CCL Industries (CCL-B) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 12.2% year-over-year to $1.85B, driven by 8.5–9% organic growth, acquisitions, and currency effects.

• Operating income increased 25–25.4% to $303.5M, with net earnings up 79.3% to $279.5M, including a $78.1M revaluation gain from the Pacman-CCL acquisition.

• Adjusted basic EPS set a record at $1.13, up 25.6% year-over-year.

• All four segments posted organic sales growth, with Checkpoint leading at 17.5%.

• Pacman-CCL is now fully consolidated following the acquisition of the remaining 50%.

Financial highlights

• Q2 EBITDA rose 21–21.1% to $386.7M; operating margin reached 16.4% (up 170 bps).

• Free cash flow from operations was $118.8M for Q2 and $567.8M for the trailing twelve months.

• Net debt at June 30, 2024, was $1.76B, leverage ratio at 1.23x EBITDA.

• Effective tax rate dropped to 18.8% due to a non-cash gain.

• Adjusted EBITDA margin for Q2 was 20.9%.

Outlook and guidance

• Management expects continued strong performance in H2 2024, with Innovia's $17–$20M annual operating income improvement to begin in H2.

• CCL Design recovery expected to remain strong; CCL Secure to slow in Q3 but improve in Q4.

• Avery progress steady; Checkpoint RFID growth to continue; Innovia to benefit from operational savings.

• Currency translation impact expected to be neutral for Q3 2024.

• Ongoing focus on global expansion, supported by robust liquidity and undrawn credit capacity.