GfK Improves on Poor First Quarter

GfK has reported a decline in sales and operating income during the first half of the year despite an improvement in the second quarter. In organic terms, first half sales were down 8.5%.

While in Q2 reported sales increased by 10.6% to EUR 292.8m compared with the first three months of the year, overall sales for the first six months were down 5.5% to EUR 557.5m compared with the prior year period.

In the second quarter, adjusted operating income increased to EUR 36.8m compared with EUR 14.8m in the first quarter of the year. Margin was up from 5.6% in Q1 to 12.6% in the second quarter.

For the first six months of 2009, income totalled EUR 51.6m compared with EUR 66.8m in the same period last year, and margin was down to 9.3% from 11.3% in 2008.

The Custom Research division saw the biggest drop in sales for the first six months - these declined 11.8% to EUR 335.5m versus 2008 figures. In the Media sector, sales decreased by 1.5% to EUR 63.3m, but in the Retail and Technology division, overall sales rose by 9.9% to EUR 157.0m.

During the period, GfK has implemented a series of cost-savings initiatives to reduce personnel expenses, including introducing short-time working, a hiring freeze, in-sourcing, salary cuts and redundancies.

These have resulted in savings of approximately EUR 6.0m during the period, and the firm's goal of making EUR 30m in cuts has now been raised to EUR 40m, with 40% of this figure set to be generated in 2009.

For the full year, the GfK Group anticipates sales will approximately match the prior year's level. The Group expects to further expand the half-year margin to achieve a low double-digit percentage figure for 2009. As of the end of July 2009, orders covered a total of 73.4% of expected annual sales, compared with 80.6% at this point in 2008.

Web site: www.gfk.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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