1. JPE INDUSTRY REVIEW NIGHT Presented by: Hagop Tchamkertenian Manager, Industry & Commercial Policy Printing Industries Association of Australia

2. JPE INDUSTRY REVIEW NIGHT Developments in the industry during financial year 2002-2003 and over recent years Latest data from Printing Industry Trends Report and Industry Benchmarking study Industry Prospects for 2004 and beyond

3. Compared to 2002 how was 2003? Good Average Bad Industry Conditions How good are we doing?

4. Importance of Our Industry A Historical Context A ranking of the 100 most influential persons in history shows: Ts’ai Lun inventor of paper at number 7 Johann Gutenberg “father of printing” developer of movable type at number 8 Gutenberg’s invention facilitated an easier exchange of ideas throughout Europe and helped spread the ideas of the Renaissance

5. Importance of Our Industry A Historical Context Printing has been the principal vehicle for the conveying of ideas during the past 500 years In Australia the printing industry was one of the earliest industries to emerge after white settlement Industry icon – John Sands was founded in 1837 and was the 2 nd company to be registered in Australia after the Bank of NSW

6. Industry Significance Current Demographics 5,000 plus firms Employment of more than 115,000 Turnover of more than $17 billion Industry value added of more than $8.5 billion Exports of nearly $600 million Average annual capital expenditure of $724 million Physical presence in every region

7. How fast did we grow? ABS Data

8. How fast are we growing now? ABS Data

9. Tortoise or hare? ABS Data

10. Recession… technically speaking ABS Data

11. Investment Trend Downward ABS Data

12. Contrasting Trends ABS Data

13. Depressed sales ABS Data

14. Booming profits? Read the fine print ABS Data

15. Subdued cost pressures ABS Data

16. Falling selling prices ABS Data

17. Margins once again tighten ABS Data

18. Business expectations remain positive Printing Industry Trends data

19. Investment intentions strengthen Printing Industry Trends data

20. Utilisation rates improve Printing Industry Trends data

21. Lack of orders less of a problem Printing Industry Trends data

22. Production improves Printing Industry Trends data

23. So does sales Printing Industry Trends data

24. Selling prices fall Printing Industry Trends data

25. Profits improve Printing Industry Trends data

26. Debtors profile worsens Printing Industry Trends data

27. Low margins Benchmarking data

28. For many printing ≠ good returns Benchmarking data

29. Up for some, down for others

30. The key to profitability Benchmarking data

31. The higher the better Benchmarking data

32. Does idle capacity await you? Benchmarking data

33. Cash flow gap – 26 days! Benchmarking data

34. INDUSTRY FORECASTS Paper and Paper Product Manufacturing 2004-20052005-2006 Employment-4.00.5 Production0.02.6 Local Sales0.10.9 Printing and Services to Printing 2004-20052005-2006 Employment11.61.7 Production-0.71.9 Local Sales-0.61.8 Publishing 2004-20052005-2006 Employment11.61.7 Production2.55.2 Local Sales2.44.7 Source: Econtech

35. Improvements in printing industry economic conditions anticipated during 2004 Pick up expected in advertising expenditure 2004 is an election year Further rationalisation and industry consolidation inevitable Possible improvements in capacity utilisation rates Possible reversal in labour force downsizing Forecasts and Prospects

36. Exports and import replacement efforts will remain at the mercy of currency movements Currency probably has reached its peak and will begin to depreciate Capital expenditure likely to continue recent trend meaning it is unlikely to reach past peaks Selling prices to continue to be driven down for traditional areas of printing Targeted customisation campaigns to continue to overtake mass marketing campaigns Benchmarking takes off!!! Forecasts and Prospects

37. Compared to 2003 how will 2004 be? Good Average Bad Industry Expectations: How well are we going to do?