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Avery Dennison's (AVY) CEO Dean Scarborough on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 27, 2016 10:00 ET


Cindy Guenther - Vice President, Finance and Investor Relations

Dean Scarborough - Chairman and Chief Executive Officer

Mitch Butier - President and Chief Operating Officer

Anne Bramman - Senior Vice President and Chief Financial Officer


Ghansham Panjabi - Robert W. Baird & Company

Scott Louis Gaffner - Barclays Capital Incorporated

Jeff Zekauskas - JPMorgan

Alex Wang - Bank of America Merrill Lynch

Christopher John Kapsch - BB&T Capital Markets


Ladies and gentlemen, thank you for standing by. Welcome to Avery Dennison’s Earnings Conference Call for the First Quarter Ended April 2, 2016. This call is being recorded and will be available for replay from 9 a.m. Pacific today through midnight Pacific Time April 30. To access the replay, please dial 800-633-8284 or 402-977-9140 for international callers. The conference ID number is 21782906. [Operator Instructions]

I would now like to turn the call over to Cindy Guenther, Avery Dennison’s Vice President of Finance and Investor Relations. Please go ahead, ma’am.

Cindy Guenther

Thank you, Pamela. Today, we will discuss our preliminary unaudited first quarter results. The non-GAAP financial measures that we use are defined, qualified and reconciled with GAAP on Schedules A-2 to A-4 of the financial statements accompanying today’s earnings release. We remind you that we will make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the Safe Harbor statement included in today’s earnings release.

On the call today are Dean Scarborough, Chairman and CEO; Mitch Butier, President and Chief Operating Officer; and Anne Bramman, Senior Vice President and Chief Financial Officer.

I will now turn the call over to Dean.

Dean Scarborough

Thanks, Cindy and good day everyone. We are off to a very good start to the year on several fronts, including better than expected earnings growth. Both of our core businesses delivered solid organic sales growth and significant margin expansion driving mid-teens growth in adjusted earnings per share. We also signed a definitive agreement to acquire Mactac Europe from Platinum Equity. This acquisition aligns perfectly with our strategy to enhance our competitiveness in high-value pressure sensitive materials for graphics applications. Mactac complements our existing business with a strong brand and loyal customer base expanding our product offering, capabilities and distributor network.

Our consistently strong operating performance, along with the disciplined execution of our long-term capital allocation plan is testament to the strategic foundations we have laid as well as to the strength and depth of our leadership team. I am happy to say that the leadership transition we have had underway has been seamless. As we announced in February, I am formally handing over the CEO reins to Mitch this week. I will stay on the board as Executive Chairman, with Mitch joining the Board following his election at tomorrow’s shareholder meeting.

Since joining Avery Dennison in 2000, Mitch has worked in various businesses and regions across the company and in roles of increasing responsibility. He has been a close partner of mine and has been at the center of our most successful business strategies. Most recently, he was the driver behind our focus on the high-value market segments of our portfolio, while making the investments necessary to be competitive across all product segments. Just as important, Mitch is a champion of the values, integrity and high ethical standards that define Avery Dennison. I am handing off my CEO duties to Mitch with complete confidence in his ability to guide Avery Dennison toward an increasingly prosperous future.