There were no surprises in ACCO Brands’ third quarter 2022 results following the update the company had provided a few weeks ago.
In that trading statement, the office products supplier had reduced its sales and earnings outlook for Q3 and the full year, citing macroeconomic challenges such as high inflation and the energy crisis in Europe.
Commenting further in the Q3 results press release, ACCO CEO Boris Elisman said: “In Europe, the current energy crisis and significant inflation have created a more challenging macroeconomic environment, impacting sales and profits in our EMEA segment. To offset the near-term macroeconomic challenges, we have implemented cost savings and pricing actions.”
Third quarter results:
Sales declined by 7.8% as reported to $485.6 million (£426 million). Adjusted for currency, the decrease was 2.1%. Lower inventory replenishment by retailers and a soft demand environment in many countries – especially in Europe – more than offset global price increases and strong volume growth in the International division.
ACCO Brands EMEA:
Sales declined by a reported 19.1% to $130.3 million. Excluding the $24.1 million hit from weaker European currencies, the decrease was 4.1%.
Lower volumes more than offset price increases, while the energy crisis in Europe and “significant” inflation have created a more challenging macroeconomic environment that has impacted sales.
Adjusted operating profit was $7.4 million, down from $17.3 million in 2021, while adjusted operating margin slipped by 500 basis points to 5.7%.
Company revenue for the January-September period was $1.45 billion, representing a comparable increase of 4.2%. The benefit of higher prices in all segments and strong volume growth in the International business were partially offset by lower volumes in EMEA and North America.
Adjusted operating profit fell by 17% to $123.5 million.
Elisman concluded: “We remain confident in our strategy and that the solid fundamentals of our overall business have us well positioned for long-term profitable growth. The company is well-capitalised and generates robust free cash flow, which will enable us to successfully navigate the current economic environment. Our strategic transformation plan to be a more consumer-, brand-, and technology-centric company remains on track.”
ACCO reaffirmed its full-year 2022 outlook, with comparable net sales growth expected to be flat to up 2% and reported sales forecast to come in just below $2 billion.