Avery Dennison (AVY) Q4 2024 earnings summary

Executive summary

• Achieved 19% adjusted EPS growth in 2024, reaching $9.43, with reported EPS at $8.73 and net sales of $8.8 billion, up 4.7% year-over-year; organic sales up 4.5%.

• Both Materials and Solutions Groups delivered strong top and bottom-line results, aided by recovery from inventory destocking and margin expansion.

• High-value categories now represent nearly half the portfolio, driving outsized growth and higher margins.

• Returned $525 million to shareholders via dividends and share repurchases, maintaining a net debt to adjusted EBITDA ratio of 2.0.

• Strategic focus remains on GDP-plus growth, margin expansion, and top quartile returns on capital.

Financial highlights

• FY24 adjusted EBITDA margin reached 16.4%, up 130 basis points; adjusted operating margin was 12.8%, up 130 basis points.

• Q4 adjusted EPS was $2.38, up 10% year-over-year; Q4 net sales were $2.2 billion, up 3.6%.

• Generated $700 million in adjusted free cash flow for the year, with 100% conversion.

• FY24 adjusted net income was $760.9 million, up 19% year-over-year; reported net income was $704.9 million, up 40%.

• Returned $525 million to shareholders in 2024; accelerated share repurchases in 2H 2024.

Outlook and guidance

• 2025 adjusted EPS guidance is $9.80–$10.20, up 7%–12% excluding currency; reported EPS guidance is $9.55–$9.95.

• Expect 3%–4% organic sales growth and mid-single digit volume growth in 2025.

• Intelligent Labels projected to grow 10%–15% in 2025, contributing 1–1.5 points to total company growth.

• Restructuring savings of ~$40 million expected in 2025; currency translation estimated to be a $30 million headwind.

• Targeting ~100% adjusted free cash flow conversion; fixed and IT capital spend of ~$250 million.