Continued Headwinds For ACCO
Trends seen in the third quarter continued to drag on ACCO Brands’ Q4 results.
Sales in the fourth quarter were $529.3 million, a comparable year-on-year decline of 4.6%. US sales fell by more than 9%. Adjusted operating profit for the quarter was down 17% to $70.1 million, while net profit dropped 19% to $42.9 million.
“While 2018 did not live up to our expectations, we generated strong cash flow and delivered terrific results in Brazil, Canada and across EMEA,” said CEO Boris Elisman.
“In the US, we are taking aggressive actions to offset sales and margin pressures from commercial customer consolidation. While we expect the environment to remain a challenge in 2019, we believe we are well positioned to improve our profit and cash flow. We can execute on our strategy, and increase shareholder value.”
Q4 business segment highlights:
ACCO Brands North America
Sales were $228.9 million, a currency-adjusted decrease of 9.2%. Pricing added 2.5%. The decreases were primarily due to lower sales to a US office wholesaler and reduced sales of calendar products.
Adjusted operating profit of $31.6 million represented a 31.6% decline from the prior-year quarter. P
The company implemented price increases in the US in October 2018. The first quarter of 2019, will hopefully fully offset current inflation, including tariffs.
ACCO Brands EMEA
Sales were $167.1 million, a comparable decline of 1.7%, primarily driven by the insolvency of European wholesaler ADVEO.
Adjusted operating profit of $23 million decreased 8% from the prior-year period due to lower sales and higher transportation and material costs. These are partially offset by synergy savings for the integration of the Esselte business.
ACCO Brands International
Sales of $133.3 million, approximately flat on a comparable basis because of strong sales growth in Brazil is offset by declines in Mexico and Australia.
Adjusted operating profit of $24.3 million decreased 5.4%, due to adverse foreign currency.