European Results Help Strong GfK

GfK Group has this week announced a successful third quarter of 2006 with revenue up 27.5% to Euros 800.4m and adjusted operating income up 34.2% to Euros 100.2m. Organic revenue growth was 5.7%. Central and Eastern Europe saw especially strong organic growth.

Margin improved for the third successive quarter, to 12.5% (vs 11.9% the previous year).

Growth from acquisitions amounted to 21.5%, mainly from the consolidation of the former NOP World companies, whose business performance has been included as of June 1, 2005.

GfK says the results reflect very good business performance in all five business divisions and faster than expected progress in integrating the former NOP World companies.

The NOP acquisition contributed to a disproportionately high rise in sales in Custom Research, Media and HealthCare. Euros 371.7m sales for the Custom Research division in the first nine months represent a 38.9% increase on the year. Organic growth was 5.1 percentage points. Margin was down from 8.3% to 7.8% due GfK says to the lower margins of NOP World companies. The Retail and Technology division had sales of Euros 166.5m, growth of 9.4% of which 8.2% is organic. The Consumer Tracking division saw sales rise 9.8% to Euros 78.8m, all organic. Sales for the Media division rose by 35.1% to Euros 84.0m, although organic growth was only 4.8%. US subsidiary Mediamark Research has another particularly successful period. The Healthcare division enjoyed a rise in sales of 39.7% to Euros 95.7m, almost all due to acquisitions (37.1% vs 2.3% organic).

Of the firm's six core regions, Germany accounted for 24% of sales (up 5.0%, purely organic, to Euros 195.1m. Western and Southern Europe, the biggest region, saw a rise of 19.4% to Euros 208.6m, of which a healthy 8.2% was organic 11.4% from acquisitions. Northern Europe saw a fast rise of 55% to sales of Euros 121.1m, but acquisitions accounted for almost all of this (organic 0.5%). The firm says the 'adverse impact of the restructuring of GfK Martin Hamblin is continuing to decline.' Sales in Central and Eastern Europe were up 24.6% to Euros 44.7m, almost all growth being organic. In America, revenues rose to Euros 201.6m, mostly due to acquisitions (2.3% organic). Sales in Asia and the Pacific were up only 1.9% to Euros 29.4m, almost all organic – excluding Japan, GfK says the organic growth rate was 9.2%.

GfK is raising its forecast for total income for the financial year, to a margin of between 13.3% and 13.6% (originally 13%). It has confirmed its forecast for the year for consolidated sales of at least Euros 1.1bn, a year-on-year rise more than 18%. By the end of October, 93.1% of this year's sales target had already been invoiced or booked as orders in hand or orders received (prior year: 92.2%).

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.