GfK Revenues Down, Profits Up in First Quarter

GfK has announced results for the first quarter, with an organic decline of 0.7% in sales, reported as EUR 334.9m, a decline of 3.5% due to currency effects. However the Group said it achieved 'a significant increase in all profit indicators', and has confirmed its forecast for the year.

Adjusted operating income was up 2.7% to EUR 23.6m, with margin up from 6.6% to 7.0%. Cash flow from operating activities was almost doubled at EUR 18.3m.

CEO Matthias Hartmann said the quarter was 'satisfactory overall', explaining: 'All profit indicators are pointing in the right direction. Although the strategic realignment of the product portfolio affected the sales trend, it has already had the intended positive effect on the company's performance.' GfK says its two divisions are pursuing different strategies, with Consumer Experiences focused on improving income and margin, and high-profit Consumer Choices 'continuing to pursue its growth strategy'. Q1 like-for-like organic sales growth in the latter was 4.2% (1.3% with currency effects) - sales were EUR 141.6m. Consumer Experiences sales were down 6.9% on the previous Q1, to EUR 192.5m, with 3.2% of this down to currency effects.

In terms of world regions, organic sales rises of 11.5% in Central Eastern Europe, Middle East, Turkey and Africa, 10.0% in Latin America and 11.5% in Asia and the Pacific were offset by declines in Northern, Southern and Western Europe and North America.

GfK says it expects 'overall global economic growth to continue to increase slightly in the course of this year, even if uncertainties persist in individual regions', and says by year end it should have 'completed the key projects for its ongoing transformation.' It expects organic growth of 1 to 2% for 2014 and a margin of 12 to 12.5%.

Web site: www.gfk.com .