Profit Up, Revenue Down for Viad, GES in 2013
Viad Corp., the parent company of Global Experience Specialists (GES), ended 2013 with a $4-million increase in operating income, a 9.6-percent improvement over 2012, and a $52.4-million decline in revenue (5.1 percent).
GES, Viad’s largest division, saw results that nearly mirrored its corporate parent with a revenue decline of $57.1 million (6.3 percent), accompanied by an operating income increase of $2.2 million (12.2 percent), according to reports released today on both the company’s fourth-quarter and full-year performance.
GES President Steve Moster attributed the revenue decline to negative show rotation and the income increase to improved productivity and efficiencies.
“We’re really focused on initiatives to improve efficiency,” Moster says, focusing on changes regarding labor management and service delivery processes.
Total 2013 revenue for Viad was $972.8 million and operating income $45.9 million. For GES, annual revenue amounted to $844.9 million and operating income $20.1 million.
The guidance for GES, according to the report, is for revenue to increase at a high single-digit rate in 2014 and for operating margins to hover around 4 percent, up from last year’s 2.4 percent.
Moster pointed to two reasons for optimism this year. The first is show rotation, which cost GES nearly $65 million last year, he says, and should have a positive impact in 2014 of $55 million.
Events that GES will service this year that did not take place last year include CONEXPO-CON/AGG in Las Vegas, the International Manufacturing Technology Show in Chicago and MODEX in Atlanta.
Moster noted that CONEXPO-CON/AGG in late March will help with first-quarter show rotation since, for the first time in many years, GES did not service International CES in January. Last year, the Consumer Electronics Association made the decision to give its general service contracting work to Freeman.
He also says several pieces of new business in 2014 should add to the bottom line as well. Internationally, Moster points out, Pennwell Corp. has given GES the service contract for several shows it holds in the Middle East and it recently won the contract to be the preferred service provider at ExCeL London for the next 10 years.
In the U.S., this is the first year GES has handled all the service contracting for Advanstar’s MAGIC Market Week, an assignment it previously shared with Freeman. It has also added several new services it offers for the Los Angeles Auto Show.
Viad released its fourth-quarter and 2014 results this morning shortly before a conference call with analysts and investors. Freeman, GES’ primary competitor, is privately held and does not release information on its performance.