Avery Dennison is easy to label: It's a global leader in the making of adhesive labels used on packaging, mailers, and other items. Pressure-sensitive adhesives and materials account for more than half of its sales. Its Pressure-sensitive Materials unit is split into two other units: Label and Packaging Materials (LPM) and Graphics and Reflective Solutions (GRS). Under the Avery Dennison and Fasson brands, it makes papers, films, and foils coated with adhesive and sold in rolls to printers. Its most widely used products are the self-adhesive stamps used by the US Postal Service since 1974. The company also makes retail branding and security tags, printer systems, and fasteners.
LPM, its larger unit, has differentiated products, but its film products have the fastest growth. It launched almost 20 products in 2011, elevating Avery to leadership positions in several key markets. Avery plans to continue the unit's growth with more new products in targeted markets, such as its Avery Dennison Shrink PS for food labeling and Global MDO film for home and personal care products. The GRS unit is also innovative; more than half of its sales growth in 2011 came from its cast films, which consist of new or reformulated products.
The Retail Branding and Information Solutions (RBIS) unit provides global branding and supply chain services and products for the retail apparel industry. RBIS operates facilities in more than 40 countries to check the quality of branding on apparel. It also offers labeling technology to check inventory and pricing accuracy. It is a leader in RFID (Radio Frequency Identification) tagging for retailers, and its apparel-related RFID sales grew more than 60% in 2011. The unit has a new line of heat transfer products for printing graphics on apparel.
Avery also holds specialty converting businesses that use its expertise in one market to develop products for other markets.
The company expanded its operations in Asia, Latin America, and Eastern Europe in 2010. By the end of 2011, it operated about 200 manufacturing and distribution facilities in more than 60 countries.
Despite a challenging year in 2011, Avery posted revenues of $6.03 billion, about 4% higher than the $5.78 billion it reported the previous year. It offset a $200 million increase in raw material costs with price increases and cost reduction measures. Sales of the company's largest unit, Pressure-sensitive Materials, rose 2% from the previous year, with both LPM and GRS realizing growth. Sales in its RBIS unit declined, however, because of lower demand from the US and Europe. Sales in its Other Specialty Converting Businesses unit also dipped 6%. Net income declined from $316.9 million in 2010 to $190.1 million in 2011, due to restructuring costs and foreign exchange translations.
The company follows a strategy of trying to obtain leading share positions in global markets. Avery attempts to leverage its global reach and scale and its product expertise to sustain competitive advantages in its core businesses. It focuses on increased productivity, cost reductions, and pricing to counteract softened demand caused by the global economic recession. The company also seeks continued growth of its key global brands in both new and emerging markets.
In 2013 Avery agreed to sell its Office and Consumer Products segment to CCL Industries for $500 million. The segment makes school and office products (Avery, Marks-A-Lot, HI-LITER). With the sale, Avery will focus on its Pressure-sensitive Materials and Retail Branding and Information Solutions businesses. It plans to use the proceeds from the deal to invest in its two core businesses and reduce debt and pension liability.
In 2011 Avery also decided to divest its Metalure pigments business, which it sold to the Eckart Effect Pigments division of ALTANA. Eckart had been the distributor of the PVD-type aluminum pigments for more than 20 years. – less