ANNUAL REPORT AND ACCOUNTS

Transcription

1 quickening the pace ANNUAL REPORT AND ACCOUNTS 2015 Tarsus Group plc YEAR ENDED 31 DECEMBER 2015

2 Tarsus is an international business-to-business media group with interests in exhibitions, conferences, education, publishing and online media. Connecting buyers with sellers, Tarsus is focused on developing a business that facilitates relationships between them; helping them to do business in their respective markets efficiently and profitably. Exhibitions offer a unique and unparalleled proposition in their ability to provide face-to-face interaction, and are particularly resilient in emerging markets where personal relationships are so highly valued. A full pdf of the Annual Report and further information about the Group and its businesses can be found online at our corporate website:

3 CONTENTS STRATEGIC REPORT 2 Who we are 4 Strategy 7 Highlights 8 Chairman and Managing Director s statement 12 Financial Review STRATEGIC REPORT GEOGRAPHICAL AREAS 14 Emerging Markets 26 US 30 Europe GOVERNANCE 34 Corporate Social Responsibility 36 Board of Directors 37 Director s Report 42 Corporate Governance Report 46 Nomination Committee Report 47 Audit Committee Report 53 Remuneration Committee Report 70 Director s Responsibility Statement FINANCIAL STATEMENTS 71 Independent Auditors Report 77 Consolidated income statement 78 Consolidated statement of comprehensive income 79 Consolidated statement of financial position 80 Consolidated statement of cash flows 81 Consolidated statement of changes in equity 83 Notes to the consolidated financial statements 117 Tarsus Group plc - company income statement 118 Tarsus Group plc - company statement of financial position 119 Tarsus Group plc - company statement of cash flows 120 Tarsus Group plc - company statement of changes in equity 121 Notes to the financial statements of Tarsus Group plc OTHER INFORMATION 125 Shareholder information Tarsus Group plc 1

4 Strategic Report who we are Our Quickening the Pace growth strategy gained further traction and we achieved industry leading organic growth through our focus on delivering larger numbers of buyers to our exhibitions up 9% in Douglas Emslie, Group Managing Director WHAT WE DO Tarsus owns and manages a portfolio of leading trade exhibitions in a range of sectors in the Emerging Markets, the US and Europe. These exhibitions represent a vital business-to-business sales channel that facilitates the development and monetization of relationships between buyers and sellers in their respective markets. Tarsus also reinforces its trade shows through online interaction and education and by the provision of market-leading publications and through thought leadership conferences. One key to Tarsus success is its ownership of leading brands backed by high-quality local delivery and expertise. A must attend event like Labelexpo Europe for example is a valuable asset and presents significant barriers to entry to competitors. Since its inception in 1998, Tarsus has developed its portfolio by both geography and industry through a combination of organic growth supplemented by strategic acquisitions. The Group s businesses are managed strongly at a local level with a focus on growing the number of buyers that attend exhibitions and the Group is increasingly taking its brands into new territories to deliver organic growth. Acquisitions have been identified in faster growth markets or industries undergoing fundamental change collectively markets in transition adding to the Group s growth dynamic. A key differentiator is a culture that welcomes and encourages entrepreneurs to join the Tarsus team and develop their business in partnership. THE MARKETPLACE The global exhibition industry grew by over 4% in 2014 and is now estimated to be worth some $29 billion. AMR International estimates a similar rate of growth in the near-term supported by above average growth in Emerging Markets, including the Gulf region, along with further recovery in mature markets. While the US and Germany remain the two largest individual markets, China has now moved into third position and is expected to be bigger than Germany in the not too distant future. Tarsus has consistently built up its exposure to emerging markets and following the sale of its French business in 2015, these now comprise over 80% of annual proforma revenues. The portfolio has grown through a combination of organic growth and acquisition and the Group s main business interests now lie within America and the emerging markets of China, Middle East, Turkey, Mexico and Southeast Asia. Key events and brands cover a diverse range of industries including the aerospace, automotive, fashion, construction and houseware business sectors. As a result the Group s portfolio looks increasingly well positioned. 2 Tarsus Group plc

5 TARSUS AT A GLANCE Business sector Key events and brands EM US EU Aerospace Dubai Airshow, MEBAA, AIME Automotive AAITF, AMB Tarsus Auto Fashion OFFPRICE, SIUF Education GESS Housewares Zuchex, Ideal Homex Horticulture Plant Fair Hospitality AMB Tarsus Food and Hotel Infrastructure and Building IIW, Big 5, AMB Tarsus Energy, Water and Build, Yapi Decoor, REW, ISG Industrial and Manufacturing Asansor, Plastimagen, Komatek, Expomanufactura, Industrial Print Expo, Equipment Manufacturing Labels and Printing Labelexpo, Gulf Print & Pack, Labels & Labeling, Additive Manufacturing Livestock Agrilivestock Medical South Beach, PAINWeek, Medical Equipment, MCII, Cardio, CMHC Travel and Leisure COTTM, China Horse Fair Tarsus geographic footprint AMERICA EUROPE EMERGING MARKETS: Middle East, China, Turkey, South East Asia, Mexico Tarsus Group plc 3

6 Strategic Report strategy 2015 was an important year for Tarsus. We passed an important milestone in the strategic progress of the Group with the sale of our French business. This will allow us to concentrate our resources on our selected core geographies which offer the best opportunities for growth. Douglas Emslie, Group Managing Director STRATEGY Tarsus launched its Quickening the Pace strategy in This seeks to accelerate the pace of financial returns to Shareholders through three principal levers: Driving organic growth from the existing portfolio by: increasing buyer attendance, thereby increasing the returns on existing assets geographical replication of major brands into fast growing markets Small strategic acquisitions in selected geographies Our strategy is building on the reshaping of the portfolio over the past few years, which has seen the Group s exposure to selected Emerging Markets economies expand progressively to take advantage of higher levels of growth. These selected markets comprise China, Mexico, South East Asia, Turkey and the Middle East (principally Dubai). This ability to deliver our strategy is enhanced by the entrepreneurial approach the Group takes towards developing its portfolio. Exhibition markets globally are consolidating and high quality assets are in demand. Tarsus flexibility and willingness to work in partnership with vendors to develop their business and further their strategic goals is increasingly seen by the Group as a point of differentiation from our competitors and is attractive to vendors. The Quickening the Pace strategy targets countries that are experiencing a fundamental shift in prospects like Indonesia or industries where technological innovation or substantial additional investment is driving growth for example infrastructure in Turkey. The acquisition of 50% of AMB in 2015 is an ideal example. This business focused largely on 4 Tarsus Group plc

7 Tarsus Quickening the Pace strategy was launched at the beginning of 2013 and is designed to accelerate financial returns to shareholders through: Organic growth from the existing portfolio by growing buyers Geographical replication of brands into faster-growing markets organic growth indonesia The below table shows the expansion in Indonesia since Tarsus aquired PTIA in 2013 Existing event acquired in 2013 New brands added in Brand replications JV Launch Visitors ,500 Visitors ,000 Myanmar and Cambodia has very experienced and entrepreneurial management and offers Tarsus first mover advantage in some key sectors in rapidly growing markets. In addition it adds strength and depth to the Group s South East Asian operations and should facilitate the replication of some of Tarsus leading brands into the region. STRATEGIC PROGRESS IN 2015 Our strategic focus delivered further positive results in 2015, an important outturn given the biennial weighting in the portfolio. The major events in particular Labelexpo Europe and the Dubai Air Show - performed extremely well and buyer growth across the portfolio was very encouraging at 9%. In addition, the Group ran a record number of replications 15 - during the year. The Group also disposed of its French business, raising its exposure to the Emerging Markets and the US resulting in 86% of pro-forma revenues coming from these geographies, ahead of its 75% 2015 target. Organic growth - Buyer growth was 9% in 2015, compared to 6% in 2014 ahead of the Group s KPI of 5%. An ability to grow the number of buyers that attend the exhibitions is a key factor in their ultimate success. Deep knowledge of our customers requirements, up-to-date databases, must attend conferences and a focus on consumer service all contribute to this goal. Replications - Tarsus has a strong track record of successfully replicating its brands globally. The Group s Labelexpo portfolio has grown from two western events and one in Singapore to a series in nine countries, the majority being in the Emerging Markets. This has been delivered by leveraging Tarsus resources, expertise and connections at both a local and global level. Tarsus strategy to take leading brands in one of its markets and launch and develop them into others or to broaden reach within one of its existing territories continues to build momentum. There were 15 replications in 2015 including the Dubai educational event GESS which launched in Mexico and Indonesia and three additional events in the US in Atlanta, Dallas and Las Vegas, related to the Boston-based Cardiometabolic Health Congress, which the Group bought in Tarsus Group plc 5

8 Monterrey México Febrero replications gathering pace 2015 Repeat 2016 new GESS ü ü - Additive Manufacturing ü ü ü Cardio ü ü ü OFFPRICE ü - - EXPO MEXICO 2016 Industrial Print ü ü ü Zuchex ü - ü Turkey ü ü - Aerospace ü ü ü AAITF ü - - AMB - - ü Quickening the pace - KPIs Target Achieved 2015 Accelerating earnings per share growth 5-10% pa 7% Increasing share of revenues from US and Emerging Markets 75% 86% Visitor growth 5% 9% This table shows the key performance indicators of the Group s Quickening the Pace strategy Acquisitions - Tarsus acquisition strategy focuses on markets in transition and market-leading brands. By their nature such acquisitions provide higher growth and the possibility of internationalization. In addition, Tarsus entrepreneurial culture is often a valuable asset in terms of attracting potential vendors, many of whom are entrepreneurs themselves, who wish to further grow in partnership. Following a very active year for acquisitions, 2015 saw the addition of AMB to the portfolio, substantially widening the Group s position in South-East Asia by adding Malaysia, Myanmar and Cambodia to its Indonesian base. Tarsus intends to scale up AMB s existing events and launch new exhibitions in its existing markets. The disposal of the Group s French business was in line with the Quickening the Pace strategy that has seen an increasing focus on economies offering the best opportunity for growth. The disposal allows Tarsus to recycle capital and continue to invest in these higher growth economies. 6 Tarsus Group plc

9 Strategic Report highlights RECORD PERFORMANCE Strong performances from key shows have delivered record revenue and profits for the year CONTINUED STRONG ORGANIC GROWTH Like-for-like revenues up 10% DUBAI AIRSHOW SUCCESS Strong revenue growth and buyer attendance increased 9% rebooking strong and at record level for show CONTINUED GROWTH IN BUYER FOOTFALL 9% increase across the Group. Buyer growth driven through established events continued strong performances and successful organic replications LABELEXPO EUROPE STRENGTH Celebrates 35th anniversary with largest ever show. Buyers up 12% and record rebooking for 2017 SUCCESSFUL INTERNATIONAL REPLICATIONS STAGED 15 organic event replications including GESS in Mexico and Indonesia PAINWEEK PURCHASED Acquisition of America s largest pain conference completes Tarsus Medical Division as footprint is expanded and diversified to cover all four pillars of preventative medicine. DISPOSAL OF FRENCH BUSINESS Completes portfolio transformation started in 2010 with further reduction in exposure to Eurozone PORTFOLIO DOUBLED IN SOUTHEAST ASIA Acquisition of 50% of AMB Group bringing major presence in Myanmar and Cambodia and expansion opportunities in Vietnam, Philippines, Laos and Sri Lanka Tarsus Group plc 7

10 Strategic Report Chairman s and Managing Director s statement STRATEGIC OVERVIEW The Group made further progress in delivering its Quickening the Pace strategy which is focused on accelerating financial returns to shareholders. This is being achieved through a combination of organic growth from the existing portfolio, geographical replications of major brands across faster growth economies and the identification of small strategic acquisitions in our selected geographies. Tarsus made two strategic acquisitions in the year. The addition of Painweek in the US completed our footprint for the Medical Division and extends our coverage to address all four pillars of preventative medicine. The acquisition of 50% of AMB gives us further exposure to the fast growing markets of South East Asia. The Group s entrepreneurial culture, specifically its size, flexibility and willingness to collaborate with its partners in the development of their businesses, is proving increasingly attractive to vendors and proved instrumental in enabling us to secure these acquisitions for the Group helping to accelerate the overall strategy. In the future, there will be an emphasis on gradually buying in the outstanding minority interests of our joint ventures in the Group s Emerging Markets portfolio. This will help us deliver sector leading earnings per share growth towards the top end of our target range. The Group assesses its performance against three KPIs: 1. Accelerating EPS growth Through targeting underlying growth at its exhibitions in growth markets, the Group aims to deliver enhanced financial returns to its shareholders. By proactively managing its portfolio of events, adjusted EPS grew (on a constant currency basis over the biennial cycle) 7% per annum to 21.4p, against a 5-10% growth per annum target. 2. Increasing share of revenues from faster growth economies in the emerging markets and the US The Group has identified geographies (certain emerging markets and the US) which it believes provide higher potential for growth. For the year ended 31 December 2015 the Group recorded 86% of proforma revenues (79% of reported) from its emerging markets and US events, ahead of its 75% target. 3. Driving visitor growth The Group aims to drive visitor attendance at its events and strong growth of 9% in 2015 compares favourably with an industry average of 3% and an internal target of 5%. This is being assisted by executing a focused programme for every show and by higher levels of knowledge sharing and best practice disciplines internally. FINANCIAL RESULTS The financial results were in line with the Board s expectations. Group revenues for the full year were 86.9m (2014: 60.6m), up 15% on a biennial basis (2013: 75.9m). Like-for-like revenues, at constant exchange rates, increased by 10%. Revenues were not materially impacted by foreign exchange in 2015 with a strengthening in the US dollar offsetting a depreciation of the Turkish Lira. Group adjusted profit before tax was 26.3m (2014: 17.0m), up 9% on a biennial basis (2013: 24.2m). Net interest expense of 2.0m (2014: 1.7m) reflected increased debt levels across 2015 as a result of 8 Tarsus Group plc

11 acquisitions. Reported profit before tax was 19.1m (2014: 7.1m). The Group incurred an amortisation charge of 5.2m (2014: 4.5m) and an impairment charge of 1.8m (2014: nil) on the disposal of its French business. The adjusted tax charge of 3.8m (2014: 2.5m) represents 15% (2014: 15%) of the Group s adjusted profit before tax. The reported tax charge is 2.2m (2014: 1.7m). The Group continues to focus on tax efficiency and generates nearly all of its profits outside of the UK, including markets with significantly lower tax rates. Adjusted earnings per share were 21.4p (2014: 12.7p), 7% up on a biennial basis (2013: 20.0p). Basic earnings per share for 2015 were 14.4p (2014: 5.0p). The group generated 27.0m of adjusted operating cash* during the year (2014: 19.5m and 2013: 23.9m). The Group s net debt as at 31 December 2015 increased to 43.8m (2014: 38.4m). Reflecting the strong financial performance during 2015 the Tarsus Board is proposing a final dividend of 5.9p per share, bringing the total for the year to 8.4p per share (2014: 7.8p per share), an increase of 8%. This proposed rise is the fifth consecutive year of increases to the dividend and represents a compound annual growth rate of 7.5%. The final dividend, subject to Shareholder approval, will be paid on 7 July 2016 to Shareholders on the Register of Members on 27 May A scrip dividend will continue to be offered as an alternative. CORPORATE ACTIVITY Two strategic acquisitions were completed during the year. In May 2015, Tarsus acquired 100% of Painweek in the US. This completes the exposure of the Group s medical business to the four main sectors of the US preventative medical market neurology, endocrinology, cardiovascular and oncology. Painweek has enjoyed strong growth since it was established in 2007 and its main annual event is supported by a series of satellite events in the US and a strong digital presence. In July 2015, the Group purchased 50% of the AMB Group, an established South-East Asian exhibition organiser with a major presence in Myanmar and Cambodia. This adds significant scale and presence across the region, building on Tarsus existing business in Indonesia. Tarsus intends to scale up AMB s events and launch new exhibitions in its existing markets. The Group sold all of its French business in July 2015 to French management, in line with the previously stated strategy of reducing exposure to France and allowing the Group to concentrate resources on its selected core geographies which offer the best opportunities for growth. OPERATING REVIEW EMERGING MARKETS Dubai - The Group s largest event, the Dubai Airshow, once again saw strong revenue growth and buyer attendance increased by 9%. The aerospace sector in the region continues to go from strength to strength, this was reflected at the Dubai Airshow where a record rebook for the next edition in 2017 was secured. The education event GESS performed well with buyer growth of 11%. GESS is one of the Group s key replication brands with successful launches during 2015 into both Mexico City and Jakarta. Turkey - Overall the portfolio performed well and once again there were strong performances from the larger shows, notably the biennials, Asansor (lifts) and Komatek (construction), as well as the Flower Show (landscaping equipment and services). Zuchex (Homewares) saw buyer growth of 6% with its international visitors running at twice that level supported by investment into multi-lingual marketing and advertising. Ideal Home (Homewares) and Sign (Advertising) both produced solid results. The Sterling translated results were impacted during 2015 by a weakening of the Turkish lira by 30% compared with prior events. China - We were encouraged by the performance of our Chinese business in 2015 despite slowing GDP growth in China. Hope, the Group s Central China operation turned in another year of good growth led by its medical equipment events. SIUF, the leading Asian show for underwear demonstrated good progress over the 2014 edition while AAITF (auto aftermarket) was Tarsus Group plc 9

12 The Group s size, flexibility and willingness to work with vendors to develop their businesses in partnership with Tarsus is becoming increasingly attractive to partners and helps accelerate the overall strategy Douglas Emslie, Group Managing Director successfully repositioned in Shenzhen in January 2015 where it performed well. Mexico - There was a good performance from Expo Manufactura (manufacturing) including a successful launch of the co-located Industrial Print Expo. GESS (Dubai-based) also enjoyed a successful replication launch into the Mexican market. South-East Asia - In Indonesia the established IIICE (infrastructure) event achieved strong buyer attendance following increased investment by the Group in marketing. The first edition of Big 5 Construct, held via a joint venture with DMGT, was launched successfully. Construction and infrastructure are important and growing areas for the Indonesian economy and the Group is well placed to take advantage of developments. Our GESS education brand (Dubai-based) also enjoyed a successful launch in Jakarta in 2015 and the outlook for this event is very promising. The Group substantially increased its regional presence with the acquisition of 50% of AMB in July 2015 thereby adding Malaysia, Myanmar, Cambodia and the Philippines to its Indonesian base. The ASEAN economies are growing strongly and the joint venture will offer Tarsus first-mover advantage in some key sectors in these exciting markets. AMB performed in line with our expectations and its acquisition business case. US Medical - The Group has continued to reposition the Medical Division to address the larger mainstream medical market. Following the acquisition of Painweek in July 2015, the Group now addresses all four pillars of the preventative medicine market. Its key brands are: Neurology Painweek Cardiovascular Cardiometabolic Health Congress (CMHC) Oncology South Beach Symposium (SBS) Endocrinology MMI A number of initiatives were launched in 2015 to drive future growth. Firstly, the Group has seen a number of opportunities arise from collaboration and cross-working within the business units which now make up the division. Secondly, building on the model successfully employed by CMHC, this division is establishing a central team focussed on obtaining educational grants from pharmaceutical companies to develop an additional revenue stream across the other business units. Finally, the business is launching a new medical technology event in December The Group s established anti-aging events in Orlando (May) and Las Vegas (December) were both record shows with increased attendances, while both SBS and Painweek performed well in their first editions under Tarsus ownership. Offprice - Both Offprice events in Las Vegas during 2015 performed well with solid revenue growth of 5%. EUROPE The Group s second largest event, Labelexpo Europe, produced a very strong result with buyers up by 12% on the previous edition to a record 35,700. In addition, re-bookings at the event for the 2017 edition reached a very encouraging 84%. 10 Tarsus Group plc

13 Geographical Analysis Emerging Markets United States Europe ( m) Biennial revenue Annual revenue Total revenue Adjusted profit before tax highlights Revenue m adjusted profit before tax m adjusted earnings per share p m m p adjusted effective tax rate % ADJUSTED operating CASH m dividend per share p % m p The 3D Printshow business successfully completed an aggressive launch programme in We are looking to consolidate this business in 2016 into two larger events, in Amsterdam and Pasadena, California focused on industrial additive manufacturing, to address the B2B market. The Group completed the sale of its French business in July 2015 in line with its strategy to focus on markets with higher growth potential. solid events. Expo Manufactura recorded a strong performance in Mexico in February. Forward bookings for the Group s major events in 2016 are tracking +10% ahead of 2015 (adjusted for biennials and acquisitions). We are mindful of the current global macroeconomic uncertainty and geopolitical risk and have budgeted accordingly. The Group is well positioned to deliver a good performance in OUTLOOK Trading for the first two months of 2016 has been in line with management expectations. AAITF showed good growth in its second edition in Shenzhen. AIME and MRO in Dubai also performed well. In the US the South Beach Symposium and Off Price were Neville Buch Chairman 2 March 2016 Douglas Emslie Group Managing Director 2 March 2016 Tarsus Group plc 11

14 Strategic Report Financial Review Our high quality portfolio is delivering strong growth in revenues, profits and cash. With a strong balance sheet we are well positioned to achieve our Quickening the Pace strategy. Dan O Brien, Group Finance Director FINANCING The geographical composition of Tarsus international event portfolio means that revenues and profits are generated in a range of currencies, principally US Dollars, Euros, Turkish Lira and Sterling. In 2015 approximately 55% of revenues were generated in US Dollars, 6% in Euros, 12% in Turkish Lira, 16% in Sterling and 10% in Chinese Renminbi. As a result of the Group s currency composition, Sterling translated trading results are significantly affected by any changes in prevailing exchange rates during the year. The average exchange rates applicable for 2015 were: US$: 1.50 Euro: 1.38 Turkish Lira: budgeted exchange rates are US$: 1.50, Euro: 1.35 and Turkish Lira: CASH FLOWS Tarsus continues to generate strong cash flows from its operations. The larger events in the Group s portfolio typically have a positive working capital cycle and the business in general has a low capital investment requirement. The biennial nature of the Group s event portfolio results in an increase in working capital (excluding cash) in odd years (including 2015) which include the Group s two largest events. This occurs as deferred income relating to these events builds up in the Statement of Financial Position ahead of the events in the following year. During 2015, the Group generated 27.0m of adjusted operating cash* (2014: 19.5m; 2013: 23.9m). The key non-operating cash flows in 2015 included: Dividends paid of 7.6m Deferred consideration payments totalling 7.2m Tax and interest paid totalling 3.7m Acquisition of PainWeek and AMB 5.9m Proceeds on disposal of France 3.2m Share purchases by Employee Benefit Trust 1.5m NET DEBT The Group s funding objective is to ensure that the business has sufficient resources, secured on competitive terms, to meet its various financial commitments as they arise. It achieves this objective by actively monitoring its cash flows and requirements on both an historic and forward looking basis. The Group is cautious in its approach, applying appropriate sensitivities to both the quantum and timing of its projections. In June 2015 Tarsus external bank debt facility of 60m was extended to 75m and remains in place until September At 31 December 2015 all borrowings were denominated in Sterling. The Group has entered into interest rate swaps to fix the interest rates payable under its banking facilities. 12 Tarsus Group plc

15 The Group s net debt was 43.8m at 31 December 2015 (31 December 2014: 38.4m). NET ASSETS As at 31 December 2015, the Group had net assets of 39.9m (31 December 2014: 37.5m). INTANGIBLE ASSETS Intangible assets comprise goodwill, trademarks and customer lists. The carrying value of intangible assets at 31 December 2015 was 127.1m (31 December 2014: 126.8m). WORKING CAPITAL It is the Group s policy to recognise profits upon the completion of an event. Until completion, revenues and costs are held on the Statement of Financial Position. Included in net current liabilities as at 31 December 2015 is deferred income of 24.1m (2014: 28.5m; 2013: 18.4m). Prepaid event costs of 4.8m (2014: 3.7m; 2013: 2.8m) are included in Trade and other receivables. Dan O Brien Group Finance Director 2 March 2016 Tarsus Group plc 13

16 Dubai Airshow Tarsus Group plc

17 50% Percentage of Group revenue generated from Emerging Markets in 2015 ( m) Biennial revenue Annual revenue Total revenue Adjusted profit before tax Emerging markets Middle East China Turkey Southeast Asia Mexico Tarsus strong foothold in the emerging markets of China, the Middle East, Turkey, Southeast Asia and Mexico positions its market leading brands as excellent platforms for sustainable growth.

18 Strategic Report - Emerging Markets MIDDLE EAST With its open economy, sizeable middle class population with high per capita income and excellent, modern infrastructure, Dubai offers many compelling reasons for doing business in the region. The United Arab Emirates (UAE) is a federation of seven states which form one of the Middle East s most important economic centres. The second largest Emirate, Dubai is also the most populated with over 2.4 million inhabitants. Having diversified its economy away from fossil fuels, set up industryspecific free zones throughout the city to attract foreign investment and offering a pro-business environment, the entrepreneurial spirit is alive and well in Dubai. KEY FACT : BUYERS INCREASED 10% IN COMPARISON TO PREVIOUS EDITIONS WITH A COMBINED FOOTFALL OF 95,833 LOOKING BACK REGIONAL HIGHLIGHTS AEROSPACE - The Group organised four aerospace industry events during 2015 including the Group s flagship Dubai Airshow and newly launched MEBAA Show in North Africa. The 14th Dubai Airshow wrapped up an action-packed week at the beginning of November which saw 1,103 exhibitors representing 61 countries meet, network and do business. Buyer numbers for this year s aviation industry showcase broke all previous records attracting 66,346 sector professionals; representing an increase of 9% on 2013 s show. On the financial front, the final tally for the 2015 order book came in at US$37.2 billion, the fourth highest since records began in 1999, with a wide range on onsite deals covering high profile aircraft, maintenance services, infrastructure and systems and flight training programme agreements. The smaller Aircraft Interiors Middle East, (AIME), is co-located with the Maintenance, Repair & Overhaul (MRO) Middle East show. It is firmly established as the ideal platform for interiors suppliers, manufacturers and buyers to network and form new relationships in the Middle East. The 2015 edition, held in February, reported increased attendance compared to 2014 with 4,298 buyers and 251 exhibitors. Capitalising on the success of the existing MEBAA Show held biennially in Dubai, the inaugural MEBAA Morocco Show was staged in Casablanca during September. The first business aviation show of its kind in the region, the two-day event attracted 2,033 buyers. The African business aviation market has been resilient through the global financial crisis. New aircraft sales have fared better than in developed markets such as Europe and North America and Africabusiness.com stated that 16 Tarsus Group plc

19 Africa s business jet fleet has more than doubled in the last 10 years. Held under the high patronage of His Majesty King Mohammed VI and organised by F&E Aerospace on behalf of the Middle East and North Africa Business Aviation Association, its next edition is due in DUBAI AIRSHOW 2015 Exhibitor Q&A with Adam Thomas, Senior Spokesman for Defence & Security in UK TI DSO EDUCATION - Quality education plays a key role in the economic development of any nation and in the case of the GCC countries, it is one of the key forces enabling their future growth. As the education sector remains a key pillar of development, the Group s GESS brand continues to perform strongly in line with demand from the region. Since its launch in 2008, GESS Dubai has grown exponentially s edition was held in February (alongside the GESS Education Awards and Global Education Forum) achieving gains in both buyers and exhibitors. The exhibition and conference programme concluded with over 400 exhibitors (up from 350 in 2014) and 10,000 buyers also saw the Group launch successful event replications in Mexico and Indonesia. LABELS & PACKAGE PRINTING - Gulf Print & Pack is billed as the premiere print industry trade show in the Middle East and North African region. Originally two separate co-located exhibitions called Gulf Print and Gulf Pack, which were first held in 1990, the event s format was reworked in 2011 when it was rebranded. The region s definitive platform for the commercial and package printing industry, 2015 s edition, which was held in April, posted a 26.7% rise in buyers with a footfall of 12,186 and featured over 300 exhibitors. THE VALUE OF DOING BUSINESS IN AN EMERGING MARKET How was it exhibiting at the Dubai Airshow? The Dubai Airshow has been absolutely fantastic. We ve been incredibly impressed at the organisation. The networking has been brilliant and this is a really good opportunity for the UK to show continued commitment to the UAE. The Dubai Airshow is unique and one of the best airshows in the world. What makes the Dubai Airshow unique in your opinion? Two fold, what you ve done wonderfully well here is you ve brought together the civil and defence side incredibly well, you ve brought delegations from both sides as well. Our SME s have met people they have never met before and have been able to find out much more about what people s requirements are. I also think it is the atmospherics, it s really well organised and relaxed. The delegations have been very comfortable when they have come here. How has the business benefitted from exhibiting at the Dubai Airshow? The guys that have come here have met a phenomenal number of people, realised how they can use this requirement and realise and get their technology over. Our SMEs here have seen major delegations, there s been good B2B and they ve had a chance also to talk to local companies about their future requirements. So it s a really good environment to do business in and, I think, probably one of the best environments in the world. What are your top highlights from exhibiting at the show? The show is probably one of the best networking events in the world and it has given us a great opportunity to expose our capabilities in the defence and security sector. But most importantly, it gives our small and medium size companies a chance to meet with delegations that we otherwise perhaps wouldn t meet at all. My view is, if you want to do business in the gulf, you have to be at the Dubai Airshow. LOOKING AHEAD Forward bookings remain in line with expectations for 2016 s events including AIME, MRO, MEBAA and GESS Dubai. Tarsus Group plc 17

20 Strategic Report - Emerging Markets China With an historic average annual growth of 10%, China s economic rise over the last 30 years has resulted in the single biggest creation of a consumer class the world has ever seen. With a population of over 1.3 billion, China has become the world s second largest economy. After experiencing rapid growth for many decades, China s economic data shows its economy has been gradually slowing down over the last few years. Despite this, China still remains a vast engine for global development with growth close to 7%. Still developing, China is a complex and diverse place in which to do business. Due to its sheer scale and size, it can be subdivided into regional economies where opportunities vary widely. Opening its first office in Shanghai in 2005, Tarsus hosts over 20 events across different industries in China s first and second tier cities. KEY FACT : SIUF 2015 HOSTED OVER 61,000 BUYERS AND 400 EXHIBITORS LOOKING BACK REGIONAL HIGHLIGHTS AUTOMOTIVE AFTERMARKET - AAITF was the first large event of 2015 and took place for the first time in Shenzhen. This has been a transitional year for the event given the change of location from its previous home in Guangzhou. The venue move was received better than expected and the 11th addition of the annual trade show received 3,500 exhibitors and just under 49,000 buyers. CLOTHING - Part of the Tarsus Group portfolio since early 2014, China (Shenzhen) International Brand Underwear Fair (SIUF) is the leading show for underwear garments in the Asian Pacific market. Launched In 2006, the show is held annually in Shenzhen, Southern China. The global underwear market is currently valued at approximately $30 billion. The Chinese market was valued at approximately $10 billion in 2010 and is the fastest growing market globally, supported by a strong domestic manufacturing and retail base s show, the second organised under Tarsus ownership, covered an exhibition area of 58,500 square metres and registered over 400 exhibitors and increased total of 61,000 buyers. LABELS & PACKAGE PRINTING - Held biennially since 2003, Labelexpo Asia is the region s largest trade show for the label and packaging printing industry. Labelexpo Asia 2015 enjoyed its most successful edition with 300 exhibitors and 22,104 buyers - an increase of 3.2% on OTHER BUSINESS SECTORS - Hosting numerous other events across China as part of its joint venture 18 Tarsus Group plc

21 with Hope, other highlights included the China Horse Fair (CHF). Since its launch in 2007, it has consistently grown and developed alongside the industry it represents and it is now acknowledged as China s largest, most established and international gathering for trade professionals involved in all forms of equine sports and leisure activities. CHF 2015 attracted Exhibitors International exhibitors Buyers 43,830 61,358 International buyers 957 1,447 exhibitors and 3,378 buyers, representing an increase of 44% over 2014 s show. China Outbound Travel & Tourism Market (COTTM) was held in Beijing in April with 350 exhibitors and 3,800 buyers - up 15% on previous years. The industry s definitive B2B event for outbound tourism, this year saw a full three day seminar and workshop programme consisting of targeted sessions designed to address key issues and learning requirements of both exhibitors and visitors. The team also organised two supporting regional events in Guangzhou and Shenzhen which focused on more intimate tailormade networking activities. INTERNATIONALISATION IN THE EXHIBITION INDUSTRY Q&A with Laura Fan, Project Director, SIUF What benefits has the joint venture with Tarsus brought to SIUF? As an international media and exhibition group, Tarsus has been helping SIUF to open the door to the wider international market. For the first year, best practice was shared to put more of an international perspective on the SIUF team s management skills in terms of operations, marketing, PR, media, sales presentation, business partner recruitment and so on. What areas of the business/show has the partnership helped enhance the most? Tarsus focuses on promoting SIUF as an international brand to customers. As a result some high end international lingerie brands have been recruited by Tarsus to attend SIUF Meanwhile Tarsus is working closely with different associations, media and agencies to expand the influence of SIUF to a wider target group, aiming to leverage the brand image of SIUF to an even higher standard. How do you see the SIUF brand developing in the next five years? SIUF has good opportunities to enter new territories such as casual wear and swimwear because of their natural links with the lingerie industry. The SIUF brand has very high potential to become a world-wide leading international fair for the lingerie industry. In addition, the Chinese lingerie industry s very strong growth will definitely support this trend. LOOKING AHEAD The outlook for 2016 is positive with AAITF s continued growth and steady growth expected across the rest of the portfolio. Tarsus Group plc 19

22 Strategic Report - Emerging Markets TURKEY With a population of around 77 million, Turkey offers a large, skilled and cost effective labour force. In addition, approximately 60% of its population are aged under 35 providing substantial growth potential. Turkey also offers attractive prospects for business diversification, being an excellent springboard for business with central Asia and the Middle East. Tarsus has been active in the Turkish market since 2011 when it acquired Istanbul-based IFO. This was quickly followed with the acquisitions of CYF and Life Media in 2012 and SADA and the Komatek brand in KEY FACT : ZUCHEX POSTED A RECORD EDITION WITH 607 EXHIBITORS AND 33,993 BUYERS LOOKING BACK REGIONAL HIGHLIGHTS HOUSEWARES - The Turkish housewares sector maintained its strong growth throughout 2015 and the Group s Zuchex brand celebrated its most successful ever edition. The four-day event hosted 607 exhibitors and welcomed 33,993 buyers, up 6% on The number of international exhibitors grew, up 12% on the previous biggest year (2012) and overseas buyer attendance also rose 12%. The sister event Ideal Homex posted robust results with good buyer and exhibitor attendance. INDUSTRIAL - Bought in 2014, Komatek was held under Tarsus ownership for the first time in May. Marking its 14th edition, Ankara played host to the global construction machinery industry. Supported by IMDER - The Turkish Construction Machinery Distributors and Manufacturers Association, whose 37 members account for 96% of the country s sector - exhibitors occupied an area of more than 61,291 net square metres, an increase of 15% over A record 505 suppliers from 25 countries displayed their 20 Tarsus Group plc

23 latest products to over 32,000 professional buyers and operators. OTHER SECTORS - The Group s other biennial event, ASANSOR Istanbul, took place during March. The 14th edition of what is one of the world s top three elevator exhibitions, hosted 434 exhibitors from 28 countries including pavilions from Germany, China and Italy. The show was attended by 28,278 buyers from 88 countries including 6,082 international attendees. The Group also staged several other annual events. The 11th Recycling, Environmental Technologies and Waste Management International Fair (REW Istanbul), was co-located alongside the first ever edition of ISG Eurasia, the new occupational health and safety fair which is organised with the support of the Turkish Ministry of Environment and Urbanisation. The combined events attracted 322 exhibiting companies from 22 different countries and 10,582 buyers from 49 countries. The 8th YAPI Decoor event ran in Ankara and hosted 120 exhibitors and 12,389 buyers while the newly launched SecuriTex Eurasia fair which caters for the security and safety market drew 101 exhibitors and 4,358 buyers. SIGN Istanbul is the region s most important platform for showcasing the latest innovations in sign making, advertising and digital print technologies and in 2015 it achieved a new record for buyer attendance. Featuring 438 exhibiting companies from 30 countries, the annual event hosted 23,900 buyers. The 7th edition of Eurasia Plant Fair/Flower Show Turkey took place in November. Serving the professional horticultural and floricultural sector, it is strategically located in this established trade and commercial hub for the region s exhibition attracted 319 exhibitors from 21 countries and 14,865 buyers from 53 countries, making it the largest and most international exhibition for the area s rapidly expanding ornamental plants and landscaping market. GROWING OUR EVENTS THROUGH DEVELOPING INDUSTRIES Q&A with Levent Baykal, general manager of SADA. What benefits for SADA and Komatek have you noticed by partnering with Tarsus? The biggest benefit has been the freedom allowed and respect shown for the experience and expertise of the operating team in managing the business. Being allowed to work freely but with close scrutiny helped the SADA team to set goals and achieve targets while doing work the way we know. Being a member of an international group pushes Komatek s standards up and we are investing in higher level international marketing, website expertise and management procedures. What do you think are the advantages and opportunities for Tarsus by working with Turkish exhibition experts like SADA? I believe Tarsus is a very well defined international investor. By this I mean the way Tarsus acquires and manages exhibitions worldwide is well known and very successful. By owning SADA shares Tarsus has cemented its position in Turkey as an international exhibition company owner, owning well-established flagship exhibitions run by strong local teams. What opportunities do you foresee for the exhibition industry outside of Istanbul? Turkey will become the exhibition hub that a lot of international exhibition companies foresaw a decade ago. Istanbul is a huge city with a lot of attractions, but the city is crowded and the infrastructure could be improved. Certain exhibitions have already moved out from Istanbul, Komatek being one, and there are other cities in Turkey like Ankara, Izmir, Antalya and Konya seeking to attract organisers. When proper infrastructure investment in these cities is completed I believe that at least half of the major exhibitions will take place outside Istanbul. How do you see the Komatek brand developing over the next five years? Komatek is already an international brand and has the potential of being the world s fourth largest and Europe s second largest space-occupying construction machinery exhibition. In this sector the world seems to be divided into geographical regions where there is one leading event. Komatek is the leading event in Eastern Europe and Russia and should get larger as new venues are built in Turkey that accommodate big outdoor events. LOOKING AHEAD Of Tarsus existing brands, there will be 2016 editions of Zuchex, Ideal Homex, Sign, Yapi Decoor, REW, Flower Show Turkey, ISG Eurasia and SecuriTex. Forward bookings for these events remain in line with the Group s expectations. Tarsus Group plc 21

24 Strategic Report - Emerging Markets SOUTHEAST ASIA Southeast Asia offers excellent strategic opportunities for businesses looking beyond the traditional BRIC nations (Brazil, Russia, India, China) and is a region where economic growth and development are predicted to surpass the global average. KEY FACT : THROUGH AMB GROUP ACQUISITION, TARSUS NOW HOLDS EVENTS IN CAMBODIA, MALAYSIA, MYANMAR, THE PHILIPPINES, SRI LANKA AND VIETNAM ASEAN s Free Trade Agreement combined with its wealth of natural resources, low-cost skilled workforce and growing middle class ensure the region offers dynamic and vibrant opportunities for commercial growth. Tarsus has predominantly focused the core of its business interests in Indonesia since 2013 by acquiring PT Infrastructure Asia (PTIA) and partnering with Dyandra Promosindo. LOOKING BACK REGIONAL HIGHLIGHTS In July the Group significantly strengthened its portfolio and growth prospects in the region by acquiring a 50% share of AMB Group. Established in 1996, the AMB Group is a leading Southeast Asian exhibition organiser with a major presence in Malaysia, Myanmar and Cambodia and a growing business in the region. It has built up a portfolio of market leading exhibitions and conferences in some of Tarsus key strategic sectors with the largest focused on building, infrastructure, automotive and food processing. AMB Group has enjoyed strong growth in recent years, driven by the establishment of leading events in Myanmar and Cambodia - MyanFood and Cambuild respectively. The partnership adds significant scale and presence across Southeast Asia, building on Tarsus existing successful assets in Indonesia - PT Infrastructure Asia and the replication of two Tarsus brands, GESS Indonesia and Table and Home Indonesia s events performed well and looking ahead, Tarsus intends to scale up AMB s existing events and launch new exhibitions in its existing markets. EDUCATION - Indonesia has come a long way since 22 Tarsus Group plc

25 1973 when 20% of its youth were illiterate. Now only 2% of those aged between 15 and 24 are unable to read. With a growing young population where the median age is 27, Indonesia has shown its commitment to schooling by dedicating 20% of its annual budget to education. Indonesia is now in the second stage of its long-term development plan, which is focused on improving the quality of human resources, the development of science and technology and strengthening economic competitiveness. The inaugural GESS Indonesia was held in October in Jakarta and organised in conjunction with PTIA. The threeday show featured 3,749 buyers from 29 countries and over 100 exhibitors. INDUSTRIAL - Tarsus annual Indonesia Infrastructure Week (IIW) brings together infrastructure related exhibitions, conferences and seminars with the aim to accelerate infrastructure development across Indonesia. It offers an unprecedented opportunity for the infrastructure, construction and technology community to come together and build/strengthen existing partnerships between the public and private sector from Indonesia and abroad. IIW 2015 brought together 266 exhibitors and 13,620 participants from all sectors of critical infrastructure in three highly successful days of business. One in four visitors were responsible for investment or procurement and between them concluded deals worth over USD $9 billion during the event. The Big 5 Construct Indonesia event debuted in May in Jakarta to cater for the international building and construction sector. It was co-organised with dmg events, the organiser of the Big 5 series of events - the Middle East s largest construction event in Dubai and events in Saudi Arabia, Kuwait and India. The brand brings the international building and construction world together in a single location providing a valuable meeting place to source products, conduct business and build strategic partnerships. It showcased new and innovative products to the Indonesia market for the first time and recorded exhibitors from 26 countries and 5,775 buyers. LOOKING AHEAD The acquisition of 50% of AMB has substantially widened the Group s geographic coverage in South East Asia. Strong performances and continued growth in buyer numbers is expected from events being held in Malaysia, Myanmar, Cambodia and the Philippines in addition to the Group s Indonesian base. IIICE is also expected to track ahead of 2015 benefiting from continued investment in marketing helping to drive strong buyer attendance in a fast growing market. SCALING GROWTH AND COMMERCIAL OPPORTUNITIES THROUGH LOCAL EXPERTISE Q&A with Alan Solowiejczyk, CEO of PTIA What benefits for PTIA have you noticed by partnering with Tarsus? The Tarsus partnership has been impactful from the offset, but three areas stand out. Firstly, I ve valued Tarsus respect for me as an entrepreneur. Tarsus has shied away from trying to impose their own corporate culture; instead they have enabled me to continue to lead and run PTIA, whilst providing me with the right strategic and practical support to achieve growth. I think my very good relationship with Douglas Emslie has been critical in this. Secondly, Tarsus has spent time understanding me, my business and my team. This shared understanding has afforded us the opportunity to successfully deliver two new launch events in 2015, as well as expand our core infrastructure event to a stage where the 2016 event is forecast to sell out the current venue, so necessitating a move to a larger venue in Tarsus ability to cultivate an international community has been instrumental to this. Finally, whilst Tarsus has been careful not to upset the entrepreneurial spirit of PTIA and impose its own will, it has invested resources into upskilling my team and transferring best practice. Marketing communications, conference production and sales performance are areas where Tarsus has already positively impacted. What do you think are the advantages and opportunities for Tarsus by working with Indonesian exhibition experts like PTIA? Many of Tarsus competitors continue to lose money in events in Indonesia, especially within sectors that we operate in. The material difference between Tarsus experience and others has been driven by PTIA s expertise in understanding the needs of the local public and private sectors, and then working closely in partnership with them. Tarsus success is underpinned by our understanding of Indonesian business culture and our personal relationships with all our stakeholders. How crucial is local industry knowledge and expertise in geo-adapting a brand into a new region? Adapt is the critical descriptor in geo-adapting. Opportunities abound for international trade shows in most key global industry segments in Indonesia. However, there are plenty of examples of leading trade show brands which have tried and failed here, mostly because they forgot to start by listening to local needs and opinions. What opportunities do you foresee for the exhibition industry in Indonesia over the next few years? Increased venue capacity will certainly lead to greater competition for incumbent events. This will only speed up the continued professionalisation and internationalisation of the Indonesian B2B trade show industry. For PTIA, we have a huge opportunity to continue to lead and partner with the Indonesian infrastructure community, and expand the topic into new and exciting adjacencies. Tarsus Group plc 23

26 Strategic Report - Emerging Markets MEXICO With the US to the north and Latin America to the south, Mexico is perfectly placed for cross border trade. KEY FACT : THE MOST SUCCESSFUL EVER EDITION OF LABEL SUMMIT LATIN AMERICA WAS HELD WITH 1,080 BUYERS As part of the world s largest free trade agreement, Mexico offers an attractive business environment to overseas investors. Advances in its infrastructure, a growing middle class and rapidly declining poverty rates lead forecasters to predict that Mexico will enjoy a higher GDP per capita than all but three European countries by Tarsus has staged events in Mexico since 2004 when the first Label Summit Latin America was first held in Mexico City. In December 2013, Tarsus and EJ. Krause & Associates (EJK) formed a strategic partnership to expand into emerging markets with the Group acquiring a 50% interest in two major exhibitions owned by EJK. The two events in the joint venture were Plastimagen Mexico, the leading exhibition for the plastics industry in Latin America and Expo Manufactura, Mexico s premiere manufacturing event. In addition it was agreed that the joint venture would launch a number of its key brands into the Mexican market. LOOKING BACK REGIONAL HIGHLIGHTS EDUCATION - The Group launched its Global Education Supplies & Solutions Exhibition (GESS) brand in Mexico City in April. Quality education plays a key role in the economic development of any nation and is one of the key forces in enabling growth. Mexico s national education system currently serves 35 million children and President Enrique Peña Nieto s government allocated a record investment of over $47 billion for education in Working alongside EJK, this was the first of two planned replications for the GESS brand globally during The event brought together leading international suppliers and local companies to showcase the best in educational supplies. 2,294 educational professionals from 21 countries attended, while the show featured 100 exhibitors and brands from 15 different countries. INDUSTRIAL - Expo Manufactura (EM) held its 19th edition in February. Representing 60% of foreign direct 24 Tarsus Group plc

27 SUCCESSFUL GEO-ADAPTION investment, the manufacturing industry has emerged as one of the country s most important sectors; attracting major investment and creating employment opportunities. Regarded as the country s leading business forum, EM presents cutting edge technologies such as machinery, robotics and precision engineering systems for sectors including metal working, automotive, medical manufacturing, automation and industrial printing/3d. Organised in partnership with EJK, the 2015 event enjoyed continued success with 328 exhibitors and 10,607 buyers. Co-located alongside Expo Manufactura, Industrial Print Expo debuted in Bringing together domestic and international companies from 3D, screen, speciality, digital, laser and inkjet printing, this new expo aims to establish itself as the only Latin American event presenting innovative print technology used in the manufacturing of industrial and consumer goods. Its second edition was scheduled for February LABELS & PACKAGE PRINTING - The 12th edition of Label Summit Latin America was held in April with a record attendance level. Designed to showcase the latest trends and solutions for businesses to drive profit and best practice, the Summit, held in Mexico City attracted 1,080 buyers and over 80 Mexican and international exhibitors. LOOKING AHEAD Forward bookings remain in line with expectations for 2016 s events including GESS Mexico, Expo Manufactura, Industrial Print Expo and Plastimagen. New replication AAITF Mexico is scheduled to take place in June Exhibitors 100 Countries exhibiting 15 Visitors 2,294 Countries visiting 21 Q&A with Matt Thompson, Event Director GESS, Tarsus Group. Why was Mexico chosen for the GESS replication? Mexico s national education system is currently enjoying a record investment so the launch of GESS Mexico was very timely and represents a unique opportunity. What have been the major obstacles in launching the GESS brand into the Mexican market? GESS is a well-known event amongst the education supplier community and we already benefit from a strong network of internationally recognised speakers. The main obstacle that we faced in launching the show was on the buyer recruitment side, where we had little or no penetration when we started out. We needed to source data, identify and work with key associations, and engage with the main media for this sector. How instrumental has the working relationship with EJ Krause been in delivering a successful event? It was our close collaboration with the EJK team that helped us overcome the obstacle regarding visitor promotion. As the brand owner, the Tarsus team drove the strategy and direction of the show, whilst the EJK team were dynamic and determined when engaging with the local education community. The inaugural GESS Mexico was an outstanding success, attracting over 2,000 buyers, 100 exhibitors and more than 60 speakers. Such a result could not have been achieved without the on the ground support of EJK. How has the GESS brand been specifically adapted to suit/work in the Mexican market? GESS Mexico was a replication of its mother brand in Dubai in terms of profile, structure and format. The target audience for exhibitors, buyers and speakers was broadly the same but we consulted with the industry to make sure that GESS covered topics that held resonance to Mexico specifically ranging from a focus on vocational training in order to bridge the skills gap, through to niche topics such as a need to increase the quality of education and performance in regions of indigenous communities. What are the plans to enhance or extend the GESS brand in Mexico and beyond? Our aim is to build a show that becomes recognised as the annual meeting place for educators across Mexico. We are very pleased to have recently announced a collaboration with the Virtual Educa Foundation, an initiative of the Organization of American States which will help develop our institutional and academic programme. Tarsus Group plc 25

28 3D Printshow New York Tarsus Group plc

29 30% Percentage of Group revenue generated from the United States in 2015 ( m) Biennial revenue Annual revenue Total revenue Adjusted profit before tax united states Tarsus has broadened its portfolio by adding new events to its clothing and medical portfolios to capitalise on the growth the US market offers.

30 Strategic Report united states The United States remains the world s biggest single market for exhibitions where few sectors are not represented. The market overall continues to show impressive growth and exposure to this dynamic is a must for any serious exhibition operator. Tarsus has been active in the North American exhibition and publishing industry since being founded in Starting with the Labelexpo brand which was launched in 1989, Tarsus increased its interests there by acquiring OFFPRICE in 1999 with additional acquisitions of TSNN in 2000, its initial Medical business in 2006 and CMHC in 2014 and PAINWEEK in 2015 KEY FACT : OUR MEDICAL BUSINESS NOW COVERS ANTI-AGING, DERMATOLOGY AND THE FOUR MAIN SECTORS OF US PREVENTATIVE MEDICINE NEUROLOGY, ENDOCRINOLOGY, CARDIOVASCULAR AND ONCOLOGY LOOKING BACK REGIONAL HIGHLIGHTS CLOTHING - Consumer appetite for discounted fashion shows no sign of slowing down as retailers seek new and innovative ways to remain competitive. The off-price business model has been the answer for some of the country s largest retailers. From apparel to footwear, accessories to jewellery, available for 20%- 70% below the wholesale price, it is easy to see why so many make the OFFPRICE Show a must-see. First held in 1995, the biannual discount clothing and accessories event had just 24 exhibitors at its first edition but has grown significantly under Tarsus s ownership. Holding two editions during Fashion Week in February and August in Las Vegas, the show again continued its trend of steady growth producing another robust performance. Two further successful smaller OFFPRICE Show events were held in New York and for the first time in Miami. INDUSTRIAL - The 3D Printshow a successful edition in Pasadena. With 3D printing technology transforming design and manufacturing, the 3D Printshow has been rebranded as the Additive Manufacturing Show with strategic focus going forward placed on the medical, automotive and aerospace sectors. Additive Manufacturing Americas is due to take place in Pasadena in December MEDICAL - The Group has continued the work it started in 2014 to reposition its Medical Division. Following the acquisitions of the Cardiometabolic Health Congress (CMHC) and South Beach Symposium in 2014, the addition of PAINWeek in 2015 to the division has extended Tarsus reach to cover all four pillars of preventative medicine. This, alongside the launch of the Metabolic Medical Institute and the restructuring of its educational offering, means the 28 Tarsus Group plc

31 Group now reaches a significantly higher percentage of the mainstream medical market and is well placed for future growth. The Medical Division s established education business - while performing satisfactorily - now represents less than 25% of the overall Medical portfolio. Future growth is expected to be achieved through a combination of launching new events across the different therapeutic areas combined with an educational offering that will increasingly target the mainstream medical market. The South Beach Symposium was held in February under the Group s ownership for the first time. Focused on all aspects of dermatology, this annual event was held in Miami and hosted 535 buyers. The first edition of PAINWeek was run under the Group s ownership since acquiring it in May Held in September in Las Vegas, it is the nation s largest pain conference for frontline clinicians with an interest in pain management and attracted 2,212 medical professionals including physicians, nurses, pharmacists, dentists, psychologists and social workers. The Group also organised a series of regional PAINWEEKEnd conferences across Northern America. The 10th edition of CMHC was held in Boston during October. 963 clinicians attended the annual event which consists of an exhibition, symposia and workshops to highlight the latest techniques to reduce cardiometabolic risk. The congress was also complemented by a new Best of the CMHC Regional Conference Series which saw events held in Atlanta, Dallas and Las Vegas. The year closed with thousands of medical practitioners attending the 23rd Annual World Congress in Anti-Aging Medicine which was held in Las Vegas. Proving to be the largest event the medical division has hosted to date, the congress featured more than 325 exhibitors, 100 speakers and 5,200 buyers. LOOKING AHEAD Work will continue to reposition the Medical Division to better address the larger mainstream medical market. Forward bookings for 2016 s events including Labelexpo Americas, OFFPRICE, CMHC, South Beach Symposium and PAINWeek remain in line with the Board s expectation, with strong growth expected from the Group s larger medical events and online educational revenues. Q&A with Douglas Emslie, Tarsus Group Managing Director Why is the Medical Division focussed on preventative medicine? The medical market has moved away from being disease based to preventative with consumers being more interested and proactive in managing their health and wellness. Our products cater to this need and recognise the market is in transition. Why is the Medical Division being reshaped in the way it is? We have reshaped the Medical Division to fully leverage and better capitalise on the growth opportunities these particular areas of medical expertise offer as they are still developing. The acquisition of PAINWeek in mid complemented our existing medical businesses and enables us to now address all four pillars of the preventative medical market. For example we see a number of opportunities for us to expand the PAINWeek brand and to cross-promote our other medical events. How will growth be achieved? Growth will be achieved in a number of ways. One is by organic growth which can be achieved through event replication. We have already experienced a strong performance during 2015 by holding three additional events in the US in Atlanta, Dallas and Las Vegas which were bolt-ons to our Boston-based Cardiometabolic Health Congress. Other initiatives for driving further growth include building on the model successfully employed by CMHC, whereby the division is establishing a central team focussed on obtaining educational grants from pharmaceutical companies to develop an additional revenue stream across the other business units. We have also launched a new medical technology event, Medtech Impact, the first edition of which is due to be held in December Tarsus has made a number of strategic acquisitions over recent years, not least in the medical division. What are the key factors in making an acquisition successful and can deliver growth? The quality of our assets which address markets in transition and the geographical positioning of our portfolio, targeted at faster-growing economies, is a key differentiator for the Group. I think that many of our own strategic acquisitions, such as the South Beach Symposium, PAINWeek and Cardiometabolic Health Congress, have been aided by the attractiveness of the Group s entrepreneurial culture to the equally innovative vendors of those businesses we have acquired. Tarsus size, flexibility and willingness to work with vendors to develop their businesses in partnership with the Group is becoming increasingly appealing to partners and it helps accelerate the Group s overall strategy. The entrepreneurial culture we have in which to further expand their business has enabled us to capture attractive strategic opportunities in the emerging markets we ve chosen where commercial growth is solid and sustainable. Tarsus Group plc 29

32 Labelexpo Europe Tarsus Group plc

33 20% Percentage of Group revenue generated by Europe in 2015 ( m) Biennial revenue Annual revenue Total revenue Adjusted profit before tax EUROPE Success continues for our flagship brand Labelexpo Europe - while we have consolidated our 3D business to deliver the largest European trade event for this sector.

34 Strategic Report europe In line with our Quickening the Pace strategy, the Group s business has been increasingly focused on selective Emerging Markets to reduce exposure to the slower growing European markets. LOOKING BACK REGIONAL HIGHLIGHTS LABELS & PACKAGE PRINTING - The Group s second largest exhibition is Labelexpo Europe, which is held biennially in Brussels. This is the world s leading label and package printing industry event. Attracting a global audience, the show is aimed at trade professionals including label printers, brand owners and designers. Famous for its live heavy machinery demonstrations it routinely attracts highlevel printing executives looking to invest significant amounts in in new labelling equipment. KEY FACT : LABELEXPO EUROPE CELEBRATED ITS 35TH ANNIVERSARY WITH ITS LARGEST EVER SHOW FLOOR AND HIGHEST EVER BUYER AND EXHIBITOR NUMBERS s event celebrated its most successful ever edition. Posting new buyer, exhibitor and exhibition space records, its eight exhibition halls hosted 650 exhibitors. Despite being a long established show, the label and package printing sector is enjoying strong growth and the event drew 35,739 buyers - an increase of 12% on 2013 s total with buyers coming from 146 countries. Labelexpo Europe also played host to the 12th annual Label Industry Global Awards ceremony. 32 Tarsus Group plc

35 EXHIBITIONS AN EFFECTIVE ROUTE TO MARKET AND CLOSING SALES Celebrating its 35th anniversary, 2015 s show put a more strategic emphasis on package printing. Offering lucrative commercial opportunities to printers and suppliers alike, package printing is now central to the label printing community and overall Labelexpo experience. With 53% of its total exhibitors showing products for flexible packaging and 32% featuring products for folding cartons, Labelexpo Europe has now established itself as having the most extensive showcase of package printing solutions available at any tradeshow. INDUSTRIAL - The 3D Printshow - which Tarsus acquired in returned with editions held in London, Berlin, Madrid and Paris. Covering the many facets of 3D printing/additive manufacturing, the events featured content ranging from high-end industry, business and automotive manufacturing to medicine, fashion and art and design. With 3D printing technology transforming design and manufacturing, the 3D Printshow has been rebranded as the Additive Manufacturing Show with strategic focus going forward placed on the medical, automotive and aerospace sectors. Additive Manufacturing Europe is due to take place in Amsterdam in June FRANCE - The Group sold its French business interests in July. This included a broad portfolio of exhibitions and conferences operating in sectors such as education, marketing, IT and the events and meetings industry. Its disposal has been core to the Group s Quickening the Pace strategy which is focused on the faster growing economies of the emerging markets and the US. OTHER BUSINESS SECTORS - Online Recruitment (Onrec) magazine is for HR directors, personnel managers, job boards and recruiters providing them with information on the Internet recruitment industry. During 2015, Onrec held several successful events such as its annual exhibition and conference and awards programme in the UK and Scandinavia. Q&A with Christian Menegon, Worldwide Business Development Manager, Labels and Packaging, HP Indigo. How important are trade shows like Labelexpo Europe in your overall marketing and sales strategy? To be accurate, I have to separate my answer into two parts: there is any show and then there is Labelexpo. We are selling hardware, machines and heavy pieces of metal to an industry which was born in such an environment and still lives in it daily. Such machines cannot be sold via the internet. The potential buyers have to see them, touch them, evaluate them and compare with other suppliers. There is nothing better than a show for that. But there are many shows - too many other shows - and as a supplier we cannot attend all of them. We need to ensure a good ROI, a good time between two events (as we need to bring something new and this cannot happen annually) and a good attendance and promotion. Labelexpo has all the tools around for that objective, starting from the magazine, the PR activities, the summits and the show s geographic spread. What would be your primary route to market if you did not use exhibitions to reach your customers? Open houses, for the same reason: show hardware, let the prospect feel the heavy metal. How does the Labelexpo team help you stand out from the crowd in a busy market place? There is a long lasting relationship between us and the Labelexpo team. What I appreciate most is the open communication we have. We can agree, disagree, but we talk openly and this makes things advance for both of us. A question - we ask, an issue - we discuss, an idea - we share! This can be informal, a phone call, an SMS or a face to face meeting, but always in full respect of each other. How has your business benefited from exhibiting at Labelexpo Europe over the years? I guess the number of square metres we need says it all! Over the years we ve grown a lot, demanded more and more, had to relocate from one hall to another. We have the chance to be part of the leaders changing the industry, and as such I suppose we ve also contributed to Labelexpo s own development. If we continue to contribute by bringing more people, we also help the industry to grow somehow! For us the show has allowed us to introduce new solutions, new platforms and to educate the market. For sure a great additional sales aid. LOOKING AHEAD Forward bookings for 2016 remain ahead on a likefor-like basis with key events including the first edition of the rebranded Additive Manufacturing Europe in Holland. Tarsus Group plc 33

36 Governance Corporate Social Responsibility CORPORATE SOCIAL RESPONSIBILITY HIGHLIGHTS As a global company, Tarsus is strongly committed to corporate social responsibility (CSR) to acting responsibly, operating sustainably and contributing to the communities in which we work and live. This is a summary of some of the key activities that our Corporate Social Responsibility Committee and Group employees have taken part in this year. Further information about the formal corporate social responsibility policies of the group can be found in the Directors Report and Corporate Governance Report. SUSTAINABILITY AND ENVIRONMENTAL POLICIES Tarsus is committed to ensuring its operations are as environmentally friendly as possible, and has a number of company-wide policies to achieve this, including: i) Keeping staff travel to a minimum and making active use of alternative means of communication (e.g. video conferencing etc) to reduce travel requirements and reduce the Group s overall carbon footprint where possible; ii) Discouraging the printing of s and making information available online in addition to in print to reduce paper wastage; and iii) Encouraging the development and use of Mobile Apps at our events, which contain all show data to reduce the volume of print event guides required. CORPORATE CHARITY SUPPORT Employees from Tarsus Group completed two major charity challenges as part of the Events for Namuwongo project, which has seen them cycle to 34 Tarsus Group plc

37 the summit of Mont Ventoux and complete a Tough Mudder course. The cycle to the top of Mont Ventoux, a mountain in the Provence region of southern France and part of the Tour de France cycling race. Mont Ventoux is the largest mountain in the region and is known as the Beast of Provence, amongst other names. sanitation, healthcare, education and more for the community in Namuwongo. Previous charity initiatives undertaken by the Events for Namuwongo Tarsus team include the Three Peaks Challenge and a London to Paris bike ride. Events for Namuwongo is a partnership of companies and individuals from the events industry who have come together to support a slum community on the edge of Kampala, Ugandan. The initiative has the aim of raising funds to provide free and clean water, Tarsus Group plc 35

38 Group Structure Board of directors EXECUTIVE DIRECTORS 1. Neville Buch (69) (Chairman) founded the Group when it launched in He was previously Executive Chairman of Blenheim Group plc, a leading international exhibition, publishing and conference company which was acquired by United Business Media plc for 593 million in Douglas Emslie (49) (Group Managing Director) joined the Group when it launched in 1998 as Finance Director, becoming Group Managing Director in Prior to joining the Group he held senior management positions at Blenheim Group plc and after its takeover, United Business Media plc. He is past Chairman and remains a Director of both the Association of Event Organisers and the Events Industry Alliance. He is also the first international board member of the US industry trade body SISO. 3. Dan O Brien (48) (Group Finance Director) joined the Group in July Since qualifying as a Chartered Accountant with Deloitte in 1991 he has held the role of CFO at TV production company Shine Group and at the listed B2B publisher Huveaux plc. He also held senior finance roles at Hanson plc, computer games company Eidos and Digital Theatre. NON-EXECUTIVE DIRECTORS 4. David Gilbertson (59) (Non-executive Director) joined the Group in March 2014 as the Company s Senior Independent Director, Chairman of the Remuneration Committee and a member of the Nomination, Audit and Disclosure Committees. Previously he was Chief Executive Officer of Emap Limited and Informa plc and Chairman of Sigaria. He is Chairman of Gambling Compliance, Green Power Conferences, Old St Labs, Concerto Group as well as an a non-executive director of Incisive Media. 5. Tim Haywood (52) (Non-executive Director) joined the Board of Directors as a Non-Executive Director in July He is Chairman of the Audit Committee and a member of the Remuneration, Nomination and Disclosure Committees. He is Group Finance Director at Interserve plc and prior to that was Finance Director of St Modwen Properties. Earlier roles include Group Finance Director at Hagemeyer UK and senior positions in Williams Holdings. Tim is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of its Sustainability Board. He is also a member of the Enterprise Leadership Team of Business in the Community. 6. Robert Ware (61) (Non-executive Director) joined the group in February He was a director of MEPC Limited ( MEPC ) until June Initially Corporate Development Director, he was appointed Deputy Chief Executive in May In 2003 he left MEPC and listed The Conygar Investment Company PLC, an AIM-Listed company of which he is the Chief Executive. He is also Chairman of the Marwyn Value Investors Limited, Terra Catalyst Fund and Marwyn Management Partners Limited. COMPANY SECRETARY 7. Simon Smith (40) (Group Company Secretary and Head of Corporate Affairs) was appointed Company Secretary of the Company on 3 November An Associate of the Institute of Chartered Secretaries and Administrators he has previously held company secretarial positions at PartyGaming plc, Associated British Foods plc, BG Group plc and KPMG. 36 Tarsus Group plc