Good day. Welcome to BIC's 2026 first half 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 to questions at any time by pressing star and then one on your telephone keypad. Now, I would like to hand the call to your host, Brice Paris, Vice President, Investor Relations.
Good morning. Welcome to BIC's first half 2026 results call. I'm Brice Paris, Vice President, Investor Relations. We're in Clichy today with Rob Versloot, our CEO, and Grégory Lambertie, our CFO. This call is being recorded, and the replay will be available on our website with the presentation and press release. We'll start with the usual results presentation, followed by a Q&A session. First, please take the time to read the disclaimer at the beginning of the presentation. With that, I give the floor to Rob.
Thank you, Brice. Good morning, everyone. Thank you for joining us today. Let me start with four key messages from our first half performance. First, we delivered a good set of results in the second quarter, resulting in H1 organic growth of +1.7%. This performance gives us increasing confidence that the actions we launched are beginning to deliver tangible results. While there is still a lot to do, these encouraging early signs allow us to raise our full year outlook today.
Second, our Q2 growth of +1.8% was well-balanced across our categories and geographies. We saw continued sequential improvement in the U.S., driven by the strong performance of Stationery and Blade Excellence. Tangle Teezer delivered another outstanding quarter, with organic growth accelerating to +21% in Q2, confirming both the strength of the brand and the quality of its innovation pipeline. In parallel, the Middle East and Africa region returned to strong growth after a challenging first quarter.
While we remain mindful of the evolving geopolitical environment and its potential implications for our business and supply chain, we are encouraged by the resilience demonstrated across the region. Third, we delivered an adjusted EBIT margin of 16% and generated EUR 64 million in free cash flow. While U.S. tariff refunds provided a temporary benefit at the end of June, this improvement was also supported by the operational progress we are seeing across the business. Finally, 2026 is a pivotal year for BIC.
We are moving with speed and discipline to strengthen the foundations of our business. I look forward to sharing more about our priorities and ambitions during our strategic update in September. Let me now turn to the performance across our different regions. Starting with the U.S., we continued to see sequential improvements during the first half. Stationery delivered strong growth, supported by distribution gains at specialized retailers and continued momentum in e-commerce.
In Lighters, net sales stabilized following a difficult year in 2025. Shavers remained challenging, particularly in the women's segment, in a highly competitive environment. At the same time, we continue to see encouraging momentum in premium men's products, especially with our Flex 5 refillable shaver, which is gaining traction with consumers. Tangle Teezer once again delivered an excellent performance in the U.S., supported by further distribution gains with major retailers, continued e-commerce expansion, and additional market share gains.
The Matte and Chrome premium collections performed particularly well, alongside the successful The Devil Wears Prada collaboration, reinforcing our confidence in the long-term growth potential of the brand. Beyond the U.S., we also saw resilient performance across our international markets. In Europe, growth was broadly stable in the first half year. A slower start to the back-to-school season was offset by positive momentum in Lighters and mid-single-digit growth in Blade Excellence, driven by Tangle Teezer.
We also continued to invest behind our brands through impactful consumer campaigns, including the launch of our new Vibez collection in France and the M10 Smurfs campaign in Belgium, celebrating the 70 years of our iconic BIC pen. In Latin America, we delivered a solid first half, with stabilization in Mexico following a particularly challenging 2025. Flat organic growth in Brazil and strong performances across Argentina and several other markets. Strategic partnerships continued to support growth in shavers, including our recent Ronaldinho campaign in Brazil, which strengthened brand visibility and contributed to positive commercial momentum.
In the Middle East and Africa, we returned to high single-digit growth in the second quarter after a difficult first quarter impacted by the regional conflict. Overall, the region delivered slightly positive growth in the first half, led by stationery, with a particularly strong start to the back-to-school season in North Africa, alongside continued strength in lighters. This once again demonstrates the resilience of our business in the region. Overall, what is particularly encouraging is that our improvement is becoming increasingly broad-based.
We are seeing positive momentum across most categories and geographies, reflecting both the resilience of our portfolio and the early impact of the actions we have taken. That said, we remain realistic about the second half. Comparisons will become significantly more demanding, and the macroeconomic and geopolitical environment continues to require caution. We believe the progress achieved during the first six months of the year gives us confidence that we are moving in the right direction and building a stronger platform for sustainable, profitable growth.
With that, I will now hand over to Grégory, who will take you through our first half financial results in more detail.
Thank you, Rob, and good morning, everyone. Let's begin with an overview of our key financial figures. Net sales in Q2 were EUR 586 million, up 1.8% on an organic basis, driven by solid performance in Blade Excellence and Flame for Life. For the first half, net sales stood at EUR 1,040 million, up 1.7% on an organic basis, with positive contribution from all categories and key regions. H1 adjusted EBIT stood at EUR 166 million, representing a 16% margin. This margin includes a positive contribution of 1.5% from U.S. tariff refunds.
Excluding this impact, adjusted EBIT margin was 14.5% compared to 13.7% last year. This increase was mainly driven by the exit of underperforming businesses. Adjusted EPS was EUR 2.81, comprising a EUR 0.30 positive contribution from U.S. tariff refunds. Excluding this impact, adjusted EPS was EUR 2.51, up 7% versus last year. Lastly, free cash flow was very strong at EUR 64 million compared to EUR -14 million last year, mainly driven by tax phasing and the impact of the tariff refunds.
Turning to slide seven, let's review the main building blocks of Q2 net sales evolution. Q2 net sales were EUR 586 million, up 1.8% organically, driven by positive contributions from Blade Excellence for EUR 8 million, lighters for EUR 3 million, and other products for EUR 2 million. On the other hand, stationery had contribution of EUR -2 million. Foreign exchange and perimeter had a negative impact this quarter of respectively 0.3 points and 3.5 points on group net sales.
Turning to slide eight, let's review the main building blocks of net sales evolution for the first half. Organic growth was 1.7% in H1, with net sales reaching EUR 1,040 million, driven by positive contributions from all categories, starting with Blade Excellence for EUR 8 million, lighters for EUR 6 million, and stationery and other products each contributing EUR 2 million. Foreign exchange and perimeter had a significant negative impact of respectively 2.4 points and 2.8 points on group net sales.
Turning on to slide nine, let me now walk you through the performance for H1 2026 by division, starting with Human Expression. Net sales were EUR 377 million, up 0.5% on an organic basis. In North America, significant growth in H1 was mainly fueled by distribution gains and good performance in e-commerce. Key products contributing to growth included correction products, ball pens, and mechanical pencils. In Europe, H1 2026 net sales declined as a result of slow back-to-school sell-in, particularly in France and the U.K.
However, BIC new products performed well in the region, such as our Cristal Vibez collection. In Latin America, net sales performance was negatively impacted by Brazil and Mexico due to the continued challenging competitive environment in both countries, particularly in the modern trade channel. Lastly, in Middle East and Africa, organic growth for the first half was up mid-single digits. After a tough Q1, BIC delivered a solid rebound in Q2, notably driven by strong back-to-school momentum in North Africa.
Human Expression adjusted EBIT margin was 13.7% in H1 compared to 11% last year. This increase was mainly due to U.S. tariff refunds, as well as the exit of underperforming businesses, partially offset by unfavorable fixed cost absorption and currency fluctuations. Moving on to the performance of the Flame for Life division. Net sales were EUR 351 million in H1, up 1.7% on an organic basis. After a challenging 2025 in North America, performance improved, leading to flat net sales for H1 this year.
This was particularly driven by growth in the convenience channel and in e-commerce. In Europe, slight organic growth was driven by strong performance in the traditional trade channel across key European countries. In Latin America, growth was solid, mainly fueled by solid commercial execution in Mexico. Flame for Life adjusted EBIT margin was 31.9% in the first half compared to 28.6% last year. Key drivers included the positive contribution of tariffs, favorable price and mix, as well as lower brand support investment compared to last year.
Turning to the next slide on Blade Excellence. Net sales totaled EUR 296 million, up 2.9% on an organic basis. In North America, organic growth was slightly up, mainly driven by Tangle Teezer's robust double-digit growth. At the same time, our shavers business declined due to distribution losses and a tough competitive environment. In Europe, organic growth was up mid-single digits, fueled by Tangle Teezer. In addition, in our shavers business, our premium razors across the Flex and Soleil ranges gained distribution.
In Latin America, BIC's premiumization strategy in the triple blade segment continued to deliver, driving growth in both Mexico and Brazil. Lastly, in Middle East and Africa, the slight decline in H1 was primarily due to a challenging first quarter affected by the conflict in the Middle East. Performance rebounded strongly in Q2, supported by growth in Western and North Africa. Overall, Blade Excellence adjusted EBIT margin was 15.2% in H1 versus 14.7% last year.
Once again, this increase was driven by the positive contribution of U.S. tariff refunds, as well as a favorable price and mix, as well as manufacturing efficiencies. Finally, let's turn to Tangle Teezer on slide 12. Tangle Teezer accelerated to 21% organic growth in Q2, bringing H1 organic growth to 16%. Growth was driven by the U.S. and Europe, supported by distribution expansion, market share gains, and strong demand for our premium detangling ranges. Moving on to page 13. H1 2026 adjusted EBIT margin was 16%.
Overall, gross profit had a positive impact of 0.8%, driven by positive impact of U.S. tariff refunds, the exit of underperforming businesses, as well as favorable price and mix. This was partially offset by continued negative impact from currency fluctuations. Brand support was lower by 0.3 points, and operating and other expenses had a 1.2% positive impact. On slide 14, let's review the key elements of the P&L. Adjusted EBIT stood at EUR 166 million, up EUR 19 million versus last year. Non-recurring items amounted to EUR 8 million.
This included restructuring and transformation costs as we start to implement our new strategy, as well as costs related to discontinued activities. As a result, income before tax was EUR 157 million compared to EUR 111 million last year. Net income group share was EUR 108 million compared to EUR 76 million last year, while our adjusted net income group share was EUR 114 million compared to EUR 97 million last year. Our adjusted EPS stood at EUR 2.81 compared to EUR 2.35 last year.
On the next slide, you can see the main building blocks of free cash flow in H1 2026. Operating cash flow amounted to EUR 221 million, up EUR 22 million year-on-year, following the positive contribution of U.S. tariff refunds. Change in working capital was EUR 107 million. Income tax paid was EUR 14 million. CapEx were EUR 31 million, relatively flat versus last year. As a result, for the first half of 2026, free cash flow was EUR 64 million. Before giving the floor back to Rob, let me go briefly through our net cash position on slide 16.
On top of the free cash flow elements, in H1, we paid EUR 98 million in dividends and bought back shares for EUR 18 million. This concludes the review of BIC's consolidated result for the first half of 2026. To conclude, we posted a good set of results in the first half, enabling us to raise our outlook for the full year. Looking ahead, we have a clear strategic roadmap and have already begun executing it with discipline. We look forward to sharing more detail with you at our September strategic update. With that, I give the floor back to Rob.
Thank you, Grégory. Our first half performance gives us confidence in the trajectory of the business. As a result, we are raising our full-year outlook. We now expect modest organic growth in 2026, implying flat to slightly negative net sales in the second half. Adjusted EBIT margin to be slightly above 14%, reflecting our decision to continue investing behind our brands and our transformation as we prepare for 2027. Free cash flow generation to be broadly stable compared to last year.
As you know, 2026 is a key transitional year for BIC. With my new leadership team, we are strengthening the foundations of the business and positioning the company back on the path of growth. We have streamlined our portfolio by discontinuing non-core and underperforming activities. We've initiated our transformation program and will accelerate its execution during the second half of the year. We have a clear roadmap with well-defined priorities and disciplined execution.
We are encouraged by the progress we have already made and remain fully focused on delivering sustainable and profitable growth. On September 8th, we will present the next chapter of this journey during our strategic update. We look forward to sharing it with you. Thank you. We will now take your questions.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and then one on your telephone keypad. The first question we have is from Christophe Chaput of ODDO. Please go ahead.
Yes. Good morning, ladies and gentlemen. Christophe Chaput from ODDO. First, if I may, congratulations for the first half results. If I may, I have got two sets of questions. The first one is, I would like to come back on the page, on the slide 13 on your EBIT bridge, just to have a little bit more granularity, because excluding the U.S. tariff, the EBIT is EUR 161 million versus EUR 146 million. Whereas in the meantime, you benefited from the discontinuation of underperforming activity, and the light obviously was positive during the semester.
My question is, could you remind us the positive impact on the discontinuation operation? What are the potential tailwind that you had, nevertheless? I think you mentioned the currency, but what was the amount of the negative impact of the currency? The second set of the question is that, on the full year guidance, you expect the operational profit margin to be slightly higher than 14%, which means that excluding the U.S. tariff, it should be more or less flat versus last year.
If we consider the H1 performances, which are good, it implies a decline in H2 for your operating profit margin. Is it a degree of prudence on your part, or should we take into consideration future cuts that you have, let's say, for example, marketing expense or again, negative impact from the currency? Just to have a better granularity. Thank you so much.
First, on your first question, thank you very much, Christophe for your good words and for your questions. On your first question, which is around perimeter, I will answer in two ways. First on H1, second on the impact on the full year. On the perimeter impact for H1, there are two main impacts. Two-thirds is on Cello, which is at sales level impacting around by 150 basis points, and one-third is Rocketbook and Skin Creative, which is impacting the top line by 60 basis points.
If I look at EBIT, which was the core of your question, is the other way around, given relative profitability. Cello has a positive impact of around 50 basis points, whereas the disposal and closure of Rocketbook/Skin Creative brings a positive impact of 110 basis points. That is for H1. For the full year, it's pretty similar, although Cello was sold towards the end of the year, Cello weighs a little bit less. If you have to look at full year impact, Cello is probably 110 basis points on the perimeter with Rocketbook, Skin Creative at 60 basis points, and it's the other way around in terms of EBIT for the full year.
Around about 100 for Rocket and Skin Creative and 40 basis points for Cello. That's the impact on the EBIT margin. You had a second question around the impact of currency, I believe. Is that right?
Yeah, totally. The impact on the currency for H1.
Yeah. On the currency, we basically had a transactional ForEx for H1, which was unfavorable on gross profit. It's between 1%-2%, so it's pretty significant. It's mainly due to unfavorable dollar-Brazil cross and dollar-Mexican cross, which is the heavier, the latter being the heavier impact. Overall, you get ForEx had a negative impact of around 150 basis points on EBIT margin. That's what you should have in mind. Your last question is around how do we see margin evolution for H2? Here, I want to be pretty clear.
We have, as Rob just said, we're taking an outlook which is cautious on H2. We're seeing some uncertainty globally. We're seeing some positive momentum still in our Tangle Teezer division, for example. Overall, the view is that in terms of cost outlook, given the Middle East crisis, and given the fact that we want to reinvest the majority of our tariff refund into the business to prepare for growth for 2027, we guided at a slightly improved 14% margin.
Okay. Thank you.
The next question we have is from Marie-Line Fort of Bernstein. Please go ahead.
Yes. Good morning. Thank you to take my question. The first one is about the scope impact on your Blade Excellence. I saw you have a 490 basis points scope. Would like to know where does it from. The second question is to have some ideas of how the U.S. tariffs refunds has been splitted across the division, because if we look at the Blade Excellence, the ramp-up in margin is lower than other division. Is it linked to the fact that probably this division did not benefit as the other one from the U.S. tariffs?
And on the U.S. tariffs also, I would like to know if you are expecting additional refunds from the second half or not. And lastly, would like to better understand what makes you cautious on H2. Is it linked to particular division? I'm thinking about Stationery, where probably you've got some older books, giving you some ideas of the second half momentum. If you can comment further on your view on the second half would be helpful. Many thanks.
Okay. Thank you very much, Marie-Line, for your question. I think the first one is pretty straightforward. The scope impact on Blade Excellence, it's entirely related to Tangle Teezer. You may remember we acquired it at the end of 2024. There were some revenues from 2024, which were consolidated in the first half of 2025. Those were adjusted in our 2026 release and leading to this perimeter impact. That's entirely on Blade Excellence, given the fact that Tangle Teezer is accounted for there.
The second part of your question around tariffs split by division, we don't provide that. There hasn't been that much difference between divisions. However, the impact on margin that you're referring to is mostly driven by the brand support allocation that we've chosen for the first half. Indeed, there was an impact here. Third question around additional tariff refunds. We don't expect anything material here. The vast majority, 98%, 99% of what we claimed has been received. Really no impact to be expected of significance for the rest of the year.
By the way, just clarifying for listeners on the call, we do not expect the new regime of tariffs to change our outlook compared to what we had said previously. On your last question, which is similar to what Christophe was asking a minute ago. No particular caution on any particular division. I think, as I said earlier, there is, on the one hand, a cost outlook that's slightly more negative and has been called out by others in recent earning release, given the uncertainty in the Middle East in particular.
The second piece is what I mentioned earlier, which is the fact that we're going to reinvest a majority of the benefits of the tariffs into the business, into growth, to prepare for 2027. That's what we want to do to make sure we are on an accelerating trend.
I just want to come back on your answer about the scope impact on Blade. Why is it negative by 4.9%? That's my question.
The overall impact of around EUR 7 million for that extra 2024 revenues that was accounted for in the H1 of 2025 leads to that level of magnitude. It's around EUR 7 million.
Okay. Thank you very much.
The next question we have is from Geoffrey d'Halluin of BNP Paribas. Please go ahead.
Yes, good morning. Thanks for taking my questions. Just two questions, if I may, please. The first one, just to confirm your margin targets for the year. The new targets include about, let's say, EUR 15 million-EUR 16 million of tariffs, which is how much you got in the first half? Just to be 100% clear on that point, please. The second question is related to the free cash flow target, which is unchanged while you raise your organic revenue growth and EBIT margin target for the year. I just wanted to get what free cash flow target is unchanged for the year. Thank you.
Good morning, Geoffrey, thank you for your question. On the first one, very clear, yes, everything's included in the outlook. As I mentioned, we'll reinvest that in the business, for a majority, hence the overall guidance. Second, on the free cash flow, what I wanted to be clear about is that in H1, we have exceptional impacts, one of which is a phasing that should normalize throughout the year. We have the tariff refunds, which we will be reinvesting partly as I mentioned earlier.
For the full year, our outlook implies lower free cash flow in H2 versus last year, mainly driven by two factors. The first one is we ended up the year with inventories, which were a little bit too low to our liking. That's the first bit. The second bit is that we have transformation costs, as you see in H1. We started the transformation. We expect to continue with that transformation. That will have additional costs, which we will be sharing the overall plan and the intent on the 8th of September. Please bear with us until then.
That's the driver for maintaining the free cash flow guidance.
That's clear. Thank you very much.
Ladies and gentlemen, we have reached the end of the question- and- answer session, and I will now hand it back to Rob for final remarks.
I would like to thank everyone for having joined us in our call this morning, and also use this opportunity as we are close to August month to wish everybody great holidays in case you have a break. We look forward seeing you during our Capital Market Day on September 8th after the holidays. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.