Slide 1: Supplemental Presentation Materials: Third Quarter 2010 Financial Review and Analysis
Supplemental Presentation Materials Third Quarter 2010 Financial Review and Analysis (preliminary, unaudited) October 27, 2010
Slide 2: Forward-Looking Statements
2 October 27, 2010 Second Quarter 2010 Financial Review and Analysis 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 stateme
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 October 27, 2010 Third Quarter 2010 Financial Review and Analysis 4 Third Quarter 2010 Results Third consecutive quarter of strong top line growth driven by Pressure-sensitive Materials and Retail Information Services Operating margin declined as pricing actions lagged raw material inflatio
Slide 5: Summary
October 27, 2010 Third Quarter Summary Net sales grew 6% from prior year, or approx. 8% on an organic basis(1) Operating margin declined 80 basis points to 6.5% before restructuring charges and other items Interest expense unchanged vs. prior year Effective (GAAP) tax rate of approx. 17% Adjusted ta
Slide 6: Sales Trend Analysis
Sales Trend Analysis October 27, 2010 Third Quarter 2010 Financial Review and Analysis 6 Reported Sales Change (10.2%) 0.7% 9.0% 15.4% 5.9% 3Q09 4Q09 1Q10 Organic Sales Change (5.9%) (0.6%) 7.3% 14.1% 8.3% Currency (4.3%) 4.5% 4.9% 1.3% (2.4%) Extra Week -- (3.2%) (3.2%) -- -- 2Q10 3Q10
Slide 7: Margin Analysis
7 Gross Profit Margin (total Company) 27.6% 28.1% 29.2% Operating Margin (non-GAAP(1)): Pressure-sensitive Materials 8.3% 9.9% 9.6% Retail Information Services 3.5% (2.1%) 8.8% Office and Consumer Products 11.4% 16.8% 15.9% Other specialty converting businesses 2.3% 4.5% 3.1% Total Company 6.5% 7.3%
Slide 8: Key Factors Impacting Margin
Key Factors Impacting Margin Gross profit margin declined by 50 basis points vs. prior year to 27.6% 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) expense ratio
Slide 9: Third Quarter Segment Overview: Pressure-sensitive Materials
9 Third Quarter Segment Overview PRESSURE-SENSITIVE MATERIALS Reported sales of $897 mil., up 5% compared with prior year Organic sales growth of approx. 9% Roll Materials sales grew at high-single digit rate (organic basis), reflecting strength in all regions Graphics & Reflective sales grew at mid
Slide 10: Third Quarter Segment Overview (continued): Retail Information Services
10 Third Quarter Segment Overview (continued) RETAIL INFORMATION SERVICES Reported sales of $379 mil., up 17% compared with prior year Organic sales growth of approx. 18% 3Q comparison benefited from significant inventory destocking in the prior year, as well as improved retail apparel sales and new
Slide 11: Segment Overview (continued)
11 OFFICE AND CONSUMER PRODUCTS Reported sales of $230 mil., down 5% compared with prior year Sales down approx. 5% on an organic basis Excluding restructuring charges and other items, operating margin declined to 11.4% due to increased investment in demand creation, consumer promotions, and innovat
Slide 12: Update to Contributing Factors to 2010 Financial Results
October 27, 2010 12 Update to Contributing Factors to 2010 Financial Results Reported revenue growth of ~9% One less week in fiscal year At current rates, negligible impact to reported sales growth and EBIT from currency translation Estimated $70 mil. of incremental restructuring savings, net of tra
Slide 13: 2010 Earnings and Free Cash Flow Guidance
2010 Earnings and Free Cash Flow Guidance 2010 Guidance Reported (GAAP) Earnings Per Share $2.93 - $3.03* Add Back: Estimated Restructuring, Asset Impairment, and Other Items ~ $0.17 Adjusted (non-GAAP) Earnings Per Share $3.10 - $3.20* Capital Expenditures & Investments in Software ~ $125 mil. Free
Slide 14: AS vee
AS vee DENNISON