After ten years at the helm of Bic, its general manager Mario Guevara surprised Wednesday by announcing his retirement, at only 56 years old: he leaves a group with strong backs, but which anticipates a slowdown in its activity this year. “I have worked for a long time, since the age of 14, I want to devote more time to my family,” said Wednesday Mr. Guevara, a Mexican also with American nationality, who joined Bic in 1992. He will be leaving his position at the end of the group’s general meeting on May 18, while remaining a member of the board of directors.
“I will miss Mario, we’ve been working together for 25 years” confided with some emotion Bruno Bich, the president of the group and son of the founder of the company, Baron Marcel Bich, on Wednesday during a presentation conference of the annual results of the French giant of disposable pens, razors and lighters in Clichy (Hauts-de-Seine). As Mr. Guevara has no designated successor for the moment, Bruno Bich, 69, is due to become Chairman and CEO of the group again after the general meeting, a position he had already held from 1993 to 2006. The family Bich, founder of the world leader in disposable products, is in 25th place in the Challenges ranking of French great fortunes.
“It’s not the best of times,” Bich admitted. “I’m going to have to work hard for another two years,” he said, which is the time he thinks it takes to “prepare” a new CEO. Ultimately his son, Gonzalve Bich, 37, currently responsible for the group’s developing markets, would make “a good potential successor” to Mr. Guevara, said Bruno Bich. The current deputy chief executive officer, François Bich, the president’s brother, 66 years old, will also retire on March 1.
The cautious stock exchange
The Paris Bourse very badly received this unforeseen waltz of the leaders of a group usually without surprise. The title Bic ended Wednesday’s session down 8.02% to 129 euros, while the CAC 40 gained nearly 3%. The news of Mr. Guevara’s upcoming departure was all the more destabilizing for the market as it was added to the group’s forecasts for 2016, which were lower than last year.
Bic expects this year a slowdown in the growth of its sales on a comparable basis, which should reach around 5% against 6.2% in 2015, and a decrease from 1% to 1.5% of its normalized operating margin compared to in 2015, where it had increased slightly to 19.3%.
Bic justified the expected drop in this margin by doubling its investments in the promotion of its brand and in research and development next year, ie more than 100 million euros to “stimulate” its long-term growth.
Another factor of uncertainty, the future of the promotional products division Bic Graphic, for which the group will examine “all the strategic options”, including a sale, partial or total. A decision should be taken at the end of the year. A historical division of the group since 1969, Bic Graphic has penalized the group’s overall profitability for several years. Long affected by the economic crisis, the division returned to growth in 2014 but its activity remained weak last year (1.6% to 319.3 million euros).
This division of 2,500 employees is exposed to strong competition in the American market, its main area of activity, due to a consolidation of the sector and the arrival of new entrants via the Internet.
Bic announced on Wednesday solid results in 2015 in all its geographical areas, exceeding its objectives, in line with market expectations. Net profit reached 325.1 million euros, up 24% year-on-year, for sales of 2.24 billion euros, up 13.3% or 6.2% on a comparable basis (excluding currency effects and acquisitions).
In the fourth quarter, net profit amounted to 72.1 million euros (20.8%) and sales to 559.4 million euros (8.9% or 7.3% on a comparable). The normalized operating margin, the main index of profitability of the group, however, narrowed to 15.8%, against 17.6% a year earlier. The board of directors will propose for the past financial year a dividend of 3.4 euros per share (against 2.85 euros for 2014), as well as an exceptional dividend of 2.50 euros “in view of the good performance and of the solidity ”of the balance sheet.