Slide 1: Third Quarter 2012 Financial Review and Analysis
Third Quarter 2012 Financial Review and Analysis (preliminary, unaudited) Supplemental Presentation Materials October 24, 2012 Unless otherwise indicated, the discussion of the company’s results is focused on its continuing operations
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. These forward-looking statements and financial or other business targets are subject to certain r
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. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. Reconciliations of non-GAAP f
Slide 4: Solid quarter across all segments
Solid quarter across all segments Sales up approx. 6% on organic basis driven by higher volume Operating margin, as reported, improved 80 basis points as the benefit of higher volume and productivity initiatives more than offset higher employee-related expenses, the impact of changes in product mix,
Slide 5: Third Quarter P&L Summary
Reported net sales declined 0.8% Sales increased 5.9% on organic basis Gross Margin improved 180 basis points to 26.3% Operating margin, as reported, improved 80 basis points to 5.1% Adjusted operating margin improved 110 basis points Interest expense up slightly Effective tax rate of 34.5% Year-to-
Slide 6: Sales Trend Analysis
3Q11 4Q11 1Q12 2Q12 3Q12 Organic Sales Change (0.8%) 0.7% (0.9%) 3.7% 5.9% Product Line Divestitures - (0.2%) (0.4%) (0.3%) (0.4%) Currency 5.8% (1.0%) (1.6%) (4.2%) (6.4%) Reported Sales Change* 5.0% (0.5%) (2.8%) (0.8%) (0.8%) Sales Trend Analysis *Totals may not sum due to rounding.
Slide 7: Segment Sales and Margin Analysis
Segment Sales and Margin Analysis Reported Organic Net Sales Growth: Pressure-sensitive Materials (1%) 7% Retail Branding and Information Solutions 4% 7% Other specialty converting businesses (9%) (1%) Continuing Operations (1%) 6% Adjusted As Reported (Non-GAAP) 3Q12 3Q11 3Q12 3Q11 Operating Margin
Slide 8: Third Quarter Segment Overview
Third Quarter Segment Overview PRESSURE-SENSITIVE MATERIALS Reported sales of $983 mil., down approx. 1% compared to prior year Sales up approx. 7% on organic basis Label and Packaging Materials sales up high single digits on organic basis Graphics and Reflective Solutions sales up mid-single digits
Slide 9: Third Quarter Segment Overview (continued)
RETAIL BRANDING AND INFORMATION SOLUTIONS Reported sales of $374 mil., up approx. 4% compared to prior year Sales up approx. 7% on organic basis Operating margin improved 210 basis points to 2.8% as the benefit of productivity initiatives, higher volume, and lower restructuring costs more than offse
Slide 10: Contributing Factors to 2012 Results
Organic sales growth of 2% to 3% At recent rates, currency translation has ~$19 mil. negative impact to EBIT vs. 2011 Tax rate in low to mid-thirty percent range; cash tax rate in upper-twenty percent range Restructuring costs and other items of ~$55 mil. Capital expenditures (including IT) of ~$150
Slide 11: 2012 EPS and Free Cash Flow Guidance
2012 EPS and Free Cash Flow Guidance (continuing operations) Add Back: Estimated Restructuring Costs and Other Items ~ $0.35 Adjusted EPS (non-GAAP) Reported EPS $1.65 - $1.70 Free Cash Flow $280 mil. - $310 mil. $2.00 - $2.05
Slide 12: Avery Dennison
A AVERY DENNISON