Stationery at the of BIC

July 2005
July -2005
1
HONOR THE PAST,
... INVENT THE FUTURE
July -2005
2
BIC History – Consumer Stationery Products
July -2005
1950
Launch of the famous BIC CRISTAL ballpoint pen
1956
Launch of the BIC M10 retractable ballpoint pen
1961
New tungsten carbide ballpoint and BIC ORANGE FINE
1965
Authorization to use the ballpoint pen in French schools
1970
Launch of the BIC 4 COLOURS in 1 retractable pen
1979
Acquisition of Conté (French pencils and felt pens)
1980
Launch of the BIC ROLLER
1985
Creation of BIC Graphic USA
1988
Launch of the 7 de CONTE mechanical pencil
1991
BIC introduces Wavelength Value Added Pens
1992
Acquisition of WITE OUT (US correction products)
1993
Conté Evolution wood-free resin pencil
Rubberized cushion barrels ballpoint pen (Softfeel)
1996
Creation of BIC Graphic Europe
3
BIC History - Products
1997
Acquisition of TIPP-EX (correction
products) and of SHEAFFER
(luxury pens)
2002
Smooth Ink
Velocity Retractable Gel
Conté Evolution Triangle Crayon
Z4 Free Ink Roller
1998
Cristal Grip
Round Stic Grip
Atlantis Retractable Ball Pen
2003
2000
Velocity Retractable Ball Pen
INTENSITY gel ink roller
EXACT TIP free ink roller
Tipp-Ex foam applicator
Cristal Gel
Atlantis Mechanical Pencil
BIC Permanent Marker Line
Disney Coloring
Glues
2004
New Easy Glide Ink System
Atlantis Stic
Velocity Mechanical Pencil
BU2 & BU2 Grip
Acquisition of Stypen (refillable
fountain pen
2001
July -2005
BIC CRISTAL POCKET ballpoint pen
BIC e.3 – ballpoint + pencil + stylus
BIC TECHNOLIGHT free ink highlighter
TIPP EX SHAKE ’N SQUEEZE
2005
correction pen
Cristal Gel 2
BIC fountain pens
Clic Master
4
BIC History – Geographic Expansion
1950
Marcel Bich launches BIC CRISTAL in France
1954
BIC enters Italy
1956
BIC enters Brazil
1957
BIC acquires Biro Swan to enter the UK market
1958
BIC acquires Waterman Pen to enter the USA market.
Expansion in Africa and the Middle East
1959
BIC acquires Ballograf to enter Scandinavian Countries
1965
BIC enters the Japanese market
1965
BIC enters Mexico
1995
BIC enters Eastern and Central Europe
1997
Expansion in Asia
2004
BIC acquires 100% of Japanese Distributor Kosaido Shoji and renamed
BIC Kosaido KK
2005
BIC opens its own operations in China (October 2005)
July -2005
5
BIC’s Category Segmentation
BIC Group
BIC Group
Net Sales
IFO
Stationery
53%
Lighter
26%
Stationery
46%
Lighter
45%
Shaver
19%
Other 2 %
July -2005
2004 Full Year Results
Shaver
9%
6
BIC’s Brand Recognition
is the # 1 recognized Writing Instrument
Brand in multiple Key Markets.
along with
July -2005
7
BIC’s Organization for Consumer Stationery
Global
Category Management
Consumer Marketing
Research & Development
Manufacturing/Outsourcing
Resource Allocation
Developing People/Best
Practices
Four Geographic Regions
Europe, Middle East, Africa
and Sub-Continent
North America and Oceania*
Latin America**
Asia
* includes Australia & New Zealand
** includes Mexico, Central & South America
July -2005
8
BIC’s Organization for Consumer Stationery
Category Management
Four Geographic Regions
Global Consumer Marketing
Regional Trade Marketing
Research & Development
Sales & Customer Relations
Manufacturing/Outsourcing
Customer Service & Supply
Resource Allocation
Local Operations
Developing People/Best
Practices
Developing People/Best
Practices
July -2005
9
BIC’s Results in Total Stationery (Consumer
(Consumer Stationery
Stationery and
and BIC
BIC Graphic)
Graphic)
In million Euro
791
722
711
Net Sales
IFO
122
2002
99
100
2003
2004
Change in sales
- 1.1%
- 10.2%
+ 1.7%
Change in sales on a comparative basis*
+ 5.5%
+ 1.4%
+ 5.6%
+ 4%
- 4%
+ 7%
15.4%
13.9%
13.8%
Change in volume
Operating margin
July -2005
10
*Comparative basis means at constant perimeter and constant currencies
BIC’s Annual Volume in Consumer Stationery
Stationery
July -2005
BIC’s Units sold through subsidiaries
3.5 billion
BIC’s Units sold through distributors
0.7 billion
11
Agenda
July -2005
Pages
Our Marketplace
13 - 24
Our vision and strategy
25 - 30
Implementation
31 - 43
Our Results
44 - 47
12
Our Marketplace
July -2005
13
Our Marketplace - Defined
We compete in a flat market with a value of over € 7 billion.
Pens
Pencils
Markers
Coloring
Correction
• Ball Point
• Woodcase
• Permanent
• Felt Pen
• Bottle
• Gel
• Extruded
• Board
• Pencils
• Pens
• Roller
• Mechanical
• Highlighters
• Markers
• Tape
• Felt tip
• Wax Crayons
•Fountain pen
July -2005
14
Our Marketplace – Value Segmentation for the Worldwide Market
Correction
7%
Pens
48%
Coloring
14%
Markers 16%
Pencils
15%
BIC Estimate & Published Research
July -2005
15
Our Marketplace – BIC’s Volume Share of the Worldwide Market
The Worldwide Market is estimated at 40 billion units.
18%
16%
15%
16%
14%
12%
10%
10%
8%
6%
6%
6%
3%
4%
2%
0%
Pens
Pencils
Markers
Coloring
Correction
Total
BIC Estimate & Published Research
July -2005
16
Our Marketplace – BIC’s Value Share of the Worldwide Market
Value
20%
18%
18%
16%
14%
12%
11%
10%
9%
8%
8%
6%
6%
4%
4%
2%
0%
Pens
Pencils
Markers
Coloring
Correction
Total
BIC Estimate & Published Research
July -2005
17
Our Marketplace - Regional Breakdown of the Worldwide Market
Value
West Europe
23%
Asia
28%
EEMEA
8%
North America
33%
South America
8%
BIC Estimate & Published Research
July -2005
18
Our Marketplace – BIC’s Market Share in Consumer Stationery
Interpretation
Overall
Classic
Ball Pen
Other
Pens
+++
++
++++
+++
++
+
North & Central
America
+++
++++
South America
+++
++++
EEMEA
Africa
Rest of EEMEA
+++
+
++++
+
Western Europe
France
Rest of WE
Scale:
++++
strong
July -2005
Pencils
Markers
Coloring
Correction
++
+
++
++
+
+++
+++
++
++
+
++
+
+
+
+++
+
++
+
+
+
weak
19
Our Marketplace – Unaided Awareness – BIC Writing Instruments
Greece
France
77%
83%
Mexico
77%
80%
South Africa
Argentina
July -2005
Source: Global Brand Awareness Study - December 2000
9%
Malaysia
57%
Poland
72%
19%
Russia
Australia
Brazil
78%
59%
57%
75%
79%
Romania
United States
Italy
Spain
United
Kingdom
7%
Germany
19%
4%
20
Our Marketplace – The Strength of the BIC Brand
Brand Perceptions
% Agreement
BIC is a Brand you Trust
86%
BIC has High Quality S tandards
77%
BIC repres ents good Value for Money
79%
BIC is Reliable
77%
BIC is a Leader*
85%
Source: 2002 Quantitative Studies - Western Europe / North America
July -2005
* Note: Rated in North America Only
21
Our Marketplace – Premium Pens
We also compete in the premium Writing Instrument Market with
• The premium WI market has a value of about $1 billion, and is
declining.
Pens
Ball Point
Fountain
Gel
Roller
Pencils
Mechanical Pencils
Accessories
Desk Sets
Calligraphy Sets
Refills
• Main competitors are Mont Blanc/Parker/Waterman/Cross and a
host of smaller players.
July -2005
22
Our Marketplace – Weighting of the Market by Distribution Channel
USA
France
32 %
50 %
68 %
50 %
Office Supply
Mass Market & Traditional Retail
July -2005
23
Our Marketplace – Competitive Profile of the Worldwide Market
Newell
Rubbermaid
17%
BIC
10%
All other
53%
Avery
Edding
Faber-Castell Fila
Henkel
Local Players
Private Label
Schwan
Stabilo
Staedtler
Zebra
BIC Estimate & Published Research
July -2005
Pilot
7%
Pentel
6%
Mitsubishi
4%
Crayola
3%
24
Our Vision and Strategy
July -2005
25
Our Vision
• Keep best-in-class quality as a founding
principle of our strategy
• Continue to develop our leading position in
value for money
• Innovate
July -2005
26
Our Strategy
• Our strategy is focused on sales growth to achieve profitable
scale.
• We aim to grow sales 5-7 percentage points faster than the
market at constant currencies.
• Sales growth combined with productivity is aimed to drive IFO to a
sustainable 16 to 17% of Sales (including the imprinted business).
• In 2004, IFO as a percent to sales established at 13.8%.
July -2005
27
Our Strategy
Strengthen our leadership in our historical segments
•
Improve our existing products
•
Offer consumers products that meet their needs and
desires, leading to added-value products
•
Leverage our brand
Enter new market segments
•
Develop the research for new technologies and new
designs
•
Study acquisition opportunities to expand either our
portfolio or our geographic presence
Improve our margins
July -2005
•
Rein costs
•
Leverage added-value products
28
Our Strategy - Quality
A complex expertise to assure the quality of a simple product: example
of the ball pen
ª Control of measurements, appearance and roughness of balls
ª Double control of the point measurements
ª Physical and chemical control of inks
ª Control of the cartridge and pen assembly
ª Control of the writing quality at each stage of the product
manufacturing process
ª Audit of the finished products, with samples taken both in our plants and
from distribution channels
ª All these controls are implemented in all of our factories. As far as OEM
products are concerned, each product is systematically checked before
shipment.
July -2005
29
Our Strategy - Research & Development
Improvement of product performance and launch of new products
ª BIC uses the latest improvements in materials and chemistry to develop and
validate inks, points, leads, pencils, mechanical systems and correction
systems
ª New products are launched on the basis of common standardized
components : cartridges, retractable and mechanical systems
ª We develop and make our own specific manufacturing and control
equipment
ª Consumer satisfaction is a top priority for BIC’s General Management.
July -2005
30
Implementation
July -2005
31
Implementation – Product line
Offer a wide choice of simple, inventive and reliable products
Adults
Cristal Gel
SHEAFFER
Atlantis
BIC Select
Intensity
Orange
XXL
Velocity
BIC Matic
Wide Body Ice
Z4
M10
Cristal
Daily
use
Fountain pens
Velleda
5 to 8 years
old
Intensity Gel
Fluo / Pastel
Cristal
Colors
4 colors
- Coloring pencils
Roller Z4
fun ink
BIC Matic Fun
Cristal
Pocket
Scents
BIC Kids :
- Felt pens
Roller Fluo
Intensity Gel
Sophisticated
& fun
Licence
fountain pens
BIC Kids
Imagine
- Wax crayons
BIC Disney
Magic Artist
2 to 4
years old
July -2005
Meet all the consumers’ needs and desires
32
Implementation – New products
Mini Kid color
Ball pen:
Smoothie
Fountain pens
Mechanical pencil:
Clic Master
Correction product:
Clear Micro Tape
Ball pen: Atlantis Stic
July -2005
Cristal Gel
33
Implementation – Pens
Point
Tungsten
Carbide Ball
(Brass / Nickel Silver)
Plastic support
section
Tube
6 Ink
Cartridge
Plug
July -2005
34
Implementation – Pens
• Developing a full menu of technology for a full range of Pens
– Different point sizes and specifications
– Variety in Point Materials (Brass and Nickel Silver)
– Multiple ink technologies
Ball Point Inks
Gel Inks
Liquid Inks
Pigments
with
or
Dyes
– Different materials and mechanical systems
• Cost Reduction through standardization and technology
development
July -2005
35
Implementation - Pens
Expand Added Value Ball Pen Range
July -2005
Atlantis
Velocity
WideBody Ice
XXL Pro (2003)
Atlantis Stic (2004)36
July -2005
5,00
4,00
2,75
2,00
1,75
0,25
0,00
€ 1,50
1,50
1,25
€ 1,25
1,00
€ 0,82
€ 1,00
0,75
€ 0,55
0,50
€ 0,15
€ 0,20
€ 0,15
€ 0,25
€ 0,22
€ 0,30
€ 0,30
€ 0,35
€ 0,33
€ 1,00
€ 1,00
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BIC Pens – retail prices (€)
4,75
€ 4,99
4,50
4,25
3,75
€ 3,99
3,50
3,25
3,00
2,50
€ 2,49
2,25
€ 1,90
€ 1,98
€ 1,66
€ 1,00
€ 1,30
€ 0,85
€ 0,73
€ 0,42
37
Implementation - Pens
Packaging – Graphic Differentiation
Retail Price - € 1.49
July -2005
Retail Price - € 3.99
Retail Price - € 4.29
38
Implementation - Pencils
• BIC has solid market share in Classic
Mechanical Pencil.
• Leads in BIC’s mechanical pencils
have been improved to match those
of the #1 competitor (Pentel).
• BIC has developed a 0.9 mm lead to
meet growing consumer interest in
bold writing.
• BIC is under-represented in Added
Value Mechanical Pencil.
• BIC launched Atlantis and Velocity
Added Value Mechanical Pencils in
2003.
July -2005
BICMatic Fun
Atlantis
Velocity 39
BIC Pencils – retail prices (€)
1,40
1,30
€ 1,29
1,20
€ 1,25
€ 1,20
1,10
1,00
€ 1,05
0,90
€ 0,85
0,80
0,70
0,60
€ 0,55
0,50
0,40
€ 0,40
0,30
€ 0,31
0,20
0,10
0,00
July -2005
BIC Pencil
BIC Pencil
(Fashion)
BIC Matic Grip
(.5 & .7)
Great Erase
Softsider
Color Codes
Atlantis Pencil
Velocity Pencil
40
Implementation - Markers
Permanent Markers
•
BIC’s participation in the Permanent
Marker and Board Marker segments is
limited to France.
•
There is a large, profitable market for
Permanent Marker in the USA,
dominated by Sharpie.
•
In 2003, BIC launched a range of
premium permanent markers with
superiority claims over the
competition.
•
“Value” and “better” positioned
permanent marker have also been
launched.
•
Europe is also following this product
strategy.
July -2005
Good
Better
Best
41
Implementation - Markers
Highlighters
• BIC has strong market share in
the USA with Briteliner.
• BIC’s participation in the market
was strengthened with BriteLiner
Grip in 2002.
• The “Free Ink” Technolight
launched in 2001 has been
supplemented with Z4
Highlighter in 2003.
Briteliner
Briteliner Grip
July -2005
Z4
Technolight
42
Implementation - Correction
•
BIC’s Wite-Out is the #1 brand in North
America.
•
BIC’s Tipp-Ex is a strong #1 or #2 brand in
Europe.
•
BIC is gaining share in key markets.
•
The correction pen and tape markets are
growing while bottle is declining.
•
BIC has developed a solid range of
products in correction tape.
•
The Shake & Squeeze pen has continued
to out perform the market.
July -2005
43
Our Results
July -2005
44
Our Results
• Innovation: 21% of 2004 sales achieved by new products and
line extensions
• Limited price increases on core products.
• Selling price deflation is an issue in some markets.
• Strong everyday focus on productivity is the key response.
• The Stationery Streamlining plan accelerated our
implementation of cost reductions, allowing increased
investment in Brand Support while improving margins.
July -2005
45
Our Results - BIC Factories Around the World
USA - 3
Milford
Gaffney
Fountain Inn
Mexico - 1
Cuautitlan
Brazil - 1
Manaus
July -2005
France - 4
Marne la Vallee
Boulogne
Vannes
Cernay
South Africa - 1
Johannesburg
46
Our Strategy - Recap
€ million
Net Sales
IFO
IFO to
Sales
FY 2003 FY 2004 % change % change
on C.B.*
04/03
711
722
+1.7%
+5.6%
99
100
+2.9%
+10.3%
13.9%
13.8%
Financial Targets
• Sales Growth: 5-7 points faster than market
• Mid-term IFO margin target: 16-17% of Sales (including the imprinted
business) under French GAAP
July -2005
*On C.B.: on a comparative basis, i.e. at constant currencies and constant perimeter
47