President and CEO 's comments
"2012 - strongest year since start in 1918"
We can sum up 2012 as a fantastic year and the best ever for the Swedish Exhibition & Congress Centre. Invoiced sales totalled SEK 901m, operating profit SEK 118m and profit after financial items SEK 75m.
Cash flow of SEK 155m (before investment) and an equity ratio of 22.7%, both historically high financial ratios, strengthen the picture of a record year. The Group grew both organically through the strong development of our businesses and in investment terms through the expansion of our venue.
Summing up 2012, it is particularly gratifying that the trade show business, which has a very important role in generating flow to our venue, delivered its strongest ever year with sales of SEK 401m (238), despite a difficult economic climate.
In 2012 we made clear progress in creating a more competitive Swedish Exhibition & Congress Centre, an international world-class venue. We previously determined new growth targets and strategies, which were preceded by an in-depth external business environment analysis. Today it is increasingly evident that trade show and meeting buyers are looking for all-inclusive attractive package solutions that include hotel, restaurant, conference rooms, exhibition space and service products.
Over the past year we have therefore, as part of this strategy, implemented a structural change in the Group's organisation, staffing and working practices. This new structure, with its customer and business environment focus, led to a strategic decision to form a trade show organisation and a venue organisation as from 1 January 2013.
With 27 of our own trade shows, 2012 was a strong trade show year. Sales in this business area reached record levels, while the shows attracted over half a million visitors and 6,800 exhibitors (+12%). The net area sold increased by 23% to over 184,000 square metres.
The year's most notable meeting was without doubt the Astra Tech World Congress in May. With 3,000 guests over four days, it was one of the largest corporate events of the year in Europe. To sum up, the Congress was a major success, which is creating a valuable ripple effect.
With a 73% occupancy rate and 177,000 room nights sold, at a good average price, the hotel year was on a par with the very best, but 2.7% below the record high in 2011.
Our restaurant business repeated its 2011 record figures and even succeeded in increasing sales somewhat.
Venue of the future takes shape
We are investing a total SEK 1.2 billion in creating the venue of the future and expanding our hotel.
The Upper House is nearing completion. It will be a 'hotel within a hotel', with larger rooms, suites, a topclass restaurant and a three-floor spa & relaxation suite – all to an international luxury standard.
Total experience – our strength
Our explicit ambition is to be Europe's most attractive venue by offering the best total experience. We shall achieve this through increased culinary experiences, more entertainment, exciting environments and lots of activities, both within the scope of our facility and within the city as a whole.
The Group generated SEK 2.3 billion in tourist spend in 2012, according to HUI Research, making us the strongest engine for Gothenburg's visitor industry, alongside Liseberg amusement park.
When the whole expansion project is completed in late autumn 2014, we will be able to offer a modern venue in an almost unique city centre location, which satisfies the 'international' concept in terms of capacity, feel and atmosphere. This will give us the setting to compete globally in earnest for congresses and events, and hopefully win even more international, national and local trade shows, conferences and congresses for Gothenburg.
President and CEO