BIC CAPITAL MARKETS DAY PRESENTATIONS 10 NOVEMBER 2020
1 DISCLAIMER
This document contains certain forward-looking statements concerning SOCIETE BIC. Such forward-looking statements represent trends or objectives and cannot be construed as constituting forecasts regarding the future SOCIETE BIC’s results or any other performance indicator. Forward-looking statements in this document include, but are not limited to, financial projections and estimates and their underlying assumptions.
Although BIC believes its expectations are based on reasonable assumptions, investors are cautioned that these forward-looking statements are subject to numerous various risks, whether known or unknown, and uncertainties and other factors, including currency fluctuations, the ongoing global impact of the COVID-19 pandemic and the duration and severity of this pandemic on BIC’s business and operations, all of which may be beyond BIC’s control and could cause actual results to differ materially from those anticipated in these forward-looking statements. A description of the risks borne by BIC appears in the section, “Risks” in BIC’s 2019 Universal Registration Document filed with the French financial markets authority (AMF) on March 31, 2020. Any information relating to past performance contained herein is not a guarantee of future performance. Nothing herein should be construed as an investment recommendation.
2 CONSUMER-CENTRIC AND OPEN INNOVATION THOMAS BRETTE Group Insights & Innovation Officer
3 AGENDA
INNOVATIVE AND OPEN AND EFFICIENT 01 CONSUMER-LED 03 INNOVATION
CONSUMER-CENTRIC 02 INNOVATION
4 Innovative and consumer-led
Consumer-centric Innovation
Open and Efficient Innovation INNOVATIVE AND CONSUMER-LED
Consumer-centric and Open Innovation
5 6 INNOVATION AT BIC
CONSUMER-CENTRIC OPEN AND EFFICIENT
7 Innovative and consumer-led
Consumer-centric Innovation
Open and Efficient Innovation CONSUMER- CENTRIC INNOVATION
Consumer-centric and Open Innovation
8 9 CONSUMER-CENTRICITY THE CONNECTED SHAVER
The BIC Connected Shaver
is a connected device offering us a window to the “moments of truth” - while a consumer is shaving!
We can collect implicit and objective data that we have never had before
10 CONSUMER-CENTRICITY THE CONNECTED SHAVER
Self-assessed answers Implicit data & objective & performance evaluation measurements through the Connected Shaver mobile application through the Connected Shaver sensors
• Number of strokes • Number of rinses • Stroke duration • Rinse duration • Hair density • Ambient temperature • Ambient humidity
11 12 CONSUMER-CENTRICITY THE BIC CREATIVE COMMUNITY
An online community launched in June 2020… with 200 interesting and interested BIC consumers… collaborating through regular challenges
DAY 01 DAY 02 DAY 04 DAY 05
BRIEFING BRAINSTORM IDEAS AND CHOICE SOLUTIONS
13 CONSUMER-CENTRICITY THE BIC CREATIVE COMMUNITY
14 Innovative and consumer-led
Consumer-centric Innovation
Open and Efficient Innovation OPEN AND EFFICIENT INNOVATION
Consumer-centric and Open Innovation
15 16 OPEN AND EFFICIENT INNOVATION PROJECT LEAF
17 18 CONSUMER-CENTRIC AND OPEN INNOVATION
19 A VALUE-DRIVEN GLOBAL SUPPLY CHAIN PETER DALSBERG Group Supply Chain Officer
20 AGENDA
DRIVING OUR GLOBAL RESPONDING FAST 01 SUPPLY CHAIN STRATEGY 03 TO A CHANGING WORLD
BEING A RELIABLE REDUCING COSTS 02 BUSINESS PARTNER 04
21 Driving our global supply chain strategy
Being a reliable business partner
Responding fast to a changing world
DRIVING OUR Reducing costs GLOBAL SUPPLY CHAIN STRATEGY
A Value-Driven Global Supply Chain
22 THE 3 DRIVERS OF OUR GLOBAL SUPPLY CHAIN STRATEGY
PEOPLE PROCESS TECHNOLOGY
23 CREATING A BEST-IN-CLASS WORKFORCE
PEOPLE
Enabling people development
Ensuring we have the right talent in the right place
Adapting the organization to anticipate business needs
24 DRIVING AGILITY BY PRACTICING LEAN PROCESSES
PROCESS
Establishing lean processes to drive value throughout our end-to-end value chain
Aligning demand forecast and optimizing supply plan for factories, including expected inventory levels and financial impact
Evaluating and balancing needs across our organization
25 EVALUATING AND BALANCING NEEDS IN OUR SUPPLY CHAIN
CUSTOMER SERVICE
CAPACITIES WORKING & UTILIZATION CAPITAL
26 TRANSFORMING OPERATIONS WITH IMPROVED TECHNOLOGY
TECHNOLOGY
Improving our day-to-day operations making them more digital and automated
Leveraging powerful tools to support connectivity, collaboration and operational efficiency
Upgrading our systems for faster decision making
27 OUR GLOBAL SUPPLY CHAIN STRATEGIC ROADMAP
RELIABILITY RESPONSIVENESS REDUCING COSTS
28 Driving our global supply chain strategy
Being a reliable business partner BEING Responding fast to a changing world A RELIABLE Reducing costs BUSINESS PARTNER
A Value-Driven Global Supply Chain
29 OPTIMIZING OUR CAPACITY TO PRODUCE AND DELIVER
WHAT WE DID DURING COVID-19 PANDEMIC
Mask production Hydroalcoholic machine gel production
Prioritizing Keeping Taking action our people’s production up with mask and safety and running gel production 30 EVALUATING OUR SUPPLIER BASE TO ENSURE COST-EFFECTIVE SOURCING
300 10% strategic suppliers reduction of total number of suppliers in 1 year to ensure the most secure, to achieve a leaner organization innovative and efficient sourcing
All of our Suppliers are part of BIC’s Responsible Procurement 2025 Commitment
31 STRENGTHENING OUR AGILITY BY LEVERAGING OUR OEMS*
DEVELOPMENT AND SOURCING OF FINISHED PRODUCTS ACCORDING TO BIC DESIGN INTENT
Low capital Low High production High speed to investment volumes flexibility market capability
* Original Equipment Manufacturers
32 Driving our global supply chain strategy
Being a reliable business partner RESPONDING Responding fast to a changing world QUICKLY IN A Reducing costs FAST-CHANGING ENVIRONMENT
A Value-Driven Global Supply Chain
33 RESPONDING QUICKLY TO CREATE BUSINESS VALUE
Portfolio management A solid Operating Model Taking on the new and segmentation to support our business transformation sustainability challenges to reduce complexity of a changing world
34 CREATING SPACE FOR NEW AND INNOVATIVE SKUS BY REDUCING COMPLEXITY
Over 13,000 -20% SKUs SKUs reduction target in our portfolio by 2022
35 SUPPORTING OUR BUSINESS TRANSFORMATION WITH A SOLID OPERATING MODEL
Idea Generation & Validation Stage gate process
Source Validate Investigate Develop Deliver Launch Post Launch of Idea & Connect Question Integrated Prepare Go-To -Market Results White Space for Innovation Business Case Launch Plan
Pre-Charter Charter Contract Launch checkpoint Product Launch Date
36 BUILDING ON OUR EXCEPTIONAL SAFETY TRACK RECORD
On track towards achieving our 2025 goal of ZERO ACCIDENTS across all operations at BIC
Employee accident rate has already been reduced by 25% two years in a row
37 Driving our global supply chain strategy
Being a reliable business partner
Responding fast to a changing world
Reducing costs REDUCING COSTS
A Value-Driven Global Supply Chain
38 ON TRACK TO DELIVER OUR COST SAVINGS TARGETS
GROUP SUPPLY CHAIN CONTRIBUTING TO MORE THAN 60% OF BIC'S TOTAL SAVINGS TARGET: 50M€ BY 2022
Direct procurement savings in 2020 Indirect procurement savings in 2020 >10M€ ~5M€ Projects related to raw materials
8% 17% 19% metal plastics reduction in plastics gas packaging reduction in transportation savings in electricity
39 ACHIEVING MANUFACTURING EFFICIENCIES THROUGH CONTINUOUS PRODUCT OPTIMIZATION
Shavers Stationery reducing the amount of steel by 27% automation of the assembly line per blade, while retaining excellent quality for the Mini Pocket Mouse:
Increasing productivity by 15% Improving the quality
27% thinner blade
74 μm
100 μm
40 MANAGING OUR INVENTORY EFFICIENTLY TO REDUCE COSTS
Target-range of 15M€ to 30M€ in inventory reduction in 2020 driven by:
Leveraging Decreasing our stock Reducing Sales and Operation Planning of raw materials and finished Slow and obsolete (S&OP) to better forecast goods inventory inventory levels
41 OPTIMIZING OUR FOOTPRINT
Ecuador STATIONERY FACTORY CLOSURE To improve our Latin American manufacturing efficiency
France BIC TECHNOLOGY MOVE TO MARNE-LA-VALLEE FACTORY To be more efficient & enhance economies of scale
India CLOSURE OF ONE OF CELLO FACTORIES To adapt to the current environment
42 A VALUE-DRIVEN GLOBAL SUPPLY CHAIN
43 RAISING THE BAR OF OUR COMMERCIAL EXCELLENCE CHESTER TWIGG Group Chief Commercial Officer
44 AGENDA
OMNICHANNEL PORTFOLIO APPROACH 01 STRATEGY 03 TO MARKET MANAGEMENT
REVENUE GROWTH 02 MANAGEMENT
45 Omnichannel Strategy
Revenue growth management
Portfolio approach to market management OMNICHANNEL STRATEGY
Raising the bar of our commercial excellence
46 ON TRACK TO DRIVE E-COMMERCE GROWTH
20 20 20 20 20 18 19 20 21 22
VISIBILITY MARKET SHARE GROWTH LEVERAGING >10% OF NET SALES GAIN ACCELERATION DIGITAL AMBITIONS IN E-COMMERCE
47 WHERE WE STAND TODAY IN OUR ONLINE JOURNEY
#1 ~2X 80% >2X ~4X
Leading market positions online Growth in pure Media investment Sales conversion for DTC* Shopper traffic increase in Stationery, Lighters and eCommerce channels in digital websites globally for DTC* website in Europe one-piece Shavers
*Direct to consumer NB: figures above are year-to-date October 2020
48 Omnichannel Strategy Revenue growth management
Portfolio approach to market management REVENUE GROWTH MANAGEMENT
Raising the bar of our commercial excellence
49 GROWING VALUE THROUGH REVENUE GROWTH MANAGEMENT INITIATIVES
TRADE AND PROMOTION PRICING ASSORTMENT DECISIONS AND INVESTMENTS
Reducing complexity and Optimizing promotional strategy Driving value through leveraging our portfolio to place to increase efficiency appropriate pricing the right SKUs in the right in a changing world channels
50 PRICING: GROWING VALUE THROUGH INNOVATION WITH EZ REACH
Driving category expansion by addressing new flame occasions. Combining the accessibility of pocket lighters with the functional benefits of the Multi-purpose lighter
Already a top 5 SKU in BIC lighters
51 PRICING: GROWING VALUE THROUGH PREMIUMIZATION WITH DJEEP
Sustaining growth by broadening BIC's product portfolio Offering real value to consumers at a premium price Generating operational and commercial synergies On average 50% higher in value than the equivalent BIC lighters
52 PRICING: GROWING VALUE THROUGH COMMERCIAL INNOVATION WITH PREVAGUARD
Our new Antimicrobial pen
Only 5 months from concept to our shelf
53 ASSORTMENT: GROWING VALUE BY REDUCING COMPLEXITY
Driving complexity out of BIC’s business Benefits of this strategy Example: Strong SKU optimization efforts in Brazil
Solves consumer choice paradox - ~25% SKU reduction Improves space utilization 10% Cost savings Reduces manufacturing and warehousing challenges
54 Omnichannel Strategy
Revenue growth management PORTFOLIO Portfolio approach to market management APPROACH TO MARKET MANAGEMENT
Raising the bar of our commercial excellence
55 A CLEAR STRATEGY FOR ALL OUR MARKETS
GROW IN A INVEST TO GROW PROFITABLE WAY
LEVERAGING MATURE CHANGING MODEL
MARKETS BIC’s BIC’s growth potential
BIC’s ability to capture growth profitably
56 INVEST TO GROW
INVEST TO GROW
where potential to grow market share has been identified to build a solid presence. Example:
Russia Germany Nigeria BIC’s BIC’s growth potential
BIC’s ability to capture growth profitably
57 CHANGING MODEL
CHANGING MODEL
where working with a partner makes more sense. Example:
Colombia South Korea BIC’s BIC’s growth potential
BIC’s ability to capture growth profitably
58 GROW IN A PROFITABLE WAY
GROW IN A PROFITABLE WAY
where opportunities are identified to drive growth while maintaining our profitability Example:
USA BIC’s BIC’s growth potential
BIC’s ability to capture growth profitably
59 LEVERAGING MATURE COUNTRIES
LEVERAGING MATURE MARKETS
where profitability and commercial efficiency should be our primary focus. Example:
Japan BIC’s BIC’s growth potential
BIC’s ability to capture growth profitably
60 BUILDING STRONG TALENT CAPABILITIES TO DRIVE OUR COMMERCIAL EXCELLENCE
Leveraging talent to drive commercial expertise
Implement world class commercial organization
Drive and deliver commercial algorithm
61 RAISING THE BAR OF OUR COMMERCIAL EXCELLENCE
62 EXPAND OUR HORIZON SARA LAPORTA Chief Strategy & Business Development Officer
63 AGENDA
EXPANDING DOUBLING-DOWN OUR FUNCTIONAL ON OUR SUSTAINABLE 1 CAPABILITIES TO DRIVE 3 DEVELOPMENT STRATEGY 0 PROFITABLE GROWTH 0
REFRAMING 2 OUR CATEGORIES FOR 0 ACCELERATED GROWTH
64 Expanding our functional capabilities to drive profitable growth
Reframing our categories for accelerated growth
EXPANDING OUR Doubling-down on our sustainable development FUNCTIONAL strategy CAPABILITIES TO DRIVE PROFITABLE GROWTH
Expand our Horizon
65 EXPANDING OUR FUNCTIONAL CAPABILITIES TO DRIVE PROFITABLE GROWTH 18 MONTHS OF TRANSFORMATION FROM A PRODUCT-DRIVEN TO A CONSUMER-DRIVEN MINDSET
OPEN COMMERCIAL VALUE DRIVEN FINANCIAL INNOVATION EXCELLENCE GLOBAL DISCIPLINE SUPPLY CHAIN
66 Expanding our functional capabilities to drive profitable growth
Reframing our categories for accelerated growth Doubling-down on our sustainable development REFRAMING OUR strategy CATEGORIES FOR ACCELERATED GROWTH
Expand our Horizon
67 REFRAMING OUR CATEGORIES FOR ACCELERATED GROWTH
Invest
Create
Develop
Perform Human Flame Expression for Life
Blade Excellence
68 REFRAMING OUR CATEGORIES FOR ACCELERATED GROWTH
Invest
Create
Develop
Human Expression Perform Adopt a Consumer-lens to Stationery category expansion, adapt to shifting consumer habits and expand in faster- growing Creative Expression and Digital Writing Markets
69 REFRAMING OUR CATEGORIES FOR ACCELERATED GROWTH
Invest
Create
Develop
Flame For Life Perform Sustain Profitability and grow the Lighter Business by leveraging all flame occasions and evolve to a value-driven model
70 REFRAMING OUR CATEGORIES FOR ACCELERATED GROWTH
Blade Excellence Capitalize on our assets, advanced innovation and manufacturing capabilities to sustain growth momentum
71 REFRAMING OUR CATEGORIES FOR ACCELERATED GROWTH
Invest Expanding our total Create addressable market Develop
Perform Human Flame Expression for Life Shifting to a revenue-realization mindset in mature markets
Blade Excellence Capitalizing on our core assets to open up opportunities
72 TO HUMAN EXPRESSION
73 INCREASE TOTAL ADDRESSABLE MARKET
2019 2025 €bn €bn
Digital Writing +9.4% p.a. Tattooing +4.6% p.a.
~ 19bn ~ 4bn Writing ~ 5bn instruments
~ 23bn ~ 50bn Arts & Crafts +6.5% p.a. Writing instruments +4.1% p.a. SOURCE: Euromonitor 2019, Creative Industries, IBIS World, BIC analysis P.a : per annum 74 ARTS AND CRAFTS
Art & Creative Creative Teens & Adults Kids
75 ARTS AND CRAFTS BIC INTENSITY
76 BODY ARTS BODYMARK
77 DIGITAL WRITING A NASCENT SEGMENT - DIRECTLY ADJACENT TO OUR WRITING INSTRUMENTS CATEGORY
2019 €bn 2025 €bn
Digital notebooks & slates ~0.5bn Digital pen +4.8% p.a. +10.4% p.a. ~0.7bn ~1.4bn Active stylus +5-7% p.a. ~0.3bn ~2.8bn ~0.5bn Digital writing ~ 2.2bn Digital writing Total addressable market ~ 4.0bn SOURCE: Euromonitor, Grand View Research, Expert interviews, imarc, BIC estimates 78 TO BLADE EXCELLENCE
79 BLADE EXCELLENCE
ENHANCE CORE ONE-PIECE CAPITALIZE ON OUR BUSINESS WITH INNOVATION STRENGTHS, ADVANCED R&D, AND SUSTAINABILITY AND EXCELLENCE IN MANUFACTURING TO BUILD A SELECTIVE NEW BUSINESS BY ENABLING OTHER BRANDS TO ACCESS WORLD-CLASS PERFORMANCE CAPABILITIES
80 BLADE EXCELLENCE
ENHANCE CORE ONE-PIECE BUSINESS WITH INNOVATION AND SUSTAINABILITY
81 BLADE EXCELLENCE
CAPITALIZE ON OUR STRENGTHS, ADVANCED R&D, AND EXCELLENCE IN MANUFACTURING TO BUILD A SELECTIVE NEW BUSINESS BY 2019 2025 ENABLING OTHER BRANDS TO €bn €bn ACCESS WORLD-CLASS PERFORMANCE CAPABILITIES
~ 4bn
One piece Shaver market ~ 15bn
Wet shave market Total addressable market
SOURCE: Euromonitor 2019
82 Expanding our functional capabilities to drive profitable growth
DOUBLING- Reframing our categories to accelerate growth
DOWN ON OUR Doubling-down on our sustainable development strategy SUSTAINABLE DEVELOPMENT STRATEGY
Expand our Horizon
83 DOUBLING-DOWN ON OUR SUSTAINABLE DEVELOPMENT STRATEGY
Taking our circular economy journey to the next level by transforming the way we use plastics
84 TRANSFORMING THE WAY WE USE PLASTICS TWO AMBITIOUS TARGETS
Packaging Products
By 2025 By 2030 By 2025
100% Reusable, recyclable or compostable 50% 20% non virgin as intermediate 100% 100% 75% petroleum plastics step Recycled or certified PVC Free Recycled content in cardboard plastics plastic packaging
85 A CLEAR ROADMAP BIC’S 4R PHILOSOPHY
Recycled Recyclability Reduce / Alternative Materials Refillable / End of life
Reduce our raw Replace virgin plastic Reduce the overall Support the availability material consumption by using recycled plastic consumption of recycled plastics by ensuring or alternative materials by proposing refills our products & packaging are recyclable
BIC Ecolutions Range
5.8 g
BIC Flex 5 Hybrid BIC MAXI SD
86 Flame Sustainability for Life
Human Expression Blade Excellence
87 EXPAND OUR HORIZON
88 DIGITAL WRITING THOMAS BRETTE Group Insights and Innovation Officer
89 AGENDA
ENTERING DIGITAL 01 WRITING
02 ROCKETBOOK
90 Entering Digital Writing
Rocketbook
ENTERING DIGITAL WRITING
Digital Writing
91 92 DIGITAL WRITING A 4 BILLION EURO MARKET BY 2025
Analog to Digital Digital
Stylus for Tablets
Pressure-Sensitive Capture with Paper
Price Price Point Slate Writing Smart Pens Tablets
Reusable Notebooks
Digitalization
93 DIGITAL WRITING A 4 BILLION EURO MARKET BY 2025
Analog to Digital Digital
Stylus for Tablets
Pressure- Sensitive Capture with Paper
Price Price Point Slate Writing Smart Pens Tablets
Reusable Notebooks
Digitalization
94 Entering Digital Writing
Rocketbook
ROCKETBOOK
Digital Writing
95 96 97 98 DIGITAL WRITING
99 FLAME FOR LIFE FRANÇOIS CLEMENT-GRANDCOURT Group Lighter General Manager
100 AGENDA
TRANSFORMING TO A A LIGHTER IS AN VALUE-DRIVEN MODEL 01 ESSENTIAL ITEM 03
FOCUSING ON ALL BUILDING COMPETITIVE 2 CONSUMER LIGHTING 4 ADVANTAGE THROUGH 0 OCCASIONS 0 SUSTAINABILITY
101 A lighter is an essential item
Focusing on all consumer lighting occasions
Transforming to a value-driven model
Building competitive advantage A LIGHTER IS AN through sustainability ESSENTIAL ITEM
Flame for Life
102 "A FLAME IS ESSENTIAL"
103 LIGHTER USAGE
89% 48% 63% of adults globally of flame usage is for 31% use flames throughout non-smoking purposes
the year Developed Developing Countries Countries
In developed countries, 31% of flames are for non-smoking usage; in developing countries 63% of people mainly use flames for non-smoking usage
SOURCE: Statégie - U&A Flame & Spark – 33 Markets – 2016
104 FLAME IGNITION
Penetration per Flame Devices (%) Claimed Share of Flames per Flame Device (Utility lighters represent less than 0.1%) Sparklers 13%
Matches 27%
Pocket Lighter 60%
SOURCE: Usage & Attitude - 33 Countries – 2016
105 A lighter is an essential item
Focusing on all consumer lighting occasions FOCUSING ON Transforming to a value-driven model Building competitive advantage ALL CONSUMER through sustainability LIGHTING OCCASIONS
Flame for Life
106 FOCUSING ON ALL CONSUMER LIGHTING OCCASIONS
UNITED STATES MEXICO
Other BBQ Emergency Prep 3% Gas Oven 4% 7% 5%
Logs 7%
BBQ Tobacco Tobacco 10% 48% 27% LIGHTING Gas Stove LIGHTING OCCASIONS 36% OCCASIONS
Candle & Incense Candle & Incense 25% 17% Others 9%
SOURCE: Hannover Research 2019 IPSOS – Mexico – Flame Usage – 2018 - Question: What have you lit?
107 FOCUSING ON ALL CONSUMER LIGHTING OCCASIONS CAPITALIZING ON NEW OPPORTUNITIES
Everyday Cooking Lighting Candles Fireplace Birthday Parties
Romantic Dinners BBQ & Grilling Relaxing
108 FOCUSING ON ALL CONSUMER LIGHTING OCCASIONS EZ REACH
109 A lighter is an essential item
Focusing on all consumer lighting occasions
Transforming to a value-driven model
TRANSFORMING Building competitive advantage TO A VALUE- through sustainability DRIVEN MODEL
Flame for Life
110 TRANSFORMING TO A VALUE-DRIVEN MODEL PERSONALIZING OUR OFFER
Think of the Possibilities! Birthdays, weddings, bachelorette parties are just a few of customizable occasions for our Design My BIC lighters.
If you can dream it up, we can print it !
111 TRANSFORMING TO A VALUE-DRIVEN MODEL TRADING UP
Decorated Lighters as % of total Lighter Net Sales
35% 36% 32% 32% 30% 26% 26% 23% 23% 21%
2015 2016 2017 2018 2019 Total Group United States
112 TRANSFORMING TO A VALUE-DRIVEN MODEL IMPLEMENTING REVENUE GROWTH MANAGEMENT
TRADE AND PROMOTION PRICING ASSORTMENT DECISIONS AND INVESTMENTS
113 TRANSFORMING TO A VALUE-DRIVEN MODEL PERSONALIZING OUR OFFER
Sustain Offer Generate growth real value operational by broadening to consumers and BIC's product at a premium commercial portfolio price synergies
J25 J25 Decor J26 J26 Decor Djeep EZ Reach J26 U140 U110 Personalization
114 A lighter is an essential item
Focusing on all consumer lighting occasions
BUILDING Transforming to a value-driven model COMPETITIVE Building competitive advantage ADVANTAGE through sustainability THROUGH SUSTAINABILITY
Flame for Life
115 BIC LIGHTER LIFE CYCLE
Usage & End-of-life Raw Materials & Eco-design • Collection • Sustainable sourcing • Recycling • Alternative materials • Exploring new design
Packaging Production & Logistics • Less packaging • Plant performance • Environmentally friendly • Waste management packaging • Improved logistics • Alternative to plastic packaging
116 BUILDING COMPETITIVE ADVANTAGE THROUGH SUSTAINABILITY
BIC Maxi Standard BIC Maxi Ecolutions
Pusher Pusher Red Pusher in Nylon Recycled POM Fork & Cheeks Fork & Cheeks Female Cheek in recycled Zamak 100% recycled Zamak Spark wheel Spark wheel 100% recycled scrap metal 100% recycled scrap metal Flint Flint Flint from China New Supplier with SD Priorities Body & Base Body & Base POM (Delrin) Biosourced POM (Delrin) Assorted Colors & BIC logo (Colorants) No colorant Sleeve Sleeve PVC PET Others Others PVC free PVC free 100% Green Electricity 100% Green Electricity 90% of industrial waste recovery 90% of industrial waste recovery Recyclable with Collection Program
117 FLAME FOR LIFE
118 FINANCE AND CAPITAL ALLOCATION CHAD SPOONER Chief Financial Officer
119 AGENDA
01 FINANCIAL HIGHLIGHTS 04 GROUP TARGETS
02 ITF UPDATE 05 CAPITAL ALLOCATION
03 CATEGORY UPDATE
120 Financial Highlights
ITF update
Category update FINANCIAL Group Targets HIGHLIGHTS Capital Allocation
Finance and Capital Allocation
121 HISTORIC PERFORMANCE
SLOWING GROWTH RESILIENT PROFITABILITY Net Sales Organic Growth Adjusted EBITDA Adjusted EBIT Margin (Normalized IFO margin)
6.2% +2.3% 24.3% 24.1% 23.3% 22.8% 22.2% 5 years average 4.2% 19.3% 20.2% 19.6% 18.1% 17.0%
1.4% 1.5%
2015 2016 2017 2018 2019
Adjusted EBITDA margin Adjusted EBIT margin (NIFO margin) -1.9% 23.4% 18.8% 2015 2016 2017 2018 2019 EBITDA – 5 years average EBIT - 5 years average
2015 et 2016: including BIC Graphic North America 2017: before IFRS 15 adjustments 2016: excluding BIC Graphic North America 2018: after IFRS 15 adjustments 2017 and 2018: after IFRS 15 adjustments
122 HISTORIC PERFORMANCE
CAPEX CHANGE IN WORKING CAPITAL In M€ In M€
2.1 2.0
1.3 1.3 1.1 -8.1
-24 -21,1
176 184
121 124 114 -62.8 -73 2015 2016 2017 2018 2019
2015 2016 2017 2018 2019 CAPEX CAPEX to D&A
2016 et 2017: excluding BIC Graphic North America
123 ROBUST CASH FLOW GENERATION
NET CASH In M€
89% 81% 77% 79% 64% 436
381
315 318 299 304
197 205 176 184 180
121 123 124 114
2015 2016 2017 2018 2019
Net Cash From Operating Activities CAPEX Free Cash Flow before Acquisitions Net Cash Conversion*
2016 et 2017 CAPEX: excluding BIC Graphic North America
*: EBITDA – CAPEX –Working Capital / EBITDA
124 SOURCE AND USE OF FUNDING
In M€
14 315 117
161 74 160 56 6 16 158 205 197 12 155 180 135
123
82 97 54 26 39
Source of Use of Source of Use of Source of Use of Source of Use of Source of Use of Funds 2015 funds 2015 funds 2016 funds 2016 funds 2017 funds 2017 funds 2018 funds 2018 funds 2019 funds 2019
Free cash flow before acquisitions Business divestiture Share buyback Ordinary dividend Exceptional dividend Acquisitions
125 SUSTAINED TOTAL SHAREHOLDER REMUNERATION
In € In M€
55% 55% 59% 50% 45% 6.77 97 6.24 6.26 5.87 82 5.47
54 3.40 3.45 3.45 3.45 39 2.50 2.45 26
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Dividend per share Exceptional dividend Share Buyback Normalized EPS per share Pay-out ratio
126 Financial Highlights ITF update
Category update
Group Targets
ITF UPDATE Capital Allocation
Finance and Capital Allocation
127 BIC 2022- INVENT THE FUTURE ROADMAP
ROLL-OUT 20 • Strengthen market positions 20 • Extend brand leadership 19 • Expand in e-commerce 22+ • Speed-up product launches • Reinforce and consolidate overall efficiency
SET THE FOUNDATIONS FULL IMPACT • Consumer-centric innovation 20 • Operational effectiveness • Global end-to-end supply chain • Engaged consumers • Omni-channel go-to-market strategy 20 • Inclusive company • New organization • Accelerated growth • Enhanced skills and capabilities 20 21
128 INVENT THE FUTURE TARGETS SAVINGS
80% SAVINGS achieved by the end of 2021
7% 50 M€
End-to-End Supply Chain 28% Commercial Excellence
Efficient Support Functions 65%
App. 5 M€
2019 2020 2021 2022 End of 2022
129 ADAPTING TO COVID-19 COST OPTIMIZATION
Others 20%
Travel and Labor Expenses Training 51% 12%
Discretionery Expenses 17%
Year to Date September 2020
130 Financial Highlights
ITF update Category update CATEGORY Group Targets UPDATE Capital Allocation
Finance and Capital Allocation
131 STATIONERY WRITING INSTRUMENTS
Fragmented Industry Complex Product Offering Slowing
Average Annual Growth (CAGR)
Faber- Castell 4% Ball Pens Newell Others 23% M&G 4.5% 9% 33% 4% 4.1% 19 Bn € 19 Bn € 3.2% In value In value Roller & Gel Pilot 15% 6% Marking BIC Coloring 17% 9% 13% Writing Instruments 5 Years 3 Years 1 year
132 PIVOTING TO HUMAN EXPRESSION
2019 2025 Net Sales Growth €bn €bn and Profitability driven by
Digital Stationery Tattooing +9.4% p.a. +4.6% p.a. Development in Creative Expression ~ 19bn ~ 4bn ~ 5bn Expansion in the fast-growing Digital Writing market ~ 50bn Writing instruments ~ 23bn SKU and product rationalization
Writing instruments Arts & Crafts +4.1% p.a. +6.5% p.a. Manufacturing footprint optimization
TAM: total addressable market for BIC
SOURCE: Euromonitor 2019, Creative Industries, IBIS World, BIC estimates
133 LIGHTERS
Concentrated Industry BIC market leader in value Flat to declining
Average Annual Growth (CAGR)
6% 8%
32% 1.7% 44% 17% 4.7 Bn € 4.7 Bn € 1.0% In value In value 57%
6% 25% 3% -1.0% Lighters 1% 5 Years 3 Years 1 year Others Latin America Asian Player Flamagas North Amercia Europe Swedish Match Tokaï Asia BIC
134 EXPANDING TO FLAME FOR LIFE
UNITED STATES Net Sales Growth Other and Profitability Emergency Prep 3% driven by 7% Logs 7% Revenue Growth Management Tobacco 48% FLAME Incremental usages BBQ OCCASIONS from consumer for 10% all flame occasions
A value-driven Business Model
Candle & Trade-up Incense 25% Personalization
SOURCE: Hannover Research 2019 Sustainability
135 SHAVERS
Driven by the Refillable segment Concentrated Competitive Set Flat to slightly increasing
Average Annual Growth (CAGR)
3% 16%
2% 1.2% 1.0% 5% 7% 12 Bn € 39% 12 Bn € In value In value 58% 58% 0.3% 13%
Wet Shave 5 Years 3 Years 1 year Procter & Gamble Edgewell BIC Private Label Refilable One-Piece Double-Edge Unilever Others
136 LEVERAGING BLADE EXCELLENCE
2019 2025 Net Sales Growth €bn €bn and Profitability driven by
Innovation ~ 4bn in the core one-piece segment
Focus ~ 15bn on key markets Wet shave market One-piece shavers Best utilize our assets as a high-precision manufacturer for other brands
TAM: total addressable market for BIC
SOURCE: Euromonitor 2019
137 Financial Highlights
ITF update
Category update GROUP Group Targets TARGETS Capital Allocation
Finance and Capital Allocation
138 HORIZON PLAN FINANCIAL TARGETS
Accelerated and Sustainable Robust Cash Growth Generation
Mid-Single Digit > 200 M€ Run Rate Growth trajectory Free Cash Flow
139 Financial Highlights
ITF update
Category update CAPITAL Group Targets ALLOCATION Capital Allocation
Finance and Capital Allocation
140 CAPITAL ALLOCATION POLICY
Fund Profitable Ensure Sustainable Growth Shareholder Returns
141 CAPITAL ALLOCATION POLICY
Fund Profitable Ensure Sustainable Growth Shareholder Returns
Investments into Operations (CAPEX) Ordinary Dividend
Targeted Acquisitions Share Buyback
142 BIC’S LONG-TERM VALUE CREATION BUSINESS MODEL
Bringing simplicity and joy to everyday life Creating high quality, safe, affordable, essential products trusted by everyone
Consumer-Centric Brands
Open and Responsible Sustained Innovation and balanced 1 2 3 long-term value Efficient, Reliable, and Sustainable 0 0 0 creation for all Global Supply Chain stakeholders Accelerated Strong Cash Sustainable Commercial Growth Generation Shareholder Returns Excellence
TALENTED AND ENGAGED PEOPLE
143 FINANCE AND CAPITAL ALLOCATION
144