Good day and welcome to BIC's First Half 2025 Results Conference Call. Throughout today's presentation, all participants will be in a listen-only mode . Later, we will conduct a Q&A session. You may register for questions at any time by pressing one on your telephone keypad. Now I'd like to hand the call over to your host, Brice Paris, VP Investor Relations. Please go ahead.
Good morning and welcome to BIC's First Half 2025 Results Call. I'm Brice Paris, Head of Investor Relations. We are in Clichy today with Gonzalve Bich, our CEO, and Chris Dayton, our Interim CFO. We are also pleased to welcome Rob Versloot, our incoming CEO who is also with us today. We will be available at the end of the call for the usual Q&A session. As a reminder, this call is being recorded and the replay will be available on our website along with the presentation and press release. As always, please take a moment to read the disclaimer at the beginning of the presentation. Before we move on to it, let's start with a short introduction from Rob Versloot. Rob, the floor is yours.
Thank you, Brice, and good morning everyone. I am Rob Versloot. It is a great pleasure to attend this call with you today. I am really looking forward to stepping into my new role as BIC's CEO and will begin my duties starting September 15th . I think there are many things in common between the BIC of today and the world I come from and it is undoubtedly a right time for me to join the group. I am eager to contribute to a new chapter of BIC leveraging my lengthy experience in transforming brands and companies during this transition period. I'm thrilled to have the opportunity to count on Gonzalve, who will be by my side for the next few months, passing on to me the numerous subtleties and DNA of BIC. Let me finish this short introduction by giving you some insights about my background.
For those of you who don't know me, I started my career at Nutrition and Danone where I held several positions in Senior Marketing, Commercial, and General Management across various geographies. I worked in Brazil, Indonesia, Russia, and Europe. I joined the Hero Group in 2008, initially overseeing regional markets in Europe, North America, and China before being appointed as CEO in 2012. Since then, we deeply and successfully transformed the company, building high performance teams and capabilities across both emerging and mature markets to drive sustainable growth while improving profitability. I am sure I will have the opportunity to meet some of you during the second half of the year and we will all be in touch at BIC's Q3 net sales conference call in October.
With that, I will now hand it over to Gonzalve and Chris for the results presentation and I will be available to answer any of your questions at the end of the call during the Q&A session. Thank you.
Thank you, Rob. Good morning everyone, and thank you for joining us today. As you know, this is my final earnings conference call as CEO of BIC. I'll reflect more on my time as CEO after taking you through our performance for the first half of 2025. BIC continued to demonstrate its resilience in a highly volatile trading environment, and here are the key takeaways I'd like to highlight. Firstly, BIC returned to growth during the second quarter, delivering 1.4% growth at constant currency. That's a notable 8.4 percentage points improvement in net sales growth compared to Q1. Secondly, we saw sequential improvement across all three of our core businesses and geographies, with the most significant progress coming in Flame for Life, where net sales performance rebounded by 15 percentage points versus the first quarter.
Thirdly, Tangle Teezer was a star performer, achieving double-digit growth and contributing 4 points to the group's overall growth in the first half. Last, as we focus on what we can control in H1 by maintaining a resilient margin of 13.7%, 120 basis points below last year despite a tough start to the year. This is a reflection of the capabilities we've developed across the business through Horizon. Let's now move on to our H1 results in more detail. As you all know, the first half of 2025 presented us with a series of complex global challenges, including ongoing tariff uncertainties, shifts in consumer behavior, and broad pressure on purchasing power. Globally, consumer confidence has declined, with shoppers becoming far more cautious, particularly in discretionary categories. The effects were especially evident in the U.S., where all three of our core markets contracted, some more than we expected.
In stationery, the U.S. market declined 1.7% in value, with the ball pen segment, our most exposed category, experiencing mid-single-digit declines. The U.S. lighter market fell 5.4% versus -5% in 2024, while the disposable shaver category was down 1.5% in value. As a result, our total group net sales for the first half declined 2.4% at constant currencies. However, we did see a solid rebound in Q2, driven by sequential improvements across the board in Human Expression. While global market conditions remain challenging, we saw encouraging momentum in key regions like the U.S., supported by growth in core stationery segments like mechanical pencils and correction products. In Flame for Life, we continue to navigate headwinds in the U.S. and faced heightened competitive activity in Latin America. Nevertheless, we demonstrated resilience, improving quarter-on-quarter performance across all geographies and returning to growth in Europe and the Middle East and Africa.
Powered by distribution gains in Blade Excellence, our performance was fueled by our premium hairbrush brand Tangle Teezer. Our core shaving business also performed well with solid growth in Latin America and the Middle East and Africa and modest growth in Europe driven by the continued success of our value-added Flex and Soleil ranges. Returning to Tangle Teezer, the brand successfully outperformed its category in the first half, achieving double-digit net sales growth. This success was driven by distribution gains and bold creative advertising campaigns across the U.S., Europe, and especially the U.K. The Ultimate Detangler brush family and the newer Chrome and Plant brush collections were standout contributors in the U.S. Brand awareness has tripled, a testament to the strength of our marketing strategy and the effectiveness of our distribution capabilities. Our Horizon Strategic Plan came into its own during the first half of 2025.
We remain fully focused on executing the plan and I'm proud of the progress we've made in each of our strategic pillars as we approach the finish line. Let's start with innovation and our continued focus on improving and launching new products that meet consumer demands, which is the cornerstone of our growth model. In stationery, we should be proud of the success of our iconic 4-Color pen over the years, which has grown an impressive 35% in net sales since 2021. More recently, the launches of the 4-Color Smooth and Intensity Paint markers in Europe were met with strong market enthusiasm and both were key contributors to our first half performance. Our strategy to serving every lighting occasion indoors and out continues to drive innovations in our lighter business. Last year we launched our Easy Load Lighter, a first-of-its-kind refillable utility lighter across several countries in Europe.
In France, this launch exceeded expectations, especially in modern mass retail where it was supported by excellent in-store execution by the team. In Blade Excellence, we successfully rolled out the Flex 5 Sensitive Shaver for men globally, featuring an innovative anti-inflammatory ingredient for a smoother shaving experience. In the U.S. this breakthrough innovation was a great success in the first half and enabled us to gain further market share in the competitive men's segment. Another important pillar of Horizon is to elevate brand visibility and connect more deeply with consumers, and we continue to do so through impactful marketing campaigns. In Europe, o ur Squid Game Lighter Collection has attracted consumers with its creative designs. The campaign was launched in May and has been gathering strong momentum. This sleek all-black limited edition lighter was well received by consumers, adding a more premium edge to our standard range.
In Brazil, the Soleil Escape Summer campaign delivered solid results, driving significant consumer engagement. This campaign, coupled with our trade-up strategy in the region over the past five years, has helped the Soleil range to deliver more than 30% average annual growth between 2020 and 2025. Looking ahead to the back-to-school season, BIC is launching major campaigns across several European markets, including A Pen for Every Side of You for our iconic 4-Color Smooth pen and Go Make Wow for the BIC Kids Collection. Another key Horizon priority is our relentless focus on supply chain optimization. A highlight in H1 was the transfer of production of our correction range, the Mini Pocket Mouse, from Mexico to our Bizerte facility in Tunisia. This move brings our operations closer to the European market, reduces transportation and manufacturing costs, and enhances supply chain agility, a critical gain in today's volatile environment.
Fourth, we pushed forward with achieving distribution gains across key channels and geographies, enabling further increases in brand awareness. In Europe, i n just two years, we've delivered an impressive growth of more than 20% in the discounters channel driven by stationery and lighters, evidencing the success of our omni-channel strategy. Building BIC consumer loyalty is also critical when it comes to preserving gains. To that end, I'm especially proud that BIC was recently named France's favorite consumer brand out of more than 1,300 brands across all categories, becoming the first non-food brand to win this distinction. Our talented teams from BIC Brazil won three Lions Awards at the Cannes Lions Festival for a campaign celebrating the 75th anniversary of the Crystal Pen. In our own unique way, we used a robot powered by AI to rewrite Romeo and Juliet, replicating Shakespeare's own handwriting.
This was a beautiful testimony of the pen's durability and the brand's timeless value. To conclude this first section, despite significant market uncertainties, we are progressing steadily. As expected, we saw a rebound in the second quarter after a soft start to the year by deploying the numerous capabilities developed under our Horizon plan. With that, I'll now hand it over to Chris, who will walk you through our financial performance for the first half.
Thank you, Gonzalve. Good morning everyone. I'm Chris Dayton, Interim CFO, and I'm happy to be with you today to present our consolidated results for the first half of 2025. Let's start with an overview of our performance and some key financial figures on slide 6. In the second quarter, net sales were EUR 598 million, up 1.4% at constant currency, sequentially improving across all divisions and geographies relative to Q1. In the first half, net sales were EUR 1.1 billion, down 2.4% at constant currency. Excluding Tangle Teezer, net sales declined 2.7% in Q2 and 6.4% in H1. On a comparative basis, H1 2025 adjusted EBIT was EUR 147 million, representing a 13.7% margin, down 120 basis points versus last year. Adjusted EPS was EUR 2.35 compared to EUR 2.95 last year.
In the first half, free cash flow was negative EUR 14 million compared to a positive EUR 37 million last year, and at the end of June 2025 our net cash position was EUR 21 million. Turning to the next slide, I'll provide you with a snapshot of the performance of our three divisions in H1 2025. Let's begin with Human Expression. Net sales were EUR 406 million, down 7.8% at constant currency. In North America, performance was impacted by a challenging trading environment with the U.S. stationery market declining 1.7% in value. We saw a steeper decline in the ball pen segment of 6.4% where BIC is the most exposed. In this context, net sales performance declined significantly in H1 but improved in Q2 versus Q1. In Europe, net sales decreased low single digits due to lower consumer demand in France and softer performance in e-commerce in the U.K.
However, the success of recent launches including the 4-Color Smooth and 4-Color Pastel delivered growth, and ongoing distribution gains in the discounters channel also contributed. In Latin America, net sales remained negative in H1, impacted by increased competitive pressure across traditional channels in both Mexico and Brazil. However, recent launches in Mexico like the Gelocity and BIC Intensity ranges led to solid growth in the gel and coloring segments. In the Middle East and Africa, performance was driven by strong commercial execution in Nigeria with the continued growth of the iconic BIC Cristal pen and distribution gains in Morocco. These successes offset market headwinds and competitive pressures in some countries, and overall sales in the region were flat. In H1 2025, Human Expression adjusted EBIT margin decreased 40 basis points to 11% driven by higher raw material costs, unfavorable Rocketbook Performance, and currency fluctuations.
This was partially offset by favorable price and mix and lower operating expenses. Moving on to our Flame for Life division's performance, net sales totaled EUR 354 million in H1 2025, down 8.6% at constant currency. Following a challenging first quarter, BIC demonstrated resilience with net sales evolution improving by 15 percentage points in Q2 versus Q1, driven by all geographies. In North America, our lighters activity in H1 was impacted by lower consumption trends. However, Q2 performance improved significantly relative to Q1. BIC was able to deliver steady share gains, particularly in the utility lighter segment where we gained 1.8 points of market share in value. In Europe, following soft performance during the first quarter, BIC returned to growth in Q2 with relatively flat net sales growth in H1.
This was mainly driven by key products such as the Slim Pocket Lighter and the BIC EZ Reach, which grew double digits in the first half. In Latin America, net sales decreased high single digits in H1. In Brazil, BIC gained distribution in the utility lighter segment. However, performance was negatively impacted by strong competition from low-cost pocket lighters. In the Middle East and Africa, BIC returned to growth in Q2, driven by solid performance across Western and Central Africa as well as distribution gains in Nigeria. This led to high single-digit growth in the region during the first half. In H1 2025, Flame for Life adjusted EBIT margin was 28.6% versus 31.5% last year. This decrease was mainly driven by the net sales decline during the first half, particularly in the U.S., and by higher raw material costs, unfavorable absorption, and currency fluctuations.
Finally, in the Blade Excellence Division, H1 net sales were EUR 302 million, up 15.6% at constant currency. As mentioned earlier by Gonzalve, Tangle Teezer performed very well, growing double digits driven by the U.S. and Europe. On a comparative basis, Blade Excellence net sales were down 1.4% in the first half. In North America, BIC continued to face tough competition, particularly in the women's disposable shaver segment, leading to a mid single-digit decline in H1 on a comparative basis. In Europe, while net sales declined slightly in H1 on a comparative basis, Q2 growth was positive. Performance was boosted by continued distribution gains in Eastern Europe and the success of value-added shavers such as BIC Hybrid Flex 5 and Soleil Escape. In Latin America, our trade-up strategy to the multi-blade segment continued to deliver positive results in the region.
In Q2, Brazil achieved strong growth and we continued to grow in Mexico. Lastly, in the Middle East and Africa, H1 net sales were down mid-single digits with significant growth in Q2. This was driven by a solid mix of value-added products and distribution gains in key markets such as Morocco and Nigeria. The Blade Excellence adjusted EBIT margin for H1 improved by 60 basis points versus last year, reaching 14.7%. Favorable price and mix, fixed cost absorption, and manufacturing efficiencies were key margin drivers. However, raw material and electricity costs were unfavorable. Turning to Slide 8, let's now review our consolidated financial results starting with net sales evolution in the second quarter and first half of 2025. Net sales for the second quarter were up 1.4% at constant currency, excluding the 4.1-point impact of Tangle Teezer. Growth on a comparative basis was -2.7%.
Currency fluctuations had a negative impact of 4.5 points. For the first half, net sales were down 2.4% at constant currency. Excluding the impact of Tangle Teezer, net sales were down 6.4% on a comparative basis. Currency fluctuations had a negative impact of 3.1 points. Now let's review the change in our adjusted EBIT margin versus last year o n slide 9. H1 adjusted EBIT margin was 13.7%, down 120 basis points versus last year mainly due to gross profit margin decline. This was driven by higher raw material and electricity costs and unfavorable currency fluctuations. This was partially offset by favorable price and mix, continued manufacturing efficiencies, and the positive impact of Tangle Teezer. Brand support was favorable 30 basis points while operating and other expenses had a negative impact of 50 basis points. On Slide 10, we have the key P&L elements.
Adjusted EBIT for the first half was EUR 147 million, down EUR 23 million versus last year. Non-recurring items amounted to EUR 25 million. This includes a EUR 19 million non-cash impairment on our digital writing business Rocketbook following an impairment test performed in June. This was the result of lower than expected performance and a EUR 6 million inventory fair value adjustment for Tangle Teezer. This inventory was revalued at the time of the acquisition to reflect its fair value and impacted the P&L in H1 2025. Income before tax for the first half of 2025 was EUR 111 million compared to EUR 155 million last year. Net income group share was EUR 76 million compared to EUR 111 million last year, while adjusted net income group share was EUR 97 million compared to EUR 123 million last year. Our group EPS was EUR 1.85 compared to EUR 2.67 last year. Our adjusted EPS stood at EUR 2.35 compared to EUR 2.95 last year.
On slide 11, we have the main elements of working capital. Our inventory levels increased by EUR 18 million compared to December 2024. We continued to improve our inventory in days versus June last year. Trade and other receivables increased by EUR 153 million, mainly due to back-to-school seasonality. Trade and other payables increased by EUR 25 million from the end of December. Finally, on slide 12, we see our net cash evolution. From December 2024 to June 2025, operating free cash flow amounted to EUR 199 million, down EUR 29 million year on year, mainly due to the decrease in EBIT following the net sales decline. Change in working capital and others was negative EUR 179 million versus negative EUR 159 million for the same period last year, mainly due to net sales seasonality. CapEx were EUR 34 million in H1. This resulted in a negative free cash flow of EUR 14 million during H1 2025.
We also paid EUR 127 million in dividends and bought back shares for EUR 13 million. As a result, our net cash position at the end of June 2025 was a positive EUR 21 million. This concludes the review of our first half 2025 consolidated results. With that, I'd like to hand it back over to Gonzalve.
Thank you, Chris. Let me now end with a few remarks on our 2025 outlook. Despite all macroeconomic and industry challenges we face, the strength and resilience of our model, as well as the dedication of our teams globally, make me confident in confirming our 2025 outlook for the full year. 2025 net sales are expected to grow between 0% and 3% at constant currency, adjusted EBIT margin expected to be around 15%, and free cash flow is expected to be above EUR 240 million. As we bring BIC's Horizon chapter and my own to a close, I'm proud of how BIC has transformed as a stronger, more agile, and innovative company. We've pivoted to growth by harnessing our capacity to innovate, embedding sustainability at the heart of our strategy, and embracing new ways of working with great pride and confidence in BIC's future.
Now is the time to start a new chapter by welcoming Rob as CEO. As I prepare to step down at the end of September, I'm incredibly grateful for this journey of leading such an iconic company. The past seven years have been full of learning, partnership, challenges, and achievements, and I'm very proud of what we've built together with our teams across the globe. BIC is in a strong position as Rob takes over. He brings a distinguished international career and a wealth of experience to the CEO role, and the company is in exceptionally capable hands under his leadership. Before we open it up to questions, I want to take a moment to thank you all. We've interacted a lot during my time as CEO at numerous roadshows and conferences and with more than 30 conference calls together.
Just so you know, I will still be listening in on these calls and yes, I'll still be placing my bets on which analyst gets the first question. With that, the team and I are happy to take your questions. Thank you.
Thank you, ladies and gentlemen. As a reminder, if you would like to ask a question, please press Star one on your telephone keypad. We'll pause for just a moment while waiting for them to queue for questions. Thank you. We will now take our first question from Marie Fort of Bernstein . Your line is open. Please go ahead.
Hi, good morning to you all and thanks Gonzalve for this last conference call and I would say bon vent for you. I've got several questions. The first one is on earnings. Could you tell us what the impact was, the contribution to EBIT, to adjusted EBIT of Tangle Teezer? Second question is about lighters and to better understand what explained the kind of rebound in Q2 sales. Firstly, it's about inventories. In which category did you build inventories? I suspect it should be stationery, but I would be curious to know the reason for this increase. Lastly, how do you explain the resilience of the operating margin for the stationery division on the back of strong organic sales decline. Thank you very much.
Thanks. For the first question on Tangle Teezer, in H1, Tangle Teezer was slightly margin accretive. For the full year, we expect it to contribute slightly to the group's margin, and then in 2026 and beyond, we expect it to continue to be margin accretive.
Morning Marie, and thank you for your comments. Lighter in Q2 sequentially improved. I think part of that is definitely rebuilding of strategic inventories by some of our clients. I think we had said in the first quarter that some of them had run them down. I don't see anything particularly different from that. Nobody's arbitraging or trying to time the system there. I would, in addition to that, call out the really great job that the North American team has done from a visibility and impact perspective, as well as some of the more innovative digital campaigns that drove some of the sales on the limited edition and utility lighters.
Hi, for the question on the margin, it was pretty resilient given the headwinds we faced. We did have higher raw material costs, unfavorable currency fluctuations, and of course we did have difficult performance in Rocketbook, but we were able to offset that through favorable price mix, lower operating expenses, and manufacturing efficiencies. Lastly, I think there was a question regarding the inventory levels. Most of that is due to the seasonality that we experience in Back to School. On the Human Expression side, we started a little bit later this year from some of our customer fulfillment, and we expect that to bleed out as we get into H2.
They asked for fulfillment later. It wasn't us delayed, it was the market asking.
We will now take our next question from Cédric Rossi of Stifel. Your line is open. Please go ahead.
Yes, good morning everyone.
First of all, wishing you all the best Gonzalve and welcome to Rob. I've got three questions. The first one is could you come back on, I was curious to have your view on the retailers' mood, especially in North America ahead of the back to school season. We have seen some retailers saying that they won't increase prices on stationery for back to school. I was also curious to have your view on the order side of this business and how you expect the back to school season to occur in the U.S. The second question is to come back on Tangle Teezer. A strong operational performance in H1. I was also curious to have your view on what are the next steps in terms of integration for the second half of the year.
Are you enlarging the distribution globally or would you open up new categories and so on? The third one is on the ethics. What are your expectations for the second half of the year? There's been a strong headwind to margin in H1. I was also happy to have your view on the second half of the year. Thank you.
Thanks, Cédric. Great questions. I'm not an analyst, so I don't comment on retailer statements. What I can tell you about non-food retail, and specific to seasonal non-food retail, is what I said in my prepared remarks, right? Which is, consumers are cautious, they're fickle, the wallet is tight, and they're going to be looking for value for sure. The good news is, and you all have covered us for long enough to know that these plans were put in place nine to twelve months ago. It's really down to execution in store, which I know that all our retail partners are hard at work on, making sure that they're switching from Summer Barbecue to Back- to-S chool before they set out Halloween.
When I look at the different in-store campaigns and marketing communication vehicles that the teams have fielded in all our top strategic markets, I'm confident that we'll deliver a very solid result this year. I'm not particularly worried about that Tangle Teezer. That team is doing super well. I was there a few weeks ago actually with Rob. That was my third kind of business review on integration this year with them. I'm really pleased both from a people, process, technology, and outlook perspective. The brand has performed really well in H1, ahead of the market with double-digit growth and doing some incredible things, especially in the U.K., kind of their home market where we test things. The U.S. is also strong. In my prepared remarks, I talked about the Ultimate Detangler and the new Chrome and Plant brushes that we're excited about.
2025 is really about bedding this in and making sure that it's solid to continue to grow double-digit in 2026. I'm really, really pleased with that.
Hi Cédric. On the FX outlook, we expect a continued unfavorable impact, largely due to the USD, the Real, and the Mexican Peso. On a net sales perspective, we expect it to be 350 to 400 basis points unfavorable for the year.
Okay, thank you.
Thank you. As a final reminder, ladies and gentlemen, if you would like to ask a question, please press Star one on your telephone keypad. We will pause for a further moment. Thank you. We will now take our next question from Alessandro Cuglietta of Kepler Cheuvreux. Your line is open. Please go ahead.
Yes.
Hi.
Hi Gonzalve, everyone. Just a quick question on the benefit from price mix in H1. Maybe could help us quantify the benefit from that. It's mentioned multiple times in the release. How much remains to be captured or how much that could be a tailwind for H2? Thank you.
Hi Alessandro. You know Price Mix was favorable in all three categories, and you know, about 50% in the first half, and then we'll expect 50% of that in the second half. It's pretty balanced throughout the year.
Great. Thank you.
Thank you. There are no further questions in queue. I will now hand it back to Gonzalve Bich for final remarks.
Again, guys, thank you so much for all these years of, I'm not going to say partnership, but gently ribbing me when it was necessary, pushing us and all the partnership for helping the investment community understand the company where it is, its performance and trajectory. You can't see me, but I'm heartily clapping Rob on the back and wishing him well. This is my final sign off, and you'll be talking to him and Chris and Brice late October for our Q3. Thanks very much and have a great day.
Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.