CCL Industries (TSE:CCL.A) reported fourth-quarter and full-year 2025 results that management described as a record year-end performance, with higher sales and operating income and a sharp increase in free cash flow. President and CEO Jeff Martin and CFO Sean Waszczuk also outlined shareholder return plans, balance sheet positioning, and early 2026 demand trends across the company’s segments.
Fourth-quarter results: modest organic growth, higher taxes weigh on net earnings
For the fourth quarter of 2025, CCL said sales increased 3.5% to almost $1.9 billion, up from roughly $1.8 billion a year earlier. The company broke out the growth as 0.6% organic growth, 0.2% acquisition-related growth, and a 2.7% positive impact from foreign currency translation.
Net earnings declined year over year to $171.1 million from $179.8 million. Waszczuk attributed the quarter’s higher effective tax rate to withholding taxes, noting the effective tax rate rose to 28.5% from 22.9% in the fourth quarter of 2024, resulting in a $10.1 million increase in tax expense between the comparative quarters. Net finance expense improved to $17.2 million from $19.1 million, which the company attributed to higher finance income earned on cash and cash equivalents.
Basic and adjusted basic earnings per Class B share were $0.99 and $1.03, respectively, compared with $1.01 basic and $1.02 adjusted basic in the prior-year quarter. Management said adjusted EPS increased $0.01 year over year, helped by improved operating income, favorable currency translation, and reduced net finance costs, partially offset by lower joint venture equity earnings and a higher tax rate.
Full-year 2025: operating gains and record free cash flow
For the year ended December 31, 2025, CCL said sales and operating income increased 3% and 6%, respectively, excluding the impact of foreign currency translation. The company noted that 2025 results included contributions from three acquisitions completed since January 1, 2024, with acquisition-related sales growth of 0.7%, organic growth of 2.5%, and foreign currency translation providing a 2.6% tailwind to sales.
Management highlighted that net income comparisons were affected by a $78.1 million non-cash revaluation gain recorded in the second quarter of 2024. Excluding that gain, the company said adjusted net income increased 5.3% in 2025.
Free cash flow from operations was a central theme in the update. In the fourth quarter, free cash flow from operations rose to $292.8 million from $261.7 million, driven primarily by improved net working capital, partially offset by higher net capital expenditures. For the full year, free cash flow from operations reached a record $891.3 million, up 47% from $606.5 million in 2024, reflecting improved adjusted earnings and working capital improvements.
Shareholder returns: dividend increase and an expanded repurchase program
CCL said it repurchased approximately 3.9 million shares for $300 million during 2025. Including dividends paid of $223.7 million, the company returned $523.7 million to shareholders for the year. Management also referenced dividend actions in both 2025 and 2026, noting the company announced a 10.3% increase in the 2025 annual dividend (announced in February 2025) and a 12.5% increase in the 2026 annual dividend (announced in the company’s fourth-quarter press release).
On the buyback front, management said the company modified its normal course issuer bid from a discretionary buyback to an automatic share repurchase plan and is authorized to potentially spend up to $1.2 billion over the next 12 months. In the Q&A, Martin said the company’s objective is to be in the market purchasing shares every day, with the share price influencing how much is purchased over time.
When asked about alternatives such as a special dividend, Martin said the company has reviewed that option in the past and concluded—after consultation with some shareholders—that buybacks are the preferred approach.
Balance sheet and capital spending plans
Net debt at December 31, 2025 was $1.26 billion, down $356.9 million from a year earlier, driven by lower total debt outstanding and higher cash and cash equivalents. The company reported a leverage ratio of 0.78 times at year-end 2025, down from 1.08 times at the end of 2024. Liquidity included almost $1 billion of cash on hand and approximately $1.1 billion undrawn on its revolving credit facility.
During the fourth quarter, CCL amended its syndicated revolving credit facility to extend the maturity to November 2030. The company’s overall finance rate was approximately 2.5% at December 31, 2025, slightly below 2.6% a year earlier.
On capital spending, Martin said 2025 gross capital spending was $441 million ($430 million net), noting it was “mainly the disposal of the building for Innovia in Belgium.” The company is estimating approximately $470 million in capital spending in 2026. In the Q&A, management indicated investors should expect capital expenditures to be around 5% to 6% of sales, varying with project timing.
Segment commentary and 2026 outlook themes
Martin outlined mixed performance across segments:
- CCL segment: Martin cited “solid” fourth-quarter organic growth of 3.6%, with low single-digit growth in North America, mid-single-digit growth in Europe, and double-digit growth in Asia Pacific (including the Middle East), partly offset by a modest decline in Latin America. Profitability gains were described as very strong at CCL Design, solid at healthcare and specialty, and down in some consumer categories such as home and personal care and food and beverage. He said CCL Secure profits were “halved” versus a strong fourth quarter of 2024 due to shipment timing. In the Q&A, Martin said he expects low- to mid-single-digit growth in the CCL segment in 2026, while noting the first quarter could be more challenging due to snow-related disruptions in the U.S., particularly around organizing freight shipments.
- Avery: Management called it a “very good quarter,” driven by a very strong direct-to-consumer business in North America and solid international performance, with progress in horticulture. In the Q&A, Martin attributed the strength to growth in print-label offerings for small businesses and consumers, as well as items such as conference badges, alongside seasonality in slower legacy product lines that shifted mix toward growth categories.
- Checkpoint: Martin said MAS delivered another strong profit quarter in Europe and Asia but was weak in North America amid tariff impacts from China and a slow Christmas season. Apparel labeling profitability improved, though sales remained soft, with Paris-related disruption cited in the apparel supply chain and continued inventory caution. Management said order intake improved so far in the first quarter of 2026. On RFID, Martin said the overall industry did not grow in 2025 and that total industry shipments were below 2024 levels. He said CCL grew in RFID during 2025 and expects to grow again in 2026, “hopefully in double digits,” with improvement tied to normalization in apparel inventory and new applications outside apparel. He also noted the company’s Mexico facility remains in start-up mode and is supporting Walmart’s general merchandise RFID initiative.
- Innovia: Sales declined due to lower resin cost pass-through and volume declines in slow consumer markets. Martin highlighted share gains in EcoFloat and in-mold label films (predominantly made in Poland) and said the company incurred about $4 million in startup costs at a new German plant, which management expects to improve as 2026 progresses. In the Q&A, Martin emphasized Innovia is a pass-through business where margins are less meaningful than absolute operating income or EBITDA dollars, and he said the company is planning for improvements in 2026 versus 2025.
Looking to 2026, management said overall CCL segment orders remain stable, Avery is expected to be stable, and Checkpoint’s ALS and RFID businesses are expected to strengthen driven by improving orders. Martin added that foreign exchange is expected to be a modest tailwind and noted Innovia faces more challenging comparisons in the first half of the year than in the second half.
On other financial items, Waszczuk told analysts the company expects a smoother tax year in 2026 and estimated an annual effective tax rate of around 25%.
About CCL Industries (TSE:CCL.A)
CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments, which include The CCL segment, which generates the majority of revenue, sells pressure sensitive and extruded film materials used for labels on consumer packaging, healthcare, automotive, and consumer durable products. The Avery segment sells software, labels, tags, dividers, badges, and specialty card products under the Avery brand. The Checkpoint segment includes the manufacturing and selling of technology-driven, inventory management and labeling solutions.
