In 2020, the COVID-19 pandemic had a significant impact on the business operations and therefore the financial results of Royal Dutch Jaarbeurs. Revenue dropped by 59% to €57.9 million, and the loss was €12.4 million.
The effects of the pandemic have been absorbed, and measures have been taken.
The upward trend that had been successfully established since 2016 came to an abrupt halt in the first quarter of 2020. As a result of the pandemic, revenue dropped by €82.9 million, and a loss of €12.4 million resulted. The government’s NOW scheme (temporary emergency measure to help businesses pay wage costs) contributed €12.6 million. In addition, firm measures were taken to limit losses. Direct costs dropped because of lower revenue. The reduction of fixed costs led to savings of €4.4 million and the ongoing nature of these savings will lead to additional savings in 2021. The balance sheet remains solid, and liquidity at year’s end was €80.3 million (2019: €97.5 million), still a considerable buffer.
Staying the course and accelerating, thanks to a solid foundation
Partly thanks to our financial foundation, we were able to continue and even accelerate our national efforts to pursue the priorities under our strategy: renewal, new business, and sustainability, as well as technological, digital, and other innovation. The planned investments in the masterplan for the new Jaarbeurs also continued. Measures were taken to reduce the level of costs on a permanent basis. Part of this involved the greenfield set-up of the organisational blueprint and, partly as a result of this, some 80 employees left the organisation, mainly in the first quarter of 2021.
Internationally, a profitable year was achieved despite the decline in revenue. Our subsidiary in China was up and running fully again starting in June 2020, with domestic fairs and exhibitions. Our subsidiary in Thailand postponed its largest trade show, VIV Asia, last year, and there has been a particular focus on online and hybrid events.
In 2020, revenue from operations declined to €57.9 million (2019: €140.5 million), of which 59% was generated in the Netherlands, virtually the same as for 2019. Trade shows, consumer fairs, and events generated 76% of the revenue.
Because of the drop in revenue, the operating result fell from €21.4 million in 2019 to negative €15 million in 2020. EBITDA dropped to negative €3 million (2019: €32.7 million), a margin of negative 5.3% (2019: 23.3%).
Shareholders’ equity fell by €13.4 million to €141.6 million. As a result of the decrease in balance sheet total, our solvency ratio rose to 71.4%. There was no recourse to financing from banks.
Cash flow from operating activities came to negative €7.7 million. This was mainly due to the negative operating result. Investments in tangible and intangible fixed assets came to €9.4 million in 2020, as against €8.1 million in 2019. In addition to regular investments in building maintenance, investments were made in the Ungerboeck Financials IT system, the newly built transport bridge, and the masterplan for the new Jaarbeurs.
Liquidity fell by €17.2 million to €80.3 million.
For detailed explanations of these figures, please see the financial statements.
Events after the balance-sheet date
The COVID-19 pandemic had a significant impact on our business starting in January 2020. We cannot yet open our doors in 2021 in the Netherlands because of government restrictions. It is also difficult to estimate how long this period of ‘inactivity’ will last. Starting from the third quarter of 2020, our sights have been set on a quick and well-executed restart, and on making 2021 a year for investment and transformation. It now seems that the vaccination programme is beginning to pick up steam, and we thus expect to reopen in the third or fourth quarter of 2021. It is still unclear what numbers and what capacity will be possible at that point. The government’s NOW scheme runs until 2021.
The financial consequences of the government measures currently in force are still considerable. Scenario analyses have been prepared, and the liquidity buffer seems adequate to absorb the loss that is foreseen.