Emerging market events drive UBM results

UBM Chief Executive David Levin has told Conference News
large scale events and continuing investment in the emerging markets
are responsible for an 11.9 per cent rise in its organic events revenue.
media giant’s annual results demonstrates the resilience of large-scale
events and the benefits of investment in China and the emerging
markets, growing a live events division that now comprises three
quarters of the media giant’s global profits.
Speaking to CN
on the day the company released its annual results (1 March), Levin said the
organiser’s top 100 events now provide 85 per cent of the company’s
total events revenue.
UBM produces around 400 exhibitions a
year, 100 of which produce more than £1m (US$1.5m) last year. Organic
revenue from its events division rose to £412.8m from £357.9m, with
operating profit up to £142.4m from £133.3m, an increase of almost seven
per cent.
“We have continued to focus on large tradeshows,”
said Levin. “In 2012, 100 annual events generated revenues of more than
£1m, accounting for 85 per cent of annual event revenues. We grew
overall revenues and profits, with robust underlying revenue growth in
our key events and PR Newswire businesses,” he commented. “Events now
account for three quarters of the group’s continuing operating profit.”
is a familiar trend for the industry. Announcing its 2012 results,
Informa said large B2B exhibition revenue provided “a much higher
quality of earnings”, confirming a strategic move towards large-scale
events and departure from small conferences and volatile markets.
purposes of comparison, however, Informa’s definition of a large-scale
exhibitiion is one that makes £100,000 – one tenth of the size of events
UBM defines as ‘large scale’.
UBM’s chief financial officer Robert Gray told CN the
company’s focus on acquisitions in event is biased towards the emerging
markets, and that its recent purchase of Shanghai urban fashion event
Novomania is “exemplary” of the kind of event UBM intends to acquire.
company had particular success in the emerging markets in 2012, where
revenues rose 26 per cent, or 15 per cent underlying (after adjustments
to eliminate the effects of acquisitions, discontinued products, foreign
exchange and biennial events). This gives emerging markets 43 per cent
of UBM’s annual event revenue, up on 39.4 per cent the year before.
China is now the company’s largest single market at 31.4 per cent of the
company’s annual events revenue, outstripping its business in North
America. Key contributors include Furniture China, CBME and CPhI, as
well as incremental revenue from Dentech, acquired by UBM in 2012.

company now intends to invest further in the emerging markets, a
venture likely made possible by the sale earlier this year of most of
its Data Services business to Electra Partners for £160m. This part of
UBM’s business saw a revenue decline £10m [5.6 per cent] from 2011 to
2012, although operating profit remained at 2011 levels.
strategic review, which likely prompted the sale of the division,
highlighted a need for investment in the faster growing areas of its
“The sale of the Delta businesses is a significant
strategic step which simplifies UBM’s business, improves the quality of
our earnings, enhances underlying growth rates and removes the challenge
of transitioning the Delta businesses to the digital environment,” said

“We can now focus on further developing UBM as a
fast-growing and increasingly profitable events-led marketing services
and communications business,” he said, adding that 2012 had been a good
year for UBM “both operationally and strategically”.

The company
invested £30.5m (including £6.4m of contingent and deferred
consideration) buying outright or majority interests in eight events
businesses which contributed £10.0m to 2012 reported events revenue.
These were closely linked to its core strategies and included 4G World,
Airport Cities, Malaysian International Furniture Fair, ICC, WineTech,
Greenbuild, Dentech and Negocios Trihos.

Had it owned these businesses since 1 January 2012 they would have contributed a further £2.3m

overall revenue for the year ended 31 December 2012 rose to £797.8m
from £782.3m the year before, a rise of two per cent or six per cent
organically. Adjusted operating profit rose to £177m from £174m in 2011.

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Paul Colston


Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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