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PERSPECTIVES ON THE EXHIBITIONS SECTOR PERFORMANCE AND

PROJECTIONS

From a UFI perspective

By Sonia Thomas UFI Director of Operations

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UFI is the Global Association of the Exhibition Industry, uniting the industry’s organizers, venues, associations and partners of the

industry

What is UFI?

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UFI IMPACT

• 4,500 Exhibitions organised or hosted by UFI members

• Presence of UFI members in 85 countries including the 40 largest countries in terms of GDP

3 UFI Offices Headquarters in Paris, Regional Office Asia/Pacific in Hong KongRegional Office in Middle East/Africa in Kuwait

ⓒ UFI 2012

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June 2013

633 members in 85 countries

206 members with “venue”

activity(32.5%)

456 members with “organizer” activity (72%)

52 “Associations”

(8.2%)

46 “Partners ofthe Industry”

(7.3%)

79 “Venuesonly”

(12.5%)

127 “Venue&

Organizer” (20%)

329 “Organizer only” (52%)

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WHAT IS THE CURRENT STATE OF THE ECONOMY?

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According to the IMF, activity has stabilized in advanced economies, supported by policies and renewed confidence.

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7Source: FT/Wall Street Journal @UFI 2013

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What can we expect in 2013?

• The US Fiscal Cliff takes 1% off growth in the

Autumn. US close to recession in 2014

• Euroland stays in recession for whole year, but Germany grows again Q3 fuelled by demand from Asia

• Currency realignment; Euro weakens, Dollar strengthens, another Eurozone panic

• Global equities fail to gather momentum after initial burst in the Spring

• No change in interest rates even thoughinflation will trend upwards

Well run businesses with clearly defined compelling reasons for purchase will continue to outperform regardless of the economy

Source: Roger Martin-Fagg, Economist

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UFI MEMBERS AND THE ECONOMIC CRISIS

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0%

20%

40%

60%

80%

100%

2009 2010 2011 2012

Operating profits compared to the previous year

10th Global Exhibition Barometer (January 2013)

Americas EuropeAsia & Pacific Middle East & Africa

% of companies declaring stable profits (between -10% and +10%)or increases of more than 10%

% of companies declaring profit increases of more than 10%

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% of companies declaring – over the last 6 Barometer surveys – that the impact of the “economic crisis”on their exhibition business is now over

10th Global Exhibition Barometer (January 2013)

0%

50%

100%

June2010

Dec.2010

June2011

Dec.2011

June2012

Dec.2012

Americas

Europe

Asia & Pacific

Middle East & Africa

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Key challenges for exhibitions

• Competition (in some markets) from over-capacity in venues

• Certain sectors badly affected by the crisis• Surprisingly, certain sectors are doing better than

ever • GDP growth in certain countries: MINT, BRICSA,

MIST, CIVETS, N-11, MINTS! etc.• Theme competition issues • Pressures on business travel• Cost controls and environmental constraints

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Key challenges for exhibitions

Online marketing and product news release• Balance internet and face-to-face marketing• Industry needs better to communicate how a

combination of these is the key to marketing effectiveness.

• In-house activities and product launches have eaten into traditional event spend.

• Source of tomorrow’s competition?Targeting the Facebook generation with real

world events.

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SMEs

Exhibitions - most effective way to:• promote their products and services, • find new clients open up new markets• They have a strong need for new business.• They have a strong need to identify & commercialize innovations.

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UFI VENUES (INDOOR) EXHIBITION SPACE IN 2011

496 venues15.6 million sqm

(48%)

184 venues6.6 million sqm

(20%)

389 venues7.9 million sqm

(24%)

70 venues1.3 million sqm

(4%)33 venues

0.8 million sqm(2%)25 venues

0.5 million sqm(2%)

5 million sqm

Scale

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14,6

7,5

4,8

1,20,7 0,5

15,6

7,96,6

1,3 0,8 0,5

Europe North America Asia/Pacific Central &South America

Middle East Africa

2006

2011

UFI World Map of Exhibition VenuesRegional trends between 2006 and 2011

+7%

+5%+38%

+7%+16% -6%

in 2006 50% 26% 16% 4% 2% 2%

in 2011 48% 24% 20% 4% 2% 2%

Marketshare

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(Venues with a minimum of 5,000 sqm indoor exhibition space)

The global top 10Net space rented between 2008 and 2011

(in million net sqm) Trend since 2008

1. USA 23,3 (*) - 7%2. China 13,0 + 13%3. Germany 8,8 - 5%4. Italy 6,2 - 5%5. France 5,4 - 8%6. Spain 3,5 - 24%7. Japan 3,2 - 3%8. UK 2,8 - 6%9. Russia 2,6 - 13%10.Brazil 2,6 + 4%

65

70

75

80

85

90

95

100

105

110

115

120

2008 2009 2010 2011 65

70

75

80

85

90

95

100

105

110

115

120

2008/9 2009/10 2010/11

in Europe in Asia

ChinaIndia

Japan

Germany

Spain

Italy

France

Turkey

Russia

Korea

UTILIZED SPACETrends in the net space rented in several major national markets(in sqm, UFI estimations)

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Events and Exhibitions

• Global exhibition market was worth $25bn in 2010.

• Emerging from the 2008 economic downturn, the sector returned to growth in 2011.

• AMR forecasts that the market will expand by 5% p.a. to 2015, attesting to the ongoing demand for face-to-face contact between buyers and sellers.

• Emerging markets such as China, Brazil, India and the Gulf Region will spearhead the growth at almost 10% p.a.

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Events and Exhibitions

• renewable energy• green building• internet retailing

are among the hottest show sectors, experiencing significant growth across the globe 

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UFI MEMBERS: STRATEGIC RESPONSE TO THE ECOOMIC CRISIS

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13%

38%

20%

28%

25%

34%

39%

33%

38%

22%

23%

17%

25%

6%

17%

22%

25% 36% 23% 16%

Current strategic prioritiesStay within

current scope of activities (as a

venue, an organizer or a

service provider)

Develop new activities within the classical

range of the exhibition industry (venue /

organizer / services)

Develop new activities in terms of live events or

virtual events

ASIA & PACIFIC

MIDDLE EAST & AFRICA

EUROPE

AMERICAS

WORLD

Both these developments

10th Global Exhibition Barometer (January 2013)

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43%

59%

42%

33%

57%

41%

58%

67%

Operate in new countries

and in relation to geographic exposure….

ASIA & PACIFIC

MIDDLE EAST & AFRICA

EUROPE

AMERICAS

WORLD

10th Global Exhibition Barometer (January 2013)

46% 54%

Stay in the same countries as those

where I currently operate

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Opportunities for venues

• See exhibitions as real business opportunities, not « gap fillers »

• « in-house» exhibitions: sometimes low quality• Average survival rate of new shows: 8 – 10% • Geocloning (take brand elsewhere)• Joint ventureslocal partners work best in certain markets• Exhibitions: provide reliable repeat business if handled

properly (Exhibitor renewal rates: 65%)• Exhibitions have excellent cash flow possibilities

Stand space paid in full up to 1 year in advance • Conferences: often one-off (due to rotation), long process from

tender to conference taking place

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Evolution of trade fairs

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Associations => trade fairs

Representation worldwide: • USA: 50 – 60%• Europe: 15 – 20% (organizers)• Asia: similiar to Europe (less developed)

For associations, trade fairs:Enhance member experience• networking• Education• Business opportunities

Enhance associations• revenue • provide member value and ROI• Tradition

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Exhibitions and Congresses

• 4:1 ratio of exhibition space:congress space now 2:1

• Revenue from exhibitions varies but remains important for many associations. One sixth of total income.

• Multi-dimensional and multifunctional • Pricing model of exhibitions must move

away from square metres • Need to focus on service

Fickle customers, fierce competition, everything is negotiable

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Multi-dimensional events

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Smarter databases are key

They are our key assets• How do we move beyond them being a simple, functional

tool to being the heart of the communities we serve

CRM – knowing our customers is the key to successful thought leadership, business retention, improved sales, etc. etc. etc.

Matchmaking facilitator• “The random contact model is over”• High on the agenda for 5 – 10 years

But what real progress outside travel industry events?

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Meetings technology/smart destinations

•Human interaction remains vital, •but engagement is more and more important

•Destination promotion: •must also be pushed by the venues

•Associations are more cost-conscious – •Need for clear and relevant cost structures •Collaboration between associations and the meetings

industry

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« Smart » destinations

The technology industry continues to dictate today’s « needs »

• Apps at the heart of the communication mix• Significant bandwidth, privacy and commercial concerns on switch from PCs towards tablets and smart phones• Staying ahead in a constantly changing game • Augmented reality an interesting tool but not a game changer• Need for “state of the art” screens, projectors, etc. to enhance meeting experience

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In summary:

• Enrich conferences with higher quality content, and vice-versa for trade shows

• Provide more efficient return on time for attendees by combining eventsalso addresses environmental and cost concerns about multiple business trips

• Be a « smart » destination• Trade fairs provide more reliable income streams for

associations• Link key events into the heart of the year-round dialogue in

the industries we serve• With margins of up to 40%, the events and exhibitions

industry is highly profitable

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