A New Kodak is emerging. This is not your father’s Kodak. POLL AUDIENCE FOR HOW MANY HAVE PURCHASED FILM AND HOW MANY OWN A DIGITAL CAMERA OR HAVE A CELL PHONE WITH A DIGITAL CAMERA ON IT
By 1880, George Eastman had invented a dry plate formula, and patented a machine to prepare large numbers of the plates. In April 1880, he leased the third floor of a building on State Street in Rochester, and began to manufacture dry plates for sale. “ The idea gradually dawned on me,&quot; he said, &quot;that what we were doing was not merely making dry plates, but that we were starting out to make photography an everyday affair… to make the camera as convenient as the pencil.&quot; That &quot;idea&quot; continues today. Additional notes on George Eastman: The Kodak heritage and our founder George Eastman, whose beliefs continue to serve as the foundation for the New Kodak – more than 125 years after the company’s founding. Eastman was born July 12, 1854 in the village of Waterville, some 20 miles southwest of Utica, in upstate New York. Died on March 14, 1932 at the age of 77. A modest, unassuming man, Eastman was a brilliant inventor and marketer, an executive with a global vision, a philanthropist and a champion of inclusion. Eastman promoted simplicity, as captured in an early advertising phrase: “You press the button, we do the rest.” He also understood the value of globalization. By the early 1900's he had created the foundation for many of Kodak's global operations. In building his business, Eastman blended human and democratic qualities with remarkable foresight. He believed employees should have more than just good wages – a management philosophy that was far ahead of his era. In 1919, Eastman gave one-third of his own holdings of company stock – then worth $10 million – to his employees. Kodak was also among the first businesses to offer employee benefits like pensions and profit-sharing programs. He began giving to nonprofit institutions when his salary was $60 a week – with a donation of $50 to the Mechanics Institute of Rochester, now the Rochester Institute of Technology. He gave more than $4 million to historically black schools like Howard University and Hampton-Tuskegee Institute at a time when such gifts were uncommon. On a single day in 1924, Eastman signed away $30 million to the University of Rochester, M.I.T., and Hampton and Tuskegee Institutes.
Eastman invented the word “Kodak,” and registered it as a trademark in 1888. He felt &quot;K” was a &quot;strong&quot; letter and tried various combinations using the letter K. Eastman also selected Kodak's distinctive yellow trade color.
Worldwide headquarters is in Rochester, N.Y. Kodak has more than 100 subsidiaries and operating locations, spread across the world.
Here are some interesting facts most people don’t know: About 70 million pictures are captured daily with Kodak digital cameras or film. Kodak invented the digital camera back in 1975. In fact, this year is the 30 th anniversary of the patent. 40% of all printed material is touched by Kodak technology. For 80 years, all Oscar-winning Best Pictures have been on Kodak film. Kodak has won 9 Oscars and 12 Emmys. Our technology is even used to print scratch off lottery tickets.
We have the 2 nd largest social network next to MySpace, with over 70 million members and over 4 billion photos. Our 39 megapixel image sensor – the world’s largest – is used in 3 out of 4 medium format cameras and backs. 5% of all U.S. mail is printed by our Versamark printers. Cinesite, a wholly owned subsidiary of Kodak is one of Europe’s largest and most successful visual effects facilities. Also has an office in LA. For example, they created the effects for Harry Potter and the recent HBO series Generation Kill, and won an Emmy for their work on the HBO series Rome In 2007, our digital intermediate technology was used on 80% of all feature films.
Our core businesses are heavily centered on technologies that are based on image science and material science, again, our technology &quot;sweet spot.&quot; You can already see examples of crossover between the two: Inkjet technologies we have created at Kodak have potential to revolutionize consumer and commercial printing markets. Digital presses created primarily for commercial printers are becoming popular for producing consumer photo albums at Kodak Gallery, our online service CMOS image sensors that serve the automotive, industrial, and mobile markets are now in our own digital camera, the C513
… for movie-makers and entertainment professionals Additional detail for presenter: Kodak film still records the action on most movie sets, and it is used for the prints shown in neighborhood theaters. It's been that way for years. In fact, in the 80 years the Academy Awards have been presented, all Oscar-winning &quot;Best Pictures&quot; have been shot on Kodak film. Since 1931, Kodak and its people have received nine Academy Awards for scientific and technical excellence – the most of any non-studio company. Our most recent Oscar came in early 2008, in recognition for the technology behind our popular KODAK VISION2 films. In addition to movies, many popular TV shows and commercials are captured on Kodak film, and Kodak has won 12 EMMY awards (television's equivalent of the Oscar). Showing our ongoing commitment to the industry, we recently introduced KODAK VISION3 Color Negative Films. They give filmmakers more exposure latitude, allowing them to capture more detail especially in areas of brightest highlights and darkest shadows. We are involved in an industry-wide effort to create a high-quality digital cinema system in Hollywood. This is used for pre-show ads and entertainment in movie theaters, as well as digital projection of full-length films. Kodak also has a hand in the digital special effects and other post-production services that go into making movies today. Since the early 1990s, our Cinesite unit has created digital effects for nearly 200 movies, television shows, commercials, and music videos. Movies include all &quot;Harry Potter&quot; films. Our 2003 acquisition of Laser-Pacific Media added to our post-production offerings.
… for commercial printers Additional detail for presenter: From its earliest years, Kodak has supplied products and materials for the printing industry. In the 1950’s and 60’s the explosion of color in magazines and books was fueled by Kodak’s knowledge of – and products for – high-quality color printing. Today, Kodak products or services help to produce about 40% of the commercially printed pages in the world. The company provides: Electrophotographic printing systems for commercial printers and other graphic arts businesses. Inkjet printing systems, including high-speed solutions for printing credit card statements and other applications. Enterprise solutions, including workflow software. Prepress solutions, including equipment and consumables like printing plates.
… and for those in business and government – including other manufacturers who need state-of-the-art sensors and components for their products and systems. Additional detail for presenter: Kodak has supplied imaging sensors, for digital cameras and other products, since the 1980's. Recently, we created a 1.4 micron, 5-megapixel device that offers a new level of resolution for mobile phones and other small-pixel consumer imaging devices. Overall, Kodak sensor offerings include: full-frame CCD imagers used in digital still cameras, industrial imaging and other applications; interline imagers for real-time applications like video and surveillance; linear imagers, for products like document scanners; and CMOS imagers – a lower-power alternative to CCDs. KODAK Security Solutions help protect against the growing problem of counterfeiting in a number of industries. With the Kodak technology, customers can embed invisible markers in products or packaging. Special readers can later detect these markers to verify a product’s authenticity. For decades, Kodak products have helped banks, insurance companies and other entities manage their documents. Today, Kodak offerings include market leading mid- and high-volume document scanners. Kodak also produces products for aerial and industrial imaging. Industrial products include: films for printed circuit board manufacturing, surveillance, and data recording; antimicrobial chemicals for textiles and plastics. Our organic light emitting diode (OLED) displays contain self-luminous pixels, and don't require backlights as do liquid crystal displays (LCDs). OLEDs offer clearer images and other advantages when used in digital cameras, mobile phones, and other devices. Kodak is addressing the high performance flat panel display opportunity with OLED, and also licenses OLED technology to various display and device manufacturers around the world.
70% of Kodak’s revenues will come from our digital businesses in 2008 Our business model has changed from majority business to consumer to 60% B2B @ 60% of Kodak’s EFO will be digital in 2008
2008 – 2011 digital businesses compound annual growth rate will be between 10 – 12%
60% of Kodak’s revenue/spend is actually outside of the US We have a strong brand worldwide and are well positioned to take advantage of growth outside the US
We’ve identified our sweet spot It’s at the intersection of digital image science and materials science At that intersection Kodak can’t be beat
We feel very good about how far we've come. Despite the constraints and changes, we’ve made great progress. GCG did not exist 4 years ago More than half our current employee base is new This shows the market position of some of our key products. We are number one, or in the top three, of all of these categories – most of which are digital. These are not insignificant businesses. Together, they account for about 80% of Kodak's revenue. Note that in most cases, they are businesses centered on that intersection of image science and material science – and in that spot, I believe we are unbeatable.
Here is a great depiction of our product positioning Speak to slide
We have Top 3 market share in almost every one of the 11 digital product lines. And would you believe more than half of those product lines didn’t exist four years ago? That’s an incredible success story.
We’ve completed one of the most remarkable turnarounds in corporate history. Let me show a video that demonstrates our change. Go to next slide for Winds of Change video.
Winds of Change video plays
Kodak has been an Olympic sponsor for many years. As a new Kodak has emerged so has the way we think about our sponsorships and partnerships POLL AUDIENCE FOR HOW MANY HAVE PURCHASED FILM AND HOW MANY OWN A DIGITAL CAMERA OR HAVE A CELL PHONE WITH A DIGITAL CAMERA ON IT.
Sample of the Applications: 500,000 A4 images of print production during the games Kodak Picture of the Day – poster and postcard feature the official Kodak picture of the day Custom Photo books – for accredited photographers, Getty Images, and Kodak Operations USOC Daily Postcards – daily postcards for the USA house and families of the Athletes USOC Daily Newsletter – 1500 daily newsletters from USOC media operations, also distributes electronically to USOC supporters worldwide Around the Rings Newsletter – 1200 daily for publications Many more to come…… Equipment & Unified Workflow -Software Kodak NexPress S2500 Digital Production Color Press with high capacity stacker, Kodak NexPress Glossing unit Kodak PRINERGY Workflow System v5.0 - Digital Direct and Digital Submit, Kodak INSITE Prepress Portal system v5.5.2, Kodak IINSITE Storefront System v5.5.2, Kodak INSITE Variable Data Print System v3.1.2, Kodak DARWIN software
And Kodak’s sponsorship with the PGA is a great example of how the new Kodak marketing strategy has also evolved. This relationship will provide us with a unique opportunity to directly connect with our customers and to showcase Kodak's products, innovations and services It’s a natural fit for the Kodak brand To kick-off the relationship in 2008, Kodak will be featured on the new digital scoreboards that are in place at virtually all official PGA TOUR events. One side-panel of the scoreboards will be redesigned to reflect Kodak's familiar yellow and red logo. Kodak will also host corporate hospitality and entertainment venues at selected TOUR events. KODAK and PGA TOUR expand marketing partnership January 26, 2009 Kodak and the PGA TOUR today announced an expansion of their marketing partnership that includes several new official categories, plus the addition of six holes to the Kodak Challenge. Under terms of the new agreement, Kodak is now the Official Imaging Provider of the PGA TOUR, as well as the Champions Tour and Nationwide Tour, adding the official category designations of Camera, Printer and Scanner. This expands upon the original six-year Official Marketing Partnership between Kodak and the PGA TOUR that began in 2008 and that also includes the first-of-its-kind Kodak Challenge competition, Kodak branding on digital scoreboards and corporate hospitality. “ Kodak is proud to announce that we are strengthening our commitment to the PGA TOUR by becoming the Official Imaging Provider, as well as adding six new holes to the Kodak Challenge,” said Jeffrey W. Hayzlett, Chief Marketing Officer and Vice President, Eastman Kodak Company. “The additional categories will enable us to promote more of our products to fans and consumers as well as B-to-B customers – from our digital cameras to our All-in-One Printers, to our commercial digital presses. Plus, the addition of six holes will allow us to bring the Kodak Challenge to more fans in more markets who can follow the Kodak Challenge all season long.” Celebrating beautiful holes and memorable moments on the PGA TOUR, the Kodak Challenge now will feature 30 holes throughout the 2009 season, adding The Honda Classic – hole #16 at PGA National Champion Course; Arnold Palmer Invitational presented by MasterCard – hole #18 at Bay Hill Club and Lodge; Shell Houston Open – hole #18 at Redstone Golf Club Tournament Course; WGC-CA Championship – hole #8 at Doral Golf Resort; WGC-Bridgestone Invitational – hole #16 at Firestone Country Club South Course; and a final tournament to be determined. “ We are extremely pleased to broaden our partnership with Kodak, incorporating some additional official categories as well as expanding the presence of the Kodak Challenge on the PGA TOUR,” said Tom Wade, Chief Marketing Officer of the PGA TOUR. “We have had very positive feedback from our tournaments, players and fans, and we are pleased to increase the Kodak Challenge by six holes.” The Kodak Challenge teed off at the Mercedes-Benz Championship with the par-5 18th hole at The Plantation Course at Kapalua Resort in Hawaii and continued this past week at The 50th Bob Hope Classic hosted by Arnold Palmer at the par-3 17th hole of Palmer Private Course at PGA WEST in California. After two Kodak Challenge holes, Johnson Wagner is atop the leaderboard at 3-under-par. The Kodak Challenge continues this week at the FBR Open with the par-3 16th hole at TPC Scottsdale in Arizona. In 2009, 30 PGA TOUR tournaments will feature a designated Kodak Challenge hole. Players must play at least 18 of the 30 Kodak Challenge holes throughout the season to compete for $1 million and the Kodak Challenge trophy. A player’s lowest score relative to par on his best 18 Kodak Challenge holes will be counted. The player with the lowest cumulative score relative to par wins. In the case of a tie, a sudden death playoff will take place on the final Kodak Challenge hole immediately following the conclusion of the Children’s Miracle Network Classic in November. The Kodak Challenge holes were selected by the Kodak Challenge Advisory Board in collaboration with Kodak and the PGA TOUR. Advisory Board members are David Feherty, CBS Sports golf analyst; Rees Jones, golf course architect; Jules Alexander, golf photographer; Andy Pazder, PGA TOUR Senior VP, Tournament Administration; and Lance Barrow, CBS Sports golf, Coordinating Producer. Holes were selected based on their beauty and their connection to memorable moments in golf and are featured on kodakchallenge.com . For more on the Kodak Challenge visit kodakchallenge.com and pgatour.com/kodakchallenge . Fans can also follow the Kodak Challenge at facebook.com/kodakchallenge , twitter.com/kodakchallenge , and 1000words.kodak.com/kodakchallenge .
You know what they say, “ A picture is worth a thousand words” From a marketing perspective, the picture says it all. Our motorsports relationships help create business opportunities with other sponsors and business partners
The celebrity apprentice is being referred to as “marketing genius” THE VIDEO WILL PLAY NEXT SLIDE
4.4 Kodak mentions/minute for 43 minute episode 6.3 Rating ( Apprentice Premier: 4.9; Desperate Housewives: 7.5; CSI: 5.9; 60 Minutes: 4.2) Total Impressions/Reach = 89,268,000 Sales Doubled the Week Following the Show
The PR sampling associated with the celebrity apprentice showing was phenomenal Access hollywood – viewership over 3 million Jimmy Kimmel - over 2 million viewers
Our 360 degree marketing campaign at retailers We integrated content into existing activities
Kodak’s online 360 marketing campaign included a microsite off kodak.com Content Links, Poll, Printable Projects Kodak store Promo Photo Contest: Entries: 4,183 Views: 1,082,963
NBC.com Banners: 8M impressions, .37 CTR Pre-roll: ~800k impressions; .19% CTR 18.48% interaction rate (electronics benchmark 7.13%) AccessHollywood.com: Celebrity Apprentice ‘Clip of the Week’ 337,883 impressions, .13 CTR Pre-roll: 14,633 impressions, 0.9 CTR CES Lennox Lewis Guest Appearance 500 Autographs 50,000 Booth Visitors 7 New Media Interviews 17M Impressions Employee Celebration Viewing Parties Across the Country Home Parties/Kits
You will continue to see us doing new things – big and small – to position our brand. We are getting more aggressive and innovative in telling the Kodak story. Sponsorships: as our company has evolved so has our marketing strategy. For example, we’ve entered into a new partnership with the PGA TOUR that includes the Kodak Challenge, a first-of-its-kind competition for PGA TOUR players that celebrates beautiful holes and memorable moments in golf. We’re on the digital scoreboards at PGA TOUR tournaments. We’re part of Donald Trump’s The Celebrity Apprentice. We have a new partnership with Paige Davis and Trading Spaces around our Make Something Kodak campaign. This was the last year of our Olympics sponsorship. We’ve been a NASCAR sponsor for 23 years. 60% of our sales are outside the U.S. so we’re looking at opportunities to engage customers in other countries. Our PGA TOUR partnership gives us a strong U.S. presence.
We are a recognized leader in social media It’s about being a part of the conversation and connecting with our customers How many people are using technology to promote or market their brand?
Kodak Moments = Kodak Momentum Go to next slide for Kodak Momentum video
Thank You. I’d be happy to take some questions.
Thank You. I’d be happy to take some questions.
Steve Green - The Transformation
The Transformation Steve Green Region Managing Director, Consumer Digital Group & Graphic Communications Group, Asia Pacific Region, Eastman Kodak Company
“ The idea gradually dawned on me, that what we were doing was not merely making dry plates, but that we were starting out to make photography an everyday affair… to make the camera as convenient as the pencil." - George Eastman The beginning of Kodak
Kodak operating locations Luxembourg Romania Italy New Zealand Sweden Corporate Headquarters Rochester, NY Barbados Austria Australia Argentina Bermuda Brazil Canada Chile Portugal Dominican Republic Denmark China Egypt Finland Greece Hong Kong India Iceland Hungary Indonesia Japan Poland Mexico Malaysia France England Peru Switz. South Africa Spain Russia Germany Thailand Taiwan Ukraine United States Scotland Norway Korea Neth. Bel. Col o mbia Panama Uruguay Singapore Phillipines Lebanon Turkey Dubai
Kodak Asia Pacific Region Regional Headquarters <ul><li>Manufacturing facilities : </li></ul><ul><li>Gunma, Japan </li></ul><ul><li>Shanghai, China </li></ul><ul><li>Xiamen, China </li></ul><ul><li>Wuxi, China </li></ul><ul><li>Goa, India </li></ul><ul><li>Malanpur, India </li></ul>Melbourne Sydney Perth Pakistan Australia New Zealand Japan Korea India Greater China Cluster South East Asia Beijing Philippines Singapore Malaysia Indonesia Thailand Taiwan Seoul Tokyo New Delhi Mumbai Shenzhen Guangzhou Shanghai Chennai Brisbane Auckland Vietnam Hong Kong Wuhan Xian Chengdu Kolkata
You didn’t know, did you? About 70 million pictures are captured daily with Kodak digital cameras or film. Kodak invented the digital camera in 1975 . That 40% of all printed material is touched by Kodak technology. All Oscar-winning Best Pictures have been on Kodak film - 80 years! Kodak technology is used to print 80% of the world's scratch-off lottery tickets.
… and there is more! Kodak Gallery has more than 70 million members and manages over 4 billion photos! Our 39 megapixel image sensor, the world's largest, is used in 3 out of 4 medium format cameras and backs. Everyday ~5% of all U.S. mail is printed by our Kodak Versamark printers. Cinesite, a Kodak subsidiary, creates visual effects for feature film and television. Our digital intermediate technology was used on 80% of all feature films in 2007.
The New Kodak Film Photofinishing Entertainment Group (FPEG) Consumer Digital Group (CDG) Graphic Communications Group (GCG) Other Entertainment Imaging Film Capture Aerial and Industrial Markets Enterprise Solutions Digital Print Solutions Prepress Solutions Document Imaging Security Solutions Inkjet Systems Digital Capture and Devices Image Sensor Solutions Retail Printing Solutions Consumer Imaging Services Display
The world’s imaging expert for filmmakers and entertainment
The world’s imaging expert for graphic communicators
The world’s imaging expert for business, government and OEMs
The New Kodak: 2008 Revenue ~ 60% of Kodak’s earnings from operations is digital in 2008 Traditional (Film Photofinishing Entertainment Group) The New Kodak is 70% digital revenues. Digital (Consumer Digital Group & Graphic Communications Group) Business to Consumer Business to Business The New Kodak is 60% higher-margin commercial businesses.
Digital Business: Critical Mass and Healthy Growth Output Capture The New Kodak digital businesses are 60% output with associated fast growing annuities businesses. Greater than $7B in 2008 Our Consumer Digital Group and Graphic Communications Group businesses share IP, innovation, sourcing and best practices. 2008 – 2011 Digital Business CAGR = 10% - 12% Consumer Digital Group Graphic Communications Group
Geographic Balance: Global Stability and Growth <ul><li>Strong brand worldwide </li></ul><ul><li>Well positioned to take advantage of growth outside the U.S. </li></ul>Kodak revenue/spend outside the US is 60% 2008 Revenue/Spend US outside the US
Strong Worldwide Share Positions <ul><li>Transactional production inkjet </li></ul><ul><li>Color digital printing systems (electrophotography) </li></ul><ul><li>Distributed (desktop) document scanning </li></ul><ul><li>Digital cameras </li></ul><ul><li>Kodak Gallery </li></ul>1 # 3 TOP <ul><li>Thermal CTP systems </li></ul><ul><li>Digital printing plates </li></ul><ul><li>Unified workflow software (commercial printing) </li></ul><ul><li>Production (mid to high volume) document scanning </li></ul><ul><li>Entertainment films </li></ul><ul><li>Film capture </li></ul><ul><li>Color negative paper </li></ul><ul><li>Kiosks and media </li></ul>80% Kodak Revenue Added Together =
Below Above Gross Profit % vs. Corporate Average Low High Growth Commercial Inkjet Kodak Gallery 2008 Digital Portfolio: Built to Grow EP Retail Solutions Enterprise Solutions Sensors Digital Capture Scanners Consumer Inkjet Digital Prepress 2008 Avg.
… it’s an incredible success story! <ul><li>11 digital product lines </li></ul><ul><li>provide 2/3 of our revenue </li></ul><ul><li>Kodak holds top 3 market share </li></ul><ul><li>in almost all those product lines </li></ul><ul><li>More than HALF didn’t exist at Kodak 4 years ago </li></ul>
Perceptions of Kodak Over the Years <ul><ul><ul><li>Trustworthy </li></ul></ul></ul><ul><ul><ul><li>Reliable </li></ul></ul></ul><ul><ul><ul><li>Caring & Human </li></ul></ul></ul><ul><ul><ul><li>Prints & Memories </li></ul></ul></ul><ul><ul><li>Trustworthy </li></ul></ul><ul><ul><li>Reliable </li></ul></ul><ul><ul><li>Caring & Human </li></ul></ul><ul><ul><li>Prints & Memories </li></ul></ul><ul><ul><li>Film rolls </li></ul></ul><ul><ul><li>Traditional </li></ul></ul><ul><ul><li>Not high-tech </li></ul></ul>O L D N E W
Today We Are … product roadmaps digital services public relations customer experience web site co-marketing brand licensing brand identity product advertising image advertising product design Innovative High-tech Leader in new imaging categories Modern, young
Kodak at the Beijing 2008 Olympics Kodak Image Center showcase digital printing technologies (Nexpress & workflow) producing on-demand, full-color materials, postcards, newsletters. The Kodak Experience - self-service kiosks Accreditation and ID Services utilizing Kodak scanner, camera & thermal printer
"We are thrilled to expand our relationship with Kodak …," said Tim Cindric, President of Penske Performance, Inc. "I am excited to see the familiar Kodak yellow and red on the track at Talladega in April as they return to Nextel Cup primary sponsorship.” "Our motorsports relationships help us create business opportunities with other sponsors and racing enthusiasts, whether they're die-hard Nascar fans or business partners in the racing community," said Jeffrey W. Hayzlett
Kodak Episode/Key Results <ul><li>4.4 Kodak mentions/minute for 43 minute episode </li></ul><ul><li>6.3 Rating ( Apprentice Premier: 4.9; Desperate Housewives: 7.5; CSI: 5.9; 60 Minutes: 4.2) </li></ul><ul><li>Total Impressions/Reach = 89,268,000 </li></ul><ul><li>Sales Doubled the Week Following the Show </li></ul>
PR Sampling “ Lennox Lewis @ CES” Jan. 17 & 18, 2008 Viewership: 3,268,000 “ Gene Simmons Appearance” Jan. 18, 2008 Viewership: 2,100,000 "Inner Tube: Dots All“ Dec. 6, 2007 Circulation: 2,791,680 (Print and Online) "NBC Shares 'Apprentice' Wealth“ Dec. 6, 2007 Circulation: 876,585 (Print and Online) “ Seen & Heard” (Lennox Lewis @ CES) Jan. 16, 2008 Circulation: 1,310,931 Kodak Has Some Fun in Printer Spot Jan. 22, 2008 Circulation: 154,751 (Online) RollingStone .com "Gene Simmons Exhiled from Planet Kodak“ Jan. 18, 2008 Circulation: 5,916,260 (Online) "Kodak handiwork on 'Apprentice' episode“ Jan. 18, 2008 Circulation: 149,386
360 Marketing Campaign: At Retail <ul><li>Integrated Content into Existing Activities </li></ul><ul><li>FSI to 40M </li></ul><ul><li>Promotions </li></ul><ul><li>Themed Merchandising </li></ul><ul><li>Themed Demo Days @ >1500 stores </li></ul>