Avery Dennison Announces First Quarter 2025 Results

About this update from Avery Dennison Corporation

Highlights: MENTOR, Ohio, April 23, 2025 --( BUSINESS WIRE )--Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its first quarter ended March 29, 2025. Non-GAAP financial measures referenced in this release are reconciled from GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year. "We delivered a strong first quarter, in-line with expectations," said Deon Stander, president and CEO. "Both our Materials and Solutions Groups achieved strong results in a dynamic environment. "We have a proven track record of delivering strong results across cycles, due to the strength of our overall franchise," added Stander. "While uncertainty is elevated, we are prepared for multiple scenarios as we progress through the year. "Once again, I want to thank our agile, engaged and talented team for their focus on excellence and commitment to addressing challenges at hand." First Quarter 2025 Results by Segment Materials Group Solutions Group Other Balance Sheet and Capital Deployment During the first quarter of 2025, the company returned $331 million in cash to shareholders through a combination of share repurchases and dividends. The company repurchased 1.4 million shares at an aggregate cost of $262 million in the quarter. Net of dilution from long-term incentive awards, the company’s share count was down 2.3 million compared to the same time last year. The company continues to deploy capital in a disciplined manner, executing its long-term capital allocation strategy. The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.3x at the end of the first quarter. Income Taxes The company’s reported effective tax rate was 26.7% in the first quarter. The adjusted tax rate (non-GAAP) for the quarter was 26.0%. Cost Reduction Actions In the first quarter, the company realized approximately $14 million in pre-tax savings from restructuring, net of transition costs, and incurred approximately $5 million in pre-tax restructuring charges. Guidance In its supplemental presentation materials, "First Quarter 2025 Financial Review and Analysis," the company provides a list of factors that it believes will contribute to its financial results. Based on the factors listed and other assumptions, the company expects second quarter 2025 reported earnings per share of $2.25 to $2.45. Excluding an estimated ~$0.05 per share impact of restructuring charges and other items, the company expects second quarter 2025 adjusted earnings per share of $2.30 to $2.50. For more details on the company’s results, see the summary tables accompanying this news release, as well as the supplemental presentation materials, "First Quarter 2025 Financial Review and Analysis," posted on the company’s website at www.investors.averydennison.com , and furnished to the SEC on Form 8-K. Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding. About Avery Dennison Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company. We are Making Possible™ products and solutions that help advance the industries we serve, providing branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and better connect brands and consumers. We design and develop labeling and functional materials, radio-frequency identification (RFID) inlays and tags, software applications that connect the physical and digital, and offerings that enhance branded packaging and carry or display information that improves the customer experience. Serving industries worldwide — including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive — we employ approximately 35,000 employees in more than 50 countries. Our reported sales in 2024 were $8.8 billion. Learn more at www.averydennison.com . "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 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 risks and uncertainties. We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impact on underlying demand for our products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations and preferences; (ii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions. Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following: For a more detailed discussion of these factors, see "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K, filed with the Securities and Exchange Commission on February 26, 2025. The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law. For more information and to listen to a live broadcast or an audio replay of the quarterly conference call with analysts, visit the Avery Dennison website at www.investors.averydennison.com . A-4 Reconciliation of Non-GAAP Financial Measures from GAAP 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 certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. Reconciliations of our non-GAAP financial measures from the most directly comparable GAAP financial measures are provided in accordance with Regulations G and S-K. Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture investments and other, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing. We use the non-GAAP financial measures described below in the accompanying news release. Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, the currency adjustments for transitional reporting of highly inflationary economies, and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for an extra week in our fiscal year and the calendar shift resulting from an extra week in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year that began on December 29, 2024 will end on December 31,2025; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31. Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures. We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period. Adjusted operating income refers to net income adjusted for taxes; other expense (income), net; interest expense; other non-operating expense (income), net; and other items. Adjusted EBITDA refers to adjusted operating income before depreciation and amortization. Adjusted operating margin refers to adjusted operating income as a percentage of net sales. Adjusted EBITDA margin refers to adjusted EBITDA as a percentage of net sales. Adjusted tax rate refers to the projected full-year GAAP tax rate, adjusted to exclude certain unusual or infrequent events that are expected to significantly impact that rate, such as effects of certain discrete tax planning actions, impacts related to enactments of comprehensive tax law changes, and other items. Adjusted net income refers to income before taxes, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges, and other items. Adjusted net income per common share, assuming dilution (adjusted EPS) refers to adjusted net income divided by the weighted average number of common shares outstanding, assuming dilution. We believe that adjusted operating margin, adjusted EBITDA margin, adjusted net income, and adjusted EPS assist investors in understanding our core operating trends and comparing our results with those of our competitors. Net debt to adjusted EBITDA ratio refers to total debt (including finance leases) less cash and cash equivalents, divided by adjusted EBITDA for the last twelve months. We believe that the net debt to adjusted EBITDA ratio assists investors in assessing our leverage position. Adjusted free cash flow refers to cash flow (used in) provided by operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from company-owned life insurance policies, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments, less net cash used for Argentine Blue Chip Swap securities. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases, and acquisitions.   View source version on businesswire.com: https://www.businesswire.com/news/home/20250423620455/en/ Contacts John Eble Vice President, Finance and Investor Relations [email protected] Holly Billik Corporate Communications and Media Relations [email protected]

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