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GfK to Cut Salaries and Jobs
For the first three months of the year, GfK's sales slipped 1.3% from EUR 268.1m in Q1 2008 to EUR 264.7m. In order to absorb further 'crisis-related losses' the firm has announced measures to reduce personnel costs including short-time work, hiring freezes, salary cuts and redundancies.
In February, the firm also implemented an efficiency programme in a bid to save EUR 30m by 2010. The BISS (Business IT Services and Streamline Services create Synergies) programme combines projects across different sectors and countries to make procedures more effective and reduce costs.
At EUR 14.8m, adjusted operating income was down 35.7% on last year's Q1 figure. This decline was the result of lower sales - particularly in the Automotive, Financial Services and HealthCare segments. In addition, stronger price pressures from clients curbed income further, and some panel contracts were not forthcoming.
While organic sales decreased by 4.6%, acquisitions enhanced sales by 2.1%, and currency effects had a positive effect of 1.3%, particularly as a result of the rise in the value of the US dollar.
The firm's Custom Research sector experienced 'subdued demand' and postponed orders, but this was virtually offset by improved sales in the Retail and Technology sector, while the Media sector also increased its sales.
In terms of the different regions, GfK recorded good organic sales growth in Latin America and Asia and the Pacific, while seeing organic sales decline in Central and Eastern Europe, Germany, Western Europe/Middle East/Africa and North America.
The firm says its level of incoming orders in April was better than expected. By the end of April, 57.6% of the anticipated sales of the GfK Group for 2009 had already been booked or were on the order book. In line with expectations, the order book was below the high previous year's level of 61.8%.
'As a financially conservative company, GfK has adopted a long-term strategy of spreading the risk and focusing on innovations in the three different sectors,' the firm said in a statement. 'GfK will capitalize on the weakness in the economy to secure and, where possible, expand market shares, even if this results in a temporary reduction in income.'
Web site: www.gfk.com .
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