AVY
#I think retailers ---+ this is always a challenge for them.
I hate to say this because most of you guys are in the Northeast.
Kind of hoping for a polar vortex so we get a lot of sales of warm clothes for cold winter but it's the same thing every year.
If they can't move the goods, they'll discount them.
We hope they don't have to.
I think retailers are generally pretty disciplined about inventories and now they will focus on them and make sure they have accurate inventory so they can meet customer needs whether they're ordering online or online picking up at the store and all the other ways consumers can buy products.
From what we're seeing, North America, we expect to see some modest growth coming out of that is what we'd expect the market to do.
Europe we'd expect to be a little more challenged.
If you look at the import data you can see imports into the US tracking above what we're seeing in Europe which makes sense some of the currency headwinds they have as far as apparel unit cost and so forth.
Great question.
We built up a pipeline of possibilities in I would say graphics, in tapes, even in the medical converting area.
A lot of the companies are private so takes time and we're working on it and again, we're disciplined about how we do it so we feel good about the pipeline but these things take time.
As I said before, we're going to be disciplined and patient.
That's our strategy in M&A.
I'm a native Clevelander so I remember those days.
(Laughter)
So if you look at graphics, the primary end market, think of signage.
These are very large pressure-sensitive labels if you will that would go on the side of trucks, that would go on the sides of buildings and so forth or as you've seen in our materials, car wraps, which is the fastest growing area for cast films within the graphic space.
So a lot of that is share gain with the exception of some of the car wraps.
That whole market is actually growing from various small base.
Within the specialty label area, we've traditionally had relatively high share in speciality labels and that's more application specific so it's going out and finding new opportunities to drive new application, adoption of pressure-sensitive materials.
Absolutely.
Thank you.
Okay, first of all, just thanks again for listening.
I want to thank our team at Avery Dennison for another solid quarter.
We're pleased with our trajectory, especially given some of the headwinds that we face this year, especially around currency.
And armed with the knowledge that we can do even better.
Our overall strategy is working.
PSM is delivering at or above the 2018 levels.
The graphics business is now profitable.
And our strategy change in RBIS will get us back on track to hit those 2018 targets.
The business continues to deliver strong free cash flow year-to-date and as I mentioned we are building a pipeline of small bolt on acquisitions in the medical, tapes, and graphics materials business.
And we're going to continue to be disciplined and patient about our capital allocation.
Thank you.
