Avery Dennison Corporation said second quarter 2023 net sales were $2.1 billion, with organic sales change (non-GAAP) down 10%. “The pace of our recovery is slower than anticipated.”
Avery Dennison paint protection film
“Earnings per share increased sequentially in the second quarter, a trend we expect to continue in coming quarters,” said Mitch Butier, chairman and CEO. “Volumes in our Materials businesses continue to recover from slow market conditions, largely destocking, while our Intelligent Labels platform accelerates adoption into new categories.
"While it's good to see the continuing sequential improvements in our Materials businesses and the building momentum in Intelligent Labels, the pace of our recovery is slower than anticipated,” added Butier. “Our results for the quarter were below our expectation due to lower revenue, something the team was able to largely offset through cost reduction actions.”
Deon Stander, president and COO: “We remain confident this period of challenging results will soon pass. Our leadership positions in large diverse growing markets, the strategic foundations we have laid, and the dedication and expertise of our team positions us well to continue to deliver GDP+ growth and top-quartile returns over the long-run.”
Second Quarter 2023 Results by Segment
Materials Group
- Reported sales decreased 13% to $1.5 billion. Sales were down 12% ex. currency and on an organic basis. Label materials sales were down mid-teens on an organic basis. Lower volume was driven primarily by inventory destocking. Sales increased by high-single digits organically in the Graphics and Reflective Solutions businesses.
Solutions Group
- Reported sales decreased 7% to $615 million. Sales were down 4% ex. currency and 7% on an organic basis. Sales in high-value categories were up low-single digits on an organic basis. Sales were down high-teens organically in base solutions as retailer and brand sentiment remains muted.
Balance Sheet and Capital Deployment
During the first half of the year, the company deployed $194 million for acquisitions and returned $216 million in cash to shareholders through a combination of dividends and share repurchases. The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.75x at the end of the second quarter.
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