The soft economy led to declines in most market segments, including books, at three of North America's largest printers in 2001. Total revenues at Quebecor World fell 3% in the year, to $6.52 billion; revenues were down 8% at R.R. Donnelley, to $5.30 billion; and Banta Corp. reported a 5.5% decline in sales, to $1.45 billion. All three companies instituted cost-reduction programs in the year, which included closing plants and cutting jobs to meet the decline in demand. Looking ahead to 2002, the printers were not expecting any noticeable improvement in business until the second half of the year.
Donnelley reported that sales in its book division fell 9.2% for the full year, to $708.4 million. The division had a particularly difficult fourth quarter with revenues down 17.7%, to $166.2 million. The decline in the fourth quarter was attributed mainly to a slowing in orders for educational textbooks, and the company said that, despite reports of a relatively good holiday season for book retailers, reorders in the trade segment were also slow.
At Banta's book group, sales of trade and business books were down in the year, and results from the educational segment were also weaker than expected. Banta chief financial officer Gerry Henseler said that, after a disappointing first half in the educational market, business picked up in the third quarter but fell back again in the fourth period. He said that, while many publishers have lowered their inventory, Banta was not receiving many early orders from educational publishers.
Results were a bit different at Quebecor World's North American operations. Marc Reisch, president of Quebecor's North American group, said that, while there were "pockets of strength" in the trade segment, sales did not reach 2000 levels. The company did, however, increase its share of the educational market in the year, and Reisch said Quebecor is planning to dedicate three to five more machines to its book group over the next 12 to 15 months to take on new business from educational publishers. Despite the boost from the educational segment, Reisch said he was not budgeting for "meaningful" growth in the book division for 2002.
A silver lining for publishers in the weak economy has been the drop in paper prices. Banta's Henseler reported that paper prices were down about 18% in the fourth quarter and 9% for the year. He expects prices to remain at current levels to about mid-year. The decline in paper costs contributed to the decline in printers' revenues. At Donnelley, for example, value-added revenue (revenues excluding paper costs) fell 5.2% in the year to $502.7 million, compared to the steeper 9.2% decline in net revenues.
