Marketing Hadar Friedland Marketing Product Manager January 2007

Marketing Hadar Friedland Marketing Product Manager January 2007 © 2006 Hewlett-Packard Development Company, L. P. The information contained herein is subject to change without notice

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

Market and growth • Wide format graphics, $90 to 100 B market (RVPO) • Largest opportunity: analog to digital conversion of screen printing • Digital penetration currently 23%; will double in five years Digital 51% 26% 23% 2005 30% Screen printing Offset, Flexo &Other 25% 45% 2010 Source: IT-Strategies

Changing competitive landscape— wide format printing Agfa + Mutoh +Thieme HP buys Scitex HP LFP Gandi Qu alit y EFI buys Vutek Productivity D. S. buys Inca

FY 07: LFP Business expected to grow 6% FY 07 TOTAL LFP Revenue ($M) FY 06 FY 07 Designjet 1, 246 1, 320 Growth 4% 6% Scitex 168 184 Growth 11% 10% Total LFP (incl. 1, 414 consumables) Growth 5% 1, 504 Zoom in: Industrial Solutions 6% Echo products: DJ 8000, 9000, 10000 HW + Inks Industrial Solutions represents 32% of the total LFP Business

Customers: Print-Service-Providers (PSP) • Small to medium digital shops, medium to large screen printers (analog), sign shops, photo labs 20 to 100 employees $2 -10 M annual turnover 1 -3 shift operations Service oriented activity • Printer is largest capital investment $100 K - $1 M • •

Outdoor signage—the Market Volume Growth Total $35 B (31 B ft 2) 6% Digital $6. 2 B (17%) 30% (last 2 years) Source : I. T. Strategies

Outdoor graphics LFP industrial solutions and unique selling points HP Scitex XL 1500 and HP Scitex Grand—industry’s “work horse” solutions • Size, application and media versatility • High quality-to-speed ratio • Excellent reliability • HP Scitex XL 1500 at CGS, Los Angeles, CA

Outdoor signage—customer story Customer name OSG, Hungary Business description Signage, billboards and street graphics Application Banners celebrating Hungary’s admission to the European Union, printed by OSG Hungary to decorate the towers of the Elizabeth Bridge over the Danube in Budapest The challenge Time to market double-sided 1. 5 days

Indoor graphics* Volume Growth Total $33 B (25 B ft 2) 7% Digital $2. 2 B (7%) 13% (last 2 years) *Excluding POP Source: I. T. Strategies

Indoor graphics - LFP industrial solutions and unique selling points • The HP Scitex TJ 8300 (solvent) & TJ 8500 (UV) are the only solutions in the market matching screen printing’s productivity with lower operating costs • USP’s HP Scitex TJ 8300 (Turbojet) at O’Donnell, Orlando, FL • Break-even point at 500 copies • Outstanding quality and sharp text • Quick return on investment New HP Scitex TJ 8500 for UV curable printing

Indoor graphics—customer story Customer name O’Donnell, Orlando, FL Business description Packaging company, POP displays division Application Indoor applications used in theater lobbies, theatre marquees, glass display cases, balconies, and ad spaces in and around theaters (bus, train, subway depots, etc. ) The challenge Creating 200 theater posters—“one-sheets, ” 27”x 40” on paper, used in theater lobbies in one hour

POP displays—the market Volume Growth Total $8 B 10% Digital $0. 5 B (6%) 60% (last 2 years) Source : I. T. Strategies

POP displays LFP industrial solutions and unique selling points • The HP Scitex FB 6700 is the highest productivity system in its class • USP’s • Fully automated HP Scitex FB 6700 at Duran Dogan, Turkey • Outstanding print quality • Environment-friendly water based pigmented ink HP Scitex FB 6700 with in-line laminator

POP displays—customer story Customer name Carmel Container Systems Business description Packaging company, POP displays division Application 3 D displays prepared towards promotion of Disney movies The challenge Repeated orders of short runs (6 units of each), overnight delivery time at outstanding quality

Widest Portfolio of Digital Wide Format Products Wide Format Super Wide Format Flatbed

Providing Wide Range of Applications Wide Format Super Wide Format POP Displays & Packaging Soft Signage

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

Trends: Screen vs. Digital Printing • FESPA ’ 05, Munich: − − − Digital domination in a screen-printing show Approx. 2/3 dedicated to inkjet No real new screen developments Rapid change of material as retailers react to competition or environment changes • Ability to compete with screen in features such as flexibility, functionality vs. productivity issue •

Trends: Screen vs. Digital Printing • According to PIRA: − − in 2005, breakeven point was up to 500 copies. By 2010, it is estimated that this breakeven pt. will increase up to 1000 copies 2000 2005 2010 Growth (2005 -10) WW Screen printing (M €) 31, 611 29, 119 23, 865 -18% WW Wide format digital Printing (M €) 7, 598 16, 174 26, 499 63. 8

Increase revenues • Support also short and medium runs (more jobs) Revenues • Meets the advertising new campaigns trend (shorter runs) Improves Business Opportunities!

Reduces Production Costs ~ 300 No. of Copies How (Combination of): • No setup required Speed: quality printing of 400 sqm/hr / 4, 304 sqft/hr • Wide media offerings including uncoated low cost materials • Efficiency: S/W – arranging print + load files to queue while printing, media – loading the required size while printing and an integrated Scitex vision dryer •

Proofing • Real-size proof within minutes! • Same colors from copy # 1 to copy # 500 (Huge challenge in screen printing) 24

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

HP Scitex Drum based family HP Scitex TJ 8300 HP Scitex TJ 8500 External drying system Wide choice of media Solvent based Ink Internal curing system Additional media options UV Curable Ink

HP Scitex Drum based family HP Scitex TJ 8500 (UV) Complementary HP Scitex TJ 8300 (Solvent) Environment al Barriers Technology Trend High Volumes of Billboards Outdoor signage Indoor signage Vehicle wraps Etc. Wide format Industrial Printing Market Uncoated Media Space Problem

HP Scitex TJ 8500 Ink Workflow Printing Modes • UV 850 Supreme • 2 years durability Media Handling Ink Printhead

Color Gamut Comparison

HP Scitex TJ 8500 features and benefits in production • UV curing requires less machine length and less production floor space than thermal drying Machine Length (m) Machine Footprint (sq. m. ) Maximum Power* (k. W) HP Scitex TJ 8500 UVC inks 8 32 90 HP Scitex TJ 8300 Solvent inks 19 57 80 * Machine plus UV curing or ink drying station

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

Competitive Landscape • Analog (Screen) • No real digital competition − Augend Technologies F 16 Printer (subsidiary of Infinity) • • • A new drum-based product Solvent inkjet printer, offers UV curing as an option Produced in Belgium Productivity of 400 sqm/hr, spectra heads… It should cost approx. 1. 5 m$

Analog Printing Characteristic Character Screen Printer Offset Throughput >600 sqm/hr >1, 000 sqm/hr Machine Price (4 colors) ~ $800 k ~ $1, 500 k Ink Price/L < $10 (20 -30 c/sqm) < $5 (<10 c/sqm) Media Price < $0. 3 < $0. 2 Maintenance costs Low Training required Low High Setup Costs High Very High Time to market Medium long

Contents LF Business Screen vs. Digital Printing HP Scitex Drum based family Competitive Analysis Key Messages

TJ Family Key Messages Fastest WF digital Printer in the world without compromising on quality • More cost-effective than screen printing for short and medium print runs • Integrated Ink, SW and curing system makes it a complete solution Continuing the proven, unique drum technology success • Customer Service Approach of HP Scitex •

Thank You