Avon 2007 Annual Report Download - page 9

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
information are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Words
such as “estimate,” “project,” “plan,” “believe,” “may,”
“expect,” “anticipate,” “intend,” “planned,” “potential,”
“expectation” and similar expressions, or the negative of those
expressions, may identify forward-looking statements. Such
forward-looking statements are based on management’s
reasonable current assumptions and expectations. Such forward-
looking statements involve risks, uncertainties and other factors,
which may cause the actual results, levels of activity, perform-
ance 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
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 strat-
egies, enterprise resource planning, customer service
initiatives, product line simplification program, sales and oper-
ation planning process, strategic sourcing initiative, out-
sourcing strategies, zero-overhead-growth philosophy and
cash management, tax, foreign currency hedging and risk
management strategies;
• our ability to realize the anticipated benefits (including our
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 or recession in one or more of
our geographic regions such as North America;
• the inventory obsolescence and other costs associated with
our product line simplification program;
• our ability to effectively implement initiatives to reduce
inventory levels;
• our ability to achieve growth objectives, particularly in our
largest markets and new 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 mar-
ket, 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 impact of substantial currency fluctuations on the results
of our foreign operations;
• general economic and business conditions in our markets,
including social, economic and political uncertainties in Latin
America, Asia Pacific, Central and Eastern Europe and the
Middle East;
• the risk of disruption in Central and Eastern Europe associated
with a change to a more rapid selling cycle with more fre-
quent brochures;
• 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 increase
Representative productivity, to improve Internet-based tools
for our Representatives, and to compete with other direct- sell-
ing organizations to recruit, retain and service Representatives;
• the impact of the seasonal nature of our business, 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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