UBM’s ‘Events First’ Strategy Pays Off with 30-percent Revenue Surge in 2015
UBM announced last year its strategy was going to focus on putting ‘Events First’, and those efforts paid off, with full-year 2015 total revenues surging 30 percent to $1.3 billion (£974 million) , compared with $1 billion (£746 million) in 2014.
The addition of Advanstar Communications to the company’s portfolio was a boost, with a first year return on investment of 10.3 percent. UBM also sold PR Newswire for $841 million last year, further solidifying its ‘Events First’ strategy.
“UBM has taken significant steps in its transformation in 2015. We’ve integrated Advanstar, announced the sale of PRN, successfully begun implementing ‘Events First ’ and delivered an operational performance ahead of expectations,” said Tim Cobbold, UBM’s CEO.
He added, “Looking forward, UBM is now a focused business with more than 82 percent of revenues derived from events across a range of industry verticals and geographies. Our ‘Events First’ strategy will deliver growth, margin and, we believe, create the best platform in the industry.”
UBM’s annual events in 2015 posted a revenue increase of 35 percent to $811 million (£582 million), compared with $598 million (£429 million) from the year before.
The company’s seven biennial ‘major’ events also performed well, growing by 34 percent, on a constant currency basis, compared with their 2013 editions.
UBM runs 116 ‘major’ (more than $1.4 million in revenue) annual events, which delivered 86 percent of annual event revenue in the year.
Revenue growth of these major shows grew 5 percent, despite the Furniture China and Sign/LED shows, compared with 3.9 percent (underlying growth adjusted for rationalization) for the portfolio as a whole.
Advanstar’s events, which are 74 percent of the UBM Advanstar division, grew just more than 4 percent last year, with a major initiative focusing on further integrating the business into UBM’s overall structure.
All UBM divisions, including UBM Life Sciences, were brought under one umbrella in the U.S., as well as changes were made in the management structure.
Simon Foster was appointed Interim CEO of UBM Americas after the departure of Sally Shankland, who previously had the role.
“As he has demonstrated, Simon was well-placed to take this role, combining his 25 years of experience in the industry with specific knowledge of many of the constituent businesses in UBM Americas,” UBM officials said.
The remaining Advanstar integration (of finance systems and processes, and other business systems) will take place during the next 18 months.
The acquisition of Advanstar has re-balanced UBM’s geographic presence to be more in line with the global exhibitions industry.
In 2015, North America accounted for 42.6 percent of Annual Events revenue (2014: 24.7 percent) and Emerging Markets, as a whole, accounted for 40.7 percent (2014: 50.8 percent), with China 30 percent of annual revenues (2014: 36 percent.)
Further honing its events portfolio last year, two of UBM’s events were sold and 47 events were discontinued, as well as the company also added three events businesses in 2015.
The acquisition of Hospitalar enhances UBM’s presence in the healthcare sector. The show, which is the leading healthcare event in Brazil, is expected to experience good growth despite the weak macroeconomic backdrop. The acquisition also makes UBM the third largest organizer in Brazil.
The buyout of the eMedia joint venture results in control of CIOE, a show that has been operating in Shenzhen for more than 20 years and which strengthens UBM’s portfolio in China.
Both events are ‘major’ events while CSTPF, the third acquisition, is a small digital textile printing show in China.
With the sale of PR Newswire, company officials said they would pursue further acquisition activities “that meet our strict financial criteria.”
Looking into the future, Cobbold said, “The Board expects continued good growth (excluding the impact of biennials and ongoing portfolio rationalization) although it remains conscious of the global macroeconomic uncertainty. It also expects further margin progress although this will be offset by the even-year biennial effect.”