GfK Reports Successful 2001

Despite a difficult trading environment, preliminary figures from GfK indicate that the agency has achieved good results for the 2001 year. Total revenue rose by 11% to EUR 534.0 million, whilst earnings before interest and tax including income from participations (aEBIT), increased by 14.5% to EUR 45.1 million.

Net income for financial year 2001 was affected by non-recurring charges totalling EUR 10.5 million, reported by GfK in the last quarterly accounts. The charges comprised the costs of changes in the field research team at GfK Data Services and migrating the finance and personnel management to SAP R/3, amounting to EUR 3.5 million. A figure of EUR 7 million also related to the depreciation concerning the participation in Jupiter Media Metrix (JMXI) in the USA.

The write-down became necessary because of the takeover offer by VNU subsidiary Netratings for JMXI. Given the likely prohibition by the US cartel authority, the FTC, the parties involved in the takeover have agreed not to pursue this any further. JMXI is currently investigating alternative options for pursuing its activities. Since the write-down on JMXI is not tax deductible, GfK is expecting a taxation ratio of some 45%.

In 2001, GfK`s total performance rose by 12%, of which 6.6% related to organic growth, 4.9% to acquisitions, while exchange gains accounted for 0.5%.

The Non-Food Tracking, Media and Ad Hoc Research divisions expanded their total performance markedly. Growth in the Consumer Tracking division fell slightly because of the sale of the retail panel in Sweden.

In Germany, GfK`s home market, the company`s total performance increased by almost ten per cent. Growth in Northern Europe reflects the takeover of the British Martin Hamblin Group. GfK also expanded its good position in Central and Eastern Europe further.

In financial year 2001, GfK continued the targeted expansion of its international network by acquiring companies and increasing its existing shareholdings. This related to the Media and Ad Hoc Research divisions in particular, as well as the UK and Switzerland. Outside Europe, expansion focused on North and South America.

The two major acquisitions were the Martin Hamblin Group in the UK and Telecontrol in Switzerland. With the acquisition of a majority holding in the Martin Hamblin Group, GfK has positioned itself as number seven among the biggest market research companies in the UK. By topping up from a minority to a 100% participation in the Swiss company, Telecontrol, GfK has completed its value added chain in the important ongoing television and radio consumption measurement segment.

GfK launched activities in Latin America and South Africa at the year end. In Latin America, the group is set to acquire a minority share of 19.9% in Indicator, the fifth largest Brazilian market research company. The phased expansion to 100% of the shares has also been agreed. In South Africa, GfK founded GfK Marketing Services South Africa, which offers information services in the non-food tracking segment.

For the current financial year, GfK`s target total revenue is more than EUR 570 million, which equates to an increase of 6.7% in the group`s organic growth. GfK aims to exceed sector growth, which is estimated to stand at between 3.5% and 5%. Further growth is also expected from acquisitions as GfK intends to expand its global network still further in 2002.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.