US parent ramps up new product strategy.

 

ACCO Brands global CEO Tom Tedford (pictured) said the company is considering acquisitions in the wake of its improved financial position.

 

In the company’s third quarter 2024 earnings statement, Tedford pointed to ACCO’s “robust” cash flow (which, among other things, has enabled the vendor to reduce debt), lower leverage and refinanced credit facilities.

 

“We’re advancing our strategy as we continue to improve our innovation and new product development processes, expand into new points of distribution and extend our product offering into adjacent categories,” he stated.

 

He continued: “In addition, given our improved balance sheet and strong cash flow, we are able to consider potential acquisitions. These initiatives, combined with our $60 million multiyear cost reduction programme, are strengthening our competitive position.”

 

The vendor incurred US$6.7 million in restructuring expenses during the quarter and expects to achieve more than US$20 million in cost savings for 2024 as a whole. 

 

There were no surprises in ACCO’s third quarter results, which were in line with expectations, as the supplier maintained its previous full-year outlook. Tedford noted that overall sales trends had improved during Q3 compared with the first half of the year.

 

Company sales for the quarter were US$448 million, a comparable year-on-year decline of five per cent. The decrease reflected softer back-to-school purchases by customers in Latin America and North America, while the exit of some lower margin business in North America accounted for approximately 2% of the decline.

 

ACCO said global demand for certain office-related products was weaker, but it achieved growth in technology accessories categories.

 

ACCO Brands International

 

Comparable sales were US$159.8 million, down 2.3 per cent versus Q3 2023. Reduced demand for certain office products was partially offset by growth in the technology accessories categories and the benefit of price increases.

 

Adjusted operating profit was virtually flat at US$17.1 million as the benefit of cost reduction actions offset the impact of lower sales volumes.

 

Outlook

 

ACCO expects full-year revenue of between US$1.67-US$1.69 billion. This equates to a comparable sales decline of 8-9 per cent, in line with its previous guidance.

 

“As we approach year end and look ahead to next year, our cost reduction actions should allow us the ability to maintain our solid margins, contain expenses and generate strong cash flow,” Tedford said. 

 

For more on this story and other global news from OPI, go to https://www.opi.net/news/region/001-north-america/acco-acquisitions-on-t...