GfK Results Exceed High Expectations
May 2 2006
Global group GfK has confirmed its upbeat preliminary announcement from 28th February regarding results for 2005, announcing 'the most successful year in the company's history' with sales up by over 40% to Euros 937.3m, 6.5% organic growth and margin improving to 13.3%.
Results were generally an improvement on the already positive figures projected in February (www.mrweb.com/drno/news5226.htm ). Adjusted operating income rose by almost 51% to Euros 125.1m and the dividend is set to rise by 10% to Euros 0.33. Since its IPO in 1999, GfK has increased dividend payments each year.
GfK says the integration of NOP World is 'progressing according to schedule'. Acquisitions accounted for 33.2 percentage points of the 40.1 point total revenue rise; and currency effects for 0.4 percentage points. Figures allow for NOP World integration costs of Euros 15.7m, amortization on disclosed hidden reserves of Euros 15.9m and expenses for staff options of Euros 2.6m.
Business Divisions
The NOP World acquisition affected three of GfK's five business divisions: Custom Research, whose share of GfK's overall sales rose from 37.3% to 44.4%, Media, whose share of sales increased from 9.3% to 10.3%, and Healthcare, whose share of sales grew from 10.2% to 11.4%. In the financial year 2005, all business divisions recorded growth in sales.
Custom Research showed the highest growth in sales, up 67% from Euros 249.4m to Euros 416.4m (59.7 % acquisition-related and 6.5% organic). Companies in all European areas performed well. The business division's income rose by 104.0% to Euros 40.9m.
The
Retail and Technology division increased its sales by 12.1% to Euros 209.6m. With organic growth of 7.9 percentage points, it was once again the leading GfK business division in this respect.
Sales in GfK's
Consumer Tracking division rose by 6.3% to Euros 100.3m (prior year: Euros 94.4m). 5.9 percentage points of the growth were of an organic nature and 0.4 percentage points resulted from currency effects. The household panel ConsumerScan performed particularly well in Germany, with a strong performance also from GfK Panel Services, Netherlands, especially with ConsumerScope. Income was 'unsatisfactory', falling 22.3% to Euros 4.5m, due mainly to the reorganization of the panel business in Switzerland.
The
Media division saw a further increase in demand. Sales rose 54.5% from Euros 62.2m in 2004 to Euros 96.2m, (47.5% acquisition and 6.7% organic). Additional orders for television viewer ratings in Germany as well as an order for the delivery of 4,000 GfK meters to measure TV reach to India contributed to this growth. The Media division's income increased at 143.8% to Euros 19.6m.
GfK's
HealthCare division increased its sales by 57.6% to Euros 107.3m, although 52.4 percentage points of this were due to acquisitions and a more modest 4.7 organic. Income rose by 54.9% with 22 percentage points of this organic, largely thanks to the good income generated by GfK V2, USA, as well as the German companies, GfK HealthCare and GPI Kommunikationsforschung. GfK says the HealthCare divisions of GfK Martin Hamblin did 'unsatisfactory business' and had a negative effect: as a result, they were integrated into GfK NOP, UK, and into GfK v2, USA, as of September 1, 2005.
GfK's
Other division saw sales slightly on the year from Euros 7.9m to Euros 7.5m.
Regions:
The NOP World acquisition has changed the regional split of GfK's business significantly. The regions Western and Southern Europe, Northern Europe and America expanded appreciably, with Germany for the first time ever relinquishing its position as the region with the highest volume of sales (a share of 27.1%, down from 35.3%). The region Western and Southern Europe is now the leader with a share of 27.5%, while sales share for the region America has increased from 12.3% in 2004 to 22.1% in financial year 2005.
All the regions increased their sales and, apart from Asia and the Pacific, income in financial year 2005 compared to the prior year.
Outlook
In 2006, the GfK Group aims to significantly increase sales and income again. With the same scope of consolidation, GfK expects sales to total Euros 1.1 billion, equivalent to an increase of almost 18%. As in prior years, GfK assumes that it will outperform the market and gain market share. It expects all five business divisions to increase sales and income.
The Group's home page is at
www.gfk.com .
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.
