consumer durables and the information technology industry which have higher price points and can be impacted by changes in how society works. Certain markets, such as for beverage and agro-chemical products, are more seasonal in nature and affect the variability of quarterly sales and profitability. The state of the global economy and geopolitical events can affect consumer demand and ultimately CCL’s customers’ plans. CCL’s customers react to these issues and to competitive activity in their product categories by developing marketing and sales promotion strategies including the introduction of new products. These factors directly influence the demand for CCL’s products. The Company’s growth expectations generally mirror the trends of each of the markets and product lines in which CCL’s customers compete and the growth of the economy in each geographic region. CCL also anticipates improving its market share generally in each market and category over time, which is consistent with its overall historical trend. The label market is large and highly fragmented with many players but with no single competitor having the substantial operating breadth or global reach of CCL Label. The Container Segment operates only in North America, which includes Mexico. There are two direct competitors in the Container business in the United States and one in Mexico. The Tube Segment operates only in the United States where there are a small number of competitors. CCL’s vision is to increase shareholder value through leading supply chain solutions and product innovations delivered to large global customers across the three Segments. CCL builds on the strengths of its people in manufacturing and product development; and nurtures strong relationships with its international customers and suppliers. The Company anticipates increasing its market share in most product categories by capitalizing on the growth of its customers, by following market trends such as globalization and by driving new product innovation. A key driver in CCL’s strategy is maintaining its focus and discipline. The Company aspires to be the market leader and the highest value-added producer in each product line and region in which it chooses to compete. CCL’s strategy is to continue to improve the performance of the Container Segment, develop the strong performance of the Tube Segment in North America while investing in the growth of the Label Segment globally both organically and by acquisition. In 2011, CCL acquired Thunder Press Inc. (operated under the trade name “Sertech”), a healthcare label producer in Chicago, Illinois; and a 50% interest in Pacman-CCL, a group of label companies based in Dubai servicing the Middle East. In 2010, Purbrick Pty Ltd., a healthcare label producer in Australia was acquired to further increase the Company’s market share. In addition, to continue servicing its global customers in new territories, CCL signed a label licence agreement in Turkey with Dekopak Ambalaj Sanayi Ve Tic. A.S. (“Dekopak”), and a label and tube licence agreement in Indonesia with PT. Master Label. The Company’s strategic objective in the past decade has been the long-term growth of earnings through the building of a global business platform with investment in new plants and equipment, by acquisitions and through innovation in new product development. This approach is intended to allow the Company to increase market share and to grow internationally with its core customers. The acquisition strategy includes seeking attractively priced acquisitions within CCL’s core competencies and manufacturing capabilities that will be immediately accretive to earnings. In addition, such acquisitions should generally support its strategic geographic expansion plans and/or provide new technologies, and/or new customer relationships and products to CCL’s portfolio. The Company’s financial strategy is to be fiscally prudent and conservative. Financial leverage has been maintained at modest levels, and ensuring liquidity has been a cornerstone of the Company’s philosophy. This strategy continues to serve the Company well, particularly during the recent global economic downturn, which had a dramatic adverse impact on many companies, including some of its major competitors. During good and difficult economic times, the Company has maintained high levels of cash on hand and unused lines of credit to reduce its financial risk and to provide flexibility when acquisition opportunities are available. The Company currently has several long-term private debt placements in place and over $91 million available on an unsecured revolving line of credit, which further enhances its liquidity and strengthens its financial foundation for the foreseeable future. CCL has a continuous focus on minimizing its investment in working capital in order to maximize cash flow in support of the growth in the business. In addition, capital expenditures are approved when they are expected to be accretive to earnings and are selectively allocated towards the most attractive growth opportunities. A key financial target is return on equity before goodwill impairment loss, restructuring and other items and tax adjustments (“ROE,” a non-IFRS measure; see “Key Performance Indicators and Non-IFRS Measures” in Section 5A below). CCL continues to execute its strategy with a goal of achieving a comparable ROE level to its leading peers in specialty packaging. Historically, the Company has CCL Industries Inc. 2011 Annual Report 8 C) Strategy and Financial Targets MANAGEMENT’S DISCUSSION AND ANALYSIS Years ended December 31, 2011 and 2010 (Tabular amounts in millions of Canadian dollars, except per share data)