Preliminary results announcement

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Organic growth drives strong results

Financial highlights
  Year to 
30 September 2013
Year to
30 September 2012
Revenue £192.3m £172.3m
Headline pre-tax profit * £59.4m £53.0m
Headline diluted earnings per share ** 19.3p 16.9p
Profit before tax £43.9m £40.5m
Diluted earnings per share 14.0p 12.8p
Dividend per share 7.0p 6.5p
Net cash £23.5m £13.0m

  • Record results in stronger biennial year
  • Revenues up 12% to £192m; Headline profits up 12% to £59.4m
  • Strong cash conversion at 112% of headline PBT
  • Group now firmly established in Asia – first step into China
  • Good trading conditions continue into 2014
  • £106m of revenues booked for 2014, in-line with the Board’s expectations

Russell Taylor, CEO of ITE Group plc, commented:
“ITE has continued to expand its business this year through a mixture of organic and acquisition led growth. The Group has now firmly established itself in the Asian exhibition markets through its investments in ABEC in India, Tradelink and ECMI in Malaysia and, since the end of the financial year, in Sinostar in China. Good organic growth across our core portfolios in Russia and the CIS together with a strong biennial performance from the Moscow International Oil and Gas Exhibition have combined with the newly acquired businesses in Asia to deliver record financial and operating results.

ITE is well positioned in growth markets and the Board remains confident in ITE’s growth prospects. As we enter the new financial year, trading is in line with our expectations and we are well placed to continue our growth, both organically and through selective acquisitions.”

* Headline pre-tax profit is defined as profit before tax, amortisation of acquired intangibles and impairment of goodwill, profits or losses arising on disposal of group undertakings, revaluation of financial liabilities in relation to put options over non controlling interests, settlement of contingent consideration and direct costs on completed and pending acquisitions and disposals and tax on income from associates and joint ventures – see note 3 for details.

** Headline diluted earnings per share is calculated using profit before amortisation of acquired intangibles and impairment of goodwill, profits or losses arising on disposal of group undertakings, revaluation of financial liabilities in relation to put options over non controlling interests, settlement of contingent consideration and direct costs on completed and pending acquisitions and disposals – see note 9 for details.

Russell Taylor, Chief Executive, ITE Group plc 020 7596 5000
Neil Jones, Group Finance Director, ITE Group plc 020 7596 5000
Charles Palmer/ Emma Appleton, FTI Consulting 020 7831 3113

Chairman’s Statement

Group Performance
ITE has continued to expand its business this year through a mixture of organic and acquisition led
growth. The Group has now firmly established itself in the Asian exhibition markets through its
investments in ABEC in India, Tradelink and ECMI in Malaysia and since the end of the financial
year in Sinostar in China. Good organic growth across our core portfolios in Russia and the CIS
together with a strong biennial performance from the Moscow International Oil and Gas Exhibition
have combined with the newly acquired businesses in Asia to deliver record financial and operating
results. In this, the stronger year of its biennial pattern, ITE’s revenues were £192.3 million (2012:
£172.3 million) and have yielded headline profits before tax of £59.4 million (2012: £53.0 million) and
headline diluted earnings per share of 19.3p (2012: 16.9p). Reported pre-tax profit was £43.9 million
(2012: £40.5 million) and fully diluted earnings per share was 14.0p (2012: 12.8p). The Group finished
the year with net cash of £23.5 million (2012: £13.0 million), after investing £26.1 million on
acquisitions during the year.

Board and Management
Michael Hartley has served ITE as a non-executive director since October 2003. He has been
Chairman of both the Remuneration and Audit Committees during his tenure and has made a
significant contribution to ITE’s Board over the last ten years. In line with corporate governance best
practice Mike is standing down at the next AGM of the Company. On behalf of the Board, I would
like to express our appreciation for his focus and dedication to the Group. Stephen Puckett joined
ITE’s Board as a non-executive director on 1 July 2013 and will succeed Mike as Chairman of the
Audit Committee. Stephen brings a wealth of relevant experience in emerging markets gained in his
previous role as Chief Financial Officer of Michael Page International PLC. The Board has taken
positive steps this year to strengthen itself and the way in which the non-executives interface with
the executives. Following an external review of Board effectiveness, we are adopting a number of
initiatives in line with the recommendations of the review. Notably we intend to appoint an
additional non-executive director and establish a separate sub-committee of the Board to review risk
and the Group’s mitigation of risk.

ITE continues to prosper because of the efforts and loyalty of its staff worldwide. The Group now
has 40 operating offices in 17 different countries with a broad range of cultural backgrounds, all cooperating with each other and participating in helping to grow ITE. Almost 50% of our staff have
been employees of ITE for more than five years, and 60% are participants in one of our equity
schemes. I am proud to be Chairman of a Group with such a dedicated employee base, and I, on
behalf of the Board, would like to thank and acknowledge the contribution of ITE’s management and
employees to this year’s result.

ITE’s Board recognises that good corporate governance is in the long term interests of the Group and
we are conscious of our responsibilities for setting values which underpin the Group culture. As
Chairman, I am mindful of my personal responsibility for leading the Board and ensuring it operates

ITE’s growth has supported a consistent increase in annual dividends. This year the interim dividend was increased from 2.1p to 2.3p and the proposed final dividend is 4.7p, making a full dividend for the year of 7.0p (2012: 6.5p). This is an increase in dividend of circa 8%, in line with the underlying earnings growth in headline profits over the biennial cycle. The final dividend is proposed for payment on 10 February 2014.

This year, the Group has again enjoyed good trading conditions in its major markets, producing a strong financial performance. Although large events have traded well, much of this year’s growth has come from our portfolio of medium sized events, often run from the smaller regional offices. This growth in smaller events looks set to continue into FY 2014, and forecasts are for economic growth in Russia to be maintained at current levels. Currency fluctuations were not a significant factor in this year’s results, but the Group’s results remain sensitive to sterling strength against the currencies of ITE’s markets. At 30 November revenues booked for FY 2014 were £106 million, in line with the Board’s expectations and representing circa 55% of market expectations for 2014 revenues. On a like-for-like basis revenues are circa 7% ahead of last year.

The recent announcement of the Sinostar joint venture means ITE enters the new financial year with good business prospects in three of the major emerging market economies: Russia, India and China. Growth prospects remain positive in Russia and most of the CIS markets, and the Group’s portfolio of core events should continue to perform well. With a strong balance sheet and operating cash flows, the Group remains in an excellent position to expand its business through organic development and acquisitions. The Board is focused on the execution of ITE’s strategy, and has confidence in ITE’s future prospects.

Marco Sodi

Chief Executive’s Statement

The Group’s performance this year
ITE has delivered a good trading performance with increased revenue reflecting good trading conditions in most of its markets and a strong result from its biennial Moscow International Oil and Gas Exhibition. ITE’s main focus this year has been on the development of its business in the Asian markets of India, South East Asia and most recently China. These acquisitions and investments in Asia have had a relatively small effect on this year’s results, but will make a more significant contribution in the future.

Revenues for the year of £192.3 million (2012: £172.3 million) represent a 12% increase over last year and are derived from volume sales of 793,000m2, marginally less than last year. Organic revenue growth was £12.3 million with the net biennial pattern accounting for an additional £3.9 million of revenue, and first time contribution from acquisitions a further £3.8 million. Gross profits increased by £10.4 million, of which circa £3.8 million is attributable to the net biennial pattern. The good trading result was achieved during a period of higher levels of planned investment made in the management and infrastructure of the Group. This reflects both the full year costs of businesses acquired last year and supporting the Group’s expansion in Asia.

Mosbuild, the Group’s largest and most profitable event performed well this year in a competitive environment, and delivered volume and revenue growth. The Group’s other large events traded well, but the main drivers of organic growth in revenues and gross profits were the next tier of medium sized events and the regional offices as the Group’s portfolio becomes increasingly diversified.

Trading conditions in most of our markets were good throughout the year with the Russian regional offices of Siberia and Krasnodar, together with Azerbaijan all putting in strong performances and all reporting revenue growth of more than 10%. Trading conditions in the other Central Asia markets were also good and supported strong revenue growth. The UK, Turkish and Ukrainian businesses performed less well. The UK and Ukraine were hampered by difficult economic conditions and the Turkish business was impacted by space constraints on its largest events and a weaker Turkish Lira.

The main factors affecting Group profitability this year are summarized in the profit bridge below.

ITE Group Results Bridge 2012-2013

*Timing refers to changes in the date of recurring events which causes them to skip or occur twice in a financial year.

Development of the business
The main objectives for the Group this year were securing the position of ITE’s premiere Moscow construction event, Mosbuild, in its new competitive environment and continuing with the business expansion programme in Asia.

Mosbuild performed well this year, selling more space than last year and growing its revenue base, but delivered slightly lower profits than last year. More importantly visitor and exhibitor research confirmed that its positioning as the ‘must attend’ construction event had not been affected by the recent change in venue and format of the event. We are continuing to invest in the event to ensure Mosbuild retains its current status.

The Group has now established a strong business base in Asia and the acquired businesses are performing well. In December last year we acquired a 28.3% minority stake in ABEC, a major Indian exhibition business, with an option to take a controlling position in 2015. We have spent this year developing the working relationship with ABEC’s management and establishing where we can best co-operate between our respective businesses. This has resulted in a repositioning of our existing Indian business which now runs alongside the ABEC business. In January of this year we acquired a small maritime event alternating between Singapore and Hong Kong, to form the base for the launch of an ITE transport infrastructure brand in Asia, TransAsia. Also in January we acquired a 75% majority position in Tradelink, owner of Metaltech, the leading metalworking event in Malaysia. With the retention of the existing management, this event has the potential to be a platform for growing other metalworking events in Asia.

In April we agreed terms to form a joint venture with the owners of ECMI, a Malaysian based business running its Beauty and Laboratory events in Malaysia, Indonesia and Vietnam. This joint venture provides ITE with a fast track route to launching exhibitions across South East Asia. It has already helped generate the launches of Paperex (from India) in Indonesia, and Beauty and Oil and Gas events in Myanmar for next year. In the autumn our UK fashion business MODA agreed terms to co-operate on a recently launched event for menswear in Hong Kong. In November we were able to announce the formation of a joint venture to develop exhibitions in the coatings and surface finishing industries by investing £33 million in a 50% shareholding in the Chinacoat exhibition business. As well as acquiring a stake in one of the leading exhibitions in the world in this growing sector, the purpose of the joint venture is to use the Chinacoat brand and data to support a roll out of other events across the manufacturing countries of Asia, and into the end user markets of Russia and the CIS. ITE is committed to building a network of offices across Asia and now has representation in Malaysia, Indonesia, Hong Kong and on the South Eastern Chinese seaboard.

It is important for ITE to invest in building the ‘brand’ and profile of its events to support the development of portfolios along vertical industrial lines. This aspect of our strategy was exemplified by the acquisition in October of Beauty Eurasia, the principal event serving the beauty industry in Turkey. Aligned with the beauty events we acquired in Ukraine last year and the ECMI beauty exhibitions run in Malaysia, Indonesia and Vietnam, ITE now has an opportunity to build a strong presence in the beauty sector in more markets.

In Russia, the benefits of common brands and systems developed over the last few years are now being realised with an active programme of replicating and cross-marketing events into and across the regional markets. New opportunities are expected to arise from the expansion in regional venue capacity over the next few years. Recently we have seen new regional exhibition centres developed in Ekaterinburg and Novosibirsk which have helped to generate renewed levels of growth in the local exhibition businesses. Over the course of 2014 the Expoforum venue will open in St Petersburg. This is a major new venue of 50,000m2 gross with conference facilities that will present new opportunities for the further development of exhibitions and conference businesses in the North West of Russia. In the South West, ITE’s Krasnodar office has signed an agreement to be the principal user of a new venue, which will add over 30,000m2 of quality exhibition space in the city. The new venue should be completed and ready for use by 2016. The Group is well positioned to participate in the growth that these investments in local exhibition facilities are expected to generate.

ITE’s objectives and strategy
ITE’s principal objective is to create a business with sustainable growth in headline earnings per share. Its strategy is to develop positions of market leadership in the exhibition business in emerging and developing (high growth) markets.

Four priorities underpin ITE's strategy
  1. Build on existing positions of market leadership
  2. Expand into new sectors and geographies with potential for strong market positions
  3. Enhance and improve our exhibition brands
  4. Invest in developing our people.
ITE’s performance against its strategic priorities is set out below:

(i) Build on existing positions of market leadership:

ITE’s existing positions of market leadership are founded on its ability to generate international sales, its recognised brands, its local office infrastructure and its longstanding relationships with venues.

International sales strength
ITE’s ability to generate international sales has differentiated it from its local competition in Russia and the related CIS markets. Through its subsidiary sales offices the Group has established a loyal customer base and a geographic reach which is hard to replicate for competitors. In 2013 the total net metres sold by the Group’s international sales offices increased by 15% to 133,000m2. This represents circa 25% of the Group’s 2013 revenues, an increase on 2012 reflecting the Group’s investment in building-up its international sales presence last year, including opening a new sales office in Malaysia to target potential customers from South East Asia. Approximately 11% of revenues were sold by the Group’s London office, 4% by its German office, 3% by its Chinese office and 3% by its Turkish office.

ITE’s international brands
ITE has established strong brand identities in certain exhibition sectors. In particular, the Build brand in construction, the Oil & Gas events brand, the ITE Travel exhibition and World Food brands all have strong reputations with customers as leading events in the Russian and CIS markets earned through more than fifteen years of sustained good performance. The Group is working to ensure that the new construction businesses in the Group, notably in Turkey and India, are aligned with ITE’s historic construction brand and that all the benefits available from sharing best practice are realised. The acquisition of Beauty Eurasia and ECMI has created an opportunity for ITE to build an internationally recognised brand in this sector. There are also a number of developing brands in security, transport, packaging, printing and mining events which have prospects to support new events in different markets.

Building ITE’s local office infrastructure
ITE’s brands have built their reputation through sustained delivery of successful exhibitions to customers. The foundation of this is in ITE’s local offices which now employ over 900 staff. Local offices generate the local sales, reputation and visitor participation of the event as well as managing technical staging of the exhibitions. Critically they own and develop the database of local visitors who make the exhibition successful for the exhibitors. In its core markets, ITE’s local offices have always been a competitive advantage over other international exhibition organisers and a barrier to entry for new organisers wishing to run events. ITE will continue to develop strong local offices as part of its exhibition business in new markets. The Group has an integration programme for new offices acquired into the ITE network and is increasing its investment in the infrastructure that underpins these offices and in staff training. The Group has high rates of employee retention in its offices, and supports this by its commitment to having widespread equity ownership - currently more than 60% of staff participate in some form of equity scheme.

Maintaining venue relationships
ITE has always enjoyed long-standing relationships with the venues that host its exhibitions. In its core markets ITE has supported the development of venue facilities which in turn has helped the Group’s exhibitions to prosper. The Group has always sought to establish rights to run its main exhibition themes in its partner venues at the time of its choice and ITE has continued to work on maintaining and improving the venue relationships that underpin its business. Most of ITE’s major events have agreements which provide for venue facilities for at least three years ahead. This year ITE has agreed to support the development of a new venue in Krasnodar, where ITE will have the exclusive rights to run exhibitions.

(ii) Expand into new sectors and geographies with potential for strong market positions:
In existing markets this strategy means targeting new sectors or regions in which to acquire or develop exhibitions where there is potential for the participation of international exhibitors. In new markets, ITE is targeting the development of exhibition businesses where there is clear opportunity for strong future growth.

This year the Group has expanded its business presence into India, South East Asia and China. In so doing it has acquired expertise in new sectors – some of which have potential in ITE’s core markets, and also made it possible for the Group to run its existing brands in the new markets. The launch of TransAsia, Paperex Indonesia and Oil and Gas Myanmar are good examples of the opportunities created by access to new marketplaces. In time the Group will benefit from extending the newly acquired Chinacoat and Beauty portfolios back into its core markets.

As the Group’s acquisition activity over the last two years has opened up access to new markets, there are now increasing synergies and benefits to be gained from strengthening its industry portfolio in each sector. The Group aims to increasingly focus its acquisition activity on building portfolio strength and leadership in exhibition sectors – creating stronger more defensible business positioning for its exhibitions.

(iii) Enhance and improve our exhibition brands:
The Group’s management has been working to improve the strength of ITE’s existing international brands. This is being achieved by introducing product improvements to enhance customer experience and ensuring consistency in the presentation and promotion of similar events in ITE’s vertical industry sectors. The Group’s brand development projects have covered all aspects of product quality, naming, character, tone-of-voice and graphic designs associated with events in the Group’s largest portfolios. The improvements will deliver numerous benefits, including increasing the global recognition of ITE’s brands and enabling the Group to launch ‘cloned’ events into new territories.

(iv) Invest in developing our people:
We have made some good progress in developing the strength and depth of the leadership and management teams in the year as well as improving the communication between the different offices. We have improved our talent management processes, including identifying and addressing individual development needs. Our rolling programme of internal senior management and functional conferences has been a huge success as has the leadership development programme. We have also continued to extend and develop internal communication between offices and opened up communication by functional management i.e. connecting staff lines across the different offices such as construction / marketing / IT and finance.

ITE’s strategic objectives are unchanged. We have been successful in establishing positions in new markets and the future accent will be more orientated towards development of brands and industry verticals in order to leverage the potential synergies of the newly acquired assets.

Russell Taylor
Chief Executive Officer

Divisional trading summary 2013
Overall in 2013 the Group ran 233 events (2012: 264). The decrease in the number of events is caused by a combination of timing differences and the cancellation of some marginal events as part of the on-going review of our portfolio of events. A detailed analysis of volumes, revenues and gross profits from the Group’s exhibition and conference activities is detailed below:

    Square Metres Sold
Gross Profit
Average yield
per m2
2012 All events 798 172 78  
  Non-annual (74) (10) (4)  
2012 Annually recurring 724 162 74 224
  Acquisitions 25 4 2  
  Timing (15) (3) (1)  
  Net Growth 12 15 6  
2013 Annually recurring 746 178 81 239
  Non-annual 47 14 7  
2013 All events 793 192 88  

This has been a year of record revenues and profits for ITE reflecting good economic growth in the Group’s main markets, a first time contribution from newly acquired businesses and the positive effect of the Group’s stronger biennial events running in the year. The mix of business in the year saw volume sales fall by 1% to 793,000m2 and revenues increase by 12% to £192.3 million. On a like for like basis, volume sales fell by 1% and revenues grew by 8%.

Russia 121.1 105.1 +15% +10%
Central Asia & Caucasus 28.9 26.5 +9% +9%
Eastern & Southern Europe 28.9 28.4 +2% +1%
UK & Western Europe 9.7 9.5 +2% +2%
Asia 3.7 2.8 +31% n/a%
Total 192.3 172.3 +12% +8%

# measures the change over the previous year after excluding biennial events and acquired events impacting the results for the first time.

(Moscow, St Petersburg, Novosibirsk, Krasnodar, Ekaterinburg)
During the year ITE held 109 events in Russia (2012: 118), with total volume sales this year of 399,100m2 (2012: 391,800m2). Revenue of £121.1 million was 15% higher than the previous year, reflecting a combination of organic growth and the return of the biennial Moscow International Oil & Gas Exhibition (MIOGE). On a like-for like basis volume sales in Russia increased by 2% and revenues by 10% over last year’s result.

The Russian economy continues to grow although at a slower pace than in recent years, with GDP growth of around 2% in 2013 and slightly higher growth forecast for 2014. This backdrop of economic stability underpinned by relatively stable commodity prices, most notably oil, is providing the environment for continued growth in ITE’s exhibitions, particularly in the offices outside Moscow.
Moscow is ITE’s largest office in Russia accounting for around 80% of the region’s revenues. The office has performed well this year with the continued success of Mosbuild, the Group’s largest event, and the return of the biennial MIOGE. Moscow’s volume sales for the year were 258,500m2 (2012: 251,200m2); on a like-for like basis volume sales were 3% higher and revenues 7% higher than in the prior year. The portfolio of industrial events led by Aquatherm Moscow delivered double digit growth which helped offset a small decline in volumes at the Moscow International Travel and Tourism exhibition from 20,000m2 to 19,500m2. The largest events in Moscow run in the second half of the year and all performed strongly. As expected Mosbuild continued to prove resilient to local competition, delivering volume sales of 68,700m2 an increase of 4% on the prior edition, although investment to improve the quality of visitor and exhibitor experience reduced profits. The biennial MIOGE returned in June delivering a record 24,000m2 (2011: 22,800m2) and record revenues. The logistics event TransRussia and the security event, Moscow International Security & Protection again both produced double digit growth, and World Food Moscow grew 2% from 24,400m2 to 24,900m2.

In St Petersburg, ITE made further good progress, building on the improving trading conditions experienced over the past two years. During the year ITE operated 19 events from this office increasing sold space by 8% to 31,600m2 (2012: 29,200m2) and revenues by 15%. There was good growth across all sectors, with notably strong growth in Mining World Russia and Expoelectronica, the former serving the mining support services industry, and the latter focusing on electronic components. The St Petersburg business has now recovered to its pre-recession market size and the opening of a new venue in the city in mid 2014 will provide the Group with access to increased space in a world class facility.

In Novosibirsk, Siberia, ITE is the anchor tenant in the city’s main venue which opened in early 2012. The international quality space it offers has provided a platform for growth in the Group’s business in this region. During 2013 the region held 27 events (2012: 26), with overall volume sales of 45,000m2 (2012: 42,700m2). Local revenues improved by 27% to over £8 million, as lower yielding events were removed from the portfolio and remaining products grew strongly.

The Krasnodar region in south-west Russia is one of the most prosperous outside Moscow. The region is the centre of the Russian agricultural industry and is the base for a number of international manufacturers. The exhibition portfolio covers a broad range of sectors, the largest events being in the agriculture and construction sectors. In total this office contributed volume sales of 64,000m2 (2012: 68,000m2) and generated over £9 million in revenues this year, growing by 13% over the prior year. However, the Group’s business in Krasnodar is restricted by the size of the current venue, and in August the Group entered into an agreement to become the anchor tenant at a new venue in the city with over 30,000m2 indoor space and 15,000m2 dedicated outdoor space, which is due to be completed in early 2016. It is anticipated that this new facility will allow ITE’s largest events to grow and the business to expand into new industry sectors.

Central Asia and the Caucasus
ITE’s principal offices in Central Asia are in Kazakhstan, Azerbaijan and Uzbekistan. This year ITE organized a total of 69 events (2012: 93) across these territories delivering total volume sales of 82,300m2 (2012: 80,200m2), an increase of 3% over the previous year. Revenues of £28.9 million represented an increase of 9% over the previous year. All of the economies in this region are largely dependent on Oil and Gas for their overseas earnings and economic wealth. The consistent $100+ price of oil has helped support economic confidence within these economies feeding through to good levels of economic growth, which has been reflected in the growth of the Group’s business in the region this year.

Kazakhstan continued to grow well in 2013, delivering volume growth of 4% and revenue growth of 6%. This was driven by a strong performance in the construction sector which, while it has not yet recovered to its pre-recession peaks, grew by 36%, along with a further strong performance in the leisure and Health & Pharmaceutical sectors. Oil & Gas remains the largest sector in the region, accounting for around 40% of regional revenue. The largest event in the region is the Kazakhstan Oil & Gas Exhibition (KIOGE) which took place in Almaty in October 2012 and was slightly larger than the prior edition at 8,600m2 (2012: 8,500m2). ITE continues to enjoy a good working relationship with Atakent, the principal venue in Almaty, and at present this facility offers the Group sufficient space in which to operate its events.
In Azerbaijan, ITE has once again experienced strong growth backed by the country’s continued economic expansion. This year the region achieved volume sales of over 24,700m2 (2012: 22,400m2) a 10% increase on the prior year. ITE is also benefitting from being the recognized industry leader and has organized a number of one-off 3rd party conferences resulting in an overall revenue increase of nearly 30% during the year.

ITE’s Uzbekistan business showed a decline in 2013 selling 11,600m2 (2012:13,600m2) as a result of a number of shows moving date out of the financial year. Excluding these timing differences, volumes and revenue grew by 8% led by events in the Textile Machinery and Food sectors.

Eastern & Southern Europe
The Eastern and Southern Europe region comprises the Group’s offices in Turkey and Ukraine. Overall the region sold 252,800m2 in 2013 (2012: 268,600m2), which on a like-for-like basis represented a decrease of 4% in volumes but from which was generated a 1% increase in like-for-like revenues.
Ukraine has continuing economic and political difficulties, but remains an attractive market for ITE over the long term. In the short term, economic conditions are forecast to remain challenging and ITE will concentrate on staging and maintaining its high quality market leading exhibitions ensuring that it will benefit when conditions improve. During the year volume sales increased by 7% to 66,000m2 (2012: 61,500m2), helped by the first editions of some small exhibitions acquired with the Autoexpo portfolio in May 2012. Overall revenues grew by 2% on a like-for-like basis aided by a solid performance from the 2012 acquisitions (Autoexpo and Beauty) but held back by a flat performance of the Group’s largest event in the portfolio Aquatherm, serving the heating, ventilation and air conditioning sectors and sensitive to weaknesses in the construction sector.

In Turkey, while there were political tensions this year, the economy continues to grow and economic forecasts are for further economic growth of around 4% per annum over the short to medium term. There was a mixed performance from the Turkish portfolio of events this year, with lower volume sales of 186,700m2 (2012: 207,100m2), due to a change in the mix of biennial events, event timing and currency weakness. On a like-for-like basis volume sales were 3% less than last year, with revenues unchanged. Turkeybuild the pre-eminent construction event in Turkey, took place in early May and delivered its largest ever event with volume sales of 36,200m2. The event enjoys strong demand for additional space from its exhibitors, which at present can’t be satisfied by the current venue arrangements, although work has now begun on additional space at the venue which is expected to be completed ahead of the 2015 edition. The Group’s leading regional travel event EMITT, again produced an excellent performance selling over 27,000m2 on improved margins. The Group is focused on improving the margins in this office by increasing the level of international participation and decreasing the influence of trade associations and adding events to the portfolio which match this criteria. The acquisition of Beauty Eurasia announced in early October 2013 with its high level of international participants is in line with this strategy and improves the quality of the Turkish events portfolio and supports the Group’s establishment of an international Beauty brand.

UK & Western Europe
The Group’s business in the UK is focused on the Fashion industry. Through MODA the Group owns the leading mid-market fashion event for Womenswear, Menswear, Footwear and Lingerie which runs twice a year in Birmingham generating volume sales in excess of 35,000m2 annually. In London the Group operates Bubble, a niche high-end childrenswear event, Jacket Required, a designer-led menswear event, and it also owns a 40% stake in Scoop, a designer-led womenswear event. This year saw a good performance from the portfolio gaining further market share in very difficult market conditions which impacted the sector across Europe. Overall these events were flat in volumes and revenues with the mid-market sector experiencing a small decline in trading, offset by a strong performance in the niche high-end fashion exhibitions. The Group is now looking to take its expertise in the fashion sector outside the UK and in October 2013 it acquired a 20% interest in “The Hub” a designer-led menswear event in Hong Kong.

In December 2012, the Group purchased a 40% stake in Warsaw based Lentewenc (“Lent”). Lent aims to exploit a gap in the Warsaw market for quality international exhibitions and has already launched a number of events for 2013 and 2014.

The Group’s operations in this Division are in India, South East Asia and China. These regions represent new markets for ITE in which to grow our existing products and develop new sectors. These markets are characterised by fast growing economies, underpinned by a rapidly expanding aspirational middle class population which is expected to drive consumer demand. In addition, they have relatively immature exhibition industries and these two factors combine to offer excellent growth opportunities for ITE over the medium term. ITE has focused its initial expansion of activities in this region during 2013 with acquisitions in India and Malaysia.

The Indian exhibition industry offers great potential due to the current lack of international quality venue space within the country which is severely limiting the industry at present and has slowed ITE’s progress in India since entering the market in 2009. In December 2012, the Group continued to expand its presence in this market with the purchase of a 28.3% stake in ABEC, India’s largest private exhibition organiser. The portfolio of 19 exhibitions across 11 sectors includes Acetech – India’s leading construction event. With the larger biennial events absent it was a quieter year within our existing Indian business, with the focus on integration of the previous years acquisitions, repositioning our existing business to run alongside and complement ABEC and improving the efficiencies of the existing operations.

The Group entered the South East Asian market for the first time in 2013, with three acquisitions. In January, we purchased a 75% stake in Tradelink. Based in Kuala Lumpur, Malaysia the company runs the Metaltech event serving the machine tool technology and metal fabrication industries. The event, which sells over 12,000m2 takes place each May in Kuala Lumpur and performed ahead of our initial expectations. In February the Group made a small acquisition in Hong Kong, acquiring the biennial Asia Work Boat and China Maritime events. In April the Group purchased a 50% stake in Kuala Lumpur based ECMI which operates the pan-ASEA professional beauty event series “Cosmobeaute” and the laboratory equipment “Lab” exhibitions. These acquisitions, and ECMI in particular, offer the Group a base of operations from which to replicate its events across the region, and the Group has already announced the launch of an Oil and Gas event and Cosmobeatue in Myanmar, Paperex in Indonesia, Cosmobeaute in Thailand and TransAsia in Singapore.

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