avery dennison jefferies industrials conference · avery dennison jefferies industrials conference...
TRANSCRIPT
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1 | Avery Dennison Investor Presentation
Avery Dennison Jefferies Industrials Conference August 9, 2016
Anne Bramman SVP and Chief Financial Officer
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Forward-Looking Statements 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. Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to risks and uncertainties relating to the following: fluctuations in demand affecting sales to customers; worldwide and local economic conditions; fluctuations in currency exchange rates and other risks associated with foreign operations, including in emerging markets; the financial condition and inventory strategies of customers; changes in customer preferences; fluctuations in cost and availability of raw materials; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; the impact of competitive products and pricing; loss of significant contracts or customers; collection of receivables from customers; selling prices; business mix shift; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; integration of acquisitions and completion of potential dispositions; amounts of future dividends and share repurchases; customer and supplier concentrations; successful implementation of new manufacturing technologies and installation of manufacturing equipment; disruptions in information technology systems, including cyber-attacks or other intrusions to network security; successful installation of new or upgraded information technology systems; data security breaches; volatility of financial markets; impairment of capitalized assets, including goodwill and other intangibles; credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest and tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; fluctuations in pension, insurance, and employee benefit costs; the impact of legal and regulatory proceedings, including with respect to environmental, health and safety; changes in governmental laws and regulations; protection and infringement of intellectual property; changes in political conditions; the impact of epidemiological events on the economy and our customers and suppliers; acts of war, terrorism, and natural disasters; and other factors.
We believe that the most significant risk factors that could affect our financial performance in the near-term include: (1) the impacts of economic conditions on underlying demand for our products and foreign currency fluctuations; (2) competitors' actions, including pricing, expansion in key markets, and product offerings; and (3) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through selling price increases, without a significant loss of volume.
For a more detailed discussion of these and other factors, see Risk Factors and Managements Discussion and Analysis of Results of Operations and Financial Condition in our 2015 Form 10-K, filed on February 24, 2016 with the Securities and Exchange Commission, 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.
Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures as defined by SEC rules. We report 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 presentation of our financial results that are prepared in accordance with GAAP. Based upon feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are useful to their assessment of our performance and operating trends, as well as our liquidity. In accordance with Regulation G, reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, including limitations associated with these non-GAAP financial measures, are provided in the Appendix of this document.
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3 | Avery Dennison Investor Presentation
> Sustainable competitive advantages in two core businesses Global reach, scale Product breadth, technical expertise, innovation Service, quality
> #1 share positions worldwide
> Above-industry margins and ROTC
> Targeting double-digit adjusted EPS CAGR through 2018
> Strong, consistent FCF with solid balance sheet, enabling significant return of capital to shareholders
Business Overview
2015 Net Sales (as reported) = $6.0 billion
2015 Sales by Segment
PSM 73% RBIS 26%
Vancive Medical Technologies
1%
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4 | Avery Dennison Investor Presentation
Sales by End Market
U.S. 25%
Western Europe
23%
Asia 30%
Latin America
8%
U.S. 37%
Western Europe
31%
Asia (ex-Japan)
16%
Latin America
6%
Eastern Europe & MENA
5%
Other* 5%
* Canada, Australia, South Africa, and Japan
Emerging Markets ~30% Sales by Product Segment Sales by End Market
Non-durable
Consumer Goods
42%
Logistics & Shipping
13%
Medical / Healthcare
6%
Retail Apparel
22%
Industrial / Durable
17%
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5 | Avery Dennison Investor Presentation
Pressure-Sensitive Materials (PSM)
2015 Sales $4.4 bil.
Organic Sales Change 5.4%
Adjusted Operating Margin* 11.7%
FINANCIAL SNAPSHOT
> Leading manufacturer of self-adhesive film and paper label material
> Packaged goods end markets: Home & Personal Care Food & Beverage Pharmaceutical
> Variable information end markets: Shipping Labels Bar Codes
> 10,000+ printing company customers serving packaged goods and logistics companies around the globe
> Large and growing addressable markets Approx. 40% of segment sales in emerging
markets * Excluding restructuring charges and other items
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6 | Avery Dennison Investor Presentation
PSM Key Drivers of Value Creation
Gain share in Graphics, Performance Tapes, Specialty/Durables
Continue to drive productivity and capital efficiency
Win in base (less differentiated) segments
Leverage high relative share position (and associated scale) in every region
Continue to lead industry in quality, service, and innovation
Generally higher growth segments with attractive variable margins, where current share position is relatively low
Enterprise Lean Sigma (ELS), material cost re-engineering; capital investment focused on high-value growth segments
Reduce cost and complexity; maintain pricing discipline
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7 | Avery Dennison Investor Presentation
Retail Branding & Information Solutions (RBIS)
2015 Sales $1.5 bil.
Organic Sales Change 2.7%
Adjusted Operating Margin* 7.6%
FINANCIAL SNAPSHOT
> Global leader (~4x nearest competitor) in branding & information solutions for apparel industry Branding solutions: graphic tags,
packaging, labeling, embellishments Information solutions: inventory tracking
and routing, loss prevention, price management, brand protection ~50% share of UHF Radio-frequency
Identification (RFID) tags/labels for apparel
* Excluding restructuring charges and other items
http://en.wikipedia.org/wiki/File:Marks_&_Spencer_new_logo.svghttp://www1.macys.com/index.ognc
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8 | Avery Dennison Investor Presentation
RBIS Key Drivers of Value Creation
Accelerated RFID Adoption
External Embellishment Share Gains
Global Supply Chain Optimization / SG&A Reduction
Maintain/accelerate growth in key high value segments; recapture share in base (less differentiated) segments
Market Segment Leadership
Global leadership in integrated, end-to-end inventory & loss prevention solutions
Performance innovation & leading brand partnership
Faster, highly-flexible, capital efficient supply chain / manufacturing footprint; cost-effective front/back-end
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9 | Avery Dennison Investor Presentation
Strategic Priorities
> Drive above average growth in high value segments, through innovation and differentiated quality and service. Key growth catalysts: Emerging markets Graphics / Industrial Tapes / Specialty Labels RFID / Performance Athletic
> Improve competitiveness in base (less differentiated) segments, by reducing costs and tailoring our go-to-market strategies
> Drive continuous productivity improvement, through Lean / Six Sigma, product reengineering, and restructuring
> Maintain capital discipline to deliver strong returns to shareholders Investing to support growth, both organically and through bolt-on acquisitions Ample capacity to fund dividend, stock buyback, and M&A strategies
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10 | Avery Dennison Investor Presentation
Good progress against long-term financial objectives
4% 5% CAGR(1)
Organic Sales Growth
9%10% in 2018 Operating Margin
16%+ in 2018 (up 4+ pts vs 2013)
Return on Total Capital (ROTC)(2)
12% 15%+ CAGR(1)
Adjusted(2) EPS Growth
1.7x to 2.0x Net Debt to Adjusted(2) EBITDA
2014 2018 TARGETS
4% 2 Yr CAGR
7.9% in 2015 Adj(2): 9.0% in 2015
17% in 2015
13% 2 Yr CAGR
1.3x in 2015
2014 2015 RESULTS
(1) Reflects five-year compound annual growth rates, with 2013 as the base period (2) Excluding restructuring charges and other items
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11 | Avery Dennison Investor Presentation
PSM on track to achieve long-term targets. Strategy change in RBIS positions business to meet 2018 goals
2.0% 3.1%
4.1% 4.7%
4% - 5% (CAGR) 4.7%
5.4%
~8.5% 8.7% 9.2%
10.2% 10.2% 11.7%
2009- 2010
2011 2012 2013 2014 2015
PSM
10%-11%
0.1%
-2.7%
3.1%
4.9% 4% - 5% (CAGR)
-1.6%
2.7% ~1.0%
4.0% 5.1%
6.3% 6.9% 7.6%
2009- 2010
2011 2012 2013 2014 2015
RBIS
Long-term Target
(2014 2018) (2)
10%-11% (By 2018)
(1) Excluding restructuring charges and other items (2) Represents 2-year CAGR for organic sales, with 2008 as base period, and 2-year average for adjusted operating margin. Financials were not restated to reflect the realignment
of reportable segments and corporate expense undertaken in the fourth quarter of 2012. Reflects management's estimate of impact to reported results from the realignment.
Organic Sales Growth Adj.(1) Operating Margin
Long-term Target
(2014 2018) (2)
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12 | Avery Dennison Investor Presentation
First Half 2016 Results
Solid organic growth and margin expansion > On organic basis, PSM sales up over 4%, RBIS up over 3% vs. 1H15 > Adjusted operating margin up 120 basis points vs. 1H15 > Adjusted EPS up ~17% vs. 1H15
PSM continues to outperform; acquired Mactac Europe for 200 million
RBIS making good progress on business model transformation
Higher free cash flow and continued strong balance sheet > Free cash flow of $152 mil., an improvement of $38 mil. vs. 1H15 > Continued discipline in execution of shareholder distributions; repurchased
2.4 mil. shares (1.2 mil. net of dilution) and paid $70 mil. in dividends in 1H16
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13 | Avery Dennison Investor Presentation
Track record of capital discipline contributing to value creation
0.01.02.03.04.05.06.07.08.0
2010 2011 2012 2013 2014 2015
Fixed Asset (Net PP&E) Turnover(1)
(1) Annual net sales divided by 2-point average consolidated net PP&E; 2013 and beyond reflects continuing operations for both sales and net PP&E (2) 5-point average operational working capital divided by annual net sales; 2011 and beyond reflect continuing operations for both operational working capital and net sales (3) Net Debt / LTM Adj. EBITDA, 4-qtr Avg.; adj. EBITDA excludes restructuring charges and other items
Operational Working Capital % of Sales(2)
0%
3%
6%
9%
12%
15%
2010 2011 2012 2013 2014 2015
0.0
0.5
1.0
1.5
2.0
2.5
2010 2011 2012 2013 2014 2015
Long-Term Target (annual average)
Net Debt / Adj. EBITDA(3)
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14 | Avery Dennison Investor Presentation
Continuing significant return of capital to shareholders
5-Year Capital Deployment($ in millions)
2014 - 2018Cumulative
Capital Sources:Leverage Capacity (2013) ~ $350Add'l Leverage Capacity (Organic EBITDA Growth) up to $700Cash Flow from Ops before Restructuring $2,700 - $2,900Available Capital $3,300 - $4,000
Capital Uses: % of TotalCapex / Restructuring ~ $1,200 ~ 30%Dividends ~ $750 ~ 20%Add'l Capital Available to Shareholders / M&A $1,400 - $2,000 ~ 50%
Total Capital Available to Shareholders / M&A $2,150 - $2,750 ~ 70%
Slide
5-Year Capital Deployment($ in millions)2014 - 2018Cumulative Target
Capital Sources:
Leverage Capacity (2013)~ $350
Add'l Leverage Capacity (Organic EBITDA Growth)up to $700
Cash Flow from Ops before Restructuring$2,700 - $2,900
Available Capital$3,300 - $4,000
Capital Uses:% of Total
Capex / Restructuring~ $1,200~ 30%
Dividends~ $750~ 20%
Add'l Capital Available to Shareholders / M&A$1,400 - $2,000~ 50%
Total Capital Available to Shareholders / M&A$2,150 - $2,750~ 70%
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15 | Avery Dennison Investor Presentation 15 | Avery Dennison Investor Presentation
Appendix A: 2016 EPS Guidance and Contributing Factors
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16 | Avery Dennison Investor Presentation
2016 EPS Guidance (as of July 26, 2016)
Contributing Factors to 2016 Results > At recent currency translation rates, reported net sales up 1% to 2% (vs. previous assumption of
0.5% to 2.0%) Organic sales growth (non-GAAP) of 3% to 4% (vs. previous assumption of 3% to 4.5%) Based on recent rates, currency translation represents:
~2.5% reduction to reported net sales (vs. previous assumption of 2%) ~$18 mil. reduction to EBIT (vs. previous assumption of ~$15 mil.)
RBIS product line divestiture headwind of (0.4)%, more than offset by PSM acquisition (Mactac) benefit of ~1% (immaterial impact to EPS)
> Incremental savings of ~$75 mil. from restructuring actions > Tax rate in the low to mid-thirty percent range > Average shares outstanding (assuming dilution) of 90 to 91 mil.
Add Back: Est. restructuring charges and other items ~$0.20
Adjusted EPS (non-GAAP)
Reported EPS $3.25 $3.40
$3.75 $3.90
Est. non-cash charge to settle certain U.S. pension obligations ~$0.30
Previous Updated
$3.35 $3.50
~$0.15 $0.30
$3.80 $3.95
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17 | Avery Dennison Investor Presentation 17 | Avery Dennison Investor Presentation
Appendix B: Reconciliation of Non-GAAP Financial Measures to GAAP
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Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures as defined by SEC rules. We report 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 presentation of our financial results that are prepared in accordance with GAAP. Based upon feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are useful to their assessment of our performance and operating trends, as well as our liquidity.
Our non-GAAP financial measures exclude the impact of certain events, activities, and 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, both positive and negative, of certain items (e.g., restructuring charges, asset impairments, legal settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, losses from curtailment and settlement of pension obligations, gains or losses on sales of certain assets, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. These non-GAAP financial measures are used internally to evaluate trends in our underlying performance, as well as to facilitate comparison to the results of competitors for a single period. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency, or timing.
We use the following non-GAAP financial measures in this presentation:
Organic sales change refers to the increase or decrease in sales excluding the estimated impact of currency translation, product line exits, acquisitions and divestitures, and, where applicable, the extra week in our fiscal year. The estimated impact of 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. We believe that organic sales change assists investors in evaluating the sales growth from the ongoing activities of our businesses and provides improved comparability of our results from period to period.
Adjusted operating margin refers to income from continuing operations before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales.
Adjusted tax rate refers to our anticipated full-year GAAP tax rate using the most likely scenario in a range of estimated tax rates for the year. This range includes various items such as the impact of the discrete rates applicable to the adjustments we make in calculating our adjusted non-GAAP earnings, changes in uncertain tax positions and our repatriation assertions on unremitted earnings, and other items that may impact our full-year GAAP tax rate.
Adjusted income from continuing operations refers to reported income from continuing operations tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items.
Adjusted EPS refers to reported income from continuing operations per common share, assuming dilution, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items.
We believe that adjusted operating margin, adjusted income from continuing operations, and adjusted EPS assist investors in understanding our core operating trends and comparing our results with those of our competitors.
Free cash flow refers to cash flow from operations, 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 sales (purchases) of investments. 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.
Adjusted EBITDA refers to net income before interest expense, taxes, depreciation, and amortization, excluding income(loss) from discontinued operations, restructuring charges and other items.
Net debt to adjusted EBITDA refers to total debt less cash and cash equivalents, divided by adjusted EBITDA. Return on total capital refers to adjusted income from continuing operations excluding the expense and tax benefit of debt financing divided by the average
of beginning and ending invested capital.
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19 | Avery Dennison Investor Presentation
Organic Sales Change
(1) Totals may not sum due to rounding.
($ in millions)Avery Dennison 2011 2012 2013 2014 2015 1H15 1H16Net sales 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0$ Reported sales change 0.3% 4.7% 3.1% -5.7% -3.9% -0.6%
Foreign currency translation 3.4% -0.1% 1.1% 8.6% 8.4% 3.6%Extra week impact ~-1.2% ~1.2% ~-1.4%Product line divestiture 0.1% 0.1% 0.6% 0.2% 0.8%
Organic sales change(1) 3.8% 4.8% 3.1% 4.6% 3.4% 3.9% 3.8% 4.1%
Pressure-sensitive Materials 2011 2012 2013 2014 2015 1H15 1H16Net sales 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1$ Reported sales change -0.1% 4.6% 4.6% -6.1% -3.9% 0.1%
Foreign currency translation 4.2% -0.1% 1.4% 10.3% 10.2% 4.2%Extra week impact ~-1.2% ~1.2% ~-1.5%
Organic sales change(1) 4.1% 4.7% 4.7% 5.4% 4.8% 4.3% 5.0% 4.7%
Retail Branding & Information Solutions 2011 2012 2013 2014 2015 1H15 1H16Net sales 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1$ Reported sales change 1.6% 5.0% -1.2% -4.5% -3.8% -2.0%
Foreign currency translation 1.5% 0.0% 0.6% 3.8% 3.5% 2.1%Extra week impact ~-1.1% ~1.1% ~-0.7%Product line divestiture 2.3% 0.7% 3.1%
Organic sales change(1) 3.1% 4.9% -1.6% 2.7% -0.3% 3.2% 0.5% 2.2%
2-Yr CAGR
4-Yr CAGR
Organic Growth
($ in millions)2-Yr CAGR4-Yr CAGR
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Reported sales change0.3%4.7%3.1%-5.7%-3.9%-0.6%
Foreign currency translation3.4%-0.1%1.1%8.6%8.4%3.6%
Extra week impact~-1.2%~1.2%~-1.4%
Product line divestiture0.1%0.1%0.6%0.2%0.8%
Organic sales change(1)3.8%4.8%3.1%4.6%3.4%3.9%3.8%4.1%
Pressure-sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Reported sales change-0.1%4.6%4.6%-6.1%-3.9%0.1%
Foreign currency translation4.2%-0.1%1.4%10.3%10.2%4.2%
Extra week impact~-1.2%~1.2%~-1.5%
Organic sales change(1)4.1%4.7%4.7%5.4%4.8%4.3%5.0%4.7%
Retail Branding & Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Reported sales change1.6%5.0%-1.2%-4.5%-3.8%-2.0%
Foreign currency translation1.5%0.0%0.6%3.8%3.5%2.1%
Extra week impact~-1.1%~1.1%~-0.7%
Product line divestiture2.3%0.7%3.1%
Organic sales change(1)3.1%4.9%-1.6%2.7%-0.3%3.2%0.5%2.2%
Net Income & EPS
Net Income
4-Yr CAGR3-Yr2014
($ in millions)201120122013201420151H151H16CAGRGrowth
As reported net income from continuing operations$ 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.62.3%
Adjustments(1)$ (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)n/a
Previously reported net income from continuing operations141.7157.6244.3251.1273.8135.9169.6
Non-GAAP adjustments:
Restructuring charges and other items$ 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8
Tax effect of pre-tax adjustments and impact of adjusted tax rate(3)$ (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)
Adjusted Net Income from Continuing Operations (non-GAAP)$ 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.916.1%19.2%10.9%
EPS
2-Yr CAGR4-Yr CAGR3-Yr2014
201120122013201420151H151H16CAGRGrowth
As reported net income per common share from continuing operations, assuming dilution$ 1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.877.1%
Adjustments(1)$ (0.01)$ (0.02)$ 0.03$ 0.04$ - 0$ (0.01)n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87
Non-GAAP adjustments per common share, net of tax:
Restructuring charges and other items(2)(3)$ 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15
Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.0213.3%20.2%23.5%16.0%
EBIT
($ in millions)
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Operating income from continuing operations before interest and taxes, as reported$ 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5
Adjustments(1)$ 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)n/a
Operating income from continuing operations before interest and taxes, previously reported$ 284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5
Operating margin, as reported4.8%5.3%7.0%6.7%7.9%7.6%8.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8
Asset impairment and lease cancellation charges$ 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2
Other items$ 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3
Adjusted operating margin (non-GAAP)5.7%6.5%7.5%7.8%9.0%9.0%10.2%
($ in millions)
Pressure-Sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Operating income from continuing operations before interest and taxes, as reported$ 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9
Operating margin, as reported8.2%8.4%9.9%9.3%11.4%11.3%12.8%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4
Asset impairment and lease cancellation charges$ 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4
Other items$ 0.4$ (0.6)$ - 0$ 1.4$ (1.5)$ (1.7)$ 1.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4
Adjusted operating margin (non-GAAP)8.7%9.2%10.2%10.2%11.7%11.9%13.2%
($ in millions)
Retail Branding and Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Operating income from continuing operations before interest and taxes, as reported$ 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4
Operating margin, as reported2.8%3.5%5.1%5.5%4.6%3.8%7.2%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3
Asset impairment and lease cancellation charges$ 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8
Other items$ (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2
Adjusted operating margin (non-GAAP)4.0%5.1%6.3%6.9%7.6%7.1%8.0%
FCF
($ in millions)2012-'15 Avg.
Avery Dennison20122013201420151H151H16
Net cash provided by operating activities(1)$ 513.4$ 319.6$ 354.9$ 473.7$ 170.4$ 216.0
Purchases of property, plant and equipment(99.2)(129.2)(147.9)(135.8)(56.4)(61.3)
Purchases of software and other deferred charges(59.1)(52.2)(27.1)(15.7)(4.0)(6.1)
Proceeds from sales of property, plant and equipment4.238.74.37.62.83.2
Sales (purchases) of investments, net (6.7)0.10.3(0.5)(0.3)- 0
Charitable contribution to Avery Dennison Foundation utilizing proceeds from divestitures- 010.0- 0- 0- 0- 0
Discretionary contributions to pension plans utilizing proceeds from divestitures- 050.1- 0- 0- 0- 0
Plus (minus): divestiture-related payments and free cash outflow (inflow) from discontinued operations(49.7)92.70.20.11.0- 0
Free Cash Flow - Continuing Operations$ 302.9$ 329.8$ 184.7$ 329.4$ 113.5$ 151.8$ 286.7
Net Debt-EBITDA
4-pt
($ in millions)1Q142Q143Q144Q141Q152Q153Q154Q15Avg.
Net sales$ 1,550.1$ 1,615.8$ 1,559.6$ 1,604.8$ 1,528.0$ 1,516.0$ 1,468.1$ 1,454.8
As reported net income$ 66.0$ 48.3$ 60.2$ 70.6$ 71.9$ 63.7$ 81.7$ 57.0
Interest expense$ 15.4$ 15.6$ 15.4$ 16.9$ 15.3$ 15.3$ 14.7$ 15.2
Income taxes$ 20.9$ 26.4$ 38.2$ 28.0$ 28.1$ 36.6$ 34.8$ 35.0
Provision for loss(income) from discontinued operations$ 0.4$ 1.9$ 0.7$ (0.8)$ - 0$ 1.0$ (0.4)$ (0.5)
Operating income from continuing operations before interest and taxes, as reported$ 102.7$ 92.2$ 114.5$ 114.7$ 115.3$ 116.6$ 130.8$ 106.7
Adjustments(1)$ 0.5$ 0.5$ 2.1$ 0.5$ (0.5)$ (0.5)n/an/a
Operating income from continuing operations before interest and taxes, previously reported$ 103.2$ 92.7$ 116.6$ 115.2$ 114.8$ 116.1$ 130.8$ 106.7
Non-GAAP Adjustments:
Restructuring costs:
Severance and related costs$ 7.0$ 35.9$ 5.1$ 6.7$ 13.5$ 16.8$ 4.7$ 17.5
Asset impairment and lease cancellation charges$ 0.3$ 2.6$ 1.6$ 6.9$ 0.4$ 3.2$ 1.9$ 1.5
Other items$ - 0$ - 0$ 1.1$ 1.0$ 0.4$ 7.7$ 0.4$ 0.3
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 110.5$ 131.2$ 124.4$ 129.8$ 129.1$ 143.8$ 137.8$ 126.0
Depreciation$ 33.6$ 32.4$ 33.0$ 36.5$ 33.2$ 31.7$ 30.4$ 29.9
Amortization$ 16.4$ 17.0$ 16.1$ 16.6$ 16.1$ 15.7$ 15.7$ 15.6
Adjusted net income before interest, taxes, depreciation & amortization ("EBITDA") (non-GAAP)$ 160.5$ 180.6$ 173.5$ 182.9$ 178.4$ 191.2$ 183.9$ 171.5
Total Debt$ 1,112.5$ 1,167.1$ 1,106.8$ 1,144.4$ 1,206.0$ 1,146.9$ 1,049.0$ 1,058.9
Less: Cash and cash equivalents(2)$ 203.9$ 220.8$ 186.1$ 207.2$ 189.0$ 225.7$ 143.8$ 158.8
Net Debt$ 908.6$ 946.3$ 920.7$ 937.2$ 1,017.0$ 921.2$ 905.2$ 900.1
Net Debt to Adjusted LTM* EBITDA ( Non-GAAP)1.41.31.21.21.3
*LTM = Last twelve months
1Q132Q133Q134Q131Q142Q143Q144Q14
YTD Depreciation33.66699135.533.264.995.3125.2125.2
QTD Depreciation33.632.43336.533.231.730.429.9125.2
YTD Amortization16.433.449.566.116.131.847.563.163.1
QTD Amortization16.41716.116.616.115.715.715.663.1
Check$ -0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ -0$ 0.0$ -0
ROTC
($ in millions)
Avery Dennison201320142015
As reported net income from continuing operations$ 247.3$ 274.4
Adjustments(1)$ 3.8$ (0.6)
Previously reported net income from continuing operations$ 251.1$ 273.8
Non-GAAP adjustments:
Restructuring charges and other items$ 68.2$ 68.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (21.3)$ (22.6)
Adjusted net income from continuing operations (non-GAAP)$ 298.0$ 319.5
Interest expense, net of tax benefit(1)$ 43.6$ 40.6
Effective Tax Rate31.1%32.9%
Adjusted income from continuing operations, excluding expense and tax benefit of debt financing (non-GAAP)$ 341.6$ 360.1
Total debt$ 1,021.5$ 1,144.4$ 1,058.9
Shareholders' equity(1)$ 1,468.1$ 1,047.7$ 965.7
Return on Total Capital (ROTC)14.6%17.1%
QTD
Organic Sales Change
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Reported sales change-6.2%1.7%
Foreign currency translation9.5%1.7%
Extra week impact
Product line divestiture0.4%0.6%
Organic sales change(1)3.7%4.0%
EPS
2Q152Q16
As reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Adjustments(3)$ - 0n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Non-GAAP adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, and other items(2)$ 0.22$ 0.21
Adjusted Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 0.91$ 1.09
Adjusted Operating Margin
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Operating income from continuing operations before interest and taxes, as reported$ 101.3$ 99.3
Adjustments(3)$ (0.5)n/a
Previously reported income from continuing operations before taxes$ 100.8$ 99.3
Operating margin, as reported6.7%6.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 16.8$ 3.6
Asset impairment and lease cancellation charges$ 3.2$ 2.8
Other items$ 23.0$ 59.2
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 143.8$ 164.9
Adjusted operating margin (non-GAAP)9.5%10.7%
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20 | Avery Dennison Investor Presentation
Adjusted Net Income and EPS
(1) Amounts have been revised to reflect the impact of adjustments made in third quarter 2015 to certain of the Company's benefit plan balances and to correct the timing of previously recorded out-of-period adjustments.
(2) The adjusted tax rate for 2011, 2012, 2013, 2014, 2015, 1H15 and 1H16 was 34%, 34%, 33%, 31%, 33%, 34% and 34%, respectively. (3) Reflects restructuring charges and other items, tax-effected at the adjusted tax rate.
Net Income
($ in millions) 2011 2012 2013 2014 2015 1H15 1H16As reported net income from continuing operations 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.6$ Adjustments(1) (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)$ n/aPreviously reported net income from continuing operations 141.7 157.6 244.3 251.1 273.8 135.9 169.6
Non-GAAP adjustments:Restructuring charges and other items 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8$ Tax effect of pre-tax adjustments and impact of adjusted tax rate(2) (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)$
Adjusted Net Income from Continuing Operations (non-GAAP) 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.9$ 16.1%
EPS
2011 2012 2013 2014 2015 1H15 1H16As reported net income per common share from continuing operations, assuming dilution
1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.87$
Adjustments(1) (0.01)$ (0.02)$ 0.03$ 0.04$ -$ (0.01)$ n/aPreviously reported net income per common share from continuing operations, assuming dilution
1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87$
Non-GAAP adjustments per common share, net of tax:Restructuring charges and other items(2)(3) 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15$ Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP) 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.02$ 13.3% 20.2%
4-Yr CAGR
2-Yr CAGR
4-Yr CAGR
Organic Growth
($ in millions)2-Yr CAGR4-Yr CAGR
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Reported sales change0.3%4.7%3.1%-5.7%-3.9%-0.6%
Foreign currency translation3.4%-0.1%1.1%8.6%8.4%3.6%
Extra week impact~-1.2%~1.2%~-1.4%
Product line divestiture0.1%0.1%0.6%0.2%0.8%
Organic sales change(1)3.8%4.8%3.1%4.6%3.4%3.9%3.8%4.1%
Pressure-sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Reported sales change-0.1%4.6%4.6%-6.1%-3.9%0.1%
Foreign currency translation4.2%-0.1%1.4%10.3%10.2%4.2%
Extra week impact~-1.2%~1.2%~-1.5%
Organic sales change(1)4.1%4.7%4.7%5.4%4.8%4.3%5.0%4.7%
Retail Branding & Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Reported sales change1.6%5.0%-1.2%-4.5%-3.8%-2.0%
Foreign currency translation1.5%0.0%0.6%3.8%3.5%2.1%
Extra week impact~-1.1%~1.1%~-0.7%
Product line divestiture2.3%0.7%3.1%
Organic sales change(1)3.1%4.9%-1.6%2.7%-0.3%3.2%0.5%2.2%
Net Income & EPS
Net Income
4-Yr CAGR3-Yr2014
($ in millions)201120122013201420151H151H16CAGRGrowth
As reported net income from continuing operations$ 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.62.3%
Adjustments(1)$ (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)n/a
Previously reported net income from continuing operations141.7157.6244.3251.1273.8135.9169.6
Non-GAAP adjustments:
Restructuring charges and other items$ 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)
Adjusted Net Income from Continuing Operations (non-GAAP)$ 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.916.1%19.2%10.9%
EPS
2-Yr CAGR4-Yr CAGR3-Yr2014
201120122013201420151H151H16CAGRGrowth
As reported net income per common share from continuing operations, assuming dilution$ 1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.877.1%
Adjustments(1)$ (0.01)$ (0.02)$ 0.03$ 0.04$ - 0$ (0.01)n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87
Non-GAAP adjustments per common share, net of tax:
Restructuring charges and other items(2)(3)$ 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15
Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.0213.3%20.2%23.5%16.0%
EBIT
($ in millions)
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Operating income from continuing operations before interest and taxes, as reported$ 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5
Adjustments(1)$ 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)n/a
Operating income from continuing operations before interest and taxes, previously reported$ 284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5
Operating margin, as reported4.8%5.3%7.0%6.7%7.9%7.6%8.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8
Asset impairment and lease cancellation charges$ 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2
Other items$ 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3
Adjusted operating margin (non-GAAP)5.7%6.5%7.5%7.8%9.0%9.0%10.2%
($ in millions)
Pressure-Sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Operating income from continuing operations before interest and taxes, as reported$ 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9
Operating margin, as reported8.2%8.4%9.9%9.3%11.4%11.3%12.8%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4
Asset impairment and lease cancellation charges$ 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4
Other items$ 0.4$ (0.6)$ - 0$ 1.4$ (1.5)$ (1.7)$ 1.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4
Adjusted operating margin (non-GAAP)8.7%9.2%10.2%10.2%11.7%11.9%13.2%
($ in millions)
Retail Branding and Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Operating income from continuing operations before interest and taxes, as reported$ 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4
Operating margin, as reported2.8%3.5%5.1%5.5%4.6%3.8%7.2%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3
Asset impairment and lease cancellation charges$ 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8
Other items$ (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2
Adjusted operating margin (non-GAAP)4.0%5.1%6.3%6.9%7.6%7.1%8.0%
FCF
($ in millions)2012-'15 Avg.
Avery Dennison20122013201420151H151H16
Net cash provided by operating activities(1)$ 513.4$ 319.6$ 354.9$ 473.7$ 170.4$ 216.0
Purchases of property, plant and equipment(99.2)(129.2)(147.9)(135.8)(56.4)(61.3)
Purchases of software and other deferred charges(59.1)(52.2)(27.1)(15.7)(4.0)(6.1)
Proceeds from sales of property, plant and equipment4.238.74.37.62.83.2
Sales (purchases) of investments, net (6.7)0.10.3(0.5)(0.3)- 0
Charitable contribution to Avery Dennison Foundation utilizing proceeds from divestitures- 010.0- 0- 0- 0- 0
Discretionary contributions to pension plans utilizing proceeds from divestitures- 050.1- 0- 0- 0- 0
Plus (minus): divestiture-related payments and free cash outflow (inflow) from discontinued operations(49.7)92.70.20.11.0- 0
Free Cash Flow - Continuing Operations$ 302.9$ 329.8$ 184.7$ 329.4$ 113.5$ 151.8$ 286.7
Net Debt-EBITDA
4-pt
($ in millions)1Q142Q143Q144Q141Q152Q153Q154Q15Avg.
Net sales$ 1,550.1$ 1,615.8$ 1,559.6$ 1,604.8$ 1,528.0$ 1,516.0$ 1,468.1$ 1,454.8
As reported net income$ 66.0$ 48.3$ 60.2$ 70.6$ 71.9$ 63.7$ 81.7$ 57.0
Interest expense$ 15.4$ 15.6$ 15.4$ 16.9$ 15.3$ 15.3$ 14.7$ 15.2
Income taxes$ 20.9$ 26.4$ 38.2$ 28.0$ 28.1$ 36.6$ 34.8$ 35.0
Provision for loss(income) from discontinued operations$ 0.4$ 1.9$ 0.7$ (0.8)$ - 0$ 1.0$ (0.4)$ (0.5)
Operating income from continuing operations before interest and taxes, as reported$ 102.7$ 92.2$ 114.5$ 114.7$ 115.3$ 116.6$ 130.8$ 106.7
Adjustments(1)$ 0.5$ 0.5$ 2.1$ 0.5$ (0.5)$ (0.5)n/an/a
Operating income from continuing operations before interest and taxes, previously reported$ 103.2$ 92.7$ 116.6$ 115.2$ 114.8$ 116.1$ 130.8$ 106.7
Non-GAAP Adjustments:
Restructuring costs:
Severance and related costs$ 7.0$ 35.9$ 5.1$ 6.7$ 13.5$ 16.8$ 4.7$ 17.5
Asset impairment and lease cancellation charges$ 0.3$ 2.6$ 1.6$ 6.9$ 0.4$ 3.2$ 1.9$ 1.5
Other items$ - 0$ - 0$ 1.1$ 1.0$ 0.4$ 7.7$ 0.4$ 0.3
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 110.5$ 131.2$ 124.4$ 129.8$ 129.1$ 143.8$ 137.8$ 126.0
Depreciation$ 33.6$ 32.4$ 33.0$ 36.5$ 33.2$ 31.7$ 30.4$ 29.9
Amortization$ 16.4$ 17.0$ 16.1$ 16.6$ 16.1$ 15.7$ 15.7$ 15.6
Adjusted net income before interest, taxes, depreciation & amortization ("EBITDA") (non-GAAP)$ 160.5$ 180.6$ 173.5$ 182.9$ 178.4$ 191.2$ 183.9$ 171.5
Total Debt$ 1,112.5$ 1,167.1$ 1,106.8$ 1,144.4$ 1,206.0$ 1,146.9$ 1,049.0$ 1,058.9
Less: Cash and cash equivalents(2)$ 203.9$ 220.8$ 186.1$ 207.2$ 189.0$ 225.7$ 143.8$ 158.8
Net Debt$ 908.6$ 946.3$ 920.7$ 937.2$ 1,017.0$ 921.2$ 905.2$ 900.1
Net Debt to Adjusted LTM* EBITDA ( Non-GAAP)1.41.31.21.21.3
*LTM = Last twelve months
1Q132Q133Q134Q131Q142Q143Q144Q14
YTD Depreciation33.66699135.533.264.995.3125.2125.2
QTD Depreciation33.632.43336.533.231.730.429.9125.2
YTD Amortization16.433.449.566.116.131.847.563.163.1
QTD Amortization16.41716.116.616.115.715.715.663.1
Check$ -0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ -0$ 0.0$ -0
ROTC
($ in millions)
Avery Dennison201320142015
As reported net income from continuing operations$ 247.3$ 274.4
Adjustments(1)$ 3.8$ (0.6)
Previously reported net income from continuing operations$ 251.1$ 273.8
Non-GAAP adjustments:
Restructuring charges and other items$ 68.2$ 68.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (21.3)$ (22.6)
Adjusted net income from continuing operations (non-GAAP)$ 298.0$ 319.5
Interest expense, net of tax benefit(1)$ 43.6$ 40.6
Effective Tax Rate31.1%32.9%
Adjusted income from continuing operations, excluding expense and tax benefit of debt financing (non-GAAP)$ 341.6$ 360.1
Total debt$ 1,021.5$ 1,144.4$ 1,058.9
Shareholders' equity(1)$ 1,468.1$ 1,047.7$ 965.7
Return on Total Capital (ROTC)14.6%17.1%
QTD
Organic Sales Change
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Reported sales change-6.2%1.7%
Foreign currency translation9.5%1.7%
Extra week impact
Product line divestiture0.4%0.6%
Organic sales change(1)3.7%4.0%
EPS
2Q152Q16
As reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Adjustments(3)$ - 0n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Non-GAAP adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, and other items(2)$ 0.22$ 0.21
Adjusted Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 0.91$ 1.09
Adjusted Operating Margin
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Operating income from continuing operations before interest and taxes, as reported$ 101.3$ 99.3
Adjustments(3)$ (0.5)n/a
Previously reported income from continuing operations before taxes$ 100.8$ 99.3
Operating margin, as reported6.7%6.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 16.8$ 3.6
Asset impairment and lease cancellation charges$ 3.2$ 2.8
Other items$ 23.0$ 59.2
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 143.8$ 164.9
Adjusted operating margin (non-GAAP)9.5%10.7%
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21 | Avery Dennison Investor Presentation
Adjusted Operating Margin Avery Dennison
(1) Amounts have been revised to reflect the impact of adjustments made in third quarter 2015 to certain of the Company's benefit plan balances and to correct the timing of previously recorded out-of-period adjustments.
($ in millions)Avery Dennison 2011 2012 2013 2014 2015 1H15 1H16Net sales 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0$ Operating income from continuing operations before interest and taxes, as reported 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5$ Adjustments(1) 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)$ n/aOperating income from continuing operations before interest and taxes, previously reported
284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5$
Operating margin, as reported 4.8% 5.3% 7.0% 6.7% 7.9% 7.6% 8.4%
Non-GAAP adjustments:Restructuring costs: Severance and related costs 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8$ Asset impairment and lease cancellation charges 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2$ Other items 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8$
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP)
335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3$
Adjusted operating margin (non-GAAP) 5.7% 6.5% 7.5% 7.8% 9.0% 9.0% 10.2%
Organic Growth
($ in millions)2-Yr CAGR4-Yr CAGR
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Reported sales change0.3%4.7%3.1%-5.7%-3.9%-0.6%
Foreign currency translation3.4%-0.1%1.1%8.6%8.4%3.6%
Extra week impact~-1.2%~1.2%~-1.4%
Product line divestiture0.1%0.1%0.6%0.2%0.8%
Organic sales change(1)3.8%4.8%3.1%4.6%3.4%3.9%3.8%4.1%
Pressure-sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Reported sales change-0.1%4.6%4.6%-6.1%-3.9%0.1%
Foreign currency translation4.2%-0.1%1.4%10.3%10.2%4.2%
Extra week impact~-1.2%~1.2%~-1.5%
Organic sales change(1)4.1%4.7%4.7%5.4%4.8%4.3%5.0%4.7%
Retail Branding & Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Reported sales change1.6%5.0%-1.2%-4.5%-3.8%-2.0%
Foreign currency translation1.5%0.0%0.6%3.8%3.5%2.1%
Extra week impact~-1.1%~1.1%~-0.7%
Product line divestiture2.3%0.7%3.1%
Organic sales change(1)3.1%4.9%-1.6%2.7%-0.3%3.2%0.5%2.2%
Net Income & EPS
Net Income
4-Yr CAGR3-Yr2014
($ in millions)201120122013201420151H151H16CAGRGrowth
As reported net income from continuing operations$ 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.62.3%
Adjustments(1)$ (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)n/a
Previously reported net income from continuing operations141.7157.6244.3251.1273.8135.9169.6
Non-GAAP adjustments:
Restructuring charges and other items$ 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8
Tax effect of pre-tax adjustments and impact of adjusted tax rate(3)$ (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)
Adjusted Net Income from Continuing Operations (non-GAAP)$ 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.916.1%19.2%10.9%
EPS
2-Yr CAGR4-Yr CAGR3-Yr2014
201120122013201420151H151H16CAGRGrowth
As reported net income per common share from continuing operations, assuming dilution$ 1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.877.1%
Adjustments(1)$ (0.01)$ (0.02)$ 0.03$ 0.04$ - 0$ (0.01)n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87
Non-GAAP adjustments per common share, net of tax:
Restructuring charges and other items(2)(3)$ 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15
Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.0213.3%20.2%23.5%16.0%
EBIT
($ in millions)
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Operating income from continuing operations before interest and taxes, as reported$ 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5
Adjustments(1)$ 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)n/a
Operating income from continuing operations before interest and taxes, previously reported$ 284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5
Operating margin, as reported4.8%5.3%7.0%6.7%7.9%7.6%8.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8
Asset impairment and lease cancellation charges$ 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2
Other items$ 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3
Adjusted operating margin (non-GAAP)5.7%6.5%7.5%7.8%9.0%9.0%10.2%
($ in millions)
Pressure-Sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Operating income from continuing operations before interest and taxes, as reported$ 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9
Operating margin, as reported8.2%8.4%9.9%9.3%11.4%11.3%12.8%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4
Asset impairment and lease cancellation charges$ 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4
Other items$ 0.4$ (0.6)$ - 0$ 1.4$ (1.5)$ (1.7)$ 1.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4
Adjusted operating margin (non-GAAP)8.7%9.2%10.2%10.2%11.7%11.9%13.2%
($ in millions)
Retail Branding and Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Operating income from continuing operations before interest and taxes, as reported$ 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4
Operating margin, as reported2.8%3.5%5.1%5.5%4.6%3.8%7.2%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3
Asset impairment and lease cancellation charges$ 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8
Other items$ (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2
Adjusted operating margin (non-GAAP)4.0%5.1%6.3%6.9%7.6%7.1%8.0%
FCF
($ in millions)2012-'15 Avg.
Avery Dennison20122013201420151H151H16
Net cash provided by operating activities(1)$ 513.4$ 319.6$ 354.9$ 473.7$ 170.4$ 216.0
Purchases of property, plant and equipment(99.2)(129.2)(147.9)(135.8)(56.4)(61.3)
Purchases of software and other deferred charges(59.1)(52.2)(27.1)(15.7)(4.0)(6.1)
Proceeds from sales of property, plant and equipment4.238.74.37.62.83.2
Sales (purchases) of investments, net (6.7)0.10.3(0.5)(0.3)- 0
Charitable contribution to Avery Dennison Foundation utilizing proceeds from divestitures- 010.0- 0- 0- 0- 0
Discretionary contributions to pension plans utilizing proceeds from divestitures- 050.1- 0- 0- 0- 0
Plus (minus): divestiture-related payments and free cash outflow (inflow) from discontinued operations(49.7)92.70.20.11.0- 0
Free Cash Flow - Continuing Operations$ 302.9$ 329.8$ 184.7$ 329.4$ 113.5$ 151.8$ 286.7
Net Debt-EBITDA
4-pt
($ in millions)1Q142Q143Q144Q141Q152Q153Q154Q15Avg.
Net sales$ 1,550.1$ 1,615.8$ 1,559.6$ 1,604.8$ 1,528.0$ 1,516.0$ 1,468.1$ 1,454.8
As reported net income$ 66.0$ 48.3$ 60.2$ 70.6$ 71.9$ 63.7$ 81.7$ 57.0
Interest expense$ 15.4$ 15.6$ 15.4$ 16.9$ 15.3$ 15.3$ 14.7$ 15.2
Income taxes$ 20.9$ 26.4$ 38.2$ 28.0$ 28.1$ 36.6$ 34.8$ 35.0
Provision for loss(income) from discontinued operations$ 0.4$ 1.9$ 0.7$ (0.8)$ - 0$ 1.0$ (0.4)$ (0.5)
Operating income from continuing operations before interest and taxes, as reported$ 102.7$ 92.2$ 114.5$ 114.7$ 115.3$ 116.6$ 130.8$ 106.7
Adjustments(1)$ 0.5$ 0.5$ 2.1$ 0.5$ (0.5)$ (0.5)n/an/a
Operating income from continuing operations before interest and taxes, previously reported$ 103.2$ 92.7$ 116.6$ 115.2$ 114.8$ 116.1$ 130.8$ 106.7
Non-GAAP Adjustments:
Restructuring costs:
Severance and related costs$ 7.0$ 35.9$ 5.1$ 6.7$ 13.5$ 16.8$ 4.7$ 17.5
Asset impairment and lease cancellation charges$ 0.3$ 2.6$ 1.6$ 6.9$ 0.4$ 3.2$ 1.9$ 1.5
Other items$ - 0$ - 0$ 1.1$ 1.0$ 0.4$ 7.7$ 0.4$ 0.3
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 110.5$ 131.2$ 124.4$ 129.8$ 129.1$ 143.8$ 137.8$ 126.0
Depreciation$ 33.6$ 32.4$ 33.0$ 36.5$ 33.2$ 31.7$ 30.4$ 29.9
Amortization$ 16.4$ 17.0$ 16.1$ 16.6$ 16.1$ 15.7$ 15.7$ 15.6
Adjusted net income before interest, taxes, depreciation & amortization ("EBITDA") (non-GAAP)$ 160.5$ 180.6$ 173.5$ 182.9$ 178.4$ 191.2$ 183.9$ 171.5
Total Debt$ 1,112.5$ 1,167.1$ 1,106.8$ 1,144.4$ 1,206.0$ 1,146.9$ 1,049.0$ 1,058.9
Less: Cash and cash equivalents(2)$ 203.9$ 220.8$ 186.1$ 207.2$ 189.0$ 225.7$ 143.8$ 158.8
Net Debt$ 908.6$ 946.3$ 920.7$ 937.2$ 1,017.0$ 921.2$ 905.2$ 900.1
Net Debt to Adjusted LTM* EBITDA ( Non-GAAP)1.41.31.21.21.3
*LTM = Last twelve months
1Q132Q133Q134Q131Q142Q143Q144Q14
YTD Depreciation33.66699135.533.264.995.3125.2125.2
QTD Depreciation33.632.43336.533.231.730.429.9125.2
YTD Amortization16.433.449.566.116.131.847.563.163.1
QTD Amortization16.41716.116.616.115.715.715.663.1
Check$ -0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ -0$ 0.0$ -0
ROTC
($ in millions)
Avery Dennison201320142015
As reported net income from continuing operations$ 247.3$ 274.4
Adjustments(1)$ 3.8$ (0.6)
Previously reported net income from continuing operations$ 251.1$ 273.8
Non-GAAP adjustments:
Restructuring charges and other items$ 68.2$ 68.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (21.3)$ (22.6)
Adjusted net income from continuing operations (non-GAAP)$ 298.0$ 319.5
Interest expense, net of tax benefit(1)$ 43.6$ 40.6
Effective Tax Rate31.1%32.9%
Adjusted income from continuing operations, excluding expense and tax benefit of debt financing (non-GAAP)$ 341.6$ 360.1
Total debt$ 1,021.5$ 1,144.4$ 1,058.9
Shareholders' equity(1)$ 1,468.1$ 1,047.7$ 965.7
Return on Total Capital (ROTC)14.6%17.1%
QTD
Organic Sales Change
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Reported sales change-6.2%1.7%
Foreign currency translation9.5%1.7%
Extra week impact
Product line divestiture0.4%0.6%
Organic sales change(1)3.7%4.0%
EPS
2Q152Q16
As reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Adjustments(3)$ - 0n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Non-GAAP adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, and other items(2)$ 0.22$ 0.21
Adjusted Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 0.91$ 1.09
Adjusted Operating Margin
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Operating income from continuing operations before interest and taxes, as reported$ 101.3$ 99.3
Adjustments(3)$ (0.5)n/a
Previously reported income from continuing operations before taxes$ 100.8$ 99.3
Operating margin, as reported6.7%6.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 16.8$ 3.6
Asset impairment and lease cancellation charges$ 3.2$ 2.8
Other items$ 23.0$ 59.2
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 143.8$ 164.9
Adjusted operating margin (non-GAAP)9.5%10.7%
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22 | Avery Dennison Investor Presentation
Adjusted Operating Margin PSM
($ in millions)Pressure-Sensitive Materials 2011 2012 2013 2014 2015 1H15 1H16Net sales 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1$ Operating income from continuing operations before interest and taxes, as reported 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9$ Operating margin, as reported 8.2% 8.4% 9.9% 9.3% 11.4% 11.3% 12.8%
Non-GAAP adjustments:Restructuring costs: Severance and related costs 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4$ Asset impairment and lease cancellation charges 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4$ Other items 0.4$ (0.6)$ -$ 1.4$ (1.5)$ (1.7)$ 1.7$
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4$ Adjusted operating margin (non-GAAP) 8.7% 9.2% 10.2% 10.2% 11.7% 11.9% 13.2%
Organic Growth
($ in millions)2-Yr CAGR4-Yr CAGR
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Reported sales change0.3%4.7%3.1%-5.7%-3.9%-0.6%
Foreign currency translation3.4%-0.1%1.1%8.6%8.4%3.6%
Extra week impact~-1.2%~1.2%~-1.4%
Product line divestiture0.1%0.1%0.6%0.2%0.8%
Organic sales change(1)3.8%4.8%3.1%4.6%3.4%3.9%3.8%4.1%
Pressure-sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Reported sales change-0.1%4.6%4.6%-6.1%-3.9%0.1%
Foreign currency translation4.2%-0.1%1.4%10.3%10.2%4.2%
Extra week impact~-1.2%~1.2%~-1.5%
Organic sales change(1)4.1%4.7%4.7%5.4%4.8%4.3%5.0%4.7%
Retail Branding & Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Reported sales change1.6%5.0%-1.2%-4.5%-3.8%-2.0%
Foreign currency translation1.5%0.0%0.6%3.8%3.5%2.1%
Extra week impact~-1.1%~1.1%~-0.7%
Product line divestiture2.3%0.7%3.1%
Organic sales change(1)3.1%4.9%-1.6%2.7%-0.3%3.2%0.5%2.2%
Net Income & EPS
Net Income
4-Yr CAGR3-Yr2014
($ in millions)201120122013201420151H151H16CAGRGrowth
As reported net income from continuing operations$ 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.62.3%
Adjustments(1)$ (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)n/a
Previously reported net income from continuing operations141.7157.6244.3251.1273.8135.9169.6
Non-GAAP adjustments:
Restructuring charges and other items$ 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8
Tax effect of pre-tax adjustments and impact of adjusted tax rate(3)$ (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)
Adjusted Net Income from Continuing Operations (non-GAAP)$ 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.916.1%19.2%10.9%
EPS
2-Yr CAGR4-Yr CAGR3-Yr2014
201120122013201420151H151H16CAGRGrowth
As reported net income per common share from continuing operations, assuming dilution$ 1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.877.1%
Adjustments(1)$ (0.01)$ (0.02)$ 0.03$ 0.04$ - 0$ (0.01)n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87
Non-GAAP adjustments per common share, net of tax:
Restructuring charges and other items(2)(3)$ 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15
Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.0213.3%20.2%23.5%16.0%
EBIT
($ in millions)
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Operating income from continuing operations before interest and taxes, as reported$ 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5
Adjustments(1)$ 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)n/a
Operating income from continuing operations before interest and taxes, previously reported$ 284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5
Operating margin, as reported4.8%5.3%7.0%6.7%7.9%7.6%8.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8
Asset impairment and lease cancellation charges$ 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2
Other items$ 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3
Adjusted operating margin (non-GAAP)5.7%6.5%7.5%7.8%9.0%9.0%10.2%
($ in millions)
Pressure-Sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Operating income from continuing operations before interest and taxes, as reported$ 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9
Operating margin, as reported8.2%8.4%9.9%9.3%11.4%11.3%12.8%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4
Asset impairment and lease cancellation charges$ 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4
Other items$ 0.4$ (0.6)$ - 0$ 1.4$ (1.5)$ (1.7)$ 1.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4
Adjusted operating margin (non-GAAP)8.7%9.2%10.2%10.2%11.7%11.9%13.2%
($ in millions)
Retail Branding and Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Operating income from continuing operations before interest and taxes, as reported$ 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4
Operating margin, as reported2.8%3.5%5.1%5.5%4.6%3.8%7.2%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3
Asset impairment and lease cancellation charges$ 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8
Other items$ (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2
Adjusted operating margin (non-GAAP)4.0%5.1%6.3%6.9%7.6%7.1%8.0%
FCF
($ in millions)2012-'15 Avg.
Avery Dennison20122013201420151H151H16
Net cash provided by operating activities(1)$ 513.4$ 319.6$ 354.9$ 473.7$ 170.4$ 216.0
Purchases of property, plant and equipment(99.2)(129.2)(147.9)(135.8)(56.4)(61.3)
Purchases of software and other deferred charges(59.1)(52.2)(27.1)(15.7)(4.0)(6.1)
Proceeds from sales of property, plant and equipment4.238.74.37.62.83.2
Sales (purchases) of investments, net (6.7)0.10.3(0.5)(0.3)- 0
Charitable contribution to Avery Dennison Foundation utilizing proceeds from divestitures- 010.0- 0- 0- 0- 0
Discretionary contributions to pension plans utilizing proceeds from divestitures- 050.1- 0- 0- 0- 0
Plus (minus): divestiture-related payments and free cash outflow (inflow) from discontinued operations(49.7)92.70.20.11.0- 0
Free Cash Flow - Continuing Operations$ 302.9$ 329.8$ 184.7$ 329.4$ 113.5$ 151.8$ 286.7
Net Debt-EBITDA
4-pt
($ in millions)1Q142Q143Q144Q141Q152Q153Q154Q15Avg.
Net sales$ 1,550.1$ 1,615.8$ 1,559.6$ 1,604.8$ 1,528.0$ 1,516.0$ 1,468.1$ 1,454.8
As reported net income$ 66.0$ 48.3$ 60.2$ 70.6$ 71.9$ 63.7$ 81.7$ 57.0
Interest expense$ 15.4$ 15.6$ 15.4$ 16.9$ 15.3$ 15.3$ 14.7$ 15.2
Income taxes$ 20.9$ 26.4$ 38.2$ 28.0$ 28.1$ 36.6$ 34.8$ 35.0
Provision for loss(income) from discontinued operations$ 0.4$ 1.9$ 0.7$ (0.8)$ - 0$ 1.0$ (0.4)$ (0.5)
Operating income from continuing operations before interest and taxes, as reported$ 102.7$ 92.2$ 114.5$ 114.7$ 115.3$ 116.6$ 130.8$ 106.7
Adjustments(1)$ 0.5$ 0.5$ 2.1$ 0.5$ (0.5)$ (0.5)n/an/a
Operating income from continuing operations before interest and taxes, previously reported$ 103.2$ 92.7$ 116.6$ 115.2$ 114.8$ 116.1$ 130.8$ 106.7
Non-GAAP Adjustments:
Restructuring costs:
Severance and related costs$ 7.0$ 35.9$ 5.1$ 6.7$ 13.5$ 16.8$ 4.7$ 17.5
Asset impairment and lease cancellation charges$ 0.3$ 2.6$ 1.6$ 6.9$ 0.4$ 3.2$ 1.9$ 1.5
Other items$ - 0$ - 0$ 1.1$ 1.0$ 0.4$ 7.7$ 0.4$ 0.3
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 110.5$ 131.2$ 124.4$ 129.8$ 129.1$ 143.8$ 137.8$ 126.0
Depreciation$ 33.6$ 32.4$ 33.0$ 36.5$ 33.2$ 31.7$ 30.4$ 29.9
Amortization$ 16.4$ 17.0$ 16.1$ 16.6$ 16.1$ 15.7$ 15.7$ 15.6
Adjusted net income before interest, taxes, depreciation & amortization ("EBITDA") (non-GAAP)$ 160.5$ 180.6$ 173.5$ 182.9$ 178.4$ 191.2$ 183.9$ 171.5
Total Debt$ 1,112.5$ 1,167.1$ 1,106.8$ 1,144.4$ 1,206.0$ 1,146.9$ 1,049.0$ 1,058.9
Less: Cash and cash equivalents(2)$ 203.9$ 220.8$ 186.1$ 207.2$ 189.0$ 225.7$ 143.8$ 158.8
Net Debt$ 908.6$ 946.3$ 920.7$ 937.2$ 1,017.0$ 921.2$ 905.2$ 900.1
Net Debt to Adjusted LTM* EBITDA ( Non-GAAP)1.41.31.21.21.3
*LTM = Last twelve months
1Q132Q133Q134Q131Q142Q143Q144Q14
YTD Depreciation33.66699135.533.264.995.3125.2125.2
QTD Depreciation33.632.43336.533.231.730.429.9125.2
YTD Amortization16.433.449.566.116.131.847.563.163.1
QTD Amortization16.41716.116.616.115.715.715.663.1
Check$ -0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ -0$ 0.0$ -0
ROTC
($ in millions)
Avery Dennison201320142015
As reported net income from continuing operations$ 247.3$ 274.4
Adjustments(1)$ 3.8$ (0.6)
Previously reported net income from continuing operations$ 251.1$ 273.8
Non-GAAP adjustments:
Restructuring charges and other items$ 68.2$ 68.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (21.3)$ (22.6)
Adjusted net income from continuing operations (non-GAAP)$ 298.0$ 319.5
Interest expense, net of tax benefit(1)$ 43.6$ 40.6
Effective Tax Rate31.1%32.9%
Adjusted income from continuing operations, excluding expense and tax benefit of debt financing (non-GAAP)$ 341.6$ 360.1
Total debt$ 1,021.5$ 1,144.4$ 1,058.9
Shareholders' equity(1)$ 1,468.1$ 1,047.7$ 965.7
Return on Total Capital (ROTC)14.6%17.1%
QTD
Organic Sales Change
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Reported sales change-6.2%1.7%
Foreign currency translation9.5%1.7%
Extra week impact
Product line divestiture0.4%0.6%
Organic sales change(1)3.7%4.0%
EPS
2Q152Q16
As reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Adjustments(3)$ - 0n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Non-GAAP adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, and other items(2)$ 0.22$ 0.21
Adjusted Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 0.91$ 1.09
Adjusted Operating Margin
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Operating income from continuing operations before interest and taxes, as reported$ 101.3$ 99.3
Adjustments(3)$ (0.5)n/a
Previously reported income from continuing operations before taxes$ 100.8$ 99.3
Operating margin, as reported6.7%6.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 16.8$ 3.6
Asset impairment and lease cancellation charges$ 3.2$ 2.8
Other items$ 23.0$ 59.2
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 143.8$ 164.9
Adjusted operating margin (non-GAAP)9.5%10.7%
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23 | Avery Dennison Investor Presentation
Adjusted Operating Margin RBIS
($ in millions)
Retail Branding and Information Solutions 2011 2012 2013 2014 2015 1H15 1H16Net sales 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1$ Operating income from continuing operations before interest and taxes, as reported 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4$ Operating margin, as reported 2.8% 3.5% 5.1% 5.5% 4.6% 3.8% 7.2%Non-GAAP adjustments:Restructuring costs: Severance and related costs 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3$ Asset impairment and lease cancellation charges 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8$ Other items (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7$
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2$ Adjusted operating margin (non-GAAP) 4.0% 5.1% 6.3% 6.9% 7.6% 7.1% 8.0%
Organic Growth
($ in millions)2-Yr CAGR4-Yr CAGR
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Reported sales change0.3%4.7%3.1%-5.7%-3.9%-0.6%
Foreign currency translation3.4%-0.1%1.1%8.6%8.4%3.6%
Extra week impact~-1.2%~1.2%~-1.4%
Product line divestiture0.1%0.1%0.6%0.2%0.8%
Organic sales change(1)3.8%4.8%3.1%4.6%3.4%3.9%3.8%4.1%
Pressure-sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Reported sales change-0.1%4.6%4.6%-6.1%-3.9%0.1%
Foreign currency translation4.2%-0.1%1.4%10.3%10.2%4.2%
Extra week impact~-1.2%~1.2%~-1.5%
Organic sales change(1)4.1%4.7%4.7%5.4%4.8%4.3%5.0%4.7%
Retail Branding & Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Reported sales change1.6%5.0%-1.2%-4.5%-3.8%-2.0%
Foreign currency translation1.5%0.0%0.6%3.8%3.5%2.1%
Extra week impact~-1.1%~1.1%~-0.7%
Product line divestiture2.3%0.7%3.1%
Organic sales change(1)3.1%4.9%-1.6%2.7%-0.3%3.2%0.5%2.2%
Net Income & EPS
Net Income
4-Yr CAGR3-Yr2014
($ in millions)201120122013201420151H151H16CAGRGrowth
As reported net income from continuing operations$ 143.1$ 159.5$ 241.7$ 247.3$ 274.4$ 136.6$ 169.62.3%
Adjustments(1)$ (1.4)$ (1.9)$ 2.6$ 3.8$ (0.6)$ (0.7)n/a
Previously reported net income from continuing operations141.7157.6244.3251.1273.8135.9169.6
Non-GAAP adjustments:
Restructuring charges and other items$ 51.6$ 68.8$ 36.6$ 68.2$ 68.3$ 42.0$ 55.8
Tax effect of pre-tax adjustments and impact of adjusted tax rate(3)$ (17.2)$ (23.8)$ (12.3)$ (21.3)$ (22.6)$ (18.0)$ (41.5)
Adjusted Net Income from Continuing Operations (non-GAAP)$ 176.1$ 202.6$ 268.6$ 298.0$ 319.5$ 159.9$ 183.916.1%19.2%10.9%
EPS
2-Yr CAGR4-Yr CAGR3-Yr2014
201120122013201420151H151H16CAGRGrowth
As reported net income per common share from continuing operations, assuming dilution$ 1.34$ 1.54$ 2.41$ 2.58$ 2.95$ 1.47$ 1.877.1%
Adjustments(1)$ (0.01)$ (0.02)$ 0.03$ 0.04$ - 0$ (0.01)n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 1.33$ 1.52$ 2.44$ 2.62$ 2.95$ 1.46$ 1.87
Non-GAAP adjustments per common share, net of tax:
Restructuring charges and other items(2)(3)$ 0.32$ 0.44$ 0.24$ 0.49$ 0.49$ 0.26$ 0.15
Adjusted Net Income per Common Share from Continuing Operations, assuming dilution (non-GAAP)$ 1.65$ 1.96$ 2.68$ 3.11$ 3.44$ 1.72$ 2.0213.3%20.2%23.5%16.0%
EBIT
($ in millions)
Avery Dennison201120122013201420151H151H16
Net sales$ 5,844.9$ 5,863.5$ 6,140.0$ 6,330.3$ 5,966.9$ 3,044.0$ 3,027.0
Operating income from continuing operations before interest and taxes, as reported$ 279.9$ 308.1$ 426.9$ 424.1$ 469.4$ 231.9$ 253.5
Adjustments(1)$ 4.4$ 2.4$ (4.8)$ 3.6$ (1.0)$ (1.0)n/a
Operating income from continuing operations before interest and taxes, previously reported$ 284.3$ 310.5$ 422.1$ 427.7$ 468.4$ 230.9$ 253.5
Operating margin, as reported4.8%5.3%7.0%6.7%7.9%7.6%8.4%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 35.0$ 49.3$ 27.2$ 54.7$ 52.5$ 30.3$ 8.8
Asset impairment and lease cancellation charges$ 8.9$ 6.5$ 13.1$ 11.4$ 7.0$ 3.6$ 3.2
Other items$ 7.7$ 13.0$ (3.7)$ 2.1$ 8.8$ 8.1$ 43.8
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 335.9$ 379.3$ 458.7$ 495.9$ 536.7$ 272.9$ 309.3
Adjusted operating margin (non-GAAP)5.7%6.5%7.5%7.8%9.0%9.0%10.2%
($ in millions)
Pressure-Sensitive Materials201120122013201420151H151H16
Net sales$ 4,261.0$ 4,257.6$ 4,455.0$ 4,658.1$ 4,373.7$ 2,234.7$ 2,237.1
Operating income from continuing operations before interest and taxes, as reported$ 349.1$ 359.7$ 442.8$ 434.4$ 496.6$ 252.7$ 286.9
Operating margin, as reported8.2%8.4%9.9%9.3%11.4%11.3%12.8%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 12.1$ 31.5$ 7.0$ 38.3$ 14.1$ 11.3$ 4.4
Asset impairment and lease cancellation charges$ 7.6$ 2.6$ 3.8$ 1.9$ 3.7$ 3.1$ 2.4
Other items$ 0.4$ (0.6)$ - 0$ 1.4$ (1.5)$ (1.7)$ 1.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 369.2$ 393.2$ 453.6$ 476.0$ 512.9$ 265.4$ 295.4
Adjusted operating margin (non-GAAP)8.7%9.2%10.2%10.2%11.7%11.9%13.2%
($ in millions)
Retail Branding and Information Solutions201120122013201420151H151H16
Net sales$ 1,510.1$ 1,535.0$ 1,611.1$ 1,591.6$ 1,520.3$ 771.9$ 756.1
Operating income from continuing operations before interest and taxes, as reported$ 42.1$ 53.3$ 81.7$ 87.9$ 70.0$ 29.2$ 54.4
Operating margin, as reported2.8%3.5%5.1%5.5%4.6%3.8%7.2%
Non-GAAP adjustments:
Restructuring costs:
Severance and related costs$ 18.1$ 14.4$ 19.9$ 16.0$ 34.3$ 15.2$ 4.3
Asset impairment and lease cancellation charges$ 1.3$ 3.4$ 8.6$ 5.3$ 1.6$ 0.5$ 0.8
Other items$ (1.6)$ 7.0$ (8.5)$ 0.7$ 10.0$ 9.8$ 0.7
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 59.9$ 78.1$ 101.7$ 109.9$ 115.9$ 54.7$ 60.2
Adjusted operating margin (non-GAAP)4.0%5.1%6.3%6.9%7.6%7.1%8.0%
FCF
($ in millions)2012-'15 Avg.
Avery Dennison20122013201420151H151H16
Net cash provided by operating activities(1)$ 513.4$ 319.6$ 354.9$ 473.7$ 170.4$ 216.0
Purchases of property, plant and equipment(99.2)(129.2)(147.9)(135.8)(56.4)(61.3)
Purchases of software and other deferred charges(59.1)(52.2)(27.1)(15.7)(4.0)(6.1)
Proceeds from sales of property, plant and equipment4.238.74.37.62.83.2
Sales (purchases) of investments, net (6.7)0.10.3(0.5)(0.3)- 0
Charitable contribution to Avery Dennison Foundation utilizing proceeds from divestitures- 010.0- 0- 0- 0- 0
Discretionary contributions to pension plans utilizing proceeds from divestitures- 050.1- 0- 0- 0- 0
Plus (minus): divestiture-related payments and free cash outflow (inflow) from discontinued operations(49.7)92.70.20.11.0- 0
Free Cash Flow - Continuing Operations$ 302.9$ 329.8$ 184.7$ 329.4$ 113.5$ 151.8$ 286.7
Net Debt-EBITDA
4-pt
($ in millions)1Q142Q143Q144Q141Q152Q153Q154Q15Avg.
Net sales$ 1,550.1$ 1,615.8$ 1,559.6$ 1,604.8$ 1,528.0$ 1,516.0$ 1,468.1$ 1,454.8
As reported net income$ 66.0$ 48.3$ 60.2$ 70.6$ 71.9$ 63.7$ 81.7$ 57.0
Interest expense$ 15.4$ 15.6$ 15.4$ 16.9$ 15.3$ 15.3$ 14.7$ 15.2
Income taxes$ 20.9$ 26.4$ 38.2$ 28.0$ 28.1$ 36.6$ 34.8$ 35.0
Provision for loss(income) from discontinued operations$ 0.4$ 1.9$ 0.7$ (0.8)$ - 0$ 1.0$ (0.4)$ (0.5)
Operating income from continuing operations before interest and taxes, as reported$ 102.7$ 92.2$ 114.5$ 114.7$ 115.3$ 116.6$ 130.8$ 106.7
Adjustments(1)$ 0.5$ 0.5$ 2.1$ 0.5$ (0.5)$ (0.5)n/an/a
Operating income from continuing operations before interest and taxes, previously reported$ 103.2$ 92.7$ 116.6$ 115.2$ 114.8$ 116.1$ 130.8$ 106.7
Non-GAAP Adjustments:
Restructuring costs:
Severance and related costs$ 7.0$ 35.9$ 5.1$ 6.7$ 13.5$ 16.8$ 4.7$ 17.5
Asset impairment and lease cancellation charges$ 0.3$ 2.6$ 1.6$ 6.9$ 0.4$ 3.2$ 1.9$ 1.5
Other items$ - 0$ - 0$ 1.1$ 1.0$ 0.4$ 7.7$ 0.4$ 0.3
Adjusted operating income from continuing operations before interest expense and taxes (non-GAAP) $ 110.5$ 131.2$ 124.4$ 129.8$ 129.1$ 143.8$ 137.8$ 126.0
Depreciation$ 33.6$ 32.4$ 33.0$ 36.5$ 33.2$ 31.7$ 30.4$ 29.9
Amortization$ 16.4$ 17.0$ 16.1$ 16.6$ 16.1$ 15.7$ 15.7$ 15.6
Adjusted net income before interest, taxes, depreciation & amortization ("EBITDA") (non-GAAP)$ 160.5$ 180.6$ 173.5$ 182.9$ 178.4$ 191.2$ 183.9$ 171.5
Total Debt$ 1,112.5$ 1,167.1$ 1,106.8$ 1,144.4$ 1,206.0$ 1,146.9$ 1,049.0$ 1,058.9
Less: Cash and cash equivalents(2)$ 203.9$ 220.8$ 186.1$ 207.2$ 189.0$ 225.7$ 143.8$ 158.8
Net Debt$ 908.6$ 946.3$ 920.7$ 937.2$ 1,017.0$ 921.2$ 905.2$ 900.1
Net Debt to Adjusted LTM* EBITDA ( Non-GAAP)1.41.31.21.21.3
*LTM = Last twelve months
1Q132Q133Q134Q131Q142Q143Q144Q14
YTD Depreciation33.66699135.533.264.995.3125.2125.2
QTD Depreciation33.632.43336.533.231.730.429.9125.2
YTD Amortization16.433.449.566.116.131.847.563.163.1
QTD Amortization16.41716.116.616.115.715.715.663.1
Check$ -0$ 0.0$ 0.0$ (0.0)$ 0.0$ (0.0)$ -0$ 0.0$ -0
ROTC
($ in millions)
Avery Dennison201320142015
As reported net income from continuing operations$ 247.3$ 274.4
Adjustments(1)$ 3.8$ (0.6)
Previously reported net income from continuing operations$ 251.1$ 273.8
Non-GAAP adjustments:
Restructuring charges and other items$ 68.2$ 68.3
Tax effect of pre-tax adjustments and impact of adjusted tax rate(2)$ (21.3)$ (22.6)
Adjusted net income from continuing operations (non-GAAP)$ 298.0$ 319.5
Interest expense, net of tax benefit(1)$ 43.6$ 40.6
Effective Tax Rate31.1%32.9%
Adjusted income from continuing operations, excluding expense and tax benefit of debt financing (non-GAAP)$ 341.6$ 360.1
Total debt$ 1,021.5$ 1,144.4$ 1,058.9
Shareholders' equity(1)$ 1,468.1$ 1,047.7$ 965.7
Return on Total Capital (ROTC)14.6%17.1%
QTD
Organic Sales Change
($ in millions)
Avery Dennison2Q152Q16
Net sales$ 1,516.0$ 1,541.5
Reported sales change-6.2%1.7%
Foreign currency translation9.5%1.7%
Extra week impact
Product line divestiture0.4%0.6%
Organic sales change(1)3.7%4.0%
EPS
2Q152Q16
As reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Adjustments(3)$ - 0n/a
Previously reported net income per common share from continuing operations, assuming dilution$ 0.69$ 0.88
Non-GAAP adjustments per common share, net of tax:
Restructuring charges, loss from settlement of pension obligations, and other items(2)$ 0.22$ 0.21
Adjusted Income per Common Share from Continuing Operations, assuming dilution (