GfK Continues Strong Growth

GfK has reported sales of EUR 660.1m in sales for the first half of 2011, reflecting 8.0% organic growth year-on-year. Adjusted operating income rose 16.8% (organic 18.0%) to EUR 83.9m. The Group has also announced the acquisition of a 25% stake in US firm MBI.

The group's margin rose from 11.8% to 12.7%, EBITDA was up 23.2% to EUR 101.4m, and adjusted EPS up 14.3% to EUR 1.36, while net debt was reduced by EUR 63.1m to EUR 431.1m.

GfK says order books are well-filled, with 84.6% of the sales expected for 2011 as a whole posted or included as of the end of July - higher than the previous year's 82.2%.

Custom Research saw sales rise 8.5% to EUR 399.4m - organic growth of 7.9% - with Germany, Western Europe, the Middle East and Africa driving this but North America lagging. Automotive, and to a lesser extent telecoms and FMCG clients, led the increase.

The Retail and Technology sector saw organic sales growth of 11.2% to EUR 192.9m. In Germany, several large international contracts were expanded, while in China increased MR spend by large companies boosted sales, and there was no significant downturn in Japan despite the disasters in the spring. Income and margins in both these sectors fared well.

In the Media sector, sales returned to growth after declining slightly in the first quarter: the net result was 1.0% organic growth in H1 - turned to a negative by currency effects (1.2% fall to EUR 65.3m). Income and margin both fell slightly.

Outgoing CEO Professor Dr. Klaus L. Wübbenhorst says the results continued the positive trend of the first three months of 2011. Senior IBM exec Matthias Hartmann was recently appointed to take over from Prof. Wübbenhorst on January 1, 2012 at the latest.

The Group recently announced plans to restructure from January 1, 2012 into two new divisions or 'sectors': market sizing and trends-focused Consumer Choices; and Consumer Experiences, which will explore consumers' experiences, perceptions and attitudes. Simultaneously, the company's products and regional investment will be reviewed with growth potential in mind.

Notwithstanding severe uncertainties in financial markets, the Management Board has confirmed its earlier guidance, forecasting 5% to 6% organic sales growth for the year; and despite a high level of planned investment has set the 'challenging' target of 14.3% margin. In line with its 'Own the Future' restructure, it has also introduced long-term growth and income targets, aiming for sales of around EUR 2bn with 16% profit by 2015.

Separately, GfK has announced the buying of a 25% stake in New York-based Media Behavior Institute (MBI), which is also 25%-owned by Nielsen, with the two founding partners owning the remaining half. MBI's syndicated USA TouchPoints survey will equip 2,000 Americans with smartphones with a preloaded app helping to measure their complete media usage at half-hour intervals and combine it with lifestyle data such as their location, activity and mood.

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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