Slide 1: Third Quarter 2023 Financial Review and Analysis
Third Quarter 2023 Financial Review and Analysis (preliminary, unaudited) October 25, 2023 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. October 25, 2023 Preliminary & unaudited, Q3 2023 financial review and analysis 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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. These forward-looking statements, and financial or other business targets, a
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. We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using cert
Slide 4: Q3 adj. EPS in line with expectations, continuing to increase sequentially
Q3 adj. EPS in line with expectations, continuing to increase sequentially; expect further improvement in Q4 Label Materials volume continues to improve ● Impact of inventory destocking continues to moderate ● Demand increased in emerging regions; remained soft in developed regions ● Margins improve
Slide 5: Third quarter 2023 review
Third quarter 2023 review Reported EPS of $1.71 Adj. EPS (non-GAAP) of $2.10, up 9% sequentially Net sales of $2.1 bil. ● Sales change ex. currency (non-GAAP) down 10% ● Organic sales change (non-GAAP) down 11% Reported operating income of $207 mil. ● Adj. EBITDA (non-GAAP) of $328 mil., up 7% seque
Slide 6: U.S. Consumer Sentiment, Business Sentiment, Apparel Imports
U.S. Consumer Sentiment U.S. Business Sentiment (Mfg. PMI) Avg. AVY Label Volume (NA + Europe) Source: University of Michigan Source: Institute for Supply Management Apparel Imports (US + Europe) U.S. Apparel Inventory to Sales Ratio ● Economic indicators conflicting ● Business and consumer sentiment
Slide 7: Intelligent Labels
Intelligent Labels Organic Sales Change % vs. PY $0.8B ~20% Org. Sales CAGR $0.25B ● Q3 2023 organic sales up ~10% ○ Non-apparel categories, particularly Logistics and Food, up ~75% compared to prior year ○ Apparel down; retailer and brand sentiment remains muted ● Anticipate ~40% growth in Q4 ● Exp
Slide 8: Quarterly sales trend analysis
Quarterly sales trend analysis 3Q22 4Q22 1Q23 2Q23 3Q23 Reported Sales Change 12% (7%) (12%) (11%) (9%) Organic Sales Change(1) 16% (1%) (9%) (10%) (11%) Acquisitions/Divestitures 4% 0% 0% 1% 1% Sales Change Ex. Currency(1),(2) 19% (1%) (9%) (10%) (10%) Currency Translation (7%) (6%) (3%) (1%) 1% Re
Slide 9: Quarterly sales trend analysis (cont.)
Quarterly sales trend analysis (cont.) Organic Sales Change 3Q22 4Q22 1Q23 2Q23 3Q23 Materials Group 19% 2% (9%) (12%) (16%) Solutions Group 7% (8%) (9%) (7%) 1% Total Company 16% (1%) (9%) (10%) (11%) Total Company 19% (1%) (9%) (10%) (10%) Sales Change Ex. Currency October 25, 2023 Preliminary & u
Slide 10: Sales change and operating margin comparison
Sales change and operating margin comparison Q3 Sales Change Reported Ex. Currency Organic Materials Group (14%) (16%) (16%) Solutions Group 3% 5% 1% Total Company (9%) (10%) (11%) Reported Adj. EBITDA Margin Operating Margin (non-GAAP) 3Q23 3Q22 3Q23 3Q22 Materials Group 12.1% 13.9% 16.4% 15.5% Sol
Slide 11: Materials Group Third Quarter 2023 Results
Third Quarter 2023 Results AVY ‘22 Sales by Segment Materials Group Materials Group Reported sales decreased 14% to $1.5 bil. 72% Solutions Group Sales down 16% ex. currency and organically ● Label Materials down high-teens on organic basis ○ Lower volume driven primarily by inventory destocking ○ V
Slide 12: Solutions Group Third Quarter 2023 Results
Third Quarter 2023 Results AVY ‘22 Sales by Segment Solutions Group Materials Group Reported sales increased 3% to $642 mil. 28% Solutions Group Sales up 5% ex. currency and 1% organically ● Apparel Solutions volume up sequentially; retailer and brand sentiment remains muted ● High-value categories
Slide 13: EPS Guidance Q4 2023
EPS Guidance Q4 2023 Reported EPS $2.05 - $2.20 Add Back: Est. restructuring costs and other items ~$0.05 Adjusted EPS $2.10 - $2.25 ● Expect Q4 2023 adj. EPS to increase sequentially ○ Volume to again improve sequentially in Label Materials and Intelligent Labels ○ Anticipate organic sales growth c
Slide 14: October 2023 Corporation. Preliminary
©October 2023 Avery 25, 2023Corporation. Dennison Preliminary & unaudited, All rights reserved. Q3 2023 Avery Dennison financial and all review other Avery and Dennison analysis brands, product names and codes are trademarks of Avery Dennison Corporation. All other brands or product names are tradema