FESPA 2024 | Exclusive Interview | Ronen Samuel, CEO | KORNIT DIGITAL

So FESPA is always a great opportunity to present our solution portfolio. This year is in Amsterdam, which is a great location. We have many customers, partners, existing customers, new customers joining us for this event, and of course our teams all together here for today. We are presenting our latest and greatest solutions, both on the direct-to-garment and in the direct-to-fabric markets. In the direct-to-garment, we are showing from entry-level products to high-end products. Today we're actually announcing a few new capabilities and new products that we're bringing to the market. One of them, of course, is the Atlas Max Plus, which now takes the Atlas Max to the next level both in terms of productivity but also in terms of capabilities, the application capabilities, and the quality of the output of the systems. For the first time, you can actually do also Max transfer with the DTG. So this is what we're feeling here today at FESPA. Of course, we have a demonstration, virtual demonstration of the Apollo. Apollo is now commercially available after beta. We got great feedback from all the beta customers; some of them bought additional systems already, and it's growing. This is going to change the market and replace the screen, becoming more relevant and moving production onshore, leveraging the Apollo technology. On the direct-to-fabric, of course, we're showing here the Presto Max. The Presto Max now is with the new ink set, the Vivido ink set, that actually enlarges the color gamut and the vibrance of the colors, and specifically the black ink, which is very important for this market. Of course, we are the only one that has whitening and XDi capability to print on any type of fabric with a fully sustainable production way: no water consumption, no pre-treatment, no post-treatment, ready to print on any fabric and to use it later on to cut and sew to any products you like. We're also showing here our portfolio of smart drying capabilities, like the Titan systems, which is the most productive system in the market, but also smart. You can run on the same dryer different garments at the same time; it could be hoodies, it could be a shirt. At the same time, the machine can adapt and change the energy per application, per garment, and it saves a lot of energy and is more sustainable. So we are very proud. What we are mostly proud of here is the range of applications that we are showing here, both for the fashion industry, the home decor industry, the sports industry, but also streetwear. Even we're getting into the footwear; we have some major projects in the footwear, and the footwear as well needs to move from an analog production into a digital on-demand production, and we see a massive potential to change this industry.

Yeah, thanks for the compliment. Kornit is all about the vision that we have. We didn't change our vision for many, many years, and I don't think we are going to change it. Our vision is really to transform the market, the textile market, the fashion market, from the way it's being produced today in large quantities, far away, the second most polluted industry, to an industry that is more relevant for the consumer, for people, relevant for the brands, and making it sustainable. Produce only what you need to wear, and that is relevant for you. And moving production from offshore, trying to focus on what the consumer wants to buy in a year from now, to really moving production onshore. So moving the industry to a sustainable production on demand, sustainable production onshore. So this is our vision, and everything that we are doing is around this vision. All our products, from the DTG, direct-to-garment, direct-to-fabrics, the smart drying capabilities, the workflow that we have, the Kornit X workflow, is all about enabling the market to change. We are actually working with many, many brands and retailers and helping them to change the supply chain into on-demand production instead of producing large quantities and storing them in the warehouse and then shipping them to the brick-and-mortars. Actually producing on demand directly to the shelf of the brick-and-mortars, so to become relevant and to adapt new trends on a daily basis. Now that social media is controlling all of us, brands need to adapt the way consumers would like to wear and to appear, and by that, they have to move to on-demand production. So yes, Kornit is 21 years; we're celebrating it. Our main market as of today is still North America. Of course, Europe is growing and Asia is growing, but specifically if you're talking emerging markets and where we see really nice growth, so in Asia, specifically India. India, we had a massive impact during the ITMA show. Many, many new customers were interested with the Presto Max that's behind me. We already implemented and installed a few systems across India. Some of the largest manufacturers in the world that exist in India are using our solution and now buying the second and third systems. So it's great to see. We actually, in the last few months, invested a lot in India, opening a new organization, moving direct in India with our sales force, with our engineering team, and working very closely with brands but also with fulfillers in India. Another market which is very interesting is in China, and specifically in the sports market and the footwear market. We're investing a lot there. Other markets in terms of emerging markets, Latin America is a growing engine for us, specifically Brazil, Mexico. Brazil is more for internal consumption, also Argentina for internal. Mexico is more nearshore for the US market. So those are the kind of the new emerging businesses. Eastern Europe, Poland, is also a very nice growth engine. We see also massive potential in Turkey for nearshore for Europe.

So if you look at Kornit's history, Kornit grew in one specific segment which is called customized apparel. We enable customers to create, to enable new markets, which is customized design, mainly printing on T-shirts and hoodies, and enabling a consumer to go online, leveraging e-commerce, and choosing a product. The product did not exist. Once you choose the product, the design actually was created. With big customers that we have, customers like Amazon and Printful and Spreadshirt, and many, many of our customers, this is their business model. Each one of them in a big different way approaching those markets. In the last few years, we've developed our technology to enable us to enter new market segments which require more sophistication, higher quality, higher productivity, and a different TCO. We took our technology, for example, to the direct-to-fabric with the Presto, so really getting into the fashion market and to the home decor market, printing on rolls of fabric. And with this technology, you can actually print on dyed rolls, so it could be a black roll or red, any color, leveraging our whitening, but also taking our technology with the XDi and building layers like 3D printing on the material, and then cutting it and of course sewing it to a product. The product could be a dress or could be a sofa. So these are new markets that we're entering, and we see really nice growth coming from the home decor and coming from the fashion market. Fashion could be haute couture with the most sophisticated and quality-sensitive brands of the world to streetwear as well. We are getting very strongly into the sports market now with the Atlas Max Poly that can print directly on polyester and dye polyester without dye migration. We see adoption of the poly solution into the sports market with sports brands getting into both the athleisure market but also for the professional sports market. So this is another very, very interesting market. You mentioned technical, so the good example for technical is actually footwear. Footwear is a very technical market, and I can tell you that today we have a few customers that are leveraging Kornit technology into the highest requirements that this market needs. It's a very innovative direction, and it's going to change this industry and be much more productive, but also much more relevant to the consumer and more sustainable. So first of all, we need to understand this is a massive market, a few trillion dollars of market. Most of this market is still analog, very traditional, very polluted. Digital is a very small part of it, and the potential for digital is massive, not only for Kornit but for many other companies. So we expect to have more competition moving into digital in the future. What Kornit is doing, we are actually trying to lead the market, to innovate all the time. We're not trying to copy any other solution. We think that we have our own way. We are the best in pigment. Pigment is the right solution and the only solution that is sustainable. We are producing pigment and inventing in pigment for more than 20 years in the DTG and now in the DTF market, and we will continue to invest in this market and to be unique. Of course, we are all the time improving on the angle of productivity, on the angle of quality. By far, we have the best quality in the market, and of course, in the total cost of ownership. Those are the main angles that we are working. You will see more and more innovation coming to the market from Kornit, not only on the production floor and the system but also how do we connect the production into the brands and the retailers and to the consumer. So Kornit X is one angle of enabling any brands and any digital platform to move into on-demand production anywhere around the world, leveraging the Kornit installed base. But we have in the pipeline some more technologies that we are going to introduce soon.

Question? Look, I've been in India in the last few months, a few times, and I visited many of our customers there and potential customers. And I must tell you that India has changed a lot. You can see it in the infrastructure everywhere, you can see it in the ports, you can feel the growth in India. But one thing that was very obvious in India is that the government has a very clear mandate to make the textile industry more sustainable. And everyone that we were talking to was saying, how can I produce sustainably without consumption of water? Water is scarce in India, it's expensive, and you don't want to create pollution. The only solution is really moving to pigment. And we are getting great interest from customers that would like or need help in this transition from dye-based, polluting industry to a more sustainable pigment industry. And we see massive potential. There are big, big players there, and we have found a common ground to change this industry to a more sustainable one.