Avery Dennison(US:AVY)2026-02-04 11:45Financial Performance - FY25 reported EPS was $8.79, with adjusted EPS of $9.53, reflecting a 1% increase year-over-year[4] - FY25 net sales reached $8.9 billion, also up 1% compared to the previous year[4] - 4Q25 reported EPS was $2.15, while adjusted EPS increased by 3% to $2.45[4] - 4Q25 net sales totaled $2.3 billion, marking a 4% increase year-over-year[4] - Total net sales for 2025 reached $8,855.5 million, a 1.1% increase compared to 2024's $8,755.7 million[28] - Total net sales for the three months ended December 31, 2025, were $2,271.2 million, an increase from $2,185.7 million for the same period in 2024, representing a growth of 3.9%[50] Cash Flow and Shareholder Returns - The company generated over $700 million in adjusted free cash flow during FY25[3] - The company returned $861 million to shareholders in FY25 through dividends and share repurchases[11] - The company reported adjusted free cash flow of $707.1 million, up from $699.5 million in the previous year[28] - Adjusted free cash flow for the three months ended December 31, 2025, was $302.6 million, compared to $279.5 million for the same period in 2024, reflecting an increase of 8.2%[48] Profitability Metrics - Adjusted operating income for 2025 was $1,123.8 million, a slight increase of 0.2% from $1,122.1 million in 2024, with margins at 12.7%[28] - Adjusted EBITDA for the year was $1,452.0 million, up 1.2% from $1,434.3 million, maintaining a margin of 16.4%[28] - Adjusted operating income for the three months ended December 31, 2025, was $281.5 million, compared to $279.9 million for the same period in 2024, reflecting a slight increase[45] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $1,452.0 million, up from $1,434.3 million for the twelve months ended December 28, 2024, indicating a growth of 1.2%[45] Income and Margins - Reported net income for 2025 was $688.0 million, down 2.4% from $704.9 million in 2024, with adjusted net income at $746.3 million, a decrease of 1.9%[28] - Adjusted net income for the three months ended December 31, 2025, was $189.4 million, compared to $191.4 million for the same period in 2024, showing a decrease of 1.0%[47] - Adjusted net income per common share for the three months ended December 31, 2025, was $2.45, an increase from $2.38 for the same period in 2024, representing a growth of 2.9%[47] Debt and Leverage - The net debt to adjusted EBITDA ratio was 2.4x at the end of 4Q25, indicating a strong balance sheet[12] - Long-term debt rose to $3,210.0 million from $2,559.9 million, indicating increased leverage[32] - The company's total debt stood at $3,732.9 million, with net debt calculated at $3,530.1 million after accounting for cash and cash equivalents of $202.8 million[54] - The net debt to adjusted EBITDA ratio for the last twelve months (LTM) was 2.4[54] Operational Efficiency - Cost reduction actions in 2025 resulted in over $60 million in pre-tax savings[14] - High-value categories now account for approximately 45% of total revenue, driving outsized growth[5] Group Performance - The Materials Group reported net sales of $6,093.3 million, reflecting a 1.3% increase, while the Solutions Group saw a 0.7% increase to $2,762.2 million[28] - The Materials Group reported net sales of $1,547.0 million for the three months ended December 31, 2025, an increase from $1,472.0 million for the same period in 2024, reflecting a growth of 5.1%[50] - Adjusted operating income for the Materials Group was $219.3 million for the three months ended December 31, 2025, compared to $217.5 million for the same period in 2024[52] - Adjusted EBITDA for the Solutions Group was $128.8 million for the three months ended December 31, 2025, reflecting an increase from $127.2 million in the prior year[52] Tax and Currency Impact - The adjusted tax rate for the three months ended December 31, 2025, was 23.6%, compared to 25.7% for the same period in 2024, indicating a decrease in the effective tax burden[47] - The company experienced a foreign currency translation impact of (1.7)% on reported net sales for the three months ended December 31, 2025[56]