Avery Dennison(AVY) - 2024 Q3 - Quarterly Results

Financial Performance - 3Q24 reported EPS of $2.25, up 32%, and adjusted EPS of$ 2.33, up 9%[1] - 3Q24 net sales reached $2.2 billion, an increase of 4%, with organic sales growth of 4%[1] - Total net sales for Q3 2024 reached$ 2,183.4 million, a 4.1% increase compared to $2,098.3 million in Q3 2023[14] - Net income for Q3 2024 was$ 181.7 million, a 31% increase compared to $138.3 million in Q3 2023[14] - Net income per common share, assuming dilution, increased to$ 2.25 in Q3 2024 from $1.71 in Q3 2023, marking a 32% rise[14] - Operating income for Q3 2024 was$ 264.4 million, representing a 28% increase from $206.9 million in Q3 2023[14] - Adjusted net income for the three months ended September 28, 2024, was$ 188.4 million, compared to $172.3 million for the same period in 2023, reflecting a year-over-year increase of 9.5%[23] Segment Performance - Materials Group reported sales increased 3% to$ 1.5 billion, with an operating margin of 14.5%[3] - Solutions Group reported sales increased 7% to $686 million, with an operating margin of 9.7%[4] - The Materials Group reported net sales of$ 1,497.7 million, up 2.9% year-over-year, while the Solutions Group saw a 6.8% increase to $685.7 million[14] - Operating income for the Materials Group was reported at$ 217.8 million for Q3 2024, up from $176.5 million in Q3 2023, reflecting a margin increase from 12.1% to 14.5%[26] - The Solutions Group achieved an operating income of$ 66.5 million in Q3 2024, compared to $50.7 million in Q3 2023, with margins improving from 7.9% to 9.7%[26] Cash Flow and Capital Management - The company returned$ 315 million to shareholders through dividends and share repurchases in the first three quarters of 2024[5] - Net cash provided by operating activities increased to $587.6 million from$ 514.1 million, reflecting a 14.2% growth year-over-year[19] - Net cash used in investing activities decreased to $169.5 million from$ 344.2 million, indicating a 50.8% reduction[19] - Net cash used in financing activities increased to $419.8 million from$ 122.7 million, showing a significant rise in cash outflows[19] - Cash and cash equivalents as of September 28, 2024, were $212.7 million, slightly up from$ 209.9 million as of September 30, 2023[17] Guidance and Future Outlook - Full-year FY24 reported EPS guidance revised to $8.75 to$ 8.90, while adjusted EPS guidance raised to $9.35 to$ 9.50[1][8] - The company expects continued growth in net sales and operating income driven by strategic initiatives and market expansion efforts[22] Restructuring and Cost Management - Approximately $50 million in pre-tax savings realized from restructuring actions in the first three quarters of 2024[7] - The company incurred restructuring charges of$ 1.5 million in Q3 2024, compared to $29.4 million in Q3 2023, indicating a significant reduction in restructuring costs[26] Debt and Equity - The company's net debt to adjusted EBITDA ratio was 2.1x at the end of the third quarter[5] - The company reported a net debt of$ 2,946.2 million, with a net debt to adjusted EBITDA ratio of 2.1[29] - Shareholders' equity increased to $2,393.9 million from$ 2,063.6 million year-over-year[18] Tax and Expenses - The effective tax rate for the third quarter was reported at 24.1%[6] - The company’s adjusted tax rate was 26% for both the three and nine months ended September 28, 2024[23] - Stock-based compensation expenses rose to $24.2 million from$ 17.4 million, reflecting a 39.3% increase[19] - Total depreciation and amortization expenses were $234 million, with depreciation at$ 147.5 million and amortization at $86.5 million[19]