Back-to-school (BTS) trading and new products helped to lift BIC sales in an otherwise tough Q3 for the manufacturer.
In the manufacturer’s stationery division, quarterly sales rose 2.6% on a comparative basis to €191.3 million ($226 million).
Overall, BIC’s Q3 was below expectations with sales down 5% at €465.8 million while profit fell 21.5% to €57.8 million. The group said it would be cutting its full year forecasts of slightly less that 2% sales growth.
For the nine months ended 30 September, sales rose 2.9% to €619.4 million.
Sales in Europe recorded mid-single digit growth. It reported a good BTS period across all European countries, which managed to offset market softness.
The stationery segment gained market share across the board, most notably in France for the 14th consecutive year, and also in the UK.
The group attributed this to improved customer relationships, targeted brand support investment and the success of new products.
In North America, sales grew low-single digit in a slightly declining market. During the BTS period, it remained flat, but new product launches allowed BIC to gain share.
In developing markets, Latin America sales grew low-single digits. In Brazil, it continued to gain market share despite a weak environment. Good BTS trading in Mexico allowed BIC to outperform the market there.
In the Middle-East and Africa, it delivered robust growth alongside market share gains, particularly in South Africa.
Adjusted operating profit margins for the segment were reported at 8.9%, compared to 9.9% for the period last year. Q3 margins were also slightly lower at 3.6% compared to 4% last year. This was due to increased brand support investment.
BIC also announced that it is to invest around €28 million in a new writing instruments facility in India. Its subsidiary Cello has acquired land and building for the construction of a new writing instrument facility in Vapi, Gujarat.
The investment will enhance its manufacturing reach in India, and enable it to meet consumer demand more effectively in this rapidly growing market. The facility is expected to be operational by the end of 2018.
By Joshua Allsopp for OPI