CCL Industries to Optimize Innovia Films' Global Capacity

TORONTO, ON / ACCESSWIRE / December 18, 2023 / CCL Industries Inc. ("the Company") (TSX:CCL.A)(TSX:CCL.B), a world leader in specialty label, security and packaging solutions for global corporations, government institutions, small businesses and consumers, announced today that it intends to permanently close its Innovia operation in Merelbeke, Belgium over the course of the 2024 first quarter.

Innovia will consolidate all "bubble film" volume into its U.K. and Australian operations, targeting $17 to $20 million of incremental operating income annually once the closure is complete. In the fourth quarter of 2023, the Company expects to record a one-time pre-tax restructuring charge to include both the closure cash costs, largely employee severance accruals in the range of $25 to $30 million and an estimated non-cash, goodwill impairment expense of approximately $120 million for Innovia.

Geoffrey T. Martin, President and Chief Executive Officer, commented, "Our operation in Belgium is a smaller two bubble line plant using older equipment with the highest cost to serve in our global network. Given the softer post-Covid demand environment, it is essential we optimize existing capacity for the future, while enhancing financial performance for 2024. Additionally, planned new technology investments in Germany and Mexico, plus the impact of building Ecofloat volume in Poland, should drive further gains in our operational effectiveness and profitability in 2025 and beyond."

Mr. Martin concluded, "We are very grateful for the many years of contribution from our people in Belgium and appreciate their understanding, professionalism and timely engagement as we collaborated on the final closure arrangement."

Forward-Looking Statements

This press release contains forward-looking information and forward-looking statements (hereinafter collectively referred to as "forward-looking statements"), as defined under applicable securities laws, that involve a number of risks and uncertainties. Forward-looking statements include all statements that are predictive in nature or depend on future events or conditions. Forward-looking statements are typically identified by the words "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of the Company, other than statements of historical fact, are forward-looking statements. Specifically, this press release contains forward looking statement regarding estimated incremental annual operating income of $17 to $20 million for 2024 and beyond; one-time restructuring charges, predominantly for severance expenses will be between $25 to $30 million; estimated goodwill impairment charges will be approximately $120 million; and further developments in Germany and Mexico as well as Ecofloat will lead to future profit improvements in 2025 and beyond.