AVY - Earnings call 3 2023 | Avery Dennison Corporation

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Operator

Ladies and gentlemen, thank you for standing by. [Operator Instructions] Welcome to Avery Dennison's earnings conference call for the third quarter ended on September 30, 2023. This call is being recorded and will be available for replay from 5:00 p.m. Eastern Time today through midnight Eastern Time, October 31. To access the replay, please dial (800) 633-8284 or +1 (402) 977-9140 for international callers. is number ID conference XXXXXXXX. The

sir. like I to Investor the ahead, over turn Eble, would Relations. Avery go and now John Finance Dennison's conference of to Vice Please President

John Eble

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

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

I'll now turn Deon. the over to call

Deon Stander

hello, and John, everyone. Thanks,

earnings margins generating expectations, quarter, such our in as new In with we categories, cash free logistics Labels strong both the in significant growth flow and in food. delivered third Intelligent line delivered and segments and volume grew sequentially,

While broader which volume cost uncertainty anticipated in than was slower the on through actions. earnings reduction for able quarter, lower line with our consumption, to was the were and team and offset macro expectations productivity

line. last I bottom the minimize our mentioned quarter, on As we have to activated impact countermeasures

back capital high-growth our Labels. cost implemented our temporary Intelligent in reduction actions, and ramped investments have paid restructuring businesses, We investments particularly our while up base platforms, in protecting initiatives

was in year year. third volume improved building this continues inventory quick customers prior delivered Materials the margins it been Now to down and and the Group inventory year, to destocking update reducing still as by business. last as compared were on quarter have a moderate. Volume quarter sequentially strong

Europe is see our at quarter. to can destocking in year-end. America anticipated in in will suggest regions in customers' on America Latest indications complete that Europe and by softer steady in complete than broader North Europe. a volume largely third Slide improve and slow particularly on inventory you North uncertainty X, these in pace As continue been the and Demand macro largely be has consumption,

continues destocking the sequentially the again October. X a weeks trend in seen quarter, fourth volume expect have improve moderate, will we As first we to through of

market emerging up in the Overall, strength sequentially, saving single Asia. particular strong structural demand cost temporary was implemented. Materials expanding and was margin label sequentially, solid and quarter, in actions with year-on-year volumes were high improved and as digits

sales margin and Sequentially, Group and in Intelligent basis Solutions adjusted Solutions points. improved were volume quarter. mid-single up in the Labels Apparel EBITDA digits improved XX

improvement We expect fourth as to drive further volume quarter increases. the margin in

be in Slide to on compared XXXX, X. to can be continue down imports which seen prior Apparel year

plans. particularly Following and their roughly we're sentiment sourcing categories, a mixed and the season, and muted near-term quarter. factor Labels brands food, non-apparel up into XX% to continues logistics in to back-to-school continue retailers Intelligent ramp significantly, in

significant of points key compelling execution and is new our customers categories segment in Our adoption. value delivering proof for rollouts for broader these

for growth a was apparel, quarter. resulting in offset decline growth XX% roughly Intelligent overall This in by partially Labels in the

continued accelerate to low Labels XXXX, to us platform than overall mid-teens expect the growth further apparel, the in growth apparel in Intelligent non-apparel soft anticipated in market. improvement enabling quarter, previously We sequential fourth with achieve to due to for along the lower

our continue and deliver food leadership the As at general Labels we platform accelerate intersection the coming expect and growth we retail XX%-plus of further apparel to rebounds, years the advance physical adoption digital. position as Intelligent in categories and like the logistics, to in

ahead in is invest of capture like large continue significant very with challenges, the logistics to efficiency Our to as ability to food, categories and we customers, help labor address resonating opportunity waste such increasingly and us. volume and

our of key Intelligent high-value Labels one is drive strategies example outsized growth categories. in to a great of

continue higher through and these benefit contributions M&A, shift we and categories both from We expect from our to organically term. categories, growth portfolio these over to towards the long

Another this in announced we example Silver agreement growth an sports our acquire Group, revenue in position established to annual expand and we player continue embellishments with platform. this of as month, $XX Crystal external an platform. apparel is application, Earlier our this customization million to key roughly in

at level. Turning to a the fourth quarter company total

we of last measured timing more non-apparel achieving as a we volumes seen we our to to earnings run Intelligent both past anticipate primary Labels $XX-plus this rate. the volumes that to increase anticipate end earnings improve, As further steadily the In we've of confident of and continue point expands, the inventory improvement industry of uncertainty quarter. macro destocking recovery nears accelerate adoption volume and a broader of businesses, indicated consumption, softer cycle. In as the sequential continue remain light as We in but will We improvement. pace some expect the achieve is cycles, EPS the in we uncertain. XXXX, at normalize this

Stepping exposed back, markets. of are We're and fundamentals the our business growing diverse underlying strong. to

businesses, advantages in are in We and innovation. competitive leaders primary with our clear scale industry

positioned that in to and our digital problems we We over to have connect been long complex help of a the clear success the the keys the some wide a serve. set we physical most are have of industries of the and term cycles, to strategies business the uniquely address range across

a that to long quartile the confident GDP-plus growth strategies us superior top over we through creation remain and generate formulated will continue term. returns the balance enable value of We to

hand. that, thank for Greg. their to to the challenges hand with entire team over want call our and addressing to resilience continued I'll commitment at unique I the And

Gregory Lovins

and hello, everybody. Deon, Thanks,

benefits the of to quarter, EBITDA to adjusted third with Adjusted adjusted up share higher dollars volume QX about productivity up and in compared delivered prior basis comparable actions. up EBITDA $X.XX by sequentially. $X.XX, from earnings year, was and we per sequentially, margin XX.X% the X% XX driven points In quarter,

due organic Compared margin to to $XX lower GAAP quarter XX% footprint charges the an volume, Materials quarter, XX% were prior in across was third year, to continues in ex-currency the majority as operating which initiatives included to basis, in destocking, charges million on which we sales largely in The and of were from productivity Europe. to taken moderate. related down portfolio. drive restructuring continue our the XX% optimization

supply Turning cash million prior adjusted the In generated flow of to generation quarter, strong We year. to cash the quarter, free continued $XXX we $XXX compared and third in allocation. up million good make third working good overall, last higher years. experienced shape. to capital over progress and our the metrics of in are we levels And reducing components, certain inventory which couple disruptions in

to And to return combination we cash acquisitions a the dividends strategy, X to share to balance million remains shareholders. through our Our as with adjusted a months first well end year, as we at deploy capital In and ratio million repurchases strategic shareholders allocation of $XXX for $XXX the execute continuing disciplined to strong, continue debt net and quarter including EBITDA of sheet X.X%. of M&A. returned

Turning first quarter improve volume volumes to through mid-single October. continued also volume the basis, America second combined at sequential results. continues by X. was Volume third down as quarter, as year being sales basis, built downstream in Europe can XX% weeks Materials inventory North to in on in digits a last in quarter. few segment by us and the seen were continues the a in from Materials to a year. ex mid-teens this the currency the increased on which to improve organic decline Label On Group driven be an of reduce Label similar pace third Slide and and

low and sequentially. North Looking up was mid-single the volume in single trends roughly digits was up down digits Materials quarter, at Label down America XX% organic versus mid-teens Europe year sequentially. prior and

was low Also and year, digits single were and Performance compared and Asia to prior digits up Latin graphics low digits was single digits. reflective and up Pacific and sequentially. were sales low up high single Medical down digits Tapes double America down single digits mid-single organically, to high and up mid- sequentially,

adjusted of sequentially Materials offset temporary year XX.X% in more a benefits basis productivity XX basis from lower as points actions EBITDA Group volume. the margin quarter, up to prior than points third cost-saving up XX strong compared and and delivered

largely saw again, as a of sequentially. reductions modest to quarter, mentioned last deflation price are our Regarding And inflation, passed in cost, significant raw costs being I customers. material period lower these we, following along

Group. Solutions X% an basis. and ex currency organic up to on were now Shifting X% Sales

mid- sentiment remains brand growth was categories offset high-value in single-digit and decline partially single-digit a high in retailer high to by muted. As business, as base the

in EBITDA Adjusted to points compared was up XX.X% offset Intelligent XX year, cost prior organic investments sequentially volume, basis margin lower basis XXX costs of actions. partially by and temporary Labels, strategic and and points by higher employee-related driven productivity down

margin in improve expect again We will EBITDA quarter. fourth the adjusted sequentially

and of environment. up a shifting be fourth midpoint, adjusted $X.XX expect in despite significantly $X.XX, to our sequential prior compared softer year earnings range consumption to at the guidance. we improvement Now the In quarter, per the to steady share to the

the more to fourth focus improve headwind structural compared quarter, further in to typical days $X.XX destocking productivity categories, reduction volume volume sales organic businesses; to continue as quarter. food, year. Labels new we from be Materials and across to moderate; implemented inventory on less as a particularly driving to to fourth we continue shipping in than our continues Intelligent In expect logistics cost accelerate; seasonality actions to the and sequential due to growth Label prior

a increase earnings We adjusted remain per will steadily share confident that earnings $XX-plus achieve rate. to we run

normalization The macro ongoing of apparel will difficult sequential given volumes. predict. structural driven Labels, be continued of uncertainty, in volume, and normalization reductions, the level productivity and is the label of growth materials the actions non-apparel So timing impact the the Intelligent cost the by of improvement to

presentation year full additional outlined materials. We've on Slide supplemental of XX our considerations

pretax million down costs, slightly. IT that as paired capital anticipate We our previous investing $XXX net we roughly million $XX roughly incremental million. projects, will contribute fixed of We and estimate back investment capital on outlook continue savings to restructuring, $XX roughly from from transition

we $XX tax to An and current has on year the currency for million mid-XX% anticipated based from now our a full rates. rate adjusted the headwind will year range. And roughly impact translation expect continue reflects in full be increased

to near-term And for value profitable growth our continuing remain disciplined summary, despite allocation. in deliver challenges, to long-term we our the strategies capital confident In results. ability and to we're continue exceptional through our improve

We call questions. for now will up open your the

Operator

question of Instructions] with of first Our line comes [Operator from America. George Bank the Staphos

George Staphos

was commentary start, in in detail apparel, it related growth you sounds sentiment like to of driven And if could that Labels. on if it the Intelligent less-than-expected I And is guess question, apparel drove consumer the terms provide and terms total, the My I what next variance. in in X the what third to understood correctly, more of terms of to to think terms relative And the then, customers why what transpired expectation of the saying consumer that were X market, was in in turn, quarters? you terms quarter? demand, of in over in your improves sentiment, by

Deon Stander

George. Thanks,

see that was anticipated we've wouldn't showed, recover the year, as If you we but quarter. year, that the that we what Slide was said anticipated had I slight apparel recall think, remainder sequentially we improvement. of sequential full so And we earlier done continued in see through you the on over what apparel period George, can volume a continued we imports in X,

that, surprisingly ratios to And in actually addition to also we to that are inventory somewhat sales declining. continue see

think, sentiment really near-term apparel so and that, And I about muted think kind combination factoring is the into sourcing retailers as opportunities. of brands their of more

value food, In to customers our non-IL demonstrating solutions addition logistics those able that bring. significantly, that, the are and our of we the have particularly really as we apparel expansion seen to are in business to

we more forward the new time, number look And I that I rollout. then recovery of anticipating as little bit apparel QX, in have, mentioned apparel. in are last And we're a a programs also into as

switch go we've volume seen will between that growth IL but time, George. add they typically that we ramp, into they Sometimes also quarters to the quarter, as fourth our as apparel over

Operator

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

John McNulty

So guide. about is my I question really guess the

you XQ, X about XX. So did

about You're I it, basically $X.XX think the big about if got guess, looking particularly the XQ. I And in up to flat you've RFID logistics. improvement, in

or anything without the end destocking cost for core, incremental would got the any high of less the put saves, like which range falling that. seems You've you at at assumption those like raws combined,

maybe guidance little I what bad but or is am a the It in of the here? Because terms for missing guess unusually seems outlook like extremely the sounds kind XQ conservative. guys it bit XQ for like I or seasonality, of --

Gregory Lovins

Thanks, John. Yes.

end, as guide midpoint at look up say a about at that would when high $X.XX at I that. So seasonality, you we're sequentially. higher the than for we the adjust you mentioned, Obviously, bit the when

driving at growth that, When we we're QX, look as we've expecting Intelligent already you pretty QX said, what's Labels talked to about. as significant

as volumes continuing as as in well to QX seeing here, we improvement. sequential are improve that our start We label the see business we've of talked about steady

I bit the on are Europe earlier, uncertainty. Deon mentioned to what to third this generally, retail the seen and continued packaged and quarter. and more companies. goods we whether think We've we're I brands think Now in consumer And macro muted in see continuing be seeing, decline we're from also sequentially apparel as well volumes it seeing sentiment cautiousness data retailers a as

guidance into and sense them And enter how of so we're get and cost we from that trying out a end that looking our of bit sentiment evolves. as see how we'll that plays holiday through to And at the year. the factor little they as

right user some side. end seeing on So the just cost now, we're there senses

our to trying factor we're So that into as well. guide

Operator

line the of Panjabi Our Baird comes with Ghansham Co. next W. question Robert & from

Ghansham Panjabi

And of in holding actually point? destocking. seems cutting aggressive XQ it destocking like given CPG interest on also year, at year-over-year they this have inventories on inventory, and first higher customers categories I guess related the on much on rates were last of the being Have to inflect of that, a more then cost just your of inflation. many the given higher are basis going comments sort started from the that curve back to to

How first rate at of it factoring then for in, to relates is more the point? the see $XX run line that? this also terms in of it And the of time way the the of year, next that outlook earnings, as importantly, you half

Deon Stander

Thanks, Ghansham.

I interest that And over packaged seen I a broader last consumer consequence this uncertainty that I number in consumers see as And think Europe companies couple months. month more it's it's year volume impact think, I out, is kind Greg, on the macro consumption. what is below And that we're or called thing macro the think of volume, market in down apparel, last goods data that of in and react. sequentially and just of retail slower end also caution, each more higher still actually large as part and think particularly we whether well. of we've do recently they consumers particular packages of how in seeing rates the

And for seeing in in sequential -- to see And we're you particularly forecast some improvement that inventory starting in the of that fourth quarter, continue see seen categories we're our that first. you've even for our to from and the so went destocking, results, the Ghansham.

it to it now, it year, run next As happen makes during very it timing to see confident when clear we rate does that rate really I that I'm we call that volume in the fundamentals That's forward. And as think difficult that will at we $XX of about but I'm path when a a run can uncertainty, will very why given happen. business. point uncertain. confident of the return, move our think it $XX-plus

Operator

the from is JPMorgan question Securities. with next Jeff Our line of Zekauskas

Jeffrey Zekauskas

looks looking X.X%. was I it, inches, question. is when it was and your QX QX October And like two-part volumes X. a measure have Slide you at 'XX on and X.X -- graph bar I for of

XX%. looks up volume it the like that Is So right? is

two second, got you've tranches debt. And of

-- You've about both X% got rate.

quarter in the XXX XXX or got Is got refinance those intention and to 'XX. of You've in of August them? to XXXX you've pay your down first

Gregory Lovins

And were see to still carried through. seeing some we is, that's November Yes, seeing What from make recall And starting I if sharp pretty bar starting in think think in conclusion you that QX, then chart, towards Jeff, with direct last really the converters in that we're so October, the we quite downturn what's year scale, that guess can't particularly scale. I started up, in stocking Europe. I you to on destock.

below still QX, seeing in comparison a volumes up when But gone levels. year you prior and QX, were, through we've now the in bit picking part where we QX, overall, a of direct make early can't to that closer there. closer yes, obviously, to we're QX So back

at And our when third you quarter I still taking think North here bit in actually and the volumes than than in up It stock our down build rate prior of on that, the little think, year. highest year. more a this America was in year, we're inventory quarter the going last quarter. third some about, less of down there week obviously, I was that versus in Europe. obviously, then look mid-teens And last quarter, stocking were at a

I that's So two how think about things. those

cash out. X From a and of little continuing that debt the plays with evolve and capital and M&A be probably perspective. allocation then again, opportunities things are a proceed M&A Absence the how looking from some But perspective, of that we that debt year perspective, next the year on on that depends opportunities we'd or I will like pay flow. or from think what how M&A next down and to at something bit major that they an determine over how

Operator

from next with the question UBS Our Spector line Josh of Securities.

Joshua Spector

within I margins wanted solutions the on segment. to ask

So your but in sales year-on-year, your up EBIT is down. were XQ

Your margin but was fairly did marginal. it improve,

think was things So the out higher I and called some et the investment, of cetera. you -- cost,

right you one, comps. growth? for when pieces have then give at year around next those labels, can easier thinking some be two, you look So get that within on growth intelligent XQ? we different the volume of any incremental And should What's and say, you granularity you

Gregory Lovins

Josh. This Thanks, is Greg. Yes.

can XX Labels majority see, you when X.X growth, solutions down. Intelligent think our base in our base already about by at around the and point, in the but business points. driven we've talked the was as as is in was segment that look I So overall organic at quarter, of the you apparel about down And quarter growth The

us bit overall quarter, down particularly you about we little like base, of that cost segment, probably a a order a that, price growth, think little so ago. bit are point And I the past, offset of point look of like things volumes inflation, wage growth need Now as mentioned when Solutions increase I in the a in second had and heard talk the we as things or were at in X.X in annual that the in in of we that up, to business. an

year-over-year as a Labels as ramping we've here. as as up that been carryover were So the we Intelligent we as perspective well making the from up investments had employee programs well costs go new in investments

the are areas really the quarter. those margins I So impacted think in that

improvement where expect that see point QX, I And prior even in We from next So say, sequential in still sequential so improvement look year further we year we at were do to I QX, QX. were in would to in get we happy back we to we made though year. below overall. margin the the or were we're expect the Solutions segment would when last rates in closer a

Operator

Next the Pettinari Global Markets. from question with of line is Anthony Citigroup

Anthony Pettinari

shareholding? any You've materials market had where XX%. that feel you do this shifts organic solutions? just conclusions looking sales losing some Gaining? a potentially kind in the differentiate share bit year you would getting that wondering, and Any between draw solutions. anything last materials better. of I'm X Are is there's solutions down Understanding is And you either at or you and quarters can

Deon Stander

Yes. Thank you, Anthony.

the it in even very during XXXX. maintained expanded having closely, view we function of the largely we know of have materials think the is share through as was across that and we unwind slow built our looked that this down reflecting being is And businesses I last just at inventory year. go that this or year our volume

address themselves share our expanded in reflects really on ensuring continued as IL and excellence are to and base by apparel share right they're that of challenges now. our that the slightly our to helping teams and customers the they held delivering and focus some quality Anthony. our facing grow And service business in We've well, continues them overall

Operator

from with Securities. Mike question the Roxland Next line Truist of

Michael Roxland

wanted to into your in happening what's Just Europe. get insights

labor of adoption your citing demand. in weak continued One stock peers is Europe, cutting

up has So that been in what point ultimately? gives you and bottom Europe the this confidence the demand at were that reached

Deon Stander

improvement. the to both not go is phase. multi-cycle consumption think softer slow that clear we've serving, a uncertainty seen day, the time we're I that recovery. the We of calling necessarily ultimately at degree typically, the markets time I the serve in around and Europe. that that I think very highlighted think And always there We growing we've do environment, we're And the I are of plus. sequential across we Mike, are and thing back is macro see diverse GDP end in been Well, the and

regard. the And so ideally a come demand we that and back, will point, markets at recover, are will positioned in

have the leadership we over have businesses, our to that and a that And strategies industry We in in businesses have continue both team successfully as the our deliver both of leads years. we positions well.

Gregory Lovins

more rebound quarter, of about, I at that accelerate add can downturn. period talked cycle. months talking of historically, would showed. or Mike, year the what think that I a through I We've this we've think, destock about of been kind is bar the a over in see as And we or we've end period as seen we in last this just a improvement of a steady bit quickly volumes these and been quarters, little last you number graphs

I improvement also a so, slowdown direct of customers kind the converters demand One of steady is the the that consumer And same think costliness the levels at at of improvement that couple or over last our in but inventory in quarter and time. things. our reflects

things So a And think a improvement two leading continuing rather we those end cycle. steady I time quarter-over-quarter project more steady of more we're our I the at than accelerated as is same that hitting destocking that to that's a increase in go why recovery think the at to forward. ramp continued

Operator

from the with Christopher line is Capital Our Kapsch next Loop Markets. of question coming

Christopher Kapsch

But on in comments demand the commentary. Yes, One, far of in of around sequential the of just the improvement October. Materials segment two-part it's sort a thus question. piggyback off some and other into

sort by category? characterize could by you geography if by wondering and/or of Just that

about XX%-plus confidence CAGR maybe are helps there's And growth in gaining then the characterization, the sustainability going commentary growth and programs of a better RFID Labels, the forward. improving in that that CAGR Intelligent -- traction, you for XX% give number of around of secondly, visibility lack

the in if retailers, I'm would the attached that apparel. to wondering apparel? this if could, just to is beyond -- expanding, that big-box just you given given I'm they're evidence use case beyond these some Labels the for of addressable the any Intelligent programs that conventional but there's extent being suggest are what just TAM wondering

Deon Stander

Yes.

address Chris, and question, me second. to first let I'll get the So the

We that have reflected the demand in improvement in seen chart. low the sequential reflects in volume think business first the of Materials That's our both the And sorry, part complete October. I we QX in destocking in of a continuation moderating North think There's end QX. bit largely go in America. it's Europe, said, bar of little as we to the in by largely now in

And volume improve regard. to slowly that in so sequentially anticipate we would

overall, Labels rate. our As it tell a degree high me IL that to And of growth why, let you XX% relates have confidence platform, in Chris. we Intelligent

forward. value for as apparel seeing going and QX. anticipate that are I These and actual categories, and our think really are in They're logistics We for real first happening in compelling that that delivering we're it to becomes customers. in that a as accelerate. we saw we well, think broader QX becomes most rollouts see as now firstly, visible, are value logistics seeing a largely They both customers. our about can more that to are adopted of customers nonapparel you adopting. importantly, food proof the food, segment mirror continue when flight. And and point And in

at is the when that And and bounce IL market recovery are And is point. recovering, a overall. happens, also the in it second not continuation use of leader new thing will we the apparel, it's think I in it just of cases. volume the apparel will back be the apparel

application with the to inventory about spoke loss in prevention I see. we addition is on think rollout productivity typically previously I Inditex our a that

continuing apparel right previously, the we're have as in see growth as we and I and They new mentioned And large now, retailers another to well. well. And rollout. will ones flight four brands four augment

significantly though, I than really other we addressable apparel. like start about consider to billion And apparel at least XX to are two the call adoption is it, categories, of they you and food the categories. let's order those of bigger logistics XX units, those the market billion If at units. XXX of think Logistics is around, non-apparel billion piece the think and in is XX just is billion are in when

So the scale that investing maintain leadership front in that's solving reason, position. We're of just some we of can sure challenges of us ensure And market been and potential we've that lies these expand the to the for Chris, tremendous. here opportunity, make our the not is we're that to unique they try we're seen the to segments on our confidence it the customers, the actually reinforces market-leading having industries impact And that team, we're future ensure just activating but rate. customers, within. and much value the having that how and those they in the that it have and that -- fact growth

Operator

of line next Raymond James. Matt is the with from question Our Roberts

Matthew Roberts

in as of Intelligent you referenced you're color everything versus of when the the inventory that earlier, making the system? When to you well than cash when conversion the about investments different If inventory, you would when is helpful. Is I Labels think as there Labels, you're that turning Intelligent the be rest else? think for I that some to revenue invest any there's and a have provide, longer in really able could book lag to cycle

Gregory Lovins

Yes, Matt, number Labels experiencing Intelligent It's be been general the the over in answer what the I similar to business no. would terms, years. think, of in we've relatively last

last when over we something were the some built up starting some driven That's chips. talked inventory of had starting year in think quarters, the we had last as inventory we see I about, to I've few challenges there.

over from when that from look difference a So expect any normal we overall, what I we at years. that. I that's But ongoing few last wouldn't why the think started we've process. seen

Deon Stander

consistent execution. only typically, the large-scale rollouts, flawless some and of to when look I'd Matt, thing these that we focus on our And is at add is,

not have We the that need. ensuring everything to actually only provide we sure business economics, [indiscernible] deliver but case, they reliance the can make we the that

from so end invest other capacity to all a asset an and we that to program people do continues out, from perspective. have capital to from collection and roll our the cash both tend we cycles make sure of that typically working normalizing as But then And that relative to capital typically working well. then to a and we up as

Operator

And America. have Staphos with George of the follow-up of line we a Bank from question

George Staphos

given to Deon, period to of payback what arguably, the some you is especially higher? the payback perhaps on quicker for products it the with return can be logistics, to somehow? customers index Can talk your return actually newer value apparel, IL for might with -- the seen the -- relative you the you that? and Can markets to of you've payback relative talk what

comp you for And November the guidance would day, was for At and materials in the know wasn't the things the quick quarter be the year, I in a volume sequential us just clear. expecting I in last up you're dropped October off. terms to year-on-year I label material in making have then Are you know of end means the quarter? know fourth then of your what in improvement. follow-on. volume fourth tough What it about segment? year-on-year

Deon Stander

of the on the complexity chain the length diversity And and retail payback depending less the The well. supply in George, been sort has supply and varies by typically George. that their good, a year depending particularly of payback as and -- complexity the cycle typically. there, than seen estate it their way on I Thanks, in we've that apparel the brand of start retail of chain

the will initially and the compressed. not pieces It right be the food orientated globally of in chain we seeing of work that's may -- of logistics, that infancy now. more supply we've doing seen. And in that at is paybacks right as we're be shorter you're we're And because some the some

cycle will be because chain food the past. seen is period within similar a have supply resins across that to that multiple the to that also year is anticipation payback as there we've in apparel, well, a Our the suppliers similar apparel way will

inventory George. some improvement the we second move to moderating fourth the forward, quarter, anticipate sequential we and label as your both through As we reflects question, destocking that well demand slight go and as do volume as improvement further

Gregory Lovins

to expect year-over-year same to see I'm -- And business, that sequential it's sure volumes up George, your question lap we said, destocking we the Deon -- year-over-year, in start not reason year. also, label as your also the last of was last that question

we've America still North a some in as in little destocking bit talked about. less We got Europe, QX, already in

prior So versus fourth start volumes in up we do the quarter to see year.

you're thing move price sales we've as looking couple seen sequential down I deflation as do we well. that at say would as some as about talked last other have line, the when the quarters, we The we've of through

volume some offset will little the increase. grow year-over-year of it to certainly, in bit we But volume quarter. So fourth expect a that

Operator

this time. Stander, the no over further Mr. any will now at remarks. there call you to I questions turn for back closing are

Deon Stander

you, you us Carlos, and Thank thank all the joining today. on for call

and and the confident dynamic, position long term. quartile ability our remains and to extremely environment the over returns in top our we prospects GDP-plus While are generate growth

thank So you, all.

Operator

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

Avery Dennison (AVY) 25 Oct 232023 Q3 Earnings call transcript