Avery Dennison Corporation (NYSE:AVY) Q3 2023 Earnings Conference Call October 25, 2023 1:00 PM ET

Company Participants

John Eble - VP of Finance and IR

Deon Stander - President and CEO

Greg Lovins - SVP and CFO

Conference Call Participants

George Staphos - Bank of America

John McNulty - BMO Capital Markets

Ghansham Panjabi - Robert W. Baird & Co.

Jeffrey Zekauskas - JPMorgan

Joshua Spector - UBS

Anthony Pettinari - Citigroup

Michael Roxland - Truist Securities

Christopher Kapsch - Loop Capital Markets

Matthew Roberts - Raymond James

Operator

Ladies and gentlemen, thank you for standing by. During the presentation, all participants will be in a listen-only mode. [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 PM 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. The conference ID number is 22020693.

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

John Eble

Thank you, Carlos. Please note that throughout today's discussion, we'll be making references to non-GAAP financial measures. The non-GAAP measures that we use are defined, qualified, and reconciled from GAAP on schedules A-4 to A-9 of the financial statements accompanying today's earnings release.

We remind you that we'll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the Safe Harbor statement included in today's earnings release.

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

I'll now turn the call over to Deon.

Deon Stander

Thanks, John, and hello, everyone. In the third quarter, we delivered earnings in line with our expectations, grew volume and margins in both segments sequentially, generating strong free cash flow and delivered significant Intelligent Labels growth in new categories such as logistics and food. While earnings were in line with our expectations for the quarter, volume was lower than anticipated on broader macro uncertainty and slow consumption, which the team was able to offset through productivity and cost reduction actions.

As I mentioned last quarter, we have activated countermeasures to minimize the impact on our bottom line. We have implemented temporary cost reduction actions, ramped up our restructuring initiatives and pared back capital investments in our base businesses, while protecting investments in our high-growth platforms, particularly Intelligent Labels.