Hybrid Software Group PLC Annual Report 2022 12 Hybrid Software Group PLC Annual Report 2022 Hybrid Software Group Strategic report Governance Financial statements Other information Copyright © Forest Digital Many facets The global digital textile printing market is segmented into clothing/apparel, home décor, soft signage, and industrial. Clothing & apparel was the largest digital segment and made up of more than 53% of digital textile production in 2021e. Digital textile printing processes include either Direct-to-Fabric where the design is printed onto a roll of fabric that is later made into a garment, and Direct-to-Garment such as the printing of designs onto t-shirts or promotional merchandise. The disruption to supply chains caused by the global pandemic has led many to believe that a systemic change to the textile supply chain has begun and that transformation is underway towards an increase in digital production. In any event, the benefits of printing on demand using digital inkjet are increasingly appreciated by textile manufacturers. Smithers’ data show that as more print service providers invest in dedicated inkjet textile presses, equipment sales will pass the €1 billion per year mark in 2026f. A key driver Sustainability is a key driver for digital inkjet production because it reduces water, energy usage, pollution and waste. The latter is of special interest: the amount of textile production ending in landfill is a particular focus for brands who are increasingly aware of their consumers’ demand for environmentally and socially responsible business practices. It’s not only in retail where sustainability is a factor; there is increasing demand for green credentials in the use of textiles for public sector spaces. Shorter cycles benefit fashion Digital inkjet enables brands to respond to changing consumer behaviour as fashion cycles shorten and more goods are purchased on-line with scope for personalisation. In 2022, additional supply chain disruption and increasing de-globalisation has accelerated the trend towards producing closer to the consumer. Digital production provides more control over inventory shortening supply chains and facilitating smaller and more flexible production runs. e. Grand View Research. https://www.grandviewresearch.com/industry-analysis/ digital-textile-printing-market-report f. The Future of Digital Textile Printing to 2026, Smithers. https://www.smithers.com/ services/market-reports/printing/the-future-of-digital-textile-printing-to-2026 https://www.graphicdisplayworld.com/categories/business/world-inkjet-printed textile-market-to-grow-from-3-82-billion-to-6-95-billion-in-2026 Recent forecasts indicate that the global digital textile market will see a compound annual growth rate of 12.7% by 2026, pushing global value to €6.95 billion in 2026f. This will see inkjet’s share of the total printed textile market – 52.7 billion square metres (2019) – rise from 6% to 10% over the forecast period. This represents a significant opportunity for digital textile OEMs: Smithers’ data shows that as more print service providers invest in dedicated inkjet textile presses, equipment sales will pass the €1 billion per year mark in 2026. Dramatic increases in energy prices have only served to highlight the efficiency benefits of digital printing and reduce the payback time for new investments in digital textile printing. Our markets continued... Textiles This steady transition to digital production is resulting in many new digital textile printers coming to market. The Company’s reputation for high-speed software, colour management technology, and expertise in inkjet drive electronics enables us to respond quickly to manufacturers’ demands for turnkey solutions to drive these machines. 13
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