Slide 1: Supplemental Presentation Materials: Fourth Quarter and Full-Year 2010 Financial Review
Supplemental Presentation Materials Fourth Quarter and Full-Year 2010 Financial Review and Analysis (preliminary, unaudited) February 2, 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 Measures This 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 r
Slide 4: Overview
Overview Delivered solid full-year 2010 results Sales grew 9% as global demand improved Double-digit growth in Pressure-sensitive Materials and Retail Information Services Operating margin, excluding restructuring charges and other items, improved 170 basis points despite rapidly increasing raw mate
Slide 5: Overview (continued)
Overview (continued) Fourth quarter results in line with expectations Solid sales growth in Pressure-sensitive Materials and Retail Information Services Operating margin in Pressure-sensitive Materials under pressure as continued raw material inflation outpaced price increases Solid sales growth and
Slide 6: Fourth Quarter Summary
Fourth Quarter Summary Net sales grew 8% from prior year, or 9% on an organic basis Operating margin improved 110 basis points to 5.9% before restructuring charges and other items Interest expense comparable to prior year Effective GAAP tax rate of negative 60% includes $0.42 per share from a discre
Slide 7: Sales Trend Analysis
Sales Trend Analysis Reported Sales Change 0.7% 9.0% 15.4% 5.9% 7.6% 4Q09 1Q10 2Q10 Organic Sales Change (0.6%) 7.3% 14.1% 8.3% 9.0% Currency 4.5% 4.9% 1.3% (2.4%) (1.4%) Extra Week (3.2%) (3.2%) -- -- -- 3Q10 4Q10 7 February 2, 2011 Fourth Quarter and Full-Year 2010 Financial Review and Analysis
Slide 8: Margin Analysis
Gross Profit Margin (total Company) 27.0% 27.3% 27.6% Operating Margin (non-GAAP): Pressure-sensitive Materials 7.8% 7.5% 8.3% Retail Information Services 4.8% 0.8% 3.5% Office and Consumer Products 10.3% 13.5% 11.4% Other specialty converting businesses (1.9%) (4.3%) 2.3% Total Company 5.9% 4.8% 6.
Slide 9: Key Factors Impacting Fourth Quarter Margin
Key Factors Impacting Fourth Quarter Margin Gross profit margin declined by 30 basis points vs. prior year to 27.0% as raw material inflation more than offset the benefits of increased volume, pricing actions, and productivity and restructuring initiatives Marketing, general and administrative (MG&A
Slide 10: Fourth Quarter Segment Overview: Pressure-sensitive Materials
Fourth Quarter Segment Overview PRESSURE-SENSITIVE MATERIALS Reported sales of $922 mil., up 9% compared with prior year Organic sales growth of approx. 11% Roll Materials sales grew at low-double digit rate (organic basis), reflecting strength in all regions Graphics & Reflective sales grew at mid-
Slide 11: Fourth Quarter Segment Overview (continued)
Fourth Quarter Segment Overview (continued) RETAIL INFORMATION SERVICES Reported sales of $386 mil., up 10% compared with prior year Organic sales growth of approx. 11% Operating margin before restructuring charges increased by 400 basis points to 4.8% driven by increased volume and restructuring an
Slide 12: Other Specialty Converting Businesses
OTHER SPECIALTY CONVERTING BUSINESSES Sales of $132 mil., up 11% compared with prior year Sales up approx. 13% on an organic basis Excluding restructuring charges, operating margin improved by 240 basis points to negative 1.9% as the benefits of increased volume and productivity actions more than of
Slide 13: Contributing Factors to 2011
Income Statement Organic sales growth of ~6% Currency translation (at current 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 material cost reduction initiatives and p
Slide 14: 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. 1Q11 earnings as a percen
Slide 15: Avery Dennison
A AVERY DENNISON