EFI looks to acquisitions and OEM launches in 2013

Simon Nias
Monday, February 4, 2013

EFI is anticipating an uptick in its cyclical Fiery business driven by new product launches, including a new Xerox device that was "secretly" shown at last months' EFI Connect user conference.

Commenting on the company’s Fiery revenues, which were down 15% for the year at $228.4m, chief executive Guy Gecht told analysts that EFI was starting to see the benefit of new product launches from its OEM partners.

Speaking on the company’s Q4 earnings conference call he said: "We saw some stability in Europe, and we expect new products throughout 2013 to drive some recovery in our strategic partners businesses."

One of these products will be a new production engine from Xerox, which Gecht said had been shown "secretly" at EFI’s Connect user conference earlier this month.

"They got very good feedback, they actually sold quite a few of that and we are working very closely with them," he added. "We’re very excited about this product."

In spite of the decline in Fiery sales last year, EFI posted its twelth consecutive quarter of revenue and earnings growth in Q4, thanks to the strength of its Productivity Software and Industrial Inkjet divisions.

Inkjet revenue grew 33.3% to $320.2m in the year ended 31 December 2012, while software revenue was up 27.5% at $103.5m, helping to push group turnover up 10% to $652.1m.

Pre-tax profit increased from $30.4m to $35m, while a $48.2m income tax benefit meant net profit came in at $83.3m, more than three times 2011’s $27.5m.

Gecht revealed that EFI was poised to do more deals in 2013, following its four acquisitions in 2012, with packaging one target area for the US-based digital printing and software giant.

He said that he believed the firm would "do more acquistions" in 2013, adding that the firm was speaking to assorted players in the industrial print sector.

"We have people that go talk to customers and trade shows, and when we feel it is the right time and we have the right target, we will pull the trigger on that," he said. "There’s a lot to do, especially in the area of packaging by the way, it’s still a big area. We are only addressing really the label with that, so the pipeline is actually pretty good."

Commenting on EFI’s most recent industrial inkjet acquisition, the ceramic tile printer manufacturer Cretaprint, Gecht said that EFI was moving closer to producing ink for the Spanish firm.

He added that EFI was working on something "technically better than the ink that is available" in the market and that it was not intending to compete on price, but rather on quality.

"That's why we'll take our time and when we bring it to the market it should be pretty good outcome for everybody," he added.

Meanwhile, EFI’s UV ink sales for its Vutek printers grew 18% year-on-year in Q4, leading to its third consecutive year of plus 20% growth in UV ink volume.

Looking ahead to Q1 2013, EFI gave revenue guidance in the $163m to $167m range, based on "mid-to-high single digit year-over-year growth for Industrial Inkjet, approximately 15% year-over-year growth for Productivity Software and approximate 5% year-over-year decline for Fiery or flat sequentially".


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