Elisman seeing green shoots

ACCO chief Boris Elisman sees the positive side and targets return to growth.


OPI spoke exclusively with ACCO CEO Boris Elisman following the company’s second quarter results at the end of July. It was a quarter of contrasting fortunes for ACCO’s three reporting divisions – North America, International and Computer Products Group (CPG) – with CPG reporting an eye-catching 17% drop in year-on-year sales.

Elisman admitted that this was a very volatile category and sales had been hit by the lack of a major tablet or smartphone release during the quarter and continued pressures in the PC and laptop categories. Hopefully that will change in the second half of the year with Apple expected to launch new versions of the iPhone and iPad shortly. ACCO is also increasing the number of products designed for Android devices, while it has changed its go-to-market models in Canada and Japan in order to drive more CPG sales.

While CPG (essentially the Kensington brand) still represents only around 10% of ACCO’s total sales, Elisman said that it was a key component of the company’s growth strategy, especially in terms of mobility products which now account for about a third of CPG’s sales, and he is expecting the division to return to double-digit growth in the medium term and for operating margins to stabilise in the mid-teens.

Of course, the same growth goals can’t be expected of other ACCO product categories which have been experiencing structural declines due to the digitisation of the workplace. “This is something that has been with us for many years and is nothing new for us,” stated Elisman. “There are categories in secular decline and categories that are growing. The trick is to harvest the categories in decline and manage them for profitability and invest in new growth categories to overcome the secular declines. For all of us in the office products industry today, that is the biggest challenge.”

Critical mass

ACCO is also reducing its dependence on the traditional office superstore channel. The mass market, including the drug-store chains, is now ACCO’s largest channel with around 31% of sales, and Elisman believes there is still room to improve, especially by offering a range of products across all different price points.

One of the reasons for the Mead acquisition last year was the possibility of achieving cross-selling synergies, including in the mass channel, and ACCO is on target to achieve $20 million in sales growth from this in 2013. That, admits Elisman, is a modest figure, but has the potential to be hundreds of millions of dollars in the long term. “It’s a slow process in a competitive marketplace,” he stated. “No-one is abdicating their positions to us, and we have to go out and win business.”

Successes so far include the shipment of Mead-branded products into the Middle East and North African markets and the introduction of ACCO products in Brazil, the market where ACCO believes it has the biggest opportunity.

The Mead integration has been “more or less completed” in the US, Elisman noted, but he confirmed that ACCO would be consolidating its Canadian operations into one facility in the second half of this year. Overall, the Mead integration is on track to be completed by the end of 2013.

Elisman wouldn’t be drawn on whether ACCO will actively look to make further acquisitions once the Mead integration has been completed, but it wouldn’t be a surprise. “Consolidation will continue on the vendor side,” he forecast. “I can’t predict the pace of that, but it’s a tough market and you will have other manufacturers that will exit this space.” 

ACCO Q2 results in brief:


  • Total company: $440 million (-5.3%)
  • North America: $287 million (-5.3%)
  • International: $116 million (-0.4%)
  • Computer Products Group: $37 million (-17%)
  • Gross profit margin: 31.1% (+1.1%)
  • Operating profit: 45.7 million (+0.7%) 
  • Pre-tax profit: $33.5 million (+11%)
  • Pro forma/adjusted v Q2 2012