Details of the full report are as follows:
Operating income for 2013 was $252.2 million, an improvement of 41.4% compared to $178.4 million for 2012. Included in the 2013 results was a $16.7 million non-cash acquisition accounting adjustment to fair value the acquired Avery Dennison finished goods inventory expensed in the Company's cost of goods sold. Excluding this adjustment, operating income was $268.9 million for the year ended December 31, 2013, an improvement of 50.7% compared to the prior year.
Earnings before net finance cost, taxes, earnings in equity accounted investments, depreciation and amortization, non-cash acquisition accounting adjustments to inventory and restructuring and other items ("EBITDA"; a non-IFRS measure; see note 1 below) was $355.6 million for 2013, an increase of 39.7% compared to $254.6 million for 2012. Excluding the impact of foreign currency translation, EBITDA increased by 36.2% over the prior year.
Net finance cost for the year increased $4.7 million to $25.6 million for 2013 compared to $20.9 million for 2012 due to the new debt required to finance the Avery Dennison acquisition.
The Company's joint ventures contributed $1.9 million in equity earnings including start-up costs for new plants in Saudi Arabia, Russia, and Thailand compared to $2.2 million in 2012. Results in Russia were negatively impacted by the devaluation of the ruble to the euro including a non-cash equity accounting adjustment.
Net earnings for 2013 increased 6.3% to $103.6 million, compared to $97.5 million for 2012. This resulted in basic and diluted earnings per Class B share of $3.04 and $2.99, respectively, for 2013 compared to basic and diluted earnings per Class B share of $2.91 and $2.86, respectively, for 2012.
Highlights of the fourth quarter include:
- Sales for the fourth quarter of 2013 increased 77.9% to $557.7 million, compared to $313.5 million for the fourth quarter of 2012, with 4.1% organic growth, 5.6% positive currency translation and the balance from the Avery Dennison and INT acquisitions.
- Operating income for the fourth quarter of 2013 was $72.2 million, an increase of 87.0% compared to $38.6 million for the comparable quarter of 2012. The Label Segment posted a 22.0% increase in operating income while the Container Segment posted a 76.5% increase in operating income for the comparable quarters. The Avery Segment posted a solid fourth quarter exceeding management's expectations.
- EBITDA was $96.1 million for the fourth quarter of 2013, an increase of 66.6% compared to $57.7 million for the fourth quarter of 2012, driven principally by aforementioned acquisitions. EBITDA improved 60.2% excluding the impact of currency translation.
- The Company's joint ventures contributed equity earnings of $0.8 million compared to $1.1 million for the 2012 fourth quarter, with the current period including start-up costs in Thailand and Saudi Arabia. Russia was negatively impacted by the declining ruble to the euro including a non-cash equity accounting adjustment.
- Net earnings for the 2013 fourth quarter were $19.5 million, compared to $19.9 million for the fourth quarter of 2012. Basic earnings per Class B share were $0.58 in the fourth quarter of 2013 compared to $0.59 per Class B share in the prior year quarter.
Geoffrey T. Martin, president and CEO commented on the report, saying, "The 2013 fourth quarter was yet another strong operating period for CCL; our thirteenth consecutive quarter of year-over-year improvement in adjusted earnings per share. Our recently acquired businesses performed well, including the new Avery Segment that notably exceeded expectations for the quarter. The comparative devaluation of the Canadian dollar against many currencies added six cents earnings per share from translation for the fourth quarter of this year; partially offset by transaction issues as certain countries were affected by local currency devaluations to the U.S. dollar and the euro."
Martin continued, "CCL Label sales increased 33% driven by acquisitions, good organic growth outside North America and positive currency translation. Legacy North American sales declined low single digits due to slow sales at many consumer customers but offset by another strong quarter at the acquired Avery Dennison Designed & Engineered Solutions business in a robust automotive market. Europe continued to improve, with solid sales and significant profitability gains across all lines of business including INT. Latin America and Asia Pacific both posted strong double digit sales growth and above average returns, although Brazil was significantly impacted by the decline of the real. Our joint ventures delivered solid underlying results held in check by start-up costs at new operations in Saudi Arabia and Thailand. Overall profitability improved appreciably for both the quarter and the year."