Avery Dennison Corporation · NYSE:AVY
Avery Dennison — Q1 2023 Earnings Presentation
16 slides from Avery Dennison's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Financial Review and Analysis
First Quarter 2023 Financial Review and Analysis (preliminary, unaudited) April 26, 2023 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. April 26, 2023 Preliminary & unaudited, Q1 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: Q1 EPS as expected; Q2 outlook lowered; reaffirm H2 EPS run rate >$10
Q1 EPS as expected; Q2 outlook lowered; reaffirm H2 EPS run rate >$10 First Quarter EPS and free cash flow as expected, despite inventory destocking in labels and apparel ● Reported EPS of $1.49; adj. EPS (non-GAAP) of $1.70, down 29% ● Net sales of $2.1 bil., down 9% ex. currency (non-GAAP) and organ
Slide 5: Intelligent Labels
Intelligent Labels $1B $0.8B 2022 Sales by End Market End Market ~20% Org. Sales Apparel $0.8B Other $0.25B ● Q1 up low-single digits; non-apparel up ~50%, largely Pipeline by End Market # of Engagements offset by decline in apparel, incl. inventory destocking ● Industry-leading position; 50%+ UHF R
Slide 6: Quarterly Sales Trend Analysis
Quarterly Sales Trend Analysis 1Q22 2Q22 3Q22 4Q22 1Q23 Reported Sales Change 14.5% 11.7% 11.8% (7.2%) (12.1%) Organic Sales Change(1) 12.7% 11.3% 15.5% (0.9%) (9.2%) Acquisitions/Divestitures 5.3% 5.4% 3.5% 0.1% 0.2% Sales Change Ex. Currency(1),(2) 18.0% 16.7% 19.0% (0.8%) (9.1%) Currency Translat
Slide 7: Quarterly Sales Trend Analysis (cont.)
Quarterly Sales Trend Analysis (cont.) Organic Sales Change 1Q22 2Q22 3Q22 4Q22 1Q23 Materials Group 10% 14% 19% 2% (9%) Solutions Group 20% 5% 7% (8%) (9%) Total Company 13% 11% 16% (1%) (9%) Total Company 18% 17% 19% (1%) (9%) Sales Change Ex. Currency April 26, 2023 Preliminary & unaudited, Q1 20
Slide 8: Sales Growth and Operating Margin Comparison
Sales Growth and Operating Margin Comparison Q1 Sales Growth Reported Ex. Currency Organic Materials Group (12.6%) (9.3%) (9.3%) Solutions Group (11.0%) (8.3%) (8.9%) Total Company (12.1%) (9.1%) (9.2%) Reported Adj. EBITDA Margin Operating Margin (non-GAAP) 1Q23 1Q22 1Q23 1Q22 Materials Group 11.0%
Slide 9: Materials Group First Quarter 2023 Results
First Quarter 2023 Results AVY ‘22 Sales by Segment Materials Group Materials Group Reported sales decreased 13% to $1.5 bil. 72% Solutions Group Sales down 9% ex. currency and organically ● Label materials down low-double digits on organic basis ○ Lower volume, driven by inventory destocking, parti
Slide 10: Solutions Group First Quarter 2023 Results
First Quarter 2023 Results AVY ‘22 Sales by Segment Solutions Group Materials Group Reported sales decreased 11% to $605 mil. 28% Solutions Group Sales down 8% ex. currency and 9% organically ● High-value categories up low-single digits organically ● Base solutions down roughly 20% organically, incl
Slide 11: 2023 EPS Guidance
2023 EPS Guidance Previous Updated Adj. EPS Reported EPS $8.85 – $9.25 $8.35 – $8.70 ~40% adj. EPS growth 2019-2022 Add back: est. restructuring costs and other items ~$0.30 ~$0.50 Adjusted EPS (non-GAAP) $9.15 – $9.55 $8.85 – $9.20 Contributing Factors ● Reported sales of -2% to 0% ○ Negligible imp
Slide 12: Appendix
Appendix April 26, 2023 Preliminary & unaudited, Q1 2023 financial review and analysis 12
Slide 13: Broad exposure to diverse end markets
Broad exposure to diverse end markets Sales by End Market Category(1) Sales by Geographic End Market(1) Staples Other(2) Other(2) ~60% Food Industrial/ LATAM U.S. Durable 27% S. Asia HPC U.S. Total China ~40% Staples Beverage ~80% Apparel E. Europe & MENA Western Pharma Discretionary Europe Western
Slide 14: Strong Balance Sheet and Ample Liquidity
Strong Balance Sheet and Ample Liquidity Q1 2023 Leverage Debt / Liquidity Considerations Total Debt Outstanding $3.6B ● Ample liquidity: $1.2 bil. available under revolving credit facility Cash and cash equivalents $0.4B (through 2026), plus ~$351 mil. in cash and cash equivalents at QE Net Debt(1)
Slide 15: Adjusted EPS
Adjusted EPS The adjusted tax rate was 24.7%, 25%, 24.1%, and 24.6% for 2022, 2021, 2020, and 2019, respectively. (1) Includes restructuring and related charges, transaction and related costs, gain/loss on venture investments, gain/loss on sale of assets, gain on sale of product line, and outcomes o
Slide 16: April Preliminary & unaudited,
©April 2023 26, Avery2023 Preliminary Dennison Corporation. & unaudited, All rights reserved. Q1 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 trademark