Avy Executive Summary

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Revenues: AVY's revenue growth is driven by its two major segments, PSM (73%), and RBIS (26%). Revenue growth for 2014 will be as per management guidance, which fits global GDP growth, and thereof driven by global GDP growth, in line with volume growth in Europe and emerging markets. In the PSM segment, USA sales will remain flat for next year, and will ramp up slowly in the following years. Western Europe will continue to grow mid-single digits and emerging markets will grow almost around 10%. In the RBIS segment, sales growth will remain strong with the Europe-based retailers and brand owners, driven largely by RFID.

EBITDA: EBITDA margins for 2014 are as per management guidance; PSM segment within a target range of 10% to 11%, and 11% over the coming years. RBIS segment is targeted to a full point of margin expansion each year through 2015. PSM lines represent an important strategic focus for the company, with opportunities for significant share gain in its relatively high variable margin product lines. Graphics and Tapes and Reflective product categories are markets where AVY has relatively low market share, but margins will be increased by providing new product innovation and improved quality in service.
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The adjusted tax rate for both Q2 and year-to-date was 33%, in line with management expectations. Management continues to anticipate the full year tax rate to be comparable to last year (33%), and there are not loss