Avery Dennison Announces 1Q 2013 Results

Avery Dennison Corporation announced preliminary, unaudited first quarter 2013 results. Unless otherwise indicated, the discussion of the company’s results is focused on its continuing operations, and comparisons are to the same period in the prior year. Results reflect classification of Office and Consumer Products (OCP) and Designed and Engineered Solutions (DES) as discontinued operations.

“First-quarter results were in line with our expectations,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Double-digit sales growth in emerging markets at Pressure-sensitive Materials and continued sales growth at Retail Branding and Information Solutions, combined with the benefits of our restructuring program, put us on track for a 22% to 40% increase in full-year adjusted earnings per share.

“We are also on track to deliver on our free cash flow target for the year,” Scarborough said. “During the quarter, we returned nearly $90 million to shareholders through dividends and the repurchase of approximately 1.5 million shares.

“Finally, I’m pleased that we have received all regulatory clearances for the sale of Office and Consumer Products and Designed and Engineered Solutions, which we expect to complete mid-year,” Scarborough said.

Pressure-sensitive Materials (PSM) sales increased approximately 3%. Within the segment, Label and Packaging Materials sales increased low-single digits. Combined sales for Graphics, Reflective, and Performance Tapes increased slightly. Operating margin improved 20 basis points to 9.6% as the benefit of productivity initiatives and higher volume more than offset the impact of changes in product mix and higher employee-related expenses.

Retail Branding and Information Solutions (RBIS) sales increased approximately 6%, driven by increased demand from U.S. and European retailers and brands, including another quarter of strong growth in RFID. Operating margin improved 210 basis points to 3.8% as the benefit of productivity initiatives and higher volume more than offset higher employee-related expenses.