1. 1 PERSPECTIVES ON THE EXHIBITIONS SECTOR PERFORMANCE AND PROJECTIONS From a UFI perspective By Sonia Thomas UFI Director of Operations @UFI 2013

2. 2 UFI is the Global Association of the Exhibition Industry, uniting the industry’s organizers, venues, associations and partners of the industry What is UFI? @UFI 2013

3. 3 UFI IMPACT 4,500 Exhibitions organised or hosted by UFI members Presence of UFI members in 85 countries including the 40 largest countries in terms of GDP 3 UFI Offices Headquarters in Paris, Regional Office Asia/Pacific in Hong Kong Regional Office in Middle East/Africa in Kuwait ⓒ UFI 2012

4. 4 June 2013 633 members in 85 countries 206 members with “venue” activity (32.5%) 456 members with “organizer” activity (72%) 52 “Associations” (8.2%) 46 “Partners of the Industry” (7.3%) 79 “Venues only” (12.5%) 127 “Venue & Organizer” (20%) 329 “Organizer only” (52%) ⓒ UFI 2013

5. 5 WHAT IS THE CURRENT STATE OF THE ECONOMY? @UFI 2013

6. 6 According to the IMF, activity has stabilized in advanced economies, supported by policies and renewed confidence. @UFI 2013

7. 7 Source: FT/Wall Street Journal @UFI 2013

8. 8 What can we expect in 2013? The US Fiscal Cliff takes 1% off growth in the Autumn. US close to recession in 2014 Euroland stays in recession for whole year, but Germany grows again Q3 fuelled by demand from Asia Currency realignment; Euro weakens, Dollar strengthens, another Eurozone panic Global equities fail to gather momentum after initial burst in the Spring No change in interest rates even though inflation will trend upwards Well run businesses with clearly defined compelling reasons for purchase will continue to outperform regardless of the economy Source: Roger Martin-Fagg, Economist

9. 9 UFI MEMBERS AND THE ECONOMIC CRISIS @UFI 2013

10. 10 Operating profits compared to the previous year 10 th Global Exhibition Barometer (January 2013) Americas Europe Asia & PacificMiddle East & Africa % of companies declaring stable profits (between -10% and +10%) or increases of more than 10% % of companies declaring profit increases of more than 10%

11. 11 % of companies declaring – over the last 6 Barometer surveys – that the impact of the “economic crisis”on their exhibition business is now over 10 th Global Exhibition Barometer (January 2013) Americas Europe Asia & Pacific Middle East & Africa

12. 12 Key challenges for exhibitions Competition (in some markets) from over- capacity in venues Certain sectors badly affected by the crisis Surprisingly, certain sectors are doing better than ever GDP growth in certain countries: MINT, BRICSA, MIST, CIVETS, N-11, MINTS! etc. Theme competition issues Pressures on business travel Cost controls and environmental constraints @UFI 2013

13. 13 Key challenges for exhibitions Online marketing and product news release Balance internet and face-to-face marketing Industry needs better to communicate how a combination of these is the key to marketing effectiveness. In-house activities and product launches have eaten into traditional event spend. Source of tomorrow’s competition? Targeting the Facebook generation with real world events. @UFI 2013

14. 14 SMEs Leading shows = flying the flag Doing well, «safe choices» Exhibitions - most effective way to: promote their products and services, find new clients open up new markets They have a strong need for new business. They have a strong need to identify & commercialize innovations. @UFI 2013

15. 15 UFI VENUES (INDOOR) EXHIBITION SPACE IN 2011 496 venues 15.6 million sqm (48%) 184 venues 6.6 million sqm (20%) 389 venues 7.9 million sqm (24%) 70 venues 1.3 million sqm (4%) 33 venues 0.8 million sqm (2%) 25 venues 0.5 million sqm (2%) 5 million sqm Scale ⓒ UFI 2012

16. 16 UFI World Map of Exhibition Venues Regional trends between 2006 and 2011 +7% +5% +38% +7% +16% -6% in 200650%26%16%4%2% in 201148%24%20%4%2% Market share ⓒ UFI 2012 (Venues with a minimum of 5,000 sqm indoor exhibition space)

17. The global top 10 Net space rented between 2008 and 2011 (in million net sqm) Trend since 2008 1.USA23,3 (*) - 7% 2.China13,0 + 13% 3.Germany 8,8 - 5% 4.Italy 6,2 - 5% 5.France 5,4 - 8% 6.Spain 3,5 - 24% 7.Japan3,2 - 3% 8.UK 2,8 - 6% 9.Russia 2,6 - 13% 10.Brazil 2,6 + 4%

18. in Europein Asia China India Japan Germany Spain Italy France Turkey Russia Korea UTILIZED SPACE Trends in the net space rented in several major national markets (in sqm, UFI estimations) ⓒ UFI 2013

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20. 20 Events and Exhibitions Global exhibition market was worth $25bn in 2010. Emerging from the 2008 economic downturn, the sector returned to growth in 2011. AMR forecasts that the market will expand by 5% p.a. to 2015, attesting to the ongoing demand for face-to-face contact between buyers and sellers. Emerging markets such as China, Brazil, India and the Gulf Region will spearhead the growth at almost 10% p.a.

21. 21 Events and Exhibitions renewable energy green building internet retailing are among the hottest show sectors, experiencing significant growth across the globe

22. 22 UFI MEMBERS: STRATEGIC RESPONSE TO THE ECOOMIC CRISIS @UFI 2013

23. 23 Current strategic priorities Stay within current scope of activities (as a venue, an organizer or a service provider) Develop new activities within the classical range of the exhibition industry (venue / organizer / services) Develop new activities in terms of live events or virtual events ASIA & PACIFIC MIDDLE EAST & AFRICA EUROPE AMERICAS WORLD Both these developments 10 th Global Exhibition Barometer (January 2013)

24. 24 Operate in new countries and in relation to geographic exposure…. ASIA & PACIFIC MIDDLE EAST & AFRICA EUROPE AMERICAS WORLD 10 th Global Exhibition Barometer (January 2013) Stay in the same countries as those where I currently operate

25. 25 Opportunities for venues See exhibitions as real business opportunities, not « gap fillers » « in-house» exhibitions: sometimes low quality Average survival rate of new shows: 8 – 10% Geocloning (take brand elsewhere) Joint ventureslocal partners work best in certain markets Exhibitions: provide reliable repeat business if handled properly (Exhibitor renewal rates: 65%) Exhibitions have excellent cash flow possibilities Stand space paid in full up to 1 year in advance Conferences: often one-off (due to rotation), long process from tender to conference taking place

26. 26 Evolution of trade fairs Selling space Square metres Complimentary services Catalogue entry Basic technical services Service orientation Integrated services Stand building Catering CRM Database marketing Target group orientation Bundling Exhibitor debit card Online reorder system Individual placement of stands Thought leadership New business ideas for clients Inter event activities Information broking Matchmaking ⓒ UFI 2012 @UFI 2013

27. 27 Associations => trade fairs Representation worldwide: USA: 50 – 60% Europe: 15 – 20% (organizers) Asia: similiar to Europe (less developed) For associations, trade fairs: Enhance member experience networking Education Business opportunities Enhance associations revenue provide member value and ROI Tradition @UFI 2013

28. 28 Exhibitions and Congresses 4:1 ratio of exhibition space:congress space now 2:1 Revenue from exhibitions varies but remains important for many associations. One sixth of total income. Multi-dimensional and multifunctional Pricing model of exhibitions must move away from square metres Need to focus on service Fickle customers, fierce competition, everything is negotiable @UFI 2013

29. 29 Multi-dimensional events ⓒ UFI 2012 Successful new-look events ConferenceEntertainmentLive-streaming Unconventional layouts Traditional trade show floor @UFI 2013

30. 30 Smarter databases are key They are our key assets How do we move beyond them being a simple, functional tool to being the heart of the communities we serve CRM – knowing our customers is the key to successful thought leadership, business retention, improved sales, etc. etc. etc. Matchmaking facilitator “The random contact model is over” High on the agenda for 5 – 10 years But what real progress outside travel industry events? @UFI 2013

31. 31 Meetings technology/smart destinations Human interaction remains vital, but engagement is more and more important Destination promotion: must also be pushed by the venues Associations are more cost-conscious – Need for clear and relevant cost structures Collaboration between associations and the meetings industry @UFI 2013

32. 32 « Smart » destinations The technology industry continues to dictate today’s « needs » Apps at the heart of the communication mix Significant bandwidth, privacy and commercial concerns on switch from PCs towards tablets and smart phones Staying ahead in a constantly changing game Augmented reality an interesting tool but not a game changer Need for “state of the art” screens, projectors, etc. to enhance meeting experience @UFI 2013

33. 33 In summary: Enrich conferences with higher quality content, and vice-versa for trade shows Provide more efficient return on time for attendees by combining events also addresses environmental and cost concerns about multiple business trips Be a « smart » destination Trade fairs provide more reliable income streams for associations Link key events into the heart of the year-round dialogue in the industries we serve With margins of up to 40%, the events and exhibitions industry is highly profitable @UFI 2013

34. 34 @UFI 2013 www.ufi.org