ITEGROUP The Company The Strategy The

Transcription

ITE GROUP
The Company
The Strategy
The Opportunity...
Introduction
1.
International Trade
2.
Exhibition Fundamentals
3.
Russian Macro Environment
4.
Russia – effects of crisis
5.
Company Strengths
6.
Strategic Opportunity
7.
Summary
Adam Smith wrote
“Man has an intrinsic propensity to
truck, barter and exchange one
thing for another
another”
The rumour on the street is, Russia’s the market
with the biggest growth potential right now and
it has
as bee
been for
o the
e last
as couple
coup e of
o years
yea s and
a d
we’re using MosBuild as a vehicle to explore
those opportunities.
We have participated for 11 years and we
we’re
re
investing as much as we have always done. In
a situation like this, it’s even more important to
attend exhibitions like this so you can be seen.
MosBuild is our main advertisement in Russia. It’s
not easy to do publicity because the market is
so big but people from all regions of Russia
come here.
I am astonished! I didn’t expect that MosBuild
was so big. It is a strong exhibition, with people
from all over the world.
MITT 2
2009
MosBuild 2
M
2009
ITE – MosBuild 09 + MITT 09 Testimonials
We are really optimistic for the future and we
think this is the best time to enter the market.
Russia is becoming very important for us
because Russian tourists spend quite a lot in
Mauritius... If you’re not visible, you might lose
your market share.
Russia is the second biggest market for Cyprus
after the British. In the first two months of this
year, despite the crisis, we had an increase of
about 18%.
At the last minute, we had to buy more space
at MITT because we have many partners in
Germany that are interested in the Russian
market.
Russia’s Imports
5%
Total imports
$290bn in 2008
* Source WTO % off total imports
i
ITE – International Sales to Russia
5%
Russian
Domestic 50%
* Sou
Source
ce WTO
O
ITE – Sales Office Expansion
Poland – Poznan (2008)
USA – New Jersey (2009)
China – Beijing (2007)
Spain – Valencia (2008)
UAE – Dubai (2008)
Malaysia – Kuala Lumpur (2008)
Exhibition Fundamentals

Main B2B channel to market in Russia & CIS

Globalisation = Growth in International exhibitions

International scalability

Resilience & Longevity
g
y of #1 events – through
g economic cycle
y

Cash flow positive
Exhibition Media in Emerging Markets
Russia Exhibitions, Publishing
and Data Markets, 2006
$m
$
UK Exhibitions, Publishing and
Data Markets, 2006
$m
$
US Exhibitions, Publishing
and Data Markets, 2006
$m
$
5,737
c.570
15,950
5,050
Russian publishing
and data
opportunities
remain small
currently
4,014
10,936
10,302
c.195
80
c.80
Exhibitions
Publishing
Data
Exhibitions
Publishing
Data
Increasingly Developed B2B Market
Source: PwC, VSS, Exhibition Venues Association, Key Note, OC&C analysis
Exhibitions
Publishing
Data
International sales in our top events
Local
37%
63%
MITT 2008
39%
61%
KIOGE EXH & CONF
46%
47%
54%
53%
MOSBUILD
WORLD FOOD
MOSCOW 2008
56%
44%
KAZBUILD & INTERIORS
International
ITE – Sector Strength
Sector Strength
g
10
9
# of events
8
7
6
6
8
8
6
4
4
5
4
3
2
1
0
22
2
2
4
3
2
2
1
1
1
3
3
22
1
1
4
4
No1
3
0
2nd/3rd
d/3 d
1
1
Cash flow profile
1200
£’000s
1000
Cumulative Cashflow
Exhibition 5000m² - £ 1.2m revenue
Second stage collections & venue payments
First stage collections
800
600
Deposits collected
400
Visitor promotion
On-site stand construction
200
- 12
- 11
- 10
-9
-8
-7
-6
Months to opening of exhibition
-5
-4
-3
-2
-1
0
Russian Macro Environment

8th largest economy in the world*

Natural resource dependent economy

Oil & gas sector accounts for 60%+ of exports #

Resource sectors - 90% of exports #

Oil p
prices underpin
p economy
y & development
p
*CIA World Fact book – 2008 GDP Data
# Economist intelligence unit
RUSSIA – 2009 in perspective

Q4 2008 – Dead Stop

Industrial out put drops 10% between Nov – Feb

Massive de-stocking

Ruble 30% devaluation – (90% in 1998)

Government spends $200bn – devaluation support

Cumulative Public Debt 2009 – 8.4% of GDP (UK 59%)
Russian GDP Growth 1997 – 2010 (f)
% y–o-y
10
8
6
4
2
0
-2
-4
-6
* Source: Business
i
monitor
i
iinternational
i
97 98 99 00 01 02 03 04 05 06 07 08 09 10
Russian Economy – The Future

$400bn sovereign
so ereign ffund
nd – 3rd Largest in World *

Ruble devaluation will boost competitiveness

Recovery possible by end of 2009

Growth in 2010 p
projected
j
+ 1% to 2%*

Oil price +/- $10 a barrel = +/- 1% GDP *

Consumer strong – no household debt
*Economist Intelligence Unit
Russia
Alexander Shtalenkov
ITE Moscow General Director since June 2005
Background: considerable and extensive expertise in managing
teams and developing business strategy for leading corporate
organisations in Russia, CIS & Central Asia, IBM, Dell, Xerox
2009 statistics:
Moscow
Novosibirsk
St Petersburg
Total
155
176
83
414
Events
28
55
19
102
Revenue ₤m
(2008)
57
5*
7
69
Staff
* Annualised
The revenue from
Russia is 60% of total ITE
Group’s revenue.
Russian Exhibition Market Trends

Projects of new exhibition centre development are postponed

Entrance to the market for new big international companies is
postponed

The overall quantity of exhibitions in Russia (2500) will decrease by
circa 50% during crisis*

Definite shrinkage of the quantity of exhibition organisers (300) by 50%
during crisis

40% of Russian enterprises databases (exhibitors & visitors) will become
out-of-date because of company bankruptcies
* EXPA Foundation market research agency
Russian Exhibition Market (m²)
In 2008, after the
acquisition of Siberian
Fair, ITE became №1
in Russia with
estimated market
share about 12%
Source: EXPA Foundation market research agency
g
y
Russian Regions
Besides Moscow and St. Petersburg, there are eleven cities in Russia
with annual net exhibition space of more then 20K square meters.
meters
Krasnodar & Novosibirsk are the biggest.
Krasnodar
75 996
Novosibirsk
Acquired 2008
74 782
Ekatherinburg
36 972
31 023
Nizhnij Novgorod
55 345
Rostov-na-Donu
Rostov
na Donu
38 519
Samara
13 171
12 000
37 006
Kazan
10 000
34 124
Omsk
39 980
Perm
34 637
Irkutsk
31 371
Krasnoyarsk
26 078
0
10 000
20 000
30 000
40 000
RUEF members
50 000
others
60 000
70 000
80 000
Opportunities for ITE
Crisis gives ITE unique opportunities:

to increase market share in Moscow and regions

to acquire new events at reasonable prices

to launch new events into a less competitive market

to expand JV’s with international brand owners

to attract leading professionals to join ITE team with their projects
to optimise internal business processes (technology for
communicating with exhibitors & visitors)
Development Strategy
External
Internal
• Regional development
• New visprom initiatives
• Acquisitions
• New WEB strategy
• New launches
• Improving sales culture
• Headhunting
H dh ti
• New management structure
Achievements 2005 - 2009
• ITE became No.1 exhibition company in Russia – 12% market share
• Recent acquisitions (Maxima, Interstroy, Sfitex, Siberian Fair)
• JV’s started (Messe Frankfurt,
Frankf rt Reed Exhibitions)
E hibitions)
• Term agreements with principal venues (Expocentre, Crocus)
• Strong governmental support received for exhibitions
• Regional expansion - Novosibirsk
• Staff development / management team built
ITE Group Strengths

#1 Exhibitions in key sectors across all Russia - CIS

Long established partnerships with venues

Local teams + international sales capability

Visibility

Flexible cost structure

No Debt
Venue Relationships

Long term commitment to use venue/ theme protection & fixed prices

Low cost finance for venue development/improved facilities

Relationship in a crisis – organiser & venue share the pain
Flexible Cost Structure of an event

Sales
Venue
St ff
Staff
Marketing
On-site
consumables
Gross Profit
Margin
g
Budget
Actual
200
(50)
(25)
(12.5)
140
(35)
(20)
(12.5)
-30%
-30%
-20%
20% - 25%
-
(12.5)
(9.5)
-25%
100
63
-36%
50%
45%
Sensitivity analysis
Hypothetical example of 20% y-o-y decline in volumes
£’m
Yr0
Yr1
Yr2
Yr3
Opening cash
30
38
38
g profit
p
Trading
NWC outflow
Tax & Dividend
32
-3
-21
38
29
-9
-20
38
20
0
-17
4
41
30
Note: This is illustrative only and does not represent management expectations
Biennial effect
Constant
dividend
GDP Growth in Core Markets
2008
2009*
2010*
• Russia
7%
- 4%
1%
• Kazakhstan
5%
- 2%
2%
• Azerbaijan
19%
4%
6%
• Uzbekistan
8%
5%
8%
• Ukraine
6%
-7%
2%
• Turkey
4%
-3%
2%
-
-4%
• UK
* Business monitor international
ITE – The Strategic Opportunity
ITE Group
G
positioned for a market recovery
Leverage expertise
internationally
Invest in portfolio of
leading events
Capitalise on macroeconomic trends
Expand geographies –
exposure to new
emerging market with
similar dynamics
Take market share in
target sectors
Economic development
will drive growth in end
markets in the future
Continue to invest in
international sales
capability
Launch – JV – acquire
into new, international
sectors
Utilise balance sheet
strength
Summary

ITE’ss business is based on real trading
ITE

Exhibitions are the route to market in Russia & CIS

ITE has strong market positions

ITE has financial strength to prosper in this crisis

ITE now has real opportunities to expand its business
Edward Strachan – Executive Director
St. Petersburg
Atyrau
Tashkent
New Jersey
Istanbul
Baku
Astana
Almaty
Bishkek
Dushanbe
j g
Beijing
Dubai
Kuala Lumpur
APPENDICES
I.
Key Exhibitions
II.
Key Management
III.
Employees
Key Exhibitions
Rank
Appendix I
(in 2008 gross profit order)
Event
Location
2009
2008
2007
m² sold
m² sold
m² sold
1
MosBuild & MosBuild+
Moscow
75,000
87,100
84,400
2
Moscow International Travel & Tourism
Moscow
20,200
20,800
18,500
3
W ld Food
World
F d Moscow
M
M
Moscow
-
24 100
24,100
24 500
24,500
4
Kazakhstan Oil & Gas / conference
Kazakhstan
10,300
11,200
9,600
5
MODA UK (Spring & Autumn)
U.K.
33,900
34,700
6
Expoelectronica
Moscow
5,300
9,200
8,900
7
Transrussia
Moscow
9,500
8,200
6,200
8
Kazbuild (Spring & Autumn)
Kazakhstan
14,800
18,300
9
Baltic Building Week
St Petersburg
9,600
10,400
10
Ukraine International Travel & Tourism
Kyiv
7,100
5,700
226,000
221,200
% of ITE’s 08 Gross Profit earned by Top 10 events
5,000
67%
Key Management
Appendix II
Iain Paterson
Chairman
61, Non Executive Chairman since May 2002, former Board member
at Enterprise Oil; Chairman of AnTech Ltd and Plebble Loyalty Ltd
and Non-Executive Director at MOL NyRt., and Hunting PLC.
Russell Taylor
CEO
50, ACA, joined ITE in 2003 as Finance Director , appointed CEO in
2008. Formerly Finance Director at Earls Court Olympia Group and
Air Miles International Group, 15 years experience in industry.
Neil Jones
Finance Director
42, ACA, joined ITE in November 2008, formerly Finance Director at
Tarsus Group Plc and Advanstar Communications, 10 years
experience in industry.
Ed
Edward
d Strachan
St
h
CIS R
Regional
i
l
Director
44, Operational
44
O
ti
l Manager
M
f ITE in
for
i Russia,
R i the
th CIS and
d the
th Caspian
C
i
region since 1992.
ITE Board Director since 2003, 17 years
experience in industry.
Alexander
Shtalenkov
General Director
Moscow
43, Joined ITE in 2005, formerly Managing Director for Dell Distribution
in Russia, formerly IBM Management, 4 years experience in industry.
Stephen Keen
Sales & Ops
Director – Moscow
43, Joined ITE in 2000. Based in Moscow managing sales and
operations of the Moscow portfolio, 9 years experience in industry.
Infrastructure
Office
Appendix III
Country
2009
Events
E
t
28
Moscow
Russia
Staff
St
ff
155
St Petersburg
Russia
83
19
Novosibirsk
Russia
176
55
London
UK
96
-
North, England
UK
36
6
Almaty, Astana, Atyrau
Kazakhstan
104
47
Kiev
Ukraine
73
18
Istanbul
Turkey
40
5
Hamburg
Germany
35
-
Tashkent, Bishkek
Uzbekistan/Tajikistan/Kyrgyzstan
26
16
Baku
Azerbaijan/Georgia
37
20
Other
Africa/China /Turkmenistan
36
2
897
215