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Esko-Graphics to Decrease Focus on Commercial Printing Market

Press release from the issuing company

Gent (Belgium), September 17, 2004 – Esko-Graphics today announced some adjustments to its business strategies. The company will from now on primarily focus on the Packaging market, offering value-adding solutions combining hardware and software products with a growing selection of customer services and consultancy. In the Commercial Printing segment, Esko-Graphics will concentrate on SCOPE workflow software, on smaller format CtP devices for polyester and violet plates, and on Espresso, the company’s innovative 4-up Computer-to-UV-Plate (CtUP) system. “When asked by customers for advice on what strategy they should adopt, we have a straightforward answer: understand the drivers of your business, make clear choices, build innovative extensions to your existing strengths, and help your customers reduce costs and create value”, says Kim Graven-Nielsen, President and CEO. “We follow exactly the same principles for Esko-Graphics. We see the rapidly changing market dynamics in the graphics industry, and have evaluated the feedback from the many people visiting us at DRUPA 2004. We now make the choices that will best serve the interests of our company and its customers, and that will keep Esko-Graphics at the forefront of the industry”. More focus on Packaging Esko-Graphics’ Packaging activities currently account for over 60% of its revenues. Sales are growing strong in all regions and have increased by 11% over the first half of 2003. The new solutions announced at DRUPA have been very well received by customers and prospects alike, and further growth is expected for the rest of the year. “Packaging is our major flagship today”, comments René Delbar, Senior Vice-President Marketing. “We have earned an industry reference position with unique value-adding solutions, and with many products that are leaders in their respective segments.” Esko-Graphics’ SCOPE software suite seamlessly integrates graphic and structural design and pre-production with asset and project management. CDI platesetters image over 90% of the digital flexo plates used worldwide. More than 1,700 Kongsberg samplemaking and digital conversion tables are installed in 50 countries. “The Packaging market is a healthy and growing business environment, attracting many new customers. We have decided to put more focus and resources towards this booming part of our activities, to grow and expand it even further”, concludes Delbar. Distribution and service to the Packaging markets will continue through Esko-Graphics’ direct sales organization, as well as through qualified resellers around the world. Commercial Printing “The Commercial Printing market is served by many suppliers and shows little or no overall industry growth”, states Graven-Nielsen. “Fierce competition leads to price pressure and low margins. It becomes very difficult for us and for many other offset CtP suppliers to maintain a sustainable business in this segment”. Despite more attention and endorsements for violet CtP from the industry, the market development so far has been constrained by the limited availability of plates. “Considering both these elements, we have decided to stop further investments into our PlateDriver violet CtP product line and to direct our efforts towards growth areas where we have a strong product position”, concludes Graven Nielsen. Esko-Graphics’ will refocus its distribution organization for Commercial Printing towards its expanding OEM and reseller channels, carrying the DPX, PlateDriver Compact, DotMate CtF and EskoScan product lines. SCOPE workflow software will also remain an important part of Esko-Graphics’ offering to the Commercial Printing market. The company will continue to offer customer services for the installed base of all hardware and software products, directly or through distribution partners. Changing the strategy for Commercial Printing will create a number of redundancies in several areas of the company, mostly related to violet CtP. In total, up to 15% of Esko-Graphics’ total workforce may be affected. Espresso around the corner The new Espresso 4-up Computer-to-UV-Plate product has been presented with great success at DRUPA. Espresso is capable of digitally imaging conventional pre-sensitized plates with UV light, and offers printers a very affordable option to adopt a CtP workflow. Excited prospects and distribution partners confirm Esko-Graphics’ vision on the many market opportunities across the printing industry. The Espresso development team currently makes the last refinements to quality, reliability and performance. Field testing will start shortly. Esko-Graphics plans to commercially introduce Espresso during the second quarter of 2005.