Tallinn, Novtember, 2005 INTERGRAF 1 Business Trends and
Overview of Competitiveness Issues in the European Printing
Industry Anne-Marie De Noose
Slide 2
Tallinn, Novtember, 2005 INTERGRAF 2
Slide 3
Tallinn, Novtember, 2005 INTERGRAF 3 The European Printing
Industry Western Europe (EU15) 90,000 companies 700,000 employees
82,5 billion EUR turnover Figures for EU 25 are still difficult to
collect
Slide 4
Tallinn, Novtember, 2005 INTERGRAF 4
Slide 5
Tallinn, Novtember, 2005 INTERGRAF 5
Slide 6
Tallinn, Novtember, 2005 INTERGRAF 6 How and what about
SECTORAL Statistics in the EU ?! Poor and disappointing for a
sector consisting mainly of SMEs ! EUROSTAT is in charge of :
establishing classifications (both activities NACE & products,
CPA, Combined Nomenclature), Regulations on collection of
statistics, centralizing data. Source of data is either
administrative (customs declarations, VAT returns) OR
Slide 7
Tallinn, Novtember, 2005 INTERGRAF 7 How and what about
SECTORAL Statistics in the EU ?! Enquiries The enquiry source is
the less efficient ! Regulation plans for obligatory collection in
companies employing more than 20 workers; significant loss of
information for printing sector Companies miss time and expertise
to participate, questionnaires are complicated. PRODCOM : enquiry
on production volume and value STRUCTURE OF BUSINESS : data on com-
panies (number & employment), investment, utilization of
production capacity
Slide 8
Tallinn, Novtember, 2005 INTERGRAF 8 How and what about
SECTORAL Statistics in the EU ?! Individual national initiatives
Belgium : National Bank collects data Printing national federations
organize opinion polls : eg BPIF in UK, Febelgra in Belgium on
various indicators (order books, paper price, sales prices), BVDM
in De. Results are produced as indexes, or bulletins
Slide 9
Tallinn, Novtember, 2005 INTERGRAF 9 Part1 : General economic
trends
Slide 10
Tallinn, Novtember, 2005 INTERGRAF 10 INFLATION RATE Annual
average rate of change in Harmonized Indices of Consumer Prices
(HICPs )
Slide 11
Tallinn, Novtember, 2005 INTERGRAF 11
Slide 12
Tallinn, Novtember, 2005 INTERGRAF 12 INFLATION RATE A nnual
average rate of change in Harmonized Indices of Consumer Prices
(HICPs ) September 2005 FINLITFRDEATEuro-zonePTIEBEELESLU
1.11.7p2.22.42.62.6p 2.72.83.03.8 4.7 EU Member States outside the
euro-zone SEPLCZMTCYSKDKUK3EU25LTSIHUEELV 1.11.82.0 2.12.32.4Aug 05
2.4 2.5p2.63.23.64.97.4
Slide 13
Tallinn, Novtember, 2005 INTERGRAF 13 Real GDP growth rate at
constant prices (1995) - percentage change on previous year
Slide 14
Tallinn, Novtember, 2005 INTERGRAF 14
Slide 15
Tallinn, Novtember, 2005 INTERGRAF 15
Slide 16
Tallinn, Novtember, 2005 INTERGRAF 16 GDP per capita in PPS GDP
per capita in Purchasing Power Standards (PPS), (EU-25=100) Spring
2005 Report to the Council
Slide 17
Tallinn, Novtember, 2005 INTERGRAF 17
Slide 18
Tallinn, Novtember, 2005 INTERGRAF 18 June 2005 compared to May
2005 Industrial producer prices up by 0.5% in euro-zone Up by 0.4%
in EU25
Slide 19
Tallinn, Novtember, 2005 INTERGRAF 19 Volume of retail trade %
change compared with the same month of the previous year1, 4
EUROZONE Books, newspapers and other sales in specialised stores
Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 0.1 0.8 0.9 -1.3 1.1 EU
25 Books, newspapers and other sales in specialised stores Jan-05
Feb-05 Mar-05 Apr-05 May-05 Jun-05 1.2 0.9 1.1 -1.9 0.9
Slide 20
Tallinn, Novtember, 2005 INTERGRAF 20 Part 2 : Printing
Industry Trends
Slide 21
Tallinn, Novtember, 2005 INTERGRAF 21 Trends in turnover as for
printing industry as a whole in 2004/5 Reported increases range
from 0.7% (DE) to about 13% (MT) & (ES). DK +3,80% DE +0.7%
(after a 10% drop over last years) globally, domestic orders +0.4%,
foreign orders +2.5% IT Production +3.8%. Turnover increased by 3%,
(compared with -0.8% of 2003). Estimated turnover for 2004 : 11771
mln .
Slide 22
Tallinn, Novtember, 2005 INTERGRAF 22 September 2005
Slide 23
Tallinn, Novtember, 2005 INTERGRAF 23 Trends in turnover as for
printing industry as a whole in 2004/5 MT Sales of print/publishing
increased significantly in 2003 (+/- 6%) and remained at high level
in 2004. Added value /capita followed the same curb. Investment
almost doubled in 04 against 03. NO+ 2 to 5% PTPrint/publishing
improved by 5.8% last 12 months
Slide 24
Tallinn, Novtember, 2005 INTERGRAF 24 Trends in turnover as for
printing industry as a whole in 2004/5 SE Recovery by 1.5% in 2004
(2,244 billion euro) based on higher demand and higher raw material
prices. UK Slight improvement in 2004. Sales of printed products
were -1.2%, -2.3% and -3.6% between 2001 & 2003. ES Production
index : 2003: 112.1, 2004:119.4, 2005 1stQ 125.8., ie +7%, 13%
Slide 25
Tallinn, Novtember, 2005 INTERGRAF 25 Trends in turnover as for
printing industry as a whole in 2004/5 CHglobally stable in spite
of some fluctuations FRAfter an improvement for the printing
industry in the 3 first Qs of 2004, printing activities drew back
in 4Q.Early 2005 trends remain hesitating, also negatively
influenced by higher cost for raw material and transport. SctStable
but unsatisfactory
Slide 26
Tallinn, Novtember, 2005 INTERGRAF 26 Short-term developments
in turnover for industry as a whole, paper and graphic industry.
Source : VSD Industry as a wholePaper Industry Graphic
Industry
Slide 27
Tallinn, Novtember, 2005 INTERGRAF 27 Trends in turnover as for
printing industry as a whole in 2004/5 Range of decrease : - 0.6%
(NL) to above - 10% (AT). AT Production 15.1% (Sold production
however 10.8%) BE04.2005/04.2004 -1.71% in nominal terms. FI-4%
NL2004 : -0.6% (demand rose by 0.8% prices dropped by 1.4%). For
2005 forecast : growth 2.8%
Slide 28
Tallinn, Novtember, 2005 INTERGRAF 28 Overview of market
segments
Slide 29
Tallinn, Novtember, 2005 INTERGRAF 29 Trends in turnover in
market segments Belgium
Slide 30
Tallinn, Novtember, 2005 INTERGRAF 30 Trends in turnover in
market segments. DK Books & leaflets increased while magazines
and periodicals decreased DE Improved trends in advertising market
influenced positively several market segments ( detailed table) NL
Significant differences between the market segments : newspapers
9%, stationary printing +9%. Printers of packaging and advertising
material +1%.
Slide 31
Tallinn, Novtember, 2005 INTERGRAF 31 Trends in turnover in
market segments Germany
Slide 32
Tallinn, Novtember, 2005 INTERGRAF 32 Trends in turnover in
market segments IT Dynamic market for books and periodicals
(+3.1%), success of inserts, and successful free sheets.
Advertising and commercial printing performed well +4.2%, SE
Significant differences between the large companies (growth rate
+3.5%) and small companies (+2.2%) many of them disappearing from
the market. Traditional printing had a modest recovery, while
digital printing and ancillary services had a relative success.
They will get stronger as customer will look increasingly for
"communication solution' from a single provider.
Slide 33
Tallinn, Novtember, 2005 INTERGRAF 33 Trends in turnover in
market segments : UK
Slide 34
Tallinn, Novtember, 2005 INTERGRAF 34 Trends in advertising No
country reported any longer a general decrease !! Reported
increases range from 1% (DE) to above 10% (ES), (FR during part of
2004) and even 19% in PT. Strong variations in the distribution of
increased shares, internet advertising improves in all countries.
After general increase in first part of 2004, some countries
mention a decline at the end of the year.
Slide 35
Tallinn, Novtember, 2005 INTERGRAF 35 Trends in advertising BE
significant increase over several years : 2000 : +8.16%, 2001 :
+2.2%, 2002 : +10.36%. 2003 : +10.68%, 2004 : +7.42%. DE +1% (after
-13% in 2001/2003). Decline of advertising in newspaper in 1st half
2005 DK general increase by 6.5%; free sheets +9.2%, direct mail
+6.9%, other printed ad material decreased by 12.5% ES +.6.9% as a
whole (magazines +10.5%), posters +4% FI increase in 2004 (more in
electronic media than printed media
Slide 36
Tallinn, Novtember, 2005 INTERGRAF 36 Trends in advertising FR
after improvement up to 12% growth mid 2004, decline to 7.6% growth
4Q 2004. 2.5% decline of ads in newspapers, 18.4% increase of
internet advertising IT +6.2% or even +7.3% according to diff
sources. Increase in press is however 1.6% : +2.4% in newspapers
and 0.3% in periodicals. TV ads +10.4%. As a whole TV reached 56%
of all adv expenditure in 2004 and press 37.6% Forecasts 2% growth
for 2005 PT Investments reach 1.700 million euros, +19.2% last 12
months. Distribution: TV 68%, Press 20%, Outdoors 7%, Radio 5%,
Movies 0%
Slide 37
Tallinn, Novtember, 2005 INTERGRAF 37 Trends in advertising SE
Strong increase in late 2004 & early 2005 : 6.7% Expectations
next year are moderate 3 to 4 % increase. UK advertising
expenditure picked up in 2003 and 2004. Growth areas were regional
newspapers, consumer magazines, directories and outdoor &
transport media. Direct Mail has levelled off after some growth.
Internet related advertising expenditure has been the largest
growth area in recent years. Early evidence for 2005 indicates a
cut off
Slide 38
Tallinn, Novtember, 2005 INTERGRAF 38 Trends in advertising
NLMarket is stable, however a shift from ads in periodicals towards
addressed and non- addressed mail.
Slide 39
Tallinn, Novtember, 2005 INTERGRAF 39 AUSTRIA : A comparison
between the first 4 months of 2005 & 2004 shows the following
developments (as percentage) Forecast for 2 nd half of 2005 : Total
+1.5% Print + 0.8% Internet / new media +6.9%
Slide 40
Tallinn, Novtember, 2005 INTERGRAF 40 Total number of
adsCommercial adsNumber of pages, variation Switzerland, Source VSD
Also mentioned nnon commercial ads
Slide 41
Tallinn, Novtember, 2005 INTERGRAF 41 Best performing
advertising printed products Free sheets+ Direct mail+ +, but also
+- - Magazines Large interest magazines- Specialized magazines+++
Newspapers national- + + regional+ + + inserts in newspapers -
Posters+ + Directories+ +
Slide 42
Tallinn, Novtember, 2005 INTERGRAF 42 Trends in employment
level Belgium
Slide 43
Tallinn, Novtember, 2005 INTERGRAF 43 Trends in employment
level AT-7.8% DK Unemployment is generally low, however a bit
higher than average in printing industry FI Employment is
constatntly on the decline, and it is not expected to increase even
when the production is rising again. DE Drop in employment level
was 6% in 2003, and 4.5% in 2003. IT0.2% reduction in employment,
NL 2004: decline by almost 3%. Forecast is further regression.
Slide 44
Tallinn, Novtember, 2005 INTERGRAF 44 Trends in employment
level NO Unemployment is increasing PT -1.2% UK Continuation of
decline, due to closures and redundancies CH Decreasing : 1Q04
35900, 2Q 35100, 3&4Q 34700, 1Q05 34600 ie 5.4% decrease in
2004 SE Unemployment was 8% and brought down to 7% due to
favourable trends. Employment declines however steadily : in 2005
some 17000 employed in commercial printing, 17700 in 2004 and 19000
in 2003.
Slide 45
Tallinn, Novtember, 2005 INTERGRAF 45 Trends in employment
level ES Number of employees 2004/2003: +3.7% (estimate) MT Slight
constant increase
Slide 46
Tallinn, Novtember, 2005 INTERGRAF 46 Trends in utilization of
production capacity generally improving in all countries !
Switzerland, Source VSD
Slide 47
Tallinn, Novtember, 2005 INTERGRAF 47 Utilisation of Production
Capacity
Slide 48
Tallinn, Novtember, 2005 INTERGRAF 48 Trends in utilization of
production capacity AT Strong variations : swinging between
satisfactory or hardly satisfactory BE 1999 : 86,7, 2000 : 86,8,
2001 : 84,8, 2002 : 84,3 and 2003 : 87,0 DK Consolidation of the
industry and specialisation also means better utilization rates FI
Overcapacity is a permanent situation. Large variations in the
capacity utilization rate between companies FR Rate remains tight,
situation of order books is fragile DE 2003 : 81.1%, 2004
82.3%.
Slide 49
Tallinn, Novtember, 2005 INTERGRAF 49 Trends in utilization of
production capacity IT 76% on yearly basis, ie 0.6% increase PT
Improving in 2nd half of 2004 SE Around 80% according to sample
investigation, aggregate data quote about 75%. UK Printers opinion
poll suggests improvement NO Approx. 70% (stable). Scotl Unchanged
excess capacity and week demand
Slide 50
Tallinn, Novtember, 2005 INTERGRAF 50 Trends in number of
bankruptcies Mergers of companies continue AT Level is stable,
about 20 cases/year BE 66 companies in 2004, the highest figure
since 1999. DK Still relatively low rate of bankruptcies, but
strong consolidation trends towards fewer but bigger companies DE
366 bankruptcies (+/- 2.8%) were recorded in2003, 2004 : 306 cases
ie 16% reduction and back to the level in 2002 FI About 4-5 % of
companies yearly, on average. No major changes during recent
years.
Slide 51
Tallinn, Novtember, 2005 INTERGRAF 51 Trends in foreign trade
Austria Belgium 2004 : exports +4.1%, imports +1.8% 1 st Q 2005 :
exports 9.7%, imports +1.4%
Slide 52
Tallinn, Novtember, 2005 INTERGRAF 52 Trends in foreign trade
DK Exports decreased in 2003, but with big differences according to
markets and products DE Exports improved substantially, + 4.2% and
imports dropped by 16.9%, compared with 2003 exports +0.4% and
imports +11.78%. FI The value of exports has decreased, value of
imports has slightly increased. This is a slow trend since 2001.
The balance of trade is still strongly positive. ES Stable. Exports
2004/2003: +0.45% - Imports 2004/2003: +0.72%. MT Exports reached a
peak level in 2003, and was almost maintained in 2004. NL Stable,
and flows are in balance.
Slide 53
Tallinn, Novtember, 2005 INTERGRAF 53 Trends in foreign trade
NO Import: increased by 2,5% in volume and 5,3% in value IT in
2004, increase of imports (4.7%) and small decrease in exports
(-0.9%); balance dropped by -4.3% Most significant drop refers to
books (-8.2%) due to relocalization, but increase of advertising
material export (+5.9%) The deterioration of export turnover was
due to the decisive drop in advertising and commercial printing
(-9.5%) and to the reduction in magazines (-6.4%), while books
settled at the 2002 levels (-0.8%); there was also a reduction in
export of albums and picture books (-26.5%), transparencies
(-21.7%), postcards (- 11.9%), maps (-9.7%) and stamps (-8%);
increase in export of printed music (+20.5%) and calendars
(+11.6%).
Slide 54
Tallinn, Novtember, 2005 INTERGRAF 54 Trends in foreign trade
PT Decline of trade activities SE Levelling of trade deficit gap.
Trade deficit is down from 100 million Euro in 2002 to 60 million
Euro. In 2004. Imports: 302 million Euros; Exports: 244 million
Euros UK Exports and imports of printed products increased in 2004.
The value of exports increased at a higher rate so that the balance
of trade improved
Slide 55
Tallinn, Novtember, 2005 INTERGRAF 55 Influence of New Media DK
The market has trust in print, but however in shorter runs with a
pdf-file on the net, which often in the end becomes a replacement
to the printed matter FI Moves are slower than expected SE
Digitalization has had an ongoing impact on the market since a
couple of years. Sole web-based information is now a reality when
costumers want to publicize their information. The bulk of
commercial information is still in printed products but electronic
services is in line with rising advertisements on the web
growing.
Slide 56
Tallinn, Novtember, 2005 INTERGRAF 56 Influence of New Media NL
Printers offer new media services to customers, who are mostly
still unaware of potential for their companies PT Growing use for
all purposes UK Companies with digital printing capabilities are
increasingly moving toward multiple-media output options,
developing expertise in internet and email marketing techniques.
2005 British International Direct Marketing Fair featured a Digital
Print Pavilion supported by the BPIF. The BPIF is developing closer
relationships with the Direct Marketing Association in order to
ensure that print, in particular variable data printing, is
retaining its predominant position in the direct marketing sector.
The principal annual London trade fair for the printing industry is
Digital Print World again emphasizing the importance of using
digital printing to engage in and win the new media challenge
Slide 57
Tallinn, Novtember, 2005 INTERGRAF 57 Developments in sales
prices AT Continuation of unsatisfactory sales prices DK Generally
decreasing, hard competition and more cost effective production ES
Index of sales prices for printed products (NACE 22.22) 2003:105.7,
2004:108.1, 2005 1st Q : 110.2 FR stable/declining and cannot
reflect increases in production cost. IT Persistenly declining NL -
1.4% in 2004, -1% in 2003.
Slide 58
Tallinn, Novtember, 2005 INTERGRAF 58 Developments in sales
prices PT stable/declining UK Prices continue to be under
considerable downward pressure. July 2005 printers opinion poll
reports that 46% more respondents experienced price decreases in
the previous quarter than price increases. Furthermore 30% more
respondents expect price decreases than increases in the next
quarter. CH Constantly increasing pressure
Slide 59
Tallinn, Novtember, 2005 INTERGRAF 59 Belgium : FEBELGRA
enquiry on business satisfaction among printers
Slide 60
Tallinn, Novtember, 2005 INTERGRAF 60 Belgium : FEBELGRA
enquiry on business satisfaction among printers
Slide 61
Tallinn, Novtember, 2005 INTERGRAF 61 Developments in
profitability Switzerland Higher unchanged lower Balance between
positive & negative answers
Slide 62
Tallinn, Novtember, 2005 INTERGRAF 62 Competitiveness issues DK
Strong consolidation : fewer but stronger companies, and
specialization in niche products, knowledge and equipment. BE
Graphical companies invested more in 2004 due to the need for
automation of certain production steps (in order to reduce costs)
and to offer more services to clients. 2004 was a Drupa-year. The
companies invested mainly in the automation of certain production
steps (software, CTP, JDF,) and in finishing equipment (online /
offline). Books China In the import figures, increased imports of
books from China. books for children and art books are more often
printed in China
Slide 63
Tallinn, Novtember, 2005 INTERGRAF 63 Competitiveness issues IT
Gradual deterioration of profitability indexes, which started
around 1995. Continuing need of high investment in new production
technology and environmental technologies cannot be transferred
into sales prices PT endangered by increasing costs for taxes and
petrol products SE New technology and customer preferences indicate
there are incentives for the graphic industry to continue a dual
path, services alongside printed products, particularly for
companies with financial strength and know how. Companies with long
term business contracts, strong on local and regional markets, with
good control of quality and expenditure were winners in 2004.
Slide 64
Tallinn, Novtember, 2005 INTERGRAF 64 Competitiveness /
Delocalization Delocalization of print towards CHINA to become an
investigation area for Intergraf and member federations. Request
for study addressed to Directorate General Enterprise. Aims :
finding out about : actors, reasons, products etc Total over 89 mln
in 2005, in 1995 it was nearly 12 mln, ie 86% increase over 10
years.