The Recycler Issue 331

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FEATURE Covid-19: Where to from here? Wherever you are in the world, this coronavirus pandemic is impacting on our personal and business lives. Over the last few weeks we have been fielding Skype calls and emails from around the world and across the sector, OEMs, remanufacturers, resellers, distribution and the supply channels. The conversations are all about the pandemic and its impact on the office print market. The headline number is that depending on where you are in the market, sales have declined between 20% and 82%, so here is our take on where we are and what we think might be evolving in the coming months for the office print market. The arrow of time never points backwards is a good phrase as we assess where we are and what might be happening as we go forward. There are lots of questions about when we will get back to normal and the short answer to that is, nobody expects that we will. In other sectors British Airways are looking to let 12,000 employees. The first wave of several thousand Boeing layoffs will start in June. The International Labour Organisation (ILO) reports that 81% of the global workforce of 3.3 billion has been impacted in some way by the coronavirus. A continued sharp decline in working hours globally due to the COVID-19 outbreak means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed. The normal you knew at the start of the year is gone forever. It has been replaced by the pandemic activity that has seen the sales of printers flying off the shelves and into homes as social distancing is implemented and the work from home and home school protocols kick in. The normal you knew at the start of the year is gone forever. To make matters worse, the ILO forecasts that the drop in working hours in the current (second) quarter of 2020 is expected to be significantly worse than previously estimated. Taking to LinkedIn, IDC reports that worldwide shipments of hard copy devices were down 8.8% in Q1. It doesn’t take a rocket scientist to see that Q2 will be something similar or worse. So far Epson, Kyocera and Xerox all report tough times. Fuji are delaying their reporting and that is never good news. FEATURED A R TIC L E At some point in the coming weeks children will go back to school and workers will go back to the office, but do not expect the normal you were used to. First of all, every day the pandemic lockdown lasts economies are impacted. Some businesses won’t survive, those that do will take time to recover. 4 Issue 331 June 2020
You can contact visit www.therecycler.com The Recycler via Twitter for at all @RecyclerMedia the breaking news Some see the current situation as an opportunity and according to David Connett, a Partner at Connett & Unland GbR: “There are investors actively looking to make acquisitions at the moment. One investor has a €20 million ($21.64 million) fund to make acquisitions now. In the imaging sector most businesses are small relative to the OEMs and bigger players. Depending what sort of business it is and what the owners exit plans are, exiting now may be a better option than waiting two or three years for the new normal to emerge. Profitable, well run businesses will always sell.” Whatever the new normal will be, do not expect it to arrive any time soon because normal goes hand in hand with a stable economy and it will take a few years for economies to stabilise. As the lock down eases companies will reopen, but some businesses, stores and restaurants, resellers, collectors, remanufacturers will not reopen because they just ran out of financial resources to sustain their business during the lockdown. In a Reuters article the Barclays CEO, Jes Staley, said after the bank reported a fall in first-quarter profits: “Putting 7,000 people in a building may be thing of the past.” The bank, which like companies worldwide has seen the majority of its staff work from home or backup sites, will not revert fully to its pre-January working habits, Staley added. Against a background of reduced printing, it is the OEMs who are likely to take the big hit over the next 18 months or longer. The OEMs are feeling the pinch as revenues plummet. OEM contacts tell us budget printers and consumables are selling well in Q1 and Q2, but the more lucrative corporate cost per copy revenues are down. The OEMs are feeling the pinch as revenues plummet. In an interview with CRN, HP CEO Enrique Lores said “that the move to workfrom-home and localised manufacturing through 3D printing will likely remain in the post-coronavirus world. We think that this is going to be a permanent effect. In any crisis, there are tailwinds and headwinds. Clearly, this is a significant tailwind." And while we would not agree with Lores on a lot of things, when it comes to the pandemic and the printer market, we would agree when he says, "when these situations happen, usually strong companies get stronger.” It is gloomy and for sure printed page volumes will plummet this year and expect that to recover somewhat in 2021, printed page volumes will not get back to 2019 levels anytime soon, if ever. But it is not the end of the world. Issue 331 June 2020 5
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The Recycler Issue 331

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