1Q22 Reported EPS of $2.39

Adjusted EPS (non-GAAP) of $2.40

1Q22 Net sales increased 14.5% to $2.3 billion

Sales growth ex. currency (non-GAAP) of 18.0%

Organic sales growth (non-GAAP) of 12.7%

Raised FY 2022 EPS guidance

Reported EPS of $9.35 to $9.75 (previously $9.25 to $9.65)

Adjusted EPS of $9.45 to $9.85 (previously $9.35 to $9.75)

Reported sales increased 8% to $1.5 billion. Sales were up 12% ex. currency and 12% on an organic basis.

Label and Packaging Materials sales were up low-double digits on an organic basis, with strong growth in both high value product categories and the base business.

Sales increased by high-single digits organically in the combined Graphics and Reflective Solutions businesses.

On an organic basis, sales were up high teens in North America and Western Europe and low-to-mid single digits in emerging markets.

Reported operating margin decreased 240 basis points to 14.0%. Adjusted EBITDA margin (non-GAAP) decreased 280 basis points to 15.6%, largely driven by the net impact of pricing, freight, and raw material costs. Adjusted EBITDA margin increased 110 basis points sequentially.

The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~210 basis points.

Inflation remains persistent in our materials businesses; we are anticipating roughly 20% inflation in 2022 compared to prior year.

Reported sales increased 41% to $679 million. Sales were up 43% ex. currency and 20% on an organic basis, reflecting strong growth in both the high value product categories and the base business.

Intelligent Labels was up over 20% organically.

Reported operating margin increased 90 basis points to 13.3%. Adjusted EBITDA margin increased 240 basis points to 19.1%, as the benefits from higher organic volume and acquisitions were partially offset by growth investments and higher employee-related costs.

The Vestcom business is achieving our acquisition objectives.

Reported sales decreased 1% to $190 million. Sales were up 1% ex. currency and 1% on an organic basis, reflecting a low-single digit decrease in industrial categories and a low-double digits increase in healthcare categories.

Reported operating margin decreased 410 basis points to 8.2%. Adjusted EBITDA margin decreased 410 basis points to 11.8% driven by lower volume/mix and the net impact of pricing, freight, and raw material costs.

The higher revenue base from price increases alone, with no corresponding incremental EBITDA as they offset inflation, reduced margin by ~120 basis points.

COVID-19

International Operations – worldwide and local economic and market conditions; changes in political conditions, including those related to the Russian invasion of Ukraine; and fluctuations in foreign currency exchange rates and other risks associated with foreign operations, including in emerging markets

Our Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, environmental standards, laws and regulations, and customer preferences; the impact of competitive products and pricing; execution and integration of acquisitions, including our acquisition of Vestcom; selling prices; customer and supplier concentrations or consolidations; financial condition of distributors; outsourced manufacturers; product and service quality; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; successful implementation of new manufacturing technologies and installation of manufacturing equipment; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; and collection of receivables from customers

Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; retention of tax incentives; outcome of tax audits; and the realization of deferred tax assets

Information Technology – disruptions in information technology systems or data security breaches, including cyber-attacks or other intrusions to network security; and successful installation of new or upgraded information technology systems

Human Capital – recruitment and retention of employees; and collective labor arrangements

Our Indebtedness – credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest rates; volatility of financial markets; and compliance with our debt covenants

Ownership of Our Stock – potential significant variability of our stock price and amounts of future dividends and share repurchases

Legal and Regulatory Matters – protection and infringement of intellectual property; impact of legal and regulatory proceedings, including with respect to environmental, anti-corruption, health and safety, and trade compliance

Other Financial Matters – fluctuations in pension costs and goodwill impairment

Net sales, by segment:

Label and Graphic Materials

Retail Branding and Information Solutions

Industrial and Healthcare Materials

Total net sales

     % of Sales    

Operating income (loss) / operating margins before interest, other non-operating expense (income), and taxes, by segment:

Label and Graphic Materials

Retail Branding and Information Solutions

Industrial and Healthcare Materials

Corporate expense (d)

Total operating income / operating margins before interest, other non-operating expense (income), and taxes

Interest expense

Other non-operating expense (income), net (e)

Income before taxes

Provision for (benefit from) income taxes

Equity method investment (losses) gains

Net income

Net income per common share, assuming dilution

Free Cash Flow (f)

Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation and the reclassification of sales between segments, and, where applicable, an extra week in our fiscal year and the calendar shift resulting from the extra week in the prior fiscal year and currency adjustment for transitional reporting of highly inflationary economies. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior period results translated at current period average exchange rates to exclude the effect of currency fluctuations.

Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures.

Excludes impact of restructuring charges and other items.

As reported “Corporate expense” for the first quarter of 2021 includes severance and related costs of $.6.

As reported “Other non-operating expense (income), net” for the first quarter of 2021 includes pension plan settlement loss of $.4.

Free cash flow refers to cash flow provided by operating activities, less payments for property, plant and equipment, software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments. Free cash flow is also adjusted for, where applicable, certain acquisition-related transaction costs.

 Net sales

 Cost of products sold

 Gross profit

 Marketing, general and administrative expense

 Other expense (income), net⁽¹⁾

 Interest expense

 Other non-operating expense (income), net⁽²⁾

 Income before taxes

 Provision for (benefit from) income taxes

 Equity method investment (losses) gains

 Net income

 Per share amounts:

 Net income per common share, assuming dilution

 Weighted average number of common shares outstanding, assuming dilution

“Other expense (income), net” for the first quarter of 2022 includes gain on venture investment of $3.7, partially offset by outcome of legal proceedings of $1, severance and related costs of $.9, and transaction and related costs of $.2.

“Other non-operating expense (income), net” for the first quarter of 2021 includes pension plan settlement loss of $.4.

Current assets:

Cash and cash equivalents

Trade accounts receivable, net

Inventories

Other current assets

Total current assets

Property, plant and equipment, net

Goodwill and other intangibles resulting from business acquisitions, net

Deferred tax assets

Other assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term borrowings and current portion of long-term debt and finance leases

Accounts payable

Other current liabilities

Total current liabilities

Long-term debt and finance leases

Other long-term liabilities

Shareholders’ equity:

Common stock

Capital in excess of par value

Retained earnings

Treasury stock at cost

Accumulated other comprehensive loss

Total shareholders’ equity

Operating Activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

Amortization

Provision for credit losses and sales returns

Stock-based compensation

Pension plan settlement loss

Deferred taxes and other non-cash taxes

Other non-cash expense and loss (income and gain), net

Changes in assets and liabilities and other adjustments

Net cash provided by operating activities

Investing Activities:

Purchases of property, plant and equipment

Purchases of software and other deferred charges

Proceeds from sales of property, plant and equipment

Proceeds from insurance and sales (purchases) of investments, net

Proceeds from sale of product line

Payments for acquisitions, net of cash acquired, and investments in businesses

Net cash used in investing activities

Financing Activities:

Net increase (decrease) in borrowings with maturities of three months or less

Repayments of long-term debt and finance leases

Dividends paid

Share repurchases

Net (tax withholding) proceeds related to stock-based compensation

Net cash used in financing activities

Effect of foreign currency translation on cash balances

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Reconciliation from GAAP to Non-GAAP operating margins:

Net sales

Income before taxes

Income before taxes as a percentage of net sales

Adjustments:

Interest expense

Other non-operating expense (income), net

Operating income before interest expense, other non-operating expense (income), and taxes

Operating margins

Income before taxes

Adjustments:

Restructuring charges:

Severance and related costs

Asset impairment and lease cancellation charges

Outcomes of legal proceedings

Transaction and related costs

Gain on venture investment

Gain on sale of product line

Interest expense

Other non-operating expense (income), net

Adjusted operating income (non-GAAP)

Adjusted operating margins (non-GAAP)

Reconciliation from GAAP to Non-GAAP net income:

As reported net income

Adjustments:

Restructuring charges and other items⁽¹⁾

Pension plan settlement loss

Tax effect on restructuring charges and other items and impact of adjusted tax rate

Adjusted net income (non-GAAP)

Includes pretax restructuring charges, outcomes of legal proceedings, transaction and related costs, gain on venture investment, and gain on sale of product line.

Reconciliation from GAAP to Non-GAAP net income per common share:

As reported net income per common share, assuming dilution

Adjustments per common share, net of tax:

Restructuring charges and other items⁽¹⁾

Tax effect on restructuring charges and other items and impact of adjusted tax rate

Adjusted net income per common share, assuming dilution (non-GAAP)

Weighted average number of common shares outstanding, assuming dilution

Includes pretax restructuring charges, outcomes of legal proceedings, transaction and related costs, gain on venture investment, and gain on sale of product line.

Reconciliation of free cash flow:

Net cash provided by operating activities

Purchases of property, plant and equipment

Purchases of software and other deferred charges

Proceeds from sales of property, plant and equipment

Proceeds from insurance and sales (purchases) of investments, net

Payments for certain acquisition-related transaction costs

Free cash flow (non-GAAP)

Label and Graphic Materials

Retail Branding and Information Solutions

Industrial and Healthcare Materials

Corporate Expense

TOTAL FROM OPERATIONS

Label and Graphic Materials

Operating income and margins, as reported

Adjustments:

Restructuring charges:

Severance and related costs

Asset impairment charges

Outcome of legal proceedings

Transaction and related costs

Gain on venture investment

Gain on sale of product line

Adjusted operating income and margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA and margins (non-GAAP)

Retail Branding and Information Solutions

Operating income and margins, as reported

Adjustments:

Restructuring charges:

Severance and related costs

Asset impairment and lease cancellation charges

Outcome of legal proceedings

Transaction and related costs

Loss on sale of asset

Adjusted operating income and margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA and margins (non-GAAP)

Industrial and Healthcare Materials

Operating income and margins, as reported

Adjustments:

Transaction and related costs

Gain on sale of assets

Adjusted operating income and margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA and margins (non-GAAP)

Net sales

Operating income before interest expense, other non-operating expense (income) and taxes, as reported

Operating margins, as reported

Non-GAAP adjustments:

Restructuring charges:

Severance and related costs

Asset impairment and lease cancellation charges

Other items

Adjusted operating income (non-GAAP)

Adjusted operating margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA margins (non-GAAP)

Net sales

Operating income before interest expense, other non-operating expense (income) and taxes, as reported

Operating margins, as reported

Non-GAAP adjustments:

Restructuring charges:

Severance and related costs

Asset impairment and lease cancellation charges

Other items

Adjusted operating income (non-GAAP)

Adjusted operating margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA margins (non-GAAP)

Net sales

Operating income before interest expense, other non-operating expense (income) and taxes, as reported

Operating margins, as reported

Non-GAAP adjustments:

Restructuring charges:

Severance and related costs

Asset impairment charges

Other items

Adjusted operating income (non-GAAP)

Adjusted operating margins (non-GAAP)

Depreciation and amortization

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA margins (non-GAAP)

Corporate expense, as reported

Non-GAAP adjustments:

Restructuring charges: