Avery Dennison Corporation

Ladies and gentlemen, thank you for standing by. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. And welcome to the Avery Dennison's earnings conference call for the first quarter ended on April 1st, 2023. This call is being recorded and will be available for replay from 5 p.m. Eastern Time today through midnight Eastern Time April 29th. To access the replay, please dial 800-633-8284 or 1-402-977-9140 for international callers. This conference ID number is 22020691. I'd now like to turn the call over to John Ebley, Every Denison's Head of Investor Relations. Please go ahead.

Thank you, Kathy. 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 A4 to A8 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 Mitch Butier, Chairman and Chief Executive Officer, Deon Stoddard, President and Chief Operating Officer, and Greg Lovins, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Mitch.

Thanks, John, and good day, everyone. We continue to make progress on our long-term strategies and objectives and continue to expect to achieve a run rate greater than $10 of EPS in the second half of this year. That said, the year started off even more challenging than we anticipated a few months ago. In the first quarter, we delivered EPS in line with our expectations as our productivity measures offset a shortfall in revenue. This lower revenue was due to higher than anticipated inventory destocking, a trend that has continued into the second quarter, causing us to reduce our outlook for Q2 and thus the full year. Inventory levels downstream from our materials business were greater than we, and our customers previously anticipated and are being unwound at a rapid pace. While the magnitude of inventory destocking is causing near-term challenges, the underlying fundamentals of our business remain strong. We are exposed to diverse and growing end markets, principally staples. We are market leaders in our primary businesses with clear competitive advantages in terms of scale and innovation. And we have a clear set of strategies that have been the keys to our success over the years. An important element of these strategies, as you know, is to drive outsized growth in higher value categories. And the best example of that is intelligent labels, which we've built leveraging both our materials and solutions businesses, as well as our leadership in RFID technology. This strategy has not only increased the growth and margin potential of our company, but of the markets we serve. With the underlying strengths of our markets, our businesses, our strategies, and, of course, our team, we remain confident in our ability to deliver long-term superior value for all of our stakeholders and are on track to achieve our 2025 and 2030 objectives. As for 2023, as I said earlier, we are off to a challenging start. We have implemented a number of countermeasures to reduce the impact of the soft volume environment in the first half and expect to deliver an EPS run rate of greater than $10 in the second half. I'll now turn it over to Dion, then Greg, for more color on the results and our outlook.