Deutsche Messe in Hannover - Report for 2006

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2006 was a positive year for Deutsche Messe. The results of its flagship fairs and all the major events it hosted were largely good to very good. DOMOTEX, for example, kicked off the year with record exhibitor and visitor numbers. HANNOVER MESSE 2006 (the Hannover Fair) showed just why it is considered to be the world's leading technology trade fair, returning to its rightful position with topics geared very much to the market.

IAA Commercial Vehicles, EuroBLECH and EuroTier were extremely successful, with results significantly exceeding expectations. While other IT fairs are disappearing from the market, CeBIT 2006 achieved good results despite the difficult market situation, boasting a net display space of around 300,000 m². The smaller event program typical of even years ended for Deutsche Messe in Hannover with sales of EUR 232 million. This figure was down on the result for 2005 with its larger number of events but up on 2004, a more comparable year. Traditionally, odd calendar years have more events and, consequently, higher sales.

Result much better than planned

The net loss for the 2006 business year, which was kept in single figures, is mainly a result of the high outlay for trade fair infrastructure and the radical changes in some sectors, which even affected leading shows. The information and telecommunications industry is being particularly hard hit. In June, Deutsche Messe was still anticipating a loss in double figures based on its HERMES multiyear planning, but things have improved substantially over the past six months thanks to the company's efforts. According to Sepp D. Heckmann, Chairman of the Managing Board, "We are progressing confidently and focusing on the future. Deutsche Messe is constantly adapting to new challenges, concentrating on its strengths and remaining true to its principles of focusing consistently on markets and customers."{mospagebreak}

Last year's EBITDA (earnings before interest, taxes, depreciation and amortization) was around EUR 37 million and the cashflow for the same period EUR 22 million.

In the year under review, Deutsche Messe's results were once again significantly impaired by high interest payments and annual depreciation amounting to approximately EUR 46 million from the investment program prior to 2000. The company is, however, making great strides with loan repayments. By the end of 2007, it is planning to have knocked a further EUR 15 million off the amount owed. This means it will have more than halved its debt in the period 2000 to 2007. According to Stephan P. Kühne, Member of the Managing Board, "This will create the flexibility that is essential if we are to tackle fierce national and international competition in the future."

In the 2006 business year, Deutsche Messe AG organized 98 events - 50 trade fairs and exhibitions in Germany and 48 in other countries. A total of 23,398 exhibitors came to Hannover and just under 1.8 million visitors attended events at the world's largest exhibition center.

New prospects in foreign markets enjoying strong growth

In addition to the agreed cooperation with Messe Stuttgart, Deutsche Messe also has high expectations of the strategic cooperation with Milan-based trade fair company Fiera Milano. The Brazilian, Russian, Indian and Chinese markets are the focal points of these joint activities. A new exhibition center is about to open in the Indian city of Bangalore. Here too, Deutsche Messe has a cooperation arrangement. "Our early involvement in foreign markets enjoying strong growth has paid off," comments Board Member Ernst Raue. "We are accompanying our customers into the prospering regions of the world as a marketing partner and communication service provider, while simultaneously making the Hannover Exhibition Center more attractive on an international level," he continues. SNIEC, the Shanghai New International Expo Centre, for example, has enjoyed another record year.{mospagebreak}

Outlook for 2007

2007 will see Deutsche Messe organizing a total of 19 leading international trade fairs: DOMOTEX, CeBIT, HANNOVER MESSE with its 13 flagship shows (INTERKAMA+, Factory Automation, Industrial Building Automation, MDA - Motion, Drive & Automation, Digital Factory, Subcontracting, Energy, Pipeline Technology, FM Solutions, ComVac, SurfaceTechnology with PCE, MicroTechnology and Research & Technology), LIGNA+ HANNOVER, EMO, BIOTECHNICA and AGRITECHNICA. DOMOTEX, the event kicking off 2007, has just finished and results are extremely encouraging. Some of the subsequent events are already significantly ahead of target. Since the middle of last year, Deutsche Messe has been working with exhibitors and the Exhibitors' Committee to totally restructure CeBIT, which will return to the market with renewed vigor in 2008. A presentation on these developments is scheduled for 23 January.

(All figures quoted are based on provisional projections as at January 2007.)

For more information, contact:

Deutsche Messe
Messegelände
D-30521 Hannover

phone: +49-511/89-0
fax: +49-511/89-32626

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