Slide 1: Supplemental Presentation Materials First Quarter 2011 Financial Review and Analysis
Supplemental Presentation Materials First Quarter 2011 Financial Review and Analysis (preliminary, unaudited) April 27, 2011
Slide 2: Forward-looking statements
Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and financial or other business targets are subject to certain ri
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial MeasuresThis presentation contains certain non-GAAP financial measures as defined by SEC rules. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included with the financial schedules accompanying the earnings news re
Slide 4: Overview
Overview First Quarter 2011 Financial Review and Analysis April 27, 2011 First quarter results in line with expectationsStrong growth in Pressure-sensitive Materials with sequential margin expansion reflecting pricing and productivityContinued momentum in Retail Branding and Information Solutions (f
Slide 5: First Quarter P&L Summary
First Quarter P&L Summary 5 First Quarter 2011 Financial Review and Analysis April 27, 2011 Net sales grew approx. 7% on both a reported and organic basis Operating margin (non-GAAP) declined 110 basis points to 5.4% Interest expense comparable to prior year Effective GAAP tax rate of 34% Adjusted t
Slide 6: Sales Trend Analysis
Sales Trend Analysis Reported Sales Change 9.0% 15.4% 5.9% 7.6% 6.7% 1Q10 2Q10 3Q10 Organic Sales Change 7.3% 14.1% 8.3% 9.0% 6.5% Currency 4.9% 1.3% (2.4%) (1.4%) 0.2% Extra Week (3.2%) -- -- -- -- 4Q10 1Q11 6 First Quarter 2011 Financial Review and Analysis April 27, 2011
Slide 7: Margin Analysis
Gross Profit Margin (total Company) 27.4% 28.4% 27.0% Operating Margin (non-GAAP): Pressure-sensitive Materials 9.1% 10.0% 7.8% Retail Branding and Information Solutions 3.3% 0.8% 4.8% Office and Consumer Products 1.0% 11.2% 10.3% Other specialty converting businesses (0.1%) 2.3% (1.9%) Total Compan
Slide 8: Key Factors Impacting First Quarter Margin
Key Factors Impacting First Quarter Margin Gross profit margin declined 100 basis points vs. prior year to 27.4% as raw material inflation, increased employee-related costs, and negative segment mix more than offset the benefits of pricing actions, productivity initiatives, and higher volumeMarketin
Slide 9: First Quarter Segment Overview: Pressure-sensitive Materials
First Quarter Segment Overview PRESSURE-SENSITIVE MATERIALSReported sales of $987 mil., up 10% compared with prior year on both a reported and organic basisLabel and Packaging Materials (formerly Roll Materials) sales grew at a low double-digit rate on an organic basis reflecting both solid volume g
Slide 10: First Quarter Segment Overview (continued)
First Quarter Segment Overview (continued) RETAIL BRANDING AND INFORMATION SOLUTIONSReported sales of $375 mil., up 9% compared with prior year on both a reported and organic basisOperating margin (non-GAAP) increased by 250 basis points to 3.3% driven by increased volume and productivity initiative
Slide 11: First Quarter Segment Overview (continued): Other Specialty Converting Businesses
OTHER SPECIALTY CONVERTING BUSINESSESReported sales of $141 mil., up 6% compared with prior year Organic sales growth of approx. 7%Operating margin (non-GAAP) declined by 240 basis points to negative 0.1% due largely to the impact of the warehouse fire in BrazilBenefit from increased volume, pricing
Slide 12: Contributing Factors to 2011
Organic sales growth of ~6%Currency translation (at December rates, represents approx. 0.5% tailwind to reported sales growth; approx. $5 mil. positive impact to EBIT vs. 2010)Raw material inflation of $140 to $150 mil., partially offset by raw material cost reduction initiatives and pricing actions
Slide 13: 2011 Earnings and Free Cash Flow Guidance
2011 Earnings and Free Cash Flow Guidance 2011 Guidance Reported (GAAP) Earnings Per Share $2.85 - $3.15 Add Back: Estimated Restructuring Charges and Other Items ~ $0.15 Adjusted (non-GAAP) Earnings Per Share $3.00 - $3.30 Free Cash Flow (before dividends) $325 - $350 mil. 13 First Quarter 2011 Fin
Slide 14: A ves
A ves DENNISON