Necessary turnaround: Will the MCH Group's new structure do the trick?

The MCH Group is facing major challenges: The change in the exhibition business, which is in decline worldwide, the reasons for which are complex and the digital transformation is just one of them. Then the Corona crisis, which has brought the exhibition and event business to a complete halt worldwide. Finally, the former flagship, the Baselworld watch and jewelry show, which is barely salvageable. The MCH Group (picture: Exhibition Center Basel) is now looking for investors to finance the turnaround and future business.

Board of Directors confirmed for one year

Additional investors are being sought, which will entail new ownership. Other urgent tasks that now lie ahead: What happens to Baselworld, which is in crisis? What if Art Basel cannot take place this year? And what financial settlement can be found with the exhibitors of the cancelled Giardina, Habität-Jardin and SmartSuisse fairs?
At the Annual General Meeting on April 24, 2020, the existing shareholders, which with 49% are essentially the city and canton of Zurich and the cantons of Basel Stadt and Basel Land, confirmed the members of the Board of Directors in office for a further year in their written vote. In 2021, following the planned retirement of the Chairman of the Board of Directors, Dr. Ulrich Vischer, there will then be a renewal in this body.

New structure: With new investors?

What's next for the MCH Group? The minutes of the 2020 General Meeting provide information on this. Double-digit millions are to be invested in digitization, innovation and internationalization. 20 million Swiss francs are to be saved by 2024 through efficiency enhancements. And a new structure in four divisions shows how it is structured today:

.. Global Platforms: In plain language Baselworld and Art Basel online and offline at home and abroad.
.. Swiss Events: trade and public exhibitions in Switzerland.
.. Live Marketing Solutions, the consulting and trade fair construction business
.. Venues: Operation of the exhibition halls in Basel and Zurich and congress business.

The structure is understandable, it can help the MCH Group to identify and take the right steps.

In the media release of 24 April for the 2020 General Meeting, the MCH Group writes that the evaluation for financing the necessary investments is being driven forward and that the favored option is the entry of new investors and a capital increase. The MCH Group then says in the press release: "To this end, the Board of Directors will convene an extraordinary General Meeting at the appropriate time." This shows that the search for investors is a top priority.
The minutes state that the goal is to invest double-digit millions in internationalization and in (previously neglected) digitization, i.e., in digital extensions of the trade show business that run throughout the year. So why not bring a technology company on board as a new investor?
Internationalization means strengthening the global brands Baselworld, if it survives, and Art Basel, abroad. Internationalization can also mean expanding the business of Live Marketing Solutions, if this is not sold in order to raise the necessary capital.

Outlook

The Corona crisis has hit the MCH Group, Switzerland's biggest company in the exhibition, congress and event business, like a tsunami. It has led to an acceleration of the already existing economic crisis. This acceleration could now lead to a relatively rapid turnaround.

Will the MCH Group, albeit a different MCH Group than before and with new ownership, turn a crisis into an opportunity? Who would want to grant it, Switzerland as a business location and the benefiting trade?

The 2019 Annual Report, the 2019 Financial Report, the Compensation Report and the Sustainability section can be found at here. (SDA)