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Deutsche Messe reports a successful 2013 and a broader business base

Deutsche Messe AG, the leading trade fair company headquartered in Hannover, Germany, has just signed off on a very successful 2013. With consolidated revenues of more than €312 million and a net profit of €13.4 million, the company has delivered its second best result since 2001. "In other words, Deutsche Messe has continued to build on the successes of the past few years," the Chairman of the company’s Managing Board, Dr. Wolfram von Fritsch, announced Tuesday in Hannover. The announcement was made following the meeting of the company’s Supervisory Board at which the annual financial statements for the 2013 year were approved. At that same meeting, the Supervisory Board elected the Minister of Economics of the German state of Lower Saxony, Olaf Lies, as its new Chairman. It also elected the Lord Mayor of Hannover, Stefan Schostok, as its Deputy Chairman and Chairman of its Executive Committee.

At €312 million, Deutsche Messe’s consolidated revenues for 2013 are up 24 percent on 2012. Perhaps even more significantly, they are also up markedly on 2011, which, with its similarly structured trade fair calendar, provides a more meaningful comparison. Consolidated revenues for that year totaled €292.8 million. The increase in revenues contributed to a net profit of €13.4 million for 2013, as compared with a net loss of €19.8 million for 2012. Net cash flow, which underpins the company’s ability to fund its activities from its own resources, grew from €1.1 million in 2012 to €34.1 million in 2013 and was thus also significantly up on the €31.6 million generated in the comparison year of 2011. "This markedly positive development over the two-year cycle from 2011 to 2013 is the result of a major strengthening of our business base," Dr. von Fritsch said, announcing a €2 million dividend payout to Deutsche Messe AG’s shareholders for the 2013 year.

Dr. von Fritsch emphasized that Deutsche Messe was on track to achieve the profitability target set under the HERMES+ strategic initiative launched in 2009. Under the initiative, the company aims to achieve a positive result on a four-year cumulative basis from 2011 to 2014. "The pleasing result for 2013 stands us in good stead for attaining our medium-term goal of sustained profitability," he said. Addressing the business fundamentals underlying the initiative, von Fritsch noted that in 2013 the company reached an agreement with the German Machine Tool Builders’ Association (VDW), the organizer of the EMO machine tools exhibition, that would see EMO staged at the Hannover Exhibition Center for many years to come. The company had in 2013 also expanded its foreign trade fair business by various means, including targeted equity investments. In Canada, for instance, it had acquired a 75 percent stake in the CanWEA wind energy fair, and in China had acquired the rights to operate the Industrial Automation Shenzhen show. Similarly, in Turkey, Deutsche Messe had acquired an 80 percent holding in Sectorel, the company that organizes Turkey’s ICCI energy trade fair; and in Brazil had taken over the remaining shares in Hannover Fairs Sulamérica Ltda. (HFSA). In 2013, Deutsche Messe AG and its subsidiaries had, he said, launched nine new trade fairs outside Germany, including six in the fast-growing BRIC economies (Brazil, Russia, India and China).

In 2013, Deutsche Messe ran 56 trade fairs, exhibitions and events in Germany, which together attracted a total of more than 2.1 million visitors, including more than 300,000 from outside Germany, and featured 24,300 exhibitors, including 10,300 from beyond Germany. That year, the company’s 63 foreign-based trade fairs had 16,700 exhibitors and drew just on 1.9 million visitors.

2013 also saw the launch of Deutsche Messe’s market-driven infrastructure development plan. The plan is a strategic roadmap for building developments at the Hannover Exhibition Center over the next 20 years. Implementation of the plan got underway towards the end of the year with the laying of the foundation stone for a new multifunctional exhibition hall (Hall 19/20). Construction is proceeding smoothly, and the new hall will be ready for use in the spring of 2015. The new hall complex will enable Deutsche Messe to further grow its corporate-events segment and extend the scope and number of niche supporting events it can offer on the periphery of its flagship trade fairs. The corporate-events segment is just starting to take off, with major market players Volkswagen AG and MAN SE staging their AGMs at the Hannover Exhibition Center for the very first time in May last year.

Turning to 2014, Dr. von Fritsch noted that the strong performance of the company’s first- and second-quarter events had gotten the year off to a good start. 2014 was likely, he said, to close with a loss in the low double-digit millions – in line with the typically weaker performance of the even-year part of the company’s normal two-year business cycle. He said it was difficult at this stage to quantity what effect the current exchange-rate volatility and political instability in parts of Eastern Europe might have on the company’s bottom line for 2014. However, based on the €251.3 million in revenues earned in the structurally similar 2012 year, the company was currently projecting sales of over €280 million for 2014. "The performance of our events in the first half of this year has been in line with these projections," he said.

CeBIT 2014 was well received thanks to its new B2B focus on ICT professionals. This year, HANNOVER MESSE, with its official motto of Integrated Industry – Next Steps, gave the market everything it was looking for and more with its focus on the two biggest themes facing global industry today, namely Industry 4.0 and Energy System Transformation. In doing so, it further strengthened its position as the world’s leading trade fair for industrial technology.

Similarly, CeMAT, which was held in Hannover in late May this year, further increased the percentage of foreign nationals in its visitor mix, thereby consolidating its preeminence as the world’s foremost trade fair for intralogistics. Of course, 2014 is far from over, with major events like the IAA Nutzfahrzeuge commercial vehicles show, the EuroBLECH international sheet metal working technology exhibition and the EuroTier animal production fair still to come.

At its meeting on Tuesday, the Supervisory Board also attended to a number of routine changes in its membership. Marc Hansmann, the City Treasurer of Hannover, stepped down as Chairman of the Supervisory Board at the end of his term of office. Olaf Lies, the Minister of Economics for the German state of Lower Saxony, was elected as the new Chairman in accordance with the Supervisory Board’s standing orders. The new Lord Mayor of Hannover, Stefan Schostok, was elected to the Supervisory Board and was also appointed Chairman of the Supervisory Board’s Executive Committee. Dr. Dietmar Harting, a prominent and respected figure in German business circles, stepped down from the Supervisory Board in connection with pursuing his retirement. His successor is Friedhelm Loh, Chairman and CEO of the Friedhelm Loh Group.

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