Avery Dennison Announces Fourth Quarter and Full Year 2022 Results

Q4 2022 Results




  • FY22 Reported EPS of $9.21, up 4%
    • Adjusted EPS (non-GAAP) of $9.15, up 3%, up 11% ex. currency
  • FY22 Net sales increased 7.5% to $9.0 billion
    • Sales growth ex. currency (non-GAAP) of 13.1%
    • Organic sales growth (non-GAAP) of 9.5%
  • 4Q22 Reported EPS of $1.51
    • Adjusted EPS (non-GAAP) of $1.65, down 23%
  • 4Q22 Net sales declined 7.2% to $2.0 billion
    • Sales change ex. currency (non-GAAP) of (0.8%)
    • Organic sales change (non-GAAP) of (0.9%)
  • FY23 Reported EPS guidance of $8.85 to $9.25
    • Adjusted EPS guidance of $9.15 to $9.55

MENTOR, Ohio, February 2, 2023 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its fourth quarter and full year ended December 31, 2022. 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 impressive results in 2022, once again achieving double-digit earnings growth on a constant currency basis,” said Mitch Butier, Chairman and CEO. “Both our Materials and Solutions Groups delivered strong top-and bottom-line results while accelerating adoption of Intelligent Labels.


“Our strong performance came amidst a very challenging environment that was capped by volume declines in the fourth quarter due to significant inventory reductions downstream,” added Butier. “Recent volume trends are indicative of patterns in previous slowdowns; we have been activating countermeasures accordingly.


“Despite the challenges in the macro environment, we remain well-positioned to continue our long track record of earnings growth in 2023, including accelerating growth in Intelligent Labels,” said Butier.


“Once again, I want to thank our entire team for continuing to raise their game to address the unique challenges at hand and deliver value for all our stakeholders.”


Fourth Quarter 2022 Results by Segment


Materials Group

  • Reported sales decreased 5% to $1.4 billion. Sales were up 2% ex. currency and 2% on an organic basis.
    • Label materials sales were up by low-single digits on an organic basis, with growth in both high-value and base product categories.
      • Pricing more than offset a low-double-digit volume decline, driven by inventory destocking.
      • On an organic basis, sales were down low-to-mid single digits in North America; sales were up low-double digits in Western Europe and mid-single digits in emerging markets.
    • Sales increased by low-single digits organically in the Graphics and Reflective Solutions businesses.
    • Sales increased by low-double digits organically in the combined Performance Tapes and Medical businesses.
  • Reported operating margin decreased 110 basis points to 10.7%. Adjusted EBITDA (non-GAAP) decreased by 15% to $184 million, with adjusted EBITDA margin (non-GAAP) of 12.8%.

Solutions Group

  • Reported sales decreased 11% to $585 million. Sales were down 7% ex. currency and 8% on an organic basis.
    • High-value categories sales were up mid-single digits on an organic basis.
    • Sales decreased by high-teens organically in base solutions, as customers adjusted inventory levels.
    • Enterprise-wide Intelligent Labels sales for the full year were up approximately 15% on an organic basis.
  • Reported operating margin decreased 590 basis points to 8.8%. Adjusted EBITDA decreased by 27% to $93 million, with adjusted EBITDA margin of 15.9%.



Balance Sheet and Capital Deployment


During 2022, the company deployed $40 million for acquisitions and returned $618 million in cash to shareholders, up $217 million, through a combination of share repurchases and dividends. The company repurchased 2.2 million shares at an aggregate cost of $380 million. Net of dilution from long-term incentive awards, the company’s year-end share count was down 2.0 million compared to the same time last year.


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


In January 2023, the company extended the maturity date of its revolving credit facility (“Revolver”) to February 2026 and increased its capacity to $1.2 billion in support of the company’s continued growth.


Income Taxes

The company’s reported effective tax rate was 27.4% for the fourth quarter and 24.2% for the full year. The company’s adjusted tax rate (non-GAAP) was 21.1% for the fourth quarter and 24.7% for the full year.


The company’s 2023 adjusted tax rate is expected to be in the mid-twenty percent range based on current tax regulations.


Cost Reduction Actions

During 2022, the company realized approximately $26 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $8 million.




In its supplemental presentation materials, “Fourth Quarter and Full Year 2022 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2023 financial results. Based on the factors listed and other assumptions, the company expects 2023 reported earnings per share of $8.85 to $9.25.


Excluding an estimated $0.30 per share impact of restructuring charges and other items, the company expects 2023 adjusted earnings per share of $9.15 to $9.55.


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 2022 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.


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 from global economic conditions, political uncertainty, and changes in environmental standards and governmental regulations, including as a result of COVID-19; (ii) the cost and 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; (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 are not limited to, risks and uncertainties relating to the following:

  • Our Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, environmental standards, laws and regulations, and customer preferences; the impact of competitive products and pricing; execution and integration of acquisitions; selling prices; 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
  • International Operations – worldwide and local economic and market conditions; changes in political conditions, including those related to the Russian invasion of Ukraine; and fluctuations in foreign currency exchange rates and other risks associated with foreign operations, including in emerging markets
  • COVID-19
  • 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 or data security breaches, including cyber-attacks or other intrusions to network security; and successful installation of new or upgraded information technology systems
  • Human Capital – recruitment and retention of employees; and collective labor arrangements
  • Our Indebtedness – credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest rates; volatility of financial markets; 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; impact of legal and regulatory proceedings, including with respect to environmental, anti-corruption, health and safety, 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 2021 Form 10-K, filed with the Securities and Exchange Commission on February 23, 2022, 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