Half-year Closing 2021 MCH Group

First half of 2021 marked by lockdown and embarking on a new future

  • Minimal business activity due to the Covid-19 pandemic and preparations for events in the coming six months lead to a decline in operating income to
    CHF 60.4 million and a loss of CHF -29.4 million in the first half of 2021.
  • Despite the still tense situation, there is a spirit of optimism. The work to gradually ramp up business activities and the initiated implementation of the strategy approved by the Board of Directors are being intensively pursued.
  • The strategic framework comprises numerous initiatives in all business areas.
    With the realisation of a clearly defined implementation plan, the MCH Group will grow again and increase its profitability.

The assumptions for the 2021 business year have so far proved to be largely correct. Unfortunately, as far as the first six months were concerned, business activities remained virtually at a standstill, as in the previous ten months. However, there is confidence with regard to the second semester, given that major events can be staged once more and business activity can be gradually stepped up - if there is no renewed tightening of restrictions due to the Covid-19 situation. Accordingly, the first half of 2021 was marked equally by the lockdown and the dawn of new future.

Monthly losses significantly reduced

When drawing comparisons with the same period in the previous year, it should be noted that substantial income was still generated in the first «pre Covid months» of 2020, including the staging of Swissbau and SWISS-MOTO. The operating income of CHF 60.4 million generated in the first half of 2021 is therefore significantly lower than in the same period last year (CHF 132.7 million). In view of the extensive standstill in business activity, it is of course not possible to present a positive half-year result for 2021. At CHF -29.4 million, the consolidated half-year loss for 2021 is, however, only CHF -5.0 million below that of the first half of 2020 (CHF -24.4 million). EBITDA for the first semester of 2021 amounts to CHF -17.4 million (first half of 2020 CHF -10.9 million).

In line with the half-year loss, cash and cash equivalents fell from CHF 130.1 million to CHF 99.7 million in the first semester of 2021. Shareholders' equity has fallen to CHF 36.8 million, and the equity ratio is now 9.9 %.

The average monthly consolidated loss of approximately CHF 5 million was considerably reduced relative to the 2020 financial year (average approximately CHF 6 million) and the second half of 2020 (average approximately CHF 8 million).

This was achieved primarily through the careful evaluation and planning of human and financial resources deployment. It proved possible to avoid uncovered costs by cancelling or postponing a large number of events at an early stage. Wherever possible and meaningful, short-time working and, in the USA, furlough, were continued.

Key projects implemented and pursued

At the same time, key projects were implemented and driven forward. Art Basel in Hong Kong - the only event that the MCH Group was able to hold in the first half of 2021

  • had to take place physically on a reduced scale, but also included expanded digital formats. Although the Watch/ Jewellery/Gemstones event planned for spring 2021 had to be cancelled, the time was spent on developing a new BASELWORLD concept for the entire community in the mid- and high-end market segment. With the acquisition of Digital Festival AG, new and attractive events have been added to the portfolio, and the group's competence in developing innovative event formats and future-oriented topics has been further strengthened. In the Experience
    Marketing division, numerous hybrid and digital projects have been realised.

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Basis for a successful future

Despite the Covid-19 pandemic, the MCH Group can look confidently to the future. With its transformation and strategy, MCH Group is prepared for the major changes in the experience marketing market that were already becoming apparent before the Covid-19 crisis, but which have been intensified and accelerated by the pandemic. It has thus laid the foundations for a successful turnaround and prosperous further development over the past two years - and especially in the first half of 2021.

After the capital increase and the entry of the new anchor shareholder Lupa Systems in the previous year, the renewal of the Board of Directors was completed at the Annual General Meeting in April 2021. Thereafter, the management and the Board of Directors conducted a review of the strategy. It was confirmed that the network of the three divisions - Community Platforms (physical, hybrid and digital platforms), Experience Marketing (strategy, creation and implementation of marketing solutions) and Venues (own infrastructure in Basel and Zurich) - constitute a unique asset with a high synergy and development potential. The strategic orientation has been confirmed and further sharpened through prioritised strategic initiatives in all the divisions.

The strategy is based on creating unique added value for communities in selected ecosystems with various formats on physical, hybrid and digital platforms throughout the year. It also supports stakeholders within various ecosystems with holistic experience marketing solutions in positioning and activating their brands as well as in building and maintaining customer relationships. Apart from securing the group's business in the course of the expected upswing in the period following the Covid-19 pandemic, the strategic focus is on geographic expansion, digital transformation, innovative offerings and the cross- utilisation of competences and services throughout the group.

The MCH Group has set ambitious growth and profitability targets in the corresponding revision of its mid-term plan. It is convinced that, with the strategic plan that has been drawn up at group level and in all business fields, it will achieve these objectives.

Gradual ramp-up of business activity

In view of the worldwide easing of the restrictions imposed to combat the COVID-19 pandemic, it is expected that the MCH Group will be able to gradually step up its business activities over the next few months. In Switzerland, large- scale events have been possible again since July 2021, subject to certain conditions, such as a protection concept and a COVID certificate or the obligation to wear a mask. The confederation and cantons will also pay part of any uncovered costs for events that have to be cancelled or postponed at short notice on account of the epidemiological situation, thus giving organisers greater planning security.

The MCH Group teams have therefore already been working for many months with great motivation and enormous commitment on the preparations for the events to be held over the next six months.

The MCH Group assumes that Art Basel in Basel can be successfully staged as a physical event with expanded digital offerings. The Digital Festival with HackZurich, the career fairs in Zurich and Lausanne, as well as Ilmac in Basel, which will be accompanied by the new InMedCompact format and IFAS Digital, will be further highlights in the «event autumn» of 2021. The MCH exhibition program in the second half of 2021 will conclude with Art Basel in Miami Beach.

It has unfortunately been necessary to cancel IGEHO/ Lefa and the Basel Wine Festival. The Igeho Exhibitors' Committee was not supportive of holding the fair and was also against an alternative format or its postponement to 2022, since the hospitality sector, which has suffered tremendously as a result of the COVID-19 situation, is not

yet ready to stage its most important national industry event.

Target of a balanced second half-year

The MCH Group is expecting a loss for the year 2021 that will be lower than in the previous year 2020, but still in the double-digit million range. The great uncertainty still prevailing with regard to the development of the epidemiological and economic situation means that the expectations for the second half of 2021 and the annual result for 2021 span a very broad range. The way in which business activity develops in the months of September to December will be decisive for this.

According to its current estimates, the MCH Group is aiming for a balanced half-year result in the second half of 2021. However, the achievement of this target depends on a positive development in the USA, where the situation is currently increasingly uncertain again. In the worst - but unlikely - case that only very few or no events can take place worldwide until the end of 2021, a loss in the order of magnitude of the first half-year is to be expected in the second half of 2021.

Based on the updated mid-term plan, the management and the Board of Directors came to the conclusion that the group will be a going concern beyond 2022. With regard to the refinancing of the CHF 100 million bond due in 2023, a Bond Exchange Offer is being considered in 2022.

3

Group balance sheet

to the half-year closing 2021

Group balance sheet

30.06.2021

31.12.2020

(abridged)

CHF million

%

CHF million

%

Cash and cash equivalents

99.7

130.1

Other current assets

74.2

64.3

Total current assets

173.9

46.9

194.4

48.7

Total non-current assets

197.1

53.1

205.1

51.3

Total assets

371.0

100.0

399.5

100.0

Short-term loans

8.5

12.7

Other current liabilities

77.1

68.7

Total current liabilities

85.6

23.1

81.4

20.4

Long-term loans

140.9

142.0

Bond

100.0

100.0

Other long-term liabilities

7.7

8.8

Total non-current liabilities

248.6

67.0

250.8

62.8

Total liabilities

334.2

90.1

332.2

83.2

Total shareholders' equity

36.8

9.9

67.3

16.8

Total liabilities and shareholders' equity

371.0

100.0

399.5

100.0

4

Group income statement

to the half-year closing 2021

Group income statement

01.01. - 30.06.2021

01.01. - 30.06.2020

(abridged)

(adjusted)

CHF million

% /income

CHF million

% / income

Net sales from deliveries and services

39.7

120.3

Other operating income

19.4

14.9

Changes in work in progress

1.3

-2.5

Total operating income

60.4

100.0

132.7

100.0

Personnel expenses

-35.7

-50.1

Administration

-8.0

-8.9

Maintenance, repairs

-3.6

-4.0

Insurance, ground rent, rents

-7.4

-9.2

Energy

-1.9

-2.2

Furnishing expenses, stand construction

-19.1

-37.1

Exhibition and conference operations

-0.4

-27.1

Advertising, press, public relations

-2.3

-7.2

Other operating expenses

0.6

2.2

Operating result before interest, taxes and depreciation

-17.4

-28.8

-10.9

-8.2

(EBITDA)

Depreciation and impairment

-10.0

-10.8

Operating result (EBIT)

-27.4

-45.4

-21.7

-16.4

Result of associated organisations

0.1

0.0

Financial result net

-1.9

-2.3

Loss before income taxes

-29.2

-48.3

-24.0

-18.1

Income tax

-0.2

-0.4

Loss for the half-year

-29.4

-48.7

-24.4

-18.4

of which attributable to minority interests

-0.4

-0.9

of which attributable to the shareholders of the parent

-29.0

-23.5

company

Result per share in CHF (diluted / undiluted)

-1.95

-3.91

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MCH Group AG published this content on 03 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 September 2021 07:41:08 UTC.