CCL Industries Inc. reported 2020 third quarter results.
Sales for the third quarter of 2020 increased 1.2% to $1,373.4 million, compared to $1,357.1 million for the third quarter of 2019, with 2.5% organic decline offset by 2.2% acquisition-related growth and 1.5% positive impact from foreign currency translation.
Operating income for the third quarter of 2020 increased 17.4% to $246.3 million compared to $209.8 million for the comparable quarter of 2019. Operating income increased 16%, excluding currency translation.
Net earnings were $153.3 million for the 2020 third quarter compared to $127.7 million for the 2019 third quarter.
For the nine-month period ended Sept. 30, 2020, sales and operating income declined 3.8% and 0.5% to $3.9 billion and $610.2 million, respectively. However, net earnings increased 3% to $383.8 million, compared to the same nine-month period in 2019.
The 2020 nine-month period included results from 13 acquisitions completed since Jan. 1, 2019, delivering acquisition-related sales growth for the period of 1.8%. Organic sales decline was 5.9% and foreign currency translation was a 0.3% positive impact.
“I am very pleased to report record quarterly earnings,” said Geoffrey T. Martin, president and CEO. “This outstanding performance, in the midst of ‘once in a generation’ pandemic challenges, speaks to the resilience of our business model and the unrelenting commitment and dedication of our front line people around the world.
“The CCL Segment posted organic sales growth of 4.2% and a 300 basis point improvement in operating margin. CCL Secure’s performance improved significantly on a favorable mix coupled with unusually strong demand for currency. Both CCL Design electronics and Healthcare & Specialty maintained second quarter momentum, as sales increased on share gains and higher consumer demand from the pandemic driving strong profit improvement,” Martin added.
“Avery ‘WePrint’ and kids’ labels direct-to-consumer franchises were strong globally but not enough to offset steep declines in event and name badging as attended sports events, concerts, trade conventions and business meetings temporarily disappeared. Back-to-school performance, while initially encouraging, faded amid a somewhat chaotic return to schools and colleges in North America. Checkpoint sales declined compared to a strong prior year in the MAS business but overall profitability improved as apparel labeling demand rebounded, results aided by strong growth in RFID and cost-saving initiatives.”
“The company completed the third quarter with a stronger balance sheet driven by persistent free cash flow, reducing the company’s net leverage ratio to 1.51 times adjusted EBITDA compared to 1.8 times at the end of 2020 second quarter,” Martin concluded.