Cost reductions help ACCO’s Q4 results

Lake Zurich (IL), USA. ACCO has reported an improvement in adjusted operating profit for the fourth quarter, but still faces stiff challenges in North America and in its Computer Products division.

Q4 adjusted operating income at ACCO was $79 million, a 6% improvement compared to the same quarter in 2012, as cost synergies from the Mead integration and productivity improvements more than offset the impact of lower sales.

Sales for the quarter were $529.7 million, a 2% decline on a constant currency basis versus Q4 2012, with decreases in North America and Computer Products partially offset by a 6.5% increase at the International division.

For the full year, sales came in at $1.77 billion, a comparable decline of 5.2%, in line with ACCO’s preliminary earnings release in January.

Adjusted operating profit for the year was $180.3 million, an improvement of 5% on 2012.

Q4 business segment highlights

North America

  • sales of $269.6 million, a 6% constant-currency decline
  • a quarter of the decline was attributed to planned exits, with the rest due to soft demand and market-share losses
  • a 10% increase in operating profit to $36.6 million, thanks to Mead cost synergies and productivity improvements


International

  • sales of $188.3 million, a 6.5% constant-currency increase (although most of that was due to price, rather than an uptick in demand)
  • growth in all international markets, with the strongest performance in Brazil, up 10%
  • 17% increase in adjusted operating profit to $35.4 million


Computer Products

  • sales of $45.8 million, a 12.3% drop in local currencies
  • two-thirds of the decline was due to the tablet and smartphone categories
  • adjusted operating profit down about 50% to $5.4 million


More details shortly on ACCO’s strategy following our analysis of today’s earnings conference call.