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Avery Dennison Outlines Solid Long-Term Growth Strategies

Press release from the issuing company

NEW YORK--March 18, 2002--Avery Dennison provided an update on its strategies for long-term growth at an annual New York meeting of securities analysts and investors hosted by the Company. Avery Dennison also reaffirmed its first quarter 2002 earnings guidance provided earlier in the year. Philip M. Neal, chairman and chief executive officer of Avery Dennison, profiled the Company's key strategies, underlying growth drivers, and major initiatives for achieving top-line growth in core businesses, as well as new venture opportunities and long-term financial goals. "Our business fundamentals today are stronger than ever,'' said Neal. "We have either maintained or increased our market share positions in all of our core businesses, expanded our global presence and strengthened our competitive advantage, while continuously improving our cost structure during a period of particularly challenging worldwide economic conditions.'' Neal discussed the Company's strong commitment to value creation and the resulting focus on profitable top-line growth. Key components of Avery Dennison's top-line growth strategies include leveraging the power of the Company's market-leading Avery and Fasson brands with a continual stream of new product introductions, developing innovative service programs, continuing to pursue value-enhancing acquisitions and investing in new venture opportunities to create businesses with high-growth potential. The presentation to analysts and investors, which was broadcast live over the Internet, included an overview of the Company's investment in new venture efforts that target unmet customer needs. Avery Dennison is refocusing its research and development activities to create new products and services for a number of specific, high-growth potential markets, combining the Company's proprietary technologies with its manufacturing expertise. Research and development resources are directed at capitalizing on the Company's core competencies, including roll-to-roll manufacturing, converting of multilayer laminates, microreplication, and precision coating and embossing. The Company pointed out that margin expansion will play a key role in profitability improvement during the near term. "We will see the benefit of many cost reduction actions already implemented, as well as results from ongoing productivity improvement programs,'' said Neal. "Going forward, we anticipate margins to grow as a result of a strategic shift in our product mix that includes new, higher margin market categories and businesses.'' Avery Dennison confirmed that the current range of analyst estimates for first quarter 2002 earnings remains consistent with the Company's projections. "Across our businesses, we have seen orders strengthen in the U.S. during the last few weeks, but these positive signs are coming fairly late in the quarter and conditions in Europe remain soft,'' said Neal. "While we remain comfortable with the current range of analyst estimates for the first quarter, it is too soon to raise expectations for the year.'' Neal commented on the long-term outlook, stating that "we continue to target earnings growth in excess of 10 percent, with margin expansion driving a relatively larger share of the earnings growth over the next two to three years. We expect this weighting to shift to top-line growth over time, as sales from our new ventures gain momentum.''

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