GfK Enjoys 8% Organic Growth in First Quarter

GfK has reported a strong first quarter in its 2011 financial year, with consolidated sales up 10.4% to EUR 310.2 million and organic growth of 8.0%.

Operating margin climbed from 9.0% a year ago to 9.8%, adjusted operating income rose 20.5% to EUR 30.5 million and EBITDA was up 24.4% to EUR 38.8 million.

The firm's Custom Research sector generated sales of EUR 186.0m, up 11.2% year-on-year (8.2% organic growth), driven by its Western Europe/Middle East/Africa and Germany regions, with North American sales hit by postponement of orders into later quarters of the year. Income grew 60.1% to EUR 6.3 million.

The Retail and Technology sector also saw a good rise in sales, up 13.5% to EUR 90.4m, with Domestic Appliances and Telecom strong and good performance from new business areas FashionLife and Tourism. Here Central and Eastern Europe led the charge with Asia Pacific and Germany also strong. Income, already strong for this sector, rose again by 16.4% to EUR 22.8m, a margin of 25.2%.

By contrast, Media sales were flat at EUR 32.6m (down 1.1% in organic terms). Cuts in the public sector in the Western Europe/Middle East/Africa region cancelled out gains and new contract wins in Central and Eastern Europe. Income for the sector fell 10% to EUR 3.4m.

GfK says its order book is strong, with 65.4% of expected annual sales booked, up from 62.8% at the same point last year. The Group expects organic sales growth of 5% to 6% for financial year 2011 with all three sectors contributing and has set an exacting target of at least 14.3% for operating margin. It lists its main priorities as 'rigorous international alignment, increasing digitalization and expansion into growth markets' and says it will move forward also with standardization of methods, software and survey contents, and with finding and implementing cross-sector synergies.

CEO Prof. Klaus L. Wübbenhorst says the results show growth is 'established on a sound and solid basis' and adds: 'We are confident of achieving the aims we have set for 2011'.

Home page: www.gfk.com .