This article was first published in print in the February issue of ProPrint, to read the online version of the magazine, please click here.
Like many businesses, AAB Holdings faced multiple challenges due to COVID-19.
The pandemic coincided with the company’s 20th year of service to the print and logistics industries and created hurdles once considered unthinkable.
“The pandemic presented us with a unique set of challenges, but we are no stranger to challenges over the past 20 years, especially in this ever evolving industry. But we are still here and trading strong, albeit in a different shape and from 20 years ago.”AAB Holdings CEO Wayne Finkelde
As one of Australia’s most successful end-to-end print businesses, AAB Holdings owns Pegasus Print Group, SOS Print + Media, F&M Supplies and AB Warehousing & Logistics.
In the midst of the pandemic, it also expanded with the purchase of UltraPress, which Finkelde says strategically added to the group’s capabilities.
“It was a timely acquisition as we saw a great deal of large format display production that would normally have gone to low cost manufacturing companies in South East Asia coming back to Australia, so we were well prepared to take it on,” Finkelde said.
But this extra offering was not enough to shield AAB Holdings from the pain of the pandemic, as publication and commercial print was hit hard, and early.
Finkelde responded, as many businesses around the country did, by snapping into action and grouping together with his senior management team, including Pegasus Print Group general manager Sam Carter to devise a plan.
Board members, senior management, admin, sales and production personnel all agreed to pay cuts to support the business.
“It was all hands-on deck with no job considered too small or insignificant for anyone across the company to carry out,” Finkelde said.
Fast forward to December 2020 and Finkelde reports stronger trading results with growth within several industry sectors, including a lift in grocery retail and FMCG activities and a three-fold increase in self-adhesive label production within the company’s large pharmaceutical client base.
No stranger to acquisitions
The history of AAB Holdings dates back to 1929 when Woolworths established Woolprint to meet the retailer’s growing print and packaging needs in Australia.
This business later became known as Chisholm Manufacturing.
Then, in June 2000 Pegasus Print Group was borne when a trio of buyers established AAB Holdings Pty Ltd to buy the business when then Woolworths CEO Roger Corbett decided to shed non-core assets.
This is where Finkelde, a third generation printing industry stalwart, entered the picture. Finkelde was brought in to run the new company, which also included a food service arm.
The takeover was a safe bet with lucrative Woolworths contracts in place and endless room to upscale.
In 2004, the group acquired the well-established MAPS Litho in Sydney’s northern suburb of Frenchs Forest. Another acquisition quickly followed with the purchase of a boutique digital printer known for servicing Sydney’s elite agencies. Located in Sydney’s Rosebery, this addition placed yet another feather in AAB Holdings’ cap.
Suddenly, AAB Holdings had three manufacturing sites across Sydney, but this presented the business with a new challenge.
With the three trading companies continuing to operate under their respective brands, an identity question arose.
So Finkelde brought Greg Hourigan into the business to develop a group branding and marketing strategy.
“At the time the group had an enormous industry advantage due to its expanding capacity and capabilities,” Hourigan told ProPrint.
“Overnight group capabilities went from just an offset printer to an offset printer with expanded capabilities in high-end digital and on demand printing and then throw in mailing services. No other organisation in Australia could match this kind of USP.
“The group as a whole was greater than its parts, and that was exactly the competitive advantage the group set out to achieve.”
Hourigan then set about rebranding the three companies under the one Pegasus Print Group banner.
In 2018 Finkelde was again on the acquisition path with the purchase of SOS Print + Media. This company is known for its innovation in display design and campaign management systems and also specialises in on-demand digital book printing for several international bluechip companies.
In 2020 along came UltraPress, which fits under the Pegasus Print Group banner and operates from the group’s mega site in Sydney’s west producing super large offset sheets up to 1600mm x 1200mm.
This complemented a wide format investment in 2019 when AAB Holdings purchased a Durst digital wide format press and a Roland large format offset press and associated finishing equipment.
Finkelde says he is often approached by businesses looking to be bought out.
“We are on the acquisition path and I talk to a lot of different companies of all sizes,” Finkelde said.
“You talk to businesses that are turning over millions, you know $10 or $15 million – mind you they were turning over $15 million before COVID but now they are turning over $7.5 million and they haven’t made any changes to their business, they don’t know what post- COVID is going to look like and I say I am pretty damn sure it is not going to be back to where you were.”
Already within the AAB Holdings group is a promotional merchandising business, F&M Supplies, along with AB Warehousing & Logistics, which continues to grow in strength.
“Demand for integrated warehousing and logistics has become an integral feature of our offering when print managing on behalf of our clients,” Finkelde said.
Innovation: the only forward
Finkelde is realistic about business and has a print pedigree that gives him a crystal-clear understanding about the industry. He admits that whilst ink on paper has given ground to digital communication, print still has a life and is here to stay, but the role it plays and the form it takes will vary deeply.
In Finkelde’s mind, printers are creative thinkers.
He says printers can think outside of the box and are at the forefront of new ideas when it comes to innovations that keep customers satisfied and develop new frontiers of what is possible, whether through retail, display, packaging, direct mail, or catalogues.
Continued innovation in the areas of design, packaging, warehousing and fulfilment and IT is where Finkelde sees the growth and where AAB Holdings is heading.
“We are looking at more design, more fulfilment, more warehousing and logistics and the IT infrastructure and systems to support the expansion of our existing services. We are also looking at growth strategies through diversification into alternate communication channels such as multi and omnichannel marketing for web, SMS, email and direct mail,” he said.
Finkelde attributes AAB Holdings’ success to being able to control its own desinty in just about every part of the print and post-print process including finishing, warehousing, picking, packing, distribution and logistics.
“We are now 98 per cent vertically integrated and our growth will come through acquisitions,” Finkelde said.
Learning from others in the industry is also crucial for success, Finkelde says.
He is not afraid to pick up the phone and seek advice from other leaders in the industry about the best way forward.
During the height of COVID he implemented new management practices shared with him by one of his clients to address the unprecendented circumstances surrounding COVID.
During the worst months of the pandemic, this client provided Finkelde with a detailed monthly report on how its business was tracking. This was designed to keep everyone in the loop, both internally and externally.
Finkelde followed suit and provided updates to the company’s top 25 customers and staff so everyone understood the status of the business.
When asked about what the biggest threat to the industry, Finkelde is clear – Australia Post.
“I have probably lost more customers in 10 years because Australia Post keep jacking up their price compared to the print and paper price increases. These days it can cost more to post than it does to print,” Finkelde said.
“I think the publication market will be a challenge, number of publishers, advertising in publications, postage, this all means publishing is under pressure. The big publishers are merging and doing less publications.
“We are very open about where we want to grow. We are even looking at mail houses. In our industry today direct mail is still popular so that is another string to our bow that we need to be in, at a reasonable price point.
“If we can expand in this sector, at a reasonable cost with reasonable revenue, you could squeeze the lemon for the next five years. With all printing, folding, binding, mounting, die cutting and mailing services in-house, we control the cost.”
Any advice for printers on how to improve margin?
“I think the pressure is going to be on smaller printers that want to outsource the folding and the stitching,” he said.
They don’t have a lot to offer apart from good customer service and customers these days are looking for more than just good customer service.
“If you no longer add value, your company is no longer of value. Customers, historically, would have gone to an advertising agency for ideas and concepts but now they come to us and ask us what the market is doing in terms of innovation. Smaller operators would do well to try and get in on this intel,” he said.
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