Financial Analysis and Market Sizing of the Event Management Software Market
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Transcript of Financial Analysis and Market Sizing of the Event Management Software Market
Financial Analysis and Market Sizing of the Financial Analysis and Market Sizing of the Global Event Management Software Market Global Event Management Software Market
Operational efficiency key in achieving a profitable bottomOperational efficiency key in achieving a profitable bottom--lineline
Debbie Wong, Senior Consultant
Renganathan K, Senior Research Analyst
Business and Financial ServicesBusiness 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
Over 6 years of experience in the IT
and consulting industry
• Experience in Valuation and Financial Modelling
Renganathan K,
Senior Research Analyst
Frost & Sullivan
Over 15 years in the financial services and
consulting industry.
•Strategic consulting experience in value
Debbie Wong,
Senior consultant
Frost & Sullivan
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• Six Sigma Green Belt holder creation, operational strategy, business
development and marketing
Agenda
Introduction to the Global Event Management Software Market
Market Dynamics
1
2
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Financial Analysis
Financial Returns for PE/VC Investment
Bottomline
3
4
5
Introduction to the Global Event Management Software Market
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Research Objectives and Scope
Geographic Scope: Global Study
• 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
Research Objective
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Source: Frost & Sullivan analysis.
• Event Registration
• Event-Related Mobile Applications
Global
Ratios Analyzed
• Profitability
• Activity (Turnover)
• Liquidity
• Solvency
Research Objective and Scope (continued)
Forecast Period
FY 2013–2016
Scope of Analysis
• 481 companies (Public & Private) across the globe
• 647 funding transactions
• Transactions include PE, VC, PIPE, M&A and public offering transactions
Who Will Benefit? Sources
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Source: Frost & Sullivan analysis.
• 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
• 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
Introduction – Global Event Management Software Market
There are 512 million attendees at these meetings and events.
Over $500 billion spent on meetings and events annually.
Globally, there are 5 million meetings and events held annually.
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Over $500 billion spent on meetings and events annually.
Event planners are still utilizing manual processes.
Source: Frost & Sullivan analysis.
Event management software supports the process through automation and helps improve efficiency, while driving event costs down.
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.
3
3.5
4
4.5
5
30.00
31.00
32.00
33.00
Gro
wth
Rate
(%
)
$ B
illi
on
Event Management Software Market: Addressable Market Size and Growth Rate, Global, 2012-2016
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Source: Frost & Sullivan analysis.
2012 2013 2014 2015 2016
Global EMS Market (software and non-software)
28.00 28.70 29.60 30.50 31.90
Growth Rate (%) 2.4 3.1 3.3 4.5
0
0.5
1
1.5
2
2.5
3
26.00
27.00
28.00
29.00
30.00
Gro
wth
Rate
(%
)
$ B
illi
on
Market Share – U.S. Event Management Software Market, 2012
•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
Tier 1
Tier 2
5.0% - 20.0%
Event Management Software Market: Market Share
Distribution, U.S., 2012
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largest players in the market have no more than 15.0%-20.0% share.
Source: Frost & Sullivan analysis.
Market Share Range
Tier 3
1.0% - 5.0%
0.26% - 1.0%
Tier 4•Other small players•Manual processes
Market Drivers and Restraints – Event Management Software Market
Economic growth will support budget allocations and spending in the
meetings and event market.
Business best practices which
incorporate event planning tools/ software.
Hotels increasingly using RFP tools as
part of their business growth and marketing.
Dri
ve
rs
Dri
ve
rs
The growth of the global event and meetings market.
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Source: Frost & Sullivan analysis.
Dri
ve
rs
Dri
ve
rs
Re
str
ain
ts
Re
str
ain
ts
Moderate economic growth projections.
Customer IT budget constraints. Resistance to change;
event planners still utilizing manual
processes for planning.
Re
str
ain
ts
Market Trends – Event Management Software MarketP
resent M
ark
et C
onditio
ns
Futu
re M
ark
et C
onditio
ns
Consolidation will eventually occur – niche players will either combine with other companies are leave the industry
Customer focus – customer demands will drive future
Market evolving at a fast pace – no real saturation of the market in the near term
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Pre
sent M
ark
et C
onditio
ns
Futu
re M
ark
et C
onditio
ns
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
Source: Frost & Sullivan analysis.
Mobile and social media proliferation
Financial Attractiveness
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Key Takeaways for Investors
Event Management Software: Venture Capital Average Deal Value and Deal Volume (Global), FY 2009-2013
EMS Companiesthat 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
EMS companies that received funding & private equity/venture capital companies that funded
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In the venture capital segment, there is a trend of declining
average deal values despite an increase in the number of
deals signifying greater investor prudence and reduced
appetite for risk taking abilities.
*Please note that similar analysis of deal values, volumes and types
of deals are available in the study.
Source: Frost & Sullivan analysis.
Tribeca Venture Partners
Zerista, Inc. New Markets Venture Partners
ARSystemsInternational, Inc.
The Grosvenor Funds
OnVantage, Inc. VentureLink Brighter Future Fund
51Pegasi B.V. VentureLink LP
ViewCentral, Inc. Valhalla Partners
Vibrant Solutions Tribeca Venture Partners
Key Takeaways for Investors
Financial Indicators- What do the fundamentals indicate?
Despite relatively, high gross margins, industry participants witnessed an erosion in profits due to very highlevels of SG&A expenses. This is one of the critical reasons for the negative net income margins in this industry.
Event Management Software industry: Profitability Margin Analysis, FY 2009-2013
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levels of SG&A expenses. This is one of the critical reasons for the negative net income margins in this industry.
In terms of asset utilisation, smaller start-ups in the event management software market have displayed greaterefficiency than their mid-sized counterparts. The total asset turnover for these firms has been range-bound between1.2x and 1.4x between 2009 and 2013. This is greater than the industry average which has been stable at 1.0x duringthe said period. Mid-sized firms on the hand have ratios lesser than 1.0x.
*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
Source: Frost & Sullivan analysis.
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 fundingScenario Two: Entrepreneur with no Venture Capital funding
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
Key Takeaways- A Snapshot
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
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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 X
General Administration as % of Sales (Year 1) % X X
General Administration CAGR (Year 1 to Year 10) % 4.5 4.5
Research & Development as % of Sales Average (Year 1 to Year 10)
% X X Note: Each of the metrics mentioned here has several underlying
assumptions which are detailed in the study.
increasingly favourable exit valuations for VCs in the next 18 to 24 months.
Source: Frost & Sullivan analysis.
Company Name 2012Revenue ($ Million)
The Active Network, Inc. 418.9
Cvent, Inc. 83.5
The Pulse Network, Inc. 3.6
Sample Companies included
Conclusion
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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
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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.
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For Additional Information
Debbie Wong
Senior Consultant
Business & Financial Services
(210) 771-8168
Renganathan K
Research Analyst
Business & Financial Services
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Shrikanth S
Industry Manager
Business & Financial Services
Britni Myers
Corporate Communications
Business & Financial Services