In This Article:
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Sales Growth: 5% for the year.
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Adjusted EBITDA Margin: Expanded by 130 basis points.
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Adjusted EPS Growth: 19% for the year.
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Fourth Quarter Adjusted EPS: $2.38, up 10% compared to prior year.
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Fourth Quarter Sales Growth: 3.5% excluding currency, 3.3% on an organic basis.
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Fourth Quarter Adjusted EBITDA Margin: 16.4%, up 40 basis points compared to prior year.
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Fourth Quarter Adjusted Free Cash Flow: $280 million.
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Full Year Adjusted Free Cash Flow: $700 million.
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Shareholder Returns in 2024: $525 million through dividends and share repurchases.
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Intelligent Labels Revenue: $900 million in 2024, 9% organic growth.
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2025 Adjusted EPS Guidance: $9.80 to $10.20, up roughly 10% excluding currency.
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2025 Organic Sales Growth Expectation: 3% to 4%.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Avery Dennison Corp (NYSE:AVY) reported a 5% sales growth for the year, with adjusted EPS growing 19%, reaching the high end of their original guidance.
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The company achieved a 130 basis point expansion in adjusted EBITDA margin, demonstrating strong productivity-driven margin expansion.
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High-value categories now represent almost half of Avery Dennison Corp (NYSE:AVY)'s portfolio, contributing significantly to organic sales growth.
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The Materials Group delivered strong top-line growth in 2024, driven by significant volume growth and margin expansion.
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Avery Dennison Corp (NYSE:AVY) signed a new partnership with CVS Health to launch Vestcom shelf edge solutions chain-wide, expecting strong growth in 2025.
Negative Points
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Vestcom sales were softer than anticipated in 2024, primarily due to lower volume in the drugstore channel driven by store closures.
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Sales in the logistics segment were lower in 2024 due to a year-on-year comparison with a large RFID program rollout in 2023.
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The Solutions Group's high-value solutions were down mid-single digits, below expectations, impacting overall margins.
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The company anticipates a $30 million headwind to operating income from currency translation in 2025.
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Avery Dennison Corp (NYSE:AVY) expects slight declines in the logistics segment between 2024 and 2025, impacting growth projections.
Q & A Highlights
Q: Can you talk specifically about what your assumptions are for growth and logistics within Intelligent Labels (IL) for 2025, and how a large customer's volume pullback might affect your IL growth plans? A: We anticipate a slight decline in the logistics segment between 2024 and 2025. The impact from the customer you mentioned has already been factored into our 10% to 15% IL growth range. We have aligned volumes with this customer for 2024 to 2025 and are not assuming further adoptions during 2025, with more likely adoptions in 2026.