CCL Industries Inc. (TSX:CCL.A)(TSX:CCL.B) -
Results Summary
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For periods ended March 31 Three months unaudited
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% Change
Excl.
2013 2012 % Change FX(i)
(in millions of Cdn dollars, except
per share data)
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Sales $ 363.6 $ 341.4 6.5% 6.2%
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EBITDA(1) $ 81.0 $ 71.2 13.8% 13.3%
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Operating income(2) $ 61.9 $ 52.6 17.7% 17.1%
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Earnings in equity accounted
investments $ 0.4 $ 0.8 (50.0%)
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Restructuring and other items -
loss $ 1.3 $ - n.m.
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Net earnings $ 34.1 $ 30.4 12.0% 11.4%
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Per Class B share
Basic earnings per share $ 1.01 $ 0.91 11.0%
Diluted earnings per share $ 0.99 $ 0.89 11.2%
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Restructuring and other items - net
loss $ 0.03 $ - n.m.
Adjusted basic earnings per Class B
share(3) $ 1.04 $ 0.91 14.3%
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Number of outstanding shares (in
000's)
Weighted average for the period -
basic 33,838 33,427
Actual at period end 34,143 33,751
(i) - Change over prior year's comparative period excludes
estimated impact of foreign currency translation.
CCL Industries Inc. ("CCL" or "the Company") is a world leader
in the development of label solutions for global producers of
consumer brands in the home & personal care, healthcare,
durable goods, and premium food & beverage sectors; and a
specialty supplier of aluminum containers for the same customers in
North America.
First Quarter 2013 Results
Sales for the first quarter of 2013 were $363.6 million, an
increase of 6.5%, compared to the $341.4 million for the first
quarter of 2012. Excluding the impact of foreign currency
translation, sales increased 5.6% organically with an additional
0.6% increase from the acquisition of Graphitype in July 2012.
Operating income (a non-IFRS measure; see note 2 below) for the
first quarter of 2013 was $61.9 million, an improvement of 17.7%
compared to $52.6 million for the first quarter of 2012. Both the
Label and Container segments contributed to the increase in
operating income.
Earnings before net finance cost, taxes, earnings in equity
accounted investments, depreciation and amortization and
restructuring and other items ("EBITDA", a non-IFRS measure; see
note 1 below) was $81.0 million for the first quarter of 2013,
compared to $71.2 million for the first quarter of 2012.
The overall effective income tax rate was 29.2% for the first
quarter of 2013 compared to 27.6% for the first quarter of 2012.
The increase in the effective tax rate is primarily due to a higher
portion of the Company's income being earned in higher tax
jurisdictions.
Net earnings for the 2013 first quarter increased 12.0% to $34.1
million, compared to $30.4 million recorded for the first quarter
of 2012. This resulted in basic and diluted earnings per share of
$1.01 and $0.99, respectively, for the first quarter of 2013
compared to basic and diluted earnings per share of $0.91 and
$0.89, respectively, for the first quarter of 2012.
Adjusted basic earnings per Class B share (a non-GAAP measure;
see note 3 below) were $1.04 for the first quarter of 2013, an
increase of 14.3% compared to $0.91 in the corresponding quarter of
2012. The adjustment to basic earnings per Class B share includes
the after tax costs of $0.8 million and $0.3 million, respectively,
for restructuring a small label plant in France and transaction
costs related to the proposed acquisition of the Office &
Consumer Products and Designed & Engineered businesses from
Avery Dennison Corporation, announced on January 30, 2013.
Geoffrey T. Martin, President and Chief Executive Officer
stated, "We are delighted to report record quarterly results and
our tenth consecutive period of year-over-year improvement that
broke the one dollar earnings per share milestone for the first
time. Operating income increased 18% over the prior year and both
the Label and Container Segments contributed to the record
performance. Results were nominally improved by foreign currency
translation compared to the prior year period."
Mr. Martin continued, "CCL Label, which now includes our Tube
business, posted a good first quarter increasing sales 5.7% with
all geographies contributing and highlighted by strong growth in
emerging markets. Operating income increased 12.7% with return on
sales reaching a record 18%. North American sales were up low
single digits on top of the strong double digit advance reached
during the first quarter of 2012; we also matched the substantially
improved profitability achieved in the prior year period. European
sales gains were also low single digits but profitability advanced
significantly on turnarounds and a strong performance in Food &
Beverage. Latin America and Asia both delivered double digit
revenue growth with particularly strong results in China and a
rebound from the slow second half of 2012 in Brazil. Profit
improvement in Asia and Latin America was robust; performance in
Australia was solid. Our joint ventures contributed very good
results in the Middle East, offset by tough comparisons in Russia,
where the prior year benefitted from currency movements, and
start-up costs at the new plant in Santiago. The Chilean operation
continues to exceed expectations."
Mr. Martin then added, "CCL Container sales were up 11% for the
current quarter in part due to the peak sun care season that was
delayed to the second quarter in 2012 returning to the first
quarter of 2013. Profitability more than doubled compared to the
prior year with all of our operations delivering broad based
operational gains. Cash flow was excellent and returns are now
considerably above our cost of capital hurdle."
Mr. Martin continued, "Order intake levels were very solid for
the first quarter but did slow in late March, perhaps due to the
early Easter vacation period. We continue to expect low single
digit growth rates in developed economies as long as the macro
environment remains fragile but still see opportunities to augment
that in higher growth emerging markets. Currency markets have moved
very slightly in our favour and we could progressively benefit from
this as the year unfolds if current rates for the Canadian dollar
are sustained or weaken. The input cost situation remains
stable."
Mr. Martin also stated, "The Company finished the quarter with a
healthy balance sheet, $190 million of cash on hand and a net debt
to total book capitalization of 13.4% compared to 19.3% at March
31, 2012. On April 3, 2013, utilizing our cash on hand, we
announced the acquisition of INT Autotechnik perfectly
complementing our existing CCL Design business, which supplies the
German automotive industry with tread plates, badges, decals and
functional die cut pressure sensitive films. We have committed
credit facilities of $700 million for our planned Avery Dennison
transaction and to provide for future flexibility. Based on our
strong cash flow and prospects for the remainder of the year, your
Board of Directors has declared a dividend of $0.2150 per Class B
non-voting share and $0.2025 per Class A voting share payable to
shareholders of record at the close of business on June 14, 2013,
to be paid on June 28, 2013."
Mr. Martin concluded, "We have now received all the required
regulatory approvals to complete the Avery Dennison Office &
Consumer Products and Designed & Engineered Solutions
transaction. Current transition and business planning activities
are targeting a close early in the third quarter of 2013."
With headquarters in Toronto, Canada, CCL Industries now employs
approximately 6,700 people and operates 74 production facilities
globally located to meet the sourcing needs of large international
customers. CCL Label is the world's largest converter of pressure
sensitive and film materials for a wide range of decorative,
instructional and functional applications in consumer packaging,
healthcare, automotive and consumer durables markets. Extruded
plastic tubes, folded instructional leaflets, precision printed
& die cut metal components with LED displays and other
complimentary products and services are sold in parallel to
specific end use markets. CCL Container is a leading producer of
impact extruded aluminum aerosol cans and bottles for consumer
packaged goods customers in the United States, Canada and
Mexico.
1. EBITDA is a critical non-IFRS financial measure used extensively in the
packaging industry and other industries to assist in understanding and
measuring operating results. It is also considered as a proxy for cash
flow and a facilitator for business valuations. This non-IFRS financial
measure is defined as earnings before net finance cost, taxes,
depreciation and amortization, goodwill impairment loss, earnings in
equity accounted investments and restructuring and other items. See
section entitled "Supplementary Information" below for a reconciliation
of operating income to EBITDA. The Company believes that it is an
important measure as it allows management to assess CCL's ongoing
business without the impact of net finance cost, depreciation and
amortization and income tax expenses, as well as non-operating factors
and one-time items. As a proxy for cash flow, it is intended to indicate
CCL's ability to incur or service debt and to invest in property, plant
and equipment, and it allows management to compare CCL's business to
those of CCL's peers and competitors who may have different capital or
organizational structures. EBITDA is a measure tracked by financial
analysts and investors to evaluate financial performance and is a key
metric in business valuations. EBITDA is considered an important measure
by lenders to the Company and is included in the financial covenants of
CCL's senior notes and bank lines of credit.
2. Operating Income is a key non-IFRS financial measure used to assist in
understanding the profitability of the Company's business units. This
non-IFRS financial measure is defined as income before corporate
expenses, net finance cost, goodwill impairment loss, earnings in equity
accounted investments, restructuring and other items and taxes.
3. Adjusted Basic Earnings per Class B Share is an important non-IFRS
financial measure used to assist in understanding the ongoing earnings
performance of the Company excluding items of a one-time or non-
recurring nature. It is not considered a substitute for basic net
earnings per Class B share but it does provide additional insight into
the ongoing financial results of the Company. This non-IFRS financial
measure is defined as basic net earnings per Class B share excluding
gains on dispositions, goodwill impairment loss, restructuring and other
items and tax adjustments.
Supplementary Information
For periods ended March 31st
Reconciliation of Operating Income to EBITDA
Unaudited
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(In millions of Canadian dollars)
Three months ended
March 31st
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Operating Income
2013 2012
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Label $ 56.6 $ 50.2
Container 5.3 2.4
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Total operating income 61.9 52.6
Less: Corporate expenses (7.5) (6.5)
Add: Depreciation & amortization 26.6 25.1
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EBITDA $ 81.0 $ 71.2
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The financial information presented herein has been prepared on
the basis of IFRS for financial statements and is expressed in
Canadian dollars unless otherwise stated.
This press release contains forward-looking information and
forward-looking statements (hereinafter collectively referred to as
"forward-looking statements"), as defined under applicable
securities laws, that involve a number of risks and uncertainties.
Forward-looking statements include all statements that are
predictive in nature or depend on future events or conditions.
Forward-looking statements are typically identified by the words
"believes," "expects," "anticipates," "estimates," "intends,"
"plans" or similar expressions. Statements regarding the
operations, business, financial condition, priorities, ongoing
objectives, strategies and outlook of the Company, other than
statements of historical fact, are forward-looking statements.
Specifically, this press release contains forward-looking
statements regarding the anticipated growth in sales, income and
profitability of the Company's segments; and the Company's
expectations regarding general business and economic
conditions.
Forward-looking statements are not guarantees of future
performance. They involve known and unknown risks and uncertainties
relating to future events and conditions including, but not limited
to, the after-effects of the global financial crisis and its impact
on the world economy and capital markets; the impact of
competition; consumer confidence and spending preferences; general
economic and geopolitical conditions; currency exchange rates;
interest rates and credit availability; technological change;
changes in government regulations; risks associated with operating
and product hazards; and CCL's ability to attract and retain
qualified employees. Do not unduly rely on forward-looking
statements as the Company's actual results could differ materially
from those anticipated in these forward-looking statements.
Forward-looking statements are also based on a number of
assumptions, which may prove to be incorrect, including, but not
limited to, assumptions about the following: global economic
recovery and higher consumer spending; improved customer demand for
the Company's products; continued historical growth trends, market
growth in specific sectors and entering into new sectors; the
Company's ability to provide a wide range of products to
multinational customers on a global basis; the benefits of the
Company's focused strategies and operational approach; the
achievement of the Company's plans for improved efficiency and
lower costs, including stable aluminum costs; the availability of
cash and credit; fluctuations of currency exchange rates; the
Company's continued relations with its customers; the Company's
expectation to close the announced purchase of the Office &
Consumer Products and Designed & Engineered Solutions
businesses of Avery Dennison Corporation within the predicted
timeframe and expected terms; and general business and economic
conditions. Should one or more risks materialize or should any
assumptions prove incorrect, then actual results could vary
materially from those expressed or implied in the forward-looking
statements. Further details on key risks can be found in the
Management's Discussion and Analysis section of CCL's 2012 Annual
Report, particularly under Section 4: "Risks and Uncertainties."
CCL's annual and quarterly reports can be found online at
www.cclind.com and www.sedar.com or are available upon request.
Except as otherwise indicated, forward-looking statements do not
take into account the effect that transactions or non-recurring or
other special items announced or occurring after the statements are
made may have on CCL's business. Such statements do not, unless
otherwise specified by the Company, reflect the impact of
dispositions, sales of assets, monetizations, mergers,
acquisitions, other business combinations or transactions, asset
write-downs or other charges announced or occurring after
forward-looking statements are made. The financial impact of these
transactions and non-recurring and other special items can be
complex and depends on the facts particular to each of them and
therefore cannot be described in a meaningful way in advance of
knowing specific facts.
The forward-looking statements are provided as of the date of
this press release and the Company does not assume any obligation
to update or revise the forward-looking statements to reflect new
events or circumstances, except as required by law.
Note: CCL will hold a conference call at 2:30 p.m. EDT on May 2, 2013, to
discuss these results. The analyst presentation will be posted on the
Company's website.
To access this call, please dial:
416-340-2218 - Local
866-226-1792 - Toll Free
Audio replay service will be available from May 2, 2013, at 6:00 p.m.
EDT until May 16, 2013, at 11:59 p.m. EDT.
To access Conference Replay, please dial:
905-694-9451 - Local
800-408-3053 - Toll Free
Access Code: 8428715
For more details on CCL, visit our website - www.cclind.com.
CCL Industries Inc.
Consolidated condensed interim statements of financial position
Unaudited
In thousands of Canadian dollars
As at As at
March 31 December 31
2013 2012
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Assets
Current assets
Cash and cash equivalents $ 189,647 $ 188,972
Trade and other receivables 227,892 191,538
Inventories 96,624 90,194
Prepaid expenses 6,402 6,205
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Total current assets 520,565 476,909
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Property, plant and equipment 704,040 679,857
Goodwill 355,095 353,350
Deferred tax assets 54,034 54,686
Equity accounted investments 43,573 42,878
Intangible assets 28,509 29,620
Other assets 17,024 16,783
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Total non-current assets 1,202,275 1,177,174
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Total assets $1,722,840 $ 1,654,083
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Liabilities
Current liabilities
Trade and other payables $ 235,386 $ 226,248
Current portion of long-term debt 85,107 84,701
Income taxes payable 19,884 10,771
Derivative instruments 923 435
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Total current liabilities 341,300 322,155
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Long-term debt 248,395 244,332
Deferred tax liabilities 107,299 110,607
Employee benefits 85,313 81,082
Provisions and other long-term liabilities 10,308 8,720
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Total non-current liabilities 451,315 444,741
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Total liabilities 792,615 766,896
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Equity
Share capital 243,960 226,702
Contributed surplus 3,568 9,584
Retained earnings 722,043 697,937
Accumulated other comprehensive loss (39,346) (47,036)
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Total equity attributable to shareholders of the
Company 930,225 887,187
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Total liabilities and equity $1,722,840 $ 1,654,083
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CCL Industries Inc.
Consolidated condensed interim income statements
Unaudited
In thousands of Canadian dollars, except per share data
Three Months Ended
March 31
2013 2012 % Change
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Sales $ 363,643 $ 341,396 6.5
Cost of sales 267,913 257,620
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Gross profit 95,730 83,776
Selling, general and administrative 41,307 37,720
Restructuring and other items 1,322 -
Earnings in equity accounted investments (377) (830)
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Results from operating activities 53,478 46,886
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Finance cost 5,367 5,511
Finance income (160) (308)
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Net finance cost 5,207 5,203
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Earnings before income taxes 48,271 41,683 15.8
Income tax expense 14,189 11,261
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Net earnings $ 34,082 $ 30,422 12.0
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Attributable to:
Shareholders of the Company $ 34,082 $ 30,422
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Net earnings for the period $ 34,082 $ 30,422
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Basic earnings per Class B share $ 1.01 $ 0.91 11.0
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Diluted earnings per Class B share $ 0.99 $ 0.89 11.2
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CCL Industries Inc.
Consolidated condensed interim statements of cash flows
Unaudited
In thousands of Canadian dollars
Three Months Ended
March 31
2013 2012
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Cash provided by (used for)
Operating activities
Net earnings $ 34,082 $ 30,422
Adjustments for:
Depreciation and amortization 26,633 25,109
Earnings in equity accounted investments,
net of dividends received (377) (438)
Net finance cost 5,207 5,203
Current income tax expense 16,771 14,386
Deferred taxes (2,582) (3,125)
Equity-settled share-based payment transactions 521 1,081
Gain on sale of property, plant and equipment (135) (114)
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80,120 72,524
Change in inventories (6,430) (3,776)
Change in trade and other receivables (36,354) (26,708)
Change in prepaid expenses (197) 961
Change in trade and other payables 10,978 (2,332)
Change in income taxes payable 701 1,565
Change in employee benefits 4,231 2,586
Change in other assets and liabilities 1,924 607
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54,973 45,427
Net interest paid (10,065) (10,332)
Income taxes paid (8,359) (4,980)
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Cash provided by operating activities 36,549 30,115
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Financing activities
Repayment of long-term debt (2,639) (1,246)
Proceeds from issuance of shares 11,087 1,552
Repayment of executive share purchase plan loans - 233
Dividends paid (7,322) (6,550)
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Cash provided by (used for) financing activities 1,126 (6,011)
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Investing activities
Additions to property, plant and equipment (39,250) (23,300)
Proceeds on disposal of property, plant and
equipment 241 572
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Cash used for investing activities (39,009) (22,728)
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Net increase (decrease) in cash and cash
equivalents (1,334) 1,376
Cash and cash equivalents at beginning of period 188,972 140,698
Translation adjustment on cash and cash
equivalents 2,009 (150)
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Cash and cash equivalents at end of period $ 189,647 $ 141,924
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CCL Industries Inc.
Segment information
Unaudited
In thousands of Canadian dollars
Three Months Ended
March 31
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Sales Operating income
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2013 2012 2013 2012
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Label $ 312,264 $ 295,250 $ 56,579 $ 50,188
Container 51,379 46,146 5,317 2,416
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Total operations $ 363,643 $ 341,396 61,896 52,604
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Corporate expense (7,473) (6,548)
Restructuring and other
items (1,322) -
Earnings in equity
accounted investments 377 830
Finance cost (5,367) (5,511)
Finance income 160 308
Income tax expense (14,189) (11,261)
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Net earnings $ 34,082 $ 30,422
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Effective January 1, 2013, the Company changed its operating
segments to incorporate all the entities previously reported within
the Tube segment in the Label segment, to more closely represent
the current management structure and reporting. Comparative segment
information has been restated to conform with current year
presentation.
Contacts: CCL Industries Inc. Sean Washchuk Senior Vice
President and Chief Financial Officer 416-756-8526
www.cclind.com
CCL Industries (TSX:CCL.A)
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