Avery Dennison Corporation
Media Relations
Rob Six
T: +1 (626) 304-2361
rob.six@averydennison.com
Investor Relations
John Eble
T: +1 (440) 534-6290
john.eble@averydennison.com
Highlights:
GLENDALE, Calif., April 28, 2021 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its first quarter ended April 3, 2021 and provided an update related to the impact of the COVID-19 pandemic on the company. Non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, comparisons are to the same period in the prior year.
“We are off to a strong start to the year, with earnings growth well above expectations, driven by higher volume and productivity gains across the portfolio,” said Mitch Butier, Avery Dennison president and CEO.
“All three of our operating segments delivered strong sales growth and significant margin expansion. Our strong performance comes at a time when the global health crisis is resurging in many parts of the world and supply chains are tightening. The current environment further reinforces our determination to remain vigilant in ensuring the health and well-being of our employees, delivering for our customers, supporting our communities, and creating value for our shareholders.
“We have raised our full-year outlook for adjusted earnings per share, reflecting the strong performance in the first quarter, and a higher organic growth assumption for the balance of the year,” said Butier. “We continue to remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation for all our stakeholders."
“Once again, I want to thank our entire team for their tireless efforts to keep one another safe while delivering for our customers during this challenging period, bringing a whole new level of agility and dedication to address the unique challenges at hand.”
Uncertainty surrounding the global health crisis remains elevated as many parts of the world are experiencing a resurgence in COVID-19 cases. The safety and well-being of employees has been and will continue to be the company’s top priority. The company has taken steps to ensure employee safety, quickly implementing world-class safety protocols and continuing to adapt guidelines as the pandemic evolves.
As supply chains remain tight, the company continues to actively manage through a dynamic supply and demand environment. The company is leveraging its global scale and working closely with customers and suppliers to deliver industry-leading products and services. The company continues to mitigate risk to keep supply chain disruptions negligible and the team continues to demonstrate agility and preparedness through robust scenario planning.
Label and Graphic Materials
Retail Branding and Information Solutions
Industrial and Healthcare Materials
Balance Sheet, Liquidity, and Capital Deployment
The company’s balance sheet remains strong, with ample liquidity. The company deployed $31 million for acquisitions and equity investments in the first quarter, including two strategic acquisitions, JDC Solutions, Inc. in the IHM segment and ZippyYum, LLC in the RBIS segment.
The company recently announced it raised its quarterly dividend rate by 10%, following a 7% increase in 2020. Additionally, the company repurchased 0.3 million shares in the first quarter at an aggregate cost of $56 million. Net of dilution from long-term incentive awards, the company’s share count at the end of the quarter was down by 0.2 million compared to the same time last year. During the first quarter, the company returned $107 million in cash to shareholders through a combination of share repurchases and dividends.
Income Taxes
The company’s first quarter effective tax rate was 21.6%. The adjusted (non-GAAP) tax rate for the quarter was 25.0%, reflecting the company’s current expectation for the full-year adjusted tax rate.
Cost Reduction Actions
In the first quarter, the company realized approximately $19 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $3 million, the vast majority of which represents cash charges.
In its supplemental presentation materials, “First Quarter 2021 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2021 financial results. Based on the factors listed and other assumptions, the company has raised its guidance range for 2021 reported earnings per share from a range of $7.50 to $7.90 to a range of $8.25 to $8.65. Excluding an estimated $0.15 per share related to restructuring charges and other items, the company’s guidance for adjusted earnings per share has been raised from a range of $7.65 to $8.05 to a range of $8.40 to $8.80.
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 2021 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.
Avery Dennison Corporation (NYSE: AVY) is a global materials science company specializing in the design and manufacture of a wide variety of labeling and functional materials. The company’s products, which are used in nearly every major industry, include pressure-sensitive materials for labels and graphic applications; tapes and other bonding solutions for industrial, medical, and retail applications; tags, labels and embellishments for apparel; and radio frequency identification (RFID) solutions serving retail apparel and other markets. Headquartered in Glendale, California, the company employs more than 32,000 employees in more than 50 countries. Reported sales in 2020 were $7.0 billion. Learn more at www.averydennison.com.
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“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
“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 impacts to underlying demand for our products and/or foreign currency fluctuations from global economic conditions, political uncertainty, changes in environmental standards and governmental regulations, including as a result of the coronavirus/COVID-19 pandemic; (ii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (iii) 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; and (iv) 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 are not limited to, risks and uncertainties relating 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 2020 Form 10-K, filed with the Securities and Exchange Commission on February 25, 2021.
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.
Avery Dennison Corporation
Media Relations
Rob Six
T: +1 (626) 304-2361
rob.six@averydennison.com
Investor Relations
John Eble
T: +1 (440) 534-6290
john.eble@averydennison.com
Various trademarks and trade names are used herein and are the property of their respective owners.