ɳ�� Announces First Quarter 2022 Results

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FOR IMMEDIATE RELEASE

Highlights:

1Q22 Reported EPS of $2.39
- Adjusted EPS (non-GAAP) of $2.40
1Q22 Net sales increased 14.5% to $2.3 billion
- Sales growth ex. currency (non-GAAP) of 18.0%
- Organic sales growth (non-GAAP) of 12.7%
Raised FY 2022 EPS guidance
- Reported EPS of $9.35 to $9.75 (previously $9.25 to $9.65)
- Adjusted EPS of $9.45 to $9.85 (previously $9.35 to $9.75)

MENTOR, Ohio, April 26, 2022?�C ɳ�� Corporation (NYSE:AVY) today announced?preliminary, unaudited results for its first quarter ended April 2, 2022. Non-GAAP financial?measures referenced in this document are reconciled to GAAP in the attached financial?schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.

��We once again delivered strong financial results amidst a challenging environment, with?earnings ahead of expectations,�� said Mitch Butier, ɳ�� chairman and CEO.

��Our strong performance comes at a difficult time as COVID-19 continues, supply chains remain?tight and inflationary pressures persist. Despite these challenges, we have raised our outlook?and we continue to expect strong top- and bottom-line growth for the year,�� said Butier. ��We?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.

��Once again, I want to thank our entire team for their tireless efforts to keep one another safe?while continuing to deliver for our customers during this challenging period. The team continues?to raise their game each quarter, to address the unique challenges at hand.��

First Quarter 2022 Results by Segment

Label and Graphic Materials

Reported sales increased 8% to $1.5 billion. Sales were up 12% ex. currency and 12% on an organic basis.
- Label and Packaging Materials sales were up low-double digits on an organic basis, with strong growth in both high value product categories and the base business.
- Sales increased by high-single digits organically in the combined Graphics and Reflective Solutions businesses.
- On an organic basis, sales were up high teens in North America and Western Europe and low-to-mid single digits in emerging markets.
Reported operating margin decreased 240 basis points to 14.0%. Adjusted EBITDA margin (non-GAAP) decreased 280 basis points to 15.6%, largely driven by the net impact of pricing, freight, and raw material costs. Adjusted EBITDA margin increased 110 basis points sequentially.
- The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~210 basis points.
Inflation remains persistent in our materials businesses; we are anticipating roughly 20% inflation in 2022 compared to prior year.

Retail Branding and Information Solutions

Reported sales increased 41% to $679 million. Sales were up 43% ex. currency and 20% on an organic basis, reflecting strong growth in both the high value product categories and the base business.
- Intelligent Labels was up over 20% organically.
Reported operating margin increased 90 basis points to 13.3%. Adjusted EBITDA margin increased 240 basis points to 19.1%, as the benefits from higher organic volume and acquisitions were partially offset by growth investments and higher employee-related costs.
The Vestcom business is achieving our acquisition objectives.

Industrial and Healthcare Materials

Reported sales decreased 1% to $190 million. Sales were up 1% ex. currency and 1% on an organic basis, reflecting a low-single digit decrease in industrial categories and a low-double digits increase in healthcare categories.
Reported operating margin decreased 410 basis points to 8.2%. Adjusted EBITDA margin decreased 410 basis points to 11.8% driven by lower volume/mix and the net impact of pricing, freight, and raw material costs.
- The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~120 basis points.

Other

Balance Sheet and Capital Deployment

During the first quarter of the year, the company deployed $33 million for acquisitions and?returned $208 million in cash to shareholders through a combination of share repurchases and?dividends, up from $107 million compared to last year. The company repurchased 0.8 million?shares at an aggregate cost of $152 million. Net of dilution from long-term incentive awards, the?company��s share count at the end of the quarter was down 1.2 million compared to the same?time last year.

The company��s balance sheet remains strong, with ample capacity to continue executing our?long-term capital allocation strategy. Net debt to adjusted EBITDA (non-GAAP) was 2.35 at the?end of the first quarter.

Income Taxes

The company��s reported first quarter effective tax rate was 26.5%. The adjusted tax rate?(non-GAAP) for the quarter was 25.6%, which is also the company��s current expectation for its?full-year adjusted tax rate.

Cost Reduction Actions

In the first quarter, the company realized approximately $9 million in pre-tax savings from?restructuring, net of transition costs, and incurred pre-tax restructuring charges of approximately?$1 million.

Guidance

In its supplemental presentation materials, ��First Quarter 2022 Financial Review and Analysis,��?the company provides a list of factors that it believes will contribute to its 2022 financial results.?Based on the factors listed and other assumptions, the company has raised its guidance range?for 2022 reported earnings per share from $9.25 to $9.65 to $9.35 to $9.75.

Excluding an estimated $0.10 per share related to restructuring charges and other items, the?company��s guidance range for adjusted earnings per share has been raised from $9.35 to $9.75?to $9.45 to $9.85.

For more details on the company��s results, see the summary tables accompanying this news release, as?well as the supplemental presentation materials, ��First Quarter 2022 Financial Review and Analysis,��?posted on the company��s website at www.investors.averydennison.com, and furnished to the SEC on?Form 8-K.

Throughout this release and the supplemental presentation materials, amounts on a per share basis?reflect fully diluted shares outstanding.

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About ɳ��

ɳ�� Corporation (NYSE: AVY) is a global materials science and digital identification solutions company. We are Making Possible? products and solutions that help advance the industries we serve, providing branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and better connect brands and consumers. We design and develop labeling and functional materials, radio frequency identification (RFID) inlays and tags, software applications that connect the physical and digital, and offerings that enhance branded packaging and carry or display information that improves the customer experience. Serving industries worldwide �� including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive �� we employ approximately 35,000 employees in more than 50 countries. Our reported sales in 2024 were $8.8 billion. Learn more at .

��Safe Harbor�� Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe?harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking?statements, and financial or other business targets, are subject to certain risks and uncertainties. Forward-looking?statements also include those related to the acquisition of CB Velocity Holdings, LLC (��Vestcom��), including its effect?on our long-term targets and future financial results.

We believe that the most significant risk factors that could affect our financial performance in the near-term include: (i)?the impacts to underlying demand for our products and/or foreign currency fluctuations from global economic?conditions, political uncertainty, changes in environmental standards and governmental regulations, including as a?result of COVID-19; (ii) the availability of raw materials; (iii) competitors' actions, including pricing, expansion in key?markets, and product offerings; (iv) the degree to which higher costs can be offset with productivity measures and/or?passed on to customers through price increases, without a significant loss of volume; and (v) the execution and?integration of acquisitions, including our acquisition of Vestcom.

Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors,?including but are not limited to, risks and uncertainties relating to the following:

COVID-19
International Operations �C worldwide and local economic and market conditions; changes in political?conditions, including those related to the Russian invasion of Ukraine; and fluctuations in foreign currency?exchange rates and other risks associated with foreign operations, including in emerging markets
Our Business �C fluctuations in demand affecting sales to customers; fluctuations in the cost and availability?of raw materials and energy; changes in our markets due to competitive conditions, technological?developments, environmental standards, laws and regulations, and customer preferences; the impact of?competitive products and pricing; execution and integration of acquisitions, including our acquisition of?Vestcom; selling prices; customer and supplier concentrations or consolidations; financial condition of?distributors; outsourced manufacturers; product and service quality; timely development and market?acceptance of new products, including sustainable or sustainably-sourced products; investment in?development activities and new production facilities; successful implementation of new manufacturing?technologies and installation of manufacturing equipment; our ability to generate sustained productivity?improvement; our ability to achieve and sustain targeted cost reductions; and collection of receivables from?customers
Income Taxes �C fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated?with interpretations of such laws and regulations; retention of tax incentives; outcome of tax audits; and the?realization of deferred tax assets
Information Technology �C disruptions in information technology systems or data security breaches, including?cyber-attacks or other intrusions to network security; and successful installation of new or upgraded?information technology systems
Human Capital �C recruitment and retention of employees; and collective labor arrangements
Our Indebtedness �C credit risks; our ability to obtain adequate financing arrangements and maintain access?to capital; fluctuations in interest rates; volatility of financial markets; and compliance with our debt?covenants
Ownership of Our Stock �C potential significant variability of our stock price and amounts of future dividends?and share repurchases
Legal and Regulatory Matters �C protection and infringement of intellectual property; impact of legal and?regulatory proceedings, including with respect to environmental, anti-corruption, health and safety, and trade?compliance
Other Financial Matters �C fluctuations in pension costs and goodwill impairment

For a more detailed discussion of these factors, see ��Risk Factors�� and ��Management��s Discussion and Analysis of?Financial Condition and Results of Operations�� in our 2021 Form 10-K, filed with the Securities and Exchange?Commission on February 23, 2022.

The forward-looking statements included in this document are made only as of the date of this document,?and we undertake no obligation to update these statements to reflect subsequent events or circumstances,?other than as may be required by law.

For more information and to listen to a live broadcast or an audio replay of the quarterly?conference call with analysts, visit the ɳ�� website at?

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