Avery Dennison Corporation announced preliminary, unaudited results for its third quarter ended 01 October 2016.
All non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, comparisons are to the same period in the prior year.
“We delivered another solid quarter, with EPS above our expectations,” said Mitch Butier, Avery Dennison president and CEO. “PSM continues to deliver, with strong emerging market growth and ongoing operational excellence worldwide. RBIS is making progress with its business model transformation; however, revenue growth and margin are short of our expectations amidst a challenging retail apparel environment.
“Overall, our outlook has improved for full year earnings per share by ten cents,” Butier added. “The effective execution of our strategies continues to enhance our competitive advantage, while driving profitable growth and improving returns."
Third Quarter 2016 Results by Segment
Organic sales change refers to the increase or decrease in sales excluding the estimated impact of currency translation, product line exits, and acquisitions and divestitures. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales
Pressure-sensitive Materials (PSM)
PSM reported sales increased approximately 4 percent; on an organic basis, sales grew approximately 3 percent. Within the segment, sales for the Label and Packaging Materials business grew at a mid-single digit rate on an organic basis. Sales for the combined Graphics and Performance Tapes businesses declined at a low-single digit rate on an organic basis, reflecting an expected program loss in Performance Tapes.Operating margin improved 30 basis points to 12.3 percent as the benefit of productivity initiatives and increased volume more than offset the net impact of price and raw material input costs and unfavorable mix. Adjusted operating margin improved 50 basis points.
Retail Branding and Information Solutions (RBIS)
RBIS reported sales increased 1 percent; on an organic basis, sales grew approximately 2 percent.Operating margin improved 90 basis points to 7.7 percent primarily due to the benefit of lower restructuring charges. Adjusted operating margin improved 20 basis points as the net savings associated with the business model transformation and higher volume were largely offset by higher employee-related costs.
