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CCL Industries Inc Class B (TSE:CCL.B)
TSX:CCL.B
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CCL Industries
(TSX:CCL.B)
78Outperform
Positive Factors
Business Model
CCL's resilient and diverse business model highlights its ability to manage through challenging market backdrops and seek out pockets of growth.
Competitive Position
CCL's competitive position as the world's largest label converter with a global network of plants and profitable expansion into materials science supports its outperform rating.
Financial Position
CCL remains well positioned and is one of the only players in the industry that has the financial wherewithal to take advantage of and benefit from many trends in the label industry.
Negative Factors
CCL Industries (CCL.B) vs. S&P 500 (SPY)
Market Cap
$12.66B
Dividend Yield1.69%
Average Volume (3M)371.64K
Price to Earnings (P/E)15.2
Beta (1Y)0.67
Revenue Growth8.95%
EPS Growth64.88%
CountryCA
Employees25,700
SectorConsumer Cyclical
Sector Strength51
IndustryContainers & Packaging
Share Statistics
EPS (TTM)4.74
Shares Outstanding164,745,940
10 Day Avg. Volume404,840
30 Day Avg. Volume371,643
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)N/A
Price to Sales (P/S)1.74
Price to Cash Flow (P/CF)10.20
P/FCF Ratio11.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$90.14Price Target Upside25.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
CCL Industries Business Overview & Revenue Model
Company DescriptionCCL Industries, Inc. engages in the conversion of pressure sensitive and extruded film materials for decorative, instructional, security, and functional applications. It operates through the following segments: CCL; Avery; Checkpoint; and Innovia. The CCL segment focuses on the production of pressure sensitive and extruded film materials. The Avery segment manufactures and sells consumer products, including labels, binders, dividers, sheet protectors, and writing instruments. The Checkpoint segment involves in technology-driven, loss-prevention, inventory management and labelling solutions. The Innovia segment covers specialty high-performance, multi-layer, surface-engineered specialty films for label, packaging, and security applications. The company was founded by Gordon S. Lang in 1951 and is headquartered in Toronto, Canada.
How the Company Makes MoneyCCL Industries makes money through its diverse portfolio of packaging solutions and services, primarily segmented into four main business units: CCL Label, Avery, Checkpoint, and Innovia. CCL Label generates revenue by providing pressure-sensitive labels and sleeves for a variety of industries including healthcare, consumer products, and automotive. The Avery segment offers office products and printable media solutions, while Checkpoint specializes in technology-driven loss prevention solutions for retail. Innovia focuses on the production of specialty films for labels, packaging, and security applications. The company also benefits from strategic partnerships and acquisitions that expand its global reach and product offerings. CCL Industries' commitment to innovation and sustainability enhances its competitive advantage, contributing to its revenue growth.
CCL Industries Financial Statement Overview
Summary
CCL Industries has demonstrated strong financial health with impressive revenue growth of 9% and consistent cash flow strength. The company's balance sheet is stable with a healthy equity ratio and manageable debt levels. While the absence of EBIT data for 2024 suggests potential areas for improvement, the company's overall performance is commendable.Income Statement
CCL Industries has demonstrated strong revenue growth with a 9% increase from 2023 to 2024. Gross profit margin improved, indicating efficient cost management. The EBITDA margin of 22.4% showcases solid operational performance, although the EBIT margin is unavailable for 2024, suggesting potential areas for improvement in operating profitability.85
Very Positive
Balance Sheet
The company maintains a healthy equity ratio of 53.6%, reflecting a strong equity base. The debt-to-equity ratio stands at 0.46, indicating prudent leverage management. Return on equity improved to 16%, highlighting effective use of shareholders' equity. Overall, the balance sheet depicts a stable financial position with manageable debt levels.78
Positive
Cash Flow
Operating cash flow shows consistent strength with a slight increase over the years. The free cash flow to net income ratio of 0.71 indicates robust cash generation relative to net income. The free cash flow growth rate of 11.1% from 2023 to 2024 signifies positive cash flow dynamics, supporting future investment opportunities.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.25B | 6.65B | 6.38B | 5.73B | 5.24B | Gross Profit |
| 2.14B | 1.91B | 1.72B | 1.59B | 1.50B | EBIT |
| 0.00 | 928.80M | 895.40M | 849.60M | 787.30M | EBITDA |
| 1.62B | 1.25B | 1.26B | 1.19B | 1.09B | Net Income Common Stockholders |
| 843.10M | 530.20M | 622.70M | 599.10M | 529.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 820.60M | 774.20M | 831.50M | 594.10M | 700.30M | Total Assets |
| 9.86B | 8.92B | 8.66B | 7.63B | 7.34B | Total Debt |
| 2.45B | 2.28B | 2.36B | 1.85B | 2.09B | Net Debt |
| 1.63B | 1.52B | 1.53B | 1.26B | 1.39B | Total Liabilities |
| 4.58B | 4.30B | 4.40B | 3.88B | 4.05B | Stockholders Equity |
| 5.28B | 4.62B | 4.27B | 3.75B | 3.28B |
| Cash Flow | Free Cash Flow | |||
| 601.90M | 541.70M | 545.60M | 514.90M | 600.10M | Operating Cash Flow |
| 1.06B | 1.00B | 992.80M | 838.70M | 882.90M | Investing Cash Flow |
| -600.30M | -768.00M | -706.60M | -541.30M | -428.00M | Financing Cash Flow |
| -424.30M | -295.20M | -72.60M | -370.00M | -461.30M |
CCL Industries Technical Analysis
Negative
71.72
Price Trends
72.22
Negative
75.01
Negative
75.13
Negative
Market Momentum
-0.18
Positive
47.98
Neutral
15.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CCL.B, the sentiment is Negative. The current price of 71.72 is below the 20-day moving average (MA) of 72.44, below the 50-day MA of 72.22, and below the 200-day MA of 75.13, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 47.98 is Neutral, neither overbought nor oversold. The STOCH value of 15.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CCL.B.
CCL Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.66B | 15.16 | 17.16% | 1.69% | 8.95% | 64.88% | |
72 Outperform | C$337.46M | 18.03 | 10.26% | 3.72% | 16.67% | 40.01% | |
71 Outperform | C$2.42B | 12.16 | 11.45% | 0.41% | 0.56% | 4.94% | |
67 Neutral | 8.55 | 18.66% | 4.76% | -4.26% | -7.76% | ||
59 Neutral | $12.44B | 10.63 | 2.89% | 3.66% | 1.52% | -17.39% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:CCL.B
CCL Industries
71.72
1.71
2.45%
GIL
Gildan Activewear
46.53
13.38
40.36%
STN
Stantec
82.48
-2.56
-3.01%
TSE:KBL
K-Bro Linen
32.25
-0.32
-0.98%
TSE:RPI.UN
Richards Packaging
27.75
-3.01
-9.79%
TSE:WPK
Winpak Limited
39.15
1.49
3.96%
CCL Industries Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: 1.51% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong financial performance and strategic investments. However, challenges in specific segments and industries, such as Checkpoint and automotive, were noted. The company's overall position remains robust with continued growth and shareholder returns.Highlights
Strong Financial Performance
Sales increased by 9% in Q4 2024 compared to Q4 2023, with 6.8% organic growth, resulting in sales of $1.81 billion. Operating income rose by 5%, and net earnings for Q4 2024 were $179.8 million compared to $38.8 million in Q4 2023.
Segment Growth
CCL segment saw 5.4% organic growth with strong performance in Asia Pacific and Latin America. Innovia reported strong volume growth in North America with improved results in Europe and Poland.
Increased Returns to Shareholders
The company repurchased 2.6 million shares for $200.6 million. Dividends paid amounted to $206.4 million, totaling $407 million returned to shareholders in 2024.
Liquidity and Financial Position
Net debt was $1.62 billion, with a strong balance sheet and a leverage ratio of 1.08x. Liquidity was robust with $829 million of cash on hand and $1 billion of available undrawn credit capacity.
Expansion and Investment
Capital spending forecasted at $485 million for 2025, with new plant completions, including a new apparel label plant in Vietnam, highlighting ongoing investment in growth.
Lowlights
Checkpoint Segment Challenges
Checkpoint experienced a decline in EBITDA margins due to unfavorable mix, foreign exchange issues in Turkey, and a poor quarter in Latin America.
Slowing Automotive Industry
CCL Design faces more difficult comparisons and a slowing automotive industry, which could impact growth.
Free Cash Flow Decline in Q4
Free cash flow from operations was $261.7 million in Q4 2024, slightly behind the $273.8 million posted in Q4 2023.
Company Guidance
In the fourth quarter of 2024, CCL Industries reported a 9% increase in sales, reaching $1.81 billion compared to $1.66 billion in the same period in 2023. This growth was driven by 6.8% organic growth, 1.4% from acquisitions, and a 0.8% positive impact from foreign currency translation. Operating income rose to $267.9 million, up 5% from the previous year, while net earnings surged to $179.8 million from $38.8 million, influenced by a goodwill impairment charge in 2023. The effective tax rate decreased significantly to 22.9% from 57% in 2023. Earnings per share improved, with basic EPS at $1.01 and adjusted EPS at $1.02. Free cash flow from operations for the quarter was $261.7 million, slightly down from $273.8 million in 2023. The company's balance sheet remained strong with a net debt of $1.62 billion and a leverage ratio of 1.08x. Looking ahead, CCL expects to spend approximately $485 million on capital expenditures in 2025, with a new plant in Vietnam set to start operations in Q1.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.