Glendale, CA-based Avery Dennison Corp. reports its preliminary, unaudited results for Q1 2019 varied depending on the product category and sales region.
“Our Q1 performance was solid, given a challenging start to the year, with adjusted earnings in line with our expectations,” says Mitch Butier, president/CEO.
“In the Label and Graphic Materials segment, organic growth slowed, while profitability was solid. We expect organic growth and operating margin to improve through the course of the year. Retail Branding and Information Solutions continues to deliver, with another quarter of strong sales growth for RFID products, solid growth in the base business, and significant margin expansion. And, despite a modest organic sales decline, Industrial and Healthcare Materials delivered strong margin expansion through increased productivity.
“We reaffirm our previous guidance for 2019 adjusted earnings per share, with organic growth improving over the balance of the year, along with continued margin expansion,” added Butier. “Our ongoing confidence in our ability to achieve our guidance and long-term targets reflects the resilience of our business and ability of our team to adapt under changing market conditions.”
First Quarter 2019 Results by Segment
Label and Graphic Materials
“Our Q1 performance was solid, given a challenging start to the year, with adjusted earnings in line with our expectations,” says Mitch Butier, president/CEO.
“In the Label and Graphic Materials segment, organic growth slowed, while profitability was solid. We expect organic growth and operating margin to improve through the course of the year. Retail Branding and Information Solutions continues to deliver, with another quarter of strong sales growth for RFID products, solid growth in the base business, and significant margin expansion. And, despite a modest organic sales decline, Industrial and Healthcare Materials delivered strong margin expansion through increased productivity.
“We reaffirm our previous guidance for 2019 adjusted earnings per share, with organic growth improving over the balance of the year, along with continued margin expansion,” added Butier. “Our ongoing confidence in our ability to achieve our guidance and long-term targets reflects the resilience of our business and ability of our team to adapt under changing market conditions.”
First Quarter 2019 Results by Segment
Label and Graphic Materials
- Reported sales declined 3.3 percent; on an organic basis, sales grew 1.4 percent, as prior year pricing actions more than offset a modest decline in volume/mix. On an organic basis, sales increased modestly in Label and Packaging Materials, and were up low-single digits in the combined Graphics and Reflective Solutions businesses.
- Reported operating margin decreased 50 basis points to 11.8 percent, reflecting higher employee-related costs, lower volume, and transition costs associated with the European restructuring plan. Adjusted operating margin also decreased 50 basis points to 12.5 percent.
- Reported sales increased 3.2 percent; on an organic basis, sales grew 7.0 percent driven by continued strength in radio frequency identification (RFID) solutions and solid growth in the base business.
- Reported operating margin increased 390 basis points to 12.9 percent, as a decline in restructuring charges, increased volume, and lower currency-related costs more than offset higher employee-related costs. Adjusted operating margin increased 220 basis points to 12.4 percent.
- Reported sales declined 5.1 percent; on an organic basis, sales declined by 1.0 percent. On an organic basis, sales in industrial categories were down low-single digits (up mid-single digits excluding products serving global automotive markets), while sales in healthcare categories were up low-single digits.
- Reported operating margin increased 80 basis points to 8.3 percent as the benefit of productivity actions more than offset the impacts of lower volume and higher restructuring charges. Adjusted operating margin increased 200 basis points to 9.5 percent.
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