Convergence: How the Wide-Format Industry is Changing SPIRE Conference Steve Urmano, Director of Wide Format February 2018

Production Digital Printing Application Landscape Graphic Communication Packaging Decorative Functional Functional & Industrial Graphics Arts Materials Ink & Toner Paper Paper/Board/Plastic Industrial Substrates Objects Addressing CAD Photo Promotional Publishing Sign & Display Transactional Brand protection Coding/Barcodes Consumer Labels Corrugated Direct-to-shape Flexible Packaging Folding carton Ceramics Glass Architectural Automotive Consumer electronics Consumer goods Laminates Wall/Floor covering Wood Textiles & DTG 3D/AM Prototypes Tooling Manufacturing Printed Electronics Semiconductors Displays Solar panels Biomedical Pharmaceuticals Organs In the last several years we have seen growing demand from consumers for products and solutions that better fit their life style And as a result many consumer goods companies today provide their clients with an ever expanding range of products tailored to their needs. These, combined with technological innovation are a fertile ground for new products that help manufacturers deliver goods and products tailored to their customers. Short-run and just-in-time manufacturing are key drivers in developing print related solutions that deliver output at the time of need in industry segments, such packaging; ticket, tag, and label printing; Decorative printing; 3D printing; printed electronics; just to name a few. Some applications are meant to add a level of richness such as color images and messaging to a product while others such as 3D printing are creating functional devices.. However the myriad of products and solutions could, at times, be confusing and require focused attention that can reveal where key opportunities are, profit pools, and the needs of producers around the world. Geographic, and cultural differences also play key role in adaptation of some of these technologies. For that reason InfoTrends, as your strategic partner, will be addressing these opportunities under the umbrella terms “Functional and Industrial Printing.” Product decoration definition: Product decoration is the direct printing of consumer products by analog or digital means, to enhance appearance or add or enhance brand imagery such as logos.   Product decoration can be achieved by analog printing such as pad printing or transfer printing, or by digital printing such as inkjet or laser etching. Product decoration can be on flat surfaces or on curved or multiple surfaces. Product decoration could include textile products such a T-shirts, but it should be kept separate. Product decoration is separate from product coding, where the focus is not on enhancing appearance, but rather on conveying information. Functional printing today is the digital deposition of materials to create products with active or passive functionality Creates physical products Enables rapid prototypes, small batches Simplifies manufacturing Reorganizes the industry value chain 3D printing is the additive layering of jetted materials to create closely designed functional three-dimensional objects Market drivers: New jetting technologies and materials Capital investment inflow OEM strategic transformation – value, costs, time

How the Wide-Format Industry is Changing 1 Wide Format’s Big Picture 2 Market Trends 3 Media, Equipment & Technology Trends 4 Wide Format Workflow Trends 5 High Value Applications Add Growth 6 Conclusions / Takeaways

Wide Format Enables An Industry Evolution! Ron: I made changes below – I think fewer words is better? Concerned about trying to map back to the consumer – isn’t it more the brand and print buyer at Print 17? Wide Format Enables An Industry Evolution! Mass-customization Supply chain optimization Just-in-Time Short Run Automation Innovation in Digital Technology Consultative sales Print 4.0 & Smart Print Manufacturing Print volume growth What are the obvious adjacencies What are the less obvious adjacencies Wide format Folding Carton Label Corrugated The impact of lower TCO

Market Trends & Expectations for 2018 Optimism and confidence swells on back of revenue growth Customer demands drives change from mass production to mass customisation Digital technology is the change enabler. The future of Sign & Display printing becomes more integrated with digital media Functional & Industrial inkjet becomes more broad based Textile print growth in graphics, decor and industrial markets Decorative surfaces are becoming a growth opportunity for the PSP

New Applications + Automation = Growth Roland DG Durst AqueousUV Formica Laminates HP Latex Décor' Digitran Automated Sewing Swiss Q Print Robotics Zund Cutting & Routing INCA Autoloading

Value Add Services = Growth CNC Routing The Finished Product Interactive displays integrate with graphics. www.parcsigns.co.uk/ Integrated Décor Hard and Soft Surfaces

Production Graphics Wide Format Print Volume Forecast CAGR 4% Source: Wide Format Print Forecast: 2016-2021; Keypoint Intelligence – InfoTrends 2017

Wide Format UV Technology – Landscape Flatbed – Production UV Printer Large Scale high productivity UV printing, analogue replacing machines Flatbed - Floor Standing UV Printer Free standing multi-purpose UV printing with small to medium bed sizes, targeted towards sign, specialty graphics and personalization companies Flatbed - Table top UV Printer Small form factor desktop printers for prints on a variety of substrates including plastics, metal, wood, leather and glass onto materials to around 2” Roll to Roll UV Printer Roll fed UV printers for paper and flexible media Hybrid UV Printer Convertible UV printers integrated with both Roll-to-Roll & flat bed feeding systems for prints on a wide array of sign, display, décor and art materials

Emerging Wide Format Decorative Applications Glass Laminates Tile Customization & Personalization Décor’ Apparel

Soft Signage Poised For Continued Growth Consumers like the look and tactile feel of the of soft signage imagery. Popular backlit applications are produced by using Dyesub, Latex, LED UV inks. PSPs see soft signage as a major growth market. Finishing & sewing requirements need to be considered. EFI VUTEk FabriVU 5M Aqueous Sublimation Printer HP 3500 High Production Latex Printer Fujifilm Uvistar Hybrid 320 Source: EFI

Tensioned Fabric Displays Using UV Flex Inks Are Now Common Tradeshow & exhibition companies have embraced UV textile printing and for use in signs and entire booth construction. Source: McCrae Digital Imaging

Packaging Application Worldwide Volumes Advance Millions /M2 Folding Cartons Flexible Packaging Labels Corrugated Printing High speed single pass will dominate volume 2020

Become the Best Printer A Print 4.0 Evolution Production automation Process integration Connected DFEs Data collection Predictive management Robotics Business optimization Estimation, quoting, onboarding remain pain points. Shop Floor Data Collection gains importance to enable Print 4.0, dashboards and predictive modelling Robotics for efficiency $1 billion USD in revenue for 2016, representing 10.3% of the entire print production software market Subscriptions will grow across all segments as vendors offer entire replacements or add-on modules, e.g. analytics and dashboards, to complement on-premise licenses. As digital print equipment placements grow, so do digital workflows that are often bundled. Adoption rates are lower than those seen for conventional and packaging, which translates to growth opportunities. The importance of color management systems is only strengthening as PSPs need to manage and match color across different print technologies, ink, and substrates. Transactional workflows are growing as new features and new, i.e., mobile, reporting options for production managers are being added. Print 4.0 demands Digital Print Presses & Modules Web-to-print automation Quick preparation On-demand production Just-in-time manufacturing Large-scale manufacturing Affordable short runs Growing number of substrates White-paper-in/Full-color-out Customization & Personalization Growing number of finishing options Lights out production Process improvement Ecologically friendly processes

Workflow: New Methods + New Products = Revenue Growth Make it easier for customers to buy Automate order to delivery Expand your product catalog Investigate new finishing techniques Consider methods to provide new value within the supply chain How companies create new products and drive volume Investment decision paths Workflow requirements Peripherals that make a difference Making work flow to broader output channels Hand off to Matt

Media and Substrates Usage

Rigid Media Substrates Flexible Media Substrates Growth of UV-Curable is Driving Growth of Rigid Media Rigid vs. Flexible Media Q40: Of the rigid media you print on, what percent is on the following substrates? Q41: Of the flexible media you print on, what percent of your digital wide format output is on the following media? Rigid Media Substrates Flexible Media Substrates N = 310 Respondents Source: Wide Format Printing Critical Element in the Communications Mix, InfoTrends 2013

Market Trends-Latest InfoTrends 2017 Study: Looking for BIG Opportunity in Graphic Communications & Specialty Printing; InfoTrends 2017

Objectives Identify key equipment investment and market trends to pinpoint new opportunities for providers and technology suppliers Uncover the key reasons providers are purchasing devices, software, and media products Determine the best actions and hardware/software investments for providers to support growth of current application mix and expansion into other application areas or markets Define best practices for business growth Identify the tools and information that wide format graphic providers require from equipment and supplies manufacturers to grow their wide format businesses

Demographics: Primary Business Q1: Which of the following best represents your company’s primary business? N = 304 Total Respondents Source: Looking for BIG Opportunity in Graphic Communications & Specialty Printing; InfoTrends 2017

Most Shops Get >50% of Revenue from Wide Format Q11: What percentage of your revenue is related to sign, display, and specialty graphics? Overall Mean Revenue from Sign/Display/ Specialty Graphics: 57% 54% N = 304 Total Respondents Source: Looking for BIG Opportunity in Graphic Communications & Specialty Printing; InfoTrends 2017

Adjacencies help build the business Top Key Study Takeaways

Wide format printing surrounds us…

The Wide Format Market Continues to Expand Demand and Profitability Wide format is a growth market! The share of surveyed firms reporting volume increases outnumbered those reporting decreases by 17 to 1. Top industries that purchase wide format include retail, advertising, education, real estate, and construction Application Purchasing The most popular traditional wide format products include banners, vehicle graphics, signs, window graphics, and backlit displays. Newer applications include wallpaper, soft signage, industrial products, floor graphics, and apparel.

Advancing Applications White Ink on Clear Acrylic Ad Specialty Cell Phone Covers Wall Décor Thermoforming Direct-to-Shape Thermoforming Inks can stretch up to 300% Soft Signage Decals Backlit Displays

Wide Format Printer Volumes Are Increasing Survey respondents expected output volumes to grow across all types of devices. UV roll-to-roll and flatbed devices had the highest monthly volume output, often 2 to 5 times greater than most other devices. Respondents expected the volume produced on eco-solvent devices to grow, followed by latex and direct dye sublimation. Unit placements counter by -23%.

A Wide Variety of Media Types Add Growth Over 75% of wide format output is produced on flexible media. Pressure-sensitive vinyl was the most popular type of flexible media. Commercial printers and ad specialty providers most commonly used paper and banner vinyl. The most popular film is high-gloss white poly. Half of commercial printers’ output is produced on clear media. Nearly 25% of wide format output is produced on rigid media. Coroplast was the must popular rigid media across all company types. PVC was the most popular digital media. Screen printers printed the most on wood.

Priorities are Shifting! Operations Trends Three-quarters of respondents report increasing demand for short turnaround; the majority require production in less than 24 hours. Many respondents are outsourcing to meet expanding customer demands; the most commonly outsourced applications include flags, billboards, and ad specialty items. Marketing Over 40% of respondents are taking a vertical market focus. Key marketing priorities include retaining customers, building relationships, increasing value, and growing brand awareness. Social media is an important venue for promoting and expanding wide format business opportunities.

Aquisition, Demand, and Profitability Trends

Application Purchasing, Demand, and Profitability Firms report volume growth outnumbered those reporting declines by 17 to 1. Key purchasers of WF include retail, advertising, education, real estate, construction, restaurant, manufacturing, & healthcare

Print Directly on Glass Print Backlit Displays UV Wide Format Printers offer a vast range of application opportunities Print on Foam Core & Sintra Print Flexible Outdoor Flags, Signs Print on Wood or Acrylic Print Directly on Glass Print on Buildings & Car Wraps Print on Cell Phone Covers Print Backlit Displays Print Floor Graphics Print POP Displays Print Billboards

Application Production Trends

Change in Application Volumes Q40: For the applications that you regularly produce, how is volume changing? N = Varies; Base: 304 Respondents who offer these digital wide format applications Source: Looking for BIG Opportunity in Graphic Communications & Specialty Printing; InfoTrends 2017

Conclusions / Takeaways Diversify!, Wide Format remains a growth market but adjacencies are offering additional growth benefits. PSP’s are looking to expend into direct to surface and décor for additional growth opportunities. Competition is coming from many directions as many paper based franchises enter into wide format to survive. Commercial printers stay close to their paper based roots however are also generating higher volumes. Training & education are the key ingredients to growth. Workflow will gain more importance as more automation is adopted.

Steve.Urmano@keypointintelligence.com www.KeypointIntelligence.com Thank you Steve.Urmano@keypointintelligence.com www.KeypointIntelligence.com