"We have more than doubled our share of sales in the emerging markets over the past five years, with revenue from these regions currently representing more than 20 per cent of the company’s total sales,” says Scarborough. “Opportunities for profitable growth in these markets are outstanding, and we have made significant investments to capture that anticipated growth."
Scarborough and Avery Dennison’s senior management team presented a review of the company’s global operations at the meeting, as well as its performance targets and investment strategies, as well as updates on its pressure-sensitive materials business, office products business, retail information services business, and specialty materials and converting businesses.
Scarborough highlighted the progress to date for Avery Dennison’s new RFID business, stating that similar to the emerging markets today, RFID will one day represent an entirely new platform for growth.
He announced that global consumer products manufacturer Kimberly-Clark recently selected Avery Dennison as its supplier for Gen 2 inlays, which are the industry’s current standard for RFID labels. As previously announced, the company is targeting approximately $10m in revenue from RFID inlays this year, including sales related to Kimberly-Clark’s implementation plans, as well as those of other key end users and converters expected to be announced in the coming months.
Pointing out that the timing and pace of industry development are highly uncertain, Scarborough says Avery Dennison has targeted a market share goal of 30 per cent by the end of 2006, which should eventually translate into a business contributing hundreds of millions of dollars of revenue annually. He also outlined the company’s competitive advantages in the RFID marketplace, including its proprietary high speed manufacturing capability for inlays and its extensive network of existing relationships with label converters that will supply RFID tags to end users.
A wide ranging programme for continued improvement of the company’s profitability was discussed, including a global initiative to streamline and simplify operations and support functions that will result in more cost efficient, customer-focused businesses.
"Our top priorities are growth and productivity improvement," says Scarborough. "Our business fundamentals remain strong, as we continue to enjoy market leading positions in our core businesses. We are executing against a balanced strategy for superior long-term value creation, encompassing top line growth, margin improvement and capital efficiency, and we have a proven management team that continues to build a high-performance organisation focused on maximising long term shareholder value."
Avery Dennison is a global leader in pressure-sensitive labeling materials, office products and retail tag, ticketing and branding systems, with 2005 sales of $5.5bn and more than 22,000 staff in 48 countries worldwide.