Nikos Choudalakis and his team can handle crises, they have proven that. While Greece was teetering on the economic brink for years, the Athens-based company Forum SA, owned by entrepreneur Choudalakis, was a success story. Between 2009 and 2019, it quadrupled its sales and eightfold its pre-tax profit. When the Nuremberg trade fair company took over Forum SA in the summer of 2019, the company was the largest trade fair organizer in Greece.
After that it went downhill. Mind you, not explicitly with the newcomer from Athens, but with the trade fair industry as a whole and thus also with the business of the Nuremberg company at home and abroad. It is the third year in which the corona pandemic is making traditional trade fairs, i.e. personal encounters between exhibitors, visitors and trade visitors, impossible or at least severely restricted.
In Nuremberg, the toy fair and the beverage technology fair Brau-Beviale have just been canceled and the organic world fair Biofach has been postponed to the summer. According to the industry association Auma, 100 trade fairs will be canceled or postponed nationwide in 2022. The damage is therefore five billion euros.
For the people of Nuremberg, the pandemic came at the worst possible moment. Within a few years, the regional trade fair location had worked its way up to the top of the German and thus the European trade fair organizers, because as the venue for two thirds of the industry’s leading trade fairs, Germany is the largest location in this regard. And Nuremberg wanted to keep growing.
Half a billion euros should be invested in the exhibition center in the Langwasser district by 2027, including in a fourth congress center. For 2020, the trade fair organizers headed by managing directors Peter Ottmann and Roland Fleck are aiming for the best financial year ever. “It’s going to be a blast year,” said Ottmann in January 2020.
The reality of the pandemic is all the more bitter. After sales of 110.3 million euros in 2020, revenues dropped again in 2021 to just 70 million euros. And that with a loss of almost 50 million euros at the same time, after 68.6 million euros in 2020. Of the 77 Nuremberg trade fairs planned worldwide, 51 were canceled last year. How long will this be good?
The two managing directors of the Nuremberg trade fair company, Peter Ottmann (right) and Roland Flick (left), are convinced that trade fairs have a future after the pandemic.
(Photo: Ralf Rödel/Nuremberg Messe)
“We are still in a state of emergency,” says Ottmann, and Fleck seconded that it was of decisive advantage that the three owners of the trade fair, the Free State and the City of Nuremberg, and with a minimal share the Middle Franconian Chamber of Industry and Commerce, ” have ensured that our liquidity was always available even in the past two years of crisis. Also, none of our banks canceled credit lines, so from this side we are on the safe side”.
The company itself has rigorously put the brakes on costs, pushed the development of digital trade fair formats, postponed investments and bridged the gap with short-time work. There was also 30 million euros in state corona aid. About ten percent of the 600 or so jobs in Nuremberg and twenty percent of around 1,100 worldwide were cut. “There was not a single redundancy and we are not planning any for 2022,” said Fleck and Ottmann.
The management duo is certain that trade fairs will have a future after the pandemic. “The digital replacement formats were very well received, especially at the beginning of the pandemic,” says Ottmann. “But it is noticeable that the exhibitors and visitors want to meet again in person and exchange ideas.”
In all of this, there is a lot at stake, not only for the Nürnberg Messe Group, but also for the Franconian metropolitan area. The expansion of the trade fair business was one of the most important structural responses to the loss of tens of thousands of jobs at the industrial location of Nuremberg at the end of the 20th century. The plan worked, not only because the trade fair company itself grew, but also because enormous hotel capacities were created in the city, service providers located close to the trade fair and sectors such as gastronomy and taxi trade benefited.
The Ifo Institute has calculated that with its events before the pandemic, the Nürnberg-Messe generated almost two billion euros in purchasing power and 365 million euros in tax revenue and secured around 15,600 jobs. Not only, but above all in and around Nuremberg.
The financial basis is in place
The owners seem to be aware of this importance. “Public participation in such an infrastructure facility is still absolutely necessary in order to create positive framework conditions for the domestic business location,” says the Free State’s participation report, which Finance Minister Albert Füracker (CSU) presented to the state parliament last week.
The state and city have brought forward planned cash contributions of ten million euros each for 2027. Like the municipality in 2021, the Free State of the Fair will provide a current account line of 40 million euros in 2022 – “to provide support in a crisis situation through no fault of one’s own,” it says.
So the financial basis is in place. And the trade fair bosses Ottmann and Fleck believe that the worst is behind them. After 19 months without face-to-face events and a total of 243 days with a ban on events, autumn 2021 succeeded with several trade fairs such as Fachpack, it-sa, Feuer-Trutz and Consozial, but also with guest events such as Consumenta, Biogas and Retro Classics Bavaria a reboot. International business has also picked up speed, and in China things are “almost normal again,” says Ottmann.
2022 is said to be “the year of positive change of direction”. The Nuremberg company is organizing six new trade fairs in China, Italy, the United Arab Emirates and Indonesia. A total of more than 100 events are planned. 2022 will be mixed, but better than 2020 and 2021 in terms of sales and earnings. Thanks also to the Greek Forum SA, by the way. It can also be a crisis in Corona times. “Of all the subsidiaries, business is going best there,” says Peter Ottmann.