is financed, office reprographics has, over time, become a
profitable industry for leasing companies throughout Europe. The
picture is becoming less rosy, however, as the recession begins to
affect the European market directly.
2009. InfoTrends, a consulting and market research firm, has
forecasted that sales in the laser office device market in Western
Europe will decline at a compound annual growth rate (CAGR) of
-3.12 percent through 2012.
The looming recession has also led European businesses to
reassess their printing needs – with many businesses postponing
upgrades and the acquisition of new equipment. This is having a
direct impact on lessors.
“Several customers who were approaching the end of their lease
terms have approached us to ask if they can just keep their current
equipment and continue to rent it from us,” Steve Hewson, marketing
director at Toshiba Tec, a global printer manufacturer,
explained.
Go deeper with GlobalData
“They do not want to commit to another three- or five-year lease
due to the market uncertainty.”
Because the original lease would have already paid for the cost
of the equipment, however, the profit from the rentals goes
straight to the manufacturer’s bottom line, benefiting the
business.
One UK-based business that has taken this trend in its stead is
Annodata, a UK printer and IT dealership, which refurbishes units
for second-hand use.
The evolution from traditional photocopiers to a networked
printer model is due to the rise in computer and e-mail usage,
where businesses want to be able to print straight from their
screens.
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By GlobalDataIn turn, this has led to the rise of the multifunction device
(MFD), which is not only a networked printer but also acts as a
photocopier, a scanner and even a fax machine.
“Employees are 10 times more likely to print documents than copy
them,” said Rod Tonna-Barthet, sales director at Annodata.
“This is causing a significant fight between manufacturers for
print space. Traditional photocopier manufacturers are moving to
supply MFDs and taking up the printer space, and providing faster
printer models than before.”
Another major trend is the move towards colour printers. Océ,
one of the world’s top printer manufacturers, estimates that sales
of colour printers have trebled in the past five years.
According to research from InfoTrends, this is set to continue.
The consultancy estimates that in 2008, laser colour printers
accounted for 25 percent of sales in Western Europe. By 2012, this
is estimated to rise gradually to 45 percent.
Tonna-Barthet believes that this progression can be attributed
to better and faster technology, and lower costs.
“In the past few years, we have seen a dramatic shift from 70
percent of our portfolio being black-and-white devices to 60
percent colour today. Quicker, cheaper, colour machines appeal to
businesses,” he explained.
Despite the appeal for cheaper colour printers, negative growth
is still expected. Rather than promoting leasing, lessors are
tightening lending criteria.
“The continuously tighter underwriting criteria for office
equipment leases are having a direct effect on the industry,”
explained Zac Butcher, director at InfoTrends. “As leasing
companies vet businesses’ credit worthiness more rigorously, some
customers are being shut out.”
Ed Hudson, marketing manager at Océ, said: “While there have
indeed been some issues with credit clearance due to tighter
lending criteria, we do usually find a way around any
problems.”
Océ has a global financing agreement with De Lage Landen, and
even employs DLL employees directly in its offices. This, according
to Hudson, has created a “very efficient and symbiotic workflow”,
to help Océ provide finance.
Steve Hewson at Toshiba Tec also believes they can work around
lessors’ tightening criteria.
“The general feeling is it isn’t necessarily more difficult to
obtain finance for our customers – they just need to supply more
data,” he said. “Lessors are checking all their risks, and
customers are now getting used to providing more information.”
