Hello, and welcome to the BIC full year results twenty twenty call. My name is Rinkel, and I will be your coordinator for today's event. Please note this conference is being recorded. And for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call.
This can be done by pressing 1 on your telephone keypads to register your question. If you require assistance at any point, please press 0, and you will be connected to an operator. I will now hand you over to your host, Sophie Collier Capio, to begin today's conference. Thank you.
Thank you, Rinco. Good afternoon, and good morning, everyone, and thanks for joining this full year results twenty twenty conference call for BIC. As usual, the call will be hosted by our Chief Executive Officer, Gonzalo Bic, and our Chief Financial Officer, Charles Pooner. They will start by a short presentation of our results, and it will be followed by a Q and A session. Let me give the floor to Gonzal.
Gonzal?
Thank you, Sophie, and good day, everyone. Thank you for joining and attending this call. Before I start reviewing our 2020 performance in detail and how we foresee 2021, I'd like to share some insights we've gained as we look back at last year. There's no question that 2020 was a challenging year for Vic in the world. As I reflect on the obstacles we faced and how we overcame them, I believe that we achieved a solid operating performance and perhaps even more importantly, showed our resilience of the business.
While we have more to overcome in 2021, I wanna take a moment to thank the BIC team for focusing on what we were able to control in this environment and for their rigorous execution. Their teamwork resulted in our demonstrating strength in business continuity, commercial execution, efficiency, cost control, and operating cash flow generation throughout the year. We've become proficient in our operating model, stronger and more agile as a team, and are fully on track to achieve our transformation. While I'm pleased with these successes, COVID nineteen has and will continue to have a lasting impact on consumption patterns and shopping behaviors. These continue to affect our categories in a myriad of ways.
I'm confident that our horizon plan positions us to meet these changes head on and puts us on a trajectory towards accelerated, innovative, and sustainable growth. Let's take a closer look at our markets in 2020. In stationary, the overall writing instrument segment was hit hard by the shift to elearning and remote working as people temporarily adapted to new rhythms and norms. A bright spot was the coloring segment, which grew mid single digits across key markets as consumers leaned into more artistic and creative activities during lockdown period. In lighter's foot traffic lower foot traffic can outpace demand for hygiene products and grocery products prompted convenience stores to adapt by reducing their inventory of products like pocket lighters.
On the positive side, utility lighters enjoyed growing popularity and usage during the pandemic due to increased home and outdoor cooking and the use of candles. This segment delivered a strong performance growing double digit in The US. Turning to shavers, lockdowns and remote working changed men's and women's shaving habits. These resulted in market declines in our key geographies in both the one piece and refillable segments. The pandemic did, however, accelerate the shift to ecommerce with online shaver market growing 50% in value in The US.
In this challenging context, we focus on what we can control. Thanks to strong teamwork and solid execution, we increased or maintained market share in growing strategic product segments and in key markets. As you can see, we made noticeable gains in the coloring and permanent marker segments across key countries such as The U. S, Brazil, France and The UK, a confirmation of consumer trust in our brand and our ability to succeed as we look to expand into the arts and craft space. We gained share in pocket lighters in all our key markets including Brazil, The US, Mexico, Germany, and Russia.
Utility lighters also delivered solid results gaining 4.3 points in market share in The US. And lastly, in shaver, we outperformed most of our markets worldwide from The US to Brazil and Europe as our teams worked relentlessly and effective promotional activities combined with our success in premium products like the BIC Flex Hybrid and BIC Soleil ranges. The strong shift to online purchases during the pandemic resulted in an 18% increase in net sales in ecommerce with double digit growth across key geographies like The US, Europe, Latin America, India. Our direct to consumer sales more than doubled, a 118% growth rate. This went hand in hand with healthy conversions and favorable reviews on our d to c website, pic.com, in The US and France.
In line with our goal of engaging with consumers directly as part of our transformation journey, we were rightfully invested behind our strategies and dedicated 83% of media investments to online channels. Though we're pleased with our progress in ecommerce, this slide paints a picture of the pandemic's impact on our customers. Pure players with Amazon leading grew 85% through 2020 and their share of our overall e commerce sales climbed to 14 points. At the same time, the pandemic lockdowns caused certain omnichannel retailer sales to plummet. The brunt of this came from the b to b business like office suppliers due to office closures.
Sales to omni retailers declined by 10% yearly with b to b channel down 20%. Looking ahead, our overall ecommerce strategy is on track. We're building meaningful digital capabilities within the organization to accelerate online growth, paving the way to become a genuine omnichannel company. A central piece of our horizon plan is harnessing innovation to accelerate growth. And in 2020, we demonstrated that we are on track to do just that, with innovation contributing 7.6% to net sales, up one point versus twenty nineteen.
I'm excited to see the success of our new products like Easy Reach Lighter, which in just six months has achieved 0.5 market share value in The US. The launch of Previguard, an antimicrobial pen is another excellent example of how quickly we're responding to what consumers want. In this case, we reacted to their understandable obsession with germs. In just a few short months, we were able to move this product from concept to shelf. Also in 2020, we signed two exciting partnerships that moved Bix open innovation system forward.
We teamed up with IP ROVA to create our invention lab using their machine learning based data driven approach to innovation to help us anticipate and respond effectively to consumer needs. This lab accounted for more than 10% of our total patent filings only six months after opening. Our collaboration with the plug and play platform, one of the world's largest startup incubators, gives us access to a diverse range of talent that can help us expand our innovation capabilities and support our journey towards more sustainable products. These are some of the latest steps in our ongoing commitment to nurturing an open ecosystem for discovering and integrating the latest technology internally as well as externally. And it's only the beginning of our transformation towards becoming more agile and innovative to better address consumer ever changing trends.
Looking forward to 2021, several new and innovative products will be added to our brand portfolio, all consistent with our horizon plan to bring more value and sustainable offerings to consumers. In stationary, we will extend the BIC Crystal family with the BIC Crystal Renew, a premium refillable version of our iconic crystal made in metallic. In lighters, we will test launch the BIC Maxi Ecolutions, which will offer consumers equal levels of quality and safety with an environmental impact reduced by 10% compared to the classic BIC Maxi lighter. And in shaver, we will introduce our new sustainable development hybrid range with both male and female one piece razors that you can refill with a handle made from recycled materials and housed in 100% recyclable packaging. I'd like to shift now to two key acquisitions in 2020 that position us to boost profitable growth effectively in line with our horizon plan.
In July, we acquired Jeeps, which consolidates our leadership position in Leiters. The integration is well on track and will support our shift for the value driven model, favoring premium and personalized design. In December, we acquired Rocketbook. This marks BIC's entrance into the fast growing digital writing segment. Rocketbook provides simple, elegant, and accessible solutions to digital writing, which is very much in line with BIC's vision to bring simplicity and joy to everyday life.
I'm very excited about this next step for BIC and the potential it brings as we leverage on their unique brand building skills and expand our presence into the human expression space. We started to consolidate Rocketbook this quarter, and I'm thrilled to share that they had an outstanding performance during the key holiday season at the 2020. Their sales on Amazon in The US grew by more than 80% versus fourth quarter twenty nineteen, and their US direct to consumer business increased by 30%. In November, we took our sustainability journey to the next level with our new commitments to reducing plastics dramatically in our products and packaging by 2030. These ambitious targets are a continuation of our historical pledge to sustainability embedded in our writing the future commitment, One of the most important in this fight against climate change.
In 2020, we continued to reduce greenhouse gas emissions, and we achieved our goal of 80% renewable electricity five years ahead of schedule. Our team's health and safety remains an utmost priority, and I'm pleased to say that reportable accidents saw a 30% decrease compared to last year. With a significant focus on the health of our team members, we were able to keep them safe and keep production up and running in most geographies despite the pandemic. I'm proud of the measures our team took to quickly ensure that we were meeting and in many cases exceeding established local protocols to keep our team members healthy. We continued our efforts to help children succeed in their education.
In 2020, we reached more than seven 57,000,000 children around the world, many through innovative digital programs. Since 2018, we have served 118,000,000 children, which is a tremendous source of pride for the team. Before moving to shareholder returns, let's take a quick look at our financial performance in 2020, which Chad will take you through in more detail later during the call. Net sales for the full year was €1,000,000,627,900,000 down 12.6% on a comparative basis. Normalized IFO was at €229,100,000 with a 14.1% margin in line with our guidance of above 13.5%.
This was a solid performance achieved by prudent management of operating expenses and the savings generated by our transformation plan. Normalized earnings per share was at €3.54 down €35.3 versus last year. Free cash flow was strong at €274,500,000 thanks to a strong improvement in working capital. In line with our horizon plan capital allocation policy, 2021 shareholder return is maintained versus 2020 levels at €121,000,000 It includes €81,000,000 dividend payment for a €1.8 per share subject to approval at our next Annual General Meeting in May and a €40,000,000 share buyback program. As announced in December, we will partner with Exane BNP Paribas to pioneer the first European impact share buyback and allocate part of the funds to J PAL, the global research center working to reduce poverty and to the BIC Foundation for Education.
I'm thrilled that BIC is a pioneer in this space as we are historically committed to the education cause, notably through our comprehensive sustainability program, writing the future together. Today, sustainability and corporate purpose continues to be meaningful to companies and consumers, and this groundbreaking program will accelerate the path towards genuine long term value creation for all our stakeholders. As I mentioned earlier, stationary was undoubtedly the category most negatively impacted by the worldwide school and office closures. Back to school seasons were delayed or canceled in both hemispheres. Highly dependent on convenience and traditional trade channels, Latin America, Africa, and India accounted for almost 60% of the total category decline year on year.
Nevertheless, our teams demonstrated strong operational execution and 2020 yielded several positive worth noting. We maintain share in Europe, thanks to great visibility in stores as a result of excellent partnership with our customers and effective and efficient merchandising and brand support. In The U. S, while the overall stationary market was down 12.2% year on year, we held share and outperformed in coloring and permanent market markers. Thanks to the body mark and big kids coloring ranges.
These solid executional results were visible in back to school replenishment orders, which were around 10% higher than in 2019 in both France and The US. It was an incredibly challenging year in Latin America with a competitive environment that the COVID nineteen pandemic exacerbated. In Mexico, schools have been closed since March, and as a result, more than 33,000,000 students are still remote learning. India is another area where we face tremendous headwinds. Schools and office closures have taken its toll as have mobility restrictions limiting the sale of nonessential items.
The result was a close to 40% market decline. Dick's historic ballpoint pen was the segment most affected largely due to remote learning conditions. We nonetheless remain number one reaching 25.1% market share in value. Turning to Leiters, as I mentioned already, the category was affected by lockdowns in all key markets, although there were regional differences. Europe, where traditional stores play a significant role saw relatively weak performance for the year, notably in France, Belgium and The UK.
However, we continue to grow in Russia and Germany due to new listings and effective promotional activities, two of our invest to grow markets. In North America, despite a soft start to the year, full year lighter net sales were flat, which is a great result given the current environment. Momentum in the second half was driven by successful price adjustments implemented in June as well as solid promotional activities which offset the decline. DICK pocket lighter sales outperformed the flattish market gaining 0.8 points value share. The utility lighter segment in which we've invested these last two years grew 27.1% in 2020, bolstered by shopping trends as consumers turn to home grilling and other lighting occasions.
We gained 4.3 points of market share. At the 2020, utility lighter sales accounted for 15% of our sales lighter sales in North America, plus six points compared to 2019. Our overall market performance was boosted by introducing our new easy reach lighter, which as I mentioned earlier, has successfully grown to 0.5 market share in the first six months of its launch. Easy Reach continues to outperform in 2021, reaching more than 3% value share in January. Latin America was a mixed bag with an essential especially challenging situation in Mexico.
At the same time, Brazil made gains in market share of 0.7 points. Turning now to shaver. Evolving consumer habits were compounded by lockdown conditions that changed personal grooming routines and regimens in various ways. And by our historical value proposition and the success of our new products, we outperformed in all regions in both female and male segments. We gained 0.6 points in The UK and continued to gain share in Russia and Poland.
Overall in shaver, we outperformed the European market for the third consecutive year driven by both male and female products. Both core and new products did well in The US, especially amongst men. Thanks to a more aggressive promotional strategy and placement of gift sets, we won one point value share of the one piece market, which declined 6.4%. The flex five Hybrid and Soleil sensitive advanced range performed well and us, our gender neutral refillable razor continued to show positive results from its launch. Brazil's sellout performance was also good.
Our product trade up strategy continued to prove effective despite the pandemic. We picked up 0.7 points in value share, largely thanks to outstanding performance in the women's segment and a strong promotional push on traditional business for an impressive high of 23% value market share in 2020. This ends the review of our operational performance and I'll now leave the floor to Chad to take you through our consolidated financial figures.
Thank you, Goncalves. I will begin by reviewing the net sales results for both the fourth quarter and the full year of 2020. On an as reported basis, fourth quarter net sales were down 18.2% versus last year. On a comparative basis, our net sales were down 10.7. Currency fluctuations had a negative impact of minus 8.1 points.
This was mainly due to the continuing sharp decline of the Brazilian real and the decline of the US dollar against Euro. Net sales for the full year 2020 totaled €1,627,900,000 down 16.5% as reported, down 12.6% on a comparative basis. Here again, the negative impact of currency fluctuations of minus 4.2 points was mainly attributable to the decline of the Brazilian real and the decline of the U. Dollar against the euro. The COVID-nineteen impact on the decrease for 2020 net sales is estimated at around minus 10 points.
The perimeter impact adjustment includes mainly the acquisitions of Jeep and Lucky Stationery Nigeria. As a reminder, due to Argentina's hyperinflation, we are excluding Argentina from our net sales on a comparative basis. On Slide 15, you can see the key elements of the summarized P and L results. The gross profit margin for 2020 decreased two point zero points to 48.1% compared to 50.1% in 2019. Normalized IFO for full year 2020 was €229,100,000 compared to €331,800,000 last year, with the normalized IFIL margin of 14.1% this year versus 17% for 2019.
Let me now review the NIFO margin change for the full year 2020 versus 2019. As just mentioned, the gross profit margin decreased two point zero points to 48.1%. Excluding under absorption of fixed costs due to the COVID-nineteen pandemic, the gross profit margin increased by 0.6 points. This was driven by favorable foreign exchange and a decrease in raw material costs. This favorability was partially offset by unfavorable manufacturing cost absorption.
A decrease in brand support had a favorable impact of 0.4 points on the NIFA margin. Operating expenses and other expenses were higher by 3.9 points resulting from the sharp decline in net sales. In addition to this, we also had a negative impact from the cost to implement our new organization and higher incentive plan costs compared to last year. This total increase is partially offset by the other OpEx reductions across all geographies as we executed on the OpEx actions announced in May. As we cover the year to date non recurring items from left to right, we had €27,200,000 of restructuring costs.
The main drivers of these restructurings are the transformation plan, the closure of our Ecuador factory and our recently announced Latin America and Asia commercial operations restructuring, where we moved to an indirect model in several countries. As discussed in the second quarter, we had EUR41.7 million related to the seller impairment on property, plant and equipment and trademark. This resulted from lower than anticipated sales due to India's lockdowns and as a result, lower volume than initially anticipated, which have impacted our planned cost efficiencies. In the third quarter, we had €44,100,000 of favorable pension adjustment in The United States. Our year to date non recurring items also include EUR41.8 million in cost of goods, of which EUR35.8 million is unfavorable manufacturing cost absorption resulting from plant closures and lower product demand due to COVID nineteen.
There's also €6,000,000 of direct expenses related to additional employee protection implemented to fight against the spread of the coronavirus, items such as cleaning supplies, masks, and sanitizers. We also had an impact of €3,600,000 in operating expenses and other expenses, mostly commercial force underactivity due to COVID-nineteen. Let me now review the NIFO margin change versus the prior year for the 2020. Excluding under absorption of fixed costs due to the COVID-nineteen pandemic, gross profit margin increased by 1.5 points. This was driven by favorable foreign exchange, a decrease in raw material costs and the favorable impact of June price adjustments in US lighters.
Brand support investments remained broadly stable. OpEx and other expenses were higher by 6.8 points resulting from the sharp decline in net sales, the cost to implement our new organization and higher incentive plan costs compared to last year. This increase is partially offset by other OpEx reductions across all geographies. Fourth quarter twenty twenty non recurring items include EUR 13,200,000.0 of restructuring costs, of which the transformation plan and Latin America and Asia commercial operations restructuring are among the main drivers. And for the fourth quarter, we had EUR 12,300,000.0 in cost of goods, of which EUR 10,800,000.0 is unfavorable manufacturing cost absorption resulting from plant closures and lower product demand due to COVID nineteen.
The impact from direct expenses related to additional employee protection implemented to fight against the spread of COVID the coronavirus is €1,500,000 in the fourth quarter. Slide 18 shows normalized IFO to net income for the full year of 2020. Year to date income before tax was €155,300,000 compared to €251,400,000 in 2019. Net finance revenue was negative €1,400,000 compared to a negative €1,300,000 for the same period in 2019. Net income group share was €93,700,000 as reported for 2020 compared to €176,100,000 in 2019.
Normalized net income group share was €159,400,000 compared to €246,700,000 last year. The effective tax rate for 2020 was 39.7 versus 30% last year. EPS group share was €2.08 compared to €3.91 in 2019. Normalized EPS group share decreased 35% to €3.54 compared to €5.47 last year. In 2020, we invested €83,100,000 in CapEx, the majority in Leiters being at 44% of the total.
The overall CapEx level was in line with what we communicated in March 2020 in the range of EUR 80,000,000. On Slide 20, we see the main elements of working capital. Inventories ended the period at EUR 379,000,000 and accounts receivable at €409,600,000 Trade and other payables were €99,500,000 at the end of the year. Accounts receivable had a favorable impact on cash versus December 2019 as we closely monitored and drove our collection efforts in this challenging COVID environment where all companies are looking to conserve their cash outlays. The decrease in accounts receivable was also impacted by the lower net sales.
We had particularly good cash collections in North America and also in Latin America and India despite challenges due to pressures in local markets. The decrease in inventory days compared to the December 2019 was a result of management's focus on inventory reduction as the impact of declining net sales challenged the company to be even more vigilant with inventory production and management. Consistent with Horizon and the focus on cash management, we generated EUR275 million free cash flow in 2020, driven by the improvement in working capital that I just described and lower CapEx. To drive operational cash flow generation, we also reduced the amount of OpEx that were initially expected in 2020 by more than €28,000,000 This is more than the 15,000,000 to €20,000,000 objective announced in May 2020. This next slide summarizes the evolution of our net cash position between December 2019 and December 2020.
Net cash from operating activities was €357,600,000 including €233,900,000 in operating cash flow and €123,700,000 of positive impact from the change in working capital and others. Among the drivers of the working capital were the benefits from accounts receivable of €100,700,000 compared to December 2019, as explained in the previous slides, and inventory which contributed €46,500,000 We invested €72,500,000 for acquisitions, mostly Jeep and Rocketbook. Net cash was also impacted by investments in CapEx as we invested €83,100,000 in 2020. Shareholder return was 117,600,000 in 2020, of which €110,200,000 dividend payment and €7,400,000 share buyback. The €47,300,000 of others is mostly related to foreign exchange.
Our net cash position at the December 2020 was a positive €183,900,000 This ends the review of our Q4 and full year 2020 consolidated results. Now let me give the floor back to Ginsel.
Thanks, Chad. I'll now take you through our 2021 global market assumption. They're based on Euromonitor and internal estimates at the end of last year. They do not integrate any major disruptions due to the potential acceleration of COVID nineteen pandemic. In Europe, we expect markets to be flat to slightly increasing in our three core categories.
In North America, the stationary markets should rebound slowly after a low double digit decline in 2020. The lighter market is expected to be flat with utility outperforming pocket lighters. In shavers, the one piece segment should continue to decrease though at a slower pace than last year. In Latin America, we anticipate a low to mid single digit increase in all categories including a high single digit rebound in stationery in Mexico. Finally, we expect a stronger recovery in the Indian stationary market.
Before I conclude with our 2021 financial outlook, I'd like to share with you what will underpin our performance this year. Organic growth will be driven by an increase in volumes versus 2020, but we do not expect to recover the 2019 levels and by new product launches and line extensions. We also expect to further gain market share in key markets. Commercial excellence and notably revenue growth management will be a key component of our growth with both selected price adjustments implemented locally or regionally and efficient promotional activities. Total growth will be boosted by the addition of new businesses, notably Rocketbook, consolidated as of the 01/01/2021.
Gross margin should be flat as positive higher sales volumes and price increases will be offset by an increase in raw material costs, adverse currency impacts, and negative mix due to India's rebound in sales. Consistent with Horizon, normalized income from operations margin is expected to strengthen. Increases in brand support, research and development and innovation will be more than offset by the decrease in operational expense operating expenses as a percent of net sales, driven by the benefit of the Invent the Future and further operating expense reduction. We will continue to focus on operating cash flow with tight controls of inventory. CapEx are expected to be around €100,000,000 In summary, our 2021 outlook is as follows.
While we expect the overall trading environment to remain uncertain and volatile, particularly during the first half, our goal is to deliver plus 5% to plus seven total net sales growth at constant currencies in 2021. To succeed, we will focus on increasing market share in key growing countries through new product launches, efficient promotional activities and continued e commerce growth. In line with our horizon plan target, we expect to generate above EUR 200,000,000 of free cash flow before acquisitions and disposals based on improved operating margins and strict control of CapEx and working capital. To conclude, we are entering 2021 another unpredictable year with clear eyed optimism. Our transformation is underway and I'm confident that we have evolved into the right organization to face the challenges of tomorrow.
This year, we will continue to focus on what we can control, operational excellence, proactive management of our business portfolio and the execution of our new consumer focused business model. Through our horizon business plan, we have created the momentum needed to accelerate long term growth and create sustainable value for all our stakeholders. Thank you. I'll now open the floor for your questions.
We have few questions submitted. And our first question comes from the line of Nicolas from Exane BNP Paribas. Please go ahead.
Hello. Good afternoon, everyone. I've got four questions, please. The first one on the margin. So you mentioned improving margin in 2021.
Can you help us assess to what extent margin could improve this year? And at least give us a range depending on the like for like sales development in 2021. Secondly, can you tell us a bit more about the Blade Excellence initiative? Last November, you couldn't say much on that. Can you tell more today what sort of sales it could represent in the mid to long term?
And do you expect already some contribution in 2021? Three, according to IRI, the pricemix effect on lighter in The U. S. Increased quite a lot in January and February this year 2021. Does that reflect additional price adjustments from from you or it's related to something else?
And fine finally, just on the perimeter impact in 02/2021, if we take Jeep and Rocketbook together, what sort of sales are you expecting? Expecting? Thanks.
Nicolas. Thanks for the questions. In regard to your first question around NIFO margin for 2021, our annual guidance is consistent with our horizon plan targets. First is focused on accelerated growth and sustained free cash flow generation. But in regards to 2021 margin, we expect to grow our operating margins as volume we see volume growth, positive price impact, and lower OpEx as a percent of net sales that will more than offset the increase in raw material costs, adverse FX, and increase of brand support that we're gonna do to drive our net sales growth is a position that we'll let people know that we do see growth, but we're not giving guidance on ranges on the margin as you probably know.
And why don't I take question four since I'm talking. In regards to perimeter, what we should think about is Rocketbook Jeep and dispositions to Mako. It's around 200 basis points is what we're looking at from a perimeter impact.
Afternoon, Nikola. Thanks for your questions. So on blade excellence, as I said in November, a little bit early to give, long term targets. Two months later, my my answer really hasn't changed for you. We do have two existing customers and a robust pipeline that we're working through in 2021.
The impact of the existing customers is not material for the total group results, but our goal is to generate the business to the pipeline that would make it so for 2022. So a lot of work for the teams yet to be done, but, again, robust pipeline, strong interest from, potential projects on blade excellence. For your question related to Jan Feb twenty twenty one, no. We have not implemented any further price adjustments since the 01/01/2021 in The US. I think what you're seeing is a number of you're first seeing the lapping effect versus last year.
So it's the price adjustment of June 2020 into the 2021 numbers, as well as probably some mix effects owing to our gains of market share and the success of the launch of easy reach, which will slowly start having that mix effect impact that you're looking at in IRR.
Okay.
Okay. And in terms of price adjustment, beside The US, have you planned anything in other region, notably Europe or Latin America?
Yeah. You know, as as we say every year at this time of year, we have a robust price adjustment strategy. And now with revenue growth management being an even stronger pillar within the commercial team, that's definitely, something that we're looking at. We look at it at a tactical and strategic level adjusting for, consumer price, at the the retail level. We'll be announcing those changes to our customers first, and then we'll give you more visibility probably at our q one results.
Perfect. Thanks. Thank
you. We currently have one more question in the queue. Our next question comes from the line of Charles Scody from Kepler. Charles, your line is unmuted. Please go ahead.
Yes. Hello. Thank you very much for taking my questions. I have four questions. Actually, the first one on the COVID-nineteen impact in Q4, it was €13,000,000 quite quite substantial on EBIT.
I mean, you break it down by business line, please? Still on the COVID-nineteen impact, just for modeling purposes, are you going to keep excluding this impact from your EBITDA adjusted in 2021 again? Third question on the proceed from the sale of the headquarter in Clichy. Why have you decided to reinvest this proceeding to growth initiatives and not returning it to shareholders through special dividend for example? And shall we expect this bigger M and A transaction, I mean beyond the €100,000,000 yearly budget you have guided on?
And my fourth question, on the working capital requirement, there was a substantial improvement obviously in 2020. Do you see room to further improve the working capital going forward? Thank you.
Thank you, Charles. Why don't I start and I'll handle one, two and four, and then I'll pass it on to Dissolve for question number three. So first, in regards to the COVID impact, we do not split it out by business line. But as you can assume, stationary obviously has the majority of the impact given the nature of its impact from back to school. So that's what we'll say on the COVID impact for q four.
In regards to impact for 2021, we can't predict, I don't think as anyone can, what potential, you know, lockdowns or what may what may come of the next six months with COVID. I think as Gonzalo said, we're cautiously optimistic. We have a plan that a cop that it, you know, is very reasonable, but we can't, predict any type of COVID impact in advance, of things happening is what we can say to that. And in regards to working capital, the way that I think of working capital is really more than a dollar per more than a euro perspective, but it's on the days perspective because that shows real operational improvement. And as you can see, the improvement we made on inventory and receivables over the total year of 2020, we definitely think there's room to continue to prove those number of days on inventory and receivables going forward.
So we'll look we are doing a lot of work internally to drive those improvements going forward as well.
Thanks, Chad. Good afternoon, Charles, and thanks for your question. On the the proceeds of the sale of the past Khaleesi headquarters, we'll be moving sometime in '22. Our poll our our strategy of reinvesting in growth is absolutely consistent with our the capital allocation policy that we announced as part of the Horizon strategic plan. Right?
So number one, we invest in the business. We invest in growth, whether that be manufacturing CapEx or other types of CapEx related to commercial growth or those types of activities, which, as I've mentioned before, you should see increasing over time as we, balance that for more growth. The second is m and a. And when we, talked about Horizon in November, it's on average a €100,000,000 a year. Of course, some transactions will be higher than 100.
We did a few in 2020 that were lower than 100. These proceeds really are to invest in the business. Horizon is a growth story. That's what we're looking to do. We've reframed our three businesses.
And in human expression, there are number of different opportunities, and avenues for us to go look at where we have growth, where the brand is relevant, the products make sense, consumers are hungry. As we saw in 2020 with the lockdown, people really wanted to be creative, use coloring, do things with their kids, and we need to tap into that, those higher growth segments that will bridge for tomorrow all the while, and then that's what we're doing this year, having sustained shareholder return.
Okay. Thank you very much. I have a follow-up question. What is the right level of OpEx for you in a normal year? Or basically, to make it more simple, if revenues go back to 2019, how should the OpEx as a percentage of sales look like?
Once the volumes go back to 2019, our OpEx as a percent of net sales should be much improved. The actions that we've taken over 2020 to really reframe our operating structure should not grow back to those levels. These were changes that were permanent in structural basis for the most part and have really reset the groundwork. So as we said before, when we come out of this, we'll come out fighting because we're in much better position than we were going into it. So there should be improved margins, improved outlook as a percent
of net sales. I think just to ground us all because, you know, Horizon was a few months ago. We announced that we've streamlined commercial operations, which by definition, reduced some operating expenses. But it's really about focus, and it's about investing where we see the intersection of the opportunity between the brand, the product offer, the consumer need, the right level of profitability, so that we can grow over the medium to long term, and then continue to grow into those reframed categories. To Chad's point, you know, we'll a reset once the the volumes get to those levels.
Now by that time, we should have reached our growth trajectory that we're looking to have, and then we'll be reinvesting both in structural, investments, CapEx, and then in OpEx where necessary.
Thank you. I'm sorry, have a follow-up question, another one, last one from my side. I have seen a couple of press articles stating that the sanitary situation in India was improving quite strongly. Do you see this on your business or is it too too early?
I think if you followed India closely during 2020, it was probably one of the most volatile and unpredictable sanitary and business environment, at least that we had to to work through at a global level. It's getting a little bit better. I think it's a little bit too early to cry victory. Although, as I said, our plan or our the the models that we've used to build our plan are based on a significant rebound of business and the stationary segment in India. At at q one, we'll be able to either confirm that positive trend or give you an update.
But, like everyone, first of all, we want the safety of our team members. We do have a lot of team members in India, and we wanna make sure that we're, leaning into a positive rebound and not a volatile one.
Thank you very much. Very helpful. Thank you.
Thank you, Charles. We have a next question coming from the line of Mary Ford from Societe Generale. Mary, please go ahead.
Yes. Good afternoon. I've got one question many questions about stationary. The first question is to know what caused to you to delay in back to school orders from South And East Africa during q four in percentage in percentage points of your sales? Second question is to know what represent for you today the office specialist in your turnover.
Also, I would like to know what represent the coloring segment in terms of sales in 2020 compared to 2019 for instance? And also, it seems in your projections that the rebound for the stationary division is quite modest despite the fact that, in fact, school have have remained open in most of the countries. Why are you keeping such modest approach? And how do you set your production capacity? Would you be able to meet the demand if the if it's a rebound more than you are expecting?
Sure. And thank you for your questions. I'll let Chad give you the the the q four answer. I'll deal with the other ones. So office suppliers, as a percentage of total sales, as you'll imagine, it varies greatly from region to region.
So in emerging markets, you're talking between 510% of our stationary sales. In North America, it can be and it is, 40%. So somewhere in between then depending on where you are in the world. Coloring today or in 2020 represented 10% of our total sales, in stationary. And the year before that, it was 8%.
So a two point improvement, you know, in line with what we wanted to do or what we are doing as part of Verizon leaning into that segment, driving into arts and crafts, connecting consumers in, an even stronger way with our coloring offer and the the different brands that we have in the coloring space in the markets in which we're strong, and then also entering, into new markets. The rebound, I mean, we're being cautious. I think that's that's totally fair, on our assumptions for what stationery is. You can't draw quite as direct a link as in some countries, schools are open and in some countries, they're not. There's different levels.
The teachers are still struggling to do planning for the children. The economy is frankly not, where we would all hope it to be, and that weighs on impulse purchase and how mom or dad during back to school shops the set and then the repurchases. Although, I did mention during my, you know, prepared remarks that we did see a 10% increase in replenishment orders from consumer from customers in France and The US after the back to school, and that's really down to commercial execution and ability to flex the supply chain. So we're in summary, we're cautious. Of course, we'd love to see full rebound.
I don't think it's gonna happen in 2021. It's just not the way the governments and the school boards are setting themselves up. But to your very pointed question, which I think is a great one, about our capacity, a few years ago, we would have had trouble responding to significant increases in demand. But today, we have the capacity in our global footprint to respond to, to the the demand increases that you're suggesting as well as the ones that we're planning for. Importantly, to do that in a thoughtful, and structured way with customers to make sure that inventories in stores are in full when consumers are out there, shopping.
And in regards to your question about the South South Africa, what was the back to school delay for q four is approximately €4,000,000.
€4,000,000, you said?
Yes.
Okay. Thank you.
Thank you, Mary. We have our next question coming from the line of Christophe from ODDO. Christophe, please go ahead.
Yes. Good afternoon, Two questions for me. The first one is regarding your midterm target on operational efficiency. So you want to save €50,000,000 And previously, you say that 80% of that will be reached at the 2021. Is it still valid?
And how much do you already book as a saving for 2020? So basically, how much do we consider as an incremental saving in 2021? And the second one is about direct to consumer. So you've got a website in U. S.
And France. It represents 3% of your sales. Are you going to extend in other area direct to consumer websites? Thank you.
Hey, Christophe. I will start with the question about the EUR 50,000,000. We're staying consistent with what we said at Capital Markets Day and what we've said all along is that we're very confident that we'll hit the 80% of 50,000,000, so €40,000,000 by the 2021. And as we said in the press release, we've already achieved 25,000,000 of that savings so far. So, you know, achieving the other 15,000,000 is not a concern at all of ours, put it that way.
Don't give it all away, Chad. So your your question around direct to consumer. So we started with the two countries where it made the most sense for us to have the scale on the one side and the depth on the other to really drive a lot of learnings. I'm not gonna say it's early days because in DCC, like, a quarter is is early days. It's it's going well.
The platforms are strong. We will continue to roll out when and where appropriate, probably in Europe, in the near future. The one that I think, you wanna keep a close eye on is Rocketbook. Right? This is completely new to us.
They grew 30% in direct to consumer at in the fourth quarter. They're true omnichannel specialists, and they're gonna bring a lot of firepower to that team within BIC, as well as us being able or the the historic legacy BIC structure able to help Rocketbook continue to go from strength to strength and grow its business. So it's a really symbiotic relationship. And as we continue to look for other opportunities in the market, I think you'll see more things from us, not only in b two c, but also in omni retailer and partnerships with large global retailers.
Thank you.
Thank you, Christophe. We have one last question coming from the line of Nicolas. Please go ahead.
Hi.
Again, two quick ones. First of all, do you have anything to share regarding the trend in Q1 for January and the February, have you seen any improvement? And notably on stationary, are we talking about mostly delays of back to school purchase? Or you think you will actually lose some sales during that period? And second question on the restructuring and streamlining of operation, you had some you did couple of initiatives in 2020.
Should we expect another one in 2021? Thanks.
Thanks, Nicola. So without getting into the details of January and the February, the the the first week has been positive. They do give us confidence and to continue to work really hard through the first quarter to achieve, the trajectory that we wanna be on. At the end of the day, I think we're all living it. Right?
The different lockdowns, they come, in the evening, next day, and then they change two days later. So we continue to remain very agile, very vigilant, very focused on what we can control. The back to school periods in the key markets that I think you're referring to Brazil, South Africa, and Oceania, some of those were pushed by government orders a couple of weeks left, couple of weeks right. So at the '1, we'll be able to give you a better steer on what the impact was, whether it was lost sales completely just due to the market or whether it was just a a shift in orders.
And in regards to your restructuring question, Nikola, I kind of think of that as a nonrecurring item. Right? And how do those play out in 02/2021? And I think it's really hard to predict nonrecurring items before they materialize. But, you know, if there's anything that we we learned in 2020 was about agility and how to focus on what we can control.
Right? And so we can't give any specific color on nonrecurring items for 2021, but it's important to remember we'll continue to focus on efficiency everywhere throughout the business.
Yeah. Whether in commercial or in our industrial footprint, continue to make sure that we're responding to the market, the consumer, customer needs, demands, and frankly, the difficulty of doing global business. Even though we're a diversified global company with manufacturing in so many countries and operations in so many countries, it takes quite a bit to make all the pieces move throughout the year. And I think we resoundedly demonstrated that for our resilience of 2020.
Perfect. Thanks, guys.
Thank you. We have one follow-up question coming from the line of Charles. Please go ahead.
Yes. Sorry, one last question from my side. Can you tell us what is the hedging rate you have on the US dollar? And also how much of your long position in US dollar is hedged right now?
Yep. We have our hedge rate for this year is at quite a favorable rate. We're hedged at one thirteen. And, Sophie, do we tell the I know how much we have hedged. We have a let's put we have a a very large portion, a good amount, our full year of US dollar for 2021 hedge from a transactional standpoint.
So we feel very comfortable for our hedge there.
Okay. Very clear. Thank you.
Thank you, Charles. There are no further questions, so I will hand it back to the host. Thank you.
Hello? Yes. So thank you. Thank you for your questions. Maybe before ending the call, let me remind you that the Q1 results will be released, sorry, on the April 28.
In the meantime, we remain at your disposal for any follow-up questions, and we wish you the best until the next quarter. Thank you very much.
Thank you. Thank