“Avery Dennison delivered strong earnings improvement in 2012,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Both Pressure-sensitive Materials and Retail Branding and Information Solutions delivered solid sales growth and expanded margins, and we returned $346 million of cash to shareholders through share repurchases and an increased dividend.
“We also took actions that position us well for significant profit growth in 2013, even in a soft economic environment,” Scarborough said. “We remain committed to delivering on our long-term goals, including double-digit earnings growth and higher returns.”
Fourth Quarter 2012 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, acquisitions and divestitures. Adjusted operating margin refers to earnings before interest expense and taxes, excluding restructuring costs and other items, as a percentage of sales.
Prior period amounts have been realigned to reflect the company’s new operating structure, which includes a new corporate expense allocation methodology.
Pressure-sensitive Materials (PSM)
The PSM segment now includes the Performance Tapes business, previously reported in other specialty converting businesses.
PSM segment sales increased approximately 6 percent. Within the segment, Label and Packaging Materials sales increased mid-single digits, as did the combined sales for other product lines (Graphics, Reflective, Performance Tapes).
Operating margin improved 100 basis points to 7.8 percent as the benefit of higher volume and productivity initiatives more than offset the impact of changes in product mix and higher employee-related expenses. Adjusted operating margin improved 100 basis points.
Retail Branding and Information Solutions (RBIS)
The RBIS segment now includes all of the radio-frequency identification (RFID) business, previously reported in other specialty converting businesses.
Sales increased approximately 10 percent compared to prior year driven by increased demand from U.S. and European retailers and brands, including accelerating RFID adoption.
Operating margin improved 120 basis points to 3.0 percent as the benefit of higher volume and productivity initiatives more than offset higher employee-related expenses and an impairment charge. Adjusted operating margin improved 270 basis points.
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