Esa Saarinen_ Heidelber PMI Indicators - Market Trends 2020 FINAL

8/10/2019 Esa Saarinen_ Heidelber PMI Indicators - Market Trends 2020 FINAL

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HeidelbergerDruckmaschinenA

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PMI Trends 2020

Esa Saarinen BaltPrint Conference

October 2014 Vilnius


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PMI Trends 2020

1) Source: Global Insight

2) Source: Heidelberg estimate, industry statistics, PIRA, RISI, PRIMIR, Global Insight

3) Source: Heidelberg estimate , ZenithOptimedia

4) Source: Heidelberg estimate, Risi

2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020

2014 2015 2016 2017 2018 2019 2020

Significant differences () to previous forecast requires

downward correction of PMI Supply Market

Slide: 2

GDP growth1) Print advertising exp. Growth3)

PPV growth2) RISI paper growth4)

2014 2015 2016 2017 2018 2019 2020

-0.4% -0.2% -0.1% +0.2% +0.3%

latest Forecast

previous Forecast

+0.2% +0.3%

-1.5% -1.1% -0.8% -1.0% -0.6%-0.8% -0.4%

-1.6% -1.0% -1.6% -2.0% -3.2%-2.6% -3.9%

-3.0% -0.5% -0.2% -0.9% -1.2%-1.2% -1.3%

5)

5) Forecast June 2014 vs April 2013

6) Forecast Mai 2014 vs April 2013

7) Forecast June 2013 vs. Dec. 2012

8) Forecast Febr. 2014 vs Nov. 2012

6)

7)

8)


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Despite further penetration of electronic media the worldwide PPV will

grow moderately

406 407 401 399 410420

435 444 441406 413 414 410 407

427

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

400,0

450,0

500,0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 20

R

ea

lPrin

tVo

lume

inbn.

*

CAGR 00-13: 0,0%

Global PPV, in BillionActual 2000-2013; Forecast 2014-2020

CAGR 13-20: 0,7%

Source: Heidelberg estimate June 2014, industry statistics, PIRA, RISI, PRIMIR, Global InsightBase Year 2009

Slide: 3


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Attractive growth in Print Production Volume confirms the importance of

the developing markets

0

40

80

120

160

200

North America Central Europe Asia/Pacific Eastern Europe Latin America Middle East /

Africa

2015

2013

Print Production Volume (PPV) in billionby region

Actual 2013; Forecast 2015; 2020

2020

Rea

lPrin

tVo

lume

in

bn.

*

CAGR

13 -15

-1,0%

CAGR

13 - 20

-1,0%

CAGR

13 -15

-1,4%

CAGR

13- 20

-1,2%

CAGR

13 -15

2,3%

CAGR

13 - 20

2,5%

CAGR

13 -15

1,3%

CAGR

13 - 20

1,7%

CAGR

13 -15

1,2%

CAGR

13 - 20

1,8%

CAGR

13 -15

3,1%

CAGR

13 - 20

3,2%

Source: Heidelberg estimate June 2014, industry statistics, PIRA, RISI, PRIMIR, Global Insight

Base Year 2009Slide: 4


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Outlook on print production volume in key end markets: slow growth

in publishing and commercial and robust growth in packaging

Development of the global markets until 2020 (PPV inbn)

2013 2015 2020

Commercials Packaging Publishing & others

119,9 118,2 115,7

110,1 117,2 138,4

176,6 174,7

172,9

406,6410,1

427,0

3,2% p.a.

0,8% p.a.

-0,5% p.a.

-0,7% p.a.

0,4% p.a.

3,4% p.a.

-0,2% p.a.

-0,4% p.a.

Only

Packaging

will have

growth

potential


Base Year 2009

Packaging: Labels, Folding Carton, Flexible Packaging Slide: 5


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0

100.000

200.000

300.000

400.000

500.000

2000 2005 2007 2009 2013 2015 2020

Development of Printing Process Sharesby Print Production Volume (Mio*)

Actual 2000-2013; Forecast 2014-2020

Source: Heidelberg estimate June 2014, industry statistics, PIRA, Jakkoo Pyry, Primir (GAMIS), Global Insight

Digital: Only Digital Production Devices are taken into consideration

*Base Year 2009

Web

Offset:

Digital:

Other:

Annual Growth

(2013-2020)

Total: 0,7%

Prin

tPro

duc

tion

Volu

me

(Mio

.*)

Flexo:

On the technology side, digital printing is growing strongly, but

from a small base

Forecast

- 2,7%

Sheetfed

Offset:- 0,6%

8,5%

2,6%

- 1,3%

Slide: 6


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There will be a lot fewer printing companies around the world The remaining traditional print companies can be split into high productivity, highly

industrialized organizations, or small niche specialists.

Altogether they are well-organized, highly industrialized print companies with high

levels of automation and efficiencies.

But: Most print companies are gaining more revenues from non ink-on-paper activities!

Therefore some have become broader marketing service support companies, maybe

as groups with other service providers.

In 2020 printers will provide an online content version, artwork asset management

services, data management and analytics, mailing, warehousing and stock

management, distribution and logistics, campaign management and execution.

Specialists are handling more activities for customers, stepping in to increase their

share of the value chain. Magazine printers for example will handle mailing at the end

of a binding line with direct addressing or labelling. Others will handle the subscription

services, mailing copies and producing reminders with the magazine, or handling

renewal campaigns.

Printing in 2020

Slide: 7


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The traditional print products will still be to the fore, but many will be enhanced withadditional functionality.

Print will get more interactive with links to social media and shared communities to

identify new prospects through better analytics.

Print is just one part of the communications mix, used when it gives good returns

Printed packaging volume still forecast to grow

In the emerging markets growing urbanization and prosperity, investment in housing and

construction, the development of retail chains, and increasing healthcare and cosmetics

sectors will further increase packaging demand

The growth of packaging in industrialized countries is being driven by the trend towards

smaller households and accompanying rise in demand for more, smaller pack sizes, the

increasing requirement for convenience among consumers, rising health awareness

among ageing consumers and the growing number of men interested health and beautyproducts.

Additionally packaging will be affected by the growing awareness of environmental

issues and the adoption of new regulatory requirements, increasing demand for brand

differentiation and also by new developments in packaging materials.

Digital is growing fast from a very low base for short runs and promotional packs.

Printing in 2020

Slide: 8


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Sheetfed Sheetfed offset remains the dominant printing technology in the world in terms of print

volume, although its peak market share has passed as digital continues to grow.

We will see a smaller number of presses sold, but many of them will provide very high

productivity with high levels of automation.

Presses will be easier to operate with, therefore intelligence will be built into the press

with a library of potential setting possibilities implemented.

Productivity improvement services will help to identify areas to improve by analyzing

real performance and compare that with peers.

High-speed long perfector sheetfed presses with high levels of automation are

increasingly attacking the short run web offset market.

Web Offset

Web press manufacturers looking at packaging as a potential market, using the

advantages of offset against gravure and flexo alternatives (e.g. Sunday Vpak).

Anyway, this will be a small niche market.

Web offset will face direct competition from inkjet at the lower end in magazines and

catalogues.

Key trends in print production methods

Slide: 9


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Flexo

Developments in flexo platemaking have greatly improved quality, allowing valid

comparisons with offset and gravure. Further technology developments like direct plate

exposure, more unit control and automation will secure Flexos position in the

packaging market.

Gravure

Under increased pressure from offset as print runs decline, and flexo as quality is

improved

Most gravure is aimed at packaging and labels. The number of presses that will be

sold in the publishing segment should be very limited.

Key trends in print production technologies

Slide: 10


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Digital

VDP, very short turnaround time and new applications (often in combination with new

business models) are the primarily drivers for digital print

High speed inkjet will become mainstream

The range of products will increase: liquid toner electrophotography, digital nanography

and product offerings in B2/B1

Key trends in print production methods

Slide: 11


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A worldwide a robust growth is expected

Real GDP ForecastGrowth p.a.

Real GDP Forecast

Source: Global Insight (June 2014)real: Inflation adjusted

Global real GDP forecast European real GDP forecast

American real GDP forecast Asian & ROW real GDP forecast

Growth p.a.

Growth p.a.Growth p.a.

Real GDP Forecast

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

00 02 04 06 08 10 12 14 16 18 20

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

00 02 04 06 08 10 12 14 16 18 20

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

00 02 04 06 08 10 12 14 16 18 20

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

00 02 04 06 08 10 12 14 16 18 20

Latin America

North America Africa /

Middle East

Asia / Pacific

Developing

World

Industrialized

Real GDP Forecast Real GDP Forecast

Eastern Europe

Western Europe

Slide: 12


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Significant decrease in print advertising expenditures increases the

pressure on the future development of the PPV

Global Advertising Expenditures [in bn.] Print Share Development

26% 23%15%

23% 20% 15%

74% 77% 85%

77% 80%85%

0

50

100

150

200

250

300

350

183

0%

10%

20%

30%

40%

50%

60%

CY 95 CY 00 CY 05 CY 10 CY 15 CY 20

Print

Electronic Media

Industrialized

Developing/Emerging

CY13 CY15 CY20 CY13 CY15 CY20

204233

6587

105

source: ZenithOptimediaJune 13, FR51 estimate

*Base Year: 2012

Industrialized

countries

Developing

countries

Slide: 13


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Paper industry forecasts are generally consistent with our

print forecasts

0,0

20,0

40,0

60,0

80,0

North America Central Europe Asia/Pacific Eastern Europe Latin America Middle East /

Africa

2015

2013

Graphic Paper Consumption in million tonsby Region

Actual 2013; Forecast 2015; 2020

2020

Grap

hicPaper

Consump

tio

ninm

ill.tons

CAGR

13 -15

-3,2

CAGR

13 - 20

-3,1%

CAGR

13 -15

-3,9%

CAGR

13 - 20

-3,9%

CAGR

13 -15

1,5%

CAGR

13 - 20

1,2%

CAGR

13 -15

0,9%

CAGR

1320

0,8%

CAGR

13 -15

1,2%

CAGR

13 - 20

1,2%

CAGR

13 -15

3,0%

CAGR

13 - 20

3,1%

Source: FR-51 EstimateFeb 2014, RISI

Slide: 14


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PMI Trends 2020

50

100

150

200

250

300

350

00 02 04 06 08 10 12 14 16 18 20

50

100

150

200

250

300

350

00 02 04 06 08 10 12 14 16 18 20

GDP & PPVIndustrialized Markets GDP & PPVDeveloping / Emerging Markets

Real GDP

CAGR: 2,2%

Real PPV

CAGR: -1,2%

Real GDP

CAGR: 2,3%

Real PPV

CAGR: -1,1%

2013- 20202013 - 2015

Real PPV

CAGR: 4,0%

Forecast

Real PPVCAGR: 4,2%

Real GDP

CAGR: 5,3%

2013- 2020

Real GDP

CAGR: 4,6%

2013 - 2015

Forecast

Print Production Volume w/o print for manufacturing, corrugated packaging, metal packaging, glass packaging; real PPV base year is 2009

Index

(2000 = 100)

Index

(2000 = 100)


In CY 15 might be the starting point of a decoupling in the

developing markets

Slide: 15


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Approximately 70% of the global PPV is still produced in

industrialized countries

PPVIndustrial Markets [in mill.] PPVDeveloping Markets [in mill.]

343

302

282 276262

0

50

100

150

200

250

300

350

400

CY 07 CY 09 CY 13 CY 15 CY 20


Base Year 2009

101 104

124134

165

0

50

100

150

200

250

300

350

400

CY 07 CY 09 CY 13 CY 15 CY 20

Slide: 16


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PMI Trends 2020

Print volume per capita varies significantly by region

251

338

276

253

19

47

31 11

050

100

150

200

250

300

350

400

world average:

53 per capita

Euro

Annual per capita print production volume by region

(2013)

Industrialized Developing / Emerging



PMI T d 2020


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PMI Trends 2020

120bn.

110bn.

177bn.

2013

Newspaper24,1%

Magazines33,4%

Specialty24,1%

BookPrinting18,4%

Advertising33,0%

Gen.Commercial

35,9%

Catalogs11,2%

Financial&Legal5,9%

Converted4,9% Other

9,1%

FlexiblePackaging

44,7%Folding

Boxes37,8%

Labels &

Tags17,5%

Heidelberg is focusing its activities on commercial and packaging

print sectors

Global Print Production Volume (bn) Printing technology by end market

407 bn.

Commercial

Packaging

Publishing &

Others

Sheetfed-Offset28,7%

Web- Offset46,7%

Digital13,3%

Other11,3%

Sheetfed-Offset

44,4%

Web- Offset27,6%

Digital18,3%

Other9,7%

Sheetfed-Offset33,2%

Flexo40,0%

Digital2,4%

Other24,4%



PMI T d 2020


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PMI Trends 2020

Approx. 70% of the global PPV is produced in industrialized countries

PPVIndustrial Markets [in mil]

GDPGrowth 2,3% p.a. (20132020)

PPVDeveloping Markets [in mil]

GDPGrowth 5,3% p.a. (20132020)

207 199178

7577

83

0

50

100

150

200

250

300

89 94110

3540

55

0

50

100

150

200

250

300

CY 13 CY 15 CY 20 CY 13 CY 15 CY 20


Base Year 2009

Commercials Packaging Commercials Packaging

- 2,1%

p.a.- 2,1%

p.a.

1,5%

p.a.1,5%

p.a.

2,8%

p.a.

3,2%

p.a.

6,8%

p.a.

6,7%

p.a.

282276

262

124134

165

Packaging growth in line with avg. GDPPackaging growth below avg. GDP

Slide: 19

PMI T d 2020


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PMI Trends 2020

Process Share Worldwide Process Share Emerging Markets

Sheetfed Web Flexo Digital Others

Sheetfed Offset will continue to be the major print technology -

Digital is growing, but from a small base

Source: Heidelberg estimate June 2014, industry statistics, PIRA, Jakkoo Pyry, Primir (GAMIS), Global Insight

Base Year 2009

37% 36% 34%

26% 24%20%

12% 13%14%

13% 15% 21%

12% 12% 11%

0%

20%

40%

60%

80%

100%

CY 2013 CY 2015 CY 2020

42% 41% 39%

25% 23%20%

10% 10%11%

11% 13% 18%

13% 12% 12%

0%

20%

40%

60%

80%

100%

CY 2013 CY 2015 CY 2020

Slide: 20

PMI T d 2020


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Worldwide PPV is stable, Sheetfed Offset is the most suitable

printing technology (trade-off between flexibility and productivity)

Global & SFO PPV inbn

406 407 401 399410

420435

444 441

406 413414 410 407

427

162 162 159 157 161 164168 171 168

154 156 155 152 150 143

0

100

200

300

400

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020e

SFO PPVGlobal PPV

Source: Heidelberg estimate June 2014, industry statistics, PIRA, RISI, PRIMIR, Global InsightBase Year 2009

Packaging: Labels, Folding Carton, Flexible Packaging Slide: 21

PMI Trends 2020


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PMI Trends 2020

400%

300%

200%

100%

1980 20001990 2010

year

high

low

faster

Inkjet

Electro-photography

Offset

Cos

t

Qualitative Technology ComparisonDevelopment of Performance- Total Cost

Heidelberg has been monitoring digital imaging technologies for

years

HDM Orig inal Prognosis

(2000)

Uncertainty

Heidelberg Conf ident ia l


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Document Printing

Packaging & Label

PoS

Advertising

Commercial Short run

and VDP

23

Not in focus

Not in focus

and will leverage key partner(s) to serve its main markets

Market ElectrophotograhpyDry Toner

ElectrophotographyLiquid Toner

Ink jet

Ricoh

ResellerHDM +

Partner (s)

Heidelberg Conf idenital

PMI Trends 2020


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PMI Trends 2020

Heidelberg Digital

Strategy

Next steps- Heidelberg Digital Printing

Commercial Label & FoilFolding

Carton

Technology

Partner

Sales &

Service

Channel

Product

Offering

GallusHeidelberg

Fujifilm

Peak Peformance

RolltoRoll

Digital Label Press

Peak Peformance

Sheet

Perfecting



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Price

Entry

Performance

Performance

Peak

Value

Result

Commercial

Sheetfed

Folding

Carton

Labels &

FoilsMar

ket

Price/Performance Segmentation Digital

Future



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Heidelberg Positioning


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Gallus DCS 340

Configuration @ Gallus Innovation Days

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GallusInnovationDays,

PressE

vent,22.

September2014,

+

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Esa Saarinen_ Heidelber PMI Indicators - Market Trends 2020 FINAL

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