Deutsche Messe investing in growth

Posted in Germany on Thursday, 28 June 2012. Print

Building on success achieved in 2011, Deutsche Messe will invest in further growth and in the development of the Hannover Exhibition Center. During its meeting in Hannover on Thursday, June 28, the Supervisory Board laid the groundwork for the rebuilding of halls 19 and 20, as well as for several acquisitions in Germany and abroad. “Now that the strategic realignment of the company has been completed, we are now entering a new phase of forward-looking investment,” said Dr. Wolfram von Fritsch, Chairman of the Managing Board of Deutsche Messe AG. The Board approved capital spending worth more than €60 million, the largest investment package in over 10 years.

Deutsche Messe investing in growth

The Managing Board approved the Annual Financial Statements for 2011, a year in which the company staged more events than ever before in its history and reported the best results in 10 years. “For Deutsche Messe, the year 2011 marked a substantial turnaround,” von Fritsch emphasized. “All the financial indicators show that the positive trend is continuing, thanks to the Hermes+ program initiated in 2008. We are keeping our word: Deutsche Messe will continue to operate and grow on the basis of its own resources and, over a four-year period, will reach its target of achieving a cumulative profit.”


In 2011 Deutsche Messe reported revenues of € 292.8 million (2009: 222.3 million) and earnings excluding special items of € 23.5 million (2009: -28.1 million). Earnings before special items were more than 40% higher than planned. EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to € 63 million, € 48.5 more than in the comparable year 2009.


The Annual Report posts an extraordinary item of € 18.7 million attributable to the premature termination of cross-border leasing business. In August 2011 Deutsche Messe was Germany’s first trade fair company to terminate such potentially risky financial transactions. For the first time in its history Deutsche Messe distributed a portion of its profits (€ 18.7 million in total) to its shareholders.


In the course of 2011 more than 25,000 companies took part in the 62 trade fairs and exhibitions staged by Deutsche Messe in Germany. These events attracted a total of 2.2 million visitors, including 330,000 from abroad. More than 13,000 enterprises exhibited at the 41 foreign trade shows organized by Deutsche Messe. These events attracted more than 1.2 million visitors. The total exhibition space rented in Germany and abroad amounted to 3.4 million square meters.


With regard to the current year, von Fritsch remarked: “2012 began with several successful events and with growth in terms of both exhibitors and attendees.” Von Fritsch went on to explain that, in line with the company’s mid-term plans, 2012 will not be closed with a profit due to the comparatively small number of major events being staged in Germany this year.


The Supervisory Board endorsed the company’s plans to rebuild halls 19 and 20 along the northern perimeter of the grounds, in close proximity to a tram station. The existing halls 19 and 20, which date back to 1961, are two of the oldest buildings on site and no longer live up to modern exhibition standards. This hall investment project is the first of its kind for more than 10 years. Scheduled modernization and refurbishment work can now be dispensed with. The new halls will enhance the attractiveness of the Hannover Exhibition Center for hosted events and increase the overall competitiveness of Deutsche Messe in the international trade fair market. They will also lend themselves to new and different event formats. Construction work is scheduled to begin yet this year. Upon completion, the new halls will offer the same amount of exhibition space as their predecessors (18,000 m²). Around € 40 million has been earmarked for this project, which will be completed at the turn of the year 2014/2015.


In addition, the Supervisory Board discussed various planned acquisitions in Germany and abroad and approved the plans drawn up by the Managing Board. In this context Deutsche Messe will acquire the “parts2clean” trade fair from the private company fairXpertsGmbH, Neuffen. In this way Deutsche Messe will enhance its surface treatment portfolio, as featured at both the SurfaceTechnology show (which takes place every two years under the umbrella of HANNOVER MESSE) and O&S. The contracting parties have agreed not to disclose the purchase price. Deutsche Messe stages O&S in Stuttgart in even-numbered years. O&S 2012 (12–14 June) reported a 50 percent upsurge in attendance.


The meeting of the Supervisory Board set the stage for the continuity of the management team. One year before they were due to expire, the employment contracts for the Board Members Dr. Wolfram von Fritsch and Dr. Andreas Gruchow were extended for a further five years (i.e. until 2018).


In consultation with the relevant contracting parties, Deutsche Messe will be publishing details about other planned acquisitions in the course of the next few weeks.


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