Across the Pond Is a Little Sunnier Than U.S.

By the end of 2008, the economic downturn was in full swing in the United States, and things were looking pretty grim for several public companies related to the tradeshow industry.

Gaylord Entertainment’s earnings plunged from a net income of $111 million in 2007 to a net income of $4 million one year later, a 96-percent drop.

Casino giants, such as Las Vegas Sands and Harrah’s Entertainment, also saw their stocks take a beating, with Sands posting a 2008 loss of $163 million in net income, and Harrah’s ending the year with total revenue loss in its Las Vegas portfolio alone of close to $100 million.

Even though European and Asian countries’ economies also have been battered, companies such as United Business Media and Reed Elsevier, both based in the United Kingdom, as well as Global Sources, with shows primarily in Asia, have fared relatively well, all gaining in revenue, though some of their profits, too, have dipped.

United Business Media’s revenue was up 10.7 percent, from £801.6 million ($1.18 billion) in 2007 to £887 million ($1.3 billion) last year.

“UBM delivered a robust performance in 2008. While UBM is not immune to the effects of the slowdown taking place across markets and economies worldwide, we are confident that we are as well placed as we can be to continue to deliver value to shareholders,” said David Levin, UBM’s CEO. “In 2008, we continued our long-term strategy to reshape UBM, with a more diverse and resilient set of products and services, operating in higher growth markets and economies.”

Last year, he added, the company also reshaped the organizational and management structures of a number of its businesses to improve the market focus, “creating smaller, more agile business units and bringing their management teams closer to their customers and audiences.”

And to keep the good news coming in the future, Levin said, “We have also taken early action to reduce costs and have maintained a prudent balance sheet, allowing us to continue to make selected acquisitions as pricing improves and opportunities arise.”

The earnings report for 2008 wasn’t all positive though; profits dipped from £114 million ($164 million) in 2007 to £83 million ($119 million) last year, a 27-percent drop.

Even so, with fewer profits, most companies last year were taking a conservative approach to the mergers and acquisitions market, but UBM continued on its aggressive march toward beefing up its portfolio. UBM acquired 14 companies in 2008 for a total of £38.4 million ($54.5 million).

Some of the acquisitions included Think Services, £11.2 million ($16.5 million); Vision Events, £4.5 million ($6.6 million); and Next Level, £2.5 million ($3.7 million).

UBM’s events division clearly is one of the company’s big winners, with a contribution of 32.9 percent of revenues and 47.3 percent of UBM’s profits.

And the future looks even brighter. According to the company, upcoming bookings for this year’s major events – which contribute approximately £120 million ($176 million), or approximately 40 percent of revenue – are showing 5-percent growth.

UBM Asia’s portfolio (formerly CMP Asia) also looks to have a good year. Key events, such as the September edition of the Hong Kong Intl. Jewellery Show, the All China Leather Exhibition, Marintec, Furniture China and Cosmoprof Asia are on track to achieve growth this year, according to the company.

Another company with a strong tradeshow portfolio in Asia, Global Sources, also had a good year in 2008. Global Sources revenue increased 14 percent, from $182.1 million in 2007 to $206.9 million last year. Online revenue drove a lot of that growth, with a 24-percent increase from $75.9 million in 2007 to $94.5 million in 2008. Tradeshow revenue also saw an uptick of 13 percent, from $51.6 million in 2007 to $58.2 million in 2008.

Profits, though, dipped slightly from $8.15 million in 2007 to $7.53 million in 2008, a 7-percent decrease.

“For 2009, the difficult economic environment will impact revenue and profitability,” said Merle A. Hinrichs, Global Sources’ chairman and CEO. “However, we have overcome many challenges in our 38-year history, and we are committed to profitability. We have excellent product positioning, a very experienced management team, a solid customer base of professional buyers and suppliers, and a strong balance sheet. Our objectives are to enhance our competitive position and be well positioned to thrive when the economy improves.”

Not all the financial news was stellar, though. As is the case with most business-to-business media companies, the print sector of Global Sources’ portfolio took a hit, dropping 5 percent from $49.9 million in 2007 to $47.6 million in 2008.

Another U.K. company, Reed Elsevier (parent company of Tradeshow Week), had a good revenue year in 2008, with its print portfolio, Reed Business Information, posting 9-percent growth, and its tradeshow division, Reed Exhibitions, bringing in even stronger numbers.

Last year, total revenue for Reed Elsevier was £6.7 billion ($9.8 billion), compared with £5.3 billion ($7.78 billion) in 2007, a 16-percent jump. Reed Exhibitions had the biggest increase in 2008, with revenue of £707 million ($1.04 billion), compared with £577 million ($848 million) in 2007, a 23-percent uptick.

According to Reed Elsevier officials, “Reed Exhibitions had an exceptional year, with major successful shows and the net cycling in of biennial exhibitions demonstrating that, in an increasingly online world, face-to-face exhibitions continue to deliver significant value for exhibitors and visitors alike.”

Reed Elsevier launched 24 shows last year, including Photovoltaic Power Generation in Tokyo. In addition, the company acquired nine other shows and sold off the remainder of its defense portfolio in May.