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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 bottom Operational efficiency key in achieving a profitable bottom-line line Debbie Wong, Senior Consultant Renganathan K, Senior Research Analyst Business and Financial Services 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.

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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.

Next Steps

Develop Your Visionary and Innovative SkillsGrowth Partnership Service Share your growth thought leadership and ideas or

join our GIL Global Community

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Join our GIL Community NewsletterKeep abreast of innovative growth opportunities

Phone: 1-877-GOFROST (463-7678)EMEA: +44 (0) 20 7343 8383 Email: [email protected]

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For Additional Information

Debbie Wong

Senior Consultant

Business & Financial Services

(210) 771-8168

[email protected]

Renganathan K

Research Analyst

Business & Financial Services

[email protected]

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Shrikanth S

Industry Manager

Business & Financial Services

[email protected]

Britni Myers

Corporate Communications

Business & Financial Services

[email protected]