Investor Presentation February 2026 February 2026 Investor Presentation 1 Classification: Avery Dennison - Public 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. We believe that the most significant risk fac ...

Core Viewpoint - Avery Dennison Corporation, a leading global materials science and digital identification solutions company, is set to participate in several upcoming investor events in 2026 [1] Group 1: Upcoming Investor Events - The company will attend Citi's 2026 Global Industrial Tech and Mobility Conference on February 17 [1] - The company will also participate in Bank of America's 2026 Global Agriculture and Materials Conference on February 25 [1] - Additionally, the company is scheduled to be at Jefferies' Europe Paper & Packaging Summit on March 3 [1]

Group 1 - Avery Dennison (NYSE:AVY) is recognized as one of the top 8 paper and plastic packaging stocks to buy according to hedge funds [1] - BMO Capital analyst John McNulty raised the price target for Avery Dennison from $215 to $224, maintaining an Outperform rating after the company's fourth-quarter earnings beat [1] - Truist Financial also increased its price target for Avery Dennison from $213 to $234, indicating an upside potential of over 22% [3] Group 2 - The company operates through two segments: Materials Group and Solutions Group, offering products such as pressure-sensitive label materials and performance tapes [5] - Avery Dennison sells its products under brands like Avery Dennison, Fasson, and JAC [5] - The firm anticipates slight weakness in packaging volumes in early 2026, but some consumer packaged goods (CPGs) are increasing volumes while retaining price gains [4]

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Core Insights - The company reported a solid performance for the full year 2025, with adjusted EPS of $9.53 and $700 million in adjusted free cash flow, demonstrating resilience despite macroeconomic challenges [3][25] - The adjusted EBITDA margin was maintained at 16.4%, reflecting effective productivity measures to offset higher employee-related costs and trade policy impacts [3][15] - The company is focused on driving growth in high-value categories, which now represent a significant portion of its portfolio, and aims to return to stronger organic revenue growth [7][12] Financial Performance - Adjusted EPS for Q4 was $2.45, up 3% year-over-year, driven by higher volume and productivity, despite challenges from trade policy changes [14][25] - Full-year 2025 free cash flow reached $700 million, with a conversion rate exceeding 100%, and a net debt to adjusted EBITDA ratio of 2.4 [15][25] - The company returned approximately $860 million to shareholders in 2025, including $572 million in buybacks and $288 million in dividends [15][25] Segment Performance - In the Solutions Group, sales increased by approximately 1.5%, with high-value categories now making up 60% of the portfolio, which helped offset declines in base solutions due to tariff-related uncertainties [1][19] - The Materials Group reported a 5% increase in sales, although organic sales were slightly down, with high-value categories contributing to low single-digit growth [2][16] - Intelligent Labels and other high-value categories showed strong growth, with Intelligent Labels growing mid-single digits, driven by food and logistics segments [20][21] Strategic Focus - The company is committed to expanding its high-value categories, which have shown a mid-single-digit CAGR over the past six years, and aims to increase their share of total sales to approximately 45% by 2025 [7][12] - Innovation and digital capabilities are key areas of focus, with efforts to enhance operational productivity and shorten innovation cycles through AI and automation [10][11][76] - The company plans to continue its disciplined capital allocation strategy while investing in productivity and innovation to drive long-term value [11][12] Outlook - For 2026, the company anticipates adjusted EPS growth of approximately 6% and reported sales growth of 5% to 7%, with organic sales growth expected to be between 0% and 2% [12][23] - The company expects to see stronger growth in the second half of 2026, driven by new program rollouts and a recovery in apparel and general retail [6][12] - Continued focus on productivity and effective capital deployment will be essential to navigate the current economic environment and achieve growth targets [12][26]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $9.53 and $707 million of adjusted free cash flow for the full year 2025, demonstrating the durability of its franchise [3][15] - Adjusted EBITDA margin was 16.4% for the full year, reflecting resilience despite headwinds from trade policy changes and softer consumer sentiment [3][15] - Fourth quarter adjusted EPS was $2.45, up 3% compared to the prior year, driven by higher volume and productivity [15][25] Business Line Data and Key Metrics Changes - In the Materials Group, reported sales increased by 5%, although organic sales were slightly down due to deflation-related price reductions [4][17] - The Solutions Group saw sales increase by approximately 1.5%, with high-value categories now representing 60% of the portfolio, which helped offset declines in base solutions [6][19] - Intelligent Labels within the enterprise-wide platform grew mid-single digits, driven by strong performance in food, logistics, and other categories [7][20] Market Data and Key Metrics Changes - In developed markets, North America experienced low single-digit volume mix declines, while Europe delivered mid-single-digit growth [17] - Emerging markets in Asia Pacific and Latin America were up low single digits, indicating some resilience in these regions [17] - The apparel business was down roughly 7%, impacted by tariff-related uncertainties, while other categories like food and logistics showed high teens growth in Q4 [6][8] Company Strategy and Development Direction - The company is focused on driving growth in high-value categories, which now represent approximately 45% of total sales, and aims to expand this further [9][10] - There is a strong emphasis on innovation and digital capabilities to enhance operational productivity and customer solutions [10][11] - The company plans to maintain a disciplined capital allocation strategy while continuing to invest in productivity and innovation to strengthen market positions [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to stronger growth despite ongoing macroeconomic challenges, with expectations for adjusted EPS growth of approximately 6% in Q1 2026 [13][25] - The company anticipates that growth in high-value categories will continue to be a key driver, with a focus on expanding customer adoption and market penetration [9][39] - Management acknowledged the need to improve organic revenue growth and is taking decisive actions to address this trajectory [9][13] Other Important Information - The company achieved its 2025 sustainability objectives, including reducing energy intensity and enabling more sustainable products [11][12] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 2.4, and the company returned approximately $860 million to shareholders in 2025 [16][25] Q&A Session Questions and Answers Question: Can you provide more detail on the 40 basis point drop in margin? - The drop was attributed to soft base volumes, wage inflation, and some one-time benefits in the prior year, along with the impact of extra calendar days in Q4 [28][30] Question: What are the growth expectations for Intelligent Labels in 2026? - Growth is anticipated to be above the low single digits seen in 2025, driven by increased adoption in apparel and logistics sectors [37][39] Question: How do high-value categories compare in margin to core categories? - High-value categories typically have higher variable margins than the rest of the portfolio, contributing to overall margin expansion [44][46] Question: Has the Walmart partnership increased inquiries from other grocery sellers? - Yes, the partnership has catalyzed interest from other grocery sellers, leading to a growing pipeline of inquiries [52][53] Question: What is the expected impact of temporary savings on 2026? - Temporary savings from incentive compensation in 2025 will be a headwind in 2026, similar in magnitude to the $50 million restructuring actions [55][56] Question: What is the outlook for the apparel market in 2026? - There is uncertainty due to tariff policies, but growth is expected as retailers adjust their supply chain strategies [61][63]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $9.53 and generated $707 million of adjusted free cash flow for the full year 2025, demonstrating the durability of its franchise [3][14] - Adjusted EBITDA margin was maintained at 16.4% for the full year, despite headwinds from trade policy changes and softer consumer sentiment [3][14] - In Q4, adjusted EPS was $2.45, up 3% compared to the prior year, with reported sales increasing by 3.9% [13][14] Business Line Data and Key Metrics Changes - In the Materials Group, reported sales increased by 5%, with low single-digit volume and mix growth offset by deflation-related price reductions [4][15] - The Solutions Group saw sales increase by approximately 1.5%, with high-value categories representing 60% of the portfolio [5][19] - Intelligent Labels within the Solutions Group grew mid-single digits, driven by food, logistics, and industrial categories [6][18] Market Data and Key Metrics Changes - In developed markets, North America experienced low single-digit volume mix declines, while Europe delivered mid-single-digit growth [15] - Emerging markets in Asia Pacific and Latin America were up low single digits [15] - The apparel business was down approximately 7%, impacted by tariff-related uncertainties [5][56] Company Strategy and Development Direction - The company is focused on driving growth in high-value categories, which now represent 45% of sales, and aims to expand this further [8][10] - There is a commitment to accelerating innovation and enhancing digital capabilities to improve operational productivity and customer solutions [9][10] - The company achieved its 2025 sustainability objectives and is making progress towards its 2030 goals [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to stronger growth in 2026, anticipating adjusted earnings per share growth of approximately 6% at the midpoint [11][21] - The company does not expect macroeconomic tailwinds in the near term, focusing instead on internal levers to drive performance [11][38] - There is a recognition of the need to improve organic revenue growth, with decisive actions being taken to address this [8][12] Other Important Information - The company returned approximately $860 million to shareholders in 2025, including $572 million in buybacks and $288 million in dividends [14] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 2.4 [14] Q&A Session Summary Question: Can you provide more details on the 40 basis point drop in margin? - The drop was attributed to soft base volumes, wage inflation, and some one-time benefits in the prior year [26][28] Question: What are the growth expectations for Intelligent Labels in 2026? - Growth is anticipated to be above the low single digits achieved in 2025, driven by increased adoption in apparel and logistics [32][34] Question: How do high-value categories compare in margin to core categories? - High-value categories typically have higher variable margins than the rest of the portfolio, contributing to overall margin expansion [40][42] Question: What impact has the Walmart partnership had on inquiries from other grocery sellers? - The partnership has increased interest and inquiries from other grocery sellers, leading to potential pilots and trials [47][48] Question: What is the expected timing for restructuring benefits throughout 2026? - Restructuring benefits are expected to be balanced across the year, with a more significant impact in the middle quarters [68][70] Question: What actions are being taken to drive organic growth in high-value categories? - The company is focusing on new customer acquisition, accelerating innovation outcomes, and leveraging digital capabilities [75][78]

Avery Dennison (NYSE:AVY) Q4 2025 Earnings call February 04, 2026 11:00 AM ET Speaker2Ladies and gentlemen, welcome to Avery Dennison's Earnings Conference Call for the fourth quarter, ended on December 31, 2025. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a Q&A section. At that time, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and enter the queue. As a reminder, this webcast is being recorded ...

Key Takeaways AVY posted Q4 adjusted EPS of $2.45, beating estimates, as revenues rose 3.9% y/y to $2.27B.AVY expanded the gross margin to 28.7% as cost of sales improved and gross profit increased 6.8% y/y.AVY returned $861 million to shareholders in 2025 via buybacks and dividends, repurchasing 3.2 million shares.Avery Dennison Corporation (AVY) has delivered adjusted earnings of $2.45 per share in fourth-quarter 2025, beating the Zacks Consensus Estimate of $2.40. The bottom line increased 2.9% year over ...

Fourth Quarter and Full Year 2025 Financial Review and Analysis (preliminary, unaudited) February 4, 2026 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. Safe Harbor Statement 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 busine ...