Avery Dennison Corporation (NYSE:AVY) Q4 2014 Earnings Conference Call - Final Transcript

Feb 02, 2015 • 11:00 am ET

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Avery Dennison Corporation (NYSE:AVY) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Ladies and gentlemen, thank you for standing by and welcome to Avery Dennison's Earnings Conference Call for the Fourth Quarter and Full Year ended January 3rd, 2015. This call is being recorded and will be available for replay from 10:00 AM Pacific Time today through midnight Pacific Time, February 5th. To access the replay, please dial 1800-633-8284 or 402-977-9140 for international callers. The conference ID number is 21734744.

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

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

Executive
Eric Leeds

Thank you. Welcome, everyone. Today, we'll discuss our preliminary unaudited fourth quarter and full year 2014 results. Please note that, unless otherwise indicated, today's discussion will be focused on our continuing operations. The non-GAAP measures that we use are defined, qualified and reconciled with GAAP on schedules A-2 to A-5 of the financial statements accompanying today's earnings release.

(Forward-Looking Cautionary Statements)

On the call today are Dean Scarborough, Chairman and CEO; and Mitch Butier, President, COO and CFO.

I'll now turn the call over to Dean.

Executive
Dean A. Scarborough

Thanks, Eric; and good day, everyone. 2014 represented another year of solid progress toward our strategic and long-term financial goals. We delivered 3% growth in organic sales and 16% growth in adjusted earnings per share, while boosting return on capital by nearly 3 points. We maintained our strong capital discipline, returning over $480 million to investors through dividends and share repurchase. We raised the dividend by 21% in 2014 and repurchased 7.4 million shares.

Free cash flow came in below our original expectations for the year, due largely to the combined effects of currency and actions we took to reduce the volatility associated with year-end changes in working capital levels. Going forward, we expect to see a return to our consistent pattern of delivering solid free cash flow.

We remain highly confident in our strategy and in our ability to achieve the long-term financial goals we communicated last May. We will grow through innovation and differentiated quality and service. Our significant exposure to faster-growing emerging markets, global share gain opportunities in performance tapes and graphics, and our leadership position in RFID will continue to be key catalysts of long-term growth for the company.

We will further expand margins through productivity and leveraging our global scale has reflected in the increase to 2014 and 2015 restructuring investments. We'll continue to optimize our use of capital in terms of both investment strategy and our disciplined approach to shareholder distribution. Any long-term strategy acquire some (technical difficulty) financial objectives, which we set with a view to delivering above average returns for our shareholders. In this regard, 2015 represents an important milestone for us, as the final year of measurement for the full year financial targets we first communicated in 2012.

I'm very pleased to report that we are well on track to meeting those objectives. We included our