Net sales at Top 40 supplier BIC Graphic (asi/40480) decreased by 2.5% last year overall and by 12.8% in the fourth quarter of 2016, according to an earnings statement released on Monday. In the statement, parent company BIC Group noted that a strategic review of BIC Graphic is “partially completed” and that “alternative discussions” regarding the entity and BIC’s Asia Sourcing operations are ongoing. BIC did announce that going forward BIC Graphic Europe operations will report to the European BIC Consumer Product business.
Despite lower sales, BIC Group maintained there were many positives about its promo operations in 2016. “Customers continued to recognize the vast expertise of BIC Graphic in the fields of quality, safety compliance and trademarks,” BIC said, in a statement. “We continued to enhance our customer service and we benefited from our ‘Good value’ positioning and new products launches.”
Along with slipping revenues, full-year 2016 normalized IFO margin at BIC Graphic fell to 2.4% versus 3.3% in 2015. The margin would have been 3.3%, the company said, if not for the impact of a special employee bonus. In Q4 2016, normalized IFO margin was 8.2% compared to 11.3% during the same period a year earlier.
In total at BIC Group, led by lighters and shavers, net sales were up 1.6% in 2016. “Our solid 2016 results are further testimony to the quality and strength of our business model. In a fast-moving and challenging market environment, such as in shavers in the U.S., net sales growth was robust and consistent across all consumer categories,” said Bruno Bich, chairman and CEO of BIC Group.
Looking to 2017, BIC Group is forecasting “mid-single digit organic growth” in net sales. “In 2017, the volatility of currencies and the unpredictable global environment will require increased levels of agility from our teams to ensure continued success,” Bich said. “We will continue to launch new products and strengthen our distribution, with a focus on e-commerce in developed markets. To enhance long-term growth, we plan another year of selected investments in R&D, CAPEX and brand support."
Regarding the ongoing review of BIC Graphic, the company would not comment beyond the earnings statement, which noted that BIC Group expects “to be able to communicate the outcome of these discussions in the coming weeks.” Counselor ranks BIC Graphic as the fourth largest supplier in the industry, after the firm reported 2015 North American promo product sales of $321.2 million.