Market Trends and Dynamics in the Printing Industry What are the Key Drivers for Change? Engelbert Stranegger Business Development 20.02.2014
Agenda Introduction Global Printing Market Printing Market Dynamics by Region Asia Printing Markets 2013 2018 Print Technologies Most critical impacts to drive change in Printing Industry Key drivers for change Q & A Alina Gafu Océ Software Romania 2
Leadership in digital printing and document management
Corporate profile: Canon - Océ Leader in professional and consumer imaging Founded 1937, HQ in Tokyo, Japan Top 3 position in US patents One of the best known global brands with rank 30 in Interbrand ranking Revenues: $ 46 billion per year ~200,000 people worldwide 87,000 people in manufacturing (44%) Leader in printing and document services for professionals Founded 1877, HQ in Venlo, The Netherlands Member of the Canon Group since 2010 Revenues: $ 1.8 billion per year (Production Printing Products only) ~3,800 people worldwide ~1,600 people in R&D ~1,300 people in manufacturing ~ 900 people in other departments Alina Gafu Océ Software Romania 4
Global printing industry market 2013 Total market size: 898 billion $ 4% Billion $ 39% 349,6 Asia RoW 36 900 800 Packaging & 700 Labels 600 388,3 304 EMEA 34% 500 400 300 208 509,4 North America 200 Graphic Applications 100 23% Asia represents 39% of global printing industry market 0 Graphic applications make up about 57 % of global printing market Source: PIRA: The Future of Global Printing to 2018
Global printing industry market 2013 Total market size: 898 billion $ Billion $ 500 28.4 Security / Transactional 388.3 Packaging Labels 509.4 Graphics 400 300 200 174.9 146.7 Commercial / others Advertising / Catalogs 100 156.3 Publishing 0 Graphics market represents about 57% of printing industry market Publishing, Advertising and Commercial are almost equal in size
Global printing industry market size 2008-20182018 Billion $ constant 2012 prices & exchange rates*) 1,200 Total 1,000 800 600 400 Graphics Packaging 200 0 Alina Gafu Océ Software Romania 2008 2012 2013 2014 2018 PIRA forecasts globally a slightly declining graphics market Growth is driven by packaging segments Source: PIRA: The Future of Global Printing to 2018
Printing Market Dynamics by Regions CAGR 2013-2018 2018 by value % World total Europe total Asia total NOA total LatAm total Africa total 8.0 6.0 6.8 6.0 5.6 6.2 4.0 2.0 0.0-2.0 1.8-0.1 41 4.1 41 4.1 1.2 1.8 1.5-0.6-0.6-1.9-2.6 3.8 2.0 3.9-4.0 Total market Graphics Packaging/Labels PIRA forecasts positive global growth mainly due to dynamics of Asian and LatAm markets. EMEA and NOA printing markets are slightly declining Graphic applications are loose heavily in Western Europe and US Growth in packaging throughout the regions Eastern Europe, Africa, Middle East: small but showing growing potential Source: PIRA: The Future of Global Printing to 2018 Alina Gafu Océ Software Romania
Asia printing markets 2013-2018 Total market size 2013: 349,6 billion $ Total market size 2018: 427,5 billion $ Country Market Share CAGR 2018 144,3 China China 210,4 7,8% 10,4 10,5 116,9 Japan India South Korea Taiwan Indonesia Other Asia Japan 108,3-1,5% India 32,5 5,7% Korea 19,1 1,1% Taiwan 11,7 2,0% Indonesia 14,5 6,8% Other Asia 31 4,9% China and Japan represent 73,2% of total Asia printing market 7,8% CAGR in China until 2018 while Japan Printing Market is expected to decline Significant growth in many of the other Countries in Asia expected Source: PIRA: The Future of Global Printing to 2018
Asia printing market size by application Development t2013-2018 2018 (w/o packaging & labels) l Billion $ 80.0 2,0% 70.0 60.0 50.0 CAGR 2013-2018 40.0 2,5% 30.00 1,2% -0,3% 20.0 10.0-0,6% -1,3% -0,7% +9,7% 0.0 Alina Gafu Océ Software Romania 2013 2018 Commercial and advertising printing are most important print markets and promising Publishing markets show considerable decline PIRA forecasts significant growth for transactional and security print Source: PIRA: The Future of Global Printing to 2018
Printing technologies World and Asia Printing equipment sales and development 2013-2018 2018 10.0 80 8.0 6.0 4.0 2.0 0.0-2.0-4.0-1.6 Growth rates machine sales by printing technology worldwide -0.9 90 9.0 CAGR 2013-2018 in % 30 3.0 Offset Other conv.* Inkjet Electrophotography 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0 Growth rates machine sales by printing technology in Asia -1.7-0.3 10.8 42 4.2 Offset Other conv.* Inkjet Electrophotography Alina Gafu Océ Software Romania Offset is shrinking digital printing grows at high pace Digital share 2013 in machinery sales is 18,4% worldwide while Asia reports a share of 27,3% Inkjet exhibits higher h growth rates than any other print technology * Gravure, flexo, screen, incl. pre- and post processing Source: PIRA: The Future of Global Printing to 2018
Critical impacts to drive change in GA-Industry Competition with online media Saturated markets Price competition Carbon footprint Industry consolidation Digital printing capabilities Declining run length Alina Gafu Océ Software Romania
Key Drivers for Change Changed Customer Requirements Clients Requirements Shorter product lifecycles Faster turnaround Fragmentation of consumer interests More but smaller jobs Tighter budgets Global, targeted, multimedia communications Competition Increased productivity Expanded services with web & print Stronger client relationships Due to shorter print runs and tighter deadlines, demand for digital printing is significantly growing (Source: NAPL)
Key Drivers for Change Key Applications driving the Transformation Transaction Printing 2012 2018 Offset pre-printed forms Plain paper solution Digital overprints mono Full digital color Leaflet, promotion offset printed Target marketing, customer relevant promotion R2 - Confid dential 8% Digital Mono Source: Caslon Digital Color Billion pages 400 350 Digital Mono Digital Color 300 92% 250 77% 200 150 100 50 0 2012 2016 2012 2018 Digital Overall print volume is declining, due to paperless payments. Amount of digital color pages will increase, mainly through target marketing activities. 23% 14
Key Drivers for Change Key Applications driving the Transformation Direct Mail 2012 2018 Offset printed and personalization with digital overprinting / imprinting Plain paper solution Full digital color Full personalization R2 - Confid dential Digital Mono 23% Digital it Color 77% Billion pages 800 700 600 500 400 300 Digital Offset Digital Mono Digital Color 56% 44% 200 100 0 2012 2018 2016 Source: Caslon Overall Direct Mail spending will decrease, but a high growth in digital color volume is forecasted customized Direct Mail. 15
R2 - Confid dential Key Drivers for Change Key Applications driving the Transformation Books 2012 2018 Most books offset printed, few start with digital production E-Books widely accepted for paperbacks 10% Digital Mono Digital Color 90% Declining offset volumes, use of digital printing for monochrome and color prints Billion pages 2500 Digital Mono Digital Color 18% 2000 1500 1000 Digital Offset 82% Source: Caslon 500 0 2012 2018 2016 Total book print volume will fall significantly over the next five years. E-books will have a dramatic effect on printed sales of mass market paperbacks, resulting in more digital print volume. 16
Reference Sources R2 - Confid dential Pira: The Future of global Printing to 2018 IBIS World Industry Report: Printing in the US Caslon Report: North American Monochrome Production Digital Printing Market Caslon Report: North America Production Digital Printing Color Market Forecast WAN-IFRA: Digital Printing for Newspaper IT-Strategies: Research on Emerging g Print Markets Pira: The Future of Digital Print for Packaging to 2018 Pira: The Future of Folding Cartons Market Forecast to 2018 Interquest: The Direct Mail Market Info Trends: The Production Color Inkjet Market 2013 Info Trends: Substrates and Inkjet The move toward higher Quality Output PRIMIR: The Evolution of general Commercial Print Implications for the Future 17
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