Good afternoon, this is the Chorus Call conference operator. Welcome, and thank you for joining the Fiera Milano Results as of the 30th of June 2024 Conference Call. As a reminder, all participants are on listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Vincenzo Cecere, Head of Investor Relations and Sustainability. Please go ahead, sir.
Good evening, everyone, and welcome to Fiera Milano's First Half 2024 Results Conference Call. This is Vincenzo Cecere speaking, Head of Investor Relations and Sustainability, and I'm here with Francesco Conci, CEO, and Massimo Di Tullio, CFO of Fiera Milano. The presentation of today will be structured in four sections. During the first section, Mr. Francesco Conci will give you an overview of the business, an update on progress of the strategic plan, main financial highlights, and 2024 outlook. Then, Mr. Massimo Di Tullio will go through the divisional results in financial fields in greater detail. On a final note, an update on sustainability will also be provided. At the end of the call, you will be invited for a Q&A session with management available for your questions. At this point, I leave the floor to Francesco Conci, CEO, for the key messages of the H1 2024 results.
Please, Francesco, go ahead.
Good evening, everyone. Welcome, and thank you for joining the Fiera Milano First Half 2024 Results Conference Call. I'm very pleased to present to you a very positive set of results for the first six months of the year. With 37 exhibitions, 67 congresses, more than 836,000 sq m sold, the group has delivered a solid growth. Revenues have reached EUR 144 million, reflecting an increase of 9% or EUR 12 million growth compared to the first semester of 2023. This result is particularly significant given the less favorable season calendar effect, with the absence in this semester, for example, of the biennial TuttoFood or the multi-year ITMA. The very positive news is that the good performance of the exhibitions and congresses more than compensated the negative calendar effect.
To share with you some numbers, the growth in revenue of EUR 12 million resulted from a performance effect of EUR 22 million, reflecting a like-for-like growth of 19% compared to H1 2023. This was driven by a 14% increase in sold area and 26% rise in services, along with a strong performance in the congress business, which grew by 8%. An unfavorable seasonal calendar effect accounted for EUR 10 million, which was completely compensated by the very positive performance effect. EBITDA has shown a notable increase, reaching EUR 54.6 million, marking an improvement of EUR 13 million, resulting in a 31% growth compared to H1 2023, mainly due to better revenue performance and lower energy costs. Net income from continued operation, so excluding the non-recurring capital gain coming from the TuttoFood transaction, stood at EUR 22.6 million, a growth of EUR 15 million compared to H1 2023.
Finally, taking into account the distribution of EUR 10 million dividend in the second quarter and the new advance and payment regime for rent, which required us to pay three installments in the first semester, our net cash availability decreased by EUR 70 million. After an overview of the numbers, let me give you an update on the progress of our 2024-2027 strategic plan and share some positive news on the strategic front. As you may recall, as part of our strategic plan for 2024-2027, we committed to launch three new exhibitions by 2027. In June, we proudly announced Net Zero Milan, an expo summit dedicated to decarbonization in the industrial sector. This event is scheduled for 2025 and aims to bring together industry leaders to discuss and advance our collective effort towards a sustainable future. This strategic move also reinforces our commitment to integrating sustainability into our business model.
By launching an event entirely dedicated to sustainability dems, allow us to actively participate in spreading sustainable practices across our industry. Additionally, I'm pleased to share that Fiera Milano, with its convention center, Allianz MiCo, has been chosen to host in 2027 the European Society of Cardiology Congress, the world's largest cardiology congress, and with more than 50,000 participants expected. This is a remarkable success for Fiera Milano and further confirms Milan's reputation as a preferred destination city for large medical scientific congresses. This achievement underscores Fiera Milano's growing appeal and competitiveness on an international scale. In fact, potential candidates have been evaluated based on 20 tangible criteria, going from venue-related assets, sustainability measures and programs, strategic location, and logistics. Great news also on the international front.
In the first semester, we launched two new exhibitions in Brazil, through the attraction of a joint venture with IFEMA Madrid and Esquadra with NürnbergMesse. Both the exhibitions have achieved results that exceeded our expectations. As a key initiative in our strategic plan to enter the entertainment business, we confirm that Fiera Milano Live has already successfully hosted 10 of 11 international concerts, with the final event scheduled for September 2024. These concerts have been well received by audiences and have reinforced our reputation as a premier location for large-scale entertainment. In conclusion, we are pleased to announce that in September 2024, our office will move to the modern and functional X-Wind building in Rome. This relocation is a key priority of our 2024-2027 strategic plan for human capital development, aiming to create a more efficient work environment and promote a culture of sharing and collaboration.
There will be no significant economic impact from the relocation. At this point, before leaving the floor to Massimo for the business and financial review, I would like to provide you with an update on 2024 guidance. Given the positive outcomes from a recent event and promising forecasts for the rest of the year, we are optimistic about the future. Congress results have surpassed expectations, indicating for the full year 2024 a double-digit growth. This, along with strong service momentum, very positive international performance, especially in Brazil, and reduced energy costs, has significantly boosted our confidence. As a result, we anticipate reaching the upper end of our revenue and EBITDA 2024 guidance. Revenue: EUR 250 million-EUR 255 million, up from previous range of EUR 245 million-EUR 255 million. EBITDA: EUR 70 million-EUR 75 million, up from previous range of EUR 65 million-EUR 75 million.
Additionally, we have improved by EUR 5 million our net financial availability guidance to EUR 60-65 million, from the previous EUR 55-60 million. At this point, I will leave the floor to Massimo for the business and financial review. Please, Massimo.
Thank you, Francesco, and good evening, everyone. As Francesco already mentioned, during this semester, Fiera Milano delivered a very positive set of results. Before we get into details of the performance effect and calendar effect at the consolidated level, which will help you to understand the dynamics of this semester, let's first take a brief overview of our divisional performances. We will briefly cover the Italian and foreign exhibition business, as well as the congresses, providing what we call the divisional legal entity view at slide number 8. Let's start from the Italian exhibition business. As you can see, we experienced a revenue growth of 8.4%, moving from EUR 110 million in 2023 to EUR 119.4 million in 2024.
This result has been achieved despite a negative calendar effect, let's say, caused by the absence of the multi-year ITMA, multi-year exhibition ITMA, and also from the absence of the biennial even year TuttoFood in this semester. This effect, this negative effect, has been partially offset by the presence of the biennial Mostra Convegno Expocomfort and Transpotec and Logitec. The divisional EBITDA saw a significant growth as well. There was an increase from EUR 33.3 million in H1 2023 to EUR 42.9 million in H1 2024. This was a growth of 29%, which was largely due to the positive revenue trends that we have already discussed, and was also helped from lower energy costs. This lower energy cost is due to two different impacts. On one side, we have the, let's say, unitary cost, which is lower compared to the previous year. On the other side, we are saving.
We are, let's say, benefiting also from a more favorable climate. We needed less energy, let's say, to cool our pavilion during the second quarter exhibitions. Moving to the foreign exhibition business, the foreign exhibition business has shown a remarkable progress with a revenue growth of 45%. We went from EUR 3 million in H1 2023 to EUR 4.3 million in H1 2024, which was a growth of EUR 1.4 million. This growth is primarily due to the successful exhibition in Brazil, such as Expotec, which saw a 10% increase in occupied square meters compared to H1 2023. We also had the first successful edition of Fruit Attraction, an exhibition managed with a partnership with IFEMA Madrid, and Esquadra, an exhibition in partnership with NürnbergMesse. Additionally, the Cape Town Art Fair in South Africa performed very well with a 6% increase in occupied square meters.
When looking at the EBITDA, we saw an even higher increase. We moved from EUR 0.4 million EBITDA in H1 2023 to EUR 2.6 million in H1 2024. There was an increase of more than EUR 2.3 million, which has been driven basically from the revenue growth that we were mentioning before. On top of that, we also had the positive impact coming from the JV in China, the JV managed with HANNOVER MESSE . The result of the JV was increasing by more than EUR 1.4 million, approximately. It was mainly due to the better result of Lazer Fair and also the, let's say, favorable calendar impact of Domotex, which was, let's say, last year was held in the second semester, and this year was moved to the first semester. Moving to the last division, congresses, even for congresses, we are speaking about very good performances.
We have seen a revenue growth of 8.6%. We see revenues moving from EUR 24.4 million in 2023 to EUR 26.5 million in 2024. This increase is primarily due to the higher revenue from recurring events such as Salone del Risparmio, Salesforce, and AWS Summit, along with the additional revenue from a higher number of non-recurring events, including EASL, SIRM, and the Zurich Convention. This growth is somehow offset by the absence of the EAU conference, which took place in H1 2023. The divisional EBITDA of congress increased by EUR 1.1 million, which equates to an increase of 13.5%, can be basically attributed to the positive revenue trends along with lower energy costs compared to the H1 2023.
Looking at the consolidated level, I think it could be useful to move to slide number 9 in order to better understand the calendar effect and the like-for-like growth of both the hosted and organized exhibition. Moving from what we have seen here, a legal entity view, to a more business line and managerial perspective. We have tried in this chart to, let's say, summarize the impact, the contribution of each division to the growth of the revenues. Again, we are pleased to report a solid growth of EUR 12 million compared to H1 2023, which represents, as we already said, a 9% year-over-year increase. When we look into detail, we can see that this growth has been composed by several key factors. First factor, we experience a very high performance impact.
We grew by EUR 22 million in a like-for-like comparison compared to the first semester of 2023, which translates to a remarkable 18%-19% growth versus H1 2023. How this growth was done? When looking at the growth in terms of organized events, we see EUR 7 million. Taking aside the only positive impact in terms of calendar that we faced because of the presence of Transpotec, this EUR 7 million growth equates to a 24% increase in the revenues coming from the sold area. When we look at the EUR 3 million increase coming from the hosted exhibition, we are looking to a like-for-like increase of 10% compared to the last edition coming from revenues from sold area.
Even when we look at the minus EUR 3 million coming from the services, when we take out the negative calendar effect, we score a very impressive 26% growth in terms of like-for-like on the services. It is also remarkable to notice that congresses, as we already mentioned, are growing by 8.6% compared to last year. This is a EUR 2 million increase. Last but not least, we increased also by EUR 4 million in other businesses like the foreign business. We mentioned before the growth from Brazil driven by Expotec, Fruit Attraction, and Esquadra. We had also the positive launch of the entertainment division. We hosted the Fiera Milano Live concerts. This brought additional revenues, clearly, compared to last year, as well also with the other activities that we are managing outside, let's say, the venue.
All the fittings activities that we are managing also during Salone del Mobile clearly helped to reach this additional revenue. Despite all this, clearly, let's say, despite all this positive impact, we had to discount and we had to face also the calendar impact, which was unfavorable, as Francesco already mentioned. The unfavorable impact was more or less EUR 10 million. This was mainly due to the absence of ITMA, as I was mentioning before, which covered more than 120,000 sq m in 2023. This negative impact is also due, clearly, to the absence of biennial TuttoFood, which covered last year 60,000 sq m. To partially offset this impact, we have counted this year on Mostra Convegno Expocomfort with 86,000 sq m and Transpotec with 26,000 sq m.
In summary, despite the challenging seasonal factors, our strong performance in sold area and services and congress business has driven a remarkable growth in revenues, underscoring our resilient business model. Now, I would just, let's say, show you an example in chart number 10 of some of the exhibitions that scored an increase compared to the last edition. You can see on the left side of the chart the growth coming from the organized events, the growth that was mainly driven by better performance of Milano Home and Quicken More, the performance coming from BIT that increased square meters sold by 7%, as well as PTA and Next Mobility exhibition. While on the right-hand side of chart number 10, you can see the main improvement coming from some of the hosted exhibitions.
You can see how better did Mostra Convegno Expocomfort in Q1 with an 11% increase, Mido which increased by 21%, and Milano Unica by 27%. It was clearly a very positive impact coming from the volume. Now, I'm going to provide in the next chart in the financial review some deep, let's say, dive on our financials. If we go to the income statement on chart number 12, you can see here in the first line, top line, the revenues, but we have already, let's say, already commented on this. We scored EUR 144.4 million with an increase of EUR 12.2 million, which equates to a 9% increase. As we already mentioned, in a like-for-like comparison, we clearly increased by more than EUR 12 million. We increased by, let's say, EUR 22 million.
Moving to the EBITDA, where we are scoring EUR 54.6 million compared to the EUR 41.6 million of last year, so an increase of 13%, we see clearly a very significant increase. This increase represents a 31% growth compared to 2023. This strong growth was driven by better performance on revenues, as we commented already, basically on all the division. We also had the benefit of lower energy costs and lower consumption of energy, thanks also to a favorable climate impact. We had also a positive contribution to the EBITDA coming from the JV with Hannover Messe. Basically due to the better result of Lazer Fair and, as we were mentioning before, also the anticipation of Domotex Asia in the first semester compared to last year.
In terms of financial management, we saw as well an improvement of EUR 1.3 million, mainly driven by higher rates on the liquidity that we managed this year. I remind everybody that we have a positive net financial availability last year, but also in this semester. Our net result for the period coming from continuing operation amounted to EUR 22.6 million. This compared to a EUR 13.4, sorry, this compared to a EUR 9.2 million in H1 2023. It represents a EUR 13.4 million increase compared to last year. While if we look at the net result, in the net result, we are slightly lower than last year because of the absence, basically, of the positive impact of the TuttoFood operation. I will now move to the balance sheet, the chart number 13. I would basically focus on the change on the networking capital.
In this quarter, we have seen, let's say, a change in net working capital by almost EUR 20 million, which was caused by, let's say, at least three or four main reasons. First of all, we had a reduction in trade and other receivables by EUR 11 million and an increase in inventory and contracting progress by EUR 1.1 million. This was positive in terms of cash and, let's say, net working capital variation. At the same time, we faced a reduction in trade payables by EUR 17.5 million, which is related to the payment of trade payables connected to the Q4 2023 events. At the same time, we faced, let's say, a forecasted decrease in advances by EUR 7.2 million. This is clearly due to the seasonality that we face every year. This reflects a balance between increasing advances invoiced to customers for upcoming events and in particular ly, Host.
At the same time, we faced a decrease for events that has been hosted in the first half of 2024. The net of these two impacts is a negative of EUR 7.2 million. We also faced a decrease in current liabilities by EUR 6.4 million, which is mainly due to a reduction in liabilities to organizers. You know that we manage the invoice and the cash collection for our organizer. We have to give back the money to our organizer when these happen. Depending on the cutoff of the semester, we can have also this kind of negative temporary impact.
All in all, our net financial position has moved from EUR 81 million approximately at the end of 2023 to a net availability of approximately EUR 60.64 million at the end of June, resulting in a free cash flow decrease of EUR 17.3 million, which is mainly due to basically the movement in networking capital. If we want to have also a view in terms of, let's say, cash flow, in terms of cash flow, we can say that we scored an EBITDA of EUR 54.6 million. When we consider the cash out coming from the rentals, we have to account for EUR 42.5 million cash out. It's worth to remember that this quarter we had to pay an additional installment to come back to what the contract basically was always stating. We had a temporary change during COVID and for the consequence, the consequence two years.
Now we have come back to the regular, let's say, rules for payments. Basically, we pay an additional quarter, basically. We had this net working capital negative impact of approximately EUR 21 million that I was explaining before. We have also to consider that we have distributed dividends in the second quarter for almost EUR 1 million. All in all, this explains why we have gone down from EUR 81 million to EUR 64 million. Looking at the financial ratio stability indicators, we see basically both on the current assets over the current liabilities and the other ratios. The equities over the fixed assets, we see a stable situation. In terms of current assets and current liabilities, the index worsens slightly due to the fact that the semester provided a negative cash flow payment of an extra rent installment, as I was explaining before.
At this point, I will give you again an overview and a reminder, let's say, on our strategic plan guidance. As Francesco already anticipated, based on the result of the first semester and the visibility that we have on the second half, we have been able to communicate an improvement of our estimate for expected results for 2024. Given the positive outcomes from recent events and the promising forecast, like for instance, and also considering the expectation of further improvement on congresses, for instance, where we expect a double-digit growth, we are able to review our guidance for revenues and EBITDA in the upper part of the range. Basically, we see revenues now in the range of EUR 250 million-EUR 255 million, while before it was EUR 245 million-EUR 255 million. EBITDA in the range of EUR 70 million-EUR 75 million, while the previous range was a little bit higher, was EUR 65 million-EUR 75 million.
Additionally, as already mentioned, we have improved by EUR 5 million our net financial availability guidance, to EUR 65 million at the end of 2024. Now I will leave the floor to Vincenzo for a brief note on sustainability.
Thank you, Massimo. Just a very quick update on the sustainability initiatives we took during the semester. In the first quarter, we inaugurated one of the largest rooftop photovoltaic plants in Europe. Just to give you some numbers, 50,000 panels installed, 330,000 sq m of coverage, and 22 gigawatt hour of production. We also obtained the environmental certification, and this will help us to reduce our environmental impact coming from our operations. We also obtained two very relevant awards in sustainability. The first one was the ESG Identity Corporate Index 2024, and we positioned Fiera Milano as the number one among the mid-cap listed companies. The second one was a sustainability award regarding the business, so it was related to the exhibition industry. We were awarded as an industry partner award, so the best partner for growth for our stakeholders.
I believe we have concluded with the presentation, and we can start with the Q&A session.
Thank you. This is the closed call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone with a question may press star and one at this time. The first question is from Simonetta Chiriotti of Mediobanca.
Yes, good afternoon. Thank you for taking my questions. I have a couple. The first one is on the second half of the year. If you could highlight which are the main changes in the calendar, which are the main things that we have to bear in mind when looking at the coming quarters. Secondly, if it is possible to make a rough comparison of the first half numbers with the normal year, similar, so another even year to highlight how the business is progressing when compared with the same calendar, so without calendar effects. Thank you.
Okay, Simonetta. About what we expect in the second half of the year, clearly this is an even year, so it's not the most, let's say, favorable one. We will for sure have a higher negative impact coming from calendar. Let me remark, we had EUR 10 million negative impact in terms of revenues in this half. We are expecting a EUR 50 million almost negative impact in the second half of the year. Why this? Because we will basically miss, compared to last year, we will miss Host, we will miss Made Expo, we will miss Sicurezza, and we will miss Plast. The first three are biennial events, so clearly they recur in the odd year and they are missing in the even one. The last one, Plast, is a multi-year event, so it will recur in 2026.
At the same time, the only additional event, let's say, compared to last year will be, let's say, the most representative one will be CPHI , and then we will have also SIMEI. The net impact of the one missing and the one present that are present this year and that were missing last year is clearly highly negative and is mainly due to Host, which is our best show in terms of revenues and financial. This is what we have to bear in mind. At the same time, we count on, let's say, progressing and improving our like-for-like performances as we did already in the first semester. We expect this negative impact to be counterbalanced, partially counterbalanced by performances coming from the exhibition division and congresses division.
Clearly, we will not manage to offset completely this huge calendar impact, but this was already included, I mean, in our guidance.
Sorry, can you repeat me the number in EUR million in the second half?
We will have at least EUR 50 million negative calendar impact in terms of revenue.
Five zero?
Five zero, yeah. This is already included basically in our guidance. If we consider that we end up last year with EUR 284 million and our guidance now is for EUR 250-255 , we are already discounted this impact now in our guidance.
Yeah, yeah.
The second question is about the comparison with 2018, so somehow we are speaking about the comparison with pre-COVID. Compared to pre-COVID, basically, we have in this quarter, I would say, even a slightly better result. In 2018, first of all, 2018 was not completely comparable with 2024 because we had in the first semester, we had the Innovation Alliance. We had some events that this year we added. This already equates to something like EUR 24 million less in terms of calendar impact in the comparison with 2018. If we take out, I mean, the calendar impact, I would say that we are basically in line in this quarter with the result of 2018.
This demonstrates that the exhibition business and the congress business did very well, and we are in line with the recovery of the performances of the pre-COVID performances. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is a follow-up from Simonetta Chiriotti, Mediobanca. The next question is from Andrea Bonfà, Banca Akros.
[Foreign language] . My question is related to CPHI and in particular if there is any chance that this, let's say, event is becoming, let's say, a stable asset of your portfolio. I mean, if you are working on that, if that is feasible or not. The second one is regarding to the fact that you have been awarded this major cardio conference, cardio congress in 2027 based on 20 KPIs for Milan. If this is, let's say, a scenario which is increasingly favorable to your business in the sense that Milan is becoming a very attractive city and if you can elaborate on the fact that you can, let's say, obtain similar congress and similar events in the future.
The final is a detail on your tax rate, which was very low in the first half of the year, and if you can elaborate on that. Thank you very much.
About the first question on CPHI, we are working. Let's say we are working on this opportunity and it's still a work in progress, so I cannot disclose more at this stage. Clearly, we are trying to pursue this opportunity, so I cannot add anything more. About the congresses and the cardiology one, clearly this is the result of how Milan and how Fiera Milano congresses is doing well. Let's say it's clear that after the expo, Milan has attracted a lot of visibility, and this is helping us in attracting also this kind of international events. Milan has also all the opportunities and structure to make it possible to host these huge events with this huge number of attendance. This is already part of our plan.
I mean, it was already, let's say, this congress was not expressibly part of our plan, but our strategy for congresses is based on this. It is one of the pillars of our congress strategy to increase the presence of these international huge associative events.
The Olympics will boost the attractiveness.
For sure, this will be another example, and this will be attractive as well. Once it will be known that Fiera Milano congresses is hosting this kind of such an important event, other organizers will probably put their eyes on our venue and consider also the possibility to come in Milan. The Olympic Games as well will probably boost this visibility and this attractiveness. About the tax rate, in this moment, the tax rate is quite low in the first semester because we expect, because of the seasonality impact I was mentioning before, the net result at year-end to be clearly a little bit lower compared to the one that we are scoring now.
Because of the seasonality, because of the second half of the year in which we will miss some huge events that we had last year, for instance, our, let's say, before taxes result will be probably lower than the one that we scored in each one. That's the reason why our tax rate in the first semester, which is based on the final year result, is a little bit lower than last year.
Thank you very much.
For any further questions, please press star and one on your telephone. The next question is a follow-up from Simonetta Chiriotti, Mediobanca.
Yes, thank you. Another question on the new business line of events. If you could elaborate a bit more on these. In particular, is it correct to expect a good contribution of these in the third quarter, so in the second part of the year? The second question is on M&A, if it is possible to have an update on this front. Thank you.
Okay. On the entertainment business, on the concerts, our revenues basically in this part of the initial growth of this sector are not very huge. They are coming from the rental of the spaces, basically, and partially from the catering and restoration services where we get commission, basically, on the sales. In the second half, we will have just one remaining event for the Fiera Milano Live Rasegno. We do not expect a massive increase compared to what we scored so far, at least from the summer events. Clearly, this is a new division, so we are working every day to build what will be the strategy and the further development of this division in the future, when we will also use the new asset, the new pavilion 13 and 15, that will be basically combined. It will be probably we will rename it.
I mean, because it will not make any more sense to call them 13, 14 pavilion because they will be clearly one only pavilion, covered pavilion of 34,000 sq m. This is a new line of business, even new compared to the one that we are working now, the summer one, which is an outside business at this moment. We will work both on the outside possibility and the new pavilion, the new covered pavilion. For sure, in the future, the revenues will grow as we already highlighted in our strategic plan.
If I may add just last note, we hosted 10 international concerts with over 150,000 people. It was very well received from the audience, and this also was used for positioning Fiera Milano as first experience in providing concerts. We are satisfied from the first result.
About M&A, I can only confirm that we are working on multiple tables in this moment, at least when we speak about possible M&A in the services sector. We hope to have positive news for the second half of the year. I mean, I cannot add anything further, but I can confirm that we are working on multiple possibilities, and each of these possibilities can be potentially closed. They are not alternative to each one.
Thank you.
For any further questions, please press star and one on your telephone. If you wish to ask a question, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. I'll turn the conference back to you for any closing remarks.
Thank you very much to everybody. Have a nice holiday. Should you have any other questions, we are here available for your questions. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.