Slide 1

Daniel R. O’BryantExecutive Vice President and Chief Financial Officer

AVERY DENNISONCredit Suisse 2006 Chemical Conference

September 19, 2006

Forward-Looking Statements

Certain information presented in this document or discussed during this presentation may constitute “forward-looking” statements. These statements and financial or other business targets are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to fluctuations in cost and availability of raw materials; ability of the Company to achieve and sustain targeted cost reductions; foreign currency exchange rates; worldwide and local economic conditions; impact of competitive products and pricing; selling prices; impact of legal proceedings, including the U.S. Department of Justice (“DOJ”) criminal investigation, as well as the European Commission (“EC”), Canadian Department of Justice, and Australian Competition and Consumer Commission investigations, into industry competitive practices and any related proceedings or lawsuits pertaining to these investigations or to the subject matter thereof (including purported class actions seeking treble damages for alleged unlawful competitive practices, and purported class actions related to alleged disclosure and fiduciary duty violations pertaining to alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation, as well as a likely fine by the EC in respect of certain employee misconduct in Europe); impact of potential violations of the U.S. Foreign Corrupt Practices Act based on issues in China; impact of epidemiological events on the economy and the Company’s customers and suppliers; successful integration of acquisitions; financial condition and inventory strategies of customers; timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; and other matters referred to in the Company’s SEC filings.

The Company believes that the most significant risk factors that could affect its ability to achieve its stated financial expectations in the near-term include (1) potential adverse developments in legal proceedings and/or investigations regarding competitive activities, including possible fines, penalties, judgments or settlements; (2) the impact of economic conditions on underlying demand for the Company's products; (3) the impact of competitors’ actions, including expansion in key markets, product offerings and pricing; (4) the degree to which higher raw material and energy-related costs can be passed on to customers through selling price increases (and previously implemented selling price increases can be sustained), without a significant loss of volume; and (5) the ability of the Company to achieve and sustain targeted cost reductions.

The 2006 financial information presented in this document represents preliminary, unaudited financial results. The document contains certain non-GAAP financial measures; a reconciliation of these measures to the nearest GAAP measures is provided at the Company’s website and in attachments A-2 to A-4 of the Company’s quarterly press release financials.

Slide 3

First Half 2006 At A Glance

• E.P.S. up 14% on lower sales (before restructuring charges and discontinued ops), due to improved gross profit margin, operating expense ratio, and tax rate

• Adjusted unit volume growth has improved

• The shortfall between top line growth and the Company’s medium-term organic sales growth target of 4% - 6% is explained by last year’s price-related share loss in North America– Anticipate 2 to 3 points of improvement in underlying

unit volume over the next few quarters

Slide 4

First Half 2006 At A Glance (continued)

• Slightly behind inflation curve in first half… expect previously implemented selling price increases and procurement savings in second half to neutralize impact of inflation for the full year

• Projected savings from restructuring actions increased to $85 to $100 mil. (annualized) when completed

Slide 5

Core volume growth (est.) 1.0% (1.1)% (4.6)% 1.6% 0.8%Comparability adjustments(1) (1.0)% 0.8% 4.6% 0.4% 1.7%“Underlying” volume growth 0.0% (0.3)% 0.0% 2.0% 2.5%

Reported Sales Growth 7.1% 2.0% (4.5)% (0.4)% (0.1)%

Management Analysis of Underlying Sales Trends (continuing operations)

(1) Adjustments for comparability: Q2-05 -- Shift in timing of back-to-school orders from Q3 to Q2, estimated short-term benefit of competitor plant strike in Europe, and final customer inventory depletions related to 2004 buying ahead of price increase.

Q3-05 -- Shift in timing of back-to-school orders from Q3 to Q2.Q4-05 -- Extra week of sales and pre-buy activities in 2004 ahead of price increase.Q1-06 -- Decision to exit certain low margin private label business.Q2-06 – Decision to exit certain low margin private label business, shift in timing of back-to-school orders from Q2 to Q3 (return to normal order pattern), prior year short-term benefit of competitor plant strike in Europe.

(2) Reported Sales Growth less the impacts of foreign currency translation, acquisition and divestitures, and comparability adjustments

Q2-05 Q3-05 Q4-05 Q1-06 Q2-06

Adj. Organic Sales Growth(2) 2.3% 1.7% 0.7% 3.0% 3.2%

Other factors impacting reported sales growth:Acquisitions, Net of Divestitures 0.6% 0.3% 0.0% (0.3)% (1.4)%Price/Mix + 2% + 2% + 1% + 1% + 1%Currency 3.2% 0.8% (0.6)% (2.7)% (0.3)%

Slide 6

Medium-term top-line growth target in line with historical average

1.2%

4% to 6%

7.4%

2.5%

4.9%

-1.8%

4.7%

2000 2001 2002 2003 2004 2005 Target

* Excluding currency, acquisitions, and divestitures

Organic Sales Growth*

Slide 7

"Core" Operating Margin*(% of sales)

6.06.57.07.58.08.59.09.5

10.010.511.0

Q1-03

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

2006est.

Operating margins have improved…

* Excludes restructuring charges and RFID spending

Margin impact of option expense

GuidanceRange

Slide 8

… and we expect substantial margin expansion ahead

Sources of Change in Operating Margin2008 vs. Today

11.0%

9.6%

2005 Productivity Price/RawMaterials

CapacityUtilization

RFID Segment Mix OtherBusinessRealities

2008TARGET

?

Slide 9

• Emerging markets• New products, niche applications

Growth Drivers

Overview of Today’s Portfolio

Pressure-sensitive Materials

Office & Consumer Products

Retail Info ServicesOther Specialty Converting

2005 Segment Mix3-5 Yr Sales

Growth Target*

• Emerging markets • Increased penetration of PS

label technology for product ID (food & beverage)

• Share gain in durables• RFID adoption driving carton

labeling penetration

• Increased penetration of core products

• New category innovation; existing product upgrades

• Global consolidation• New products and services

Sales Op ProfitOperating

Margin Target

5-7%

down modestly

6-8%

10%+

18-20%

10-12%

> 10%

10-12%

* Excluding acquisitions and divestitures

Slide 10

International operations growing faster-than-average… and profitability is expanding

** Excluding restructuring charges

2005 Revenue by Region(before intergeographiceliminations)

* “Other” includes Canada, Australia, and South Africa

2005 Operating Margin**, International Operations

U.S.

Western Europe

Eastern Europe

Asia

Latin America

Other*

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2003 2004 2005

Slide 11

We’ve increased our participation in the rapidly growing emerging markets…

Local Management Leveraging Global Capabilities

Emerging Markets

Emerging Markets Share of Total Sales

Contribution to Overall Growth: 0.2 pts. 2.4 pts. 3.5 pts.

20052000 2010

Slide 12

… and these markets are contributing significantly to our profit growth and returns

Largest single growth platform today

Operating Profit from Emerging Markets*($ millions)

* Figures are approximate. Estimates do not include allocation of expenses incurred in North America and Europe for direct support of businesses in emerging markets (particularly significant for RIS).

~ 40

~ 115

> 200

2000 2005 2010

Slide 13

Key Growth Priorities By Business

• Grow materials businesses through expansion in emerging markets, increased service leadership, and innovation in new applications

• Invest in new marketing programs to accelerate growth of Avery-brand printable media products

• Accelerate growth of RIS business with new products and continued geographic expansion

• Expand new RFID business through share gain of rapidly expanding carton label market and innovation in new applications for selected markets

Slide 14

RFID… fundamental improvement in competitive position vs. a year ago

• Manufacturing speeds, yields beating internal targets

• Customers, other partners recognize our technical capabilities

• Continue to target significant share gain for carton labeling applications (market share objective of 30%+)

• Sufficient progress to begin broadening reach:– Develop and commercialize HF products– Increase pharmaceutical, apparel, other item level

engagements– Expand activities in Europe / Asia

Slide 15

Margin expansion is key near-term priority for the Company

• Maintain our pricing rigor

• Targeting $85 to $100 million of annual savings from restructuring actions currently underway

• Productivity improvement initiatives across all businesses

• Enterprise Lean Sigma to drive continuous improvement

Slide 16

Expect to generate significant free cash flow; solid financial flexibility

• 2006 Free Cash Flow target (after cap ex and software invt.) = $300 to $350 mil.

• Debt-To-Total Capital ratio currently below our target range

• Priorities for use of free cash:– Invest to grow business (including acquisitions)– Maintain healthy dividend– Reinitiate share repurchase program, as

appropriate

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$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

'75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05

Div

iden

ds p

er s

hare

30 consecutive years of dividend increase…30 consecutive years of dividend increase…~ ~ 13% compound annual growth13% compound annual growth

Expect continued modest increase to dividend

Slide 18

Key Takeaways

• Solid progress against near-term goals… balanced strategy for growth and margin expansion

• Net restructuring savings of $45-$50 mil. in ’06, incremental $40-$50 mil. in ’07

• Expect to accelerate organic sales growth over medium term to 4-6% (in line with history)

– Rapidly growing emerging markets represent an increasing share (> 20%) of portfolio

– Solid secular growth drivers for PSM and RIS segments

– Increasing marketing investment to accelerate growth of highly profitable Printable Media (OCP segment)

– Horizons growth process embedded throughout Company

• Significant free cash flow potential… intend to reinitiate share repurchase when appropriate