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GfK Set to Beat Forecasts
The GfK Group has released preliminary indicators showing a year of rapid growth in 2005. The prelims show sales up more than 39% from 671.7m to 935.0m euros - about 4% ahead of its forecast - and EBIT after income from participations up c. 41.2% from 91.1m to 128.6m euros.
The EBIT figure is around 14.0% ahead of the forecast of 'more than 112.5m euros', and the margin is likely to be 13.7% (12.5% forecast) - but see below re the effects of the move to IFRS rules on this. The results take into account integration costs relating to NOP World amounting to almost 16m euros.
From 2005 onwards GfK will use IFRS accounting principles for its financial statements and not US GAAP. This means various items will be charged to expenses that had not been under GAAP:- Intangible assets are valued differently under the purchase price allocation method, resulting in amortization of 16.8m euros
- expenses for employee stock options must be reported in the income statement, producing expenses amounting to 2.3m euros.
- Exchange differences resulting from foreign currency liabilities are not taken into account, adding expenses of 5.5m euros.
Under IFRS rules EBIT including income from participations amounts to around 104.0m euros.
The Group, which will publish its full preliminary results next Tuesday, is online at www.gfk.com .
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