As an integrated Group operating in all event professions, GL events works in three major segments:
event organisation, event venue management and services for fairs, congresses and events.
© Odile Decq architect / Felice Varini – Altitude 150
Revenue growth: +25%
Profit before tax: €41.5 million
Operating cash flow: €80.5 million
A new organisation adapted to growth prospects and development
|€ millions||2009||2009 |
|Net financial expense||(11.9)||(10.1)||(7.3)||-|
|Profit before tax||33.5||23.3||41.5||+78%|
|Corporate income tax||(6.6)||(6.0)||(12.5)||-|
|Associates and non-controlling interests||(1.7)||(1.7)||(2.7)||-|
(1) Restated for real estate disposals in 2009: €7m capital gain , €7m rent - €3m depreciation.
2010, A YEAR OF STRONG DEVELOPMENT
Against the backdrop of improved market trends for the event industry in 2010, GL events had revenue of €727.2 million, up 25% (+16% like-for-like(2)).
This performance benefited from the strength the Group's business model, high-quality assets, team commitment and solid global positions accelerating further gains in market share. With this momentum, GL events registered strong growth in Asia, Africa and South America. Broken down by region, France accounted for 50% of sales, Europe 25% and other international markets 25%.
Both of the Group's major business divisions delivered very good commercial performances. Services contributed to the most important global event of the year (FIFA 2010 World CupTM Africa Cup of Nations, Commonwealth Games in New Delhi, Shanghai World Expo, Ryder Cup golf competition in Wales). The Group was also present at prestigious events in France (Saut Hermès international show jumping competition, World Badminton Championship, and the Tennis BNP Paribas Masters of Paris–Bercy, Davis Cup quarterfinals in Clermont-Ferrand and the semifinals in Lyon, Cannes International Film Festival, etc.).
The Group also pursued its expansion in Venue Management and Events with the successful integration and commercial launch of a number of high quality sites (Palais Brongniart, Oran Exhibition Centre, Hôtel Salomon de Rothschild, and full-year contributions of the World Forum Congress Centre of The Hague, Amiens Mégacité Exhibition and Convention Centre, Brussels Square meeting centre).
Finally, the Event Organisation business showed resilience in an environment that continued to be challenging for the corporate segment in Europe, benefiting from strategic positions in international markets and the recovery in Trade Fairs.
(2) Like-for-like: comparable structure and exchange rates.
PROFIT BEFORE TAX OF €41.5 MILLION, SLIGHTLY ABOVE TARGET
In response to these positive developments and concrete signs that a sustainable recovery is underway, the Group continued to recruit, train and deploy its teams and invest in quality event assets to prepare for the favourable 2011-2012 calendar.
Profit before tax marginally exceeded the most recent guidance at €41.5 million, up 23.8% on a reported basis and 78% on a comparable pro forma basis restated for real estate disposals, with operating profit of €48.8 million (+7% on a reported basis, +46% on a comparable pro forma basis). This represented an operating margin of 6.7% or an improvement of 1.1 points over the prior year. Net financial expense declined to €7.3 million or 28% year-on-year.
Net income attributable to equity holders of the parent company amounted to €26.4 million, up 70% on a restated basis.
Cash flow grew 13% to €72.2 million and represented 10% of sales. Reflecting the Group's business model, strong growth in 2010 did not result in a decrease in working capital (WCR). As a result, operating cash flow amounted to €80.5 million after growth in the net source of funds (negative WCR) of €8.3 million.
Despite significant capital expenditures (€51.5 million), free cash flow grew 20% to €28.9 million.
These good operating performances further strengthened the Group's balance sheet, reducing gearing(3) to 0.53 for shareholders' equity of €352.3 million with a net source of funds (negative WCR) of close to €95 million. As a result, the Group has a strong financial base that is unique in the event industry.
(3) Ratio of net financial debt to equity
SERVICES: GOOD MARGINS
Services had revenue of €343.4 million, advancing 33.9% (+24% like-for-like). This level of business reflected the successful efforts and commitment of the Group's commercial teams, particularly in international markets.
This revenue growth was accompanied by an improvement in the operating margin as a percentage of sales to 8% translating into operating profit of €27.7 million.
VENUE AND EVENTS MANAGEMENT: POSITIVE DEVELOPMENT THOUGH MARGINS TEMPORARILY UNDER PRESSURE
Venue and Events Management had revenue in 2010 of €383.8 million, up 18.1% (+4.8% like-for-like), accounting for 53% of total consolidated sales.
Operating profit for the division amounted to €21.2 million, up 42%, restated for the impact of property disposals in Hungary and Italy that generated capital gains.
The division's operating margin remained temporarily under pressure at 5.5%. Capital expenditures in connection with the opening of venues (€2.5 million) and difficulties limited specifically to Hungary (€3.2 million) were two factors weighing on margins that will diminish in 2011.
STRONG GROWTH POTENTIAL OVER THE SHORT, MEDIUM AND LONG-TERM
The Group has got off to a good start in 2011 with strong momentum for Trade Fairs. SIRHA 2011 held in Lyon in January registered record performances in terms of economic results and media coverage. Other noteworthy events included the Rendez-vous Bâtiment Energie Positive in Lyon devoted to clean energy in the construction industry and the fashion industry and fabrics trade fair, Première Brazil in Brazil.
Events created or duplicated by the Group also registered important successes. These include the 1st edition of the Florshow gardening fair organised and staged by Padovafiere or the 1st edition of the Qatar Motorshow that brought together all worldwide manufacturers at an event attended by 80,000 visitors.
The start of the year has also seen good momentum for large worldwide events with installations provided for the AFC Asian Cup in Qatar (revenue of €12 million in 2010 and 2011).
These trends should contribute to balanced and profitable growth by the Group in 2011. GL events on this basis confirms its annual sales guidance of €770 million with growth of 6% accompanied by improvements at different levels of the margins.
Growth potential for the events market is expected to remain sustained over the long-term in a number of segments from trade fairs to corporate events as well as large sports, political and cultural events at the worldwide level. The Group in consequence intends to strengthen its leadership positions in France and Europe while focusing on the best opportunities for international development.
A NEW ORGANISATION ADAPTED TO THE GROUP'S DEVELOPMENT
The post-crisis period has confirmed the validity of the Group's strategic choices and business model for expansion based on providing an integrated offering of solutions and services for events.
The Group now intends to strengthen this approach by fine-tuning its organisation to:
- Further improve its ability to respond to market needs;
- Optimise the turnover of assets;
- Accelerate development in France and international markets.
GL events Live will cover the full range of business lines and services for corporate, institutional and sports events. From consulting services and design to producing the event itself, GL events Live teams will be capable of proposing turnkey event solutions to major worldwide event customers.
GL events Exhibitions will manage and coordinate the Group's 250 proprietary trade fairs, promoting the duplication of events, innovation and operating synergies between the Organisation and Services business lines.
GL events Venues will cover Venue Management operations for the current portfolio of 36 event venues. The development teams will be responsible for optimising the performances of this network and its expansion in France and international markets.
On 4 March the Board of Directors appointed Olivier Ferraton as Managing Director of GL events and Caroline Weber as Independent Director by co-optation and will propose at the next General Meeting of the Shareholders the appointment of a new Independent Director.
PROPOSAL TO MAINTAIN THE DIVIDEND AT €0.90 WITH A 3.7% DIVIDEND YIELD
On 4 March 2011, the Board of Directors voted to propose a dividend of €0.90 at the next Annual General Meeting of the Shareholders. This decision to maintain the dividend that will result in a yield of 3.7% based on the closing price of 7 March is to reward the shareholders for their confidence and loyalty. It also ensures that GL events Group retains the resources to support its continuing development both through internal growth and acquisitions.
2011 first-quarter sales: 26 April 2011 (after the close of trading)
GL events, bringing people together
Managing Director Corporate Finances and Administration : Erick ROSTAGNAT
Telephone : + 33 4 72 31 54 20
Fax : + 33 4 26 20 42 00
Email : email@example.com
Code ISIN : FR0000066672
Code Bloomberg : GLO FP
Code Reuter : GLTN.PA
Code FTSE : 581
Erick Rostagnat - Managing Director Corporate Finances and Administration:
Tel : +33(0)4 72 31 54 20