“We are off to a good start to the year, with adjusted EPS up 30% driven by a combination of solid operating results, currency translation tailwinds, and a lower tax rate,” said Mitch Butier, president and CEO. “Label and Graphic Materials delivered solid organic growth and sustained its strong operating margin; Retail Branding and Information Solutions expanded its margin significantly, with solid organic growth driven by strength in RFID; and Industrial and Healthcare Materials results were in line with expectations, with revenue up nearly 50%, largely due to acquisitions, while operating margin declined.
“We have initiated a large, multi-year restructuring plan associated with the consolidation of LGM’s European footprint, designed to further enhance our competitive position in the region,” he adds. “Excluding the incremental charges from this action, our current year outlook has improved, reflecting a continuation of strong operating performance and an increased benefit from currency translation.”
Label and Graphic Materials reported a sales increase 11.8%. Sales ex. currency increased 4.2% and on an organic basis, sales grew 3.6%. Sales on an organic basis increased mid-single digits in Label and Packaging Materials and increased low-single digits in the combined Graphics and Reflective Solutions businesses.
Reported operating margin decreased 30 basis points to 12.3%, reflecting the impact of restructuring actions. Adjusted operating margin increased 20 basis points to 13% as the benefits of increased volume and productivity more than offset higher employee-related costs and the net impact of pricing and raw material costs.