Annual Report 2020

The strength of an organization becomes particularly apparent in times of crisis. For the past ten years, Messe München has delivered a series of outstanding results and earned itself a place among the most successful trade-fair organizers worldwide. The company has consistently rewarded the faith placed in it by its shareholders. Over and above this, it has established itself as a trustworthy and popular ambassador for the Free State of Bavaria and the City of Munich, both domestically and internationally.

The coronavirus pandemic has placed a heavy burden on all of us, impacting our health, our finances, and our emotional lives as well. It has proved an acid test for each of us as individuals and for society as a whole. The crisis has served to bring the things we stand for in the forefront again – qualities like solidarity and social cohesion, but also attributes such as strategic thinking and resolute action. These are the virtues that have made us what we are today. And these virtues are precisely the reason why Messe München is able to look with confidence to the better years that lie ahead.

Although forced to hit the pause button on large-scale international events, Messe München was able to put the time to good use. During the period in which the exhibition grounds in Riem were taken over by the health authority’s contact tracing team and the City of Munich’s vaccination center, the company’s management team and employees were working from their home offices to set a new course for the future. Cornerstones of this new strategy, designed to ensure a speedy return to previous successes, are an extensive restructuring program and systematic enhancement of the business model. The route to the future will be shaped to a great extent by digital innovations, developments that will underscore the company’s leadership claim in the trade fair sector. However, on top of all the necessary cuts and constructive measures, one should never underestimate the extent to which a confident attitude can engender trust in future success.

MINISTER OF STATE
HUBERT AIWANGER

“Trade fairs are the best stimulus package and are urgently needed. The new start of Bavaria’s trade fair business can make a decisive contribution to overcoming the economic consequences of the coronavirus pandemic in many sectors. Trade fairs are the window to the world for our export-oriented Bavarian economy. And also for many service partners in the hotel, restaurant, retail, cleaning and security, transport or craft sectors, trade fairs are a significant factor for sustainable economic development in the post-coronavirus era. Over the past years, the Bavarian trade fair organizations have earned themselves a leading position in the global trade fair market, and this lead needs to be maintained. That is why it is important to now give trade fair organizers, exhibitors and visitors planning security for a successful resumption of trade fair business.”

MAYOR
DIETER REITER

“In 2020, the success story that is Messe München was brought to an abrupt standstill by the coronavirus pandemic. It was vital to utilize this enforced break to develop new ideas and approaches for the future. And this is precisely what Messe München has done!”

FOR THE SUPERVISORY BOARD

The trade fair industry faces a radical cultural change. Although this process began before the onset of the coronavirus pandemic, the crisis has served to accelerate its progress. The traditional in-person trade fairs we were familiar with, and successfully organized for several decades, will almost certainly cease to exist in their old form. The entire sector is undergoing radical change, and Messe München will also need to undergo its own realignment.

The coronavirus crisis is a natural disaster that has hit our company with the force of a sledgehammer. The successful development of our business operations over the last few years, culminating in our outstanding record year of 2019, was brought to a crashing halt. During the most serious economic crisis since the Second World War, our normal world largely came to a standstill. And we will continue to feel the impact for quite some time. But we have acted quickly and decisively, taking resolute decisions that will enable us to emerge from the pandemic even stronger than before.

That’s why we feel confident about the future. Companies that take the right decisions now will have a good chance of retaining their leading positions. Our goal is to maintain and expand our prominent position in the worldwide rankings for trade fair organizations. With this in mind, we have initiated a complete transformation of the company that will create the even more efficient structures we need to expand into new growth sectors. This transformation will certainly be more of a marathon than a sprint.

What will the trade fair of the future look like? At Messe München, we have a tremendous opportunity to decisively shape the path ahead. In our opinion, intensifying customer centricity will become more and more important. In addition, in the critical areas of digitalization and sustainability, we have built up a reputation as a thought leader and innovator. We will exploit this potential to write the next chapters in our success story over the coming years.

For many years, Messe München found itself on a steep upward trajectory. 2019 was a mega year for the company. With a Group sales volume of EUR 474.2 million, we moved up from position 6 to position 5 in the global ranking of trade fair companies Our goals were clearly formulated and strategically sound: further growth and higher revenue. We aimed to expand our position, not simply maintain it.

The coronavirus pandemic hit us while we were traveling at full speed, and forced us to slow down to an almost complete standstill. Striking with an impact similar to that of a natural disaster, it caused one of the severest crises in the history of the trade fair sector. Just like city centers and airports, trade fair halls were deserted. Our world suddenly shut down. Instead of hosting the world’s leading trade fairs and major events, our halls now housed Munich’s vaccination center and the health authority’s contact tracing hub. Across the globe, around 4,000 trade fairs were canceled or postponed, 900 of them in Germany alone.

In the final event, the enforced timeout over those lockdown months for trade fair business served to convince us of the correctness of our strategy. Sharpening our focus even more keenly, the crisis moved three of our findings into the spotlight:

We must press ahead with the digitalization of Messe München, at the utmost possible speed and as our top priority. Our experiences in 2020, both inside and outside the company, have taught us this lesson.

Despite the greater distances involved, the workforce has become an even closer unit. In March of 2020, practically from one day to the next, all 800 employees were instructed to work from home. Because remote mode and location-independent working had already been deployed and tested a year beforehand, it was a smooth transition.

In Munich, even in the midst of the crisis, we continued to deliver on the promise inherent in our corporate claim “Connecting Global Competence”. When it wasn’t possible to organize in-person events, we set up digital platforms that enabled our customers to utilize our global network to present their products, maintain their existing business contacts or make new ones. In the course of 2020, around 40,000 visitors were able to meet exhibitors, sponsors and speakers at 14 digital events.

• At the ISPO Re.Start Days, 1,300 participants from 50 countries logged in during the two days of the event.
• The ’Let’s talk by automatica‘ virtual format was utilized by 1,000 experts and top decision-makers from the robotics and automation sector.
• Held in October, analytica virtual, the digital trade fair for the analysis and laboratory sector, exemplified the success of our digital strategy: 261 exhibitors from 25 countries participated in the five-day event. Over 22,000 visitors from 158 nations were able to digitally attend analytica virtual.

The possibilities that will open up once the pandemic is over can already be witnessed in China. In spite of mandatory face masks and social distancing, and thanks to sophisticated hygiene concepts, our events in the People’s Republic are proving extremely attractive to visitors.

Messe München is one of the best-positioned players and trade fair organizers on the Chinese market. By mid-2020, trade fair business in China had already returned to its regular routine. Our subsidiary Messe Muenchen Shanghai posted a net profit of approx. EUR 20 million. Similarly, the Shanghai New International Expo Centre (SNIEC) recorded a net profit of around EUR 18 million.

ISPO Shanghai reported a 15 percent rise in attendance, and over 80,000 visitors came to the electronica CHINA and productronica China events. BAU and bauma were staged with the usual success, and the regional spin-off of IE expo, held in Guangzhou, was attended by 401 exhibitors and 20,000 visitors.

Although we are not yet able to say with any great detail what the trade fair of the future will look like, one thing is crystal clear: over the next few years there will be no return to the “old normality” of pre-coronavirus days. That’s why we have taken the first steps in a complete transformation of Messe München.

We have set ourselves five core goals:

We have reacted quickly and resolutely, which is why there is a good chance we will come out of this pandemic even stronger than before. This is why we look to the future with confidence. We are focusing on the further development of our current business model. For us, digitalization is no longer merely a specialist matter. It needs to be anchored firmly in our company. Here, we are certainly the pioneers in our market.

The foreseeable future of trade fairs will be characterized by hybrid events, a combination of online and in-person offerings. Our customers certainly welcome the greater profusion of digital platforms. But, at the same time, they are indicating that they will continue to place importance on in-person trade fairs in the future. This is no surprise, of course. It is clear to all of us that digital meetings cannot fully replace personal interaction.

Our business model centers on connecting people. We no longer see ourselves simply as providers of hall space, but as managers of platforms – whether in physical form at a trade fair or in digital form for 365 days a year. The pandemic has reinforced this trend. We’re facing radical changes similar to those that have come with the mobile phone in recent years. There was a time it was only used to make mobile calls. Nowadays, you can also use your smartphone to take pictures, listen to music, navigate, watch TV, play games or track your health. Up until now, our core business was the letting of exhibition space. As was the case with smartphones, we now have to create additional digital offerings that bring real added value for our customers.

Our future success depends clearly on strategies, skills and products – but the attitude with which we accept and shape this future will be paramount. The entire trade fair industry is facing a radical cultural change.