Avery Dennison Announces Fourth Quarter and Full Year 2021 Results

Q4 2021 Results




  • 4Q21 Reported EPS of $2.19, down 4% driven by impact of extra week in prior year
    • Adjusted EPS (non-GAAP) of $2.13, down 6%; up 23% vs. 2019
  • 4Q21 Net sales increased 9.7% to $2.2 billion
    • Sales growth ex. currency (non-GAAP) of 18.5%
    • Organic sales growth (non-GAAP) of 12.8%
  • FY21 Reported EPS of $8.83, up 34%
    • Adjusted EPS (non-GAAP) of $8.91, up 25%
  • FY21 Net sales increased 20.6% to $8.4 billion
    • Sales growth ex. currency (non-GAAP) of 18.6%
    • Organic sales growth (non-GAAP) of 15.6%
  • FY22 Reported EPS guidance of $9.25 to $9.65
    • Adjusted EPS guidance of $9.35 to $9.75

GLENDALE, Calif., February 2, 2022 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its fourth quarter and full year ended January 1, 2022. Non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.


“2021 marked the company’s tenth consecutive year of strong top- and bottom-line growth,” said Mitch Butier, chairman, president and CEO. “We delivered 19 percent revenue growth on a constant currency basis and 25 percent adjusted earnings per share growth, while generating record free cash flow.


“Our strong performance comes at a challenging time as the global health crisis continues, supply chains are tight and significant inflationary pressures persist.

“2021 marked an important milestone for the company, as the final year of measurement for the five-year financial targets we communicated in early 2017,” added Butier. “ I’m pleased to report that we achieved our long-term goals for this period.”


“For 2022, we expect to again deliver strong top- and bottom-line growth and are targeting continued progress toward our 2025 goals,” said Butier.


“Once again, I want to thank our entire team for their tireless efforts to keep one another safe while delivering for all our stakeholders.”


Operational/Market Update


In the fourth quarter, uncertainty surrounding the global health crisis remained elevated as many parts of the world experienced an increase in COVID-19 cases. The safety and well-being of employees remains the company’s top priority. The company has continued to adapt its world-class safety protocols as the pandemic evolves. All manufacturing locations are currently operational.


The company continues to actively manage through a dynamic supply and demand environment. Demand across the majority of its businesses and regions remains strong, while raw materials, freight and labor availability continue to be constrained. The company continuesto leverage its global scale and work closely with customers and suppliers to minimize disruptions. Inflation remains persistent and additional pricing and material re-engineering actions are being implemented to offset higher costs.


Fourth Quarter 2021 Results by Segment


Label and Graphic Materials

  • Reported sales increased 3% to $1.3 billion. Compared to prior year, sales were up 12% ex. currency and 11% on an organic basis.
    • Label and Packaging Materials sales were up low-double digits from prior year on an organic basis, with strong growth in both high value product categories and the base business.
    • Sales increased by low-double digits organically in the combined Graphics and Reflective Solutions businesses.
    • On an organic basis, sales were up mid-teens in North America and high-single digits in Western Europe and emerging markets.
  • Reported operating margin decreased 370 basis points to 12.2%. Adjusted EBITDA margin decreased 310 basis points to 14.5%, as the benefit from higher organic volume/mix was more than offset by the net impact of pricing, freight and raw material costs and the impact of the extra week in 2020.
    • The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they are offsetting inflation, reduced margin by ~140 basis points.

Retail Branding and Information Solutions

  • Reported sales increased 30% to $659 million. Sales were up 39% ex. currency and 20% on an organic basis, reflecting strong growth in both the high value product categories and the base business.
    • Intelligent Labels was up more than 20% organically.
  • Reported operating margin decreased 60 basis points to 14.7%. Adjusted EBITDA margin decreased 30 basis points to 19.3%, as the benefits from acquisitions and higher volume were more than offset by growth investments, higher employee-related costs and the headwind from prior-year temporary cost reduction actions.
  • The Vestcom business is achieving our acquisition objectives.

Industrial and Healthcare Materials

  • Reported sales increased 2% to $193 million. Sales were up 12% ex. currency and 10% on an organic basis, reflecting a mid-single digit increase in industrial categories and a mid-teens increase in healthcare categories.
  • Reported operating margin decreased 360 basis points to 8.8%. Adjusted EBITDA margin decreased 300 basis points to 12.9% as the benefit from productivity was more than offset by the net impact of pricing, freight and raw material costs, the impact of the extra week in 2020, higher employee-related costs and growth investments.
    • The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they are offsetting inflation, reduced margin by ~90 basis points.



Balance Sheet and Capital Deployment

During 2021, the company deployed $1.48 billion for acquisitions and returned $402 million in cash to shareholders through a combination of share repurchases and dividends, up from $301 million compared to last year. The company repurchased 0.9 million shares at an aggregate cost of $181 million. Net of dilution from long-term incentive awards, the company’s year-end share count was down by 0.3 million compared to the same time last year.


The company’s balance sheet remains strong, with ample capacity to continue executing our long term capital allocation strategy. Net debt to adjusted EBITDA (non-GAAP) was 2.2 at the end of the fourth quarter, below the lower end of the company’s long-term target range.


Income Taxes

The company’s reported effective tax rate was 25% for both the fourth quarter and the full year. The company’s adjusted (non-GAAP) tax rate was 23.9% for the fourth quarter and 25% for the full year.


The company’s 2022 adjusted tax rate is expected to be in the mid-twenty percent range based on current tax regulations.


Cost Reduction Actions

In the fourth quarter and full year 2021, the company realized $16 million and $63 million, respectively, in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of $7 million and $14 million, respectively, the vast majority of which represents cash charges.



In its supplemental presentation materials, “Fourth Quarter and Full Year 2021 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2022 financial results. Based on the factors listed and other assumptions, the company expects 2022 reported earnings per share of $9.25 to $9.65.


Excluding an estimated $0.10 per share impact of restructuring charges and other items, the company expects 2022 adjusted earnings per share of $9.35 to $9.75.


For more details on the company’s results, see the summary tables accompanying this news release, as well as the supplemental presentation materials, “Fourth Quarter and Full Year 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.



About Avery Dennison

Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company that provides a wide range of branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and better connect brands and consumers. Our products and solutions include labeling and functional materials, radio frequency identification (RFID) inlays and tags, software applications that connect the physical and digital, and a variety of products and solutions that enhance branded packaging and carry or display information that improves the customer experience. Serving an array of industries worldwide — including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive — we employ approximately 34,000 employees in more than 50 countries. Our reported sales in 2023 were $8.4 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. Forward-looking statements also include those related to our acquisition of Vestcom, including its anticipated benefits, financing and effect on our long-term targets and future financial results.


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 COVID-19; (ii) availability of raw materials; (iii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (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; and (v) the execution and integration of acquisitions, including the acquisition of Vestcom.


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:

  • COVID-19
  • International Operations – worldwide and local economic and market conditions; changes in political conditions; and fluctuations in foreign currency exchange rates and other risks associated with foreign operations, including in emerging markets
  • Our Business – changes in our markets due to competitive conditions, technological developments, environmental standards, laws and regulations, and customer preferences; fluctuations in demand affecting sales to customers; execution and integration of acquisitions, including the acquisition of Vestcom; selling prices; fluctuations in the cost and availability of raw materials and energy; the impact of competitive products and pricing; customer and supplier concentrations or consolidations; financial condition of distributors; outsourced manufacturers; product and service quality; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; successful implementation of new manufacturing technologies and installation of manufacturing equipment; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; and collection of receivables from customers
  • Our Vestcom Acquisition – risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company; unknown liabilities; and the possibility that, if we do not achieve the perceived benefits of the acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of our common stock could decline
  • Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; retention of tax incentives; outcome of tax audits; and the realization of deferred tax assets
  • Information Technology – disruptions in information technology systems, including cyber-attacks or other intrusions to network security; successful installation of new or upgraded information technology systems; and data security breaches
  • Human Capital – recruitment and retention of employees; fluctuations in employee benefit costs; and collective labor arrangements
  • Our Indebtedness – credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; volatility of financial markets; fluctuations in interest rates; and compliance with our debt covenants
  • Ownership of Our Stock – potential significant variability of our stock price and amounts of future dividends and share repurchases
  • Legal and Regulatory Matters – protection and infringement of intellectual property and impact of legal and regulatory proceedings, including with respect to environmental, health and safety, anti-corruption and trade compliance
  • Other Financial Matters – fluctuations in pension costs and goodwill impairment

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, and subsequent quarterly reports on Form 10-Q.


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

Media Contacts


Kristin Robinson

Vice President, Global Communications




John Eble

Vice President, Finance and Investor Relations