Interview |
|||
|
tried to get a balance right.“ We needed a high degree of respect for the business we acquired, but there had to be absolute clarity that we were the acquirer. It wasn’ t a merger. You needed ultimately one party that could make decisions on how it could work.”
Some UBM old hands had defended the‘ retired’ UBM brand, particularly in Asia, but Carter made the decision to drop it within 12 months.“ It wasn’ t a bad brand, but we need to be one company under one brand,” he said and thought, by and large, things worked out pretty well.
“ The exhibition industry is respectful and we didn’ t burn too many bridges.”
UBM experience in China, Carter said, had actually helped Informa move quickly in response to the Covid threat.
“ Had we been the old Informa we wouldn’ t have read the situation so early,” he acknowledged.
“ We locked down early and moved to Europe and America. It took colleagues there a lot longer to see that this wasn’ t just SARS 2, the sequel. We were clear it was a gamechanger.”
Carter reheated an old
|
investors’ saying to make the point on Informa’ s strategy to go for liquidity:“ Revenue is vanity, cash is sanity and profit is reality!”
He pointed out that the company’ s record in driving revenue growth for 27 straight quarters had helped relationships with investors.“ They don’ t lend you money at scale if you can’ t deliver results,” he said, noting that revenue had“ disappeared in a click when Covid-19 appeared and it quickly became about cash. He moved at speed to shrink costs, and to enhance liquidity.“ We secured $ 1.24bn of cash liquidity from banks,” he added, recalling that the shareholders then took a 20 % dilution for the fresh equity.
The company had effectively, he said, secured enough liquidity to be able to look through all of 2020 as a zero year for events if worse came to the worst.
Investors bought into the model and the company’ s judgement of the long-term value of its business, something Carter said speaks to the quality of this exhibition industry.
“ Investors see the efficiency of the tradeshow product and the power of its
|
network effect. They see this as an extraordinary set of circumstances. A disjunction … however, we have taken the risk of 2020 off the table.”
Carter believes the worstcase scenario won’ t happen and has events scheduled, including the first one of scale in Vietnam in August.
Carter is clear also that the product will not be the same on the other side as it was before Covid-19.
Future The long term issue for Carter is how to make a controlled physical gathering and wrap it to ensure that digital, data and service delivery are also part of the product.
The Informa CEO has some advice for the industry and its associations:“ When industries speak with five voices it’ s confusing, a single view and voice makes an enormous difference.”
His second piece of general advice is backed up by his experience of working in the halls of power:“ Governments generally don’ t like solutions that are industry-specific, they like economic benefits. Politicians would be keener to make decisions on economic
|
stimulation rather than‘ saving tradeshows’,” he said, urging the industry to shout about its multiplier effect in a form that speaks to the economic restart. Carter said this was particularly important at a time when the government radar is moving from‘ lives’ to‘ livelihoods’.
Carter was also supportive of efforts to lift the exhibition‘ product’ out of the category of random mass events and put them in a different category.
Any return, he said, would be phased and the exhibition industry needs to be nearer phase 1 and 2 than the back end.
Through to the end of 2020, Carter expects smaller events to come into their own, but in 2022 he expects to see a different set of economics.
Carter noted he faced criticism for holding a diversified portfolio, but feels vindicated.“ Diversification has obvious benefits,” he said.
“ Where we have digital, training, subscription, product, etc, our footprint is greater than the markets where we simply run the biggest tradeshow. I’ d rather have a deep relationship for 300 days rather than one for 10 days!” he added.
In reply to Emslie’ s question of whether Carter saw a shift to specialisation, he noted:“ Most markets are super technical. It is very hard to turn up as a gifted amateur in a sector to be credible. The answer is in the data.”
|