CCL Industries Inc.

Thank you, Crystal. Just before we begin, I’ll draw everyone’s attention to Page 2 of our presentation, our disclaimer regarding forward-looking statements.

I’ll remind everyone that our business faces known and unknown risks and opportunities. For further details of these key risks, please take a look at our 2019 annual MD&A or in our quarterly MD&As for updates, particularly the section Risks and Uncertainties.

Our annual and quarterly reports can be found online at the company’s website cclind.com or on sedar.com. Geoff?

Thank you, Sean and good morning everybody. Very happy to be here this morning reporting record quarterly results for the company, not a situation we expected to be in, in the depths of despair we were all in, in April and May this year, in the middle of the worst of the pandemic, but we are now where we are.

So I’d like to take this opportunity to thank all CCL employees throughout the world for the monumental efforts they’ve put on to post these numbers. And Sean is now going to take you through them point by point.

Thank you, Jeff. Moving to Slide 3, for the third quarter of 2020, sales increased 1.2%, including the 1.5% positive impact of currency translation, 2.2% acquisition-related sales growth partially offset by a consolidated organic decline of 2.5%, resulting in sales of $1.37 billion compared to $1.36 billion in the third quarter of 2019.

Operating income increased 16%, excluding currency translation, to $246.3 million for the 2020 third quarter compared to $209.8 million for the third quarter of 2019. Importantly, operating income increased almost 51% sequentially from the second quarter of this year when the full impact of the COVID-19 initially took hold globally.

Jeff will expand on the segmented operating results of our CCL Avery, Checkpoint and Innovia segments momentarily. Included in the third quarter results was a $5.8 million reduction in corporate expenses due to decreases in short-term and long-term variable compensation expenses for the comparable periods.

Consolidated EBITDA for the 2020 third quarter excluded the impact of foreign currency translation, increased approximately 16% compared to the same period in 2019. Net finance expense was $16.4 million for the third quarter of 2020 compared to $19.5 million for the 2019 third quarter.

The decrease in net finance costs is attributed to lower average interest rates and lower average debt outstanding for the comparable periods. The overall effective tax rate was 25.1% for the 2020 third quarter, less than the 25.7% effective tax rate recorded in the third quarter of 2019.

The effective tax rate may change in future periods, depending on where the taxable income is earned. Net earnings for the 2020 third quarter, was $153.3 million, up 17.6% excluding foreign currency translation compared to $127.7 million for the 2019 third quarter.

For the 9-month period, sales declined 4.1%, operating income declined 0.8% and net earnings increased 2.5% compared to the 9-month period in 2019. 2020 included results from 13 acquisitions completed since January 1, 2019, delivering acquisition-related sales growth for the period of 1.8%, organic sales decline of 5.9% and foreign currency translation tailwind of 0.3% to sales.

Moving to Slide 4, earnings per share. Basic earnings per Class B share increased 21.1% to $0.86 for the third quarter of 2020 compared to $0.71 for the third quarter of 2019.

Net loss from restructuring and other items amounted to $0.07 for the 2020 third quarter compared to $0.01 in the 2019 third quarter. I will get into these details momentarily.

Adjusted basic earnings per Class B share were a record $0.93, up 29.2% compared to adjusted basic earnings per Class B share of $0.72 for the third quarter of 2019. This record adjusted basic earnings per class B share of $0.93 exceeds the previous record of $0.83 posted in the fourth quarter of 2017.

The increase in adjusted basic EPS to $0.93 is primarily attributable to an increase in operating income of $0.13, a decline in corporate and interest expenses, et cetera, for $0.02. Equity earnings and tax changes each accounted for $0.01.

The 2020 9-month period, $0.12 improvement in adjusted basic earnings per Class B share was principally attributable to a decrease in corporate expenses, net interest expense amount, partially offset by a reduction in operating income that resulted in adjusted basic earnings per share of $2.24 for the 2020 9-month period compared to $2.12 for the 2019 9-month period. Moving to Slide 5, the restructuring and other items.

These included an additional accrual of $9.4 million for a long-standing legal matter that was settled during the quarter. It also included $6.8 million of restructuring that is expected to generate $18 million annually.

This is largely at the Avery and Checkpoint segments. These two items amounted to the $0.07 adjustment to earnings per Class B share.

There will be modest restructuring in the upcoming fourth quarter. Moving to Slide 6, free cash flow from operations.

For the third quarter of 2020, free cash flow from operations improved $45.1 million compared to the third quarter of 2019. The improvement can be primarily attributed to improved operating income and a decline in capital spending for the comparative quarters.

For the last 12 months ended September 30, 2020, free cash flow from operations improved $140.3 million, compared to the last 12 months ended September 30, 2019. This comparative improvement is attributable to a change in working capital and reduced capital spending for the comparable periods.

Moving to Slide 7, net debt as of September 30, 2020, was $1.65 billion, a decrease of approximately $65 million compared to December 31, 2019. This decrease is primarily due to an increase in cash and cash equivalents, which is attributable to an improvement in free cash flow.

The company’s balance sheet closed the quarter in a strong position. Our balance sheet leverage ratio was approximately 1.51x, declining from 1.9x at the end of the first quarter 2020.

Liquidity was robust, with $760.2 million of cash on hand and an additional $1.2 billion of available and un-drawn capacity on our revolving credit facility. Furthermore, the company does not have any significant debt maturities until its term loan comes due in 2022.

The company’s overall average finance rate was 2.1% at September 30, 2020, lower than the 2.3% average finance rate at December 31, 2019 due to a decrease in interest rates on the company’s variable drawn debt. In absence of any significant acquisitions, management expects to continue de-leveraging the company’s balance sheet through the final quarter of 2020.

Geoff, over to you.

Thank you, Sean. And we are now on Page 8 highlights of capital spending.

We look like coming in about $290 million for the year. Slightly below annual depreciation and amortization and about $60 million under our original $350 million budget for the year.

Moving to Slide 9, results for CCL. Best quarter we’ve had in this part of the company for quite some time, 4.2% organic sales growth, which is very good to see.

Regionally, that was up in the low single digits in North America, mid-single digits in Europe. Latin America was up double digits, although a lot of that was eaten away by inflation, a modest decline in Asia-Pacific, which was really driven by Australia and South Africa.

Asia itself was up like Europe mid single-digits. The profit gains really were led by CCL Secure and Home & Personal Care.

In CCL Secure, we benefited from the run on cash in many central banks around the world during the pandemic. Slightly counterintuitive, I know, but it is the case.

So that’s benefited us for sure. And we had very good results in with all the moves in the HPC companies to add cleansers and hand sanitizers to their product range.

Our Healthcare & Specialty business continues to do well as did CCL design, and that improved significantly on an automotive rebound, which was much faster and much quicker than we expected it to be. So we are very pleased to see that.

Food & Beverage profits were also up modestly, but on-premise demand for a lot of our customers remains curtailed. Moving on to Slide 10, results of our two joint ventures.

Now as two label businesses left in this slide on the P&L, one in Russia, one in the Middle East, both had exceptional quarters in Q3 despite many challenges in Russia with the devaluation of the Ruble, we still had excellent results there. Slide 11, results for Avery, mixed story here.

Our direct-to-consumer business was strong in labels, but that was more than offset by very steep declines in badges. A lot of the badge business we do in this part of Avery is driven by events, so sports events, business conventions, rock concerts and the like.

So they’re all down pretty significantly. The back-to-school selling was good, but the consumer pull-through faded as the quarter progressed on the chaotic school return in North America and workplace related demand remains down.

We did have solid results internationally, which were an offset. And cost savings globally boosted profitability.

Moving on to Slide 12, results of Checkpoint, another good quarter here, too, our merchandise availability business faced very tough comps this quarter. We had a record quarter in the U.S.

this quarter last year. So we – considering that, I think we did pretty well.

And we sequentially improved quite significantly from the downs of Q2. Our apparel label business was up on the demand rebound and strong growth in RFID and cost savings everywhere boosted the results.

Moving on to Page 13, results for Innovia. Volume here did soften after the Q2 pantry hike that we experienced that benefited the previous quarter, but it was still reasonable.

And profitability was really driven by much improved mix. So that’s the CCL secure impact, had was something to do with that.

But across the board, right across the business, we had much improved mix. Cost savings in the business, better productivity and asset utilization definitely helped.

Resin was not our friend this quarter. It was stable in Europe, and it increased actually quite significantly in North America from June lows.

A better-than-expected contribution from the Polish acquisition continues. So we’re very pleased with the performance of that acquisition.

Page 14, just a few outlook comments on Q4. October results came in consistent with the results we’ve seen during the summer months.

We had 1 less workday in October than we had this time last year, but pretty reasonable month overall. We do expect Avery and Checkpoint still to be down in Q4, but we also expect CCL and Innovia segments to progress.

Commodities are beginning to rise. We do have a modest FX tailwind at today’s rates.

And we are now expecting fiscal year 2020 free cash flow to exceed $500 million. So with that, operator, we would like to open up the call for questions.

Geoff and Sean, good morning and congrats on a really nice quarter. Geoff, you mentioned that the run on cash during the pandemic as well as auto having been much better than you expected.

Was that principally – were those factors principally why CCL segment results were so much better than what you were expecting just 3 months ago or were there a number of other factors as well?

Well, the businesses did really well in the quarter. We are in order of how well they did the best performing business was CCL Secure by far.

The next best performing business was Home & Personal Care. So we had very good results in the label and chew businesses in that part of the company.

Aerosols was a negative, but labels achievements are strong. And then Healthcare & Specialty, so Healthcare & Specialty did also continue to do well in the quarter.

And then the CCL design also had a good quarter. And the automotive rebound was the main reason.

So automotive was actually up on prior year, which surprised us. It came back very, very fast.

Got it. I appreciate that.

You mentioned in the release a...

Some perspective, Adam, it’s – automotive is $300 million out of the $5 billion in change revenue, so to put that in perspective.

Yes. In your commentary in the release, Geoff, you talked about the second wave of the virus as a reason for some caution regarding November and December.

Just wondering if it’s possible or probable that the lockdowns and the related changes in behavior are, in fact, benefiting many parts of your business and that they’re leading to exceptionally strong demand for all manner of At Home Goods? I just ask, obviously, because your organic sales growth in CCL was the best you’ve had since 1Q ‘19, which is obviously well before the pandemic hit and amid what was a reasonable economy at that point?

Yes. Well, the organic sales growth was very – was heavily driven by CCL Secure and heavily driven by Healthcare.

So our Consumer Packaged goods business was okay. I wouldn’t – certainly well below the average.

So we just don’t know. The problem with telling you about the Q4, it’s always a difficult quarter with the 2 short months in November and December.

So – and who knows? I mean it’s in the U.S., I think we haven’t seen much change so far, but if you talk about people in Europe, it’s very different environment over there.

Yes, yes. And relatedly, Geoff, when the pandemic hit, you thought your earnings wouldn’t exceed 2019 levels until 2022.

Now you just reported a record quarter, your earnings are actually up nicely year-to-date. So obviously, the year has played out, I think, dramatically better than what your worst fears were in April, May.

So given that, what lessons, if any, do you draw for next year?

I think it’s still uncertain. I think what we know is it’s very difficult to predict anything.

Certainly, no one would have predicted in December what happened in March, April and May and no one in March, April and May would have predicted what’s happened in the third Q3. So how are we supposed to predict what’s going to happen next year?

I think it’s very hard to say.

Yes, understood. Thank you.

Yes.

Yes, thanks very much and yes, great quarter, everyone. I want to focus on your margins here and I know, Geoff, when I asked you last time about operating leverage, your job shop comment sort of suggested that there wasn’t any.

But clearly, margins are going up. Is this really a mix, they are going up in areas that tend to just be higher margin or are you indeed now seeing new ways to operate or efficiencies to take advantage of that’s allowing your margins to go up?

It’s all mix.

Yes, yes.

It’s all mix. It’s – the businesses that did well this quarter are higher margin businesses.

So it was a very mixed revenue result.

Okay, that makes sense. When you look at your acquisition pipeline and you see the divisions and what COVID-19 did to the divisions that are doing well and those that are doing more – doing less well.

Are you changing at all your focus on where you want to build up scale when you’re looking at acquisitions? And are those acquisition opportunities becoming more plentiful because of COVID-19.

I know you have gradually gotten warmer and warmer to the idea as the quarters have unfolded, I would just love to get your take there on the pipeline now for acquisitions?

Yes, yes. Well, we have done $170 million, $180 million worth of deals so far this year and the multiples we wanted to pay and they have all been bolt-ons, but most of them have worked out.

But not – we haven’t changed our approach in any shape, way or form, we are still looking in the areas we have thought about in the past, direct-to-consumer at Avery, some small bolt-ons in Checkpoint, CCL Design in the CCL space. So we are looking at anything and everything, but there has been no change in approach as a result of COVID.

Alright. Thank very much.

That’s all my questions.

No problem.

Thank you. Good morning guys.

Good morning, Steve.

Good morning. I just want to get some good color on the CCL outlook, I was just wondering if – would you characterize, you talked about October being okay.

Would you characterize the movements being similar to how they were in Q3 by segment in terms of...

I am not going to get into that. I just – we have to just comment that October was 1 workday shy of last year.

That’s the only thing I would just point out. So the calendar this year is not a replica of the calendar last year.

But the overall trends in October were broadly similar. We don’t expect to repeat the call that we had in CCL Secure in Q4.

So that will have an impact. But beyond that, I wouldn’t have anything I could add.

That’s helpful. In the past, you have been able to quantify kind of once CCL was lumpy, even though to quantify what the impact has been within the quarter.

Are you able to do that for Q3?

In what respect?

In respect to the dollar contribution on a relative year-over-year basis since it was so strong in Q3?

Well, the big driver of it was CCL Secure. So, I would say close to half of the profit improvement in the quarter came from CCL Secure in the CCL segment.

Okay, okay. Thank you.

And then maybe just finally, you made an interesting comment on Checkpoint with respect to growth in RFID. And I know that’s a smaller business that you have always sort of driven an R&D engine with.

Are you seeing more RFID adoption in the pandemic or do you think you will see more adoption coming out of the pandemic?

I don’t know. We did get a one new rollout with a large customer in China.

So that had an impact. But I think what we saw in apparel labeling this quarter was just a big bounce back.

So after the – what happened between February and May in China and in South Asia, with the impact on just being able to get supply to retailers from there. There was a big bounce back in the summer months.

So I think we felt some benefit from that. And our RFID in May – factory in China is now running full ball, so we are getting the benefit of in-sourcing all of the inlays we used to buy on the outside.

So, the combination of those two things, but just to keep it in perspective, apparel labeling is less than $200 million for us. It’s not a – it’s not a huge business, but we are quite optimistic now about continuing to improve this for the coming quarters.

Okay. That’s great.

Thanks, Geoff and congratulations.

Thank you.

Hey, good morning guys. Great quarter.

Yes, great quarter. Impressive time to put up a record quarter.

So, it’s so good for you. I just want to follow-up on, I guess, some of the questions.

I appreciate again October, it sounds like it was trending well. I appreciate.

I guess I am just trying to get a sense sort of real time, like there is a lot of happening, thinking about Europe and sort of lockdowns in other economies. Is there anything to speak to?

Again, I appreciate it’s only a few weeks into November, but anything sort of to speak to materially just on...

Well, I can’t really – if we had anything, I would have said something, Mark. It’s…

Sure.

I mean in Europe now, we have got – we’ve got the whole of the UK locked down, many other countries in some form of lockdown. So, the impact of that for us is not clear.

When it happened in April and May, it was the same all away around the world. This time, it’s much more prevalent in Europe.

So, what the impact of that so far is it’s not very clear, we are only 5, 6 weeks into it. And we are into it in a very difficult time, because it’s just coming up to the holiday season.

So, we have the Thanksgiving holiday in the U.S. We have the early shutdown in December.

So, how customers are going to behave in this next 6 weeks period before [indiscernible], so it’s always a difficult and volatile quarter to predict and this year has not been helped by the pandemic.

Sure, sure. I appreciate that.

Just follow-up on to Walter’s question, just on again, the costs and the efficiencies. Is there anything to sort of speak to in terms of structural cost renewals or...

No, no.

No, no, okay.

It’s really a mix story. So, the area where we have been doing some work on the cost side has been Checkpoint and Avery, because they have been the two businesses that have been most challenged.

In the CCL business, which is doing well, there is really very – no help there on the cost side at all. So if anything, we have had to spend more money than we wanted to just to deal with the pandemic and some absenteeism in certain places where you have had factories that have been affected by temporary shortages and stuff like that.

So I think very little we can really tell you. The story in the CCL segment is really about mix.

Okay, okay. Maybe just one last one and this one, I don’t know, maybe it’s more difficult, but there’s a lot of different moving parts to the business.

And just holistically, like would there still be sort of 20%, 25%ish of your business sort of still down materially because of the pandemic? I’m just sort of trying to think about next year a little bit and sort of what might come back and sort of...

Well, the businesses to look to focus on that, Mark, are Avery and Checkpoint. So Avery, as you’ve seen, is still impacted, and we expect it to continue to be impacted for another two or three quarters.

I don’t think their situation is likely to change anytime soon. And so just to give you one frame of reference, so our badge business, which I talked about a little bit in the opening remarks, so one of our operations last year in Madison, Wisconsin, had sales in the third quarter of $13 million.

And this quarter had sales of less than $500,000. So when you’ve got stuff like that going on in your business, and there’s no sports events, no convention, no rock concerts, it’s not likely to change anytime soon.

But when they all come back, as I’m sure they will, at some point, maybe even next year, the back end of next year, our demand there will come back with it. And a little bit the same at Checkpoint.

So the MAS business at Checkpoint is not as badly affected as Avery is. But there’s certainly some impact there.

And again, I think we’ve seen in jurisdictions where things have been more normal. We’ve seen more normal levels of demand.

But – so they are the two, which we would expect to see some improved demand in when as next year unfolds, but it will take a little while.

Yes, sure. Understood.

And again, thanks a lot. Again, very impressive quarter.

Thanks.

No problem.

Hey, good morning. Geoff, just wondering on CCL Secure, good results, how is the new customer pipeline there evolving?

Well, the – we have a long pipeline of customers there who are all pretty sensitive about their security, so that we can never really comment on anything that’s going on in this space that’s actually happened. But there is a very good pipeline.

There is a lot of interest in polymer notes. And I would say that it’s accelerated during the pandemic because people are worried about the cleanliness of currency as well as the cost efficiency and all the other aspects of it.

So we’ve got a lot of interest in that field. But it does remain a business that’s volatile in terms of quarter-to-quarter demand as we have seen the positive side of that this quarter.

So that’s just a feature of the business.

Okay. And then you touched on the MAS part of Checkpoint before, you do have a pretty broad customer mix in that business.

So I mean, do you see big variances between different groups of customers taking place?

Sure. Yes, absolutely.

So if you look at supermarkets, business is strong. If you look at drug stores, they are down a bit, but not much.

And you go to apparel, it’s down a lot. Anything which is discretionary retail, where we have them in a customer base, that’s where you see the impact.

So malls in the U.S. are a real problem.

Okay. And then you probably don’t want to give me a quantification but is it kind of like a 50-50 type up good.

Things are okay. And then 50% is down sort of dynamic or is it something...

If you can imagine, what the REITs, I don’t know what town you live in, but if you drive around the retail environment in your own town, our business looks like that so where the stores are busy, we are busy and we are they are shut, we are shut.

Okay. And then circling back to M&A, when we look at Checkpoint and Innovia and what you’ve been able to accomplish with those – with those 2 segments in terms of integrating these acquisitions.

Like how do you – when we look out 5 years in terms of what those 2 segments might look like, do you see – what type of growth opportunities from an M&A perspective? Do you see in front of you?

Are they meaningful? Or is it just a function of tuck-ins primarily?

Well, there are meaningful opportunities in both of them. So – but I think we’re looking at – we’ve looked at deals in both spaces, are looking at deals in both spaces.

But they are more of a tuck-in nature at the moment. It’s very difficult to deal with anything more than that right now, but they are both – they both have opportunities to grow by acquisition.

I think across our company, if you take the five segments of CCL, Avery, Checkpoint and Innovia, they all have opportunities to grow through M&A.

Okay. Thanks for taking the questions.

No problem.

Thank you. Good morning, gentlemen.

Nice quarter. So just thinking about market share gains, what are you seeing in terms of gains in the CCL consumer business?

Are you seeing increases with your major global customers? Are they consolidating suppliers?

I guess, in other words, taking advantage of your global footprint?

I wouldn’t say that. I wouldn’t have said that was a factor in most of our packaged goods label customers this quarter on a – for the quarter.

So maybe long-term, we could say we’ve got a bit of a trend there. But short-term, we didn’t see any real share gain that was material to the quarter.

Does that answer your question?

Yes, just – yes, I guess it does. Are you seeing any distress in your – some of your larger smaller competitors?

So what’s your question, Scott, what do you...

So are your competitors competing suppliers? Are you seeing any financial distress?

Like are you seeing any pickup in business that...

No, I wouldn’t say anything out of the norm. I think in the label industry in general, because this pandemic has increased at-home purchases.

So if you are in the label business, I don’t think it’s been – it’s been a stressful time. So the stress points have been more in the businesses that have had the end markets that have had difficulties.

And these – you wouldn’t say it’s been a bad time for consumer packaged goods companies.

Okay. Well, the results, at least show it.

And are you seeing any inventory building in your customers?

I wouldn’t say so.

Okay. Final question, I’m running out of steam here.

Are you seeing any specific benefits from increased e-commerce, online shopping work from homers or is it just moving just a whack-a-mole?

No. I think e-commerce is changing the landscape of retail.

But I do think the mega trend there is to move towards the omni-channel world where the best retailers in the world will do a bit of both and use their brick-and-mortar stores to be last mile pickup points. So that’s the mega trend we see in the retail landscape.

So – and everyone is focused on that across the consumer goods industry.

Okay, great. Thank you.

Thank you. A couple of questions.

So you talked about – excuse me. You talked about CCL Secure, that it was quite strong in Q3, but you said it won’t repeat in Q4.

Would it be reasonable to think that CCL Secure’s performance in Q4 ‘20 would be something similar to Q4 ‘19?

We will talk about that in the next quarter. I mean, it’s not something we can predict.

Okay. So then just looking at your guidance for – well, no, sorry, yes, your guidance for free cash flow of being greater than $500 million, when you look at the LTM free cash flow of $603 million, I’m just wondering, is there something unusual that you expect in Q4 ‘20 that would lead you to think that it’d be more closer to $500 as opposed to $600 million?

Well, it’s a short quarter. So we will have to wait and see what we actually – what the number ends up being, we will find that out in a couple of months’ time.

But it is a short quarter. So that’s – so Q3 is a big cash flow quarter for us because of we collect all of our back-to-school cash by the end of the quarter.

So Q4 is never as good as Q3. So we will have to wait and see what we collect in the coming weeks.

Okay. And then lastly, just on Avery and Checkpoint, obviously, they were down in the third quarter, and I don’t know if you can provide any color here, but would it be reasonable to expect that for the fourth quarter, they would be down on a similar rate in terms of revenue?

Well, we have commented that both of them will be down. I haven’t got anything to add to that.

Okay, alright. Thank you.

Okay.

Thanks, Geoff and Sean. Appreciate it.

Geoff, perhaps this is a stupid question, but the run on cash that you talked about, is that a global phenomenon? I mean, where did you see this?

How significant an impact was it? And just somewhat related question to that business, which is there are a number of central banks that have talked about evaluating moving to digital currencies.

Just wondering any thoughts you might have on that and how that could potentially affect your Secure business?

Yes. So there has been a run on cash in every central bank in the world in the pandemic.

I mean there isn’t a single bank in the world that hasn’t – hasn’t seen increased demand for cash. So there is lots of theories about why that might be, which I think are not really worth going into but – so that’s all I can really tell you.

It’s – I don’t think digital currencies will have any impact on us any time soon. It’s only going to replace cash when they come, but it’s only going to replace cash any more than credit card did or bank checkbooks did or [indiscernible], but digital currencies are likely to come in at some point in the next I don’t know 10, 20 years.

Who know? But you have to think about cash is used in all countries in the world.

So the continents of Africa and the continents of South Asia, so cash is a global thing and digital currencies when they come, are likely to come initially in the more sophisticated economies and even then there is no sign of any bank I know is talking about replacing currency with digital cash. It’s [indiscernible] payments.

Got it. Right.

Thanks, Geoff. On the sustainability front, you signed the new Plastics Economy Global commitment and announced a $35 million investment in a sustainable film project in the quarter.

Have your thoughts or approach to the whole sustainability issue evolved or changed of late, perhaps driven by any recent conversations with customers or announcements from them? And I’m just wondering if they have taken recent actions that are consistent with their 2025 pledges about using all recycled resin or what have you?

Yes. There’s a lot of interest in the – we’ve had products for labels that aid recycling for some time.

And so there’s been a lot more interest in them in the last 5 years than we had in the previous 10 before that. So these are not new ideas we have.

They’re just – re-interest in them is just become a lot more prescient due to what’s going on with the end consumers. So the big focus in our world is focusing on making packaging circular and making packaging easy to recycle, and most of the products we make in the – that investment that we talked about in Europe is really driven around that, maintenance – allowing labels to come away from plastic containers.

So the plastic bottle itself is more easy to recycle.

Got it. And just last question for me, Geoff.

Have the respective performances of your businesses this year cause you to think, I want to in the years to come, invest more or less in particular segments than you might have thought pre-pandemic? In other words, has it changed the way you think about the attractiveness of each of your segments?

Yes. Well, the business has done much better than we could have imagined this year in Innovia.

We didn’t get any questions about that on the call. But that’s the business that’s seen the biggest change in performance year-on-year.

I mean it’s basically made up for the downside of Avery and Checkpoint. So it’s sort of showing the value of having a portfolio.

So we’re very pleased with that. So we’re more optimistic about making investments in that space than we would have been, say, a year or so ago.

And just drawing out, what has fundamentally changed in Innovia this year, just a high level?

Well, I think we’ve got very disciplined on pricing. So we’ve been very disciplined on the resin pass-through.

So that’s really improved significantly. And we’ve been much more focused on the value-added parts of the portfolio there.

So mix management has been a big factor. Our success in currencies is also a factor.

I think we did – we’ve done a very good job with the Treofan acquisition, particularly the plant in Mexico, that’s really been transformed. And the acquisition in Poland was a home run.

So we’ve done very well out of that.

Thanks a lot, Geoff.

No problem.

Thank you. I just had one follow-up question for you Geoff.

You talked a lot about – you talked a little bit about M&A and how you have attractive M&A opportunities across all the portfolios. Has the M&A backdrop changed at all?

Sounds as though you are not seeing any distressed sellers, certainly on the label side, but I am just curious, has the ability to do M&A improved with economies opening back up, notwithstanding the second wave that we’re seeing right now?

I wouldn’t have said it’s changed a whole lot as the year’s evolve because we’re still very travel restricted. And so we can look at things where we’ve got people in place to – so we announced the deal that you’ve seen in Malaysia a couple of days ago.

And so one of our sort of more senior guys is based in Singapore. So he has been able to handle that transaction even though the business leader who is based in Europe for a while weren’t able to travel to Asia.

So the ability to travel is still a pretty heavy constraint on us. And it improved a bit in the summer, but now it’s kind of back to where we were.

I mean it’s very, very difficult to get around. So that’s the constraint we’re operating under.

But where we’ve got people in city or in country or in place, where we can do the due diligence we need and can have the kind of meetings we need to have, then we’ve been able to do what we’ve been able to say.

Okay. And I guess it would be safe to assume that until travel opens up, acquisitions would be similar to the ones that you’ve done more tuck-in related?

Correct.

Yes. Okay, great.

Thanks, Geoff and Sean.

Okay. Well, thank you very much for calling in everybody and we will look forward to talking to you next quarter.

Thanks very much for your time and attention.