Specialist
Former VP at Flint Group
Agenda
- Competitive landscape for packaging ink and Flint's positioning
- Pricing across packaging inks for sheetfed packaging
- Operational scaling for water-based segment and margin impact
- Packaging ink carve-out, including potential buyers
Questions
1.
Would you agree that seasonality was the key cause of Flint Group’s 5.5% packaging ink volume decline in Q1, as was suggested in a previous Interview [Flint Group – Global Sheetfed Ink – 22 July 2019], and what do you think drove revenue declines in Q2?
2.
Could you outline what the restructuring of the services platform – which you identified as a cause of Flint’s market share loss – entailed operationally? Which clients would choose to move over and why?
3.
Could you expand on Siegwerk’s investments and the strategy for the flexible packaging side, and the timing of it? It seems to have worked out that well for Flint if it is scaling back while competitors are building out.
4.
What might shift a customer over to Siegwerk instead of staying with Flint? Is it pricing or better quality of service?
5.
Do you expect Flint can win back the market share it has lost?
6.
Could you explain which ink types are used across each key category of packaging, and what the aggregate tonnage would be across the four ink types?
7.
How is the market tonnage and price growth trending for the solvent-based ink and flexible applications?
8.
What pricing dynamics are you observing in the flexible packaging segment, given the recent slowdown in value growth?
9.
It seems as if the key growth driver for the water-based inks is the shift from single-use packaging to more renewable packaging types. What volume growth rate and pricing developments are you noticing?
10.
How does the ability to add new capacity in the water-based inks limit the ability to grow pricing in the medium-to-long term?
11.
Would you expect market shares to remain stable and continue to grow at the underlying rate without any pricing growth in the water-based segment?
12.
What market share dynamics would you identify in the water-based ink segment?
13.
What is the impact of Huber, Toyo and others entering into the flexible and the paper and board segments? How has it changed the pricing dynamics for the key incumbents?
14.
How important do you think the international accounts are vs the more regional accounts?
15.
To what extent do you think Huber and Toyo can pick up some of these slow-growing but higher-margin regional accounts?
16.
How do you expect Sun’s strategy to develop, and how might that impact Flint within the flexible and the paper and board segments?
17.
Could you assess the label printing segment’s market shares, market size, volume growth and then pricing dynamics?
18.
You mentioned digital penetration into the label segment slowing slightly. How long do you think it would be until 100% digital printing penetration into label? What stops that shift from occurring entirely?
19.
Could you explain how flexographic plates are consumed, and when customers make these orders?
20.
Could you indicate EBITDA contributions across the key six categories?
21.
Could you explain the pricing pressure in the flexographic plate segment – the highest EBITDA contributor – when the innovation started to slow down as you suggested?
22.
What trends are you observing in volume and pricing for flexographic plates?
23.
How do you expect the pricing competition to develop between DuPont and Flint?
24.
How difficult is it for the end customer to switch flexographic plates to a player such as Kodak from an incumbent such as Flint?
25.
How would you compare the servicing and the financing between Kodak, MacDermid and the incumbents?
26.
Do you think Flint is at any advantage in the flexographic plates due to also selling the inks, or does that not make a difference?
27.
We have discussed Flint’s digital segment in previous Interviews [Flint Group & the Digital Printing Market – 20 Apr 2018]. Reports have suggested it haspoor geographic alignment, a weak product offering and lacking execution. Do you have a performance update on the Xeikon acquisition and any issues there?
28.
Do you have any comments on the transfer media chemicals? Are there any changes in market share or pricing?
29.
What strategic options are available to Flint for this packaging ink division carve-out, either sold off as one or as individual units?
30.
Who might be likely to buy the transfer media and chemical business? Given Flint has a slightly different internal structure, with the sheetfed as both the packaging and the commercial, could that business integrate well with an acquirer?
31.
Who might be a likely acquirer for the flexographic business, and what valuation multiples would you expect?
32.
What multiple would you expect for digital printing, and who would you expect to acquire that?
33.
What would you expect to happen with the remaining three divisions, the paper and board, the flexible and the label?
34.
What threats would there be to the remaining core parts of the business if the other three segments are carved out? Would Flint lose any synergies?
35.
Why do you think the blankets have been added to the packaging division, and to what extent do you think they belong there?
36.
What is your take on the management changes, with Steve Dryden and Tony Lord moving into packaging?
37.
Would you interpret that Flint’s intentions are to build out the packaging segment to counter Siegwerk’s market share gains?
38.
Could you summarise your views on Flint and your outlook on this packaging divestment?