Highlights:
- 4Q21 Reported EPS of $2.19, down 4% driven by impact of extra
week in prior year
- Adjusted EPS (non-GAAP) of $2.13, down 6%; up 23% vs. 2019
- 4Q21 Net sales increased 9.7% to $2.2 billion
- Sales growth ex. currency (non-GAAP) of 18.5%
- Organic sales growth (non-GAAP) of 12.8%
- FY21 Reported EPS of $8.83, up 34%
- Adjusted EPS (non-GAAP) of $8.91, up 25%
- FY21 Net sales increased 20.6% to $8.4 billion
- Sales growth ex. currency (non-GAAP) of 18.6%
- Organic sales growth (non-GAAP) of 15.6%
- FY22 Reported EPS guidance of $9.25 to $9.65
- Adjusted EPS guidance of $9.35 to $9.75
Avery Dennison Corporation (NYSE:AVY) today announced
preliminary, unaudited results for its fourth quarter and full year
ended January 1, 2022. Non-GAAP financial measures referenced in
this document are reconciled to GAAP in the attached financial
schedules. Unless otherwise indicated, comparisons are to the same
period in the prior year.
“2021 marked the company’s tenth consecutive year of strong top-
and bottom-line growth,” said Mitch Butier, chairman, president and
CEO. “We delivered 19 percent revenue growth on a constant currency
basis and 25 percent adjusted earnings per share growth, while
generating record free cash flow.
“Our strong performance comes at a challenging time as the
global health crisis continues, supply chains are tight and
significant inflationary pressures persist.
“2021 marked an important milestone for the company, as the
final year of measurement for the five-year financial targets we
communicated in early 2017,” added Butier. “ I’m pleased to report
that we achieved our long-term goals for this period.”
“For 2022, we expect to again deliver strong top- and
bottom-line growth and are targeting continued progress toward our
2025 goals,” said Butier.
“Once again, I want to thank our entire team for their tireless
efforts to keep one another safe while delivering for all our
stakeholders.”
Operational/Market
Update
In the fourth quarter, uncertainty surrounding the global health
crisis remained elevated as many parts of the world experienced an
increase in COVID-19 cases. The safety and well-being of employees
remains the company’s top priority. The company has continued to
adapt its world-class safety protocols as the pandemic evolves. All
manufacturing locations are currently operational.
The company continues to actively manage through a dynamic
supply and demand environment. Demand across the majority of its
businesses and regions remains strong, while raw materials, freight
and labor availability continue to be constrained. The company
continues to leverage its global scale and work closely with
customers and suppliers to minimize disruptions. Inflation remains
persistent and additional pricing and material re-engineering
actions are being implemented to offset higher costs.
Fourth Quarter 2021 Results by
Segment
Label and Graphic Materials
- Reported sales increased 3% to $1.3 billion. Compared to prior
year, sales were up 12% ex. currency and 11% on an organic basis.
- Label and Packaging Materials sales were up low-double digits
from prior year on an organic basis, with strong growth in both
high value product categories and the base business.
- Sales increased by low-double digits organically in the
combined Graphics and Reflective Solutions businesses.
- On an organic basis, sales were up mid-teens in North America
and high-single digits in Western Europe and emerging markets.
- Reported operating margin decreased 370 basis points to 12.2%.
Adjusted EBITDA margin decreased 310 basis points to 14.5%, as the
benefit from higher organic volume/mix was more than offset by the
net impact of pricing, freight and raw material costs and the
impact of the extra week in 2020.
- The higher revenue base from price increases alone, with no
corresponding incremental EBITDA as they are offsetting inflation,
reduced margin by ~140 basis points.
Retail Branding and Information Solutions
- Reported sales increased 30% to $659 million. Sales were up 39%
ex. currency and 20% on an organic basis, reflecting strong growth
in both the high value product categories and the base business.
- Intelligent Labels was up more than 20% organically.
- Reported operating margin decreased 60 basis points to 14.7%.
Adjusted EBITDA margin decreased 30 basis points to 19.3%, as the
benefits from acquisitions and higher volume were more than offset
by growth investments, higher employee-related costs and the
headwind from prior-year temporary cost reduction actions.
- The Vestcom business is achieving our acquisition
objectives.
Industrial and Healthcare Materials
- Reported sales increased 2% to $193 million. Sales were up 12%
ex. currency and 10% on an organic basis, reflecting a mid-single
digit increase in industrial categories and a mid-teens increase in
healthcare categories.
- Reported operating margin decreased 360 basis points to 8.8%.
Adjusted EBITDA margin decreased 300 basis points to 12.9% as the
benefit from productivity was more than offset by the net impact of
pricing, freight and raw material costs, the impact of the extra
week in 2020, higher employee-related costs and growth investments.
- The higher revenue base from price increases alone, with no
corresponding incremental EBITDA as they are offsetting inflation,
reduced margin by ~90 basis points.
Other
Balance Sheet and Capital Deployment
During 2021, the company deployed $1.48 billion for acquisitions
and returned $402 million in cash to shareholders through a
combination of share repurchases and dividends, up from $301
million compared to last year. The company repurchased 0.9 million
shares at an aggregate cost of $181 million. Net of dilution from
long-term incentive awards, the company’s year-end share count was
down by 0.3 million compared to the same time last year.
The company’s balance sheet remains strong, with ample capacity
to continue executing our long term capital allocation strategy.
Net debt to adjusted EBITDA (non-GAAP) was 2.2 at the end of the
fourth quarter, below the lower end of the company’s long-term
target range.
Income Taxes
The company’s reported effective tax rate was 25% for both the
fourth quarter and the full year. The company’s adjusted (non-GAAP)
tax rate was 23.9% for the fourth quarter and 25% for the full
year.
The company’s 2022 adjusted tax rate is expected to be in the
mid-twenty percent range based on current tax regulations.
Cost Reduction Actions
In the fourth quarter and full year 2021, the company realized
$16 million and $63 million, respectively, in pre-tax savings from
restructuring, net of transition costs, and incurred pre-tax
restructuring charges of $7 million and $14 million, respectively,
the vast majority of which represents cash charges.
Guidance
In its supplemental presentation materials, “Fourth Quarter and
Full Year 2021 Financial Review and Analysis,” the company provides
a list of factors that it believes will contribute to its 2022
financial results. Based on the factors listed and other
assumptions, the company expects 2022 reported earnings per share
of $9.25 to $9.65.
Excluding an estimated $0.10 per share impact of restructuring
charges and other items, the company expects 2022 adjusted earnings
per share of $9.35 to $9.75.
For more details on the company’s results, see the summary
tables accompanying this news release, as well as the supplemental
presentation materials, “Fourth Quarter and Full Year 2021
Financial Review and Analysis,” posted on the company’s website at
www.investors.averydennison.com, and furnished to the SEC on Form
8-K.
Throughout this release and the supplemental presentation
materials, amounts on a per share basis reflect fully diluted
shares outstanding.
About Avery Dennison
Avery Dennison Corporation (NYSE: AVY) is a global materials
science company specializing in the design and manufacture of a
wide variety of labeling and functional materials. The company’s
products, which are used in nearly every major industry, include
pressure-sensitive materials for labels and graphic applications;
tapes and other bonding solutions for industrial, medical, and
retail applications; tags, labels and embellishments for apparel;
and radio frequency identification (RFID) solutions serving retail
apparel and other markets. Headquartered in Glendale, California,
the company employs more than 35,000 employees in more than 50
countries. Reported sales in 2021 were $8.4 billion. Learn more at
www.averydennison.com.
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995
Certain statements contained in this document are
"forward-looking statements" intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements,
and financial or other business targets, are subject to certain
risks and uncertainties. Forward-looking statements also include
those related to our acquisition of Vestcom, including its
anticipated benefits, financing and effect on our long-term targets
and future financial results.
We believe that the most significant risk factors that could
affect our financial performance in the near-term include: (i) the
impacts to underlying demand for our products and/or foreign
currency fluctuations from global economic conditions, political
uncertainty, changes in environmental standards and governmental
regulations, including as a result of COVID-19; (ii) availability
of raw materials; (iii) competitors’ actions, including pricing,
expansion in key markets, and product offerings; (iv) the degree to
which higher costs can be offset with productivity measures and/or
passed on to customers through price increases, without a
significant loss of volume; and (v) the execution and integration
of acquisitions, including the acquisition of Vestcom.
Actual results and trends may differ materially from historical
or anticipated results depending on a variety of factors, including
but are not limited to, risks and uncertainties relating to the
following:
- COVID-19
- International Operations – worldwide and local economic and
market conditions; changes in political conditions; and
fluctuations in foreign currency exchange rates and other risks
associated with foreign operations, including in emerging
markets
- Our Business – changes in our markets due to competitive
conditions, technological developments, environmental standards,
laws and regulations, and customer preferences; fluctuations in
demand affecting sales to customers; execution and integration of
acquisitions, including the acquisition of Vestcom; selling prices;
fluctuations in the cost and availability of raw materials and
energy; the impact of competitive products and pricing; customer
and supplier concentrations or consolidations; financial condition
of distributors; outsourced manufacturers; product and service
quality; timely development and market acceptance of new products,
including sustainable or sustainably-sourced products; investment
in development activities and new production facilities; successful
implementation of new manufacturing technologies and installation
of manufacturing equipment; our ability to generate sustained
productivity improvement; our ability to achieve and sustain
targeted cost reductions; and collection of receivables from
customers
- Our Vestcom Acquisition – risks related to future opportunities
and plans for the combined company, including the uncertainty of
expected future financial performance and results of the combined
company; unknown liabilities; and the possibility that, if we do
not achieve the perceived benefits of the acquisition as rapidly or
to the extent anticipated by financial analysts or investors, the
market price of our common stock could decline
- Income Taxes – fluctuations in tax rates; changes in tax laws
and regulations, and uncertainties associated with interpretations
of such laws and regulations; retention of tax incentives; outcome
of tax audits; and the realization of deferred tax assets
- Information Technology – disruptions in information technology
systems, including cyber-attacks or other intrusions to network
security; successful installation of new or upgraded information
technology systems; and data security breaches
- Human Capital – recruitment and retention of employees;
fluctuations in employee benefit costs; and collective labor
arrangements
- Our Indebtedness – credit risks; our ability to obtain adequate
financing arrangements and maintain access to capital; volatility
of financial markets; fluctuations in interest rates; and
compliance with our debt covenants
- Ownership of Our Stock – potential significant variability of
our stock price and amounts of future dividends and share
repurchases
- Legal and Regulatory Matters – protection and infringement of
intellectual property and impact of legal and regulatory
proceedings, including with respect to environmental, health and
safety, anti-corruption and trade compliance
- Other Financial Matters – fluctuations in pension costs and
goodwill impairment
For a more detailed discussion of these factors, see “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in our 2020 Form 10-K, filed
with the Securities and Exchange Commission on February 25, 2021,
and subsequent quarterly reports on Form 10-Q.
The forward-looking statements included in this document are
made only as of the date of this document, and we undertake no
obligation to update these statements to reflect subsequent events
or circumstances, other than as may be required by law.
For more information and to listen to a live broadcast or an
audio replay of the quarterly conference call with analysts, visit
the Avery Dennison website at
www.investors.averydennison.com
Fourth Quarter Financial Summary - Preliminary, unaudited
(In millions, except % and per share amounts) (13 weeks) (14
weeks)
4Q 4Q % Sales Change
vs. P/Y
2021
2020
Reported Ex. Currency Organic (a) (b) Net sales, by segment: Label
and Graphic Materials
$1,331.4
$1,294.7
2.8%
11.5%
10.6%
Retail Branding and Information Solutions
659.1
508.0
29.7%
38.9%
19.7%
Industrial and Healthcare Materials
192.7
188.2
2.4%
11.7%
9.5%
Total net sales
$2,183.2
$1,990.9
9.7%
18.5%
12.8%
As Reported (GAAP) Adjusted Non-GAAP (c) (13
weeks) (14 weeks) (13 weeks) (14 weeks)
4Q 4Q
% % of Sales 4Q 4Q % % of
Sales
2021
2020
Change
2021
2020
2021
2020
Change
2021
2020
Operating income (loss) / operating margins before interest, other
non-operating expense (income), and taxes, by segment: Label and
Graphic Materials
$162.5
$205.7
12.2%
15.9%
$164.6
$199.6
12.4%
15.4%
Retail Branding and Information Solutions
96.6
77.5
14.7%
15.3%
89.0
79.6
13.5%
15.7%
Industrial and Healthcare Materials
16.9
23.3
8.8%
12.4%
18.0
23.1
9.3%
12.3%
Corporate expense (d)
(12.5)
(33.5)
(18.8)
(33.0)
Total operating income / operating margins before interest, other
non-operating expense (income), and taxes
$263.5
$273.0
(3%)
12.1%
13.7%
$252.8
$269.3
(6%)
11.6%
13.5%
Interest expense
$20.0
$15.6
$20.0
$15.6
Other non-operating expense (income), net (e)
($0.5)
$2.1
($2.0)
$1.6
Income before taxes
$244.0
$255.3
(4%)
11.2%
12.8%
$234.8
$252.1
(7%)
10.8%
12.7%
Provision for (benefit from) income taxes
$60.9
$62.9
$56.0
$60.7
Equity method investment (losses) gains
($0.4)
($0.9)
($0.4)
($0.9)
Net income
$182.7
$191.5
(5%)
8.4%
9.6%
$178.4
$190.5
(6%)
8.2%
9.6%
Net income per common share, assuming dilution
$2.19
$2.28
(4%)
$2.13
$2.27
(6%)
Free Cash Flow (f)
$158.5
$205.8
See accompanying schedules A-4 to
A-10 for reconciliations from GAAP to non-GAAP financial
measures.
(a)
Sales change ex. currency refers
to the increase or decrease in net sales, excluding the estimated
impact of foreign currency translation, and, where applicable, an
extra week in our fiscal year and the calendar shift resulting from
the extra week in the prior fiscal year and currency adjustment for
transitional reporting of highly inflationary economies. The
estimated impact of foreign currency translation is calculated on a
constant currency basis, with prior period results translated at
current period average exchange rates to exclude the effect of
currency fluctuations.
(b)
Organic sales change refers to
sales change ex. currency, excluding the estimated impact of
acquisitions and product line divestitures.
(c)
Excludes impact of restructuring
charges and other items.
(d)
As reported "Corporate expense"
for the fourth quarters of 2021 and 2020 include gain on venture
investment of ($6.3) and severance and related costs of $.5,
respectively.
(e)
As reported "Other non-operating
expense (income), net" for the fourth quarters of 2021 and 2020
include pension plan settlement and curtailment losses of $1.5 and
$.5, respectively.
(f)
Free cash flow refers to cash
flow provided by operating activities, less payments for property,
plant and equipment, software and other deferred charges, plus
proceeds from sales of property, plant and equipment, plus (minus)
net proceeds from insurance and sales (purchases) of investments.
Free cash flow is also adjusted for, where applicable, certain
acquisition-related transaction costs.
Full Year Financial Summary - Preliminary, unaudited (in
millions, except % and per share amounts)
(52 weeks)
(53 weeks)
% Sales Change vs. P/Y
2021
2020
Reported Ex. Currency Organic (a) (b) Net sales, by segment: Label
and Graphic Materials
$5,430.4
$4,715.1
15.2%
12.7%
12.0%
Retail Branding and Information Solutions
2,201.8
1,630.9
35.0%
34.9%
25.2%
Industrial and Healthcare Materials
776.1
625.5
24.1%
21.7%
17.8%
Total net sales
$8,408.3
$6,971.5
20.6%
18.6%
15.6%
As Reported (GAAP) Adjusted Non-GAAP (c)
(52 weeks)
(53 weeks)
% % of Sales
(52 weeks)
(53 weeks)
% % of Sales
2021
2020
Change
2021
2020
2021
2020
Change
2021
2020
Operating income (loss) / operating margins before interest, other
non-operating expense (income), and taxes, by segment: Label and
Graphic Materials
$801.7
$688.8
14.8%
14.6%
$773.6
$711.0
14.2%
15.1%
Retail Branding and Information Solutions
257.2
144.7
11.7%
8.9%
293.8
167.4
13.3%
10.3%
Industrial and Healthcare Materials
81.6
58.2
10.5%
9.3%
84.0
66.6
10.8%
10.6%
Corporate expense (d)
(81.8)
(82.5)
(87.1)
(82.2)
Total operating income / operating margins before interest, other
non-operating expense (income), and taxes
$1,058.7
$809.2
31%
12.6%
11.6%
$1,064.3
$862.8
23%
12.7%
12.4%
Interest expense
$70.2
$70.0
$70.2
$70.0
Other non-operating expense (income), net (e)
($4.1)
$1.9
($6.6)
$1.4
Income before taxes
$992.6
$737.3
35%
11.8%
10.6%
$1,000.7
$791.4
26%
11.9%
11.4%
Provision for (benefit from) income taxes
$248.6
$177.7
$249.8
$190.7
Equity method investment (losses) gains
($3.9)
($3.7)
($3.9)
($3.7)
Net income
$740.1
$555.9
33%
8.8%
8.0%
$747.0
$597.0
25%
8.9%
8.6%
Net income per common share, assuming dilution
$8.83
$6.61
34%
$8.91
$7.10
25%
Free Cash Flow (f)
$797.7
$547.5
See accompanying schedules A-4 to
A-10 for reconciliations from GAAP to non-GAAP financial
measures.
(a)
Sales change ex. currency refers
to the increase or decrease in net sales, excluding the estimated
impact of foreign currency translation, and, where applicable, an
extra week in our fiscal year and the calendar shift resulting from
the extra week in the prior fiscal year and currency adjustment for
transitional reporting of highly inflationary economies. The
estimated impact of foreign currency translation is calculated on a
constant currency basis, with prior period results translated at
current period average exchange rates to exclude the effect of
currency fluctuations.
(b)
Organic sales change refers to
sales change ex. currency, excluding the estimated impact of
acquisitions and product line divestitures.
(c)
Excludes impact of restructuring
charges and other items.
(d)
As reported "Corporate expense"
for fiscal year 2021 includes gain on venture investment of ($6.3)
and severance and related costs of $1, and fiscal year 2020
includes severance and related costs of $.3.
(e)
As reported "Other non-operating
expense (income), net" for fiscal years 2021 and 2020 include
pension plan settlement and curtailment losses of $2.5 and $.5,
respectively.
(f)
Free cash flow refers to cash
flow provided by operating activities, less payments for property,
plant and equipment, software and other deferred charges, plus
proceeds from sales of property, plant and equipment, plus (minus)
net proceeds from insurance and sales (purchases) of investments.
Free cash flow is also adjusted for, where applicable, certain
acquisition-related transaction costs.
A-1
AVERY DENNISON CORPORATION PRELIMINARY CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per
share amounts) (UNAUDITED)
Three Months Ended Twelve Months Ended Jan.
1, 2022 Jan. 2, 2021 Jan. 1, 2022 Jan. 2,
2021 (13 weeks) (14 weeks) (52 weeks) (53 weeks) Net
sales $
2,183.2
$
1,990.9
$
8,408.3
$
6,971.5
Cost of products sold
1,598.1
1,419.8
6,095.5
5,048.2
Gross profit
585.1
571.1
2,312.8
1,923.3
Marketing, general and administrative expense
332.3
301.8
1,248.5
1,060.5
Other expense (income), net(1)
(10.7
)
(3.7
)
5.6
53.6
Interest expense
20.0
15.6
70.2
70.0
Other non-operating expense (income), net(2)
(0.5
)
2.1
(4.1
)
1.9
Income before taxes
244.0
255.3
992.6
737.3
Provision for (benefit from) income taxes
60.9
62.9
248.6
177.7
Equity method investment (losses) gains
(0.4
)
(0.9
)
(3.9
)
(3.7
)
Net income $
182.7
$
191.5
$
740.1
$
555.9
Per share amounts: Net income per common share, assuming
dilution $
2.19
$
2.28
$
8.83
$
6.61
Weighted average number of common shares outstanding,
assuming dilution
83.6
84.1
83.8
84.1
(1)
"Other expense (income), net" for
the fourth quarter of 2021 includes gain on venture investments of
$18.1, partially offset by severance and related costs of $5.4,
asset impairment and lease cancellation charges of $1.2, and
transaction and related costs of $.8.
"Other expense (income), net" for
the fourth quarter of 2020 includes gain on venture investment of
$6.9 and gain on sale of assets of $.5, partially offset by
severance and related costs of $2.7 and transaction costs of
$1.
"Other expense (income), net" for
fiscal year 2021 includes severance and related costs of $10.5,
asset impairment and lease cancellation charges of $3.1,
transaction and related costs of $20.9, and loss on sale of assets,
net, of $.2, partially offset by gain on venture investments of
$23, gain on sale of product line of $5.7, and outcomes of legal
proceedings, net, of $.4.
"Other expense (income), net" for
fiscal year 2020 includes severance and related costs of $49.1,
asset impairment charges of $6.2, and transaction and related costs
of $4.2, partially offset by gain on venture investments, net, of
$5.4 and gain on sale of assets of $.5.
(2)
"Other non-operating expense
(income), net" includes pension plan settlement and curtailment
losses of $1.5 and $2.5 in the fourth quarter and fiscal year 2021,
respectively, and $.5 in the fourth quarter and fiscal year
2020.
A-2
AVERY DENNISON CORPORATION PRELIMINARY CONDENSED
CONSOLIDATED BALANCE SHEETS (In millions)
(UNAUDITED) ASSETS Jan. 1, 2022 Jan.
2, 2021 Current assets: Cash and cash equivalents
$
162.7
$
252.3
Trade accounts receivable, net
1,424.5
1,235.2
Inventories, net
907.2
717.2
Other current assets
240.2
211.5
Total current assets
2,734.6
2,416.2
Property, plant and equipment, net
1,477.7
1,343.7
Goodwill and other intangibles resulting from business
acquisitions, net
2,792.9
1,361.3
Deferred tax assets
130.2
197.7
Other assets
836.2
765.0
$
7,971.6
$
6,083.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Short-term borrowings and
current portion of long-term debt and finance leases $
318.8
$
64.7
Accounts payable
1,298.8
1,050.9
Other current liabilities
930.3
810.4
Total current liabilities
2,547.9
1,926.0
Long-term debt and finance leases
2,785.9
2,052.1
Other long-term liabilities
713.4
620.9
Shareholders' equity: Common stock
124.1
124.1
Capital in excess of par value
862.3
862.1
Retained earnings
3,880.7
3,349.3
Treasury stock at cost
(2,659.8
)
(2,501.0
)
Accumulated other comprehensive loss
(282.9
)
(349.6
)
Total shareholders' equity
1,924.4
1,484.9
$
7,971.6
$
6,083.9
A-3
AVERY DENNISON CORPORATION PRELIMINARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions)
(UNAUDITED) Twelve Months Ended
Jan. 1, 2022 Jan. 2, 2021 (52 weeks) (53 weeks)
Operating Activities: Net income $
740.1
$
555.9
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation
167.3
154.2
Amortization
76.8
51.1
Provision for credit losses and sales returns
35.7
64.0
Stock-based compensation
37.2
24.0
Pension plan settlement loss
1.6
0.5
Deferred taxes and other non-cash taxes
2.6
9.3
Other non-cash expense and loss (income and gain), net
10.1
44.9
Changes in assets and liabilities and other adjustments
(24.6
)
(152.6
)
Net cash provided by operating activities
1,046.8
751.3
Investing Activities: Purchases of property, plant
and equipment
(255.0
)
(201.4
)
Purchases of software and other deferred charges
(17.1
)
(17.2
)
Proceeds from sales of property, plant and equipment
1.1
9.2
Proceeds from insurance and sales (purchases) of investments, net
3.1
5.6
Proceeds from sale of product line
7.6
---
Payments for acquisitions, net of cash acquired, and investments in
businesses
(1,477.6
)
(350.4
)
Net cash used in investing activities
(1,737.9
)
(554.2
)
Financing Activities: Net increase (decrease) in
borrowings with maturities of three months or less
259.2
(110.4
)
Additional borrowings under revolving credit facility
---
500.0
Repayments of borrowings under revolving credit facility
---
(500.0
)
Additional long-term borrowings
791.7
493.7
Repayments of long-term debt and finance leases
(13.4
)
(270.2
)
Dividends paid
(220.6
)
(196.8
)
Share repurchases
(180.9
)
(104.3
)
Net (tax withholding) proceeds related to stock-based compensation
(25.4
)
(19.7
)
Other
(6.3
)
---
Net cash provided by (used in) financing activities
604.3
(207.7
)
Effect of foreign currency translation on cash balances
(2.8
)
9.2
Increase (decrease) in cash and cash equivalents
(89.6
)
(1.4
)
Cash and cash equivalents, beginning of year
252.3
253.7
Cash and cash equivalents, end of year $
162.7
$
252.3
A-4
Reconciliation of Non-GAAP Financial
Measures to GAAP
We report our financial results in conformity with accounting
principles generally accepted in the United States of America, or
GAAP, and also communicate with investors using certain non-GAAP
financial measures. These non-GAAP financial measures are not in
accordance with, nor are they a substitute for or superior to, the
comparable GAAP financial measures. These non-GAAP financial
measures are intended to supplement the presentation of our
financial results that are prepared in accordance with GAAP. Based
on feedback from investors and financial analysts, we believe that
the supplemental non-GAAP financial measures we provide are useful
to their assessments of our performance and operating trends, as
well as liquidity.
Our non-GAAP financial measures exclude the impact of certain
events, activities or strategic decisions. The accounting effects
of these events, activities or decisions, which are included in the
GAAP financial measures, may make it difficult to assess our
underlying performance in a single period. By excluding the
accounting effects, positive or negative, of certain items (e.g.,
restructuring charges, outcomes of certain legal proceedings,
certain effects of strategic transactions and related costs, losses
from debt extinguishments, gains or losses from curtailment or
settlement of pension obligations, gains or losses on sales of
certain assets, gains or losses on venture investments, and other
items), we believe that we are providing meaningful supplemental
information that facilitates an understanding of our core operating
results and liquidity measures. While some of the items we exclude
from GAAP financial measures recur, they tend to be disparate in
amount, frequency, or timing.
We use these non-GAAP financial measures internally to evaluate
trends in our underlying performance, as well as to facilitate
comparison to the results of competitors for quarters and
year-to-date periods, as applicable.
We use the non-GAAP financial measures described below in the
accompanying news release and presentation.
Sales change ex. currency refers to the increase or decrease in
net sales, excluding the estimated impact of foreign currency
translation, and, where applicable, an extra week in our fiscal
year and the calendar shift resulting from the extra week in the
prior fiscal year and currency adjustment for transitional
reporting of highly inflationary economies. The estimated impact of
foreign currency translation is calculated on a constant currency
basis, with prior period results translated at current period
average exchange rates to exclude the effect of currency
fluctuations.
Organic sales change refers to sales change ex. currency,
excluding the estimated impact of acquisitions and product line
divestitures.
We believe that sales change ex. currency and organic sales
change assist investors in evaluating the sales change from the
ongoing activities of our businesses and enhance their ability to
evaluate our results from period to period.
Adjusted operating income refers to income before taxes;
interest expense; other non-operating expense (income), net; and
other expense (income), net.
Adjusted EBITDA refers to adjusted operating income before
depreciation and amortization.
Adjusted operating margin refers to adjusted operating income as
a percentage of net sales.
Adjusted EBITDA margin refers to adjusted EBITDA as a percentage
of net sales.
Adjusted tax rate refers to the full-year GAAP tax rate,
adjusted to exclude certain unusual or infrequent events that are
expected to significantly impact that rate, such as effects of
certain discrete tax planning actions, impacts related to the
enactment of the U.S. Tax Cuts and Jobs Act ("TCJA"), where
applicable, and other items.
Adjusted net income refers to income before taxes, tax-effected
at the adjusted tax rate, and adjusted for tax-effected
restructuring charges and other items.
Adjusted net income per common share, assuming dilution
(adjusted EPS) refers to adjusted net income divided by the
weighted average number of common shares outstanding, assuming
dilution.
We believe that adjusted operating margin, adjusted EBITDA
margin, adjusted net income, and adjusted EPS assist investors in
understanding our core operating trends and comparing our results
with those of our competitors.
Net debt to adjusted EBITDA ratio refers to total debt
(including finance leases) less cash and cash equivalents, divided
by adjusted EBITDA for the last twelve months. We believe that the
net debt to adjusted EBITDA ratio assists investors in assessing
our leverage position.
Free cash flow refers to cash flow provided by operating
activities, less payments for property, plant and equipment,
software and other deferred charges, plus proceeds from sales of
property, plant and equipment, plus (minus) net proceeds from
insurance and sales (purchases) of investments. Free cash flow is
also adjusted for, where applicable, certain acquisition-related
transaction costs. We believe that free cash flow assists investors
by showing the amount of cash we have available for debt
reductions, dividends, share repurchases, and acquisitions.
Reconciliations are provided in accordance with Regulations G
and S-K and reconcile our non-GAAP financial measures with the most
directly comparable GAAP financial measures.
A-5
AVERY DENNISON CORPORATION PRELIMINARY RECONCILIATION
FROM GAAP TO NON-GAAP FINANCIAL MEASURES (In millions,
except % and per share amounts)
(UNAUDITED)
Three Months Ended
Twelve Months Ended
Jan. 1, 2022
Jan. 2, 2021
Jan. 1, 2022
Jan. 2, 2021
(13 weeks)
(14 weeks)
(52 weeks)
(53 weeks)
Reconciliation from GAAP to Non-GAAP operating
margins: Net sales
$
2,183.2
$
1,990.9
$
8,408.3
$
6,971.5
Income before taxes
$
244.0
$
255.3
$
992.6
$
737.3
Income before taxes as a percentage of net sales
11.2
%
12.8
%
11.8
%
10.6
%
Adjustments:
Interest expense
$
20.0
$
15.6
$
70.2
$
70.0
Other non-operating expense (income), net
(0.5
)
2.1
(4.1
)
1.9
Operating income before interest expense, other non-operating
expense (income), and taxes
$
263.5
$
273.0
$
1,058.7
$
809.2
Operating margins
12.1
%
13.7
%
12.6
%
11.6
%
Income before taxes
$
244.0
$
255.3
$
992.6
$
737.3
Adjustments:
Restructuring charges:
Severance and related costs
5.4
2.7
10.5
49.1
Asset impairment and lease cancellation charges
1.2
---
3.1
6.2
Transaction and related costs
0.8
1.0
20.9
4.2
(Gain) loss on sale of assets, net
---
(0.5
)
0.2
(0.5
)
Gain on venture investments, net
(18.1
)
(6.9
)
(23.0
)
(5.4
)
Gain on sale of product line
---
---
(5.7
)
---
Outcomes of legal proceedings, net(1)
---
---
(0.4
)
---
Interest expense
20.0
15.6
70.2
70.0
Other non-operating expense (income), net
(0.5
)
2.1
(4.1
)
1.9
Adjusted operating income (non-GAAP)
$
252.8
$
269.3
$
1,064.3
$
862.8
Adjusted operating margins (non-GAAP)
11.6
%
13.5
%
12.7
%
12.4
%
Reconciliation from GAAP to Non-GAAP net income:
As reported net income
$
182.7
$
191.5
$
740.1
$
555.9
Adjustments:
Restructuring charges and other items(2)
(10.7
)
(3.7
)
5.6
53.6
Pension plan settlement and curtailment losses
1.5
0.5
2.5
0.5
Tax effect on restructuring charges and other items and impact of
adjusted tax rate
4.9
2.2
(1.2
)
(13.0
)
Adjusted net income (non-GAAP)
$
178.4
$
190.5
$
747.0
$
597.0
(1)
2021 includes Brazil indirect tax
credit based on the Brazilian Federal Supreme Court ruling of
$29.1, partially offset by contingent liability related to a patent
infringement lawsuit of $26.6 and legal settlement of $2.1.
(2)
Includes pretax restructuring
charges, transaction and related costs, gain/loss on sale of
assets, gain/loss on venture investments, gain on sale of product
line, and outcomes of legal proceedings.
A-5 (continued)
AVERY DENNISON CORPORATION PRELIMINARY RECONCILIATION
FROM GAAP TO NON-GAAP FINANCIAL MEASURES (In millions,
except % and per share amounts)
(UNAUDITED)
Three Months Ended
Twelve Months Ended
Jan. 1, 2022
Jan. 2, 2021
Jan. 1, 2022
Jan. 2, 2021
(13 weeks)
(14 weeks)
(52 weeks)
(53 weeks)
Reconciliation from GAAP to Non-GAAP net income
per common share: As reported net income per common
share, assuming dilution $ 2.19 $ 2.28 $ 8.83 $ 6.61
Adjustments per common share, net of tax: Restructuring
charges and other items(1) (0.13
)
(0.05
)
0.06 0.64 Pension plan settlement and curtailment losses
0.01 0.01 0.03 0.01 Tax effect on restructuring charges and
other items and impact of adjusted tax rate 0.06 0.03 (0.01
)
(0.16
)
Adjusted net income per common share, assuming
dilution (non-GAAP) $ 2.13 $ 2.27 $ 8.91 $ 7.10 Weighted
average number of common shares outstanding, assuming dilution 83.6
84.1 83.8 84.1 Our adjusted tax rate was 23.9%
and 25% for the three and twelve months ended Jan. 1, 2022,
respectively, and 24.1% for the three and twelve months ended Jan.
2, 2021.
(1) Includes pretax restructuring
charges, transaction and related costs, gain/loss on sale of
assets, gain/loss on venture investments, gain on sale of product
line, and outcomes of legal proceedings.
(UNAUDITED)
Three Months Ended
Twelve Months Ended
Jan. 1, 2022
Jan. 2, 2021
Jan. 1, 2022
Jan. 2, 2021
(13 weeks)
(14 weeks)
(52 weeks)
(53 weeks)
Reconciliation of free cash flow: Net
cash provided by operating activities $ 284.0 $ 309.5 $
1,046.8 $ 751.3 Purchases of property, plant and equipment (124.4
)
(109.7
)
(255.0
)
(201.4
)
Purchases of software and other deferred charges (7.3
)
(3.4
)
(17.1
)
(17.2
)
Proceeds from sales of property, plant and equipment
---
9.0
1.1
9.2 Proceeds from insurance and sales (purchases) of investments,
net 1.9 0.4 3.1 5.6 Payments for certain acquisition-related
transaction costs
4.3
---
18.8
---
Free cash flow (non-GAAP) $ 158.5 $ 205.8 $ 797.7 $ 547.5
A-6
AVERY DENNISON CORPORATION PRELIMINARY SUPPLEMENTARY
INFORMATION (In millions, except %) (UNAUDITED)
Fourth Quarter Ended NET SALES OPERATING
INCOME (LOSS) OPERATING MARGINS
2021
2020
2021
2020
2021
2020
(13 weeks) (14 weeks) (13 weeks) (14 weeks) (13 weeks) (14 weeks)
Label and Graphic Materials
$
1,331.4
$
1,294.7
$
162.5
$
205.7
12.2
%
15.9
%
Retail Branding and Information Solutions
659.1
508.0
96.6
77.5
14.7
%
15.3
%
Industrial and Healthcare Materials
192.7
188.2
16.9
23.3
8.8
%
12.4
%
Corporate Expense
N/A
N/A
(12.5
)
(33.5
)
N/A
N/A
TOTAL FROM OPERATIONS
$
2,183.2
$
1,990.9
$
263.5
$
273.0
12.1
%
13.7
%
RECONCILIATION FROM GAAP TO NON-GAAP SUPPLEMENTARY
INFORMATION Fourth Quarter Ended OPERATING INCOME
OPERATING MARGINS
2021
2020
2021
2020
Label and Graphic Materials
Operating income and margins, as reported
$
162.5
$
205.7
12.2
%
15.9
%
Adjustments: Restructuring charges: Severance and related costs
1.1
0.3
0.1
%
---
Asset impairment charges
0.9
---
0.1
%
---
Transaction and related costs
0.1
1.0
---
0.1
%
Gain on venture investment
---
(6.9
)
---
(0.5
%)
Gain on sale of assets
---
(0.5
)
---
(0.1
%)
Adjusted operating income and margins (non-GAAP)
$
164.6
$
199.6
12.4
%
15.4
%
Depreciation and amortization
27.8
28.6
2.1
%
2.2
%
Adjusted EBITDA and margins (non-GAAP)
$
192.4
$
228.2
14.5
%
17.6
%
Retail Branding and Information
Solutions Operating income and margins, as reported
$
96.6
$
77.5
14.7
%
15.3
%
Adjustments: Restructuring charges: Severance and related costs
3.5
2.1
0.5
%
0.4
%
Asset impairment and lease cancellation charges
0.3
---
---
---
Transaction and related costs
0.4
---
0.1
%
---
Gain on venture investment
(11.8
)
---
(1.8
%)
---
Adjusted operating income and margins (non-GAAP)
$
89.0
$
79.6
13.5
%
15.7
%
Depreciation and amortization
37.9
20.0
5.8
%
3.9
%
Adjusted EBITDA and margins (non-GAAP)
$
126.9
$
99.6
19.3
%
19.6
%
Industrial and Healthcare
Materials Operating income and margins, as reported
$
16.9
$
23.3
8.8
%
12.4
%
Adjustments: Restructuring charges: Severance and related costs
0.8
(0.2
)
0.4
%
(0.1
%)
Transaction and related costs
0.3
---
0.1
%
---
Adjusted operating income and margins (non-GAAP)
$
18.0
$
23.1
9.3
%
12.3
%
Depreciation and amortization
6.9
6.9
3.6
%
3.6
%
Adjusted EBITDA and margins (non-GAAP)
$
24.9
$
30.0
12.9
%
15.9
%
A-7
AVERY DENNISON CORPORATION PRELIMINARY SUPPLEMENTARY
INFORMATION (In millions, except %) (UNAUDITED)
Twelve Months Ended NET SALES OPERATING INCOME
(LOSS) OPERATING MARGINS
2021
2020
2021
2020
2021
2020
(52 weeks) (53 weeks) (52 weeks) (53 weeks) (52 weeks) (53 weeks)
Label and Graphic Materials
$
5,430.4
$
4,715.1
$
801.7
$
688.8
14.8
%
14.6
%
Retail Branding and Information Solutions
2,201.8
1,630.9
257.2
144.7
11.7
%
8.9
%
Industrial and Healthcare Materials
776.1
625.5
81.6
58.2
10.5
%
9.3
%
Corporate Expense
N/A
N/A
(81.8
)
(82.5
)
N/A
N/A
TOTAL FROM OPERATIONS
$
8,408.3
$
6,971.5
$
1,058.7
$
809.2
12.6
%
11.6
%
RECONCILIATION FROM GAAP TO NON-GAAP
SUPPLEMENTARY INFORMATION Twelve Months Ended
OPERATING INCOME OPERATING MARGINS
2021
2020
2021
2020
Label and Graphic Materials
Operating income and margins, as reported
$
801.7
$
688.8
14.8
%
14.6
%
Adjustments: Restructuring charges: Severance and related costs
1.2
27.0
---
0.6
%
Asset impairment charges
2.2
0.9
---
---
Transaction and related costs
0.5
1.7
---
---
Outcomes of legal proceedings, net(1)
(26.3
)
---
(0.5
%)
---
Gain on sale of product line
(5.7
)
---
(0.1
%)
---
Gain on venture investment
---
(6.9
)
---
(0.1
%)
Gain on sale of assets
---
(0.5
)
---
---
Adjusted operating income and margins (non-GAAP)
$
773.6
$
711.0
14.2
%
15.1
%
Depreciation and amortization
114.3
107.0
2.2
%
2.2
%
Adjusted EBITDA and margins (non-GAAP)
$
887.9
$
818.0
16.4
%
17.3
%
Retail Branding and Information
Solutions Operating income and margins, as reported
$
257.2
$
144.7
11.7
%
8.9
%
Adjustments: Restructuring charges: Severance and related costs
6.7
17.1
0.3
%
1.0
%
Asset impairment and lease cancellation charges
0.9
1.6
---
0.1
%
Transaction and related costs
19.3
2.5
0.9
%
0.2
%
Outcomes of legal proceedings, net(2)
25.9
---
1.2
%
---
Loss on sale of asset
0.5
---
---
---
(Gain) loss on venture investments
(16.7
)
1.5
(0.8
%)
0.1
%
Adjusted operating income and margins (non-GAAP)
$
293.8
$
167.4
13.3
%
10.3
%
Depreciation and amortization
102.2
71.6
4.7
%
4.4
%
Adjusted EBITDA and margins (non-GAAP)
$
396.0
$
239.0
18.0
%
14.7
%
Industrial and Healthcare
Materials Operating income and margins, as reported
$
81.6
$
58.2
10.5
%
9.3
%
Adjustments: Restructuring charges: Severance and related costs
1.6
4.7
0.2
%
0.7
%
Asset impairment charges
---
3.7
---
0.6
%
Transaction and related costs
1.1
---
0.1
%
---
Gain on sale of assets
(0.3
)
---
---
---
Adjusted operating income and margins (non-GAAP)
$
84.0
$
66.6
10.8
%
10.6
%
Depreciation and amortization
27.6
26.7
3.6
%
4.3
%
Adjusted EBITDA and margins (non-GAAP)
$
111.6
$
93.3
14.4
%
14.9
%
(1)
2021 YTD includes Brazil indirect
tax credit based on the Brazilian Federal Supreme Court ruling of
$28.4, partially offset by legal settlement of $2.1.
(2)
2021 YTD includes contingent
liability related to a patent infringement lawsuit of $26.6,
partially offset by Brazil indirect tax credit based on the
Brazilian Federal Supreme Court ruling of $.7.
A-8
AVERY DENNISON CORPORATION PRELIMINARY SUPPLEMENTARY
INFORMATION Reconciliation of Adjusted EBITDA Margins
(In millions, except %) (UNAUDITED) QTD
YTD (13 weeks) (14 weeks) (13 weeks) (52 weeks) (53 weeks)
(52 weeks)
Label and Graphic
Materials
4Q21
4Q20
4Q19
4Q21
4Q20
4Q19
Net sales
$
1,331.4
$
1,294.7
$
1,176.2
$
5,430.4
$
4,715.1
$
4,745.9
Operating income before interest expense, other non-operating
expense (income) and taxes, as reported
$
162.5
$
205.7
$
140.9
$
801.7
$
688.8
$
601.5
Operating margins, as reported
12.2%
15.9%
12.0%
14.8%
14.6%
12.7%
Non-GAAP adjustments:
Restructuring charges:
Severance and related costs
$
1.1
$
0.3
$
15.1
$
1.2
$
27.0
$
27.7
Asset impairment and lease cancellation charges
0.9
---
---
2.2
0.9
1.3
Other items
0.1
(6.4)
---
(31.5)
(5.7)
(0.7)
Adjusted operating income (non-GAAP)
$
164.6
$
199.6
$
156.0
$
773.6
$
711.0
$
629.8
Adjusted operating margins (non-GAAP)
12.4%
15.4%
13.3%
14.2%
15.1%
13.3%
Depreciation and amortization
$
27.8
$
28.6
$
26.0
$
114.3
$
107.0
$
100.2
Adjusted EBITDA (non-GAAP)
$
192.4
$
228.2
$
182.0
$
887.9
$
818.0
$
730.0
Adjusted EBITDA margins (non-GAAP)
14.5%
17.6%
15.5%
16.4%
17.3%
15.4%
Retail Branding and Information
Solutions
4Q21
4Q20
4Q19
4Q21
4Q20
4Q19
Net sales
$
659.1
$
508.0
$
426.9
$
2,201.8
$
1,630.9
$
1,650.3
Operating income before interest expense, other non-operating
expense (income) and taxes, as reported
$
96.6
$
77.5
$
49.1
$
257.2
$
144.7
$
196.6
Operating margins, as reported
14.7%
15.3%
11.5%
11.7%
8.9%
11.9%
Non-GAAP adjustments:
Restructuring charges:
Severance and related costs
$
3.5
$
2.1
$
6.3
$
6.7
$
17.1
$
9.3
Asset impairment and lease cancellation charges
0.3
---
0.1
0.9
1.6
0.5
Other items
(11.4)
---
2.6
29.0
4.0
0.1
Adjusted operating income (non-GAAP)
$
89.0
$
79.6
$
58.1
$
293.8
$
167.4
$
206.5
Adjusted operating margins (non-GAAP)
13.5%
15.7%
13.6%
13.3%
10.3%
12.5%
Depreciation and amortization
$
37.9
$
20.0
$
13.2
$
102.2
$
71.6
$
52.6
Adjusted EBITDA (non-GAAP)
$
126.9
$
99.6
$
71.3
$
396.0
$
239.0
$
259.1
Adjusted EBITDA margins (non-GAAP)
19.3%
19.6%
16.7%
18.0%
14.7%
15.7%
Industrial and Healthcare
Materials
4Q21
4Q20
4Q19
4Q21
4Q20
4Q19
Net sales
$
192.7
$
188.2
$
169.8
$
776.1
$
625.5
$
673.9
Operating income before interest expense, other non-operating
expense (income) and taxes, as reported
$
16.9
$
23.3
$
12.2
$
81.6
$
58.2
$
60.0
Operating margins, as reported
8.8%
12.4%
7.2%
10.5%
9.3%
8.9%
Non-GAAP adjustments:
Restructuring charges:
Severance and related costs
$
0.8
$
(0.2)
$
1.9
$
1.6
$
4.7
$
6.1
Asset impairment charges
---
---
3.3
---
3.7
3.3
Other items
0.3
---
---
0.8
---
---
Adjusted operating income (non-GAAP)
$
18.0
$
23.1
$
17.4
$
84.0
$
66.6
$
69.4
Adjusted operating margins (non-GAAP)
9.3%
12.3%
10.2%
10.8%
10.6%
10.3%
Depreciation and amortization
$
6.9
$
6.9
$
6.4
$
27.6
$
26.7
$
26.2
Adjusted EBITDA (non-GAAP)
$
24.9
$
30.0
$
23.8
$
111.6
$
93.3
$
95.6
Adjusted EBITDA margins (non-GAAP)
12.9%
15.9%
14.0%
14.4%
14.9%
14.2%
Corporate expense
4Q21
4Q20
4Q19
4Q21
4Q20
4Q19
Corporate expense, as reported
$
(12.5)
$
(33.5)
$
(22.1)
$
(81.8)
$
(82.5)
$
(87.6)
Non-GAAP adjustments:
Restructuring charges:
Severance and related costs
$
---
$
0.5
$
2.2
$
1.0
$
0.3
$
2.2
Other items
(6.3)
---
---
(6.3)
---
3.4
Corporate expense (non-GAAP)
$
(18.8)
$
(33.0)
$
(19.9)
$
(87.1)
$
(82.2)
$
(82.0)
Total Company
4Q21
4Q20
4Q19
4Q21
4Q20
4Q19
Net sales
$
2,183.2
$
1,990.9
$
1,772.9
$
8,408.3
$
6,971.5
$
7,070.1
Operating income before interest expense, other non-operating
expense (income) and taxes, as reported
$
263.5
$
273.0
$
180.1
$
1,058.7
$
809.2
$
770.5
Operating margins, as reported
12.1%
13.7%
10.2%
12.6%
11.6%
10.9%
Non-GAAP adjustments:
Restructuring charges:
Severance and related costs
$
5.4
$
2.7
$
25.5
$
10.5
$
49.1
$
45.3
Asset impairment and lease cancellation charges
1.2
---
3.4
3.1
6.2
5.1
Other items
(17.3)
(6.4)
2.6
(8.0)
(1.7)
2.8
Adjusted operating income (non-GAAP)
$
252.8
$
269.3
$
211.6
$
1,064.3
$
862.8
$
823.7
Adjusted operating margins (non-GAAP)
11.6%
13.5%
11.9%
12.7%
12.4%
11.7%
Depreciation and amortization
$
72.6
$
55.5
$
45.6
$
244.1
$
205.3
$
179.0
Adjusted EBITDA (non-GAAP)
$
325.4
$
324.8
$
257.2
$
1,308.4
$
1,068.1
$
1,002.7
Adjusted EBITDA margins (non-GAAP)
14.9%
16.3%
14.5%
15.6%
15.3%
14.2%
A-9
AVERY DENNISON CORPORATION PRELIMINARY SUPPLEMENTARY
INFORMATION Reconciliation of Adjusted EBITDA Margins and
Net Debt to Adjusted EBITDA (In millions, except %)
(UNAUDITED) QTD
Total Company
1Q21
2Q21
3Q21
4Q21
Net sales
$
2,051.3
$
2,102.0
$
2,071.8
$
2,183.2
Operating income before interest expense, other non-operating
expense (income) and taxes, as reported
$
283.8
$
269.9
$
241.5
$
263.5 Operating margins, as reported
13.8
%
12.8
%
11.7
%
12.1
%
Non-GAAP adjustments: Restructuring
charges: Severance and related costs
$
2.4
$
1.6
$
1.1
$
5.4
Asset impairment and lease cancellation charges
0.5
0.1
1.3
1.2
Other items
(2.0
)
(2.3
)
13.6
(17.3
)
Adjusted operating income (non-GAAP)
$
284.7
$
269.3
$
257.5
$
252.8
Adjusted operating margins (non-GAAP)
13.9
%
12.8
%
12.4
%
11.6
%
Depreciation and amortization
$
54.4
$
55.2
$
61.9
$
72.6
Adjusted EBITDA (non-GAAP)
$
339.1
$
324.5
$
319.4
$
325.4
Adjusted EBITDA margins (non-GAAP)
16.5
%
15.4
%
15.4
%
14.9
%
Total Debt
$
3,104.7
Less: Cash and cash equivalents
162.7
Net Debt
$
2,942.0
Net Debt to Adjusted EBITDA LTM* (non-GAAP)
2.2
*LTM = Last twelve months (1Q21 to 4Q21)
A-10
AVERY DENNISON CORPORATION PRELIMINARY SUPPLEMENTARY
INFORMATION (UNAUDITED) Fourth Quarter
2021 (vs. 2020) TotalCompany Label andGraphicMaterials
RetailBranding andInformationSolutions Industrial
andHealthcareMaterials
Reconciliation from GAAP to Non-GAAP
sales change Reported net sales change
9.7%
2.8%
29.7%
2.4%
Foreign currency translation
0.3%
0.6%
(0.3%)
(0.6%)
Extra week impact
8.5%
8.0%
9.5%
10.0%
Sales change ex. currency (non-GAAP)(1)
18.5%
11.5%
38.9%
11.7%
Acquisitions and product line divestitures
(5.7%)
(0.8%)
(19.3%)
(2.2%)
Organic sales change (non-GAAP)(1)
12.8%
10.6%
19.7%
9.5%
Full Year 2021 (vs. 2020) TotalCompany Label
andGraphicMaterials RetailBranding andInformationSolutions
Industrial andHealthcareMaterials
Reconciliation from GAAP to
Non-GAAP sales change Reported net sales change
20.6%
15.2%
35.0%
24.1%
Foreign currency translation
(3.4%)
(3.6%)
(2.2%)
(4.4%)
Extra week impact
1.4%
1.1%
2.1%
2.0%
Sales change ex. currency (non-GAAP)(1)
18.6%
12.7%
34.9%
21.7%
Acquisitions and product line divestitures
(3.1%)
(0.8%)
(9.7%)
(3.8%)
Organic sales change (non-GAAP)(1)
15.6%
12.0%
25.2%
17.8%
Full Year 2021 (vs. 2019)(2) TotalCompany Label
andGraphicMaterials RetailBranding andInformationSolutions
Industrial andHealthcareMaterials
Reconciliation from GAAP to
Non-GAAP sales change Reported net sales change
18.9%
14.4%
33.4%
15.2%
Foreign currency translation
(2.3%)
(2.3%)
(1.1%)
(4.2%)
Extra week impact
---
---
---
---
Sales change ex. currency (non-GAAP)(1)
16.7%
12.1%
32.3%
11.0%
Acquisitions and product line divestitures
(5.2%)
(0.5%)
(19.3%)
(3.7%)
Organic sales change (non-GAAP)(1)
11.5%
11.6%
13.0%
7.3%
(1) Totals may not sum due to rounding. (2) 2021 vs.
2019 results are presented to facilitate comparison with
pre-pandemic performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220201006186/en/
Media Relations: Rob Six (626) 304-2361
rob.six@averydennison.com
Investor Relations: John Eble (440) 534-6290
john.eble@averydennison.com
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