Deutsche Messe returns to profit in 2007

- Continuation of strategy for consolidation  

Provisional figures indicate that Deutsche Messe's business performance in 2007 will be notably better than expected, with profits of more than €1 million. "We have had an extremely busy and successful year", said Sepp D. Heckmann, Chairman of the Board at Deutsche Messe AG, speaking in Hannover on Tuesday.

"As a result of strong growth across our portfolio of events and numerous improvements in our internal business processes, earnings and profits were much better than had been expected at the start of the year." At the beginning of 2007 the company was forecasting a net loss of €5.7 million.

According to provisional figures, Deutsche Messe increased its turnover by 21 per cent to €283 million. While foreign turnover of €25 million fell slightly for normal scheduling reasons, domestic turnover rose from €210 million to €260 million.

Following a net loss of €8.7 million in 2006, the company is heading for a seven-digit profit in 2007. At the same time Deutsche Messe has reduced its borrowings during the year just ending - from €155 million to €130 million. This means that the company has halved its debt since 2001 by its own efforts. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 20 per cent year on year to €43 million.

Stephan Ph. Kühne, a member of the Board of Deutsche Messe AG, noted: "Over the course of the year we have succeeded in improving our operational business thanks to a series of intelligent cost-cutting measures and a highly motivated team. 2007 has seen substantial further progress towards consolidation, and demonstrated the resilience and potential of Deutsche Messe."

He went on to say that the company must now exploit that potential in the coming years in order to build on its strong competitive position. With other German trade show organizers now in receipt of public subsidies, there is considerable distortion of competition in the marketplace, which is putting excessive pressure on margins in the trade show business.

During 2007 Deutsche Messe 2007 staged 110 trade fairs worldwide, including 54 events in other countries and 42 hosted events. A grand total of 25,300 exhibitors took part in the company's events - some 2,000 more than in 2006. The number of visitors at all events rose from 1.8 million to 2 million in 2007. The net display area grew by 15 per cent to 1.4 million square metres.

"Profitability was boosted by significant growth both in our own trade fairs and in the events that we hosted", noted Heckmann, pointing out that CeBIT recorded a ten per cent increase in visitor numbers to 480,000. And with a total of 241,000 trade visitors, HANNOVER MESSE achieved its best result in five years. "A strong DOMOTEX and a record-breaking LIGNA got us off to a flying start in the first half-year.

And a good showing from the two hosted events EMO and AGRITECHNICA ensured that the year ended on a high note." Successful hosted events like these are important not only for the organizers, but also for Deutsche Messe as a company and for the whole Hannover region. "This is testimony once again to the outstanding quality of our facilities and the calibre of our team, which are widely praised by our customers", said Heckmann.

Looking forward to 2008, Heckmann observed: "We shall continue to move ahead with consolidation during the coming year." At the same time, he noted, the company is working to explore new opportunities for growth. "We have plenty of ways of fine-tuning our business to generate additional turnover." One of the keys to future growth is the continuing development of Deutsche Messe's international business.

Ernst Raue, who sits on the Board at Deutsche Messe AG, highlighted this point: "In just a few years we have made our overseas operations profitable. We shall continue to expand and develop our efforts in this direction."

At the start of December the first three trade fairs in the Indian city of Bangalore were premiered. "The success of these events shows that we are on the right path." As he pointed out, the importance attached to the company's international business in the future can also be gauged from the decision to appoint a new and separate board of management, which will concentrate exclusively on developing this area of business operations.

The expansion of the company's online presence offers another way forward in the drive for more business. "The Internet cannot compete with our trade shows, but it can complement them in lots of exciting ways", declared Heckmann. "Our recently launched program Internet 2010 is a milestone in the company's history. We intend to set the standard for the German trade show industry in online services."

In order to achieve this, Deutsche Messe is setting up a joint enterprise with the Berlin-based Internet company ngn (Next Generation Network). "Deutsche Messe has often been in the forefront of new developments in online business. We intend to build on this position of leadership and generate revenues from the Internet."

Heckmann then pointed to the continuing expansion of the conference business as the third major source of growth for Deutsche Messe. "The trade show landscape has changed right across industry. Now businesses want more opportunities to communicate and exchange ideas, more examples of best practice, and more know-how transfer. We need to meet these demands through our trade shows, but also through other event formats."

Therefore Deutsche Messe is teaming up with Landesmesse Stuttgart and a professional congress organizer to establish a new joint enterprise. "This will put us in a position to exploit this trend to the full", said Heckmann.

- Hartwig von Saß-