CCL Industries Reports Strong Q3 2025 with 6.3% Sales Growth and 11.4% Operating Income Increase

NEWS

Jino John

11/12/20255 min read

CCL Industries Inc. (TSX:CCL.A)(TSX:CCL.B) ("the Company"), a world leader in specialty label, security and packaging solutions for global corporations, government institutions, small businesses and consumers, today reported 2025 third quarter results.

Sales for the third quarter of 2025 increased 6.3% to $1,965.9 million, compared to $1,849.7 million for the third quarter of 2024, with organic growth of 3.7%, acquisition-related growth of 0.1% and a 2.5% positive impact from foreign currency translation.

Operating income(1) for the third quarter of 2025 improved 11.4% to $321.8 million compared to $288.9 million for the comparable quarter of 2024. Foreign currency translation had a 2.2% positive impact on operating income for the comparable quarters.

The Company recorded an expense for restructuring and other items of $1.6 million, primarily attributable to severance cost at CCL Design and Checkpoint, compared to $2.2 million principally related to transaction costs for the acquisition of Pacman in the 2024 second quarter.

Tax expense for the third quarter of 2025 was $71.6 million compared to $61.4 million in the prior year period. The effective tax rate for the 2025 third quarter was 25.5% compared to 24.5% for the 2024 third quarter due to a higher portion of the Company's taxable income earned in higher tax jurisdictions.

Net earnings were $210.8 million for the 2025 third quarter compared to $191.7 million for the 2024 third quarter. Basic and adjusted basic earnings per Class B share(3) for the 2025 third quarter were $1.21, compared to basic and adjusted basic earnings per Class B share(3) of $1.08 and $1.09, respectively, in the prior year third quarter. Foreign currency translation had a positive impact of $0.02 on adjusted basic earnings per Class B share(3).

For the nine-month period ended September 30, 2025, sales and operating income(1) improved 6.5% and 9.9% to $5.8 billion and $960.8 million, respectively, compared to the same nine-month period in 2024. Net earnings for the 2025 nine-month period were $631.3 million compared to $663.3 million for the 2024 nine-month period. For the nine-month period ended September 30, 2025, organic sales growth was 3.1%, acquisition related growth of 0.8% and foreign currency translation had a positive 2.6% impact. Net earnings for the 2024 nine-month period included a $78.1 million non-cash revaluation gain in conjunction with the acquisition of the final 50% interest of Pacman-CCL in June 2024. Finally, for the nine-month period ended September 30, 2025, basic and adjusted basic earnings per Class B share(3) were $3.60 and $3.61, respectively, compared to basic and adjusted basic earnings per Class B share(3) of $3.72 and $3.30, respectively, in the prior year nine-month period. Foreign currency translation had a positive impact of $0.06 on adjusted basic earnings per Class B share(3).

Geoffrey T. Martin, President and Chief Executive Officer, commented, "Given the challenging geopolitical back drop and highly disrupted trade environment, I'm very pleased with our results for the third quarter of 2025. 3.7% organic sales growth and tight operational controls drove an 11.4% increase in Company operating income(1) on robust performance from our CCL Segment and continued improvement at Checkpoint. As expected, Avery and Innovia were impacted by tariff costs in the United States and start-up costs for the large new plant in Germany respectively. All-in, the Company posted $1.21 adjusted basic earnings per Class B share(3) for the quarter compared to $1.09 in the prior year period."

Mr. Martin stated, "The CCL Segment delivered strong 6.6% organic sales growth with substantial profitability gains. Home & Personal Care results increased on very strong sales growth for aluminum aerosols and bottles plus label sales strength in the Middle East and recovery in Asia, with improved profitability in all regions except Latin America on currency challenges. Healthcare results improved in most geographies, although notably excluding Canada where customers reduced exports to the United States; AgChem results were strong in the United States but soft in Europe. Modest Food & Beverage profitability gains were currency translation driven with underlying performance flat on slow end markets and new plant start-up costs. Solid demand and new business wins in electronics markets, particularly across Asia, alongside improved profitability in automotive despite slowing demand, drove significant gains for CCL Design. CCL Secure results also improved significantly, although compared to a weak prior year, on volume gains in polymer banknotes and passport components."

Mr. Martin continued, "Avery's results were modestly behind the 2024 third quarter as unplanned tariff costs and lower shipments of organization products for the back-to-school season impacted profitability. The direct-to-consumer channel continued to post sales and profitability gains in both North America and Europe. Checkpoint's improved results were driven by strong gains for MAS operations in Europe and Asia, more than offsetting lower North American profitability, somewhat impacted by unrecovered tariff cost. Apparel labeling results declined modestly compared to exceptional prior year performance as the global supply industry continues to rebalance tariff-related risk. RFID volume continued to grow, increasing significantly in September. Underlying results for Innovia were solid for the quarter, excluding startup costs at the new facility in Germany that drove the entire decline in profitability, as productivity gains in the U.K. and continued volume growth for EcoFloat in Poland more than offset lower demand in North America."

Mr. Martin added, "Foreign currency translation had a $0.02 positive impact on adjusted earnings per Class B share for the third quarter of 2025. At today's Canadian dollar exchange rates, currency translation impact would be a modest tailwind to earnings, if sustained, for the fourth quarter of 2025."

Mr. Martin concluded, "The Company delivered particularly strong free cash flow this quarter, finishing the period with a consolidated leverage ratio(5) of just 0.93 times Adjusted EBITDA(2), despite returning $467.9 million to shareholders in dividends and share repurchases under its Normal Course Issuer Bid in the first nine months of 2025. With $1,136.9 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. The Board of Directors declared the quarterly dividend at $0.32 per Class B non-voting share and $0.3175 per Class A voting share, payable to shareholders of record at the close of business on December 16, 2025, to be paid on December 30, 2025."

2025 Third Quarter Highlights

CCL

  • Sales increased 9.4% to $1,260.6 million on 6.6% organic growth and 2.8% positive impact from foreign currency translation

  • Regional organic sales growth: mid-single digit in Europe and North America, high-single digit in Asia Pacific (including the Middle East) and Latin America

  • Operating income(1) $216.3 million, up 20.7%, 17.2% operating margin(1) up 170 bps

  • Label joint ventures added $0.01 earnings per Class B share

Avery

  • Sales decreased 0.1% to $279.3 million due to 2.8% organic decline partially offset by 0.4% acquisition contribution and 2.3% positive impact from foreign currency translation

  • Operating income(1) $53.1 million, down 3.8%,19.0% operating margin(1), down 70 bps

Checkpoint

  • Sales increased 6.2% to $255.3 million on organic growth of 4.4% and 1.8% positive impact from foreign currency translation

  • Operating income(1) $38.8 million, up 5.7%, 15.2% operating margin(1), down 10 bps

Innovia

  • Sales declined 3.6% to $170.7 million due to 6.0% organic decline partly offset by 2.4% positive impact from foreign currency translation

  • Operating income(1) $13.6 million, down 23.6%, 8.0% operating margin(1), down 210 bps

The Company will hold a live webcast call at 7:30 a.m. ET on November 12, 2025, to discuss these results.

The quarterly results review presentation, including outlook commentary, is posted on the Company's website at https://www.cclind.com/investors/investor-presentations/

To access the webcast or webcast replay, please use the following webcast link:

https://www.webcaster5.com/Webcast/Page/2807/53088

To access the audio/listen only live webcast, please use the following numbers:

Toll Free: 1-877-545-0320
International: 1-973-528-0002
Conference Entry Code (CEC): 915492