EBITDA/Sales Slip Slightly for NAPL Performance Indicators Participants

By Andrew Paparozzi
In June 8, 2010

(earnings before interest, taxes, depreciation, and amortization) averaged
6.56% of sales during the 12 months ending in March for NAPL Performance

participants. That is down slightly from 6.72% during the 12 months ending in
February, but well above the 5.02% low of September 2009. During the 12 months
ending in January 2009, EBITDA averaged 7.20% of sales. (See the figure below.)

Why the
slippage? Most likely because cost inflation—particularly for paper and
energy—is already accelerating even though our industry is still in recession.
Among the specifics for the NAPL Printing Business Panel, as summarized in our
May 2010 Printing Business Conditions:

65.7% report paper prices have
increased so far this year and 43.3% report energy prices have increased. The
average increases: 5.0% and 6.7%, respectively.

56.4% have passed at least some of
the cost increase to date along as higher prices. The average pass-through:
49.9% of the increase, usually materials only.

38.7% have either tried to pass
cost increases along but couldn’t (16.9%) or haven’t tried (21.8%). A widely
held concern: Any pass-through will drive clients to other printers or to
electronic alternatives to print.

results remind us the overall environment has gotten better compared to the
depths of the recession but is nowhere near where we want to be—not even for
industry leaders like the majority of Performance Indicators
participants—and that maximizing
productivity and minimizing costs will be as important during recovery as they
were during the recession. (See the “New Rules of Recovery” in the NAPL
State of the Industry: Strategic Perspective 2010

EBITDA_Sales Mar10€ 

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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