Avery Dennison Announces Third Quarter 2021 Results

Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its third quarter ended October 2, 2021. 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 delivered another strong quarter,” said Mitch Butier, chairman, president and CEO. “Both LGM and RBIS delivered impressive top and bottom-line growth, with continued momentum in Intelligent Labels. This strong performance comes during a challenging period given the ongoing global health crisis, as supply chains remain tight and significant inflationary pressures continue to build.

“Given our performance in the third quarter, we raised our outlook for the full year as we continue to deliver significant earnings growth,” added Butier. “We are also pleased that the acquisition of Vestcom, a business that further expands our position in high value categories in RBIS and has the potential to further advance our Intelligent Labels strategy, closed in the quarter.

Label and Graphic Materials
Reported sales increased 18% to $1.3 billion. Compared to prior year, sales were up 15% ex. currency (12% vs. 2019) and 14% on an organic basis (11% vs. 2019).
Label and Packaging Materials sales were up approximately 15% from prior year on an organic basis, with strong growth in both the high value product categories and the base business.
Sales increased by approximately 11% organically in the combined Graphics and Reflective Solutions businesses.
On an organic basis, sales were up low-double digits in North America and emerging markets and more than 20% in Western Europe.
Reported operating margin decreased 140 basis points to 13.7%. Adjusted operating margin decreased 140 basis points to 13.8%, driven by the benefit of higher volume/mix, net of supply chain disruptions, which was more than offset by the net impact of pricing and raw material costs and higher employee-related costs.

Retail Branding and Information Solutions
Reported sales increased 25% to $531 million. Compared to prior year, sales were up 22% ex. currency (29% vs. 2019) and 14% on an organic basis (9% vs. 2019), reflecting strong growth in both the high value product categories and the base business.
Intelligent Labels was up approximately 15% organically (40% vs. 2019).
Reported operating margin was flat to prior year at 11.0%. Adjusted operating margin increased 170 basis points to 13.8% as the benefits from higher volume and productivity were partially offset by the headwind from prior year temporary cost reduction actions, higher employee-related costs and growth investments.
The Vestcom acquisition closed on August 31, 2021. Vestcom expands RBIS’ role managing variable data in adjacent markets and accelerates the portfolio shift to high value product categories. The Vestcom business has above average sales growth and margins; we expect modest EPS accretion from the acquisition in fiscal year 2021.

Industrial and Healthcare Materials
Reported sales increased 24% to $195 million. Compared to prior year, sales were up 20% ex. currency (11% vs. 2019) and 15% on an organic basis (6% vs. 2019), reflecting a high-teens increase in industrial categories and a high-single digit increase in healthcare categories.
Reported operating margin increased 170 basis points to 9.6%. Adjusted operating margin decreased 220 basis points to 9.9% as the benefit from higher volume/mix net of supply chain disruptions was more than offset by the net impact of pricing, freight and raw material costs and higher employee-related costs.
details at: https://www.investors.averydennison.com/news-releases/news-release-details/avery-dennison-announces-third-quarter-2021-results

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