Avery Dennison Corp
For the period ended Dec 28, 2024. Filed Feb 26, 2025.
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FY2024 · Filed Feb 26, 2025
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Results of Operations by Reportable Segment
During the fourth quarter of 2024, we modified our segment performance measure to exclude other expense (income), net. These changes align with how our CODM evaluates segment performance and allocates resources. Prior periods have been conformed to the current period presentation. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense, other non-operating expense (income), net; and other items.
Refer to Note 15, “Segment and Disaggregated Revenue Information,” to the Consolidated Financial Statements for more information.
| (In millions) | 2024 | 2023 | 2022 |
|---|---|---|---|
| Net sales including intersegment sales | $6,175.8 | $5,968.4 | $6,632.2 |
| Less intersegment sales | (162.8) | (157.1) | (137.1) |
| Net sales | $6,013.0 | $5,811.3 | $6,495.1 |
| Segment adjusted operating income(1) | 924.7 | 789.2 | 845.9 |
| (1) Segment adjusted operating income excluded charges associated with restructuring actions and related costs in all years, loss on venture investment in 2024, losses from Argentine peso remeasurement and Blue Chip Swap transactions and outcomes of legal matters and settlements, net, in 2024 and 2023, loss on sale of assets in 2023, and gain on venture investment in 2022. These items were included in "Other expense (income), net." | $40.4 | $88.3 | $(13.4) |
The factors impacting reported net sales change are shown in the table below.
| 2024 | 2023 | |
|---|---|---|
| Reported net sales change | 4% | (11)% |
| Foreign currency translation | — | — |
| Sales change ex. currency(1) | 4 | (10) |
| Organic sales change(1) | 4% | (10)% |
(1)Totals may not sum due to rounding.
In 2024, net sales increased on an organic basis compared to the prior year due to higher volume, partially offset by the impact of raw material deflation-related price reductions. On an organic basis, net sales increased by low single digit rates in North America and Western Europe and a high single digit rate in emerging markets.
In 2023, net sales decreased on an organic basis compared to the prior year due to lower volume driven primarily by inventory destocking, partially offset by the impact of pricing actions. On an organic basis, net sales decreased by a low double-digit rate in North America, a high teens rate in Western Europe and a high single digit rate in emerging markets.
Segment Adjusted Operating Income
Segment adjusted operating income increased in 2024 compared to the same period in 2023 primarily due to higher volume and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and the net impact of pricing and raw material input costs.
Segment adjusted operating income decreased in 2023 compared to the same period in 2022 primarily due to lower volume, partially offset by benefits from productivity initiatives, including temporary cost-saving actions, material re-engineering and savings from restructuring actions, net of transition costs, and the net impact of pricing and raw material input costs.
| (In millions) | 2024 | 2023 | 2022 |
|---|---|---|---|
| Net sales including intersegment sales | $2,795.0 | $2,588.5 | $2,581.6 |
| Less intersegment sales | (52.3) | (35.5) | (37.4) |
| Net sales | $2,742.7 | $2,553.0 | $2,544.2 |
| Segment adjusted operating income(1) | 289.3 | 252.0 | 310.1 |
| (1) Segment adjusted operating income excluded charges associated with restructuring actions, outcomes of legal matters and settlements, net, and transaction and related costs in all years, loss on venture investments in 2024 and 2023, and gain on sales of assets in 2022. These items were included in "Other expense (income), net." | $30.8 | $86.3 | $7.8 |
The factors impacting reported net sales change are shown in the table below.
| 2024 | 2023 | |
|---|---|---|
| Reported net sales change | 7% | —% |
| Foreign currency translation | 1 | 2 |
| Sales change ex. currency(1) | 8 | 2 |
| Acquisitions | (2) | (3) |
| Organic sales change(1) | 6% | (1)% |
(1) Totals may not sum due to rounding.
In 2024, on an organic basis, net sales increased by a low single digit rate in high-value categories and a low-double digit rate in the base business compared to the prior year. Company-wide, on an organic basis, sales of intelligent labels increased by a high single digit rate compared to the prior year.
In 2023, on an organic basis, net sales increased by a high single digit rate in high-value categories and decreased by a low double-digit rate in the base business compared to the prior year. Company-wide, on an organic basis, sales of intelligent labels increased by a low double-digit rate compared to the prior year.
Segment Adjusted Operating Income
Segment adjusted operating income increased in 2024 compared to 2023 primarily due to higher volume and benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and growth investments.
Segment adjusted operating income decreased in 2023 compared to 2022 primarily due to higher employee-related costs, lower volume, growth investments and the impact of unfavorable foreign currency translation, partially offset by benefits from productivity initiatives, including temporary cost-saving actions and savings from restructuring actions, net of transition costs.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.