GL events looks to China to lead upturn as it continues to control costs

Integrated event industry group GL events' first half results to 30 June 2021 show a 21.4% drop in revenues (to €209.8m) under the impact by the Covid pandemic. The group reported an upturn in its business in China, however, and a strengthening of its overall cash position.

The interim financial statements for the 2021 first half were approved by the GL events Board on 22 July 2021 and group chairman-CEO Olivier Ginon commented: “The group continued to demonstrate its resilience and ability to adapt in the first six months of 2021. In addition to implementing efficient health protocols, in China we exceeded levels of business reached in 2019 and continued to adapt our service offerings in Europe where business resumed in June.

“We have also continued to adapt our financial structure. Our cost reduction efforts, the optimisation of business assets through equity partnerships and government relief measures allowed us to reinforce our cash position at 30 June 2021.

“In France, the announcements by the French president concerning the Health Pass represent an opportunity for our businesses. They strengthen the outlook for a recovery by our businesses with the end of restrictions on the size of public gatherings.”

The financial results show GL events posting second quarter growth of nearly 118% in relation to Q1 2021, which management said pointed to a gradual recovery of business within an improving health situation in the first half.

EBITDA in consequence increased significantly in relation to H1 2020, despite the drop in revenue, benefitting from significant cost-saving measures, aid provided by European governments and the strong momentum of businesses in Asia.

GL events achieved additional savings in fixed costs which reached €83m for the first six months.

GL Events Live division posted revenue in H1 2021 of €131m, down 16.8% in relation to the same period in 2020. This division benefitted from the delivery of the Temporary Grand Palais and the gradual resumption of events in France (Dakar Rally, the Grand Prix of Le Castellet, Roland Garros, the Dior Haute Couture fashion show) and robust business activity of GL Events Live Shenzhen (+15% at 30 June 2021 in relation to 30 June 2019).

The division recorded savings of €40m in H1 2021 compared to €32m in H1 2020.

GL Events Exhibitions had revenue in the first half of €51.m, up 14.8%, reflecting the gains from Chinese exhibitions (CIEC, CACLP and Fashion Source) and the organisation in France of four exhibitions (CFIA in Rennes, SEPEM in Colmar, Tranoï and Fashion Rendez-vous Première Vision in Paris) in June. Cost savings achieved by the division amounted to €6m in relation to H1 2019 (versus €10m at 30 June 2020 in relation to H1 2019).

GL Events Venues division, meanwhile, had revenue of €27.2m, down 57.8% and was impacted by government-ordered closures for five months in Europe and six months in South America. During this period, the division adapted, with spaces converted into Covid-19 testing or vaccination centres or student exam centres. Broadcast studios set up in 2020 provided new sources of revenue. In relation to H1 2019, the division generated savings of €35m over the first half.

At 30 June 2021, the group’s cash position stood at €462m, up in relation to 31 December 2020, to which is added an undrawn government-backed credit line of €12m.

Ongoing cost-saving measures, tight controls over capital expenditures (€21m in the first half) and inflows from equity partnerships, contributed to reducing net debt to €662m at 30 June 2021 compared to €681m at 31 December 2020.

In China, after Nexus Point became a new shareholder of GL events Greater China, the group was selected to acquire a 10% equity stake in Capital Exhibition Group (CEG), a 60%-state-owned manager of venues, organiser of exhibitions and large events. CEG has a portfolio of 15 sites (exhibition and convention centres) representing a total area of 1,000,000 sqm under management, including the China National Convention Center and Beijing International Convention Center.

In the fourth quarter, the group should benefit from the rescheduling of the main events initially planned for the first half (SIRHA, Global Industries, Fairs…), momentum provided by the economic recovery and the impact of mega-events (Tokyo Olympic Games, the Dubai World Expo).

GL events estimated sales revenues for 2021 will approach €700m, resulting in positive net profit.