Sales increased for the quarter by 4 percent due to organic growth and acquisitions, while foreign exchange accounted for a reduction of 1 percent. CCL President Geoffrey T. Martin says that financial comparisons to the prior year’s second quarter results have been negatively affected by the significant depreciation of the US dollar (8 percent) and the UK pound (9 percent) but this was offset in part by the appreciation of the euro (7 percent). Also, he adds, business acquisitions in the label division have had a positive impact on the comparison to prior periods. For the year to date, sales decreased by 2 percent as a result of negative foreign exchange of 5 percent partially offset by organic growth and acquisitions of 3 percent.
“We are pleased with our earnings performance in CCL’s second quarter of 2008 in light of the economic turbulence in the United States, increasing uncertainty in parts of Europe and the impact of record high commodity and energy costs,” says Martin. “We have also been affected by unfavorable currency exchange and the loss of earnings from the sale late last year of the ColepCCL joint venture. However, our global businesses have held up very well under the circumstances and have delivered operating income that was 10 percent higher than last year’s record second quarter despite unfavorable currency.
“The label division, which now represents over 80 percent of our sales, continued to show good growth overall in both sales and operating income, especially outside of North America. Although we have experienced market weakness in our home and personal care business in both North America and parts of Europe, this has been more than offset by the strength of our global healthcare business, new products such as our patented wash-off labels for glass beverage bottles and geographic expansions into emerging markets with higher growth profiles. We are particularly pleased with the CD-Design business in Germany, which was acquired in January. Results from the first quarter of reporting from the Clear Image Australian wine label acquisition were also solid.”