CCL Industries (CCL-B) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 12.2% year-over-year to $1.85 billion, driven by 8.5–9% organic growth, 3% from acquisitions, and a $78.1 million non-cash revaluation gain from the Pacman JV acquisition.

• Operating income increased 25–25.4% to $303.5 million, with consolidated EBITDA up 21% year-over-year.

• Net earnings reached $279.5 million, up 79.3% year-over-year, including the Pacman revaluation gain.

• Adjusted basic EPS set a record at $1.13, up 25.6% from Q2 2023.

Financial highlights

• Free cash flow from operations was $118.8 million in Q2, nearly flat year-over-year.

• Net debt increased to $1.76 billion, mainly due to capex, acquisitions, and share buybacks; leverage ratio at 1.23x EBITDA.

• Liquidity remained strong with $665.9 million cash and $0.9 billion undrawn credit facility.

• Effective tax rate dropped to 18.8% due to the Pacman gain; excluding this, it was 24.5%.

Outlook and guidance

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

• Avery progress anticipated to be steady; Checkpoint RFID growth to continue; Innovia to benefit from $17–$20 million annual operational savings in H2.

• FX impact expected to remain benign for the rest of the year.