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Avery Dennison sales decline modestly in Q1
Apr '12
• Reported EPS (including discontinued operations) of $0.41
• Reported EPS from continuing operations of $0.44
• Excluding impact of restructuring costs and other items, EPS from continuing operations of $0.45 (non-GAAP)
• Net sales declined approximately 3 percent to $1.48 billion
• Sales declined approximately 1 percent on organic basis
• Repurchased 2.4 million shares
• Maintaining 2012 EPS and free cash flow guidance
Avery Dennison Corporation announced preliminary, unaudited first quarter 2012 results. All non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, the discussion of the company's results is focused on its continuing operations.

"As expected, first-quarter sales declined modestly on an organic basis, reflecting the slowdown in volume we began to experience in the second quarter of last year," said Dean Scarborough, Avery Dennison chairman, president and CEO.

"Despite the lower sales and impact of raw material inflation, we increased operating profit through productivity initiatives and pricing. We are delivering on our commitment to return more cash to our shareholders, through share repurchases and the increased dividend.

"For the full year, we expect to increase earnings per share and free cash flow in line with our previous guidance, and to continue returning more cash to shareholders while maintaining our strong balance sheet," Scarborough said.

First Quarter 2012 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, acquisitions and divestitures.

Pressure-sensitive Materials (PSM)
• Label and Packaging Materials sales were comparable to prior year as volume declines were offset by higher prices. Sales in Graphics and Reflective Solutions grew compared to prior year due to higher volume and pricing.
• Operating margin improved 50 basis points to 8.8 percent due to productivity initiatives and pricing actions taken last year to offset higher raw material costs. Excluding costs associated with restructuring, operating margin improved by 40 basis points.

Retail Branding and Information Solutions (RBIS)
• Consistent with recent trends, sales declined approximately 4 percent, reflecting lower unit demand from retailers and brands in the U.S. and Europe.
• Operating margin declined 130 basis points to 2.0 percent as the impact of lower volume, as well as the effects of a prior year legal settlement and higher restructuring costs were partially offset by the net benefit of productivity initiatives. Excluding costs associated with restructuring and other items, operating margin declined by 60 basis points.

Other specialty converting businesses
• Sales increased modestly due to pricing, partially offset by lower volume.
• Despite lowervolume and higher costs associated with restructuring actions, operating margin improved 130 basis points to approximately break-even due to the benefit of pricing and productivity actions. Excluding costs associated with restructuring, operating margin improved by 280 basis points.

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