In the first quarter of 2024, BIC's CEO, Gonzalve Bich, presented a mixed financial picture during the earnings call. The company reported flat net sales growth at €522 million, with the Flame for Life division experiencing a decrease due to the return of Asian imported lighters in the U.S. market. Despite these challenges, BIC has shown resilience with robust performance in Europe, Brazil, the Middle East, and Africa, driven by geographic diversification and sales channel expansion.
The company's e-commerce sales have seen double-digit growth, and it has launched new products including the BIC EZ Load Lighter. BIC's adjusted EBIT margin stood at 12%, with a decrease in adjusted earnings per share by 11.1% compared to the previous year. However, the company achieved strong free cash flow of €24 million and maintained a net cash position of €393 million. Looking forward, BIC reiterated its full-year 2024 outlook, expecting net sales growth between 5% and 7% at constant currency, excluding Argentina, and a slight improvement in adjusted EBIT margin.
Key Takeaways
- BIC's Q1 2024 net sales were flat at €522 million, with the adjusted EBIT margin at 12%.
- The Flame for Life division's sales declined by 7.8%, affected by Asian imports in the U.S.
- Strong performance in Europe, Brazil, the Middle East, and Africa with double-digit growth.
- E-commerce sales outperformed the market with double-digit growth.
- Launch of the BIC EZ Load Lighter and marketing campaigns with celebrities like Snoop Dogg.
- Free cash flow was strong at €24 million, with a net cash position of €393 million.
- Full-year 2024 outlook anticipates net sales growth of 5% to 7% at constant currency, excluding Argentina.
Company Outlook
- BIC expects to generate over €220 million of free cash flow in 2024.
- The company maintains its full-year net sales growth forecast at 5% to 7% at constant currency, excluding Argentina.
- A slight improvement in adjusted EBIT margin is anticipated for the full year.
Bearish Highlights
- The Flame for Life division's sales declined, especially in the U.S. due to competition from Asian imports.
- Adjusted earnings per share decreased by 11.1% compared to the previous year.
- Negative impacts on net sales due to currency fluctuations and the situation in Argentina.
Bullish Highlights
- The Blade Excellence division's net sales grew by 8.8%.
- Revenue growth management initiatives led to increased net sales per SKU and reduced inventory levels.
- Operational excellence in Latin America improved manufacturing and procurement capabilities.
Misses
- The adjusted EBIT margin decreased by 1 point mainly due to higher raw material costs and unfavorable fixed cost absorption.
- Operating expenses and other expenses rose.
Q&A Highlights
- BIC plans to focus on new products and product extensions in the Middle East, Africa, and Europe.
- Lobbying for improved lighter safety regulations in Europe to allow for higher-priced products.
- Positive impact of recent acquisitions on profitability discussed.
- Pricing outlook in Europe and North America remains consistent with a rise in private labels in some markets.
- Confidence in capturing a high share of the back-to-school market due to e-commerce growth.
- Plans for Q2 store launch of the EZ Load lighter in the U.S., with brand support dropping between Q2 and Q3, and potential expansion to Latin America or Europe in 2025.
Full transcript - None (BICEY) Q1 2024:
Operator: Good day and welcome to today’s BIC First Quarter 2024 Results Presentation hosted by Gonzalve Bich, CEO; and Chad Spooner, CFO. [Operator Instructions] At this time, I’d like to hand the call over to Brice Paris, VP Investor Relations. Please go ahead.
Brice Paris: Good morning, everyone and welcome to BIC’s first quarter 2024 results call. I am Brice Paris, Head of Investor Relations, and we are here in Kishi today with Gonzalve Bich, our CEO; and Chad Spooner, our CFO. This call is being recorded, and the replay will be available on our website along with today’s presentation and Q1 press release issued yesterday. We will start with the usual results presentation followed by a Q&A session. But first, please take the time to read the important legal disclaimer on Page 2. With that, I give the floor to Gonzalve.
Gonzalve Bich: Thank you, Brice. Welcome everyone. Thank you for joining us today for our first quarter results presentation. I will kick off with a summary of our performance in Q1 and then hand it over to Chad, who will take you through a detailed summary of our financial results. I will conclude with our outlook for the remainder of 2024. To begin with, BIC’s relentless focus on commercial execution is enabling us to demonstrate resilience despite the ongoing challenging macroeconomic environment. We know consumers continue to face inflationary pressures in their everyday lives and BIC’s value-for-money promise helps us deliver savings and quality, both of which are front of mind for consumers. As expected, we had a slow start to the year. Q1 net sales growth was flat at constant currencies, excluding Argentina. However, the ongoing successful implementation of our strategic horizon initiatives provides us with the confidence to reiterate our full-year outlook. The return of Asian imported lighters in the U.S. continued to be a challenge during the first quarter of 2024. It negatively impacted our overall performance in our Flame for Life division in North America. The return of these imports has been impacting us for now almost a year and is conditioned on improved freight rates from Asia as well as foreign exchange volatility. This impact will start to annualize in the second quarter. We are thus expecting a gradual normalization starting Q2, which positions us well for stronger performance in the second half of the year. Performance in the U.S. will also be supported by continued growth in our premium lighter products which respond to consumers’ needs, such as easy reach, utility, and decorated lighters with exciting campaigns and commercial initiatives being put in place throughout the year. Our popular EZ Reach lighter in the U.S. continues to perform strongly, achieving over 6% of share and value of the total U.S. Pocket Lighter in Q1, almost 4 years after its launch. In the first quarter, we had robust performance in other key markets like Europe, Brazil, the Middle East, and Africa. Our success is the result of our drive to diversify geographically across all our strategic and added-value segments and across sales channels, both online and offline. For example, in Europe, within our human expression division, we saw double-digit net sales growth and solidified our leadership positions, notably in France, Italy, and Poland, driven by solid execution from our commercial teams. Additionally, our iconic products such as our new 4-Color collection with the color gradient or the 4-Color Olympics Decor contributed to our robust performance. In Brazil, our Blade Excellence division posted solid growth. Our added value triple-blade products increased 20% in net sales with Star performers Flex (NASDAQ:FLEX) 3, Comfort 3, and Simply Soleil shavers. In the Middle East and Africa region, we saw strong revenue growth of over 40%, boosted by expanded distribution, notably in South Africa, Nigeria, and Algeria. Our focus on executing our Horizon plan remains as strong as ever as we double down on our growth ambitions. A vital element of this is the execution of a successful omnichannel commercial strategy, which is already yielding tremendous results. During the first quarter, total e-commerce sales increased by double digits, driven primarily by Europe and North America. This is well ahead of the market’s performance with growth coming from all categories and most channels. We also continue to boost and support our innovation pipeline and M&A integration with marketing excellence by investing in exciting new product launches and partnerships with key brand ambassadors. I’m very pleased about the early results of the recent launch of our new BIC EZ Load Lighter, BIC’s first-ever reloadable lighter, and the first innovation in the utility category in over 15 years. Our research showed consumers strongly desired a more sustainable product offering with an extended lifespan from their lighter, and insight that drove the development of the BIC EZ Load lighter. Backed by our longstanding commitment to safety and quality, BIC EZ Load introduces unparalleled longevity in the multipurpose category. The product is available online and will be launched in retail this month in the U.S. and Canada with rollout in additional retailers throughout 2024. Moreover, there are many campaigns to highlight during the first quarter. Let me start with the global rollout of the BIC EZ Reach Lighter. We successfully launched our iconic Snoop and Martha media plan across Europe and Asia. In the U.S., we started the year with the new most borrowed campaign spot with Snoop Dogg, Martha Stewart, and Willie Nelson. With support from the YouTube AdBlitz platform during the big game, most borrowed garnered outstanding earned media performance, reaching more than 1.8 billion impressions, tripled the performance we saw a year ago at the same time. Similarly, in March, Djeep launched its Ignite Your Passion campaign with DJ Khaled in New York City. DJ Khaled is an authentic partner to our campaign as a champion of self-expression. I witnessed firsthand at the House of Djeep campaign launch, the energy and enthusiasm that followed him, and how the brand and he are a perfect match. In March, we rolled out our BIC Draw Planet Go Make Wow roadblocks world, which meets our younger consumers where they are online. It’s been a successful launch for BIC in the digital world with the game ranking as the fourth most visited roadblocks game with a consumer goods brand. It has delivered 500,000 visits and 2 million virtual drawings created with BIC Kids branded products. I can’t possibly talk about campaigns without briefly highlighting an educational campaign in South Africa launched during the back-to-school season in Q1. In this country, school dropout rates are as high as 41% with each single dropout representing a lost opportunity for a brighter future. This campaign calls upon businesses and individuals alike to make completing school a reality for every child in South Africa. This is just one of the many examples and initiatives undertaken by BIC’s Drive to improve children’s learning condition, a cause we all care deeply about. Another strategic pillar in our Horizon plan is our continuous revenue growth management initiatives, which deliver value through strategic pricing, a value-accretive mix, portfolio simplification, and effective promotions. During the first quarter, net sales per SKU increased by 13%, while our total SKU count came down by 11% compared to Q1 last year, with human expression delivering the most significant SKU reduction. This is helping to reduce further inventory levels, which aligns with our focus on working capital improvement. I’d also like to highlight our efforts to maximize operational excellence, notably in Latin America as we deploy best-in-class manufacturing and procurement capabilities globally. In March, we were pleased to inaugurate the extension of our plant in Saltillo, Mexico. Our increased presence in the region positions BIC well to prioritize supply chain efficiencies, which mitigate cost volatility while providing clients across North America, Mexico, and Latin America with seamless service and high-quality products. Lastly, our continued efforts to focus on what we can control delivered strong free cash flow results in the first quarter amounting to €24 million, an increase of €57 million compared to the same period last year. This was fueled by robust operational cash flow and continued improvement in working capital, making me confident in our ability to reach our full-year target. In summary, despite the expected softness experienced during the first quarter, BIC’s momentum is building coming into the second quarter and will continue to accelerate during the second half of the year. Globally, there is a strong underlying demand for our everyday essential products, underpinned by our compelling value proposition and high levels of brand loyalty. I’m proud to see that in 2023, BIC ranked 12th out of 1,300 most loved brands by the French public in an annual survey. These achievements would not be possible without our incredible teams worldwide who continue to manage tough market conditions to drive strategic growth through innovation, a relentless focus on excellence, and commercial execution. I now turn you over to Chad, who will take you through our first-quarter financial results. Chad?
Chad Spooner: Thank you, Gonzalve. Let’s begin with an overview of our consolidated results for the first quarter of 2024 on Slide 6. Net sales for the quarter were €522 million, flat at constant currency, excluding Argentina. Our adjusted EBIT was €63 million, which resulted in a margin of 12%. I’ll go into more details on the drivers later in my presentation. Adjusted earnings per share were €1.04, a decrease of 11.1% versus last year. Free cash flow for the quarter was strong at €24 million versus negative €34 million in Q1 of 2023. At the end of March 2024, our net cash position was €393 million. Turning to the next slide, you’ll see a snapshot of our 3 divisions’ performance, starting with human expression. Net sales were €174 million, up 3.9% at constant currency, excluding Argentina. Our strong value positioning was reflected in the performance of our core products, such as our iconic 4-color pen and our mechanical pencil, which both grew over 15% in net sales. In line with our Horizon ambitions, our value-added products, such as our GelPen, also contributed to growth. In Europe, net sales grew above 10%, building on our geographical expansion strategy, marked by further distribution gains across Eastern and Western Europe. In Mexico, our performance was solid, driven by higher volumes and improved mix. Key segments such as Ball (NYSE:BALL) Pen and coloring posted double-digit growth. Lastly, our e-commerce net sales performance was robust, growing double digits, mainly driven by Europe and North America. The human expression adjusted EBIT margin was at 5.3%, an improvement of 3.9 points compared to Q1 last year. The biggest contributor is gross profit improvement driven by price and mix as well as favorable ForEx. On the center of the slide, you can see our Flame for Life division’s performance. Net sales were at €207 million, down 7.8% at constant currency, excluding Argentina. As mentioned by Gonzalve, performance was strongly impacted by a challenging quarter in the U.S. Lighter business, due to competitive imports coming from Asia as well as negative market trends in the measured market. However, in both Brazil and Europe, our net sales growth was solid. As we continue to lean towards a more value-driven model, our premium products such as decorated lighters performed well in both regions. Additionally, the ramp-up of our popular new EZ Reach utility Pocket Lighter launched last year in most European countries is showing promising results. The Flame for Life division’s soft performance was reflected in the adjusted EBIT margin declining from 36.7% to 30.6% compared to Q1 of 2023. This was mainly driven by higher raw material costs, unfavorable fixed cost absorption, and negative net sales operating leverage in the U.S. Lastly, in our Blade Excellence division, performance was solid. Net sales were €132 million, up 8.8% at constant currency, excluding Argentina. The Middle East and Africa region, Brazil, and Europe all posted robust double-digit growth. In Brazil, net sales grew close to 20% as our trade-up strategy towards the 3-blade segment continued to bear fruit with further distribution gains. Similarly, in Europe, BIC successfully gained market share in 9 out of 12 countries, including Greece, Italy, and Poland, demonstrating our strong value-for-money proposition. Net sales performance across Europe was solid, driven by the 4 and 5-blade segments with double-digit growth for each. Blade Excellence’s adjusted EBIT margin improved strongly from 10.4% compared to 4.5% in Q1 of 2023. This increase year-on-year was driven primarily by favorable price and mix, fixed cost absorption as well as manufacturing efficiencies. The margin improvement was also positively impacted by lower brand support investments versus last year. Turning to Slide 8. Let’s now review our consolidated financial results, starting with the first quarter of 2024 net sales evolution. On an as-reported basis, net sales for the first quarter of 2024 totaled €522 million, down 3.2% versus last year. At constant currency, excluding Argentina, our net sales were flat. Currency fluctuations had a negative impact of minus 2.5 points. Argentina contributed minus 0.7 points. Let us now take a closer look at our adjusted EBIT margin change versus the prior year for the first quarter of 2024 on Slide 9. Q1 2024 adjusted EBIT margin was 12%, a decrease of 1 point versus Q1 last year. First off, as communicated in February, a special bonus, which is a non-recurring item excluded from our adjusted EBIT margin will be awarded to team members who have not been granted shares under our regular long-term incentive plans. It will be paid after the approval of the exceptional dividend at BIC’s shareholder meeting in May. Excluding this special bonus, Q1 gross profit margin was up 0.5 points. This was driven by favorable price and mix, ForEx, and manufacturing efficiencies. This was partially offset by higher raw material costs, notably in the Lighter business and unfavorable fixed cost absorption. Brand support slightly increased versus the first quarter last year, notably due to investments in our 4-Color product line in human expression and for the BIC EZ Reach campaigns in Flame for Life. OpEx and other expenses increased by 1.4 points due to net sales negative operating leverage in Q1 of 2024 and timing of expenses. We expect this negative impact to reverse for the full year and favorable operating leverage will drive adjusted EBIT margin improvement. On Slide 10, we have the key P&L elements summarized. Adjusted EBIT for Q1 of 2024 was €63 million compared to €70 million last year. Non-recurring items for Q1 of 2024 were related to the special bonus, which I mentioned to you before. Finance costs for Q1 of 2024 are mainly related to the fair value adjustments for the virtual power purchase agreement in Greece and for the power purchase agreement in France. Q1 2024 income before tax was €47 million compared to €71 million in Q1 of 2023. The net income group share was €34 million compared to €51 million for Q1 of 2023. And our adjusted EPS group share was €1.04 compared to €1.17 last year. Moving on to Slide 11, we see the main elements of working capital. Our inventory levels increased as expected, mainly for our stationary products and human expression division as we build inventory for the upcoming 2024 back-to-school season. In-line with our Horizon goals, we continue to drive inventory efficiencies, improving our inventory in days versus previous years. We have sustained our efficient working capital levels for receivables and days with DSO equal to 60 days, similar to last year at the same period. Trade and other payables increased by €34 million due to higher manufacturing activity with the upcoming back-to-school season. On Slide 12, we have our net cash evolution from December of 2023 to March 2024. We had strong operating cash flow, coupled with continued improvement in working capital as explained in the previous slide. Net cash was also impacted by investments in CapEx of €19 million. This resulted in a positive free cash flow of €24 million. During Q1 of 2024, we bought back €14 million in shares. And lastly, our net cash position at the end of March 2024 was €393 million. This concludes the review of our first quarter 2024 consolidated results. With that, I’d like to hand it back over to Gonzalve.
Gonzalve Bich: Thank you, Chad. Moving on to our full year 2024 outlook, while it was a slow start to the year, the successful execution of our Horizon strategy is bearing fruit, enabling us to reinforce our confidence in our prospects for the full year. Firstly, as mentioned previously, our Flame for Life division impacted by the return of Asian imports in the U.S. market will begin to see a normalization of trading during the second quarter. We also expect our strong value positioning to continue fueling our growth in other key geographies across Europe, Brazil, the Middle East, and Africa. Secondly, we remain committed to delivering on our strategic goals through which we drive new product innovation, achieve market leadership through exemplary omni-channel execution and compelling consumer marketing. Finally, we have a highly determined and engaged management team who will leave no stone unturned in pursuing potential opportunities to accelerate growth by building on our many new capabilities. With that, I’m pleased to confirm our outlook for 2024. Full-year net sales are expected to grow between 5% and 7% at constant currency, excluding Argentina. We expect to see a slight improvement in adjusted EBIT margin in 2024 as we continue to drive EBIT expansion to deliver long-term profitable growth in line with our 2025 targets. As a result, we expect to generate more than €220 million of free cash flow in 2024. Thank you. And with that, we’ll now take your questions.
Operator: Thank you. [Operator Instructions] Our first question comes from Kate Rusanova from UBS. Your line is opened. Please go ahead.
Kate Rusanova: Good morning, Gonzalve, Chad and Brice. Thank you for taking my questions. So I wanted to ask a question about your performance in Europe. So you posted a very strong growth in Q1. You talked about double-digit performance in human expression and excellent mid-single-digit growth in Lighters. So could you please talk a bit more about the drivers of this growth? Was there an element of maybe retailer build-out? And what was the contribution from pricing? Basically, I’m just trying to understand whether we should extrapolate the strong performance going forward. And my second question is related to your full-year top-line outlook. You reiterated the guidance for 5% to 7% growth at constant currency. So that assumes a very strong acceleration in H2. You mentioned that Asian players will start annualizing from Q2. But what are the other elements of that acceleration? Can you talk about maybe some new innovation launches? So what will be driving that mix element in the second half? Thank you.
Chad Spooner: Hey, Kate, thanks for your questions. What we’ll do is a little bit of reverse order because I think it’ll carat nicely, and I’ll start with the full-year outlook and then hand it over to Gonzalve. As we – we’ve said several times, and we told you in February, Q1 was soft. But if you look at Q1 and you dissect it, Outside of North America NAM, the rest of the company actually grew approximately 8%, so really strong performance from all the rest of the company. And we expect those trends to continue because we’re going to see growth in our distribution, and we’re going to continue to drive really favorable price mix through our trade-up strategy, which Gonzalve talked about. Now what we will see also is some recovery. It will start in Q2, and we’ll see normalization of this from the U.S. Lighter throughout the second half of the year. So we expect that by the second half to be normalized. When you think about the gradual recovery in Q2, that will put us at H1 at a low single digits and then much stronger performance robust in the second half of the year, which will keep us within consensus from guidance. And the one thing I’ll add before I hand to Gonzalve is what you’ll see in Q2, Q3, and Q4 is growth across all of our categories. So right now, our forecasts are showing all of our categories growing in each of the quarters. So that will be some of the contribution will be across the board.
Gonzalve Bich: Thanks, Chad. Good morning, Kate. And thank you for your questions. When I think about the growth vectors, the first thing I think about is core, building on the assets of brand and distribution that we’ve been building over decades, but really have been focused on in the last few years. And when you look at Q1, I’m not going to say extrapolate, but it should give you a perspective forward. So in the core, you have growth in 4-Color. You have growth in each of the different parts and in many of the geographic locations. When I think about Shave, one of the things I look at is the growth of our 3, 4 and 5-blade segments around the world and how we can over-deliver there. You also have new products or product extensions for color, absolutely, but also in flame for life with EZ Reach and EZ Load. From a geographic perspective, we’ve had really positive results in the Middle East and Africa, which shouldn’t overshadow also the super solid results that we’ve had in e-commerce globally and specifically in Europe. So I’ll bridge this into a European point as well. In Europe, we continue to grow in each of the pillars that we want to pull, whether that’s in the base business through RGM, promotional effectiveness, distribution gains, and then new product launches or segment extensions. And with the important back-to-school season coming up in Western Europe really focused on making sure that the distribution and visibility is there so that we can gain share yet again in those key markets that we’ve been investing in for a number of years and that are so critical to our strategy. In Flame for Life as well, there are white spaces that we can continue to go get and be aggressive. We’ve talked often and over many years about the need for improved application of regulations in the European environment when it comes to lighter safety, and we continue to lobby and push there. And as slow as that is and frustrating for me, we need to do it, A, because it means that the consumer is better protected by having only compliant products on the market, but also it gives us the ability to put decors, designs, and EZ Reach at higher price points into the market. And then finally, in Shave, I’ve been really impressed with the performance of all of our added value products and how consumers are taking to that, not only in the U.S. where it’s driven some of the performance, but globally.
Kate Rusanova: Thank you, Gonzalve
Operator: Thank you. [Operator Instructions] We will take our next question from Mary Fort from Bernstein. Your line is opened. Please go ahead.
Mary Fort: Yes. Good morning, thank you for the presentation. My first question is about the raw mat on your first quarter. Could you explain why it still has an impact on your earnings and when this headwind should turn to a tailwind? The second question is about lighters. I would like to understand what makes you confident to see a recovery on Q2 because it seems that the market is very weak. So a weak market plus a big import from Asia, probably leads to inventories building for retailers. So I would like to understand the mechanisms. And the third question is about Blade Tech, could you give us an update of the ramp-up of your current contract and the outlook and probably precise a bit the different steps to reach your ambitious targets for Blade Tech by 2026? And my last question is about the PPA. I didn’t understand what covers the PPA in Greece and the PPA in France. Could you elaborate a bit on that topic? Thank you very much.
Chad Spooner: Hi, Mary. Thanks for your questions. What I’ll do is I’ll do raw material and PPA and then hand it over to Gonzalve if that works. So Q1 raw material was really impacted by Flame for Life specifically. And as we always say, inventories bought at year-end, we sell throughout the first quarter. And for Flame for Life, it’s call it a faster process. It turns quicker than Blade Excellence in human expression. So, what we are seeing is the inventories bought at year-end, there were price increases on the specific plastics that we buy specifically for our lighters. And we are seeing that in Q1. That should subside and you won’t see this type of impact for the rest of the year. So, we will call it the inventory selling off in this quarter and a muted impact for the rest of the year for on that. In regards to the PPA, what we have done, I think we have talked about this is for two reasons. One, to secure favorable electricity prices and two, in line with our ambitions for sustainable development, we have entered into PPAs with solar plant in Greece and a VPPA in Greece and a PPA in France. And it locks down our prices essentially at really good rates throughout the years. And what you see in the financing cost is we mark to market every single quarter what the position on those is. I will say when we signed the one in Greece, for example, is extremely favorable to assumed market rates. So, we had quite a bit of favorability as market rates come down, some of that favorability, which is well above our expectation – our expected price starts to come down. So, it’s a zero cash impact and the spot rates for Greece, for example, that we have secured are still better than what you see in the market.
Mary Fort: Okay. And what’s the gross amount of the total PPA just to know what would be the financial revenues, excluding this PPA?
Chad Spooner: We will come back to you, or the IR team will come back to you with that for the two contracts because they are longer in nature. And Brice and team will come back to you on that.
Mary Fort: Thank you.
Gonzalve Bich: Good morning Mary and thanks for the questions. So, as it relates to U.S. lighter and Asian imports in Q2 and full-year performance, as we said at the beginning of the year, we had forecasted or expected that this would be the situation now. Consumption, the lower consumption in the U.S. market was worse by 1% or 2% than what we had originally forecasted, and we are tracking Q2 quite closely. When I think about how we are going to deliver or the reasons that we believe that we are going to deliver the full year. We have promotional support through the year, both in-store and from an advertising perspective. In my prepared remarks, I talked about DJ Khaled and the partnership. The new partnership that we have there, the continued partnership with Snoop and Martha, and I saw the rushes of the next series of ad campaigns from those two that are really great and funny. I would also point us to the launch of EZ Load and the continued rollout of EZ Reach. Sometimes we tend to forget how long it takes to get full depth and breadth of distribution in the U.S. across all the points of sale. And then finally, as we have been discussing and demonstrating through the results these last couple of years, even in markets as penetrated as the U.S., there are opportunities for us to improve our on-shelf distribution. So, in some cases, we will have seven out of eight SKUs, well, okay, how do we make it eight out of eight or eight out of nine and keep pushing those added value sleeve designs, decors, and now new products. So, when I put all of those together, it gives me the confidence to reiterate our full-year outlook as well as my perspective on U.S. lighter. As we think about big latex, so what we talked about, what it seems like just a few weeks ago was we signed three new clients, bringing our current total of partners to six. And there is a good geographic mix in there. There is also a good weight mix. I am really excited by the discussions that we are having with additional new clients who present to us their business plans and then the amount of customization that they want. When I look at that in the pipeline, we continue to see the double-digit accretive growth that we wanted to the top line as well as the accretive margins that this brings. So, it helps all of Blade Excellence and it also helps the total group. So, those are really the building blocks that we see helping us reach our mid-term ambition.
Mary Fort: Thank you.
Operator: [Operator Instructions] We will take our next question from Christophe Chaput from Oddo. Your line is open. Please go ahead.
Christophe Chaput: Yes. Good morning to all. Just a quick one for me. Do you think that the better profitability of Cello and inbox, let’s say, is material on the Q1? And if you have any figure related to that, it will be great. Thank you so much.
Chad Spooner: Hey Christophe. Thanks for your question. The way that I think about it, if you look at the Human Expression division and if you take out Cello and the acquisitions, take all of them, right, there is – the other ones are pretty minor. It’s a couple of hundred basis points, right, to impact the total core business. So, that’s what we are seeing in Q1 in terms of impact. So, when those things go towards profitability, it could have a few basis points impact for the business overall.
Christophe Chaput: Okay. So, it’s not fully material, let’s say, on the division at the end of the day?
Chad Spooner: Not fully material on the group, on the division, right, at 7% or so, two points would help, right.
Christophe Chaput: Yes. Okay. Thank you so much.
Gonzalve Bich: Thank you, Christophe.
Operator: [Operator Instructions] We will take our next question from Alessandro Cuglietta from Kepler. Your line is open. Please go ahead.
Alessandro Cuglietta: Yes. Hi. Good morning everyone. Just a quick question on lighters, I just wanted to come back on the market performance of the – lighter volumes were down in Q1 by 6%. Just wanted to make sure why or maybe you can give us the main drivers of that decline, except from the Asian imports because I understand that those are two effects, two different effects. And if you expect lighters volumes overall on the market to recover from Q2 and to end positive or flat by the end of the year.
Chad Spooner: Good morning Alessandro. At the end of the day, when you are looking at market data, you have to understand it as consumption data with the consumer. There is nothing that I am going to point you to that specifically would have engendered a minus 6% versus a minus 4%. There is inflation in the U.S. There is uncertainty around the U.S. economy that is making people per strengths tighter. Things are just a little bit more challenging for Mrs. Smith to not say Madison in that market. And I know Jamie Dimon actually made some interesting comments to that effect last night. Our forecast for the full year is still a decline. And for the total market, we want to continue to gain share. But for the total market, low-single digit decline. After that, it’s about back to what I said, improving distribution, making sure that the launches of EZ Load are successful as well as the continued rollout of EZ Reach, making sure that our promotional drops are impacting the consumer to I don’t remember – whose question, Mary’s question that I should have built on. One of the things that we absolutely don’t want to happen is having customer inventory builds during the year. So, we are still very focused on making sure that they have the right amount of inventory, but that they are not building something that they will want to offload later on, given the mechanics of the U.S. lighter market.
Alessandro Cuglietta: Okay. Thanks Chad. It was very clear.
Operator: [Operator Instructions] We will take our next questions from Kate Rusanova from UBS. Your line is open. Please go ahead.
Kate Rusanova: Hi. I just wanted to follow-up with a question on your pricing outlook in Europe and North America because Nielsen data is showing some negative price development in stationery and shavers in the U.S. So, I just wanted to check if that is something that you were seeing as well and I think maybe in Europe, the situation is different. Thank you.
Chad Spooner: Thanks for your question, Kate. So, the way we work with our customers around the world on price is fairly consistent, although the time lags are a little bit different for a variety of reasons. But we take the different RGM actions, that’s pricing, promotion, mix and others well ahead of things and the teams are confident of being able to capture the pricing actions that we have set for ourselves, so that’s fine. I don’t know specifically what data you are referring to. So, I would be interested to see it, and maybe we can criss-cross it. We did see in some markets, probably not our most major markets, a little bit of a rise of private label, but nothing to talk to you all about in that segment. I think this back-to-school will be really important as we go back to this next normal, if you will, of the back-to-school season with Madison, Mr. and Mrs. Smith, and making sure that we are capturing the highest share of backpacks that we possibly can. And what gives me confidence in that outlook is the growth that you have seen our business have in e-commerce these last 3 years, even our first quarter e-comm growth was really robust, well ahead of our total company growth. So, I am really excited by our over-delivery of share in e-comm.
Kate Rusanova: Thank you very much.
Operator: Thank you. We will take our next questions from Mary Fort from Bernstein. Your line is open. Please go ahead.
Mary Fort: Yes. Thank you. Just a follow-up question about the EZ Load lighter, you mentioned good feedback, but I understand the product launch has been pretty limited in Q1. Could you remind us what the commercial plan for EZ Load lighter? And what from the first feedback you have.
Chad Spooner: Thanks for your question. It started with an online launch. So, please feel free to go and look at the online reviews, which are quite positive so far. It will hit stores in Q2. Actually, I think we have already shipped some of them already in stores in Q2, and then we will continue to roll out through the year. The brand support drops right at the edge of Q2 and Q3. I am not going to make because I don’t remember which week it drops in, but whatever. And then we will support the launch for the first 12 months to 18 months as we build on this innovation, which I am excited about. It’s our first innovation in over a decade in utility. It’s the first big rechargeable product that allows consumers that sustainability benefit of being able to load all those lives into the product while having that utility use for barbecues and candles and outdoors.
Mary Fort: It’s only in the U.S. for 2024.
Chad Spooner: For 2024, yes.
Mary Fort: And 2025, Latin America, probably, or Europe?
Chad Spooner: Depending on the results and how much back order we might have, we will let you know. But we want to make sure that we serve the markets appropriately.
Mary Fort: Okay. Thank you again.
Operator: Thank you. It appears there are no further questions. This concludes today’s call. Thank you for your participation. You may now disconnect.
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