The transformation process for MCH Group is progressing at pace. Following the strengthening of the capital structure and the shareholder base, the management and Board of Directors have reviewed and further developed the strategy. Several strategic initiatives have already been implemented and others are on the verge of being realized.
MCH Group had already launched a far-reaching transformation process prior to the Covid-19 pandemic, triggered by the company’s economic situation at that time and by the changes that were coming about in the live marketing sector. In 2019, the necessary restructuring measures were put in place to cut costs and boost efficiency. At the same time, the corporate strategy and organizational structure were aligned to the requirements of a future-oriented experience marketing company.
After the 2020 financial year had got off to a promising start, the Covid-19 pandemic and the restrictions imposed by the authorities brought business activity to a more or less complete standstill. This made further cost-cutting measures necessary. At the same time, work progressed with reduced resources on implementing the strategy and taking key projects forward. It was thus possible, for example, to offer the first Art Basel “Online Viewing Rooms” in March 2020 already, when the first Art Basel show had to be cancelled in Hong Kong.
Strengthening the capital structure, the shareholder base and the management
Against the backdrop of the transformation and strategy implementation that was required and given the economic consequences of the Covid-19 pandemic, the Board of Directors and the Executive Board drew up a comprehensive package of measures for strengthening the capital structure, the shareholder base and the company management. This was approved with a large majority by the Extraordinary General Meeting of 27.11.2020. The package included capital increases in excess of CHF 90 million, the entry of Lupa as a new anchor shareholder and the partial renewal of the Board of Directors.
The changed shareholder structure following the capital increases is balanced, with the public sector (Canton of Basel-Stadt and the Canton and City of Zurich), Lupa and the private shareholders having a stake of around one third each. This also applies for the future composition of the Board of Directors, with three representatives from each of the three shareholder groups. With the election of Andrea Zappia as new Chairman and Marco Gadola as new Vice-Chairman, the new composition of the Board of Directors was finalized at the Annual General Meeting of 28.04.2021.
Major potential of the business model and corporate strategy
Despite the difficult circumstances that prevailed, it proved possible to find a new anchor shareholder in Lupa who has agreed to a long-term involvement and supports the strategy – including the commitment to the Basel and Zurich locations. Lupa's commitment underscores the conviction that MCH Group’s business model and strategy hold great potential. The international industry experience, innovative strength and management competence that Lupa is bringing into the company will serve to speed up the transformation process.
At the start of the 2021 financial year, there were also changes in the Executive Board. The Board of Directors appointed Beat Zwahlen as new Group CEO and Michael Hüsler as new Group CFO. Under the leadership of Beat Zwahlen who, as Group CFO, had played a key role in the reorientation of the company in previous years, the Executive Board has placed greater focus on synergy potentials and cooperation between the different business segments.
Art Basel in Basel
In spring 2021, the management and Board of Directors reviewed and further developed the corporate strategy. It was confirmed that the network comprising the three business units of Community Platforms (physical and digital formats), Experience Marketing (strategy, creation and implementation of marketing solutions) and Venues (own infrastructure in Basel and Zurich) constitutes a unique asset with a high synergy and development potential. The strategic alignment has been confirmed and further sharpened with prioritized strategic initiatives in all the group’s business segments.
Community platforms, experience marketing and the host cities of Basel and Zurich
MCH Group’s strategy is focused on innovation, digitalization and internationalization and is based on the following three pillars:
- It creates future-oriented platforms in different formats for the communities of selected ecosystems. These platforms promote, enliven and expand the activities of the communities concerned, thus making a valuable contribution to the functioning and development of the ecosystems. The formats can be physical or digital in nature, with a commercial or communicative character; they can be aimed at professional target groups or end consumers, and have either an international or a regional reach.
- It supports the stakeholders in the ecosystems with holistic experience marketing solutions – from strategy and creation through to implementation. The stakeholders are institutions, organizers and companies active in the fields of business, culture and sport. The services provided support them in positioning and activating their brands, as well as in building and maintaining lasting customer relationships, and can be either material or digital in nature and offered worldwide.
- It is committed to its physical locations in Basel and Zurich. It is improving the occupancy rate of its halls and rooms by various means and working closely with the two cities to strengthen the position of the Basel and Zurich locations as host cities for major events for the benefit of both the company and the local environment.
Despite the very strong negative impact of the ongoing global pandemic, extensive progress was made on the group’s transformation and strategy implementation in the reporting year. A number of strategic initiatives have already been implemented and numerous others are in progress and will be realized in the current 2022 financial year.
The three highly successful Art Basel shows that were staged were thus supplemented with the extended “Art Basel Live” digital program, for example. Commitments in Tokyo and Singapore are strengthening the presence of Art Basel in Asia and this support for the Asian art market will also have a positive impact on Art Basel in Hong Kong. In addition, at the start of the current financial year, MCH Group and Art Basel were awarded the contract to organize a new art show in Paris, which is to be staged for the first time in October 2022 already.
Implementation of strategic initiatives in all business segments
In the Swiss Events segment, intensive work is underway on the development of the “Built Environment” and “Life Sciences” ecosystems, together with other themes, on the basis of the existing robust trade fairs. With the acquisition of Digital Festival AG, new and attractive events have been added to the portfolio, further boosting the group’s competence in developing innovative event formats and future-oriented topics.
In the light of the Covid situation and the great uncertainty that still prevails, launching a new concept for a new target segment is an extremely challenging undertaking. This has been illustrated by the case of watches/jewelry and Baselworld. In developing a new Baselworld, the management will thus be taking the necessary time to precisely analyze customer requirements. The aim is still to create added value for the community of mid-market manufacturers and retailers through the internationally anchored Baselworld brand and innovative platforms.
In the Live Marketing Solutions division, transformation into an Experience Marketing Full Service Agency had already been stepped up prior to the pandemic. This is now paying off. While MCH Group has also suffered the consequences of Covid in this area too, the Live Marketing Solutions division is now particularly well placed and equipped for the expected upturn.