CCL Industries Reports Record Quarterly Results
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/EINPresswire.com/ -- TORONTO, ON--(Marketwired - November 05, 2015) - CCL Industries Inc. (TSX: CCL.A) (TSX: CCL.B)
Third Quarter Highlights
-
Record quarterly basic and adjusted basic earnings per Class B share
(3) of $2.36 and $2.34, up 29.0% and 27.9% respectively; includes $0.21 currency tailwind - Sales increased 17.9% supported by 6.9% CCL Label organic sales growth
-
Operating income
(1) increased 25.3% driven by strong CCL Label and CCL Container performances with Avery meeting expectations
Nine-Month Highlights
-
Year-to-date basic and adjusted basic earnings per Class B share
(3) of $6.45, up 29.5% and 28.5%, respectively -
Avery delivers 15.6% sales growth and 37.1% operating income
(1) improvement - Board approves 2015 fourth quarter dividend of $0.375 per Class B share
CCL Industries Inc. ("CCL" or "the Company"), a world leader in specialty label and packaging solutions for global corporations, small businesses and consumers, today reported 2015 third quarter results.
Sales for the third quarter of 2015 increased 17.9% to $812.9 million, compared to $689.7 million for the third quarter of 2014, with 3.4% organic growth, 10.7% positive currency translation impact and 3.8% from the six acquisitions completed since the second quarter of 2014.
Operating income
Restructuring and other items of $0.9 million was reported for the third quarter of 2015. This consisted of $4.5 million restructuring charge related to the previously announced Avery reorganization and plant closure in Meridian, Mississippi, offset by $3.6 million of contingent consideration foregone related to the acquisition of DekoPak Ambalaj San. Ve Tic. A.S. in Turkey. No expense for restructuring and other items was recorded in the 2014 third quarter.
Net earnings improved 29.6% to $81.8 million for the 2015 third quarter compared to $63.1 million for the 2014 third quarter. Basic and adjusted basic earnings per Class B share
For the nine-month period ended September 30, 2015, sales, operating income and net earnings improved 14.9%, 31.3% and 30.5% to $2,240.3 million, $374.0 million and $223.2 million, respectively, compared to the same nine-month period in 2014. Results for the 2015 nine-month period include results from eight acquisitions completed since January 1, 2014, delivering acquisition related sales growth for the period of 4.7%. Solid organic sales growth averaging 3.7% persisted through the nine months of 2015 driving sound profit improvement while foreign currency translation added $0.35 per share. For the nine-month period ended September 30, 2015, adjusted basic earnings was $6.45 per share compared to $5.02 per share for the 2014 nine-month period.
Geoffrey T. Martin, President and Chief Executive Officer, commented, "Results for the third quarter and 2015-to-date exceeded expectations in spite of the uncertain global economic environment. Per our outlook commentary at the end of the second quarter, Avery sales were impacted by the decision to exit certain product lines in the back-to-school category, especially low margin economy ring binders, while the Printable Media business continued to post solid results. Strong performances from both the Label and Container segments drove record earnings per share for the quarter. We continue to expand CCL Label's capabilities with the recently completed acquisition of Sennett Security Products specializing in high security labels, stamps, identity cards and document components."
Mr. Martin added, "Foreign currency translation added $0.21 per share for the quarter with the stronger U.S. dollar partly offset by weaker Latin American currencies. Current Canadian dollar exchange rates would provide a currency translation tailwind for the balance of the year."
Mr. Martin concluded, "We reduced our drawn debt in the past quarter bringing the Company's leverage ratio
2015 Third Quarter Highlights
CCL Label
- Sales increased 19.4% to $522.2 million, with 6.9% organic growth, 3.1% acquisitions, 9.4% positive currency translation.
- Regional organic sales growth: mid-single digit in North America, high single digit in Europe, low single digit in Asia Pacific and strong double digit in Latin America.
- Operating income margin
(1) up 200 basis points to 15.6%. Gains in all regions and business lines, especially Food & Beverage and Home & Personal Care. - Label joint ventures added $0.04 earnings per Class B share.
Avery
- Sales increased 13.9% to $233.1 million, 6.3% from acquisitions, 14.0% positive currency translation partially offset by 6.4% organic sales decline, largely due to lower back-to-school volumes in North America.
- Printable Media posted solid profitability globally, broadly in-line with prior year.
- Operating income
(1) increased 3.8%, principally on a foreign exchange tailwind. - pc/nametag acquisition continues to perform ahead of expectations.
CCL Container
- Sales increased 21.0% to $57.6 million driven by 13.4% organic growth and 7.6% positive currency translation.
- Favourable mix and exchange rates accompanied by lower aluminum costs drove improved results with operating income doubling over prior year.
- At current U.S. dollar exchange rates the capacity consolidation project remains delayed until at least the end of 2016.
- Start-up losses at the Rheinfelden Americas aluminum slug joint venture reduced earnings by less than $0.01 per Class B share.
CCL will hold a conference call at 9:00 a.m. EST on November 5, 2015, to discuss these results. The analyst presentation will be posted on the Company's website.
To access this call, please dial:
416-340-2219 -- Local
1-866-225-2055 -- Toll Free
Forward-looking Statements
This press release contains forward-looking information and forward-looking statements (hereinafter collectively referred to as "forward-looking statements"), as defined under applicable securities laws, that involve a number of risks and uncertainties. Forward-looking statements include all statements that are predictive in nature or depend on future events or conditions. Forward-looking statements are typically identified by the words "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of the Company, other than statements of historical fact, are forward-looking statements. Specifically, this press release contains forward-looking statements regarding the anticipated growth in sales, income and profitability of the Company's segments; and the Company's expectations regarding general business and economic conditions.
Forward-looking statements are not guarantees of future performance. They involve known and unknown risks and uncertainties relating to future events and conditions including, but not limited to, the after-effects of the global financial crisis and its impact on the world economy and capital markets; the impact of competition; consumer confidence and spending preferences; general economic and geopolitical conditions; currency exchange rates; interest rates and credit availability; technological change; changes in government regulations; risks associated with operating and product hazards; and CCL's ability to attract and retain qualified employees. Do not unduly rely on forward-looking statements as the Company's actual results could differ materially from those anticipated in these forward-looking statements. Forward-looking statements are also based on a number of assumptions, which may prove to be incorrect, including, but not limited to, assumptions about the following: global economic recovery and higher consumer spending; improved customer demand for the Company's products; continued historical growth trends, market growth in specific sectors and entering into new sectors; the Company's ability to provide a wide range of products to multinational customers on a global basis; the benefits of the Company's focused strategies and operational approach; the achievement of the Company's plans for improved efficiency and lower costs, including stable aluminum costs; the availability of cash and credit; fluctuations of currency exchange rates; the Company's continued relations with its customers; general business and economic conditions. Should one or more risks materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking statements. Further details on key risks can be found in the 2014 Annual Report, Management's Discussion and Analysis, particularly under Section 4: "Risks and Uncertainties." CCL's annual and quarterly reports can be found online at www.cclind.com and www.sedar.com or are available upon request.
Except as otherwise indicated, forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on CCL's business. Such statements do not, unless otherwise specified by the Company, reflect the impact of dispositions, sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them and therefore cannot be described in a meaningful way in advance of knowing specific facts. The forward-looking statements are provided as of the date of this press release and the Company does not assume any obligation to update or revise the forward-looking statements to reflect new events or circumstances, except as required by law.
The financial information presented herein has been prepared on the basis of IFRS for financial statements and is expressed in Canadian dollars unless otherwise stated.
Financial Information
CCL Industries Inc.
Consolidated statements of financial position
Unaudited
In thousands of Canadian dollars
As at As at
September 30 December 31
2015 2014
Assets
Current assets
Cash and cash equivalents $ 298,757 $ 221,873
Trade and other receivables 501,789 380,965
Inventories 230,110 192,286
Prepaid expenses 20,201 14,949
Income taxes recoverable 1,085 11,810
----------------------------------------------------------------------------
Total current assets 1,051,942 821,883
----------------------------------------------------------------------------
Non-current assets
Property, plant and equipment 1,013,324 925,512
Goodwill 639,666 563,730
Intangible assets 263,351 226,567
Deferred tax assets 13,693 4,183
Equity accounted investments 57,546 54,652
Other assets 26,192 21,848
----------------------------------------------------------------------------
Total non-current assets 2,013,772 1,796,492
----------------------------------------------------------------------------
Total assets $ 3,065,714 $ 2,618,375
----------------------------------------------------------------------------
Liabilities
Current liabilities
Trade and other payables $ 590,795 $ 519,440
Current portion of long-term debt 213,674 59,058
Income taxes payable 47,778 21,419
Derivative instruments 1,481 280
----------------------------------------------------------------------------
Total current liabilities 853,728 600,197
----------------------------------------------------------------------------
Non-current liabilities
Long-term debt 492,878 600,011
Deferred tax liabilities 46,603 43,453
Employee benefits 161,655 138,594
Provisions and other long-term liabilities 14,118 19,413
Derivative instruments 580 488
----------------------------------------------------------------------------
Total non-current liabilities 715,834 801,959
----------------------------------------------------------------------------
Total liabilities 1,569,562 1,402,156
----------------------------------------------------------------------------
Equity
Share capital 269,992 248,087
Contributed surplus 27,859 26,241
Retained earnings 1,122,748 938,526
Accumulated other comprehensive income 75,553 3,365
----------------------------------------------------------------------------
Total equity attributable to shareholders of the
Company 1,496,152 1,216,219
----------------------------------------------------------------------------
Total liabilities and equity $ 3,065,714 $ 2,618,375
----------------------------------------------------------------------------
CCL Industries Inc.
Consolidated income statements
Unaudited
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
In thousands of Canadian
dollars, except per share 2014
information 2015 2014 2015
Sales $ 812,907 $ 689,691 $ 2,240,271 $ 1,949,793
Cost of sales 587,664 502,159 1,610,018 1,427,166
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Gross profit 225,243 187,532 630,253 522,627
Selling, general and
administrative expenses 103,319 91,603 295,024 262,526
Restructuring and other
items 864 - 1,804 2,041
Earnings in equity
accounted investments (1,100) (516) (1,863) (1,560)
----------------------------------------------------------------------------
122,160 96,445 335,288 259,620
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Finance cost 7,048 6,864 20,472 20,215
Finance income (709) (373) (1,610) (703)
----------------------------------------------------------------------------
Net finance cost 6,339 6,491 18,862 19,512
----------------------------------------------------------------------------
Earnings before income tax 115,821 89,954 316,426 240,108
Income tax expense 34,027 26,872 93,218 69,136
----------------------------------------------------------------------------
Net earnings $ 81,794 $ 63,082 $ 223,208 $ 170,972
----------------------------------------------------------------------------
Attributable to:
Shareholders of the
Company $ 81,794 $ 63,082 $ 223,208 $ 170,972
----------------------------------------------------------------------------
Net earnings $ 81,794 $ 63,082 $ 223,208 $ 170,972
----------------------------------------------------------------------------
Earnings per share
Basic earnings per Class B
share $ 2.36 $ 1.83 $ 6.45 $ 4.98
----------------------------------------------------------------------------
Diluted earnings per Class
B share $ 2.33 $ 1.79 $ 6.35 $ 4.88
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CCL Industries Inc.
Consolidated statements of cash flows
Unaudited
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
In thousands of Canadian
dollars 2015 2014 2015 2014
Cash provided by (used
for)
Operating activities
Net earnings $ 81,794 $ 63,082 $ 223,208 $ 170,972
Adjustments for:
Depreciation and
amortization 41,296 37,229 119,980 109,785
Earnings in equity
accounted investments,
net of dividends
received 1,548 1,672 996 628
Net finance costs 6,339 6,491 18,862 19,512
Current income tax
expense 46,982 25,709 103,762 67,670
Deferred taxes (12,955) 1,163 (10,544) 1,466
Equity-settled share-
based payment
transactions 1,074 4,402 7,348 10,212
Gain (loss) on sale of
property, plant and
equipment 1 (369) (957) (439)
----------------------------------------------------------------------------
166,079 139,379 462,655 379,806
Change in inventories 4,209 24,915 (32,260) (3,807)
Change in trade and
other receivables (22,049) 20,495 (116,063) (33,468)
Change in prepaid
expenses 7,824 1,127 (4,828) (4,548)
Change in trade and
other payables 28,795 (17,253) 65,794 3,208
Change in income taxes
receivable and payable (332) (101) (624) (72)
Change in employee
benefits 11,875 2,072 23,061 9,612
Change in other assets
and liabilities (7,988) 5,421 (13,915) (6,949)
----------------------------------------------------------------------------
188,413 176,055 383,820 343,782
Net interest paid (10,590) (10,119) (22,430) (23,205)
Income taxes paid (42,706) (17,327) (67,611) (59,926)
----------------------------------------------------------------------------
Cash provided by operating
activities 135,117 148,609 293,779 260,651
----------------------------------------------------------------------------
Financing activities
Proceeds on issuance of
long-term debt $ 8,792 $ 17,969 $ 55,815 $ 129,561
Repayment of debt (45,714) (118,508) (98,233) (166,357)
Proceeds from issuance of
shares 6,755 2,432 12,760 7,216
Dividends paid (13,100) (10,361) (39,165) (27,567)
----------------------------------------------------------------------------
Cash used for financing
activities (43,267) (108,468) (68,823) (57,147)
----------------------------------------------------------------------------
Investing activities
Additions to property,
plant and equipment (38,807) (26,442) (130,400) (110,589)
Proceeds on disposal of
property, plant and
equipment 10,131 7,716 12,576 13,368
Business acquisitions and
other long-term
investments (7,833) (15,199) (46,456) (102,123)
----------------------------------------------------------------------------
Cash used for investing
activities (36,509) (33,925) (164,280) (199,344)
----------------------------------------------------------------------------
Net increase in cash and
cash equivalents 55,341 6,216 60,676 4,160
Cash and cash equivalents
at beginning of period 234,720 208,303 221,873 209,095
Translation adjustments on
cash and cash equivalents 8,696 1,507 16,208 2,771
----------------------------------------------------------------------------
Cash and cash equivalents
at end of the period $ 298,757 $ 216,026 $ 298,757 $ 216,026
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CCL Industries Inc.
Segment Information
Unaudited
In thousands of Canadian dollars
Three Months Ended September 30
-------------------------------------------------------
Sales Operating income
--------------------------- ---------------------------
2015 2014 2015 2014
------------- ------------- ------------- -------------
Label $ 522,198 $ 437,431 $ 81,612 $ 59,392
Avery 233,082 204,671 46,532 44,782
Container 57,627 47,589 6,197 2,979
-------------------------------------------------------
Total operations $ 812,907 $ 689,691 134,341 107,153
---------------------------
Corporate expense (12,417) (11,224)
Restructuring and
other items (864) -
Earnings in equity
accounted
investments 1,100 516
Finance cost (7,048) (6,864)
Finance income 709 373
Income tax expense (34,027) (26,872)
---------------------------
Net earnings $ 81,794 $ 63,082
---------------------------
Nine Months Ended September 30
-------------------------------------------------------
Sales Operating income
--------------------------- ---------------------------
2015 2014 2015 2014
------------- ------------- ------------- -------------
Label $ 1,477,229 $ 1,284,929 $ 235,405 $ 184,762
Avery 591,440 511,794 118,369 86,330
Container 171,602 153,070 20,265 13,807
--------------------------------------------------------
Total operations $ 2,240,271 $ 1,949,793 374,039 284,899
---------------------------
Corporate expense (38,810) (24,798)
Restructuring and
other items (1,804) (2,041)
Earnings in equity
accounted
investments 1,863 1,560
Finance cost (20,472) (20,215)
Finance income 1,610 703
Income tax expense (93,218) (69,136)
---------------------------
Net earnings $ 223,208 $ 170,972
---------------------------
Total assets Total liabilities
------------------------- -------------------------
September 30 December 31 September 30 December 31
------------ ------------ ------------ ------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
Label $ 1,900,167 $ 1,668,565 $ 487,891 $ 436,527
Avery 604,885 490,337 213,074 189,567
Container 168,490 162,460 61,172 54,701
Equity accounted
investments 57,546 54,652 - -
Corporate 334,626 242,361 807,425 721.361
---------------------------------------------------
Total $ 3,065,714 $ 2,618,375 $ 1,569,562 $ 1,402,156
---------------------------------------------------
Depreciation and
amortization Capital expenditures
------------------------- -------------------------
Nine Months Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
2015 2014 2015 2014
------------ ------------ ------------ ------------
Label $ 96,711 $ 88,799 $ 111,969 $ 85,369
Avery 11,171 9,929 10,728 7,978
Container 11,352 10,458 7,703 17,242
Equity accounted
investments - - - -
Corporate 746 599 - -
----------------------------------------------------
Total $ 119,980 $ 109,785 $ 130,400 $ 110,589
----------------------------------------------------
Non-IFRS Measures
Reconciliation of operating income to EBITDA
Unaudited
---------------------------------------------------------------------------
(In millions of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
------------------------- -------------------------
Sales 2015 2014 2015 2014
------------ ------------ ------------ ------------
Label $ 522.2 $ 437.4 $ 1,477.2 $ 1,284.9
Avery 233.1 204.7 591.5 511.8
Container 57.6 47.6 171.6 153.1
---------------------------------------------------------------------------
Total sales $ 812.9 $ 689.7 $ 2,240.3 $ 1,949.8
---------------------------------------------------------------------------
Operating income
Label $ 81.6 $ 59.4 $ 235.4 $ 184.8
Avery 46.5 44.8 118.3 86.3
Container 6.2 3.0 20.3 13.8
---------------------------------------------------------------------------
Total operating income 134.3 107.2 374.0 284.9
Less: Corporate expenses (12.4) (11.3) (38.8) (24.8)
Add: Depreciation &
amortization 41.3 37.2 120.0 109.8
---------------------------------------------------------------------------
EBITDA $ 163.2 $ 133.1 $ 455.2 $ 369.9
---------------------------------------------------------------------------
Label operating income
margin 15.6% 13.6%
Reconciliation of Basic Earnings per Class B Share to
Adjusted Basic Earnings per Class B Share
Unaudited
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
------------------- -------------------
2015 2014 2015 2014
--------- ------------------- ---------
Basic earnings per Class B Share $ 2.36 $ 1.83 $ 6.45 $ 4.98
Net loss from restructuring and other
items 0.02 - - 0.04
----------------------------------------------------------------------------
Adjusted Basic Earnings per Class B
Share $ 2.34 $ 1.83 $ 6.45 $ 5.02
----------------------------------------------------------------------------
Unaudited
----------------------------------------------------------------------------
(In millions of Canadian dollars)
September 30, 2015
----------------------------------------------------------------------------
Current debt $ 213.7
Long-term debt 492.9
----------------------------------------------------------------------------
Total debt 706.6
Cash and cash equivalents 298.8
----------------------------------------------------------------------------
Net debt $ 407.8
EBITDA for 12 months ending September 30, 2015 (see
below) $ 566.9
----------------------------------------------------------------------------
Leverage Ratio 0.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
EBITDA for 12 months ended December 31, 2014 $ 481.6
less: EBITDA for nine months ended September 30, 2014 (369.9)
add: EBITDA for nine months ended September 30, 2015 455.2
----------------------------------------------------------------------------
EBITDA for 12 months ended September 30, 2015 566.9
----------------------------------------------------------------------------
Supplemental Financial Information
Sales Change Analysis
Revenue Growth Rates (%)
Three Months Ended September 30, 2015
----------------------------------------------------------------------------
Organic Acquisition FX
Growth Growth Translation Total
Label 6.9% 3.1% 9.4% 19.4%
Avery (6.4%) 6.3% 14.0% 13.9%
Container 13.4% 0.0% 7.6% 21.0%
CCL 3.4% 3.8% 10.7% 17.9%
----------------------------------------------------------------------------
Nine Months Ended September 30, 2015
----------------------------------------------------------------------------
Organic Acquisition FX
Growth Growth Translation Total
Label 4.9% 4.8% 5.3% 15.0%
Avery (0.3%) 6.1% 9.8% 15.6%
Container 6.3% - 5.8% 12.1%
CCL 3.7% 4.7% 6.5% 14.9%
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Business Description
With headquarters in Toronto, Canada, CCL Industries now employs approximately 11,000 people and operates 105 production facilities in 29 countries on six continents with corporate offices in Toronto, Canada, and Framingham, Massachusetts. CCL Label is the world's largest converter of pressure sensitive and extruded film materials for a wide range of decorative, instructional and functional applications for large global customers in the consumer packaging, healthcare, automotive and consumer durables markets. Extruded & laminated plastic tubes, folded instructional leaflets, precision printed & die cut metal components with LED displays and other complementary products and services are sold in parallel to specific end-use markets. Avery is the world's largest supplier of labels, specialty converted media and software solutions to enable short run digital printing in businesses and homes alongside complementary office products sold through distributors and mass market retailers. CCL Container is a leading producer of impact extruded aluminum aerosol cans and bottles for consumer packaged goods customers in the United States, Canada and Mexico.
Audio replay service will be available from November 5, 2015, at 6:00 p.m. EST until December 4, 2015, at 11:59 p.m. EST.
To access Conference Replay, please dial:
905-694-9451 -- Local
800-408-3053 -- Toll Free
Access Code: 5150372
For more information on CCL, visit our website -- www.cclind.com or contact:
Sean Washchuk
Senior Vice President and Chief Financial Officer
416-756-8526
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