown by main supplier (in value)
BIC cc.10%
Pilot 6%
New ell Rubbermaid 13% Mitsubishi: 3% Pentel: 3% Crayola: 3% Zebra: 3% Schwan-Stabilo: 2% Sakura: 1%
BIC Estimate & Published Research – 2009 – Manufacturers figures –Pens, pencils, markers, coloring, correction
Others 57%
22
2010 BIC Stationery Consumer Key Figures
2010
YoY Change
YoY Change at constant currencies*
Net Sales
580.7
+14.0%
+6.7%
Income from Operations
69.3
+59.9%
BIC Group In million euros
Normalized* IFO Margin
* see glossary
12.1%
23
Stationery Consumer – BIC Strategy Generate profitable growth through
increasing distribution and visibility supporting classic products by constantly improving their quality fostering innovation by launching new products with higher value added further developing our presence in fast growing countries permanently listening consumers to bring them new and improved products
24
Stationery Consumer: “Quality @ a BIC price” More than 3m outlets worldwide
Historical and close relationship with the trade
Iconic products
Strong brands
Worldwide leadership positions
Innovation Strong positions in major market segments
Consumer trust for more than 50 years 24 million BIC stationery products bought every day worldwide
25
Stationery Consumer BIC positions in major market segments*
N°1 in Europe (18% market share)
N°1 in Ball Pen (19% market share)
N°1 in Mechanical Pencils (17% market share)
N° 2 worldwide cc. 10% market share N°2 in the U.S. (14% market share)
N°2 in Marking (8% market share)
N°1 in Correction (19% market share)
* BIC Estimates– 2009
N°1 in Latin America (22% market share)
26
BIC Stationery category in 2011 Innovation…Quality…Price
27
Cello Pens
PENS
The leading Indian writing instrument brand
>35% share of the
Appr. 5,000 employees
Indian Pen market
90% unaided
1 bn pens per year
awareness
(2 industrial sites )
The widest distribution network in India
Strong growth - High Profitability Approximately 30% FY07-09 EBIT margin
Cello Pens are distributed nationwide through 731,000 outlets all across India a network of 42 superstockists and 4,200 distributors
Revenue (INR Million) 4,100
2,300
12% 02-03
sC ale s s ear 5y
R AG
07-08
28
India’s writing instrument market overview Total writing instruments: ~ INR 28billion (440 million Euros)
Total stationery: ~ INR 90billion (1.4 billion Euros)
Pencils
Pens
Writing Instruments
63% 63% 31% 31%
79% 79%
15% 15% 6% 6%
6% 6% Others Paper and Notebooks
63.6 INR = 1 euro (January 20, 2009)
Others
Mid to high-single digit annual growth
29
India’s writing instrument market overview: focus on pens Total pen market: ~ INR 22billion Low but increasing per capita pen consumption
Highly fragmented distribution network Modern Retail
cc. 17
General Stores
24% 24%
5% 5% Stationery 25% 25% Shop
cc.3 India
US
Retail price point
12%
16%
Traditional "Mom &Pop" stores
46% 46%
A market leader with market share twice the nearest competitor
10% Lexi, Flair, Linc, Add Pens, Montex, GM Pens, Luxor, Today’s, Rotomac
< 5 INR
37%
PENS
INR 5-10 INR 10-15 > 15 INR
63%
62% Cello Pens Estimate & Published Research – 2007 – Retail value
30
Lighters
The pocket lighter market Volumes vs. value
Value: 3.1 billion euros
Volumes: 10.6 billion units
29% 29%
World Excl. Asia
Asia 71% 71%
35% 35%
65% 65%
BIC estimates for 2009 – Retail prices 32
The pocket lighter market Flint vs. electronic
Value: 3.1 billion euros
Volumes: 10.6 billion units
World excl. Asia Flint
22% 22%
25% 25%
World excl. Asia Electronic
7% 7%
28% 28%
4% 4%
55% 55% Asia Electronic
49% 49%
10% 10%
Asia Flint
BIC estimates for 2009 – Retail prices 33
The pocket lighter market Key players outside Asia
Market shares in value outside Asia
Market shares in volumes outside Asia
15% 15%
Asian manufacturers
18% 18% 39% 39%
51% 51%
BIC
34% 34%
Other branded lighters
BIC estimates for 2009 – Retail prices
43% 43%
34
The pocket lighter market Retail Price positioning
Index compared to pocket lighter average retail price
BIC Lighter
1.0
1.0
0.9
0.5
USA
Asian Lighter 1.4
1.3
1.2
Average
1.0
0.5
Europe
Latin America
BIC estimates for 2009 – Base = Average Retail Selling Prices 35
Overview of safety regulation around the world - ISO 9994*
2000
1989 2006
H1 2011 2005 2004
1997 2003
1998
2010 2007
2003 2003
*: mandatory
2006
36
Overview of safety regulation around the world - Child Resistant*
1995 2006 H2 2011 1994
1992
1997
1999
*: mandatory 37
V alue sales
Long term view of safety regulation impact on lighter sales
Africa
Asia
Europe
Latin America*
North America* ISO 9994 conform lighters
Low quality lighters
Matches
Time scale
*: real enforcement of the regulation 38
2010 BIC Lighter Key Figures
2010
YoY Change
YoY Change at constant currencies*
Net Sales
480.8
+20.5%
+11.6%
Income from Operations
173.6
+35.8%
Normalized IFO Margin
36.2%
BIC Group In million euros
* see glossary
39
BIC Lighter – Strategy
strengthen its position as the only lighter brand with worldwide strengths
by promoting the extension and the enforcement of international safety standards by accelerating the development of value-added products (sleeves, cases and utility lighters).
40
BIC Lighter N°1 branded lighter manufacturer Consumer preference
Safety – Quality – Prevention & education
Brand awareness US Disposable Pocket Lighter
BIC
Competitor A
86%
vs. market average
10%
More than 50 automatic quality controls Competitor B
8%
Market leadership Estimated market shares (in value)
> 60%
Integrated distribution network > 60%
43%
• Dedicated Customer Support Teams in all countries
March 2011
Agenda (1/2)
Cello Pens
28
4
India's writing instrument market overview
29
History and definition
53
BIC Today
5
India's pen market
30
A large and growing business
54
Markets and categories
6
A cost effective advertising medium
56
International footprint
7
The Pocket Lighter market
A structured BUT fragmented industry
58
Capital Ownership
8
Overview of safety regulation around the world 36
BIC APP
62
Strategic assets
9
63
10
38
BIC APP Highlights and key figures
Key Strengths
Long term view of safety regulation impact on lighter sales
2010 Key Figures
66
11
2010 Key Figures
39
BIC APP Today
67
Use of cash policy
12
Strategy
40
Return to shareholders
13
N°1 branded lighter manufacturer
41
2011 Group perspectives
14
Toward more value-added products
42
Measure…
69
BIC in 2011
15
Lighter category in 2011
43
… to eco-design
70
Ambitions for the next 3 to 5 years
18
French Ecolabel NF Environnement
71
An exemple of ecodesign
72
Glossay
73
2011 Agenda
74
Contact
75
Group Overview History
Manufacturing network
Stationery The consumer stationery market
20
2010 Key Figures
23
Strategy
24
"Quality @ a BIC price"
25
BIC positions in major market segments
26
Stationery category in 2011
27
Lighters 32
Shavers The shaver market
45
2010 Key Figures
47
Strategy
48
Quality and innovation at a reasonable price
49
3&4 Blades one-piece Market shares
50
Shaver category in 2011
51
Advertising & Promotional Products
Sustainable Development
2
Group Overview
History at a glance
1950…Marcel Bich launches the BIC® Cristal, the first high quality ballpoint pen at an affordable price.
1954…The group starts its international expansion in Europe (Italy, UK, …), Latin America (Brazil) and North America (USA)
1969…first step in Advertising & Promotional Writing Instrument (BIC Graphic) 1973 : First BIC lighter 1974 : First BIC one piece shaver ®
®
Since the beginning, on-going product development (correction, luxury fountain pen, school fountain pen, imprinted promotional bags, …) and geographical expansion (Latin America, Eastern and Central Europe, …)
4
2010 Normalized Income From Operations
9,313 employees 22 factories on 4 continents
2010 NET SALES
BIC today
Every day,
24 million BIC stationery products 5 million BIC lighters 10 million BIC shavers 5 million BIC Advertising and
€1,831.5 m
2005 – 2010 growth average on a comparative basis: +4.8%
€314.9
2005 – 2010 Average Normalized IFO* margin: 16.0%
€4.29
2005 – 2010 EPS* CAGR: +5.5%
®
2010 EPS
®
®
Promotional Products are bought in
160 countries
2010Free Cash Flow
®
€205.0m
2010 FCF / net sales: 11.2%
5
Markets
FY 2010 sales breakdown by categories
FY 2010 sales breakdown by markets
Other consumer Products
Advertising & Promotion
Advertising & Promotional Products
One-piece shavers
N°2 in Europe & USA
20%
80%
5% 17%
26%
Consumer Goods
N°2 worldwide
20% 20%
32%
Lighters Stationery
N°1 worldwide
N°2 worldwide
6
International footprint 2010 sales breakdown by geography 1950 : France Europe Developing Markets
1954 : Italy 1956 : Brazil 1957 : “Sterling” zone (UK, Australia…)
29% 29%
29% 29%
1958 : USA, Africa, Middle East 1959 : Scandinavian countries 1965 : Japan, Mexico
42% 42%
1995 : Eastern and Central Europe 1997 : Expansion in Asia
North America
2009 : India (partnership with Cello)
7
Capital ownership As of February 15, 2011*
Bich Family 42,7% (55% voting rights)
Public 39,6%
First Eagle LLC 2,9%
Fondation de France 3,3%
Silchester Blackrock International Treasury stocks Investors 5,0% 1,0% 5,5%
*Figures calculated from the latest available information.
8
Strategic assets Quality and Value product positioning A large and diversified product portfolio aimed at answering consumers’ needs: Innovation: 21% of net sales through new products in 2010 Recognised brands o Historical international footprint o Present in more than 160 countries o 29% of 2010 net sales in developing countries An international, complete and solid distribution network On-going and sustained productivity improvement policy. A solid balance sheet and a clear use of cash strategy
9
Key strengths
Products
Brand…S
Worldwide leadership
N°2 Simple Reliable Inventive At the right Price
Stationery cc.10% market share
N°1 Lighters 43% market share**
222.4€ Free Cash Flow after Acquisitions in 2010
N°2
Shavers 20% market share* of one-piece in USA and Europe
N°2 *one-piece shavers in major markets (US, Europe, Latin America) **: Outside Asia
Balance Sheet
Advertising & Promotional Products
397.1 M€ Net Cash Position at the end of 2010 10
Manufacturing network
11
Use of cash policy 2006
1 Focus on Strategic acquisitions
2009
2009
APP
Cello Pens
- Promotional products - Europe
- Writing Instruments - India
Norwood Promotional Products - USA
2007
PIMACO
2009
Atchison Products - Promotional products - USA
-Adhesive labels -Brazil
Continue to look for strategic acquisitions, although focus will be to succeed in leveraging recent moves
2
In euros
1,90 1,30
Dividend
Regular dividend per share
1,40
1,35
0,90 1,00
44% payout*
1,00
in 2010 based on 2004
2005
2006
Dividend per share
3
1,35
1,15
2007
2008
2009
2010
2010 results
Special Dividend
In million euros
71,6 49,3
39,9
Share Buy-back
25,7 1,9
2005 *: based on ordinary dividend
42
2006
2007
2008
2009
2010 12
Return to shareholders
In million euros
Free cash flow*
Share buyback
Ordinary dividend
Exceptional dividend
Acquisition
182
308
3 27 31
63
1
13 49
43 161
160
58 129 86
71
49
1
179 64
145 66
99 72
68 49
40
26 2
2003
2004
2005
2006
2007
2008
2009
*: Cash from operating activities – cash from investing activities (before acquisition) 13
2011 Group perspectives
Stationery
No significant recovery anticipated for 2011 in developed markets, with on- going negative impact of the high level on unemployment rates on Office Products Channel
Consumer Business
Continued strong growth in developing markets
Lighters
Flat to slight decline in mature markets (evolution of cigarette consumption and regulation) Continued growth in developing markets
Low-single digit growth is anticipated in developed markets
Shavers
Strong brand support activity likely to continue in the refillable segment (tough competition between Gillette and Energizer) In the one-piece segment, no major new competitive launches have been announced, suggesting promotional pressure may be the main focus for the next year
Strong growth in developing countries Consumer trade-up to 3-blade products is expected to continue
Advertising & Promotional Products
As in 2010, sales performance of the Advertising and Promotional Products industry in North America and Europe will be notably impacted by the level of visibility companies will have on global economic trends 14
BIC in 2011 BIC APP integration plan on track Benefits from the 2009 restructuring Increase in brand support Enhanced positions in fast growing markets Market shares gained in all consumer business categories
Leverage 2010 achievements… 15
BIC in 2011
…to continue to grow in fast growing markets…
Eastern Europe
Latin America
Africa
2% of total net sales in 2010
MiddleEast
Oceania & Asia
“Developing markets” 29% of total net sales in 2010 16
BIC in 2011
…and generate profitable growth Consumer Business • Continue to strengthen our position through distribution and market share gains • Successfully launch innovative new products
Advertising and Promotional Business • Finalize BIC APP integration • Deliver improved normalized IFO margin despite low sales growth
Protect Gross margin from raw material prices volatility (improvement of manufacturing efficiency and reasonable targeted prices adjustments when appropriates)
Invest in innovation and brand support
17
Ambitions for the next 3 to 5 years Grow faster than our markets thanks to our Quality & Price positioning
Continue to improve our operational efficiency
Continue to monitor working capital Be ready to seize external growth opportunities through bolt-on and strategic acquisitions, while maintaining a sound balance sheet
Annual Organic Growth*
Normalized IFO margin
Consumer business
Between 2% and 4%
Between 15% and 18%
Advertising & Promotional Products
Between 5% et 10%
Between 8% et 12%
*: net sales growth at constant currencies and bolt-on acquisitions
18
Stationery Consumer
The consumer stationery market (1/3) Total worldwide consumer stationery market = 6.7 billion Euros in 2009 Key Geographical Markets (breakdown in value)
Glue
Rest of the World Europe India
Breakdown by main segment (in value)
13% 13%
Correction
Coloring
18% 18%
2% 7% 7%2% 14% 14%
7% 7%
China 20% 20%
Markers 14% 14%
Japan
6% 6%
56% 56%
16% 16%
22% 22%
6% 6%
USA
South and Latin America
All market shares are based on 2009 estimated suppliers net sales figures
Mechanical Pencils
Pens (Ball Pens: 24% / Rollers: 5%)
20
The consumer stationery market (2/3) 2006-2007 market trends by geographies (in value) Market growth
14%
12%
China
10%
8% India
Eastern Europe
6%
Latin America
4% Western Europe
2%
-1%
Japan
North America & Oceania Size in million euros
-3%
BIC Estimate & Published Research - 2007
21
The consumer stationery market (3/3) Total worldwide consumer stationery market = 6.7 billion Euros in 2009 Breakdown by main supplier (in value)
BIC cc.10%
Pilot 6%
New ell Rubbermaid 13% Mitsubishi: 3% Pentel: 3% Crayola: 3% Zebra: 3% Schwan-Stabilo: 2% Sakura: 1%
BIC Estimate & Published Research – 2009 – Manufacturers figures –Pens, pencils, markers, coloring, correction
Others 57%
22
2010 BIC Stationery Consumer Key Figures
2010
YoY Change
YoY Change at constant currencies*
Net Sales
580.7
+14.0%
+6.7%
Income from Operations
69.3
+59.9%
BIC Group In million euros
Normalized* IFO Margin
* see glossary
12.1%
23
Stationery Consumer – BIC Strategy Generate profitable growth through
increasing distribution and visibility supporting classic products by constantly improving their quality fostering innovation by launching new products with higher value added further developing our presence in fast growing countries permanently listening consumers to bring them new and improved products
24
Stationery Consumer: “Quality @ a BIC price” More than 3m outlets worldwide
Historical and close relationship with the trade
Iconic products
Strong brands
Worldwide leadership positions
Innovation Strong positions in major market segments
Consumer trust for more than 50 years 24 million BIC stationery products bought every day worldwide
25
Stationery Consumer BIC positions in major market segments*
N°1 in Europe (18% market share)
N°1 in Ball Pen (19% market share)
N°1 in Mechanical Pencils (17% market share)
N° 2 worldwide cc. 10% market share N°2 in the U.S. (14% market share)
N°2 in Marking (8% market share)
N°1 in Correction (19% market share)
* BIC Estimates– 2009
N°1 in Latin America (22% market share)
26
BIC Stationery category in 2011 Innovation…Quality…Price
27
Cello Pens
PENS
The leading Indian writing instrument brand
>35% share of the
Appr. 5,000 employees
Indian Pen market
90% unaided
1 bn pens per year
awareness
(2 industrial sites )
The widest distribution network in India
Strong growth - High Profitability Approximately 30% FY07-09 EBIT margin
Cello Pens are distributed nationwide through 731,000 outlets all across India a network of 42 superstockists and 4,200 distributors
Revenue (INR Million) 4,100
2,300
12% 02-03
sC ale s s ear 5y
R AG
07-08
28
India’s writing instrument market overview Total writing instruments: ~ INR 28billion (440 million Euros)
Total stationery: ~ INR 90billion (1.4 billion Euros)
Pencils
Pens
Writing Instruments
63% 63% 31% 31%
79% 79%
15% 15% 6% 6%
6% 6% Others Paper and Notebooks
63.6 INR = 1 euro (January 20, 2009)
Others
Mid to high-single digit annual growth
29
India’s writing instrument market overview: focus on pens Total pen market: ~ INR 22billion Low but increasing per capita pen consumption
Highly fragmented distribution network Modern Retail
cc. 17
General Stores
24% 24%
5% 5% Stationery 25% 25% Shop
cc.3 India
US
Retail price point
12%
16%
Traditional "Mom &Pop" stores
46% 46%
A market leader with market share twice the nearest competitor
10% Lexi, Flair, Linc, Add Pens, Montex, GM Pens, Luxor, Today’s, Rotomac
< 5 INR
37%
PENS
INR 5-10 INR 10-15 > 15 INR
63%
62% Cello Pens Estimate & Published Research – 2007 – Retail value
30
Lighters
The pocket lighter market Volumes vs. value
Value: 3.1 billion euros
Volumes: 10.6 billion units
29% 29%
World Excl. Asia
Asia 71% 71%
35% 35%
65% 65%
BIC estimates for 2009 – Retail prices 32
The pocket lighter market Flint vs. electronic
Value: 3.1 billion euros
Volumes: 10.6 billion units
World excl. Asia Flint
22% 22%
25% 25%
World excl. Asia Electronic
7% 7%
28% 28%
4% 4%
55% 55% Asia Electronic
49% 49%
10% 10%
Asia Flint
BIC estimates for 2009 – Retail prices 33
The pocket lighter market Key players outside Asia
Market shares in value outside Asia
Market shares in volumes outside Asia
15% 15%
Asian manufacturers
18% 18% 39% 39%
51% 51%
BIC
34% 34%
Other branded lighters
BIC estimates for 2009 – Retail prices
43% 43%
34
The pocket lighter market Retail Price positioning
Index compared to pocket lighter average retail price
BIC Lighter
1.0
1.0
0.9
0.5
USA
Asian Lighter 1.4
1.3
1.2
Average
1.0
0.5
Europe
Latin America
BIC estimates for 2009 – Base = Average Retail Selling Prices 35
Overview of safety regulation around the world - ISO 9994*
2000
1989 2006
H1 2011 2005 2004
1997 2003
1998
2010 2007
2003 2003
*: mandatory
2006
36
Overview of safety regulation around the world - Child Resistant*
1995 2006 H2 2011 1994
1992
1997
1999
*: mandatory 37
V alue sales
Long term view of safety regulation impact on lighter sales
Africa
Asia
Europe
Latin America*
North America* ISO 9994 conform lighters
Low quality lighters
Matches
Time scale
*: real enforcement of the regulation 38
2010 BIC Lighter Key Figures
2010
YoY Change
YoY Change at constant currencies*
Net Sales
480.8
+20.5%
+11.6%
Income from Operations
173.6
+35.8%
Normalized IFO Margin
36.2%
BIC Group In million euros
* see glossary
39
BIC Lighter – Strategy
strengthen its position as the only lighter brand with worldwide strengths
by promoting the extension and the enforcement of international safety standards by accelerating the development of value-added products (sleeves, cases and utility lighters).
40
BIC Lighter N°1 branded lighter manufacturer Consumer preference
Safety – Quality – Prevention & education
Brand awareness US Disposable Pocket Lighter
BIC
Competitor A
86%
vs. market average
10%
More than 50 automatic quality controls Competitor B
8%
Market leadership Estimated market shares (in value)
> 60%
Integrated distribution network > 60%
43%
• Dedicated Customer Support Teams in all countries
