An Introduction to ITE Group plc May 2019 Contents Our Senior - - PowerPoint PPT Presentation

May 2019

An Introduction to ITE Group plc

ITE Group plc

›

Our Senior Executive team pg 2

›

Our business model pg 3

›

Market overview pg 6

›

2017 Strategic review pg 9

›

TAG programme update pg 16

›

Appendices pg 36

Contents

1 /

Mar ark Sha hashou

• ua – Chi

hief Ex Executiv ive Off ffic icer

›

Appointed CEO in September 2016

›

Previously CEO of i2i Events Group, (events arm of Ascential) from 2011, led the professionalisation and diversification of the business, turning it from double-digit CAGR decline to one of consistent organic CAGR growth

›

Second-generation and prominent figure in the international events industry

›

From 2001, he was a co-founder and Chief Executive Officer of Expomedia Group Plc and from 2009-2011, Mark was the

• perating partner of Advent International, a leading private

equity fund

›

One of the founding members of the ITE group which grew

• rganically from 3 people to over 800 and 80 shows. He led the

floatation of the business in 1998 as CEO, and was a board director until 1999.

And Andrew Be Beach h – Chi hief Fi Financia ial Off ffic icer

›

Appointed CFO in October 2016 and is Chairman of ITE’s Risk Committee

›

Previously the Chief Financial and Operating Officer of Ebiquity plc, spent nine years

• verseeing the rapid expansion of the business

to 20 offices in 14 markets, employing over 900 staff

›

Prior to joining Ebiquity, he spent nine years at PwC as part of the Entertainment and Media assurance practice where he qualified as a Chartered Accountant (ICAEW) in 2000

›

Andrew headed up the PwC UK Publishing sector knowledge network and managed a portfolio of large media clients

Our Senior Executive Team

2 /

Introduction to ITE Group plc

Our business model

3 /

4 /

Our business model

EXHIBITORS

use our events to satisfy all of their marketing needs: to transact, market their brand, launch a product, educate the sector, deploy thought leadership or steer their industry.

VIS ISITORS

come to our events to learn, experience, develop their skills, find inspiration, meet new contacts or buy products.

IT ITE Group pr provides mar arket-leading , , fa face ce-to to- fa face ce pla platforms where co communities ca can co come to together to to ac achieve al all l of

• f th

this wit ithin a a hi high- qua uality exhi hibition expe perience.

Connecting people

80.8% 14.2% 3.0% 2.0% Exhibitor space Technical services Sponsorship Other

Our ur revenue is s gen generated thro through h mu mult ltip iple le str streams

80. 80.8% of our revenue is generated from exhibitors, with each exhibitor paying for floor space at an event. Usually, visitors attend for free (with a few exceptions). Some events benefit from sponsorship revenue and we also provide technical services, such as stand construction, to some of our customers.

We do do thin things the the IT ITE way so so exhibitors rs, vis visit itors an and d spo sponsors rs ch choo

• ose us

us

MARKET- LEADING: We focus on market-leading events, so that we have the highest value proposition for exhibitors and visitors CONTENT- DRIVEN: We supply thought- provoking content that attracts high quality visitors and raises the profile of our events MUST-ATTEND: We offer the best of everything to ensure we are the one event that our customers choose to put in their calendars OUTSTANDING CUSTOMER EXPERIENCE: We have a relentless focus

• n improving

every part of the customer experience and tailoring our communication with them RETURN ON INVESTMENT: Our customer success team makes sure exhibitors achieve their event goals so that they come back next time

Revenue streams managed the ITE way

Our business model

5 /

Market overview

6 /

7 /

Overview of the events industry

Market overview

Com

• mpetit

itio ion

Significant change in the Industry

›

M&A consolidation in traditional event organisers

›

New market entrants focussing on sectors which are being disrupted

›

Online business communities and DIY meet-up platforms challenging the traditional model

›

Impact of new technologies - augmented reality, facial recognition, improved analytics tools provide

• pportunities to increase engagement, create better

products and drive better ROI and ROT for customers

176 196 257 300 330 354 390 559 1422 1829 GL Events ITE Deutsche Messe Clarion Comexposium Messe Munich Messe Dusseldorf Messe Frankfurt Reed Exhibitions Informa

Top 10 event organisers by

• rganising revenues, 2017,

million USD

1

Global exhibition market forecast

Market size represents the size of the 14 main geographic markets analysed by AMR and the six SEA countries added in 2017; excludes the ‘Rest of the World’ Source: AMR Global, Globex 2018 report

Market overview

8 /

›

Steady growth is forecast - 5% by 2022, driven by stable underlying economies and consistent demand for face- to-face business interactions.

›

AMR Global predict that face-to-face interactions enabled by exhibitions will remain a critical channel for buyers and sellers.

›

They further predict that alternative online channels will remain complementary, and may become sources of enhanced visitor and exhibitor experience.

26.3 27.7 28.9 30.4 31.7 33.6 0.6 0.6 0.7 0.7 0.8 0.8 2017 2018 2019 2020 2021 2022

Overall market forecast 2017-2022, $bn

Mature & Emerging (excl SE Asia) SE Asia

5%

CAGR

2017 Strategic review

9 /

Continued challenging market conditions Acquisition-led strategy Margin maintained, despite revenue decline Investment held back across the portfolio

• 1. Headline EBITDA

Source: Annual Reports, Broker Reports, ITE Management Data

FY11 FY12 FY13 FY14 FY15 FY16 EBITDA¹ Costs

Revenue and nd EBIT EBITDA, , FY FY11 11-16 16 £m

Historical context prior to TAG programme

2017 Strategic review

31% 34% 31% 30% 30% 33% 134 134 136 136 175 175 192 192 172 172 155 155

• 11%

CAGR

+11%

CAGR

10 /

The po portfolio had add dditional ch challenges be beyond market co conditions A number of f events had d underperformed th the market There were so some obvious st stars to to off ffset th these ch challenges

• 100%
• 90%
• 80%
• 70%
• 60%
• 50%
• 40%
• 30%
• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

• 50.0
• 40.0
• 30.0
• 20.0
• 10.0

0.0 10.0 20.0 30.0 40.0 50.0

ITE Event Space Growth (%), 2014-16 CAGR

Ev Even ent perf erformance vs vs unde underlying ma market

Portfolio challenges prior to TAG programme

2017 Strategic review Underlying Market Growth (%), 2014-15 Und Underperforming the mark market Ou Outp tperf rform rming themar

arket

11 /

The May 2017 Portfolio: Events Ranked by Revenue

2017 Strategic review

85% 85%

Co Core e Ev Events Re Revenue

12 /

Philosophies

Ret etentio ion-led bus busin iness ena enabled by tec technology Con

• ntent-le

led – hig high on

• n rele

levance Mar arket t leading events – ROI / / ROT

2017 Strategic review

Cus ustomer r ins nsig ight an and d dat data Cus ustomer r se serv rvice Stro trong sal sales an and d ma mark rketin ing per performance bas based cu culture re

13 /

ITE view of the exhibitions industry

2017 Strategic review

Dis isru rupters of

• f Ex

Exis isting Sho hows (sh (show form formats or

• r ind

ndustry nich niches) Product-led Developed Mar arket Region

• nal Speciali

lists Em Emerg rging Mark rkets Specia ialis ists Gl Global l Por

• rtfoli

lio Region

• nal

Players

14 /

Our vision

“To create the world’s leading portfolio of content-driven, must-attend events deli livering an outstanding experience and ROI for our customers.”

15 /

2017 Strategic review

TAG programme update

16 /

TAG - the Transformation and Growth programme

TAG – the Transformation and Growth programme

Pro roduct-led Acquisitions Manage th the Portf tfolio Cre reate a Scalable Plat latform Underpinned by a pe performance-led cu culture

TAG Pro rogramme

17 /

Cha Change Op Operating Mod Model

Dri rive a perfo rformance ce cu cult lture Buil ild ca capability & ta tale lent In Invest in in sh show operations Buil ild a fit fit for for purp rpose IT IT in infrastructure & sy syst stems Cre reate be best practice fu functions & te teams

TAG programme

Cre reate a a Sca calable Pla latform – best pr practice ap approach

18 /

TAG – the Transformation and Growth programme

TAG programme - Investment

£20m

2017 : £6-7m 7m 2018 : £8-10m 10m 2019 : £4-6m 6m

Ph Phasing Ran ange

One ne-off Co Costs Mix ix

Capex Opex - Exceptional Best Practice Infrastructure & Systems Invest in Show Operations Performance Culture Capability & Talent

In Investment by y Transformation Lever

19 /

TAG – the Transformation and Growth programme

FY 2017 FY 2018 FY 2019

Create ‘best practice’ functions & teams In Invest t in event

• pe

perations Build a ‘fit for purpose’ IT IT infrastr tructu ture & systems Drive a a perf rform rmance cu culture Build ca capa pability & tal alent

TAG milestones

New event content deployed Roll out of event ‘blueprint’ Roll out of dedicated specific training programmes Implementation of the ‘ITE way’ Design of the ‘ITE way’ Setup of Customer Success team Implementation of value-based pricing methods Setup of dedicated Content team Review of performance structure Development of Sales leadership Standardisation of Performance Management

20 /

Systems design & development Systems deployed in phased waves Launch of integrated sales and marketing systems 1st new hardware roll out Launch of ‘one view’ back office systems Recruitment of key organisational roles

Ma Marc rch 2019 2019 TAG – the Transformation and Growth programme

21 /

Benefitting from investing in event operations

New customer service team helps exhibitors maximise success Systematic lead generation for each core event

New business generation almost doubled Exhibitor NPS increased 8% to +17; industry average is -17*

New high quality content attracts key visitors

Visitor NPS increased 5% to +29; industry average is +7**

*UFI & Explori, Global Exhibitor Insights, November 2017 Edition **UFI & Explori, Global Visitor Insights, 2018/19 Edition

TAG – the Transformation and Growth programme

›

MosBuild moved to Crocus Expo, Russia’s largest venue, from 2019

›

Much improved content programme with Perfect Home, VR design lab and MosBuild TV

›

Volume up 15%

›

Visitor numbers up 19%

›

Key buyers up 19%

MosBuild 2019

22 /

TAG – the Transformation and Growth programme

Africa Oil Week 2018

23 /

›

Speaker numbers increased 30%

›

Government ministers attending increased 36%

›

Paid delegates increased 54%

›

New business more than quadrupled

›

Delegate Net Promoter Score improved 18 points to +27

›

Exhibitor Net Promoter Score improved 39 points to +32

TAG – the Transformation and Growth programme

Event Quality ty & Pote tential High gher Lower

TAG programme – Managing the portfolio

Gro rowth

Market tailwind

Mat ature

Stable, mature market

Cha Challenged

Facing market or competitive threat

La Larg rge

>£1.0m revenue Me Medium £0.5m-£1.0m revenue

Sm Small ll

<£0.5m revenue

Non

• n-Core

Use full suite of transformational levers Enable sales & marketing to drive volume growth Invest in content and shows to drive great customer experience Sc Scal ale Pricing, show value and content to drive yield and retention Manage pro-actively, solve issues across commercial, content and operations

Top Top priority Med Medium priority Low priority

24 /

89 89 less profitable

shows discontinued since start of TAG Successful disposal

• f TradeLink, ECMI

and ITE Expo (Russian non-core) Continue to review all options for less profitable shows

Onsite re-booking, sales commissions

Cor Core

TAG – the Transformation and Growth programme

Pha hase 1 1

Quick screening

Pha hase 2

Thorough analysis

Pha hase 3

Due diligence

Pha hase 4

Transaction Ob Objecti tive “be effective” “identify pearls” “don’t miss risk” “fair deal” Acti Activity Screen maximum #

• f shows...

... employing set of clear criteria Assessment of concrete potential for ITE Strategic / market DD Financial DD Synergy estimate Integration planning Final price negotiation Deal structuring (e.g. earnout)

TAG programme - Product-led acquisitions

M& M&A fun funnel

Exa Example Scree eening Cri Criteria

Size Distinct Customer Value Proposition Structurally Attractive Market for Exhibitions High Growth Underlying Market Organic Revenue Growth and Profit Margin International Roll Out Potential ROIC EPS Accretion

25 /

TAG – the Transformation and Growth programme

26 /

Ascential deal strategic rationale

2

Signific icant pot potentia ial un under our

• ur man

management nt as as Cor

• re events

3

Furth rther va valu lue thr throu

• ugh syn

synerg rgies

4

A mo more re bala balanced por portfoli lio for for the the en enla larg rged gr group

1

Product-led por portfoli lio with gl global an and ma mark rket lea eading br brands

5

Str trong fi fina nancia ial ratio ationale le; earn earnin ings enh enhancin ing in in 20 2019

TAG – the Transformation and Growth programme

Reinvesting half of the synergies to drive growth

27 /

Re-edit events and add new sectors Visitor acquisition teams to target online and major chains Sector expansion in Germany Regional expansion in the US and China Investigate new markets over the longer term Focus on customer proposition

Rein investing half lf of f th the sy synergies to to dri drive 2020 gro growth Prod roduct

Re-edit events to improve customer experience Focus on key accounts Grow international events to scale and investigate new markets

1

TAG – the Transformation and Growth programme

28 /

Mining Indaba acquisition

›

Met the TAG acquisition criteria as the must-attend event in the African mining industry

›

Strong strategic rationale and complementary to Africa Oil Week

›

AOW and MI teams now merged to drive synergies

›

Implementation of ITE best practice will drive growth from FY20

• nwards

28 /

TAG – the Transformation and Growth programme

Improving the quality of the portfolio

29 /

269

events

130 130

events May 2017 Closed Divested Acquired May 2019

89 89 65 65 15 15

Ma May y 20 2017 17 Ma May y 20 2019 19

• No. of
• f eve

events 269 269 130 130 52% 52% Rev evenue £134m1 £214m2 60% 60% Rev evenue per er eve event £0.5m £1.6m 220% 220%

TAG programme update

35% 35%

Top

• p 10

10 as s a % of

• f our
• ur por
• rtfolio

lio

Top 10 Other

Pr Previous portf tfolio

30 /

A more balanced portfolio for the combined group

Top

• p 10

10 even ents s – Ma May y 201 2017

1 MosBuild Russia 2 WorldFood Moscow Russia 3 MITT Russia 4 AquaTherm Moscow Russia 5 TurkeyBuild E/S Europe 6 Acetech Mumbai Asia 7 MIOGE Russia 8 RosUpack Russia 9 YugAgro Russia 10 10 Breakbulk Europe Global Brands

Top

• p 10

10 even ents s – Ma May y 201 2019

1 Spring Fair UK 2 MosBuild Russia 3 Bett UK Global Brands 4 Autumn Fair UK 5 WorldFood Moscow Russia 6 CWIEME Berlin Global Brands 7 Mining Indaba Global Brands 8 MITT Russia 9 RosUpack Russia 10 10 Breakbulk Europe Global Brands

Note: Events ranked by revenue

11% 11% 3% 3% 20% 20% 13% 13% 53% 53%

Revenue by y di divis ision1

Global Brands Asia Central Asia E/S Europe Russia UK

24% 24% 10% 10% 7% 7% 7% 7% 28% 28% 24% 24% 44% 44%

Curr rrent t port rtfolio TAG programme update

31 /

Industry-leading growth

Revenue £m TAG programme update

Ahead of plan on most TAG targets

32 /

TAG pil pillar1 Target Original pla plan Revised Sta tatus

1 Positive ROI FY20 FY FY19 Ahead ROI>WACC FY21 FY FY20 Ahead Cash payback FY21 FY FY21 Ahead2 1-3 High single digit LFL revenue growth FY22 FY FY18 Ahead High 20s operating profit margin FY22 FY FY22 On track

TAG pillar 2 = Manage the portfolio TAG pillar 3 = Product-led acquisitions

TAG programme update

Positive ROI

Plan Within 3 years (FY20) Update Within 2 years (FY19)

FY17 FY18 FY19 FY20 FY21 FY22

TAG plan Update

In In-year net operating profit after tax (“NOPAT”)

“Create a scalable platform” targets ahead of plan

Positive ROI in FY 2019

33 /

1

ROI > WACC1

Plan Within 4 years (FY21) Update Within 3 years (FY20)

Cash Payback

Plan Within 4 years (FY21) Update Within 3. 3.5 years (FY21)

2 3

TAG programme update

34 /

Driving sustainable revenue growth and operating profit margins

Operating profit margin % Entry Velocity 2017 Low twenties Exit Velocity 2022 High twenties Like-for-like revenue growth % Entry Velocity 2017 Low single digit Exit Velocity 2022 High single digit

• 10

10%

• 12

12%

• 8%

8% 5% 5%

11% 11%

LFL revenue growth

35% 35% 36% 36% 29% 29% 23% 23% 22% 22% 25% 25% 26% 26%

Operating profit margin

City consensus

4 5

TAG programme update

On track to deliver our 3-year guidance

35 /

FY18 FY19 FY20 Revenue growth Margin growth EPS growth

TAG programme update

Appendices

36 /

27% 7% 11% 21% 11% 23%

FY18 Pro forma1

Russia E/S Europe Asia Brands Central Asia UK 42% 9% 15% 6% 14% 14%

FY18 Actual

Russia E/S Europe Asia Brands Central Asia UK

37 /

Revenue by division

10% 90%

Non-core Core

38 /

Revenue by sector

FY FY18 (FY (FY17 fig figure res in n br brackets)

23% 23% 16% 16% 9% 9% 8% 8% 8% 8% 8% 8% 7% 7% 7% 7% 6% 6% 5% 5% 3% 3%

Build & Interiors (28%) Food & Packaging (16%) Fashion (7%) Oil, Gas & Energy (10%) Manufacturing & Industrial Tech (9%) Transport & Logistics (7%) Travel & Tourism (8%) Retail Advanced Technologies (6%) Beauty & Healthcare (6%) Connect (3%)