Avery Dennison Corporation · NYSE:AVY
Avery Dennison — Q1 2020 Earnings Presentation
20 slides from Avery Dennison's earnings presentation, Apr 29, 2020
Slide 1: First Quarter 2020 Financial Review and Analysis
1 April 28, 2020 First Quarter 2020 Financial Review and Analysis First Quarter 2020 Financial Review and Analysis (preliminary, unaudited) April 28, 2020 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year.
Slide 2: Safe Harbor Statement
2 April 28, 2020 First Quarter 2020 Financial Review and Analysis Safe Harbor Statement Certain statements contained in this document are "forward - looking statements" intended to qualify for the safe harbor from liab ility established by the Private Securities Litigation Reform Act of 1995. These
Slide 3: Use of Non-GAAP Financial Measures
3 April 28, 2020 First Quarter 2020 Financial Review and Analysis 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 conf ormity with accounting principles generally accepted in the United
Slide 4: Key Takeaways
4 April 28, 2020 First Quarter 2020 Financial Review and Analysis Key Takeaways ● Q1 earnings exceeded our expectations; strong volume in essential label categories offset RBIS/IHM declines ● Safety and well - being of our employees is our top priority during global health crisis ● Early stages of t
Slide 5: First Quarter Review
5 April 28, 2020 First Quarter 2020 Financial Review and Analysis First Quarter Review Reported EPS of $1.60; adj. EPS (non - GAAP) of $1.66, above our expectations, reflecting lower - than - planned raw material and employee - related costs ● Reported sales declined 1.0% ○ Sales change ex - currenc
Slide 6: Operations / Market Update in Light of COVID-19
6 April 28, 2020 First Quarter 2020 Financial Review and Analysis Operations / Market Update in Light of COVID - 19 Label and Graphic Materials (LGM) 67% of 2019 sales Retail Branding and Info. Solutions (RBIS) 23% of 2019 sales Industrial and Healthcare Materials (IHM) 10% of 2019 sales ● Plants la
Slide 7: Agile teams effectively managing through crisis
7 April 28, 2020 First Quarter 2020 Financial Review and Analysis Agile teams effectively managing through crisis Ensuring Safety and Well - being of Our Team ● Leveraged learnings from early experience in China to develop safety protocols (e.g., employee temperature checks, social distancing, masks
Slide 8: Broad exposure to diverse end markets
8 April 28, 2020 First Quarter 2020 Financial Review and Analysis Broad exposure to diverse end markets, with ~60% tied to non - durable consumer goods, logistics & shipping, and medical products 2019 Sales by Product Category Non - durable consumer goods Retail Apparel Industrial / Durable Logistic
Slide 9: Diversified geographic exposure
9 April 28, 2020 First Quarter 2020 Financial Review and Analysis Diversified geographic exposure 2019 Sales by Manufacturing Location 2019 Sales by End Market, estimated (1) Other includes Canada, South Africa, Australia, and New Zealand U.S. Western Europe China Other Asia (ex - China) E. Europe &
Slide 10: Our businesses are resilient through economic cycles
10 April 28, 2020 First Quarter 2020 Financial Review and Analysis Our businesses are resilient through economic cycles * Externally reported organic growth by segment during this period has been adjusted to reflect divestitures and transfers be twe en segments. Organic growth trends* during Great R
Slide 11: Key Cost Saving Initiatives
11 April 28, 2020 First Quarter 2020 Financial Review and Analysis Key Cost Saving Initiatives ● Continuing to execute long - term, strategic restructuring plans, reflecting our relentless focus on productivity ● Temporary sources of cost savings to weather the downturn: ○ Short - term belt - tighte
Slide 12: Strong Balance Sheet and Ample Liquidity
12 April 28, 2020 First Quarter 2020 Financial Review and Analysis Strong Balance Sheet and Ample Liquidity Leverage @ 3/28/20 Total Debt Outstanding $2.82 B Cash $0.74 B Net Debt $2.08 B Adjusted EBITDA, trailing 4 qtrs $1.02 B Net Debt to Adj. EBITDA (non - GAAP) 2.0 X Debt / Liquidity Considerati
Slide 13: Outlook
13 April 28, 2020 First Quarter 2020 Financial Review and Analysis ● High degree of market uncertainty; suspending 2020 EPS guidance ● Prepared for range of possible macro scenarios and how they might impact each business ○ Generally expect LPM to fare relatively better than it did through ‘08 - ’09
Slide 14: Q1 Results Detail
14 April 28, 2020 First Quarter 2020 Financial Review and Analysis Q1 Results Detail
Slide 15: Sales Trend Analysis
15 April 28, 2020 First Quarter 2020 Financial Review and Analysis Sales Trend Analysis 1Q19 2Q19 3Q19 4Q19 1Q20 Reported Sales Change (2.0%) (3.2%) 0.1% 0.2% (1.0%) Organic Sales Change 2.4% 1.6% 2.1% 2.1% 0.3% Acquisitions 0.7% Sales Change Ex. Currency* 2.4% 1.6% 2.1% 2.1% 1.0% Currency Translati
Slide 16: First Quarter Sales Change and Operating Margin Comparison
16 April 28, 2020 First Quarter 2020 Financial Review and Analysis First Quarter Sales Change and Operating Margin Comparison Reported Adjusted (Non - GAAP) Operating Margin 1Q20 1Q19 1Q20 1Q19 Label and Graphic Materials 14.6% 11.8% 14.7% 12.5% Retail Branding and Information Solutions 8.0% 12.9% 8
Slide 17: Label and Graphic Materials
17 April 28, 2020 First Quarter 2020 Financial Review and Analysis Label and Graphic Materials ● Reported sales increased 0.2% to $1.18 bil. ● Sales were up 2.5% ex. currency and 1.8% on an organic basis, as volume/mix more than offset raw material - related price reductions ○ Label and Packaging Ma
Slide 18: Retail Branding and Information Solutions
18 April 28, 2020 First Quarter 2020 Financial Review and Analysis Retail Branding and Information Solutions ● Reported sales declined 0.9% to $395 mil. ● Sales were up 0.1% ex. currency, and down 1.1% on an organic basis ○ Base business down mid - single digits, driven by site closures and lower ap
Slide 19: Industrial and Healthcare Materials
19 April 28, 2020 First Quarter 2020 Financial Review and Analysis Industrial and Healthcare Materials ● Reported sales declined 9.7% to $148 mil. ● Sales declined 7.8% on an organic basis ○ Mid - single digit decline in industrial categories driven by automotive, which was down over 10% ○ Low - sin
Slide 20: Thank you
20 April 28, 2020 First Quarter 2020 Financial Review and Analysis © 2020 Avery Dennison Corporation. All rights reserved. Avery Dennison and all other Avery Dennison brands, product names and co des are trademarks of Avery Dennison Corporation. All other brands or product names are trademarks of th