ACCO Brands (ACCO) – Second Quarter Post Call Commentary


Thursday, August 10, 2023

ACCO Brands Corporation is one of the world’s largest designers, marketers and manufacturers of branded academic, consumer and business products. Our widely recognized brands include AT-A-GLANCE®, Esselte®, Five Star®, GBC®, Kensington®, Leitz®, Mead®, PowerA®, Quartet®, Rapid®, Rexel®, Swingline®, Tilibra®, and many others. Our products are sold in more than 100 countries around the world. More information about ACCO Brands, the Home of Great Brands Built by Great People, can be found at www.accobrands.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Margin Focus Remains. Management remains laser focused on restoring margins. In 2Q23, gross margin improved by 450 basis points and adjusted operating margin improved 220 bp year-over-year. The Company upped its full year gross margin goal to 31%-32% from a prior 30.5%. The longer-term goal is for gross margin to return to the 33%+ level.

Debt Reduction to Pay Dividends. Strong cash flow in 1H23 enabled ACCO to reduce its net leverage ratio to 4.3x at the end of the quarter, with management expecting the ratio to be in the 3.3x-3.5x range, below the old 3.5x-3.7x range, by year end. As debt declines, it positively impacts interest expense, providing additional capital to continue reducing debt levels or invest in the business.


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