CCL Industries Announces Record Results for 2025 Second Quarter

Executive Summary

• CCL Industries Inc. reported second-quarter 2025 results, posting adjusted basic earnings per Class B share of $1.22, an 8.0% increase year-over-year, driven by strong performance in the CCL, Checkpoint, and Innovia segments.
• Total sales for the quarter reached $1,934.6 million, a 4.8% increase, supported by 2.0% organic growth, 1.0% acquisition growth, and 1.8% positive currency translation.
• The company returned $155.8 million to shareholders during the quarter ($55.8 million in dividends and $100.0 million in share repurchases) and maintained a strong balance sheet with a consolidated leverage ratio of 1.04 times Adjusted EBITDA.

Key Details

• Q2 2025 Financial Performance:
  • Sales: $1,934.6 million (up 4.8% from $1,845.6 million in Q2 2024).
  • Operating Income: $322.1 million (up 6.1% from $303.5 million), with an operating margin of 16.6%.
  • Net Earnings: $213.1 million (down from $279.5 million in Q2 2024, which included a $78.1 million non-cash revaluation gain from the Pacman acquisition).
  • Basic EPS: $1.21 (down from $1.56); Adjusted Basic EPS: $1.22 (up from $1.13).
  • Tax Expense: $71.4 million (effective rate 25.3%).
  • Restructuring/Other Items: $0.7 million expense (primarily severance at Checkpoint).
• Six-Month 2025 Performance:
  • Sales: $3.8 billion (up 6.7% from $3.58 billion), driven by 2.9% organic growth, 1.2% acquisition growth, and 2.6% positive currency translation.
  • Operating Income: $639.0 million (up 9.1%), with an operating margin of 16.7%.
  • Net Earnings: $420.5 million (down from $471.6 million).
  • Basic EPS: $2.39 (down from $2.64); Adjusted Basic EPS: $2.40 (up from $2.21).
  • Shareholder Returns: $312.1 million returned in the first six months ($112.1 million dividends, $200.0 million share repurchases).
• Segment Performance (Q2 2025):
  • CCL: Sales $1,229.7 million (up 7.9%); Operating Income $204.3 million (up 7.1%, margin 16.6%). Driven by Home & Personal Care and CCL Design; Food & Beverage profitability declined.
  • Avery: Sales $266.1 million (down 3.9%); Operating Income $50.6 million (down 16.6%, margin 19.0%). Impacted by unplanned tariff costs and lower back-to-school shipments.
  • Checkpoint: Sales $255.5 million (up 4.6%); Operating Income $43.5 million (up 18.5%, margin 17.0%). Strong profit improvement from MAS products in Europe.
  • Innovia: Sales $183.3 million (down 0.7%); Operating Income $23.7 million (up 54.9%, margin 12.9%). Dramatic improvement due to Americas results and European footprint consolidation, offsetting start-up costs in Germany.
• Balance Sheet & Cash Flow:
  • Cash on Hand: $962.5 million.
  • Undrawn Credit Facility: US$0.8 billion.
  • Leverage Ratio: 1.04 times Adjusted EBITDA.
  • Free Cash Flow: Strong performance noted; 12-month Adjusted EBITDA calculated at $1,565.1 million.
• Dividends:
  • Board declared quarterly dividend of $0.32 per Class B non-voting share and $0.3175 per Class A voting share.
  • Payable to shareholders of record on September 15, 2025, with payment on September 29, 2025.
• Operational Updates:
  • New large film extrusion facility in Germany commenced early scale operations, incurring start-up costs.
  • Avery direct-to-consumer channel continued to post gains in North America and Europe.
  • Checkpoint RFID growth moderated but continued.

Notable Quotes

• "Given the difficult external operating conditions, I'm very pleased our people delivered a second consecutive quarter of record adjusted earnings per share. Profitability improvement was driven by strong results from our CCL, Checkpoint and Innovia segments... All-in, the Company posted a record $1.22 adjusted basic earnings per Class B share (3) for the quarter compared to $1.13 in the prior year period." — Geoffrey T. Martin, President and CEO
• "The Company delivered particularly strong free cash flow this quarter, finishing the period with a consolidated leverage ratio (5) of just 1.04 times Adjusted EBITDA (2) , despite returning $312.1 million to shareholders in dividends and share repurchases under its Normal Course Issuer Bid in the first six months of 2025. With $962.5 million cash-on-hand and US$0.8 billion undrawn capacity on our syndicated revolving credit facility we are well placed to fund global expansion initiatives." — Geoffrey T. Martin, President and CEO