Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information OUR MARKETS Innovation It has been observed that the packaging industry seemed to use the pandemic as a platform for growth and innovationa. There have certainly been many exciting developments in recent years with water-based inks, paper pouches, flexible films and recycled materials. One such is Direct-to-Shape printing which prints the product “label”, including full-colour images, text linework, and other special effects directly onto cans, bottles, sleeves and other shaped objects as an in-line step in the manufacturing process. Flexibility Whilst packaging produced by the flexographic process accounts for the largest share of the market in Europe and the US, the share of digitally printed labels and packaging is rising significantly. This is due to a number of factors, not least its flexibility whereby short runs can be produced quickly in response to changing consumer demand. Most packaging in Asia is still printed with gravure cylinders, but this is also migrating toward flexographic and digital printing methods. Asia is projected to be one of the highest growth areas for digital label printing in the near future. Sustainability The rising prominence of the ESG - Environmental, Social and Governance - agenda, new legislation, and consumer pressure are fuelling practical measures to reduce environmental impacts. One of the first steps towards sustainability is the reduction of waste, and since digitally printed packaging can be produced in very precise quantities, the digital conversion of packaging will continue to be driven by sustainability initiatives. Smart factories As more consumer brands seek to incorporate inkjet printing into their production lines, the Company has developed SmartDFE TM a solution to add print into Smart Factory and Industry 4.0 environments via a Smart Digital Front End. This solution went into full scale production with a number of OEM partners in 2022. The Company operates in all digital printing and manufacturing segments, but sales and marketing efforts target four strategic growth markets: packaging, ceramics, textiles, and 3D printing & additive manufacturing. In each of these segments, inkjet technology is giving brands the flexibility to respond to changing customer demands by just-in-time digital production, and to create products that would not be possible using analogue production methods. Set against the transition to digital printing, another trend is at play: manufacturers of digital printing devices are looking for turnkey software solutions that are fast and flexible enough to power the next generation of digital inkjet printers at blistering production speeds. The Company’s software engineering expertise allows us to develop solutions to meet and exceed these requirements. a. Dave Zwang https://whattheythink.com/articles/113241-time-thrive/ b. https://www.smithers.com/services/market-reports/ printing/the- future-of-digital-printing-to-2032. c. https://www.smithers.com/ en-gb/services/market-reports/printing/ the-future-of-package-printing-to-2027. Hybrid Software Group PLC Annual Report 2022 9 8 Our markets continued... iC3D software generates photorealistic 3D virtual mock-ups for labels and packaging applications. According to “The Future of Digital Printing to 2032b, in 2032 digital print will account for almost a quarter of the global value of all print and printed packaging by value, worth $230.5 billion. The same report indicates that inkjet accounted for 61.4% of digital print value with 62.4% of volume in 2022 and predicts that this will increase to 74.1% of value and 77.5% of volume in 2032. Packaging will see the biggest change, with digital print gaining traction in corrugated, cartons, flexible packaging, rigid plastics and metal. In 2022, Smithers estimated that the overall package printing market was worth $473.7 billion; and would reach $551.3 billion by 2027 (constant 2021 prices), with a growth rate of 3.1%c. Packaging This market requires specialised knowledge and advanced software solutions to provide the speed and precision required for high-volume production. Hybrid Software Group offers OEMs and print service providers the full gamut of expertise required, from 3D visualisation of packaging designs, the faithful reproduction of brand colours, layout and proofing tools, to the high-speed processing of variable data for personalisation.
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