For the year ending December 31 2010, Reed Exhibitions brought its parent company, Reed Elsevier, close to $1.1 billion in revenue. While the event division of this international company continues to expand, the group’s success relies on its ability to work in tandem with the other units within the larger Reed portfolio. Moving into 2012, Reed Exhibitions Chairman and CEO Mike Rusbridge explains to EXPO how the company plans to expand across the global spectrum, and why the whole of this business is greater than the sum of its parts.

EXPO: Describe Reed Exhibitions’ relationship with Reed Elsevier’s other business units. Does it operate as a standalone entity, or are there operational overlaps in terms of markets and audiences served? Is there the same blending between the company’s other assets and events that we often see at other media organizations?

Mike Rusbridge [MR]: Our approach is one that we pursue excellence in whatever we do with our respective businesses and each of them is performing extremely well. Where Reed Exhibitions does overlap with Reed businesses is specifically at the moment more likely to be with Elsevier Science. In that context, we have very good relationships and that can be seen through joint efforts or providing content to conferences or exchanges of databases—the full nine yards. If you look across the majority of our businesses, it isn’t particularly widespread because the level of overlap is not that significant today.

EXPO: Reed has been fairly acquisitive lately in emerging and other markets. Where are you focusing your acquisition opportunities? Can you describe how you’re balancing acquisitions with organic growth?

MR: We do both. We’re in the fortunate position of having good, organic growth and we’ve had a very ambitious program of 46 events launched this year. We really look at acquisitions from the point of view of quality, long-term sustainability. We have the option of making a decision—if we like an event we’ll do them and if we don’t believe they add sufficient value or growth then we don’t. We’re not in a position of having to make acquisitions to grow. In terms of where we are looking, the simple answer is we’re looking at any—whether by geography or sector—areas that give us that good quality growth prospects.

EXPO: We’ve seen a lot of turbulence in the Euro Zone lately. How are the economics of the Euro Zone, which has been a dominant part of the marketplace, coupled with political turbulence there, impacting your business from an exhibitions and expansion standpoint?

MR: If I look, first of all, at just the strategic picture, we are definitely looking to extend the balance of our business and our target is a 65/35 split between what I categorize as the Western economies, principally the United States and Europe, to Asia and other high-growth emerging markets. Within the next year or so we’ll pretty much have achieved that. A number of years ago we were very heavily focused to Europe and America. Why are we expanding into other markets? It’s sort of stating the blindingly obvious: The rates of growth and opportunities in emerging markets are frankly better by-and-large than we’re likely to enjoy in America or Europe.

That doesn’t mean to say that those markets are less important to us, but really the balance of focus is, as you would expect, to try and get a equilibrium of business between some very significant, high-quality assets that are operating in mature markets like Europe and the really good high double-digit growth rates we can expect out of a lot of Asia, the Middle East, Latin America, etc. That culminates into an ongoing program of trying to rebalance the business in those areas, and we’re doing the same in looking at sectors.

What sectors are likely to give us more attractive growth opportunities? With regards to what’s happening at the moment [in the Euro Zone], the interesting thing is we’re actually seeing, to date, very little impact looking forward into our business in 2012. We’re expecting 2012 to be an extremely good year for us, pretty much across the patch and at the moment, although there is clearly a lot of uncertainty and clearly issues of business confidence, as it comes to actual bookings in the first half of next year they’re really going according to plan with a few minor exceptions. At the moment, we’re very solid.

EXPO: Are there any plans to change the ratio of 65/35 as these emerging markets become larger global players and their market places grow as well?

MR: By next year, Brazil will be comfortably over $100 million of revenue for us. Perhaps we don’t make the sort of noise that some other organizers do, but we’ve been quietly building a very significant business in Brazil. We’ve also done so in China and that will continue in addition to other new territories that we’re in the process of opening up as we speak, which is an ongoing process.

We’re not yet at the 65/35 balance, which is something we hope to achieve in the next year or so, but clearly it’s all about trying to balance these large, very stable but lower-growth parts of our portfolio in mature economies with those that will yield higher growth. It’s really a question of getting a sufficient balance of the two.

EXPO: What is Reed Exhibition’s share of revenue within Reed Elsevier? Can you share your growth projections over the next 12-18 months? How you’re planning on getting there?

MR: If you look at 2010, which is the last full statement by Reed Elsevier, Reed Exhibitions accounted for approximately 11 percent of their total revenues. In terms of what are our prospects for the next year or two, we have the advantage. We are a cyclical business and that means we have a significant cycling element of odd and even years. If one looks at the actual year-on-year growth from 2010 to 2011, it’s looking fairly modest because we had a fairly significant cycling out year in 2011. That comes back in 2012 together with some pretty ambitious growth targets, as I mentioned. Right now, 2012 is looking to be a record year for us for growth, and cycling will help it but there is some powerful underlying growth from across the Reed Exhibitions portfolio—most markets and sectors are giving us some very good growth. We’re looking at record revenue growth in 2012.

EXPO: Can you provide some details or examples of which sectors or demographics you believe will take off? Which areas are you seeing the most powerful growth?

MR: It’s difficult to generalize because you’ve got to look at our portfolio by geography and sector. A good example would be a few years ago we had a very significant portfolio of manufacturing events in the West, both in the United States and Europe. We have exited virtually all of them. We have replaced that with an equally significant but rapidly growing portfolio in manufacturing in Asia and Brazil. You have to look at it by geography and sector because you can’t generalize by sector on a worldwide basis for the reasons I’ve just described. Depending on where you look, you’ve got different growth rates.

EXPO: What’s the latest figure on the number of events Reed Exhibitions currently operates?

MR: It’s changing and moving all the time but we started 2011 with 470 events worldwide. We’ve launched a few more since then and we’ve also acquired a few more. Our portfolio—if you look at the 46 launches and a number of acquisitions, does it increase by that every year? No, it doesn’t. We’re a portfolio management business and we look very closely at what gives us long-term, sustainable growth. We are equally as rigorous in removing things that are at the bottom. The portfolio moves and it is moving upwards but it isn’t just a pure numbers game—we are trying to balance it out with good quality and sustainable growth.

EXPO: With such a diverse array of markets served and event models, how is the organization structured to leverage common strengths, infrastructure, audience, and so on?

MR: That is a very interesting area; it’s one where this company is undergoing more change than I’ve seen in the last 10 to 15 years. It’s quite exciting and it’s quite challenging. First of all, there is no replacement and there will be no replacement for local teams close to local markets that are servicing the particular needs of their customers—that is the fundamental building block of Reed Exhibitions. You layer onto that the largest organizer worldwide with presence in multiple geographies and sectors and what we’ve been focusing on in the last two or three years is a whole range of things that really leverage our scale and the huge internal strength that we’ve got. If one looks at sectors, we’ve now created a culture where our customers buy our services globally, and that’s not obviously in every sector but in things like aerospace, property or travel, we’ve created global groups.

That means to say, people are responsible for those portfolios irrespective of where they are in the world. You have local-specific teams, but in certain selected global sectors, you have groups. We have, which is probably unique, a dedicated network of over 80 people and over 200 agents selling over $100 million worth of business every year across our portfolio of events. We’ve been putting a lot of effort and money into developing systems over the last few years that really bind the company together and leverage its scale. We now have a global Web platform that will host ultimately all of our shows. We’ve got over 300 Web sites up on it at the moment, and that will ultimately be close to 500. We are rolling out a sales CRM system worldwide and we’ve been developing a lot of business intelligence that helps us make informed management decisions through a worldwide reporting system.

Most shows have their own character and operate in different ways. The challenge is you need to meet the sorts of services you require for a jewelry show in North America or a property show in Hong Kong. There are certain commonalities but they all have their own features. We’re trying to make sure that what we’re doing is spread across our business and our entire portfolio on a worldwide basis because there are common learnings, common skills and common technologies we can embrace. We’ve got working groups, whether in sales, marketing or e-business operations, where we’re bringing people from one part of the world to meet others.

All the time we’re trying to create connections between one business and another or one skill and another, to really make sure we feed on and develop these pockets of excellence and connect them together. We also make sure we have those skill transfers operating effectively across the group. The ultimate aim is to decide if we’re a collection of businesses or an integrated company that’s geared up when necessary to meet the demands of its customers worldwide, one that feeds off of and develops from the skills and the connectivity that it has in all of the parts of the world it operates.

EXPO: Is there anything you’d like to note, or particularly want people to know?

MR: In our business you have to understand your customer and your market. Particularly in today’s environment—whether it’s volatility, technology, macro trade partnerships or changes in distribution channels—things are moving and reshaping all the time. What we pride ourselves on, and we’re continuing to strive to improve, is our grasp, knowledge and understanding of what our customers needs and wants are. That impacts the types of services we offer—there’s been a huge amount of work in the last few years to tailor make and develop new types of services to meet customer needs. That drives very high satisfaction levels in our shows, which we’re very proud of.

Here we are, just coming out of a recession and who knows where we’re headed next? We are a business that is very confident about the future of face-to-face and very confident about our growth. As big as we are, we’re looking at record revenue performance for next year and that has been from a remarkable pace of recovery from where we were in 2009. We were affected just like so many others and we’ve made a very rapid recovery, which I’m delighted with. I think at the moment, as far as one can see, I’m very optimistic about things and I think the next couple of years will have some very exciting opportunities for Reed Exhibitions.