market trends in us tradeshow industry 2015
TRANSCRIPT
Trends and the future outlook for the US tradeshow industry
Sector report
2©2015 AMR
Contents
1. Tradeshow fundamentals
2. Market opportunity
3. Organizer opportunities and challenges
4. AMR’s sector experience
3©2015 AMR
Economic recovery and continued demand for face to face will drive tradeshow growth
US tradeshow industry size and growth 2009-2018(f)
Source: AMR Globex report 2014
14.414.013.412.812.311.811.310.910.611.0
-12
-8
-4
0
4
8
12
16
-20
-15
-10
-5
0
5
10
15
2009 2010 2017f2013 2014e 2018f2016f
4.0%CAGR
2011 2012 2015f
Mar
ket
size
($
bn
)C
han
ge %
US real GDP % change
Market size ($bn)
Market % change
4©2015 AMR
Tradeshows achieve high gross margins and exhibit healthy cash flow
Tradeshow profitability
Source: ITE Group
0-20,000
20,000 – 75,000
75,000 +
15%
45%
60%+
Tradeshow size (sqf) Typical gross margin
Tradeshow cash flow
0
200
400
600
800
1,000
1,200
-12 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0-11
Deposits
2nd deposit Pay
vendors
Final balance
Stand construction
Months to opening
Cu
mu
lati
ve c
ash
flo
w $
’00
0s
5©2015 AMR
Contents
1. Tradeshow fundamentals
2. Market opportunity
3. Organizer opportunities and challenges
4. AMR’s sector experience
6©2015 AMR
Major tradeshow acquisitions timeline and multiples
2005 2011 2013
Ebit
da
/ tr
ansa
ctio
n v
alu
e m
ult
iple
Size of transaction $ m: <50
50-500
>501
Corporate buyers have stepped up to the plate with 10-12x EBITDA deals. This used to be the terrain of private equity
Source: Company accounts, AMR research and analysis
20090
2
4
6
8
10
12
14
16
18
2007
Inter-CHARM
Alcantara Machado
JV
Asian Gaming
Expo SinoPharm JV
VNU NV
Advanstar
Emap B2B
Clarion
Hanley Wood
MC Communications
Abu Dhabi portfolio
Adipec
Ad:Tech
Evanta
Aircraft Interiors
SST
Canon Comm.
Ecobuild
GLM
BTS
CloserStill
MMPI
EvantaNielsen
2015
Hanley Wood
Advanstar
Reed ExhibitionsDMGPrivate equity UBM Informa Emerald Euromoney i2i
GLM
Mining Indaba
Money 2020
Clarion
Quantum Bus MediaIthaca
Vision
ITE
BreakBulk
Comexposium
7©2015 AMR
Top 5 organizer
Number of exhibitions1
Turnover2
($m)Net space
sold (sqft m)Net space
sold (sqm m)Sector focus
Emerald 30 184 4 0.4Media, retail, sports, merchandise, real estate, jewellery
GLM (acquired by Emerald)
11 77 3 0.3Gift, toys, other consumer, sports and leisure, textiles and fashion
Reed Exhibitions
81 219 4 0.4Home, lifestyle, security, healthcare
Advanstar (acquired by UBM)
33 211 5 0.4Fashion & licensing, power sports, life sciences
Hanley Wood (acquired by Informa)
12 38 2 0.2Building products, home repair and construction
The market remains highly fragmented despite recent M&A activity. The top five organizers account for only c.6% and span a range of served markets
Top five US tradeshow organizers 2013
Note: 1Domestic; 2Domestic exhibition organising turnoverSource: AMR analysis
6%
Rest
Total US market 2013
Top 5
94%
The high market fragmentation is driven by the unique structure of the US market – c.80% of shows are association-run. However, there are a number of tier two for-profit organizers that may be attractive
acquisition targets
8©2015 AMR
Contents
1. Tradeshow fundamentals
2. Market opportunity
3. Organizer opportunities and challenges
4. AMR’s sector experience
9©2015 AMR
Continued M&A and better analytics are the key growth opportunities.Managing competition and staying close to served markets remain critical
Opportunities and threats
Pursue scale with acquisitions and launches, particularly in emerging markets
Diversify business models via addition of non-stand revenue streams such as online communities and data products
Use analytics and segmentation to align price to value on an exhibitor by exhibitor basis (limited opportunity for wholesale price rises)
Build analytics capacity in order to convert data into business insight e.g. attendee intelligence for better marketing
OPPORTUNITIES THREATS
Most common management pitfalls are (i) losing touch with market needs (ii) driving square footage at expense of show focus
The threat from other marketing channels is mitigated by the surviving value of face to face interaction, but to compete organizers must get better at proving ROI
Competitive threat, both from pre-existing shows and spin-offs, requires continual management –emphasis on facilitating valuable interactions (right attendees + right environment) is critical for prolonged competitive strength
Source: AMR analysis
10©2015 AMR
Tradeshows are becoming data-driven organizations
Data analytics use by organizers
Source: Use of analytics today by B2B exhibition organizers, CEIR 2015; AMR analysis
13.0%
Active 55.0%
Soon to be active
Inactive
32.0%
Analytics is fast becoming a critical driver of organizer success
Advanced organizers use analytics to deliver against key business objectives:
Attendee marketing
Registration data segmentation
Social media analysis to identify social “influencers”
Heat maps to identify attendee interests
Pricing and ROI demonstration
Leads data to demonstrate exhibitor ROI
Leads data to identify highest value stand positons
Floor planning and operations
Heat map analysis for crowd control and to maximize stand traffic
Use of analytics by B2B exhibitor organizers, CEIR research (n=307)
11©2015 AMR
Contents
1. Tradeshow fundamentals
2. Market opportunity
3. Organizer opportunities and challenges
4. AMR’s sector experience
12©2015 AMR
AMR have advised corporates and private equity in most of the major events deals
Select US deals AMR has supported 2012-2014
Business to retail trade shows Registration data service
One-to-one events in consumer/retail
Registration data service Fashion trade shows E-commerce tradeshow Consumer related trade shows and conferences
Fashion tradeshows
Geo-adapting events Online information groupInternational packing
exhibition Mexican
tradeshow platform
13©2015 AMR
AMR advises 15 of the top 20 global organizers on key business questions
What is the future outlook for my
shows and what paths can I take to
gain growth?
What acquisition options do I have to expand my events through vertical
channels?
Who are my competitors, how
do my events compare to them, and what can I do
to gain advantage?
How can I optimize my pricing models
for my major events to increase
the number of visitors?
What should my strategy be for convention and
exhibition facilities?
How can I leverage data for show
success?
I want to launch a show in a highly
fragmented events sector, how do I ensure success?
What do I need to change in my
business model so that I can expand internationally?
14©2015 AMR
AMR publishes the exhibitions industries annual assessment and forecast
AMR’s Globex report
Globex reportNow in its 6th edition
http://www.amrinternational.com/globex-report
AMR’s authoritative Globex market report is a definitive dataset and forecast for the exhibitions industry released annually since 2009
The 450-page report tracks the developments and future growthprospects of the world’s largest and most promising exhibitions markets, and analyses growth options and challenges in eachof them
It also provides an overview of the performance and strategiesof the world’s leading global exhibition groups providing outlook on pricing models, venue development and visitor/exhibitor dynamics.
“Everyone in the industry needs a copy of this report. It brings everything together with clear analysis - it’s worth it for the forecasts alone.” Reed Exhibitions
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