CCL Industries Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ahmed Abdullah - National Bank of Canada - Analyst : Yeah, hi, good morning. Thank you for taking my question and congrats on this strong quarter. Just touching on that tariff slide and your comments around competitive advantage as customers reconsider supply chains, can you give us a bit more color? Are these conversations already happening? Do you foresee significant market share gain there because of that?

Question: Ahmed Abdullah - National Bank of Canada - Analyst : Okay, thanks. And given the backdrop of tariffs and some cost pressures that are obviously yet to come as a result of that, how much of the segments of CCL segments growth this year do you see coming from pricing?

Question: Ahmed Abdullah - National Bank of Canada - Analyst : Okay, that's fair. And just one last one for me. In some instances, there's been complexity in implementing tariffs. Do you see an opportunity there in leveraging RFID solutions or other logistics or verification solutions that you have, as the CPP tries to formulate how to apply tariffs? Is that is that a possible tailwind? Okay, I'll get back in case. Thank you.

Question: Hamir Patel - CIBC Capital Markets - Analyst : Hi, good morning, Geoff. For your main CCL segment. I know you said orders have been solid quarter to date, but would you expect a slower year to year level of growth from the 4.5% that you printed in Q1 just given, just thinking about the tough 9% organic comps you had in Q2 a year ago?

Question: Hamir Patel - CIBC Capital Markets - Analyst : Fair enough. And just want to think about the M&A environment and the pipeline. Have you seen, any sort of change in vendor expectations and would you expect to be able to sustain the same pace of tuck in M&A that you did last year in '25?

Question: Hamir Patel - CIBC Capital Markets - Analyst : Okay, fair enough. Thanks, it's all ahead. I'll turn over.

Question: Sean Stewart - TD Cowen - Analyst : Thanks. Good morning, everyone. Geof, a question on the checkpoint organic sales growth, which slowed down this quarter. How much of that was tied to the North American MAS products tariff fallout? And can you give us some more specifics on the mitigation initiatives you've talked about to address that particular issue?

Question: Sean Stewart - TD Cowen - Analyst : And the mitigation initiatives around the China supply. How does that take to play it?

Question: Sean Stewart - TD Cowen - Analyst : Okay, thanks for that. And question for Sean. The seasonal increase in working cap was a little larger than we would normally expect. Should we just chalk that up to the broader macro environment and how should we think about the cadence of that unwind going forward through the rest of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 11:30AM, CCLb.TO - Q1 2025 CCL Industries Inc Earnings Call

Question: Sean Stewart - TD Cowen - Analyst : Understood. Okay, that's all I have for now. Thanks, guys.

Question: Stephen MacLeod - BMO Capital Markets - Analyst : Thank you. Good morning, guys. Geoff, just on the outlook side as it relates particularly to the CCL segment. In past quarters, you've had kind of the breakdown of the, of some of the moving parts on the components in the CCL segment. I was just wondering if you can provide that color for the Q2 outlook.

Question: Stephen MacLeod - BMO Capital Markets - Analyst : Okay, that's helpful. Thank you. And then just on the ALS business, I was just wondering if you give a little bit of color around, the RFID growth within that business and then secondly, with the, for the new plant you have in Vietnam, are you seeing increased demand from apparel suppliers, apparel manufacturers exiting China for that increased demand level because of that phenomenon?

Question: Stephen MacLeod - BMO Capital Markets - Analyst : Right, okay, that's great. And then maybe just finally for Sean, just on the DNA it was a little bit higher step up in Q1 from Q4 and I'm just wondering if that's a new run rate?

Question: Stephen MacLeod - BMO Capital Markets - Analyst : Right, okay. That's great, that's helpful, thanks guys appreciate it.

Question: Daryl Young - Stifel Nicolaus Canada Inc. - Analyst : Hey, good morning, everyone. Just wanted to follow up a little bit on Stephen's question and maybe with respect to your facility development plans over the last 18 to 24 months you've had a pretty good pipeline. Are you hitting pause on new facility development or shifting the geography you want to be in as a function of what's happening today in the tariff environment?

Question: Daryl Young - Stifel Nicolaus Canada Inc. - Analyst : Gotcha. Okay. And then in terms of CCL secure, with the recent completion of the acquisition of your competitor in that market, is there any shifting market dynamics or opportunities that might come from that or anything that we should be thinking about going forward on the money printing side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 11:30AM, CCLb.TO - Q1 2025 CCL Industries Inc Earnings Call

Question: Daryl Young - Stifel Nicolaus Canada Inc. - Analyst : Okay, and then just one last one on Innovia and the profitability, obviously very strong on the facility rationalization, but is there any changes in the commodity price and resins and what might be happening in that market that's a benefit as well?

Question: Daryl Young - Stifel Nicolaus Canada Inc. - Analyst : So an operating leverage impact in North America?

Question: Daryl Young - Stifel Nicolaus Canada Inc. - Analyst : Great. Thanks very much for your time.

Question: Arthur Nagorny - RBC Dominion Securities Inc. - Analyst : Hey, good morning. Just maybe starting with the checkpoint segment. It sounds like your RFID facilities in China and Mexico don't have direct exposure to tariffs. But are you seeing any indirect impacts, in that business, or are things relatively unchanged so far?

Question: Arthur Nagorny - RBC Dominion Securities Inc. - Analyst : That's helpful. And I think you quantified your tariff exposure and MAS within Checkpoint. Can you maybe help quantify your China sourcing exposure with Avery as well?

Question: Arthur Nagorny - RBC Dominion Securities Inc. - Analyst : I think that's helpful. And then I think within CCL design you called out, slowing auto markets, and I was just wondering what you're seeing kind of globally and how you expect to navigate the current environment.

Question: Arthur Nagorny - RBC Dominion Securities Inc. - Analyst : Okay, and then last question for me, just wanted to touch on the eco float line, in Poland, just wondering how that's coming online, and, when you expect to hit sort of full run rate, in that facility?

Question: Arthur Nagorny - RBC Dominion Securities Inc. - Analyst : Alright, that's all for me. Thank you for the time.

Question: Ahmed Abdullah - National Bank of Canada - Analyst : Yeah, hi, this one's for Sean. The Belgium facility is up for sale, and it's anticipated to happen in 2025. Should we expect an EBITDA bump in one of the quarters like what happened in the third quarter of '22 when you sold excess China real estate?

Question: Ahmed Abdullah - National Bank of Canada - Analyst : That's it for me. Thank you very much.