Fiera Milano S.p.A. ($FM)

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fiera Milano Results at the 31 March 2026 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. Please go ahead, sir.

Thank you. Good evening, everyone, and welcome to Fiera Milano's [Technical Difficulty] Conference Call. This is Vincenzo Cecere, Head of Investor Relations and Sustainability, and I'm here joined today by Francesco [Technical Difficulty] Massimo De Tullio, CFO of Fiera Milano. Today's presentation will be structured into main sections. Francesco Conci will begin with an overview of the key [Technical Difficulty] developments for the first quarter of 2026. Massimo De Tullio will then provide a more detailed review of the group's business performance and financial results [Technical Difficulty] initiatives. Following the presentation, we will open the floor for Q&A during which management will be available to answer your questions. [Technical Difficulty] key messages of the quarter. Francesco, please go ahead.

Good evening, everyone, and thank you for joining us today. Q1 2026 was an outstanding quarter for Fiera Milano with very strong growth across all our main financial indicators and a significant improvement in profitability. Revenues almost doubled year-on-year, increasing by 98% to EUR 126.4 million compared with EUR 63.7 million in Q1 2025. EBITDA increased by plus 316% to EUR 50.1 million. Net profit reached EUR 27.7 million. The performance of the quarter was supported by several positive directs. First, [Technical Difficulty] benefited from a more favorable exhibition calendar, mainly due to the presence of Mostra Convegno Expocomfort, one of the leading international exhibition in the heating, ventilation, air conditioning and [Technical Difficulty] contribution from the acquisition completed during 2025, particularly Expotrans and Stipa, which are supporting both revenue growth and the expansion of our integrated service platform. Third, the contribution from the Milano Cortino 2026 Winter Olympic Games was above expectation, generating [Technical Difficulty] revenues in the quarter, including EUR 20 million related to temporary infrastructure activity, EUR 6.8 million related to venue users. Beyond the economic contribution, the Olympics continue to strengthen the international valuability and strategic positioning of Fiera Milano as a key infrastructure platform capable of managing highly complex global events. This growing international recognition is also confirmed by the recent announcement that Allianz MiCo we lost CIS in October 2026, the official European stop of the of [Technical Difficulty] of CIS Las Vegas, one of the most leading technology events. At the same time, the Congress Business delivered a very strong performance with revenue increasing from EUR 10.5 million to EUR 18.9 million, also supported by the use of Allianz MiCo as the main media center for the Olympic Games. Looking ahead, we continue to see solid momentum across our exhibition portfolio. The 2026 calendar benefit from a more balanced seasonality measured by annual exhibition now taking place in even number of years, including Tuttofood, the contribution from new events launched in recent quarters and the progressive integration of recent acquisitions. For this reason, including the strong start to the year, the currently limited impact for -- from the geopolitical environment, the above expectation contribution from Olympic-related activities and the progress in integrating recent acquisition, we decided to upgrade our 2026 guidance. Our updated guidance now includes revenue expected in the range of EUR 380 million to EUR 400 million compared with the previous guidance of EUR 305 million, EUR 325 million. EBITDA expected between EUR 100 million, EUR 110 million compared with the previous range of EUR 90 million to EUR 100 million. More broadly, we believe these results confirm that Fiera Milano is entering in a new phase of development, supported by a broader, more diversified and structurally more resilient business platform. Let me now hand over [Technical Difficulty] financial review.

Thank you, Francesco, and welcome to everybody. So before we get into the details of the so-called performance effect and the calendar effect at consolidated level, let me briefly walk you through the divisional performance by legal entities, which it helps to explain the strong results recorded in the first quarter 2026. So starting from the -- starting with the Italian exhibition business, which represents and remains the core of our activity with 76% of the group revenues in this quarter. So looking at revenues, so revenues increased from EUR 52.8 million to EUR 98.2 million with a growth of EUR 45.4 million. EBITDA is raising from EUR 11.3 million in the first quarter 2025 to EUR 38.1 million in Q1 2026 with a growth of EUR 26.8 million. So this performance was mainly driven by at least 3 factors. For sure, the contribution from the Milano Cortina 2026 Winter Olympic Games. Secondly, a more favorable exhibition calendar, mainly due to the presence of Mostra Convegno Expocomfort in Q1 2026. This is a biannual even year exhibition. And third, the contribution from the recent acquisition of the Stipa company, the company operating in the stem fitting sector. So looking at the -- what the Olympics games generated for us, we can identify revenues clearly coming from the venue usage agreement. So the contract we signed in order to make available the spaces, Pavillion 2224 and 1315 in order to host the speed skating and hockey games. And the other leg of the revenues coming from the Olympic Games clearly is related to the construction of the temporary infrastructure [Technical Difficulty] to sport disciplines. More broadly, these results confirm the strong scalability and operating leverage of our exhibition platform. Now moving to the foreign exhibition business, which represents around 2% of the group revenue during the quarter. Revenue increased by EUR 2.2 million to EUR 3 million, mainly supported by the group performance of the international events such as food attraction of Sao Paulo in Brazil and in the Cape Town in South Africa. EBITDA slightly improved from minus EUR 0.4 million to minus EUR 0.3 million and this reflects the result of the JV in China. Now turning to the Congress Business at Allianz MiCo, which represents around 15% of our revenue. We have seen revenues increasing from EUR 10.5 million to EUR 18.9 million. And also EBITDA was growing very impressively from EUR 1.1 million to EUR 11.5 million. The main driver of this growth is clearly related to the contract we signed with the Olympic Foundation in order to host in our venue, in our Allianz MiCo venue, the main media center and broadcasting center for the Olympic Games. So this clearly was substituting the normal business for the Congress activities, but was bringing additional revenues, but more importantly, a completely different profitability for this kind of contract, which helps to reach this level of EBITDA. Finally, moving to the other sector, which in this moment includes basically Expotrans Group revenue amounted to EUR 9.5 million. Clearly, there is no comparison with 2025 because the acquisition of the group was managed during the second quarter, starting from May. So we are accounting now for EUR 9.5 million revenues in the first quarter and an EBITDA of EUR 0.8 million. So the overall putting all together, all this business -- all these divisions brought a group revenue of EUR 126.4 [Technical Difficulty] EBITDA margin increasing from 18.9% in Q1 2025 to 39.6% in Q1 2026. And clearly, this level of EBITDA margin is positively affected by the Olympic activities and also by the calendar. Now moving to the, let's say, the performance effect and the calendar effect in order to understand how revenues moved from approximately EUR 64 million to EUR 126 million and more million [Technical Difficulty] which amounted almost EUR 60 million was boosting the hosted division. So the presence of Mostra Convegno Expocomfort is the main driver for this impact. New exhibition amounted to around EUR 0.4 million EBITDA positive impact. We had a positive performance effect all in all of EUR 1.8 million, which, to be honest, I think it's important to be highlighted because growing -- still growing with, let's say, a material number anyway compared to 2025, which was the record year for Fiera Milano. And growing in this kind of geopolitical scenario and also economic environment, it was something that we were not even expecting, to be honest. So we are quite positive on the fact that we managed to anyway reach a positive growth compared to the previous year. Clearly, in explaining the element and the impacts that led to a growth of this size, there is the consolidation scope effect amounting to EUR 12 million almost, which is mainly driven by the consolidation of our Expo funds that was not present in the Q1 2025, but also driven by the impact of the consolidation of the new company, both from Fiera Milano Stipa. And then as we mentioned before, EUR 27 million almost coming from the Olympic activities, EUR 20 million related to the 2026 portion of the revenues generated by the contract for the temporary infrastructure. Just as a reminder, this contract finally reached EUR 31 million revenues, of which EUR 11 million were accounted in 2025 and the remaining EUR 20 million has been accounted in 2026. And on top of this EUR 20 million in 2026 Q1, we are clearly recording also the revenues from the use of the raw venue for the usage of Pavilion 2224 and 1315, which amounts to EUR 7 million. On top of that, last but not least, the positive performance of the Congress division, mainly driven by the contract to host the Olympic media and broadcasting center. Now moving to the consolidated income statement. Again, let me highlight that revenues increased by -- from EUR 63.7 million to EUR 126 million. We're showing a growth of more than EUR 70 million -- EUR 62 million, almost EUR 63 million. Again, main driver were performance, close to EUR 2 million impact calendar effect, EUR 16 million, the consolidation scope, which added with another EUR 12 million with Expotrans and Stipa. And then we have also the impact of Milano Cortino EUR 27 million and the Congress Business. EBITDA, again, recorded an absolute value of EUR 50 million, EUR 50.1 million with a positive change of plus EUR 38 million. Again, the main factor of this growth are the same, the Milano Cortino Olympic Games with a contribution of almost EUR 15 million in terms of additional EBITDA compared to '25, Q1 2025. The calendar effect related to Mostra Convegno again, close to EUR 12 million. And then Congress Business where the increase in revenue has been even overcome in terms of increase in margin because the profitability connected to this contract, the Olympic -- the contract towards the media broadcasting center is by far higher than the standard profitability that we reached when we host [Technical Difficulty] corporate events. So again, commented now clearly, we have also the impact of the recent acquisition. Again, the impact is not huge because we have clearly the consolidation of Expotrans, but we started consolidating Stipa just from the 4th of March. So all in all, the impact of the acquisition is approximately EUR 1.4 million. Again, the Olympic activity is EUR 15 million. And then as I already remember and recall the impact of the Congress Business [Technical Difficulty] the balance sheet. Let me highlight the main changes in our balance sheet. So first of all, goodwill. Looking at goodwill, we see an increase of EUR 20.4 million. Clearly, this movement from EUR 97.6 million to EUR 118 million is mainly driven by the acquisition. So the acquisition of Stipa, but also the acquisition of Made in Steel, which is not creating economic impact in our P&L this year because this company is organizing a show, which will be organized basically in all the even -- sorry, odd years. So we will not see major economic impacts up to basically second quarter of 2027 coming from this acquisition. But for sure, on our balance sheet, the impact of the acquisition is visible in terms also of additional goodwill. In terms of net working capital, the net working capital moved from EUR 135 million as of 31 December 2025 to EUR 126 million. The change of close to EUR 9 million is basically due to the following components. So the increase in the current assets of EUR 27.6 million, which is driven by the rise in trade and other receivable of EUR 25 million. Part of this increase was related clearly to the change of perimeter of consolidation, so EUR 10 million are coming from the new company -- companies included in this acquisitions basically that we performed in the Q1. Increase in current liabilities by close to EUR 19 million, which is the result of a decrease in the trade payables of approximately EUR 4 million and an increase in advances by close to EUR 25 million, which basically represents the increase due to the invoices related to exhibition that will take place in the following quarter, in particular, Salone that was opened in April, so in the second quarter Tuttofood which is happening during these days with very positive results and Plast. So all exhibition that will happen later or this year or even in the next -- in the coming years. And then we also registered a decrease in provision for risk and charges. In terms of equity, the movement in the equity, so the equity group increased from EUR 181 million to EUR 196 million, up by EUR 50 million overall, mainly supported by clearly EUR 27.4 million net profit generating during the quarter, which has been partially offset by the EUR 30 million accounting impact related to the food option associated with the acquisition of Stipa. And now looking at the net financial position, despite basically approximately EUR 34 million of net impact on our net financial position considering the food option and the upfront payment, the group maintained a very strong financial profile. So net financial position stood at EUR 145.1 million compared to EUR 157.2 million. So this reduction basically reflects the acquisition completed during the quarter, partially offset by the positive operating cash flow generation of the business. Overall, the balance sheet confirms a strong cash generation of the group and solid financial flexibility. So again, looking at finally the cash flow and starting from our EUR 50.1 million EBITDA result, taking out the cash out related to rents, which accounts to more or less EUR 14 million and adding a net working capital negative movement of EUR 9 million that I already explained mainly related to the movement in the trade receivables. And then we end up with an operating cash flow positive by EUR 25.4 million, taking out taxes, but more importantly, taking out the impact of the M&A, finally, we end up with a net free cash flow in the quarter of minus EUR 12.2 million. Now related to the guidance, clearly, Francesco already highlighted that based on results achieved in Q1 based on the fact that despite the geopolitical environment and economic environment, we do not see at the moment major negative impacts on our main KPIs that we monitor in order to understand if the business or all the different business are working or not. So we do not see a very huge impact in terms of decrease in terms of visitors. We do not see in this moment a major impact in terms of attendance of the exhibitors. We do not even see a reduction in terms of expenses in services from the exhibitors. So at this moment, we remain prudent with our previous forecast, but clearly, we are embedded now in our guidance, the impact of the acquisition and the better results that we achieved with the Olympic Games. So the result of this stable position in terms of performance and positive impact coming from the acquisition and the Olympic Games led us to this new guidance for 2026 of EUR 380 million, EUR 400 million in terms of revenues and EBITDA in the range of EUR 100 million, EUR 110 million. SG topics.

Thank you, Massimo. Just a very quick final note on sustainability. During the first quarter, the group obtained the final legality rating, a certification issued by the Italian Competition Authority that accept the company's compliance with high standards of legality, transparency and ethical business conduct, achieving the maximum available scope. With this, we conclude today's presentation, and 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, Equita.

Three questions from my side. I would like to start with the Congress Business, which clearly posted a strong set of results in the first quarter ahead of my expectation. Can you help me understand the contribution of the Olympic game on this business unit? And looking at the remaining part of the year, can you just comment on the booking level for the Congress Business? The second question is on the second quarter. If you can just comment on the performance of the second quarter events, specifically any indication on Salone del Mobile and Tuttofood will be useful. I think you mentioned during the speech, a very good performance of Tuttofood, but any additional comments will be useful. And the third one is on the capital allocation because still very strong cash generation in the first quarter. You sit on over EUR 140 million of net cash. Should we have to expect new M&A deals this year?

So regarding the business -- the Congress Business, as we anticipated, basically, it's since the last quarter that we have not used the Congress center for its normal purposes because we have completely made available these spaces for the Olympic organizer in order to host the [Technical Difficulty] center. So there has been a complete substitution of business in which we have signed a contract that totally amounted for EUR 26 million [Technical Difficulty] 2025 and first quarter, to be honest, first 4 months of 2026, the media and broadcasting center. This led to a very positive impact in terms of revenues compared to the normal seasonality of Q1 in congresses. So we scored this additional revenues. But more importantly, this contract is different from the normal standard contract that we signed when we host congresses or corporate events because basically a lot of costs that we normally incur and we have to repay with the normal tariffs were to be added on top of the contract and the tariff list that we set up with the Olympic committee. So this led to a very huge important profitability in this sense. And coming to the expectation -- sorry, [Technical Difficulty] in our availability the Allianz MiCo, we anyway organize some congresses using the Rho Fiera venue. And so this is part of the synergy that we clearly use in this group. So spaces that we have in our fair venue in a Rho can be used also to host congresses and corporate events. So in these cases, we also hosted 4 events, 4 congresses and corporate events in Q1. And this was an additional boost to revenues in Q1. And looking at -- looking forward, we see a very positive booking level on the Congress venue. 2026 will not be the year in which we will host major international events because the [Technical Difficulty] used the Allianz MiCo venue in 2026 or later in order to organize their major international events. But we will anyway book a lot of events and use this event to host lots of events in 2026. So we see anyway a level of revenues very, very close, probably the same that we reached in 2024, in 2025 and probably we will again be able to reach in 2026. Then second question is about the exhibition that -- the second quarter. [Technical Difficulty] you remember well. So in the quarter, we have been hosting 2 very important exhibition for us, Salone del Mobile and Tuttofood. So starting from Salone del Mobile, we have registered -- we have seen a very solid exhibition again, there were more than 300 visitors during events, clearly an increase compared to 2025. It was a decrease compared to 2024. So if we want to do a like-for-like comparison, there has been a decrease. But considering [Technical Difficulty] the Europe cities or to use the to buy app, we think that this result was anyway quite important. In terms of contribution margin, we increased our contribution margin compared to the last edition 2025 by close to 8%. So it was in line with our budget. And again, considering what is happening that was not forecasted when we did the budget, we are quite happy of the results that we have achieved. Regarding Tuttofood, Tuttofood has increased again square meters sold. There is an increase of approximately 4%, 4%, 5% in terms of square meters. Also, our results in terms of revenues and contribution margin is increasing. I think we will reach probably a 10% or even more increase in terms of revenues and contribution margin. So this again is the -- confirms that the exhibition is consolidating its positioning as international [Technical Difficulty] be ready to fight directly against SIAL in a couple of years. But another important -- very important signal to be highlighted is that we have seen visitors rate increase in the region of 20%, even 30% in some days in part of the days of the exhibition. So the venue is really crowded. We have not seen so often the venue so crowded with an international exhibition. So again, all in all, very positive signals from Q2. The results of Salone del Mobile and Tuttofood are in line with our expectation. And it's important to highlight that the more Tuttofood is strong, the more this will help to reduce now the impact of the seasonality because now Tuttofood is definitely an even year exhibition, so will help to boost 2026, 2028 and going forward, all the even years. So this clearly will not absorb completely the calendar effect, but will help to reduce it or anyway will help to make an even year attractive in terms of economic performance and financial performance like an odd year. The third question was about cash. This cash availability is clearly something we want still to rely in order to keep working on our M&A strategy. We have concluded 4 M&A in less than 1 year and we are still working on identifying new targets. Some of them have been already identified and we are working in order to understand if there are the conditions to start setting up a term sheet and eventually to going forward with an M&A operation. There are at least 3 possible M&A operations in the near future. One of this is related to the -- is at international level in the sense that it's related to a company which operates in another country in which we are already present with a legal entity. And this is at a very advanced stage. We have to start -- we will probably start very quickly the due diligence process. So H2 could be also the moment in which this acquisition could happen. And then there are another couple of M&A on which we are at the point in which we have to draft the term sheet probably in order to start the process to start throwing it in.

The next question is from Simona Chiriotti, Mediobanca.

A couple of questions also from my side. The first is on services. This quarter basically you report in Slide 11 a negative trend in services net of calendar effect. So I'm wondering if this reflects the fact that revenues have been used for other purposes. And more in general, if you can comment on the trend in services in the quarter apart from that? And also on the company that you have acquired, so now they are consolidated, how were the first weeks? Can you comment on the performance and expectations?

So services performance has been affected basically, I would assume by 1 exhibition. So we had a negative impact on this and this is not related to our capability to deliver or the quality of what we deliver, but it was a kind of physiological impact because some of the regions that are exhibiting indeed had to change by their internal rules the provider. So we were not able to support and to provide our services, our tent fitting services to some of the regions where we did last year this kind of activity. So we were expecting anyway to find substitutional clients and customers. But because of the also performance of the exhibition that was not growing as we expected, probably also because of the presence of the Olympic Games in the first quarter, so the services didn't reach the same result of last year. But I would just highlight that is mainly due by 1 exhibition and the main reason is probably it's a kind of external impact. So it's related to some constriction that the regions have in their purchasing process and their purchasing rule. [Technical Difficulty] this is clearly [Technical Difficulty] reached important results in 2025. '25 was a record year for Fiera Milano. So it's challenging, at least in this moment, in this context, considering what is happening in terms of geopolitical scenario and economic scenario is a little bit of challenge to grow in this moment compared to 2025. So we still see performances overall in line and slightly above last year, but this cannot be considered a normal result if we do consider what is happening in the environment in which we are working. Speaking about Stipa, we are really, really excited about the positive that this company can bring to the group. They are quite solid in the custom pipes and fitting industry. They have a big chunk of their revenues coming from abroad because just to give you an idea, 30% of their revenues are generated [Technical Difficulty] delivered in Europe, mainly. So in other venues, I've been in Dusseldorf for Interpack, a major exhibition just few days ago where Stipa built 6 stand in that exhibition. So -- and we really rely on the synergies that we, for sure, will create using this company and the asset of this company and the capability of this company to provide to our customers additional services, additional very high-end and very quality-driven services. All in all, we expect during the year Stipa to bring to the group something like EUR 50 million additional revenues with EBITDA margin in the region of 20-plus percent.

The next question is from Andrea Bonfa, Banka Akros.

Very quickly, it's a more generic one in the sense that you increased your sales guidance by something like on average of EUR 75 million looking at the midpoint, but you just increased your profitability guidance by EUR 10 million. So let's say, the increase in sales is much higher than the one in profitability. And considering that the delta is likely, if I'm correct, to the Olympics, which had a good profitability, I was wondering if you can comment on the mix underneath this kind of calculation indication.

So I mean, in terms of revenues, clearly, the impact of the Olympic Game was not part of our plan. But we have also to consider that we increased the guidance because of the acquisition of Expotrans, the acquisition of Stipa and the acquisition of Made in Steel. And looking at Expotrans and Stipa clearly, the contribution, the EBITDA margin that is attached to these 2 companies and the business they manage is not comparable to the one of the, let's say, standard business of Fiera Milano, so in terms of organizing events or hosting events or hosting Congress Business. So this is the main reason why the increases in revenues is not bringing an increase in terms of EBITDA comparable or proportional to the increase in terms of revenue. So we are a little bit of changing the mix at least and clearly, when we speak about even years, this creates even more an impact in terms of possible dilution of the EBITDA margin because we cannot rely on our biannual organized events, which are bringing a higher profitability or increasing the weight of the organized events out of the total revenues. So that's the main reason why we increased guidance by -- in a less proportional way compared to the increase in terms of revenues. I forgot also to mention that we are consolidating now MiCo DMC within the integrational consolidation method, which again brings additional EUR 1 million in terms of revenues with a lower profitability because MiCo DMC has a different profitability and has a different EBITDA margin compared to the past. So again, this is creating, again, this kind of impact.

[Operator Instructions] Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Thank you, everyone.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.