Avery Dennison has released its second quarter results for 2017, which show a 6 per cent increase in net sales to $1.6bn.
Its second quarter reported earnings per share (EPS) of $1.34, adjusted EPS for $1.31 and its sales change ex currency is at 7 per cent, while its organic sales change is at 3 per cent.
Labels and graphic materials sales came in at an increase of 5.5 per cent, and on an organic basis sales grew 2.3 per cent driven by solid growth in high value categories with modest growth in the base business.
The Avery results highlight the ongoing growth in labels and packaging, and compare well with suppliers of paperstock to the commercial print sector.
[Related: Avery Dennison launches wrap challenge]
Mitch Butier, Avery Dennison president and CEO says, “We continued to make good progress against our strategic and financial objectives in the second quarter. LGM generated strong profitability despite a short-term moderation in organic growth; RBIS had a great quarter, with accelerated sales growth and margin expansion as our multi-year transformation delivers; and IHM continues to make progress against its strategic priorities, including the completion of two acquisitions.
“We have raised our outlook for full-year earnings per share, reflecting continued strong operating performance and a reduction in the tax rate. We continue to remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline.”
Labels and graphic materials sales came in at an increase of 5.5 per cent and on an organic basis sales grew 2.3 per cent driven by solid growth in high value categories with modest growth in the base business.
Operating margin improved 20 basis points to 13.2 per cent. Adjusted operating margin of 13.6 per cent was flat as the benefits from productivity initiatives and increased volume were offset by higher employee-related costs and the modest net impact of pricing and raw material costs.
Retail branding and information solutions reported sales came in at 4.6 per cent and on an organic basis grew an estimated 5.8 per cent driven by strength in RFID and the base business.
Industrial and healthcare materials reported sales increased 8.7 per cent; sales were essentially flat on an organic basis. Sales in industrial categories increased low-double digits on an organic basis, offsetting the anticipated decline in healthcare categories.
The company repurchased 400,000 shares in the second quarter at an aggregate cost of $36m. Net of dilution, the company’s share count decreased 500,000 in the quarter.
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