Complete Story
03/14/2022
Printing Industry Performance Insights Study Results
Source: Ralph Williams, Jones College of Business / Middle Tennessee State University, March 6, 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” for the products 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.