Societe BIC SA

PAR:BB

Earnings Call Transcript 2021-Q1

[Operator]

Hello, and welcome to the BIC First Quarter 2021 Results Presentation. My name is Val, and I will be your coordinator for today's event. Please note this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Sophie Palliez, to begin today's conference. Thank you.

[Sophie Palliez-Capian]

Thank you. Good afternoon, and good morning, everyone, and welcome to this conference call. The call will be hosted today by Gonzalve Bich, Chief Executive Officer; and Chad Spooner, BIC's Chief Financial Officer. We will start, as usual, by a short presentation followed by a Q&A session. Let me now give the floor to Gonzalve. Please, Gonzalve.

[Gonzalve Bich, CEO & Director]

Thanks, Sophie, and welcome, everyone. Thank you so much for being here with us today. I'd like to begin our presentation by providing you with some context on our first quarter results. But before I start, I want to recognize all our team members worldwide, particularly those in India, Brazil, South Africa and Mexico and the many countries where the pandemic continues to be very active. These robust Q1 results are a reflection of their unwavering commitment and courage, and they are all the more remarkable considering the continued challenging trading environment. As I'll cover in more detail later, on top of a favorable comparison base and growth in our 3 categories, our first quarter performance was led by exceptional growth in our Flame for Life division, and particularly in our U.S. Lighters business. Driving this performance was a shift in market trends and customers realigning their orders during the first quarter to meet stronger-than-expected consumer demand. As you may recall, this time last year, the U.S. lighter market was declining 6.5%. The negative trend began in 2019 and worsened through the onset of the pandemic lockdown.Despite the favorable comparison base, the market's 11.1% growth rebound in value at the end of March this year was unexpected and caught our customers by surprise. Increased consumer demand has driven this market rebound. A recently completed online survey of U.S. households on flame usage over the last 12 months indicated that 2/3 of respondents household stock of lighters were purchased during these last 3 months, which is equivalent to 2 or 3 units of pocket and utility in sample-based households. Our Q1 success in lighters extended beyond our classic range of pocket utility lighters and included our new EZ Reach lighter, which continues to drive positive results and gain distribution in the first quarter. We're very encouraged by the consumer response to this product thus far. Also driving the comparable growth base was the solid execution of active pricing and revenue growth management. As a result, year-to-date, we grew dollar sales per point of distribution by more than 18%. Nevertheless, as I mentioned already, our overall trading environment remained volatile and uncertain during the first quarter. Ongoing restrictions due to the pandemic still affect consumers' everyday behaviors, reshaping their needs and shopping habits worldwide. Constrained by various lockdown measures, moms are shifting their purchases online, even for basic stationery products and men are shaving less often.From a geographical standpoint, countries like Brazil, Mexico and India continue to be the hardest hit by the pandemic, and it's fair to say that when we don't even expect return to normalcy before the next cycle. However, there are many reasons to be optimistic as we continue to move forward with our transformation journey, confirming that we've made the right operational and strategic choices. One example is how we're managing rising raw material prices and disrupted sea freight. Through agile and inventive mitigation plans, which included alternative material sourcing, the use of recycled materials and airfreight, our teams succeeded in lessening the impact of product shortages and sea transportation issues to secure business continuity. From a strategic standpoint, much of the momentum we see in the business now results from our Horizon Plan. In human expression, we grew in our strategic segments of Coloring as well as in digital writing with Rocketbook, whose sales doubled versus the same period last year. Finally, e-commerce delivered solid performance overall, with 42% net sales growth in the first quarter. Pure player channels continued to grow rapidly at over 80% year-on-year. We made further gains or effectively held share in key markets, such as stationery in Europe and India and shaver in the U.S. This strong growth was supported by increased and effective digital brand support.Looking ahead, for the balance of the year, we remain cautiously optimistic. Our caution is rooted in the uncertainty that remains due to the low visibility for Northern Hemisphere upcoming back-to-school season, the ongoing impact of the pandemic and the volatile trading environment in Latin America, Africa and India, and the volatility of input costs and the overall supply chain disruptions that have resulted from the pandemic. Nonetheless, I am optimistic in our organizational capability to deliver. With a continued focus on executional excellence and our Horizon Plan serving as our North Star, we will continue to innovate to support our business, with new product launches like the new crystal -- BIC refillable Cristal and a new range of 1-piece shavers offering compelling sustainability benefits in line with consumer choice through innovative and relevant marketing campaigns and with an impactful back-to-school execution in Europe and North America.Finally, our cost savings and cash productivity initiatives have proven to be effective and should continue to drive short and long-term value creation for all our stakeholders. For these reasons, and despite a better-than-expected start of the year, our full year outlook remains unchanged, though we now expect to be at the higher end of our 5% to 7% growth objective at constant currency. We'll provide a business update of our outlook in July once we have better visibility on the evolution of our overall trading environment and particularly on back-to-school in the Northern Hemisphere. With this big picture in mind, let's now look at our Q1 operational and financial performance in more detail. Let's first take a look at a snapshot of our financial performance in Q1 2021, which Chad will take us through in more detail later on during the call. Net sales for the first quarter were EUR 411 million, up 20.9% on a comparative basis and up 25.6% at constant currency. Adjusted EBIT was EUR 60.5 million with a 14.7% margin. Adjusted earnings per share were EUR 0.96, up 60% versus last year. Free cash flow before acquisitions and disposals was EUR 36 million, and our net cash position at the end of the quarter was EUR 393.6 million, including the sale of our Clichy headquarters. As I mentioned earlier, our human expression division continues to be the most impacted. With the core writing instrument segments hardest hit by the pandemic due to ongoing school and office closures and evolving consumer shopping habits towards more online purchases. Back-to-school seasons in countries like Brazil and South Africa were tough from a market end consumption perspective, yet we gained or held share overall and particularly in the Coloring segment. We achieved solid results in Nigeria, with net sales more than doubling in Q1, underpinning the successful acquisition of Lucky Stationery and our efficient route-to-market strategy in that area.In India, Cello net sales grew double digits for the first time, driven by improved domestic market conditions and positive momentum in e-commerce. In more mature markets in Europe and North America, bright spots included share gains in our strategic Coloring segment, which is a key consumer trend. We gained 0.5 points in value share in France and 2.1 points in the U.K., thanks to compelling offers around creativity and art. We also saw a very strong performance in e-commerce, driven by Amazon as well as our -- in our Invest To Grow countries, particularly Turkey. Unfortunately, this did not offset the negative impact of the decline in core writing instrument segments like ballpen. Similarly, in the U.S., although we continued to gain share in the coloring markers and coloring pencils segments, the weighing of classic products in our portfolio drove an overall market share loss of 1.1 points of market share in value.Rocketbook, however, was a standout performer, doubling sales this quarter versus Q1 2020. I'm very excited about the integration of this new business and the opportunities ahead in the promising world of digital writing. Rocketbook's flagship product Fusion is rated 4.5 stars with over 27,000 reviews on Amazon, and I encourage you to try it for yourself. This is an outstanding performance and promises exciting things for the future. It's surely only a matter of time before Rocketbook products become one of the sought after back-to-school shopping items in a couple of years. Turning to our Flame for Life division. As I laid out earlier, we had an exceptional first quarter performance in our U.S. Lighter business, with net sales growing more than 70%, driven in part by a substantial shift in market dynamics. I'll cover this together with the other main drivers in more detail in the next slide. In Europe, net sales grew high single digits, driven by pocket and utility lighters in the traditional channels in France, Spain and Italy, which were severely impacted by the lockdown at this time last year. In Russia, we grew distribution and our strong performance continued. We grew double-digit in Latin America, with solid growth in Brazil through widespread consumer usage occasion and the benefit of reduced lighter importation. In line with Horizon and our focus on all flame occasions, we continue to grow share in utility lighters within our total lighters. At the end of March, total utility lighters accounted for 14% of our U.S. lighter sales, up 2 points versus last year. If we now focus on our U.S. Lighter business as a powerful driver of performance of our first quarter, there are 5 contributing factors that led to a net sales increase of 78%. The first 2 drivers are the result of positive market trends. As shown here, the main driver was the market's dynamic, accounting for 20 points of the growth. Following a negative trend towards the back end of last year and a favorable quarterly comparison base, the first quarter of 2021 saw the pocket lighter market grew 8.5% in value and BIC gaining 1.7 points. In utility, the market grew 28.9% in value, and we gained 0.7 points. There are several elements contributing to this, including the rise of nontobacco lighting occasions, with candles growing over 40% in value according to the latest IRI data. And another being the stimulus checks provided by the government at the end of 2020 and beginning of '21, which we've seen benefit of in many consumer staples. Although we currently believe that the U.S. pocket lighter market should continue to grow in 2021, the pace of growth should slow for the balance of the year. This important and unexpected shift in market trends led customers to recalibrate their orders during the first quarter to meet consumers' anticipated demand, and this represented approximately 31 points. The third driver is the positive impact resulting from further distribution gains and the pipeline effect of the new successful EZ Reach lighter launched in June last year, which will continue to drive growth this year. While the lighter is already doing well, I look forward to our upcoming marketing campaign, which will feature celebrity spokespeople, Snoop Dogg and Martha Stewart. This exciting campaign will drive awareness and trial, ultimately supporting sales.The last 2 drivers of the performance in the U.S. lighter are the impacts from pricing, which we expect to continue to fuel our lighter performance for the balance of the year, approximately 8 points related to the impact of our overall pricing strategy, including revenue growth management and the positive impact from the June 2020 price increase. Finally, the last 7 points include pre-buys ahead of the price increase planned in May this year, which will be in the low single-digit price range. Overall, first quarter market dynamics have led us to review our initial market assumptions, and we now expect the U.S. lighter market to be somewhere between flat and up 2% to 3% in 2021 versus our previous expectation of a flat market.In our Blade Excellence division, we can clearly see that challenging market trends remain in most geographies, partly due to continued changes in consumer trends with a pandemic. Yet we saw continued success for our added-value products and robust growth in e-commerce. In Europe, the impact of declining markets in France, the U.K. and Italy were partially offset by further market share gains in Russia. In the U.S., the in-store disposable market declined 10% in value, and we underperformed by 0.9 points as a result of intense competition in the female segment. However, our brand demonstrated solid execution and gain share in the male segment, driven by the success of our Flex 5 and Hybrid Flex ranges. I'm also very pleased with our performance in e-commerce, where we outpaced the market gaining 2.2 market share points year-to-date.In Latin America, we performed well in Brazil in a difficult but growing market, gaining 0.3 share points driven by the female segment and male hybrid ranges. In Mexico, we saw a robust performance in the female segment with BIC Soleil range up 3.9 points, demonstrating the continued success of our trade up strategy. For the balance of the year, momentum will be driven by the launch of the new male and female lines of hybrid shavers with clear sustainability benefits. We're also launching an innovative system shaver with a handle made of bamboo in the Nordic market. It's just hit e-shelves and appears to be well received by both customers and consumers and rollout in retail will be in a couple of months. These new product launches are consistent with and support our sustainability journey and our commitment to reach 50% of non-virgin petroleum plastics in our products by 2030. To conclude on Shaver, I'm excited to see that our B2B Blade Excellence strategy is starting to bear fruit. We mentioned in February that we already had secured 2 customers. I'm pleased to share with you today that one of them has already increased commitment. Although we don't expect a material impact on our sales before next year, we are confident that we made the right choice for our Shaver business. This ends our operational review. Chad will now take us through the detailed financial performance of our first quarter.

[Chad J. Spooner, Chief Financial Officer]

Thank you, Gonzalve. I'll begin by reviewing the net sales results for the first quarter of 2021. On an as reported basis, first quarter net sales totaled EUR 411 million, up 15.1% versus last year. On a comparative basis, our net sales were up 20.9%, mainly explained by the exceptional performance in North America lighters. Currency fluctuations had a negative impact of minus 9.5 percent points, excluding the foreign exchange impact from Argentina. This was mainly due to the continuing decline of the U.S. dollar and the Brazilian real against the euro. The perimeter impact adjustment includes mainly the acquisitions of Rocketbook plus 3.6 points and Djeep plus 1 point, partially offset by the Pimaco divestiture and Asian business closure. As a reminder, due to Argentina's hyperinflation, we are excluding Argentina from our net sales on a comparative basis. On Slide 9, you can see the key elements of the summarized P&L results. Gross profit margin for Q1 2021 increased 0.5 points to 51.6% compared to 51.1% in Q1 of 2020. Adjusted EBIT for Q1 2021 was EUR 60.5 million compared to EUR 25.3 million last year with an adjusted EBIT margin of 14.7% this year versus 7.1% for Q1 of 2020.First quarter 2021 income before tax was at EUR 228.2 million compared to EUR 34.8 million in 2020. Net finance revenue was positive EUR 0.8 million compared to a positive EUR 11.8 million for the same period in 2020. This is explained by the strong favorable impact of the fair value adjustments to financial assets denominated in U.S. dollars versus the Brazilian real and the Mexican peso in Q1 of 2020.Net income group share was EUR 161.6 million as reported for the first quarter of 2021 compared to EUR 25.0 million in Q1 of 2020. Adjusted net income group share was EUR 43 million compared to EUR 26.9 million last year for the same period. The Q1 2021 effective tax rate was 29.2%, whereas the Q1 2020 effective tax rate, excluding Cello impairment, was 31.2%. The decrease is mostly due to the lower statutory French tax rate in 2021.EPS group share for Q1 2021 was EUR 3.59 compared to EUR 0.56 in Q1 of 2020. Adjusted EPS group share for Q1 2021 increased 60% to EUR 0.96 compared to EUR 0.60 last year.Let me now review the adjusted EBIT margin change for the first quarter of 2021 versus 2020. As just mentioned, the gross profit margin increased 0.5 points to 51.6%. This was driven by the strong increase in lighter net sales, particularly in North America, a decrease in brand support above net sales and manufacturing cost savings, partly offset by adverse foreign exchange from Latin America currencies against the U.S. dollar. Brand support and operating and other expenses were lowered by 1.2 points and 5.9 points, respectively, mainly driven by strong net sales leverage. As we look at the EUR 166.8 million of nonrecurring items in Q1 2021, we had EUR 167.7 million of net gain for the sale of our Clichy headquarters, EUR 3 million net gain from the Pimaco divestiture and EUR 3.9 million related to transformation plan costs.I would like to now spend a few minutes to discuss raw materials as it is a topic that is being focused on global these days. As we've just seen, the total impact is neutral in Q1 with a minus 0.1 point impact on gross profit. Although we had a negative impact from last year's purchases recognized in Q1, this was offset by savings from procurement initiatives. However, since the beginning of this year, we see ongoing pressure from market prices, notably in plastics, which were up 37% on average compared to Q4 of 2020. These adverse trends will undoubtedly impact our input costs for the balance of the year.As expected, full year raw materials will negatively impact our GP, despite ongoing procurement savings and the hedging policy initiated at the end of last year. In first quarter 2021, we invested EUR 15.9 million in CapEx, with the greatest focus in lighters, which accounted for 36% of the total. The forecasted CapEx level for 2021 is in the range of EUR 100 million.On Slide 13, we see the main elements in working capital. Inventories ended the period at EUR 421.5 million. Trade and other receivables ended at EUR 445 million. Trade and other payables were EUR 137.5 million at the end of the first quarter of 2021. Accounts receivables increased versus December of 2020 as we grew our net sales during the quarter. The increase in inventory compared to the end of December of 2020 was a result of our seasonal inventory build in preparation for the back-to-school season in many countries.This next slide summarizes the evolution of our net cash position between December of 2020 and March 2021. Net cash from operating activities was EUR 51.9 million, including EUR 91.1 million in operating cash flow and EUR 39.2 million of negative impact from the change in working capital and others. Among the drivers of the working capital were the increase in accounts receivable of EUR 31 million compared to December of 2020, as explained in the previous slide, and inventory, which contributed EUR 37 million. This was partially offset by an increase in accounts payable of EUR 41 million.We received cash proceeds of EUR 177.3 million, EUR 173.9 million for the sale of our headquarters building at Clichy and EUR 3.4 million for the Pimaco divestiture. The tax related to the HQ sale, which will be EUR 46 million, will be paid later in the year.In Q1 2021, we invested EUR 4.2 million related to the HACO Industries and Rocketbook acquisitions. Net cash was also impacted by investments in CapEx as we invested EUR 15.9 million in the first quarter of 2021. Shareholder return was EUR 2.7 million. This was done through our share buyback program. Our net cash position at the end of March 2021 was EUR 393.6 million. This ends the review of our first quarter 2021 consolidated results. Now let me give the floor back to Gonzalve.

[Gonzalve Bich, CEO & Director]

Thanks, Chad. Looking now to how we see the rest of 2021 from a market perspective. I'll lay out our 2021 global market assumptions, which we've slightly revised based on the market dynamics observed so far since the beginning of the year. These are based on Euromonitor and internal estimates. In Europe, in light of the soft start to the year in many countries, including the rolling lockdowns and restrictions notably in France and the U.K., we now expect the market to be flat in Shaver versus our initial estimate of flat to slightly increasing. In Stationery and Lighters, our assumptions are unchanged. In North America, for all the reasons already covered, we now expect the pocket lighter market to be in the range of flat to up 2% to 3%. In Stationery and Shaver, our assumptions are unchanged. In Latin America, given the tough market environment in Stationery, with the Brazilian market down 49% and Mexico declining 29% in value in the first quarter, we now anticipate markets to decrease between 2% and 6% in value. And we remain particularly watchful of the situation in Mexico in anticipation of the upcoming back-to-school season and whether children will go back to the classrooms next year or stay in remote learning. In Lighter and Shaver, our assumptions are unchanged.Before I conclude, I'd like to share with you, as I did back in February, the main drivers of our performance outlook for the balance of the year. Organic growth will continue to be driven by increase in volumes versus 2021 -- versus 2020, new product launches and line extensions and a drive for further market share gains in key markets. Commercial excellence and notably revenue growth management will continue to be a key component of our growth as well as the addition of new businesses like Rocketbook, which already contributed fairly well to our growth in the first quarter. Gross margin should be flat as positive higher sales volumes and price increases will be offset by an increase in raw material costs, adverse currency impacts and a negative mix due to India's rebound in sales. Yet we remain cautious on the impact of rising input costs on our business for the balance of the year and particularly for the second half. In line with Horizon, our adjusted EBIT margin is expected to strengthen versus last year, driven by the decrease in operating expenses as a percentage of net sales, thanks to the numerous benefits of our invent a future plan and further operating expense reductions, which will more than offset increases in brand support, R&D and innovation. We will continue to focus on free cash flow generation with tight control of inventory.CapEx is expected to be around EUR 100 million as initially planned. As I mentioned before, despite a better-than-expected start to the year, our full year outlook remains unchanged so far. But we now expect to be at the high end of our 5% to 7% growth objective at constant currency. We'll update you on our business outlook alongside our half year results in July once we have better visibility on the evolution of our overall trading environment, particularly on back-to-school in the Northern Hemisphere. Full year 2021 free cash flow is expected to be above EUR 200 million, driven by strict control of CapEx and working capital. Sum up, we continue to navigate through a challenging trading environment effectively and are focused on what we can control: operational excellence, proactive management of our business portfolio and the execution of our new consumer-focused strategy and business model. With our Horizon Plan as our North Star, our first quarter results demonstrate that we're moving in the right direction. I'm convinced that the capabilities we're building throughout our organization will drive accelerated, profitable growth and create long-term value.Thank you, and I'll now open the floor to your questions.

[Operator]

[Operator Instructions] We do have a few questions in the queue. The first one comes from the line of Christophe Chaput from ODDO.

[Christophe Chaput, Analyst]

In fact, I've got 3, if you don't mind. The first one is coming back to the Shaver in U.S. So the market declined by 10% in value. Did you have a comment on volume as well? And because you do not change your assumption for the full year, which is a low to mid-single-digit decrease, why should the trend reverse in -- for the balance of the year? Is it a basis of comparison or something like that? The second question is on the Lighter division, so in the U.S., for sure. Do you have any idea of the level of inventories right now from your clients? So the question is, could we have some positive effect as well in Q2 related to restocking or inventory effect from your clients? The last one, a very small one, is on the market share in U.S. for the Lighter division. What are the lighter -- the utility lighter market share in U.S.? Is there a big difference versus the pocket lighter for you?

[Gonzalve Bich, CEO & Director]

Christophe, since all 3 are for me, and you talked faster than I could write them down, I'm going to have to ask you to come back. Let me -- it's okay. Let me do the first 2, and then I'll come back and you can jump back on the line and ask me the third one. So U.S. Shaver minus 10% value. Volume is flat. Now just to be specific, and I should do a better job of calling that out in the prepared remarks. That's in-store. That's not the blended in-store plus online. But you're right, it's a very tough competitive market out there coming out of 2020, when -- as we've talked about before. Last year, the promotional mechanics in the first part of the year were all but switched off. And of course, that has a comparative base effect on both Q1 and Q2 and probably for the balance of the year. We -- there is definitely -- and we're going to have this on all the categories and all the discussions we have this year. The comparisons are going to be really thrown by the volatility of 2020. And so we'll have to do a really good job of normalizing stuff as much as we can.I talked about product launches. I'm really excited about the hybrid range of male and female products. I think from a consumer perspective, they have a lot of legs, we've got good commitments from our customers. And I'm excited what that can be. And this year, we'll have more promotional support with at least in-store and as well as the digital advertising that we've invested increasingly in over the last couple of years. Last year, you remember, we were mostly digital. And this year, we're still in digital support formats.U.S. customer inventories Q2, I think we saw a little bit of that effect -- well, quite a bit of that effect in Q1. Q2 will be largely determined whether that effect continues by everyone's view, our customers' view of what the ongoing market dynamics will be. I've given you our outlook, I think, flat to up 2% or 3%. If it continues to be as strong as it is now, we'll continue to see strength in orders and inventory rebuild. But we all need to stay cautiously optimistic, I think, is the word that I'm going to use. We're -- as I mentioned, though, we're continuing to gain distribution. And we're continuing to grow the EZ Reach business, which I'm really excited about. Can you give me the third question? I'm really sorry.

[Christophe Chaput, Analyst]

U.S. Lighter market share in utility versus pocket lighter market share.

[Gonzalve Bich, CEO & Director]

I had it. Yes. So in utility, we're at 54.1% right now. And you compare that to the well, well north of 70 number that we give you on pocket. So there's room for continued growth and improvement, which I think is not only on share. What I'm excited also is -- and what EZ Reach does is it increases the awareness of the category with consumers. Now last year, with a lot of people in the U.S. barbequing, I think the awareness of utility lighter probably increased, and we'll be measuring that sometime in the year. But creating those new flame occasions. And as I shared with you, candle is up 40% in the first quarter in the U.S. So there's a lot of other flame occasions that we can tap into for growth.

[Christophe Chaput, Analyst]

Okay. And there is no reason why the market share for the utility shouldn't be the same than pocket lighter for you? I mean it's...

[Gonzalve Bich, CEO & Director]

I wish you set my sales team's goals that way. But that's definitely what I'm -- what we're driving for. The markets are a little bit different. The competitive set is a little bit different. And so we need to be agile in how we go to market and in the way we present the brand, and that's why I'm so excited in our tie up with Snoop and Martha, who are the spokespeople for the EZ Reach product, and you'll start seeing that on the airwaves digitally and otherwise in the next couple of weeks.

[Christophe Chaput, Analyst]

Okay. But just who are the competitors that are present in the utility lighter and not into pocket later? I mean, sorry for that, that's...

[Gonzalve Bich, CEO & Director]

There's a lot more non-branded in utility than there is in pocket.

[Operator]

The next question comes from the line of Nicolas Langlet from Exane BNP Paribas.

[Nicolas Langlet, Research Analyst]

I have 3 questions. The first one to come back on the lighters question. What has been the trend since the beginning of April? Did you continue to see those kind of restocking effect, notably in the U.S. or not? And in the past, you used to generate between EUR 160 million, EUR 180 million of net sales in Q2 for Lighters, for the division as a whole. Do you think it's a good base when we think about Q2 '21?Second question on FX. So the impact was quite negative on gross margin in Q1, 2.8 points. What's the outlook for the coming quarters based on current exchange rate. And finally, on M&A., are there any advanced projects in the pipeline at the moment?

[Gonzalve Bich, CEO & Director]

Nicolas, let me tackle your first question upfront. If there were any advanced M&A pipeline projects, this would be the absolute last place I would be talking about them. As much as I know you would love to hear about it, I don't think it would be appropriate. But M&A continues to be -- or inorganic growth vectors continue to be important focuses for me, my team and how we view our transformation in addressing opportunities in each of our 3 divisions.Lighter, the trend in April is in line with what we saw in March and the first quarter. It's actually a couple of ticks up from that in sell-out and so we should continue to see strong growth in sell-in. Now let me qualify that on a couple of points. First, let's remember that there's a very favorable comparison base versus 2020 because April was the hardest-hit month for us all. No. End of March was the beginning of COVID, but April and May were really the full lockdowns all over Europe and the U.S. was kind of a dog's breakfast. So the -- but we are outperforming in the -- we're gaining 1.7 points of share on a very comparable basis. So a lot of good momentum there. And then I'll let Chad answer the gross margin question.

[Chad J. Spooner, Chief Financial Officer]

Yes. The question, I think, Nicolas, was around FX in Q1 and what do we see for the outlook for the future. I'm kind of smiling because as you can imagine, we don't and we can't predict foreign exchange and what we're going to see in the future. But you do know that what our hedge rates are for at least a U.S. dollar and euro. And also, you can tell what the impact was from the Latin American currencies versus U.S. dollar. They did have a very strong negative impact in our first quarter results. So I think you can take that as an indication of what happens in the future to those different rates, what the response will be for our margin rates.

[Gonzalve Bich, CEO & Director]

To come back on your question, Nicolas, on M&A, although I can't talk prospectively, I will use your question to remind us, Lucky Stationery doubled in its sales in the first quarter. GP integration is going well, and the growth momentum is definitely there. And Rocketbook has had now 2 very solid quarters, the first quarter of this year doubling the sales. So I'm really happy with what we've done from a capability building perspective also internally.

[Nicolas Langlet, Research Analyst]

Okay. And actually, on the Rocketbook, so the sales were up 100% in Q1. Was there anything exceptional in that performance? And how should we think about the performance of Rocketbook on a full year basis for 2021?

[Gonzalve Bich, CEO & Director]

We're both hoping for a very strong 2021 of Rocketbook. I think the current context lends itself well to the product, to what it offers the consumer from a sustainability perspective of the product itself, from a digitalizing of writing, from sharing of information, it's really interesting. The biggest quarters for the Rocketbook business, as you might imagine, are the Q4 time frame because that's the lead up to Christmas and Rocketbook was one of the top. And I think I mentioned this in the full year Q4 time frame, it's a good stocking stuffer, right? It's a great gift at that $20 to $30 price point. So we're really excited. The business has launched a new product just recently. So from an innovation perspective, it's going where I think it needs to go. Very fresh consumer messaging, a lot of digital content being put out. But also, as we think about how we create new use cases for the product, lots of great work there. And then there's just distribution gaps for us to fill, right? So it's a heavily B2C business so far, although Amazon and other pure players are a big part of the business, but there's other growth avenues that we can explore in retail. I'm really excited about what Rocketbook means as the first step in our digital writing journey as part of our Horizon transformation to human expression.

[Operator]

Your next question comes from the line of Marie-Line Fort from Societe Generale.

[Marie-Line Fort]

I just want to come back again on utility lighters. Given your success in the U.S., can you give us some details of your plan to launch your EZ Reach in Europe and as well as the timetable? And also, is this new category of lighters leading you to diversify your distribution network? Like, for instance, offering in all the -- in the same shelf of candle or barbecues, I don't know. I've got a second question to know if it's possible for you to quantify the impact in Q1 '21 of your new growth initiatives, meaning Coloring, Utility Lighters, subcontracting in razers, even if I understood that it's not meaningful at this stage, but can we have a sense of the impact of your organic growth in Q1?

[Gonzalve Bich, CEO & Director]

Marie-Line. No, on utility, you're right. We're very pleased with how EZ Reach is going. We actually launched this month, April in France. And other countries will follow for the balance of the year. I think we're doing Benelux, Belgium and the Netherlands, and we're doing the Austria, Germany cluster later this year. But those are soft launches. We'll build into 2022 with EZ Reach in the European perimeter, and we should expect to be full steam across the European footprint by 2023.I'd also remind us that the U140, which is kind of the in-between product that we've been commercializing in Europe for many years now, continues to perform really well in Europe. And you're absolutely right. I think I'm definitely going to be inviting you and Christophe to the sales meetings. We're diversifying our distribution into other mass retail formats. What we need to be very careful on is the size of the opportunity, in some cases, the store is not big enough for us to send direct distribution, but we do that through wholesale. And you hit the nail right on the head, which is that other flame occasions vector that's such a big part of Horizon and Flame for Light. So outdoor, barbecue, wellness, home spa and the like. So really excited about what the utility business can mean.We grew that business 45% in the first quarter over the same period last year. And at this point, total utility lighter sales for our global business is now at 11%. So really becoming a notable part of our overall portfolio with still a lot of legs. Your question about Coloring, we had a very strong quarter in Coloring at a global level. We grew 15% in the first quarter versus last year. And that segment within our total business of stationery now represents 8%. In shaver, it is a little bit too early for me to give quantitative details about Blade Excellence business. But as I mentioned, we had 2 contracts signed when last we talked in February. One of our customers has increased their commitment, which is great news because it means they're happy with the quality of the product and the partnership with us. And alongside this, we remain absolutely focused because it's very much that dual-pronged strategy on added value shaver and our 5 blade segments, which grew 35% in the launch of the new hybrid line of shavers.

[Operator]

There is another question in the queue, and that comes from the line of Charles Scotti from Kepler Cheuvreux.

[Charles-Louis Scotti]

I have 2 questions. The first one on the U.S. pocket lighters market. You say you are witnessing a change -- a shift in the market dynamic. Is it just an improvement, let's say, a technical rebound on low pandemic comparison basis? Or is it really a market growing again? Because it seems that in Q1 2020, the market was down 7% in volumes. And apparently, it was flat again in Q1 2021, which suggests no rebound in volumes. So any comment on that would be helpful. And the second question. I have seen press article stating that Harry's was launching its offering -- shavers DTC offering in France, Germany, Netherlands and Belgium. Do you see any increase in the competition across European market online and also off-line as apparently Harry's is also quite aggressive on the off-line channels?

[Gonzalve Bich, CEO & Director]

Thanks, Charles. So technical rebound versus systemic shift of U.S. lighter depends on the time frame that you're looking at. And if we've seen anything in the last year across all consumer staples is that the use cases of products, not only in our segments but all, is significantly changing, not only how people shop but also how people use. Work from home is becoming a lot more prevalent, people are spending a lot more time. Nobody's focused on those. But you're right, from a volume perspective, the shift is nowhere near as big as it looks like in dollars, and that's why I highlighted all the work in revenue growth management and pricing. What's our focus right now is continuing to gain share, always doing that, supporting EZ Reach's continued launch and distribution because that really brings new usage to the segment and a different way of looking at our brand. And then making sure that always, always, always, we're focusing on the quality of consumers, which is so paramount in this category. On Harry's launch in France, Belgium and a couple of other countries, they had launched a couple of years ago in the U.K. They've done reasonably well. I mean, they're a formidable customer with a great proposition, and they are very aggressive. It's a little bit early for me to give you any numbers because they just are in the process of launching. It's something that we stay very close to, and we want to make sure that we understand what are the drivers. But at the end of the day, we're very focused on making sure that our products both on and off-line, have the best distribution and are putting forward their consumer benefits to our shoppers in a compelling way to continue to gain share.

[Operator]

The next question comes from the line of Roland Könen from Value-Holdings.

[Roland Könen, Fund Advisor]

I have just a technical one. I have to admit that I'm not very familiar with the French taxation law, but I'm wondering about the very high tax quote on your sale gains of your headquarters. I had hoped for much less taxes, as we see, for example, here in Germany for a similar transaction, very low tax quotes. So aren't there any tax benefits for transaction with real estate, which were owned for a very long time?

[Gonzalve Bich, CEO & Director]

Roland, thanks for your question. What I'll say is in terms of tax expertise, we've got a team of professionals in France that work in this, and they get us what is the right tax rate for these type of transactions. And as you can imagine, this was vetted by all of our tax experts, internal and external, and this is what the rate is what it is on this type of gain for sale properties, what I can say.

[Operator]

There is a follow-up question coming from the line of Charles Scotti from Kepler Cheuvreux.

[Charles-Louis Scotti]

Sorry, I have one follow-up question. I was not there at the very beginning of the call. Maybe you gave these details, but you mentioned pre-buy ahead of the May 2021 price increase. Have you quantified the price increase for the lighters business?

[Chad J. Spooner, Chief Financial Officer]

Yes, it's low single digits.

[Operator]

There are currently no further questions in the queue. [Operator Instructions] There are no further questions at the very moment. [Operator Instructions]

[Sophie Palliez-Capian]

Okay. So this is Sophie. I guess there's no further questions. So once again, I'd like to thank you. And as usual, the IR team remains at your disposal for any follow-up questions you may have. And maybe a short reminder of our upcoming agenda. Our AGM will be held on May 19, and we will report our second quarter results on the 28th of July. Thank you.

[Gonzalve Bich, CEO & Director]

Thanks very much.

[Operator]

Thank you for joining today's call. You may now disconnect. Hosts, please stay on the line and wait for the instructions.