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Avery Dennison Revises Third Quarter Earnings Outlook

Press release from the issuing company

PASADENA, Calif.--Sept. 18, 2003-- Avery Dennison Corporation will provide an overview of its strategies for long-term growth at the Credit Suisse First Boston 16th Annual Chemical Conference in New York today. In anticipation of the presentation, the Company announced that it now forecasts that earnings per share could be approximately $0.05 below the low end of its previous expectation for the third quarter of 2003. In July, the Company had projected third quarter earnings of $0.70 to $0.75 per share. In his presentation today, Daniel R. O'Bryant, senior vice president and chief financial officer of Avery Dennison, will profile the Company's key strategies, underlying growth drivers, and initiatives to accelerate top-line growth. O'Bryant also will briefly address near-term business trends which are expected to impact results for the third quarter. Avery Dennison said that underlying business conditions have not improved measurably compared to the second quarter, and in fact have weakened in its retail information services and pressure-sensitive adhesive materials businesses. In particular, pricing pressures in these businesses, already felt in the second quarter, have continued in the third quarter. In addition, while it is anticipated that total third quarter sales for the Company's North American office products business will meet expectations, profits are expected to fall short due to unfavorable product mix and higher-than-expected service costs required to fill unusually large orders placed at the start of the quarter. "Despite some external indicators of a strengthening global economy, the benefits have come too late in the quarter to offset the effects of weak demand and competitive market conditions which have had an impact on the Company over the past six months," said O'Bryant. "We have recently seen orders pick up in a number of our businesses around the world, led by our pressure-sensitive adhesive materials business in North America, and expect continued improvement in demand trends as economic conditions strengthen. In the meantime, we are moving aggressively to reduce costs and improve our productivity." O'Bryant's presentation to analysts and investors, which will be broadcast live over the Internet, will highlight key long-term growth drivers for the Company, including the rapidly expanding markets of Asia, Latin America, and Eastern Europe. O'Bryant will also provide an update on Avery Dennison's aggressive program to accelerate sales growth at operations throughout the Company. "Our underlying business fundamentals today are strong," said O'Bryant. "We continue to see strong growth in our pressure-sensitive adhesive materials business in Asia. With our new programs to accelerate top-line growth throughout the Company, along with substantial cost savings ahead from the completion of the Jackstaedt integration and other productivity improvement efforts, we are well positioned to create long-term value for our shareholders in the years to come."