Messe Düsseldorf Group: Success story continues in the 2015 financial year Expected Group revenue of EUR 300 million

2015 trade fair cycles result in a financial year with fewer Events - Messe Düsseldorf GmbH: Sales above plan with EUR 240 Million - Messe Düsseldorf Group 2016: Revenue forecast to grow to more than EUR 400 million - Messe Düsseldorf GmbH 2016: Expected revenue growth to more than EUR 370 million - 2030 Concept: Strategic expansion of international portfolios continues - Freedom from subsidies as the basis for further investment

Messe Düsseldorf Group could continue its success story in the 2015 financial year. In a year with a scheduled lower number of events due to the regular trade fair cycle, the total Group expects a sales figure of approx. EUR 300 million (compared to EUR 412 million in 2014). In 2016, it will again see another clear upswing. In the year of the drupa and K international number-one trade fairs, consolidated Group sales are forecast to increase to approx. EUR 400 million.

In 2015, the sales of Messe Düsseldorf GmbH were approx. 2 per cent above plan and amounted to EUR 250 million (2014: EUR 348 million), EUR 39 million of which were generated abroad. The operative international business of Messe Düsseldorf Group amounts to approx. EUR 93 million (2014: EUR 112 million). “Due to the stra-tegic development of our international portfolio, about 30% of our sales are now gen-erated outside Germany”, explains Werner M. Dornscheidt, President and Chief Ex-ecutive Officer of Messe Düsseldorf GmbH.

Messe Düsseldorf GmbH expects to post annual net profits of approx. EUR 26 mil-lion (2014: EUR 51.1 million). A one-time special effect of EUR 22 million is the re-sult of the disposal of Veletrhy Brno a.s.. Adjusted for this non-recurring effect, the earnings of Messe Düsseldorf GmbH amount to EUR 4 million.

Compared to the previous year, the lower annual net profit is primarily the result of a lower number of events in the 2015 trade fair year. “As a result of the high number of events in 2016, we expect an increase of our annual net profit to more than EUR 50 million for the coming financial year”, says Dornscheidt.

 

National and international: Impressive event portfolio as the basis for success

The biggest revenue drivers in Düsseldorf were the number-one events MEDICA, ProWein, A+A and boot as well as the quartet of trade fairs in the “Metals and Flow Technologies”, namely GIFA/METEC/THERMPROCESS/NEWCAST. International-ly, the CPM events and the interplastica trade fair in Moscow were the biggest reve-nue drivers in the Group. The thematic expertise of Messe Düsseldorf and its export in connection with the trade fair company‘s worldwide portfolio is and will be the guarantee for the successful development of Messe Düsseldorf GmbH and Messe Düsseldorf Group.

At its home base Düsseldorf, it organised 30 events (2014: 34), 18 of which were proprietary events and 12 were events organised with partners/guests. About 25,700 exhibitors and 1.1 million visitors attended the events in Düsseldorf and confirmed the relevance of trade fairs as a marketing tool.

The share of international exhibitors at the company‘s proprietary events in Düssel-dorf was again significantly high, it increased to approx. 69 per cent (previous events: 67.2 per cent). “The high level of internationality at our events and the steadi-ly increasing number of decision-makers confirm the world-class quality of Düssel-dorf as a trade fair venue”, explains Dornscheidt. Events such as NEWCAST (85 per cent), ProWein (84 per cent) and MEDICA (78 per cent) offered an impressive proof of this fact. With approx. 26 per cent, the share of international trade visitors almost reached the level of previous events. The highest shares were recorded for the NEWCAST trade fair with 66 per cent and for MEDICA with a 61 per cent share of foreign visitors.

 

91 proprietary events and participations abroad Russia remains an important international market for Messe Düsseldorf

Messe Düsseldorf takes a positive view of its international business development. About EUR 93 million were generated abroad in 2015, with the subsidiaries in Brno contributing EUR 32 million, the Moscow and Singapore subsidiaries EUR 7 million each, and the contribution of the Igedo Company amounted to EUR 10 million. All in all, Messe Düsseldorf realised 91 proprietary events and participations (2014: 93). In 2016, 97 events and participations are scheduled to take place abroad.

In the Czech Republic, the stated goal for 2015 was the sale of shares in the Brno subsidiary, Veletrhy Brno a.s.. Brno City Council approved the acquisition of the majority of shares in the municipal trade fair company on 18 December 2015. Messe Düsseldorf previously held a total of 61 per cent of these shares. With the acquisition of the Düsseldorf share, the City will hold a total of 95 per cent of all shares in the Brno trade fair company, the remaining shares are held by minority shareholders. The agreement was signed on 22 December 2015 in Brno, the legal and financial closure of the transaction will probably be completed by the end of February.

The sales price amounts to EUR 8.3 million, and the Brno trade fair company will pay back a EUR 13.7 million loan to Messe Düsseldorf. This means that Messe Düsseldorf will recover the capital invested in Veletrhy Brno a.s..

Werner Dornscheidt comments: “The decision to sell our shares is the appropriate business decision to respond to the changed market situation. Changes in the Central and Eastern European markets - partly triggered by the financial and economic crisis – have led to a stronger regionalisation of the trade fair business.” While this development offers new opportunities for the further development of its trade fair venue to both the trade fair company and to Brno City, the venue would be of little use for Messe Düsseldorf and its customers, added Dornscheidt. Messe Düsseldorf was in the process of repositioning its international activities and intended to show even greater commitment in the Asian, North American and South American economic regions. To consistently continue this process, Messe Düsseldorf had offered its shares for sale to Brno City as early as 2012.

Even when the shares were acquired 17 years ago, the agreement specified that Brno City could completely take over the trade fair shares held by Messe Düsseldorf. The majority of Veletrhy Brno a.s. now is owned by Brno City. This turns out to be the case for many trade fair cities, says Düsseldorf. The advantages are obvious: the exhibition centre can now be used even more intensively as a marketing tool to promote the business development in the City and the region as a whole. And: “An exhibition centre of the size of Brno, which partly consists of listed buildings, cannot be economically run from Düsseldorf in the long term. It will be much more success-fully run from the City of Brno”.

The Brno and Düsseldorf trade fair companies continue to be associated as partners; the relevant longterm agreement has already been concluded. Among other things, it includes: the existing network of Messe Düsseldorf‘s international representative offices will continue to be available to the Brno trade fair company, the Brno trade fair company will continue to act for Messe Düsseldorf as their international representative office in the Czech Republic, the existing agreement with the Brno trade fair company on stand construction services for the Düsseldorf trade fairs was ex-tended until 2021.

Despite the crisis, Russia continues to be the international market generating the highest sales for Messe Düsseldorf. 57 per cent of Messe Düsseldorf GmbH’s international sales were generated there. The recession, currency exchange losses and sanctions have impacted strongly on the Russian economy, however, and have meanwhile also reached the trade fair market. “The tense situation in Russia left clear marks on the country’s trade fair market in 2015”, reports Dornscheidt.

Other important markets for Messe Düsseldorf GmbH in 2015 were India with a 10 per cent share of international sales (2014: 6 per cent), China with 8 per cent (2014: 11 per cent) and the United Arab Emirates with 6 per cent.

 

2016 Focus: Further quality development of the No. 1 international trade fairs drupa and K

2016 will be an important year for the further development or repositioning of the international No. 1 trade fairs organised at Messe Düsseldorf’s home base. drupa, the No.1 international trade fair for print and crossmedia solutions (31 May until 10 June 2016) will change to a three-year cycle after 2016 and thus accommodate the transformation of this industry introduced by digital developments. New applications, solutions and innovative technologies such as 3D printing, printed electronics or func-tional printing will become a major focus. For these reasons, drupa revised and ex-tended its nomenclature and now addresses new target groups from the manufacturing industries. drupa 2016 is again sold out. All leading international manufacturers will be present and we expect about 300,000 trade visitors.

K, The World's No. 1 Trade Fair for Plastics and Rubber (19 to 26 October 2016), intends to further intensify the dialogue between research and industry and - following its premiere in 2013 - it will further expand the Science Campus with an increasing number of participating scientific organisations. Supplementing the presentations of universities, institutes and research institutions, it will present its guiding themes such as “resource efficiency”, “Industry 4.0”, “new materials”, and “lightweight construction”. The “Plastics shape the future” special show presents the developments already taking shape today and the visions, which can be realised tomorrow.

 

Highlights in 2015

In China, the global portfolio on Packaging & Processing was extended by the new swop trade fair quartet – Shanghai World of Packaging. At the same time, a EuroShop satellite celebrated a successful premiere last year with the C-star trade fair in Shanghai. As an important international trading and contact platform in the growth markets of the Middle East and the United Arab Emirates, the Metal Middle East trade fair could position itself in Dubai. Furthermore, interplastica, the leading plastics trade fair in Russia, was held not only in Moscow, but was also launched in the Ka-zan metropolitan area.

Highlights in 2016
In India, the new FoodPex India will be a complement to International PackTech India and drink technology, the successfully established twin trade fairs organised in Mumbai. And the portfolio of events hosted in connection with the ProWein No. 1 international trade fair also grows: after the Düsseldorf No 1. event successfully expanded to China in 2013, it will open its doors for the first time in Singapore in 2016 as ProWine Asia. And a satellite of the Düsseldorf PUMP SUMMIT expert conference will make a trip across the Atlantic and take place as the PUMP SUMMIT AMERICAS in Houston for the first time next year. 

Designing our future: Messe Düsseldorf 2030
With its focus on the development of international events, the company started implementing its “Messe Düsseldorf 2030” concept in 2015: “With this project, we will focus even more strongly on further developing our global portfolios and strengthen-ing our international sales activities. And we also intend to further develop our leading global brands in Düsseldorf and our digital customer services”, explains Dornscheidt. For Dornscheidt this means opening the company for the challenges and transfor-mations of the digital age. This especially includes the digital transformation. 

Freedom from subsidies and growth as the basis for further Investments
Its solid annual net profits provide the basis for Messe Düsseldorf to undertake new investments, extend its event portfolio worldwide and thus consolidate its leading international position in the long run. “We continue to operate without any subsidies and grow organically”, underlines Dornscheidt.

As in previous years, the majority of the operative cash flow will go to the modernisation of the Düsseldorf Exhibition Centre as well as the further development of the contents and operative development of the company’s global portfolio. Specifically, the company will have completely rebuilt or modernised 10 of its 19 halls until the end of 2015. Work will continue on three further halls in 2016. And the gradual mod-ernisation of the CCD Süd Congress Center will continue in the years to come. Messe Düsseldorf intends to complete the refurbishment of its exhibition centre until 2030. The planned investment total for all refurbishing and new construction projects will amount to approx. EUR 636 million. All investments were and will continue to be funded from the company‘s own resources.

 

The Messe Düsseldorf Group*:

With a turnover of EUR 300 million in 2015, Messe Düsseldorf Group has again confirmed its posi-tion as one of Germany's most successful trade fair companies. At this year’s events in Düsseldorf, approx. 25,700 exhibitors presented their products to 1.1 million trade visitors. Add to this more than 400,000 congress delegates. With about 50 trade fairs, including 24 number-one events organized at its Düsseldorf Exhibition Centre in its five areas of expertise - machinery, plant and equipment, retail, skilled trades and services, medicine and health, fashion and lifestyle as well as leisure – and its 80 to 100 additional proprietary events, international participations and third-party events in other countries, Messe Düsseldorf GmbH is one of the leading export platforms worldwide. In this context, Messe Düsseldorf GmbH ranks number one in terms of the international participation in its capital goods exhibitions. At the company's proprietary trade fairs in its areas of expertise - machinery, plant and equipment - about 64 per cent of all exhibitors and 54 per cent of all trade visitors travelled to the Rhine from abroad; customers from about 180 countries visited the trade fairs in Düsseldorf. The Group’s global network consists of sales organisations in 132 countries (71 international representa-tive offices) as well as centres of expertise in 8 countries.

* All figures subject to the final balance.

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