Avery Dennison (AVY) Jefferies Mining and Industrials Conference 2025 summary

Business Overview and Strategy

• Recognized as a global leader in materials science and digital identification, operating in over 50 countries with approximately 35,000 employees.

• Focuses on materials science and digital identification, with materials making up 70% and solutions 30% of the portfolio.

• Exposed to broad end markets, with 60% in consumer staples, providing stability and less cyclicality.

• Maintains market leadership in labeling materials and UHF RFID technology, supporting a digitized future.

• Consistent execution of strategy, strong global team, and operational excellence underpin long-term success.

High-Value Categories and Portfolio Evolution

• High-value categories, such as Intelligent Labels, Vestcom, Embelex, and specialty adhesives, now represent 44% of the portfolio, up from ~25% in 2014.

• These categories outgrow GDP by 2–2.5x and have driven margin expansion by over 500 basis points since 2014.

• Intelligent Labels segment targets 15%+ growth, contributing to long-term sales outperformance.

• Portfolio shift toward high-value categories has resulted in adjusted EBITDA margin growth from 11.3% in 2014 to 16.4% in 2024.

• Multiple levers across the portfolio enable resilience and consistent delivery on multi-year targets.

Capital Allocation, Financial Strategy, and Recent M&A

• Maintains a strong balance sheet with leverage in the low twos, targeting a net debt to adjusted EBITDA ratio of ~2–3x.

• Over $8B in capital available for deployment from 2024–2028, with 50–55% allocated to buybacks/M&A and 20% to dividends.

• Capital allocation: 25–30% to internal growth, 20% to dividends (compounding at 10%), and 50% split between share buybacks and M&A.

• $360 million in share buybacks completed in H1, with ongoing disciplined approach.

• Recent acquisition of Taylor Adhesives (from Meridian) expands high-value adhesives, leveraging core capabilities and targeting synergies.