NarrowWebTech

Label giants report strong earnings

NORTH AMERICA • Owners of privately held label companies the world over no doubt are watching the steady growth by acquisition of the world’s two largest label converting businesses: CCL and Multi-Color Corporation (MCC). These giants, both public companies based in North America, continue to grow at a strong pace and return healthy dividends to investors.

CCL Industries, based in Toronto, Canada and parent of CCL Label, its largest division, recently approved a 20% dividend increase for its second quarter. Q2 sales rose 80% to CDN 650.4 million, compared with CDN 361.4 million in the second quarter of 2013. Of that increase, 6.2% was organic growth, 6.7% positive currency translation, and the balance from the acquisitions of two Avery Dennison business units in July 2013, Sancoa in New Jersey in January 2014, and others. This week the company announced its intent to acquire Bandfix, a prominent Swiss label converter.

CCLLabel

President Geoffrey Martin said CCL Label sales increased 37% driven by acquisitions. “North America recorded high single digit organic growth with Healthcare improving notably as certain customers recovered from FDA quarantines. Specialty was mixed with strong World Cup promotional activity, offset by a soft Agricultural Chemicals season attributed by the market to the prolonged tough winter. Home & Personal Care sales, excluding the Sancoa acquisition, improved on new business momentum but in the face of continuing sluggish market demand. Results in Food & Beverage improved meaningfully with notable gains at our West Coast wine plants.”

At Multi-Color Corporation (MCC), headquartered near Cincinnati, Ohio, revenues of USD 194 million and 20% gross margins drove the fourth quarter to a record earnings per share of 68 cents and ended the year at USD 2.14. Revenues for the 2014 fiscal year were USD 706 million, up $47 million on the prior year. President Nigel Vinecombe noted that MCC made six acquisitions during the year with annualized revenues over USD 120 million. Multi-Color has operations on six continents.

MCC_LogoThe company has also been investing in infrastructure improvements. “Fiscal 2014 saw an unusually high number of printing press installations – new and transfers” said Vinecombe, “plus four plant ERP and SAP installations.” Two of the company’s plants were closed during the year.

A few weeks ago MCC announced that it had acquired Multiprint Labels Ltd, of Dublin, Ireland, which specializes in beverage labels for Ireland and the UK and has annual revenues of USD 7 million. Two years ago, MCC bought Labelgraphics, a major producer of beverage and other labels based in Glasgow, Scotland.

www.cclind.com and www.ccllabel.com

www.multicolorcorp.com

Jack Kenny, NarrowWebTech's North American correspondent, has written about the label and packaging industries since 1995.

Jack Kenny
A career journalist specialising in the label converting industry, Jack Kenny is the North American correspondent for NarrowWebTech. He was the founding editor of USA-based Label & Narrow Web magazine. He has delivered numerous addresses to industry associations and business, and served for several years on the Environmental Committee of the Tag & Label Manufacturers Institute.

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