CCL Industries (CCL-B) Q4 2023 earnings summary

Executive summary

• FY2023 sales were $6,649.6M, up 4.2% reported and 3% ex-FX; operating income rose 8.2% to $1,010.6M.

• FY adjusted net earnings were $666.4M; adjusted basic EPS was $3.76 versus $3.57.

• Q4 sales were $1,662.5M, up 4.7% reported; operating income reached $254.8M, up 20.6% reported.

• Q4 reported basic EPS was $0.22 versus $0.82, including the $95.0M Innovia goodwill impairment and restructuring costs.

• Management cited better-than-expected Q4 results and improved early-2024 orders in label materials after five quarters of destocking-related declines.

Financial highlights

• Q4 adjusted basic EPS was $0.97 versus $0.83; reported net earnings were $38.8M versus $145.2M.

• FY reported net earnings were $530.2M versus $622.7M; basic EPS was $2.99 versus $3.50.

• FY sales growth comprised 2.4% acquisition growth and 4.3% positive FX translation, offset by a 2.5% organic decline; Q4 organic sales declined 0.5%.

• Q4 free cash flow from operations was $273.8M versus $271.6M; FY free cash flow was $559.6M.

Outlook and guidance

• 2024 capital expenditures are expected to be ~$455M, including greenfield projects in Germany, Raleigh, NC, and Mexico.

• Completion of the Belgian closure and production consolidation is expected to add $17M–$20M in annualized operating income by mid-2024.

• Momentum continued into early 2024; sustained current Canadian-dollar rates would create a modest Q1 FX headwind.

• The quarterly dividend rose 9.4% to $0.29 per Class B share and $0.2875 per Class A share, payable March 28, 2024.