ACCO Brands Corporation (NYSE:ACCO) Q3 2018 Earnings Conference Call Transcript
Oct 30, 2018 • 08:30 am ET
Good day, ladies and gentlemen, and welcome to the Third Quarter of 2018 ACCO Brands Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be provided at that time. (Operator Instructions) And as a reminder, today's call is being recorded for replay purposes.
I'd now like to turn the conference over to Jennifer Rice, Vice President, Investor Relations. Please go ahead.
Good morning, and welcome to our third quarter 2018 conference call. Speaking on the call today are Boris Elisman, Chairman, President and Chief Executive Officer of ACCO Brands Corporation; and Neal Fenwick, Executive Vice President and Chief Financial Officer. Slides that accompany this call have been posted to the Investor Relations section of accobrands.com.
When speaking to quarterly results, we may refer to adjusted results. Adjusted results exclude transaction, integration and restructuring costs and apply normalized tax rate, which was 30% in the current quarter and 32% in the prior year quarter.
Schedules of adjusted results and other non-GAAP financial measures and a reconciliation of these measures to the most directly comparable GAAP measures are in this morning's earnings release and the slides that accompany this call.
(Forward Looking Cautionary Statements)
Following our prepared remarks, we will hold a Q&A session. Now it is my pleasure to turn the call over to Boris Elisman.
Thank you, Jennifer, and good morning, everyone. Our third quarter results demonstrated momentum in some areas and continued headwinds in others, reflecting diverging environments in the U.S. versus the rest of the world. We saw accelerated growth and strong profitability in EMEA, good improvements in revenue trends and profit growth in International and very mixed results in North America.
I'll begin with the highlights. I'm very pleased with a strong performance in EMEA, where our comparable sales increased 5% as we successfully expanded the distribution of legacy ACCO products with a broader customer base of former Esselte for cross-selling. We had double-digit sales growth with Rexel shredders and Kensington computer accessories, both for the quarter and year-to-date. This was driven by the increased distribution as well as strong underlying demand and new product introductions.
We also saw solid performance of Leitz, Esselte and Rapid branded products. We are seeing better growth from our branded products in EMEA and from private label.
In addition to executing on sales growth initiatives, the European team is doing an excellent job of driving profit improvement, capturing cost synergies related to the integration of the ACCO and Esselte businesses. 20 months into the acquisition, we are on track to deliver at least $23 million of committed synergies on time and at a lower cost. EMEA gross and operating margins were up during the quarter due to higher sales, better product mix, acquisition synergies and expense leverage. It was an excellent quarter in EMEA by most measures, and I'm very pleased with and appreciative of the work our team is doing there.
We also posted improved results in our