Avon 2008 Annual Report Download - page 11

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR”
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Statements in this report that are not historical facts or infor-
mation are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Words such as
“estimate,” “project,” “forecast,” “plan,” “believe,” “may,”
“expect,” “anticipate,” “intend,” “planned,” “potential,” “can,”
“expectation” and similar expressions, or the negative of those
expressions, may identify forward-looking statements. Such
forward-looking statements are based on management’s reason-
able current assumptions and expectations. Such forward-looking
statements involve risks, uncertainties and other factors, which
may cause the actual results, levels of activity, performance or
achievement of Avon to be materially different from any future
results expressed or implied by such forward-looking statements,
and there can be no assurance that actual results will not differ
materially from management’s expectations. Such factors include,
among others, the following:
• our ability to implement the key initiatives of and realize the
operating margins and projected benefits (in the amounts and
time schedules we expect) from our global business strategy,
including our multi-year restructuring initiatives, product mix
and pricing strategies, enterprise resource planning, customer
service initiatives, product line simplification program, sales
and operation planning process, strategic sourcing initiative,
outsourcing strategies, zero-overhead-growth philosophy,
cash flow from operations and cash management, tax, foreign
currency hedging and risk management strategies;
• our ability to realize the anticipated benefits (including any
projections concerning future revenue and operating margin
increases) from our multi-year restructuring initiatives or other
strategic initiatives on the time schedules or in the amounts
that we expect, and our plans to invest these anticipated
benefits ahead of future growth;
• the possibility of business disruption in connection with our
multi-year restructuring initiatives or other strategic initiatives;
• our ability to realize sustainable growth from our investments
in our brand and the direct-selling channel;
• a general economic downturn, a recession globally or in one
or more of our geographic regions, such as North America, or
sudden disruption in business conditions, and the ability of our
broad-based geographic portfolio to withstand such economic
downturn, recession or conditions;
• the inventory obsolescence and other costs associated with
our product line simplification program;
• our ability to effectively implement initiatives to reduce
inventory levels in the time period and in the amounts we
expect;
• our ability to achieve growth objectives or maintain rates of
growth, particularly in our largest markets and developing and
emerging markets;
• our ability to successfully identify new business opportunities
and identify and analyze acquisition candidates, and our ability
to negotiate and consummate acquisitions as well as to suc-
cessfully integrate or manage any acquired business;
• the effect of political, legal and regulatory risks, as well as
foreign exchange or other restrictions, imposed on us, our
operations or our Representatives by governmental entities;
• our ability to successfully transition our business in China in
connection with the resumption of direct selling in that market
in 2006, our ability to operate using the direct-selling model
permitted in that market and our ability to retain and increase
the number of Active Representatives there over a sustained
period of time;
• the effect of economic factors, including inflation and fluctua-
tions in interest rates and currency exchange rates, and the
potential effect of such fluctuations on our business, results of
operations and financial condition;
• general economic and business conditions in our markets,
including social, economic and political uncertainties in the
international markets in our portfolio;
• any consequences of the internal investigation of our China
operations;
• information technology systems outages, disruption in our
supply chain or manufacturing and distribution operations, or
other sudden disruption in business operations beyond our
control as a result of events such as acts of terrorism or war,
natural disasters, pandemic situations and large scale power
outages;
• the risk of product or ingredient shortages resulting from our
concentration of sourcing in fewer suppliers;
• the quality, safety and efficacy of our products;
• the success of our research and development activities;
• our ability to attract and retain key personnel and executives;
• competitive uncertainties in our markets, including competi-
tion from companies in the cosmetics, fragrances, skin care
and toiletries industry, some of which are larger than we are
and have greater resources;
• our ability to implement our Sales Leadership program glob-
ally, to generate Representative activity, to enhance the Repre-
sentative experience and increase Representative productivity
through investments in the direct-selling channel, and to com-
pete with other direct-selling organizations to recruit, retain
and service Representatives;
• the impact of the seasonal nature of our business, adverse
effect of rising energy, commodity and raw material prices,
changes in market trends, purchasing habits of our consumers
and changes in consumer preferences, particularly given the
global nature of our business and the conduct of our business
in primarily one channel;
• our ability to protect our intellectual property rights;
• the risk of an adverse outcome in our material pending and
future litigations;
• our ratings and our access to financing and ability to secure
financing at attractive rates; and
• the impact of possible pension funding obligations, increased
pension expense and any changes in pension regulations or
interpretations thereof on our cash flow and results of
operations.
We undertake no obligation to update any such forward-looking
statements.
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