Fiera Milano S.p.A. (FM) Earnings Call Transcript

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fiera Milano Results at 30 September Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Vincenzo Cecere, Head of Investor Relations and Sustainability of Fiera Milano. Please go ahead, sir.

Good evening, everyone, and welcome to Fiera Milano's 9 Months 2026 Results Conference Call. This is Vincenzo Cecera, Head of Investor Relation and Sustainability, and I'm joined today by Francesco Conci, CEO; and Massimo De Tullio, CFO of Fiera Milano. Today's presentation will be structured into 3 main sections. Francesco Conci will begin with an overview of the key highlights of the first 9 months, the fourth quarter calendar and the updated outlook for the full year 2026. Massimo De Tullio will then provide a more detailed review of the group's business performance, financial results and cash flow. Finally, we will conclude with an update on our ESG performance. Following the presentation, we will open the floor for a Q&A session, during which management will be available to answer your questions. At this point, I would like to hand over to Francesco Conci for the opening remarks and key messages for the period. Francesco, please go ahead.

Good evening, everyone, and thank you for joining us today. The first 9 months of 2026 confirmed the solid growth recorded in the first half with a strong increase in profitability and allow us today to raise our full year EBITDA guidance. Revenue increased by 27% to EUR 293.7 million compared with EUR 231.3 million in the first 9 months of 2025. EBITDA increased by 26% to EUR 89.9 million with an EBITDA margin of 50%. Net profit almost doubled plus 92%, reaching EUR 32.7 million compared with EUR 70.1 million in the same period last year. Net cash stood at EUR 88.3 million after approximately EUR 35 million of M&A investment and EUR 21 million of dividend and buyback. Revenue growth of approximately EUR 61.9 million was supported by 4 main drivers. The M&A and consolidation scope effect amounting to approximately EUR 36.3 million, reflecting the contribution from Expotrans, Stipa and the full consolidation of MiCo DMC. Milano Cortino 2026 Winter Olympic games, which contributed approximately EUR 24.7 million, a negative calendar effect of approximately EUR 4 million as the multiyear exhibition we had in 2025, mainly IPACK-IMA and Gastech were only partly offset in 2026 by the even year biennials, Mostra Convegno Expocomfort, Transpotec Logitec and Plast. The positive like-for-like performance of approximately EUR 4.9 million corresponded to growth of around 2% with service revenue up 5% net of the calendar effect. These results confirm the increased scale and diversification of our platform and its ability to grow even in a year with an unfavorable exhibition calendar. Looking ahead in light of the results achieved in the first 9 months, the improved visibility on year-end and the strong trading in the fourth quarter, we are raising our full year 2026 EBITDA guidance despite the persisting macroeconomic uncertainty. EBITDA is now expected between EUR 110 million and EUR 115 million compared with the previous range of EUR 100 million to EUR 110 million. Revenue are expected at the upper end of the [ EUR 380 million ] to EUR 400 million range. Finally, we confirm that the new strategic plan 2027, 2031 will be presented in the first quarter of 2027. Let me now spend a few words of the fourth quarter, which is traditionally the most important period of the year together with the first quarter. We had a strong start to Q4, supported by above expectation result from CPhI and EICMA. EICMA reached a record addition across 10 halls, 1 more than in 2025. We launched the new event Bevertech, which debuts alongside SIMEI further strengthening of our exhibition portfolio in the food and beverage technology sector. On the international front, FIND Design Fair Africa moves to Bangkok following the establishment of Fiera Milano Asia Pacific. Finally, despite the geopolitical tensions in the region, we confirm our presence in Saudi Arabia. Host Arabia returns to Riyadh for its second addition in December in partnership with Semark. Overall, the fourth quarter calendar is strong and diversified across sectors and geographies and support the upgrade guidance for the full year. Let me now hand over to Massimo De Tullio, who will talk you through the business and financial review.

Thank you, Francesco, and good evening, everybody. So before moving to the consolidated income statement, let me briefly walk you through the divisional performance by legal entities. Starting with the Italian exhibition business, which remains the core of our activity and represented approximately 70% of our group revenues in the period. Revenues increased from EUR 179.6 million up to EUR 212 million with a plus EUR 32.4 million, while EBITDA of this division rose from EUR 54.5 million to EUR 65.9 million with a plus EUR 11.4 million. The performance was mainly driven by the Milano Cortina 2026 Winter Olympic Games, including the use of the Rho venue and the temporary structures by the even year biannual Mostra Convegno Expocomfort and Transpotec and Logitec and by higher stand fitting services following the acquisition of Stipa in the first quarter. These effects were partially offset by a less favorable third quarter calendar, mainly due to the absence of the multiyear exhibition IPACK-IMA and Gastech. EBITDA growth reflects the revenue trend, partially offset by higher operating and personnel costs related to the integration of Stipa. Moving to the foreign exhibition business, which represent around 2% of our group revenues. Revenues increased from EUR 4.3 million up to EUR 5.7 million, mainly driven by good performances of Fruit Attraction Sao Paulo and Exposec, organized through exhibition organized by our Brazilian subsidiary. EBITDA increased from EUR 1.8 million -- sorry, decreased from EUR 1.8 million to EUR 0.9 million. This mainly reflecting the result of the joint venture with Deutsche Messe, and this decrease is mainly due to the difference in the exhibition calendar. So again, it's a kind of calendar effect that we are discounting in this quarter. Turning to the Congress Business, which represented approximately 21% of our group revenues. We can see that revenues increased from EUR 45.3 million up to EUR 63 million with a plus EUR 17.7 million, mainly due to the full consolidation of Mico DMC starting from the 1st January 2026, previously reported with the equity method. Further support came from some very important congresses like ISPE, The International Pharmacoepidemiology Congress, which performed above expectation and from EASD, a major international diabetes Congress. EBITDA rose from EUR 13.9 million to EUR 21 million with a plus EUR 7.1 million, mainly driven by a more favorable business mix and the high-margin Olympic-related activities, partially offset by higher costs following the consolidation -- the full consolidation of MiCo DMC. And finally, with -- in the other sector, which mainly include in this moment, the logistic and integrated services of Expotrans, representing around 8% of the group revenues. We saw an increase in revenues from EUR 12.7 million up to EUR 25.7 million, also reflecting the consolidation of Expotrans for the full 9 months this year compared with only 5 months in 2025. EBITDA rose from EUR 1.4 million up to EUR 2.1 million, in line with the revenue performance and for the same reason I already explained. Overall, these dynamics led to group revenues of EUR 293.7 million and EBITDA of EUR 89.9 million with an EBITDA margin of 30.6%, broadly stable compared with 30.9% in the first 9 months of 2025. I would like now to move to the revenue growth contribution by business line. So as we already mentioned, we scored more than EUR 62 million growth compared to the first 9 months of 2025, which can be briefly divided in at least 4 main impacts. So on one side, we have the M&A contribution to this growth. M&A that contributed for approximately EUR 36.3 million to the increase. And particular in specific, we have Expotrans with EUR 14 million, MiCo DMC with another EUR 14 million and CPhI with EUR 8 million contribution. Then we also benefited in this kind of growth from the presence of the Olympic Games with more than EUR 24.7 million. Out of this EUR 24.7 million, EUR 20 million were coming from the setup activities of the temporary infrastructures and additional EUR 4.6 million came from increased revenue coming from the venue agreement. Then we discounted negative calendar impact or approximately EUR 4 million in this 9 months, mainly due to the rotation of biannual and multiyear events. And last but not least, the performance effect, which accounted for EUR 4.9 million, which represent a like-for-like growth for all the division in average of 2%. I would also highlight that service revenue showed a slight decrease of EUR 1.2 million only because of the calendar effect. If we take out the calendar effect, the services grew in this first 9 months by 5%. Now let me spend some moments on the calendar effect, which explain basically the EUR 4 million net headwind in the period. So moving to the chart at Page #10, you can see on the left, the exhibition that were held in 2025, but were not present in the first 9 months of 2026. So if you take a look to this left part of the chart, you see that most of the missing revenues relate to the multiyear exhibition IPACK-IMA and Gastech together with the odd-year biannual such as Lamiera, Made in Steel, Pulire and Vitrum. In addition, 2 annual events, NetZero Milan and Racquet Trend shifted to October outside the 9-month period. In the center, the exhibition held in 2026, one in green, but not in 2025. So this need to be added, led by Mostra Convegno Expocomfort, Transpotec Logitec together with the multiyear plus exhibition. So overall, taking out the left part of the chart and adding the contribution of the green part, we remain with a net calendar headwind of EUR 4 million. Now let me briefly go to the income statement, just to highlight again at Chart 12 that group revenues again increased compared to 2025 by EUR 62 million. EBITDA, as already highlighted, moved from EUR 72 million to EUR 89 million, so with a plus EUR 80 million and finally, financial management and net profit. So financial management improved by EUR 2.4 million. And as a result also profit before taxes reached EUR 45 million and net profit amounted to EUR 32.7 million with an increase of EUR 15.7 million compared to last year. Now balance sheet. Let me just highlight the main movement in our balance sheet. So looking at the noncurrent assets and goodwill, noncurrent assets amounted to EUR 496.5 million compared with EUR 503.5 million. The decrease of EUR 7 million is mainly reflecting the amortization of the right of use and of the assets and the lower value of equity accounted investments, partially offset by the increase in goodwill of EUR 22 million coming from the acquisition. Net working capital moved from negative EUR 135.3 million to a negative of EUR 84.6 million with a change of EUR 50.7 million. The main drivers were basically two, an increase in the current assets of EUR 25 million, mainly driven by the trade and other receivable up to EUR 20.2 million, reflecting the wider consideration scope, Stipa and MiCo DMC and the receivable from Fondazione Milano Cortina. And then second impact, the decrease in the current liabilities of EUR 25.6 million, mainly due to a lower trade payables down by EUR 26 million approximately. And it's worth to highlight that payments of trade payable falling due were not offset by new payables. This is due to the lower intensity of the calendar in the third quarter, which is a traditionally less active quarter. Equity finally attributed that we can attribute to the group amounted to EUR 180 million, broadly stable with EUR 181 million around at year-end of 2025. Net financial position stood at EUR 88.3 million compared to EUR 157.2 million. The change of EUR 68 million can be reflected now can be explained starting from the EBITDA of EUR 89 million. We take out the cash of the rentals for approximately EUR 41 million, then we take out the EUR 51 million change in the net working capital I just explained, CapEx for EUR 6.5 million. And then we had financial management positive contribution of EUR 2.2 million. And then we remain with also EUR 12.3 million taxes to be deducted, the impact of the M&A for approximately EUR 35 million, considering the upfront payment and the liability connected to the put option. And then we have also to consider dividends and buyback for a total of close to EUR 21 million. So this explain basically the movement in our net financial position of close to EUR 69 million. At this point, I would close the financial section, and I will hand over to Alicia Gattone, who will walk you through the key messages on our ESG performance.

Thank you, Massimo. I'm pleased to share that Fiera Milano has received an ESG risk rating of 11 from Sustainalytics, a Morningstar Group company. The rating represent a significant improvement over previous year, 11% better than 2024 when the score was 12.3 and 35% better than 2022 when it was 16.9. With this, we conclude today's presentation. We are now ready to open the floor for the Q&A session and take your questions. Thank you.

[Operator Instructions] The first question is from Emanuele Gallazzi of Equita.

I will start with 3 questions. The first one, during your initial speech, you provided some comment about the fourth quarter. I just would like to understand a little bit better the trend that you are seeing in the fourth quarter, discussing the CPhI performance and the Eicma performance. And looking at the first quarter 2027, if you can provide some initial comment on the bookings for the most relevant events. The second question is related to the Congress business, which is still performing really well. Can you provide an initial outlook on 2027? Any indication about the let's say, the current level of bookings for 2027 for the Congress Business will be useful. And the last one is on the M&A because if I'm not wrong, during the last conference call, you mentioned like 3 potential acquisitions of one, I think, in very advanced stage. Could you just provide an update on the M&A side?

Good evening, Emanuele. So let's start from the first one. It was about Q4 performances that led us also to increase our guidance. So basically, we have seen very good performances from ACMA and CPhI, as you already mentioned. In order -- just to give you an idea, ACMA increased square meters occupied by close to 10%. So very, very, very close to 10% in terms of increase of square meters occupied by the exhibition. And in terms of revenues, the increase was more or less the same was close to 10%. So a very, very positive performance from this kind of exhibition. And I think it was a record year for this event. And we also saw a very impressive increase in terms of visitors for the exhibition. And then the second exhibition that really went above our expectation and not only above the last addition result was CPhI. CPhI again increased square meters by close to 10%, but the increase in revenues was even higher. Here we speak to something that looks like more than 30% increase. And this was mainly led by additional services sold to exhibitors and the organizer that we were able to perform in this quarter. So very positive news from the exhibition. The second question, what was it?

Massimo, if I may, just to understand a little bit better about the CPhI performance. You are seeing a 30% increase in revenues also driven by the services. I mean this increase has been driven by the new acquisition like Stipa or Expotrans or for say your as per order sense.

Yes, part of the, yes, yes, absolutely. Part of the increase was led by the acquisition of Expotrans and Stipa. Absolutely. But it's not only the -- it's not the only reason of the increase. So part of the increase came from additional services that we were able to sell with Healthcare Milano, let's say, with our standard set of services. On top of that, we also increased our share, thanks to the acquisition of these two companies. Then in terms of 2027 pipeline, I mean Q1, in Q1, we have our annual events. So you know that we have the Borsa Internazionale del Turismo, BIT, Milano Home, PTE, Quick & More. So regarding these exhibition, we do see in this moment opportunity to slightly increase performances of 2025. As we know -- 2026. As we know, these are not our, let's say, main driver of growth, at least not in the odd year when we can count also on the biannual exhibition that anyway will take place in the last part of the year. Anyway, the Q1 2026 so far -- 2027 so far in terms of organized events is looking quite positive. Then additional question was about the Congress Business in 2027. So regarding the Congress Business, what we can, for sure, highlight is that for 2027, we will rely on a very strong pipeline of events. In particular, we will host in 2027, the Congress of the European Society of Cardiology, the ESC Congress, which will host close to 34,000 participants coming from 170 countries. We will host as well the ERS Congress, the European Respiratory Society with close to 20,000, 22,000 participants, the European Society for Radiotherapy and Oncology Congress. So very important congresses. And on top of that, what is really interesting to highlight is that if we normally have at this point in time, more or less 30% of recurring Congress to be accounted for the next year in this moment, considering the pipeline also of these international events, we can say that we have already covered more or less 70% of our revenue pipeline for 2027. So we have positive expectation of the revenue stream coming from the Business Congress for 2027.

And maybe, Massimo, if I may, do you think that the, let's say, the current situation in the Middle East is helping your Congress Business?

I think it's not really related to the Middle East because most of these congresses are European congresses, so are not attracting, I would say, participants for the -- from the Middle East. It's more a matter of these kind of events are getting more and more traction over the years. So having events with at the center, the focus on content is the key for the success and scientific congress like this are the best example of events created around content, very strong content. So I think this is the key of the success of these events, which are growing in Europe. But when they arrive to Milan, it looks like they are even more -- growing even faster and better than the other cities in Europe. So we have, for sure, expectation of growing over revenues that we scored during these last 2, 3 years. Last question was about M&A, if I remember well. So clearly, M&A still remains and will remain one of the key pillar of our growth strategy, and we continue to assess opportunity primarily in the exhibition business. So having also the possibility, as we know, to leverage on a expected year-end net cash position of EUR 110 million, we will, for sure, still look for potential opportunities. In this moment, we can say that we will start very shortly the due diligence activities on 2 possible deals regarding exhibitions organizers.

The next question is from Simonetta Chiriotti from Mediobanca.

Clearly M&A, are you beyond performance of recent acquisition. So, how is it performing Expotrans and Stipa, anything expectations. So this is the first question. And the second question is on 2027, if you could remind us if there are major international addition planned for 2027 and in general give us an update on the possibility of getting new multiyear events.