Analyst & Investor Day March 31, 2010 Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
OVERVIEW OF THE BIC CP USA RETAIL ENVIRONMENT Investor Relations Department: +33 (0)1 45 19 52 26 www.bicworld.com
Current U.S. Economic Landscape THE GOOD Q4 09 GDP +5.7% VS Q4 08 Largest increase in six years Feb 10 Unemployment Rate at 9.7% VS 10% in Dec 09 Total Q4 09 Retail Sales +1.9% VS Q4 08 Flat to Slight (+2%) retail growth currently projected for 2010 3
Current U.S. Economic Landscape THE BAD... Continued Near 10% Unemployment level Highest rate in 26 years 22 straight months of employment decline ending Oct 09 Continued Low Consumer Confidence Currently at 46 Feb 10 (Lowest level in 10 months) -40 points below average of last nine years Consumers continue to shop for necessities Continued Retailer Conservatism Less Inventory / Smaller Assortment Smaller stores More Out of Stocks 4
U.S. Industry Overview Food Channel Food Channel Est. Stores 16,000 / Est. Sales $346bn While still fragmented and regionally focused, the U.S. Food Channel has experienced significant consolidation with the top 5 retailers (ex Walmart) now accounting for >50% of total sales Walmart and Target are major national retailers who continue to emphasize food in their stores. Walmart largest National Food retailer. The primary challenge for the Food Channel is remaining competitive with Walmart and Target Retailer 2009E Sales (US $B) % Change '08 '09E Est. Channel Share 1 Kroger $67,9 5% 20% 2 Safeway $35,2-6% 10% 3 Supervalu $26,7-8% 8% 4 Publix $24,1 2% 7% 5 Ahold $21,9 3% 6% Source: MVI-Insights, Supermarket-USA Overview and Growth Forecast as of Dec 09 5
U.S. Industry Overview Mass Merchandiser Channel Mass Merchandiser Channel Est. Stores 7,600 / Est. Sales $354bn Large format Super Centers with food have been a key driver of growth during the recession and now these stores account for 2/3 rds of channel sales Walmart dominant leader, others include Target, K-Mart and regional retailers Walmart Project Impact - Major focus on simplified shopping experience (cleaner stores, less product, less displays, more space to shop, low prices, focus on winning categories, setting standard for all retailers Retailer 2009E Sales (US $B) % Change '08 '09E Est. Channel Share 1 Walmart $252,5 1% 71% 2 Target $61,3 0% 17% 3 Meijer $14,7-1% 4% 4 Sears / Kmart $14,3-3% 4% Source: MVI-Insights, USA Overview and Growth Forecast Mass Merch (no SC) + Hypermarket, as of Dec 09 6
U.S. Industry Overview Convenience Channel Convenience Channel Est. Stores 145,000 / Est. Sales (Non-Fuel) $160bn Channel transitioning from Chains to Single Owner stores which now account for more than 60% of total channel sales Big Oil divesting retail operations 7-11 dominant National Chain, numerous strong regional chains Fuel accounting for nearly 75% of sales, merchandise 21% and Foodservice 4% Business under pressure due to tobacco tax, new aggressive fuel competition, pricing perception. Foodservice is key potential growth focus. Top Retail Groups Est. # Stores 7-Eleven 6 271 BP North America 4 863 Chevron Texaco 4 011 Shell 4 673 Exxon Mobil 4 466 Source: AC Nielsen, C-Store News Annual Report Aug 09 7
U.S. Industry Overview Drug Channel Drug Channel Est. Stores 24,000 / Est. Sales $154.3bn Two major national retailers CVS and Walgreen s Rapid growth via expansion and acquisitions. Both have +7,000 stores Both focus on convenience, professional care, and managed healthcare (B-to-B) Rite Aid is a distant number 3 National in scope, not as developed as big 2, no managed healthcare emphasis Retailer 2009E Sales (US $B) % Change '08 '09E Est. Channel Share 1 Walgreens $57,4 6% 37% 2 CVS $56,2 19% 36% 3 Rite Aid $25,5-3% 17% Source: MVI-Insights, Drug-USA Overview and Growth Forecast as of Dec 09 8
U.S. Industry Overview Club Channel Club Channel Est. Club Stores 1200 / Est. Sales $115B Member based channel serves consumer and small business (including Convenience Stores) Two national leaders Costco and Sam s Club (owned by Walmart) and a regional chain BJ s (East Coast) Focused on providing product Value for Members High number of categories with limited product assortment of large sizes/large packs branded and private label product Focused on providing services at leading value for members Pharmacy, gasoline, travel services, auto Channel continues to perform well with food as lead category emphasis Clubs Est. # Club Stores Sam s Club 596 Costco Wholesale 414 BJ s Wholesale Club 187 Source: MVI-Insights, USA Overview and Growth Forecast Wholesale Clubs, as of Dec 09; Company websites. 9
U.S. Industry Overview Dollar Store Channel Dollar Store (Including Deep Discounter) Channel Est. Stores 20,000 / Est. Sales $53.9bn Value Positioning - Channel experiencing significant growth during recession Good mix of overall product but Limited assortment within each category Many chains expanding Retailer 2009E Sales (US $B) % Change '08 '09E Est. Share 1 Dollar General $11,8 13% 22% 2 Aldi Süd $7,5 13% 14% 3 Family Dollar $7,4 6% 14% 4 Aldi Nord $6,3 10% 12% 5 Supervalu $6,0-10% 11% 6 Dollar Tree $5,2 13% 10% Source: MVI-Insights, Discounter-USA Overview and Growth Forecast as of Dec 09 10
U.S. Industry Overview Office Super Stores & Office Products Office Super Store Channel Est. Stores 3,600 / Est. Sales $19bn 3 major National retailers Staples is the biggest and top performing due to recent acquisitions and organic growth. Promoting leading National Brands (supported by PL), strong customer service, applying innovative/aggressive promotions, focusing on win categories. Office Max sales have moderated at minus 11%. Leveraging National Brands but have greater focus on Private Label vs Staples Office Max has 4 levels of Private Label brands Office Depot financials are stabilizing after late 2008 liquidity concerns; Significant reduction in categories, brands, sku s. Limited National Brand and Private Label focus. Sales continue at minus 16%. Retailer Super Stores 2008 Sales (US $B) Est. Share 1 Staples $9,3 49% 2 Office Depot $6,0 32% 3 Office Max $3,7 20% Office Products 2008 Sales (US $B) Est. Share 1 Staples $8,8 49% 2 Office Max $4,1 32% 3 Office Depot $3,0 20% Office Products / Contract Stationery Channel $24bn Dominated by the 3 players above Additional two primary Wholesalers (S.P. Richards and United) Heavy focus on declining dealer network. Entire channel hit extremely hard by the recent U.S. employment situation Source: Store Count from MVI-Insights, Office Superstore-USA Overview and Growth Forecast as of Dec 09 Sales Dollars from BIC estimates using MVI, NPD syndicated data and 2008 Annual Reports 11
U.S. Industry Overview Stationery Channel Sales Segmentation The Office Products (Contract Stationers) and Office Super Stores make up almost half of all Stationery dollar sales 70% of total stationery sales are direct to retailer s warehouse with almost 30% B-to-B served by the Contract Stationers Channel Est. Total U.S. Store Count Est. Share of Total Stationery Dollar Sales $2.4bn Food Contract Stationers (incl Wholesalers) Mass Merchandiser (incl Super Centers) 16,000 n/a 7,600 Mass Merch 28% 20% Super Stores Stationery Office Super Stores Club Stores 3,500 1,200 8% Club Stores Drug Discount (Dollar Stores, Extreme Value) All Other* Convenience 24,000 20,000 5,000 145,000 Contract Stationers (Office Products B2B) 29% 4% 2% 2% 7% Food Drug Discount All Other * Craft Stores, Military, etc. Source: MVI Insights as of Dec 09 Convenience Store: MVI, TD LINX, and Internal Estimates Source: Internal Estimates YTD Dec 09 12
U.S. Industry Overview Lighter Channel Sales Segmentation INCLUDES Non-Refillable Pocket and Multi-Purpose Convenience Stores account for more than half of all Lighter dollar sales Over 50% of lighter sales are bulk (non-packaged) goods Less than 50% of lighter sales are shipped direct to retailer warehouse Est. Total U.S. Store Count Est. Share of Total Lighter Dollar Sales $837m Convenience Store Mass Merchandiser Food Drug Discount (Dollar Store) 145,000 7,600 16,000 24,000 20,000 Mass Merch 12% Food 7% Drug 6% 8% Discount 15% All other* All Other* 70,100 * Small Food, Tobacco Liquor, News, DIY, Hardware, Military Convenience / Gas 52% Source: MVI Insights as of Dec 09 Convenience Store: MVI, TD LINX, and Internal Estimates Source: MVI Insights YTD Dec 09 Convenience Store estimates: IRI, Capstone, TD LINX, Import Reports, and Internal Estimates YTD Dec 09 13
U.S. Industry Overview Total Wet Shave Channel Sales Segmentation Three trade channels combine for 89% of Total Wet Shave POS dollar sales 93% of shaver sales are direct to retailer warehouses Est. Total U.S. Store Count Est. Share of Total Shaver Dollar Sales $2.7bn Mass Merchandiser (incl Super Centers) 7,600 Drug Food Drug 16,000 24,000 21% Club Stores 1,200 46% Mass Merch Discount (Dollar Store) Convenience Stores 20,000 145,000 Food 22% All Other* 5,000 4% 7% * Military, etc. Discount Club, Convenience, Military, All Other Source: MVI Insights as of Dec 09 Convenience Store: MVI, TD LINX, and Internal Estimates Category Includes Disposables, Handles, and Refills Source: IRI FDMx 52 w/e 10-Jan-2010, Internal estimates YTD Dec 09 14
U.S. Industry Overview Disposable Shaver Channel Sales Segmentation Three trade channels combine for 86% of Disposable Shaver POS dollar sales 94% of shaver sales are direct to retailer warehouses Est. Total U.S. Store Count Est. Share of Disposable Shaver Dollar Sales $954m Mass Merchandiser (incl Super Centers) 7,600 Drug Food 16,000 18% Drug 24,000 Club Stores 1,200 46% Mass Merch Discount (Dollar Store) 20,000 Food 22% Convenience Stores All Other* 145,000 5,000 8% 6% * Military, etc. Discount Club, Convenience, Military, All Other Source: MVI Insights as of Dec 09 Convenience Store: MVI, TD LINX, and Internal Estimates Source: IRI FDMx 52 w/e 10-Jan-2010, Internal estimates YTD Dec 09 15
BIC U.S. Retail Market Strategies Stationery Category Strategy Stationery Increase presence on everyday Planogram (All Channels) Play lead role in developing everyday sales with growth-oriented select accounts Grow everyday office supply business Win at Back-To-School 16
BIC U.S. Retail Market Strategies Lighter Category Strategy Lighter Position BIC lighter as leading Impulse Category line (All Channels) Increase Customer Exclusivity at C-Store Level Promote multiple seasonality periods associated with Multi-Purpose Category 17
BIC U.S. Retail Market Strategies Shaver Category Strategy Shaver Leverage BIC s 2009 only growing National Brand results Leverage improved performance/ Best Value For Money positioning by emphasizing new product introductions Increase presence in everyday planogram and promotional support 18
U.S. Consumer Communication BIC More For Your Money OBJECTIVES: Communicate BIC s Best Value for Money positioning across all three categories Create an emotional connection with target consumers through the visual elements of the campaign Develop consumer understanding and knowledge of BIC s cross-brand offerings Stationery, Lighter, and Shaver 19
U.S. Q4 09 Media: Four ½ page spread in leading national magazines - call-to-action coupon included 20
U.S. National 2009 Back To School Stationery Consumer Ad August Back To School 21
U.S. National Lighter Consumer Ad May Summer BBQ season August Tailgating season November Holiday Candle & Fireplace 22
2010 U.S. National Shaver Consumer Ad New Product Launch Support Men s and Women s Family example 23