MCH Group: Surprisingly flat Annual General Meeting
The MCH Group intends to retain its exhibition centers in Basel and Zurich. The investments needed for future operations are to be funded either through a capital increase or, most likely, not through the sale of Live Marketing Solutions. Cost savings of twenty million francs are to be achieved by 2023.
The Extraordinary General Meeting of the MCH Group, which in the run-up to the event appeared to be explosive and was demanded by the larger shareholder AMG Fondsverwaltung, proceeded calmly. Characteristically, AMG owner Erhard Lee said: "I would like to emphasize that we do not want to be opposition," and added: "I explicitly acknowledge the efforts of the Board of Directors and the new operational management." AMG had previously submitted a list of 39 questions for response. Most of them were directed at some kind of attempted past-tense of mistakes made. What this ("who was responsible for which mistakes") would entail was unclear.
There has been a lot of talk in recent months at the MCH Group about the future "strategy", but to date this topic remains unanswered. On the contrary: major shareholder Erhard Lee said to the management consultancy called in for this purpose: "For me, McKinsey has failed." At the extraordinary general meeting, it was again pointed out that the MCH Group needs money for the future, probably for the transformation of the exhibition business. According to CEO Bernd Stadlwieser (on the left in the picture with Chairman of the Board of Directors Dr. Ulrich Vischer), the amount is in the double-digit millions.
Digitization
Are exhibitions becoming digital (online)? Into "platforms", as the MCH Group keeps calling them? To hybrid, simultaneously digital and real-time events, as was also asked at the General Meeting? Digitisation is a core topic in the global exhibition business, and it appears correspondingly frequently in the MCH Group's pronouncements. But worldwide, no successful solution has yet been found for extending the exhibition business to 365 days and capitalizing on it.
But that is precisely what CEO Bernd Stadlwieser announced at the General Meeting. The MCH Group is already very far along in the transformation of exhibitions into platforms, he said, and will be launching the first solutions as early as 2020 "in order to generate sales as well".
In particular, the Art Basel was addressed, according to the rumor, the well-running trade fair flagship in Basel. Here, unlike Baselworld, one would have built up a community with 3 million people (contacts? Or hits? That was not said). Bernd Stadlwieser mentioned that for Baselworld one still wants to build this community and - interestingly - "as a hub for local communities in the big metropolises of this world". This means: The internationalization in the live marketing business of the MCH Group in worldwide cities will be pursued further.
If the future means "digital", is there still a need for the large cluster risks of the expensive exhibition centers in Basel and Zurich (picture above: The Basel exhibition center)? Bernd Stadlwieser comments in the Basler Zeitung: "Perhaps the public sector is the better owner."
Live Marketing Solution
Will Live Marketing Solutions with its core companies Expomobilia and MC2 in the USA be sold for the corresponding financing? The MCH Group is keeping a low profile: In September 2019, it was still saying that it wanted to sell either the exhibition business or LMS. Given the clear commitment to the exhibition business at the Extraordinary General Meeting, the LMS would remain as an option for sale. However, the Chairman of the Board of Directors, Dr. Ulrich Fischer, said at the Extraordinary General Meeting that a sale of LMS was only an option and he let it be known that he would prefer to keep LMS.
Share capital increase
Instead, an increase in share capital is to be considered. Apparently, private investors are now being sought to bring in money so that all business units can be retained. However, the AMG company spoke out against a chapter increase, because: "The stability of the company is not endangered. Such steps are not absolutely necessary," said Erhard Lee.
Conclusion
The MCH Group's problem is not the recalcitrant AMG shareholder group, it is only partly the dramatically shrunken Baselworld - by all accounts, Art Basel is doing very well instead. And hopefully a suitable solution will also be found for the exhibition centers.
The problem lies in the disruption that has gripped the exhibition business, not only in Switzerland, and whose future is an unresolved issue worldwide. And here comes the question: If the MCH Group explicitly talks about new platforms, for which the term "hybrid" (simultaneously digital and live) is repeatedly used - then it would have to have corresponding young specialists with a track record, perhaps from Generation X, Y, on the Executive Board and the Board of Directors. As Albert Einstein said: You should never solve problems with the same way of thinking that created them.
What did the Extraordinary General Meeting achieve? On the one hand, it created more transparency. In the last few days, the MCH Group has admitted to communicative mistakes and promised to do better. In the best case, the possible trust-building between the major shareholder AMG and the MCH Board of Directors will also lead to solutions that are more in the interests of both and of all shareholders. That would then be a (very) positive result of this exercise.
