Good Results at GfK

Preliminary figures from GfK indicate that sales rose by 10.5% in 2002 to EUR 558.8 million, making the group the fifth largest market research organization in the world. Earnings before interest and tax (EBIT) including income from participations increased by 53.2% to EUR 50.1 million (previous year: EUR 32.7 million).

Following organic growth of 2.3% in the first nine months of 2002, GfK almost tripled this figure in the fourth quarter of the year. For 2002 as a whole, organic growth amounted to 3.5%. Net of the fixed volumes from long-term contracts, the figure stands at 5.3%. GfK, therefore, achieved its goal of growing faster than the market research sector as a whole, which, according to experts, grew by just under three per cent over the same period. 7.7% of growth came from acquisitions. Exchange losses, particularly in Asia and the Pacific and America, reduced growth in sales by 0.7%.
During financial year 2002, the Consumer Tracking division, which provides information services on consumer purchase behaviour to clients throughout Europe, concentrated its activities on reducing costs and optimizing production processes. This included in particular the continued Europe-wide implementation of the aTRACKtive data collection and evaluation system. Two thirds of the 1.4% growth in this division is organic. Exchange gains also impacted positively on results, accounting for 0.4% of growth.

The Non-Food Tracking division is the world's leading provider of information services on consumer durables and in recent years has achieved double-digit growth on an almost continuous basis. In the past financial year, the division again saw an above average increase in sales of 12.3%. Following an excellent performance in the fourth quarter with double-digit organic growth, the rate for the year as whole rose to 8.5%. Exchange losses depressed growth by -1.7%.

With three major contracts, the Media division has been able to further strengthen GfK's leading role in quantitative research on media reach in Europe. The TV ratings contract for AGF in Germany has been extended to include ratings for digital channels, the contract with Belgian television to establish the TV ratings for Belgium has been renewed and runs from 2002 to 2008 and the term of the TV research contract in France has been extended until 2005. All existing long-term contracts are therefore being continued. However, sales have fallen slightly due to the impact of the economic conditions on ad hoc contracts, especially from the print media.

The Ad Hoc Research division makes up the largest share of GfK sales. Despite reticence on the part of clients to place orders for communications research due to the difficult economic conditions, the division achieved above average growth in sales. Thanks to an excellent fourth quarter in which organic growth rates reached double digit figures, Ad Hoc Research pushed its organic growth up to eight per cent for 2002 as a whole.

With double-digit growth rates, business development in Western and Southern Europe, Northern Europe and Central and Eastern Europe has been very pleasing.

In Germany GfK grew its business by a total of 6.2%, which essentially resulted from acquisitions. Organic growth was reduced following the cessation of the data collection services by GfK Data Services on behalf of Information Resources GfK. Net of this effect, organic growth would have amounted to 1.1%.

The rates for organic growth in Asia and the Pacific (8%) and America (8.5%) were also very pleasing. The regions recorded growth by acquisition of 2.3% and 7% respectively. Exchange losses reduced growth rates by 6.9% and 5.8%.

2003 has started well for the GfK Group both in Germany and abroad. The order book for the consolidated companies, including sales already invoiced, already amounted to 39 per cent of the sales target in 2003 (previous year 38 per cent) for January. For the current financial year, GfK is aiming for sales of EUR 590 million. With the same scope of consolidation, this equates to growth of more than five per cent. GfK's aim is to outperform industry growth which, according to experts, is estimated at three per cent. GfK is also expecting growth from acquisitions, as the company intends to further expand its global network in 2003.

In addition, GfK expects its income to once again increase more strongly than sales. The margin, which is the ratio of EBIT including income from participations to sales, is set to rise to ten per cent.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.