An Introduc+on to ITE Group plc. May 2015

Transcription

1 An Introduc+on to ITE Group plc May 2015

2 Introduc+on

3 Introduc)on About ITE Founded in 1991; listed on LSE in March 1998 B2B exhibi+on organiser; over 90% of revenues from emerging markets Exhibi+ons market leader in Russian and CIS Leading market posi+ons in Turkey and India Growing presence in China, Southeast Asia & Africa Annual revenues of circa 135m*; headline PBT circa 45m*; market cap circa 500m* *Analyst es+mates for FY 30/09/15 3

4 Introduc)on Offices and Event Loca)on Country Offices Events USA Brazil Ireland UK Belgium Netherlands Germany Poland Ukraine Greece Turkey South Africa Georgia Azerbaijan Russia Turkmenistan UAE Uzbekistan Kazakhstan Kyrgyzstan India China Hong Kong Myanmar Thailand Malaysia Vietnam Indonesia Singapore 4

5 Introduc)on 2015 (EST) Revenue by Sector & Region` ITE Group Revenue by Region ITE Group Revenue by Sector 13% 2% 7% 2% 5% 5% 26% 14% 53% 9% Build (31%) Food & Packaging (14%) 18% 12% 13% 8% 14% Travel & Tourism (8%) Energy (6%) Industrial (17%) Fashion (7%) Russia (59%) Central Asia & Caucasus (19%) Eastern & Southern Europe (12%) UK & Western Europe (7%) Asia (3%) Transport & Logis+cs (3%) Pharma & Healthcare (4%) Beauty (1%) Other (9%) 2014 figures in brackets 5

6 Introduc)on Sector Strength ITE s leading events in 2014 (by profit) categorised by region and sector Construc+on Fashion Food Oil Transport Travel Other & Interiors & Tex+les & Drink & Gas Beauty & Logis+cs & Tourism Industrial Other Total Moscow 17 St. Petersburg 5 Novosibirsk 1 Krasnodar 4 Kazakhstan 7 Azerbaijan 2 Uzbekistan 2 Ukraine 5 Turkey 4 Malaysia 1 UK 2 India Total

7 Introduc)on Divisional Analysis Year to 30 September Revenue ( m) Contribu)on ( m) Revenue ( m) Contribu)on ( m) Russia Central Asia S/E Europe UK + W Europe Asia Corporate O/H (11.4) Group HPBT (11.6)

8 Introduc)on Key Abributes Geographic Loca)on: growing & developing markets Sector: big interna+onal business Brands: interna+onal and local recogni+on Venue: long- established venue rela+onships Infrastructure: network of local offices and interna+onal sales capability Sales Visibility: forward contracted revenue Flexibility: of cost structure Balance Sheet: strong cash flow minimal gearing 8

9 Emerging Markets & Exhibi+ons

10 Emerging Markets & Exhibi)ons Exhibi)on Facts The World s exhibi+on business $28bn 40%+ is in the USA $8bn good growth 25%+ is in Western Europe $6.3bn low growth 12%+ is in BRICs $3.7bn high growth Developed West: 38% of World GDP 66% of exhibi+ons BRICs: 20% of World GDP 13% of exhibi+ons Source: AMR Globex Report

11 Emerging Markets & Exhibi)ons Exhibi)on Facts 0.06% of GDP Size of exhibi+on industry in developed markets 11

12 Emerging Markets & Exhibi)ons Key Factors Behind the Growth of the Exhibi)on Industry GDP growth in country Sufficient venue capacity Popula+on size Sub- size industry structural growth 12

13 Emerging Markets & Exhibi)ons GDP Projec)ons 10% 8% Average Annual GDP Growth Forecast Source: IMF % Established presence % % % 13

14 Emerging Markets & Exhibi)ons Structural Growth Poten)al GDP $tn 2014 GDP Per Capita $k Av. Annual GDP Growth Exhibi)on v GDP % UK % 0.06 Germany % 0.06 USA % 0.07 China % 0.02 Russia % 0.04 Brazil % 0.04 Turkey % 0.05 Hong Kong % 0.14 India % 0.02 Benchmark % Source: AMR Globex Report

15 Emerging Markets & Exhibi)ons Exhibi)on Size and Growth Expecta)ons USA Established presence Exhibi+ons Market Size $bn UK Germany Brazil Russia 9.5 China Others GDP in $trn* * 2014 es+mates - IMF Turkey HK India % Expected Exhibi+ons Industry CAGR ( ) 15

16 Strategy

17 Strategy Objec)ve Create sustainable growth in headline earnings per share Strategy By developing and maintaining industry leadership in exhibi+ons in emerging markets 17

18 Strategy Key points Renewed focus on Organic Growth Maintain M+A Appe)te Strengthen Industry Ver)cals Leverage Digital 18

19 Strategy Applica)on and Execu)on Renewed focus on Organic Growth Maintain M+A Appe)te Strengthen Ver)cals Leverage Digital Build & Construc+on NPD in Africa, Vietnam Integrate India ABEC Call Op+on WB365 Launched Fashion Launch in Asia Grow high- end in London Scoop Finalised Social Marke+ng Oil & Gas Integrate AOW NPD in Africa, SE Asia AOW acquired Content Marke+ng Transport & Logis+cs NPD in ColdChain BreakBulk, EurasiaRail, Comtrans, acquired Content Marke+ng Travel & Tourism þ þ þ Food & Packaging NPD in Ukraine, Russia þ þ Others NPD in Coa+ngs in Ukraine & Thailand; Beauty in Thailand Palm Acquired þ 19

20 Strategy Building out by Ver)cal Breakbulk (Dec 14) Africa Oil Week (50%) Eurasia Rail (Jan 15) Global Transport & Logis+cs Considera+on $40m (+2) EBIT $4.4m Houston 5,000m2 Antwerp Shanghai 6,000m2 3,200m2 South Africa Oil & Gas Considera+on 16m EBIT 4.5 Capetown 1,500 AIF - Other Turkey Transport & Logis+cs Considera+on 9.7m EBIT 1.3m Istanbul 9,400m2 20

21 Strategy Geographical Diversifica)on of Revenues* FY12* 2% FY14* FY16 (indica)ve)* 6% 15% 7% 16% 6% 24% 32% 11% 51% 15% 61% 17% 10% 12% 16% Increasing geographical diversifica+on Russia Asia ESE CAC UKW *including 100% of revenue from associates ROW 21

22 Strategy Forward Key messages Trading in Russia has stabilised Russia will be circa 40% of ITE s 2016 business Asia and Turkey are con+nuing to perform strongly Con+nua+on of strategy more complementary bolt- ons Robust financial posi+on to support strategy 22

23 Appendices Appendix 1: ITE fundamentals i. Shareholder 27 April 2015 ii. Management Team iii. Balance sheet iv. Key exhibi+ons v. Currency of hedging vi. Financial Results: FX Impact 2015 vii. Resilient business Appendix 2: Exhibi)on fundamentals i. Cash genera+on (i) ii. Cash genera+on (ii) iii. Growth iv. Venue rela+onships v. Flexibility of costs 04

24 Appendix 1: ITE Fundamentals Shareholder Structure as at 27 April 2015 Schroders Brandes Franklin Templeton Mason Hill Fidelity Management & Research Threadneedle Investments NBIM SEB Legal and General Directors ESOT Other Ins+tu+ons and individuals % No. of Shares (millions) Total Shares in issue Op+ons in the money: Management including op)ons in the money Free float (Excluding Directors & ESOT) 97.9 Average daily trading volume (6 months) 0.4m 25

25 Appendix 1: ITE Fundamentals Management Team Marco Sodi Chairman John Price Russell Taylor Company Secretary CEO Neil Jones Suzanne King Alexander Shtalenkov Edward Strachan Stephen Keen Colebe Tebbub Nik Rudge Baris Onay Chief Financial Officer Corporate Development Director Regional Director Russia Regional Director Azerbaijan / Uzbekistan Construc)on Sector Fashion Sector Regional Director Europe / Asia / Kazakhstan Digital / Data 26

26 Appendix 1: ITE Fundamentals Consolidated Balance Sheet Mar- 15 ( m) Mar- 14 ( m) Non Current Assets Goodwill & intangibles Other non- current assets Current Assets Trade debtors Prepayments Other current assets Net (debt)/cash (56.1) (1.8) Creditors (6.5) 54.8 Deferred revenue (66.1) (91.4) Trade & other payables (14.2) (16.2) Deferred considera+on & put op+on liabili+es (22.2) (16.2) Deferred tax (13.3) (10.9) Provisions (0.4) (0.6) (116.2) (135.2) Net Assets

27 Appendix 1: ITE Fundamentals Key Exhibi)ons (in 2014 Gross Profit order) Rank Event Loca)on 2015 m² sold 2014 m² sold 1 MosBuild Moscow 39,100 65,400 2 Moscow Interna+onal Travel & Tourism (MITT) Moscow 16,400 20,300 3 World Food Moscow (September 2014) Moscow Sep 25,800 4 Turkeybuild (YAPI) Istanbul 39,800 36,300 5 MODA UK* Birmingham 16,700* 33,700 6 MIOGE Moscow June 24,000** * February edi+on only; Second edi+on in August ** 2013 edi+on Events by GP (2015 est) Top % 45% 33% Top 6-10 Top Rest 22% 14% 13% 31% 11% 28

28 Appendix 1: ITE Fundamentals Currency Hedging EM Currencies Currency of pricing 2015 % Average Transla)on Rate FY 15 (YTD) % change FY 14 EUR % Euro Hybrid 8 N/A N/A RUB % USD & Sterling 22 N/A N/A Other 18 N/A N/A 30

29 Appendix 1: ITE Fundamentals Financial Results: FX Impact 2015 m 20 Transla+on loss B/S Gain 0-20 Revenue ` Profit H1 H2* Currency Average Transla+on Rate FY 15 (YTD) % change FY 14 Profit Impact Full Year RUB 81-40% Circa 5.0m q Euro hedged forward 62m at 1.21 q Euro Sales average 1.30 (- 8%) (In trading) q Introducing more sterling and USD invoicing * Assumes 80: 1 29

30 Appendix 1: ITE Fundamentals Resilient business L4L drop in profits - 3m (10%) m 30 Headline profit before tax ( m) p Headline diluted EPS (pence)

31 Appendix 2: Exhibi)on Fundamentals Cash Genera)on in Exhibi)on Business Cash posi+ve model generates nega+ve working capital Cash flow from opera+ons headline PBT in a growing business Forward sales contrac+ng = excellent sales visibility 32

32 Appendix 2: Exhibi)on Fundamentals Cash Genera)on in Exhibi)on Business Cumula)ve Cashflow Exhibi+on 5000m² - 1.2m revenue First stage collec+ons Second stage collec+ons & venue payments Circa 50% margin 000s Deposits collected Visitor promo+on On- site stand construc+on Months to opening of exhibi+on Currency & Sales 2014 Sales % of Revenue Euro based (including hybrid) 90m 52% Rouble based 45m 25% Other 40m 23% 33

33 Appendix 2: Exhibi)on Fundamentals Growth Pabern of an Exhibi)on Revenue / m² / profit gross margin gross margin Rapid development phase (due to market dynamics) gross margin 15% 45% 60% + Established Establishment phase 0 2,000m² 2,000 7,000m² 7,000m²+ 34

34 Appendix 1: ITE Fundamentals Venue Rela)onships Venue Loans/Prepayments 30 Sept 2014 m Russia 7.5 Central Asia & Caucasus 0.6 Eastern & Southern Europe 2.1 Total

35 Appendix 2: Exhibi)on Fundamentals Flexible Cost Structure of an Event Budget Actual Variance Sales (60) (30%) Venue (50) (35) 15 (30%) Staff (25) (20) 5 (20%) Marke)ng (12.5) (12.5) 0 On- site consumables (12.5) (9.5) 3 (24%) Gross Profit (37) Margin 50% 45% (5%) 36