ite group plc interim results may 2010.pdf · financial results ite group plc – interim results...
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Interim Results Presentation – May 2010
ITE Group plc
Table of contents
1 S 31 Summary 3
2 Financial Results 6
3 Markets 13
4 Strategy Outlook 214 Strategy – Outlook 21
5 Appendices 25
ITE Group plc – Interim Results – six months to 31 March 2010 2
Highlights – six months to 31 March 2010
2010 2009
Revenue £39.2m £43.2m -9%
Headline PBT £6.4m £13.3m
Headline PBT excluding Forex £8.5m £9.4m -9%
Interim dividend 1.7p 1.6p
Cash at 31 March £29.7m £25.3m
H1 is in line with expectations - reflecting full effects of the recession
Recovery is beginning – but ‘late cycle’ financial effectRecovery is beginning but late cycle financial effect
Expansion of business in India, Moscow, Turkey, Ukraine
ITE Group plc – Interim Results – six months to 31 March 2010 3
Financial highlights – six months to 31 March 2010
L4L volume sales down 20%
L4L Revenues down 16%
L4L Gross profit down 10%
Gross margin up 1% to 43%
Year on Year foreign exchange effect (£6.0m)
Strong operating cash flow in first six months of £27.5m (2009:£20.4m)
£100m of 2010 sales booked (95% of consensus)
ITE Group plc – Interim Results – six months to 31 March 2010 4
Trading environment
L4L volume sales for full year expected to be down by circa 10%
‘Peak to trough’ L4L volume sales down circa 30%
#1 events emerge stronger - L4L volume sales down 20%
Moscow exhibition business is now beginning to recover
Local exhibitors returning faster than internationals Local exhibitors returning faster than internationals
Construction industry remains weak outside Moscow
ITE Group plc – Interim Results – six months to 31 March 2010 5
FINANCIAL RESULTS
ITE Group plc – Interim Results – six months to 31 March 2010 6
Financial highlights for the six months to 31 March 2010
2010 2009
Acquisitions: +£3.1mPricing & Fx: +£1.4mVolumes: ‐£8.5m
2010 2009
Revenue £39.2m £43.2m -9%
Gross profit margin 43% 42%
Headline profit before tax £6.4m £13.3m
Net forex (£2.1m) £3.9m
Headline profit before tax - excl forex £8.5m £9.3m -9%
Dividend 1.7p 1.6p
Net cash £29.7m £25.3m
Progressive dividend policy
ITE Group plc – Interim Results – six months to 31 March 2010 7
Headline PBT bridge – six months to 31 March 2010
13.3 (6 0)
16
Paperex – IndiaIMOB - Turkey
13.3 (6.0)
10
12
14
£M
(1.8)
0.8 0.1 6.4
6
8
10
Head
line
PBT £
2
4
6
02009 Headline PBT Foreign exchange
turnaroundProfit decline 2010 Acquisitions Overheads, Financing
receipts & Associates2010 Headline PBT
ITE Group plc – Interim Results – six months to 31 March 2010 8
Cash flow bridge – six months to 31 March 2010
(2 3)
60
Turkey £4.3mKazakhstan £1.0m
India £2.0mNovosibirsk £0.9m
+35% on PY
27.5 (0.6) (2.3) (5.8)
(2.9)(9.3)
40
50
£M
23.1
29.730
Cas
hflo
w -
£
10
20
02009 Cashflow from
OperationsNet Financing &
ForexTax Venue
PrepaymentsAcquisitions & Def
ConsiderationDividends 2010
ITE Group plc – Interim Results – six months to 31 March 2010 9
Currency and hedging
Forward cover2010-2013
Currencyof sale
2010 %
Av sales rate2010 2009
€63m @ £1.11EUR 70 1.16 1.21
GBP 11 1.0 1.0
+4%
RUB 6 48 46.5
Other 13
50
fx lossfx gain
40
45
50
EUR/RUB
GBP/RUB
35
10.2
008
12.2
008
03.2
009
06.2
009
09.2
009
12.2
009
03.2
010
Ruble depreciation early 2009
Ruble appreciation early 2010= Fx gains/losses
ITE Group plc – Interim Results – six months to 31 March 2010 10
01.
01.
01. 0
01.0
01.0
01.
31. 0
Exhibitions – Performance summary
Square Meters
Revenue£m
Gross Profit
Average Yield£ per m2Meters
‘000 £m Profit
£m£ per m2
First half 2009* 188.6 42.5 17.8 225
Acquisitions 53 4 3 1 0 9 58Dilutive yield
effectAcquisitions 53.4 3.1 0.9 58
Net organic change (38.4) (7.0) (1.8)
First half 2010* 203.6 38.6 16.9 190
effect
* excludes publishing activity
• L4L Volume sales – 20%%
• L4L Revenues – 16%
• L4L Gross profit – 10%
ITE Group plc – Interim Results – six months to 31 March 2010 11
Trading update – 2010 contracted sales
100
£m Sales booking
£65m £69m£85m £94m £103m
£100m
70
80
90
100
40
50
60
70
%% Booked of full years revenue after 7.5 months trading.
82% 85% 86% 86% 87% 95%
20
30
40* Based on consensus revenue estimates of £105m (including acquisitions)
0
10
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 *
• £100m of sales booked for 2010 (95% of market consensus)
ITE Group plc – Interim Results – six months to 31 March 2010 12
GROUP RESULTS - MARKETS
ITE Group plc – Interim Results – six months to 31 March 2010 13
Business review
SUMMARY – Revenues for the six months ended 31 March 2010
2010£m
2009£m
% change
Russia 16.7 20.5 -19%
Central Asia & Caucasus 9.6 10.8 -11%
Eastern & Southern Europe 7.8 8.2 -5%
UK & Western Europe 4.0 3.5 +14%
Rest of World 1.1 0.2 N/A
Total 39.2 43.2 -9%
ITE Group plc – Interim Results – six months to 31 March 2010 14
Russia
2010
6 months 6 monthsMoscow – recovery underway
St. Petersburg – very difficult trading conditions
2010 2009
m² ‘000 64 80
Revenue £16.7m £20.5m
Outlook
Complementary acquisition of Global Expo - Moscow
Further acquisition opportunities presenting themselves
Novosibirsk – new venue options
ITE Group plc – Interim Results – six months to 31 March 2010 15
Central Asia
6 months 6months
2010
6 months2010
6months2009
m² ‘000 28 34
Revenue £9.6m £10.8m
Kazakhstan – markets improving | construction lagging
Azerbaijan – good solid trading conditions
Uzbekistan – recovery in evidence | positive trading
Outlook
Aqua-therm opportunities in Kazakhstan and Azerbaijan
Azerbaijan – new venue opens in June
ITE Group plc – Interim Results – six months to 31 March 2010 16
Eastern and Southern Europe
6months 6 months
2010
2010 2009
m² ‘000 86 58
Revenue £7.8m £8.2m
Ukraine - very difficult trading conditions
Turkey - shows trading ahead of last year
Outlook
New sectors in Turkey Food | Furnishings | Machinery | GiftsNew sectors in Turkey - Food | Furnishings | Machinery | Gifts
Aqua-therm Kyiv - a market leading event
ITE Group plc – Interim Results – six months to 31 March 2010 17
UK / Rest of World
2010 6 months 6 months2010
UK - Steady trading conditions | brand extension
2010 2009
m² ‘000 25 16
Revenue £5.1m £3.7m
India - Good trading conditions
Outlook
Launch opportunities in India
ITE Group plc – Interim Results – six months to 31 March 2010 18
April trading results
2010m2
2009m2
Mosbuild 62,700 74,900
Interstroyexpo 6,400 10,100
TransRussia 7,500 7,300
Expoelectronica 5,100 5,300
ITE Group plc – Interim Results – six months to 31 March 2010 19
GDP growth in ITE’s markets
2009* 2010* 2011*
• Russia (8%) 4% 3%
• Kazakhstan 1% 2% 4%
• Azerbaijan 9% 3% 1%
• Uzbekistan 8% 8% 7%
• Ukraine (15%) 4% 4%
• Turkey (5%) 5% 3%
• UK (5%) 1% 3%
*Source: IMF World Economic outlook database, April 2010
ITE Group plc – Interim Results – six months to 31 March 2010 20
STRATEGY - OUTLOOK
ITE Group plc – Interim Results – six months to 31 March 2010 21
New growth opportunities
Industrial
New Sectors New GeographiesIndia
Industrial Machinery
ITF Split
New Sectors New Geographies
Global ExpoEMITT
Aquatherm
Sochi
AquathermKyiv
AquathermMoscow
Joint Ventures
International Brands
Acquisitions
Launches
ITE Group plc – Interim Results – six months to 31 March 2010 22
Acquisitions
Strategy execution 2009 - 2010
Date Event Consideration Annual Revenue €
Jan 2009 EMITT €4.0m - €5.5m €2.6mJan 2009 EMITT €4.0m €5.5m €2.6m
Nov 2009 India €2.7m - €4.0m €1.6m
Feb 2010 Split Associate 50% of Associate €5.0m
April 2010 Global Expo €1.8m €1.4m
April 2010 Aquatherm €13m €4.0m
TOTAL €14.6m
Sector expansion in market
New market
ITE Group plc – Interim Results – six months to 31 March 2010 23
Outlook
Stable trading conditions| growth returning in Moscow
Cash at 14 May - after all acquisitions over £14m
Ongoing strong cash flow with gearing available
Management focus on detail of integration
Good opportunities to expand the business modelGood opportunities to expand the business model
ITE Group plc – Interim Results – six months to 31 March 2010 24
APPENDICES
ITE Group plc – Interim Results – six months to 31 March 2010 25
Contents
I Sh h ld St t t 27 A il 2010I Shareholder Structure at 27 April 2010
II Key Management Team
III Top 10 Events
IV Group Balance SheetIV Group Balance Sheet
V Venue Prepayments and Loans
ITE Group plc – Interim Results – six months to 31 March 2010 26
Shareholder Structure at 27 April 2010 APPENDIX I
% No. of Shares(millions)
SchrodersBlackrock
16.5%15 4%
40.838 3Blackrock
Scottish WidowsOld MutualLegal and GeneralStandard LifeThreadneedle InvestmentsCe da Erem
15.4%5.8%5.7%5.3%4.9%4.6%3 8%
38.314.514.113.112.211.4
9 4Ceyda EremDirectors
ESOTOther Institutions and individuals
3.8%2.9%
4.0%31.1%
9.47.1
10.077.4
Total Shares in issue 100% 248.3Options in the money: 0.2% 0.5m
Management including options in the money 3.5%Management including options in the money 3.5%
Free float 96.5%
Average daily trading volume (6 months) 0.6m
ITE Group plc – Interim Results – six months to 31 March 2010 27
Key Management Team APPENDIX II
ITE Group plc – Interim Results – six months to 31 March 2010 28
Main Board Directors
Key Exhibitions (in 2010 gross profit order) APPENDIX III
Rank Event Location 2010
m² sold
2009
m² sold
1 MosBuild & MosBuild+ Moscow 62,700 74,900
2 Moscow International Travel & Tourism (MITT) Moscow 19,500 20,200
3 World Food Moscow Moscow Sept 16 3003 World Food Moscow Moscow Sept 16,300
4 MODA UK (Spring only) U.K. 16,900 14,900
5 Kazakhstan Oil & Gas / conference Kazakhstan 7,900 10,300
6 Transrussia Moscow 7,500 7,3006 Transrussia Moscow , ,
7 Expoelectronica Moscow 5,100 5,300
8 Interstroyexpo St. Petersburg 6,400 10,100
9 Ukraine International Travel & Tourism Kyiv 4,600 5,100
10 OGU Uzbekistan 2,100 1,900
% of ITE’s 10 Gross Profit earned by Top 10 events 63%% of ITE’s 10 Gross Profit earned by Top 10 events 63%
ITE Group plc – Interim Results – six months to 31 March 2010 29
Consolidated Balance Sheet APPENDIX IV
31-Mar-10unaudited £‘m
31-Mar-09unaudited £‘m
Non Current Assets•Goodwill & Intangibles 67.8 60.4•Other non-current assets 8.1 4.8
75.9 65.2Current Assets• Debtors due within 1 year 36.9 31.8• Cash (net of O/D) 29.7 25.2
66 6 57 066.6 57.0Creditors• Deferred Revenue & Creditors 81.2 86.2• Deferred Consideration 0.7 1.1• Deferred Tax 3 2 2 3
£44.3m £54.4m
• Deferred Tax 3.2 2.3• Provisions 0.9 1.2
86.0 90.8
Net Assets 56.5 31.4
ITE Group plc – Interim Results – six months to 31 March 2010 30
Venue Prepayments and Loans APPENDIX V
Venue LocationPrepayments
31 March 2010Theme
ProtectionRates
Agreed
Expocentr Moscow - 2011 2011p
Crocus Moscow £1.2m 2015 2011
Lenexpo St Petersburg £0.4m 2012 2012
Atakent Almaty £1.4m 2017 2017
IEC Kiev £1.1m 2014 2012
Uzexpocentr Tashkent £0.4m 2011 2011
CNR Turkey £4.8m 2014 2014
TOTAL £9.3MO £9.3
ITE Group plc – Interim Results – six months to 31 March 2010 31