Boris Elisman: 2022 started well. There was a lot of optimism about an economic recovery, a strong back-to-school in North America and people returning to work globally. We saw that in our numbers and had a very strong first half.
Then, a couple of things drove a change in sentiment. One was the war in Ukraine. By late Q2, the world realised this was going to have a longer-term impact on us all and we saw that with high energy and food inflation, especially in Europe.
In the US, the Federal Reserve realised inflation was not temporary and became hawkish, talking up interest rates. This convinced the CEOs of the world we were heading into a recession, which led to them becoming much more cautious as regards investments – whether that be inventory, capital or people.
The biggest issue for us overall was certainly inflation globally, but it was especially high in Europe, driven by energy prices. Even though we had several price increases, we were not able to keep up with higher input costs.
This is the big challenge for ACCO Brands this year. On 1 January 2023, we implemented a price increase almost globally and we believe this will largely restore margins to where they need to be. As things currently stand, we don’t anticipate needing to raise prices again in the US and Europe in 2023.
In terms of M&A, we will continue to look because you never know what opportunities come up, and the timing of these things. However, I certainly don’t believe there will be any near-term deals, given our priority of paying down debt.
Listen to the OPI Talk podcast with Boris Elisman
Walter Johnsen: I was so glad to see the back of 2022 – every day, there seemed to be more crises and challenges. We had one vessel coming into Baltimore, Maryland, that got stuck in the mud for six weeks. How do you plan for this? Our customers needed product and it was there, sitting in the mud!
We tried to keep our price increases reasonable in light of the problems which were happening. It’s evident, however, with our loss in the fourth quarter, that we didn’t keep up with the costs that we incurred. But I believe we gave our customers timely deliveries at a fair price. Ultimately, that’s an investment in the future.
For the past six months, we have been integrating the acquisitions of 2022 into our organisation. There has been a lot going on behind the scenes you don’t see, but which is very important. This eventually squeezes out cost and, hopefully, gives Acme United a growth propellant.
Depending on what the economy is like and where we are as a company, I think in the back half of the year, we will be in a position to [make another acquisition].
Listen to the OPI Talk podcast with Walter Johnsen