Challenging Q1 for BIC

BIC’s Stationery division reported a 5.8% comparable decline in sales in its Stationery division in the first quarter, although e-commerce sales continued to grow.
Breaking down the sales by region:
Net sales were up slightly, with BIC stating that it outperformed a declining market and delivered strong e-commerce growth. The new Gelocity Full Grip pen drove a 1.6% value share gain in France.
North America
Net sales fell in the low single digits in a flat market, resulting in an estimated market share loss of 0.2%. However, BIC reported growth in the gel segment and in e-commerce.
Latin America
Net sales declined in the high single digits largely due to the Pimcao adhesive labels business and by a weak performance in Ecuador. Sales in Brazil grew in the mid-single digits and BIC said it outperformed the market during the back-to-school season there. Sales in Mexico were also up in the mid-single digits, fuelled by the marking and colouring segments.
Middle East & Africa
BIC said it was starting to see the benefits of its ownership of the Haco Industries manufacturing facilities and distribution activities in Kenya, in line with its “proximity strategy” to grow further in Africa.
Cello Pens’ comparable sales were down in the mid-double digits, which BIC attributed to changes in its go-to-market model that led to reduced sales to “superstockists”.  BIC continues to invest heavily in India, and in January it inaugurated a major new writing instruments facility in the city of Vapi, north of Mumbai.
BIC Stationery adjusted operating profit for the quarter was €1.8 million, a steep decline from the €9.6 million profit reported this time last year. Adjusted operating margin fell from 6.3% in Q1 2018 to 1.2% in Q1 2018. BIC blamed higher raw material costs and increased investments in brand support for the margin decrease.

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