Meet the new Geon – Print21 magazine article

Over the past three-to-four years, Geon has grown at a blistering pace to become the region’s largest sheetfed printer. It was a journey that took up a lot of management time and energy with the acquisitions, building of new premises and rationalising the workforce. Now Graham Morgan, CEO, tells Patrick Howard that the company’s days of looking inwards are over; instead, it is re-focusing on its customers and is more than ready to meet the industry. Introducing the new Geon …

At one stage, it seemed as though Geon was in the business of buying printing companies. Over three to four years, it appeared to announce a new acquisition every other month, on different sides of the Tasman. It was a dash for growth, a private equity-backed strategy to bulk up to the point at which the company could legitimately term itself the largest sheetfed printing company in the region.

Then came the morning after, a time to trim down and concentrate on right-sizing, paring back excess and eliminating duplication, turning the company into the lean printing machine which Graham Morgan, CEO, claims it is today.

No easy task, it meant many decisions that caused anguish to a lot of people in the industry. The roll call of some of the companies that went into the making of Geon is illuminating … Penfold Buscombe, Agency Printing, Graphic World, Dynamic Press and, over in New Zealand, Brebner Print and Albion Graphics, to name just a few. As with every shot at the title, there were winners and losers and, along the way, Geon acquired a reputation that sometimes sat uncomfortably with Morgan.

Now that the dust has settled and the company is stabilised, he wants to draw a line in the sands of time … that was then, this is now. After the tumult, Geon has emerged as what Morgan describes as a progressive printing and communications company with a go-to-market management team, industry benchmark technology and 25 locations in Australia and New Zealand.

“Print is at the heart of Geon. It is what we do. There were two to three years of action, buying businesses and growing very quickly. When I took over as CEO it was to make this thing work. This is now the business we were seeking to create,” he says.

“I don’t think people realise how much we accomplished in not only integrating different businesses but building new ‘big sheds’ to get the efficiencies. We had to grow massively in a short time.”

Recognising that some of the decisions upset some people, he defends the company’s record.

“We needed the size, the scale and the footprint. We had to grow quickly. I would not change it.”

It was a horribly tough year
Last year there was a virtual news blackout from Geon as the senior management team kept their heads down, concentrating on making a new company out of the many disparate businesses it had acquired. In an industry that thrives on rumour, there was talk of financial difficulties, that perhaps Gresham PE, the financier, was becoming disillusioned with the strategy. Not true, according to Morgan.

“Gresham’s strategy is to build an industry-leading print and communications company. There is a five-year strategic plan to 2015, but a share market launch or purchase by a private bidder may happen before or after that timeframe. It depends on the performance of the company and the conditions of the market.

“It’s about growth. We will be sold when we can realise the value in the business. In that nothing has changed,” says Morgan.

“Gresham is a good partner. We could not have done so much without their support. Private investors such as Gresham take a longer view of things, they know they are in an industry with cycles and must invest to take advantage of them.

“They have invested for the long term. The strategy is that, to be successful, it is inevitable we will grow. They gave us the headroom we need,” he says.

However, Geon is far from immune from the financial storms wracking the economy and the industry. Morgan is quite candid about last year’s conditions.

“It was a horribly tough year for everyone. All volumes were down, across the board; publications, DM, mail and retail. Prices were down too and not just for us but by double digits across the industry.

“Having said that, we did pick up some good contracts. Overall there were more customers and more jobs, even if their value was down.”

Morgan believes Geon’s diversification proved a major factor in preventing the volume from dropping even further. The company has a significant presence across all areas of commercial print. It also has a unique variety of production facilities, ranging from its four ‘big sheds’ in Sydney, Melbourne, Brisbane and Auckland to over 20 smaller printing operations and sales offices throughout the region. Prism MIS software links most of the locations to create an integrated production platform unlike anything seen before.

The variety of Geon sites means the company is not out to obliterate normal commercial printing through consolidation of work into its ‘big sheds’, says Morgan.

“We operate in six out of the eight Australian states as well as the North and South Islands of New Zealand. We deliver a complete end-to-end solution to our customers, design to warehouse. Roughly half of our tonnage goes through the big sheds but we also operate traditional commercial printing in all our locations. These range from sites such as Docklands in Melbourne with its Anapurna wide format inkjet and digital printing to sales offices on the South Island with two to three people.

“Some of our sites operate around the clock, others such as Brunswick and Napier operate five days a week. These are traditional commercial printers, they are growing and we do not want to change them.”

Riding the peaks and the troughs
Morgan is happy to admit that he and his senior management have been on a learning curve over the past few years. You do not assimilate that many different companies without learning how different systems work, sometimes better than you know.

“One of the benefits in buying so many companies is we learned how everybody does things,” he says.

Part of this learning has seen the company flatten its management structure and slim down its senior management. Geon currently employs 1,250 people but has a senior management team of only six. With three general managers – Tony Onsley (northern region Australia), Scott Thompson (southern region Australia) and Andrew Durrans (New Zealand), there is little evidence of an all-controlling central office. According to Morgan, local management on the ground make most of the operating decisions.

That said, the ability to shift work around the network to the most appropriate production facility is an essential part of the company’s strategy.

“We are learning to use the network, to maximise capacity and ride the peaks and troughs. We’ve been doing it for quite a while in New Zealand and now on the eastern seaboard in Australia. There are certainly benefits. This year will see the entire company on the Prism network.”

Rise of the super printer
The Geon phenomenon grew out of many ambitions, partly the recognition by Gresham PE that there were far too many printing companies in a market that could be profitably consolidated into a number of major brands; partly because of the way print was bought and sold at the start of the decade. According to Morgan, the rise of the print management companies was a natural response to the difficulty of buying printing and to customers’ changing requirements.

“Five to ten years ago customers did not find it easy to buy print. They had to negotiate with many different printers. Printers thought it was the customers’ place to go and speak to them.

“But corporations were changing; they wanted as few touch points as possible. Print management companies came in and presented them with a simpler way to buy print. Most printers did not understand that at the time. More of them do now and the need for print management companies is becoming less.”

If Morgan has a mantra it is “Listen to the customers”. It is certainly a recurring theme throughout our interview. While much of Geon’s work comes from normal commercial competitive selling – “no job too small,” says Morgan - there is an underlying focus on servicing corporate clients. Geon has learned that its customers want a single source of supply for a wide variety of graphic products and services. It sources whatever it does not manufacture itself from a panel of suppliers, just as any print management company does.

“We have a contestable model. We do not need to make everything we sell. There is senior management in charge of all our corporate relations. Bid teams and project management units are dedicated to every major customer. I want to know who is responsible. The only way to guarantee the health and well-being of a customer is to listen to what they want. Retaining is just as important as winning.”

Elements of success
Geon is a private company so it does not have to release details of how it is tracking financially. Morgan is understandably reticent in revealing too much. He declares the company is meeting expectations, but that is all we get. Rather he focuses on the growth targets – double digit increases in revenue over the next few years.

Most of this growth will come from the expansion of the services Geon delivers to its customers. End-to-end service is defining its strategy. From design through production to fulfilment, the aim is to be a complete provider. A new design studio is currently under development in Melbourne, rolling out a model whereby customers will find in Geon their full marketing services partner.

Geonline is another essential development, linking customers to the range of services available, including ordering and inventory management. After a huge investment in presses during its initial growth, the company is now evaluating the next generation technology. Among its recent investments are a new HP Indigo press as well as finishing equipment.

“We have a strong contingent going to IPEX. We’re reviewing the next generation of offset presses as well as how the industry is changing. I’m very positive for the future of print but it’s important to recognise there is a conversion of some print to the internet. We were first with large perfecting presses. Now I want to see the next generation of presses.”

There is no doubt that one of the advantages of being Geon’s size is buying leverage. Although it has pulled back from an earlier model of seeking single suppliers across all supply lines, there are still areas, such as plates and ink, where a single source is attractive. (Its plate contract, one of the largest in the industry, is currently on tender.) Morgan is pragmatic about the advantages this delivers in pricing.

“Of course, you get reduction for bulk buying. It’s the same way printers look at different prices for a $1 million and a $10 million job. We buy in bulk, but it’s not always for the lowest price, because we need our suppliers to be profitable and successful. We are looking for improvements to the supply chain, for ways to help reduce the supply chain costs.”

Being of the industry
Geon is not the anti-industry behemoth so often imagined. Morgan comes across as quite the responsible printer, admitting that while they compete vigorously across the board, it is important for printers to be able to help each other out when there is a breakdown. This is traditional printing industry practice.

“It’s important to work together to grow the complete pie. We will be competitive but we will contribute to the welfare of the industry,” he says.

Morgan also believes in training, be it OHS, sales training, professional development or traditional apprenticeships. Geon wants 10 per cent of all its employees to be either apprentices or trainees.

“I have a passion for training. Learning is a lifetime thing. We work closely with Printing Industries. We understand that to have a secure future, we have to do things to help the industry succeed.”

He believes the worst should be over for the industry and the economy. There is growth in orders and in volumes, although price pressure is a fact of life and here to stay. He has no plans to grow by buying more printing companies; further increases will come by organic development.

“We have done the work and we have the company we want. To borrow a phrase, we are now fighting fit at the right weight.”