Print Market Overview: Employment – Markets – Technology

Prepared by Nick Waite, Head of Market Research, Smithers Pira

Introduction – Smithers Pira print research

EU commercial printing industry Printer demographics (employment, companies)

Impact of automation

EU print market trends Market overview

Print product/process trends

Consumables & equipment

Digital printing developments

Outlook

Agenda

Who we are

Delivering high value information enabling you to make better decisions, faster

3 Information

Hubs in Europe

and the US

Working with a

Global Network of associates

consultants, freelancers

and experts

To serve a

World-wide

Customer Base

Who we serve

50 market reports on paper, print, packaging

& other industrial areas each year

Bespoke multi-client & single-client market

research and technical consultancy

Producer of 20-30 industry conferences

each year

Journals & online database products

Laboratories & package testing facilities

Smithers Pira

• Primary and secondary research, backed up by in-house technical consultants

• Global network of market research associates in Europe, Asia and the Americas

• Survey programs plus informal contacts with industry

• Wide range of secondary sources consulted

• Proprietary in-house print database and information centre

General methodology

EU28 commercial printing industry –

employment and enterprises, 2008-2014

Source: Eurostat/Smithers Pira estimates

130.134 124.177 122.950 119.589 116.976 117.709 114.637

798.010 726.334 724.360 696.311

653.004 627.485 620.842

0

200.000

400.000

600.000

800.000

1.000.000

2008 2009 2010 2011 2012 2013 2014

Number of enterprises

Number of employees

Increasing automation leading to greater efficiencies throughout the print business, including in both administration and print production. Key areas include online printing portals (e.g. VistaPrint), photobook manufacturing, self-publishing – and also standard jobbing print items

Companies increasingly adopting workflow systems that gang jobs together, often employing one makeready for multiple jobs. Prepress becoming largely automated, with plates automatically generated by workflow system. A variety of jobs can be bundled on a single plate – possibly 6 business card jobs or even 150

Declining print demand since 2007/8 leading to business failures and redundancies

Print production process also becoming increasingly automated, with equipment taking instruction from admin side, normally enabled through JDF (job description format) from original order. Changeovers on modern sheetfed presses now taking less than 10 minutes for whole makeready, with minimal manual intervention required

Employment levels hit by combination of

declining demand and rising automation

German sheetfed printer with a presence across Europe – part of growing German trend of adopting web-to-print techniques, using large format sheetfed litho to print standard products, and ganging jobs together to share the cost (and time) of make-readies across several jobs. Standard paper stocks and process colour printing make sheetfed competitive

SaxoPrint

• Product lines encompass advertising print, packaging, commercial print and publication print (e.g. magazines)

• SaxoPrint business model based on providing high quality, fast turnaround and environmentally friendly production; has expanded over the years to become very cost efficient though economies of scale Recent Speedmaster XL acquisitions from Heidelberg providing efficiency at short runs

EU27 commercial printing output, 2008:

€61.3 billion

Sharp downturn in output in 2009 (down

12%) followed by more stable conditions in

2010/11/12

Annual € declines of 2.2% per annum, 2009-

2014

Overall decline of more than 5% in revenues in

2014 despite some more positive indicators

elsewhere

Some signs of stabilization in commercial

printing industry output after protracted

period of decline, but revenues down

again in 2014 according to Eurostat data

EU27 commercial printing industry output,

2008-2014 (€ million)

Source: Eurostat

61.265

53.705 52.415 53.108 53.564 50.614

47.984

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2008 2009 2010 2011 2012 2013 2014

Other data points to stronger performance, with

decline 1.0-1.5% in P&W paper demand in 2014

Source: Eurostat/CEPI

000 tonnes

Eurostat data CEPI

2007 2009 2011 2013 2014 CAGR 07/14 % C, 13-14 % C, 13-14

Newsprint 11,098 9,186 8,999 7,987 7,802 -6.8 -2.3 -2.7

Uncoated woodfree 11,259 9,654 8,861 7,958 8,160 -6.2 2.5 1.0

Uncoated mechanical 5,503 4,965 5,179 5,070 4,693 -3.1 -7.4 -4.1

Coated woodfree 5,377 4,257 4,899 4,638 4,449 -3.7 -4.1 -1.5

Coated mechanical 9,082 6,246 6,633 6,000 6,205 -7.3 3.4 -0.5

Total 42,319 34,307 34,571 31,652 31,310 -5.8 -1.1 -1.4

EU28 printing & writing paper consumption by type, 2007-14

Printing ink demand down just 0.5% in 2014

Source: Eurostat

000 tonnes 2007 2009 2011 2013 2014 CAGR 07/14 % C, 13-14

Black printing inks 214 176 167 161 157 -4.3 -2.5

Other printing inks 1,039 886 834 809 809 -3.5 0.0

Total 1,253 1,062 1,001 970 966 -3.6 -0.5

0

200

400

600

800

1.000

1.200

2007 2009 2011 2013 2014

Black printing inksOther printing inksEU28

printing

inks

demand,

2007-14

Smithers Pira view

Currently finalising global figures for 2014

Preliminary view – European printing & packaging output down 0.3% to €165 billion Packaging & labels up 2.0% to €76 billion

Graphic print down 2.3% to €89 billion

Trends in EU28 similar to Europe as a whole – no growth in Russian printing revenues in 2014

Trends in European Printing & Printed Packaging Output,

2009-2019f (€bn, constant 2013 prices & exchange rates)

0,0

20,0

40,0

60,0

80,0

100,0

120,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Graphic print

Printed packaging

Note: constant price values show market

data at 2013 prices, removing impact of

inflation and exchange rate fluctuations

from one year to the next

Source: Smithers Pira

European Printing & Printed Packaging

Output, 2009-2019f

140,0

145,0

150,0

155,0

160,0

165,0

170,0

175,0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

€ b

illio

n

€ billion, current prices & exchange rates

€ billion, constant (2013) prices & exchange rates

Source: Smithers Pira

European Printing & Printed Packaging Output by Print

Product, 2013-2019f (€ million, current prices &

exchange rates)

Source: Smithers Pira

2013 2014 % change, 2013-14 2019f CAGR (%), 2014-19

Books 6.77 6.43 -5.0 5.25 -4.0

Magazines 11.09 10.90 -1.7 10.04 -1.6

Newspapers 5.77 5.42 -6.1 4.20 -5.0

Advertising 24.65 24.35 -1.2 23.90 -0.4

Catalogues 5.21 5.00 -4.1 4.16 -3.6

Directories 3.18 3.02 -5.0 2.36 -4.8

Security 1.39 1.39 -0.1 1.38 -0.1

Transactional 3.20 3.28 2.6 4.12 4.7

Other commercial 29.66 29.08 -2.0 28.38 -0.5

Packaging 67.60 68.90 1.9 78.91 2.7

Labels 6.72 6.92 3.1 8.26 3.6

Total 165.24 164.69 -0.3 170.96 0.8

Newspapers

Source: WAN/IFRA

European mkt, 2014: €5.42bn

-6.1%, 2014p

-5.0% p.a., 2019f

European newspaper advertising

expenditure, 2009-2013 (€ billion)

20,43 21,37 19,98 19,64

17,36

0

5

10

15

20

25

2009 2010 2011 2012 2013

Source: Smithers Pira

Magazines

Source: World Magazine Trends

European mkt, 2014: €10.9bn

-1.7%, 2014p

-1.6% p.a., 2019f

European magazine advertising

expenditure, 2007-2014 (€ billion)

94,60

88,30

82,12

92,46 91,26

97,24

93,40 95,71

70

75

80

85

90

95

100

Source: Smithers Pira

Books

Source: Eurostat

European mkt, 2014: €6.43bn

-5.0%, 2014p

-4.0% p.a., 2019f

EU 27 book printing revenues by type,

2008-2014 (€ million)

2008 2014 % change, 2008-14

Books, total 6,561 5,292 -19.3

Books, brochures, pamphlets (excl. single sheets) 5,607 5,204 -7.2

Children's picture, etc. books 301 54 -82.0

Dictionaries & encyclopaedias 537 22 -96.0

Map books, etc. 117 12 -89.9

Source: Smithers Pira

Non-EU and Chinese share of EU book

imports, 2002-Q1 2015

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1,2015

% s

har

e b

y vo

lum

e (

ton

nag

e)

Non-EU, overall China

Source: Eurostat/UN

Catalogues

Source: Eurostat

European mkt, 2014: €4.99bn

-4.1%, 2014p

-3.6% p.a., 2019f

Source: Smithers Pira

EU 27 catalogue printing revenues by

type, 2008-2014 (€ million)

4.618

4.177 3.945 4.010 4.052

4.290

3.561

0

1.000

2.000

3.000

4.000

5.000

2008 2009 2010 2011 2012 2013 2014

Advertising

European mkt, 2014: €24.3bn

-1.2%, 2014p

-0.4% p.a., 2019f

Source: Smithers Pira Source: Smithers Pira

European printed advertising output

by type, 2014 (% share by value)

Brochures, pamphlets,

other promotional

38%

Direct mail 18%

Inserts 7%

Indoor PoS/signage

24%

Outdoor PoS/signage

13%

Other commercial

print

Source: Smithers Pira

European mkt, 2014: €36.8bn

-1.8%, 2014p

-0.3% p.a., 2019f

Source: Smithers Pira

Photobooks 4% Directories

8%

Info print 17%

Business forms

3%

Business ID 8%

Fin/legal 6%

Coupons, etc. 2%

Manuals <1%

Newsletters <1%

Transactional 9%

Security 4%

Cheques <1%

Others 39%

Other European commercial printing

output by type, 2014 (% share by

value)

European mkt, 2014: €75.8bn

+2.0%, 2014p

+2.8% p.a., 2019f

Packaging &

labels

Source: Smithers Pira Source: Smithers Pira

European package & label printing

revenues by type, 2009-2014 (€

million)

0

5.000

10.000

15.000

20.000

25.0002009

2014

European Printing & Printed Packaging Output

by Process, 2012-2019f (€ million, constant

2013 prices & exchange rates)

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

2013

2014

2019

Source: Smithers Pira

European Printing Inks Consumption by

Type, 2014 (% share by volume)

Sheetfed 12%

Coldset 19%

Heatset 12%

Gravure 22%

Flexo 25%

Screen 2%

Letterpress 1%

Toner 5%

Inkjet 2%

Total printing inks & colourants consumption: one million tonnes

Source: Smithers Pira

EU28 printing equipment sales by type,

2008-2014 (sold production, € million)

Source: Eurostat

2008 2009 2011 2013 2014 CAGR 08/14 %C, 13-14

Reel fed offset 2,008 1,106 523 521 364 -24.8 -30.0

Other offset 2,515 1,157 1,800 1,291 1,500 -8.3 16.2

Flexographic 443 365 548 535 610 5.5 14.0

Reel fed letterpress 127 99 82 88 78 -7.8 -11.4

Gravure 171 40* 138 161 165 -0.6 2.7

Other commercial printing equ’t. 1,010 864 1,590 1,711 1,641 8.4 -4.1

Postpress equipment for books 717 419 416 363 355 -11.1 -2.4

Press equipment 178 114 166 180 187 0.8 3.7

Total 7,169 4,164 5,262 4,850 4,901 -6.1 1.0

Note: *estimate, probably too low

European Sales of Printing Equipment by

Type, 2014 (% share by value)

Sheetfed 29%

Heatset 4%

Coldset 3% Gravure

6%

Flexo 13%

Screen 2%

Prepress 8%

Postpress 7%

Electro-photography 11%

Inkjet 14%

Total sales of new printing equipment: €5.32 billion

Source: Smithers Pira

Digital printing equipment sales forecast to grow by 5% per annum in current terms over the next five years, from €1.47bn in 2014 to €1.91bn by 2019. Inkjet sales to reach €1.12bn

Digital share of printing output to rise from 14% in value terms to 20% between 2014 and 2019. Volume share to remain below 4%

Focus will remain on short and short-medium run length areas like signage, but also print-on-demand. Strong growth in digital across commercial printing areas, labels and books. Packaging will emerge as a key target area for development

Inkjet to take share from electrophotography in mono book printing; growth in electrophotography here likely to be more value-driven

Digital printing

Océ VarioPrint i300 Series inkjet Printer Previously codenamed ‘Niagara’, the VarioPrint i300 is the first high-speed colour B3

sheetfed inkjet production print system, representing a new category of press

• Features patented ink, print head

and paper handling technology

enabling it to print on a wide

range of media, including

uncoated, coated and inkjet

treated paper

• Incorporates ColorStream 3000

inkjet technology mono cut sheet

VarioPrint 6000 series paper

handling system, and PRISMA

control platform

• Aimed to take share from cut

sheet digital presses as users

develop new commercial print

applications with the press, as

well as from high speed inkjet

lines

Ricoh Pro™ VC60000 • New high-speed production

printer from Ricoh

• Designed for high-quality

printing on standard

substrates, enabled by a

priming station that allows

standard offset papers to be

printed, and an inkjet coating

capability that provides

protection and enhancement

to the print

• VC60000 uses a new high

viscosity, high pigment loading,

water-based ink system,

drying rapidly at the surface of

a primed paper leading to very

smooth results.

HP High-speed Inkjet Corrugated Packaging

New 2.8m wide T1110 corrugated machine developed in conjunction with KBA, with a

speed of 183m per minute, equating to over 30,000 square metres per hour – the most

productive of any digital printing device

LANDA S10 Nanographic Printing® Press

• Deliveries of first, highly-anticipated Landa line set for next year

• B1 format press targeted principally at cartons and general commercial printing jobs

• Claimed to have lowest consumable cost of any digital printing machine – against sheetfed litho, it should be competitive up to 5-7,000 x B1 prints or around 30,000 boxes

Thank you for your attention!

Nick Waite – Head of Market Research

Cleeve Road, Leatherhead, Surrey, KT22 7RU

Phone: +44 1372 802115

Email: nwaite@smithers.com

www.smitherspira.com