I I T E G R T E G R O U P O U P The Company The Company The - PowerPoint PPT Presentation

I I T E G R T E G R O U P O U P The Company The Company The Strategy The Opportunity...

Introduction Introduction International Trade 1. Exhibition Fundamentals 2. Russian Macro Environment 3. Russia – effects of crisis 4. Company Strengths 5. Strategic Opportunity 6. Summary 7.

Adam Smith wrote Adam Smith wrote “Man has an intrinsic propensity to “Man has an intrinsic propensity to truck, barter and exchange one thing for another” thing for another

ITE – MosBuild ITE – osBuild 09 + MITT 09 Testimonials 09 + MITT 09 Testimonials T he rumour on the street is, Russia’s the market We are really optimistic for the future and we 2009 2009 with the biggest growth potential right now and think this is the best time to enter the market. it has been for the last couple of years and as bee o e as coup e o yea s a d MosBuild 2 MITT 2 we’re using MosBuild as a vehicle to explore those opportunities. Russia is becoming very important for us because Russian tourists spend quite a lot in Mauritius... If you’re not visible, you might lose M We have participated for 11 years and we re We have participated for 11 years and we’re your market share. investing as much as we have always done. In a situation like this, it’s even more important to attend exhibitions like this so you can be seen. Russia is the second biggest market for Cyprus after the British. In the first two months of this MosBuild is our main advertisement in Russia. It’s year, despite the crisis, we had an increase of not easy to do publicity because the market is about 18%. so big but people from all regions of Russia come here. At the last minute, we had to buy more space at MITT because we have many partners in at MITT because we have many partners in I am astonished! I didn’t expect that MosBuild Germany that are interested in the Russian was so big. It is a strong exhibition, with people market. from all over the world.

Russia’s Imports Russia’s Imports 5% Total imports $290bn in 2008 * Source WTO % of total imports % f i

ITE – ITE – International Sales nternational Sales to Russia to Russia 5% Russian Domestic 50% * Source WTO Sou ce O

ITE – ITE – Sales Office Expansion ales Office Expansion Poland – Poznan (2008) USA – New Jersey (2009) USA New Jersey (2009) China China – Beijing (2007) Beijing (2007) Spain – Valencia (2008) UAE – Dubai (2008) Malaysia – Kuala Lumpur (2008)

Exhibition Fundamentals Exhibition Fundamentals Main B2B channel to market in Russia & CIS � Globalisation = Growth in International exhibitions � International scalability � Resilience & Longevity of #1 events – through economic cycle g y g y � Cash flow positive �

Exhibition Media in Emerging Markets Exhibition Media in Emerging Markets Russia Exhibitions, Publishing UK Exhibitions, Publishing and US Exhibitions, Publishing and Data Markets, 2006 Data Markets, 2006 and Data Markets, 2006 $ $m $ $m $ $m c.570 5,737 15,950 5,050 4,014 Russian publishing 10,936 10,302 and data opportunities remain small currently c.195 c.80 80 Exhibitions Publishing Data Exhibitions Publishing Data Exhibitions Publishing Data Increasingly Developed B2B Market Source: PwC, VSS, Exhibition Venues Association, Key Note, OC&C analysis

International sales in our top events International sales in our top events Local International 37% 37% 39% 39% 46% 46% 47% 47% 56% 56% 63% 63% 61% 61% 54% 54% 53% 53% 44% 44% MITT 2008 MITT 2008 KIOGE KIOGE EXH EXH & & CONF CONF MOSBUI MOSBUILD WORLD FOOD WORLD FOOD KAZBU KAZBUILD & & INTERIORS INTERIORS MOSCOW MOSCOW 2008 2008

ITE – ITE – Sector Strength ector Strength Sect Sector Stren or Strength g th 10 8 9 8 8 6 6 7 nts 6 6 # of eve 4 4 5 4 4 4 3 3 4 No1 3 3 2 2 3 2 2nd/3rd d/3 d 1 2 2 1 2 1 1 2 2 2 1 0 1 1 1 0

Cash flow profile Cash flow profile Cumulative Cashflow Cumulative Cashflow 1200 Exhibition 5000m² - £ 1.2m revenue Second stage collections & venue payments First stage collections 1000 £’000s 800 600 Deposits collected Visitor promotion 400 On-site stand construction 200 200 - 12 - 11 - 10 - 9 - 8 - 7 - 6 - 5 - 4 - 3 - 2 - 1 - 1 0 Months to opening of exhibition

Russian Macro Environment Russian Macro Environment 8 th largest economy in the world* � Natural resource dependent economy � Oil & gas sector accounts for 60%+ of exports # � Resource sectors - 90% of exports # � Oil prices underpin economy & development p p y p � *CIA World Fact book – 2008 GDP Data # Economist intelligence unit

RUSSIA – RUSSIA – 2009 2009 in perspective in perspective Q4 2008 – Dead Stop Q4 2008 Dead Stop � Industrial out put drops 10% between Nov – Feb � Massive de-stocking � Ruble 30% devaluation (90% in 1998) Ruble 30% devaluation – (90% in 1998) � � Government spends $200bn – devaluation support � Cumulative Public Debt 2009 – 8.4% of GDP (UK 59%) �

Russian GDP Growth 1997 Russian GDP Growth 1997 – 2010 2010 (f) (f) % y–o-y 10 8 6 4 2 0 -2 -4 -6 97 98 99 00 01 02 03 04 05 06 07 08 09 10 * Source: Business monitor international i i i i

Russian Economy Russian Economy – The Future he Future � $400bn sovereign fund – 3 rd Largest in World * $400bn so ereign f nd 3 rd Largest in World * � Ruble devaluation will boost competitiveness � Recovery possible by end of 2009 � Growth in 2010 projected + 1% to 2%* p j � Oil price +/- $10 a barrel = +/- 1% GDP * � Consumer strong – no household debt Consumer strong no household debt *Economist Intelligence Unit

Russia Russia Ale xande r Shtale nkov ITE Moscow General Director since June 2005 ITE Moscow General Director since June 2005 Background: considerable and extensive expertise in managing teams and developing business strategy for leading corporate teams and developing business strategy for leading corporate organisations in Russia, CIS & Central Asia, IBM, Dell, Xerox 2009 statistic s: 2009 statistic s: Mosc ow Novosibir sk St Pe te r sbur g T otal Staff 155 176 83 414 Events 28 55 19 102 The revenue from Russia is 60% of total ITE Revenue ₤ m 57 5* 7 69 Group’s revenue. (2008) * Annualised

Russian Exhibition Market Trends Russian Exhibition Market Trends Projects of new exhibition centre development are postponed � Entrance to the market for new big international companies is � postponed The overall quantity of exhibitions in Russia (2500) will decrease by The overall quantity of exhibitions in Russia (2500) will decrease by � � circa 50% during crisis* Definite shrinkage of the quantity of exhibition organisers (300) by 50% � during crisis 40% of Russian enterprises databases (exhibitors & visitors) will become � out-of-date because of company bankruptcies * EXPA Foundation market research agency

Russian Exhibition Market (m²) Russian Exhibition Market (m²) In 2008, after the acquisition of Siberian Fair, ITE became № 1 in Russia with in Russia with estimated market share about 12% Source: EXPA Foundation market research agency g y

Russian Regions Russian Regions Besides Moscow and St. Petersburg, there are eleven cities in Russia with annual net exhibition space of more then 20K square meters with annual net exhibition space of more then 20K square meters. Krasnodar & Novosibirsk are the biggest. Krasnodar 75 996 Acquired 2008 Novosibirsk 74 782 Ekatherinburg 31 023 36 972 Nizhnij Novgorod 55 345 Rostov na Donu Rostov-na-Donu 38 519 38 519 13 171 13 171 Samara 37 006 12 000 Kazan 34 124 10 000 Omsk 39 980 Perm Perm 34 637 34 637 Irkutsk 31 371 Krasnoyarsk 26 078 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 RUEF members RUEF members others others

Opportunities for ITE Opportunities for ITE Crisis gives ITE unique oppor tunitie s : to increase market share in Moscow and regions � to acquire new events at reasonable prices to acquire new events at reasonable prices � � to launch new events into a less competitive market � to expand JV’s with international brand owners � to attract leading professionals to join ITE team with their projects � to optimise internal business processes (technology for � communicating with exhibitors & visitors)

Development Strategy Development Strategy Inte r nal E xte r nal • New visprom initiatives • New visprom initiatives • Regional development • Regional development • New WEB strategy • Acquisitions • Improving sales culture • New launches • New management structure New management structure • Headhunting H dh ti

Achievements 2005 Achievements 2005 - 2009 2009 • ITE became No.1 exhibition company in Russia – 12% market share ITE became No.1 exhibition company in Russia 12% market share • Recent acquisitions (Maxima, Interstroy, Sfitex, Siberian Fair) • JV’s started (Messe Frankf rt Reed E hibitions) JV’s started (Messe Frankfurt, Reed Exhibitions) • Term agreements with principal venues (Expocentre, Crocus) • Strong governmental support received for exhibitions • Regional expansion - Novosibirsk • Staff development / management team built