AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 05/11/2026
Moat—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Pricing power—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Predictability93
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 5.63
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.89
- observedAnnualPeriods
- 5.00
Financial strength41
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 39.43
- netDebtEbitGrade
- 33.43
- interestCoverageGrade
- 62.11
- currentRatioGrade
- 30.15
- Debt / FCF (x)
- 5.24
- Net debt / operating income (x)
- 3.33
- Current ratio (x)
- 1.13
Capital allocation94
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 18.77
- 3-year average dilution (%)
- -1.45
- 3-year average SBC / revenue (%)
- 0.30
- cashConversionGrade
- 100.00
Management—
Awaiting a sourced assessment under the current scoring policy and financial basis.
Evidence
As of December 31, 2025, we operated over 200 manufacturing and distribution facilities and had locations in more than 50 countries.
2025 Form 10-K, filed 2026-02-25; Business Overview; manufacturing and distribution footprint at December 31, 2025 · Filed 25/02/2026
As of December 30, 2023, we operated over 200 manufacturing and distribution facilities in more than 50 countries.
2023 Form 10-K, filed 2024-02-21; Business Overview; manufacturing and distribution footprint at December 30, 2023 · Filed 21/02/2024
We believe that entry of competitors into the field of pressure-sensitive adhesives and materials is limited by technical knowledge and capital requirements.
2025 Form 10-K, filed 2026-02-25; Materials Group; management's assessment of technical and capital entry barriers · Filed 25/02/2026
We believe that our technical expertise, size and scale of operations, broad line of quality products, reliable service, product and process innovation, distribution capabilities and brand strength are the primary advantages in maintaining and further developing our competitive position.
2025 Form 10-K, filed 2026-02-25; Materials Group; management's claimed competitive advantages · Filed 25/02/2026
We leverage the group's materials science capabilities and process engineering expertise to develop and manufacture Intelligent Labels at scale and drive their further adoption through our converter channel access.
2024 Form 10-K, filed 2025-02-26; Materials Group; intelligent-label manufacturing and converter-channel capabilities · Filed 26/02/2025
Segment adjusted operating income increased in 2024 compared to 2023 primarily due to higher volume and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, partially offset by higher employee-related costs and the net impact of pricing and raw material input costs.
2025 Form 10-K, filed 2026-02-25; Materials Group adjusted operating income; 2024 versus 2023 · Filed 25/02/2026
Segment Adjusted Operating Income
Segment adjusted operating income decreased in 2025 compared to 2024 primarily due the net impact of pricing and raw material input costs, as well as higher employee-related costs, partially offset by favorable volume/mix and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs.
2025 Form 10-K, filed 2026-02-25; Materials Group adjusted operating income; 2025 versus 2024 · Filed 25/02/2026
Segment Adjusted Operating Income
Segment adjusted operating income increased in the first six months of 2026 compared to the same period last year primarily due to higher volume, favorable foreign currency translation, the net benefit of pricing and raw material costs, including material re-engineering, and benefits from productivity initiatives, including savings from restructuring actions, net of transition costs.
Second-quarter 2026 Form 10-Q, filed 2026-08-04; Materials Group adjusted operating income; first six months of 2026 versus prior year · Filed 04/08/2026
These increases were partially offset by unfavorable mix and higher employee-related costs.
Second-quarter 2026 Form 10-Q, filed 2026-08-04; Materials Group adjusted operating income; offsets to first-half improvement · Filed 04/08/2026
In the first six months of 2026, net sales increased on an organic basis compared to the same period in the prior year primarily due to higher volume, partially offset by unfavorable mix and raw material deflation-related price reductions.
Second-quarter 2026 Form 10-Q, filed 2026-08-04; Materials Group organic sales; first six months of 2026 versus prior year · Filed 04/08/2026
●Sales were up 11.5% ex. currency.
●Sales up 9.7% on an organic basis
○Volume/mix growth of high single digits and price up low single digits
Second-quarter 2026 results release, filed 2026-07-30; Materials Group sales; separate volume/mix and price changes · Filed 30/07/2026
8July 30, 2026 Preliminary & unaudited, Q2 2026 financial review and analysis Classification: Avery Dennison - Secret Enterprise-wide Intelligent Labels Apparel General Retail $0.9B 2025 Sales by Category Food & Logistics All Other Overall Results: ● Q2 sales up low single digits on organic basis; in line with our expectations ○ Apparel and general retail up approximately 10% on apparel program expansions and recovery in general retail ○ Food and logistics down double digits on soft logistics customer demand and lapping outsized share gains in 2025 Key End Segment Insights for 2026: ● Apparel and general retail: Expect growth in 2026 driven by apparel new program expansions and general retail recovery ● Food: Anticipate acceleration in Food category; assuming largest U.S.
Second-quarter 2026 financial review, filed 2026-07-30; Enterprise-wide Intelligent Labels; actual Q2 category performance and separately identified 2026 expectations · Filed 30/07/2026
17February 4, 2026 Preliminary & unaudited, Q4 & FY 2025 financial review and analysis Trade policy continues to limit visibility Indirect tariff impact on base apparel was similar to Q2; HVC apparel categories still grew ● ~70% of Solutions Group sales are in tariff-impacted apparel and general retail end markets ○ In Q4, overall apparel categories were down LSD on an organic basis, with base apparel down ~7% ○ Base apparel declined LSD for full year 2025 ● Uneven customer order patterns limiting visibility in the near term Apparel Categories Sales vs.
Fourth-quarter and full-year 2025 financial review, filed 2026-02-04; tariff exposure, base apparel declines and customer order patterns · Filed 04/02/2026
14July 30, 2026 Preliminary & unaudited, Q2 2026 financial review and analysis Classification: Avery Dennison - Secret Second quarter 2026 margin comparisons Reported Operating Margin Adjusted Operating Margin Adjusted EBITDA Margin 2Q26 2Q25 2Q26 2Q25 2Q26 2Q25 Materials Group 15.6% 16.1% 15.8% 15.6% 18.0% 17.8% Solutions Group 8.9% 8.9% 11.5% 10.0% 18.6% 17.1% Total Company 12.7% 12.9% 13.6% 12.9% 17.1% 16.6%
Second-quarter 2026 financial review, filed 2026-07-30; Q2 2026 versus Q2 2025 reported and adjusted segment and company margin comparisons · Filed 30/07/2026
Cost Reduction Actions
In the first half of the year, the company realized approximately $34 million in pre-tax savings from restructuring actions and incurred approximately $34 million in pre-tax restructuring charges.
Second-quarter 2026 results release, filed 2026-07-30; first-half realized restructuring savings and charges · Filed 30/07/2026
14April 28, 2026 Preliminary & unaudited, Q1 2026 financial review and analysis Classification: Avery Dennison - Secret First quarter 2026 margin comparisons Reported Operating Margin Adjusted Operating Margin Adjusted EBITDA Margin 1Q26 1Q25 1Q26 1Q25 1Q26 1Q25 Materials Group 14.9% 15.3% 15.4% 15.6% 17.8% 17.7% Solutions Group 7.5% 8.7% 9.0% 10.2% 16.4% 17.2% Total Company 11.8% 11.9% 12.6% 12.8% 16.4% 16.4%
First-quarter 2026 financial review, filed 2026-04-28; Q1 2026 versus Q1 2025 reported and adjusted margin comparisons · Filed 28/04/2026
We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impact on underlying demand for our products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations, and preferences; (ii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions.
Second-quarter 2026 Form 10-Q, filed 2026-08-04; prospective competition, demand, raw-material and cost-pass-through risks · Filed 04/08/2026
1. APPLICABILITY. These Standard Terms and Conditions of Sale (“Sale Terms”) shall apply to all sales and contracts for sale of adhesive products or other chemical products (“Products”) by and between Avery Dennison Corporation, through its Performance Polymers Division – North America (“SELLER”), and any customer (“BUYER”).
Performance Polymers sales terms, retrieved 2026-10-23; North America applicability; retrieval date is not an adoption or publication date · Retrieved 23/10/2026
SELLER has the right to revise any price previously quoted, without notice to BUYER at any time prior to SELLER’s confirmation of an order.
Performance Polymers sales terms, retrieved 2026-10-23; North America right to revise quoted prices before order confirmation · Retrieved 23/10/2026
Prices for the Products ordered shall be those contained in SELLER’s price list in effect on the date of shipment, notwithstanding any earlier quote or order confirmation.
Performance Polymers sales terms, retrieved 2026-10-23; North America shipment-date list pricing · Retrieved 23/10/2026
In the case of a conflict between the Agreement and a written contract signed by both parties, the following order of precedence shall be made: (1) a written contract manually signed by both parties; and (2) the Agreement.
Performance Polymers sales terms, retrieved 2026-10-23; North America precedence of manually signed bilateral contracts · Retrieved 23/10/2026
These terms and conditions apply to all orders, sales, offers, acceptances, sales order acknowledgments, contracts for sale, and shipments of Products, and are incorporated into and made a part of Avery Dennison’s Performance Polymers Europe General Terms and Conditions of Sale.
Performance Polymers sales terms, retrieved 2026-10-23; scope of European sales conditions · Retrieved 23/10/2026
7.3 Seller shall have the right at any time to revise list prices and/or agreed upon prices to take account of inflation and increases in costs, including but not limited to costs of acquisition of any Products or materials, carriage, labor or other overheads, the increase or imposition of any tax, duty and/or other levy and/or any variation in exchange rates.
Performance Polymers sales terms, retrieved 2026-10-23; Europe clause 7.3; price revision for inflation and increased costs · Retrieved 23/10/2026
In the case of a conflict between the Conditions and a written contract signed by both parties, the following order of precedence shall apply: (1) a fully executed contract between the parties such as a Supply Agreement (and/or rebate agreement); and (2) the Conditions.
Performance Polymers sales terms, retrieved 2026-10-23; Europe precedence of fully executed supply or rebate contracts · Retrieved 23/10/2026
currency increased by 0.4%
REPORTED EPS
ADJUSTED EPS
$8.79
REPORTED EPS
Reported EPS of $8.79 increased from $8.73 in 2024
Adjusted EPS increased by 1.1% from $9.43 to $9.53, reflecting outsized sales growth in high-value categories and mitigation of tariff-related impacts and softer consumer volumes
NET CASH PROVIDED BY OPERATING ACTIVITIES
ADJUSTED FREE CASH FLOW
$881.4M
NET CASH PROVIDED BY OPERATING ACTIVITIES
Net cash provided by operating activities of $881.4 million decreased by 6.1% from $938.8 million in 2024
Adjusted free cash flow increased by 1.1% from $699.5 million to $707.1 million; adjusted free cash flow conversion was 103%
NET INCOME
ROTC
$688.0M
NET INCOME
Net income of $688.0 million decreased by 2.4% from $704.9 million in 2024
ROTC was 15.0%
We exited a dynamic and challenging 2025 not just more resilient, but structurally stronger to deliver longer-term value creation.
2026 proxy statement, filed 2026-03-12; actual 2025 EPS, operating cash flow, adjusted free cash flow, net income and ROTC · Filed 12/03/2026
currency increased by 0.4%
Reported EPS increased from $8.73 in 2024; adjusted EPS increased by 1.1% from $9.43 to $9.53, reflecting outsized sales growth in high-value categories, as well as mitigation of tariff-related impacts and softer consumer volumes
We used adjusted free cash flow of $707.1 million to pay $288.4 million in dividends, make $572.3 million in payments for share repurchases, and expend $401.8 million for one acquisition and five venture investments
Net income decreased by 2.4% from $704.9 million in 2024; ROTC was 15.0%
TSR Performance
Our TSR in 2025, while negative, was modestly higher than the TSR of the Dow Jones U.S.
2026 proxy statement, filed 2026-03-12; actual 2025 cash deployment, acquisition and venture spending, and net income · Filed 12/03/2026
Net of dilution from long-term incentive awards, the company’s share count at the end of the second quarter was down 2.1 million compared to the same time last year.
Second-quarter 2026 results release, filed 2026-07-30; year-over-year share-count reduction net of incentive-award dilution · Filed 30/07/2026
Cost Reduction Actions
During 2025, the company realized more than $60 million in pre-tax savings from restructuring actions and incurred approximately $47 million in pre-tax restructuring charges.
Fourth-quarter and full-year 2025 results release, filed 2026-02-04; realized 2025 restructuring savings and charges · Filed 04/02/2026
Avery Dennison Corporation | 2026 Proxy Statement
15
Table of Contents
2025 NEO TARGET TDC MIX AND ELEMENTS
CEO
Average of Other NEOs
Target TDC Mix
89% Performance-based
71% Performance-based
Long-Term Incentive Compensation
Performance Units (PUs)
Corporate NEOs
Business NEO
•
50% of LTI with payout =
0% to 200% of target award
•
Three-year performance period
- Company EVA(1) (50%)
- Company Relative TSR(2) (50%)
•
50% of LTI with payout =
0% to 200% of target award
•
Three-year performance period
- Business EVA(1) (75%)
- Company Relative TSR(2) (25%)
•
Cumulative EVA goals tied to superior TSR objective and long-term financial targets
•
Relative TSR payout capped at 100% if absolute TSR is negative
Market-leveraged Stock Units (MSUs)
•
50% of LTI with payout = 0% to 200% of target award
•
One-, two-, three- and four-year performance periods
- 100% Company Absolute TSR(3)
Annual Incentive Compensation
Corporate NEOs
Business NEO
AIP Award(4)
•
Drives performance to deliver annual company/business financial goals
•
Individual performance modifier based on achievement of strategic objectives (generally capped at 100% for NEOs)
Base Salary
•
Annual fixed-cash compensation generally set around market median
(1)
Economic Value Added (EVA) is a measure of financial performance calculated by deducting the economic cost associated with the use of capital (weighted average cost of capital multiplied by average invested capital) from after-tax operating profit.
2026 proxy statement, filed 2026-03-12; 2025 NEO incentive structure, multiyear performance periods and EVA definition · Filed 12/03/2026
As of year-end 2025, all NEOs had achieved their minimum ownership requirement.
2026 proxy statement, filed 2026-03-12; all NEOs' actual ownership-policy compliance at year-end 2025 · Filed 12/03/2026
securities laws; (ii) for officers, shares or units held in qualified and non-qualified employee benefit plans and 50% of the value of unvested MSUs at the target payout level; (iii) for non-employee directors, deferred stock units (DSUs); and (iv) for officers and non-employee directors, unvested restricted stock units (RSUs).
2026 proxy statement, filed 2026-03-12; ownership-policy measurement includes specified benefit-plan interests and unvested awards · Filed 12/03/2026
Unvested stock options and PUs are not considered in measuring compliance.
2026 proxy statement, filed 2026-03-12; unvested options and performance units excluded from ownership-policy measurement · Filed 12/03/2026
Officers may not transact in company stock until they certify that they will remain in compliance with our stock ownership policy after giving effect to the transaction they plan to effectuate.
2026 proxy statement, filed 2026-03-12; officers' ownership-compliance certification before stock transactions · Filed 12/03/2026
The Company’s stockholders (i) elected Bradley Alford, Mitchell Butier, Ward Dickson, David Flitman, Andres Lopez, Maria Fernanda Mejia, Francesca Reverberi, Patrick Siewert, Deon Stander and William Wagner to the Board for a one-year term; (ii) approved, on an advisory basis, the Company’s executive compensation; (iii) ratified the appointment of PwC as the Company’s independent registered public accounting firm for fiscal year 2026; and (iv) did not approve a stockholder proposal for an independent Board Chairman.
Annual-meeting results, filed 2026-05-01; actual one-year director elections, advisory compensation approval and rejection of independent-chair proposal · Filed 01/05/2026
The Amended and Restated Bylaws make the following changes:
(i)
Include a requirement in the advance notice provisions that a proposing stockholder disclose any material interest in the business to be brought before the meeting of stockholders by such stockholder and the beneficial owner, if any, on whose behalf a proposal is made (see Article II, Section 14);
(ii)
Include a requirement for the Company’s secretary to deliver a form of questionnaire and written representation and agreement to a requesting stockholder of record within ten (10) days of such request (see Article II, Section 16);
(iii)
Remove certain references regarding the nature of Board determinations (see Article II, Section 17);
(iv)
Increase the mandatory retirement age for directors from 72 to 75 years in line with corresponding changes made to the Company’s Corporate Governance Guidelines on February 26, 2026 and current market practices (see Article III, Section 3); and
(v)
Make other non-substantive and clarifying changes (see Article II, Section 14; Article II, Section 17; Article VI, Section 1; Article VII, Section 7; and Article VIII, Section 1).
Bylaw-amendment disclosure, filed 2026-02-26; shareholder proposal procedures and increase in mandatory director retirement age · Filed 26/02/2026
