CCL Industries Reports Record Quarterly Results

TORONTO, ON--(Marketwired - November 05, 2015) - CCL Industries Inc. (TSX: CCL.A) (TSX: CCL.B)

Third Quarter Highlights

• Record quarterly basic and adjusted basic earnings per Class B share⁽³⁾ of $2.36 and $2.34, up 29.0% and 27.9% respectively; includes $0.21 currency tailwind
• Sales increased 17.9% supported by 6.9% CCL Label organic sales growth
• Operating income⁽¹⁾ increased 25.3% driven by strong CCL Label and CCL Container performances with Avery meeting expectations

Nine-Month Highlights

• Year-to-date basic and adjusted basic earnings per Class B share⁽³⁾ of $6.45, up 29.5% and 28.5%, respectively
• Avery delivers 15.6% sales growth and 37.1% operating income⁽¹⁾ improvement
• Board approves 2015 fourth quarter dividend of $0.375 per Class B share

CCL Industries Inc. ("CCL" or "the Company"), a world leader in specialty label and packaging solutions for global corporations, small businesses and consumers, today reported 2015 third quarter results.

Sales for the third quarter of 2015 increased 17.9% to $812.9 million, compared to $689.7 million for the third quarter of 2014, with 3.4% organic growth, 10.7% positive currency translation impact and 3.8% from the six acquisitions completed since the second quarter of 2014.

Operating income⁽¹⁾ for the third quarter of 2015 was $134.3 million, an increase of 25.3% compared to $107.2 million for the comparable quarter of 2014. Excluding the impact of currency translation operating income improved 14.2%.

Restructuring and other items of $0.9 million was reported for the third quarter of 2015. This consisted of $4.5 million restructuring charge related to the previously announced Avery reorganization and plant closure in Meridian, Mississippi, offset by $3.6 million of contingent consideration foregone related to the acquisition of DekoPak Ambalaj San. Ve Tic. A.S. in Turkey. No expense for restructuring and other items was recorded in the 2014 third quarter.

Net earnings improved 29.6% to $81.8 million for the 2015 third quarter compared to $63.1 million for the 2014 third quarter. Basic and adjusted basic earnings per Class B share⁽³⁾ were a record $2.36 and $2.34, respectively, compared to basic and adjusted basic earnings per Class B share⁽³⁾ of $1.83 in the prior year third quarter.

For the nine-month period ended September 30, 2015, sales, operating income and net earnings improved 14.9%, 31.3% and 30.5% to $2,240.3 million, $374.0 million and $223.2 million, respectively, compared to the same nine-month period in 2014. Results for the 2015 nine-month period include results from eight acquisitions completed since January 1, 2014, delivering acquisition related sales growth for the period of 4.7%. Solid organic sales growth averaging 3.7% persisted through the nine months of 2015 driving sound profit improvement while foreign currency translation added $0.35 per share. For the nine-month period ended September 30, 2015, adjusted basic earnings was $6.45 per share compared to $5.02 per share for the 2014 nine-month period.

Geoffrey T. Martin, President and Chief Executive Officer, commented, "Results for the third quarter and 2015-to-date exceeded expectations in spite of the uncertain global economic environment. Per our outlook commentary at the end of the second quarter, Avery sales were impacted by the decision to exit certain product lines in the back-to-school category, especially low margin economy ring binders, while the Printable Media business continued to post solid results. Strong performances from both the Label and Container segments drove record earnings per share for the quarter. We continue to expand CCL Label's capabilities with the recently completed acquisition of Sennett Security Products specializing in high security labels, stamps, identity cards and document components."

Mr. Martin added, "Foreign currency translation added $0.21 per share for the quarter with the stronger U.S. dollar partly offset by weaker Latin American currencies. Current Canadian dollar exchange rates would provide a currency translation tailwind for the balance of the year."

Mr. Martin concluded, "We reduced our drawn debt in the past quarter bringing the Company's leverage ratio⁽⁴⁾ firmly below 1.0 times EBITDA⁽²⁾ and purchased Sennett Security Products early in the fourth quarter with cash-on-hand. Therefore our $300 million revolving credit facility remains principally untapped leaving significant capacity to execute future growth plans including both bolt-on and transformative acquisitions. Given the Company's outlook and strong free cash flow, the Board of Directors declared a continuation of the $0.375 per Class B non-voting share and $0.3625 per Class A voting share dividend, payable to shareholders of record at the close of business on December 11, 2015, to be paid on December 22, 2015."

2015 Third Quarter Highlights

CCL Label

• Sales increased 19.4% to $522.2 million, with 6.9% organic growth, 3.1% acquisitions, 9.4% positive currency translation.
• Regional organic sales growth: mid-single digit in North America, high single digit in Europe, low single digit in Asia Pacific and strong double digit in Latin America.
• Operating income margin⁽¹⁾ up 200 basis points to 15.6%. Gains in all regions and business lines, especially Food & Beverage and Home & Personal Care.
• Label joint ventures added $0.04 earnings per Class B share.

Avery

• Sales increased 13.9% to $233.1 million, 6.3% from acquisitions, 14.0% positive currency translation partially offset by 6.4% organic sales decline, largely due to lower back-to-school volumes in North America.
• Printable Media posted solid profitability globally, broadly in-line with prior year.
• Operating income⁽¹⁾ increased 3.8%, principally on a foreign exchange tailwind.
• pc/nametag acquisition continues to perform ahead of expectations.

CCL Container

• Sales increased 21.0% to $57.6 million driven by 13.4% organic growth and 7.6% positive currency translation.
• Favourable mix and exchange rates accompanied by lower aluminum costs drove improved results with operating income doubling over prior year.
• At current U.S. dollar exchange rates the capacity consolidation project remains delayed until at least the end of 2016.
• Start-up losses at the Rheinfelden Americas aluminum slug joint venture reduced earnings by less than $0.01 per Class B share.

CCL will hold a conference call at 9:00 a.m. EST on November 5, 2015, to discuss these results. The analyst presentation will be posted on the Company's website.

To access this call, please dial:

416-340-2219 -- Local
1-866-225-2055 -- Toll Free

Forward-looking Statements

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; 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 2014 Annual Report, Management's Discussion and Analysis, 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.

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.

Non-IFRS Measures

⁽¹⁾ Operating income and operating income margin are key non-IFRS financial measures used to assist in understanding the profitability of the Company's business units. Operating income is defined as earnings before corporate expenses, net finance cost, goodwill impairment loss, earnings in equity accounted investments, restructuring and other items, and taxes. Operating income margin is defined as operating income over sales.

⁽²⁾ 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. EBITDA 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. Calculations are provided below to reconcile operating income to EBITDA. The Company believes that this 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 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.

⁽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.

⁽⁴⁾ Leverage Ratio is a measure that indicates the Company's ability to service its existing debt. Leverage ratio is calculated as net debt divided by EBITDA.

Business Description

With headquarters in Toronto, Canada, CCL Industries now employs approximately 11,000 people and operates 105 production facilities in 29 countries on six continents with corporate offices in Toronto, Canada, and Framingham, Massachusetts. CCL Label is the world's largest converter of pressure sensitive and extruded film materials for a wide range of decorative, instructional and functional applications for large global customers in the consumer packaging, healthcare, automotive and consumer durables markets. Extruded & laminated plastic tubes, folded instructional leaflets, precision printed & die cut metal components with LED displays and other complementary products and services are sold in parallel to specific end-use markets. Avery is the world's largest supplier of labels, specialty converted media and software solutions to enable short run digital printing in businesses and homes alongside complementary office products sold through distributors and mass market retailers. 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.

Audio replay service will be available from November 5, 2015, at 6:00 p.m. EST until December 4, 2015, at 11:59 p.m. EST.

To access Conference Replay, please dial:

905-694-9451 -- Local
800-408-3053 -- Toll Free
Access Code: 5150372