Avery Dennison (AVY) risk factors, FY2024 10-K

Risk Related to Our International Operations

1. 01The demand for our products is impacted by the effects of, and changes in, worldwide economic, social, geopolitical and market conditions, which have had in the past and could in the future have a material adverse effect on our business
2. 02Foreign currency exchange rates, and fluctuations in those rates, affect our business
3. 03Our strategy includes continuing to grow in emerging markets, which creates greater exposure to unstable geopolitical conditions, civil unrest, economic volatility, and other risks applicable to operating in these regions
4. 04Our operations and activities outside of the U.S. subject us to risks different from and potentially greater than those associated with our domestic operations

Risks Related to Our Business

1. 05As a manufacturer, our sales and profitability depend upon the availability and cost of raw materials and energy, which may be subject to significant price fluctuations, and our ability to control or offset increases in raw material and labor costs. Raw material and freight cost increases have impacted our business
2. 06confidence and market share if we are unable to continue reducing our GHG emissions at levels satisfactory to our stakeholders
3. 07We have recently acquired companies and are likely to acquire other companies. Acquisitions come with significant risks and uncertainties, including those related to integration, technology and employees
4. 08A significant consolidation of our customer base could negatively impact our business
5. 09Because some of our products are sold by third parties, our business depends in part on the financial condition of these parties and their customers
6. 10Our reputation, sales, and earnings could be materially adversely affected if the quality of our products and services does not meet customer expectations. In addition, product liability claims or regulatory actions could materially adversely affect our business and reputation
7. 11Changes in our business strategies and the restructuring of our operations affect our costs and the profitability of our businesses. In addition, our profitability may be materially adversely affected if we generate less productivity improvement from our restructuring and other cost reduction actions than anticipated
8. 12Our ability to develop and successfully market new products and applications impacts our competitive position
9. 13Our infrastructure needs impact our business and expenditures
10. 14Difficulty in the collection of receivables as a result of economic conditions or other market factors could have a material adverse effect on our business
11. 15There is a rapidly evolving awareness and focus from certain stakeholders, including our investors, customers and employees, with respect to our company’s sustainability and governance practices, which could affect our business

Risks Related to Information Technology

1. 16Significant disruption to the information technology infrastructure that stores our information and runs our operations could materially adversely affect our business
2. 17Cybersecurity or other security breaches could compromise our information and expose us to liability, which could have a material adverse effect on our business and reputation

Risks Related to Income Taxes

1. 18Changes in our tax rates affect our business
2. 19Legislation implementing changes in taxation of business activities, adoption of other corporate tax policies, or other changes in tax legislation impact our business
3. 20The amount of various taxes we pay is subject to ongoing compliance requirements and audits by federal, state and foreign tax authorities
4. 21We have deferred tax assets that we may not be able to realize under certain circumstances

Risks Related to Human Capital

1. 22We have various non-U.S. collective labor arrangements, which make us subject to potential work stoppages, as well as union and works council campaigns and other labor disputes, any of which could adversely impact our business

Risks Related to Our Indebtedness

1. 23If our indebtedness increases significantly or our credit ratings are downgraded, we may have difficulty obtaining acceptable short- and long-term financing
2. 24An increase in interest rates adversely affects our business
3. 25Our current and future debt covenants may limit our flexibility

Risk Related to Ownership of Our Stock

1. 26Our stock price is subject to significant variability
2. 27We cannot guarantee that we will continue to repurchase shares of our common stock or pay dividends on our common stock or that repurchases will enhance long-term stockholder value. Changes in our levels of stock repurchases or dividends could affect our stock price and increase its variability

Risks Related to Legal and Regulatory Matters

1. 28Infringing intellectual property rights of third parties or inadequately acquiring or protecting our intellectual property could harm our ability to compete or grow
2. 29Unfavorable developments in legal proceedings, investigations and other legal and regulatory matters, could impact us in a materially adverse manner
3. 30We are required to comply with anti-corruption and other compliance laws and regulations of the U.S. government and various international jurisdictions, and our failure to comply with these laws and regulations could have a material adverse effect on our business
4. 31We are required to comply with environmental, health, and safety laws at our operations around the world. The costs of complying with these laws is significant and increasing
5. 32We are subject to export and import control laws and regulations in the jurisdictions in which we do business that could subject us to liability or impair our ability to compete in these markets

Risks Related to Other Financial Matters

1. 33Our pension assets and liabilities are significant and subject to market, interest and credit risk that may reduce their asset values or increase their liability values, either of which could increase our net pension liability
2. 34The actuarial assumptions used for valuation purposes affect our earnings and cash flows. Changes in accounting standards and government regulations could also affect our pension and postretirement plan expense and funding requirements
3. 35An impairment in the carrying value of goodwill could negatively impact our results of operations and net worth