AVY - Earnings call 4 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 Fourth Quarter and Full Year ended on December 30, 2023. This call is being recorded and available for replay from 5:00 p.m. Eastern Time today through midnight Eastern Time, February 6. To access the replay, please dial (800-633-8284) or 1 (402) 977-9140 for international callers. is Mr. like number call turn ID to over conference XXXXXXXX. I'd to now the The Avery Vice Eble, John Dennison's Relations. and Investor President of Finance sir. Please ahead, go

John Eble

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

today Officer; Deon Chief the President are Senior Vice call and President and Chief Deon. Lovins, call Financial now Executive and Stander, over On Officer. I'll turn Greg the to

Deon Stander

delivered with in prior free in John, hello, volume and we significantly everyone. In flow the We year expectations. compared in compared sequentially margins, generated to expanded growth quarter, segments, cash fourth delivered significantly grew and growth, Intelligent to sequential again year significant with our up prior Thanks, both Labels. earnings line and strong and earnings

we full significant on cash environment. full of the generated industries Labels to we destocking, while our high-value resilience I we throughout navigated in particularly our and on the the our the chain, and the than improved margins we initial growth am shift flow, conditions the experienced did our we turned in and continue delivered anticipated, customers, as opportunities, protected service pleased strength drivers how inventory challenging insights not towards XXXX franchise. free our portfolio year. to overall categories our strong highlighting demand at for as value deepened Looking year, for Intelligent of serve expectations and be market with out very different We deliver the on

minimize core strengths good see volume and on of increased a the in our stewardship and we value throughout the as potential thing. period, this impact we our inventory our capital More of to excess chain reduction management low productivity, leveraged broadly, During the cost of solutions the line. Label bottom environment Intelligent

our to our return to and As demonstrate and trajectory normalized growth Labels of industries in positions growth it platform more business the particular. in a power Intelligent XXXX

and most and volume seen turning physical solve a connect Avery uncertainty digital macro It consumers. them efficiency clear better customers as customers brands their to is in items to help are and labor such circularity and to challenges challenges, effectiveness, the have physical and leader the increasingly reduction, to worlds. supply for help as need digital connect and Importantly, helping the better increasingly the waste XXXX complex impacts solve Dennison will transparency some looking industry and of these identity chain

Looking remain year cautious forward, in confident a still earnings will the Inventory growth. near mixed That outlook geopolitical elevated. XXXX prudent that are is be strong said, I'm economic as risks of and half, rebounds. a largely Intelligent new destocking indicators particularly is more as adoption platform Apparel likely in Labels business second solutions, expect volumes label across high-value we and in our complete. growth particular, will in our our categories term accelerates in the apparel and recover significant

volume destocking by summary throughout the continued as improved Materials strong a moderate sequentially segment. Group Now to the delivered inventory each year of and brief quarter margins year.

prevalent, inventory a see North label improve Slide can was Europe in throughout pace year. at and to most you continued destocking the America X, on As steady volume where

demand had now quarter, uncertainty Europe anticipated slightly complete America. anticipated macro than largely And better I and In regions slow lower consumption in in broad in As continues believe and on is destocking of fourth North previously goods. to the America. be had than these mixed inventory complete indicated, was we and volume we we in in North Europe

expect volume up the in single sequentially first India particularly momentum label destocking improve and emerging trend year concludes, volume As will in the half, January. Overall, inventory for again low we we market with digits China. in seen have was the back quarter, increased in thus far a

year, decline in labels of base intelligent to were digits programs and moderate. and offset Solutions year second the as up began half the growth Group more particularly than in sales solutions. of high back the for continued improve as to the low high-value in a up the in year, digits impact solutions strong ramped, Volume margin half acquisitions throughout new the destocking single single apparel in

significantly apparel While show in in down QX, to in on XXXX, North signs Slide be improvement America of prior year to compared trend can started imports both X. continue to which seen be the

will mid-XXXX. holiday normalize and a Following Canal retailers plans. sourcing likely industry anticipate apparel relatively We muted with mixed continue near-term the to factor their issues sentiment season, Suez brands volumes and see Panama combined into shipping this

industry's were roughly In accuracy for for see possible. labels roughly RFID As history, customer X, making enterprise-wide grew XX% the the including largest reaching and translation. categories, significantly million revenue, up digits Nonapparel the XXXX, logistics including logistics, continue program single double throughout rollout year. executed wave you successfully food in in can our low ramp currency intelligent on in greater and Slide the year team $XXX the to shipping

broader rollouts customers new these This growth offset our execution partially compelling and a categories as by in for decline points in was and Our is retailers throughout significant year. inventories delivering key segment for brands adoption. reduced apparel proof in value the

our further of deliver logistics, retail the more we adoption see in growth advancing Labels platform As rebound in are as to apparel, in general digital. Intelligent XX% we and targeting XXXX, food position and leadership continue or like the well at as physical a to our categories in intersection

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as overall the invest of to to we ahead continue the the We significant industry. opportunity size capture grow

the The teams long our our raising ourselves continue of exceptional. to refine deliver ongoing been to haul, to drive strategies while superition these we the of in has our all to over adapting to ability the strategies bar for environment ensure an dynamic for continue We process stakeholders.

As the you of Slide success XX, of long focus on term our see stakeholders. over all the is our can

As exposed such, for walk growing our underlying making strong. we're of financial solid progress will markets our the our against shortly long-term through with diverse long-term back, our towards clear goals are fundamentals long-term and Greg business We're to and growth. progress catalysts objectives. Stepping sustainability

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

the have success of in our creation the unique across we significant a and term over enable and through to to a on team over challenges strong excellence complex a most the generate positioned returns over growth want including I remain that GDP-plus of help quartile digital We focus us connect the unlock delivering continue to to XXXX term, hand serve. have superior range call some rebound. for our our been to strategies top opportunities the commitment to that, wide clear resilience continued set long I'll and growth businesses addressing to cycles that and business earnings to at continue the key in uniquely our and physical of the confident industries long entire Greg. any strategies, along balance their to hand. And with as with in value environment we address execute We our to of we ability will our problems thank growth team's core are

Gregory Lovins

line the performance and provide productivity. on with Compared were our from through share by compared XX% Deon. up to our up Thanks, against volume our ex quarter, fourth quarter and adjusted basis. and on fourth additional of Hello, some in prior outlook. our results and year, delivered an prior everybody. sequentially In year, $X.XX, walk driven earnings you XXXX then we I'll color higher X% currency expectations, up long-term targets, first organic X% per our benefits to sales

As flow metrics flow to our XXXX, the year. EBITDA continuing and higher Adjusted sheet ratio remains resulting capital prior information in adjusted paring And to We're also at XX% high-value strong technology continuing was back $XXX through adjusted cash for of EBITDA end volume free nearly we and the Intelligent invest the at partially year, quarter, dividend adjusted base XXX% to repurchases, related the the up up strategy, year-end allocation debt the in full while to including year, execute to sequentially. We and cash and was reductions. strong by generated with environment to nearly our continuing with points in million disciplined categories, strong $XXX dollars in given offset margin up invested $XXX $XXX X we capital to growing than a million Labels. conversion. to In year With prior balance strategic in adjusted to a in quarter net and compared XX% compared return our EBITDA roughly deployed X.X%. shareholders. volume $XXX deflation We our investments cash and shareholders free particularly lower target acquisitions our of fourth combination share of M&A. capital returned more our million year, working fixed on in million for million price

downstream reductions offset were related low more Turning continued us from which to mix. organic Materials segment to and and single-digit fourth results Inventory down growth, on the ex volume X% than Group sales by destocking basis, for quarter. product deflation driven currency an moderate. price was by

see you particularly As this Europe America the continued Volume label volume North weeks improve to first continues combined, X, through X in improve, Slide of Europe. on can year. to in and also

quarter prior Looking than down slightly the versus year at North materials, organic label trends volume America we in anticipated. more was

and started America the largely brands through our XXXX. year-end in high now believe customers began was working destocking and their in which midway inventory the quarter up in fourth Europe We single fourth digits capital. destocking we as quarter North to retailers the at destocking, Given lap complete. managing is with

Also softer single was Latin up material the margin included XX% digits low compared margin impact of productivity organically, impact low part strong year. significant Pacific was devaluation digits. Materials from to driven for tapes following were latter was Graphics EBITDA prior the up to year, Argentine the XX.X% America of was a costs. and of adjusted up to XXX basis in Reflective mid-single GAAP from were fourth and by benefits Medical sales quarter, prior year points the QX half. raw the the Asia financials. an and in quarter, low the which non-GAAP up down out of up in and adjusted delivered second pricing Group mid-single a the impact peso operating digits This performance and digits input compared in mid-single teens of net our

saw the single-digit quarter. sequentially costs, modest just sequentially low expect we material deflation the and raw in in Regarding quarter fourth deflation first

prior Label period new out a in programs solutions Sales sequentially continue to than customers. Shifting in lower up quarter. following significant comparable quarters, of on XX% apparel grew basis, grew solutions higher largely high-value and logistics price the sequentially XX% being roughly up to particularly Adjusted couple food XX% to reductions ex inflation, of are primarily Solutions and more compared were last EBITDA Intelligent roll by were prior organic year. base up as to Group. XX% currency up and passed significantly, than more categories, basis mid-single with points categories these up sales an Nonapparel the Solutions of to up digits. and Base volume. along in mentioned XXX%, I up prior year, to As costs comparable XXX XXX apparel was year. XX.X% roughly our margin points and with now basis driven

our sales of X capital enables we volume. continue delivering strategies Now after against update of an our and Through or set And currency progress our targets recall our this delivering previous in long-term long-term materials cycle, overriding driven represents a in X communicated against focus fourth meeting the an target Slide that financial the us key the top beating performance. consistent sets. with of The execution XXXX. provides presentation supplemental GDP-plus quartile shifting our basis on to growth was higher prices the above our years that goals on X long-term targets return of our annually, by GDP, growth first and on X% constant over to on term. long our

dollars volume of adjusted to currency strong XXXX at Adjusted in translation. some was Compared X.X% XX.X% EBITDA EBITDA deflation-related year the excluding half roughly margin expect XXXX XX%. reductions with grown second as in noted. with We growth XXXX, annually previously have price the

short past Looking indicate growth of progress to currency growth, long this anticipate our EBITDA XXXX capital X forward, X.X% roughly X% currency this a our as excluding And year, due in translation, the Adjusted this we earnings our years, incremental be making end continue EPS over always, XX%, would the guidance by EVA year, CAGR annually primarily the for drive in inventory of to will expected target XXXX. grew excluding roughly margins translation. the the over to against focus target optimal and of strong term. destocking XXXX. balance With of efficiency

Our charges, the total in legal costs impact was including Argentine restructuring in peso on for capital devaluation. the XXXX the of year return XX% fees and higher

will We expect be mid- XXXX. high our ROTC up teens the back in in to

Given markets, the to make we're diversity adjust targets these our needed, of when strong confident as progress advantages organization our against in and our ability in end competitive strong course an resilience to XXXX.

the continued similar With to the underlying quarter, improvement In fourth we shifting solutions earnings XXXX our apparel example. the at measures we share seasonality in of roughly both cost to return offset logistics per sequential of an least incentive compensation of quarter and took adjusted expect in for Now partially of some XXXX. be the the outlook temporary by as first to and XXXX. with

As growth new in our productivity in earlier volume the will improve year, labels volume and as and expect of Significant by the XXXX of normalization ongoing normalization intelligent we sequentially, apparel apparel label mid-year actions. earnings driven the rebounds programs rollout progresses,

including year, for benefit prior increases by offset will the anticipate our We roughly compensation payouts We've up restructuring overall, high be overall outlined range midpoint XX costs X.X% highlight per of of materials. To factors higher to guidance offset growth, anticipate organic following growth in sales the XXXX. of the we on partially deflation contributing compared presentation and estimate full including $X related key single-digit with price wage Slide year XXXX, $X.XX, adjusted to we For supplemental to XX% lower drivers the share reductions. volume incentive productivity, our higher earnings at midpoint. and savings, of employee

items, expect and We we initiatives normalize. results and our estimate strategic selective our currency nonoperational as improve to high-value roughly advance solutions investments, be continue we to net count growth and summary, share growth we make particularly neutral. In our in interest, markets tax, to

to through strong environments ability growth We confident allocation. disciplined for through in capital in we our variety expect continue XXXX remain long-term value and strategies deliver and a a of our profitable to rebound exceptional

for will now We open questions. up call the your

Operator

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

Ghansham Panjabi

first better on Europe labels. part to is expand Second bit comments the that? back And being intelligent your little going Just on question of then a really -- you around could [indiscernible] specific

last You obviously there just so rollouts had clearly and on Or be business of your and as of uptick would customer it a And more there? very the natural lumpy will XXXX I'm forth. rollout similarly just during sort the very well? of back curious, so lumpy reflection in half year, of so a successful be

Deon Stander

we time, early that we said did recall ended we Thanks, which as January in the see started Ghansham. Yes, in continue though anticipated Europe volumes And as in come QX, through. Ghansham, you also And we'd slightly end last trend think that of I had volumes see retail stronger the and QX well. thought to make still largely European I muted. this the point, growth that QX. in that will destocking to are we at

ending there. fact, are think macro they see just the recovery volume both specifically quarter. And out the and the inventory North of decline In the anticipate destocking labels that as Europe the our in broader business. that, it despite we we underlines in third America, the normalization But uncertainty of I in

sentiment clearly the you the over growth through and and the apparel the on the largely as of Intelligent saw destocking quarter, nonapparel we Labels and the the our fourth went by up to around Labels. for categories, we whole some then the as XX% for in saw And year, year really year muted second the apparel business We in logistics the in of apparel XXX% year. for as impacted growth half well accelerating in end saw in Turning largely the Intelligent food. particularly back

move happen to XXXX, going that are still we into year. look regard, rate I X to plus things have growth And targeting Ghansham. think As through as XX% that we're in this we

those of X during we've launched will will are right all apparel, logistics, will through as food in Ghansham, and large continue just to fourth U.S. through but Those to those example in a an see, continue to to our will normalization food, reignite a we're start happen. There retailer, able clearly just in see logistics been results efficiency new tends annualize have programs that now have X for the help involved quarter be that year, we're So we've significant the anticipating grocery a apparel, typically it, of higher that to both improvement. particularly And and also indicated, that as to Greg an logistics, to which just of to seen will to volume I'll food is qualify will with this labor a across broader we go we'll the degree launch in-flight waste we're of programs in growth those, with food we going new then segments, is continue not retailer not very on can adoption impact demonstrate XXXX. trial lead only apparel. items, both give also perishable reduction And we of bakery year, you and is there apparel other in go And we last during year. and apparel. of start final piece that second the seasonality quarter. the that first categories, come, the half some then also as And to than

Operator

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

John McNulty

the material on question a So space.

the least solid destocking that in a should potential XXXX? to I guess business impact level nice up how we we at from even look be North XQ, the to margin continuing margin lift had thinking about America. So to for step with you out as

Gregory Lovins

about, as materials which set Yes. talked we targets is level of around our back we've when in in they at the long-term to John. EBITDA. XXXX, Thanks, kind get our XXXX, we're targets, looking were XX%

I back improving the a there. getting and team with think lot driving the was of margins good we half despite actions above the destocking a did the job productivity in XX%

continue in that here that expect focus our progress suggesting in continuing So to and but deliver to able make long-term XXXX, towards we'll be target, our XXXX on not exactly target progress we'll make EBITDA in there necessarily to XXXX. is get XX% to

Operator

Our with Global next question comes from Pettinari Markets. Anthony Citigroup

Bryan Burgmeier

Bryan actually all Burgmeier, is the guidance detail and This guidance. growth for sitting the I appreciate in Anthony. organic on revenue

your of As in with come you cost. I expect prices. down, which of prices raw material can is [indiscernible] embedded guide maintain kind think positive consistent Do labels

to So as think do bit or one opportunity for for you of pick Or Avery that input there's down, match think of to little have price a up will kind kind bit comes some do price? little back more one? get costs you do you margin of a

Gregory Lovins

Yes.

I given We've 'XX. in through guess, saw magnitude pricing. quarters, been about over we've 'XX we quarter the largely and few think the sheer just been second talking around that deflation I seeing we've last XXXX of of since, been inflation through as the the the passing

year QX, a of bit will right that. lot of a So would down our and mostly now, expectation. the impacts we're go to be prior But our price carryover bit with expectation little year-over-year price the a be of is little not deflation we'd have from sequential seeing in

of view 'XX, as the and will see put deflation depend overall, pricing. of through and deflation pricing we'll as rest our that of the costs we back the 'XX we in most But year. be what through that we on through that with amount of amount happens move given is, the Now passing material

Deon Stander

capability. has make into we given to ourselves as the our I'll just the that always see and part approach as productivity benefits as we years, role. been our innovation the maintain sure core tend health add our that we to the And industry maintain and to hold lent as scale productivity, capability sequentially industry investments Brian, our we of But as our move want we've as into in the of well through in stewards

Operator

with Our Staphos comes next Securities. from question George BoA

George Staphos

the I just want to margin pick on up discussion.

So of have materials? margin of if in at look ZIP guidance, land it and rough to would you XXX points the that at would in math, the all questions roughly for that's code? wind of most look basis midpoint agree about to things 'XX split? relatively and 'XX. say midpoint -- Or past, said roughly expansion, you it you when lift right earnings, your go of the up margin where some a putting of revenue Greg, the 'XX be not, we And that would will at commentary be to other with the growth, versus we fair versus would on the the in will accrue solutions together look

Gregory Lovins

Thanks, for question. the Yes. George,

it we on the point, latter mean, So the think obviously, in had, improving margins will be a I back combination. half. I in solutions

We in of proven back the materials XXXX. margins also half have in

based to So we would last our on long-term businesses, them where both I in expect we of put with I slide in 'XX overall think the At margins year. an on targets. versus were run the level, improving it rates of be those both

Our XX% margins. expectation for be plus XXXX

would XXXX. do XX% So the closer your if on in EBITDA there you be expectations, to math

thinking we total of how as segments we're how plan company, margins that's the and X thought So across about course. well about the as increasing

Operator

question from next Our Mike Roxland Truist Securities. with comes

Michael Roxland

good very Congrats a year. on to tough a finish

Canal. question, in Panama you remarks disruptions of a Just terms mentioned the in your about

pocket Suez. maybe a selling that whether be serve as the have think tailwind costs, for obviously you and issues retailers restock the that shipping and product drive that buy whether the could shipping, You particularly or Do if a a out it from actual volume be actually find because some to be alternative transportation money these -- ships? a of that to higher of of could you to ultimately think Or of get actually concerned issues? to get ways that do try lot going they're so

Deon Stander

their in to initially, having they're that to Europe about they're retailers because how their at Mike. hearing we are we're brands moment, That's round goods largely markets -- and of of are the the get normalizing second to but quicker, we're degree quarter of hearing to cape half this trying is not in and the in orders is the route some the home what what good seen that rethinking first we've first quarter. -- maybe anticipating the of hope of the pull first forward half What quarter,

So being aggregate, the on same.

I think there's taking And we're it water a as brands Panama challenge also to retailers ensure appropriate slightly broader have the the over given of level volume But there, when action that. that a Canal balance they comes seeing there. we equally and don't consequence additional to supply. continuity of anticipate

Operator

from comes question with next Zekauskas Securities. Our JPMorgan Jefferies

Jeffrey Zekauskas

have talk labels couple is And we labels questions worry intelligent can a there about which up in XX% do And In then of of continue slides, to was intelligent from And plus as will first XX% labels. fully group, you last you is grow being level? logistics were XXX%. that the a in cliff you housekeeping and your we category, Or around which is XX%, XXX. maybe it business food XX new about as standpoint, Is loaded? grow quarter from the intelligent a that the think -- solutions and that year, of to 'XX?

the levels really you numbers? business, $XXX sometimes year, or in earlier you are in are? million your clarify what there's rounding something Because that. Can you being maybe but those or currency Intelligent So slides, up an some talk Solutions right the about were like the

Deon Stander

then. the period that particular said each holiday I'll to was the that your X we've that about Greg industry's for rolling we it out to their as let through the well. third first Jeff. On the up as said or XXX%, program been well, I'll question. Sure, year, during deal X, with the in and address and quarter we XXXX. effective relates largest first ramp culminating the the question getting single customer I being as talked the fourth that ready relates program And Recall, logistics in this that thereabouts, there Thanks I as for history. single-wave think quarter Jeff, busiest

Now as to into are X of we XXXX, going player look be forward things a this.

when instance and we've start particular we is, to logistics. this that accuracy, segment. of X and shipping saw is apparel, be see then So technology we've to tends that leader drives going across this in greater the realize as to in new a This segment said, in the seen and adopt consistently benefits something again what adoption we we're have it

providers so already can best underway other world supply logistics as we're understand in aims in the enable around chain we support to well. with And discussion efficiency and them how their

as those come will of and Some through go as in either to from XXXX then pilot well. bear, trial XXXX onwards we

specifically going thing the year. peak you're the second that to of have second is think you I and the see logistics half in because this typically

quarter we'll first we be see the some contribute perspective programs anticipating a The that's just overall first also continued lower the And other we've as launched in half will volume tends quarter first terms and growth from overall. for largely the quarter. our apparel of logistics And segments to in first what we're slightly. as that of well then some see for new will well

large year first relative annualization of because the will last first The up the simply certainly Jeff. some of those of the half of programs, year be of half to

Gregory Lovins

Yes, Jeff, the That include revenue prepared year the million. in on in remarks, the your revenue does Deon indicated Intelligent I second was for think in Materials segment. some around question, that's Labels XXXX $XXX

the Solutions our bit look it's materials. at some lower if of through sold that that through channel you converted segment, is because just a So than

and said, million roughly translation as around double that XXXX, course, is $XXX There that that the we enterprise. said low we digits as we had currency we number. year, of in as kind talked for last across some $XXX impacts a grew, year well, we there, of Now business. the number about million is But overall,

Operator

Our comes with from next Spector UBS Securities. question Josh

Joshua Spector

and ask your half and today. are just retail on your confidence a wanted second couple I to where in the quickly really volumes

wrong. kind getting versus further level. fourth up, single about of are from in data say we that's you're my get I messed stacks down multiyear I digit as my guess, that low So further imagine and would the I quarter guess XXXX.

would in And the say and guess, talk your half you you possible your guidance where normalization, improvement then versus as what's today? visibility And magnitude when about into you the I see assumptions? So a worked -- you has what's second XXXX? of are to that the

Deon Stander

brand level, escalation more some So and that Josh, well. of recently. half their geopolitical -- by, We're normalization compounded they're of that in more apparel factoring we'll full think, level. retail at high see as some more the that let sourcing the uncertainty near-term the requirements year, And seeing the start we've of just me at I second largely into and macro seen because the we're anticipating

or for I North relative think around we're part part at retail continue an both see roughly forecast Europe and the point, we've of and information of through level mid-XXXX, also they're trend as similar is comes look point. XXXX. declines in in I of that in on retail X, that don't QX, to does in level, we'll at for to I to and turn that down confidence doubt you flat now XXXX normalized in America normalizing see absolute at we And volume at make we that patterns XXXX. starting and we point why volumes our continued apparel see significant from at well. around confidence when that anticipate think we is buy quarters the be That Slide Europe highlighted import if than America had that Final North volumes be to late I'd more retail X some

Gregory Lovins

Yes, Josh.

America that a you quarters to down the can XX% of in think look I little teens at as down different imports North low you XXs. from the Europe is were cost XX%. apparel worse, in slide, see low on

a on look basis, from perspective net mid-plus in XXXX. the somewhere that in teens So it's

kind still in them talked Deon of start the a first back to about. expect half that as and see We half, to in the improve trend

Operator

from Our next question with comes Matt Raymond James. Roberts

Matthew Roberts

might is in rate uncertain soon labels, that and as on many quantify of intelligent XQ? I rebound? apparel bit you half, rate as dig EPS are does to a try to growth in that is how regard little $XX just hit to you more. in the Or in still expected second normalize run imply that If the points can dependent apparel volumes could the XX% the

Deon Stander

I rate point that last think we were some XXXX, in being remains achieved clear have Matt, $XX that time confidence. So in still the confidence run the at and the we

it's In fact, our guidance. included in

the we related uncertainty the impact and timing. I see continue variable is only to that to on think the

rate will likely where second we of in half $XX this see at the so year. run a the And point,

that And of that existing relates out the to your we account sure volume that growth IL on and it well. rebounding as for our we X XXXX. new we roll XX% programs growth of have As to making to it's company look based apparel continue points going accelerate the basically as we think is sort about programs, for

Gregory Lovins

to Yes. Deon's I would add comments there. just

on rebound, food which, again, the of as XX%, quarter well. some the think I that or retail the so a second the half. general of of other that and from and that probably when of then Deon we've logistics the apparel And from of then shy that think touched we've baked I already programs into half we look from growth at it's about or just half talked and that rest

Operator

next question Loop comes Kapsch from Markets. with Capital Our Christopher

Christopher Kapsch

formal you could in of on it sort of, costs there In some just comment I'm dynamic you So just your segment coming comment? you evolved material of And the the that was price X on of context about we've materials is the of could more the in just comment if you Maybe through sort this in? mentioned protecting some just raw about to a -- broader competitive in period? wondering are as Or remarks, the some there deflation giving destocking context elaborate that. questions back guess, on referring margin. margin I focused

Gregory Lovins

Yes.

the the of I margins given that saw amount about destock. challenges we on think with volume protecting comment, the really is Chris,

overall was offset offset actions actions all that's rather really of help taking the things, volume the we about the that productivity through belt tightening, the be on some is than temporary the So taking more inflation that, price what line. were it type dynamics. the team to actions, referring to impact whether those really of that's to bottom

Deon Stander

service not Asia we let as in our grown our and that and America a we've excellence continue and for Pacific slightly on perspective, in down share well really add only as me maintained in both from Chris, grown business, share but in Europe business competitive And know we we've to XXXX our just focus dynamic North label delivering customers.

programs switching as gaining as a held out share our such of as the apparel share and of of also well. apparel and as fact, And new [indiscernible] volume IL consequence well, in some we've you're rolled external are segments our in in has we've is Our segments overall, if some high-growth as grown well. large share

Operator

with from Markets. follow-up a McNulty We have BMO Capital John

John McNulty

margin ensure say, does of solutions say, on revenue an the platform with if to a do you had flawlessly it of it, to, XQ put big want you kind case, in particular, logistics on the that business back relative full I not Did is look kind in. of you when feet lot At it as at same to however that, all-time look revenue, to have your kind there. So a ramped the was street margins, off much the uplift how high. Margin XXXX? extra coming is dialed or necessarily we that to time, that from went the nice XQ player of And kind of to get as the the at margins levels? and

Deon Stander

continue X as I So consistently have John, One there to, we forward adopt. think elements we that to ensuring are said, invest we this. is industries

overall. see when part you volume to impact overall, we on had margins so lower And of the tended

and those XXXX see actions as piece of in well. pick we've to will the temporary see solutions volume cost mix our have high-value second and we our on additional expand the are way will teams taken, we base think that had -- up operating return during of is segments business I of the that as from the this some continue during margins our the that volumes XXXX. benefit and the But we

Operator

a George have from BofA Securities. follow-up We with Staphos

George Staphos

reading questions you had within expectation the Vestcom in Deon, talk for this little to So already the what you but is the a can business degree, 'XX some bit to about did forward? looks in Solutions, 'XX covered terms we're going of going down IL the up it and versus in adoption apparel correctly. what outlook X and for 'XX, versus and us and on IL solutions. are understand relatedly, little Help you've apparel have would for on a looking KPIs if Slide bit, how is relative at my still comfortable there why 'XX it you're and then usage

Deon Stander

really your overall. expecting and to the and, Avery Thanks, making continued be that. we're In demonstrating we first as engine question ahead. Dennison [indiscernible] pace related progress are benefit national margins 'XX, grew drive And the the Vestcom, retailer part at our 'XX, that continue our that with expected process large instances, family that some we the George. data in States, very United a we and business is the delivered pleased in growth little as in in with of On to of we composition the of a shelf-edge of productivity benefits the and able piloting actually labeling to are slightly bit technology

the IL terms half. and recover right the slowly in that apparel accelerate recovers then will IL, industry the slide, what half that you're overall, on of second first is In anticipating we're in actually as

that the the technology. that accuracy not chain leverage the the from a on It's also And and seeing customers to benefit or seeing not technology you rolling also is a recovery George. volumes, just way. apparel we've that loss 'XX. from supply single it the X brand, we're both has previously, an apparel and of we're consumers is benefit IL also be continuing in of in I there. brands extension those. inventory example, impact at an well that around supply just for I'll the been of volumes shed historically to efficiency a they're see in inventory second so inventory They anecdote European third couple some move then case but of beyond brand, the X X George, the likely in from as roll moment. We're chain apparel. And just seeing this. extending the in in seeing. example continuing where into the newer in base talked pieces, other 'XX, will that that is case large efficiency, better we in of accuracy Inditex light we're up, performance half 'XX give base on in helping out the that little prevention more One connect things verification, the got And in specifically to back a are started apparel in base that, programs that's or looking some flight We're of just forward. We're accuracy and factored bit the case Mike of an as which is

an those, in with digital professional worked or our sports better the world, of NHF their franchises XXers, it's We with to consumers or had allowed that under provided, better and consumers and heroes number taken triggers the drive can garments franchise Montana have together on website for are we personalized UHF be we external the did a example example, they consumers as we and the and connect and know, their X otherwise embellishment in whether that they recently to as Joe that with where fan franchise measures so them way. you had exercise a example, embed platform. equity engage engagement more working linking [indiscernible] Imbelix with an an patch them where around to actual we And of sensors, a from

efficiency we all connection. of for through ranging consumer to there addressing retail, waste example, and problems think So finally grocery sustainability circularity these on out that in, and are from through then

platform over flight to to we're think us pieces to confidence enable ability the enable in this years great our come. have I particular will us that substantially having multiple grow to in

Operator

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

Deon Stander

call Thank you, all joining today. Frank, you for and the thank

our confident host provide to we on growth GDP+ to update. planning are New York strategy very all remains also I'm you we're a term. dynamic, City much, over the prospects Thank to XX see environment quartile an Day in everyone. ability you September I that and there. hope top to Investor the long While our position deliver announce to in and pleased and returns

Operator

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

Avery Dennison (AVY) 31 Jan 242023 Q4 Earnings call transcript