CCL Industries, a world leader in specialty label and packaging solutions, reported 27.9% increase of EBITDA amid 30.5% growth of sales y-o-y. According to the announcement, the company’s sales accounted for CAD 1,252.9 million, generating EBITDA of USD 248.4 million in the period (19.8% margin).
Geoffrey T. Martin, President and Chief Executive Officer of CCL Industries, commented:
“Second quarter results were underpinned by the newly configured CCL delivering healthy 5.7% organic sales growth considering the timing of Easter and a challenging double digit comparative for the prior year period. CCL Secure had an excellent first full quarter with results above expectations from the Innovia Security acquisition while CCL Design outperformed on stronger demand from Electronics customers. Consumer Packaging and Healthcare end markets also posted growth, as did CCL overall in all major geographies. Checkpoint delivered another good quarter eclipsing the partial post acquisition second quarter of 2016. Avery performance lagged 2016’s second quarter on superstore closures and soft wholesaler demand in the changing U.S. distribution landscape; Canadian and international operations plus direct to consumer businesses grew low single digits with improved profitability. With considerable regret, I can confirm that in early June, after many years, CCL Container finally ceased operations in Canada. An unfortunate event driven by currency volatility and the move of customers’ North American aerosol filling operations to the United States and Mexico. The transition negatively affected results for the first half but we expect Container’s performance for the balance of 2017 to be in line with the prior year period. Innovia’s film business profitability was significantly lower than expected due to an intra-quarter spike in polypropylene resin prices that, so far partially reversed in the third quarter.
Foreign currency translation impact was nominal to earnings for both the second quarter and first half of 2017. At today’s Canadian dollar exchange rates, currency translation would be a headwind, if sustained, for the third quarter of 2017.
Through the first six months of 2017, debt repayments totaled CAD 136 million and coupled with improved profitability measures including the trailing results of the
acquired business, the Company reduced its net leverage ratio, to 2.2 times EBITDA, at the end of the second quarter. With cash-on-hand of CAD 477 million, undrawn capacity of
USD 257 million on our syndicated revolving credit facility, the balance sheet and liquiditypositions of the Company remain strong. Given the solid free cash flow outlook for 2017, the
Board of Directors declared a dividend of CAD 0.115 per Class B non-voting share and a dividend of CAD 0.1125 per Class A voting share, payable to shareholders of record at the close of business on September 15, 2017, to be paid on September 29, 2017.”
Earlier CCL Industries completed aquisition of the Innovia Group, BOPP supplier for packaging.
About CCL Industries:
The company a world leader in specialty label and packaging solutions for global corporations, small businesses and consumers. It employs approximately 13,000 people operating 115 production facilities in 30 countries on 6 continents with corporate offices in Toronto, Canada and Framingham, Massachusetts.