Welcome back to INKISH TV in over the Skype. Today is Tuesday, the first day after Easter. And then in a lot of European countries there’s still a lockdown, so it’s like a lockdown period here in Denmark where I’m located in my living room right now. And my kids are in school in their rooms, and I have the pleasure of today to welcoming Franz Repp who is working for Scodix out of Switzerland. So welcome to my show, Franz.

Thank you very much, Morten.

And you’re sitting in your car and it seems that there’s good sunshine where you are.

Yes. I’m just arrived in Austria after also lockdown in living in Zurich, living in Switzerland. And I decided to come a little bit more back to normal life, starting working again, leaving Switzerland, going to customers in Austria and to Germany. As you know, I’m in charge for sales in Germany, Austria and Switzerland. But the main business is in Germany, yes.

And one of the reasons why I’m so happy to talk to you, you are one of the sales reps that actually make my life busy too. Because the first time we met each other was a year ago or something like that, where we was talking. We met at the [Ninadruch 00:01:26] and at the [Shitzel 00:01:28] Print in Motion and every time I go into some of the printing companies that have invested in Scodix equipment, they always smile. Why is that?

Because of Scodix, because of Scod…. Yeah. You know, let me tell you the following. I am in the business, in the graphic arts industry, in the printing industry, more or less now since 30 years and 27 years in sales. And I can tell you that if I’m looking back and looking to the present and may probably also to the future it was always like this. The commercial printing was always there changing the technology from this to that at the end of the day. But if you ask customers, commercial printing companies, “How is your business?” then they either were full of work or they did not have anything or something in between. But if you ask them, “How is the profitability?”, they always say, “Between one to three percent”, right?

Oh yeah.

And you asked why my Scodix customers are laughing or smiling, is because that’s what we always say, we try to bring them back with the differentiation of digital enhancement back to profitability.

And yeah…

Smiling.

Yeah. And if you look at the Scodix since… I remember actually I saw the Scodix equipment for the very first time that was actually a trade show in India. And you know, in India they really like the glimmer and the varnishes and things like that. So when I saw that for the first time, I was like, “What?” can’t say that, “What is this?” Because this was really great equipment and took enhancement from being analog to digital in a way that is… I mean that’s even seven years ago so it’s even better now. So when you go and talk to printing companies, what is your KPIs when you sell these fantastic machines that you are selling?

You know if I’m coming to somebody calling us, I call for a discussion about Scodix and digital enhancement, the process is always the same. And I present the samples, I present the technical details, the technical features of Scodix and everybody says, “Wow”. Everybody loves Scodix, right? What we are building technically and the results, what comes out of the Scodix. At the end of the day, if they ask you how much is it, how much is the investment? We are not a low cost product. We have a highly industrialized product, highest quality, best in class, best in class product, best in class service. We are not cheap. Definitely not in terms of investment, but I would tell them then immediately the number they would say, “Okay, thank you for coming. When you have finished your cup of coffee, thank you very much. Goodbye”. Right?

So I know because when I met you in Germany that last year, you actually, I don’t know if you took me for being a potential buyer. I wish I was but I think you wanted to present the way that you presented to customers because I think you talk about the value creation of sheets, how much more the jobs are worth to the printer when you add Scodix to the equation, right?

You know that is all… Again, when we present Scodix, the results, technology, everybody’s smiling. When I present them, not the number of the investment, but tell them, and that is proven, it is reality in at this moment at more than 300 installations worldwide in Europe, approximately 150 installation with Scodix and in Germany we are now approximately at 20 installations, right? Commercial printing companies, digital analog, a mixture of both. If I’m presenting them, how much the numbers, how much they need to produce per day… For the Scodix, they need to be profitable, highly profitable. And I’m not talking about one, two or three shifts I’m talking about one to two hours. And then I give them the costs, how much it will cost for producing one hour, two hours a day, multiply by 20 days compared to the revenue of the one to two hours work per day or per month for 20 days. The number is very clear, you are highly profitable. And that is what everybody is looking for. Not only a nice product, a good product, a sexy product-

They need to make money.

They’re looking for profitability.

Yeah.

Yes, nobody would invest if you talk about 50,000 euro, 100,000 euro, nobody would invest, more likely even not these days, any amount of money, if there is not profitability.

Yeah. Precisely. Yeah. One of the things that I’m has been wondering about from time to time is that as being in Europe, that there’s a huge differences from North, East, South, West in pricing, both for the print and for the labor work and things like that. And one of the things that I was wondering about when you sell Scodix machines, is your competition, the conventional enhancements like foils and embossing or what are you competing against?

I mean we have competition theoretically. I can tell you more than that, that honestly there is competition in place, but I don’t see that competition in my area in Germany, Austria, I don’t see that competition. To compare with the analog? No, that’s not the way it works. There’s buts and pros for both, for the digital and for the analog technology. Right? How does it work from the commercial side, if you print digital with an Indigo, with a Fuji, with whatever, Xerox, and then do you make the analog enhancement with the cost of tools, of cliches or set up times which are much higher than with digital enhancement that does not fit together.

So what you’re saying is that basically that, when we talk about the analog where it’s digital, it’s more about still the volume. Because, I actually thought that when I look at the Scodix machines and I see them in action, it’s also like you have, I know it’s a little abused kind of word, but mass customization where you are able to produce a lot of shifts on the short time, so you are maybe mostly driven by the fact that the customers is demanding shorter print runs. And I see that because the reason why I was asking was because I think that you also want to be in packaging and packaging often is maybe a little bit higher right?

Yeah, definitely. I give you following answer. Best, it works not technically, but from the financial point of view, it works with digital printing, small runs, digital printed with digital enhancement of Scodix, perfect fit. But we also have customers who are printing in offset, not only digital but also in offset runnings of jobs of three, four, 5,000 sheets. And it’s a question, it still fits. It still fits right? This calculation needs to be done case by case.

Yeah of course. Yeah because I guess it depends a lot on the applications and also because I think that some of the advantages you have with the Scodix machine is that you have multiple technologies and multiple kinds of enhancement in one machine. So you are capable of doing things that it’s not possible to do in analog either.

Absolutely. We have customers who are printing in offset and do the digital enhancement with Scodix not only because of the glittering stuff, the good stuff, but also for doing the customization and the personalization so they combine analog printing with digital printing with digital enhancement to do that. Instead of doing that with a digital printing press, that personalization with Scodix with foil, for example. It works.

And so that basically means that, I don’t know if it’s the case, but I would have thought that when you started years ago, the nearest market to capture was the digital market, but with the capabilities and the speed of the Scodix machines today, the market has opened way bigger. So now it’s both analog, it’s packaging, it’s commercial. You basically have 8,000 potential customers in Germany I’d say, correct?

Yes. Potential customers. Prospects.

Yeah.

Waiting for Scodix waiting for us to get them smile.

Yeah. So I think that it’s good that you started in [BMW 00:11:22] so you could get working because you’re busy. Right?

We are busy. We are absolutely busy. Yeah. There’s a huge potential. Definitely, yes.

And now the Drupa exhibition was postponed because of the Corona virus. Besides being having a lockdown as we just spoke about before we started recording, is that something that has impacted Scodix in the sense that I believe that you’re normally on these trade shows have pretty big stalls. I guess that where you about to showcase some new technology or how was that about that?

We wanted to show something new definitely. But we didn’t want to show a new platform, let’s say a new machine which is now absolutely different from that what we have. You know that we have, let’s say main product, our main machine is the Ultra.

Yeah.

The 101, the 202. At the end of day anything what we expected to see in June in Drupa was not nothing different, new technology, no. Everything what we wanted show is based on the Ultra technology.

And are you able to bring some of these things to market before or will you postpone that also to the next Dupra then.

Honestly as far as I know we didn’t take a decision yet when we will present these new things to our prospect, to the customers, to the market. What we also wanted to show in Dupra is new application for the existing product, Ultra. Means also for the existing customers who are always looking around for something new they can sell to the customer. Something special, something even more sexy that we already have.

Yeah, and that is one of the things I really like about Scodix also when you go to trade shows because you have a large emphasis on the applications. You show really really beautiful print samples and as you may know here in our print sample CV on INKISH we have also showcased a lot of great examples of Scodix technology. I was just thinking Franz, being on the road and talking to customers, one thing is that they clearly understand the value that you present in the profitability of enhancement. But is it also, it’s not a leading question, but is it from your perspective difficult to get these machines financed at this time? Or if you want to buy a machine, how difficult is it to actually get it?

You know, all our customers in Germany, I would say more or less all of them did financing with a financing bank. We are working very close with… I’m presently working very close with one financing bank in Germany. So when I’m going to a customer presenting him the quote and I’m also empowered offering him, presenting him the financing quote of the leading bank.

Okay so-

So you can know [inaudible 00:14:34] how much it cost him per month.

Yeah.

The number which is interesting, the only interest number in terms of cost, if we compare that to the revenue per month, whether that is complicated or not. I mean, you said there’s thousands of potential customers in Germany. How many may be able to get the financing?

That’s a big question of course to answer, but yeah.

Nobody knows. I can tell you we always find a solution. We always try to find a solution also for financing. So Scodix always offers a full solution package.

Yeah, but I was also thinking that I guess that as being the vendor of exclusivity, I don’t think that you want to sell to every printer, right? I mean, of course you would like to get the business, but from the perspective that you or your customers can differentiate with their product offerings also means that the pricing has an exclusive level. I made an interview with a virtual packaging in Dallas last autumn and the owner, Mr. Bennett, he said to me that one of the things that is quite interesting is with the digital mass customized products, we can sometimes even have products that are cheaper to produce than the analog versions, but we can sell them more expensive because we are exclusive in the market and they have that advantage. I take it’s exactly the same for Scodix, right?

Yes. That is generally right. On the other hand, if I’m going to a customer, to a prospect, that can be either a commercial printing company, that can be a finisher, that can be a… So working in B to B, right? We also have a B to C customers, online printing shops, selling their products, printing products to the customers, to the consumers. At the end of the day, who’s interested? One of these literally three different kinds of printing companies who’s interested to differentiate their products from the competition or to make their products more sexy that their customers are more interested to purchase these kinds of products. We are interested in anybody to talk to and to explain them how it may work, whether it may work, right?

Of course. I do understand that. I mean I have never met anybody in sales who don’t want to make the sales right?

I never said no. I never said no.

That’s great. Franz, it’s been a pleasure to talk to you here on INKISH over the Skype. I have more on a personal note because we have connected on Facebook and one of the things I really, really like about your Facebook is that you have a passion for food and really great nature spots also. Are you planning to have a restaurant somewhere in Switzerland at some point?

Maybe when I’m going to retirement. Maybe any day, but the question is when. I’m not planning to do that in two, three, four, five or 10 years. I’m so happy with Scodix. Honestly I’m not joking.

I was not thinking of it as a replacement. It was more like I really think that you’re a good photographer and I think that the food that you present looks awesome. So I want to have a bite. That’s why I’m asking.

Yeah. I like good food. Yes. I like enjoying life and I mean these days, during the Corona crisis, we all have to stay mostly at home. So what remains?

Yeah. Food.

Good food.

And good wine.

Talking to nice people and good wine and good whatever. At the end of the day that is what brings us together again.

That’s true. Thank you very much.

Pleasure to talk to you Morten.