overview of the global printing industry - fira de...

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Overview of the Global Printing Industry

Presented by Nick Waite

Head of Market Research

Smithers Pira

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Agenda

• Smithers Pira print research programme

• The global printing industry in 2012

• Trends in graphic communications

• Prospects for digital print

• Concluding statements

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SMITHERS PIRA INFORMATION SERVICES

About us and our methodology

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PAPER

PACKAGING

PRINT

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Smithers Pira Information Services

• Former printing, paper & packaging association; still maintains membership element

• Not just another market research company – Leatherhead site includes businesses engaging in testing, conferences, journals, consultancy and reports across print, paper and packaging sectors

• Publisher of around 50 reports each year with print, paper and packaging at the core; also undertaking regular technical and market research consultancy in these areas

• Acquired by Smithers in 2010, US-based provider of independent testing, consulting, information or compliance services; also owns UK-based Rubber & Plastics Research Association (RAPRA)

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The Smithers Pira approach to print market research

• Combination of primary and secondary research

• Gather as much information as possible

• Limitations of official data on commercial print

• Ask where the paper is going; where the ink is going

• Undertake regular surveys/consultancy to understand better market progression; price fairly

• Measure digital print in the same way as other print – focus on printer revenues

• Understand that all data on printed output is estimated and seek to make continuous improvements

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THE GLOBAL PRINTING INDUSTRY Terminal decline?

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The global printing industry in 2012

• Declining demand for print on paper in mature markets

• Recession having a severe impact upon short and medium-term print demand…

• … but shift to digital communications across a range of sectors means that much of lost volumes will not be recovered

• Package printing on the up

• Some opportunities in emerging markets

• Industry consolidation

• Investment in digital printing technology

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Global printing & printed packaging output by region, 2002-17, $ bn, constant (2012) prices & exch. rates

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 216.3 219.9 190.0 -13.6 176.8 -6.9

North America 269.5 277.0 238.1 -14.0 224.7 -5.6

Asia 210.8 265.8 301.5 13.4 356.9 18.4

Latin America 37.8 51.3 59.2 15.4 75.9 28.3

Eastern Europe 21.8 27.0 28.9 7.2 34.9 20.4

Middle East 13.7 15.7 17.1 8.7 21.3 25.1

Africa 8.3 7.9 7.5 -5.8 9.8 31.4

Australasia 18.2 15.7 14.0 -10.7 13.6 -2.4

World 797.3 880.9 856.2 -2.8 913.4 6.7

Leading national print and printed packaging markets, 2002-17, $ bn, constant (2012) prices & exch. rates

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Rank, 2012 Country 2002 2007 2012e

%

change,

2007-12 2017f

%

change,

2012-17

1 US 243.3 248.1 213.0 -14.2 200.0 -6.1 2 Japan 121.3 132.8 122.8 -7.5 115.0 -6.4 3 China 38.3 69.8 110.2 58.0 160.2 45.4 4 Germany 46.2 44.8 40.2 -10.2 36.8 -8.3 5 UK 34.8 36.5 30.0 -17.7 28.9 -3.9 6 France 30.6 31.6 27.3 -13.6 25.4 -6.8

7 Italy 32.2 31.0 26.8 -13.5 24.9 -7.2 8 Canada 26.3 28.9 25.2 -13.0 24.7 -1.9 9 Brazil 17.3 20.6 23.3 13.2 30.0 29.1 10 India 11.6 16.6 21.2 27.8 28.3 33.4 11 Spain 17.6 19.6 16.9 -13.7 15.7 -6.8

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The Chinese print market • Smithers Pira estimates market value at $110 billion

• Print exports were up 3% in 2011. China is a major print exporter, especially in the case of books and other – generally non-time sensitive – products including greeting cards

• 102,000 printing and package printing enterprises in China, with over 3.5 million employees and total assets in excess of $100 billion

• PEIAC (Chinese printing association) reported 21% growth in package printing in 2011

• PEIAC figures also pointed to 1% increase in publication printing revenues, but 15% decline in other printing output after a number of years of solid growth across the board

• Around 800 printing machinery manufacturers in China, with annual production valued at RMB40 billion (approx. $6 billion). Leading players include Shanghai Electrics (owner of Akiyama and Goss International), Han-Gronhi (owner of Shinohara), Founder Group and Tianjin Masterwork

• Chinese equipment manufacturers making significant strides in digital and post-press fields, as well as high-end markets more generally. Around 280 Chinese machinery manufacturers attended Drupa in 2012

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Global printing & printed packaging output by region, 2002-17, $ bn, current prices & exchange rates

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 142.9 212.1 190.0 -10.4 189.6 -0.2

North America 212.5 251.0 238.1 -5.1 245.4 3.0

Asia 143.6 197.6 301.5 52.6 388.6 28.9

Latin America 21.8 41.4 59.2 43.1 81.6 37.9

Eastern Europe 10.6 23.0 28.9 26.1 41.0 41.7

Middle East 7.7 12.4 17.1 37.5 25.7 50.3

Africa 4.1 6.3 7.5 19.4 10.9 45.5

Australasia 8.2 10.9 14.0 28.4 14.0 0.4

World 551.4 754.7 856.2 13.5 996.8 16.4

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Global printing & printed packaging output by region, 2002-17, billion A4 prints or equivalent

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 13,680 14,559 11,815 -18.9 9,461 -19.9

North America 14,519 14,262 11,018 -22.7 9,053 -17.8

Asia 12,970 15,717 17,881 13.8 21,791 21.9

Latin America 1,960 2,774 3,413 23.1 4,192 22.8

Eastern Europe 1,443 2,124 2,172 2.3 2,434 12.1

Middle East 612 889 889 0.0 1,051 18.2

Africa 681 903 820 -9.2 1,074 30.9

Australasia 783 946 811 -14.2 686 -15.5

World 46,650 52,172 48,819 -6.4 49,743 1.9

Global printing and printed packaging output by substrate, 2002-17 (million tonnes)

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Newsprint 32.7 34.2 31.5 -7.8 28.2 -10.7 Coated mechanical 15.1 18.2 15.7 -13.7 15.8 0.3 Coated woodfree 22.5 26.4 24.6 -7.0 26.9 9.6 Uncoated mechanical 14.0 15.0 12.8 -14.2 11.9 -7.4

Uncoated woodfree 26.9 30.8 30.4 -1.5 34.9 14.9 Other paper 2.7 3.3 3.5 5.8 4.4 26.4

Packaging board 83.4 103.8 107.3 3.4 115.6 7.8 Film 7.9 9.8 10.6 8.0 12.1 14.2 Foil 1.9 2.3 2.7 16.9 3.4 27.5 Other substrates 10.8 12.0 12.9 7.1 16.3 26.4 Total 218.0 255.9 252.0 -1.5 269.5 6.9

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Trends in global print and printed packaging output, 2000-2017 ($ billion, constant 2012 prices)

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Trends in global print and printed packaging output, 2000-2017 (volume, index)

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Global printing output by region, 2002-17, $ bn, constant (2012) prices & exch. rates (excl. packaging)

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 138.9 136.6 109.7 -19.6 90.8 -17.2

North America 188.3 188.9 153.2 -18.9 129.9 -15.2

Asia 144.3 178.8 188.3 5.3 202.5 7.5

Latin America 20.8 29.7 35.4 19.2 43.5 23.0

Eastern Europe 10.2 14.8 16.2 9.3 18.3 13.2

Middle East 5.5 6.0 6.3 4.4 7.1 13.8

Africa 5.3 4.7 4.0 -14.9 5.1 27.4

Australasia 13.1 10.4 9.0 -13.2 8.2 -9.8

World 526.8 570.2 522.1 -8.4 505.3 -3.2

Global printing output by region, 2002-17, $ bn, current prices & exchange rates (excl. packaging)

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 92.1 132.0 109.7 -16.9 97.5 -11.1

North America 149.1 171.3 153.2 -10.6 141.8 -7.4

Asia 98.5 133.1 188.3 41.4 220.4 17.1

Latin America 12.3 24.3 35.4 45.5 46.7 32.1

Eastern Europe 5.1 12.6 16.2 28.2 21.6 33.4

Middle East 3.0 4.8 6.3 31.5 8.6 37.8

Africa 2.6 3.7 4.0 7.6 5.7 41.4

Australasia 5.9 7.2 9.0 24.9 8.4 -7.2

World 368.5 489.1 522.1 6.7 550.9 5.5

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Global printing output by region, 2002-17, billion A4 prints or equivalent (excl. packaging)

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Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Western Europe 12,316 13,017 10,299 -20.9 7,875 -23.5

North America 13,045 12,621 9,462 -25.0 7,370 -22.1

Asia 11,859 14,269 16,096 12.8 19,383 20.4

Latin America 1,671 2,370 2,952 24.5 3,566 20.8

Eastern Europe 1,256 1,877 1,863 -0.7 2,028 8.8

Middle East 482 706 658 -6.8 726 10.3

Africa 617 798 706 -11.5 944 33.7

Australasia 730 879 748 -14.9 618 -17.4

World 41,976 46,538 42,785 -8.1 42,510 -0.6

TRENDS IN GRAPHIC COMMUNICATIONS Understand the customer market first to understand the printing opportunity

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Global printed output by broad category, 2000-2017 (billion A4 prints or equivalent)

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Global printing output by category, 2002-2017, $ billion, constant (2012) prices & exchange rates

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Print product 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Newspapers 54.4 59.4 49.8 -16.1 42.0 -15.6

Magazines 73.0 79.8 73.0 -8.6 68.2 -6.6

Books 38.3 42.4 37.4 -11.7 35.3 -5.7

Directories 19.1 19.2 17.0 -11.5 13.3 -21.8

Catalogues 52.9 51.4 37.5 -27.0 29.7 -21.0

Other advertising 108.1 122.0 117.1 -4.0 118.5 1.1

Business/other 181.0 196.0 190.2 -3.0 198.3 4.3

Total print 526.9 570.3 522.1 -8.4 505.3 -3.2

Packaging/labels 270.5 310.7 334.1 7.5 408.1 22.2

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Global printing output by category, 2002-2017, billion A4 prints or equivalent

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% change,

2007-12 2017f

% change,

2012-17

Newspapers 18,269 18,741 17,054 -9.0 15,270 -10.5

Magazines 5,655 6,642 6,663 0.3 7,781 16.8

Books 2,269 2,603 2,188 -15.9 2,075 -5.2

Directories 1,292 1,605 1,572 -2.0 1,446 -8.0

Catalogues 2,220 2,606 2,067 -20.7 1,899 -8.1

Other advertising 3,525 4,371 3,887 -11.1 3,883 -0.1

Business/other 8,746 9,971 9,354 -6.2 10,156 8.6

Total print 41,976 46,538 42,785 -8.1 42,510 -0.6

Packaging/labels 4,674 5,635 6,034 7.1 7,233 19.9

Western European printing output by category, 2002-17, $ bn, constant (2012) prices & exchange rates

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% change,

2007-12 2017f

% change,

2012-17

Newspapers 8.4 8.1 5.7 -29.0 3.9 -31.5

Magazines 23.6 23.9 19.1 -20.1 15.6 -18.1

Books 10.4 10.9 8.7 -20.9 6.6 -24.1

Directories 6.4 5.1 4.2 -18.2 2.8 -33.7

Catalogues 9.6 8.9 6.2 -29.7 4.4 -29.1

Other advertising 34.2 34.5 28.6 -17.1 24.4 -14.6

Business/other 46.4 45.2 37.3 -17.5 33.1 -11.2

Total print 139.0 136.6 109.7 -19.7 90.8 -17.2

Packaging/labels 77.4 83.3 80.2 -3.7 86.0 7.2

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Western European printing output by category, 2002-2017, billion A4 prints or equivalent

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% change,

2007-12 2017f

% change,

2012-17

Newspapers 4,793 4,895 4,119 -15.8 2,939 -28.6

Magazines 2,798 3,113 2,553 -18.0 2,254 -11.7

Books 656 689 484 -29.7 326 -32.7

Directories 373 343 271 -21.0 179 -33.8

Catalogues 462 522 383 -26.6 293 -23.6

Other advertising 1,112 1,334 1,049 -21.4 807 -23.0

Business/other 2,122 2,121 1,439 -32.1 1,077 -25.2

Total print 12,316 13,017 10,299 -20.9 7,875 -23.5

Packaging/labels 1,364 1,542 1,516 -1.7 1,586 4.6

Newspapers

• Consistent year-on-year declines in newspaper circulations in Europe; younger consumers increasingly get their news online

• Paper represents a significant proportion of costs; shift to smaller incl. tabloid/berliner formats common in recent times

• Sharp fall in advertising revenues in 2009 with classified down sharply; continuing declines since that time

• Many newspapers not making any money; questionable how sustainable this is in medium term

• Some potential going forward in markets like India and supplements will boost output in some emerging markets but sector is for the most part mature around the world

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Trends in print specifications for

newspapers in Europe

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Print specification Trend

Number of titles Continuing to decline, by 0.3% per year on average across the region

Circulation changes (impact on run lengths)

Declining by around 3% per year

Number of pages Stable since 2008, though with signs of a decline since 2010.

Format changes Still more publications going over to tabloid format from broadsheets.

Basis weight changes Little change overall, though some efforts to use lighter weights for magazine and other inserts.

Newspaper advertising’s historic and estimated shares of above-the-line media sales in Europe, 2003-2012 (%

share by value)

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0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

% s

hare

by v

alu

e

Source: Smithers Pira from World Newspaper Trends

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Forecast scenarios for European printed newspaper volumes, 2011-16 (% change in tonnages over period)

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Market segment Scenario

Expected Best case Worst case

Newspapers:

Number of titles -5.0 -3.0 -15.0

Average circulation -10.0 -8.2 -20.0

Number of pages -6.0 -2.1 -10.0

Format/Product changes -1.3 0.5 -5.0

Supplements:




Format/product changes 0.2 2.0 -3.5

Magazines

• Dominated by heatset (web) offset and gravure. Digital has some potential in newsletters but segment is in decline

• Declining circulations in mature markets • Sharp drop in magazine advertising revenues in 2009

from which sector has barely recovered – classified advertising revenues down sharply

• Business publishing sector increasingly migrating online

• Sharp falls in SC demand in North America in 2012 • Some opportunities in emerging Asian markets as well

as Latin America

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magazines in Europe

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Number of titles Expected to grow for consumer magazines, but to decline in the case of business magazines, driven by much faster migration over to web versions

Circulation changes Declining in both the consumer and business magazine segments, though more rapidly in the latter

Number of pages A general decline in page numbers has set in throughout the printed magazine industry. We expect this only to accelerate

Format and basis weight changes

Notably less activity here than in other areas, with little or no change expected. Should business magazine publishers, though, gravitate quicker than anticipated to web-only versions, changes to lower basis weights and still-smaller formats will have to be looked at

Magazine advertising’s historic and estimated shares of above-the-line media sales in Europe, 2003-2012 (%

share by value)

32

Source: Smithers Pira from World Magazine Trends

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Forecast scenarios for European printed magazine volumes, 2011-16 (% change in tonnages over period)

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Market segment Scenario

Expected Best case Worst case

Consumer magazines:

Number of titles 6.4 8.3 -4.6



Format/Product changes 0.0 0.0 -1.0

Business magazines




Format/product changes -1.7 -1.7 -5.0

Books • Declining sales of books in Europe • Rise of the e-book a significant threat to the printed edition • Book retailing hit by recession – long-term implications for

impulse/gift purchases • Greater efficiency in the book supply chain, in part assisted

by developments in digital print • More use of full colour electrophotography for reprints;

inkjet to take on more mono work; digital will benefit from shorter average run lengths as title numbers continue to rise

• European book printing output affected by increasing “offshoring” to China

• No significant growth in Eastern Europe; better prospects in Latin America and certain Asian markets like India

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books in Europe

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Number of titles Growth anticipated in both the hardback and paperback segments, though only at the rate of about 1% per year

Average run-length Forecast to decline by as much as 30% between 2011 and 2016, owing to increasingly efficient digital printing methods for short-run jobs and a need to keep waste and returns down to absolute minimums

Number of pages Little change is occurring

Format and product changes

No change expected through 2016

Forecast scenarios for European printed book volumes, 2011-16 (% change in tonnages over period)

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Scenario Scenario

Expected Best Worst Expected Best Worst

Hardback fiction: Hardback non-fiction

Number of titles 5.0 8.4 0.4 10.0 13.6 5.3

Average run length -25.0 -20.9 -28.1 -30.0 -25.3 -32.1

Number of pages -2.0 -2.0 -2.0 -10.0 -10.0 -10.0

Format/product changes 0.0 1.0 -1.0 0.0 1.0 -1.0

Paperback fiction: Paperback non-fiction

Number of titles 5.0 9.4 0.4 7.0 10.4 2.8


Number of pages -1.9 -1.9 -1.9 -10.0 -10.0 -10.0

Format/product changes 0.0 0.0 0.0 0.0 1.0 -1.0

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Promotional print

• Rising number of print jobs in some areas but lower run lengths as advertising becomes more targeted

• Affected by online advertising in a similar fashion to other sectors

• Some growth in in-store PoS in grocery as EDLP strategies give way to more promotional pricing at a time of higher food inflation, but long-term trend is for less “clutter” at retail

• Printed below-the-line advertising not making the same gains as in previous economic downturns

• Catalogue printing sector hit by growth in online selling

• Advertising mail undeveloped in many emerging markets; questionable whether this will change significantly given online alternatives on offer

• Corporate communications shifting to paper-less digital delivery

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promotional print in Europe

38


Number of jobs Further declines in the number of jobs are expected.

Average run-

length

Once again, declines are forecast, motivated by

efforts to better target materials and avoid high

distribution costs, and thereby increase efficiencies

overall.

Number of pages Rapid drops in page numbers are anticipated going

forward, in the order of 10% or more between 2011

and 2016.

Format and

product changes

More dramatic change is predicted in this category

for catalogues than for directories, for example there

will be more frequent smaller versions of big mail

order catalogues, the so-called 'magalogues', will

grow.

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Forecast scenarios for European promotional print volumes, 2011-16 (% change in tonnages over period)

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Market segment Scenario Plus Best case Worst case Directories: Number of titles -7.0 -3.4 -15.0 Average run-length -7.0 -2.9 -15.0 Number of pages -10.0 -8.7 -15.0 Format/Product changes -3.0 -2.0 0.0

Catalogues: Number of titles -2.0 5.0 -10.2 Average run-length -11.0 -8.0 -15.0 Number of pages -13.2 -10.0 -15.0 Format/product changes 5.0 10.0 2.0 Other promotional print Number of jobs 13.8 20.0 5.0 Average run-length -20.6 -15.0 -25.0 Number of pages 1.8 4.0 0.0 Format/product changes 0.0 2.0 0.0

Stationery & transactional print

• Continuing declines in business forms

• Cheques to become obsolete in short-medium term; already obsolete in some countries

• “Paper-less billing” not growing as fast as first anticipated

• Single-pass inkjet taking share from offset/laser in transactional printing

• Office printing in Europe in steady decline

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Trends in print specifications for stationery

& transactional printing in Europe

41


Number of jobs More households and increasing line detail boost print volume, while electronic versions are growing. There are more business communications, but static print is under pressure with only some Eastern European markets showing growth.

Average run-length We are expecting average run-lengths to fall as well, owing to a combination of the growth in the exchange of forms over the Internet and more targeted, customised print-jobs, as opposed to long-run 'generic' print-runs which characterised the sector up to just a few years ago.

Number of pages Not forecast to change very much, if at all; the practice of printing large numbers of 'redundant' copies, long common in the stationery and transactional jobs, has now been largely eliminated, with consequent savings. There is some consolidation, where multiple bills may be combined into a single mailing to reduce postage costs.

Format and product changes

No change predicted here over the period: formats seem to have stabilised, reflected in the near universal use of the A4 size across the entire European region; and basis weights, too, are unlikely to experience much change from the standard 80gsm grades used.

Forecast scenarios for European stationery & transactional printing volumes, 2011-16 (% change in

tonnages over period)

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Scenario Scenario

Expected Best Worst Expected Best Worst

Business forms: Office print

Number of titles -15.1 -10.0 -20.0 -5.9 -2.5 -10.0

Average run length -3.7 0.0 -15.0 -1.0 0.0 -3.0

Number of pages 0.0 0.0 -5.0 0.0 0.0 0.0

Format/product changes 0.0 0.0 0.0 0.0 0.0 0.0

Business ID: Transactional print

Number of titles -12.0 -5.0 -15.0 2.0 5.0 -5.0


Number of pages 0.0 0.0 0.0 0.0 1.0 -1.0

Format/product changes 0.0 0.0 0.0 0.0 0.0 0.0

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PROSPECTS FOR DIGITAL PRINT VS. CONVENTIONAL PRINT

In pursuit of added value

43

Position of digital vs. conventional print

• Small but growing share of overall print volumes, helping drive value-added growth

• Strongest where variable print and short-run print work are required

• Expensive at higher run lengths

• Improvements in quality

• High levels of investment in technology improvements

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Printing costs today

Figures relate to typical printing tasks undertaken by different presses; these are not like-for-like costs, i.e. do not refer to the same printing task

45

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rotogravure Narrow w eb

Flexo

Heatset Long Perfector Simplex Colour Digital

Pro

prt

ion

of

tota

l c

os

t

Press Depreciation Labour Paper Ink Overhead Energy Prepress Waste Click charge Profit margin

Global printing/printed packaging output by process, 2002-17, $ bn, constant (2012) prices & exch. rates

46 46

Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Sheetfed offset litho 183.1 203.1 194.8 -4.1 197.5 1.4 Heatset (web) offset litho 145.3 146.9 118.0 -19.6 102.8 -12.9 Coldset (web) offset litho 119.8 124.0 98.8 -20.3 80.1 -18.9 Gravure 74.3 82.6 77.2 -6.5 78.7 1.9 Flexo 133.9 149.3 151.6 1.6 171.8 13.3 Screen 29.1 25.9 19.5 -24.7 14.4 -26.0 Letterpress 8.7 8.7 5.0 -42.7 4.2 -14.5 Other 62.2 64.7 70.2 8.5 83.5 19.0 Electrophotography 24.5 49.4 78.7 59.3 105.7 34.4 Inkjet 16.5 26.6 42.6 60.3 74.6 75.3 Total 797.3 880.9 856.2 -2.8 913.4 6.7

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Global printing/printed packaging output by process, 2002-17, billion A4 prints or equivalent

47 47

Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Sheetfed offset litho 6,105 7,432 7,232 -2.7 7,546 4.3 Heatset (web) offset litho 8,993 10,516 9,791 -6.9 10,520 7.5 Coldset (web) offset litho 21,801 22,686 20,282 -10.6 18,531 -8.6 Gravure 2,944 3,624 3,368 -7.1 3,553 5.5 Flexo 3,373 4,086 4,252 4.1 5,178 21.8 Screen 421 407 318 -21.8 280 -11.9 Letterpress 841 843 624 -26.0 568 -8.9 Other 1,652 1,705 1,883 10.4 2,081 10.6 Electrophotography 418 696 768 10.2 900 17.2 Inkjet 102 177 301 70.0 584 93.9 Total 46,650 52,172 48,819 -6.4 49,743 1.9

Western European printing & printed packaging output by process, 2002-17, $ bn, constant (2012)

prices & exchange rates

48 48

Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Sheetfed offset litho 47.7 48.6 39.8 -18.0 35.0 -12.1

Heatset (web) offset litho 41.0 39.9 29.5 -26.0 22.6 -23.4

Coldset (web) offset litho 29.2 26.6 18.1 -31.8 11.0 -39.2

Gravure 19.4 18.9 15.7 -17.2 14.1 -10.1

Flexo 41.1 42.7 37.7 -11.7 36.4 -3.3

Screen 8.2 6.2 3.9 -36.7 2.3 -40.7

Letterpress 1.9 2.3 0.3 -87.8 0.1 -51.2

Other 16.9 16.7 18.9 13.0 20.3 7.2

Electrophotography 6.1 11.7 17.4 48.9 20.8 20.1

Inkjet 4.8 6.4 8.8 36.2 14.1 61.3

Total 216.3 219.9 190.0 -13.6 176.8 -6.9

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Western European printing & printed packaging output by process, 2002-17, billion A4 prints or

equivalent

49 49

Region 2002 2007 2012e

% change,

2007-12 2017f

% change,

2012-17

Sheetfed offset litho 1,472 1,594 1,214 -23.8 994 -18.1

Heatset (web) offset litho 3,264 3,586 2,862 -20.2 2,439 -14.8

Coldset (web) offset litho 6,037 6,111 4,822 -21.1 3,310 -31.4

Gravure 1,068 1,265 1,067 -15.7 936 -12.3

Flexo 1,148 1,278 1,150 -10.0 1,047 -8.9

Screen 54 53 37 -29.2 30 -19.2

Letterpress 100 98 16 -83.8 12 -26.0

Other 409 367 404 10.1 405 0.4

Electrophotography 97 159 168 5.7 160 -4.9

Inkjet 31 48 75 55.3 128 69.5

Total 13,680 14,559 11,815 -18.9 9,461 -19.9

European Printing Inks Consumption by Type, 2012 (% share by volume)

50 50

24/04/2013

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European Sales of New Printing Equipment by Type, 2012 (% share by value)

51 51

Electrophotography – typical work

• Mono direct mail & transactional

• Books & manuals

• Short run commercial print

• Photobooks

• Business cards

• Security print – passports, tickets etc.

• Self-adhesive labels

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Forecast for electrophotograhic print technology, 2011-2021

53

2011 2021

Colour electrophotography, sheetfed

SRA3+ format, 120ppm top speed (per engine, multi-engine configurations). Very high quality and good reliability

Wider range of colour toner presses, top speed some 200ppm per engine.

Large print area option from Xerox, Kodak and MGI

A few B2 colour machines but niche presence

Web presses from Xeikon and HP Indigo represent good niches, including B2 for Xeikon

Used in labels, packaging, books and mailing applications

High speed colour electrophotography

Colour duplex webs at 1,000ppm, quality lower than sheetfed

No market presence, inkjet dominates

Mono electrophotography

Sheetfed duplex up to 250ppm, on-line finishing popular

Some sheetfed applications, merging with high end office printers from Lexmark, OKI, Brother, etc.

Web-fed at 700ppm simplex widely used to overprint litho base stock in transactional, direct mail and security applications

Less high volume mono, colour more widespread. Single pass inkjet dominates in web printing replacing litho pre-print.

Toner technology Mostly mechanical pulverised toners, some chemically produced

Chemically produced toners dominate with significant bio-sourced raw materials in toners to improve sustainability.

Inkjet – typical work

• Addressing, batch and date coding

• Books, newspapers, transactional/transpromo, direct mail, magazines, catalogues

• Proofing/prototyping

• Signage, display and PoS, vehicle livery

• Labels

• Cartons & corrugated boxes

• Ceramics textiles

• Photo

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Forecast for inkjet print technology

55

2011 2021

Inkjet heads Piezo, thermal and continuous heads, drop sizes 1-40pl

Higher speed, higher resolution heads in the market. Smaller ink drops boost achievable quality

Individual heads 40-60kHz, scalability built in to head design

Nozzle speeds 100kHz common, rigid arrays 1.2m wide economic and in use

Reliability is critical with continuous recirculating ink

Reliability and redundancy built in to new inkjet presses

Inkjet inks Solvent, water-based and UV curing being joined by phase change inks.

Choice of water-based (high pigment loadings with new drying mechanisms) and UV aided curing. Phase change systems significant with low energy requirement for drying

Ink prices typically $100-200 per litre, some low cost Chinese formulations in wide-format

Significantly lower ink pricing, with much higher volumes

Narrow web inkjet presses

UV and water based common. Speeds up to 30m per minute being joined by higher performance models. Semi rotary in-line finishing will be joined by laser cutting

Inkjet has high share of label and flexible packaging printing. Many packer/fillers look to print at the filling line to give supply chain benefits

Wide web inkjet presses

Colour machines at up to 1,079mm wide, printing at 5,000ppm+ common books, newspapers, transactional and direct mail

Machines up to 1.5m print width running at 700m per minute (some 25,000ppm+). Competing with offset, flexo and gravure

Sheetfed inkjet presses

Low quality A4/A3 printers, high quality B2 presses shown in demonstration for commercial launch in 2012

B2 available running at 5,000 duplexing sheets per hour. B1 presses in development

2013 survey: printing equipment usage and investment plans (n=357)

Type % users Average number of presses (all respondents)

% planning to invest within 5 years

Sheetfed offset litho 73.7 3.1 39.9

Heatset web offset litho 13.7 0.8 7.4

Coldset web offset litho 11.2 0.7 4.8

Sheetfed laser 64.1 3.0 54.9

Webfed laser 13.2 0.6 22.1

Inkjet 55.5 2.0 62.1

Gravure 3.6 0.3 2.7

Flexo 7.8 0.5 8.6

Screen 7.3 0.3 6.9

Letterpress 23.5 0.7 6.7

56 56

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2013 survey: offset & digital printing equipment replacement and depreciation timescales

57 57

2013 survey: ave. offset & digital run lengths

58 58

n=357

24/04/2013

30

2013 survey: new applications opened up by improvements in digital print technology

59 59

Print technology map in 2013

60

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Print technology map in 2014

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CONCLUDING STATEMENTS

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SWOT of Print

63

Strengths

Tactile

Light, portable, cheap

No power source needed

High Quality

Proven, effective

Recyclable, sustainable

Weaknesses

Perceived environmental impact

Dates quickly

Cost

Distribution

Increasing transparency of costs

Packaging supply chains

Part of a mixed media campaign

Smart material capabilities

Semantic web, wider placing of jobs

Weakness of alternative media

Opportunities

Alternative media

Environmental pressures

Postal price rises

Mailing preference opt-in legislation and data security

Threats

Future of print?

• Print advocacy

– Speaking as a devotee…

– Best way to take in information

– Print has value and legitimacy/alternate view

– Sustainable

– Intellectual property

• Digital printing to take a greater share of output

– Growth prospects limited by declines in overall printing output in the medium-long term

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Thanks for listening!

Nick Waite

Head of Market Research

Smithers Pira

+44 (0) 1372 802 115

[email protected]

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