Avery Dennison Announces Long-Term Business Plans

NEW YORK, N.Y.—Avery Dennison Corporation provided an update on its long-term business plans at a March 6 meeting of securities analysts and institutional investors in New York, highlighting a balanced strategy that focuses on both top-line growth acceleration and productivity improvement.

“We are optimistic about our ability to create sustainable value during 2007 and beyond,” said Dean A. Scarborough, president and chief executive officer. “We are a leader in our industry through R&D capabilities and application development expertise that drive true innovation. And we deliver that innovation with superior product quality and service.”

In his presentation, Scarborough outlined key growth priorities by business:
• Growing the materials businesses through expansion in emerging markets, increased service leadership, and innovation in new applications;
• Investing in new products and marketing programs to accelerate growth of Avery-brand printable media products;
• Accelerating growth of the Retail Information Services business with new products and continued geographic expansion; and
• Expanding the RFID business through share gain in the expanding carton label market and through new applications for selected markets.

“Emerging markets are a major part of our growth story,” Scarborough said. “We’ve more than doubled our share of sales coming from the emerging markets to 25 percent over the last five years, with above average profitability. Growth in China has been particularly robust, driven by the expansion of the middle class and the resulting increase in consumer spending there.

“In terms of market development, India is about five or ten years behind China today. We’ve already entered the market and are seeing strong growth. All of our key businesses will have a footprint in India by the end of the year,” he added.

Scarborough also said that operating margin expansion would remain a key priority. He said that the Company continues to drive productivity improvement through programs like Enterprise Lean Sigma (ELS) that empower employees to continually look for ways to improve processes and service and eliminate waste.

“We’ve just started to roll out ELS across the Company,” Scarborough said. “Our Office Products business in North America is farthest down this path, and they’ve delivered some extraordinary results using these tools.”