00:03 Ladies and gentlemen, thank you for standing by. Welcome to Avery Dennison's Earnings Conference Call for the First Quarter Ended on April 2, 2022. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded and will be available for replay from 3:00 PM Eastern Time today through midnight Eastern Time April 29. To access the replay, please dial 1-800-633-8284 or for international callers please dial 1-402-977-9140. The conference ID number is 21997965. 01:11 I’d now like to turn the conference over to John Eble, Avery Dennison's Head of Investor Relations. Please go ahead, sir.

01:21 Thank you, [Savanah] [ph]. 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 with GAAP on schedules A4 to A9 of the financial statements accompanying today's earnings release. 01:39 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. 01:55 On the call today are Mitch Butier, Chairman and Chief Executive Officer; and Greg Lovins, Senior Vice President and Chief Financial Officer. 02:04 I'll now turn the call over to Mitch.

02:06 Thanks, John and hello everyone. We're off to a strong start to the year with the revenue up 18% and earnings per share of $2.40, above our expectations from a quarter ago driven largely by an acceleration in pricing actions in LGM and strong volume growth in RBIS. 02:26 These strong results come at a time of increasing challenges from the continuing impact of COVID-19 and supply chain constraints to the highest levels of inflation we have seen in decades, and now Russia’s war in Ukraine. All of these challenges reinforce our determination to remain vigilant in protecting the health and welfare of our team and agile to ensure we continue to meet our customers’ needs. 02:51 Our team continues to do a phenomenal job in managing a very dynamic environment and we remain confident in our ability to continue delivering superior value creation for all of our stakeholders across a wide variety of macro environments. 03:06 Now, a quick update on the quarter by business. Label and Graphic Materials posted strong topline growth for the quarter in both Label and Packaging Materials, as well as our Graphic and Reflective Solutions Business, largely driven by higher pricing. 03:21 In Labels, while demand for consumer package goods in e-commerce trends continue to drive strong orders, volumes were down as expected due primarily with tough comps. As you recall, volumes were particularly high last year due to the combined impact of pre-buys and the COVID-related order patterns that we discussed last year. 03:41 For context, volume in the quarter was up approximately 20% versus 2019 or more than 6% annually, well ahead of GDP growth over that period. Tough comps aside, supply chain constraints hampered our ability to meet demand in the quarter, despite the tremendous job our team did to…

09:11 All right. Thanks, and hello everybody. As Mitch said, we delivered a strong start to the year with adjusted earnings per share of $2.40. Consistent with last year and up 5%, excluding currency, roughly a dime above our expectations. Sales were up 18% ex-currency and 13% on an organic basis, driven by higher prices and higher volume and mix. 09:41 Despite the impact of inflation and supply chain disruptions, we delivered a strong adjusted EBITDA margin of 15.3%, up 40 basis points sequentially. Significant revenue growth and strong margins drove EBITDA growth of 6% compared to prior year, up 10%, excluding the impact of currency. 10:05 Turning to cash generation and allocation, we generated $73 million of free cash flow, down compared to last year, but well above our historical Q1 levels. Our balance sheet remains strong with a net debt to adjusted EBITDA ratio at quarter-end of 2.35. 10:25 Our current leverage position gives us ample capacity to continue executing our disciplined capital allocation strategy, including investing in organic growth and acquisitions, while continuing to return cash to shareholders. 10:41 In the quarter, we paid $56 million in dividends and repurchased more than 800,000 shares at an aggregate cost of $152 million. 10:53 Now, turning to the segment results. Label and Graphic Material sales were up 12% on an organic basis driven by higher prices, which more than offset a modest decline in volume and mix due to tough comps as Mitch mentioned. 11:09 Label and Packaging Materials sales were up low-double digits on an organic basis, with strong growth in both the high value product categories and the base business. Graphics and Reflective sales were up high single digits on an organic basis. 11:25 Looking at the segment's organic sales growth in the quarter by region, North…

15:31 Thank you. [Operator Instructions] Our first question is from George Staphos with Bank of America. Please proceed with your question.

16:17 Thanks. Hi, everyone, good morning. Thanks for all the detail. My two questions, the first is around margins broadly. And then the second is just on the impact of the strike in Europe and it's ending what it might mean for you. In terms of margin gentlemen, can you talk a little bit about qualitatively, if you can't quantify, what kind of margin trend you're seeing in Intelligent Labels either year-on-year or sequentially in the quarter? And the same question around emerging markets. I know it's a broad region, but can you talk about the margin trends you're seeing in emerging markets? 17:01 My second question with the strike now having ended, how will it most immediately impact and likely benefit your business and what are the ramifications of that? Thank you and I'll turn it over.

17:16 Sure, George, good morning. So, yes, as far as your first question on Intelligent Labels, we haven't disclosed specifically what our Intelligent Labels margins are. They are consistently above the average for the company and the average for RBIS. And what I’d say is, they have stayed, remained in a relatively tight band over time as we continue to drive growth, but also reinvest a portion of the growing profits into new growth opportunities for which you know are significant. 17:45 As far emerging markets margins, yes, I mean, the margins remain strong within the emerging markets. So, no big update from that perspective. We've talked about in the past that our margins have, kind of across the board have basically converged over the last number of years. So, there's not a lot of variation of what you see on the global level for LGM versus the individual regions. 18:10 And as far as the strike in Europe, yes, that's unfolding real time. It takes a little bit of time to restart paper mills and so forth and the lead time between once the manufacturing starts happening to when we and the rest of the industry will be able to receive product, but our assumptions here are that we will start to see product here in mid to late Q2 and it won't really probably be a full run rate until late Q2.

18:38 Our next question is from Ghansham Panjabi with Robert W. Baird. Please proceed.

18:46 Hey, guys, good day. Thanks for taking my questions. Mitch, you made some comments on China COVID and the impact on April and some of the plans being impacted, opening imminently. It looks though that some of the other regions may be impacted in China also including Beijing of the weekend, etcetera. Just curious as to the impact potentially on you, not just on LGM, but also RBIS on the base business. Maybe you can just kind of give us a sense as to what may be different with the shutdowns in China [just go around] [ph] versus 2020 and how you're navigating that?

19:24 Yeah. So, it's hard to predict what each shutdown if there are future ones or what the exact impact will be. We [commented] [ph] there was about $20 million lower revenue from the materials businesses that we have in the Shanghai area. We have an operation in the general Beijing area, but quite a bit smaller overall, as far as size and impact. 19:46 And RBIS’ footprint in China is in South China. So, in the [pro delta region] [ph], so not in the Beijing area in general. So, that's where we are as far as what the impact is. I think the bigger question, everybody needs to make their assessment, what does it really do to end demand? Does end demand – everybody is obviously been depleting their inventories, bounce back and so forth or not. We feel well-positioned regardless of the situation. 20:17 If it were to get to the South China, obviously our RBIS plans would be impacted at that time, but just as we saw that Vietnam was shut down last year, which is a major hub for us as well, we’re able to leverage the rest of our global manufacturing capability to help offset that and quickly come back from. And there it's a little bit different because mostly end market is really linked to demand in both the U.S. and Europe. 20:44 And so, we tend to see that there's a shortening of supply chains or adjustment of supply chain lead times in order to adjust for that. So, slightly different by business. Overall, I think there's, yes, positive of the fact that the Shanghai area is opening. As far as our direct interactions, we've gotten the green light to open up operations everything else, obviously it takes a little while for the gears of industry to start moving, all the customers need to be able to open up and suppliers. 21:13 And we're hoping that from the high degree of lockdown that there are lessons learned from this more broadly and that with each new lockdown should there be one that will have less impact on industry in general.

21:26 Got it. And then Greg in your comments, when you were giving us the variance for 2022 EPS versus your initial, I think you said $0.20 better operations or some version of that and half of it came from the first quarter? What is that specifically being driven by? And then at what point do you expect to reach price cost parity based on what you see at this point?

21:50 Yeah. So, just to reiterate, I guess overall, we said about $0.20 operational be it for the year from our previous expectations, offset by about $0.10 with some headwinds, things like currency translation and a little bit on tax, for instance. In the first quarter, it’s driven by a couple of things: one, the RBS volume as Mitch mentioned earlier was pretty strong in the quarter, very strong on Intelligent Labels, good growth on external embellishments. And we continue to see strong apparel imports in the U.S. and that's continuing to see strong volumes in our overall apparel business even outside of IL. 22:24 At the same time, as we talked about, we've been accelerating the pace of pricing to manage the increasing pace of inflation as well. And we closed a little bit more of that gap in the quarter than we had really expected at the beginning of the year. So, overall, we feel good with the pace of that. I think we still had a gap. I mentioned we had about a half point gap in LGM margins year-over-year, due to price inflation. 22:46 We do see sequential inflation Q1 to Q2 of high single digits and we're winning new pricing actions there. Our guidance assumes inflation in the back half is relatively stable. So, if that happens, we'll look as we enter the back half of the year to hopefully close that gap between price and inflation.

23:08 Our next question comes from Anthony Pettinari with Citigroup. Please proceed with your question.

23:16 Good morning. The revision to the full-year organic growth guidance, is that entirely driven by price presumably passing along higher costs or is there any change in the volume outlook either positively or negative or mix or anything else that we should be aware of?

23:35 Yeah, I think that's largely priced. So, as I talked about on inflation, we now expect full-year inflation of about 20%. Last quarter, I think I said low to mid-teens, so that's a pretty healthy increase on the pace of inflation, and we're increasing prices accordingly to mitigate that. So, most of that increase is really around the incremental price to deal with the incremental pace of inflation that we're seeing. 23:58 Volumes continue to be strong in RBS as we mentioned. And you know calling the back half is difficult right now with the number of things moving around. A lot of moving parts, of course. So, we don't have visibility on the inflation pace, much past in the next couple quarters and we'll look to manage as we move through the year.

24:19 Okay. And then 1Q benefited from 9 million in restructuring savings, in terms of maybe seeing a similar level in the coming quarters, is there anything you can say about, sort of restructuring as maybe a potential earnings contributor this year? Have you pulled forward some projects given inflation headwinds there, which was always, sort of in the plan? Any [OpEx] [ph] you can get there?

24:46 Yes. So, we talked about over the last couple of years, we'd accelerated a number of projects, particularly in 2020. We had a number of projects that we had on the horizon. We accelerated and pulled into the year. We're still seeing some benefits from those and some initiatives we executed last year that are helping here in the first half. So, a lot of that is carryover of some of those projects that we've been executing over the last year or so.

25:09 Our next question comes from John McNulty with BMO. Please proceed with your question.

25:15 Yeah. Thanks for taking my question. So, the Intelligent Label Business looks like it did a lot better than I think many were expecting. I guess at the same time like we've heard there are some supply chain issues even there and component issues, I guess, was there anything that actually held back any of the growth in that segment for you in the quarter that we should be thinking about where – and also, how should we be thinking about when those kind of issues might be alleviated?

25:45 Yes. So, we grew more than 20% within the quarter and that was broad based. And yes, as I said, apparel was most of the dollar growth, but percentage wise, the food and logistics categories and now home goods are from a percentage wise off a very small base growing even faster. So, continue to build momentum. What we did say, and I think you might be referring to John, is, given where the supply chain constraints specifically around microchips that would be challenging to go above the long-term growth range that we have a 15% to 20% this year, and we do see that there should be some easing and change a little bit depending what you're talking about as we go into 2023. 26:29 And an important part of this is, we've been able to leverage. We're a bit unique in being able to drive this level of growth and certain for the new market development, just leveraging our scale and our partnerships that we have up the supply chain as the chips of manufacturers and so forth work through this challenging time they have on constrained supply, but we're all aligned on what the opportunity is around RFID and Intelligent Labels more broadly.

26:57 Got it. No, that's helpful color. And then I guess, second question is just, when I think about your new guidance or your updated guidance, the midpoint of the range essentially is just, it looks like it's taking 1Q and just kind of straight lining it across and yet it does seem like on the puts and takes with the [finish strike] [ph] kind of behind us at this point, evidence that you're getting all the pricing that you need, it seems like you've probably got more tailwinds than headwinds at this point. So, I guess, is that a fair characterization or are there other things we should be thinking about on the negative side to kind of give you that more balanced approach to how you're thinking about the year?

27:41 Yes. So, I think there's a lot of moving parts here between, as you said, the strike of our paper supplier starts to get better later here in the second quarter as Mitch talked about. It doesn't have a huge impact on Q2 given that that just ended pretty much here at the end of April. So that will start to get better as we get to the middle of the year. But we talked about the same time, we got a little bit of a China headwind in the month of April at least from there that we didn't have in the first quarter. And then we exited or see shipping to the Russia market, which we had shipped for much of Q1 at least. So, there's a number of impacts there when you look from where we're in Q1 to where it be the rest of the year. 28:20 And just difficult to call what the environment will be in the back half from an inflationary perspective, as well as from a continuing macro perspective. Our next question comes from Jeffrey Zekauskas with J.P. Morgan. Please proceed.

28:40 Thanks very much. Your operating income in Label and Graphic Materials was down 20 million year-over-year. Roughly was half of that from volume and half of that from [price cut] [ph]?

28:57 Well, half of that was actually from currency translation year-over-year. The rest of it was a bit of a gap as I talked about between price and inflation still, as well as some increasing just employee cost, wage inflation year-over-year, etcetera. So, it's really about half of it is currency and the other half, a large part of the other half to remain on gap on price inflation.

29:18 Okay. And do you expect your volumes to decrease in LGM year-on-year for the next two quarters and then to begin to grow? Is that your [best case] [ph]?

29:31 We have a variety of different scenarios we would lay out, so we don't pinpoint a specific target. But as we said, the comps in Q1 Jeff were the toughest and the comps get easier as we go throughout the year. So, that's I guess the biggest thing I'd highlight. So, we don't have – we don't give quarterly guidance or in general or by business, that Q1 is the toughest comp within the materials business overall.

29:54 Is your price raw material spread getting better sequentially or you can't tell?

30:00 Sequentially, it's gotten better. We've accelerated. I think one of the things when we commented on performance in Q1 being better than we expected, so we had a number of initiatives just given the shared duration, magnitude, and consistency of the inflation we've been experiencing, we been fine tuning our pricing strategies and our execution capabilities and we're targeting specifically to reduce that lead time, and we were successful in doing that. 30:28 We're going to need to continue doing that given the incremental inflation, which is going from the low-to-mid-teens as Greg said for the full-year to roughly 20% for the full-year. So, it was better than expected is the short answer Jeff.

30:44 Our next question comes from Josh Spector with UBS. Please proceed.

30:51 Yeah, hi, thanks for taking my question. So, just again I guess on the inflation for the high single digit Q-on-Q, wondering if you could maybe breakout how much of that would you say is direct materials so the cost of material itself going up versus, is there some element of that from you operating differently. So, using film instead of paper or sourcing from a suboptimal location that is creating an additional cost burden, but perhaps goes away when supply normalizes, is there a way to differentiate between those two?

31:25 Well, I mean what we're talking about there is really the direct inflation whether that being raw materials, freight utilities, all those areas really. So, it's really about the direct inflation. The cost of substitute materials isn't as significant, but that wouldn't be included in that bucket as well at least from a Q1 to Q2 perspective.

31:43 And the way we tend to look at that is that's a different product, if you're substituting having a [film liner] [ph] versus a paper liner, it's a different product at a different price point. So…

31:54 Okay. I guess I mean, is there a way to think about that then in terms of the contact for first quarter, how much of that substitution maybe impact the profitability outside of the price cost dynamic?

32:06 We don't think it had a significant impact on profitability. This was an area where – and this is where demand is strong and customers and their customers need the product. And so, we were able to leverage our innovation and scale capabilities to be able to quickly substitute. 32:20 We've got disproportionately more experience both on the film and paper side of the industry so to be able to do mix and match of different liners, different [phased materials] [ph], it was an area of particular strength for us and that we were able to leverage those capabilities to be able to deliver and they obviously came at a different price point. So, once the supply chain normalizes, yeah, I think there will be some reversion back to the other product categories that the customers ultimately [would want] [ph].

32:49 Our next question comes from Mike Roxland with Truist Securities. Please proceed.

32:56 Thanks. Mitch, Greg, John, congrats on a good quarter. Given the label paper of lease line or supply tightness, can you just give a sense of how you're able to manage supply this quarter? Was it just a matter of procuring tons wherever you could get them and passing along the higher cost of customers? Did you work through inventories? I'm just trying to understand your performance relative to the issues experienced at the [indiscernible]?

33:25 Yeah. I think it's a combination of things, really. I mean, I think we started the year with a little bit of inventory, so we were able to manage the early part of the quarter, at least from that perspective, but as Mitch was just talking about a minute ago, we shifted some materials to filmic liners away from paper liners where possible, again, leveraging our capabilities in our plans and our R&D to make that change easily for customers. 33:46 The same time leveraging our scale with our suppliers and looking for other sources of materials. And really, we talked about the strength of our teams overall over the years and a lot of people say that, but really clearly we have the strongest teams in the industry and they've shown time and time again the resilience of managing through these things and helping us find ways to mitigate the impacts of challenges like this and work through it and still deliver for our customers. So, for me, I think there's a number of factors there, but our teams really came through in the quarter overall.

34:14 Got you. And then just quickly, just following on John's question regarding chip availability, obviously, Mitch mentioned, I think that's going to improve in 2023, what type of growth you expect to see in Intelligent Labels once if and when that chip availability improves? If you want to comment about 2023, let's look at it this way, if you had the chips available today, what type of growth would you see in Intelligent Labels versus the 15% to 20% you have seen? Thank you.

34:41 Yes. So, I'm not going – we see tremendous momentum in this space, and I'm not going to deviate from our 15% to 20% long-term growth objective. So, that's what we've laid out as a long-term growth objective. I said we'd be hard press to go above the high-end of that. We definitely see momentum for growing faster than that, but as we've seen in the past, there's a certain cadence that every market needs to go through as they adopt the technology, so that's something that we'll continue to invest ahead of the curve on and continue to lead with our customer partners to help them in their identification, how to roll-up the new technologies to capture more growth for themselves, improve their consumer experiences, and lower cost.

35:31 Our next question comes from Adam Josephson with KeyBanc Capital. Please proceed.

35:39 Thanks. Good morning, everyone. Mitch, one for you on demand, if memory serves, I think last call, you said that demand was the biggest source of uncertainty with respect to your full-year guidance. And that was before the onset of war that was before widespread lockdown in China, inflations only intensified globally since then, but it doesn't seem like your demand expectations for the year have changed at all and maybe they've even gotten better. So, I'm just trying to understand that and what you're expecting demand wise in the second half of the year as embedded within your guidance range?

36:20 Overall, our volume assumptions haven't shifted all that much from where we were a quarter ago. And we came into the year with our eyes open to some of the macro uncertainties and so forth. Remember when we gave some commentary around our volume expectations, people thought those might be a bit low. We actually saw obviously are foreseeing some of the specific challenges, but with all that the world's has been going through the last couple of years, we obviously had some temporary dislocations around demand environment built into our overall guidance for the year, and that's proven the appropriate approach thus far.

36:56 I appreciate that. And Greg, with respect to your inflation outlook, high-single-digit sequentially, 1Q to 2Q and then I think you said flat thereafter, even though the strike in Finland is coming to an end, I would think if anything, that might put some downward pressure on your paper costs in the second half of the year. Can you just talk about why you're not expecting any sequential declines in inflation beginning in 3Q or even in 4Q for that matter?

37:27 Yeah, Adam, I think it's been difficult over last year or so to really call inflation material movements over past the next couple of months really. So, I think for us, we're looking at what we can see from a line of sight perspective. There are different views, if you look at different entities indices and different outlook for the back half of where things may or may not go, but right now, we know what we see for the second quarter as we talked about and we're assuming a moderate kind of environment from an inflation perspective in the back half. That could change up or down and so we would flex our pricing accordingly, I guess.

38:02 And just thing I'll build on, just to reinforce Greg's point. Nobody really has visibility beyond 90 days. And we've seen the indices show that there's going to be an easing of the inflation three months out, four months out, a few times over the past year and that has not planned out. So, we have visibility in 90 days and we're putting in our pricing strategies and our productivity strategies accordingly, and we'll continue to pivot it and adjust as need be and go from there.

38:32 Our next question is from Joshua Wilson with Raymond James. Please proceed with your question.

38:39 Yes. Hello, Mitch and Greg. Thanks for taking my questions. Just to make sure we're clear on the modeling side of things, can you give us an update on what you're assuming for share count and the EPS guidance, and just your general thoughts on share repurchases from here since that's accelerated?

39:00 Yes. So maybe just backing up, I think our overall capital allocation balance sheet approach is the same strategy has been for a number of years now. We have a very strong balance sheet right now. Our debt ratio is at a relatively low level despite a lot of the acquisitions that we or even in light of a lot of the acquisitions we've done very recently. And so, we have ample capacity to continue investing in the business, continue leveraging M&A to help strengthen our portfolio and shift the portfolio towards high value categories, and capacity to continue increasing the rate of our dividend over time and continuing to drive share buybacks and return cash to shareholders. 39:38 So, we've talked about over the years. Our approach there has been in periods we're looking at share buybacks to generate a return and in periods where we see, if we pull back in shares, we'll have accelerators in our share buyback in the opposite if we see increases. So, it’s clearly in the first quarter, we saw the pullback in the shares and took advantage of that from a buyback perspective. 40:01 Depending on how that plays out over the rest of the year would really determine how share buyback overall plays out. I think we ended the quarter with about 83 million shares and clearly we expect to be somewhere below that by the end of the year.

40:14 Got it. And then as we think about how the European theater continues to evolve, any color you can give on what you're hearing either from your customers or seeing in your own operations as it relates specifically to logistics and outbound freight availability and trucker availability?

40:32 I don't think – we're seeing what you're reading in the headlines overall. I mean, just continued constraints, but I think the bigger item is just, yes, I think just questions about what the more the economic outlook is, then it is around freight availability and so forth. What's going to happen in the coming quarter, coming years and so forth. It's definitely a very sad development to see what's happening within Europe and that's what is on people's minds more than anything than what's going on just getting product and so forth. 41:07 So, that’s key. The sentiment has shifted in Europe overall. This is what I would say. I think growth trends and so forth still seem fairly strong, but the sentiment is more on other matters and what it means to the macro long-term.

41:24 And our next question is from Chris Kapsch with Loop Capital. Please proceed.

41:32 Yeah. Hey, it’s Chris Kapsch with Loop Capital. So, question on LGM. Good afternoon or good morning, I guess where you guys are. So question focused on LGM, I didn't catch the detail by region. I think you said that basically all the segments sales growth was effectively pricing on passing through the inflation and volume [flatter down] [ph]. My question is, is to the extent that paper liner availability constrained your volume, how did your volume compare to the industry volume? Did this constraint cause you to lose share in any region?

42:13 We don't have the industry data yet for Q1. So, overall, that's something that we don't see. We think we were – number of markets disproportionately advantage the ability to switch from one category to another, but it's hard to see exactly how things played out across from just a market perspective and share perspective. 42:34 Sequentially, we believe we're pretty confident. We've gained share, particularly in Europe, but also North America year-over-year, you've got the factor of our tough comps in Asia Pacific, which were a bit more company specific as it related to pre-buy. So, overall, the share landscape, I think you tend to see, we've talked about this before. Things moving around the board a bit, especially in periods of change and with price increases, but generally within the normal band we would expect and we'd expect them to settle out where they’ve historically been.

43:08 That's helpful. And then I think your demand again, LGM has been characterized by generally healthy with strong backlog, and to the extent that this striking result allows you to work down those backlog, would that be – do you have a sense for any part of that backlog being, sort of double ordering because of concerns on behalf of customers to get material and or and just how do you see that those lead times working down over time was – is that, do you look at this as an opportunity that maybe take share as your constraints are alleviated as this strike has resolved? Any color there would be helpful. Thanks.

43:56 Yeah, sure. So, as far as the backlog, we've talked about lead times are much longer than they've been over the past year, and particularly over the past quarter. Clearly some of that, we’re not expecting that, all are just incremental demand, what happens when in a constrained environment, people get back in the queue for ordering future materials and so forth. So, it's clear to us when we look at underlying demand for consumer packaged goods and e-commerce trends that end demand remains strong. 44:26 And as we, I think once the raw material environment stabilized a bit, you'll have less of that getting in the queue early effect, so lead times will reduce a bit, but we still expect relative to the macro, healthy growth profile. 44:43 So as far as taking share and so forth, like I said, those things we expect would be settling out. We are the industry leader and so we expect to be able to leverage our capabilities to help continue investing in innovation to drive the disproportionate amount of the industry's growth over the long run as we've done for since [indiscernible] invented the category eighty years ago.

45:08 Our next question is a follow-up question from the line of George Staphos with Bank of America. Please proceed.

45:16 Hi everyone. Thanks for taking the follow-on. Greg, Mitch, is there a way to roughly quantify what the impact of the strike might have been on your P&L from margin standpoint or in any way. And if you mentioned it prior, I apologize for having missed it, but if you could remind us then what it would be if you’d quantify and then I had a couple of quick follow-ons after that.

45:42 Yes, we haven't quantified and we're not going to overall George. It's – the net impact is relatively small, but still impactful. Because if you isolated on its own as one impact, but we've then been leveraging our other sourcing providers, materials of providers to help mitigate that as well as the material substitution to filmic liners and so forth. So, we haven't provided that, but let's, yes, something that's in our guidance is basically a return to normal, if you will by the second half.

46:17 Understood. And then another two, and I'll turn over, one, you had mentioned on the fourth quarter call, some potential that there was, and I forget the precise phrasing, but inventory in the channel that might need to be worked down. From your volume discussion and from the results, [indiscernible] like you're seeing much or effect from that, but nonetheless are you seeing any signs of destocking specifically within Europe and in the States? And then with supply chains being so volatile over the last, seems like the last couple of years, are you seeing any shift from your customers in terms of where they're planning to produce and source from, I would imagine it to be more of an effect perhaps on your RBIS customers and then in turn what that means what the implications are for Avery’s production stand over the next couple of quarters, couple of years? Thanks and good luck to the rest of the year guys.

47:11 Thanks, George. Yes. So, overall around the inventory comment, we had said that we had anecdotal evidence and believe there were some inventory building going this year, which by the way, I think is playing out well for the end markets, as far as when you're in a period of tight supply that people have some extra buffer to work through. 47:32 From what we see, it looks like some of that was worked off. We think in Q1, and we commented that our volume mix within LGM was down low single digits. So, comps was one reason, but think that inventory levels could have been another. But we think there's also still continuing some inventory here in Q2, which is important given that the impact of the strike won't be fully worked through until we work our way through Q2 and get towards the end of it. 47:59 Yes, George, I wasn't clear on the second part of your question overall. I mean, broadly speaking, what you've seen through this very dynamic environment is that we've been able to leverage our global scale, our strength and innovation to basically ensure that we are able to provide for our end markets. We are seeing as the industry leader that are not just trying to protect our own business, but also ensure the long-term health of our industries, and that's not just an LGM or a lot of discussion is, but also within RBIS and the branding information solutions we provide there, where with all the challenges that the apparel industry has seen that we've been able to show consistent robust growth through that cycle, especially relative to apparel and demand. 48:46 So, overall, very – yeah, good, very good with how we've performed. There's a lot of uncertainty on the horizon. We're confident in the team's ability to continue managing as we have over the past couple of years.

49:01 Mr. Butier, there are no further questions at this time. I will turn the call back to you for closing remarks.

49:09 Thank you. I just want to conclude by saying strong performance in a very challenging environment and just want to conclude by once again thanking our team for their phenomenal performance, dedication, and ingenuity. So, thank you to the entire team.

49:25 That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.