esa saarinen hnb commercial director

Intergraf GA / HelsinkiIntergraf GA / Helsinki 20072007

Esa SaarinenEsa Saarinen

HNB Commercial DirectorHNB Commercial Director

Intergraf GA / Helsinki 20072007

Heidelberg Nordic - BalticsHeidelberg Nordic - Baltics

Intergraf GA helsinkiIntergraf GA helsinki 20072007

Heidelberger Druckmaschinen AG

Company Profile Heidelberg


Heidelberg is market and technology leader in sheetfed offset• World-wide technologically leading

supplier of sheetfed offset solutions

• Sole supplier of seamlessly networked solutions from prepress to postpress

• Customer and market closeness as well as a strong service orientation result in clear differentiation from competition

• More than 200,000 customers in 170 countries


Soft- and Hardcopy

Proofs

CtPPrinting

Postpress/Finishing

Delivery

Internet

Prepress

Customers/ suppliers

Offset

Systems and Services Consulting and Training

The Heidelberg portfolio: Hardware, Software and Brainware around sheetfed offset printing process


14 Production and Development Sites

Amstetten (D)

Bad Homburg (D)

Brandenburg (D)

Heidelberg (D)

Kiel (D)

Langgöns (D, Gallus)

Leipzig (D)

Ludwigsburg (D)

Mönchengladbach (D)

Wiesloch (D)

Nove Mesto (CZ)

St.Gallen (CH, Gallus)

Eksjö (S)

Sidney (USA)

(in construction)


The Heidelberg Team

• Approx. 19,000 employees world-wide

• Thereof in Germany: 11,700

• At Heidelberg and Wiesloch: 8,000

• Over 1,500 employees in R&D

As at March 31, 2005


Research and Development

Yearly investments in R&D of approx. 200 Mio. Euro (6 % of sales)

– Around 1,500 employees in R&D world-wide, thereof 350 software developers

– 5,500 patents in Germany and abroad

– Intensive involvement of customers in R&D projects

– International networking with universities, research establishments and suppliers


Research & Development


Service• More than 250 agencies in over 170 countries

stand for customer-tailored on-site service.

• Around 3700 service experts work around the clock serving customers.

• The World Logistics Center ensures fast and high availability of service parts.

• Web-based Remote Service enables press inspections and maintenance without the need of an service technician on-site.

• The world-wide branches of the Print MediaAcademy provide training for our customers and employees

• Name des Autors • Datum • Dateiname • Seite:


Key Figures FY 2006/ 2007

Incoming Orders

Sales

Sales abroad

Operating result

Year‘s net earnings after taxes

Employees world-wide

3,853 Mio. Euro

3,806 Mio. Euro

more than 85 %

362 Mio. Euro

263 Mio. Euro

19,171


Heidelberg Nordic&Baltics

• EmployeesEmployees

211 employees, of which 45 in the Baltics and 166 in the Nordics

Denmark Sweden Finland Lithuania Latvia EstoniaNumber of employees 66 56 44 13 18 14

• Sales performanceSales performance

FY SalesFY Sales

2006 129,7 mill. EUR

2007 126,5 mill. EUR


80

90

100

110

120

130

140

150

160

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP Index (1998=100)Index Prod.Volume, real (1998=100)Index Prod. Volume nominalSource: Industry statistics, PIRA, FAO, Jaakkoo Pöyry, Global Insight, UBS, CD-SD estimate

Print Production Volume w/o print for manufacturing, corrugated packaging, metall packaging, glass packaging

Ind

ex

(1

99

8 =

10

0)

Print production volume decoupling from gross domestic product (GDP)

GDPCAGR: 3,4%

Real PPVCAGR: 2,5%

Nominal PPVCAGR: 4,7%

Forecast

GDP & Print Production Volume (PPV) (value-based) Global

Actual 1998-2004; Forecast 2005-2010

The sky is falling Global Indicators

Years


Online advertising and promotion growing at the expense of print

Source: Economist Intelligence Unit Survey of 300+ Senior Executives, Worldwide, February 2006

Allocate new spending for online Promotion 41%

Reallocate from offline to online 29%

Online spending to grow or shrink with overall marketing budget23%

Allocate new spending for offline 5%

Reallocate from online to offline 2%

Total: 227 Respondents

Media Budget Allocation2006-2007



Progress in display technologies substituting print



Traditional printing not a sexy business to be in



70

80

90

100

110

2000

2001

2002

2003

2004

2005

2006

Ind

ex

(2

00

0 =

10

0)

Source: Import / Export VDMA, Global Insight

On a global basis, the printing business is recovering, after a

tough start in 2000

Development of Global Printing Industry, Indexed(2000 – 2006)

Value of Print

Value of Exported Sheetfed Offset Êquipment

Print is alive and well Market Trends


Pri

nt

Pro

du

cti

on

Vo

lum

e (

Mio

Eu

ro)

SOURCE: M-IM Estimates, PIRA 2002, GAMIS 2002, Industry Statistics, Jaakko Pöyry 2002‚CAGR is Compound Annual Growth Rate

Web offset0,4 %

Sheetfed offset0,9 %

Digital10,3 %

Other0,7 %

0

100.000

200.000

300.000

400.000

500.000

600.000

2000 2004 2006 2008 2012 2016 2020

Actual Forecast Projection

CAGR‘(2000 – 2020)

Total 1,4 %

Digital printing continues to increase in importance, but it‘s a long process!

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

(Actual 2000-2005; Outlook: 2006-2020)

Digital PrintPrinters have to adapt Adapt Business Model


Paper consumption recent years

Graphic Paper Consumption

0

500

1.000

1.500

2.000

2.500

2002 2003 2004 2005 2006

'000

Met

ric

ton

s

Denmark

Sweden

Finland

Lithuania

Estonia

Latvia

Intergraf GA helsinkiIntergraf GA helsinki 20072007

GDP Growth

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

2004 2005 2006 2007E

%

Denmark

Sweden

Finland

Lithuania

Estonia

Latvia

GDP growth recent years


Inflation recent years

Inflation

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

2004 2005 2006 2007E

%

Denmark

Sweden

Finland

Lithuania

Estonia

Latvia


Printing Industry in FinlandLeading 100 Printers by Profit/Loss

2006

In addition, profitability has been a real challenge

0

5

10

15

20

25

-20% --16%

-15% --11%

-10% -

-6%

-5% -

0%

1% -

5%

6% -

10%

11% -

15%

> 15%

Profit Range (Percent)

Nu

mb

er

of

Co

mp

an

ies

Profitable

Source: Balance Consulting Oy, Ranking Report Printing Houses, January 2007

The sky is falling Local Indicators


0

40

80

120

160

200

240

280

320

360

400

440

World Central Europe Finland Denmark

Re

al P

rin

t V

olu

me

in b

n. €

*

2010

2005

Finland is expected to enjoy its share of growth in print production volume through 2010, coming from a low base…

Development of Print Production Volume (billion €)(Actual 2005; Forecast 2010)

Source: Heidelberg Estimate – March 2006, Industry statistics, PIRA, Jakkoo Pöyry, GAMIS*Base Year: 2004

+11%(CAGR: 2,2%)

+12%(CAGR: 2,3%)

+13%(CAGR:2,5%)

+8%(CAGR:1,5%)

Print Per Capita (€)2005 58 € 335 € 446 € 472 €


(2.3 bn €) (2.5 bn €)


Magazines

Advertising

Catalogs

Book Printing

General Commercial

2,4%

2,3%

2,3%

2,3%

2,4%

1,7%

1,5%

1,7%

1,6%

1,6%

Speciality

Labels & Tags

Folding Boxes

2,2%

3,6%

3,0%

1,5%

2,5%

1,9%

Forecast Annual Growth Rate 2005-2010 by Print Product

1,6%

1,4%

1,8%

1,6%

1,5%

1,7%

2,8%

1,9%

2,8%

2,0%

2,2%

2,2%

2,0%

1,7%

4,0%

3,1%

1,5%

-0,8%

-1,6%

-2,5%

0,4%

0,4%

2,2%

0,7%

1,9%

1,7%

1,6%

1,5%

1,7%

1,2%

3,2%

2,2%

Finland Denmark Nordic WorldUSAGermany


…and growth in individual print products is strong

Source: Heidelberg Estimate – March 2006, Industry statistics, PIRA, Jakkoo Pöyry, GAMIS*Base Year: 2004


What to do ?

Increase Productivity Differentiate Offerings Adapt Business Model

Printers have to adapt


Administration

From islands of automation…

PostpressPrepress Press

WorkflowIntegration

Printers have to adapt Increase Productivity


Administration

… to workflow integration

PostpressPrepress Press

Jobticket

JobData

Central JDF und core data for each machine and every work position

Delivery/Fulfillment

PostpressIntegration

PrepressIntegration

PressIntegration

Color

Solutions

Print BuyerIntegrationPrint BuyerIntegrationPrint BuyerIntegration

Print BuyerIntegration

Printers have to adapt Increase Productivity WorkflowIntegration


Efficient Order Preparation consistent data entered and reused in production systems (i.e. job ticket)

71.000 €0 €

Efficient Order Management less internal resources required per job

61.000 €0 €

Prepress reduction of staff due to level of automation

0 €636.000 €

Pressreduction of 3rd shift and material savings

0 €285.000 €

0 %

0 %

18.1 %

8.1 %

2 %

1.7 %

0 %

0 %

Total 1.096.000 € 31.2 % 139.000 € 3.9 %

Job Costingless effort to gather data and charge services not charged in past

7.000 €175.000 € 5.0 % 0,2 %

Reduced Cash-Out or additional Cash-

In

Indirect Savings (additional capacity)

Case Study 1: Direct savings of roughly 30%

Printers have to adapt Increase Productivity WorkflowIntegration

3,5 m€

35 employees

12,000 plates/year


1 2 3 4 5

Coating

Die-cutting/Window cutting

Perforating

Laser micro cutting

Iriodin

Laminating

Embossing

Higher grammages *

Hexachrome

Printing on plastic

Fluorescent inks

Scented inks

Hot-foil stamping

* > 300g/m² very interestinguninterestingSource: HDM Print Buyer Study, 2005

„Everybody can print 4c – but how can I differentiate myself from competitors?“

Printers have to adapt Differentiate Offerings

Print buyers are hungry for new effects

Print Buyer Level of Interest in Embellishment Options


Printing Industry in FinlandLeading 100 Printers by Revenue

(2006)

As in most countries, the printing industry in Finland is composed of numerous small companies– typical next phase is consolidation!

Source: Balance Consulting Oy, Ranking Report Printing Houses, January 2007

0

10

20

30

40

50

60

70

1-5 6-10 11-20 21-30 31-40 41-50 >50

Revenue Range 2006in Mio €

Nu

mb

er

of

Co

mp

an

ies

The sky is falling Local Indicators


Case Example „Tomorrow?“

Paper-based interfaces to the electronic world

Printers have to adapt Adapt Business Model Beyond Ink on Paper

esa saarinen hnb commercial director

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