Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by.

During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. [Operator Instructions]

Welcome to Avery Dennison's Earnings Conference Call for the Fourth Quarter and Full Year ended on December 31, 2022. recorded Eastern be Eastern Time XX. being from for Time, is PM X:XX today call and available will replay February This through midnight access or (XXX) international To please XXX-XXXX callers. (XXX) for XXX-XXXX replay, the X dial conference ID number The XXXX-XXXX. is

the to Avery of Please now Relations. to ahead. Head over turn would John conference I Investor go like Eble, Dennison's

John Eble

earnings reconciled non-GAAP today's we'll you, from financial estimates earnings the defined, to statement non-GAAP included references Frank. that be we'll about making statements remind are AX schedules are results. release. and Please performance safe reflect Thank harbor on statements use future statements We measures. GAAP note measures to The to discussion, financial qualified the and we you that and make certain throughout release. subject today's today's of that our views in These financial AXX that our current forward-looking predictive made accompanying

today Stander, and call Officer. the Vice are President Chief Chief Chairman Chief and Greg Senior and and On Officer; President, Officer; Lovins, Butier, Deon Financial Mitch Executive Operating

I'll over the call to Mitch. now turn

Mitch Butier

results Group ability of while deliver year, pace Materials delivered adoption. compounding Solutions and day, year-over-year in a good EPS up bottom challenging another last our to acceleration everyone. environment. XX% of XXXX delivered posted growth in consistent Both XXXX impressive and Group basis. line our top earnings in an the Labels We and John, growth, Thanks, year EPS levels, reflecting concurrent double-digit extremely driving challenges. despite Intelligent constant results currency the face solid on of We further from is and

to changed LGM Materials have create the we our operating group. see, IHM combined can segments. and you We As

to more operational evolutionary businesses years, of in the across leveraging win this these combination step more and of ability two each to IHM Over the technologies we've enhance respective business's of The been our strategy. past marketplace. the few LGM and is capabilities and next

Group segment color in in to broader results better including we of segment moment. beyond provide inflation supply businesses the impressive a of war and RBIS, in pandemic-driven ambitions sizable solutions renamed we Solutions our on China, Russian reach increasingly performance Ukraine the macro reflect will for As chain the headwinds Both the Deon delivered disruptions. significant significant demand and, especially challenges currency the and course, faced, XXXX, in movements, considering Retail.

the and Then began year. year, inflation supply In presented, built we chain the downstream beginning this which the midyear. start in This challenges caused inventory reduced us, showed swiftly at November. levels increase were that and constraints of the an the to addition chain inflation as signs disruptions to further December into moderating, and The in January. continued were ease raw unique from also demand volatility of trend supply high material out called inventories throughout

anticipated see the buildup we pressure have beginning trajectory pace significant on normalized of while magnitude to the positions a QX. thing it year, more greater Now reductions was we us in of Overall, some then inventory than downstream from and this and expected while and unwind at we corrections. put we point, past seen the faster and good reduction to in business of return and as results growth our industries QX inventory in in QX excess to now financial a this is our

That macro previous volume such patterns in slowdowns. said, sudden of a of indicative is decline

been have We activating countermeasures accordingly.

back and both M&A. cost business in particularly temporary organically our base in and initiatives paring investments -- ramping protecting initiated Labels, reduction capital We up Intelligent high-growth through base investments while businesses our have initiatives, restructuring actions,

second driven Despite half followed $XX. more environment, a EPS a than targeting by to for reflecting mid- are in rate QX corrections, by a challenging single-digit run we of macro growth XXXX, EPS inventory soft

we've foundations our our markets, the track strong of agile over talented term and reflects long Our the industry-leading strategic the and strength laid record positions, team. our

is in allocate five on productivity; profitably outsized and socially categories; overarching playbook responsible pillars: strategic in lead in well grow as manner. to capital; growth working and environmentally drive on focus focused Our high-value effectively relentlessly an to continue our we extremely base businesses;

drive key a know, element you we of Intelligent our a on our has As strategy been categories in platform Labels, this growth outsized year. to which to be expect focus billion high-value $X

strategy ensure expect this platform in for This to we coming continue We for our example years. the bar than of to We've grow all of superior a invest our to deliver raising XX% the refined strategies continue in ourselves creation the value over process it our as annually to tremendous at we work. is time, more in stakeholders.

clear of making track XXXX financial which and on focused our a great are sustainability will progress have mutual to set on We're walk towards XXXX and objectives, our momentarily. goals deliver their strategies Greg objectives through We success.

growth forward our haul achieving of including last remarkable. ability is to these The and results, long the over teams EPS once again these drive year, strategies impressive double-digit deliver

team you, our one while So all to their entire tireless safe Deon. for thank to keep I Over for other stakeholders. once efforts and our delivering of again

Deon Stander

hello, and everyone. Mitch, Thanks,

of driven impressive in extremely a now color on organic higher more I'll returns pricing the Materials Operating As digits volume unprecedented strong currency profit business. provide growth was delivered up our already strong, XX% EVA for delivering pricing the met Group to single-digit were ex of segment we in and in actions mid-single delivered Russia. environment. Mitch this impact XXXX challenging for the with high low continue decline, excluding the results said, by performance. inflation an face levels as year, of exiting segment significant

organic plus, impact compared to XXXX. Materials Group fourth grow ex the double-digit decline. quarter, Label term, an materials In to mid-teens sales X% annually up higher by up currency basis, a volume and were X% on offset Over XXXX in the prices, continue by a GDP low largely at long driven volumes from

supply a chain inventory optimize fourth year as customers the year, began And disruption inventories in downstream levels elevated earlier abated, the were destocked began they further and the material of constraints even quarter. up inflation eased period to Following midyear. that built in rapidly the

up an Label single digits. low the were materials basis Tapes On and Medical sales double organic Performance digits, were Reflective digits low low for single sales were graphics quarter, up up and and

at quarter America organic by materials growth down North were the region, mid-teens. combined Western and Looking Label in volume Europe

digits, volumes were Overall mid-single single down growth down with digits, low by exit total emerging materials China lowered points. Label markets and Russia roughly the three of

initiatives, over we and environment soft growth, few expectation the temporary our the structural. both for economic Given the been months and past have cost-saving activating moderating

structure line in strong on bottom focused are optimizing while pricing to our continuing discipline. protecting We manage and cost period lower volume the this

to factors, to to part one with expect further these all in QX, look year. two earlier the of reduced inventory roughly weeks we Given QX the anticipating the be industry across similar concluding of to destocking

diverse of durability with market-leading the markets, correction, position, Following the from and our growing QX we expect to onwards. inventory growth along plus given end GDP rebound our to

of materials us the the and continuing win business only enables not while market, our to fully Stepping LGM ability of back, IHM deliver capabilities broader to whole the the to combination EVA in also functional leverage but strengthens growth.

up Group. of in strong Turning Solutions growth to by retailer margins, and were the the record solutions growth destocking. driven impact for the year, high-value X% despite posted Organic sales

across destocking plans. destocking their in down in into we were The broad-based the business were QX inventory In X% into offset retailers the basis. Group segment, down categories. reductions In base sales lower holiday was all teens on an organic high-value Apparel to quarter, high Solutions sentiment the inventories, partially by muted organic factor through quarter, continued QX sourcing and continue and ex near-term fourth January. growth channels fourth X% organically, currency and this in as and high expect performance mid-single-digit

the both structural. we to temporary segment, Materials activating cost-saving are Similar initiatives, and

We half segment the the and to to platform. GDP significant additionally benefit the increasing the Labels Solutions in historic for expect in our our return the to apparel second growth through year business Intelligent year of growth from

we driven by programs over to of apparel mid-teens up this Turning as averaging key extend over has years, further this an drive Momentum enterprise-wide The accelerate. to in in annual on platform This time size $XXX more major horizon organic in this market. the has growth expand basis XXXX. organic Labels; last and than cases roughly in primarily Intelligent tripled XX% to strong the customers on an five basis. continue sales use growth with been continues end technology, adoption million business were

we even greater broad-based while see years, to apparel logistics, over and expect such opportunity which to targeted cases special miss use loads continue the handling, And be long accuracy. to in we package the coming largest other from as is run applications in markets. the volume In routing such as improving expanding untapped key

and operations, improved consumers. beyond the are Solutions is increased retail, pilots covering are lower we and and ultimately where grocery, apparel. reduce where efficiency cases food, waste technology use In of enhance technology seeing and labor in chain in expanded QSR and our being freshness benefits Intelligent and of The visibility, in general and end cost the of Label The supply clear. inventory speed experience promising

space. To we to the new best, both at in in including half facility the new our well Mexico XXXX As intersection capture expanding and manufacturing ultrahigh of and investing in the a beyond; than in increasing of and $XXX frequency physical lead team, we applications capacity, extremely and adding positioned growth digital; end, new to continuing markets; but not developing these are technologies, a are million back that and in opportunities experienced new the leader only for physical invest RFID, more the our digital. in most

in We here this XX% targeting be growth XXXX billion will and a the more strategies remain $X pay Our to years. coming are continue in confident off. than platform

Signing with to annual Thermopatch, in other Lastly, $XX specializing capital revenue. million in high-value a business an we solutions. embellishments January external in deploy continue agreement to in roughly acquire

an are the XXXX run. remain fundamentals results business Greg. with Inventory the our that, hand long we and extremely near confident adjustments over environment. I'll the face term, underlying impacting and in making prospects our results extremely And in the impressive to over summary, of delivered we of In challenging destocking accordingly. call is in I

Greg Lovins

our through earnings against ex our fourth our quarter, double-digit a per additional and inventory Thanks, everybody. primarily currency the first compared XX% decline results share down performance of $X.XX, our outlook. destocking. you XXXX due Deon. driven then low on delivered long-term targets provide In prior by Hello, and volume to some year, adjusted we I'll color to walk

with pricing per organic XX% XX% growth currency, For up the a sales of full share decline. volume as $X.XX, earnings offset low we ex single-digit year, of adjusted delivered

with our original Our beginning of translation. share was year of per adjusted currency for adjusted year, midpoint the the from in full earnings line guidance the

Intelligent we year, as accelerate generated on investments we to free flow, capital and the continue For $XXX million in and $XXX fixed cash we invested of Labels. IT million projects

as conversion RFID The some driven largely levels XXXX capital flow Free working higher-than-anticipated strategic inventory. including we such include chips. was in by inventory builds targeted, inventory in cash lower areas than high

addition, still year. supply In all progresses. we optimize strong the working progress this on given expect make some the chain inventory we year to focused throughout have disruptions are as to and clearly the We're

flow Despite our over XXXX. this to past average roughly has continue cash net expect challenge, GAAP been conversion we three income, in and free of XXX% this the years

remains debt with sheet at EBITDA year-end a balance strong X.Xx. net Our adjusted of to ratio

gives to return cash through current as a ample continue as capacity organically while way. position strategic Our leverage us to disciplined well shareholders acquisitions in to investing continuing

we the During combination million to well $XX a the share $XXX and shareholders year, as repurchases of million for as growing M&A. returned deployed dividend through

XXXX. of long-term in progress the against an on Slide long-term X our financial to our materials our update targets. supplemental targets we that presentation provides communicated Turning

Through after represents to growth GDP-plus sets. well strategies our execution this or currency first pricing quartile our three our M&A. return key by continue strong on focus fourth targets capital the on a XX% cycle, us on above constant growth, of term. beating our delivering against and long-term of was GDP, enables goals higher sales years with volume delivering top long overriding annually, Recall, the and target an two consistent of growth over our the set driven The and meeting basis previous

Adjusted have XX.X% with EBITDA adjusted XXXX. grown dollars in of XX% EBITDA margin XXXX, compared to

the over be to of and balance As growth, term. our continue the to margins efficiency drive incremental focus capital long will EVA always, optimal

achieving that in equation. peers. earnings to XX%. was EVA top XXXX the over as of past remain on share and target of return years, relative per of quartile our plus annually our two in part market And We XXXX capital margin surpassing in XX.X% the our capital confident XX% target grew Adjusted our XX.X%

when of needed, diversity our competitive organization in through strong end our delivering the business against range course to an advantages and these a as resilience confident targets Given wide continue to cycles. adjust our markets, we're of ability

challenging are destocking we first commented Now the in in in Label Mitch outlook shifting volume to and the XXXX; to materials see a our year on, environment Apparel as as businesses. starting and both continue quarter the for out Deon we

ability earnings are for countermeasures a in activating through the to our and been year of confident have We environments. variety grow

how play was at to per expect $X.XX first continued expect the XXXX, which year, that quarter As the the comparable we we be destocking, to in of share. look we out earnings adjusted across to given QX

QX, of than earnings to see the rebound second and Following half run moving rate $XX annualized. in a back we of a beginning the half through expect strong more year, with QX

the build such half, as roll in out inventories logistics. and the rebounding second downstream as the China move be will growth In through in expect normalized, will we our programs we areas Intelligent to Labels year as new

we exit in and For these the see expect very as strong a significant back growth half trajectory XXXX. also reasons, we earnings

be in range of $X.XX. anticipate overall, to to XXXX the For adjusted $X.XX share per earnings we

and of high and the and estimate our estimate we a another expect anticipate organic from roughly net sales transition drivers temporary end of benefit headwinds nonoperational net actions. strategic restructuring X% we interest, headwind. And to key from EPS $X.XX savings prior We and reduction the count from higher of roughly we XXXX roughly from growth, currency with growth of be roughly share highlight the year, cost of compared roughly net To tax prices. guidance $X.XX investments to $X.XX, majority costs items, $X.XX

ability this XXXX. to confident strategic profitable progress to strategies growth environment, made near-term with In our and deliver financial through and long-term we against dynamic the continue pleased allocation. summary, through exceptional our remain we're long-term the goals disciplined in challenges, value capital our in for Despite we

the up open we'll questions. Now call your for

Operator

Co. from Our & Panjabi first Instructions] [Operator question Ghansham comes Robert with Baird W.

Ghansham Panjabi

inventory more can give of us -- recession? scenario near -- just more a do that? elaborate something something you you or of terms term I broader enacting destocking your plan. sort purely versus than broader mean are you destocking inventory the in How Can is largely just gives more is yourself view confidence less recession on this you you what that yes that versus

Deon Stander

January both be Ghansham, this we the continue saw the volume And largely in is that and quarter. expect the because largely also in our QX, for December. Deon. in destocking When that trend completed Materials see at we we out you by we first inventory in that November look to destocking, business come that saw

happening of out, and Apparel last both business, On the we called ran continue in we as through I will year half the destocking into see and back inventory as well. QX QX as

have factor forward year get the rates because Lunar the of rates. GDP that don't growth return expect to visibility to that half above year. And we you clear in platform, it's that to into going the will as plans its growth retailers rebounding in of growth But then factoring the China, be much of business the also to we our ordering able the we're GDP when that our also well. second volume IO forward Year, we second historic as deliver additional of sentiment from anticipate by their are While and Apparel in half

Mitch Butier

thing our on hearing forth the end And It's built on Ghansham, talking throughout CPG they so well build to the same and as firms the are inventory just also to we're customers that. the the fact side. the from as and year what QX up that Apparel leading customers, about had marketplace,

the pretty disconnected links demand consumer it's Intel. consumption -- comparing example, for they So negative. and have to product nondurable consumption market clear have It's to we definitely of relative and goods, our between

that system 'XX, the early at called were inventory we And why much of in continued is time, then that unwinding traditionally out than it's some year. even at which there the throughout the excess the thought just we They in pace was and we positive XXXX, bit a quicker end a see.

vectors of gives So is majority number inventory lot there's confidence. correction. a at it of This us looking triangulate a we're of a

a That bit. to said, moderate consumption and do we expect

with as a a Apparel it GDP least at looking the holiday as and at America, seeing And Europe recession. North to already for they're season. You're in slight outlooks you're modest weak far

Operator

with Capital Adam from Our next KeyBanc Markets. comes question Josephson

Adam Josephson

one half, to what does a if back gets back X-quarter entail because you're this one along or still just economy need normal lines it's you will? you is, the more just second activation, to recession if blip? in exactly that you that get in Mitch, last the why And for scenario, do to need they to less to question, half, if if conditions second recession activate to anticipating Ghansham's which normal similar will

Mitch Butier

know, Yes. Well, not at -- long-term cost recession part if growing to structural will, businesses in as activation, invest way It's our we profitably recession the to more of The activation, couple high-value competitive a the are strategy, as I categories, focus margins you there's and to time. as mean, of free you a reductions on things. as well the far base as expand productivity. up our keep capital long over the

I actions, your some tightening. as we're of very side. in the days when tighten something having And volume plants just dark you to and as you're as those part the belts how look you So lower, that your savings, that's can and temporary we this focused balance environment, at type cost of load, as within is And far on everybody will, operate. if drive the wouldn't of part restructuring are belt that's should some way of well drive that environment

Operator

comes question Staphos with from next Securities. George Our BofA

George Staphos

that just looked What talk last we've nicely? incremental touch very how days. still Labels Intelligent to some details. wanted constrained have much shortages Intelligent you the could of the that growing gotten recognizing volume to chip Can the may I particularly all given Thanks your Labels at couple very, like? inbound for on growth, over is have

Could part talk turn pick important last and points, impact been have on your incremental? did of have range been about at how it your have think margins? better, Had shortages, this points, whatever Can all over. a I'll you what be -- And it you year? terms us margins basis for guidance XXX there how some not logistics rollouts that? the XXX of question, how in are much they Could to would

Deon Stander

perspective, by We the of chip XXXX, because, ensure we Thanks, chip we leader, in market was as margin secured always productivity, through There of from enough had that deliver any impacted customers' to margins. and supply volumes degree maintained our with that our we George. to as we've inflation, of all dealt shortages were believe that a Clearly, expectations. we do. don't could chip part some

And the as half part forward, be still certainly But of Apparel a I George. will our of logistics during is we to part XXXX. be as going business largest growing growth of the look our that during XXXX will well, be emphasize big second the and will

Operator

Our comes next McNulty from BMO question Capital John with Markets.

John McNulty

LGM you or some I of I segment, I certainly destocking, severity look data how the saw even that's XX%, particularly we've When at can that that's we the guess, out explain the kind happening? in of why financial shows mean, than mean, happening in there you the year-over-year decline. crisis. seen worse XX% necessarily

have . you where position production that can And much cut are trying too help us just than worse in generation of guess, focus be or a putting to maybe to restock levels, the you? even actually it's there may we little understand terms in that given that cash a ourselves I what on so bit? people deeply, have a now, GDP

Mitch Butier

John. Yes,

of that for crisis make of of sure corrections, the to all the you safety and question, end first that. see financial wanted I a the have inventory it's your back past which way one, to decline -- go because demand a why secured The stock more so much the deeper do seen why little own supply in is people to their bit disruptions, basically system, part of we've the chain was think they there enough in to reason two. So

a to couple in so and wanted and were early basically of avoid we queue in increases actually raising stage next inflation, months the Timing the to get people each significantly raising of order build in basically we or of significant price of round and were every region. inventory prices given prices

increase. So that's the drove what

And factors then both of stabilize started at those same to basically the time.

to they down. And no so needed starting were the it longer inventory, excess and build people

that's So a for you're the seeing reason here overall. shift biggest why

Operator

Pettinari Anthony next Our Citigroup. comes question with from

Bryan Burgmeier

a throughout cost for This actually is With you in year? raws? the Anthony. lower Do for to do would some think buckets what Materials price you XQ, Avery be group capture from Burgmeier benefit Bryan sitting lower assume in able inflation this moving potentially

passed just bit for just missed that that Label And target a fall along this to you XX%, could provide short I Did assume it separately, the full apparel? Or growth year? fair headwinds a that this. Is would apologies be of in if customers? little to in it given

Greg Lovins

Yes. Thanks, Bryan.

from think to of move of I So QX through QX, little to some inflation the the had from on been sequential a price relatively back bit sequentially overall we've as sequential of little inflation. a impact. was price inflation question, QX bit We taking actions half immaterial and a net we QX the

about talked a impact from deflation there. bit time, I we sequential some and the the quarter, little expected same had At sequential we paper. films chemicals, from benefit think of of bit I a last

we what's carryover specialty bit paper price had carryover papers, there. there little lot of of in capacity a sequential maybe of and chemicals change benefit on So raw we a and pressure we price, given as a XXXX, a look in from QX. benefit Still happening bit you like inflation, just we into impact inflation. the perspective at just have When of see films marketplace little a material don't overall and sequentially, of look specialty in

bit a have or also wage above at levels historical inflation. of We

benefit last last a of for we from some locked got bit a inflation year we part where as year had had little well. We've in utility prices of

inflation, inflation. look materials, raw across utility of we So basket that wage whole

those expect from that We neutral year-over-year all included. impact perspective, roughly things

Deon Stander

we've will during see XXXX, in and said, growth logistics a significant platform on be Bryan, we growth in we we and year. in more we $X question, platform Recall our in being see are confident your Apparel, this than IL And billion year. growing that this XX% very this

Operator

next comes Mike Our Truist with question Securities. from Roxland

Mike Roxland

Deon, I response in about know more XX% question, economy IL employees, with look mentioned, in soften, But as just than be last productivity IL. as growth First adoption, headwind efficiency now they question respect global to just companies benefit increase to you to as and are the and that look a to off like? could a increasingly Or really spend? laying alternately, companies the be

then obviously, And with second strict of government in that's using policies, question Zero my just is COVID last China, year. a been terms Chinese

think, Could I in as things tailwind you April, that to serve in it as was a actually normalize headwind. $XX China? million pretty big a

Deon Stander

In answer really Yes, look have first they your chain. see customers it plays into cost, for automation And supply retailers difficult are things during the times was Mike. throughout question, their heart. and visibility reduces technology labor that to to brands, this efficiency, we -- the improves the labor latter. efficiency. We that It more improve when provides

adoption to an So our Intelligent barrier a and platform. Labels not that accelerant as we of see

ongoing see part that GDP that Greg growth and that COVID believe above well. change, the as half both of it to China As quarter playing was we the what our of impact low fourth clearly, to returning And or trajectory normal single saw, growth I see have its policy Mitch in digits. said called we as out China we We post COVID That China, we out slightly And change. started to that as relates XXXX, the in saw the country. down was the in second said.

Operator

Securities. with Jefferies question JPMorgan next comes from Our Zekauskas

Jeffrey Zekauskas

they're months, the Intelligent year. Labels up year-to-date, your the nine XX% for were up and XX% For

you're fourth means the first So quarter, in to they grew X. quarter. expecting the that like quarter And the fourth be

to what the talk growth So first in you Labels Is similar in in it quarter? quarter? likely Intelligent about the in can happened be

Deon Stander

Jeffrey, we in an reflecting of perspective, have GDP digits in to of the impact platform. and the last we returns our into mid-single conviction year get its come said, IL in continue So growth, to quarter, in destocking we Apparel. anticipate helps sorry, QX. as year. And And business to -- quarter, and I through billion the play destocking, But historic around number ramp see we grew we fourth XX% that that from particularly a yes, $X fourth as the grew us we factors the

business rebounds new further Firstly, to as programs. loss during the extension Apparel in the use in year as adoption case in both next as and prevention further come as be well growth will bear business retailers such

see food as number And of out, we program going as the traction to I ramp to already and our significant increased go Secondly, we see as that the that in will back a to good year, well. an a in we're that. called half to frequency continue through are adopting second finally, pilots logistics of add the our also with

Greg Lovins

rate than on year. Jeff, for And the XXXX, Yes, more little high XX%. raw year that kind up prior in we're in teens material side, versus the a QX, would be of to mid-

And in as of between year. still had XX%. for quarter the prior inflation than price year, overall, versus a look net year, the fourth we over QX XXXX, last So headwind adjusted full we is

Operator

with from Our Spector Josh next UBS comes question Securities.

Josh Spector

for you talked or this last availability been I cost of labels, later about your any RFID destocking if that terms could. your change side, in the availability market? competitive have deflationary on months? Do pricing for that And XX there to the Just a couple chip of depth in over follow-ups, has or inflationary you're are in expect stack base in then year. year? happen in next And you seeing secured chips the what needs dynamics With the you

Deon Stander

first. question your address Josh, let second me

been on for market inflationary, into based forward. I said, has the we We well slightly and have -- and year productivity and need that move XXXX. next we're chips And and secured as we as all the this pricing sorry, adjusting, as into for XXXX both

of terms for me, repeat your just In question Josh. destocking,

Josh Spector

having impact Question label pricing competitive the business? dynamics destocking any on is within on was base

Deon Stander

to maintained moment, Josh. strong discipline as to sure fairly pricing use we strong. tend pricing our if if typically, during does will in surcharges we respond the discipline. roll leader, and to how remember the to manage Josh, hold at we those occur, pricing. the also we you the start as first are the it tend that starts Historically, market. deflation occur the see if don't is make We that is first we start inflationary And And And in things market off. But there period, changes

Operator

Staphos Securities. Our from BofA George next question comes with

George Staphos

get over here rest and for turn I'll try of to call. all in it the them the

categories you customers normally triple, in double customers well, range all of have somewhere all at what where normal inventories obviously of they saying but say between would half first half, your you key the So their to what that inventory at relative in not talk what could grew were the there? to your peak to their say build, -- inventories

as project talked market about out, doing plus and Deon, Secondly, expectations? comments the in be by last, adding alone market or your share think Vestcom past, logistics logistics how and And revenue $X in XXXX? that's we billion you've about could then the on relative not to your and is any growth how

Mitch Butier

George. so I'll Yes, Thanks, start off.

customers, So what the know, One, material as many of we side. as saying on things. you a far have our inventory particularly couple around levels, are as customers

of of anecdotes, but two inventory. were And weeks to definitely four so there's hearing we a of lot excess a range

heard inventory not they're next full And you've overall. all season. at through, can unload build what that just definitely end the of for next of waiting bit the extra quite they the -- containers have a season said read they're quite but they on of were -- mean, the -- bit the customers entire a to even you was there side, headlines Apparel So talking I and

customers think are inventory, and bit know which quite all in that's us and what So side. all what the on is I the telling we're Apparel headlines, seeing we a what of our

Apparel, inventory it's where pre-pandemic. at levels actually of hard the data actual within a dropped look bit you from it down was If

we're data of So we that a between bit says know what the there. anecdotally, definitely excess little disconnect but a and what ourselves hearing inventory there's

be as logistics, billion the and can take do that we far growth As Deon, as think logistics how to your want XXXX. by as follow-up? with can opportunity the a one question I specifically well is be $X it you big see,

Deon Stander

results know our adoption billion scale is concentrated. overall can year this And will that. you segment and see commitment our of well, of phase $X you to us to during for drive this do Logistics George, get we Yes, in the as believe as business highly initial to logistics what

for My if and it logistics become a to $X a one with customers, the happen, facto or mechanism think XXXX. that that technology this then believe as be continues de as belief by business operating around the should is will I provider world resonate should and a I billion-plus sense two that

it to... As relates

George Staphos

XXXX.

Deon Stander

XXXX. sorry, -- XXXX

through grocery and well. to market. added capability it it's well. in stable to providing also solutions perform business to and as becomes the addition, And to consistent, our The great As business relates robust a fairly team George, retail that businesses continues cycles the enormously more portfolio very our Vestcom, have and access of ensure

Mitch Butier

performance -- position the case. are Yes, and acquisition outlook of our ahead

Operator

at there time. further are to turn this Butier, now closing questions no I any Mr. will you for remarks. it back

Mitch Butier

All right. Well, today. thanks, joining us everybody, for

goals long-term continue heard call, to meet that remain all our throughout execution our all. the enable value you we for stakeholders. As creation will confident our us of strategies you've Thank the for superior consistent to of

Operator

and you the for participation gentlemen, for that We Thank Ladies disconnect your and that please thank call you. ask conference conclude your you today. does line.

Avery Dennison (AVY) 2 Feb 232022 Q4 Earnings call transcript