annual report 2018 - koelnmesse.com · for the execution of trade fairs and exhibitions. these...

Koelnmesse GmbH

Messeplatz 1

50679 Köln

Germany

Tel. +49 221 821-0

Fax +49 221 821-2574

[email protected]

www.koelnmesse.com

GB-

Prin

ted

in G

erm

any

05.2

019

www.koelnmesse.com

Power meets potentials

Annual Report 2018

At a glance Foreword

Vision meets world Confidence meets futureMission meets player Virtual meets reality Innovator meets incube8

Management report on Koelnmesse GmbH and the Koelnmesse consolidated companies for the fiscal year from 1 January to 31 December 2018Consolidated balance sheetConsolidated income statement Balance sheet of Koelnmesse GmbHIncome statement of Koelnmesse GmbH Notes concerning the consolidated financial statement and the annual financial statement Consolidated cash flow statement Consolidated shareholders’ equity list Audit opinionSupervisory Board report

Table ofcontents

04 – 05

06 – 07

08 – 09

10 – 11

12 – 13

14 – 15

16 – 17

18 – 41

42 – 43

44 – 45

46 – 47

48 – 49

50 – 75

76 – 77

78 – 79

80 – 83

84 – 85

Table of contents 02/03

Koelnmesse’s own trade fairs Koelnmesse’s own trade fairs abroad Guest events Special events Total

Koelnmesse’s own trade fairsKoelnmesse’s own trade fairs abroad Guest events

Total

Koelnmesse’s own trade fairsKoelnmesse’s own trade fairs abroad Guest events

Total

Koelnmesse consolidated companies workforce size (average for the year)Hall capacity

2528223

78

17,86113,3987,204

38,463

1,333,985626,345395,494

2,355,824

844

284,000 m2

Events

Exhibiting companies

Visitors

Sales EBITDANet profit Investments EquityEquity ratio

Sales EBITDANet profit Investments EquityEquity ratio

EUR 337.4 million EUR 81.3 million EUR 53.4 million EUR 34.1 million EUR 224.4 million

61.8 %

EUR 284.4 million EUR 72.4 million EUR 46.8 million EUR 35.9 million EUR 207.4 million

65.1 %

Koelnmesse consolidated companies

Koelnmesse GmbH

Key trade fair figures Key financial figures

At a glance Koelnmesse in figures 2018

At a glance 04/05

Foreword 06/07

Special encounters

Gerald Böse and Herbert Marner, Koelnmesse Management Board – Cologne, May 2019

It is the special encounters that make the trade fair business what it is, not just today but at the fi rst Cologne trade fair of the modern era, in 1924.

2018 was a good year for Koelnmesse – one reason being that, once again, the right interlocutors found one another at an attractive trade fair venue in a fascinating metropolis: types and characters, decision-makers and doers, innovators and investors, visionaries and realists.

That is because the success of our trade fairs lies in the quality of the encounter.

Business meets potentials. The opening pages of our Annual Report feature staged encounters that, although a bit winkingly, are all focussed on our strategic challenges.

The trade fair business in Cologne has always thrived on the diversity of the sectors and industries that go their own way with us at their side. On the interna-tionality of our exhibitors and visitors. On the relevance of the topics they bring with them and bring to life on site. But it is also subject to signifi cant changes: trade fairs are called upon to breathe life into the digital transformation and to translate it into processes and services for custom-ers. Trade fair grounds also have to offer an inspiring architectural environment for business. Events at Koelnmesse radiate emotionally to the industries and the public at large.

The encounters form the core. And Koelnmesse creates the context to match. We have maintained a brisk pace in 2018 and remain on course for growth, making 2018 the best even year of all time and promising us another record year in 2019. We have moved ahead with our Koelnmesse 3.0 investment programme, under which some 700 million euro will be devoted to our grounds by 2030, and laid the cornerstone for the new Hall 1plus. Our focus is on digitalisation as a key development programme for our company. We are strengthening our international business in the sense of covering our core competen-cies worldwide.

And we rely on the team for whom our thanks and appreciation for great performance applies not just to 2018. With around 850 employees, we are 200 more than ten years previous. Some of them can be seen in the scenes presented on the following pages.

2019 is another year of fresh encounters, in Cologne and all over the world. At established trade fairs such as Anuga, which is marking its 100th anniversa-ry. At newcomer events such as ANUFOOD Brazil. Or at new formats such as CCXP COLOGNE – Comic Con Experience, where fans will meet their comic, sci-fi and superheroes.

Of this we are certain: 2019 will also be a year of special encounters.

_SVEN MÖNNICH, PROJECT MANAGER, GERMAN PAVILIONS WORLDWIDE

Industry expertise makes successful trade fairs. It lets us offer our customers complete markets: domestically and abroad, at all levels of value creation, spanning all the relevant topics and products.

Koelnmesse develops and networks new markets worldwide:in Europe, Asia and South America, in more than 100 countries, with experience, expertise and good employees.

VISIONMEETS WORLD

Koelnmesse 08/09

_EDITH SCHULZ, ASSISTANT OF THE PROJECT MANAGER CONSTRUCTION AND MASTER PLAN

Construction is under way here. Modernisation. Investment. “Koelnmesse 3.0” is the most comprehensive future project of all time for the trade fair grounds in Cologne. Around 700 million euro will be invested in the quality of stay and events by 2030, whether in existing structures or in new halls with new possibilities.

Hall 1plus, the multifunctional Confex®, the terminal as a space for meeting and connecting: They are perfectly tailored to the require-ments of organisers, exhibitors and visitors – and to the trade fair business of the future.

CONFIDENCEMEETS FUTURE

Koelnmesse 10/11

_PHILIP SCHEFFLER, SALES MANAGER EXHIBITORS

Koelnmesse stages communication. This happens anew at every event: live and creative, always in line with the needs of the industries, innovatively oriented around the wishes of exhibitors and visitors, in emotional experience spaces.

Koelnmesse creates new event formats and produces new meeting places: pure trade fair, special event or conference + exhibition – just the way exhibitors and visitors need it.

MISSIONMEETS PLAYER

Koelnmesse 12/13

_JOANNA GABOR, TEAM LEADER ONLINE MARKETING

Digitalisation occurs in the mind – and in trade fair activity. New services for exhibitors and visitors, optimised processes for tailor-made trade fair management, lead tracking, digital signage and indoor navigation are all part of this effort.

The trade fair of tomorrow has different requirements. Digitalisation gives us the opportunity to meet them. Already today.

VIRTUALMEETS REALITY

Koelnmesse 14/15

_ANJA SIEBER, DIGITAL DEVELOPMENT_JAN OKEL, JUNIOR MANAGER CORPORATE DEVELOPMENT

From the idea to the creative playing field: “incube8” is the name of the digital campus in the heart of trade fair activity in Cologne. With incube8, Koelnmesse provides important space for good ideas and builds a bridge between established companies and newcomers.

This is where start-ups from the sector worlds represented at Koelnmesse make their way into the market. This benefits all parties involved, boosts the economy and creates a new performance dimension at Koelnmesse.

INNOVATORMEETS INCUBE8

Koelnmesse 16/17

Management report onKoelnmesse GmbH and the Koelnmesse consolidated companiesfor the fi scal year from 1 January to 31 December 2018

Business operations at Koelnmesse encompass the planning, organisation and execution of trade fairs, exhibitions and events in Cologne and in the leading markets worldwide, as well as the execution of guest events in Cologne. For this purpose, at its location in Cologne the company operates trade fair and exhibition halls along with related equipment and facilities that it constantly maintains and develops. In addition to the rental of stand space, Koelnmesse offers its customers a complete portfolio of services for the execution of trade fairs and exhibitions. These include stand construction, technical and logistics services, as well as marketing, hotel reservation, travel, catering and other services. With an overall programme in which more than 55,000 exhibiting companies from 126 countries and around 3.2 million visitors from 224 states participate, Koelnmesse is one of the largest international trade fair organisers in the world. It organises the leading trade fairs for around 25 sectors of the economy.

Each year, Koelnmesse organises and manages around 80 trade fairs, exhibitions, guest events and special events in Cologne and around the world. Along with events of its own abroad, Koelnmesse also organises participation in foreign trade fairs for stakeholders in Germany, as well as German pavilions at world expositions. The global network with 10 international subsidiaries and representative offi ces in more than 100 countries provides the greatest possible proximity to customers, sectors and markets. On average, 72 % of the exhibitors and more than 45 % of the visitors come from abroad.

1. Business model

The trade fair grounds in Cologne are the third largest in Germany and among the top ten in the world: 284,000 m² of hall space and 100,000 m² of outdoor area are available for all types of events. In the face of competition, the trade fair grounds are particularly noteworthy for their size, their fl exibili-ty, their location close to the city centre and the ease and speed with which they can be reached with all modes of transportation.

A majority share of the Koelnmesse consolidated companies is held by the City of Cologne (79.075 %) and the German state of North Rhine-Westphalia (20 %). The consolidated companies consist of Koelnmesse GmbH together with ten fully consoli-dated subsidiaries abroad, as well as Koelnmesse Ausstellungen GmbH. The newly founded, wholly-owned subsidiary Koelnmesse SAS, Bogotá, Colombia, has been included in the consolidated fi nancial statement for the fi rst time. Koelnmesse Co. Ltd, Bangkok, Thailand, has not been consolidated since 2018 in accordance with Section 296 (2) of the German Commercial Code (HGB); business in Thailand continues to be managed through the share in Expolink Global Network Ltd., Bangkok. Rounding out the portfolio are a 49-percent share each in KölnKongress GmbH (City of Cologne: 51 %) and in KölnKongress Gastronomie GmbH (KölnKongress GmbH: 51 %), as well as a 50-percent share in Koeln Parma Exhibitions S.r.l., Parma/Italy.

I. Profi le of the company and the consolidated companies

Management report 18/19

Koelnmesse provides impetus for a host of interna-tional sectors. The company promotes markets by creating a qualified and efficient convergence of supply and demand using trade fair, congress and online platforms. At the same time, Koelnmesse benefits the city and region to a considerable degree. Every year, trade fair attendees’ expendi-tures generate more than 1.1 billion euro in sales in Cologne alone. The trade fair business secures more than 11,000 full-time jobs in the city – in retail, the trades, transport, logistics, and in the hotel and restaurant industries.1

With its “Course 101” corporate strategy, Koelnmesse secures its place among the leading international trade fair organisers worldwide. As a sustainable approach, the strategy extends until 2025; it is named after the 101st birthday of Koelnmesse in that year.

Koelnmesse’s long-term internationalisation strategy primarily aims to develop and expand events abroad as well as an efficient worldwide sales structure. In addition to China, Southeast Asia and India, Koelnmesse further strengthened its international activities in South America in 2018, and especially in Brazil and Colombia.

2. Aims and strategies

The investment programme Koelnmesse 3.0 is another strategic pillar for the company’s success. Thanks to a comprehensive modernisation effort and new construction, by 2030 Koelnmesse will offer the most attractive inner-city trade fair grounds in the world. As the first new building measure, the Car Park Zoobrücke with more than 3,200 parking spaces opened as scheduled in spring 2018. The first stage of renovations to the existing structure in Hall 10 was completed with clockwork precision in autumn 2018 and featured extensive installation and expansion work.

Koelnmesse has been bundling all of the topics around digitalisation with its new Digital Transfor-mation Programme launched in 2018. Since 2014, Koelnmesse has been committed to realising the opportunities and potentials of digitalisation for its business. This new programme takes that commit-ment to a new level and confirms the Koelnmesse effort to join the leading international group for digitalisation in the trade fair sector.

By 2022, Koelnmesse will have invested a total of more than 50 million euro in digitalisation. That is how Koelnmesse intends to expand its core business by adding the “Business-Matchmaking-as-a-Service” business model, successfully transitioning the marketplace principle into the digital age. Above and beyond providing exhibition space and space-re-lated services, a broad and global portfolio of offers will be established to bring providers and customers together under the kind of matchmaking known from analogue trade fairs.

1 These figures are based on a study from the year 2014. Management report 20/21

AUMA – Association of the German Trade Fair Industry reports a solid result in the number of exhibitors and the amount of stand space at trade fairs in Germany in 2018: At the 178 international and national events, approximately 1.5 % more exhibitors were registered and about 1 % more stand space was booked than at the respective previous events. These are the results of preliminary AUMA calculations. Thus both the number of exhibitors and the amount of booked stand space increased at a considerably slower pace in 2017 than compared to the previous year (according to the AUMA balance sheet for 2017: 3.7 % and 3.1 % growth rates respectively). Visitorship was also 0.5 % lower (2017: +/- 0). The AUMA cites uncertainties over trends in the domestic economy and foreign trade as the reason for the declining growth rates – where the keyword is “protectionism”.

As in previous years, participation from abroad proved a driver of growth on both the exhibitor and visitor side: The number of foreign exhibitors and visitors grew further, by 3 % each, demonstrating the attractiveness of German trade fairs. This is a trend already seen during the past three years.

German trade fair organisers are planning 324 outbound trade fairs in 37 countries for 2019; this is slightly higher than previous years (2018: 314, 2017: 316). The regional focus remains on South, East and Central Asia, followed by the non-EU countries of Europe.

For the 174 trade fairs planned in Germany, AUMA forecasts steady to slightly increasing exhibitor and visitor figures for 2019 compared to the respective previous events.

A. General macroeconomic conditions B. Industry conditions

The global economy lost momentum in 2018 compared to the previous year. According to the German Federal Ministry for Economic Affairs and Energy (BMWi), global indicators generally point to a slight weakening in the global economic upturn. The International Monetary Fund (IMF) has calculat-ed global economic growth of 3.7 % for 2018. The IMF expects economic growth of 3.5 % in 2019 and 3.6 % in 2020.

The German economy has lost momentum as well. According to the German Federal Statistical Office, the economic situation in Germany in 2018 was characterised by economic growth of 1.5 %. The German Council of Economic Experts predicts 0.8 % growth in real gross domestic product for Germany in 2019.

1. General macroeconomic and industry conditions

II. Economy report

3 %

3 %

Approximately 3 % more foreign exhibitors in 2018

Approximately 3 % more foreign visitors in 2018

_Germany as a trade fair venue Participation from abroad was a growth driver – on both the exhibitor and visitor sides.


Koelnmesse remains on course for growth: Sales by the consolidated companies amounted to 337.4 million euro, which is more than 15 million euro higher than planned. Due to the different rhythms of the major trade fairs, even-numbered years have long tended to be the ones with lower sales figures. That is why Koelnmesse considers its sales for 2018, which are more than 20 percent higher than in 2016, to be a great success, even if this figure, as planned, falls short of the previous record year for 2017. 2018 is also the first even-numbered year since 2006 in which Koelnmesse posted a profit once again, 53.4 million euro, which also significantly exceeds the forecast figure by 52.7 million euro. In operational terms, the good result is attributable to development of Koelnmesse own events and guest events at the Cologne trade fair location and in the leading markets worldwide, as well as to the service business. Added to this is a significant special effect from the reversal of provisions for rental payments in the amount of 40.1 million euro. After years of dispute over rental amounts for the North Halls of the Cologne trade fair grounds, a settlement with the lessor went into effect at the end of 2018; the corresponding lease was signed on reduced terms compared to the original lease.

The 78 trade fairs and exhibitions held worldwide in 2018 featured more than 38,000 exhibiting compa-nies from 101 countries and around 2.4 million visitors from 211 countries. In addition to this, there were approximately 146,000 participants in congresses that were held outside of the trade fairs and organised by KölnKongress GmbH. 25 Koeln-messe’s own events, 22 guest events and 3 special events were held in Germany, all of which took place in Cologne except for Koelnmesse’s own art berlin and ZOW. 28 trade fairs took place abroad. A premiere in the Koelnmesse Group portfolio was celebrated in 2018 by Feria Mueble & Madera in Bogotá/Colombia. THE TIRE COLOGNE was held for the first time at the Cologne location. In Bad Salzuflen, Koelnmesse for the first time organised ZOW, SUPPLIER FAIR FOR THE FURNITURE AND INTERIOR DESIGN INDUSTRY.

A. Trend of business of the Koelnmesse consolidated companies

Projects already in progress – such as “ambista”, the online B2B platform for the furnishing industry, or digital services such as lead tracking – successfully continued and grew. An interdisciplinary team went to work on the conceptual design of an integrated customer portal that in future will offer exhibitors all functions and information at a central location, thus ensuring greater all-round efficiency.

The launch of digital signage for gamescom 2018 in the north section of the trade fair grounds marked a first significant milestone for the project that Koelnmesse is implementing together with Samsung SDS. The digital guidance and communica-tion system permits new forms of presentation and sets new international trade fair standards for info- tainment and marketing. This will be followed by expansion to the entire trade fair grounds and further optimisation of the system.

In 2018, the German Federal Ministry of Transport and Digital Infrastructure approved Koelnmesse’s application for funding under the “Immediate Action Programme for Clean Air 2017-2020” in the amount of 1.7 million euro for optimised routing as well as temporary environmentally-sensitive traffic management and logistics and parking space management. With resources of its own, Koelnmesse increased its total budget to 3.4 million euro.

The award by the Brazilian Omelete Group of a contract for joint organisation of CCXP COLOGNE – Comic Con Experience, beginning in summer 2019 in Cologne, further strengthened Koelnmesse’s “Digital Media, Entertainment and Mobility” field of competence. The importance of digital topics is constantly on the rise in the other areas of compe-tence and sectors at trade fairs as well.

2. Trend of business and situation of the Koelnmesse consolidated companies

With the incube8 digital campus that was launched in Messehochhaus 2 in 2018, Koelnmesse is purpose-fully taking new approaches to business matchmak-ing, connecting start-ups with established compa-nies close to Koelnmesse so that they can work on digital solutions together.

Koelnmesse’s long-term internationalisation strategy remains successful. Compared to the respective previous event, trade fairs abroad such as Pueri Expo, along with FIT 0/16 in São Paulo/Brazil; Annapoorna – World of Food India in Mumbai/India; and ANUTEC – International FoodTec India, Mumbai/India; all reported significant rates of growth among exhibitors and (trade) visitorship. With the estab-lishment of the new subsidiary, Koelnmesse SAS, with headquarters in Bogotá/Colombia, Koelnmesse is corroborating its aim of expanding its presence in the Latin American market.

In 2017, the German Federal Ministry for Economic Affairs and Energy (BMWi) commissioned Koelnmesse to organise and operate the German Pavilion at the World Expo in Dubai from October 2020 through April 2021. The project advanced further in 2018, with important milestones were reached. “CAMPUS GERMANY” picks up the EXPO motto “Connecting Minds, Creating the Future”, and presents the topic of sustainability to expected 3 million visitors in an exhibition space spanning 4,600 m². Following Japan in 2005 and China in 2010, Koelnmesse is involved in 3 of this century’s 4 major EXPOs.

In terms of the three key parameters for trade fairs (exhibitors, visitors and stand area), in 2018 a large share of Koelnmesse’s own programme developed at a rate higher than the industry average identified by AUMA – Association of the German Trade Fair Industry. ORGATEC, the international trade fair for the modern working world, as well as the interna-tional furniture trade fair imm cologne, which is the world’s leading trade fair for furniture, actually managed to produce increases across all three parameters.

The Koelnmesse 3.0 investment programmecontinued to advance in 2018. Between now and 2030, it will prepare the trade fair grounds in Cologne for the high demands of the trade fair sector of the future. The programme also sets standards in terms of efficiency, flexibility, attrac-tiveness and amenities.

In April, parallel to FIBO 2018, saw the launch of the new Koelnmesse car park, with more than 3,200 parking spaces and a logistics area for around 300 trucks. A variety of modernisation work has also taken place. The first phase of renovation work in Hall 10 was completed, featuring new ventilation technology, a lighting system and grid ceilings. Hall 1plus is the next new building measure started; preparatory work on the construction site was completed in 2018. It can be used both as a convention centre or as an exhibition hall with a surface area of up to 10,000 m². Koelnmesse consistently advanced digital topics and the digital transformation throughout the entire company in 2018.


Car Park Zoobrücke Beginning of construction: 2016

Completion: 2018

Refurbishment of existing buildings

South HallsStart of refurbishment: 2015

Completion: 2030

Confex® Beginning of construction: 2021 Completion: mid-2023

Hall 1plusBeginning of

construction: 2019 Completion: end of 2020

Exterior and facade, Halls 10 and 11Beginning of construction: 2019Completion: 2020Terminal

1st Construction phase Beginning of construction: 2021 Completion: mid-2023

Current status Current status modernisation and new construction from 2015

New construction projects through 2030

Koelnmesse 3.0 at a glance


With a worldwide network of representative offi ces in more than 100 countries, the very high rate of participation of foreign exhibitors and visitors in leading trade fairs in Cologne and 33 trade fairs abroad, where a number of them are leading industry platforms in their respective regions, Koelnmesse is well-positioned internationally. As a result of trade fair cycles, foreign business in 2018 was stronger than in 2017, with sales of 36.8 million euro (previous year1 33.2 million euro). Thus, foreign business accounted for 10.9 % of total sales.

On average, there were a total of 844 people employed with the Koelnmesse consolidated companies in 2018 (previous year 804). Of these, 641 (previous year 605) worked at Koelnmesse GmbH, 14 (previous year 14) at Koelnmesse Ausstellungen GmbH and 189 (previous year 185) at the foreign subsidiaries of Koelnmesse GmbH.

Staff recruiting requirements have risen signifi cantly. On the one hand, the situation for all job profi les on the competitor market is increasingly tense. In addition, a high level of onboarding and training of new or changing employees was required during the year as a result of the record of nearly 80 new hires and the posting of some 100 internal vacancies.

Finally, digitalisation of personnel recruitment was signifi cantly advanced.

Due to the sharp increase in personnel requirements, with around 4,500 applications, Koelnmesse received slightly more applications in 2018 than it had in 2017. Suitable candidates were located increasingly through listings on social media as well as through direct contact with XING or matching apps. Koelnmesse now uses employer rating portals such as kununu to promote transparent exchange with applicants and employees assessing Koelnmesse.

The company offered internships to 40 school pupils and university students in 2018. Working students were also deployed for the fi rst time during the reporting year. This is set to expand in 2019. To give young school girls a better insight into the trade fair business, Koelnmesse took part in “Girlsday” for the fi rst time. Koelnmesse continues its support for the best students through a scholarship at the University of Cologne and supports research and instruction at the Institute of Trade Fair Management. Together with the trainee programme (5 participants), the traineeship of the editorial department (1 partici-pant) and the 17 aspiring event managers spanning 3 training years, these measures form an important

pillar of our effort to recruit young talent. Four trainees successfully completed their training in 2018.

Koelnmesse actively pursues the promotion of women: For the third time, Koelnmesse, together with fi ve other Cologne companies, took part in the cross-mentoring programme to promote women’s careers – with four mentees successfully completing the programme in November. The company’s own “Female Leadership 2.0” network offers dedicated female employees at Koelnmesse the opportunity to network, to engage in career and personal ex-change, and use of specifi c measures in advanced training.

Koelnmesse also responded to digitalisation and the increase in staffi ng levels with a signifi cantly expanded programme for advanced training. In 2018, Koelnmesse offered its employees a variety of targeted opportunities for advanced training. 90 new and returning employees received training in SharePoint and Offi ce 365. Some 640 employees took part in 840 days of training, increasingly geared towards work with new software applications and technologies used in the course of digitalisation.

The training and development concept relaunched in mid-2018 is designed to further simplify access to advanced training measures in future. In substantive terms, Koelnmesse relies on the teaching of digital skills and on internal development programmes. Since 2018, the managers themselves have been provided with training in change management, with support provided through targeted coaching in the implementation of change, to permit them to competently assist with the digital transformation.

For the fi rst time, management feedback has also been extended to the third level of management in order to give growing teams an opportunity to furnish feedback to their direct supervisors.

The dedicated and extremely service-oriented employees of Koelnmesse are crucial to the success of the company. In combination with the framework conditions provided by the trade fair city of Cologne with one of the largest trade fair grounds in the world, a modern infrastructure and ideal access, it is these employees who are decisive to the compa-ny’s success. The management expressly thanks the entire workforce for the very good performance in the year 2018.

175 185 189140

14 14 1414

570 605 641542

employees offoreign subsidiaries

employees of Koelnmesse Ausstellungen GmbH

employees ofKoelnmesse GmbH

2015 2016 2017 2018

1 Previous fi gures before consolidation Management report 28/29

337.4 million EURSales 2018

15.2 million EURSales increase above forecast

Net asset position:Total assets signifi cantly increased from 334.2 million euro to 363.3 million euro. On the assets side, a large share of the increase owes to invest-ments in fi xed assets, which were higher by a total of 13.6 million euro. Additions in the amount of 34.1 million euro compared with depreciations of 20.2 million euro. More than 90 % of the additions were investments of Koelnmesse GmbH. Fixed assets amounted to 52.3 % of total assets (previous year 52.7 %). The average depreciation rate stood at 10.6 %, compared to 11.5 % in the previous year. In addition to the investments in fi xed assets, the increase in assets primarily stems from other assets, which rose by 10.0 million euro, as well as from higher levels of cash and cash equivalents. The increase in other assets mainly results from advance tax payments.

On the liabilities side, the 29.1 million-euro increase in total assets is mainly attributable to the 53.9 million euro increase in equity and 25.2 million euro in advance payments received on orders, parallel to a decrease of 52.1 million euro in provisions. The increase in equity by 31.6 % to 224.4 million euro is almost exclusively the result of the net income for 2018. Owing to the signifi cant increase in equity, the equity ratio rose from 51.0 % to 61.8 %. Liabilities increased by a total of 27.5 million euro, chiefl y as a result of the increase of 25.2 million euro in liabilities from advance payments received on orders due to cyclical and reporting-date effects.The decline in tax provisions is particularly due to payments made for past and current assessment periods at the parent company. The decrease in other provisions is mainly attributable to reversals and utilisation of provisions on the part of the parent company. For the remainder, we refer to the explanations on the net asset position of Koelnmesse GmbH.

B. Situation of the Koelnmesse consolidated companies

Financial situation:Cash funds according to the cash fl ow statementin the amount of 140.3 million euro (previous year 131.7 million euro) include 116.7 million euro in cash and cash equivalents, together with investment securities totalling 23.6 million euro. The increase in these funds owes mainly to the positive cash fl ow from ongoing business operations in the amount of 42.6 million euro (previous year 54.1 million euro). Cash fl ow from investing activities in fi xed assets, at 34.1 million euro (previous year 44.0 million euro) has a countervailing effect. Therefore, it was again possible to fi nance investments from operational cash fl ow without requiring the company to borrow.

Koelnmesse GmbH was in a position to meet its payment obligations at all times throughout the year 2018. Construction and modernisation measures within the scope of the project Koelnmesse 3.0 can lead to medium-term fi nancing requirements at Koelnmesse GmbH. A credit requirement totalling around 120 million euro is expected in the fi rst of three investment phases. Lines of credit exceeding 120 million euro have already been promised for Koelnmesse 3.0 but have not yet been called up.

Due to the very high level of cash and cash equiva-lents, the still very attractive opportunities for borrowing and the positive operating cash fl ows, the company assumes that suffi cient liquidity will also be available even for the signifi cant investment measures planned for the years to come. Invest-ments of 400 million euro between now and 2023 have already been secured.

The capital structure is characterised by an equity ratio that has increased by 10.8 percentage points.

Results:Consolidated sales in 2018 fell year-over-year by 20.6 million euro or 5.7 % due to cyclical effects and stood at 337.4 million euro. The forecast sales fi gure of 322.2 million euro was exceeded by 15.2 million euro. Event-related expenses decreased by 3.3 %; this is less steep than the decrease in sales com-pared to 2017. This results in a decrease of 13.5 million euro in gross profi t. The gross profi t margin is 1.5 percentage points lower and stands at 39.2 %. On the other hand, the gross profi t determined taking into account the sharp increase in other oper-ating income was able to increase signifi cantly by 26.8 million euro and stood at 175.8 million euro. The gross profi t margin improved accordingly and went from 41.3 % to 46.2 %.

Personnel expenses rose by 4.3 million euro or 7.9 %. Of the increase in personnel expenses in the consolidated companies amounted to 3.2 million euro in the German companies and 1.1 million euro in the foreign companies and are mainly the outcome of the 5.0 % increase in staffi ng levels within the consolidated companies.

The income tax expense for the year 2018 (6.0 million euro) comes from the parent company (5.0 million euro) and from the subsidiaries in China and India with (0.4 million euro each). Other taxes relate for the most part to property tax for Koelnmesse GmbH.

The consolidated companies’ net profi t of 53.4 million euro is 52.7 million euro better than the forecast, due in signifi cant measure to the reversal of provisions at Koelnmesse GmbH. Earnings before interest, income taxes, depreciation, and amortisa-tion (EBITDA) stand at 81.3 million euro (previous year 55.2 million euro), exceeding targets by 57.6 million euro.

For the remainder, we refer to the explanations on the results of Koelnmesse GmbH.


Net asset position:Koelnmesse GmbH’s total assets increased by 19.7 million euro to 318.5 million euro, chiefly due to the increase in fixed assets by 9.3 % or 16.8 million euro to 196.9 million euro. Capital additions to the total amount of 35.9 million euro compared with depreci-ations to the amount of 18.9 million euro and book value disposals of 0.2 million euro. Of the 33.5 million euro in additions to property, plant and equipment, 28.3 million euro represents additions to operating and office buildings as well as assets under construction. These amounts are mainly the result of investments in the course of the Koelnmesse 3.0 project, particularly the investments for the first construction phase of Hall 10, which was completed in October 2018. Other main components of the assets under construction include Hall 1plus, the Confex®, the Terminal and the South Halls.

Current assets were slightly higher, increasing by 3.0 million euro. While other assets rose by 9.9 million euro, due in particular of advance tax payments, trade receivables were 3.7 million euro lower due to cyclical and reporting-date effects, and cash and cash equivalents were 2.9 million euro lower as a result of reporting-date effects.

On the liabilities side, total assets were 6.6 % higher due to the higher equity as well as increased liabilities, along with a steep decline in provisions. Equity was higher by the amount of the net profit for 2018 – 46.8 million euro – and stood at 207.4 million euro. The equity ratio increased to 65.1 % (previous year 53.7 %).

Provisions decreased on balance by 53.6 million euro; 47.9 million euro of that amount represents other provisions. The decrease in other provisions results from reversals of 41.4 million euro – here

B. Situation of Koelnmesse GmbH

specifically the reversal of the lease provision for the north section of the trade fair grounds – along with utilisation of provisions in the amount of 24.9 million euro (mainly trade payables, legal disputes and personnel provisions), compared with 18.4 million euro in allocations to provisions (trade payables and personnel provisions). Tax provisions also fell sharply by 6.1 million euro as a result of advance payments made. All in all, liabilities were 26.8 million euro higher. Due to cyclical and reporting-date effects, liabilities for advance payments received on orders increased by23.5 million euro. For reasons of cyclicality and reporting date, trade payables and liabilities to affiliated companies were also higher, increasing slightly by 0.8 and 1.3 million euro, respectively.

Financial situation:At the end of 2018, Koelnmesse GmbH had 68.5 million euro in cash and cash equivalents (previous year 71.4 million euro). The decrease is mainly the result of 35.9 million euro in investments in fixed assets. There was a positive operating cash flow with a countervailing effect. Koelnmesse GmbH was in a position to meet its payment obligations at all times during the year under report. Credit lines of 120 million euro have already been pledged for Koelnmesse 3.0 but not yet activated. Investments of 400 million euro between now and 2023 have already been secured.

Results:Koelnmesse GmbH’s sales revenue increased by 8 % compared to the respective prior events. For the 2018 financial year, it totals to 284.4 million euro (previous year 315.9 million euro). The decrease of 31.5 million euro is due to cyclical effects. The budgeted sales figure was outperformed by more than 6 million euro.

Other operating income increased by around 40.2 million euro. The increase results from the reversal of provisions constituted in recent years for rental payments on the north section of the trade fair grounds.

At 6.7 %, the year-over-year rate of decrease in event-related expenses was less steep than the rate of decrease in sales (10.0 %). The reason for this, among other things, is that the fixed costs included in the expenses lead to less fluctuation in event- related expenses in relation to sales.

Personnel expenses were 7.2 % or 3.2 million euro higher. The increase resulted in particular from tariff increases in salaries as well as hiring of 36 additional employees, equalling an increase of 5.9 %. Koelnmesse GmbH derived income in the amount of 9.3 million euro from the profit transfer by Koelnmesse Ausstellungen GmbH.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA), including income through profit transfers, total to 72.4 million euro (previous year 50.8 million euro). Tax charges in 2018 are mainly the result of income taxes for the current and past years as well as property taxes.Net profit totals to 46.8 million euro and is thus 49.1 million euro higher than the forecast.

Koelnmesse GmbH organised 25 own trade fairs and exhibitions in 2018. The trend for most events was above average. Compared to the respective previous events, sales were more than 8 % higher on average. 8 events from all areas of expertise show growth in sales in the double-digit percentage range.

Participation in outbound trade fairs supplements Koelnmesse activities in the most important target markets. There were 19 projects realised worldwide (German Pavilions) in 2018, including 17 by commis-sion of the German Federal Ministry for Economic Affairs and Energy (BMWi). 2 additional projects were also organised privately.

At 77.0 million euro, the Services division made a significant contribution to sales by the consolidated companies. The aim remains to make an effort to continuously grow this share. Additional services were introduced in 2018 and the sales effort reoriented with this purpose in mind.

The Technical Services division achieved sales of 36.5 million euro, and the Catering Services division recorded 15.9 million euro in sales. The Marketing Services division achieved 17.0 million euro in sales. The digital signage, introduced together with Samsung SDS, offers new advertising space that has already led to marketing successes that have outperformed expectations – and the situation is similar with lead tracking, with which every stand visitor can be recorded via QR code on the trade fair ticket. In the area of stand construction systems, around 65,000 m² in stand area was built in 2018, with support provided to some 3,500 exhibitors. Initial tests of concepts to provide start-up areas for start-ups, and newcomer areas, were successful. Sales for stand construction stood at around 8.3 million euro.

A. Trend of business of Koelnmesse GmbH

3. Trend of business and situation of Koelnmesse GmbH


Although the portfolio of guest fairs and events was weaker due to cyclical effects, with 22 guest events and 3 special events (previous year 23 guest events, 4 special events), in its 18th year, Koelnmesse Ausstellungen GmbH concluded the fi nancial year with new records in sales and result. The positive developments mainly stem from its existing business. In addition, the successful acquisition by the special events segment of Digital 2018, the premiere event of Deutsche Telekom, made a positive contribution to sales and result.

By marketing and renting free hall capacity to national and international trade fair organisers, companies and event agencies, Koelnmesse Ausstellungen GmbH had sales of 19.8 million euro, achieving around 27 % more than the amount forecast. The company achieved a surplus of 9.3 million euro before profi t and loss transfer, thus outperforming expectations by more than 36 % in this case as well.

Total assets decreased by 155 Teuro compared to the previous year and amounted to 2,251 Teuro. On the assets side, the decline is cyclical and report-ing-date based and particularly the result of the decrease in trade receivables, which were 134 Teuro lower and stood at 2,120 Teuro.

The equity ratio increased to 22.2 % in consequence of the slightly lower total assets (previous year 20.8 %).

Great opportunities for the company arise from the Koelnmesse 3.0 investment programme. In particu-lar, the new Confex®, Hall 1plus as well as space fl exibility and improved quality of existing space is expected to signifi cantly help signifi cantly increase the acquisition of new events.

4. Trend of business and situation of Koelnmesse Ausstellungen GmbH

The company is included in the cash management system of parent company Koelnmesse GmbH.

Plans are for Koelnmesse Ausstellungen GmbH to organise 25 guest events and 4 special events in 2019. It anticipates sales of 16.0 million euro and a surplus before profi t transfer of 6.4 million euro.

5. Overall presentation

The Koelnmesse consolidated companies and Koelnmesse GmbH continued their successful development in the 2018 fi scal year. The trend in business also exceeded expectations and led to a signifi cant increase in sales and earnings compared to plan and the respective prior events. Due to the different rhythms of the major trade fairs, even-numbered years have long tended to be the ones with lower sales fi gures. That is why Koelnmesse considers its sales for 2018, which are more than 20 % higher than in 2016, to be a great success, even if this fi gure, as planned, falls short of the previous record year for 2017. 2018 is also the fi rst even-num-bered year since 2006 in which Koelnmesse posted a profi t once again, in an amount that also signifi cantly exceeds the forecast fi gure. This is compounded by a positive special effect from the reversal of provisions for rental payments in excess of 40 million euro.

We have not received any information subsequent to the reporting date that would have resulted in a different statement of the company‘s situation with regard to mandatory reporting in accordance with Section 289 (1) of the German Commercial Code (HGB).

III. Processes of special importance after the close of the fi scal year

_ Confex®

Beginning ofconstruction: 2021

3D-VISUALISATION


further developed through the measures taken under the Koelnmesse 3.0 investment programme. These investments represent the most comprehen-sive modernisation programme undertaken in the history of Koelnmesse. Koelnmesse is tackling the challenges concerning the parking and traffic situation through construction of a new car park. With professional planning in advance of the measures with external specialists as well as by a special controlling during the Koelnmesse 3.0 programme, the company has taken all steps to keep the work of expansion from adversely affecting events held there. The favourable economic situation specific to construction, however, means that construction costs will run higher than original-ly anticipated.

The imminent ban on the driving of diesel-fuelled vehicles in Cologne poses fundamental risks. The decision by the Cologne Administrative Court on a blanket ban of diesel vehicles is not yet legally binding, however. The district government of Cologne has appealed the decision with the Higher Administrative Court in Münster. This has a suspen-sory effect and will be argued before that court no earlier than the second half of 2019 at the earliest. Only then will the matter be finally decided. The district government of Cologne is currently reviewing its air pollution control plan, which is expected to provide for a driving ban for particularly polluted areas or routes in the city area of Cologne. Koelnmesse expects that certain exemptions will not be required for the trip to Koelnmesse. It will do everything in its power to ensure that all suppliers, visitors and exhibitors can continue to attend the trade fairs at all times in future.

The existing trade fairs and exhibitions at Koelnmesse continue to develop in a positive overall direction. New trade fairs are being organised and carried out in Germany and abroad. The Cologne branding process demonstrates that Koelnmesse, an attrac-tive trade fair and congress location with events for the international business community, is one of the most important aspects for Cologne as a business location.

Over the medium term, the positive trend in events is expected to lead to increasing sales revenue and net profits. From the point of view of management, the expected development is subject to operational and economic opportunities and risks.

The risk-opportunity management system in place within the Koelnmesse consolidated companies ensures that these opportunities and risks are monitored and assessed promptly and systematical-ly. Koelnmesse takes measures in response where necessary. A distinction is made between strategic, political/legal and technical risks, market and financial risks, and the relevant opportunities. In some cases, business risks are covered by insurance plans.

Koelnmesse is currently working with its sharehold-ers to merge Koelnmesse Ausstellungen GmbH and KölnKongress GmbH into a joint, wholly-owned subsidiary of Koelnmesse GmbH from 2020. This strengthens the guest event and congress business at Koelnmesse while bundling sales activities by providing market development from a single source.

The management sees strategic opportunities in the location close to the city centre that is attractive to exhibitors and visitors as well as the company’s expertise with regard to digitalisation. The attrac-tiveness of the trade fair grounds is manifested and

1. Assessment of opportunities and risks

IV. Outlook and assessment of opportunities and risks


_Car Park Zoobrücke Completion: 2018

Market risks exist relative to extensions of event contracts. Densely packed event schedules, particularly in the spring and autumn time windows, may lead to scheduling conflicts. On the other hand, there are opportunities associated with self-gener-ated and newly acquired events. In certain market segments, there are also risks as a result of increasing competitive pressure.

The at times tense situation in the hotel market, particularly in the 5-star segment for individual events – which can lead to capacity bottlenecks and associated competitive disadvantages in terms of hotel pricing for exhibitors and visitors to Koelnmesse – is a recurrent topic of constructive consultations with hotel directors and their association.

Another risk factor for the fair programme is the tense security situation in terms of international terrorism. Infrastructure such as airports, railway stations and event centres are particularly in focus. Koelnmesse responds to this with individual security concepts and increased cooperation with police and authorities in the context of its events in Cologne.

Financial risks and opportunities take the form of currency risks in the event of wide fluctuations in the value of the euro relative to foreign currencies of the Koelnmesse subsidiaries.

Following years of dispute over rental amounts for the North Halls of the Cologne trade fair grounds, at the end of 2018 a settlement took with the lessor and the City of Cologne went into effect, and a new lease was signed subject to reduced terms com-pared to the original lease. This results in a special

non-cash effect on result stemming from the reversal of provisions for rental payments of more than 40 million euro.

In 2002, the company concluded a cross-border leasing agreement for the South Halls of the trade fair grounds. The agreement would initially remain in effect until December 2033. So far, this transaction has not produced any additional obligations or risks for the company, and none is currently discernible or expected in the medium term.

Koelnmesse GmbH is a member of the supplementa-ry pension fund of the City of Cologne (ZVK). ZVK is responsible for providing its members’ employees with a supplementary pension for old age, occupa-tional disability, and surviving dependants. Current-ly, these supplementary benefits are financed through assessments. Parallel to this, ZVK is setting up capital cover. There is currently a shortfall in coverage in the amount of 38.2 million euro (consolidated companies: 39.6 million euro). If, during the transitional period from financing through assessments to financing with capital cover, ZVK should find itself unable to meet its obligations, Koelnmesse would be required to carry the obliga-tions resulting from a residual shortfall in coverage. Koelnmesse does not anticipate an obligation to pay such additional contributions.

No further major risks that could undermine the future development of the company are discernible.

In 2019, Koelnmesse intends to continue its sustainable growth, thereby laying the foundation required to invest in its infrastructure and events from its own financial strength in the future. Provided that the global economy remains stable, by 2023 it plans to achieve average annual profit in the double-digit millions and annual sales that regularly exceed 400 million euro.

The first events of 2019 confirm the path to growth at Koelnmesse. imm cologne had more visitors this year, particularly among international trade visitors, and ISM and ProSweets Cologne expanded their role as central platforms for the respective sectors. As usual, spoga horse (spring) demonstrated high internationality among trade visitors and exhibitors, and didacta – The Education Trade Fair held every three years under the direction of Koelnmesse in Cologne also reported excellent development. The signs for the remainder of the trade fair programme this year are consistently positive, both at in-house events such as IDS, the 100th anniversary of Anuga or the premiere of CCXP COLOGNE – Comic Con Experience, as well as at guest events with leading trade fairs such as FIBO and ANGA COM.

Koelnmesse is organising 83 trade fairs and exhibi-tions in the fiscal year 2019. Of these, 26 are Koelnmesse’s own events, 25 are guest events, and 4 are special events. 28 trade fairs and exhibitions will take place abroad. In addition, Koelnmesse expects to organise 26 participations in trade fairs abroad in 2019. ANUFOOD Brazil in São Paulo/Brazil, is being held in the Koelnmesse portfolio for the first time.

2. Outlook

In the Koelnmesse 3.0 investment programme, the shell of the new Hall 1plus will be largely completed in 2019, and plans for Confex® will be finalised. The second phase of renovations on the existing structure of Hall 10 will also be carried out. Work will begin to expand the Digital Signage system for digital guidance and communication in the south section of the trade fair complex. The redesign of the facades of Hall 10/11 as well as the pavements and green spaces will begin as part of the outdoor design.

Given the economic and business trends expected, the planned sales for 2019 is 407.7 million euro for the consolidated companies and 359.9 million euro for Koelnmesse GmbH. The projected result for the consolidated companies is 21.3 million euro. Profit forecast for Koelnmesse GmbH stands at 17.4 million euro. Plans for the consolidated companies assume an EBITDA in 2019 amounting to 54.9 million euro.


V. Management statement

In 2015, legislation was passed that calls for equal participation by women and men in leadership positions in the private sector and public service (Participation Act). Since then, the Supervisory Board of Koelnmesse GmbH has been required to set a target for the proportion of women in the Supervisory Board and the Management Board, and to define a deadline for achieving these goals. In addition, the Management Board has an obligation to set targets for the proportion of women in the two management levels below the Management Board, and to specify deadlines for achieving these targets.

On 29 June 2017, the Supervisory Board set a target for the proportion of women on the Supervisory Board and on the Management Board of Koelnmesse GmbH of 30 %, which – to the extent possible – was to be reached by 30 June 2018.

As of the reporting date of 30 June 2018, the proportion of women on the Supervisory Board of Koelnmesse GmbH stood at 28.57 % (2017: 23.81 %); on the Management Board, the share remained at 33.33 %.

The next deadline for reviewing the targets set for the respective gender quota on the Supervisory Board and the Management Board is 30 June 2022.

Company management has defined 30 June 2022 as the deadline for reaching the targets for management levels II and III stipulated by Section 36 (4) of the German Limited Liability Companies Act (GmbHG). The current values as of 30 June 2017 (management level II: 12 %, management level III: 29.9 %) shall be at least maintained through 30 June 2022.

Cologne, 28 March 2019

Gerald Böse Herbert Marner


“Digital Signage”, the new digital guidance and communication system in the north area of Koelnmesse.

Consolidated financial statement for the fiscal year from 1 January to 31 December 2018

Assets 31.12.2018

EUR

31.12.2017

TEUR

A Fixed assets

I. Intangible assets

1. Concessions, industrial rights and similar rights 5,907,894.00 8,087

and assets as well as licences to such rights

and assets purchased

2. Goodwill against payment 5,812,484.98 6,419

11,720,378.98 14,506

II. Property, plant and equipment

1. Land, leasehold rights and buildings including

buildings on third-party land 138,211,750.18 124,321

2. Technical machinery and equipment 3,728,480.44 4,163

3. Other equipment, plant and office equipment 12,658,041.55 10,375

4. Advance payments and construction in progress 23,344,251.40 22,697

177,942,523.57 161,556

III. Financial assets

1. Shares in affiliated companies 2.01 0

2. Participating interests 139,650.00 140

139,652.01 140

189,802,554.56 176,202

B Current assets

I. Inventories

Supplies 255,487.43 264

II. Receivables and other assets

1. Trade accounts receivable 11,539,730.46 14,613

2. Receivables from associated companies

and other investees 552,855.46 67

3. Other assets 20,224,618.25 10,243

32,317,204.17 24,923

III. Other securities classified as current assets 23,618,155.65 24,811

IV. Cash on hand and balances with credit institutions 116,640,148.77 106,851

172,830,996.02 156,849

C Prepaid/deferred items 607,423.91 1,133

D Deferred tax assets 15,099.00 0

363,256,073.49 334,184

Consolidated balance sheet

Liabilities 31.12.2018

EUR

31.12.2017

TEUR

A Equity

I. Subscribed capital 51,200,000.00 51,200

II. Capital reserve 42,038,156.35 42,038

III. Retained from earnings

Other retained earnings 77,018,183.48 77,018

IV. Consolidated accumulated profit 53,696,845.43 0

V. Per contra items from foreign currency translation -315,400.15 -240

VI. Holdings by other shareholders 760,714.81 484

224,398,499.92 170,500

B Provisions

1. Provisions for pensions and similar obligations 6,401,391.68 5,977

2. Tax provisions 939,890.06 6,533

3. Other provisions 30,459,184.61 77,341

37,800,466.35 89,851

C Liabilities

1. Customer advance payments received for purchase orders 85,434,940.62 60,283

2. Trade accounts payable 8,294,039.96 6,858

3. Residuary liabilities 5,456,902.64 4,498

of which from taxes EUR 733,138.49 (previous year TEUR 819)

of which with respect to social security contributions EUR 24,741.26 (previous year TEUR 0.8)

99,185,883.22 71,639

D Prepaid/deferred items 1,871,224.00 2,169

E Deferred tax liabilities 0.00 25

363,256,073.49 334,184

Consolidated balance sheet 42/43

Consolidated income statement

2018

EUR

2017

TEUR

1. Net sales 337,394,973.74 357,947

2. Other operating income 43,493,874.94 3,217

Total output 380,888,848.68 361,164

3. Event-related expenses

a) Expenses for supplies -8,792,147.80 -9,282

b) Expenses for purchased services -196,289,757.90 -202,851

-205,081,905.70 -212,133

Gross income 175,806,942.98 149,031

4. Personnel expenses

a) Wages and salaries -46,878,896.04 -43,490

b) Statutory social security contributions and expenses for pensions -11,618,018.65 -10,714

of which for pensions EUR 3,590,082.30

previous year TEUR 3,272

-58,496,914.69 -54,204

5. Depreciation of intangible fixed assets and property,

plant and equipment -20,180,328.24 -20,331

6. Other operating expenses -34,515,348.64 -38,389

7. Other interest and similar income 511,097.44 599

8. Depreciation of investment securities -1,192,425.00 0

9. Interest and similar expenses -965,358.45 -911

of which expenses associated with interest accrued on provisions EUR 615,856.28

previous year TEUR 571

10. Earnings before taxes 60,967,665.40 35,795

11. Income taxes -6,032,057.41 -7,238

of which deferred taxes EUR 40,011

previous year TEUR -6

12. Profit after taxes 54,935,607.99 28,557

13. Other taxes -1,211,736.54 -1,164

14. Consolidated companies’ net profit before holdings by other shareholders 53,723,871.45 27,393

15. Profit accruing to other shareholders -276,666.93 -67

16. Consolidated companies’ net profit 53,447,204.52 27,326

17. Profit carried forward 249,640.91 49,310

18. Inclusion in other retained earnings 0.00 -76,636

19. Consolidated accumulated profit 53,696,845.43 0

Consolidated income statement 44/45

Annual financial statement of Koelnmesse GmbH for the fiscal year from 1 January to 31 December 2018

Assets 31.12.2018

EUR

31.12.2017

TEUR

A Fixed assets


1. Concessions, industrial rights and similar rights 5,319,028.00 7,236

and assets as well as licences to such rights

and assets purchased

2. Goodwill against payment 1,289,736.00 1,214

6,608,764.00 8,450


1. Land, leasehold rights and buildings including

buildings on third-party land 138,200,712.18 124,304

2. Technical machinery and equipment 3,720,913.00 4,155

3. Other equipment, plant and office equipment 12,115,704.00 9,873

4. Advance payments and construction in progress 23,344,251.40 22,697

177,381,580.58 161,029


1. Shares in affiliated companies 5,618,404.58 3,358

2. Loans to affiliated companies 1,900,000.00 1,900

3. Participating interests 5,440,080.06 5,440

12,958,484.64 10,698

196,948,829.22 180,177

B Current assets

I. Inventories

Supplies 255,487.43 264

II. Receivables and other assets

1. Trade accounts receivable 7,921,011.47 11,651

2. Receivables from affiliated companies 3,231,109.92 2,728

3. Receivables from associated companies

and other investees 552,855.46 67

4. Other assets 17,250,091.85 7,378

28,955,068.70 21,824

III. Other securities classified as current assets 23,617,450.00 24,810

IV. Cash on hand and balances with credit institutions 68,535,992.22 71,425

121,363,998.35 118,323

C Prepaid/deferred items 159,630.06 254

318,472,457.63 298,754

Balance sheet of Koelnmesse GmbH

Liabilities 31.12.2018

EUR

31.12.2017

TEUR

A Equity

I. Subscribed capital 51,200,000.00 51,200

II. Capital reserve 42,038,156.35 42,038

III. Retained from earnings

Other retained earnings 67,310,133.92 67,310

IV. Consolidated accumulated profit 46,845,676.51 0

207,393,966.78 160,548

B Provisions

1. Provisions for pensions and similar obligations 6,182,553.00 5,817

2. Tax provisions 356,456.61 6,450

3. Other provisions 27,169,300.64 75,031

33,708,310.25 87,298

C Liabilities

1. Customer advance payments received for purchase orders 62,372,470.72 38,882

2. Trade accounts payable 7,008,810.05 6,168

3. Liabilities due to associated companies and other investees 1,294,543.19 14

4. Residuary liabilities 4,823,132.64 3,675

of which from taxes EUR 704,788.54 (previous year TEUR 677)

of which with respect to social security contributions EUR 24,741.26 (previous year TEUR 0.8)

75,498,956.60 48,739

D Prepaid/deferred items 1,871,224.00 2,169

318,472,457.63 298,754

Balance sheet of Koelnmesse GmbH 46/47

Income statement of Koelnmesse GmbH

2018

EUR

2017

TEUR

1. Net sales 284,420,578.42 315,906

2. Other operating income 42,969,715.53 2,783

Total output 327,390,293.95 318,689

3. Event-related expenses

a) Expenses for supplies -7,995,785.76 -8,489

b) Expenses for purchased services -177,943,246.01 -190,733

-185,939,031.77 -199,222

Gross income 141,451,262.18 119,467

4. Personnel expenses

a) Wages and salaries -37,717,673.10 -35,225

b) Statutory social security contributions -10,017,157.05 -9,290

and expenses for pensions

of which for pensions EUR 3,513,621.06

previous year TEUR 3,198 -47,734,830.15 -44,515

5. Depreciation of intangible fixed assets and property,

plant and equipment -18,912,755.81 -18,084

6. Other operating expenses -29,425,543.79 -31,676

7. Income from participating interests 0.00 508

of which from affiliated companies EUR 0.00


8. Income from profit- and loss-sharing agreements 9,275,936.38 8,033

of which from affiliated companies EUR 9,275,936.38

previous year TEUR 8,033

9. Income from loans from financial assets of which from 60,327.66 60

affiliated companies EUR 60,327.66 previous year

TEUR 60

10. Other interest and similar income 439,596.40 494

of which from affiliated companies EUR 0.00


11. Depreciation of investment securities -1,192,425.00 0

12. Interest and similar expenses -929,281.25 -860

of which to affiliated companies EUR 0.00


of which expenses associated with interest accrued on provisions EUR 614,725.28


13. Earnings before taxes 53,032,286.62 33,427

14. Income taxes -4,997,834.81 -6,042

15. Profit after taxes 48,034,451.81 27,385

16. Other taxes -1,188,775.30 -1,074

17. Net profit 46,845,676.51 26,311

18. Profit carried forward 0.00 40,617

19. Inclusion in retained earnings 0.00 -66,928

20. Accumulated profit 46,845,676.51 0

Income statement of Koelnmesse GmbH 48/49

I. General informationThe consolidated financial statement and the annual financial statement of Koelnmesse GmbH, Cologne (District Court of Cologne, Commercial Registry Entry no. HR B 952) have been drawn up in accordance with the provisions of the German Commercial Code and the law concerning limited liability companies.

The following notes pertain to both the consolidat-ed financial statement and the annual financial statement of Koelnmesse GmbH. Unless specifically noted otherwise, these remarks pertain to both financial statements.

Koelnmesse GmbH is a large joint stock company as defined by German commercial law (Section 267 (3) HGB).

The income statements were drawn up in accord-ance with the gross cost method as laid down in Section 275 (2) HGB. The “material expenses” item was renamed “event-related expenses”, as is usual for the trade fair sector.

The German subsidiary included in the consolidated financial statement, Koelnmesse Ausstellungen GmbH, avails itself of the exemption clause for subsidiaries in Section 264 (3) HGB and thus waives the filing of an annual financial statement.

II. Scope of consolidationIn addition to Koelnmesse GmbH, one German and ten foreign companies were also included in the consolidated financial statement in accordance with the regulations of full consolidation.

The scope of consolidation encompasses the following companies, in the case of each of which

Koelnmesse GmbH either directly or indirectly owns 100 % (exception: Koelnmesse YA Tradefair Private Ltd., Mumbai: 75 % as well as Expolink Global Network Ltd., Bangkok: 49.17 % of the share capital, 55 % of the voting rights since 2016) of share capital:

− Koelnmesse Ausstellungen GmbH, Cologne− Koelnmesse S.r.l., Milan− Koelnmesse Inc., Chicago− Koelnmesse Pte. Ltd., Singapore− Koelnmesse Ltd., Hong Kong− Koelnmesse Co. Ltd., Beijing− Koelnmesse Co. Ltd., Tokyo− Koelnmesse SAS, Bogotá− Koelnmesse Organização de Feiras Ltda., São Paulo− Koelnmesse YA Tradefair Private Ltd., Mumbai− Expolink Global Network Ltd., Bangkok

The newly founded, wholly-owned subsidiary, Koelnmesse SAS, Bogotá, Colombia, has been included in the consolidated financial statements in 2018 for the first time since its establishment.

Koelnmesse YA Tradefair Services Private Ltd., Mumbai, has drawn up an interim financial state-ment for the calendar year, as the local financial reporting closing date for that company is 31 March. The closing date is the same for the financial statements of all of the other included companies, as well as for the consolidated financial statement.

The share in trade fair organiser Expolink Global Network Ltd., Bangkok (share: 49.17 %; voting rights: 55 %), is held by Koelnmesse GmbH. Due to the majority of voting rights held, a dominant influence is exercised over business policy; conse-quently, the investment is now included in the consolidated financial statement and fully consoli-dated for the entire financial year.

The Italian participation Koeln Parma Exhibitions S.r.l., Parma, in which Koelnmesse GmbH holds a 50 % share, was proportionally included in accordance with Section 310 HGB.

The holding of Koelnmesse GmbH in KölnKongress GmbH, Cologne, and in KölnKongress Gastronomie GmbH, Cologne, which was founded in 2016, were not consolidated (share of capital stock: 49 % each). A specific agreement regulating the relation of financial, economic and organisational dependence between the controlled and the controlling company is in effect between the primary shareholder and KölnKongress GmbH as well as KölnKongress Gastronomie GmbH. The shareholder Koelnmesse GmbH does not have a claim to distribution of profits under these agreements. These are reserved solely for the controlling shareholder of KölnKongress GmbH and KölnKongress Gastronomie GmbH. In addition, Koelnmesse Co. Ltd., Bangkok, has not been consolidated since the beginning of 2018, in accordance with Section 296 (2) HGB. Investments were thus not consolidated pursuant to Section 310 HGB, nor pursuant to Sections 311, 312 HGB.

III. Principles of consolidationWith the exception of equity, all balance sheet items of the foreign subsidiaries have been translated at the current exchange rate as at the balance sheet reporting date. The translation of the income statements of the foreign subsidiaries was carried out using annual average exchange rates. The translation differences were recorded directly in equity without affecting results.

In accordance with Section 301 HGB, capital consolidation was carried out with the revaluation

method (up until and including 2009: carrying value method) by crediting the acquisition costs (initial value) of the holdings to the portion of the consolidat-ed companies’ equity as at the date of acquisition or first consolidation. Where Koeln Parma Exhibitions S.r.l., Parma, is concerned, the option of pro rata consolidation in application of Section 310 (1) HGB was exercised.

Within the scope of the debt consolidation, all accounts receivable and payable between the companies included in the consolidated financial statement were offset against one another.

As a result of the consolidation of expenses and income, expenses and income among the Koelnmesse consolidated companies were offset against one another, also taking profit and loss transfer agreements into account.

There were no interim results.

IV. Accounting and valuation methodsThe annual financial statements of the companies included in the consolidated financial statement, and the consolidated financial statement, have been uniformly drawn up in accordance with the accounting and valuation principles applied by Koelnmesse GmbH, while also taking into account the continuation of business operations. The accounting and valuation principles applied to the previous annual financial statements and the previous consolidated financial statement were retained.

Intangible assets are valued at acquisition cost at the time of transition of economic or legal ownership, less straight-line depreciation. The scope of acquisition cost is in accordance with Section 255 (1) HGB. Acquisition price reductions were deducted.

Notes concerning the consolidated financial statement and the annual financial statement

Notes concerning the consolidated financial statement and the annual financial statement 50/51

Scheduled depreciation amounts are based on customary useful lives in accordance with the relevant, valid official tables specifying the depreciation allowances. The useful lives for paid-for industrial rights and similar rights and assets range from three to five years. Goodwill is depreciated on a straight-line basis over ten years in the consolidated financial statement, as this corresponds to the expected duration of use. The recoverability of goodwill is reviewed annually using the simple German income approach. If necessary, non-scheduled depreciation is applied. Self-provided intangible assets and development expenditures were not capitalised.

Property, plant and equipment are valued at acquisition cost at the time of transition of economic or legal ownership, less straight-line compound rates. The scope of acquisition cost is in accordance with Section 255 (1) HGB. The useful life of technical machinery and equipment is between 8 and 15 years; for other equipment, plant and office equipment, it is between 3 and 15 years. Buildings are measured at acquisition cost less linear compound rates, and for purchases prior to first-time application of the German Accounting Law Modernisation Act (BilMoG), less linear or digressive compound rates. Scheduled depreciation amounts are recognised according to the ordinary useful life pro rata temporis and take technical and economic depreciation into account. The useful life of buildings and similar rights is between 24 and 99 years. With regard to buildings on third-party property, Koelnmesse assumes (in line with appraisal reports on Koelnmesse net asset values drawn up by the City of Cologne) an ordinary useful life that can extend beyond the point at which the relevant leaseholds expire. In the year of their addition, low-value assets are recorded as expenses

Investment securities are assessed at the lower of acquisition cost or current market value.

Cash on hand and balances with credit institutions are valued at par.

Payments made in the fiscal year under review for the following year are recorded as prepaid/deferred items.

Subscribed capital is valued at par and has been completely paid up.

Provisions take into account all identifiable risks and uncertain obligations.

Valuation is calculated in accordance with the required settlement amount as determined by a reasonable commercial assessment under conside-ration of estimated future cost increases. Provisions with a term to maturity of more than one year are discounted at a rate appropriate to their duration based on the average market interest rate as at 31 December 2018, for the prior 7 years (pension provision: 10 years) as published by the German Bundesbank.

Provisions for pensions and similar obligations are calculated in line with the projected unit credit method on the basis of actuarial calculations that utilise Klaus Heubeck’s “Richttafeln 2018 G”, which take generation-based life expectancies into consideration. These provisions are discounted on the basis of the average market interest rate for the prior 10 years as published by the German Bundesbank on 31 December 2018, whereby this average rate results from an assumed term to maturity of 15 years (Section 253 (2) sentence 2 HGB). This interest rate is 3.2 %. As at the reporting

in the year of acquisition if the acquisition cost for each asset does not exceed 250.00 euro. For simplicity’s sake, low-value assets the acquisition costs of which are between 250.00 euro and 1,000.00 euro are grouped as a compound item subject to straight-line depreciation over a period of 5 years.

Financial investments are stated at acquisition cost at the time of transition of economic or legal ownership, and in the case of loans at nominal value; where there is expected permanent impair-ment, they are measured at the lower fair value as at the closing date.

Inventory (supplies) are recorded at acquisition cost taking into consideration the lower of cost or market principle. All storage materials are depreci-ated at a suitable amount based on the storage period and the item’s limited usability. Advertising and mailing materials are assessed at fixed value.

Accounts receivable and other assets are recorded at par value. Default risks in trade accounts receivable are taken into account by means of a lump-sum specific allowance. The lump-sum specific allowance on trade accounts receivable was determined based on a depreciation rate of 70 % for receivables more than a year old as at the reporting date, and based on a depreciation rate of 10 % for receivables more than 6 months old. Receivables dating back less than half a year are depreciated separately at 3 % and 5 %, respectively, for domestic and foreign receivables. In justified cases, individual allowances are deducted insofar as identifiable risks exist. Receivables and payables are offset if the netting criteria have been met.

date, the difference between recognition of pension provisions based on a flat-rate market interest rate from the past 10 financial years and recognition of provisions based on a flat-rate interest rate from the past 7 financial years stood at 609 Teuro. The yield due to change in the assumed interest rate was allocated to interest expense. Further calculation assumptions were based on pension increases of 0.0 % p.a. or 2.0 % p.a. Wage and salary increases were not factored in because the group of beneficiaries consists exclusively of pensioners.

Provisions for the employee-anniversary payouts stated under other provisions are constituted in the same way as pension provisions and apply the projected unit credit method. These provisions are discounted based on the average market interest rate for the prior 7 years as published by the German Bundesbank on 31 December 2018,whereby this average rate results from an assumed term to maturity of 15 years (Section 253 (2) sentence 2 HGB). This interest rate is 2.3 %. For 2018, the expense due to change in the assumed interest rate amounts to 16 Teuro and was allocated to interest expenses. Where provisions for emplo-yee anniversaries at the company are concerned, assumptions were based on annual wage and salary increases of 2.0 % as well as a fluctuation rate of 2.7 %.

Provisions for semi-retirement were calculated in accordance with the block model. These provisions were discounted at an interest rate of 0.8 % that adequately takes into account risks and terms to maturity; this rate was determined in accordance with actuarial principles and in line with Section 253 (2) sentence 1 HGB. For 2017, the expense due to change in the assumed interest rate amounts to


0.2 Teuro and was allocated to interest expenses. Klaus Heubeck’s Richttafeln 2018 G served as the basis for the calculations. Annual wage and salary increases of 2.0 % p.a. were taken into account.

Provisions for contingent losses from events are made on the basis of the coverage contribution 2, taking into account specific administrative and event-related overhead costs. Overhead costs (particularly the costs for hall rental and deprecia-tion) are assigned to the individual events at an individual cost unit rate for each square metre used.

Liabilities were stated at their settlement amounts.

Business transactions in foreign currencies are valuated at the exchange rate on the day of the transaction or at the more unfavourable mean spot rate on the reporting day. Losses from exchange rate movements are valued at the rate on the reporting date. Assets and receivables denominated in foreign currency with a maturity of up to one year are always valuated at the mean spot rate on the reporting day.

Payments made in the financial year under review for the following years are recorded as prepaid/deferred items.

Deferred tax assets and deferred tax liabilities for the parent company Koelnmesse GmbH and for the respective controlled company are stated where future tax assessments or relief are expected. They are created by differences in reporting require-ments for commercial balance sheets and tax balance sheets. They result primarily from the following obligations and generate an active surplus

in the separate financial statements and for the consolidated companies as a whole:

− Securities classified as current assets− Provisions for pensions− Provisions for contingent losses− Provisions for pending rental obligations

Loss carryforwards also lead to deferred tax assets if a claim is expected. Given a uniform tax rate of 30 % across all of the consolidated companies, deferred taxes among the companies lead to possible deferred tax assets in the amount of 2.3 million euro.

The company did not make use of its option to record deferred tax assets resulting from tax reductions Section 274 (1) sentence 2 HGB.

Deferred tax liabilities are disclosed in the consoli-dated financial statements in accordance with Section 306 sentence 1 HGB. Deferred tax assets are the result of debt consolidation. Deferred taxes of the previous year have been reversed. Deferred taxes newly incurred in 2018 total to 15 Teuro as at 31 December 2018.

The items pursuant to Section 306 HGB were not summarised with the items pursuant to Section 274 HGB.

Applying the tax rate of approximately 30 % applicable in Germany and earnings before tax (but less other taxes) in the amount of 59,756 Teuro, tax expense within the consolidated companies would total to 17,927 Teuro. The difference to the effective tax expense in the amount of 6,032 Teuro amounts to 11,895 Teuro and, at 12,044 Teuro, is

mainly the result of the reversal of the rental provision at Koelnmesse GmbH of more than 40 million euro, which had not yet been recognised in the tax balance sheet. In addition, it must be kept in mind that non-capitalisation of deferred tax assets in the case of negative results in individual countries, and due as well to expenses that in individual cases are not tax-deductible and lead to tax rates in excess of 30 %, but also taking into account offsetting use of loss carryforwards in individual countries, the result is an effective tax expense of 6,032 Teuro or an effective tax rate of 10.1 %.

V. Notes on the balance sheets

Fixed assetsFor the period from 1 January to 31 December 2018, the composition and development of the consolidated companies’ fixed assets and the fixed assets of Koelnmesse GmbH are given in the following tables:


Development of consolidated fixed assets as at 31 December 2018

Acquisition cost trend Depreciation trend Residual

As at

01.01.2018

Addition Value

adjustment/

reclassification

Disposal Currency

differences

As at

31.12.2018

As at

01.01.2018

Addition Disposal Currency

differences

As at

31.12.2018

As at

31.12.2018

As at

31.12.2017

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR


1. Concessions, industrial rights and

similar rights and assets as well as

licences to such rights and assets

purchased payment 31,851,828.61 200,549.20 449,435.16 1,760.00 -134,972.45 32,365,080.52 23,765,083.83 2,758,729.37 674.68 -65,952.00 26,457,186.52 5,907,894.00 8,086,744.78

2. Goodwill against payment 9,540,900.11 11,994.00 236,974.37 0.00 -224,169.48 9,565,699.00 3,121,619.45 805,636.61 0.00 -174,042.04 3,753,214.02 5,812,484.98 6,419,280.66

41,392,728.72 212,543.20 686,409.53 1,760.00 -359,141.93 41,930,779.52 26,886,703.28 3,564,365.98 674.68 -239,994.04 30,210,400.54 11,720,378.98 14,506,025.44


1. Land, leasehold rights and buildings

including buildings on third-party

land 527,489,829.97 15,093,760.33 11,118,129.63 604,700.01 0.00 553,097,019.92 403,168,858.79 12,129,815.83 413,404.88 0.00 414,885,269.74 138,211,750.18 124,320,971.18

2. Technical machinery and equipment 18,118,013.82 62,240.94 0.00 62,287.40 -1,717.17 18,116,250.19 13,954,418.82 496,880.74 62,188.98 -1,340.83 14,387,769.75 3,728,480.44 4,163,595.00

3. Other equipment, plant and

office equipment 59,328,994.18 5,330,929.63 732,123.31 2,238,236.67 20,322.19 63,174,132.64 48,953,961.20 3,770,151.03 2,227,582.41 19,561.27 50,516,091.09 12,658,041.55 10,375,032.98

4. Advance payments and

construction in progress 22,696,904.44 13,184,009.43 -12,536,662.47 0.00 0.00 23,344,251.40 0.00 0.00 0.00 0.00 0.00 23,344,251.40 22,696,904.44

627,633,742.41 33,670,940.33 -686,409.53 2,905,224.08 18,605.02 657,731,654.15 466,077,238.81 16,396,847.60 2,703,176.27 18,220.44 479,789,130.58 177,942,523.57 161,556,503.60


1. Investments in affiliated companies 0.00 216,396.28 0.00 0.00 0.00 216,396.28 0.00 219,114.66 0.00 -2,720.39 216,394.27 2.01 0.00

2. Participating interests 139,650.00 0.00 0.00 0.00 0.00 139,650.00 0.00 0.00 0.00 0.00 0.00 139,650.00 139,650.00

139,650.00 216,396.28 0.00 0.00 0.00 356,046.28 0.00 219,114.66 0.00 -2,720.39 216,394.27 139,652.01 139,650.00

669,166,121.13 34,099,879.81 0.00 2,906,984.08 -340,536.91 700,018,479.95 492,963,942.09 20,180,328.24 2,703,850.95 -224,493.99 510,215,925.39 189,802,554.56 176,202,179.04


Development of fixed assets of Koelnmesse GmbH as at 31 December 2018

Acquisition cost trend Depreciation trend Residual

As at

01.01.2018

Addition Reclassification Disposal As at

31.12.2018

As at

01.01.2018

Addition Disposal As at

31.12.2018

As at

31.12.2018

As at

31.12.2017

EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR


1. Concessions, industrial rights and

similar rights and assets as well as

licences to such rights and assets

purchased payment 29,720,379.83 151,230.29 449,435.16 1,760.00 30,319,285.28 22,484,445.83 2,516,486.13 674.68 25,000,257.28 5,319,028.00 7,235,934.00

2. Goodwill against payment 1,580,841.74 11,994.00 236,974.37 0.00 1,829,810.11 366,666.74 173,407.37 0.00 540,074.11 1,289,736.00 1,214,175.00

31,301,221.57 163,224.29 686,409.53 1,760.00 32,149,095.39 22,851,112.57 2,689,893.50 674.68 25,540,331.39 6,608,764.00 8,450,109.00


1. Land, leasehold rights and buildings

including buildings on third-party

land 527,407,465.67 15,093,760.33 11,118,129.63 604,700.01 553,014,655.62 403,103,391.49 12,123,956.83 413,404.88 414,813,943.44 138,200,712.18 124,304,074.18

2. Technical machinery and equipment 18,078,861.48 55,998.81 0.00 62,287.40 18,072,572.89 13,923,489.48 490,359.39 62,188.98 14,351,659.89 3,720,913.00 4,155,372.00

3. Other equipment, plant and

office equipment 57,427,577.92 5,120,390.98 732,123.31 2,082,944.59 61,197,147.62 47,554,978.92 3,608,546.09 2,082,081.39 49,081,443.62 12,115,704.00 9,872,599.00

4. Advance payments and

construction in progress 22,696,904.44 13,184,009.43 -12,536,662.47 0.00 23,344,251.40 0.00 0.00 0.00 0.00 23,344,251.40 22,696,904.44

625,610,809.51 33,454,159.55 -686,409.53 2,749,932.00 655,628,627.53 464,581,859.89 16,222,862.31 2,557,675.25 478,247,046.95 177,381,580.58 161,028,949.62


1. Investments in affiliated companies 3,534,039.91 2,260,038.26 0.00 0.00 5,794,078.17 175,673.59 0.00 0.00 175,673.59 5,618,404.58 3,358,366.32

2. Loans to affiliated companies 1,900,000.00 0.00 0.00 0.00 1,900,000.00 0.00 0.00 0.00 0.00 1,900,000.00 1,900,000.00

3. Participating interests 5,440,080.06 0.00 0.00 0.00 5,440,080.06 0.00 0.00 0.00 0.00 5,440,080.06 5,440,080.06

10,874,119.97 2,260,038.26 0.00 0.00 13,134,158.23 175,673.59 0.00 0.00 175,673.59 12,958,484.64 10,698,446.38

667,786,151.05 35,877,422.10 0.00 2,751,692.00 700,911,881.15 487,608,646.05 18,912,755.81 2,558,349.93 503,963,051.93 196,948,829.22 180,177,505.00


Receivables and other assets Trade receivables as well as other assets with a maturity of more than one year total to 0 Teuro (previous year 0 Teuro) for Koelnmesse GmbH and to 220 Teuro (previous year 67 Teuro) in the consoli-dated financial statement. All other receivables and other assets have a maturity of up to one year. Receivables by Koelnmesse GmbH from associated companies and from other investees are trade receivables and, with regard to Koelnmesse Ausstel-lungen GmbH, also from the balance of cash pooling and profit sharing. Receivables from other investee companies recognised in the consolidated financial statement constitute trade receivables as well.

Other assets at Koelnmesse GmbH include receivab-les due from the City of Cologne in the amount of 355 Teuro (previous year 302 Teuro).

Investment securitiesThe marketable securities consist of a diversified fund. This is a distributing fund.

EquityThe accumulated profit in 2018 for Koelnmesse GmbH and the consolidated companies is the outcome of the respective net profits in 2018.

ProvisionsThe pension provisions in the amount of 6,401 Teuro posted in the consolidated balance sheet consist primarily of Koelnmesse GmbH’s obligations (6,183 Teuro) resulting from the company pension scheme.The tax provisions posted in the consolidated

financial statement (940 Teuro) include 431 Teuro in tax provisions by Koelnmesse Co. Ltd., Beijing, which is predominantly for taxes on income in 2018, with 356 Teuro for tax provisions of Koelnmesse GmbH.

As at 31 December 2018, other provisions consisted of the following:

Consolidated companies – goodwill

Consolidated GmbH

companies

31.12.2018 31.12.2017 31.12.2018 31.12.2017

TEUR TEUR TEUR TEUR

Rental obligations 4,110 45,795 4,110 45,795

Personnel expenses 8,561 7,763 7,624 7,119

Outstanding invoices 12,523 14,009 11,964 13,663

Contingent losses from pending transactions 1,235 938 1,235 938

Remaining provisions 4,030 8,836 2,236 7,516

30,459 77,341 27,169 75,031

Capital consolidation1 Separate financial Total

TEUR TEUR TEUR

Acquisition costs

01.01.2018 5,828 3,713 9,541

Addition 0 249 249

Currency differences 0 -224 -224

31.12.2018 5,828 3,738 9,566

Accumulated depreciation

01.01.2018 1,040 2,082 3,122

Addition 583 223 806

Currency differences 0 -174 -174

31.12.2018 1,623 2,131 3,754

Residual 31.12.2018 4,205 1,607 5,812

Residual 31.12.2017 4,788 1,631 6,419

1 Acquisition costs in the amount of 5,045 Teuro, depreciation of 505 Teuro and accumulated depreciation

in the amount of 1,387 Teuro are the result of proportionately consolidated subsidiaries Notes concerning the consolidated financial statement and the annual financial statement 60/61

The liabilities are not secured not by liens or similar rights on the part of the consolidated companies.

Liabilities to affiliated companies consist of trade liabilities.

Koelnmesse GmbH has trade accounts payable to the City of Cologne in the amount of 0 Teuro (previous year 25 Teuro) (consolidated companies 0 Teuro).

Liabilities of the consolidated companies by terms of maturity

Remaining Remaining term of Remaining Total

term of up more than 1 year up term of more

to 1 year to 5 years than 5 years

TEUR TEUR TEUR TEUR

Liabilities due to prepayments received on orders 85,435 0 0 85,435

Trade accounts payable 8,294 0 0 8,294

Residuary liabilities

from taxes 723 0 0 723

within the context of social security 25 0 0 25

remaining liabilities 4,595 114 0 4,709

99,072 114 0 99,186

Liabilities of Koelnmesse GmbH by terms of maturity

Remaining Remaining term of Remaining Total

term of up more than 1 year up term of more

to 1 year to 5 years than 5 years

TEUR TEUR TEUR TEUR

Liabilities due to prepayments received on orders 62,372 0 0 62,372

Trade accounts payable 7,009 0 0 7,009

Liabilities due to associated companies and other investees 1,295 0 0 1,295

Residuary liabilities

from taxes 705 0 0 705

within the context of social security 25 0 0 25

remaining liabilities 3,979 114 0 4,093

75,385 114 0 75,499


VI. Notes concerning the income statement

Net sales

Other operating income at Koelnmesse GmbH includes income related to other periods from the reversal of provisions amounting to 41,338 Teuro (41,251 Teuro for the consolidated companies), of which 40,147 Teuro stems from the reversal of rental provisions, and from incoming payments on written-down claims in the amount of 43 Teuro (43 Teuro for the consolidated companies) and exchange gains from currency translation amounting to 8 Teuro (401 Teuro for the consolidated compa-nies).

Other operating expenses at Koelnmesse GmbH include expenses related to other periods from the charge-off of receivables amounting to 735 Teuro (743 Teuro for the consolidated companies), and from additions to the provisions for contingent losses of 1,235 Teuro (1,235 Teuro for the consolidated companies). In addition to this, other operating expenses also include exchange losses from currency translation in the amount of 5 Teuro (347 Teuro for the consolidated companies).

VII. Commitments and contingenciesDue to the US Cross-Border Leasing transaction conducted in fiscal year 2002, Koelnmesse GmbH has an external civil commitment to pay rent to the U.S. investor for the entire duration of the rental agreement until such time as the purchase option may be exercised in 2033. With regard to these payment obligations, assumption of the performance obligation is contractually agreed by the party that has committed to perform. As long as the parties that have committed themselves to perform do so, Koelnmesse GmbH will not have to make any payments. There are currently no indications that the party in question might not be able to meet its obligations.

In the years 2006 through 2008, Koelnmesse GmbH issued an indefinite Letter of Comfort/Financial Support to each of its subsidiaries in Japan, Singa-pore, China and Hong Kong. Under the terms of these letters, Koelnmesse GmbH, as creditor and shareholder, covenants not to require repayment of amounts owed by the respective subsidiary until the company’s resources permit.

In addition, Koelnmesse GmbH covenants to provide ongoing financial support to the respective subsidiary insofar as it has the capacity to fulfil financial commitments, so that the requirements of a going concern continue to be met. The likelihood of utilisation under these obligations is deemed low; this is substantiated based on past experience and the forecast economic development of the company.

Koelnmesse GmbH is a member of the supplementary pension fund of the City of Cologne (ZVK). ZVK is responsible for providing its members’ employees with a supplementary pension for old age, occupa-tional disability, and surviving dependants. The assessment is currently 5.8 % of the remuneration subject to supplementary pension payments. To set up a capital cover, a surcharge of 3.2 % will be levied for 2018 (unchanged in 2019: 3.2 %). As at 31 December 2018, the shortfall in coverage attributable to the company, for which in an exercise of the accounting option under Art. 28 EGHGB no provisions have been created, totals to 38,154 Teuro (consolidated companies: 39,585 Teuro). The distribution-blocked difference amounts to 8,277 Teuro (consolidated companies: 8,588 Teuro). With respect to the consolidated companies, the wages and salaries subject to assessment amounted to 32,990 Teuro in the year under report. With respect to Koelnmesse GmbH, they amounted to 32,158 Teuro. In addition, there are annual liabilities to various pension funds for the pensions of the Executive Vice Presidents and several Vice Presidents. For the upcoming fiscal year, these total to 250 Teuro for the consolidated companies and to 245 Teuro for Koelnmesse GmbH. Given the current shortfall, the likelihood of utilisation is considered to be very low. This assessment results from the fact that the annual reports of ZVK are subject to independent audit, and that the business development was considered to be positive. According to the actuary, the current level of capital cover also exceeds target values. Based on what is known at this time, then, it can be assumed that ZVK is in a position to meet all of its commit-ments.

Net sales were generated in Germany and abroad as follows

Consolidated companies GmbH

2018 2017 2018 2017

TEUR TEUR TEUR TEUR

Domestic 156,704 161,010 139,385 146,210

Abroad 180,691 196,937 145,036 169,696

337,395 357,947 284,421 315,906

With regard to their sources, net sales break down as follows

Consolidated companies GmbH

2018 2017 2018 2017

TEUR TEUR TEUR TEUR

Investment income 190,940 200,226 151,699 172,830

Execution of events 7,689 9,162 7,697 9,162

Admission proceeds/catalogues 28,706 32,399 30,219 33,625

Services 58,436 61,772 55,672 60,193

Other revenues 51,624 54,388 39,134 40,096

337,395 357,947 284,421 315,906


VIII. Other financial commitmentsThe City of Cologne, Koelnmesse GmbH and the owners of the new trade fair halls built in 2005 had previously agreed under an interim agreement under which, retroactively from 1 August 2010, the rental fees for the halls were reduced, most recently to an amount equal to 75 % of the amount originally agreed upon. In December 2018, a new lease was concluded directly between Koelnmesse and the owners that specified rent payments retroactively on the basis of the interim agreement. The rent payments for the North Halls are therefore perma-nently reduced per year and thus also the future financial liabilities. These payments amount to 275,319 Teuro plus ancillary costs for Koelnmesse GmbH and the consolidated companies from the beginning of 2019.

The leases for the Congress Centre North newly built in 2005, and for the Messehochhaus, give rise to long-term obligations to Koelnmesse GmbH, and at the consolidated companies level, that total to 54,373 Teuro plus ancillary costs. There are long-term obligations of 79,177 Teuro for the extension of the leasehold agreements for the south section of the trade fair grounds concluded in December 2017 and for the leasehold agreement concluded in December 2018 for the premises of the new car park.

In addition, there are commitments of 10,954 Teuro (12,827 for the consolidated companies) from long-term rental and leasing contracts for business and office equipment (company cars, copiers, computers and peripheral equipment, etc.) at Koelnmesse GmbH.

IX. Other notes

Average workforce figures for the year

Salaried Hourly-paid Total

employees employees

Consolidated companies1 811 33 844

GmbH 608 33 641

1 The employee of the company

commensurately included at 50 % was

recognised with the value of 0.5. Notes concerning the consolidated financial statement and the annual financial statement 66/67

Total remuneration of members of management consists of a fixed annual salary, a performance-based bonus and other remuneration components, in particular a company car and the insurance premiums paid into the company pension programme.

There is no public-law pension system in place for members of management and their surviving dependants.

The expenses for remuneration of management for its work during the year under report total to 1,861 Teuro.

Remuneration for Gerald Böse is 810,103.05 euro (of which 393,124.96 euro fixed remuneration, 317,503.75 euro in royalties1 and 99,474.34 euro in in-kind and other remuneration2), for Katharina Hamma 461,384.52 euro (of which 220,458.37 euro fixed remuneration, 178,062.50 euro in royalties1 and 62,863.65 euro in in-kind and other remunera-tion2) and for Herbert Marner 589,563.25 euro (of which 280,134.36 euro in fixed remuneration, 226,262.40 euro in royalties1 and 83,166.49 euro in in-kind and other remuneration2).

Variable remuneration provisions containing long-term incentives were agreed with Executive Vice Presidents, to take effect beginning with fiscal year 2012.

1 Because exact levels of target achievement remain to be determined, the bonus amounts shown are estimates as at the date

the annual financial statement was drawn up. The corrected value will be reported in the next annual financial statement.2 In-kind and other remuneration includes the costs of a premium-based pension plan, among other things.

During the financial year there were no benefits paid to members of management on the occasion of the end of their employment.

In the event of a premature termination of employment, there are no public-law pension provisions or claims to severance pay in effect for any member of management.

Remuneration for former Executive Vice Presidents and their surviving dependants totalled to 420 Teuro during the financial year under report. Pension provisions of 6,183 Teuro are set aside for former Executive Vice Presidents and their surviving dependants.

The members of the Advisory Board of Koelnmesse GmbH and of Koelnmesse Ausstellungen GmbH each receive a meeting stipend for their work in relation to every meeting attended. The same holds true for the members of the Finance Committee, the Internationalisation Committee and the share-holders’ representatives at the general meetings. For members of the respective committees, the stipend for each meeting attended was 250.00 euro; the respective chairperson receives twice this amount and his or her deputy one and a half times this amount. Under the Articles of Associa-tion, the Chairperson of the Supervisory Board of Koelnmesse GmbH also receives an additional expense allowance.

Payment of the bonus is extended over several years. For 2018, the entire bonus amount is paid into a bonus bank. Only one-third of the amounts accrued in the bonus bank is paid out each year; consequently, for the 2018 financial year, Gerald Böse will receive 267,486.34 euro, Katharina C. Hamma 157,331.18 euro and Herbert Marner 183,168.05 euro paid out in the form of bonuses.

The result-based share of the bonus amounts to 30 % for the Chief Operating Officer and the Chief Financial Officer, and to 35 % of the total bonus for the President and Chief Executive Officer. This result-based share is subject to a malus provision and paid out based on levels of target achievement in subsequent years. In the event of clear failure to meet the results-based targets, this leads to a corresponding reduction of the bonus bank balances. In 2018, the bonus shares subject to this malus provision totalled to 74,075.46 euro for Gerald Böse; to 35,612.50 euro for Katharina C. Hamma; and to 45,252.48 euro for Herbert Marner.

The actual expense for active current members of management totalled to 1,795 Teuro for 2017 and was thus at the previous year’s level.

During the 2018 financial year at Koelnmesse GmbH, there were eight meetings of the Supervisory Board, two meetings of the Finance Committee, four share holders’ meetings, three meetings of the Internationalisation Committee, and six meetings of the Executive Committee.

At Koelnmesse Ausstellungen GmbH, there were three meetings of the Supervisory Board and one shareholders’ meeting.


Total remuneration for the individual members of the Supervisory Board for meetings in the Supervisory Board Committee, the Finance Committee, the Executive Committee and the Committee on Internationalisation of Koelnmesse GmbH was as follows:

1 Individual values rounded.2 Total value represents the total of unrounded amounts.

1 A profit and loss transfer agreement is in place.2 The holdings in these companies are owned by Koelnmesse

GmbH. The figures for the holding Koelnmesse YA Tradefair

Private Ltd. holding are based on the interim financial

statement for the calendar year that was provided for the

consolidated financial statement.3 The participation is held by Koelnmesse GmbH together

with another company. The tabular data concerning the

participation contain the proportionate values of Koelnmesse

GmbH. In each case, the participation contains proportionate

current assets in the amount of 1,206 Teuro, proportionate

non-current assets in the amount of 168 Teuro, current

obligations of 298 Teuro, and no long-term obligations. The

participation involved proportionate income of 34 Teuro and

expenses of 239 Teuro. There are no financial obligations.4 Koelnmesse GmbH owns 55 % of the voting rights.5 Koelnmesse GmbH owns 50 % of this company. The subsidiaries

in Singapore and Hong Kong each hold 25 %. The company

has no longer been included in the consolidated financial

statement since 2018.

Of the total remuneration at Koelnmesse GmbH, 53 Teuro is attributable to the Supervisory Board, 6 Teuro the Finance Committee, 11 Teuro to the Executive Committee, and 6 Teuro to the Committee on Internationalisation. The remunera-tion of the Supervisory Board in the consolidated companies (Koelnmesse GmbH and Koelnmesse Ausstellungen GmbH) totals to 57 Teuro.

The total fee charged by the BDO AG accounting firm in the 2018 financial year stood at 353 Teuro. Of this amount, 76 Teuro applies to the audit of the annual and consolidated financial statements (including 53 Teuro for Koelnmesse GmbH) and 277 Teuro to other services.

No important business under normal market conditions was conducted during the fiscal year with affiliated individuals or companies not included in the consolidated financial statement as direct or indirect wholly-owned subsidiaries.

The company is included in both its own consoli-dated financial statement (smallest group of companies or scope of consolidation) and in the communal consolidated financial statement of the City of Cologne (largest group of companies or scope of consolidation). The consolidated financial statement of Koelnmesse GmbH is available at company headquarters and is published in the Federal Gazette [Bundesanzeiger]. It can be accessed online at www.bundesanzeiger.de. The communal consolidated financial statement of the City of Cologne is published on the homepage of the City of Cologne at www.stadt-koeln.de.

Remuneration for members of the Supervisory Board

Total remuneration1

TEUR

Henriette Reker (Chairwoman) 20.3

Kirsten Jahn (1st Vice Chairwoman) 5.9

Claudia Wörmann-Adam (2nd Vice Chairwoman) 1.5

Alexander Stary (2nd Vice Chairman) 4.9

Hans-Werner Bartsch 3.0

Torsten Burmester 1.0

Pia D’Hondt 1.5

Dr. Ralph Elster 0.0

Jochen Felix 0.5

Dr. Michael Henze 2.5

Reinhard Houben 0.5

Christian Joisten 1.8

Axel Kaske 3.8

Niklas Kienitz 2.0

Alfred Kohlenberg 0.5

Dr. Barbara Lübbecke 4.0

Corinna Mülstegen 1.5

Dr. Patrick Opdenhövel 2.0

Petra Opgenoorth 1.3

Bernd Petelkau 4.0

Ulf C. Reichardt 2.5

Manfred Richter 2.0

Ingo Riedeberger 2.0

Matthias Schlüter 2.5

Martin Schumaier 0.5

Fabian Ströter 2.0

Torsten Weil 2.0

Total2 75.7

Koelnmesse GmbH holds a direct or indirect share of more than 20 % in the companies listed below:

Headquarters Shareholders’ rate Equity Last

Consolidated net income

companies/GmbH

percent EUR EUR

Koelnmesse Ausstellungen GmbH1 Cologne 100 500,000.00 0.00

Koelnmesse Inc.2 Chicago 100 1,770,261.49 73,389.35

Koelnmesse S.r.l.2 Milan 100 902,993.07 102,163.51

Koelnmesse Pte. Ltd.2 Singapore 100 947,202.68 1,220,307.42

Koelnmesse Ltd.2 Hong Kong 100 19,535,928.95 4,993,418.01

Koelnmesse Co. Ltd.2 Beijing 100 -2,111,148.87 1,685,203.60

Koelnmesse Co. Ltd.2 Tokyo 100 -1,434,809.65 253,154.49

Koelnmesse Organização de Feiras Ltda.2 São Paulo 100 -777,602.65 -1,394,173.66

Koelnmesse SAS2 Bogotá 100 722,137.73 92,122.72

Koelnmesse YA Tradefair Private Ltd.2 Mumbai 75 2,423,825.38 854,244.76

Koeln Parma Exhibitions S.r.l.3 Parma 50 1,075,089.03 -204,729.85

Expolink Global Network Ltd.4 Bangkok 49.17 209,188.02 124,223.89

Koelnmesse Co. Ltd.5 Bangkok 100 59,054.84 -5,960.32

KölnKongress GmbH2 Cologne 49 260,000.00 no information

KölnKongress Gastronomie GmbH2 Cologne 49 25,000.00 no information


Company bodies

The company bodies are comprised as follows:

Management Board

Gerald Böse, ColognePresident and Chief Executive Officer

Katharina C. Hamma, CologneChief Operating Officer (ending 19 November 2018)

Herbert Marner, Dernau Chief Financial Officer

Supervisory Board

Henriette Reker, MdR1 ChairwomanMayor of the City of Cologne

Kirsten Jahn, MdR1

1st Vice ChairwomanCertified Geographer

Claudia Wörmann-Adam4 (ending 15 May 2018)2nd Vice Chairwoman Retired

Alexander Stary4 (beginning 15 May 2018)2nd Vice-Chairman of the Works Council

Hans-Werner Bartsch, MdR1 Mayor of the City of Cologne

Torsten Burmester (ending 15 May 2018) Head of Department, Ministry for Economics, Innovation, Digitalisation and Energy of the German State of North Rhine-Westphalia

Pia D’Hondt4 (beginning 15 May 2018) Visitor Manager Art Fairs

Jochen Felix4 (ending 15 May 2018) Retired

Volker Görzel, MdR1 (beginning 26 November 2018) Attorney

Dr. Michael Henze (beginning 15 May 2018) Head of Department, Ministry for Economics, Innovation, Digitalisation and Energy of the German State of North Rhine-Westphalia

Reinhard Houben, MdB3 (ending 26 November 2018) Business graduate/Executive Vice-President

Christian Joisten, MdR1

Management consultant

Axel Kaske Kaufmann

Niklas Kienitz, MdR1

Certified attorney/Real estate economist

Dr. Barbara Lübbecke Executive Vice-President

Corinna Mülstegen4 (beginning 15 May 2018) Communications Manager

Dr. Patrick OpdenhövelSecretary of State in the Ministry of Finance of the State of North Rhine-Westphalia

Petra Opgenoorth4 Sales Manager

Bernd Petelkau, MdL2 Business graduate

Ulf C. ReichardtExecutive Director of the Cologne Chamber of Industry and Commerce

Manfred Richter, MdR1 Personnel manager

Ingo Riedeberger4

Director

Matthias Schlüter4

Director

Martin Schumaier4 (ending 15 May 2018) Employee

Fabian Ströter4

Director

Torsten WeilOffice manager, State Chancellery of the Free State of Thuringia, Office of the State Premier

1 MdR = Member of the Cologne City Council2 MdL = Member of the Landtag of North Rhine-Westphalia3 MdB = Member of the German Bundestag4 Employee representatives at Koelnmesse GmbH Notes concerning the consolidated financial statement and the annual financial statement 72/73

Proposal for the appropriation of net incomeThe management proposes to the company bodies that the net profit of Koelnmesse GmbH from 2018 be added to the retained earnings


Gerald Böse Herbert Marner

X. Subsequent events of particular importance after the balance sheet dateThere were no processes of special importance to the company within the meaning of Section 285 No. 33 HGB after the close of the financial year.


Consolidated cash flow statement

2018

TEUR

2017

TEUR

Consolidated companies' net profit after holdings by other shareholders +53,447 +27,326

Earnings share of minority shareholders +277 +67

Depreciation (+)/value adjustments (-) of items from the fixed assets +20,180 +20,331

Increase (+)/Decrease (-) of provisions -6,921 +15,630

Other expenses (+)/income (-) that do not affect payments +116 +252

Increase (-)/decrease (+) of inventories, trade accounts receivable and other assets

not related to investment or financing operations -385 -3,079

Increase (+)/decrease (-) of trade accounts payable and other liabilities not related

to investment or financing operations +27,474 -7,586

Profit (-)/loss (+) from the disposal of items from the fixed assets +203 +85

Interest expense (+)/interest income (-) +454 +312

Expenses (+)/income (-) of exceptional magnitude or exceptional importance -40,147 0

Income tax expense (+)/income tax income (-) +6,032 +7,238

Income tax payments (-)/income tax refunds (+) -18,115 -6,487

Cash flow from ongoing business operations +42,615 +54,089

Payments for investments in intangible fixed assets (-) -213 -311

Payments for investments in property, plant and equipment (-) -33,671 -43,681

Deposits due to financial investments within the scope of short-term financial disposition (+) +430 +433

Interest received (+) +76 +119

Cash flow from investment activities -33,378 -43,440

Interest paid (-) -349 -340

Dividends paid to other shareholders (-) 0 -169

Cash flow from financing activities -349 -509

Changes resulting from foreign currency translation -76 +229

Changes to cash funds that affect payments +8,812 +10,369

Changes to cash funds due to consolidation -216 0

Cash funds at the beginning of the period +131,662 +121,293

Cash funds at the end of the period +140,258 +131,662

Cash funds are comprised of cash on hand plus bank balances in the amount of 116,640 Teuro (of which 941 Teuro from proportionately consolidated companies), as well as marketable securities in the amount of 23,618 Teuro.

Consolidated cash flow statement 76/77

As at 01.01.2017 51,200 42,038 382 42,420 -469 50,179 -869 142,461 304 282 586 143,047

Distribution 0 0 0 0 0 0 0 0 -169 0 -169 -169

Currency translation 0 0 0 0 230 0 0 230 0 0 0 230

Inclusion in

retained earnings 0 0 76,636 76,636 0 -50,179 -26,457 0 0 0 0 0

Consolidated companies 0 0 0 0 0 0 27,326 27,326 0 67 67 27,393

As at 31.12.2017 51,200 42,038 77,018 119,056 -239 0 0 170,017 135 349 484 170,501

As at 01.01.2018 51,200 42,038 77,018 119,056 -239 0 0 170,017 135 349 484 170,501

Distribution 0 0 0 0 0 0 0 0 0 0 0 0

Currency translation 0 0 0 0 -76 0 0 -76 0 0 0 -76

Changes in the

scope of consolidation 0 0 0 0 0 249 0 249 0 0 0 249

Other changes 0 0 0 0 0 0 0 0 349 -349 0 0

Consolidated companies 0 0 0 0 0 0 53,447 53,447 0 277 277 53,724

As at 31.12.2018 51,200 42,038 77,018 119,056 -315 249 53,447 223,637 484 277 761 224,398

Consolidated shareholders’ equity list

Equity capital of the parent company Non-controlled shares

Consolidated

equity

Sub-

scribed

capital Reserves

Equity

differences

from

currency

translation

Profit

carried

forward

Consolidated

income

to the

parent

company Total

Non-controlling

shares

before

net income

Profit

attributable to

non-controlled

shares Total Total

TEUR

Capital

reserve

TEUR

Retained

earnings

TEUR

Total

TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR TEUR

Consolidated shareholders’ equity list 78/79

Audit opinion

OpinionsWe have audited the annual financial statement (consisting of the balance sheet as at 31 December 2018 and the income statement for the fiscal year from 1 January 2018 to 31 December 2018 and the notes, which are published together with the notes concerning the consolidated financial statement), including the presentation of the accounting and valuation principles of Koelnmesse GmbH, Cologne, and of its subsidiaries (the consolidated companies) (consisting of the consolidated balance sheet as at 31 December 2018, the income statement for the consolidated companies, the consolidated share-holders’ equity list and consolidated cash flow statement for the fiscal year from 1 January 2018 to 31 December 2018, as well as the notes concerning the consolidated financial statement, which is published along with the notes concerning the annual financial statement, including the presenta-tion of the accounting and valuation principles. We also audited the summarised management report (Management Report on Koelnmesse GmbH and the Koelnmesse consolidated companies) of Koelnmesse GmbH for the fiscal year from 1 January 2018 to 31 December 2018. In accordance with German legal requirements, we have not audited the content of the corporate governance statement issued pursuant to Section 289f (4) of the German Commercial Code (HGB). In addition, we have not audited the other parts of the Annual Report presented under “Other information” with the exception of the audited annual financial state-ment, the audited consolidated financial statement and the summary management report and our audit opinion.

In our opinion, on the basis of the audit’s findings,− the attached annual financial statements comply

in all material respects with the provisions of German commercial law applicable to corpora-tions and, in compliance with German generally accepted accounting principles, give a true and

fair view of the financial position of the company as at 31 December 2018 and of its results of operations for the fiscal year from 1 January 2018 to 31 December 2018 and

− the attached consolidated financial statement complies in all material respects with the provisions of German commercial law and, in compliance with German generally accepted accounting principles, gives a true and fair view of the financial position of the company as at 31 December 2018 as well as of its results of operations for the fiscal year from 1 January 2018 to 31 December 2018 and

− t he accompanying summarised management report as a whole provides an appropriate view of the position of the company and of the consolidated companies. In all material respects, this summarised management report is consistent with the annual financial statement and the consolidated financial statement, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our audit opinion on the summarised management report does not extend to the content of the above-refer-enced corporate governance statement.

Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audits have not led to any reserva-tions relating to the legal compliance of the annual financial statement, of the consolidated financial statement or of the summarised management report.

Basis for the opinionsWe conducted our audit of the consolidated financial statements and of the summarised management report in accordance with Section 317 HGB and the generally accepted German standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW).

Our responsibilities under those requirements and principles are further described in the “Auditor’s responsibilities for the audit of the annual financial statement, the consolidated financial statement and the sum summarised management report” section of our audit opinion. We are independent of the company and the group company in accordance with the requirements of German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the annual financial statement, the consolidated financial statement and the summa-rised management report.

Other informationManagement is responsible for the other informa-tion. Other information comprises− the corporate governance statement pursuant to

Section 289f (4) HGB− the remaining parts of the Annual Report, with

the exception of the audited annual financial statement, the audited consolidated financial statement and the summarised management report and our audit opinion.

Our opinions on the annual financial statement, on the consolidated financial statement and on the summarised management report do not cover the other information, and consequently we do not express an opinion or any other form of audit conclusion thereon.

In connection with our audits, our responsibility is to read the other information and, in so doing, to consider whether the other information− is materially inconsistent with the annual

financial statement, consolidated financial statement, summarised management report or our knowledge obtained in the audit, or

− otherwise appears to be materially misstated.

Responsibility of management and the Supervisory Board for the annual financial statement, the consolidated financial statement and the summarised management report Management is responsible for the preparation of the annual financial statement and the consolidated financial statement in compliance with German commercial law in all material respects, and for ensuring that the annual financial statement and the consolidated financial statement comply with German generally accepted accounting principles, in each case providing a true and fair view of the net assets, financial position and results of opera-tions of the company or group of companies. In addition, management is responsible for such internal controls as they, in accordance with German legally required accounting principles, have determined necessary to enable the preparation of an annual financial statement or a consolidated financial statement that are free from material misstatement, whether due to fraud or error.

In preparing the annual financial statement and consolidated financial statement, the management is responsible for assessing the ability of the company or the consolidated companies to continue as a going concern. In each case, they also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for providing an accounting of the Company’s ability to continue as a going concern on the basis of the accounting policy, insofar as this does not conflict with actual or legal circumstances.

Management is also responsible for drawing up the summarised management report, which provides an accurate overall picture of the situation of the company and the consolidated companies and is consistent in all material respects with the annual financial statement and the consolidated financial statement, complies with the provisions of German law, and accurately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures

Audit opinion 80/81

(systems) as they have considered necessary to enable the preparation of a summarised management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the summarised management report.

The Supervisory Board is responsible for monitoring the financial reporting process of the company and consolidated companies for the preparation of the annual financial statement, the consolidated financial statement and the summarised management report.

Responsibility of the auditor for audits of the annual financial statement, consolidated financial statement and summarised management report: Our objective is to obtain sufficient assurance as to whether the annual financial statement and/or consol-idated financial statement as a whole are free from material – intentional or unintentional – misstatement, and whether the summarised management report on the whole provides an accurate picture of the situation of the company and consolidated companies and is consistent in all material respects with the annual financial statement and the consolidated financial statement as well as with the findings of the respective audit, complies with German law and accurately presents the respective opportunities and risks of future development; as well as to issue an audit opinion that includes our opinions on the annual financial statement, the consolidated financial statement and the summarised management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of this annual financial statement, consolidated financial statement and the summarised management report.

We exercise professional judgement and maintain professional scepticism throughout the audits. In addition,− we identify and assess the risks of material

misstatement of the annual financial statement, consolidated financial statement and of the summarised management report, whether due to fraud or error, design and perform audit proce-dures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

− we obtain an understanding of internal control system relevant to the audit of the annual financial statement and consolidated financial statement and of arrangements and measures relevant to the audit of the summarised management report in order to design audit procedures that are appropri-ate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.

− we evaluate the appropriateness of accounting policies used by management and the reasonable-ness of estimates made by management and related disclosures.

− we draw conclusions on the appropriateness of management’s use of the respecting going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s or consolidated companies’ ability to continue as a going concern. If we conclude that a material uncertainty exists,

we are required to draw attention in the auditor’s report to the related disclosures in the annual financial statement, consolidated financial statement and summarised management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company or the consoli-dated companies to cease to be able to continue as a going concern.

− we assess the overall presentation, structure and content of the annual financial statement and the consolidated financial statement, including the disclosures, as well as whether the annual financial statement and the consolidated financial state-ment present the underlying transactions and events in such a way that the annual financial statement and the consolidated financial state-ment each provides a true and fair view of the net assets, financial position and results of operations of the company or the consolidated companies, in compliance with German generally accepted accounting principles.

− when auditing the consolidated financial state-ment, we obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express opinions on the consolidated financial statement and on the summarised management report. We are responsible for the direction, supervision and performance of the audit of the consolidated financial statement. We alone are responsible for our opinions.

− we evaluate the consistency of the summarised management report with the annual financial statement, and the consolidated financial state-ment, its conformity with German law, and the view of the company and consolidated companies that these provide.

− we perform audit procedures on the prospective information presented by management in the

summarised management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the prospective information and evaluate the proper derivation of the prospective information from these assump-tions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a significant unavoidable risk that future events will differ materially from the prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.


BDO AGAuditing Company

/signed/Herrlein /signed/PitzenAuditor Auditor

Audit opinion 82/83

Supervisory Board report

In the year under review, the Supervisory Board fulfilled the duties entrusted to it according to the laws and regulations and monitored the manage-ment of Koelnmesse to ensure it was conducted in an orderly manner. During the past business year, the Supervisory Board regularly advised the Executive Board and monitored its activities in the course of regular and extraordinary meetings. The Supervisory Board was always informed promptly and thoroughly by the Koelnmesse Executive Board about the company’s business development and its resulting profitability and liquidity. The major trans-actions that had to be submitted to the Supervisory Board for approval as a result of legal stipulations or the Articles of Association were discussed extensively during several sessions before a decision was made. Important business policy issues were addressed in depth.

The consolidated financial statement, the annual financial statement, and the management report on the situation of Koelnmesse GmbH and the Koeln-messe consolidated companies for the financial year from 1 January to 31 December 2018 were audited by BDO AG, the auditing company commissioned for this purpose at the shareholders’ meeting. The auditors issued an unrestricted audit certificate for the financial statements.

The Supervisory Board has approved the corresponding audit reports. The Supervisory Board has reviewed and approved the consolidated compa-nies’ financial statement, the annual financial statement, and the report on the situation of Koelnmesse GmbH and the Koelnmesse consolidated companies for the financial year from 1 January to 31 December 2018. The Supervisory Board approves the Executive Board’s proposal to add the net profit for 2018 to the retained earnings.

The shareholders’ meeting will be informed of this decision.

The Supervisory Board thanks the Executive Board and all of the Koelnmesse employees for the work they have accomplished in the past year.

Cologne, May 2019

Henriette Reker Mayor of the City of Cologne Chairwoman of the Supervisory Board

Supervisory Board Report 84/85

Anhang und Konzernanhang 00/00

Koelnmesse GmbH

Messeplatz 1

50679 Köln

Germany

Tel. +49 221 821-0

Fax +49 221 821-2574

[email protected]

www.koelnmesse.com

GB-

Prin

ted

in G

erm

any

05.2

019

www.koelnmesse.com

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Annual Report 2018

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