What is the focus of the Secondary Market Report on THE XEROX CHANNEL?

The report focuses on the structural transformation of the Xerox channel in Western Europe, highlighting the transition from traditional mono-brand dealers to super-partners that manage multi-OEM portfolios. It examines the competitive landscape, emerging trends in Managed Print Services (MPS), and the integration of IT services.

How has the Xerox channel in Western Europe changed recently?

The Xerox channel in Western Europe has shifted towards a model dominated by super-partners, which are capital-intensive entities that optimize client outcomes through diverse service offerings. This change is driven by intense competition, the rise of Managed Print Services, and the need for partners to adapt to a rapidly evolving market.

What are Managed Print Services (MPS) and why are they important?

Managed Print Services (MPS) refer to comprehensive solutions that manage a company's printing needs, often integrating print services with broader IT infrastructure. They are important because they help businesses reduce costs, improve efficiency, and enhance sustainability by optimizing print processes and resource usage.

What trends are expected to shape the future of the MFD/MFP and MPS market from 2025 to 2030?

Key trends include increased digitization and integration of digital and print solutions, a stronger focus on sustainability, the adoption of artificial intelligence and smart technologies, and the emergence of subscription and pay-per-use models. These trends are crucial for companies like Fuji-Film to remain competitive and create value in the evolving landscape.

What is the significance of the Nordic region in the context of the print channel?

The Nordic region is viewed as a model for the future of the print channel, where traditional copier dealers are nearly extinct and print services are integrated into broader IT contracts. This shift indicates a changing consumer demand and highlights the need for Xerox to adapt its strategies to maintain relevance in this market.

How is the economic climate affecting the Xerox partner channel in Southern Europe?

In Southern Europe, the Xerox partner channel is heavily influenced by personal relationships and regional networks, which have proven resilient despite economic volatility. Partners in this region are increasingly capital-intensive and are growing through private equity-backed acquisitions, which enable them to manage credit risk and achieve economies of scale.

What are some challenges facing the Xerox partner channel in Albania?

Albania's Xerox partner channel faces challenges such as a high ICT talent turnover rate, which complicates the retention of skilled engineers. Additionally, while the market shows potential for growth due to a stable GDP, the channel's long-term sustainability is threatened by the difficulty in maintaining a qualified workforce.

How are sustainability practices being integrated into Managed Print Services?

Sustainability practices in Managed Print Services are being integrated through eco-friendly initiatives such as reducing energy consumption and implementing recycling processes. As environmental responsibility becomes a priority, MPS providers are expected to align their services with corporate ESG goals to meet client expectations.

What role does artificial intelligence play in the future of print services?

Artificial intelligence is becoming increasingly important in print services by optimizing usage, predicting maintenance needs, and enhancing user experience. AI technologies help streamline operations, reduce downtime, and improve service delivery, making them essential for companies looking to innovate in the print sector.

Copy of Fujifilm Report_Western Europe_Xerox Channel_25.1

Q: What does the structural make-up of the European Xerox Partner Channel look like?

The structural make-up includes a tiered system of partners categorized into tier 1, tier 2, tier 3, and specialist partners across various countries. For example, countries like Germany and the United Kingdom have a significant number of tier 3 partners, indicating a diverse and competitive channel landscape.

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This is a Secondary Market Report on THE XEROX CHANNEL sponsored by Fuji-Film and facilitated by Newton Day Ltd. Published January 2026. It is Company confidential.

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Overview

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A MARKET IN TRANSITION Super-Dealers Western Europe–Structural Transformation The traditional model of the exclusive "mono-brand" dealer is The Western European channel is characterized by high maturity, rapidly eroding. intense competition, and a significant shift toward Managed Print Services (MPS) and IT services convergence. Partners in this region In its place, a new breed of "super-partners" has emerged— are increasingly capital-intensive, often growing through private entities like Xeretec in the United Kingdom and Koesio in France—that wield significant market power and manage multi- OEM portfolios to optimise client outcomes. Nordics Region - The Future of Print Channel This shift forces Xerox to compete for mindshare not only against external rivals but within its own partner network. The Nordic region (Sweden, Norway, Denmark, Finland) arguably represents the future of the print channel globally. Here, the standalone "copier dealer" is effectively extinct. Print is purchased as a subset of broader IT infrastructure contract. Mature = Intense Competition The Western European channel is characterised by high maturity, Southern Europe–Relationship Driven intense competition, and a significant shift toward Managed Print Services (MPS) and IT services convergence. In Spain, Italy, Greece, and Portugal, business remains heavily driven by personal relationships and regional networks. The economic Partners in this region are increasingly capital-intensive, often volatility of the past decade has fostered a resilient channel that is growing through private equity-backed acquisitions to achieve adept at managing credit risk and client retention. economies of scale. Central & Eastern Europe–The Wild, Wild, East The CEE markets are transitioning from pure hardware consumption to managed services, often leapfrogging Western legacy structures Company confidential

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STRATEGY

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FUTURE OUTLOOK (2025-2030) The next five years will portray a dynamic transformation for the MFD/MFP and MPS market, focused on digitisation, sustainability, and smart technologies. To remain competitive and create value in this shifting landscape, strategies must align with emerging trends. This will ensure not just survival but also positions companies like Fuji-Film as leaders in the office equipment industry going forward. Increased Integration of Digital and Print Solutions The emphasis is growing on creating cohesive digital ecosystems that include print services as part of the broader IT environment. Expect growth in offerings that seamlessly integrate printing with document management. Focus on Sustainability With a heightened focus on environmental responsibility, the print services sector will see increased pressure to adopt sustainable practices. MPS are expected to incorporate eco-friendly processes, such as reduced energy consumption and recycling initiatives, to meet corporate ESG goals. Adoption of Artifical Intelligence , Enterprise Information Services Platforms, and Smart Technologies Artifical Intelligence and machine learning are becoming integral to enterprise computing and managing print services is no exception. Artifical Intelligence is optimising usage and predicting maintenance needs. These technologies enhance user experience by providing seamless service delivery and reduced downtime. Emergence of Subscription and Pay-Per-Use There is a shift towards subscription-based or pay-per-use models that offer flexibility and cost savings to businesses. These models cater to businesses seeking to avoid large capital expenditures while still accessing cutting-edge technologies. Managed Services With Enhanced Security Security remains a top priority, with MPS providers focusing on safeguarding data and ensuring compliance with data protection regulations. Enhanced security features like user authentication and encrypted document storage will be critical as companies mitigate risks associated with digital transformation.

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DATA HIGHLIGHTS

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STRUCTURAL MAKE-UP Here-in is the structural make-up of the European Xerox Partner Channel: Albania 2 tier 1 partners, 2 tier 2 partners, 3 tier 3 partners, and 7 specialist partners, Total 7. Austria 2 tier 1 partners, 5 tier 2 partners, 13 tier 3 partners, and 20 specialist partners, Total 20. Belgium 4 tier 1 partners, 6 tier 2 partners, 8 tier 3 partners, and 1 specialist partner, Total 19. Bosnia and Herzegovina 4 tier 1 partners, 6 tier 2 partners, 8 tier 3 partners, Total 7. Bulgaria 4 tier 1 partners, 15 tier 2 partners, 350+ specialist partner, Total 370+. Croatia 3 tier 1 partners, 5 tier 2 partners, 4 tier 3 partners, 10 specialist partner, Total 22. Czech Republic 2 tier 1 partners, 2 tier 2 partners, 7 tier 3 partners, 2 specialist partner, Total 13. Denmark 3 tier 1 partners, 2 tier 2 partners, 3 tier 3 partners, 2 specialist partner, Total 10. Estonia 4 tier 1 partners, 2 tier 2 partners, 3 tier 3 partners, Total 9. Finland 8 tier 1 partners, 3 tier 2 partners, 3 tier 3 partners, 4 specialist partner, Total 18. France 4 tier 1 partners, 3 tier 2 partners, 1 tier 3 partner, Total 8. Germany 4 tier 1 partners, 10 tier 2 partners, 50 tier 3 partners, 23 specialist partner, Total approximately 87. Greece 3 tier 1 partners, 3 tier 2 partners, 6 tier 3 partners, 4 specialist and other partners, Total approximately 16. Hungary 7 tier 1 partners, 3 tier 2 partners, 8 tier 3 partners, 3 specialist and other partners, Total 21. Ireland 5 tier 1 partners, 5 tier 2 partners, 2 tier 3 partners, and 12 specialist partners, Total 12. Italy 3 tier 1 partners, 3 tier 2 partners, 3 tier 3 partners, 2 specialist and other partners, Total 11. Kosovo 2 tier 1 partners, 2 tier 2 partners, 2 tier 3 partners, 2 specialist and other partners, Total 8. Latvia 1 tier 1 partner, 1 tier 2 partner, no tier 3 partners, Total approximately 2. Lithuania 1 tier 1 partner, 1 tier 2 partner, 2 tier 3 partners, 2 specialist and other partners, Total 7. Luxembourg 1 tier 1 partner, 2 tier 2 partners, 2 tier 3 partners, 2 specialist and other partners, Total 7. Malta 1 tier 1 partner, 1 tier 2 partner, 3 tier 3 partners, Total 5. Montenegro 2 tier 1 partners, 1 tier 2 partner, at least 3 tier 3 partners, Total approximately 8. North Macedonia 2 tier 1 partners, 1 tier 2 partner, 1 tier 3 partner, Total 4. Netherlands 2 tier 1 partners, 1 tier 2 partner, 5 tier 3 partners, 1 specialist partner, Total 9. Norway 8 tier 1 partners, 5 tier 2 partners, 2 tier 3 partners, 6 specialist partners, Total approximately 21. Poland 2 tier 1 partners, 2 tier 2 partners, 3 tier 3 partners, Total 7. Portugal 2 tier 1 partners, 15 to 20 tier 2 partners, 5 tier 3 partners, plus 12 specialist and other partners, Total Approximately 30. Romania 4 tier 1 partners, 3 tier 2 partners, 22 tier 3 partners, 2 specialist and other partners, Total Approximately 31. This information is company confidential.

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STRUCTURAL MAKE-UP Continued.. Serbia 1 tier 1 partner, 3 tier 2 partners, 2 tier 3 partners, 2 specialist and other partners, Total 9. Slovakia 2 tier 1 partner, 2 tier 2 partners, 4 tier 3 partners, 1 specialist and other partners, Total 9. Spain 1 tier 1 partner, 2 tier 2 partners, 2 tier 3 partners, Total 5. Sweden 8 tier 1 partners, 5 tier 2 partners, 40+ tier 3 partners, 23 specialist and other partners, Total approximately 86. Switzerland 2 tier 1 partners, 1 tier 2 partners, 1 tier 3 partner, 5 specialist and other partners, Total 8. Turkey, the European Part: 1 tier 1 partner, 1 tier 2 partner, 1 tier 3 partner, 5 specialist and other partners, Total 8. Ukraine 2 tier 1 partners, 2 tier 2 partners, 4 tier 3 partners, 5 specialist and other partners, Total 13. United Kingdom 7 tier 1 partner, 20 tier 2 partners, 100+ tier 3 partners and specialists, Total approximately 130.

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IN COUNTRY PRESENCE ANALYSIS

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ALBANIA Key Highlights Overview Tripartite Structure: The channel operates through a three-tier hierarchy based on financial scale, logistical capacity, and technical accreditation to balance volume and service quality. Macroeconomic Support: Stability is bolstered by a GDP growth rate projected at a 3.5% average through 2026, providing the liquidity necessary for businesses to invest in technology. Critical Talent Risk: The primary threat to long-term sustainability is a 12.3% ICT talent turnover rate, making the retention of specialized, certified engineers difficult and expensive. Channel Mechanics Tier-1 Giants: Dominated by the Infosoft Group, this tier includes Infosoft Systems for high-end systems integration and ITD Sh.p.k. for wholesale logistics and national distribution. Tier-2 Specialised Integrators: Comprises "legacy integrators" like C.C.S. (the "gold standard" with industrial-press accreditations) and Kallfa (a specialised service boutique focused on maintenance and high-volume machines). Tier-3 and Specialists: Agile, digital-first players like Electron Albania focus on the SME market, while specialists like Communication Progress embed printing into broader cybersecurity and ERP frameworks. Authorised Service Provider (ASP) with high technical capacity in south-eastern Spain, while GDX Group provides niche document management software expertise. Maturity & Strategic Direction Evolution of Service: The market has matured from transactional "box-moving" to long-term contracts focused on document lifecycle management and operational efficiency. National Digital Alignment: The channel's trajectory is tied to the Albanian government’s Digital Agenda 2022-2026, which views MFPs as gateways for digitised documents and e-Albania portal interactions. Global Reinvention Strategy: Local partners are adopting Xerox’s global shift to grow digital and IT services revenue, expanding into Managed IT Services (MITS) and secure cloud-integrated environments. Ecosystem Health & Coverage Explosive Revenue Growth: Key partners demonstrate robust health, with C.C.S. achieving an 83.3% increase in turnover in 2023 (reaching over 1 billion ALL) and Infosoft Systems maintaining a high 19.3% profit margin. Urban Concentration: Primary partners are heavily centralised in Tirana, reflecting a business ecosystem where 66.4% of active enterprises are located in the Tirana-Durrës-Vlora corridor. B2G Dominance: The channel is exceptionally well-aligned with the public administration sector, securing critical tenders for the Ministry of Finance and State Police . An opportunity exists for "Advanced Production" partners to serve the marketing and publishing needs of a tourism industry projected to reach 15 million visitors by year-end 2025. Future-Outlook Alignment AI and Automation: Leading partners like Infosoft Systems are beginning to position Xerox devices as "Smart Office" endpoints that utilise AI for automatic document classification and workflow triggers. Zero-Trust and Security: In response to the 2025 Law on Personal Data Protection, the channel is shifting toward identity-centric frameworks and secure print release to meet banking and government standards. Sustainability and Circularity: There is a growing demand for "green procurement," with partners like Kallfa leveraging Xerox’s carbon-neutral Managed Print Services to win environmentally-conscious tenders. 2025 H1 Market Share figures not presented

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AUSTRIA Key Highlights Overview The market has transitioned from "box-shifting" to a "High-Performance Service Maturity" model. Vertical Focus: Industry displacement is moving toward high-growth regulated sectors; over $1.2 billion is expected to be invested in healthcare document management. Urban vs. Rural Displacement: While 74% of Austrian enterprises have "basic" digital intensity, eastern states like Burgenland (63%) and Carinthia (66%) represent significant "catch-up" opportunities for partners. Channel Mechanics Tier 1 (Strategic Hubs): Dominated by two major players: X-business.com GmbH (National Concessionaire with a federated regional network) and Bürosysteme Petric GmbH (Platinum Partner dominating southern Austria). These partners offer mono-brand loyalty and the deepest technical integration. Tier 2 (IT System Houses/DTPs): Includes 3-5 large-scale firms like ACP TEKAEF and HSA EDV-Geräte. These entities integrate Xerox into broader ICT portfolios and "Modern Workplace" strategies, often managing multi-vendor fleets. Tier 3/Specialists: A diverse group of 10+ niche players, including Phoenix Information Management (refurbished hardware), Jork Printmanagement (graphic arts reference site), and World-Direct (healthcare/high-security vertical integration). Maturity & Strategic Direction Solution Architecture: Partners now sell document workflows rather than devices. Proprietary middleware like DocuFlair creates "stickiness" by integrating hardware directly into legal or commercial data systems. Production Print Renaissance: There is a strategic pivot toward high-margin commercial print using "Beyond CMYK" (Gold, Silver, White) toners to offset declining office print volumes. Sustainability: Now a mandatory procurement requirement; mature partners have institutionalized green initiatives like Petric’s #wecare or circular economy models for refurbished units. Ecosystem Health & Coverage OPEX Financial Models: Heavy reliance on rental and leasing (managed by firms like HSA) protects partners from capital expenditure volatility. Growth Potential: The IT services sector shows resilience with a projected CAGR of 9.1% through 2033. Primary Risk: A "critical" talent shortage, with 24,000 unfilled ICT vacancies in Austria, inflates labour costs (up 12% annually) and limits innovation speed for smaller partners. Regional Hegemony: Regional hegemons (e.g., Petric in Styria, X-business in the West) ensure local proximity—a cultural business imperative in Austria. Future-Outlook Alignment The Lexmark Powerhouse: The late-2025 acquisition of Lexmark is expected to create a "powerhouse" in Austria, bringing global IoT infrastructure to local partners for proactive fleet management. AI and Cloud Orchestration: Future growth is driven by AI-powered document classification and cloud-first procurement, moving the printer from a peripheral to a proactive node in the AI-driven "Modern Workplace." KMU Optimisation: Partners are positioned to capture the €327 million KMU.DIGITAL budget through 2027 by helping 330,000 SMEs adopt cybersecurity and cloud technologies. Segment 2025 H1 Market Share % By Segment A4 Mono 21% A4 Colour 5% A3 Mono 10% A3 Colour 3% TOTAL Market Share 11%

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BELGIUM Key Highlights Overview Regional Economic Split: Flanders (2.4% avg. growth) remains the healthiest market for Xerox partners. Conversely, Brussels (0.3%) and Wallonia (0.7%) struggle with industrial transition. Operational Resilience: Channel health is being maintained through aggressive M&A and the Xerox-Lexmark integration (July 2025), which aims for $300M in global synergies by 2026. Industry Displacement Risks: In Wallonia, where manufacturing employment has fallen to 11.5%, traditional dealers face "displacement" by more efficient, software-led competitors. Channel Mechanics Tier-1 Strategic Integrators (4 players): High-performance entities that treat document technology as an IoT endpoint within broader IT managed services. Key players include XsolveIT, SPIE Belgium (primary federal government conduit), Computacenter, and Bechtle. Tier-2 Regional Anchors (6 players): The backbone for the SME market, specializing in Xerox ConnectKey and AltaLink hardware. Includes D&O Partners (Brussels focus), Groupe DS (Wallonia), Igepa (Graphic Arts), and Orange Belgium. Tier-3 Local Specialists (8 players): Regional providers for specific niches (e.g., office fit-outs). These firms are increasingly vulnerable to consolidation by Tier-1 players. Specialists & Others: Includes high-volume logistics powerhouses like Supplies Distributors SA (official Xerox store operator) and Authorized Service Providers (ASPs) like Colyer. Maturity & Strategic Direction Maturity Assessment: The channel has evolved from "Basic MPS" (supplies/maintenance) to "Full MPS" (workflow optimisation and analytics). Maturity is measured across six dimensions: insight, security, mobility, sustainability, cost, and productivity. General Strategy: Guided by the global "Reinvention" program, the channel is pivoting toward software-led revenue and high-margin IT services to offset secular declines in print revenue. Primary Catalyst: The mandatory January 1, 2026, Peppol e-invoicing mandate is the most significant strategic driver, converting partners into digital workflow consultants. Ecosystem Health & Coverage "Winner-Takes-All" Dynamic: Market leaders like XsolveIT report net profits exceeding €2.5M, while smaller regional players in Wallonia face margin compression and losses. Coverage Model ($C$): With 19 distinct partners, Belgium has high area coverage ($C \approx 1.0$) relative to demand, though service density is concentrated in the northern corridors. Demographic Displacement: Economic centres have shifted significantly toward Flanders, where SME establishment is double that of other regions. Partners are reorienting their footprints toward Flemish pharma and logistics hubs to match this opportunity. Future-Outlook Alignment Alignment (Forward Momentum): The channel is strongly aligned with AI-driven workflow automation. Deployment of Intelligent Document Processing (IDP) aims to reduce manual document handling by 40%. The growing Belgian data centre market ($388M by 2030) further supports a "Cloud-First" shift. Mechanical Friction (Headwinds): Near-term growth is pressured by macro volatility, high interest rates, and US tariffs. Delays in equipment purchases are expected to persist until government funding and trade conditions stabilise in late 2025 Segment 2025 H1 Market Share % By Segment A4 Mono 1% A4 Colour 3% A3 Mono 1% A3 Colour 6% TOTAL Market Share 3%

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BOSNIA AND HERZEGOVINA Key Highlights Overview Innovation Index: Bosnia and Herzegovina is classified as an "Emerging Innovator," with a score of 25.7% of the EU average in 2025. While the general digitalisation score is low (9.9%), the Xerox channel is ahead of the curve due to the "Reinvention”. Critical Risks: The primary threats include a significant "brain drain" and labor shortages due to out-migration. Macroeconomic factors like high inflation (3.4%–3.7%) and entity-level regulatory friction also impose operational costs on service providers. Channel Mechanics Tier-1 Anchors: The channel is anchored by two primary concessionaires: Macline d.o.o. (Sarajevo), serving the Federation, and Alf-Om d.o.o. (Banja Luka), serving the Republika Srpska. These "Platinum" partners hold exclusive rights to high-end industrial and production presses like the iGen 5 and Iridesse . Tier-2 VARs & Traders: This layer includes system integrators like Printex (focusing on IT engineering) and lean trading entities like Facit, which maintains an AA+ credit rating despite a minimal headcount. Tier-3 & Specialists: Logistical support is provided by ASBIS, while the SOHO and retail markets are dominated by Imtec. Regional specialists like Abias provide localised engineering in critical industrial zones like Tešanj. Maturity & Strategic Direction Strategic Pivot: The channel is transitioning from transactional hardware sales to a "services-led, software-enabled" model. The focus has shifted to Managed Print Services (MPS), cloud-based workflows, and AI-driven automation to support hybrid work environments . Ecosystem Health & Coverage Financial Stability: Top-tier partners show high operational health; for example, Macline successfully doubled its net profit by shedding low-margin hardware volume in favour of high-margin services. Geographic Displacement: Coverage is high in administrative hubs (Sarajevo and Banja Luka) but remains "moderate" in secondary cities like Tuzla, Zenica, and Mostar. Industry Opportunity: The channel is well-embedded in the banking and public sectors. However, there is a significant "displacement" opportunity in the manufacturing sector (28.9% of GDP) and the massive, underserved SME service market, which accounts for 41.5% of registered businesses. Future-Outlook Alignment Future Alignment: The channel is moving with global trends toward AI-powered document intelligence, zero-trust security, and sustainability. Partners are preparing clients for the EU's Carbon Border Adjustment Mechanism (CBAM) by offering energy-efficient hardware and carbon-neutral services. Market Consolidation: The integration of Lexmark into the Xerox group (closing in late 2025) is expected to significantly enlarge the channel's share in the A4 colour and enterprise markets, streamlining the competitive landscape. No market share figures supplied.

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BULGARIA Key Highlights Overview Centralized Management: Xerox Bulgaria (headquartered in Sofia) serves as the administrative and strategic hub for the cluster, including Montenegro, Albania, and North Macedonia. 100% Indirect Execution: There are no direct Xerox employees in the "spoke" territories; all last-mile delivery, technical support, and client relations are handled by the local partner ecosystem. Operational Mandate: Sofia manages high-level tender authorizations and partner certifications, placing a premium on the technical self-sufficiency of local partners. Key Risks: Persistent IT skills shortages and geographic distance from the Sofia hub remain the primary operational vulnerabilities for the channel. Channel Mechanics Tier-1 (Wholesale/Logistics): 2–4 major groups like Polycomp and ALSO (Solytron) in Bulgaria, and Comtrade and Kim Tec in the Adria region, act as the primary engines of hardware volume and logistics. Tier-2 (Solution Specialists): Roughly 10–15 enterprise-focused partners (e.g., Digit Montenegro, Jugodata) specialize in complex system integration, security, and Managed Print Services (MPS). Tier-3 (Transactional Retail): An extensive network of 350+ resellers (e.g., Datika, EuroTehnika) handles retail and e-commerce hardware sales for the SOHO and consumer markets. Specialists: Dedicated Authorized Service Providers (ASPs) like Biro Servis are the only entities qualified to perform deep technical repairs and warranty execution on behalf of the hub. Maturity & Strategic Direction Platform Pivot: The channel is transitioning from "box-moving" to platform-led growth, with a focus on AI-enabled workflows and Cloud MPS. High Adoption in Hubs: Bulgaria’s ICT market shows high maturity in urban centers, with cloud solutions commanding a 46.2% share in 2025. Strategic Value: The general direction is "Value over Volume," moving revenue toward high-margin software and recurring service contracts to offset declining hardware margins. Ecosystem Health & Coverage Vigorous Top-Tier Growth: Large logistical partners are thriving, with Kim Tec recording a 49.31% revenue increase in 2024, driven by public sector infrastructure projects. Health Bifurcation: While Tier-1/2 players are financially stable, traditional Tier-3 retailers are under pressure as the market shifts from CAPEX hardware purchases to OPEX subscription models. Sofia Monocentrism: Sofia accounts for 87.6% of Bulgaria's ICT value-added, leading to an oversaturation of enterprise services in the capital. Industry Focus: Coverage is heavily displaced toward high-value verticals, specifically BFSI, Government, and Manufacturing. Rural Gap: Rural peripheries remain underserved due to rapid depopulation and a lack of digital literacy (only 31.2% of adults have basic digital skills). Future-Outlook Alignment AI and Automation: The channel is aligning with the global "Reinvention" strategy, leveraging the Lexmark acquisition to offer AI-driven Intelligent Document Processing (IDP) and IoT analytics. Sustainability: New mandates for carbon-neutral MPS and ESG reporting are becoming basic requirements for enterprise contracts rather than optional differentiators. Subscription Model: The definitive direction of travel is toward a cloud-centric, Everything-as-a-Service (XaaS) ecosystem. No market shar figures supplied.

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CROATIA Key Highlights Overview Eurozone Integration: The 2023 adoption of the Euro stabilised the Tier-1 distribution layer by removing currency exchange risks. Regulatory Digitalisation: "Fiscalisation 2.0" and the National Recovery and Resilience Plan (NRRP) have transformed the MFP from a simple output device into a critical "input gateway" for e-invoicing and digital archiving. Industry Displacement: The "paperless" government push has displaced traditional printing but created a massive market for Information Management (IIM) and secure digital archiving. Risk Factors: Key threats include chronic labour shortages in the IT/technical sector and a structural global decline in print. Channel Mechanics Tier-1: Authorized Distributors (3 Players): Large-scale regional aggregators like M SAN Grupa and Microline. They provide the logistical "backbone," credit facilities, and centralised service hubs (e.g., MR Servis). Tier-2: System Integrators (4-5 Players): Firms like King ICT and Combis that bundle print into massive IT outsourcing and security projects for government and enterprise clients. Tier-3: Specialised Print Providers (3-4 Players): High-margin specialists focused on graphic arts and production print, such as Novel Centar (Xerox Iridesse specialist). Tier-4: Service & SME Dealers (5-10 Players): Localized providers like KSU and Xagent that dominate the Small and Medium Enterprise (SME) sector via flexible maintenance and rental agreements. Maturity & Strategic Direction Economic Resilience: Croatia’s 3.8% GDP growth in 2024 (outperforming the EU average) is driven by tourism, which accounts for 25% of GDP, creating high seasonal demand for document solutions along the Adriatic coast. Maturity Assessment: The Croatian channel is "Sophisticated and Mature,” moving beyond transactional "box-moving.” Strategic Reinvention: The indirect channel is aligning with Xerox’s global "Reinvention" roadmap, focusing on: Platform-Led Growth: Utilising the ConnectKey app ecosystem for industry-specific digital services. Lexmark Integration: The late-2025 merger is expected to significantly bolster the A4 color portfolio, crucial for the growing decentralised and hybrid work markets. Ecosystem Health & Coverage Financial Divergence: The channel exhibits a split in health. Entities integrated into large IT groups or those with diversified services (e.g., Combis, King ICT) show robust growth. Profitability Trends: Growth is now measured by service margins rather than hardware volume. Major distributors remain healthy, traditional hardware-centric resellers (e.g., Eurotrade) have faced revenue contractions (~12%). Geographic Coverage: Currently "Resilient but Zagreb-Centric.” Demographic Displacement: Traditional technician-heavy service models are being displaced by AI-enabled remote diagnostics due to a shortage of skilled labor. Future-Outlook Alignment Agentic AI & Zero-Trust: Partners are successfully positioning MFPs as "AI workflow-facilitating devices" and secure cloud endpoints. This aligns with 2026 trends toward autonomous problem resolution and identity-centric security. Sustainability & Circularity: The channel is actively developing programs for refurbished equipment (e.g., RSB d.o.o.) and carbon neutrality services, meeting strict EU regulatory requirements such as the EU Deforestation Regulation (EUDR). Managed Services Evolution: Top-tier partners are evolving from simple MPS providers into broader IT service providers, capturing a larger share of the total technology budget. No market share figures supplied.