keywordsDeutsche Messe AG
Deutsche Messe posts positive result for first half of 2011
Date: Fri, 09/02/2011 - 13:50
Deutsche Messe can look back on a highly successful first half of 2011. “We have achieved a major turning point in the fortunes of the company and are now back on a steep growth trajectory,” said Deutsche Messe Chairman Dr. Wolfram von Fritsch. “Our fairs in Germany and abroad are performing above expectations. We are covering the right themes, and market acceptance of our new products is excellent. This year, we will post our first operating profit since 2007.”
Dr. von Fritsch went on to say that Deutsche Messe’s sales would increase from 212 million euros in 2010 to at least 275 million euros in 2011, and that the company would post a profit of around 15 million euros for the year 2011 (2010: -28 million euros). A number of Deutsche Messe’s fairs in the first six months of this year had even exceeded expectations. In addition, the company’s international business operations, which had been expanded significantly in recent years, were contributing more and more to Deutsche Messe’s consolidated result. “Our trade fairs in Turkey and China are doing extremely well,” commented von Fritsch.
Deutsche Messe would continue on its international expansion course in 2011. “In 2010, we established 14 new fairs outside Germany and this year we will add another nine events to our international portfolio. That puts us well ahead of our German competitors,” Dr. von Fritsch said. According to the Association of the German Trade Fair Industry (AUMA), in 2010 and 2011 German trade fair companies established 65 new tradeshows abroad. “We account for more than a third of these,” von Fritsch point out.
Deutsche Messe’s foreign operations are also having a positive impact on the company’s domestic events. “International participation is a crucial success factor for all of our trade fairs. And we are seeing large increases in the number of international visitors at our shows in Hannover,” explained von Fritsch. In 2011, the number of non-German visitors at DOMOTEX, CeBIT and HANNOVER MESSE increased by 41 percent, to 125,000. Adding the international attendance at this year’s LIGNA and CeMAT shows, both of which are biennial events, this figure increases to nearly 175,000 – roughly twice the number of non-German visitors to Hannover recorded in the first half of 2010. “We haven’t seen this many foreign visitors in Hannover in four years,” remarked von Fritsch.
Deutsche Messe’s recently acquired majority stake in the Hannover-based event design and management firm “event it” is also expected to boost growth. “The fact that ‘event it’ is working at full capacity testifies to the fact that the company is already ideally positioned in today’s fast-changing event market with its range of state-of-the-art solutions and services,” Dr. von Fritsch explained. Deutsche Messe’s 51 percent shareholding in the company represented a significant expansion of its existing service offering. “Together, we will be able to offer our customers the best participant management services available on the market. And we will open up a whole new dimension in terms of our matchmaking capability, which is becoming increasingly important to companies exhibiting at trade fairs. In future, we will be able to notify our exhibitors’ sales executives by text message that a customer has just arrived at their stand. These capabilities put us well ahead of our competitors,” said von Fritsch. Deutsche Messe’s stake in event it would also enhance its range of support services for companies running roadshows or corporate events.
Dr. von Fritsch also made reference to another key decision that opens up new options for Deutsche Messe: “We are the first German trade fair company to have terminated a cross-border lease agreement, in this case the portion of it pertaining to halls 1 and 3.” He said the company would continue to monitor the remaining parts of the cross-border lease and terminate them, too, if it made commercial sense. Viewed over the total run of the agreement, the recent termination translates into a plus of a single-digit million amount.
A number of German municipalities and trade fair companies have used cross-border lease arrangements of this type in the past. They involve leasing or selling properties to US investors and then entering into long-term contracts to lease them back. Until a few years ago, this resulted in tax advantages for the contractual parties in both countries.