When Guy Gecht became CEO of EFI (Electronics for Imaging) in 2000 it was a very different company to what it is today. Then it was a single-product enterprise, based around the success of the Fiery RIP. Today it is a multi-million dollar technology enterprise embedded across a wide range of graphic arts sectors, and Gecht has a clear corporate goal over the next couple of years, to make EFI into a billon dollar company. He shared his thoughts with Patrick Howard at Ipex in London.
It is a phenomenal success in a challenged industry, posting record revenues (last year US$728 million), growing at 12 per cent per annum and closing in on a promise made by Gecht to his shareholders of surpassing the US$1 billion revenue mark in 2016. Over the past 14 years EFI has grown through a combination of organic growth and an energetic acquisition strategy aimed at furthering the strategic vision of being the enabling technology company for the printing industry.
When I met with Guy Gecht on the EFI exhibition stand at Ipex, more than a decade since we first crossed paths in a pub at the Rocks in Sydney, he was as passionate and, yes, as fiery as ever about growing the business. He reflected that it was better now than when he first took over.
- Billion dollar man - EFI CEO, Guy Gecht
“I feel like I’ve managed two different companies. When I took over, EFI was one company, then we transformed it and now it's a completely different company. It’s much more interesting now because at the beginning it was about cost cutting. Then it was about making a bet, first on MIS, then on inkjet. Now that it’s all working together, it’s more fun,” he said.
Built on family businesses
There is a surprising moral imperative underlying Gecht’s approach, a sense of mission beyond the normal CEO pre-occupations with shareholder value and profits. While recognising that a major part of his role is to keep his shareholders happy –and with EFI’s NASDAQ shares hovering around US$45, up from US$25 a year ago, they certainly ought to be – he identifies a deeper satisfaction in dealing with the family-oriented businesses of the printing industry.
“We are dedicated to printing, we are passionate about the industry. I love the idea that this industry is built from family-owned businesses. We just announced a sale to Pinsker in Germany, a printer whose managing director is Conny Pinsker, an energetic woman who is the fifth generation to head the company, which is 100 years old. This is a great example of the companies you find in this industry.
“That means that when you do business it’s for the longer term, on both sides. If you sell hard disks; you sell it to the IT guy. Two years from now he’ll be working for another company and someone else will do the job. And someone else will do what we do. It’s not long term. It’s deal by deal. But in our industry it's a long-term partnership. You know it's going to be the same family and you know its going to be the same core people at EFI and we’ve got to build it and make it a win-win for both sides and not just a one off deal.
“What really drives me when I come to work is not the shareholders. It’s about the fact that we have a role in this world and that role is to make the millions of people that work in the family-owned [printing] businesses much more successful, despite all the pressure they are under.”
Focus on the customers
The blueprint for development at EFI has a fairly simple basis, according to Gecht. The company is known for investing in R&D, ploughing up to 28 per cent of its revenue into research. It develops priorities by listening to customers and coming up with solutions for their problems. Gecht points to the recent development of LED UV curing on the VUTEk as an example.
- Patrick Howard (Print21) and Guy Gecht (EFI)
“There is no fun developing anything if there is no need for it. We tend to focus on ways to improve our customers’ business, make them more productive, more competitive. The secret to our success is how well we connect to the market, how well we listen to what customers tell us they need.
“We listen to the customers, then we see what’s available in the technology and we look for things that are needed three, four, ten years away. We looked at LED curing on the VUTEk. We’re the only company that can do it in production. It’s been a great success, it’s green. Nobody told us to do LED curing. But our customers told us, ‘We need to lower the cost of running, and we need to consume less’. Our scientists came up with LED curing, the next generation after UV. That was listening to customers about where they see their business and coming up with something to help them.
“We want to expand what we do for our existing customers, find new applications to allow people to grow despite the pressure on print.”
The revolution is here
This expansion is likely to involve acquiring other companies and not just depending on EFI’s own R&D. Gecht is not shy about predicting that the 2016 target is only part of the journey. Although last year was an unusually quiet one for the company in terms of buying businesses, he predicts that this year will see some more acquisitions.
“I believe that if you find a company that has a group of people that are passionate like us about the industry, who are innovative, appreciate good technology and have the same values, then adding them to EFI is a good idea. Our customers benefit and their customers benefit.
“It’s really difficult to be a small company in our industry. EFI has the scale and ability to make products even better. Last year we only had a couple of small acquisitions, so the entire group grew organically, but we like to do both.”
That EFI is growing so strongly in an industry where traditional technology suppliers are struggling for survival says much about its focus. Gecht is sanguine about the challenges facing printing, especially document printing as so much information moves to the web. But he believes in the digital renaissance of printing and takes comfort in a broad definition of printing, pointing out the banners at Ipex, the carpet tiles, the whole industrial world of print.
“The revolution is out there. Digital is the renaissance of printing. You can see that in businesses that are successful. The idea is to make your business more productive. Data-driven MIS is not just a fantasy. In the US the majority of the printing industry has MIS and most of them are using ours.”
After 14 years at the top, Gecht shows no signs of slowing down or passing on the baton. If anything he is relishing his role more than ever. He is confident of having qualified people to take over the reins if he should want to go, but by my reckoning we will see Guy Gecht driving change in the printing industry for many years to come.