Avery Dennison Announces First Quarter 2022 Results

Q1 2022 Results




  • 1Q22 Reported EPS of $2.39
    • Adjusted EPS (non-GAAP) of $2.40
  • 1Q22 Net sales increased 14.5% to $2.3 billion
    • Sales growth ex. currency (non-GAAP) of 18.0%
    • Organic sales growth (non-GAAP) of 12.7%
  • Raised FY 2022 EPS guidance
    • Reported EPS of $9.35 to $9.75 (previously $9.25 to $9.65)
    • Adjusted EPS of $9.45 to $9.85 (previously $9.35 to $9.75)

MENTOR, Ohio, April 26, 2022 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its first quarter ended April 2, 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.


“We once again delivered strong financial results amidst a challenging environment, with earnings ahead of expectations,” said Mitch Butier, Avery Dennison chairman and CEO.


“Our strong performance comes at a difficult time as COVID-19 continues, supply chains remain tight and inflationary pressures persist. Despite these challenges, we have raised our outlook and we continue to expect strong top- and bottom-line growth for the year,” said Butier. “We remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline.


“Once again, I want to thank our entire team for their tireless efforts to keep one another safe while continuing to deliver for our customers during this challenging period. The team continues to raise their game each quarter, to address the unique challenges at hand.”


First Quarter 2022 Results by Segment


Label and Graphic Materials

  • Reported sales increased 8% to $1.5 billion. Sales were up 12% ex. currency and 12% on an organic basis.
    • Label and Packaging Materials sales were up low-double digits on an organic basis, with strong growth in both high value product categories and the base business.
    • Sales increased by high-single digits organically in the combined Graphics and Reflective Solutions businesses.
    • On an organic basis, sales were up high teens in North America and Western Europe and low-to-mid single digits in emerging markets.
  • Reported operating margin decreased 240 basis points to 14.0%. Adjusted EBITDA margin (non-GAAP) decreased 280 basis points to 15.6%, largely driven by the net impact of pricing, freight, and raw material costs. Adjusted EBITDA margin increased 110 basis points sequentially.
    • The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~210 basis points.
  • Inflation remains persistent in our materials businesses; we are anticipating roughly 20% inflation in 2022 compared to prior year.

Retail Branding and Information Solutions

  • Reported sales increased 41% to $679 million. Sales were up 43% 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 over 20% organically.
  • Reported operating margin increased 90 basis points to 13.3%. Adjusted EBITDA margin increased 240 basis points to 19.1%, as the benefits from higher organic volume and acquisitions were partially offset by growth investments and higher employee-related costs.
  • The Vestcom business is achieving our acquisition objectives.

Industrial and Healthcare Materials

  • Reported sales decreased 1% to $190 million. Sales were up 1% ex. currency and 1% on an organic basis, reflecting a low-single digit decrease in industrial categories and a low-double digits increase in healthcare categories.
  • Reported operating margin decreased 410 basis points to 8.2%. Adjusted EBITDA margin decreased 410 basis points to 11.8% driven by lower volume/mix and the net impact of pricing, freight, and raw material costs.
    • The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~120 basis points.



Balance Sheet and Capital Deployment

During the first quarter of the year, the company deployed $33 million for acquisitions and returned $208 million in cash to shareholders through a combination of share repurchases and dividends, up from $107 million compared to last year. The company repurchased 0.8 million shares at an aggregate cost of $152 million. Net of dilution from long-term incentive awards, the company’s share count at the end of the quarter was down 1.2 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 2.35 at the end of the first quarter.


Income Taxes

The company’s reported first quarter effective tax rate was 26.5%. The adjusted tax rate (non-GAAP) for the quarter was 25.6%, which is also the company’s current expectation for its full-year adjusted tax rate.


Cost Reduction Actions

In the first quarter, the company realized approximately $9 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $1 million.




In its supplemental presentation materials, “First Quarter 2022 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 has raised its guidance range for 2022 reported earnings per share from $9.25 to $9.65 to $9.35 to $9.75.


Excluding an estimated $0.10 per share related to restructuring charges and other items, the company’s guidance range for adjusted earnings per share has been raised from $9.35 to $9.75 to $9.45 to $9.85.


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 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. Forward-looking statements also include those related to the acquisition of CB Velocity Holdings, LLC (“Vestcom”), including its 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) the 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 our 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, 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
  • 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, including our acquisition of Vestcom; 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
  • 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.


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