Graphic Media Alliance

03/01/2022

Printing Industry Performance Insights Study Results

Source: Ralph Williams, Jones College of Business / Middle Tennessee State University, March 1, 2022 

The latest PIPI (Printing Industry Performance and Insights) study produced two reports. One report provides printing firm leaders’ business outlooks and performance metrics (revenue growth, profitability, and returns) from national, regional, and firm revenue size perspectives. The second report sorts printing firms into different groups based on production processes applied and products/services provided. For each group, the report includes performance metrics (revenue growth, profitability, and returns) and the strategic focuses of higher performers in each group.

Aiming to provide helpful performance benchmarks and knowledge to regional printing association members, in our January PIPI study, we sought to identify “strategic groups.” A strategic group, an academic phrase, represents a set of firms pursuing a similar strategy within an industry. Going forward, we use the phrase “printing industry groups” or “groups” for the strategic groups we found.

To identify printing industry groups, we asked what processes companies apply and the products/services they provide, both as approximate percentages of revenue. We used “cluster analysis” to the product and processes responses. Cluster analysis is a statistical tool that sorts objects into groups with similarities. We see our clusters as reflecting groups of firms in the printing industry. However, our groups do not include cold- or heat-set web. The 120 usable responses were insufficient to identify groups of cold- or heat-set web firms. We will hope for more participation in future studies. We will seek to confirm the groups we identified here, possibly add groups, and update performance benchmarks for each group. After the key takeaways, we describe our five printing industry groups and provide related performance benchmarks.

Key Takeaways

• Through cluster analysis, we identified groups that seem to reflect our industry well.
• We report revenue growth, profit, and ROA, averages for each group. It appears each group is growing and producing profits, which speaks well for our industry.
• It appears the application of sheetfed printing may affect the difference between EBITDA and net profit, along with ROA – discussed in more detail below.
• We report the number of employees per million dollars of annual revenue for each group, and those numbers are generally close among four of our five groups. However, group four – focusing on specialized labels – appears to use fewer employees per million dollars in annual revenue than the other four groups.
• Proactively seeking ways to reduce cost often appeared as a strategic focus of high-performing firms in different groups.

Identifying Strategic Groups in the Printing Industry and Their Related Performance Benchmarks

Also in the January PIPI study, we identified different production/product groups in the printing industry. From those groups, we provide some helpful knowledge. We share those findings in this report.

This report shares the January PIPI study findings related to industry outlook and performance. We explore industry outlook and performance from multiple perspectives: national, regional, and multiple revenue categories.

Key Takeaways

• Consistent with previous PIPI studies, printing business leaders have a positive outlook for their businesses.
• Printing firm leaders’ relatively positive outlook is encouraging in the context of the current workforce shortages and supply chain issues.
• Our findings suggest leaders of large printing companies have a more positive outlook than leaders of small printing companies.
• We found the most optimistic outlooks in the West, Northcentral, and Southeast regions, and we observed a less optimistic outlook in the Northeast region. Yet, printing leaders’ outlooks were positive in all regions.
• Our performance data is relatively positive, indicating that printing companies are growing, reaping profits, and generating returns.
• It appears larger firms are growing more and generating higher profit percentages than smaller companies. However, small firms are generating higher ROA percentages.
• Printing firm performance appears most robust in the Southeast while the Northeast appears the weakest performer of the regions. The Southeast’s higher performance may connect with that region’s more optimistic outlook, and the Northeast’s lower performance may connect with that region’s less optimistic outlook.
• However, printing company performance is positive nationally, in every region, and in every revenue category.

Industry Outlook and Firm Performance