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Event management software market teaser Event management software market teaser Presentation Transcript

  • Financial Analysis and Market Sizing of the Global Event Management Software Market Operational efficiency key in achieving a profitable bottom-line bottom- Debbie Wong, Senior Consultant Renganathan K, Senior Research Analyst Business and Financial Services 20-Nov-2013 © 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  • Today’s Presenters Renganathan K, Debbie Wong, Senior Research Analyst Frost & Sullivan Over 6 years of experience in the IT and consulting industry • Experience in Valuation and Financial Modelling • Six Sigma Green Belt holder ND46 - F1 Senior consultant Frost & Sullivan Over 15 years in the financial services and consulting industry. •Strategic consulting experience in value creation, operational strategy, business development and marketing 2
  • Agenda 1 Introduction to the Global Event Management Software Market 2 Market Dynamics 3 Financial Analysis 4 5 ND46 - F1 Financial Returns for PE/VC Investment Bottomline 3
  • Introduction to the Global Event Management Software Market ND46 - F1
  • Research Objectives and Scope Research Objective • • • • To analyze the global event management software market and identify key drivers and restraints To estimate and forecast the market size of the market To analyze the financial performance of the market and identify areas which can enable firms to (financially) outperform in this market. To evaluate the returns to an entrepreneur and investor participating in this market Segments Covered Geographic Scope: Global Study • • Event Registration Event-Related Mobile Applications Ratios Analyzed Global • • • • Profitability Activity (Turnover) Liquidity Solvency Source: Frost & Sullivan analysis. ND46 - F1 5
  • Research Objective and Scope (continued) Forecast Period FY 2013–2016 Scope of Analysis • • • Who Will Benefit? • • • • • • • • Event Management Software companies Private Equity (PE) firms Venture Capital (VC) investors Fund managers Retail investors Sovereign wealth funds Hedge funds Insurance funds and other members of the investing community 481 companies (Public & Private) across the globe 647 funding transactions Transactions include PE, VC, PIPE, M&A and public offering transactions Sources • Frost & Sullivan in-house research expertise • Established business and financial databases, such as Capital IQ • Company annual reports • Published news • Press releases * FY Financial Year Source: Frost & Sullivan analysis. ND46 - F1 6
  • Introduction – Global Event Management Software Market Globally, there are 5 million meetings and events held annually. There are 512 million attendees at these meetings and events. Over $500 billion spent on meetings and events annually. Event planners are still utilizing manual processes. Event management software supports the process through automation and helps improve efficiency, while driving event costs down. Source: Frost & Sullivan analysis. ND46 - F1 7
  • Addressable Market Sizing – Global Event Management Software Market The estimate 2012 total global addressable market size is $28.00 billion, with a projected CAGR of 3.3 percent over the next four years. This includes the software and non-software market. Event Management Software Market: Addressable Market Size and Growth Rate, Global, 2012-2016 33.00 5 4.5 4 31.00 3.5 3 30.00 2.5 29.00 2 1.5 28.00 Growth Rate (%) $ Billion 32.00 1 27.00 26.00 Global EMS Market (software and non-software) Growth Rate (%) 0.5 2012 2013 2014 2015 2016 28.00 28.70 29.60 30.50 31.90 2.4 3.1 3.3 0 4.5 Source: Frost & Sullivan analysis. ND46 - F1 8
  • Market Share – U.S. Event Management Software Market, 2012 Event Management Software Market: Market Share Distribution, U.S., 2012 Tier 1 5.0% - 20.0% Tier 2 1.0% - 5.0% •The estimates may include all products and services (including ancillary products/services) that each company provides. •This is a highly fragmented market comprised of over 300 companies in the U.S. alone. Key players include Active Network and Cvent. •According to Frost & Sullivan analysis, the largest players in the market have no more than 15.0%-20.0% share. Tier 3 0.26% - 1.0% Market Share Range Tier 4 •Other small players •Manual processes Source: Frost & Sullivan analysis. ND46 - F1 9
  • Market Drivers and Restraints – Event Management Software Market Business best practices which incorporate event planning tools/ software. Economic growth will support budget allocations and spending in the meetings and event market. The growth of the global event and meetings market. Moderate economic growth projections. ND46 - F1 Restraints Restraints Restraints Drivers Drivers Hotels increasingly using RFP tools as part of their business growth and marketing. Customer IT budget constraints. Resistance to change; event planners still utilizing manual processes for planning. Source: Frost & Sullivan analysis. 10
  • Market Trends – Event Management Software Market Consolidation will eventually occur – niche players will either combine with other companies are leave the industry Customer focus – customer demands will drive future products/tools Integration of data analytics pre, post and during events to help customers add-value to their clientele Future Market Conditions Present Market Conditions Market evolving at a fast pace – no real saturation of the market in the near term Mobile and social media proliferation Source: Frost & Sullivan analysis. ND46 - F1 11
  • Financial Attractiveness ND46 - F1
  • Key Takeaways for Investors Event Management Software: Venture Capital Average EMS companies that received funding & private Deal Value and Deal Volume (Global), FY 2009-2013 equity/venture capital companies that funded EMS Companies that received Funding Private Equity Companies QuickMobile Inc. BDC Venture Capital NightLife Labs LLC Vancouver City Savings Credit Union Three Stage Media, Inc. Tribeca Venture Partners Zerista, Inc. New Markets Venture Partners ARSystems International, Inc. OnVantage, Inc. The Grosvenor Funds 51Pegasi B.V. VentureLink LP ViewCentral, Inc. Valhalla Partners Vibrant Solutions Tribeca Venture Partners *Please note that similar analysis of deal values, volumes and types of deals are available in the study. In the venture capital segment, there is a trend of declining average deal values despite an increase in the number of VentureLink Brighter Future Fund deals signifying greater investor prudence and reduced appetite for risk taking abilities. ND46 - F1 Source: Frost & Sullivan analysis. 13
  • Key Takeaways for Investors Financial Indicators- What do the fundamentals indicate? Event Management Software industry: Profitability Margin Analysis, FY 2009-2013 Despite relatively, high gross margins, industry participants witnessed an erosion in profits due to very high levels of SG&A expenses. This is one of the critical reasons for the negative net income margins in this industry. *Please note that a detailed financial ratio analysis across all categories is available in the study Event Management Software industry: Asset Turnover Analysis, FY 2009-2013 In terms of asset utilisation, smaller start-ups in the event management software market have displayed greater efficiency than their mid-sized counterparts. The total asset turnover for these firms has been range-bound between 1.2x and 1.4x between 2009 and 2013. This is greater than the industry average which has been stable at 1.0x during Source: Frost & Sullivan analysis. the said period. Mid-sized firms on the hand have ratios lesser than 1.0x. ND46 - F1 14
  • Valuation Scenario The study outlines two scenarios in order to asses the attractiveness of the event management software market for a prospective entrepreneur Scenario One: Entrepreneur with access to Venture Capital funding Scenario Two: Entrepreneur with no Venture Capital funding Key Takeaways- A Snapshot Key Investor Criterion Unit Start-Up Mid-Size IRR for Entrepreneur % X X NPV for Entrepreneur $ X X Initial Capital Expenditure $ X X Capital Expenditure as a Percentage of Sales Average (Year 1 to Year 10) % X X Equity Investment $ X X % Stake Acquired by Investor % X X Stake due to ESOP % 6.0 10.0 Sales CAGR (Year 1 to Year 10) % X X COGS CAGR (Year 1 to Year 10) % X X Selling and Marketing as % of Sales Average (Year 1 to Year 10) % X General Administration as % of Sales (Year 1) % General Administration CAGR (Year 1 to Year 10) Research & Development as % of Sales Average (Year 1 to Year 10) The recovering US economy supplemented by an increased focus of PE investors in the event management software market is expected to effect a marginal change in exit routes and increasingly favourable exit valuations for VCs in the next 18 to 24 months. Sample Companies included Company Name 2012 Revenue ($ Million) X The Active Network, Inc. 418.9 X X Cvent, Inc. 83.5 % 4.5 4.5 The Pulse Network, Inc. 3.6 % X X Note: Each of the metrics mentioned here has several underlying assumptions which are detailed in the study. Source: Frost & Sullivan analysis. ND46 - F1 15
  • Conclusion ND46 - F1
  • Conclusion • Aided by factors such as a recovering economy, growth in the event management software market is expected to continue with no real saturation of the market in the near term. This is expected for all segments within the event management software market. • Firms offering integrated event management solutions are expected to attract more clients and thus increase market share. • More than a focus on increasing sales, both investors and entrepreneurs need to focus on operational and financial prudence to ensure a positive bottom-line. This is essential to overcome the relatively high levels of SG&A expenses in this market. Source: Frost & Sullivan analysis. ND46 - F1 17
  • Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities Phone: 1-877-GOFROST (463-7678) EMEA: +44 (0) 20 7343 8383 ND46 - F1 Email: myfrost@frost.com 18
  • Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. ND46 - F1 19
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  • For Additional Information Debbie Wong Senior Consultant Business & Financial Services (210) 771-8168 Debbie.wong@frost.com Shrikanth S Industry Manager Business & Financial Services shrikanths@frost.com ND46 - F1 Renganathan K Research Analyst Business & Financial Services Renganathank@frost.com Britni Myers Corporate Communications Business & Financial Services Britni.myers@frost.com 21