CCL Industries (CCL-B) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 sales rose 9.4% year-over-year to $1,849.7 million, driven by 6.9% organic growth, 1.8% from acquisitions, and 0.7% positive FX impact.

• Operating income increased 13% year-over-year (excluding FX), reaching $288.9 million, with a 15.6% margin, up 50 bps year-over-year.

• Net earnings for Q3 2024 were $191.7 million, up from $169.1 million in Q3 2023; nine-month net earnings were $663.3 million, including a $78.1 million non-taxable revaluation gain.

• Adjusted basic EPS for Q3 was $1.09, up 14.7% year-over-year; nine-month adjusted EPS was $3.30.

• Nine acquisitions since January 2023 contributed 2.6% to nine-month sales growth.

Financial highlights

• Adjusted EBITDA for Q3 2024 was $380.7 million, up 11% year-over-year; nine-month Adjusted EBITDA was $1,135.5 million.

• Free cash flow from operations was $233 million in Q3 2024, up from $182 million in Q3 2023; nine-month free cash flow was $344.8 million.

• Basic EPS for Class B shares was $1.08; adjusted EPS was $1.09, up 14.7% year-over-year.

• Net finance expense decreased to $19.3 million from $20.3 million year-over-year.

• Effective tax rate was 24.5% for Q3 and 22.3% for the nine months.

Outlook and guidance

• Q4 faces higher hurdles due to tough comps and new plant startup costs, but October started better than expected.

• CCL Design faces tougher comps as the automotive industry slows; CCL Secure expected to improve sequentially.

• Avery performance expected to remain stable; Checkpoint RFID and Innovia recovery to continue.

• FX expected to be a modest tailwind at current rates.

• CCL segment faces tougher year-over-year comparisons amid uncertain geopolitical and consumer environments.