02.02.15
Avery Dennison Corporation announced preliminary, unaudited results for its fourth quarter and full year ended Jan. 3, 2015. Results reflect classification of former Office and Consumer Products (OCP) and Designed and Engineered Solutions (DES) businesses as discontinued operations. The company completed the sale of these businesses on July 1, 2013.
“I’m happy to report another year of solid progress toward our long-term goals, and I want to thank our employees for their contributions to our ongoing success,” said Dean Scarborough, Avery Dennison chairman and CEO. “In 2014, we delivered 16% growth in adjusted earnings per share, significantly increased return on capital, and distributed over $480 million of cash to shareholders.
“Pressure-sensitive Materials delivered its third consecutive year of strong volume growth, while maintaining its profitability and high return on capital. We are taking further actions to improve PSM’s long-term competitive position as we continue to invest in growth.
“Retail Branding and Information Solutions faced top-line growth challenges this year, reflecting share loss in the value and contemporary segments of the market, offset by solid growth in RFID and the performance segment,” Scarborough added. “We are focusing our sales efforts to recapture share, while reducing fixed costs and aligning resources to better serve all segments of the market. We expect to see an improvement in our growth trajectory by mid-year and to resume our strong record for margin expansion, with no change to our 2018 goals for the business.
“We expect to increase earnings per share in 2015, despite a significant headwind from currency translation,” said Scarborough. “We remain committed to achieving our long-term financial targets, growing through innovation and differentiated quality and service, with a continued focus on cost and capital discipline.”
Fourth Quarter 2014 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in the fiscal year. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.
Pressure-sensitive Materials (PSM)
PSM segment sales increased approximately 2%. Within the segment, Label and Packaging Materials increased low single digits. Combined sales of Graphics and Performance Tapes increased mid-single digits.
Operating margin improved 60 basis points to 10.1% as the benefit from productivity initiatives and higher volume was partially offset by the net impact of raw material input costs and pricing along with higher restructuring costs. Adjusted operating margin improved 100 basis points.
Retail Branding and Information Solutions (RBIS)
RBIS segment sales were down approximately 5% due to lower volume in Europe and North America. Operating margin declined 190 basis points to 5.5% as the impact of lower volume, a prior year gain on sale of assets, and other factors more than offset the benefit from productivity initiatives and lower employee costs. Adjusted operating margin declined 70 basis points.
“I’m happy to report another year of solid progress toward our long-term goals, and I want to thank our employees for their contributions to our ongoing success,” said Dean Scarborough, Avery Dennison chairman and CEO. “In 2014, we delivered 16% growth in adjusted earnings per share, significantly increased return on capital, and distributed over $480 million of cash to shareholders.
“Pressure-sensitive Materials delivered its third consecutive year of strong volume growth, while maintaining its profitability and high return on capital. We are taking further actions to improve PSM’s long-term competitive position as we continue to invest in growth.
“Retail Branding and Information Solutions faced top-line growth challenges this year, reflecting share loss in the value and contemporary segments of the market, offset by solid growth in RFID and the performance segment,” Scarborough added. “We are focusing our sales efforts to recapture share, while reducing fixed costs and aligning resources to better serve all segments of the market. We expect to see an improvement in our growth trajectory by mid-year and to resume our strong record for margin expansion, with no change to our 2018 goals for the business.
“We expect to increase earnings per share in 2015, despite a significant headwind from currency translation,” said Scarborough. “We remain committed to achieving our long-term financial targets, growing through innovation and differentiated quality and service, with a continued focus on cost and capital discipline.”
Fourth Quarter 2014 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in the fiscal year. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.
Pressure-sensitive Materials (PSM)
PSM segment sales increased approximately 2%. Within the segment, Label and Packaging Materials increased low single digits. Combined sales of Graphics and Performance Tapes increased mid-single digits.
Operating margin improved 60 basis points to 10.1% as the benefit from productivity initiatives and higher volume was partially offset by the net impact of raw material input costs and pricing along with higher restructuring costs. Adjusted operating margin improved 100 basis points.
Retail Branding and Information Solutions (RBIS)
RBIS segment sales were down approximately 5% due to lower volume in Europe and North America. Operating margin declined 190 basis points to 5.5% as the impact of lower volume, a prior year gain on sale of assets, and other factors more than offset the benefit from productivity initiatives and lower employee costs. Adjusted operating margin declined 70 basis points.
