International event organiser and venue company GL events has released its (H1) Board-approved financial statements, which show a big drop in revenues and a company strategy focused on preserving liquidity.
Chairman and CEO Olivier Ginon (pictured), announcing the results approved by the GL events' Board of Directors on 15 September 2020, said: “After a record performance in 2019, the Group entered the crisis with solid fundamentals. The health crisis, unprecedented in terms of its suddenness and severity, has significantly impacted our businesses. In this context, the Group responded very quickly and has adapted. We have significantly reduced our costs (€69m at 30 June 2020) and preserved our cash. We have also benefited from support measures adopted by the government (government-backed loans, a national furlough scheme). “All our offerings have been developed to comply with the most rigorous health regulations. And while visibility remains limited for the upcoming months, I’m confident in the Group’s resilience that will permit it to rebound once the administrative restrictions have been lifted. I would like to thank the employees for their exemplary behaviour since the beginning of this crisis. Finally, we are able to count on all our partners and subcontractors who are also going through a difficult period but who remain faithful to the Group.”
Revenue for the first six months ended 30 June 2020 amounted to €266.8m, severely impacted by the health crisis (-55.2% from one year earlier - €595.9m) which masks the excellent level of business at the start of the year.
At the end of February, and after adjusting for the biannual effect, revenue was up by 14%. And while the income statement has fallen back to unprecedented levels in response to shutdowns of activities, it also benefited from a cost reduction programme.
The €69m in savings from fixed costs in H1 was made possible, in part, by recourse to government-backed furlough measures (activité partielle) and, in part, by very tight control over the management of resources. On that basis, EBITDA showed a loss of -€21.5m.
The Gl events net loss amounted to -€32.8m (compared to net income of €41.8m in H1 2019). After taking into account the decrease in non controlling interests reflecting the results of subsidiaries, the net loss attributable to Group shareholders was -€30.m.
In terms of divisional performances, GL events Live had revenue in the 2020 first half of €157.m, down 42.9% in relation to the same period in 2019 (€275.4m). This division invoiced costs incurred for cancelled events and benefited from the strength of its industrial activities such as Spaciotempo in France, or Aganto in the UK and this division generated savings in the 2020 first half of €32m.
GL events Exhibitions division had revenue of €45m, down 69.4% (€147.1m), in light of the postponement of several exhibitions due to the health crisis. The Group revised its offering and at the end of June introduced an alternative format, 100% digital, Global Industrie Connect. Several exhibitions were moved forward to the second half of 2020 or early 2021. This division generated savings in the first half of €10m.
GL events Venues posted revenue of €64.5m, down 62.8% (€173.4m). Here the Group innovated by organising a digital event at the Palais Brongniart in France and by setting up a temporary hospital at the Johannesburg Expo Center in South Africa. This division achieved €29m in savings in the first half. GL events Venues initiated negotiations with local governments to reduce rental payments.
Financial structure preserved
GL events’ cash position has been reinforced and stood at €341m to which is added an undrawn syndicated revolving credit facility of €100m. GL events was granted a covenant holiday for fiscal 2020 by its banking partners with no changes in the contractual terms.
The Group also has initiated negotiations with its bondholders to obtain waivers for the Euro Private Placement (Euro PP). A new government-backed loan is also being negotiated, with the goal of securing total financing of €130m, of which €73m has already been granted. Net debt was €592mat 30 June 2020 compared to €480m at 31 December 2019.
Despite the current lack of visibility regarding the evolution of the health crisis, the Group says it is confident in its ability to get through this crisis.
In an environment subject to restrictions currently preventing the organisation of international or large sized events, GL events estimates its annual business volume for 2020 to date at €600m, which would lead to a loss for the full year of approximately €5m. Savings from the cost reduction programme are expected to reach €130m by year-end, the Group said.
In France, the activities of the three divisions are gradually picking up. The Live division will notably deliver the Grand Palais Ephémère at the end of 2020. Local exhibitions and fairs like those of Metz, Caen and Toulouse, but also events with a more global profile, redesigned to comply with the health safety guidelines, should be held in the second half.
Première Vision’s transformation into a 100% digital exhibition at the end of August, 15 days before it was to be held, is however another illustration of the uncertainty of the period.
In China, after the organisation of the CACLP exhibition at the end of August, Fashion Source is expected to be held in November.
The resumption of activity in China, the announcement that the Olympic Games in Tokyo will be held, a positive biennial effect (Sirha, the Rio de Janeiro International Book Fair) and the rescheduling of exhibitions (Expomin, the Piscine swimming pool and wellness event) should, the Group, said allow it to experience a recovery in business activity in 2021.