Avery Dennison Announces Second Quarter 2022 Results

Q2 2022 Results




  • 2Q22 Reported EPS of $2.61
    • Adjusted EPS (non-GAAP) of $2.64
  • 2Q22 Net sales increased 11.7% to $2.3 billion
    • Sales growth ex. currency (non-GAAP) of 16.7%
    • Organic sales growth (non-GAAP) of 11.3%
  • Raised FY 2022 EPS guidance
    • Reported EPS of $9.60 to $9.90 (previously $9.35 to $9.75)
    • Adjusted EPS of $9.70 to $10.00 (previously $9.45 to $9.85)

MENTOR, Ohio, July 27, 2022 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its second quarter ended July 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 dynamic environment, with earnings above expectations,” said Mitch Butier, Avery Dennison chairman and CEO. “LGM and RBIS delivered impressive earnings growth and momentum in Intelligent Labels is further accelerating.


“Our strong performance comes at a challenging time as supply chains remain tight, inflationary pressures are significant and COVID-19 continues. Despite these challenges and a significant currency translation headwind, we have raised our guidance for the year,” said Butier. “The strategic foundations we have laid enable us to generate superior value creation through a balance of GDP-plus growth and top-quartile returns over the long-term.


“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.”


Second Quarter 2022 Results by Segment


Label and Graphic Materials

  • Reported sales increased 8% to $1.5 billion. Sales were up 14% ex. currency and 15% on an organic basis. 
    • Label and Packaging Materials sales were up high teens on an organic basis with strong growth in both high value product categories and the base business.
    • Sales decreased by mid-single digits organically in the combined Graphics and Reflective Solutions businesses.
    • On an organic basis, sales were up high teens in North America, more than 20% in Western Europe, and mid-single digits in emerging markets.
  • Reported operating margin decreased 140 basis points to 15.2%. Adjusted EBITDA margin (non-GAAP) increased 50 basis points to 17.1%, as the benefits from the net impact of pricing, freight and raw material costs, productivity and mix more than offset higher employee-related costs and lower volume.
  • Inflation continues to be significant in the company’s materials businesses; it anticipates more than 20% inflation in 2022 compared to prior year.

Retail Branding and Information Solutions

  • Reported sales increased 24% to $658 million. Sales were up 27% ex. currency and 5% on an organic basis.
    • Growth was strong in the high value product categories, including Intelligent Labels and external embellishments.
    • Sales decreased by low-single digits in the base business following strong prior quarter, up mid-single digits year-to-date.
  • Reported operating margin increased 490 basis points to 12.9%. Adjusted EBITDA margin increased 220 basis points to 19.0% as the combined benefit from higher organic volume and acquisitions was partially offset by growth investments and higher employee-related costs.

Industrial and Healthcare Materials

  • Reported sales increased 1% to $198 million. Sales were up 5% ex. currency and 7% on an organic basis reflecting a mid-single digit increase in industrial categories and a high teens increase in healthcare categories.
  • Reported operating margin decreased 120 basis points to 10.3%. Adjusted EBITDA margin increased 190 basis points sequentially to 13.7%. Adjusted EBITDA margin decreased 160 basis points versus prior year as the benefits from the net impact of pricing, freight, and raw material costs were more than offset by higher employee-related costs and lower volume/mix.
    • Lower volume was principally driven by China.



Balance Sheet and Capital Deployment

During the first half of the year, the company deployed $37 million for acquisitions and returned $386 million in cash to shareholders, up $183 million compared to last year, through a combination of share repurchases and dividends. The company repurchased 0.7 million shares in the second quarter at an aggregate cost of $117 million. Net of dilution from long-term incentive awards, the company’s share count at the end of the quarter was down 1.9 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 second quarter.


Income Taxes

The company’s reported second quarter effective tax rate was 25.5%. 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 second quarter, the company realized approximately $6 million in pre-tax savings from restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately $3 million.




In its supplemental presentation materials, “Second 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 $9.35 to $9.75 to $9.60 to $9.90.


Excluding an estimated $0.10 per share related to restructuring charges and other items, the company raised its guidance range for adjusted earnings per share from $9.45 to $9.85 to $9.70 to $10.00.


For more details on the company’s results, see the summary tables accompanying this news release, as well as the supplemental presentation materials, “Second 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 from global economic conditions, political uncertainty, and 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; (v) foreign currency fluctuations; and (vi) 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, 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