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Revenue above expectations, planned loss as a result of rent payments
Koelnmesse CEO Böse: Focus is now on developing the trade fair portfolio and marketing the Cologne exhibition centre
Mayor Schramma: “Cologne needs a healthy and active trade fair company”
With consolidated revenue of €200.6 million, Koelnmesse considerably surpassed the expectations for business year 2007. The revenue posted by trade fairs in Cologne and abroad was on average more than 8 percent higher than that of the respective prior event [1]. However, as expected and planned, Koelnmesse recorded a net loss for 2007. This loss, which totalled €11.2 million, was caused by rent payments for the northern area of the exhibition grounds, which became payable for the first time in full last year. That means the company “already earned a significant share of the rent for the northern trade fair area,” said Gerald Böse, Chairman of the Executive Board, during his address to the press at the presentation of the Annual Report 2007 in Cologne. Cologne Mayor Fritz Schramma underscored the importance of the revenue and the jobs created by trade fair business for the city and the surrounding region. “We need a healthy and active trade fair company,” he said. “Every investment in Koelnmesse is an investment in Cologne as a business location.”
“Cologne stands for business and the enjoyment of life”
CEO Böse left no doubts concerning the importance of the state-of-the-art infrastructure created as a result of the Master Plan. “The new trade fair halls provide the basis for further positive development,” he said. “Without our new exhibition area, we would have long since dropped out of the race.” Böse said the exhibition centre has good prospects. He stated that the focus will now be on developing the trade fair portfolio for both Koelnmesse’s own activities and for guest events. In addition, Böse emphasized that the various regional organisations would have to intensify their marketing activities for the exhibition centre. “Cologne stands for business and the enjoyment of life,” he said, and this message would now have to be successfully communicated and exploited at the international level. Mayor Schramma announced that the city would support Koelnmesse by “creating an attractive urban environment” and by “temporarily foregoing profits”. Schramma went on to say that the city profited immensely from the trade fair venue — particularly from the visitors who are attracted to the exhibition centre, as well as the one billion euros of annual revenue and the 11,000 jobs that the trade fair business generates in Cologne alone.
Exhibition space and exhibitor
and visitor numbers grow faster than the sector average
In 2007, exhibition space and exhibitor and visitor numbers grew substantially faster than the average equivalent figures for German trade fairs devoted to comparable consumer-goods-related sectors. “According to the figures provided by AUMA, the numbers of exhibitors attending consumer goods fairs rose by 3.4 percent in 2007, compared to the relevant previous events. By contrast, exhibitor numbers at our fairs increased by 5.4 percent,” said Böse. “The difference is even greater with regard to visitor numbers, which rose by 3.8 percent in Cologne, compared to 0.3 percent for Germany as a whole. We also rented out 4.8 percent more stand space, while the national average increase was only 1.6 percent. That shows that we are on the right track and that our trade fairs are doing well.”
Due to cyclical reasons, fewer trade fairs were held in 2007 than in 2006. The consolidated companies of Koelnmesse organised a total of 68 trade fairs and exhibitions in 2007 — six fewer than in the previous year. The events were attended by almost 32,000 exhibiting companies from 122 countries and by 2.3 million visitors from 208 countries.
EBITDA clearly positive at €7.3 million
The consolidated revenue of the consolidated companies of Koelnmesse was almost six million euros higher than expected, amounting to €200.6 million. The figure results from the consolidation of the revenue of Koelnmesse GmbH and the subsidiaries Koelnmesse Ausstellungen GmbH, Koelnmesse Service GmbH and Koelnmesse International GmbH, as well as of the foreign subsidiaries.
The rent payments for the new area — the Northern Halls and Congress Centre North — amounted to €22.8 million and had to be paid in full last year for the first time. According to Koelnmesse’s Executive Vice President responsible for Finances, Herbert Marner, infrastructure investments as large as those Koelnmesse made in recent years cannot be recouped in just a few years. This is the case in other business sectors, as well he added. The bottom line is therefore a net loss of €11.2 million for the consolidated companies. By contrast, earnings before interest, taxes, depreciation and amortisation (EBITDA) were clearly positive at €7.3 million. In terms of EBITDA, the resulting net profit ratio was 3.6 percent. The consolidated companies’ stockholders' ratio amounted to 49.8 percent at the end of the year.
At the beginning of 2007, Koelnmesse completed the last construction measures in connection with its Master Plan. However, most of Koelnmesse’s investments of €14.3 million in 2007 were also related to improvements to the infrastructure in Cologne, as the optimisation of the exhibition centre remains an ongoing task. The consolidated companies had an average of 626 employees on their payrolls during 2007. Since around 530 of the employees work at companies in Germany, there will be seven employees on the Koelnmesse Supervisory Board in the future.
Nine new events in 2008
The consolidated companies will be organising 76 events in 2008. Nine of these are first-time events, including spoga horse (spring), which celebrated a very successful launch in Cologne last February. Asia remains the focus of Koelnmesse’s foreign activities, and most of the 29 foreign events are held there. For 2008, Koelnmesse expects to post €190 million in consolidated revenues and a net loss. Despite the large number of events in 2008, revenue this year will be lower than in 2009. This is due to the fact that many strong events will be held next year, including IDS, IMB, interzum, gamescom, Anuga and the trade fair trio consisting of aquanale, FSB and SOLARIA. Although Koelnmesse does not expect to make a profit in the immediate future, it anticipates posting positive net income again in 2012.
[1] The comparison with the previous events provides the most accurate development picture. A comparison between years is of limited validity due to the different trade fair cycles.
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