Earnings call transcript: BIC Q4 2024 shows growth amid market challenges

BIC has reported its Q4 2024 earnings, revealing a 4.4% increase in net sales at constant currency, totaling €517 million. The company also achieved an adjusted EBIT margin of 15.6%, up 90 basis points year-over-year. According to InvestingPro data, the stock is trading near its 52-week high, with impressive returns of over 117% in the past year. The company maintains a moderate debt level with a debt-to-equity ratio of 0.31. Despite challenges in the US market, BIC’s innovative product launches and strategic acquisitions have contributed to its growth. The stock market’s reaction was positive, with BIC maintaining a strong position in the non-refillable lighters and men’s razors markets.

Key Takeaways

• BIC’s net sales rose by 4.4% in Q4 2024 at constant currency.
• Adjusted EBIT margin increased by 90 basis points to 15.6%.
• The company launched new products and expanded its market presence.
• US lighter market saw a 5% decline, but BIC gained market share in Europe.
• The company expects a softer Q1 2025 but maintains a positive outlook for the year.

Company Performance

BIC reported a modest increase in full-year 2024 net sales, reaching €2,197 million, up 0.8% at constant currency. The company has successfully navigated market challenges, including a decline in the US lighter market, by focusing on innovation and market expansion. InvestingPro analysis reveals 10+ additional exclusive insights about BIC’s financial health and market position. Subscribers can access the comprehensive Pro Research Report, part of the extensive coverage available for 1,400+ top stocks. Notably, BIC’s Flex (NASDAQ:FLEX) five hybrid razor doubled its market share to 5%. The company’s strategic acquisition of Tangle Teezer further strengthens its position in the personal grooming market.

Financial Highlights

• Revenue: €517 million for Q4 2024, up 4.4% at constant currency.
• Adjusted EBIT margin: 15.6%, an improvement of 90 basis points year-over-year.
• Adjusted EPS: Increased by 8% to over €6.
• Free cash flow: €271 million.

Outlook & Guidance

Looking ahead, BIC expects net sales growth of 4-6% for 2025 at constant currency, with a maintained adjusted EBIT margin of 15.6%. The company anticipates a softer start to the year in Q1 2025 but remains focused on commercial execution and innovation to drive future growth. InvestingPro data shows the company maintains a healthy current ratio of 1.37 and analysts are projecting profitability for the current year. For deeper insights into BIC’s valuation and growth prospects, including Fair Value estimates and comprehensive financial health scores, explore the full suite of InvestingPro tools and analysis. The BladeTech brand is expected to grow in 2025, and BIC continues to explore opportunities in the personal grooming market.

Executive Commentary

CEO Gonzalves Bicke emphasized the company’s progress, stating, "We’re now 80% of the way through our five-year horizon journey." He also highlighted the strategic value of the Tangle Teezer acquisition, noting, "TangleTeaser presents us with a wonderful opportunity to expand our total addressable market." Bicke expressed confidence in BIC’s operational excellence and growth prospects, saying, "Our operational excellence, resilient business model, and new growth opportunities will enable us to hit the finish line in 2025 in great shape."

Risks and Challenges

• Continued softness in US consumer spending could impact sales.
• The decline in the US lighter market may pose challenges.
• Tariff changes remain fluid, although BIC has minimal exposure to China.
• Market saturation in personal grooming could affect growth.
• Macroeconomic pressures could impact consumer behavior and spending.

Q&A

During the earnings call, analysts inquired about the impact of tariffs and the CEO succession search. BIC management indicated that tariffs remain fluid but have minimal impact due to limited exposure to China. The CEO succession search is progressing, and the company remains focused on its strategic priorities. Analysts also questioned the performance of the Inkbox brand, which, despite challenges, remains strong according to BIC executives.

Full transcript - BlackBerry Ltd (NYSE:BB) Q4 2024:

Conference Operator: Good day, and welcome to BiCS Fourth Quarter and Full Year twenty twenty four Results Conference Call. Throughout today’s recorded presentation, all participants And now, I’d like to hand the call over to your host, Briez Parris. Please go ahead.

Briez Parris, Head of Investor Relations, BIC: Good morning, and welcome to BIIC’s full year twenty twenty four results call. I’m Briez Parris, Head of Investor Relations. We are in Kishi today with Goncalves Bicke, our CEO and Chad Spooner, our CFO. This call is being recorded and a replay will be available on our website with the presentation and press release. We’ll start with the results presentation followed by a Q and A session.

First, please take the time to read the disclaimer at the beginning of the presentation. With that, I give the floor to Gonzal.

Gonzalves Bicke, CEO, BIC: Good morning, everyone. Thank you for joining us today to present our 2024 results. It is a pleasure to be with you. Before Chad and I comment on our financial and operational performance, I want to take a step back to reflect on the remarkable progress BIC has made. We’re now 80% of the way through our five year horizon journey and I’m extremely proud of our accomplishments, particularly the fact that we delivered an average annual growth rate of more than 5% over the period, in line with our mid single digit growth ambition.

As I reflect on this today, three important takeaways come to mind. We stood resilient in the face of a volatile macroeconomic environment. We’ve driven operational excellence, delivering on a horizon targets one year ahead of schedule. And we paved our way towards value creation, most recently through the promising acquisition of Tangle Teezer. Looking back at 2024, we continued to operate in a challenging trading environment, which was further compounded by higher than expected softness in global consumption, particularly in The U.

S. Consumers continue to be impacted by inflationary pressures and showed caution in their spending. Despite this backdrop, BIC demonstrated tremendous resilience during 2024, just as we’ve done throughout our Horizon journey. Full year 2024 net sales growth was not where we wanted it to be, but there was a notable sequential improvement, which led to a mid single digit net sales growth in the last quarter of the year. This is a testament to the hard work and determination of our teams across the globe.

We also achieved a solid adjusted EBIT margin in 2024. We grew adjusted earnings per share for the fifth year in a row and free cash flow generation remains strong. First, I’d like to provide some insight into our top line performance by geography to further showcase how it’s evolved since the beginning of our Horizon plan. Starting in The U. S, our three key product categories face negative consumption trends in 2024, resulting in an overall mid single digit market decline in value.

However, even in the face of this challenge, we made significant progress. In Flame for Life, we continue to outpace the market in 2024. Our added value products including Dekkors, EasyReach and Utility lighters now represent nearly 50% of our net sales in The U. S, up six points since 2019. Since its launch in 2020, our EZ Reach utility pocket lighter has gained significant market share, reaching over 6% in value of the total U.

S. Pocket lighter market. In human expression, our core stationery business performed well in a tough market environment. We successfully maintained market share in traditional segments like ball pen and mechanical pencils. Omni channel excellence has been an important pillar of our horizon goals.

On that note, I’m proud to see that e commerce now accounts for about 40% of our U. S. Core stationery sales compared to 25% back in 2019. That said, in 2024, our overall performance in human expression in The U. S.

Was dampened by softness in our digital writing and skin creative businesses. In blade excellence, despite the ongoing competitive environment, which impacted our overall performance, we achieved solid share gains in men’s razors. Our star performer, the BIC Flex five Hybrid razor, almost doubled market share in the last three years, achieving 5% in value in 2024. Elsewhere across the globe, our geographical expansion strategy continues to yield strong results, which helps us tap into growth markets and achieve impressive performance across all divisions. In Europe, all three divisions achieved a strong performance with market share gains in most of our key countries.

Our teams did a terrific job to secure new distribution channels, particularly in discounters. Moreover, our iconic four color pen and our Mini Pocket Mouse were key growth contributors. Looking back, I’m proud to see our four color pen almost doubled its net sales in Europe since 2019. Our lighters business continues to perform well, boosted by our added value products, EasyReach and Jeep. Meanwhile, our ability to innovate continues to be instrumental in driving growth in shavers as seen by the continued success of our Hybrid Flex and Solei Escape ranges.

In fact, our entire range of five blade shaver products grew an impressive 40% in net sales during the year. In Latin America, Brazil was a standout performer with double digit net sales growth in Flame for Life, fueled by the continued rollout of Easy Reach and growth in utility lighters, which helped us gain traction. Furthermore, in blade excellence, performance continued to be robust in both Brazil and Mexico. In the last three years, the net sales of our products in the three blades segment doubled in Brazil and grew over 40% in Mexico, a tribute to our successful trade up strategy in the region. In 2024, I’m proud to see we reached a record high market share of close to 15% in shavers in Mexico.

Finally, we grew double digits in The Middle East and Africa, driven by robust performance across all categories. Our solid commercial execution in 2024, coupled with our high level of operational meant that our financial ratios outpaced our expectations for the year. Not only that, but I’m very proud that we delivered on our horizon goals a year ahead of plan. At 15.6%, our adjusted EBIT margin surpassed our long term horizon target of 15.5%. We delivered adjusted EPS growth of 8% reaching more than EUR 6, a record high since 2017.

We also generated EUR $271,000,000 of free cash flow, reflecting our strong financial discipline. This solid performance demonstrate that we’ve consistently executed our Horizon initiatives with precision throughout the year. First, through strong commercial execution, our teams have focused on innovation, value added products and geographic expansion. Additionally, impactful advertising campaigns have helped boost our visibility and distribution gains. Second, revenue growth management.

Through a disciplined approach, we’ve streamlined our product portfolio to focus on high value offerings. And third, global supply chain improvements. We’ve optimized our manufacturing processes leading to efficiencies that have positively impacted our bottom line. Delivering long term profitable and sustainable growth is Horizon’s ultimate goal and targeted M and A has been a key driver in achieving this growth, which brings me to our most recent acquisition of TangleTeaser. As we look forward to 2025 and beyond, I’m excited by the significant long term profitable growth opportunities the acquisition of Tangle Teezer brings.

This market leading premium detangling hair care company is a perfect fit for BIC and will serve as a cornerstone for the final year of our Horizon strategy. I have full confidence in the value it will create for our stakeholders over the long term. Going to the next slide, let me go into a little bit more detail on this recent acquisition. TangleTeaser is a global leader in the EUR 4,500,000,000.0 hairbrush and comb market that is growing at a double digit rate and remains fragmented. They’re number one in The UK with a market share exceeding 20% and they’re building momentum in The U.

S. With strong upside potential. With their strong fundamentals, the TangleTeaser acquisition supports our Horizon strategy by giving Vic exposure to a scaled, fast growing and profitable business with meaningful potential yet to unlock. I’m very excited to have embarked their management team into this journey as they bring a wealth of experience and they have built a one of a kind financial profile. Their track record makes me confident that this will be a highly accretive acquisition that contributes meaningfully to BIC’s long term growth and profitability, creating value in the process.

TangoTeaser shares a common DNA with BIC. They offer a comprehensive product range, which addresses simple and essential consumer needs. They create high quality and easy to use products, which consumers love. They also put innovation at the heart of their strategy much in the same way we do at BIC. Their geographical footprint is also very similar to ours.

This presents tremendous opportunities for TangleTeaser to realize its growth potential and tap into our highly efficient scaled up operational platform. A recent visit to their London headquarters to meet their broader team left me even more impressed and I’m very optimistic about our joint prospects on this new journey. One of my main goals over the coming months will be to ensure their successful integration into the VIC ecosystem by helping TangleTeaser tap into our capabilities. I’m equally sure that we’ll be able to learn from their successful exploits in recent years. Moving to our operations, we remain focused on executing our horizon goals throughout 2024.

We will keep going in the relentless pursuit of excellence and our results for the last twelve months and since the launch of our plan speak for themselves. In terms of commercial execution, our omni channel presence grew significantly both online and offline with a notable improvement in our discounters channel where we saw double digit net sales growth in both Europe and The U. S. We also saw tremendous success with our impactful advertising campaigns such as A Pen for Every Side of You featuring famous singer, Charlie Puth and the BIG Kids Go Make Wow campaign, which yielded tremendous results during the back to school season in Europe. We saw similarly successful campaigns in Blade Excellence, including one in Brazil for our Soleil Escape Shaver with celebrity Loeb Bosworth.

We also continued to roll out our now iconic Easy Reach lighter campaign worldwide with Snoop and Martha. A key pillar of our commercial success since the launch of Horizon has been our focus on revenue growth management. We doubled down on our initiatives in 2024, further streamlining our product portfolio, reducing low profit SKUs and focusing on higher value items. This has resulted in a 40% reduction in SKU count since 2019. In the meantime, we’ve almost doubled our net sales per SKU as we’ve worked to find new ways for our existing products to add value and ensure that newly created products also contribute positively.

Turning to Slide eight, let me briefly touch on some significant ongoing progress achieved by our supply chain teams in continuing to optimize our operations. Not only does their hard work further contribute to our operational resilience, but it also contributes significantly to maintaining our high levels of customer satisfaction by ensuring our products are manufactured and delivered on time, regardless of the multiple factors that have impacted global supply chains in recent years. A key part of improving our go to market strategy is strengthening our regional presence to manufacture products closer to our key markets, reducing logistical complexities. To this end, key initiatives in 2024 included relocating the manufacturing of our markers to the Seme factory in France to better serve the European markets. While in Mexico, we expanded our Saltillo factory, which manufactures our shaver and stationery products.

We’ve also made further progress in executing additional manufacturing efficiencies, which have optimized our end to end supply chain network and streamlined inventory management, positively impacting our free cash flow. We would not be able to provide consumers with high quality products of tremendous value if it wasn’t for our value engineering initiatives conducted by our team since 2022. These ongoing efforts have helped improve our margin by looking at how we can reengineer certain components to deliver significant cost savings, while also reducing our environmental impact. To date, this initiative has helped us achieve cost reductions in excess of EUR 10,000,000 since 2022. Turning to Slide nine and to our ESG initiatives, where excellent progress has been made to advance our sustainability roadmap, an important pillar of our Horizon journey.

I’m delighted to say that several key milestones have been reached this year. Many of you will know how passionate we are about education and our continued commitment to improving children’s lives. To date, we have improved the learning conditions of two ten million children by giving them access to educational programs, bringing us even closer to our commitment of two fifty million children by 2025. We also continued to make progress in reducing our carbon footprint. By the end of 2024, we reduced our Scope one greenhouse gas emissions by 46% compared to 2019.

This great progress puts us well on track to meet our goal of a 50% reduction by 02/1930. These are just a few examples of the many efforts we’ve undertaken to make a positive impact on society and the environment. Growth, resilience and cost agility helped us deliver strong financial ratios once again in 2024. As a result and in line with our capital allocation policy, Bic’s Board of Directors will propose an ordinary dividend of an increase of 8% compared to last year. This represents a 50% payout ratio in line with previous years and it reflects our commitment to delivering enhanced returns to shareholders.

In addition to this, we will continue to execute our share buyback program in 2025, for which we will dedicate a total consideration of up to EUR 40,000,000. Our excellent financial position enables us to deliver these returns to shareholders without compromising our strategic goals, our ability to maximize free cash flow, all while delivering long term profitable growth for all stakeholders. With that, I’ll now hand it over to Chad who will present to you our consolidated financial results for 2024.

Chad Spooner, CFO, BIC: Thanks, Gonsolv. Let’s begin with an overview of our consolidated results for the fourth quarter and the full year of 2024 on Slide 12. In 2024, net sales were EUR 2,197,000,000.000, up 0.8% at constant currency excluding Argentina. We saw sequential improvement throughout the year leading to Q4 net sales up 4.4% at constant currency excluding Argentina at €517,000,000 On that note, going forward, we anticipate that the hyperinflationary context in Argentina will no longer have a material impact on our top line. Gonsalvo present this year’s financial outlook including Argentina at the end of this presentation.

Q4 adjusted EBIT was EUR 71,000,000 resulting in a margin of 13.7% stable year on year. Full year 2024 adjusted EBIT totaled EUR $340,000,000, a 15.6% margin, which was a solid increase of 90 basis points versus last year. Q4 adjusted EPS was up 14% versus Q4 last year. For the full year adjusted EPS was an increase of 8% versus last year. In 2024 free cash flow was million versus EUR $249,000,000 last year.

At the December 2024, our net cash position was EUR 189,000,000. Turning to the next slide, you will see a snapshot of our three divisions performance for 2024 starting with human expression. Net sales were million, up 0.7% at constant currency excluding Argentina. Growth was driven by solid commercial execution and distribution gains across key regions such as Europe and North America notably in discounters channels. Our strong value for money proposition was illustrated by the ongoing success of our core ball pen segment as well as our iconic four color pen boosted by new decors launched during the year like the four color Olympics and the four color pastel.

In Middle East and Africa, net sales grew double digits during the year, driven by a solid back to school sell in in South Africa and strong commercial execution in Western Africa. However, in 2024, the overall growth of our Human Expression division was negatively impacted by the soft performance of our Skin Creative and Digital Writing businesses. In 2024, Human Expression adjusted EBIT margin increased 40 basis points to 7.6% due to favorable pricing mix and positive currency fluctuations, as well as lower operating and other expenses and less brand support. This was partially offset by unfavorable fixed cost absorption and higher raw material and electricity costs. In the middle of the slide, you see our Flame for Life division’s performance.

Net sales were million in 2024, down 1.8% at constant currency excluding Argentina. In North America, 20 20 4 was a challenging year for our Leiters business due to the downturn in consumption trends, especially during the first half. However, net sales performance improved sequentially quarter after quarter ending with a slight growth in the fourth quarter. In 2024, the U. S.

Lighter market declined 5% in value. In light of this, BIC was able to outpace the market solid performance coming from value added products such as our Easy Reach lighter. In Europe, net sales grew high single digits fueled by distribution gains in both modern mass market and the discounters channel, notably in Germany, The Netherlands and across Eastern Europe. In Brazil, both pocket and utility lighters were strong contributors to the growth and our EasyReach lighter also continue to ramp up in 2024 following its launch in 2023. In 2024, the Flame for Life adjusted EBIT margin was down 80 basis points versus last year at 33.3%.

This was mainly driven by higher raw material costs, unfavorable fixed cost absorption and negative net sales operating leverage. Now turning to Blade Excellence, 2024 net sales were €543,000,000 up 5% at constant currency excluding Argentina. In Europe, net sales grew high single digits with robust performance across key countries. Best performing products ranges included VIX Hybrid Flex for men and our Soleil Escape range for women, illustrating once again our strong value for money proposition in an inflationary environment. In The U.

S, while the competitive environment remained intense in the women’s segment, we successfully gained market share in the men’s segment fueled by our Flex five range. And lastly, in both Latin America and Middle East and Africa, net sales grew by an impressive double digits. Our trade up strategy continued to be a success driven by solid commercial execution and numerous digital media campaigns. In 2024, Blade Excellence adjusted EBIT margin was strong and ended the year at 18.5% versus 12.7% in 2023. This was driven by a solid gross profit margin improvement with drivers such as positive pricing and mix, fixed cost absorption, as well as manufacturing efficiencies all contributing favorably.

We also benefited from lowering operating other expenses and lower brand support versus last year. Turning to Slide 14, let’s now review our consolidated financial results starting with full year 2024 net sales evolution. On an as reported basis, 2024 net sales were down 2.9% versus last year. At constant currency excluding Argentina, net sales were up 0.8%. Currency fluctuations had a negative impact of minus two twenty basis points and Argentina contributed minus 150 basis points.

On an as reported basis, net sales for the fourth quarter were down 1.6% versus last year. At constant currency excluding Argentina, our net sales were up 4.4%. Currency fluctuations had a negative impact of minus two fifty basis points and Argentina contributed minus three fifty basis points. Let us now take a closer look at our adjusted EBIT margin change versus the prior year for 2024 on slide 15. Full year adjusted EBIT margin was 15.6%, up 90 basis points versus last year.

Excluding the special bonus, the non cash impact of the fair value adjustment of the virtual power purchase agreement in Greece and of the purchase power agreement in France, gross profit margin increased by 40 basis points to 51.1%. This was driven by favorable price and mix, manufacturing efficiencies and currency fluctuations, partially offset by unfavorable fixed cost absorption and higher raw material costs. Brand support decreased by 50 basis points versus 2023, where we had major advertising campaigns supporting the launch of new products, which did not repeat in 2024. Operating and other expenses were flat versus last year. Let us now take a closer look at the change and our adjusted EBIT margin for the fourth quarter of twenty twenty four.

Q4 ’20 ’20 ’4 adjusted EBIT margin was 13.7%, stable versus last year. Excluding the non cash impact of the fair value adjustment of the power purchase agreement signed in France and Greece, Q4 gross profit margin increased by 40 basis points to 52%. Favorable price and mix, currency fluctuation and manufacturing efficiencies were partially offset by higher raw material costs. Brand support was lower by 90 basis points compared to last year. Operating and other expenses increased by 140 basis points.

On slide 16, we have the key P and L elements. Adjusted EBIT for 2024 was million of 10,000,000 versus last year. Non recurring items in 2024 amounted to million. This mainly included a EUR 19,900,000.0 non cash impairment on our Skin Creative business, Inc. Box, following an impairment test performed in December.

This was a result of lower than expected performance in 2024. This impairment is notably explained by less favorable market conditions than initially anticipated when we acquired Inkbox. There was a €15,600,000 non cash fair value adjustment of our power purchase agreements signed in France and Greece in order to provide renewable energy to our factories. A million special bonus awarded to our team members who were not granted shares under our regular long term incentive plans. A EUR 5,800,000.0 restructuring expense related to actions taken to optimize our cost structure, and finally, a EUR 4,300,000.0 related to TangleTeaser acquisition.

2024 income before tax was €298,000,000 compared to €313,000,000 last year. Net income group share was €212,000,000 compared to €227,000,000 for 2023. Our EPS group share was compared to last year. Our adjusted EPS group share was compared to last year. Moving on to Slide 17, we’ve seen the main elements of our working capital.

Our inventory levels decreased by million compared to December of twenty twenty three. We continue to drive inventory efficiencies in line with our Horizon Plan ambition focused on financial discipline. We further improved our inventory in days by eight days versus last year. We also sustained our working capital levels for receivables in days with DSO equaling fifty nine days. Trade and other payables increased by million from the December.

In 2024, we invested million in CapEx. It was lower than initially expected mainly due to the timing of some projects that slipped into 2025 versus 2024. The greatest focus was on our growth CapEx, which represented approximately 60% of total CapEx, as we continue to invest in our business to deliver our long term growth ambitions. On Slide 19, we have our net cash evolution from December 2023 to December 2024. We had strong operating cash flow coupled with continued improvement in working capital as explained in the previous slide.

Net cash was also impacted by CapEx of million. This resulted in a solid free cash flow generation of million. During 2024, we paid million in dividends and bought back million in shares. This included million related to our regular share buyback program, an additional million for our long term incentive plans. In December of twenty twenty four, BIC acquired 100% of TangleTeaser for a total consideration of EUR201 million.

Lastly, our net cash position at the December 2024 was million. This concludes a review of our fourth quarter and full year 2024 consolidated results. Before giving the floor back to Gonsalve, I would like to inform you that following various discussions with financial market stakeholders and with the support of BIIC’s Board of Directors, we will no longer report our full financial results on a quarterly basis. Going forward, we will report and comment only on net sales performance at our Q1 and Q3 results publications and report full financial results at our half year and full year earnings releases in line with market practices. With that, I’d like to hand it back over to Gisulf.

Gonzalves Bicke, CEO, BIC: Thank you, Chad. As we enter 2025, the final year of our Horizon journey, our key priority will be to continue relentlessly to execute and capitalize on the successful initiatives we’ve implemented. First and foremost, we will continue to focus on solid commercial execution. 2025 will be marked by further market expansion across multiple channels, leveraging our go to market excellence. Our teams are poised to build on the impressive momentum of 2024, driving further distribution gains across the board.

We’re particularly enthusiastic about growth opportunities in regions like Eastern Europe and The Middle East and Africa. We’ll also continue to strengthen the positioning of our added value products through impactful advertising campaigns. To that end, you will continue to see our ongoing partnership with Snoop and Martha on your screens and devices, both in The U. S. And Europe.

On that note, I’m happy to share that BIC was recently named the most trusted brand in non refillable lighters by Newsweek and BrandSpark International, a leader in consumer insights. This illustrates our relentless commitment to offering high quality and affordable products that consumers love and trust. Secondly, consumer centric innovation will remain at the very heart of our strategy. To that end, I’m thrilled that we’ll be launching this year more new products and product extensions to further strengthen our market positions. These launches include a new trending scent for our Solei Escape shaver, a key innovation, which has already reached 4% of market share in The U.

S. In just two years since its launch. The broader distribution of our successful Flex five and Solei Click refillable shavers, both online and offline in Europe and The U. S. And lastly, the first global launch of the new Flex five sensitive shaver for men, featuring an innovative anti inflammatory ingredient for a smoother shaving experience.

On top of our innovation pipeline, we will continue optimizing our product portfolio by further reducing lower margin SKUs and at the same time supporting our trade up strategy with added value products such as our iconic four color pen. This simple yet very loved product by our consumers grew an impressive 35% in net sales since 2021. Third, we will continue to execute our cost and supply chain initiatives, remaining laser focused on enhancing our end to end network and process optimization. I’m very confident that our well established global footprint will be instrumental in countering global supply chain challenges, thanks to our increased agility and track record of delivering operational excellence. Finally, we continue to unlock new pockets of growth.

Our B2B business, BicbladeTech, continues to scale and build momentum. We will sustain this progress by leveraging our customer pipeline and modular capabilities to drive growth and profitability by offering tailored and added value solutions. TangleTeaser also presents us with a wonderful opportunity to expand our total addressable market, enabling us to tap into a personal grooming market, a category that is both well established and fast growing. Our world class teams will help us unlock synergies and accelerate TangleTeaser’s growth trajectory throughout this year. As we look at our financial outlook for the year, in line with BIIC’s Horizon Plan mid single digit growth trajectory, 2025 net sales are expected to grow between 46% at constant currency.

Adjusted EBIT margin is expected to remain at the same level as 2024 at 15.6% above our horizon target. And lastly, free cash flow is expected to be above million. That said, we recognize ongoing global challenges and the rapidly changing geopolitical landscape. While our current outlook is based on the current macroeconomic environment, I’m confident that our strengths, agility and preparedness will enable us to continue to deliver. However, as we also know factors beyond our control such as shifts in this global trading environment could still impact our business.

To conclude, as we approach the home stretch of our Horizon journey, I am filled with pride and confidence with what we’ve achieved since 2020. Our strategic initiatives have transformed Bic into a growing highly profitable company with significantly enhanced capabilities and a world class team. However, this is just the beginning. We have more to achieve and we’re excited about our prospects for the future. Our operational excellence, resilient business model and new growth opportunities will enable us to hit the finish line in 2025 in great shape, positioning us favorably to achieve new benchmarks.

I thank all stakeholders for their continued support and trust in our vision. With that, Chad will now answer your questions.

Conference Operator: Thank We will now take our first question from Kate Ruzanova of UBS. Please go ahead.

Kate Ruzanova, Analyst, UBS: Good morning all. Thank you for taking my questions. So firstly, I wanted to ask about your net sales growth outlook. The acquisition of Tangle Teezer would add roughly three percentage points to your growth this year. So this means that on a comparative basis, your growth will be roughly in the 1% to 3% range.

So is this correct? And it would be very helpful if you can give us some color on the different constituencies of this growth and in particularly pricing as we exit the few years of elevated pricing growth? My second question is related to the key building blocks of your operating margin guidance. So would it be fair to assume some gross margin contraction in light of input cost inflation? Will OpEx be a tailwind?

And are you incorporating the benefits of the three new blade tech contracts in your margin guidance? And lastly, I wanted to ask about your ambitions for human expression business. Back in 2023, you talked about opportunities that could be unlocked with MAI technologies, but we have not heard much since. And today, you talked about soft results in digital writing and inbox impairment. So can you please share whether expansion into new addressable markets is still an ambition or is this prudent to be more difficult that you initially anticipated?

Thank you.

Chad Spooner, CFO, BIC: Hey, Kate. Thanks very much for your questions. Let me start with your question on the net sales outlook and driver. Your math is directionally obviously correct in terms of the contribution from the core business and from Inkbox. One thing where I’ll say growth is going to continue to come in 2025 from solid growth in Europe, as we’re going to continue to see distribution gains across multiple channels and then launching innovations.

We’ll also continue to see growth in MEA as we did in 2024 as they focus on geographical expansion and further distribution gains. And similar to the story in 2024, Latin America will show some of the growth as well as they continue to work on their trade up strategy in Brazil and Mexico. As you said, price, we are now very surgical, right? We do have price in our forecast for the year, but it is a very, I’ll call it, surgical and very limited compared to where it’s been in the past as you could imagine given everything that’s going on in the economies today. Your second question was about margin drivers.

And one other thing I want to point out as I talk about outlook for 2025, just to make sure we’re all clear. And I think we’re hearing it from other CPG companies as well. Q1 will be a softer quarter than the rest of the year. So it’s something that we should look out for, but I want to make sure we’re all aware. What we have in Q1 is, we look at the comps from last year and there are some at a CC basis, some difficult comps, but we do have continued growth in Europe like we’re going to have all year, but The U.

S. Consumer isn’t getting much better, right? So what you’ll see is continued softness from that front and we’ll see that picking up in our forecast for the rest of the year. But I wanted to make sure that we addressed Q1 as well. On margin drivers, I think you hit the nail on the head.

We actually we’ll have some positivity from price and mix, as I just mentioned, from a total EBIT standpoint, and we actually will see operating leverage. So the activities that we took in the second half of the year to really restructure some of our cost basis, we saw some in the second half of twenty twenty four and we’ll see the rollover impact in 2025 giving us some favorable leverage throughout the year. Now on the opposite side, contrasting that as you mentioned, input cost inflation, notably in raw materials, is going to have some negative impact on gross profit margin. We’re also going to have some negative impact from fixed cost absorption, as we drive less production volumes because we continue to reduce our inventory levels and doing that part will be reducing production to get our inventories where we want them and also from a country mix. So as we talk about growth in MEA in certain parts of Europe like Eastern Europe, those will have a negative mix to gross profit as well.

So those are some of the elements obviously that will be moving us and keeping our margin flat. So we’re doing what we can to keep it at that level, which is above what we committed for our horizon period, staying at about 15.6%. Good

Gonzalves Bicke, CEO, BIC: morning, Keith. Third question, AMI. AMI is super exciting, but it’s a startup. It’s a very, very small startup that if I remind all of you guys, we bought it for some of the underlying technology. And the teams have been working diligently on different projects, but those take time.

And so we’re giving ourselves the time to be able to bring those to market. So you shouldn’t expect any real PLN L impact in the short term, but we’ll update you as those become public.

Kate Ruzanova, Analyst, UBS: Understood. Thank you.

Conference Operator: Thank you. And we will now move on to our next question from Jeffrey de Hallouin of BNP Paribas (OTC:BNPQY), Exane. Please go

Gonzalves Bicke, CEO, BIC: ahead.

Jeffrey de Hallouin, Analyst, BNP Paribas, Exane: Yes. Good morning, everyone, and thanks for taking my questions. I’ve got three questions, please. Firstly, on U. S.

Types, if you could maybe share with us how it could impact your business and perhaps a quick reminder on where do you source the products you sell in The U. S? Secondly, Gonzales, maybe regarding your succession as a CEO, could you maybe give us an update on the current search? And thirdly, regarding margins, so you are guiding to a flat margins in 2025. Just wondering how should we think about margin opportunities in the medium term?

Thank you.

Gonzalves Bicke, CEO, BIC: Good morning, Chokwe. So tariffs, as we all know, it’s extremely fluid and at this point, nothing is definite. We’ve spent the time running all the scenarios and sensitivity analysis that we need to understand on the different countries. Of course, you have Mexico, you have The U. S, you have China, which is very limited for us.

Remind us all, we source almost nothing from China into any of our geographies. But we’re very focused on making sure that the total landed cost of our products in whatever geography remains competitive so that we can have a really good year. And we’ll update you all when we get updates from definitive statements. As to the ongoing work that the committee and I are doing for my successor, it’s progressing well and that’s pretty much all I can tell you at this time. But once it’s time to tell you more, we will.

Yes.

Chad Spooner, CFO, BIC: And then your question on margins, as we talked about, the guidance is to stay flat with 2024, so 15.6% EBIT margin. And then midterm guidance, we the guidance we’re giving right now is through 2025 and there’s no further guidance for future years. But right now, what we’ll always continue to do is look at how do we continue to drive cost efficiencies in the business, and we’ll but we can’t comment on future years margin guidance at this point in time.

Jeffrey de Hallouin, Analyst, BNP Paribas, Exane: Understood. Thank you.

Conference Operator: Thank you. We will now move on to our next question from Mary Lynn Ford (NYSE:F) of Bernstein. Your line is open. Please go ahead.

Mary Lynn Ford, Analyst, Bernstein: Yes, good morning. I’ve got several questions. First one, just to know, did you expect any additional PPA in France and risk charges for 2025? Second question is, how do you see could you provide us an update on The U. S.

Latter markets and the impact of China’s imports that make move your market in 2024? Third question is about BladeTech. What is your the contribution to your sales in 2024? And what do you see for 2025? And lastly, about Inbox, how do you intend to redeploy the brand in 2025?

And have you good hopes that at some point it will recover?

Chad Spooner, CFO, BIC: Hi, Mary Lynn. This is Chad. Your first question is about PPA charges for 2025. The way that the charges happen on the PPA is really it’s just mark to market. And so those are non cash accounting adjustments that just reflect the changes based upon what the contracts have for future years and the changes in the curves.

So really we can’t forecast our best forecast is what we do at this point in time at every period to adjust it for the mark to market. So that’s there’s no obviously future forecast that’s baked into the mark to market. Your second question was about The U. S. Lighter market and Asian imports.

So as we think about what happened in 2024 in the Asian lighter market, we talked about the first half of the year being negatively impacted by Asian lighters as they came back, really stabilizing mid Q2 twenty twenty four. And we saw progressive improvements in The U. S. Lighters, right, throughout the year and having a nice, I’ll call it, a balanced performance by the end of the year, really to stabilize point and slight growth actually. We don’t anticipate more activity.

You shouldn’t hear anything in 2025, more Asian lighters changing it, because we think we’re really at a balance point right now, right? We’re, as we said, pre COVID levels, kind of a normalized level in the unmeasured market. So we’re not forecasting any material change from Asian lighters there. That being said, the consumption in The U. S.

Market and lighters, we do expect continual softness. I talked about the Q1 softness. As The U. S. Consumer continues to feel inflationary pressures and the uncertainty that they have, we do expect to continue to see softness there.

Gonzalves Bicke, CEO, BIC: Good morning, Maureen. So as I said, I think during the past year, our businesses correlated, as you imagine, to the business of our customers. So when our customers feel the sluggish demand in The U. S. Economy, especially because that’s where still a bulk of the business is, we drive through.

But Big Blade Tech in 2025 is expected to grow. We did sign new customers last year that we told you all about, as well as we’re increasing our commercial forces for 2025 to continue to engage with new customers. Now those new customers, as I’ve told you, take between twelve and twenty four months to deploy after signature. We create the product for them, they bring it to market and so on. But our medium term goal remains to continue to grow BladeTech with accretive margins to the total Blade Excellence segment.

Then on Inkbox, to your question about the brand, so the brand remains strong on Inkbox. The business didn’t perform the way we wanted it to last year, but the Inkbox brand remains the number one in the non permanent space. It still has great engagement numbers on all the social platforms. The team’s done a good job, I think, of modifying the tech stack behind the web deployment and you should start seeing that in market in Q2.

Mary Lynn Ford, Analyst, Bernstein: Okay. I’ve got another question about the CapEx. You had CapEx shift a bit from 2024 to 2025. Could you tell us what you project for 2025 in terms of CapEx?

Chad Spooner, CFO, BIC: Hey, Meredith (NYSE:MDP). Yes. So CapEx, it’s one of those things I always say, we’re usually about $100,000,000 right? Sometimes there are a couple lower, couple higher. This year, we are a bit lower than $187,000,000 As we look at the changing in our sales and what’s going on from a growth perspective, we also sometimes look at where we do our capital allocation and we’re very mindful of when do we deploy that capital for growth in the right points in times.

So this year in 2025, it’s the same number. It’s about 100 and with some of those shifts, maybe it’s around 105, right, if we execute in all the projects. So, really within that range that we normally expect nothing different from there.

Mary Lynn Ford, Analyst, Bernstein: Okay. Thank you very much.

Conference Operator: Thank you. That was our last question. I will now hand it back to Gonzales Big for final remarks.

Gonzalves Bicke, CEO, BIC: Thank you, everybody, for joining us this morning. I hope you’re as excited about the business as we are. Of course, Briece, Michelle and our IR team remain at your disposal for any follow-up questions or more details. And we look forward to talking with you in a couple of months and seeing you at the AGM. Thank you, guys.

Bye.

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