"I'm pleased to report another quarter of strong earnings growth, driven by restructuring and other productivity actions we initiated last year," said Dean Scarborough, Avery Dennison chairman, president and CEO. "Pressure-sensitive Materials (PSM) continued to benefit from its leadership position in emerging markets, growth through innovation, and significant productivity gains. Retail Branding and Information Solutions delivered its fourth consecutive quarter of strong sales growth with continued margin expansion in the first half.
"We passed two significant milestones, delivering $105 million of restructuring savings and completing the sale of Office and Consumer Products and Designed and Engineered Solutions," Scarborough added. "We are committed to achieving our earnings and free cash flow targets, and to returning the vast majority of that cash to shareholders. In the first half, we distributed over $200 million to shareholders through dividends and the repurchase of 3.5 million shares."
PSM segment sales increased approximately 4%. Within the segment, Label and Packaging Materials sales increased mid-single digits. Combined sales for Graphics, Reflective, and Performance Tapes increased low single digits.
Retail Branding and Information Solutions (RBIS) segment sales increased approximately 8%, driven by increased demand from U.S. and European retailers and brands.
On July 1, 2013, the company completed the sale of its OCP and DES businesses to CCL Industries Inc. for $500 million, subject to customary closing adjustments expected to be finalized by October 1, 2013. The company expects net proceeds from the sale of approximately $400 million, which it intends to use to repurchase shares and reduce indebtedness, including an additional pension plan contribution.