HP Inc talks up graphics growth potential

HP Inc has packaging in its sights as a key growth market for its digital printing presses.

At a special briefing ahead of HP’s upcoming split into two businesses, Enrique Lores, the new head of HP Inc’s printing division said: “The same thing we saw in digital labels, we are going to see now in digital packaging. We are bringing the same value proposition to folded cartons and flexible packaging as we have in labels.

“More than 60% of the printers printing digital labels are HP, and in the same way we will win digital packaging. This is a $10bn market we can go and capture,” he stated. Lores cited Coca-Cola's Share a Coke campaign as an example of how digital print could drive sales for brands.

HP Indigo has already launched the 20000 and 30000 models targeted at flexible packaging and carton printing. It will show the HP Indigo 20000 at Labelexpo in Brussels later this month.

HP Inc chief executive Dion Weisler told financial analysts that the firm’s overarching business model was “all about supplies”.

He described the graphics industry as a $35bn (£22.5bn) market that represented “more than 80% of all pages printed – that’s 20 trillion addressable pages annually”.

“This market is in the early stages of an analogue to digital transformation and it is one that we are accelerating.”

Lores added: “We have a growing business in the graphics market. We love these devices. They don’t use tiny cartridges. They use barrels of ink. And we love barrels of ink because this business is all about supplies."

Chief financial officer Cathie Lesjak said restructuring and separation charges would cost the business around $300m. It expects to cut 1,200 jobs next year and 3,300 roles over a three-year period.

“Separation has provided a unique opportunity to do a clean-sheet exercise on our entire cost structure, allowing us to identify significant additional savings by improving design processes, reducing material costs, and freight and logistics,” she said.

HP Inc has around 50,000 employees worldwide, and sales of $54.6bn.

The firm is also taking its PageWide inkjet technology into the 3D printing market with ambitions to become market leader in this fast-growing area.

Lesjak said she expected acquisitions to be part of the HP Inc strategy, and the company would make acquisitions that were “complementary to our existing portfolio”.

The current HP business will be split into Hewlett Packard Enterprise (enterprise services, software and financial services) and HP Inc (printing, personal systems and 3D printing) in November.

Weisler said the HP Inc business had “the heart and energy of a start-up and the brains and muscle of a Fortune 100 corporation”.

At the same briefing Hewlett Packard Enterprise said it would cut up to 30,000 jobs from its worldwide workforce of more than 300,000.