Avery Dennison Corporation · NYSE:AVY
Avery Dennison — Q3 2020 Earnings Presentation
19 slides from Avery Dennison's earnings presentation, Oct 21, 2020
Slide 1: Third Quarter 2020 Financial Review and Analysis
1 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Third Quarter 2020 Financial Review and Analysis (preliminary, unaudited) October 21, 2020 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year.
Slide 2: Safe Harbor Statement
2 October 21, 2020 Third 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. Thes
Slide 3: Use of Non-GAAP Financial Measures
3 October 21, 2020 Third 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 Unite
Slide 4: Strong execution in a challenging, dynamic environment
4 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Strong execution in a challenging, dynamic environment ● Safety and well - being of employees remains our top priority during continuing global health crisis ● Strong earnings growth vs. prior year despite lower sales ○ Margins up s
Slide 5: Third Quarter Review
5 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Third Quarter Review Reported EPS of $1.79, up ~5%; adj. EPS (non - GAAP) of $1.91, up ~15% ● Reported sales declined 1.8% ○ Sales change ex. currency (non - GAAP) of (1.3%) ○ Organic sales change (non - GAAP) of (3.6%) ● Reported o
Slide 6: COVID-19 Operational Update
6 October 21, 2020 Third Quarter 2020 Financial Review and Analysis COVID - 19 Operational Update ● Safety and well - being of employees remains our top priority during continuing global health crisis ○ To date, have identified ~350 confirmed COVID - 19 cases among 30,000+ workforce ○ In Q3, we cont
Slide 7: Organic Growth: Monthly Sales Trends
7 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Organic Growth Mar Apr May Jun Jul Aug Sep Q3 LGM 5% (4%) (2%) (8%) (6%) (1%) (1%) (3%) LPM 7% 7% 2% (6%) (5%) 0% 0% (2%) Graphics & Reflective (8%) (55%) (26%) (16%) (10%) (8%) (6%) (8%) RBIS* 2% (54%) (38%) (17%) (5%) (5%) (5%) (5
Slide 8: Broad exposure to diverse end markets
8 October 21, 2020 Third 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 Logist
Slide 9: Diversified geographic exposure
9 October 21, 2020 Third 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 once again proving resilient, as in past downturns
10 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Our businesses are once again proving resilient, as in past downturns * Externally reported organic growth by segment has been adjusted to reflect divestitures and transfers between segments. Organic growth trends* during last majo
Slide 11: Strong Balance Sheet and Ample Liquidity
11 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Strong Balance Sheet and Ample Liquidity Leverage @ 9/26/20 Total Debt Outstanding $2.14 B Cash and cash equivalents $0.28 B Net Debt $1.86 B Adjusted EBITDA, trailing 4 qtrs $1.00 B Net Debt to Adj. EBITDA (non - GAAP) 1.9 Debt /
Slide 12: 2020 Outlook
12 October 21, 2020 Third Quarter 2020 Financial Review and Analysis ● FY sales down principally due to lower volume, with trough in Q2: ○ Underlying sales trend in Q4 expected to be similar to or better than Q3 pace ○ Extra week adds roughly a point to full year growth (~4 points to Q4 growth) ○ FY
Slide 13: Q3 Results Detail
13 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Q3 Results Detail
Slide 14: Quarterly Sales Trend Analysis
14 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Quarterly Sales Trend Analysis 3Q19 4Q19 1Q20 2Q20 3Q20 Reported Sales Change 0.1% 0.2% (1.0%) (14.9%) (1.8%) Organic Sales Change 2.1% 2.1% 0.3% (13.7%) (3.6%) Acquisitions - - 0.7% 1.7% 2.3% Sales Change Ex. Currency* 2.1% 2.1% 1
Slide 15: Third Quarter Sales Change and Operating Margin Comparison
15 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Third Quarter Sales Change and Operating Margin Comparison Reported Adjusted (Non - GAAP) Operating Margin 3Q20 3Q19 3Q20 3Q19 Label and Graphic Materials 15.1% 13.4% 15.2% 13.5% Retail Branding and Information Solutions 11.0% 11.2
Slide 16: Label and Graphic Materials
16 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Label and Graphic Materials ● Reported sales declined 3.3% to $1.15 bil. ● Sales were down 2.6% on an organic basis, driven by both volume/mix and deflation - related price ○ Label and Packaging Materials down ~2% from prior year a
Slide 17: Retail Branding and Information Solutions
17 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Retail Branding and Information Solutions ● Reported sales increased 4.7% to $426 mil. ● Sales were up 5.2% ex. currency, and down 4.7% on an organic basis ○ Strong organic growth in high value categories was more than offset by ~1
Slide 18: Industrial and Healthcare Materials
18 October 21, 2020 Third Quarter 2020 Financial Review and Analysis Industrial and Healthcare Materials ● Reported sales declined 7.0% to $158 mil. ● Sales declined 7.6% on an organic basis ○ Mid - single digit decline in industrial categories, reflecting sequential improvement in trend for automot
Slide 19: Thank you
19 October 21, 2020 Third 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