In This Article:
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Sales: $1.85 billion, a 9.4% increase from Q3 2023.
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Operating Income: $288.9 million, a 13% increase excluding foreign currency impact.
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Net Earnings: $191.7 million, up from $169.1 million in Q3 2023.
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EBITDA: Increased 11% compared to Q3 2023, excluding foreign currency impact.
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Net Finance Expense: $19.3 million, down from $20.3 million in Q3 2023.
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Effective Tax Rate: 24.5%, unchanged from Q3 2023.
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Basic Earnings per Share: $1.08, adjusted to $1.09 after restructuring expenses.
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Free Cash Flow from Operations: $233 million, up from $182 million in Q3 2023.
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Net Debt: $1.68 billion as of September 30, 2024.
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Balance Sheet Leverage Ratio: 1.14 times.
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Liquidity: $760 million cash on hand, $0.9 billion available credit.
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Capital Spending: $409 million year-to-date, expected to reach $465 million for 2024.
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Segment Performance: Strong performance in Checkpoint with over 30% organic sales growth.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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CCL Industries Inc (CCDBF) reported a 9.4% increase in sales for the third quarter of 2024, with 6.9% organic growth.
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Operating income increased by 13% compared to the same quarter in 2023, excluding the impact of foreign currency translation.
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The company achieved a 14.7% improvement in adjusted earnings per Class B share, reaching $1.09 compared to $0.95 in the third quarter of 2023.
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Free cash flow from operations was $233 million for the third quarter of 2024, up from $182 million in the same period in 2023.
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The Checkpoint segment experienced over 30% organic sales growth, driven by RFID wins and retailer inventory normalization.
Negative Points
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Corporate expenses increased slightly due to short-term variable compensation.
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Start-up costs in new operations, particularly in Spain, are expected to weigh on profitability in the CCL segment.
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The CCL Secure segment faced tough comparisons to a strong prior year, resulting in reduced profitability.
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The company's net debt increased by $167.6 million due to capital expenditures, business acquisitions, and share buybacks.
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North American organic growth slowed to low single digits in the third quarter, compared to high single digits in the second quarter.
Q & A Highlights
Q: Could you comment on the start-up costs in the CCL segment and whether they will persist into Q1? A: Sean Washchuk, CFO, noted that start-up costs are associated with new operations, particularly in Spain. These costs typically run for a quarter or two, but are not expected to be materially significant. The bigger impact is the tougher comps in Q4 and the first half of next year.