Strong Fourth Quarter Caps Record Year for CCL Industries
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TORONTO, ON--(Marketwired - February 25, 2016) - CCL Industries Inc. (TSX: CCL.A)(TSX: CCL.B)
/EINPresswire.com/ -- Fourth Quarter Highlights
- Adjusted basic earnings per share
(3) ("EPS") of $2.16, up 43.0%; $2.05 basic EPS, up 54.1% - Operating income margin
(1) up 190 basis points to 15.3% - 7.1% organic sales growth with gains in all Segments and geographic regions
- Board approves 33% increase to first quarter 2016 dividend; annualized rate has doubled since March 2014
2015 Highlights
- Adjusted basic EPS of $8.61, up 31.9%; $8.50 basic EPS, up 34.7%
- Operating income
(1) increased 34.3% with significant improvement in all three Segments - Completed six acquisitions in 2015, most notably Worldmark, giving CCL Design global reach and exposure to the electronics industry
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 record fourth quarter and annual financial results for 2015.
Sales for the fourth quarter of 2015 increased 25.6% to $798.8 million, compared to $635.8 million for the fourth quarter of 2014, with 7.1% organic growth, 9.7% positive currency translation impact and 8.8% from the eight acquisitions completed since the third quarter of 2014.
Operating income
Restructuring and other items of $4.2 million was reported for the fourth quarter of 2015 primarily for the Label Segment with $2.8 million of severance costs associated with the Worldmark acquisitions and $1.4 million of severance costs related to the closure of a plant in France. Restructuring and other expenses totalling $7.1 million were recorded for the Avery Segment for the fourth quarter of 2014.
Net earnings improved 57.7% to $71.9 million for the 2015 fourth quarter compared to $45.6 million for the 2014 fourth quarter. Basic and adjusted basic earnings per Class B share
For the full year 2015, sales, operating income
Geoffrey T. Martin, President and Chief Executive Officer, commented, "Strong results for the fourth quarter capped a record year for CCL. All three operating Segments outperformed with gains broad based across the world's key economic zones. For the first time, annual sales surpassed $3 billion and adjusted net earnings
Mr. Martin added, "Foreign currency translation added $0.48 per share for the year with the stronger U.S. dollar partly offset by the weaker euro and Brazilian real. Foreign currency transaction issues associated with these movements eliminated much of this benefit in the first half of 2015 and to a limited extent in the fourth quarter due to the challenging situation in Brazil. Currency translation will remain a tailwind for the 2016 first quarter should the current exchange environment persist."
Mr. Martin concluded, "Late in the fourth quarter we took the opportunity to amend our syndicated debt arrangement establishing a five year US$1.2 billion revolving credit facility with improved terms; US$720 million remained undrawn at year end. The company's net leverage ratio
Fourth Quarter 2015 Segment Highlights
CCL Label
- Sales increased 27.6% to $553.1 million, with 8.1% organic growth, 10.6% acquisition growth, 8.9% positive currency translation.
- Regional organic sales growth: mid-single digit in North America and Europe, high single digit in Asia Pacific and strong double digit in Latin America.
- Operating income margin
(1) up 140 basis points to 14.8% with gains in all regions and business lines. - Worldmark (announced November 6, 2015) met management expectations for the quarter.
- Label joint ventures added $0.06 earnings per Class B share.
Avery
- Sales increased 23.7% to $191.2 million, with 4.7% organic growth, 6.5% acquisition growth, 12.5% positive currency translation.
- Printable Media products drove profitability gains in the United States.
- Operating income
(1) increased 50.2%, aided by improved mix, currency translation and productivity improvements globally. - Mabel's Labels acquired on December 31
st , strengthens 'web-to-print' solutions for consumers.
CCL Container
- Sales increased 14.0% to $54.5 million driven by 6.1% organic growth and 7.9% positive currency translation.
- Favourable mix Segment wide, volume gains in Mexico and currency benefits drove operating income up 53.7%.
- At current U.S. dollar exchange rates the plant consolidation project remains delayed until late 2017.
- Start-up losses at the Rheinfelden Americas aluminum slug joint venture reduced earnings by approximately $0.01 per Class B share.
CCL will hold a conference call at 8:00 a.m. EST on February 25, 2016, to discuss these results. The analyst presentation will be posted on the Company's website.
To access this call, please dial:
416-340-2216 - Local
1-866-225-0198 - 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 expected impact of a currency tailwind for the 2016 first quarter; and the Company's expected completion of the Container consolidation project in late 2017.
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
December 31, December 31,
2015 2014
Assets
Current assets
Cash and cash equivalents $ 405,692 $ 221,873
Trade and other receivables 524,621 380,965
Inventories 260,600 192,286
Prepaid expenses 20,562 14,949
Income taxes recoverable 18,389 11,810
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Total current assets 1,229,864 821,883
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Non-current assets
Property, plant and equipment 1,085,506 925,512
Goodwill 876,838 563,730
Intangible assets 285,340 226,567
Deferred tax assets 12,293 4,183
Equity accounted investments 61,502 54,652
Other assets 30,962 21,848
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Total non-current assets 2,352,441 1,796,492
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Total assets $ 3,582,305 $ 2,618,375
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Liabilities
Current liabilities
Trade and other payables $ 710,999 $ 519,440
Current portion of long-term debt 167,103 59,058
Income taxes payable 33,652 21,419
Derivative instruments 1,095 280
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Total current liabilities 912,849 600,197
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Non-current liabilities
Long-term debt 838,416 600,011
Deferred tax liabilities 59,860 43,453
Employee benefits 135,216 138,594
Provisions and other long-term
liabilities 13,833 19,413
Derivative instruments 253 488
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Total non-current liabilities 1,047,578 801,959
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Total liabilities 1,960,427 1,402,156
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Equity
Share capital 276,882 248,087
Contributed surplus 50,584 26,241
Retained earnings 1,182,686 938,52
Accumulated other comprehensive income 111,726 3,365
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Total equity attributable to
shareholders of the Company 1,621,878 1,216,219
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Total liabilities and equity $ 3,582,305 $ 2,618,375
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CCL Industries Inc.
Consolidated income statements
Unaudited
Three Months Ended Twelve Months Ended
December 31 December 31
-------------------- -----------------------
In thousands of Canadian
dollars, except per share
information 2015 2014 2015 2014
Sales $ 798,841 $ 635,844 $3,039,112 $2,585,637
Cost of sales 569,676 464,340 2,179,694 1,891,506
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Gross profit 229,165 171,504 859,418 694,131
Selling, general and
administrative expenses 120,062 96,436 415,086 358,962
Restructuring and other items 4,219 7,063 6,023 9,104
Earnings in equity accounted
investments (1,614) (2,126) (3,477) (3,686)
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106,498 70,131 441,786 329,751
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Finance cost 7,700 6,490 28,172 26,705
Finance income (925) (449) (2,535) (1,152)
----------------------------------------------------------------------------
Net finance cost 6,775 6,041 25,637 25,553
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Earnings before income tax 99,723 64,090 416,149 304,198
Income tax expense 27,853 18,496 121,071 87,632
----------------------------------------------------------------------------
Net earnings $ 71,870 $ 45,594 $ 295,078 $ 216,566
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Attributable to:
Shareholders of the Company $ 71,870 $ 45,594 $ 295,078 $ 216,566
----------------------------------------------------------------------------
Net earnings $ 71,870 $ 45,594 $ 295,078 $ 216,566
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Earnings per share
Basic earnings per Class B
share $ 2.05 $ 1.33 $ 8.50 $ 6.31
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Diluted earnings per Class B
share $ 2.03 $ 1.31 $ 8.38 $ 6.19
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CCL Industries Inc.
Consolidated statements of cash flows
Unaudited
Three Months Ended Twelve Months Ended
December 31 December 31
In thousands of Canadian dollars 2015 2014 2015 2014
Cash provided by (used for)
Operating activities
Net earnings $ 71,870 $ 45,594 $ 295,078 $ 216,566
Adjustments for:
Depreciation and amortization 44,101 36,636 164,081 146,421
Earnings in equity accounted
investments, net of dividends
received (1,614) (2,126) (618) (1,498)
Net finance costs 6,775 6,041 25,637 25,553
Current income tax expense 17,915 11,140 121,677 78,810
Deferred taxes 9,938 7,356 (606) 8,822
Equity-settled share-based
payment transactions 1,077 (1,486) 8,425 8,726
Gain on sale of property, plant
and equipment (1,906) (683) (2,863) (1,122)
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148,156 102,472 610,811 482,278
Change in inventories (6,008) 6,741 (38,268) 2,934
Change in trade and other
receivables 32,960 39,226 (83,103) 5,758
Change in prepaid expenses 4,603 3,701 (225) (847)
Change in trade and other
payables 63,651 12,238 129,445 15,446
Change in income taxes
receivable and payable (5,984) (1,462) (6,608) (1,534)
Change in employee benefits (26,439) 19,914 (3,378) 29,526
Change in other assets and
liabilities 16,742 (12,414) 2,827 (19,363)
----------------------------------------------------------------------------
227,681 170,416 611,501 514,198
Net interest paid (1,479) (958) (23,909) (24,163)
Income taxes paid (44,721) (26,579) (112,332) (86,505)
----------------------------------------------------------------------------
Cash provided by operating
activities 181,481 142,879 475,260 403,530
----------------------------------------------------------------------------
Financing activities
Proceeds on issuance of long-
term debt 268,795 9,102 324,610 138,663
Repayment of debt (1,612) (83,546) (99,845) (249,903)
Proceeds from issuance of shares 5,556 1,576 18,316 8,792
Repayment of executive share
purchase plan loans - 2,186 - 2,186
Dividends paid (13,131) (10,376) (52,296) (37,943)
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Cash provided by (used for)
financing activities 259,608 (81,058 ) 190,785 (138,205)
----------------------------------------------------------------------------
Investing activities
Additions to property, plant and
equipment (41,814) (43,068) (172,214) (153,657)
Proceeds on disposal of
property, plant and equipment 5,019 944 17,595 14,312
Business acquisitions and other
long-term investments (310,247) (13,753) (356,703) (115,876)
----------------------------------------------------------------------------
Cash used for investing
activities (347,042) (55,877 ) (511,322) (255,221)
----------------------------------------------------------------------------
Net increase in cash and cash
equivalents 94,047 5,944 154,723 10,104
Cash and cash equivalents at
beginning of period 298,757 216,026 221,873 209,095
Translation adjustments on cash
and cash equivalents 12,888 (97) 29,096 2,674
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Cash and cash equivalents at end
of the period $405,692 $221,873 $405,692 $221,873
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CCL Industries Inc.
Segment Information
Unaudited
In thousands of Canadian dollars
Three Months Ended December 31
--------------------------------------------
Sales Operating income
-------------------- ----------------------
2015 2014 2015 2014
-------------------- ---------- ----------
Label $ 553,093 $ 433,418 $ 81,847 $ 57,961
Avery 191,246 154,619 34,384 22,944
Container 54,502 47,807 6,328 4,081
---------------------------------------------
Total operations $ 798,841 $ 635,844 122,559 84,986
--------------------
Corporate expense (13,456) (9,918)
Restructuring and other items (4,219) (7,063)
Earnings in equity accounted
investments 1,614 2,126
Finance cost (7,700) (6,490)
Finance income 925 449
Income tax expense (27,853) (18,496)
----------------------
Net earnings $ 71,870 $ 45,594
----------------------
Twelve Months Ended December 31
--------------------------------------------
Sales Operating income
--------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
Label $2,030,322 $1,718,347 $ 317,252 $ 242,723
Avery 782,686 666,413 152,753 109,274
Container 226,104 200,877 26,593 17,888
----------------------------------------------
Total operations $3,039,112 $2,585,637 496,598 369,885
---------------------
Corporate expense (52,266) (34,716)
Restructuring and other items (6,023) (9,104)
Earnings in equity accounted
investments 3,477 3,686
Finance cost (28,172) (26,705)
Finance income 2,535 1,152
Income tax expense (121,071) (87,632)
-----------------------
Net earnings $ 295,078 $ 216,566
-----------------------
Total
Total assets liabilities
-----------------------------------------------
2015 2014 2015 2014
-----------------------------------------------
Label $ 2,285,169 $ 1,668,565 $ 596,902 $ 436,527
Avery 615,893 490,337 230,293 189,567
Container 173,688 162,460 50,929 54,701
Equity accounted investments 61,502 54,652 - -
Corporate 446,053 242,361 1,082,303 721,361
-----------------------------------------------
Total $ 3,582,305 $ 2,618,375 $ 1,960,427 $ 1,402,156
-----------------------------------------------
Depreciation and
amortization Capital expenditures
------------------------------------------------
2015 2014 2015 2014
------------------------------------------------
Label $ 132,796 $ 118,679 $ 145,974 $ 106,739
Avery 15,123 12,882 13,765 24,957
Container 15,191 14,064 12,475 20,077
Equity accounted investments - - - -
Corporate 971 796 - 1,884
------------------------------------------------
Total $ 164,081 $ 146,421 $ 172,214 $ 153,657
------------------------------------------------
Non-IFRS Measures
Reconciliation of operating income to EBITDA
Unaudited
----------------------------------------------------------------------------
(In millions of Canadian dollars)
Three months ended Twelve months ended
December 31 st December 31 st
------------------- -----------------------
Sales 2015 2014 2015 2014
-------------------------------- --------- --------- ----------- -----------
Label $ 553.1 $ 433.4 $ 2,030.3 $ 1,718.3
Avery 191.2 154.6 782.7 666.4
Container 54.5 47.8 226.1 200.9
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Total sales $ 798.8 $ 635.8 $ 3,039.1 $ 2,585.6
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Operating income
Label $ 81.9 $ 58.0 317.2 $ 242.7
Avery 34.4 22.9 152.8 109.3
Container 6.3 4.1 26.6 17.9
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Total operating income 122.6 85.0 496.6 369.9
Less: Corporate expenses (13.5) (9.9) (52.3) (34.7)
Add: Depreciation & amortization 44.1 36.6 164.1 146.4
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EBITDA $ 153.2 $ 111.7 $ 608.4 $ 481.6
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Label operating income margin 14.8 % 13.4 % 15.6 % 14.1 %
Avery operating income margin 18.0 % 14.8 % 19.5 % 16.4 %
Container operating income
margin 11.6 % 8.6 % 11.8 % 8.9 %
CCL operating income margin 15.3 % 13.4 % 16.3 % 14.3 %
Reconciliation of Net earnings to Adjusted Earnings and
Basic Earnings per Class B Share to
Adjusted Basic Earnings per Class B Share
----------------------------------------------------------------------------
Unaudited
(In millions of Canadian dollars, Three months ended Twelve months ended
except earnings per share December 31 st December 31 st
information)
---------------------------------------
2015 2014 2015 2014
---------------------------------------
Net earnings $ 71.9 $ 45.6 $ 295.1 $ 216.6
Net loss from restructuring and
other items 3.7 6.1 3.7 7.4
----------------------------------------------------------------------------
Adjusted Earnings $ 75.6 $ 51.7 $ 298.8 $ 224.0
----------------------------------------------------------------------------
Basic earnings per Class B Share $ 2.05 $ 1.33 $ 8.50 $ 6.31
Net loss from restructuring and
other items 0.11 0.18 0.11 0.22
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Adjusted Basic Earnings per Class B
Share $ 2.16 $ 1.51 $ 8.61 $ 6.53
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For the years ended December 31 2015 2014
----------------------------------------------------------------------------
Unaudited
(In millions of Canadian dollars)
Current debt $ 167.1 $ 59.1
Long-term debt 838.4 600.0
----------------------------------------------------------------------------
Total debt $ 1,005.5 $ 659.1
Cash and cash equivalents (405.7 ) (221.9)
----------------------------------------------------------------------------
Net debt $ 599.8 $ 437.2
EBITDA $ 608.4 $ 481.6
----------------------------------------------------------------------------
Net debt to EBITDA 0.99 0.91
----------------------------------------------------------------------------
The following table reconciles the free cash flow from operations measure to IFRS measures reported in the consolidated statements of cash flows for the periods ended as indicated.
For the years ended December 31 2015 2014
----------------------------------------------------------------------------
Unaudited
(In millions of Canadian dollars)
Cash provided by operating activities $ 475.3 $ 403.5
Less: Additions to property, plant and equipment (172.2 ) (153.7)
Add: Proceeds on disposal of property, plant and 17.6 14.3
equipment
----------------------------------------------------------------------------
Free cash flow from operations $ 320.7 $ 264.1
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Supplemental Financial Information
Sales Change Analysis
Revenue Growth Rates (%)
Three Months Ended December 31, 2015
----------------------------------------------------------------------------
Organic Acquisition FX
Growth Growth Translation Total
Label 8.1% 10.6% 8.9% 27.6%
Avery 4.7% 6.5% 12.5% 23.7%
Container 6.1% 0.0% 7.9% 14.0%
CCL 7.1% 8.8% 9.7% 25.6%
----------------------------------------------------------------------------
Twelve Months Ended December 31, 2015
----------------------------------------------------------------------------
Organic Acquisition FX
Growth Growth Translation Total
Label 5.7% 6.2% 6.3% 18.2%
Avery 0.9% 6.2% 10.4% 17.5%
Container 6.2% 0.0% 6.3% 12.5%
CCL 4.5% 5.7% 7.3% 17.5%
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Business Description
With headquarters in Toronto, Canada, CCL Industries now employs approximately 13,000 people and operates 119 production facilities in 31 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 February 25, 2016, at 9:00 a.m. EST until March 25, 2016, at 8:30 a.m. EDT.
To access Conference Replay, please dial:
905-694-9451 - Local
1-800-408-3053 - Toll Free
Access Code: 2508037
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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