sights set on global markets

Transcription

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Seite 1
CONTENTS
P R O V I S I O N A L K E Y D AT E S I N T H E F I N A N C I A L C A L E N D A R
11 April 2005
Accounts press conference, Nuremberg
G f K G RO U P: G ROW T H F RO M K N OW L E D G E
SIGHTS SET ON GLOBAL MARKETS
11 April 2005
Analysts’ conference, Frankfurt/Main
III Our corporate values
13 May 2005
Quarterly report as at 31 March 1)
IV Highlights of financial year 2004:
GfK achieves record result and continues expansion
GfK Group in figures
24 May 2005
Annual General Meeting, Nuremberg
12 August 2005
Interim report as at 30 June 1)
15 November 2005
Quarterly report as at 30 September 1)
28 February 2006
Provisional result for financial year 20051)
11 April 2006
11 April 2006
16 The Management Board
15 May 2006
21 GfK shares
23 May 2006
28 Special – GfK regions:
14 August 2006
14 November 2006
2 GfK business divisions: knowledge is the basis for
decision-making
4 2004 at a glance
6 GfK image campaign: global growth from
local knowledge
8 The Supervisory Board
9 Report by the Supervisory Board
12 To our shareholders and business associates
18 Corporate Governance
26 Investor Relations
30 Germany
GfK Group: Annual Report 2004
1 GfK Group: sights set on client markets
1) Publication is scheduled for before the start
of the trading session.
C O N TA CT S
If you wish to order further copies of
the Annual Report or have any queries,
please contact:
Public Affairs and Communications
Dr. Ulrike Schöneberg
Tel. +49 (0) 911 - 395 26 45
Fax +49 (0) 911 - 395 40 41
[email protected]
Investor Relations
Bernhard Wolf
Tel. +49 (0) 911 - 395 20 12
Fax +49 (0) 911 - 395 40 75
[email protected]
Publisher:
GfK ag
Nordwestring 101
D-90319 Nuremberg
http://www.gfk.de
Editorial support services:
Medienservice Peter Reichard, Ebersberg
Design:
Scheufele Kommunikationsagentur GmbH,
Frankfurt/Main
Photography:
Annette Hornischer, Frankfurt/Main
Lithography:
607er Druckvorlagen, Darmstadt
Translation:
aget Limited, London, uk
Printing:
Mediahaus Biering GmbH, Munich
46 Northern Europe
54 Central and Eastern Europe
62 America
70 Asia and the Pacific
MANAGEMENT REPORT AND FINANCIAL
S TAT E M E N T S O F T H E G f K G R O U P
80 Management report
110 Financial statements
116 Notes to the consolidated financial statements
146 Auditors’ report
M I S S I O N S TAT E M E N T
GfK. Growth from Knowledge
Companies need to make decisions. Knowledge is the basis for decision-making.
Annual Report 2004
Our business information services provide the essential knowledge that industry, retail,
S I G H T S S E T O N G LO B A L M A R K E T S
the service sector and the media need in order to make their decisions.
As a knowledge provider, we aim to be at the top in all the global markets in which we
This Annual Report is also available in German.
operate – in the interests of our clients, our employees, our company, our shareholders
The English language version is a translation of the audited German Annual Report.
and the general public.
Printed on unchlorinated bleached paper
38 Western and Southern Europe
A D D I T I O N A L I N F O R M AT I O N
148 Five-year overview
150 Glossaries
V List of GfK company abbreviations used in the
management report
VI Index
VII Financial calendar
VII Contacts
VII
II
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CONTENTS
11 April 2005
11 April 2005
13 May 2005
24 May 2005
12 August 2005
15 November 2005
28 February 2006
11 April 2006
11 April 2006
15 May 2006
21 GfK shares
23 May 2006
14 August 2006
14 November 2006
decision-making
4 2004 at a glance
local knowledge
30 Germany
C O N TA CT S
please contact:
Tel. +49 (0) 911 - 395 26 45
Fax +49 (0) 911 - 395 40 41
[email protected]
Investor Relations
Bernhard Wolf
Tel. +49 (0) 911 - 395 20 12
Fax +49 (0) 911 - 395 40 75
[email protected]
Publisher:
GfK ag
Nordwestring 101
D-90319 Nuremberg
http://www.gfk.de
Design:
Frankfurt/Main
Photography:
Lithography:
Translation:
Printing:
46 Northern Europe
62 America
Annual Report 2004
150 Glossaries
management report
VI Index
VII Contacts
VII
II
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O U R C O R P O R AT E VA L U E S
HIGHLIGHTS OF FINANCIAL YEAR 2004
C L I E N T- D R IV E N
B
Our clients’ needs drive our business. We continuously seek to
better understand our clients’ needs, improve all aspects of existing
research products, offer innovative products and to be an integral
part of our clients’ information systems. Accuracy, sound methodology,
excellent client service, flexibility, timely delivery and cost effectiveness
all ensure that we meet and even exceed our clients’ expectations.
We build long-term partnerships with our clients, contributing to their
success.
Beyen Marktforschung, Germany
Beyen Marktforschung GmbH, Düsseldorf,
Germany.
OUR PEOPLE
People are our main asset. Development through training, sharing ideas
and sound experience is essential to our business. Our people have the
freedom to explore and develop their talents and are empowered to achieve
our common goals. We encourage and reward initiative, dedication and
hard work. Fairness, good communication and working relationships at all
levels and locations are key to our success.
Sales were up by 12.8 per cent to eur 671.7 million, with organic growth of
6.6 per cent coming in well above the sector average.
ebit including income from participations climbed twice as fast as sales in
percentage terms, rising by 31.2 per cent to eur 91.1 million. An increase
in the margin of almost two percentage points to 13.6 per cent makes GfK
one of the most profitable companies in the industry.
bwv Group, Switzerland
bwv Holding ag, St. Gallen, Switzerland,
including its subsidiaries.
C
Following the acquisition of GfK Arbor, the GfK Group now ranks No. 15 among
market research companies in the usa, the world’s biggest market research
market.
Caribou Lake Software, usa
Caribou Lake Software, llc, Minneapolis,
usa.
F
GfK is expanding the retail research activities of its Retail and Technology
division to include additional countries in the regions of Central and Eastern
Europe, America, Asia and the Pacific as well as in the Middle East.
Fessel-GfK, Austria
fessel-GfK Institut für Marktforschung
Ges.m.b.H., Vienna, Austria.
G
GfK arbor usa
GfK arbor, llc, Media, usa.
GfK Asia, Singapore
GfK Asia Pte Ltd., Singapore, Singapore.
GfK Group in figures1)
Change
I N N O VAT I O N
We recognize that investing in continuous innovation in both the process
and the end product is a prerequisite to meeting clients’ requirements.
Our aim is to be at the cutting edge with our key business activities. Clients’
needs, evolving markets, new technology and the expertise and ideas of our
people throughout the world are what drive innovation.
671.7
+ 12.8
ebitda
in eur million
91.2
108.9
+ 19.5
2)
Consolidated total income
before minority interests
Tax rate
We respect and learn from local business practices and cultures and
provide knowledge tailored to local needs. Our global network comprises
international teams, tools and products to provide multinational clients
with consistent services. As proud members of the GfK Group, we share
local and international expertise to continually improve all aspects of our
business.
in eur million
66.4
86.9
+ 30.9
in eur million
69.5
91.1
+ 31.2
in %
11.7
13.6
+ 1.9 3)
in eur million
41.1
63.5
+ 54.7
in %
38.0
34.3
–
in eur million
33.3
52.6
+ 57.8
Earnings per share
in eur
1.06
1.68
+ 57.8
Dividend per share
in eur
0.214)
0.305)
+ 42.9
Cash flow from ongoing
GROWTH
business activity
in eur million
69.2
92.3
+ 33.3
Investment
in eur million
47.7
85.1
+ 78.4
Return on equity
in %
17.3
23.2
+ 6.0 3)
Total return on equity
in %
14.3
17.2
+ 2.8 3)
Sales return
in eur million
6.9
9.5
+ 2.6 3)
Net indebtedness
in eur million
– 24.9
– 31.7
+ 27.3
in years
0.5
0.5
– 11.5
44.3
+ 3.6
3)
+ 0.5
3)
Ratio of net indebtedness
to cash flow
Profitable growth results in greater opportunities. As individuals, teams and
business units, we are aware of the impact of our decisions and actions at
all levels. We use financial and non-financial measurements to review and
improve performance on an ongoing basis. Our growth provides investors
with a fair return on the financial resources they have entrusted to us.
Shareholders’ equity
Gearing
No. of employees at year-end
1)
2)
3)
4)
5)
III
in %
595.3
ebit after income
from participations
GLOBAL EXPERTISE – LOCAL KNOWLEDGE
2004
in eur million
Margin
2003
Sales
ebit before income
from participations
IV
in %
40.7
INDEX
L I S T O F G f K C O M PA N Y A B B R E V I AT I O N S U S E D I N T H E
M A N A G E M E N T R E P O R T A N D F I N A N C I A L S TAT E M E N T S
in %
12.2
12.7
full-time
5,066
5,539
GfK Group financial reporting in accordance with us gaap
ebit after income from participations in relation to sales
Percentage points
Dividend adjusted for the dilution effect resulting from the increase from company funds
Proposal to the Annual General Meeting on 24 May 2005
+ 9.3
GfK Bosnia Herzegovina, Bosnia
Herzegovina
GfK bh d.o.o, Sarajevo, Bosnia
Herzegovina.
GfK Business Solutions & Processing,
Germany
GfK Aktiengesellschaft, Bereich GfK
Business Solutions & Processing,
Germany.
GfK Custom Research, usa
GfK Custom Research Inc., Minneapolis,
usa.
GfK Custom Research Worldwide,
Belgium
GfK Ad Hoc Research worldwide gie,
Brussels, Belgium.
GfK Data Services, Germany
GfK Aktiengesellschaft,
GfK Data Services Division, Germany.
GfK do Brasil, Brazil
GfK do brasil ltda., São Paulo, Brazil.
GfK Fernsehforschung, Germany
GfK Fernsehforschung GmbH,
Nuremberg, Germany.
GfK Group Services, Germany
GfK Aktiengesellschaft, GfK Group
Services, Germany.
GfK Indicator, Brazil
indicator gfk ltda., São Paulo, Brazil.
GfK Latino-america Holding, Spain
gfk latinoamerica holding, s.l.,
Valencia, Spain.
GfK Market Analysis, Greece
GfK market analysis e.p.e., Athens,
Greece.
GfK Marketing Services Australia,
Australia
GfK Marketing Services Australia Pty. Ltd.,
Sydney, Australia.
GfK Marketing Services uk, uk
GfK Marketing Services Ltd.,
West Byfleet, Surrey, uk.
GfK Marktforschung, Germany
GfK Marktforschung GmbH, Nuremberg,
Germany.
GfK Morocco, Morocco
GfK memrb Marketing Services Maroc,
Casablanca, Morocco.
GfK Martin Hamblin, uk
GfK Martin Hamblin Limited, London, uk.
GfK Media, uk
GfK Media Ltd., London, uk.
GfK Methoden- und Produktentwicklung
GfK Aktiengesellschaft, GfK Methodenund Produktentwicklung, Germany.
GfK MS Chile, Chile
GfK Marketing Service Chile Limitada,
Santiago, Chile.
GfK ms Ltda Brasil, Brazil
GfK marketing services ltda., São Paulo,
Brazil.
GfK Panel Services Benelux,
Netherlands
GfK Panelservices Benelux b.v., Dongen,
Netherlands.
GfK PS Benelux Holding, Netherlands
GfK Panelservices Benelux Holding b.v.,
Dongen, Netherlands.
GfK Rus, Russia
GfK-rus Gesellschaft mbH, Moscow,
Russia.
GfK-usm, Ukraine
GfK-Ukrainian Surveys & Market Research
(usm), Kiev, Ukraine.
gpi Kommunikationsforschung,
Germany
gpi Kommunikationsforschung
Gesellschaft für Pharma-Informationssysteme mbH, Nuremberg, Germany.
116 Accounting and valuation
methods
I
96, 108 Acquisitions
ifr GfK, France
see ifr Group, France.
Ad Hoc Research
see Custom Research
120f., 142ff. Affiliated companies
ifr Group, France
cmi Field sarl, Viroflay, France
Institut Français de Recherche ifr s.a.,
Viroflay, France
ifr Europe Ltd., London, uk
ifr France s.a., Viroflay, France
ifr Italia S.r.L., Milan, Italy
ifr Marketing España s.a., Madrid, Spain
ifr Monitoring Deutschland GmbH,
Düsseldorf, Germany
ifr Nederland b.v., Amsterdam,
Netherlands
ifr Polska Sp. z o.o., Warsaw, Poland
ifr u.k. Ltd., London, uk.
iha-GfK-Group, Switzerland
bwv Holding ag, St. Gallen, Switzerland
Eiphos Holding ag, Hergiswil, Switzerland
iha-GfK ag, Hergiswil, Switzerland
iha·ims Health GmbH, Hergiswil,
Switzerland
iha Italia S.p.A., Milan, Italy
Liechti ag, Kriegstetten, Switzerland
dragon eye Ltd., Hergiswil, Switzerland
Media Focus (arge), Hergiswil,
Switzerland
Modata ag, Hergiswil, Switzerland
Modata GmbH, Berlin, Germany
Telecontrol ag, Hergiswil, Switzerland.
62ff., 69, 94f., 136 America
IV, 12, 84, 148 Margin
3, 92, 108, 135 Media
Net income for the year
see Consolidated total
income
121, 145 Associated companies
85, 111, 125ff., 148 Balance sheet
125ff. Balance sheet, notes to the
IV, 86, 148 Net indebtedness
122 Net interest income
85, 111 Total assets
Non-Food Tracking
see Retail and Technology
85f., 148 Borrowings
2f., 87ff., 105f., 108,
135, 148 Business divisions
See also
Consumer Tracking, Custom
Research, HealthCare, Media,
Retail and Technology
Cash flow
86, 112 from investment activity
86, 112, V from ongoing business
activity
86, 112, V Free cash flow
54ff., 61, 94, 136 Central and Eastern Europe
109ff. Consolidated financial
statements:
IV, 84f., 109, 148 Consolidated total income
Consolidation
116 Methods of consolidation
118f. Scope of consolidation
3, 89f., 103, 135, 148 Consumer Tracking
134 Contingencies
46ff., 53, 93f., 136 Northern Europe
2f., 84, 87ff., 92ff.,
110, 148 Operating income
IV, 87ff., 92ff., 107 Organic growth
99, 107 Organization and
administration
V Pay-out ratio
136 Pro forma statements (sfas 1)
130 Proposed appropriation of
profits
86, 111, 118f., 130f. Provisions
100, 107 Purchasing
IV, 151 Ratio of net indebtedness to
cash flow
92ff., 136 Regions
see also America, Asia and
the Pacific, Germany,
Northern Europe, Western
and Southern Europe,
Central and Eastern Europe
2, 98, 135, 148 Retail and Technology
6, 100f., 107 Corporate Communications
2, 88, 135, 148 Custom Research
85, 111, 148 Current assets
116 Currency conversion
Information Resources Deutschland,
Germany
Information Resources GfK GmbH,
Nuremberg, Germany.
86, 112, 148 Liquidity
12ff., 16ff., 19, 138, 140 Management Board
70ff., 77, 95f., 136 Asia and the Pacific
9, 18ff., 141 Corporate Governance
iha·ims Health, Switzerland
Switzerland.
26f. Investor Relations
IV, 86, 107, 148 Investment
Return, see Margin
IV, 149 Return on capital employed
96, 106 Research and development
101ff. Risk report
IV, 84, 110, 116f., 148 Sales
111, 118, 123 Deferred taxes
Segment report,
see also Business divisions,
Regions
IV, 13, 25, 130, 148 Dividend
ebit
IV, 84, 110, 148 before income from
participations
IV, 84, 110, 148 after income from
participations
IRI/GfK, Germany
Nuremberg, Germany.
12, 21ff.
IV, 23, 110, 124, 149
23, 149
22f.
IV, 84, 110, 148 ebitda
M
ebit margin
see Margin
m2a, France
m2a s.a., Saint Aubin, France.
IV, 97f., 106, 138, 149 Employees
media control GfK international,
Germany
media control GfK international GmbH,
Baden-Baden, Germany.
100 Environmental protection
86, 107, 112 Financing
85, 111, 114f., 150 Fixed assets
86, 112, 119, 133, 149 Funds statement
IV, 86, 149 Gearing
T
30ff., 37, 92f., 136 Germany
117, 125 Goodwill
Telecontrol, Switzerland
3, 90f., 105, 135, 148 HealthCare
85, 110, 148 Income from ongoing
business activity
V
84, 122, 148 Income from participations
v2 GfK, usa
v2 GfK llc, Blue Bell, usa.
84, 110, 121ff. Income statement
121f. Notes to the income
statement
V
Shares
Earnings per share
Key indicators
Share price performance
85, 111, 113, 118,
127f., 148, IV
85, 148
IV, 149
Changes in shareholders’
equity
Equity ratio
RoE
24 Shareholder structure
142ff. Shareholdings
135f. Segment reporting
see also business divisions,
regions
86f., 107 Soft facts
Staff
see Employees
9f., 19, 117, 129 Stock options
1, 12f., 108f. Strategy
8ff., 18ff., 139f. Supervisory Board
84, 123f. Taxes on income and
earnings
38ff., 45, 93, 136 Western and Southern
Europe
VI
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19:16 Uhr
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B
success.
Germany.
OUR PEOPLE
C
market.
usa.
F
Fessel-GfK, Austria
G
GfK arbor usa
GfK Asia, Singapore
Change
I N N O VAT I O N
671.7
+ 12.8
ebitda
in eur million
91.2
108.9
+ 19.5
2)
Tax rate
business.
in eur million
66.4
86.9
+ 30.9
in eur million
69.5
91.1
+ 31.2
in %
11.7
13.6
+ 1.9 3)
in eur million
41.1
63.5
+ 54.7
in %
38.0
34.3
–
in eur million
33.3
52.6
+ 57.8
Earnings per share
in eur
1.06
1.68
+ 57.8
Dividend per share
in eur
0.214)
0.305)
+ 42.9
GROWTH
business activity
in eur million
Investment
92.3
+ 33.3
in eur million
47.7
85.1
+ 78.4
in %
17.3
23.2
+ 6.0 3)
in %
14.3
17.2
+ 2.8 3)
Sales return
in eur million
6.9
9.5
+ 2.6 3)
Net indebtedness
in eur million
– 24.9
– 31.7
+ 27.3
in years
0.5
0.5
– 11.5
44.3
+ 3.6
3)
+ 0.5
3)
Gearing
1)
2)
3)
4)
5)
IV
69.2
Return on equity
to cash flow
III
in %
595.3
ebit after income
from participations
2004
in eur million
Margin
2003
Sales
ebit before income
from participations
in %
40.7
INDEX
in %
12.2
12.7
full-time
5,066
5,539
Percentage points
+ 9.3
Herzegovina
Herzegovina.
Germany
Germany.
usa.
Belgium
Brussels, Belgium.
Nuremberg, Germany.
Services, Germany.
Valencia, Spain.
Greece.
Australia
Sydney, Australia.
Germany.
GfK Media, uk
GfK MS Chile, Chile
Santiago, Chile.
Brazil.
Netherlands
Netherlands.
GfK Rus, Russia
Russia.
GfK-usm, Ukraine
Germany
methods
I
ifr GfK, France
Ad Hoc Research
see Custom Research
ifr Group, France
Viroflay, France
Netherlands
Switzerland
Switzerland
62ff., 69, 94f., 136 America
IV, 12, 84, 148 Margin
3, 92, 108, 135 Media
income
Non-Food Tracking
2f., 87ff., 105f., 108,
See also
Cash flow
activity
statements:
Consolidation
134 Contingencies
2f., 84, 87ff., 92ff.,
administration
V Pay-out ratio
profits
86, 111, 118f., 130f. Provisions
100, 107 Purchasing
cash flow
92ff., 136 Regions
Germany
Nuremberg, Germany.
Switzerland.
Return, see Margin
101ff. Risk report
IV, 84, 110, 116f., 148 Sales
Segment report,
Regions
IV, 13, 25, 130, 148 Dividend
ebit
participations
participations
IRI/GfK, Germany
Nuremberg, Germany.
12, 21ff.
IV, 23, 110, 124, 149
23, 149
22f.
Shares
Earnings per share
Key indicators
85, 111, 113, 118,
127f., 148, IV
85, 148
IV, 149
equity
Equity ratio
RoE
IV, 84, 110, 148 ebitda
M
ebit margin
see Margin
m2a, France
IV, 97f., 106, 138, 149 Employees
Germany
85, 111, 114f., 150 Fixed assets
86, 112, 119, 133, 149 Funds statement
IV, 86, 149 Gearing
T
30ff., 37, 92f., 136 Germany
117, 125 Goodwill
3, 90f., 105, 135, 148 HealthCare
business activity
V
v2 GfK, usa
statement
V
regions
Staff
see Employees
earnings
Europe
VI
Financial year 2004
THE GfK GROUP
G f K G RO U P:
Ranked No. 1 in Germany, No. 4 in Europe and No. 5 worldwide today, GfK is a leading
global market research company. Our success is based largely on the commitment of
our workforce, which includes some of the most talented, experienced and knowledgeable
people in the sector worldwide. We combine in-depth knowledge of the methods and
technology used in modern market research with vast market knowledge and marketing
expertise, making us an indispensable and well-respected partner for our clients.
Companies need to make decisions.
Knowledge is the basis for decision-making.
Our business information services provide the essential knowledge that industry, retail, the
service sector and the media need in order to make their decisions. As a knowledge provider,
we aim to be at the top in all the global markets in which we operate – in the interests of our
clients, our employees, our company, our shareholders and the general public.
OUR AIMS
Outperform sector sales growth
Achieve attractive margins
Lead the way through innovation
Focus on customer loyalty
O U R S T R AT E G I E S
We intend to achieve our aims through
Expansion in selected markets
Excellence in added value services and consultancy
Leverage of our unique expertise in consumer, healthcare, media and retail markets
Long-term investment in advanced technologies and Internet applications
GfK_1
OVERVIEW OF THE GfK BUSINESS DIVISIONS
KNOWLEDGE IS THE BASIS FOR DECISION-MAKING
People often say that today, information about consumers, markets and market players
abounds or, at any rate, such information is easy to get hold of. What counts is not the
surplus of easily accessible data, but targeted knowledge based on careful analysis, which
supports companies in their decision-making. And this is where experts like GfK come
into play. Our five business divisions offer a comprehensive range of services to clients in
the consumer goods markets, the pharma sector, retail, the media and service industries
to facilitate their marketing decisions.
C U S T O M R E S E A R C H (formerly Ad Hoc Research)
Through our Custom Research division, our 47 subsidiaries provide clients in 30 countries
around the world and via partnerships in another 63 countries with information services
for their operating and strategic marketing decisions. These include tests and surveys on
product and pricing policy, brand management, communication, distribution and customer
loyalty.
2004 in figures
Sales
Operating profit
HIGHLIGHTS 2004
Shareholding in GfK Martin Hamblin, uk and usa, topped up to
100 per cent
Acquisition of GfK Arbor in the usa
Shareholding in GfK Indicator, Brazil, increased to 95 per cent
eur 252.1 million
+ 14.2 %
eur 21.2 million
+ 37.7 %
Margin 1)
+ 8.4 %
+ 1.4 %2)
1,961
+ 14.9 %
No. of employees
1) Operating profit in relation to sales
2) Percentage points
R E TA I L A N D T E C H N O L O G Y (formerly Non-Food Tracking)
In Retail and Technology, we provide clients in industry and retail with information services
derived from continuous retail sales analyses and surveys on consumer technology products
in 56 countries around the world.
2004 in figures
Sales
Operating profit
Margin 1)
eur 187.0 million
+ 12.2 %
eur 46.9 million
+ 30.0 %
+ 25.1 %
+ 3.5 %2)
1,692
+ 11.5 %
No. of employees
2_GfK
HIGHLIGHTS 2004
Latin American company network set up in Argentina, Brazil and
Chile
Expansion of the network in the Middle East and Africa, which is
coordinated by GfK memrb, to include Morocco, Algeria, Yemen,
Lebanon and Syria
Launch of worldwide implementation of the startrack production
and database system
Business divisions – overview
THE GfK GROUP
CONSUMER TRACKING
Through the Consumer Tracking division, we provide our clients with regular information
services based on continuous surveys and analyses of consumer purchase decisions and
behaviour in 25 countries across Europe. These cover consumer goods and services of all
kinds.
HIGHLIGHTS 2004
Introduction of the ScanIT technology in the ConsumerScan panel,
which means that consumers can record their purchases on the spot
and forward this data to GfK using their pc
Expansion of the ConsumerScan panel in Germany from 15,000 to
17,000 and in Italy from 6,000 to 7,000 households
New business as a result of additional services and gaining new
major clients
2004 in figures
Sales
Operating profit
eur 94.4 million
+ 5.2 %
eur 5.9 million
+ 68.1 %
+ 6.2 %
+ 2.3 %2)
849
+ 2.4 %
eur 62.2 million
+ 6.8 %
Margin 1)
No. of employees
MEDIA
Through our Media division, we provide clients in 27 countries throughout Europe with
information services on the reach, intensity and nature of media usage and media
acceptance. The offering covers both the classic media such as television, radio, print
and outdoor advertising as well as the Internet and new online and offline media.
HIGHLIGHTS 2004
Contract with agf (Television Research Partnership) for measuring
tv ratings in Germany renewed by a further seven years
bbc commissions GfK Media uk to carry out a survey for which
viewers evaluate tv and radio programmes in the uk online every day
from 2005 onwards. Duration of the contract: three years
GfK Media uk wins Innovation Award of the British Market Research
Associations bmra and mrs
2004 in figures
Sales
Operating profit
Margin 1)
eur 7.8 million
+ 4.0 %
+ 12.5 %
– 0.3 %2)
348
+ 6.1 %
eur 68.1 million
+ 38.2 %
eur 7.7 million
+ 23.8 %
+ 11.4 %
– 1.3 %2)
246
+ 7.9 %
No. of employees
H E A LT H C A R E
Through our HealthCare division, we provide clients with information services relating to product
development, communication, image and price control of medicines covering 14 countries. We
also provide analyses of market positioning and customer satisfaction in the healthcare sector as
well as of the volume of materials and products used in the dental and veterinary sectors.
HIGHLIGHTS 2004
Shareholding in French company, m2a, which focuses on veterinary
market research, increased to 100 per cent
Global harmonized system of instruments and services implemented
in all companies belonging to the GfK HealthCare division
Various HealthCare departments set up and activities launched in
2004 in figures
Sales
Operating profit
Margin 1)
No. of employees
GfK_3
2 0 0 4 AT A G L A N C E
01
02
03
05
06
To mark the 125th birth-
GfK among the top 50
On the strength of
GfK subsidiary,
GfK’s Investor Relations
At the Week of Audience
day of GfK’s founding
German employers in
newly acquired GfK
Telecontrol, supplies
receive Börse Online
Measurement organized
father, Professor Dr.
2004: a survey carried
arbor and us-based
1,000 tv meters to
award. According to
by arf/esomar in
Wilhelm Vershofen,
out by Capital magazine
companies, GfK Custom
Decision Craft for a
private investors, GfK
Geneva, Switzerland,
GfK donates eur 50,000
showed that GfK
Research, v2 GfK
pilot survey on tv
provides the best
GfK presents its
to the Economics and
employees rated their
and Martin Hamblin
ratings carried out
Investor Relations
latest multi-talent:
Social Sciences Faculty
company highly.
Research, GfK becomes
on the basis of two
services in Germany.
MediaWatch, a watch
one of the top 15
representative house-
which records the
companies in this
hold samples in the
different mass media
sector in the usa, the
Indian cities of Mumbai
to which its wearer is
world’s largest national
(Bombay) and
exposed.
marketing research
Ahmedabad.
at Erlangen-Nuremberg
University for the
modernization of one
of the university’s
lecture theatres.
The joint “Best Brands
2004 – German brand
ranking” survey by GfK
and WirtschaftsWoche
magazine determines
agf extends contract with
Adidas, Haribo and
GfK Fernsehforschung
Siemens as the strongest
by a further seven years
German brands.
market.
GfK market researchers
The acquisition of all
and representatives from
GfK Bosnia Herzegovina
of the shares in French
GfK client companies
established in Sarajevo.
company m2a means
provide examples of how
– GfK entrusted with
This completes GfK’s
that GfK is the leading
companies can make
continuous tv research
presence in all succes-
provider in France of
sustained improvements
in Germany until 2011.
sor countries of the
ad hoc information
to their marketing and
former Yugoslavia.
services relating to
communication at the
veterinary medicine.
Research Summit 2004
Symposium in Lucerne,
Switzerland, of GfK’s
top 30 statistics and
methodology experts
from 16 countries.
Focus of the conference:
consumer and market
segmentation. Professor
Wagner a. Kamakura
from the Fuqua School
of Business at Duke
University in the usa is
guest speaker.
4_GfK
04
organized by GfK Custom
Research Worldwide in
Milan.
2004 at a glance
07
08
09
10
THE GfK GROUP
11
12
GfK ag scrip issue.
Launch of the new
The two major GfK
GfK Media uk receives
The 2004 International
The bbc commissions
GfK doubles its share
gfk4u Intranet following
divisions are renamed,
the innovation prize
Consumer Electronics
GfK to carry out a survey
capital following a share
basic structural changes
with Non-Food Tracking
of British market
Conference takes place
on terrestrial radio and
increase from company
and a visual make-over.
trading under the name
research association,
in Fürth. The slogan,
tv programmes in the
funds, increasing the
The new communication
“Retail and Technology”
bmra, for its radio
Consumer Electronics on
uk from April 2005
number of shares by
platform promotes
and Ad Hoc Research
ratings research, which
the move, attracts over
onwards. The three-
20 per cent. All GfK
knowledge and
becoming “Custom
is based on Radiocontrol
270 experts from 21
year contract is the
shareholders receive
information sharing
Research”. The change
technology. The panel of
countries interested in
biggest ad hoc research
one additional new
and should enhance
reflects the increasing
judges decides that the
the possibilities of adding
contract awarded in
share for each five
and optimize cooperation
volume of services
innovative technology
value in converging
British media research.
existing shares they
throughout the global
provided to countries
generated sustained
digital markets.
already hold.
GfK network.
outside Europe by these
value added for clients.
GfK achieves an excellent
With retrospective effect
index value of over 450
from 1 January 2004,
points in a Capital
The GfK Management
More than 100 experts
Board approves the
For the third time, GfK
attend the financial
Group’s new inter-
The GfK Annual Report
is the key sponsor of
markets conference
national advertising
the GfK Group takes
2003 wins bronze
the Nuremberg city run.
organized by fessel-
campaign, Global growth
magazine survey on the
over 100 per cent of the
at Berliner Type 2004,
Around 8,200 runners
GfK in Austria. The
from local knowledge.
quality of the Investor
shares in uk-based
the prestigious
take part in the race,
discussions focus on
To be launched in 2005,
Relations work involving
GfK Martin Hamblin.
communication design
including over 160 GfK
the economic area of
the campaign will see
around 300 analysts,
The move strengthens
award. GfK’s Annual
employees with their
Central and Eastern
ads published in trade
ranking the company
GfK’s presence in the
Report is among the
distinct t-shirts showing
Europe and its financial
magazines around the
No. 2 among SDax
second largest national
20 award-winning
the orange GfK logo.
and insurance markets.
world.
companies and No. 11
market research market.
corporate communications
among the 198 companies
of the Euro Stoxx 50,
Dr. Günther Beckstein,
two divisions.
publications.
GfK is awarded the
contract for continuous
Minister of the Interior
radio ratings research
of Bavaria, visits GfK
in Belgium for 2005
in Nuremberg with a
and 2006, which is
Almost 600 marketing
delegation of members
commissioned by the
and market research
of the regional parliament.
cim media research
experts from the whole
The visit is aimed at
working group.
of Germany gathered at
finding out more about
the 2004 GfK conference,
surveys on Nuremberg
which was held in
as a financial and
Nuremberg’s Meister-
property centre as well
singerhalle. The
as the consumer mood
conference focused on
in Germany and its
the concept of time-poor
neighbouring countries.
Dax, MDax and SDax
indices.
consumers and guest
speaker was August
Oetker, grandson of the
eponymous pioneer for
convenience food in the
German market.
GfK_5
G f K I M A G E C A M PA I G N
GLOBAL GROWTH FROM LOCAL KNOWLEDGE
In December 2004, the GfK Management Board approved a new international advertising
campaign for the Group. The new ads for the print media, which will only appear in trade
publications, have been designed to visually communicate GfK’s claim, Growth from
Knowledge. Based on a combination of intelligence, emotion and humour, the campaign
features unique images.
The basic idea was to ensure that the campaign could be used consistently all over the world
for several years without losing impact. The new GfK campaign is built around one of the
corporate values, global expertise – local knowledge, and illustrates growth using unusual
pictures. Well-known symbols, products and other features from all parts of the world are
transformed and people, monuments, indeed the world, expand. The images show that GfK
is present throughout the world.
Right royal growth a tall order in
the uk? Impossible? Visions in the
uk? Is nothing impossible today?
Want a bigger share of the market?
Going for specific targets? More
customers? As many as possible?
Want to grow? Even bigger? Want
knowledge? GfK
A fresh wind blowing in growth?
Impossible? Visions in the Netherlands? Is nothing impossible today?
Want to grow? Even bigger? Want
knowledge? GfK
6_GfK
Image campaign
THE GfK GROUP
Lady Liberty growing? Impossible?
Visions in the land where the sky’s
the limit? Is nothing impossible
today? Want a bigger share of the
market? Going for specific targets?
More customers? As many as
possible? Want to grow? Even
bigger? Want knowledge? GfK
Your reach growing? Impossible?
Visions in South America?
Is nothing impossible today?
Want to grow? Even bigger?
Want knowledge? GfK
One of the wonders of the world
growing? Impossible? Visions in
Asia? Is nothing impossible today?
Want to grow? Even bigger?
Want knowledge? GfK
GfK_7
THE SUPERVISORY BOARD
Hajo Riesenbeck
hr Committee
Hajo Riesenbeck (Chairman)
Chairman of the Supervisory Board
Dr. Wolfgang C. Berndt
from 16 December 2004
Werner Spinner
Director at McKinsey & Company,
Düsseldorf
Finance Committee
Dr. Arno Mahlert (Chairman)
Dr. Christoph Achenbach
Dieter Wilbois
Dieter Wilbois
Chairman of the Management Board of
Senior Specialist Software Development at
Karstadt Quelle ag, Essen
GfK Aktiengesellschaft
Jörg Bandt
Elmar Wohlgensinger
Data Collection Manager at
until 15 June 2004
President of the Board of Administration of
Member of the Board of Directors of
Peter Zühlsdorff
Cadbury Schweppes plc, London, uk
Chairman of the Supervisory Board
Kerstin Döpfert
since then Honorary Chairman of the
Independent Works Council representative at
Supervisory Board
Managing shareholder of dih Deutsche
until 16 December 2004,
Industrie-Holding GmbH, Frankfurt/Main
Klaus Hehl
until 15 June 2004
Deputy Chairman of the Supervisory Board
Dr. Arno Mahlert
from 15 June 2004
cfo of Tchibo Holding ag
Werner Spinner
from 15 June 2004
Chairman of the Supervisory Board of
Biotest ag, Dreieich
8_GfK
Report by the Supervisory Board
THE GfK GROUP
REPORT BY THE SUPERVISORY BOARD
In financial year 2004, the Supervisory Board kept itself informed on a regular basis of the
GfK Group’s business development, income and financial position, its personnel situation
and impending investments. It has monitored and advised on the activities of the company’s
Management Board and discussed all significant business events with the Management Board.
The Supervisory Board met six times in financial year 2004. At these meetings, the
Management Board’s reports and the company’s prospects for development were
discussed in depth. The main topics here were the strategic direction of the GfK
Group and its international acquisitions activity, as well as discussion and approval
of the annual accounts for 2003, the development of business during financial year
2004 and the budget for financial year 2005. During the financial year, the Chairman
of the Supervisory Board maintained constant contact with the Management Board.
The term “corporate governance” stands for responsible company management
and control geared towards long-term value added. The Supervisory Board has
dealt exhaustively with the rules of the German Corporate Governance Code and
on 16 December 2004, issued a declaration of compliance pursuant to § 161 of
the German Stock Corporation Act (AktG). In line with this, the Supervisory Board
and the Management Board have agreed to disclose details of their individual
remuneration components from 2005 onwards. For further information, see page
138 f. of the present Annual Report. From that time on, GfK will also comply
with the statutory publication obligations in respect of quarterly reports and this
will apply to the Annual Report from 2006 onwards. With these measures, the
company will be in compliance with 96 per cent of all the mandatory and voluntary
regulations which apply. The few deviations are indicated on page 18 ff. of the
present Annual Report, where they are discussed in detail in a separate section.
The Supervisory Board has formed two committees. The Finance Committee,
which met four times in the reporting period, dealt with the company’s business
development, income and financial position as well as impending investments.
Additional focal points were the investment policy for the company’s liquid funds,
issues of financing, as well as questions pertaining to the accounting system and
interim reporting.
The Personnel Committee met six times in 2004. One focal point was the
remuneration of the Management Board. It instructed external specialists to carry
out a market comparison of the Management Board remuneration and to draft
amendment proposals. In a meeting held on 8 June 2004, the Personnel Committee
passed some new regulations. The core of these is a new bonus system for the
members of the Management Board. The benchmark factors will be the total
income (ebit including participations) and the operating margin of the GfK Group.
Other targets have also been defined for individual Management Board members.
If performance is an agreed percentage below the defined targets for any of the
benchmark factors, the remuneration for this component will drop to zero. In the
GfK_9
case of performance above a particular percentage, there is an upper limit for the
remuneration relating to the component concerned. A further measure will be to
examine how the stock options system can be replaced by a different performancerelated system which is less dependent on the share prices.
The Head of the Finance Committee is Dr. Arno Mahlert and the hr Committee
is led by Hajo Riesenbeck. In accordance with the Corporate Governance Code,
the Supervisory Board had instructed auditors kpmg in 2003 to examine the
effectiveness of its activities. The auditing firm came to the conclusion that the
Finance Committee was fulfilling its duties in accordance with the proposals
put forward in the Corporate Governance Code. The examination was not repeated
in 2004.
As of 15 June 2004, Klaus Hehl and Elmar Wohlgensinger resigned from the
Supervisory Board at their own request. Dr. Arno Mahlert, Finance Director of
Tchibo Holding ag and Werner Spinner, Management Consultant, were elected
to the Supervisory Board.
Klaus Hehl can look back over 36 years with GfK, of which seven were spent
as Chief Executive Officer and Deputy Chairman of the Supervisory Board.
Elmar Wohlgensinger has been on the Supervisory Board of GfK for 13 years.
The Supervisory Board would like to thank them for their many years of service
and dedication to the company.
The term of office of the new Supervisory Board member, Dr. Arno Mahlert, will
run until the end of the Annual General Meeting which approves the actions of the
Supervisory Board for financial year 2007. In the case of Werner Spinner, it will
be financial year 2005. The Supervisory Board will benefit from the contribution
made by its new members, two proven experts from the retail/consumer goods
sector and from industry.
At the meeting of the Supervisory Board held on 16 December 2004, Peter Zühlsdorff resigned his post as Chairman of the Supervisory Board at his own request.
Hajo Riesenbeck was unanimously elected to succeed him and took over the post
with immediate effect. Dr. Arno Mahlert was nominated as the Deputy Chairman
of the Supervisory Board.
Peter Zühlsdorff joined the Advisory Board of GfK GmbH in 1987 and in 1989,
when the company changed to a joint stock company, he became a member of the
Supervisory Board, rising to Chairman in 1992. During his term of office, Peter
Zühlsdorff successfully advanced the initial public offering of the GfK Group, thereby laying the foundations for financing the future expansion of the company.
The Supervisory Board wishes to thank Peter Zühlsdorff for the outstanding contribution that he has made to the Group and elected him as Honorary Chairman at
its meeting on 16 December.
Peter Zühlsdorff’s successor, Hajo Riesenbeck, who has been director of McKinsey
& Company, Düsseldorf, since 1991, was appointed to the GfK Supervisory Board
on 13 June 2002, and has been its Deputy Chairman since 15 June 2004.
10_GfK
Report by the Supervisory Board
THE GfK GROUP
There have been two further Management Board changes. On April 6, the cfo of
GfK ag, Professor Dr. Merl, requested the Supervisory Board to approve premature
termination of his service contract. The Supervisory Board acceded to his request
and wishes to thank Professor Dr. Merl for his commitment to the GfK Group.
Heinrich A. Litzenroth, the Management Board member responsible for the
Custom Research division, has been identified as a victim of the tsunami which
occurred in South East Asia on 26 December 2004. The Supervisory Board
remembers him thankfully for his 26 years of commitment to GfK and extends its
sincerest sympathies to his family and friends, both within and outside GfK.
In a meeting held on 22 February, the Supervisory Board resolved that for 2004, it
would decline a component of the variable remuneration which is linked to the level
of the dividend. This reflects that the Supervisory Board is prepared to treat the
increase in dividend separately from its remuneration. The Supervisory Board is
therefore of the opinion that an examination of the remuneration regulations by an
independent external specialist is necessary. Accordingly, the Supervisory Board
will be submitting a resolution to the Annual General Meeting for its agreement.
The annual financial statements and management report for GfK ag and the GfK
Group for financial year 2004 have been audited by kpmg Deutsche Treuhandgesellschaft Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, Nuremberg, taking into
account the book-keeping and provided with an unqualified auditors’ report. All
members of the Supervisory Board received copies of the auditors’ report in good
time ahead of the accounts meeting. The Supervisory Board plenum discussed these
documents in its accounts meeting, as did the Finance Committee of the Supervisory
Board at its preparatory meeting. Both these meetings were attended by the auditors,
who signed the annual and consolidated financial statements. They reported on
the audit in general and on the key points stipulated in the audit mandate, and
gave detailed responses to questions from the members of the Supervisory Board.
The Supervisory Board has noted the audit report and, following its own examination
of the annual financial statements drawn up by the Management Board, has given
its approval. The financial statements are therefore adopted. The Supervisory
Board has seconded the proposal of the Management Board for appropriation of
the profits.
The Supervisory Board would like to thank the members of the Management
Board, the Works Councils, all GfK ag staff and the staff of affiliated companies
for their hard work and commitment.
Nuremberg, 4 April 2005
Hajo Riesenbeck
GfK_11
T O O U R S H A R E H O L D E R S A N D B U S I N E S S A S S O C I AT E S
Dear shareholders and business associates,
I am delighted that as in the previous year, I can once again report a great deal
of positive progress concerning the GfK Group’s business development to you.
Having increased our profit forecast twice during the course of the year, we
performed even better to achieve record results at the year-end, of which we can
all be proud. Compared with the stock exchange share price indices, our shares
recorded above-average growth. In 2004, we again succeeded in advancing our
ambitious strategies and targets.
Professor Dr. Klaus L. Wübbenhorst
Chief Executive Officer of GfK ag
We owe a debt of gratitude for this success to the dedication and expertise of
our management and employees, throughout every business division and region
in which we now operate. The interviews with six clients from Germany, the
Netherlands, the uk, the Ukraine, the usa and China featured in the current
Annual Report are prime examples illustrating the many and varied facets of
our work in terms of instruments, markets and understanding of local conditions.
These are evidence of the support given by our employees in the form of
information and experience, enabling clients to keep identifying new markets
and expanding their market potential on an ongoing basis.
I should now like to summarize the key developments of the year in brief:
1. A financial year producing record results
With sales totalling almost eur 672 million, in 2004 we succeeded in clearly
outperforming our target sales in excess of eur 630 million for the year. 2004
was also a financial year in which our income rose by double the increase in
sales. With a margin of 13.6 per cent, which represents a rise of 2 percentage
points, we are positioned right at the top of the league of major market research
organizations worldwide.
2. GfK shares on course for success
For GfK shares too, 2004 has meant success right the way down the line. Our
shares remained out in front of all the stock exchange indices. Having already
risen by 78 per cent in 2003, the GfK share price was up by another 50 per cent
last year, rising from its lowest point for the year of eur 18.75 on the first day
of trading to peak at eur 28.80 on the final trading day of 2004. Again and again,
the pleasing figures recorded in our interim reports exceeded the expectations
of the analysts, providing them with good reason to revise their forecasts on
business development and share price targets upwards on numerous occasions.
To a large extent, we certainly owe the rise in our share price to you, our shareholders, with your loyal support for us and the company, for which we thank you.
We should like to take this opportunity of assuring you that we regard the rules
12_GfK
Letter to shareholders T H E G f K G R O U P
of the Corporate Governance Code as the essential cornerstone of our corporate
management and our communication with you and our stakeholders.
The Supervisory Board and we, the Management Board, are particularly delighted
that at this year’s Annual General Meeting taking place on 24 May 2005, we shall
be proposing an increased dividend of eur 0.30 per share, which is 42,9 per cent
higher than last year’s.
3. Spotlight on customer market potential
Helping our clients to achieve success in the market based on knowledge not only
means offering first class services, but also taking the trouble to listen carefully
to what they have to say and contributing a rapid and reliable response. However
much our services appear to be technology-based and rooted in statistics, in the
first instance, their most salient features are the high level of knowledge and
critical faculties of our employees when it comes to the business of our clients,
their markets and consumers. The crux of the matter is finding solutions for clients
which are forward-looking and home in on the target. Our task is to structure
and make sense of the flood of facts and figures, so that together with our clients,
we can use them to develop solutions for operational and strategic issues.
4. GfK network expansion advances globally
One of the core strategic aims of GfK has been and remains expansion into new
countries and regions. Since our stock exchange launch in 1999, GfK has taken
a number of significant steps towards achieving this aim and at the same time,
prepared the way for future market potential. For instance, we have systematically
consolidated our presence in the usa, the biggest single global market for
marketing, advertising, as well as for our business, market research. The latest
major step in this direction was the acquisition of well-known communication
and brand research company, GfK Arbor, based in Media, near Philadelphia.
In 2004, almost 13 per cent of our sales were generated in the usa. We are now
ranked 15th in the league table of American market research companies. In the
uk, the second biggest market research market in the world, we have meanwhile
reached 7th place in the rankings.
In eight European countries including Germany, the Netherlands and Switzerland,
we are the market leaders and in another five, including Belgium and Russia,
we are in 2nd place, coming 3rd or 4th in a further 13 countries. We are growing in
every region and at particularly strong rates in the dynamic Central and Eastern
European markets as well as in Asia and the Pacific.
In 2004, we advanced the Group presence significantly in South America, another
region of the world which is currently recording strong growth. Our aim is to
become the first port of call here for trade and industry, when it comes to market
and consumer knowledge.
GfK_13
5. New structure in top management
2004 was a year in which we also experienced much pain. Our colleague,
Heinrich A. Litzenroth, who has been energetically advancing the business of
the Custom Research division since 2000, was holidaying in Khaolak at the
time of the tsunami in South East Asia on 26 December 2004 and has now been
identified as a victim. Mindful of his fate, we would like express our deepest
thanks for his work with GfK which spanned more than two decades and our
sincerest condolences to his family. We, that is, the management, employees and
associates of the company, have collected a total of eur 300,000 in his memory,
which will be donated to a charity project in the damaged region.
Until Heinrich A. Litzenroth’s body was identified, the Management Board
was compelled to find a stopgap and then a permanent solution. On 22 February
2005, the Supervisory Board accepted our proposal and resolved to revoke the
appointment of Heinrich A. Litzenroth and restructure the Management Board
responsibilities for GfK’s operational business.
When the vacant post of Chief Financial Officer (cfo) has been filled, the
five-member Management Board will form a comprehensive and strong team
at the core of the task of pursuing our ambitious strategies and targets with
undiminished energy. Our strategic objectives are as follows:
to pursue a consistent market philosophy
to underpin the conditions required for growth and profitability
to create comparable areas of responsibility in terms of size
to consistently pool our information and advisory services in line with the
needs and requirements of our clients
to amalgamate comparable data collection instruments and measuring
technology to obtain the optimum synergetic effect
The Management Board now comprises:
Petra Heinlein, previously head of the Media division, who will take over the
division for which Heinrich A. Litzenroth formerly had responsibility.
Dr. Gérard Hermet will continue to be responsible for the Retail and Technology
division.
Wilhelm R. Wessels, previously head of Consumer Tracking and HealthCare, will
take over responsibility for Consumer Tracking, Media and HealthCare.
Christian Weller von Ahlefeld, 46, has been appointed the new cfo by the
Supervisory Board. Mr Weller von Ahlefeld will take up his appointment on
1 June 2005 and in future, will be responsible for finances, financial controlling
and accounting, personnel and administration.
14_GfK
Letter to shareholders T H E G f K G R O U P
I shall continue in my capacity as Chief Executive Officer (ceo) and as soon
as the new cfo takes up his appointment, I shall return to concentrating
on the following tasks: developing strategy for the GfK Group, promoting
management, research and development, corporate communications and
contact with committees and boards, it services.
Outlook: focus on global market potential
We are confident that the business model we have adopted as a market researchbased Group is the right way to achieve the targets we have set ourselves and
to continue the success story of our company, which was founded in Nuremburg
over 70 years ago and is today present in almost 60 countries all over the world.
All our decisions and actions focus primarily on the wishes of our clients and our
shareholders. They give the lead which will largely determine the success and
dynamics of our operations. We shall continue to use our best endeavours to follow
this course and to expand the market potential of our clients, as well as our Group
and our shares.
We aim to grow even more and anticipate that the companies which currently
belong to the GfK Group will achieve sales around the eur 710 million mark next
year. We shall, of course, be continuing the process of expansion with company
acquisitions as well as by setting up new companies. In particular, we are again
aiming to achieve a significantly higher increase in income than in organic sales
growth and therefore surpass even the current very good margin.
I should like to express my thanks to all our employees all over the world, whose
ideas and initiatives made such a major contribution to our success in 2004.
May I ask for your continued commitment to our clients, our company and our
shares.
Nuremberg, 23 March 2005
Chief Executive Officer
GfK_15
THE MANAGEMENT
BOARD
Petra Heinlein
Chief Executive Officer (ceo)
Responsible for Strategy, Investor Relations,
Public Affairs and Communications,
Method and Product Development, it and
Management Development
Responsible for the Media division
born 23 February 1956 in Linnich
née Dengler
born 7 October 1958 in Bad Staffelstein
Professional background
Since 2005 President of the Chamber of
Industry and Commerce for Middle Franconia
Since 2005 Responsible for the Custom
in Nuremberg
Research division
Since 1998 Spokesman and, since 1999, ceo of
Since 2002 Member of the Management Board
GfK ag, appointed until 2007
of GfK ag, appointed until 2007
Since 1997 Member, and Chairman since 2002,
2001 Integration management on behalf of
of the Management Board of adm, the working
GfK ag for the GfK Martin Hamblin Group and
group of German market and social research
GfK Great Britain, uk
institutes
2000 Integration Management on behalf of GfK
ag for GfK Custom Research Inc. in the usa
1992 – 1997 Member of the Management Board
of GfK ag, responsible for Accounting,
1992 – 2000 Managing Director of contest
Finances, Financial Controlling, Personnel,
census in Frankfurt
Purchasing, General Administration, Minority
Interests, Production, it, Data Processing
1985 Joined GfK as project manager with
GfK Marktforschung
1991 – 1992 Member of the Management Board
of kba-Planeta ag, Radebeul near Dresden
1984 Research Assistant at the ArnoldBergstraesser-Institut, Freiburg (Germany)
1984 – 1991 Employee of Bertelsmann ag,
Gütersloh, latterly as Managing Director of
the Druck- und Verlagsanstalt Wiener Verlag.
Ges. mbH Nfg. kg, Himberg near Vienna
Training
1984 Degree in Political Science from the
University of Bamberg
Training
1984 Doctorate from the Technische
Hochschule, Darmstadt
1981 Graduated as Dipl.-Kfm. from the
Universität/Gesamthochschule, Essen
16_GfK
The Management Board T H E G f K G R O U P
Dr. Gérard Hermet
Heinrich A. Litzenroth
Wilhelm R. Wessels
Responsible for the Retail and Technology
division
Responsible for the Custom Research
division
Responsible for the Consumer Tracking
and HealthCare divisions
born 19 January 1951 in Montpellier, France
born 13 December 1951 in Mölln
born 12 October 1952 in Haren
deceased in December 2004, a victim of
the tsunami
1991 – 1996 Managing Director of GfK ag
Gesundheitsforschung /i+g Gruppe
1989 – 1999 Managing Director of
1984 – 1998 Managing Director of GfK France,
Gesundheits- und Pharmamarktforschung
GfK Testmarktforschung GmbH
then General Manager GfK Marketing Services,
1986 – 1996 Managing Director of gpi
1978 – 1989 Employee of GfK,
France
1978 Joined GfK, working for gpi Kommuni-
responsible for the development of
1978 – 1984 Employee of Burke Marketing
kationsforschung Gesellschaft für Pharma-
GfK BehaviorScan in Germany and for
Research, Paris, France
1975 Graduated from the French Business
GfK Marktforschung GmbH
France
1978 Doctorate from the University of Grenoble
1993 – 1999 Managing Director of
1988 – 1998 General Manager of GfK Sofema,
Training
Tracking, Media and HealthCare divisions
Board of GfK ag
Association (afm)
Informationssysteme, Nuremberg/Frankfurt
setting up GfK Testmarktforschung
Training
1977 Graduated as Dipl.-Kfm. from the Freie
Universität Berlin
Since 2005 Responsible for the Consumer
2000 – 2004 Member of the Management
1998 – 2000 Chairman of the French Marketing
Training
1977 Graduated as Dipl.-Kfm. from the
University of Saarbrücken
School (icn)
GfK_17
C O R P O R AT E G O V E R N A N C E
Since 2002, the German Corporate Governance Code (“Code”), with its recommendations
and suggestions, has been added to the statutory regulations. Recognition of these
principles will promote and strengthen the confidence of current and future shareholders,
clients, employees and the public on the national and international markets. GfK supports
responsible management and control of the GfK Group all geared towards increasing
value added.
The Supervisory Board and the Management Board have resolved to disclose their
individual remuneration components from 2005 onwards. For further information on
this, see page 138 f. of the present Annual Report. From then on, GfK will also comply
with the statutory publication obligations relating to quarterly reports. From 2006,
GfK intends to publish its Annual Report with an even shorter deadline. With these
measures, the company will comply with 96 per cent of all mandatory and voluntary
regulations which apply.
GfK’s existing practices already largely correspond to the recommendations and
suggestions of the Code. For over ten years, there have been standing rules for the
Supervisory Board and the Management Board. Since its stock market flotation in
1999, GfK has issued quarterly reports and broadcast its Annual General Meeting
and accounts press conference on the Internet. In order to make it easier for private
shareholders to exercise their voting rights, GfK appointed a proxy in 2003. This
service will be extended further. As part of adapting to the Code, GfK will also expand
the information supplied on the Internet.
Pursuant to § 161 of the German Stock Corporation Act (AktG), the supervisory and
management boards of listed companies must declare each year, the extent to which
they have complied with and will continue to comply with the recommendations of
the Government Commission of the German Corporate Governance Code published by
the German Ministry of Justice in the official section of the online Federal Gazette and
which recommendations have not been or will not be complied with. The declaration
must be made available to shareholders at all times.
The German Corporate Governance Code contains regulations, some of which are
binding. In addition to outlining the prevailing company law, it also includes
recommendations from which companies may deviate, although such companies
are then obliged to publish information on such deviations each year. The Code also
contains suggestions which may be deviated from without the need for this to be
disclosed. The Supervisory Board and Management Board of GfK ag have resolved
to continue the practice begun in 2002 of publishing details of deviations from
recommendations and suggestions. These are reported separately below.
I. Recommendations
The Supervisory Board and Management Board of GfK ag declare that they have
complied with and will continue to comply with the recommendations of the
Government Commission of the German Corporate Governance Code in the version
of 21 May 2003 published by the German Ministry of Justice on 30 June 2003 in
the official section of the online Federal Gazette. Only the following recommendations
will not be applied:
18_GfK
Corporate Governance
THE GfK GROUP
1) Point 4.2.3
Point 4.2.3 deals with variable remuneration components for the Management
Board. With regard to stock options, there is a request for “the Supervisory Board
to agree a limitation option (cap) for extraordinary, unforeseeable developments.”
GfK’s stock option programme does not include such a cap. Any limitation on the
potential profit would automatically bring with it a similar limitation on the loss, which
is not in the interest of the company. GfK’s management stock option programme is not
an additional remuneration element, but replaces the existing variable remuneration
components. This means that eligible persons decide irrevocably to waive part of their
variable remuneration in favour of receiving stock options. Once defined targets have
been reached, and only then, do they receive these options. Whereas the variable
remuneration component is paid once targets have been met, the stock options cannot
be exercised during the first two years. The strike prices for the five tranches which
were calculated in line with the capital increase from company resources are as follows:
T1: eur 46.00
T2: eur 34.75
T3: eur 20.11
T4: eur 15.44
T5: eur 25.81
The risk/reward profile is therefore balanced and it is not possible to change any
option conditions for tranches already issued or subscribed.
2) Point 7.1.2
Point 7.1.2 regulates the publication of the consolidated financial statements
within 90 days and interim reports within 45 days.
GfK is aiming to comply fully with these timeframes as of 2006. For 2005, in accordance
with the financial calendar published in the Annual Report, the deadline for the Annual
Report will be curtailed to 101 days (previously: 105 days) and the 2005 quarterly
reports will be published within the required time limits.
II. Suggestions (n. b.: there is no obligation to elucidate deviations from
suggestions)
The Supervisory Board and the Management Board of GfK ag declare that they have
complied with and will continue to comply with the suggestions of the Government
Commission of the German Corporate Governance Code in the version of 21 May 2003
published by the German Ministry of Justice on 30 June 2003 in the official section of
the online Federal Gazette. Only the following suggestions will not be applied:
GfK_19
1) Point 2.3.3
This sets out that the Management Board should ensure the appointment of a
representative to exercise the voting rights for shareholders in accordance with
instructions; this person should also be contactable during the Annual General
Meeting.
In the past, the company has appointed a representative to exercise the voting rights
as instructed and will continue to do so in the future. The representation of the shares
is assumed in accordance with the agenda. The details are published in the agenda and
on GfK’s website at www.gfk.de/Investor. Voting during the Annual General Meeting is
currently difficult for technical reasons. As soon as a practicable solution has been
found for the secure transmission of the votes, the company will look at introducing
such a system.
2) Point 2.3.4
Pursuant to point 2.3.4 of the Code, the company should enable shareholders to
follow the Annual General Meeting using modern communication media (e. g. the
Internet).
Since GfK has been listed on the stock exchange, the Annual General Meeting has been
broadcast on the Internet. The webcast lasts until the end of the report by the Management Board. The company has refrained from broadcasting more of the meeting in order
to protect the privacy rights of the shareholders and will continue to refrain from doing
so. A corresponding declaration is also available at www.gfk.de/Corporate_Governance.
Compliance Officer
Bernhard Wolf
Tel. +49 911 395 2012
Fax +49 911 395 4075
[email protected]
20_GfK
The Compliance Officer monitors compliance with the principles and reports back on this
to the Supervisory Board at least once a year.
Since the beginning of 2005, GfK employees have had the opportunity of passing
information to the Chairman of the Finance Committee, Dr. Arno Mahlert, via the GfK ag
Intranet.
GfK will continue to improve communication with shareholders and dealers as well as
with the public. The aim continues to be full compliance with the Code.
GfK shares
THE GfK GROUP
GfK SHARES
2004 financial year: second-tier stocks outperform Dax
The recovery on the stock markets in the fourth quarter of 2004 took the major
share indices to new peak levels for the year. However, overall the markets were
fairly subdued in 2004. For the third year in succession, the German second-tier
stock indices clearly outperformed both the Dax and international share indices.
As was already the case in 2003, GfK shares performed considerably better than
all the comparable indices.
After three difficult years on the stock markets since the new millennium, the upward
trend which started in 2003 continued at a lower level in 2004. While the Deutscher
Aktienindex (Dax) climbed by more than 37 per cent in 2003, growth was significantly
lower in 2004 at 7.3 per cent. However, this single figure relating to the index trend
does not provide a true reflection of the dynamic upward and downward movement
which has taken place. In the first two months of 2004, the Dax rose by almost five per
cent from 3,965 points. In March, a correction phase set in, which pushed the index
down by more than 6 per cent below the level at the beginning of the year. After a
rollercoaster ride, in August the Dax fell to its lowest level for the year of 3,619 points.
This represents a decline of almost 9 per cent compared to the beginning of the year.
Only then did a recovery phase set in. On balance, in the last two months of 2004 the
Dax showed upward movement.
GfK shares: key data
German Securities Code
587530
isin (International Stock
Identification Number)
DE0005875306
Reuters
GFK.DE
Bloomberg
GFK GR
Datastream
D:GFKX
First Call
GFK.DE
Essentially, there were three major themes which depressed investor sentiment on the
stock markets and which were responsible for the fluctuations:
several interest rate rises by the us Federal Reserve
the hike in oil prices and
the rise of the euro against the us dollar
Highest and lowest values of GfK shares from January 2004 to December 2004 in eur
29
28.80
27.85
26
24.38
25.90
24.79
23.86
23
24.58
23.92
23.33
23.03
21.87
22.63
20.57
20
20.50
24.31
23.20
24.90
22.80
21.57
20.50
21.19
20.25
17
19.25
18.75
Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04
Highest and lowest values
Jul 04
Aug 04 Sep 04 Oct 04
Nov 04 Dec 04
Monthly closing prices
GfK_21
GfK share price performance from 1 January 2004 to 8 March 2005 in eur1)
34
30
26
22
18
16
January 2003
April 2003
July 2003
October 2003
January 2004
1) All values are indexed to the GfK share price.
GfK
SDax performance
Dax 30 performance
dj Stoxx Media
The change in the us key interest rate policy strengthened the expectation that
the pace of the economic upturn might be losing impetus worldwide. Last year, the
us central bank, the fed, raised interest rates in five stages from one per cent at
mid-year to 2.25 per cent. This trend continued into the current financial year with
the sixth consecutive rise, with the Federal funds target being 2.5 per cent.
GfK share price performance comparison
In 2004
GfK ag
From ipo to
08.03.20051)
50.60 %
31.96 %
Dax
7.30 %
– 17.04 %
SDax
21.60 %
9.09 %
7.40 %
– 31.07 %
dj Stoxx Media
1) compared with the initial public offering (ipo) of eur 15.42
(adjusted for the capital increase from company funds)
At its highest levels, the oil price increased by more than 70 per cent in the previous
financial year. By the end of 2004, it was down again. However, the price per barrel
(159 litres of Brent) was up by more than 30 per cent on the beginning of the year. One
of the factors which fuelled the hike in oil prices was the fear that stocks might decline
sharply due to exhausted production capacity and increased energy requirements
in Asia. The stock markets were dominated by considerable uncertainty about the
potential impact of the higher oil price on global economic growth, a development
which also affected share price trends.
Another complicating factor was the strengthening of the euro against the us dollar.
At its peak, one euro was worth usd 1.36. The euro was therefore trading at its
highest level for eight years. However, a strong euro has an adverse effect on the
competitiveness of the heavily export-based German economy in the us dollar zone.
Compared to other global indices, the Dax turned in an average performance in 2004.
The European Dow Jones Stoxx was up by 4.3 per cent, and the British ftse 100 by
7.5 per cent. The us American key index, the Dow Jones Industrial Average, showed
growth of 3.2 per cent last year, and the sector index, the Dow Jones Stoxx Media, an
increase of 7.4 per cent.
22_GfK
GfK shares
THE GfK GROUP
As in the previous year, 2004 was mainly a year for second-tier stocks. The MDax,
which includes 50 companies, rose by more than 20 per cent in 2004, having already
shown upward movement of almost 49 per cent in 2003. The SDax, on which GfK shares
are listed, performed even better: after climbing 51 per cent in 2003, it increased by
almost 22 per cent in the past financial year.
GfK shares
Unit
2003
2004
High
eur
21.08
28.80
Low
eur
7.93
18.75
Closing price
eur
19.02
28.65
Average daily volume traded
No.
19,236
14,517
No. of no-par shares
No.
31,346,397
31,366,611
eur m
596.2
898.7
in %
15
4
3.8
17
2
4.7
0.30
Market capitalization as at 31.12.
Ranking in the SDax
by sales
by market capitalization
Index weighting by market capitalization
Dividend2)
eur
0.21
eur m
6.5
9.4
Earnings per share
eur
1.06
1.68
Free cash flow1) per share
eur
1.54
2.22
Total dividend2)
1) Before acquisitions, other investments and asset disposals; figures adjusted for the capital increase from company funds
2) Proposal to the Annual General Meeting on 24 May 2005
GfK shares: at the forefront with growth of almost 51 per cent
Last year, the GfK shares once again had a clear edge on the trend of the SDax and
the Dow Jones Stoxx Media. After growth in excess of 78 per cent in 2003, the share
price improved by almost 51 per cent last year to eur 28.65. The GfK stock reached
its lowest level for the year on the first trading day of 2004 with a price of eur 18.75
and peaked on the last trading day of the year at eur 28.80. The main reason for
the very positive share price trend was the GfK Group’s healthy operating income.
Based on the pleasing results in the respective quarters of the previous financial year,
GfK repeatedly outperformed analysts’ forecasts. Analysts then raised their sales and
earnings forecasts and price targets for GfK shares several times.
For shareholders who bought GfK shares when the company went public, there was a
price gain of almost 86 per cent at the 2004 year-end – excluding dividend income.
This corresponds to an annual return on capital employed of 12.5 per cent. Investors
who reinvested the dividend, which included a corporation tax credit up to 2000, in
GfK shares achieved an average annual return of 13.4 per cent in the same period.
An alternative investment in the bond market with a return at the level of the current
yield would have generated an average profit of 4.5 per cent p.a. in this period.
GfK_23
Current shareholder structure
GfK-Nürnberg e.V.
63.8 %
Institutional investors
20.6 %
of which usa
7.0 %
5.7 %
uk
France
3.1 %
Germany
2.2 %
Other
Private investors
2.6 %
14.1 %
Management Board and Supervisory Board
1.5 %
Stock valuation: followed by ten investment analysts
Ten well-known banks regularly publish evaluations and reports on GfK shares.
Although the number is unchanged from the previous year, there have been changes
in terms of the banks which produce research on GfK shares. The stock market
downturn has prompted banks to scale down or even close their research departments
in recent years. Most of this restructuring had already been completed last year.
However, there have been further adjustments to reflect altered demand from
investors. This has also impacted on the group of banks which produce research
on GfK. In 2004, two more banks began to follow GfK shares. At the same time,
however, two analysts stopped following GfK as their departments were affected
by restructuring measures. With ten analysts, GfK is well above-average for SDax
companies. According to a survey by dirk (German Investor Relations Association)
the average figure is just over 5 analysts per company. GfK is in discussion with other
well-known international banks, with the aim of being included in their research
universe.
Shareholder structure: stable holding ratios by investor categories
The composition of GfK’s shareholder base has not altered significantly from the
previous year. The largest single shareholder remains GfK-Nürnberg e.V., whose
stake reduced slightly in 2004 from 64.0 to 63.8 per cent as a result of options
from the stock option programme for management being exercised. The free float
has increased accordingly to 36.2 per cent.
14.1 per cent of the shares are held by private shareholders. Their stakes remained
virtually unchanged on the previous year. 1.5 per cent of shares were held by the
Supervisory and Management Boards last year (previous year: 2.3 per cent). This
change is mainly due to the fact that the shareholdings of members of the Supervisory
and Management Boards who have now left the company are no longer included in
this investor category.
The proportion of institutional investors increased slightly from 19.1 per cent to
20.6 per cent. Of the total share capital, 7.0 per cent is held by institutional investors
24_GfK
GfK shares
THE GfK GROUP
from the usa (previous year: 6.2 per cent), 5.7 per cent from the uk (5.8 per cent),
3.1 per cent from France (2.5 per cent) and 2.2 per cent from Germany (3.4 per cent).
SDax ranking: position improves further in terms of market capitalization
GfK shares have been listed on the SDax since the resegmentation of the German
stock market in March 2003. In terms of the market capitalization of the free float,
the shares have improved since that time from eighth position to second at the end
of 2004 (end of 2003: fourth). In October and November 2004 the shares even reached
No. 1 on the SDax temporarily. The index weighting has increased from 3.1 per cent
at the time of the reorganization to 4.7 per cent by 31 December 2004. In terms of
the ranking by trading volume, GfK shares came in at No. 17 out of the 50 stocks on
the SDax at the end of December 2004 (previous year: No. 15).
In 2004, average trading volume adjusted for the capital increase from company funds
was down from 19,200 to 14,500 shares daily. Thanks to the increase in the GfK share
price last year, the average sales volume in euro increased, despite the lower average
number of GfK shares traded daily.
The low free float remains one of the reasons for the decline in trading volume. Large
share blocks are usually handled via brokers, who bring the trading partners together
directly. Revenue from such transactions will not be visible on the stock market and
will not be included in Deutsche Börse ag’s sales ranking. The free float will increase
as options rights are exercised in future.
Capital increase: scrip issue at ratio of 5 : 1
At the 2004 Annual General Meeting, the shareholders resolved to virtually double
GfK ag’s share capital from company funds by disclosing hidden reserves from the
revaluation of foreign holdings. At the same time, GfK issued bonus shares to GfK
shareholders at a ratio of 5:1 in July of last year. Including the exercising of options
from the stock option programme, the number of shares increased from 26,121,998
at year-end 2003 to 31,474,522 one year later. The average number of shares in 2004
was 31,366,611.
Dividend: 20 per cent more than planned in the previous year
GfK had already announced at its 2004 Annual General Meeting that it would pay
shareholders a dividend of eur 0.25 per share in 2005 on the increased number of
shares resulting from the capital increase from company funds. The Supervisory and
Management Boards will propose a further increase to a total of eur 0.30 per share at
the next Annual General Meeting. Accordingly, the total dividend will increase by 44.6
per cent from eur 6.5 million to eur 9.4 million. Compared to the first post-flotation
dividend of eur 0.11 paid in 1999 (adjusted for the capital increase from company
funds), the dividend per share has risen by a total of 172.7 per cent. The pay-out ratio,
i.e. the ratio of the total dividend to consolidated total income, is therefore 17.7 per
cent.
GfK_25
I N V E S T O R R E L AT I O N S
Successful expansion of GfK’s Investor Relations activities
GfK’s communication strategy is based on conveying the aims and strategies of the
Group to institutional investors, private investors, analysts and financial journalists
openly and comprehensively. The dialogue between GfK and investors and analysts
facilitates transparency of GfK’s business model and activities, enabling the appropriate
valuation of GfK shares. GfK ensures that all stakeholders in the capital market are
provided with up-to-the minute information.
In the past year, GfK further expanded its Investor Relations activities. In addition to
the Annual General Meeting, GfK presented itself:
at eight international investor conferences
at two dvfa/analysts’ conferences
at eight roadshows in the usa, England, France and Germany
via six teleconferences
in 108 individual conversations with fund managers and investment analysts
at Invest 2004 in Stuttgart, one of the largest German investor fairs
at the Munich stock exchange open day, attended by over 3,000 visitors
at the Würzburg stock exchange open day, attended by over 2,000 investors
Annual General Meeting 2004
Some 470 shareholders and shareholder representatives attended the Annual General
Meeting in Nuremberg on 13 June 2004, 18 per cent more than in the previous
year. The investors and shareholder representatives who attended represented
almost 73 per cent of the shares issued. As in previous years, interested parties were
able to follow the Annual General Meeting live on the Internet up until the discussion
started.
Investors agreed to the capital increase from company funds proposed by the
Supervisory Board and Management Board. They unanimously welcomed the scrip
issue in a ratio of 5 to 1. The shares were registered in shareholders’ securities
accounts at the end of July 2004.
26_GfK
Investor Relations
THE GfK GROUP
Investor Relations work recognized
In 2004, the work of the Investor Relations department was commended on two
separate occasions:
with the award of the bird by the Börse Online stock market magazine. As was the
case in the previous year, the magazine investigated how well the top 160 joint stock
companies communicate with private investors. Readers believed that GfK provided
the best Investor Relations service for private investors in Germany. As a result, GfK
won the bird – Beste Investor Relations Deutschlands (Best Investor Relations in
Germany) prize in the small caps category. In addition, GfK succeeded in beating all
the other companies in the overall ranking to take first place. The survey focused on
the credibility and comprehensibility of corporate communications.
with the Investor Relations prize from Capital: for the eighth time the magazine
Capital and the Deutsche Vereinigung für Finanzanalyse und Asset Management
(German Association of Financial Analysis and Asset Management) assessed
the capital market communication of listed companies. With a rise of 121.5 to
450.9 points, GfK took second place among the SDax companies. As a result, having
been placed 11 out of 198 participants in the overall ranking, GfK is one of the
15 companies which were certified by the capital market players as providing
(according to Capital) “excellent communication”.
Both accolades show the high degree of trust investors place in GfK’s capital market
communication. They provide affirmation for the strategy of open dialogue with all
groups of investors and are also an incentive to further optimize and expand Investor
Relations activities.
GfK’s website offers comprehensive corporate information
The website is the first port of call for anybody wanting information on GfK.
The gfk impuls newsletter, which has been issued since 2003, has now become
a set piece in communication with private investors. It provides information on
business development, share price performance and other items of interest from
GfK’s business divisions four times a year following publication of the quarterly
figures.
The newsletter can be ordered on GfK’s website in printed or electronic form.
All back issues can be downloaded from the GfK website.
For anyone preferring to contact us personally, the staff in the Investor Relations
department are always happy to answer any questions.
GfK_27
SPECIAL – GfK REGIONS
The need to identify and exploit market potential at an early stage makes knowledge
the decisive factor in determining corporate success and sustainability. This is
not only true of the global giants, but also of companies operating at a regional level.
A company’s success depends on identifying consumer attitudes and behaviour
and understanding how product, service and media markets work. GfK provides
knowledge relating to markets, brands and people in all economically relevant
regions of the world.
The following six regional reports highlight GfK’s achievements based on market
research, GfK’s core business.
CONTENTS
28_GfK
Germany
Western and Southern Europe
Northern Europe
Brand – the most valuable asset
Concept c1000: caught in the
price/competition crossfire
Chivas Regal: breathing new life into
a traditional brand
How DaimlerChrysler is using market
research to meet the requirements of
its customers
Even in the Netherlands, retailers are
becoming fiercely competitive
How market research helped a premium
whisky to break new ground
Page
Page
Page
30
38
46
SPECIAL
GfK REGIONS
America
Asia and the Pacific
Ambitious plans of the Ukrainian
tv industry
A question of leadership
Connecting People
The Ukraine is aiming to become
a leading player in the European
tv ratings business
The Henkel Group is focusing its
commitment to the newly acquired
us Dial corporation on transnational
brand strategy
How Finnish mobile phone
manufacturer Nokia is conquering
the complex Chinese market
Page
Page
Page
54
62
70
29_GfK
Rainer Valentin, head of passenger
vehicle research at the Mercedes Car
Group, must be able to look very far
ahead into the future, since it generally
takes around 17 years from initial idea
to launch of the next model.
30_GfK
30_GfK
Germany
BRAND – THE MOST
VA L U A B L E A S S E T
How DaimlerChrysler is using market research to meet
the requirements of its customers
GfK_31
How DaimlerChrysler is using market research to meet the requirements of its customers
B R A N D – T H E M O S T VA L U A B L E A S S E T
Automotive group DaimlerChrysler is another company which is increasingly turning to market
research to measure its sales success across the world. The process starts with the initial development
of new models and continues far beyond investigating the effectiveness of advertising campaigns.
Head of passenger vehicle market research for the Mercedes Group, Rainer Valentin, tells us more.
Rainer Valentin, head of passenger vehicle market
research at the Mercedes Car Group, has to look far
into the future: “It can take anything between five
and seven years to launch a new model onto the
market following its initial conception. The vehicle
must first enjoy global sales success and then
eventually hold its value on the used car market.
This means that market researchers must somehow
be able to anticipate the requirements of consumers
from all over the world for the next 17 years.”
» the brand has become one of the most
i m p o r t a n t c o r p o r a t e va l u e s , w h i c h m a y
r i s e a n d f a l l j u s t l i k e a n y o t h e r s e c u r i t y. «
Market research also involves anticipating consumer
expectations, which can often be short-lived
and vary according to region. This is a tall order,
particularly for market research tools and their
ability to examine current trends to predict those
of the future. Valentin’s conclusion is brief but
clear-cut: “When it comes to a new development,
we have to start as early as possible with the
market research if we want to avoid any nasty
surprises along the way.” Or it might turn out
that the concept or the design is not really what
potential customers want when the investment
in manufacturing has already been made.
The car – a distinguishing feature of identity
This was by no means always the case and
previously, it was technological developments, in
particular, as well as the key features of comfort
and longevity, which created the unique selling
point of the Mercedes brand. Since its launch 100
32_GfK
years ago, it has become the most desirable and
best known car make anywhere in the world.
The company’s competitors are fighting back,
however, by offering customers in the premium
automobile segment a similar range of products
and technological developments.
Typically, in this type of situation, a strictly technical
focus is being replaced by a strictly customeroriented focus. According to Valentin, “with an
increasingly stronger focus on customers, marketing
has become more important and market research
now has a central role in product decision-making.”
The potential for distinguishing variations in
different models of vehicle have also soared over
the past few years. While classic models such
as the limousine, the estate car and the sports
car may have been in demand previously, today’s
customers are increasingly considering their
car as an extension of themselves and their
personality and a way to set themselves apart
from others around them.
Brand – an important corporate value
With the advent of the sudden demand for niche
products, managers started to pay more attention
to the term “customer satisfaction” when making
decisions. They needed answers to their questions
on market positioning and they also needed to
identify their target groups more accurately, and
these answers had to be supported by facts and
figures provided by market research. Today, in
addition to image, quality and customer satisfaction,
there are other more extensive aspects of modern
brand management. The task of “developing a
brand and tailoring it to the different cultures of
an international market” involves adopting highly
Germany
» m a r k e t re s e a rc h e r s m u st s o m e h ow b e a b l e to a n t i c i pat e t h e
requirements of consumers from all over the world for the
next 17 years.«
complex marketing and management measures.
The brand has become one of the most important
corporate values, which may rise and fall just like
any other security. The Mercedes brand alone
outstrips eur 20 billion and is the most valuable
automobile brand in the world, according to the
findings of many surveys.
Valentin describes the contribution a market
researcher makes to successful brand management
like this: “We stay on board at every stage, from
initial conception to launch of a new series and
throughout life cycle management in the markets.”
This could involve conducting analyses and drawing
conclusions derived from the market situation,
locating vacant segments of the market and
investigating the possibilities of developing classic
models. When a completely new model is designed,
product marketing will process the results of
market research and integrate them into a “vehicle
profile”, which stipulates how the new vehicle
must meet consumer requirements to give it a
competitive edge.
The company demands outstanding results from
its market research, because it needs useful
information to be available, even during the initial
design process of a new car. According to Valentin:
“First, we carry out pre-design tests, during which
representatives from our future target groups can
literally build their ideal car. They can even put a
design down on paper with the help of a designer.
This provides us with a concrete image of what
customers think the car should look like. These
instruments are very helpful, as they enable us
to understand our customers’ way of thinking.”
Of course, customers do not have the ability to be
able to see into the future and their reactions only
reflect the current situation. They are also unable
to predict possible technical developments. However, the ideas which they put on paper “help us
to understand their thoughts and feelings and
what they are actually looking for in a car. We can
use this information to develop ideas,” explains
Valentin, who heads up this market research
initiative, as he goes on to describe the next step:
“Even three years ahead of the launch of a new
model and generally before the release of its
design through the responsible managers, the
vehicle undergoes a series of pre-design tests.
Mercedes Benz star shining brightly
On 29 January 1886, engineer Karl Benz applied for a patent
for his three-wheeled “gas-powered car”. Today, patent
application No. drp 37 435 is regarded as the birth certificate
of the motor car. Strangely enough, motoring’s second
greatest pioneer, Gottlieb Daimler, lived less than 100
kilometres away from Benz and also registered a number
of automobile patents towards the end of the 19th century.
Personalities who helped the brand on the road to
success
Bertha Benz, wife of one of the pioneers and the first
woman in the world to drive, achieved the initial public
breakthrough for her husband and his invention, when she
went on a whistle-stop tour from Mannheim to Pforzheim
in the new form of transport.
In 1926, the company finally merged to become Mercedes
Benz ag and in the first decades, the company owed its
success to the innovative powers of Wilhelm Maybach,
a brilliant engineer, who made Mercedes aka Daimler
synonymous with everything it stands for today, namely
quality and innovation. The quartet is completed by the
visionary Emil Jellinek, who successfully marketed the
Daimler brand and the Mercedes, named after his daughter,
to Europe’s upper classes in the early part of the 20th century.
A brand synonymous with quality and innovation
Today, the name Mercedes stands for one of the most
successful and innovative motor manufacturers in the world.
The Mercedes star is the best known motor symbol in the
world and one of the most valuable brand logos ever.
The DaimlerChrysler Group, which was born out of the
1998 merger, is one of the global automotive giants.
The workforce totals more than 380,000. In 2004, sales
amounted to eur 142 billion. With car sales exceeding
1.2 million and revenues of eur 49.6 billion, the Mercedes Car
Group contributed to this corporate success. The company
has global market leadership in the luxury passenger
vehicle segment, where the S class has a market share of
35 per cent and in the top end passenger car segment,
where the e class has a similar share of the market.
GfK_33
34_GfK
Germany
» w h i l e p r e v i o u s ly, b u y i n g a c a r w a s t r a d i t i o n a l ly c o n s i d e r e d
the exclusive preserve of men, there are now an increasing
n u m b e r o f f e m a l e b u y e r s . c u r r e n t ly, o n e i n f i v e m e r c e d e s c a r s
is bought by a woman.«
“This allows us to test initial reactions to the newly
developed model and its acceptance by the target
group.” Then the planned interior of the new car
must pass the tests before it is approved for the
production line.
When the most important components of the new
car have been produced and just before its market
launch, information from marketing or positioning
surveys is finally provided, to determine whether
the scheduled measures suit the positioning, price
and communications strategy, or whether these
require further adaptation.
Women – an increasingly important target group
in a male-dominated sector
However, the market research carried out by
DaimlerChrysler in the area of vehicle development
is only one of the company’s market research
activities. Equal importance is attached to the
research conducted on the brand itself. According
to these results, target groups see the brand as
reliable. Demographic surveys and psychological
tests also play a part, as this is how DaimlerChrysler
distinguishes the gender differences when it comes
to decision-making abilities. While previously,
buying a car was traditionally considered the
exclusive preserve of men, there are now an
increasing number of female buyers. Currently,
one in five Mercedes cars is bought by a woman.
Premium car segment must be redefined
Help is coming from communication research
and surveys on the effectiveness of advertising,
which support what communication experts
predict. For instance, on the subject of humour
in advertising, Valentin raises the question: “Is
humour and intelligence right for a tv spot? This
question can only be answered by market research
data. We found humour to be a positive element
of our advertising strategy, providing that we stuck
to certain rules.” The most important principle is
to “laugh with” and “not laugh at”, and it should
also be borne in mind that the audience must be
able to understand the joke within the short space
of time of a tv ad, so it cannot be too complicated.
Thirdly, the focus on humour must not lead us to
lose sight of the actual message. An example of
this is the most recent Mercedes advert featuring
Formula One racing driver, Kimi Räikkönen, who
never takes his eye off the dynamic handling of
the sophisticated C class, regardless of what his
attractive female passenger is asking him about –
the gift for the host or pink rabbits.
» the future needs new automobile
concepts. the premium sector must
a l s o b e c o m p l e t e ly r e d e f i n e d , i n c lu d i n g
brand new interior designs, where
m a t e r i a l s , c o l o u r s , l i g h t, s o u n d a n d
l i n e s a r e a l l p e r f e c t ly c o o r d i n a t e d . «
Returning to the daily business of market research,
Valentin comments: “The future needs new automobile concepts. The premium car sector must
also be completely redefined, including brand new
interior designs, where materials, colours, light,
sound and lines are all perfectly coordinated. Most
importantly, Mercedes will continue to maintain
its competitive edge.” He adds, “and this is where
market research can influence the decisionmaking process with its contribution of key facts
and figures.” GfK_35
36_GfK
Germany
Region: Germany
THE UNDISPUTED NO. 1
GfK was founded 71 years ago by
Professors Wilhelm Vershofen and
Erich Schäfer, who taught at the
University of Erlangen-Nuremberg,
and Vershofen’s assistant, Ludwig
Erhard, later to become the
“architect of the economic miracle”.
It represented the beginning of
commercial market research in
Germany and explains why
Nuremberg has remained at the
heart of German market research,
not least because of the successful
development of GfK.
GfK has played a pioneering role
in market research in Germany
and throughout Europe. As early
as 1936, the company carried out
Germany’s first ever brand survey
on the Bayer “cross” logo and
this was followed in 1937 by the
development of the purchasing
power indices, which are currently
used all over Europe and overseas,
as well as in Germany. In the
mid 1950s, GfK was right at the
forefront of introducing consumer
panel research, developed in the
usa, to Europe.
GfK identified the opportunities
offered by internationalization very
early on. In 1960, the company
was one of the co-founders of the
Europanel, a household panel
which is today operated in 26 Old
World countries together with uk
market research company, Taylor
Nelson Sofres. Since 1983, GfK
has been producing the consumer
climate index: first in Germany
and meanwhile in Austria, Denmark
and the uk, and a series of Central
and Eastern European countries.
Since the 1980s, GfK has been the
leading market research institute
in Germany. It now accounts for far
in excess of 25 per cent of sales
generated by German research
organizations. The GfK German
network comprises 22 companies
located in Nuremberg, Hamburg,
Düsseldorf, Baden-Baden and
Wiesbaden and the services offered
cover the complete range provided
by all business divisions.
Selected GfK companies in Germany
Market ranking
Custom Research
No. 2
GfK Marktforschung, Nuremberg
GfK prisma, Hamburg
GfK macon, Waghäusel
No. 1
GfK Marketing Services, Nuremberg
encodex International, Nuremberg
ifr Germany, Düsseldorf
Highlights of 2004 and 2005
Beyen Marktforschung, Düsseldorf
agf extend the tv research
agreement with GfK Fernsehforschung by another seven
years.
media control GfK international, Baden-Baden
GfK acquires a 100 per cent
holding in Düsseldorf-based Beyen
Marktforschung, which operates
in the retail and technology sector.
Beyen specializes in information
services on pricing and shelfconfiguration for the electronic
consumer goods retail sector and
also offers services in the usa and
Canada.
GfK Fernsehforschung, Nuremberg
For the second time, GfK supplies
the data for adjudication of the
best corporate brand and most
dynamic and powerful product
brand for the Best Brands awards
organized by the WirtschaftsWoche
magazine, the Serviceplan agency
group, the German branded goods
association and Seven One Media.
According to an online stock
exchange survey of investors,
GfK is the company with the best
Investor Relations department in
Germany. The analysts surveyed
by Capital magazine rated GfK
No. 2 for Investor Relations in the
SDax company league table. Consumer Tracking
No. 1
GfK Panel Services Deutschland, Nuremberg
Media
No. 1
Media Markt Analysen, Frankfurt/Main
enigma GfK, Wiesbaden
HealthCare
No. 1
GfK HealthCare, Nuremberg
GPI Kommunikationsforschung, Nuremberg
Other
N. A.
GfK Data Services, Nuremberg
2004 in figures
Change
in %
Share of
GfK Group
overall
In eur million
2003
2004
Sales
221.7
236.3
+ 6.6
35.2
22.9
27.5
+ 20.2
31.9
+ 10.3
+ 11.6
+ 1.32)
–
1,459
1,502
+ 2.9
27.1
Operating profit
Margin 1)
No. of employees
GfK_37
CONCEPT C1000: CAUGHT IN THE
PRICE/COMPETITION CROSSFIRE
38_GfK
Even in the Netherlands, retailers are becoming fiercely competitive
After receiving his doctorate in
economics at the University of
Rotterdam in 1981, Dr. Jan Brouwer
worked for Schuitema. In 1996, he
was appointed as ceo of the company.
Schuitema is the parent company
of c1000, the second largest food
retail chain in the Netherlands.
GfK_39
Even in the Netherlands, retailers are becoming fiercely competitive
CONCEPT C1000:
CAUGHT IN THE PRICE/COMPETITION CROSSFIRE
Dutch food retail chain, c1000, is using a precisely-defined marketing concept targeted at local
individualization to compete with two mighty rivals. The market researchers from GfK Panelservices
Benelux are supplying the critical data for the increasingly fierce battle for customers and market
shares.
“c1000” is synonymous with the concept and is also
the name of 471 stores. 70 of the c1000 stores are
independent franchises and 91 belong directly to
Schuitema, a company with a long tradition founded
in 1888. c1000 has positioned itself exactly between
Albert Heijn and Aldi, with a high proportion of
location-specific individually tailored ranges. It is
precisely the tried and tested franchise system which
facilitates such local flexibility, where independent
businesses can join together to form a cooperative
vertical structure. The conditions stipulated by
the franchisor consist of a binding procurement,
marketing, financing, organizational and training
concept, but which, notwithstanding maintenance
of a uniform appearance, still ensures enough room
to manoeuvre for specific locally targeted activities
by the franchisee.
Customers should not be overwhelmed by the
range on offer
Brouwer explains: “The c1000 combines low
prices with high quality.” Accordingly, Brouwer is
reflecting on customers and their needs in the
Netherlands. Certainly, the fact that they are
looking for fresh products and good quality is
nothing new in the history of retailing. However,
what is new is the fact that customers want
“shopping to be an enjoyable experience and
not to be irritated by the tremendous range of
products on the shelves during their 150 or so
trips to the supermarket every year”. In addition,
customers want adequate parking and a modern
store environment offering a large, but easily chekked range of products at low prices. More than
this, Brouwer adds: “Every customer wants his or
40_GfK
her individual needs satisfied. And these may well
vary from town to town and place to place, in
accordance with the social and economic landscape in which the store is located.”
The c1000 concept makes this possible. What is
on offer is not only part of the standard range of
the chain in every c1000 store, but there are also
additional goods which are specifically tailored to
suit the requirements of customers in individual
locations. Around 20 per cent of the range can
differ from c1000 store to c1000 store, although
the basic concept remains: “Unlike Albert Heijn,
we are aiming for an aggressive price policy and
at the same time, we are trying to compete with
Aldi with our flexible ranges.”
A nickname proves it: customers have
understood the message
So Brouwer is proud of the nickname which
the general public has given his supermarkets:
“Aldi Heijn.” As a representative consumer
survey carried out by Schuitema’s market research
partners, GfK Panelservices Benelux, shows,
consumers have understood the message. The
difference between c1000 and Aldi was described
by those surveyed as: “Not quite as cheap, but
offering more service.” And as far as a comparison
between competitors c1000 and Albert Heijn is
concerned, the general consensus was: “c1000
offers a bit less service, but is much cheaper.”
Market researchers are important partners for
retailing. As Joop Holla, Divisional Manager
and Retail Specialist of GfK Panelservices in the
Netherlands comments: “This applies in the
» w h at i s n e w i s t h e fact t h at c u sto m e r s wa n t s h o p p i n g to b e a n
e n j 0 ya b l e e x p e r i e n c e a n d n ot to b e i r r i tat e d b y t h e t re m e n d o u s
r a n g e o f p r o d u c t s o n t h e s h e lv e s d u r i n g t h e i r 1 5 0 o r s o s h o p p i n g
trips to the supermarket every year.«
forefront of strategic decisions like positioning,
location analyses, image studies, competitor
studies, as well as to every conceivable piece of
information on customers and their needs, whether
a campaign reaches them or what persuades them
to prefer a particular supermarket or if not, why
not.” Data like this is injected into what is known
as category management and with this state-ofthe-art marketing tool, retail can put the spotlight
squarely on consumers and their wants and needs
in the way in which they present their wares. To
the experts, “category” denotes each individual
and distinctive group of products, which customers might regard as complementary and which
they consequently are looking to find displayed
together on the shelves of their supermarket.
Brouwer states: “We are always avid to hear from
GfK how we are doing in comparison to the
competition.” Particularly important are the aspects
concerning loyalty and customer migration and
how these can be translated into policies for better
product ranges and services. Above all, local
market information is reflected in the planning
process. To this end, Schuitema have developed
a model in conjunction with Tilburg University,
which establishes what the environment looks
like for each individual store and how widely
the households differ from the average Dutch
household and the average c1000 household.
In this way, the data gained can be used by
marketing strategists in conjunction with household expenses to develop effective local models.
conclusions on each individual c1000 market
and its competitors possible, the more successfully
the c1000 concept can be implemented at a
decentralized level.
Brouwer adds: “So we need a huge amount of data to
back our aim of sharpening up our business profile,
particularly in the local markets.” Being under
pressure from competitors like Albert Heijn on one
side and discounters with an aggressive price policy
like Aldi on the other, compels c1000 to wage war
on two fronts in a shrinking market. As Brouwer
discovered, under the persistent hammering of the
discounters, even customers in the Netherlands
Schuitema and retail chain c1000
Founded in 1888 by Jacob Fokke Schuitema in the
Dutch town of Groningen, Schuitema developed into a
wholesale company for food retailers, becoming one
of the pioneers in the establishment of modern supermarkets. Since 1981, it has been the driving force
behind c1000, a unique franchising concept in Dutch
food retail.
Mission statement – Schuitema and c1000
Our most important task is to provide consumers with
intelligent and convenient solutions for saving time,
effort and money in their day-to-day shopping.
Schuitema is one of the most successful retailers in
the Netherlands and also one of the most unique. The
Schuitema formula, known as c1000, is based on a
franchise model in which franchisees own and operate
one of Schuitema’s 430 c1000 outlets. The Schuitema
The success of the discounters is causing the
market to shrink
Brouwer explains: “We are currently in the process
of identifying our position from the consumer’s
point of view and we also would like to find out,
for instance, what effects the price war is having
on local consumers. It’s not just a question of
shopping trends. We also want to know what this
will mean for our image.” The train of thought
is clear: the more market research instruments
are improving and expanding local market
knowledge and making the drawing of accurate
central support organization takes care of the overall
company strategy as well as centralized operations
including purchasing, logistics, distribution, marketing
and public relations.
Schuitema’s 15.8 per cent market share places them
second behind giant retailer Albert Heijn. The Schuitema
stores enjoy a sound reputation for quality and price.
Schuitema has grown rapidly over the past few years with
total sales in 2004 reaching eur 3.9 billion. Over 7,200
of the company’s approx. 9,900 employees work in c1000
stores.
GfK_41
42_GfK
» w e wa n t to m a k e o u r r a n g e o f g o o d s a n d e n v i r o n m e n t
d i st i n ct i v e , b u t at t h e s a m e t i m e , w e wa n t to e n s u re t h at t h e
o v e r a l l s t a n d a r d c o n c e p t i s r e t a i n e d i n e a c h l o c a l m a r k e t. «
have become “much more price conscious than two
or three years ago”. Still more, the discounters are
conquering increasing numbers of locations and
other players in the market are having to fight harder
in the face of increasingly fierce competition in a
market which is shrinking. The discounters currently
already have around 20 per cent of the market and
the trend is upwards. In Germany, the figure is
almost double and in France, it has already reached
50 per cent.
Brouwer and his colleagues will be trying to
buck the trend by introducing four measures this
year. The first consists of improving, upgrading,
expanding and providing more parking for the
c1000 locations. The second is to align the products
on offer more accurately to the local conditions.
As Brouwer surmises: “We don’t want to be a one
formula for every supermarket business, where
every store looks identical. We want to make our
stores distinctive, but at the same time, we want
to ensure that the overall standard concept is
retained in each local market. After all, it is the
concept which determines image and success.”
“Preventing customers migrating to the
competition”
The third measure which the Schuitema boss has
introduced is any step intended to increase customer
satisfaction. And finally, the fourth measure is to
“improve the quality of our supermarket staff. We
shall be providing further training and making
sure that they learn to love the customer.” Brouwer
is certain that with this package, he will be able to
successfully defend c1000’s position as the second
largest food retail chain in the Netherlands, even in
a shrinking market. And indeed, an initial success
has already been recorded: in 2004, the c1000
market share represented approximately 15.8 per
cent of the entire food retail market, which is
3.67 per cent up on the figure for 2003.
The c1000 strategists do not have their sights set
on any particular target group. However, a GfK
survey of 2003 contained important pointers, as to
the areas on which marketing should focus in the
future. Most c1000 customers were identified as
younger families with children, with singles not
represented to any degree. c1000 stores were
able to achieve a strong position in fresh produce,
although for frozen products, Aldi were the leaders
and for cosmetic, health and bodycare products,
Albert Heijn were top of the league.
The Schuitema boss is looking to the future:
“We are open to all consumers. Our measures
are intended to reach them and also to prevent
them from migrating to discounters or other
competitors.” This will require concentration on
two important aspects:
maintaining and carefully improving price
image
increasing the number of regular customers.
» w h a t i s o n o f f e r i s n o t o n ly p a r t o f
t h e sta n da rd r a n g e o f t h e c h a i n i n e v e ry
c1000 store, but there are also additional
g o o d s w h i c h a r e s p e c i f i c a l ly t a i l o r e d t o
suit the requirements of customers in
i n d i v i d ua l lo cat i o n s . «
And he and his colleagues will be keeping up
their fighting spirit, even in the face of tireless
competition for territorial gains in the Dutch
food retail market. GfK_43
44_GfK
Region: Western and Southern Europe
THE NO. 2 GfK REGION
Ranked second of the GfK regions
after Germany in terms of sales is
Western and Southern Europe.
GfK has been offering its services
in Austria since 1960 and in 1978,
the company expanded first into
the Netherlands and then one year
later into France and Switzerland.
Today, GfK is the No. 1 market
research organization in Austria,
the Netherlands and Switzerland.
In Belgium, the company is ranked
No. 2 and in France, Greece, Italy
and Portugal, No. 3 or 4.
In all the countries making up the
region, GfK offers information and
consulting services in Custom
Research, Retail and Technology
and Media. Apart from in France and
Portugal, the company also offers
services in Consumer Tracking,
whilst HealthCare information
is currently only offered by GfK
companies based in France,
Portugal and Switzerland.
In Retail and Technology and Media,
GfK is the market leader in both
these sectors in the region. For
example, the company is contracted
to supply continuous tv and radio
audience research data in Belgium,
France, the Netherlands and
Switzerland. The technology used
in this type of media research
employing electronic meters was
developed by GfK subsidiary,
Telecontrol. The company not only
developed the tv meters, which GfK
and other companies throughout
Europe, South America and
Asia currently use to measure tv
audience ratings, but also created
the innovative Radiocontrol and
MediaWatch measuring systems.
Selected GfK companies in Western and Southern Europe
GfK increases its shareholding
in m2a, a leading French market
research institute in veterinary
medicine, to 100 per cent. The
company also extends its majority
holding in France’s Retail and
Technology research company,
ifr, to more than 75 per cent.
GfK and Telecontrol present
MediaWatch technology to more
than 600 media research experts
at the 2004 Worldwide Audience
Measurement conference organized
in Geneva by European market
research association, esomar,
and the us Advertising Research
Foundation.
Present
since
Belgium
France
Market
rating
1994
No. 2 Aspemar-GfK
Audimétrie
GfK Benelux Marketing Services,
Division Belgium
GfK Custom Research Worldwide
GfK Panelservices Benelux,
Division Belgium
Significant GfK
1979
,
ü
B
ü
C
No. 4 audimedia
GfK Marketing Services France
,
GfK Sofema International
ü
ifr France
,
Institut de Recherche d’Informations
statistiques
,
Institut de Sondage Lavialle (isl) üC
m2a
G
MarketingScan
ü
Greece
1999
No. 3 GfK Market Analysis
Like its predecessor, Radiocontrol,
MediaWatch uses a meter in
the form of a watch worn by
survey participants. MediaWatch
makes it possible to collect data
on contact with tv and radio, as
well as with the media in shopping
centres, cinemas, billboards and
the print media.
Italy
1986
No. 4 iha Italia
GfK cbi
GfK Marketing Services Italia
The cim Committee for Radio
Research in Belgium awards
GfK the contract to supply radio
audience research data for Belgium
in 2005 and 2006. From autumn
2005 onwards, this will also
involve MediaWatch technology
trials.
Switzerland
1979
Spain
1996
In Italy, the ConsumerScan
household panel is stocked up
from 6,000 to 7,000. ü
C
ü,BC
B
üC
,
Netherlands
1978
No. 1 GfK Benelux Marketing Services
GfK Panelservices Benelux
Intomart GfK
Austria
1960
No. 1 fessel-GfK
ü,BC
mmo Media-Market-Observer
üC
Portugal
1996
No. 3 GfK Portugal Marketing Services
Intercampus
MetrisGfK
,
B
üC
,
üG
üG
No. 1 iha-GfK
ü , B CG
Modata
C
Telecontrol
C
No. 5 GfK emer Ad Hoc Research
üC
GfK Marketing Services España
Business divisions:
B Consumer Tracking
ü Custom Research
C Media
,
, Retail and Technology
G HealthCare
2004 in figures
Change
in %
Share of
GfK Group
overall
In eur million
2003
2004
Sales
204.7
215.7
+ 5.4
32.1
27.5
32.0
+ 16.4
37.2
+ 13.4
+ 14.8
+ 1.42)
–
1,810
1,849
+ 2.2
33.4
Operating profit
Margin 1)
No. of employees
GfK_45
Peter Moore, Head of Consumer
Insight at Chivas Brothers, London,
and Nathalie de Rochechouart,
Marketing Services Director of the
Chivas parent company, Pernod
Ricard, Paris, took a consultative
role in the development of Chivas
Regal’s global communication
strategy.
46_GfK
Northern Europe
C H I VA S R E G A L : B R E AT H I N G N E W L I F E
INTO A TRADITIONAL BRAND
How market research helped a premium whisky to break new ground
GfK_47
How market research helped a premium whisky to break new ground
C H I VA S R E G A L : B R E AT H I N G N E W L I F E
INTO A TRADITIONAL BRAND
Even in a global economy, the way consumers behave depends both on their cultural background and
the attitudes of the age in which they live. This can be a particular problem for international brands,
as Pernod Ricard discovered when they acquired Chivas Regal. The example of the premium whisky
brand Chivas Regal shows how consumer and market surveys can be the decisive factor in bringing a
brand up to date and continuing its development.
Uisge beatha, water of life, was first distilled by
the Gaels of Ireland, Scotland and the Isle of Man.
Its name has survived until the present day, and
so has the drink itself. Whisky, or whiskey as the
Irish and Americans call this high-proof spirit made
from barley, maize, wheat or rye, has conquered
the world.
To non-connoisseurs, a glance at the encyclopaedia
offers an insight into the many different guises
of this radiant amber beverage. Brockhaus, for
example, says that malt whisky is distilled from
barley malt dried over a peat fire; grain whisky is
based on maize or rye, while Scotch is a blend of
malt and grain whiskies. Irish whiskey comes from
malted or unmalted Irish barley, while American
bourbon is distilled primarily from maize and rye.
Other American whiskies contain more rye than
maize, while their Canadian counterparts use only
wheat.
» t h e va r i e t y o f c u lt u r e s a n d t r e n d s m a k e s
m a r k e t i n g a n i n t e r n at i o n a l b r a n d l i k e
c h i va s r e g a l d i f f i c u lt. «
“Every second, someone in the world buys a bottle
of Chivas Regal whisky.” That’s the proud boast
of the Chivas Brothers distillery, acquired by the
Pernod Ricard Group in 2001. The Scotch blend,
made from 30 different malt whiskies, has achieved
a leading position in the premium segment, its
quality guaranteed by long years of ageing. While
standard whiskies are aged for only three years,
Chivas Regal is left for at least twelve, and the
exclusive edition is no less than 18 years old.
48_GfK
Huge differences between markets
Head of Consumer Insight at Chivas Brothers,
Peter Moore, says: “Chivas Regal is effectively the
icon among prestige whiskies. It’s very fruity and
flowery, with very little smoke aroma or astringency,
and it’s also milder than any other Scotch whisky.
It’s produced only in the Scottish region of Speyside.”
Here, more than 36 million bottles of Chivas Regal
are filled each year and sold in over 150 countries
around the world. In the whisky industry’s units
of measurement, this is equivalent to 3 million
nine-litre barrels. Sales are rising; Chivas Brothers
is the world’s third largest distiller of blended
Scotch whisky and the European market leader.
Distillers face a great variety of problems, not least
because their product does not enjoy the same
prestige in all countries, and standards also vary
from one place to another. For example, Moore
says, France is a big market, but people there have
a preference for standard brands – a phenomenon
also true of Britain. If consumers are looking for
something special, they prefer single malts to
prestigious brands made from different whiskies,
like Chivas. In Germany, consumers opt mainly
for American brands and, increasingly, also for
Scottish prestige brands such as Chivas Regal, or
single malts like Glenlivet. The key markets are
other European countries, including Greece and
Spain; North and South America; and the Asian
countries, led by China and Malaysia.
“Wherever you go in the world, drinking habits
are closely tied up with a country’s social and
cultural patterns,” says Moore’s colleague Nathalie
Northern Europe
» i n st e a d o f ta l k i n g a b o u t h ow lu x u r i o u s t h e p r o d u ct was , w e h a d
t o p l a c e m o r e e m p h a s i s o n i t s f l av o u r a n d t h e p l e a s u r e i t g i v e s . «
de Rochechouart, Marketing Services Director of
Chivas’s Paris-based parent company Pernod Ricard.
For instance, the way whisky is drunk varies a
great deal depending on where and when it’s
consumed: in bars or restaurants, out with friends
or at home. “That’s why we devote considerable
resources to placing our products in the right
locations at the right times. That way, the different
contexts reinforce one another and strengthen the
brand.”
A common marketing language
The variety of cultures and trends makes marketing
an international brand like Chivas Regal difficult.
Pernod Ricard is therefore highly decentralized,
with managers having a great deal of responsibility
for brands in their own particular regions and
markets. But the Group also has a centralized
marketing system, so that the Paris headquarters
can exert control over the Group’s international
brands.
“We asked GfK to supply a consistent tool that
would allow us to carry out comparative research
in a huge variety of countries and cultures,” says
Peter Moore. And Nathalie de Rochechouart adds:
“The tool became a kind of common language for
our company. It’s a big world, with a lot of very
different countries and markets.”
Moore was pleased not only with the comparability
offered by the GfK tool, but also with the degree
of detail which it allowed. “When we looked more
closely at the data, we saw that in many of our
markets, our consumers were mainly older people.
However, a lot of young people were perfectly
well aware of the brand, and we recognized that
we should extend our advertising to target this
consumer group as well.” This realization, together
with other research data, led to major changes, as
Chivas began setting up new distribution channels,
changing its image and tailoring its advertising
accordingly. The brand had been stuck in a rut
and Chivas began bringing its tradition up to date.
Placing the brand under the microscope
First of all, a summary of the knowledge gained
was produced together with GfK. “This showed
that only regular Chivas drinkers associated the
brand both with very high quality and with pleasure
and enjoyment,” explains Karen Wise, Consumer
and Brand General Manager at GfK Martin Hamblin,
London, adding: “Almost all respondents had heard
of Chivas, but hardly any of them had ever drunk
it. Nevertheless, they had a great deal of respect
for the brand, regarding it almost as a venerable
institution but having no emotional connection
or loyalty towards it. The brand was simply not
relevant.”
» t h e f o re g r o u n d m e s s ag e was t h at t h e
b r a n d i s p r e s t i g i o u s a n d h i g h - q u a l i t y, b u t
it also fits with people’s lifestyles and
g i v e s j oy at l i f e ’s s p e c i a l m o m e n t s . «
The company’s marketing therefore had to create
a closer match between the brand’s 200-year
heritage on the one hand, and consumers’ current
needs, values and habits on the other. “Instead of
talking about how luxurious the product was, we
had to place more emphasis on its flavour and the
pleasure it gives,” says Moore. This was reflected
in a new eur 45 million press and tv campaign
developed by ad agency tbwa/g1, which ran in
over 50 countries.
“The foreground message was that yes, the brand
is prestigious and high-quality, but it also fits with
people’s lifestyles and gives joy at life’s special
moments,” Moore continues. Each of the ads tells
a story in this vein, and in effect, it encourages
people to join in. “This is summarized in the slogan,
This is the Chivas life. It brings together the brand
itself and the special joie de vivre that Chivas
creates in a single advertising unit.” Chivas wants
the brand to symbolize moments of happiness
shared with friends, or in very prosaic but exciting
settings.
GfK_49
» t h e c h i va s r e g a l b r a n d i s o n t h e p a t h t o s u c c e s s , n o t o n ly
i n e c o n o m i c t e r m s b u t a l s o i n re c l a i m i n g i t s i c o n i c stat u s
i n t h e w h i s ky wo r l d . «
A more open relationship with the brand
Chivas Regal, a leading global brand
Produced and sold since the first half of the 19th century
by traders, James and John Chivas from Aberdeen, Chivas
Regal today enjoys its reputation as the epitome of high
quality whisky.
Every second, somebody somewhere in the world is
enjoying a Chivas Regal.
Tasting note, according to Colin Scott, Master
Blender at Chivas Brothers
Colour:
Nose:
radiant warm amber
an aromatic infusion of wild herbs, heather,
honey and orchard fruits
Taste:
round and creamy on the palate, Chivas Regal
has a full, rich taste of honey and
ripe apples, with vanilla, hazelnut and
butterscotch notes
Finish:
rich and lingering
Chivas Regal, acquired in 2001, is one of the jewels
in the Pernod Ricard portfolio. As a market leader in
Europe and number two in the travel retail sector, more
than 36 million bottles were sold worldwide in 2003,
which represents 3 million nine-litre barrels. Chivas Regal
is currently distributed in over 150 countries.
New advertising campaign, Chivas life
Chivas Brothers recently developed a global tv and print
advertising campaign for Chivas Regal, leading with the
central slogan, This is the Chivas life. Created by tbwa/g1,
this campaign has been launched in over 50 countries,
comprising a series of original creative sequences depicting
people searching for fulfilment through new experiences
like ice fishing in Alaska and travelling without a destination.
The central theme of Chivas life presents an epicurean
vision of life, shared by spontaneous, fun-loving people
who do not take themselves too seriously.
50_GfK
In this respect, the campaign reflects another
important lesson of the GfK study: generally
speaking, attitudes towards the brand have
changed over time. In the past most consumers,
including younger ones aged 25 to 40, used
Chivas Regal as evidence of their social status;
they were saying, “I’m important, because I can
afford to spend this much money on a drink.”
People today have a much more cultivated and
open attitude towards the brand. Moore says they
are more likely to think: “I’ve discovered this great
brand; it’s really interesting and it has a long history.
Yes, it’s expensive, but the taste is excellent with
a soft aroma which encourages you to enjoy life.”
The one exception is in Asia, where having the
most expensive brand of whisky on the table is
still an important status symbol. Moore believes
that this is a typical example of the vast range
of attitudes and different local customs global
brands are faced with.
So the pleasure of imbibing this cereal-based
nectar is very much a reflection of today’s values –
just as it probably was when uisge beatha was
first distilled a couple of thousand years ago.
The Chivas Regal brand is on course for success,
not only in financial terms but also in reclaiming
its iconic status in the whisky world. GfK and
the Pernod Ricard Group have worked together
to establish how the brand should develop.
Malt whiskies such as Glenlivet and Royal Salute
are also benefiting from the cooperation, as
these whiskies are respectably placed among
the prestige brands in Asia. That, however, is
another story. Northern Europe
GfK_51
52_GfK
Northern Europe
Region: Northern Europe
W H E R E I N N O VAT I V E M E A S U R I N G S Y S T E M S
ARE DEPLOYED
After Austria, France and the
Netherlands, Sweden was the
next European neighbour into
which GfK initially expanded from
its base in Germany. GfK Sverige
was launched in 1981 and now
offers services in four business
divisions: Custom Research,
Retail and Technology, Consumer
Tracking and Media. The same
applies for GfK Danmark, which
was established six years later.
GfK Norge was set up in 1987
and supplies information and
consultancy services for the Custom
Research, Retail and Technology
and Consumer Tracking divisions.
Alongside Germany and the
Netherlands, Sweden is one of
the countries in which new
technologies are trialled and
introduced very early on,
particularly in the consumer
tracking sector.
Particularly notable examples in
this area are the launch of
aTRACKtive, a production system
for the ConsumerScan consumer
panel which has meanwhile been
implemented throughout Europe
and the web-based new ecpo
and ScanIT technologies.
These scanners and meters log
purchases made by participants
of the ConsumerScan panels in
the most varied locations and
then enable them to transmit the
findings to GfK via the Internet.
GfK has been present in the uk
since 1989 and, with sales
totalling eur 1,769 million (2003),
it is the second biggest national
market research market in the
world. At the outset, the company
offered information services in
Custom Research and Retail and
Technology, however, with the
acquisition of the majority
holding in GfK Martin Hamblin,
the uk’s largest privately-owned
research company in 2000,
GfK moved up the rankings to
No. 7 in the uk market research
organizations. GfK was subsequently able to significantly
strengthen its presence in the
custom research sector in the uk,
undoubtedly a very important
market for global research
projects. Together with GfK Martin
Hamblin and veterinary medicine
specialists, GfK Animal Health uk,
which was acquired shortly afterwards, GfK has also become one
of the top providers of information
services in the healthcare industry.
which the new type of radio
research provides, particularly
for advertising industry clients,
is specifically highlighted in the
award speech.
GfK Media is contracted by the bbc
to carry out 15,000 online interviews per day for a period of three
years starting from 2005, to find
out what respondents had seen or
heard the night before. Selected GfK companies in Northern Europe
Denmark
Finland
uk
Since 2001, GfK had been carrying
out a pilot study to measure radio
audience reach, initially at local
level, using the newly developed
Radiocontrol technology, which
was commissioned by uk radio
network, The Wireless Group. At
the end of 2002, the radio network
asked GfK to measure audience
reach at national level throughout
the uk for a period of three years
starting from 2003 and this was
the incentive which launched GfK
Media.
Present
since
Market
rating
1987
No. 3
–
–
1989
No. 7
GfK Danmark
ü ,B CG
Via GfK Sverige
üG
GfK Animal Health uk
G
GfK Media
C
Ireland
1989
–
Norway
1987
No. 10
GfK Norge
Sweden
1981
No. 4
GfK Sverige
Via GfK Marketing Services
ü,
ü ,B C
ü ,B CG
Business divisions:
ü Custom Research , Retail and Technology B Consumer Tracking
C Media
G HealthCare
2004 in figures
In eur million
Sales
Operating profit
The British Market Research
Association (bmra) and the
Market Research Society (mrs)
award GfK Media the Innovation
Prize for 2004 for its surveys
carried out using Radiocontrol
technology. The added value
,
GfK Martin Hamblin
In 2004, GfK increases its 51 per
cent shareholding in GfK Martin
Hamblin to 100 per cent.
,
GfK Marketing Services
Margin 1)
No. of employees
Share of
GfK Group
overall
2003
2004
Change
in %
54.1
55.6
+ 2.7
8.3
3.2
2.9
– 9.0
3.4
+ 5.9
+ 5.2
– 0.72)
–
486
484
– 0.4
8.8
GfK_53
Oleg Popenko, Chief Executive Officer
of the largest media agency, Starkom,
a subsidiary of international advertising
agency, dmb&b, and Director of the
Television Industry Committee of the
Ukraine, is hoping that the Ukrainian
tv audience panel will develop into one
of the most modern in Europe.
54_GfK
AMBITIOUS PLANS OF THE
UKRAINIAN TV INDUSTRY
The Ukraine is aiming to become a leading player in the European tv ratings business
GfK_55
The Ukraine is aiming to become a leading player in the European tv ratings business
AMBITIOUS PLANS OF THE
UKRAINIAN TV INDUSTRY
After fierce debate and tough technical discussions, the Ukrainian Television Industry Committee
began to reform its tv ratings system at the end of 2002. GfK-usm, Kiev, was selected from a
shortlist of three candidates to be its market research partner.
On 3 December 2002, GfK made an announcement
to the international press, which began as follows:
“GfK’s Ukrainian subsidiary GfK-usm has concluded
an agreement with the Television Industry Committee
(tic), an association of the main national television
stations ictv, Inter, Novy Kanal and stb, as well as
the Ukraine's three top advertising agencies, dmb&b,
Effect Integrated Media and Provid/bbdo. Under
its terms, GfK-usm will be conducting tv ratings
research in the Ukraine for the next four years,
starting in 2003.”
» like all the other countries of the former
c o m e c o n b lo c , t h e u k r a i n e w i t h i t s p o p u l at i o n
o f 4 7 . 5 m i ll i o n i s ta k i n g i t s f i r st st e p s
o n t h e t h o r n y p a t h t o d e v e l o p i n g t r u ly
modern economic structures.«
The report went on to say that the tic had
commissioned GfK-usm to set up a corresponding
tv panel, beginning with 1,200 representative
telephone-owning households in towns with
populations of 50,000 or more. After three years,
the panel is to be increased to 1,500 households.
The Ukraine is on the brink of modern
marketing development
The key factors that led the tic to its decision
were GfK’s differentiated methodological and
technical expertise and the long experience of
GfK subsidiaries in continuous ratings research.
At present, GfK conducts tv ratings research
for television companies and media planners in
six European countries: Austria, Belgium, France,
Germany, the Netherlands and Switzerland.
56_GfK
With its Swiss company Telecontrol, GfK is also
the leading supplier of tv meters, which measure
audience ratings.
However, it was not just international expertise
that tipped the balance in GfK’s favour with the
Television Industry Committee (tic). With its
comprehensive services in the fields of ad hoc
research, consumer tracking and the media, GfKusm, Kiev, had also been working intensively
on the challenges of the Ukrainian markets. Like
all the other countries of the former Comecon
bloc, the Ukraine with its population of 47.5 million
is taking its first steps on the thorny path to
developing truly modern economic structures.
Self-organization of the industry didn’t work
initially
Though the basic statistics are available for the
population and economic performance, the
detailed data needed particularly for marketing
and advertising is often lacking and is only now
beginning to emerge slowly. The economic
development and expansion of the country is held
back primarily by the sharp contrasts between the
relatively prosperous towns and the very poor rural
areas, with around 29 per cent of Ukrainians living
below the poverty line. Nevertheless, with gdp
of usd 42 billion, the economic performance of
the Ukraine places the country firmly in the top
third in the world ranking. The 12 per cent growth
in gnp in 2004 was not matched anywhere in
Europe.
The tv ratings research activity now getting under
way in the Ukraine will undoubtedly generate
the data needed for the cultivation of the consumer
markets. Earlier efforts were made to supply
» s o f a r , p o p e n k o , a m e d i a p l a n n i n g e x p e r t, f e e l s o p t i m i s t i c a b o u t
a c h i e v i n g h i s o b j e c t i v e o f e n s u r i n g t h a t, a s f a r a s m e a s u r e m e n t i s
c o n c e r n e d , t h e u k r a i n i a n r at i n g sy st e m w i ll b e o n e o f t h e m o st
s o p h i st i cat e d i n e u r o p e . «
the advertisers and their advertising agencies
with figures on the penetration and ratings of tv
programmes. However, as Oleg Popenko, ceo of
the media agency Starcom Mediavest Group
Euroasia, Kiev, a subsidiary of international
advertising agency dmb&b, and director of the
Television Industry Committee recalls: “In the
beginning, the market was simply unable to
organize itself. The interests were too different
and the methods used were too disputed.”
An increasingly impenetrable web of interests
organizing the interests of the television industry,
ensuring the growth of the television industry
and making it competitive and facilitating the
development of ratings research.
» with gdp of usd 42 billion, the economic
performance of the ukraine places the
c o u n t r y f i r m ly i n t h e t o p t h i r d o f t h e
world rankings. the 12 per cent growth
i n g n p i n 2 0 0 4 was n ot m at c h e d a n y w h e re
in europe.«
A market research firm was commissioned to set
up a panel, but whether or not it was adequately
representative was disputed by the Ukrainianspeaking tv stations, which are more popular in the
west of the country, and by the Russian-speaking
broadcasters with a higher audience share in the
east. Many of the agencies and advertisers involved
were not satisfied either.
For several years, the panel did not expand beyond
the start-up sample of the 25 regional capitals.
This was down to the inability of the tv industry to
agree on the extension plan. “We doubt that the
regional capitals are representative of anything
that could be of interest to the advertisers. Much
more important for that kind of investigation is
where the purchasing power lies,” commented
Popenko by way of explanation for the refusal of
the advertising industry to lend sufficient support.
He added: “In 2001, the state of tension between
opposed views on the status and future of tv research
reached its peak. The threat of uncontrolled
development of alternative tam systems became
very real. This was not acceptable to us or our
clients.”
The need for suitable organization and the
establishment of a reliable and generally accepted
tv rating system came top of the industry agenda.
In 2002, this led to the setting up of an initiative
group which went on to become the institution we
now know as the Television Industry Committee.
The first step taken by the new organization was
to lay down the ground rules, the panel design
and the panel structure. The tic defined its tasks as
Twin-track decision making
To carry out its task, the organization developed
“a unique and very well balanced system of
decision making” to put it in Popenko’s words.
Two voting methods are used. When it comes
to the tic strategy and the acceptance of new
members, every member has a vote. However,
when the issues relate to fundamental decisions
on the development of research that are linked to
financial obligations, the decisions are taken by
the founders alone. They are the people who bear
the financial responsibility and they are also the
people who concluded the agreement with GfK.
The voting percentages are also precisely defined:
90 per cent of the votes are held by the tv stations
and 10 per cent by the other founders. Still, despite
the overwhelming voting power of the tv stations,
the right of veto of the advertisers and media buyers
gives them an important role in the decision-making
process. If they believe that their interests are
being damaged by the tv stations, their joint veto
can block a decision or urge the tv stations to
come to a compromise.
The number of founder members is clear enough:
five television stations and three advertising
agencies. Since its founding, major advertisers,
such as Coca-Cola, Gillette, Procter & Gamble and
Unilever have also joined tic. “The organization
remains open to further members, irrespective of
whether they are advertisers, advertising agencies,
media agencies or television stations.” According
GfK_57
Konstantyn Stogny, police superintendent and at the same time editor-in-chief
of the documentary and special projects
film unit for Inter, the top Ukrainian tv
station, is the producer of one of the
Ukraine’s most popular reportage series
on global political crisis areas.
58_GfK
to Popenko, “Anyone who buys or sells air-time
can become a member of the tic.”
“Development is good for the markets,” comments
Popenko. He points out that the television market
has recorded impressive growth rates of 30 per
cent per annum and that there is every likelihood
that this will continue. Given this dynamic, it has
already been decided that the panel should include
people who do not have a telephone and the panel
is set to be extended to the whole population.
At present, it is representative only for towns with
more than 50,000 inhabitants – 45 per cent of
the population of the Ukraine. Once expanded,
the GfK panel will represent 70 per cent of
Ukrainians over 15 years of age.
On the basis of what has been achieved so
far, Popenko, a media planning expert, feels
optimistic about achieving his objective of
“ensuring that, as far as measurement is
concerned, the Ukrainian rating system will be
one of the most precise and technologically
sophisticated in Europe.” Even though the
Ukrainian television industry is still young and
the financial volume of the market is not very big
– with the investment in tv advertising estimated
at eur 170 million per year as against total
annual advertising investment of eur 500 million
– he firmly believes that, even at this level,
the advertisers are entitled to an ultra-precise
measuring system for planning their television
campaigns. His medium term objectives are
correspondingly ambitious:
tv rating studies should become representative
of the whole population of the Ukraine within
the next four or five years.
The next phase should see the adoption of
audio-metric technologies capable of giving a
full picture of media behaviour.
Single source data should be gathered.
Advertisers need information on demographic
groups as well as tv viewing data concerning
users of specific brand and product groups.
GfK-usm is already geared up for this future,
now that the foundation has been laid in the form
of a panel constituted in the manner envisaged.
Peter Menneer, head of Peter Menneer Research,
an independent British consultant of the tic,
has rated the GfK panel “the best controlled panel
I have ever seen”. Ukraine’s tv market showing strong growth
In addition to the two state-owned networks, ut1 and ut2
launched in 1951, there are now another 19 Ukrainian
private stations which have only been established since
1996.
In 2004, the major Ukrainian tv stations agreed to set up
a working group for tv audience research, the Television
Industrial Committee (tic). Its membership includes the
big tv stations, Inter, Studio 1+1, New Channel, ictv and
stb, three leading advertising agencies, dmb&b, Integrated Media and Provid, along with a series of Ukraine’s
major brand manufacturers.
At the end of 2002, tic commissioned GfK-usm to
establish an electronic tv panel to measure tv audience
coverage for a period up to 2007. The declared aim of
the tic was to install a measuring system whose results
would become the recognized currency for programme
and station data for anyone involved in the tv market.
Data gathering started at the beginning of 2003, with
1,200 households in 77 of the 102 Ukrainian towns and
cities with a population of 50,000+.
The 10 most popular tv programmes in the Ukraine in 2004
Title
Genre
Poor Nastya
Series (Russia/usa)
Coverage
27.9 %
New Year’s Eve celebrations
Variety show (Russia)
22.2 %
tv election dual between
Politics (Ukraine)
21.8 %
Yushchenko and Yanukovich
Taxi 3
Feature film (France)
21.5 %
Undina 2
Series (Russia)
21.2 %
Details
News (Ukraine)
20.3 %
Party concert
Variety show (Ukraine)
20.2 %
The hunt for two hares
tv feature film (Ukraine)
20.1 %
Distorted mirror
Variety show (Russia)
19.9 %
Undina
Series (Russia)
19.8 %
GfK_59
60_GfK
Region: Central and Eastern Europe
E A R LY I D E N T I F I C A T I O N O F
MARKET POTENTIAL
Not very long ago, the countries
of Central and Eastern Europe
were to most people virtually terra
incognita in the broadest sense.
After the fall of the Iron Curtain,
although there was a degree
of rapprochement between the
populations of the East and the
West, the decades of separation
had made their mark and to a
certain extent, this still holds true
today. However, as far as business
is concerned, the situation is quite
the reverse. Major international
companies quickly identified the
vast potential offered by the new
markets and this triggered an
increase in the amount of market
research being carried out in this
countries. GfK is among the early
pioneers in this region, and this is
due, in particular to the initiative
of our Austrian subsidiary, FesselGfK. They opened their first office
before the fall of the Iron Curtain as
early as 1989, when GfK Hungaria,
only the second foreign-owned
company in Hungary, started
operating in Budapest. GfK Polonia
quickly followed in Warsaw and
GfK Praha in the Czech Republic
and GfK-rus in Russia and today,
there are a total of 19 companies
in 15 countries located throughout
the region.
In Romania, the Slovak Republic,
Slovenia and the Ukraine, GfK
is currently ranked No. 1 in the
sector, while in Bulgaria, Croatia,
Russia, the Czech Republic and
Turkey, it is No. 2 and in Bosnia
Herzegovina, Poland, Serbia,
Montenegra and Hungary, GfK
occupies either 3rd or 4th place.
All the companies established up to
2000 now offer GfK’s information
and consultancy services in the
four business sectors, Custom
Research, Retail and Technology,
Consumer Tracking and Media.
In Retail and Technology and
Consumer Tracking, GfK is either
the only company to supply data
or the market leader. Since 2003,
GfK usm has been operating an
electronic tv panel in the Ukraine
under contract from the Television
Industry Committee, an organization
whose membership is made up of
tv stations, advertisers and media
agencies.
In 2004, the Central and Eastern
Europe region achieved organic
sales growth of 26.9 per cent, the
highest of any region and, with
an increase of 22.3 per cent in
income, this again represented
the highest organic growth of any
region.
With the establishment of GfK
Bosnia Herzegovina in 2004,
GfK now has a presence in all the
countries of the former Yugoslavia.
A new subsidiary in Kazakhstan
opened its doors at the beginning
of 2005.
In 2005, GfK Retail and Technology
also started to gather retail data
in the Baltic states of Estonia,
Latvia and Lithuania through GfK
Polonia. Selected GfK companies in Central and Eastern Europe
Present Market
since
rate
Azerbaijan
1994
–
The Baltic States:
2005
– GfK Marketing Services
Via GfK Türkiye
ü ,B
,
Estonia, Latvia,
Lithuania
Bosnia
2004
No. 3 GfK Bosnia Herzegovina
Bulgaria
1995
No. 2 GfK-Bulgaria
Croatia
1999
No. 2 GfK-Croatia
Czech Republic
1990
No. 2 GfK Praha
üB
Herzegovina
ü ,B C
incoma Research s.r.o.
incoma Consult.
No. 3 GfK Hungária
ü ,B CG
ü ,B CG
ü
ü
Hungary
1989
Kazakhstan
2005
Poland
1990
No. 3 GfK Polonia
Romania
1995
No. 1 GfK Romania
Russia
1991
No. 2 GfK-rus
Serbia and
2001
No. 4 GfK Belgrade
Slovak Republic
1995
Slovenia
1990
Turkey
1994
ü ,B C
ü ,B C
No. 2 ProCon GfK Research Services ü,CG
Strateji GfK Research Services
ü
GfK Türkiye
ü,C
Ukraine
1998
No. 1 GfK-usm
ü ,B CG
– GfK Kazakhstan
ü
ü ,B CG
ü ,B C
ü ,B CG
üC
Montenegro
Business divisions:
B Consumer Tracking
No. 1 GfK Slovakia
No. 1 GfK gral-iteo
ü Custom Research
C Media
ü ,B C
, Retail and Technology
G HealthCare
2004 in figures
In eur million
Sales
Operating profit
Margin 1)
No. of employees
Share of
GfK Group
overall
2003
2004
Change
in %
31.8
40.1
+ 26.0
6.0
3.7
4.5
+ 21.7
5.2
+ 11.6
+ 11.2
– 0.42)
–
697
826
+ 18.5
14.9
GfK_61
A QUESTION OF LEADERSHIP
62_GfK
The Henkel Group is focusing its commitment to the newly acquired
us Dial corporation on transnational brand strategy
America S P E C I A L – G f K R E G I O N S
Dr. Hans-Willi Schroiff, Vice President of
International Market Research/Business
Intelligence at Henkel kgaa in Düsseldorf,
is sceptical of the purist doctrine of
“global brands”, favouring Henkel’s
“transnational strategy”.
GfK_63
The Henkel Group is focusing its commitment to the newly acquired
us Dial corporation on transnational brand strategy
A QUESTION OF LEADERSHIP
The question of whether brand management should be strictly global, or whether it is best tailored
to suit the national market mechanics, has been successfully answered by the Henkel Group: as
much standardization as possible, as much flexibility as necessary. However, the precondition for
this is a profound empathy with the psychology of the brand and an extensive knowledge of the
market and consumer factors prevailing in each market.
Hans-Willi Schroiff has studied the world intensively.
“We live in a world which is global, but not homogeneous,” said the Market Research Manager
at Düsseldorf-based Henkel kgaa (Persil), whose
success story began in 1867 with a universal
washing powder and has taken it to global player.
The group of companies, which operates in
75 countries, recorded revenues totalling around
eur 10.6 billion in 2004.
» brands are sensuous blends of
as s o c i at i o n s , m e a n i n g s , p e rc e p t i o n s
and other non-physical dimensions.
b r a n d s h av e a f a c e w h i c h h e l p s t h e m
to be recognizable.«
Not least the take-over of the Dial Corporation of
Scottsdale, Arizona, founded over a century ago, has
put Henkel among the leading producers operating
in the detergent and cosmetics market in the usa.
Dial injected usd 1.3 billion into the Henkel Group
with brands like Dial soaps, Dial shower gels and
Purex detergent and this raised the question of how
a parent should best deal with its new baby. The
initial response from Schroiff is: “Henkel has never
bought companies in order to destroy their identity.
That would not make a great deal of sense. After
all, we are not only buying production expertise, but
in the first instance, intellectual entities in the form
of brands and intellectual property.”
The transnational Henkel strategy
Schroiff knows that precisely because the world
is not homogeneous and human beings are
defined by the most varied cultures and consumer
ideas, products cannot simply be marketed by the
64_GfK
Düsseldorf corporate headquarters all over the
world on a “one size fits all” basis. This is why he
is sceptical about the strict dogma of the “global
brand”, preferring to quote the successful Henkel
management principle of “transnational strategy”,
where:
Henkel links the individual countries into
“Euroteams“ created within the strategic
corporate units and this generates a connecting
thread between global and local management.
In this way, Henkel is distinctive for its crossborder management of brand portfolios, where
finding a balance between global and local
brands is important.
At the same time, Henkel provides for the
development of products, irrespective of any
geographic consideration. Schroiff postulates:
“There should really be a transnational r&d
department as well.”
Logistics, production, product development and
market research is equally transnational.
This close interconnection of local and global
brand strategies anchors every brand product in
both local and global camps. In the first instance,
every detergent or shower gel is a product,
developed in the manufacturers’ laboratories.
As Henkel’s top market researcher confirms:
“Products are a faceless blend of physics and
chemistry, which must function in a particular way
which is useful to the user.” However, the shift
towards the “emotional and persuasive elements”
which make a brand out of a product is already
present in these objective factors: strictly speaking,
the smell, colour and texture of a detergent already
enshrine the brand promises.
» t h e ‘ p syc h o lo g i ca l b r a n d - re l at e d ca r r i e r sy st e m ’ f u n ct i o n s
d i f f e r e n t ly f r o m o n e c o u n t r y t o a n o t h e r a n d i t i s h e r e t h a t
t h e c u lt u r a l d i f f e r e n c e s i m p a c t p a r t i c u l a r ly. «
How similar should a global brand be?
The brand itself takes shape in the imaginations
of the consumers. Schroiff says: “Brands are
sensuous blends of associations, meanings,
perceptions and other non-physical dimensions.
Brands have a face which helps them to be
recognizable.” Of course, this does not happen
just by itself: brand communication, ranging from
advertising to event marketing, must anchor the
face and spirit of the brand in the hearts and
minds of the consumers.
Once again, market research produces the facts
and figures which help the management to achieve
the right measure of effective standardization in
its production, sales and marketing. And the
same applies to the creative space in which the
competitive battle for business and consumer
preference will be fought. For there must be
standardization, in order to make efficient mass
production possible; after all, economics talk of
“economies of scale”, but ultimately, it is the
consumer who will decide the success or failure
of a brand. And there simply is no standard global
consumer. The “psychological brand-related
carrier system” (Schroiff) therefore functions
differently from one country to another and it
is here that the cultural differences impact
particularly. This certainly applies to the patchwork quilt that is Europe and is becoming evident
in markets on the other side of the Atlantic, not
to mention those countries which do not belong
to the Western Christian culture club.
By way of example, Schroiff cites the typical
consumer preferences in fabric softener fragrances
in different countries, where there are clear
differences between Northern and Southern
Europe. South Europeans prefer a strong floral
accent, such as a powerful rose fragrance, which
would immediately “… asphyxiate us Germans.
But it’s just right for Italians”.
Dial, the new Henkel subsidiary
By taking over the Dial Corporation, one of the leading us
producers of detergents, cosmetics, air fresheners and food,
German detergent, cosmetics and glue manufacturers,
Henkel, have significantly expanded their business in the
usa. In future, around one fifth of sales will be generated
in the usa.
A story from the New World
Philip Danforth Armour, who started to produce canned
meat in 1868, is deemed to be the founder of Dial. In 1880,
the company started producing the washing soda known
as Borax and in 1888, soap, first known as Armour Family
Soap, was added to the range.
Later, the soap was renamed Dial, as was the company
soon after that. This happened in the early 1950s, a time
when the slogan “Aren’t you glad you use Dial?” was one
of the best-known advertising phrases in the usa.
The Dial Corporation, which is headquartered in Scottsdale,
Arizona, usa, produces a range of goods including soap,
shower gels and detergents. With a 14.5 per cent market
share, its detergent, Purex, is ranked No. 2 in the us
market. With a market share of 22.4 per cent, the air
freshener, Renuzit, is also ranked No. 2 and, with 20 per
cent, the soap bar, Dial, is No. 1. The main customer for
Dial products in the usa is America’s biggest discount
retail chain, Wal-Mart.
The parent company, Henkel: a brand like a friend
The parent company, Henkel kgaa, founded by salesman
Fritz Henkel and two partners, also has over a century of
history under its belt. Today, it ranks among the world’s
leading providers of branded goods and technology which,
according to the company’s corporate philosophy, “make
life easier, better and more enjoyable”.
In 2004, the Henkel Group achieved sales of almost
eur 10.6 billion through its three strategic business
divisions – detergents and cleaning products (No. 2 worldwide), cosmetics and bodycare (in the global top 10) and
glues, sealants and surface technology (No. 1 worldwide).
GfK_65
66_GfK
Americans prefer to use soap in the shower
There are often chasms between the aesthetic
preferences of us consumers and Europeans. In
respect of packaging, for example, as Schroiff
explains: “Let’s take typical air freshener packaging.
This would alienate the average European, who
would think it well over the top, kitsch, loud, not
very elegant, even less aesthetically pleasing
and rather shapeless.” Where shower gels are
concerned, there are also cultural differences
distinguishing Europeans from Americans. For
instance, whilst in Germany the product has
achieved wide coverage, this is clearly not so in
the usa, where the more conservative Americans
tend to shower with soap.
Italian women are also on the conservative side
when it comes to traditional washing powders,
enthusiastically carrying heavy mega-packs home
with them. Conversely, in Holland, these jumbo
packs tend to languish on the shelves, because here,
it’s the small, convenient detergent concentrates
which are a hit with housewives. Schroiff says: “My
message is simple: we respect these differences.
They are an expression of what our consumers
value and of the different consumption habits
dictated by particular cultures.” This is enshrined
in the Henkel management corporate philosophy,
which is summarized in the slogan: “A brand like
a friend.” Schroiff maintains: “We would never set
ourselves against a consumer preference,” adding,
“Naturally it is vital to achieve good corporate
statistics and these can be generated by factors
including synergies achieved by amalgamating
production plants, but never at the cost of local
consumer coverage.”
It is precisely these insights which have led
Henkel’s management away from believing in
the opportunities offered by an unadulterated
global brand, and have instead persuaded it to
concentrate on the Henkel-specific strategy: as
much standardization as possible and as much
differentiation as necessary. For this purpose,
extensive market research packages are loaded
with all the information aimed at obtaining a
picture of the market which is accurate enough to
allow decisions to be made. Market researchers
approach the task from the most varied angles and
the study takes the form of an integrated market
analysis seen from the perspective of the individual
departments. Accordingly, surveys on the retail
landscape, consumer habits and the changing
demand structures are carried out.
The broad horizon of the market researcher
Worldwide, the Henkel brands and those of
subsidiaries acquired will always remain at the
core. Although according to Schroiff, not in the
sense of a “doctrine of global brand management,
where the same product of the same brand has
to be marketed in the same packaging with the
same advertising all over the world”. Flexibility,
knowledge of the various cultural mechanics and
respect for different consumer habits are the
determining factors in Henkel marketing, which,
although coordinated from the Henkel headquarters
in Düsseldorf, still allows subsidiaries the necessary
room to manoeuvre. And with success. For 2005,
the Henkel Group aims to increase its sales by a
figure “somewhere in the ten per cent range”, in
the wake of the 2004 rise in return on earnings
from 8.8 per cent to 9.4 per cent.
» m y m e s s ag e i s s i m p l e : w e r e s p e c t t h e s e
differences. they are an expression of
w h at o u r c o n s u m e r s va lu e a n d o f t h e
d i f f e r e n t c o n s u m p t i o n h a b i t s d i c tat e d
b y pa r t i c u l a r c u lt u r e s . «
Global presence as the solution for the whole group,
is not in itself the aim, whereas securing the future
is, according to Ulrich Lehner, Chairman of the
Management Board of Henkel kgaa. In addition
to Asia and Central and Eastern Europe, the us
market has a key role and this includes Dial and its
brands, in particular Purex, the detergent which is
the market leader in terms of volume. Schroiff says
that Dial and arl-Advanced Research Laboratories,
the branded products company acquired at the
same time, are more than just major sales generators
in the Henkel portfolio. These companies provide
“a wonderful springboard for expanding our
business activities in North America, which is
currently the most profitable consumer goods
market in the world”. GfK_67
68_GfK
Region: America
E X PA N S I O N A C C E L E R AT E D S I N C E 1 9 9 9
Just over five years ago, GfK had
no presence in the usa, the world’s
biggest market research market.
This has since changed and GfK
now has over 300 staff employed
in both continents of the New World
in a total of ten GfK companies
throughout North, Central and
South America.
The cornerstone to realizing the
target of gaining a foothold in the
usa, which has been in the pipeline
for a number of years, was laid
with the stock market flotation of
GfK in September 1999. The same
year, the first us research institute
was identified.
The company, which today operates
under the name, GfK Custom
Research, was the first service
company to be awarded the
prestigious Malcolm Baldrige
Prize for quality management by
the President of the usa in 1996.
GfK Custom Research maintains
offices in Minneapolis and New
York.
At the same time as taking over uk
company, GfK Martin Hamblin in
2001, GfK also acquired a second
company in the usa: GfK Martin
Hamblin Inc., headquartered in
Southport, Connecticut.
In July 2003, GfK took a further
important strategic step, which
not only distinctly strengthened
its position in the usa, but also
became a decisive factor in GfK
establishing its own HealthCare
business division: it bought a
majority holding in pharmaceutical
research specialists, v2 GfK in
Blue Bell, near Philadelphia.
In 2004, GfK finally acquired
GfK arbor, a company with
particular expertise in brand
research, based in Media, near
Philadelphia. With this, the
Group was ranked 15th in the
American market research sector.
GfK also increased its minority
holding in GfK Indicator in Brazil,
a company founded in 2001 active
in the Custom Research sector,
to 95 per cent. This gave GfK 4th
ranking in the Brazilian market
research sector.
Selected GfK companies in America
Present
since
Brazil
Market
rating
2003
No. 4 GfK Indicator
The same year, GfK also increased
its share in the American Caribou
Lake software house to 100 per
cent. The company operates in
close cooperation with GfK Custom
Research in the database marketing
and data mining sector.
,
Canada
2005
– Beyen Marktforschung
,
Chile
2004
– GfK Chile Marketing Services
,
usa
1999
No. 15 GfK Custom Research, Minneapolis üC
GfK Custom Research, New York
üC
GfK Martin Hamblin
üG
v2 GfK
2005
In 2004, GfK set up several new
companies for the Retail and
Technology sector and began
retail data gathering operations in
the electronic consumer goods
markets on the South American
subcontinent, initially in Chile
and later in Brazil. A further
company is shortly to be launched
in Argentina.
ü
GfK Marketing Services
G
GfK arbor
ü
Caribou Lake Software
ä
Beyen Marktforschung
,
Business divisions:
C Media
G HealthCare
ä Other
2004 in figures
In eur million
Sales
Operating profit
Margin1)
No. of employees
Change
in %
Share of
GfK Group
overall
2003
2004
48.6
84.8
+ 74.5
12.6
4.4
12.3
+ 176.1
14.3
+ 9.2
+ 14.5
+ 5.32)
–
204
367
+ 79.9
6.6
With the acquisition of Beyer
Marktforschung in 2005, GfK
now has two subsidiaries in the
Retail and Technology sector
in the usa and Canada, which
gather data on prices and shelfconfiguration for electronic
consumer goods retailing. GfK_69
CONNECTING PEOPLE
70_GfK
How Finnish mobile phone manufacturer Nokia
is conquering the complex Chinese market
Colin Giles is the Senior Vice President of Customer and
Market Operations, China Area, and has helped Nokia to
become the leading mobile phone manufacturer in China.
He believes that to compete effectively with local brands
and leverage their expertise in technology and r&d and their
experience of countries with such a scale of production,
companies like Nokia have to optimize their distribution
network and expand it to non-urban areas of this vast country.
GfK_71
How Finnish mobile phone manufacturer Nokia is conquering the complex Chinese market
CONNECTING PEOPLE
China has taken over the lead in the global mobile phone market. International companies and
Chinese manufacturers are locked into battle over market shares, a tough challenge in a country of
contrasts, where purchasing power and modern economic structures are evolving at different speeds.
It is precisely the complexity and diversity of the People’s Republic of China and its 31 autonomous
provinces and regions and rural communities which is presenting marketing and market research
with a great challenge.
The 1.3 billion potential employees and consumers
and the percentage of annual economic growth
measured in almost double digits have earned the
respect of weekly magazine, WirtschaftsWoche,
which recently pronounced “the resurgence of China
and its rise to number one in the business world
the most exciting story of our times”. Experts
worldwide are in agreement with WirtschaftsWoche.
China is on the way to becoming a highly attractive
market. However, it is unlikely to become any easier,
even if Chinese consumers with their irrepressible
optimism and their desire for all the creature
comforts which modern products and services can
give them create the ideal consumer climate.
» w e d o n ’ t c re at e t e c h n o lo g y f o r t h e s a k e
o f i t. o n t h e c o n t r a r y, w e d e s i g n p r o d u c t s
w h i c h p e o p l e ca n u s e a n d w e ca n i n t e g r at e
i n t o t h e i r l i v e s . o u r a i m i s t o b e e x t r e m e ly
i n n o va t i v e . «
The statistics are impressive. According to the
German Foreign Office in Berlin, with gdp of
usd 1.4 billion in 2003, China has meanwhile
risen to No. 6 in the international league table.
In 1990, the figure was still usd 354 billion,
representing ninth place, just above Mexico.
By way of comparison: in 2003, the statisticians
gave the usa and its gdp of around usd 10.9 billion
the undisputed lead, ahead of Japan with usd 4.3
billion and Germany, usd 2.4 billion. China is
now ranked the fourth biggest trading nation in
the world.
72_GfK
The Nokia story is one of innovation
Above all, it is investment equating to about half
the figure for gdp, which is feeding the economic
boom in China and over usd 50 billion comes from
abroad. However, foreign companies do not find
it easy to share in the boom. Not least, this is due
to the unfamiliar structures and habits of this
vast country with a surface area of 9.6 million m2
(to allow comparison, Germany covers an area of
0.36 million m2), where the extreme differences
between town and country present huge challenges
to managers. Colin Giles, Senior Vice President
of Customer and Market Operations, China Area,
who has been managing the operations of Finland’s
mobile phone supplier, Nokia, across the entire
Chinese region since January 2004, shows how it
can be done successfully.
According to Giles, the Nokia success story is
one of innovation and customer proximity.
Describing the corporate philosophy as “standing
for innovation and seeing ourselves closer to
people than other companies”, he explains: “We
don’t create technology for its own sake. Quite
the contrary, we design products which people
can use and which we can integrate into living and
daily life. Our aim is to be extremely innovative,
to develop innovative products and to retain the
leading edge in the new technologies.”
Of course, Giles also knows that these fine words
need putting into practice. On the heels of the
initial successes of Nokia and other international
mobile phone companies, especially in China’s
towns and cities, which, according to the German
Embassy in Beijing, are home to just 40 per cent of
» distribution is the real challenge in china, because it has to
cover some 20,000 cities, each of which might represent a huge
m a r k e t i n i t s e l f. «
the population, there came a rude awakening
three years ago. Chinese mobile phone brands like
tcl and Bird used their greater local knowledge
to advantage to focus their activities on selling
into the national and above all, the local markets,
whose commercial structure and operations are
not very transparent to say the least. And they were
successful. Virtually overnight, they wrested decisive
market shares from international companies like
Nokia, Motorola and Samsung, and even threatened
to take over their leading position.
According to Giles: “The reason was mainly down
to distribution difficulties, which makes China very
different from other markets: in particular, its size,
complexity and the lack of distinct systems and
working methods.” The local competitors had the
edge in two specific aspects: firstly, with their better
knowledge of the country and its people, they were
able to ensure the best possible market penetration
in the fastest possible time and second, they were
more effective in activating dealers.
Every place a different market
This is where Nokia managers have found an
appropriate solution. A combination of national
distributors, also functioning as regional dealers,
and a whole series of small town dealers in the
provinces has created a balanced distribution
system comprising around 100 distributors. Giles
reports: “We also recently expanded our market
presence in close cooperation with the major retail
chains, as well as with the big electrical stores and
telecommunications chains. And we appointed a
Nokia celebrates 20th anniversary in China
In 2004, Nokia succeeded not only in retaining, but
also clearly extending its position as the No. 1 player in the
Chinese mobile phone market. Nokia’s management believes
that this is due to the strength of the Nokia brand, its leading
technology and quality products, as well as the efforts
recently undertaken to ensure the efficiency and expansion
of our distribution system to the country’s more rural areas.
Nokia’s mission
Connecting People has always been, and will continue to
be, the focus of our business.
Nokia’s China manager adds: “This is the real
challenge of China, because distribution has to
cover some 20,000 cities, each of which might
represent a huge market on its own.” Giles adds
that the problem is not just one of delivering
goods to a particular place, but also the need to
be there locally in person. The Chinese companies
already had the necessary expertise, which
competitors from East and West still needed to
acquire with some difficulty. Also, they were
already represented throughout China, so that
they were able to set up a network of local
dealers. The various Chinese manufacturers had
dispatched almost 10,000 people to either sell
their mobile phones direct to shops, or to go from
dealer to dealer convincing them to sell their
brands.
All this is legwork which costs time and effort,
because unlike in the classic industrialized
nations, Chinese retailers are as yet far from being
organized in manageable sales and distribution
structures.
By connecting people, we are helping to meet a
fundamental human need for social connections and
contact. Nokia builds bridges between people, both
when they are far apart and face-to-face, and also bridges
the gap between people and the information they need.
Founded in 1865 by the Nokia family in Finland, Nokia
has been focusing on telecommunications since the early
nineties. The company is one of the world leaders in mobile
communications and is a driving force behind the growth
and sustainability of the expanding mobile technology
sector. As the developer of the first mobile phone network
in Scandinavia in 1981, Nokia offers an extensive range
of products, all of which have a connection with mobile
communications. In 2004, the company recorded growth
of almost eur 29.5 billion.
Strategically, China is very important for Nokia. As the
company's second largest market behind the usa, 2004 net
sales for China rose sharply to usd 3.6 billion, representing
growth of 44 % on the previous year. China also plays
a major part in Nokia's global manufacturing base as a
logistics hub and in its global r&d network.
GfK_73
74_GfK
field sales force tasked with setting up sales
depots. Many of the employees then switched
from marketing to local sales. We have managed
to acquire the necessary expertise, provide the
training, modify the working methods and revise
the work processes.”
With pride, Giles adds: “These measures have
given us a clear head start on our competitors.
Compared with most and depending on which
market we are going after, we are in a position to
select from these sales channels. This means that
we can choose between the national distributors,
the retailers and the big retail chains. Added
to this, we have around 170 of our own shops.”
This provides Nokia China with a good mix of
distribution channels to suit the specific requirements of each individual market, whether this is
in the provinces or in the cities.
Chinese market trends influencing the global
market
By comparison with the trade, consumers are less
complicated. As in the West or countries like Japan
in their turn, the mobile phone has swiftly become
a status symbol in China, with the sending of text
messages virtually the national sport of the young.
Around 1,000 million sms texts are transmitted
between mobiles in China every month and it has
to be said that the international digits and letters
on the keypad are a lot quicker to use than a pc
keyboard with thousands of Chinese characters.
The system is based on the Pinyin Roman alphabet
transliteration method introduced in 1979. However,
keypads which can be used with a stylus developed
specifically for China and which have abbreviated
character symbols are also quick to use.
Nokia tailors its product strategy accordingly.
Giles is convinced that in future, Chinese market
trends will also influence the global markets, as
is the case today for Taiwan, Korea and since even
longer, Japan. The silver chrome cover, a nod
by the designers to the Chinese love of metallic
colours, is already well established all over the
world, showing, as Giles maintains “how important
this market is to Nokia in general. And this is
why we have installed a Research & Development
centre, which will be developing designs for the
entire Nokia Group from here as well.”
In cultural terms, Giles believes the mobile phone and
by extension, design, are of the utmost significance
for China. For example, when an American wants to
show someone else how important he is, he shows
off his home. In China, the status symbols are
watches like Rolex for example, or more recently,
mobile phones. Giles says: “Brands are very
important in the cities, where people feel drawn to
the most sought-after brands. They are a symbol
of status or a mark of international stature.”
» b r a n d e d g o o d s s i g n i f y b e t t e r q u a l i t y.
in the major cities people know this.
however, in the smaller towns, the brands
h av e n o t y e t a c h i e v e d t h i s i m p o r t a n c e . «
The brand as a symbol of quality
Branded goods also signify better quality. In the
major cities people know this. However, in the
smaller towns, the brands have not yet achieved
this importance. Giles is relaxed about this:
“The situation has already started to change in
recent years, which is probably also down to the
poor quality of products offered by our Chinese
competitors. Consumers are slowly becoming
more aware of the quality associated with a
particular brand.” Although of course, haggling
over the price is likely to remain the national sport
in China for some time to come.
Almost 100 million mobile phones were sold in
China in 2004, which is 22 per cent more than
in 2003. GfK was able to confirm that Nokia has
achieved market leadership. With extensive
research in this very disparate market supplying
significant insights, GfK Asia has provided critical
assistance for the marketing decision-making
process. All the more since: “The number of
competitors and the number of new mobile phone
models is growing massively,” as Andy Drake,
Managing Director of GfK Asia, describes the
situation.
The results will form the basis for Colin Giles’
vision of spreading the word according to Nokia
of Connecting People in all 20,000 cities, so that
the new technologies and products which are
launched are understood in the major cities and
that in the smaller towns and villages, people will
be able to experience the sheer joy of being in
touch with friends and family on the telephone.
Of course, as the No. 1 in the whole of China. GfK_75
76_GfK
Region: Asia and the Pacific
HUGE MARKET POTENTIAL
Experts estimate that the next ten
years will see the emergence of
a middle class comprising some
800 million enthusiastic consumers
in Asia. This equates to around
ten times the German population
and 2.7 times that of the usa.
Irrespective of how large the
group of people with an adequate
income in Asia really is, what
is crystal clear is that Asia and
the Pacific is well on the way to
becoming a consumer paradise.
The market research industry will
also benefit from this development.
This is a sector which is relatively
new to Asia and the Pacific. In
2003, it accounted for 6.4 per cent
of the global sales of the sector
(up from 5.6 per cent in the previous
year). Japan is by far the biggest
national market research market
in the region, followed by China
and Australia.
The GfK Group has been active in
Asia and the Pacific for almost 20
years. It all started in Japan, where
the company acquired its first
regional minority shareholding in
1985. In the meantime, GfK has
established its own subsidiaries in
virtually every major economy in
the region, as well as in Australia
and New Zealand and all of these
companies now offer a full range
of information and consultancy
services in the retail and technology
sector. In 2004, GfK had subsidiaries
in 13 countries in the region, with
an additional minority holding in
org-GfK Marketing Services in
India.
Although up to now, GfK has
only offered services in one of its
divisions, the Group is ranked 5th
in the league table of market
research companies operating in
Asia and the Pacific.
Selected GfK companies in Asia and the Pacific
Present
since
Australia
1993
In recent years, the growth of GfK’s
business has been particularly
dynamic in the region. In 2004,
with 27.6 per cent growth, GfK
recorded the highest increase in
income from organic growth,
and at 17.6 per cent, the highest
margin of any of the regions.
With the establishment of its
office in Manila, GfK has begun
gathering retail data in the
Philippines and the same applies
in Cambodia, where data is
gathered by GfK Marketing Services
Thailand.
In 2004, the companies in the
region started setting up databases
containing information on the
structure and composition of the
local and national retail landscape
in the various countries, and
they have been very successful in
offering this as a service to their
clients. GfK Marketing Services Australia
,
Oz Toys Marketing Services
,
Informark
,
Cambodia
2005
GfK Asia,
Representative Office Vietnam
,
China
1999
GfK Asia, Beijing Office
,
GfK Market Research, Shanghai
,
Hong Kong
1994
GfK Marketing Services, Hong Kong
,
India
1994
org-GfK Marketing Services (India)
,
Indonesia
1994
pt GfK Marketing Services Indonesia
,
Japan
1985
GfK Marketing Services Japan
,
encodex Japan
,
Korea
2000
GfK Marketing Services Korea
,
Malaysia
1994
GfK Marketing Services (Malaysia)
,
New Zealand
1993
GfK Marketing Services Australia
,
Philippines
2005
GfK Asia Philippines
,
Singapore
1994
GfK Asia
,
Taiwan
1994
GfK Marketing Services (Taiwan)
,
Thailand
1996
GfK Marketing Services Thailand
,
Vietnam
1999
GfK Asia, Representative Office Vietnam
,
Business divisions:
C Media
G HealthCare
ä Other
2004 in figures
In eur million
Sales
Operating profit
Margin 1)
No. of employees
Share of
GfK Group
overall
2003
2004
Change
in %
34.4
39.3
+ 14.3
5.8
5.6
6.9
+ 24.0
8.0
+ 16.3
+ 17.6
+ 1.32)
–
410
511
+ 24.6
9.2
GfK_77
78_GfK
MANAGEMENT
REPORT
MANAGEMENT REPORT OF THE GfK GROUP
80
1. General comments
80
2. The economy
83
3. Economic and financial development
of the GfK Group
87
4. Business divisions
92
88
Custom Research
88
89
Consumer Tracking
90
Media
90
HealthCare
91
Other
5. Regions
92
Germany
93
Europe
94
America
95
96
GfK network
96
6. Research and development
97
7. Employees
99
8. Organization and administration
100
9. Purchasing
100 10. Environmental protection
100 11. Marketing and corporate communications
101 12. Risk
105 13. Major events since the 2004 financial statements
106 14. Outlook
GfK_79
MANAGEMENT REPORT OF THE GfK GROUP
1. General comments
The following report relates to the GfK Group. The management
report and annual financial statements for GfK Aktiengesellschaft
are published separately and can be downloaded from the website
at www.gfk.de or ordered from GfK.
gdp growth in regions and countries important to GfK
(at constant prices from 1995 onwards – year-on-year change in %)
Germany
France
The GfK Group is presenting its consolidated financial statements
for financial year 2004 in accordance with the United States
Generally Accepted Accounting Principles (us gaap). The
previous year’s figures were also reported according to these
principles.
All financial data for the business divisions and regions is
drawn from the management information system and, like the
consolidated financial statements, is also reported according
to us gaap. Minority participations are not taken into account
and, in each case, operating profit therefore excludes net income
from participations.
The percentage figures reported in the details relating to the
GfK Group’s business trend are based on figures in eur 1,000
from Group accounting and controlling. Accordingly, rounding
differences may occur.
Where statements refer to the number of employees, in
principle, this represents the total number of full-time posts
at the end of the financial year, irrespective of whether the
individual posts are part-time or full-time posts. The terms
full-time employees, staff, employees and persons are used
synonymously.
Companies mentioned in the management report are referred
to by their abbreviated names. The “Additional information”
section of the Annual Report includes a list of all companies
indicated in the management report and their full names.
2. The economy
Overall economic development:
the upward trend has continued
The global economy staged a strong recovery in 2004, with
gnp increasing by 4.6 per cent. However, after initially aboveaverage growth, momentum was lost in the second half of the
year. This applied, in particular, to the usa, but also to Asia.
The main factor responsible for the slowing of growth in the
global economy was economic policy. In the usa, action on
monetary policy and the absence of impetus from financial
policy measures and in China, measures to cool down the
overheated economy. The sharp rise in oil prices also dampened
global economic growth. In the European Union (eu), the
moderate economic growth of the previous year continued
in 2004.
GfK_80
4)
2003
20041)
20052)
20062)
3)
3)
4)
2.34)
– 0.1
1.6
1.4
0.5
2.1
2.0
2.3
UK 4)
2.2
3.2
2.6
2.4
Euro-zone 5)
0.5
1.8
2.0
2.4
eu 155)
0.8
2.0
2.1
2.4
eu accession countries 5)
3.6
4.1
5.5
4.2
eu 255)
0.9
2.1
2.2
2.5
usa4)
3.0
4.4
3.3
3.6
Latin America7)
1.4
5.4
3.9
4.0
South East Asia 6)
6.9
7.9
6.7
7.2
China6)
9.1
9.4
8.0
8.5
Japan4)
2.5
4.0
2.1
2.3
World 5)
3.9
4.6
4.1
3.9
1) Estimate
2) Forecast
3) Federal Statistical Office, Wiesbaden – however, the calendar effect had a particularly
marked impact in 2004, accounting for 0.5 percentage points of growth alone.
Excluding this effect, the Federal Statistical Office calculated growth in gdp of 1.1 per cent.
4) oecd Economic Outlook 76 database
5) The Euroframe Outlook for the Euro Area, 11/2004
6) diw weekly report “Grundlinien der Wirtschaftsentwicklung (Baseline of economic development)
2005/2006”, 1-2/2005, Berlin
7) Allianz Group: Economic Research – ”Wirtschaft und Märkte“, 02/2005
Germany: export demand the main engine of growth
Thanks to very positive export demand, growth in the German
economy, which was already showing an upturn in the second
half of 2003, gained momentum in 2004. With growth in gdp
of 1.6 per cent, the phase of economic stagnation which had
lasted about three years came to an end. Export-driven growth
increased by 1.2 percentage points. In contrast, growth in the
domestic economy was not particularly buoyant in 2004. Public
sector consumption expenditure and private sector investment
made a modest, but still positive, contribution of 0.3 per cent
to gdp. In contrast, private consumption was down by 0.3 per
cent (previous year: + / – 0.0 per cent). The reasons for this
are continuing major concerns about job security and fairly
modest growth in private incomes. Perceptible cost savings
achieved by reducing non-negotiated pay scale components and
relinquishing productivity-linked wage growth meant that real
wages rose only slightly. The savings ratio also increased further,
in anticipation that the government reforms in Germany might
result in further cuts in income. The consumer climate indicator
used by GfK reflects very clearly that consumer mood in
Germany was not exactly upbeat in 2004.
Economy and the market research sector
MANAGEMENT REPORT
European Union: halting recovery
Consumer attitudes during the reform debate in 2004 –
results of the GfK consumer climate survey1)
Month
Opinion
trend
Propensity
to buy2)
Change
from previous month
Consumer
climate
indicator3)
Change
from previous month
January
Winter frost for
German
consumers
– 41.7
– 9.5
4.1
– 1.1
February
Optimism
grows
– 25.7
+ 16.0
4.4
+ 0.3
March
Consumer
uncertainly
continues
– 25.0
+ 0.7
4.8
+ 0.4
April
As changeable as
the April weather
– 26.9
– 1.9
4.7
– 0.1
May
Caution still
prevails
– 41.1
– 14.2
4.4
– 0.3
June
A glimmer of hope
on the horizon
– 24.5
+ 16.6
3.9
– 0.5
July
Interim low or
downward trend?
– 37.4
– 12.9
3.4
– 0.5
Consumer
climate: varied
and changing
– 27.8
+ 9.6
2.5
– 0.9
September
Two trends in
Germany
– 27.4
+ 0.4
2.2
– 0.3
October
Uncertainty
up slightly
– 28.6
– 1.2
2.3
+ 0.1
November
Domestic demand
waiting for the
starting signal
– 24.4
+ 4.2
2.4
+ 0.1
December
Year end
optimism
– 22.3
+ 2.1
2.6
+ 0.2
August
1) These are the findings of the survey, “GfK-Wirtschaftsdienst Konsum- und Sparklima”
(GfK financial services, consumer and savings climate), published by GfK Marktforschung.
The results are based on monthly consumer interviews, which GfK has been carrying out
on behalf of the eu Commission since 1980. In the first half of each month, around 2,000
representatively selected people are asked about their perceptions of the overall economic
situation, their propensity to buy and their income expectations.
2) The indicator on consumer confidence is based on the following question to consumers:
“Do you think it is advisable to make major purchases at the moment?” (good time – neither
good nor bad time – bad time). The values shown above are deviations from the long-term
average value. The historic maximum value is + 36.5 in April 1999, whilst the historic minimum
value is – 55.5 in November 2003.
3) The consumer climate indicator is used to describe private consumption. Key factors are income
expectations and buying propensity. The economic outlook has a more indirect effect on the
consumer climate, generally as a result of income expectations. The historic maximum value for
the indicator was 27.9 in March 1999, whilst the historic minimum value was – 8.7 in February 1994.
A widespread economic recovery in the eu is proving to be a
slow process, despite considerable impetus from foreign trade.
With gnp up by 2.1 per cent (previous year: 0.9 per cent), the
pace of the upturn lags far behind that of previous years and
that in other regions of the world.
Growth in the Euro-zone is particularly disappointing: after a
positive trend in the first six months of the year, it weakened
perceptibly in the course of the second half of 2004. Conversely,
economic growth in the uk was above-average again in 2004.
Following growth of more than 2 per cent in the previous year,
the 3.2 per cent increase in gdp this year was significantly
higher, for example, than in the two other major countries –
France (2.1 per cent, previous year: 0.5 per cent) and Germany
(1.6 per cent, previous year: – 0.1 per cent).
New eu member countries: dynamic growth continues
In the countries which joined the eu in May 2004, the dynamic
growth of the previous year continued. Up by 4.1 per cent
(previous year: 3.6 per cent), the percentage growth in gnp
was more than double the level of the 15 countries which
already belonged to the eu before 1 May. Once again, the Baltic
countries showed particularly strong growth. All eu accession
countries are benefiting from strong demand from abroad.
However, domestic demand has also increased in these countries
and investment activity has stabilized almost everywhere. In
addition to exports, private consumption was a major factor in
economic growth.
usa: boom in private consumption
The omens for the us American economy were good in 2004.
The pace of growth slackened in 2004 compared to the high
level which prevailed into the second half of 2003. However,
full-year growth amounted to 4.4 per cent (previous year:
3.0 per cent). The driving force behind the economy throughout
the whole year, despite a lack of impetus from financial policy, was
growing private consumption and increased private investment
as well as public sector consumption.
Although still banking on economic growth, the usa scaled
down its previous expansive economic policy last year with
gradual increases in key lending rates by the us Federal
Reserve. The recent rate of 2.25 per cent was still very low
in a long-term comparison. Correspondingly, monetary policy
continued to provide major impetus. The same applies to
fiscal policy, which supported the economy following the tax
GfK_81
reforms. us exports rose sharply in 2004, although the pace slakkened here too, mainly due to economic growth in export countries declined and the devaluation of the us dollar was
no longer triggering a corresponding rise in demand. Since the
marked increase in domestic demand continued, but export
activity lost momentum, the trade balance deficit widened.
Other contributory factors were higher raw material prices and
deteriorated terms of trade.
Central and South America: demand for raw materials
generates economic growth
Almost without exception, the countries of Central and
South America in which GfK is expanding its activities are
experiencing an economic upturn. This is largely based on
the sharp rise in demand for raw materials. The increase
in exports also revived domestic demand, with investment
rising and private consumption picking up. Economic policy
measures have reduced the rate of inflation almost everywhere
to below 10 per cent. In 2004, gnp increased by 5.4 per cent in
the region.
Asia: dynamic growth continues
In 2004, Asia was the region with the highest macroeconomic
growth, although the rate of expansion slowed down at the
end of the year. In Japan gdp virtually stagnated by mid-year.
The domestic economy had, however, recovered again by the
year-end and gdp increased by 4 per cent, despite continuing
deflationary tendencies and less impetus from financial policy.
The main causes were a sharp rise in private investment and
strong growth in export activity, triggered particularly by China
and other parts of the world.
The Chinese economy has been experiencing a boom for
some time. gdp rose by 9.4 per cent in 2004. A rise in inflation
is an important sign of overheating: while in previous years,
prices remained virtually stable, the rate of price increase had
accelerated to 5 per cent by the summer of 2004. Economic
policy was therefore aimed at slowing economic growth, for
example by means of interest rate rises by the central bank
and the imposition of credit restrictions. The first sign of the
restrictive measures taking effect was slower growth in raw
material imports in the second half of 2004.
In the emerging markets of Asia, rapid economic growth also
continued in 2004. Supported by expansionary monetary policy,
this was attributable to strong foreign demand, especially from
the usa and China. However, consumption and investment
reacted sensitively to the hike in oil prices during the year.
82_GfK
Nevertheless, gdp in all these countries increased by five or
more per cent, exceeding the respective growth levels of the
previous year.
Market research sector: slight recovery
Since the 1990s, when market research recorded very strong
growth rates, the sector has faced much slower growth in the
first decade of the new millennium. After real growth of 2.7 per
cent in 2003 (esomar), experts estimate that sector sales rose
by around 3.5 per cent in 2004.
In line with the varying growth rates in different regions of the
world, the sector is also showing particularly dynamic growth
in the Asia and Pacific region, in the new eu member countries,
and in Central and South America. In contrast, sector growth
has stagnated in the eu 15 region.
Market research by region and by country
2002
2003
Change in
real terms
2002/20031)
Europe
eu 15
uk
Germany
France
eu accession countries
Rest of Europe
41.3
38.0
10.6
9.0
7.6
1.1
2.2
43.8
40.2
10.6
9.5
8.4
1.3
2.3
1.0
0.7
– 0.1
– 0.1
2.4
11.8
0.7
America
usa
Central and
South America
44.0
37.8
41.3
35.2
N.A.
3.3
3.2
3.6
8.3
Asia/Pacific
Japan
China
13.4
6.3
1.8
13.6
6.2
2.0
5.6
2.1
28.0
Middle East/Africa
1.3
1.3
1.1
Market research
sales in usd million
16,668
18,922
2.7
In %
1) Rates of change based on national currencies.
Source: esomar 2004
The largest national market research market is the usa, followed
by the uk, Germany, France and Japan. China, where growth
in market research sales was particularly dynamic in 2003 with
28 per cent, is ninth ahead of Australia in the ranking of national
market research markets. The two largest market research
countries in Europe, the uk and Germany, experienced a slight
decline in growth in 2003. In contrast, the Japanese market
research market recovered.
Economic and financial development
Generally, market research is less affected by economic fluctuations than the media and advertising industry. This is partly due to
the fact that clients still require continuous research into consumer
habits, retail figures and media reach even in times of slow economic growth.
MANAGEMENT REPORT
Market research volume
by client segment 2003
in %
Industry
45
Media, agencies, research institutes
21
Retail, financial services, utilities
15
Market research industry in comparison with gnp and advertising
industry 1)
1995
1996
1997
1998
1999
2000
100 %
100 %
100 %
Business to business
107.9 %
103.7 %
103.0 %
7
Other
6
Source: esomar 2004
115.7 %
108.9 %
106.6 %
The most important client segment, which generates 45 per cent
of overall market research sales, is the consumer goods industry
(2002: 50 per cent), followed by companies from the media and
agencies operating in the communications sector market segment
and the retail, financial services and utilities sector. 76 per cent
of all market research surveys produced worldwide in 2003
related solely to national or local markets, while 24 per cent were
cross-border international surveys (2002: 20 per cent).
131.4 %
112.7 %
109.5 %
143.1 %
121.0 %
112.9 %
149.0 %
131.4 %
117.3 %
2001
6
Government institutions
155.8 %
123.0 %
118.3 %
2002
162.7 %
122.7 %
120.5 %
2003
3. Economic and financial development
of the GfK Group
Sales and income: GfK achieves record income levels
167.1 %
124.3 %
122.9 %
2004
172.9 %
132.9 %
128.6 %
1) Basis: values 1995 = 100 per cent – for 1995–1996, the 1997 conversion
factor for the euro to the us dollar was used: eur 1 = usd 1.1346
Sources: oecd and Euroframe for gnp, Zenith Optimedia for the
advertising industry, esomar and expert forecasts for market research
(2004 growth rate: 3.5 per cent)
Market research
Advertising
gnp
In 2003, 46 per cent of global market research volume was
generated from continuous panel and tracking surveys (2002:
40 per cent). 54 per cent of sales came from ad hoc surveys.
In 2004, the GfK Group generated sales of eur 671.7 million.
This represents a 12.8 per cent increase on the previous
year. Thanks to this positive growth, the company strengthened
its position worldwide as the number 5 in the market research
sector. Organic growth of 6.6 per cent once again clearly
outpaced the market research sector, whose total order volume
rose by around 3.5 per cent. 7.2 percentage points of sales
growth resulted from the first-time consolidation of subsidiaries
in the year under review. These included GfK Arbor in the usa,
acquired on 1 January 2004, and the companies v2 GfK, usa
and media control GfK international, Germany, which were
consolidated for only six months in 2003.
GfK_83
Earnings
In eur million
Sales
2003
Actual
2004
Actual
Change
in %
595.3
671.7
+ 12.8
– 528.0
– 585.6
+ 10.9
Operating income
67.3
86.1
+ 27.9
Other income less
other expenses
Operating costs
– 0.9
0.8
+ 184.1
ebitda
91.2
108.9
+ 19.5
as a percentage of sales
15.3
16.2
–
ebit before income
from participations
66.4
86.9
+ 30.9
11.1
12.9
–
3.1
4.3
+ 37.5
+ 31.2
Net income from
participations
ebit after income
from participations
69.5
91.1
11.7
13.6
–
Net interest income
– 2.0
– 2.7
– 33.1
Net other
financial income
– 1.2
2.1
+ 277.4
Result from ongoing
business activity
66.3
90.5
+ 36.6
Taxes on income
and earnings
– 25.2
– 31.1
+ 23.3
Net extraordinary
income
0.0
4.0
N. A.
Consolidated total
income before
minority interests
41.1
63.5
+ 54.7
Minority interests’
share of total income
– 7.7
– 10.9
+ 41.0
Consolidated total
income
33.3
52.6
+ 57.8
The 27.9 per cent increase in operating income resulted from
a comparatively low increase in operating costs. At 10.9 per
cent, this figure was almost two percentage points lower than
sales growth.
The personnel cost ratio, defined as the ratio of personnel
expenses to sales, was down from 43.1 per cent in the previous
year to 41.8 per cent in 2004. personnel expenses amounted
to eur 280.7 million (previous year: eur 256.6 million).
Scheduled depreciation and amortization, particularly
on software and fixtures and fittings, decreased from eur 24.8
million in 2003 to eur 22.0 million in 2004.
other income and expenses showed income of eur 2.6 million
from currency effects (previous year: earnings from currency
effects virtually zero). Income from deconsolidations was
virtually flat (previous year: eur – 0.8 million). Other income was
depressed by expenses relating to compensation payments of
eur 1.1 million.
84_GfK
The GfK Group increased its ebit before income from
participations by a pleasing 30.9 per cent from eur 66.4
million in 2003 to eur 86.9 million. The ebit margin in relation
to sales improved accordingly from 11.1 to 12.9 per cent.
net income from participations was up by 37.5 per cent
from eur 3.1 million to eur 4.3 million. In the previous
year, depreciation on participations in GfK do Brasil, Brazil
(eur 1.5 million) and m2a, France (eur 1.0 million) depressed
income from participations. Unlike in 2003 when an amount
of eur 1.6 million was generated, there was no income from
the disposal of participations in the year under review.
ebit after income from participations also increased by a
substantial 31.2 per cent on the previous year to eur 91.1 million.
The ratio of ebit after income from participations to sales rose by
almost 2 percentage points from 11.7 per cent in 2003 to 13.6 per
cent in 2004.
After a deficit of eur 1.2 million in 2003, GfK’s net other
financial income showed a profit of eur 2.1 million in
the past financial year. This significant improvement compared
to the previous year was mainly attributable to income from
the repayment of loans provided to the bwv Group in Switzerland, for which bad debt charges had been made. As part of
the process of focusing business on core competences, GfK sold
all major participations of bwv. The sales proceeds have been
used for the repayment of these loans. Moreover, in 2004 there
were no write-offs on loans to associated companies (previous
year: eur 1.9 million).
In aggregate, this resulted in a pleasing 36.6 per cent increase
in the result from ongoing business activity from eur 66.3
million to eur 90.5 million.
The income tax ratio fell from 38.0 to 34.3 per cent on a
year-on-year basis. This was mainly due to lower tax rates
abroad.
Economic and financial development
MANAGEMENT REPORT
Balance sheet growth
31.12.2003
31.12.2004
Change
in %
Share
of total
assets
in %
Fixed assets
285.0
334.2
+ 17.3
59.7
Current assets
200.9
210.7
+ 4.9
37.6
Deferred taxes
8.3
8.0
– 4.4
1.4
Prepaid expenses
7.8
7.4
– 5.2
1.3
GfK Group: ebit after income from participations and consolidated total income
before minority interests 2000 – 2004 in eur million1)
In eur Million
2000
39.4
Assets
25.4
2001
45.6
12.3
2002
50.0
30.0
2003
69.5
41.1
2004
91.1
63.5
and liabilities
1) Up to 2001, in accordance with the German Commercial Code (hgb);
from 2002, in accordance with us gaap
ebit after income from participations
Consolidated total income before minority interests
net extraordinary income of eur 4.0 million was generated
by the buyback of profit-sharing certificates at iha-GfK ag,
Switzerland.
Accordingly, the GfK Group increased its consolidated total
income before minority interests by a very positive 54.7 per
cent from eur 41.1 million in 2003 to eur 63.5 million in 2004.
204.1
248.4
+ 21.7
44.3
Minority interests
25.5
16.3
– 35.9
2.9
Other provisions
and liabilities
262.7
281.6
+ 7.2
50.3
Deferred taxes
9.1
13.8
+ 51.4
2.5
Deferred income
0.6
0.2
– 70.8
0.0
502.0
560.3
+ 11.6
100.0
Total assets
Asset and capital situation: equity ratio increased
to 44.3 per cent
current assets increased from eur 200.9 million in 2003 to
eur 210.7 million as at 31 December 2004. This is mainly
attributable to the fact that trade receivables increased by
eur 12.6 million and other receivables and assets by eur 3.0
million. In contrast, liquid funds and securities were down by
eur 5.6 million.
Compared with the previous year, the GfK Group’s total assets
increased by eur 58.3 million to eur 560.3 million. On the assets
side of the balance sheet, the increase was mainly attributable to
growth of eur 49.2 million in fixed assets. Thanks to company
acquisitions and the topping-up of shareholdings, goodwill
increased by eur 54.7 million from eur 161.8 million at the end
of 2003 to eur 216.5 million as at 31 December 2004. In contrast,
financial assets in particular showed a downward trend. This
related mainly to loans worth eur 8.1 million in existence in 2003
to former shareholders of GfK Martin Hamblin in the uk, which
were used to increase the shareholding to 100 per cent.
shareholders’ equity increased by eur 44.3 million to
eur 248.4 million. This rise is based on consolidated total
income of eur 52.6 million less the dividend pay-out and
currency effects relating to consolidations, which are reported
under other comprehensive income. Other comprehensive
income amounted to eur – 8.2 million as at 31 December 2004
(previous year: eur – 2.9 million). The change is largely a
result of the us dollar having lost value against the euro.
The equity ratio rose once again from 40.7 per cent at the
end of 2003 to a very pleasing level of 44.3 per cent as at
31 December 2004.
Development of equity ratio
2000 – 2004 in per cent1)
2000
2001
2002
2003
2004
49.6
39.5
38.7
40.7
44.3
1) Up to 2000, in accordance with the German Commercial Code (hgb); from 2001,
in accordance with us gaap
GfK_85
minority interests decreased by eur 9.2 million, totalling
eur 16.3 million as at 31 December 2004. This was mainly
accounted for by the fact that the minority stake in the iha-GfK
Group, Switzerland no longer featured and the minority stake
in the ifr Group, France was scaled down.
The remaining other provisions and liabilities increased by
7.2 per cent to eur 281.6 million. The increase resulting from the
expansion of business activity was based on two factors: firstly,
trade payables rose, as did liabilities for orders in progress.
Secondly, provisions relating mainly to taxes and personnel were
up by eur 10.3 million.
Investment and financing: net indebtedness remains low
Change in free cash flow
business activity
Capital expenditure
Free cash flow before acquisitions,
other investments and asset
disposals
Acquisitions
Other financial investments
Asset disposals
Free cash flow after acquisitions,
other investments and asset
disposals
31.12. 2004
Change
in %
69.2
92.3
+ 33.3
– 20.9
– 22.8
+ 8.9
31.12. 2003
48.3
69.5
+ 44.0
– 24.8
– 59.6
+ 140.8
– 2.0
– 2.6
+ 32.0
5.0
2.0
– 58.8
26.5
9.3
– 65.0
Capital expenditure was fully financed out of cash flow
from ongoing business activity of eur 92.3 million (2003:
eur 69.2 million). This amounted to eur 22.8 million. free
cash flow totalled eur 69.5 million (2003: eur 48.3 million).
As in the previous year, it was therefore possible for GfK to
finance all its acquisitions and other financial investments out
of free cash flow.
Despite further acquisitions, GfK’s financial liabilities in 2004
were virtually unchanged on the previous year. Cash flow
from financing activity of eur – 12.1 million is largely attributable
86_GfK
Change in net indebtedness
In eur million
Change
in %
31.12. 2003
31.12. 2004
53.3
48.7
– 8.5
7.5
6.5
– 13.9
Liquid funds and short-term
securities
60.8
55.2
– 9.2
Liabilities
to banks
45.0
45.4
+ 0.9
Pension provisions
19.0
20.0
+ 5.0
Liabilities under leases
17.1
16.4
– 4.1
4.6
5.1
+ 12.0
Liquid funds
Short-term securities
Other interest-bearing liabilities
In 2004, GfK investments totalled eur 85.1 million (2003:
eur 47.7 million). Of this, eur 59.6 million related to the
acquisition of consolidated companies and other business units,
while GfK spent eur 22.8 million on software, fixtures and
fittings and other tangible assets.
In eur million
to the payment of dividends to shareholders of GfK ag and
minority shareholders of subsidiaries.
Interest-bearing liabilities
Net indebtedness
85.7
86.9
+ 1.4
– 24.9
– 31.7
+ 27.3
net indebtedness, defined as the balance of cash, cash
equivalents and short-term securities less interest-bearing
liabilities and pension provisions, stood at eur 31.7 million
(2003: eur 24.9 million).
Gearing and ratio of net indebtedness to
ebit, ebitda, free cash flow
In %
2003
Gearing (net indebtedness/shareholders’ equity)
12.2
2004
12.7
Net indebtedness/ebit
37.5
36.5
Net indebtedness/ebitda
27.3
29.1
Net indebtedness/free cash flow
51.5
45.6
gearing, which is the ratio of net indebtedness to shareholders’
equity, amounted to 12.7 per cent in the past financial year
(2003: 12.2 per cent). The ratio of net indebtedness to ebit,
ebitda and free cash flow shows that, as in 2003, GfK was in
a position last year to repay its borrowings in significantly less
than a year.
In 2004, the GfK Group invested eur 35.1 million in soft facts
(2003: 35.0 million). These intangible assets are not capitalized,
but are charged directly to the income statement. They include
mainly expenses for setting up and maintaining panels, noncapitalized costs of proprietary software as well as costs relating
to training and continuous professional development. The
investments included under soft facts play a crucial role in
Business divisions
securing the company’s future success, as they help to raise
market entry barriers against possible competitors.
MANAGEMENT REPORT
GfK Group: breakdown of growth in sales
and operating profit 2004
Expenses for soft facts
Total growth
In eur million
2003
2004
+ 12.8 %
Change
in %
+ 27.9 %
Growth from acquisitions
Costs of maintaining panels
(incl. recruitment)
20.8
21.9
+ 5.6
Software development costs
8.5
7.4
– 13.1
Training and continuous
professional development
5.0
5.3
+ 6.0
Other
0.7
0.5
– 29.7
Total
35.0
35.1
+ 0.4
+ 7.2 %
+ 14.7 %
Organic growth
+ 6.6 %
+ 14.2 %
Currency effects
– 0.9 %
– 1.0 %
Sales
Increased expenses for the recruitment and payment of panel
households and retailers produced higher panel costs in 2004.
The decrease in costs for proprietary software is mainly
attributable to the fact that the startrack analysis and production
system entered the final stages of development in 2003. GfK
started to implement the system in the year under review.
Operating profit
Proportion of divisional sales to total sales 1)
In %
In eur
million
Custom Research
37.9
252.1
28.2
187.0
Consumer Tracking
14.2
94.4
9.4
62.2
4. Business divisions
The GfK Group provides information services in the following
business divisions:
Custom Research (until mid-year: Ad Hoc Research),
Retail and Technology (until mid-year Non-Food Tracking),
Consumer Tracking,
Media and
HealthCare (set up by GfK in 2003).
Media
HealthCare
10.3
68.1
Total
100
663.8
1) The division Other is not taken into account.
Proportion of divisional operating profit
to total operating profit1)
In %
Margin by business division
in per cent 1)
Custom Research
23.7
21.2
52.4
46.9
6.6
5.9
Media
8.7
7.8
HealthCare
8.6
7.7
100
89.5
Consumer Tracking
Custom Research
8.4
Consumer Tracking
Media
In eur
million
25.1
6.2
12.5
Total
1) The division Other is not taken into account.
HealthCare
11.4
GfK_87
In addition, the division Other comprises mainly central services
provided by GfK ag to subsidiaries, participations and their
partners.
In financial year 2004, all GfK business divisions performed
very well in terms of both sales and operating profit.
Custom Research: significant improvement in sales and margin
Through more than 47 subsidiaries in 30 countries and via
partnerships in another 63 countries, the Custom Research
division, which is GfK’s largest business division in terms of
sales and the number of employees, provides clients from
industry and the retail and services sectors with standardized
and customized services which form the basis for operational
and strategic business decisions by those companies.
Operating profit in the Custom Research division increased
by a healthy 37.7 per cent to eur 21.2 million (2003: eur 15.4
million). Acquisition-based growth amounted to 37.4 per cent.
Currency effects reduced growth by 1.1 percentage points.
The margin improved significantly from 7.0 to 8.4 per cent.
Main contributors were GfK Marktforschung, Germany, and GfK
Arbor, usa.
At the end of December 2004, the Custom Research division
had a workforce of 1,961, or 35.4 per cent of all GfK employees.
Around 80 per cent of these employees work at GfK companies
outside Germany. Compared to the previous year, the number
of employees at the 47 subsidiaries increased by 255.
Approximately 95 per cent of these work outside Germany,
mainly at companies consolidated for the first time.
Retail and Technology: position as market leader expanded
Custom Research:
key figures
In eur million
2003
2004
Change
in %
Sales
220.8
252.1
+ 14.2
Operating profit
15.4
21.2
+ 37.7
Margin in %1)
+ 7.0
+ 8.4
+ 1.42)
Number of employees
1,706
1,961
+ 14.9
of which abroad
1,336
1,577
+ 18.0
Custom Research performed very well in 2004, with sales up
by 14.2 per cent to eur 252.1 million (2003: eur 220.8 million).
Of this, around a third was attributable to organic growth.
Acquisition-driven growth, which amounted to 10.7 per cent,
was largely due to the first-time consolidation of GfK Arbor,
usa, with effect from 1 January 2004. Currency effects reduced
sales growth by 1.1 percentage points.
Custom Research: breakdown of growth in sales
and operating profit
Total growth
+ 14.2 %
+ 37.7 %
+ 10.7 %
+ 37.4 %
Organic growth
+ 4.6 %
+ 1.5 %
Currency effects
– 1.1 %
– 1.1 %
Sales
88_GfK
Operating profit
GfK’s Retail and Technology division provides clients with
information services for 56 countries on sales of consumer
durables and services, particularly in the it, consumer
electronics, telecommunications, household appliances and
photographic and entertainment sectors.
Retail and Technology:
key figures
Change
in %
In eur million
2003
2004
Sales
166.7
187.0
+ 12.2
36.1
46.9
+ 30.0
+ 3.52)
Operating profit
Margin in %1)
+ 21.6
+ 25.1
Number of employees
1,517
1,692
+ 11.5
of which abroad
1,224
1,378
+ 12.6
Last year, the Retail and Technology division continued the
successful trend of previous years. Sales increased by 12.2 per
cent from eur 166.7 million to eur 187.0 million. As in 2003,
Retail and Technology achieved the highest organic growth of all
business divisions with 11.2 per cent. Growth from acquisitions,
mainly a result of the acquisition of a majority stake in media
control GfK International, Germany, on 1 July 2003, accounted
for 1.7 percentage points. Currency effects reduced sales by
0.7 per cent.
Business divisions
Operating profit rose considerably, up 30.0 per cent, to
eur 46.9 million. The main contributors were the GfK
companies in Germany and in the Asia and Pacific region.
Organic growth accounted for 28.0 percentage points of the rise
in profit. The good margin of 21.6 per cent, already achieved in
2003, increased to an above-average 25.1 per cent.
MANAGEMENT REPORT
Consumer Tracking:
key figures
2003
2004
Sales
89.8
94.4
+ 5.2
3.5
5.9
+ 68.1
+ 3.9
+ 6.2
+ 2.32)
Number of employees
829
849
+ 2.4
of which abroad
576
590
+ 2.4
Operating profit
Margin in %1)
Retail and Technology: breakdown of growth in sales
Change
in %
In eur million
Total growth
+ 12.2 %
+ 30.0 %
+ 1.7 %
+ 2.5 %
Organic growth
+ 11.2 %
+ 28.0 %
Currency effects
– 0.7 %
– 0.5 %
Sales
Operating profit
The positive trend in Retail and Technology is a result of the
division’s market leadership and is also attributable to the
growth strategy, which was successfully pursued in 2004. The
growth strategy includes expansion into new countries and a
broadening of the offering to include new information services.
The dynamic growth in the Asian markets generated additional
impetus for growth. In 2004, business in Latin America also
continued to grow rapidly.
At the end of the financial year, the Retail and Technology
division employed 1,692 people (2003: 1,517). This represents
30.5 per cent of all GfK employees. 81.4 per cent of staff in this
division work at GfK companies outside Germany.
Operating profit rose by an above-average 68.1 per cent from
eur 3.5 million to eur 5.9 million. The margin also showed a
correspondingly strong increase from 3.9 per cent in 2003 to
6.2 per cent in 2004. Currency effects had a negligible impact on
profit. Efficient cost management contributed to this success,
resulting mainly from the aTRACKtive production platform which
has been introduced throughout Europe. Continuing demand, in
particular from producers of branded goods, for special analyses
and the expansion of the ConsumerScan panel in Germany to
17,000 and in Italy from 6,000 to 7,000 households were other
contributing factors.
Consumer Tracking: breakdown of growth in sales
Total growth
+ 5.2 %
+ 68.1 %
0.0 %
0.0 %
Organic growth
+ 5.3 %
+ 68.2 %
Currency effects
– 0.1 %
– 0.1 %
Consumer Tracking: margin improves significantly
GfK’s Consumer Tracking division provides clients in 25 countries
throughout Europe with information and advisory services
relating to the purchasing decisions and behaviour patterns of
consumers.
Sales in the Consumer Tracking division rose by 5.2 per cent to
eur 94.4 million in the past financial year. 5.3 percentage points
of the sales growth was of an organic nature, with currency
effects reducing the figure by 0.1 percentage points. All regions
in which GfK operates ConsumerScan and ConsumerScope
panels contributed to this pleasing growth.
Sales
Operating profit
The number of employees at the 25 subsidiaries active in
Consumer Tracking reached 849 at year-end. As in 2003,
around 70 per cent of staff were employed outside Germany.
The number of employees was up by 20 on the previous year.
GfK_89
Media: lowest point of economic cycle overcome
GfK’s Media division provides its clients from industry, media,
retail and the service sector with information services on the reach,
intensity and nature of media usage and acceptance covering
27 countries.
Media:
key figures
In eur million
Sales
Operating profit
Margin in %1)
2003
2004
Change
in %
58.3
62.2
+ 6.8
7.5
7.8
+ 4.0
+ 12.8
+ 12.5
– 0.32)
Number of employees
328
348
+ 6.1
of which abroad
206
210
+ 1.9
cost of groundwork relating to tenders for contracts lasting
several years and for the development of innovative software
solutions.
In 2004, a total of 348 people were employed in the 36
subsidiaries in the Media division. This represents 6.3 per
cent of the GfK Group’s total workforce. Around 60 per cent
were employed outside Germany.
HealthCare: high level of acquisition-driven growth
GfK’s HealthCare division provides information and advisory
services on drugs, biotechnology, diagnostics, medical
equipment, laboratory and medical practice supplies, as well
as dental and veterinary medicine in a total of 13 European
countries and the usa.
HealthCare:
key figures
As a result of a slight increase in demand, particularly in
the print media sector, the Media division saw a recovery
in 2004 following two weak years. It generated sales of
eur 62.2 million (2003: eur 58.3 million), which corresponds
to growth of 6.8 per cent. Of this, 7.1 percentage points were
of an organic nature. Currency effects reduced growth by
0.3 percentage points.
In eur million
Sales
Operating profit
Margin in %1)
Change
in %
2003
2004
49.3
68.1
+ 38.2
6.3
7.7
+ 23.8
+ 12.7
+ 11.4
– 1.32)
Number of employees
228
246
+ 7.9
of which abroad
159
177
+ 11.3
Media: breakdown of growth in sales
Total growth
+ 6.8 %
+ 4.0 %
0.0 %
0.0 %
Organic growth
+ 7.1 %
+ 4.5 %
Currency effects
– 0.3 %
– 0.5 %
Sales
Operating profit
Operating profit increased by 4.0 per cent to eur 7.8 million.
Organic growth amounted to 4.5 per cent. The margin of
12.5 per cent in the Media division was slightly below its
2003 level of 12.8 per cent. This is mainly attributable to the
90_GfK
The HealthCare division achieved the highest sales growth
within the GfK Group in 2004. With an increase of 38.2 per
cent, sales rose to eur 68.1 million. Of this, 33.7 percentage
points related to acquisition-driven growth. This was essentially
a result of the acquisition of v2 GfK, usa, in which a 51 per
cent shareholding had already been acquired with effect from
1 July 2003 and which was only consolidated on a pro rata basis
in 2003 and then consolidated for the full year in 2004, and
m2a, France, which has been wholly owned by the GfK Group
since the beginning of 2004. Organic growth accounted for
7.8 percentage points, while currency effects reduced sales by
3.2 per cent.
Business divisions
MANAGEMENT REPORT
Sales of eur 7.9 million generated by the Other division in
2004 were down 24.3 per cent on the previous year (eur 10.4
million). The main reason for this decline in sales, which
GfK had expected, was the lower volume of services provided
by GfK Business Solutions & Processing for the company,
Information Resources, Germany.
HealthCare: breakdown of growth in sales
Total growth
+ 38.2 %
+ 23.8 %
+ 33.7 %
+ 51.1 %
Organic growth
Other: breakdown of growth in sales
+ 7.8 %
– 23.6 %
Total growth
Currency effects
– 24.3 %
– 3.2 %
– 3.8 %
Sales
– 137.8 %
0.0 %
0.0 %
Operating profit
Organic growth
Operating profit in the HealthCare division rose by 23.8 per
cent from eur 6.3 million to eur 7.7 million. Growth resulted
solely from acquisitions, especially from the excellent earnings
trend at v2 GfK. In contrast, income generated by the HealthCare
business of GfK Martin Hamblin in the uk and the usa failed to
meet expectations. At 11.4 per cent, the margin was therefore
1.3 percentage points lower than in the previous year.
The HealthCare division is still the smallest business division in
the GfK Group in terms of the number of staff, employing a total
of 246 people (2003: 228) at 18 subsidiaries. This represents 4.4
per cent of GfK’s total workforce. 72 per cent were employed
outside Germany.
Other: internal services
The Other division primarily comprises GfK Group Services,
GfK Data Services and GfK Business Solutions & Processing as
well as GfK Methoden- und Produktentwicklung (Method and
Product Development). These companies mainly provide services
for subsidiaries, participations and their business partners.
– 23.8 %
– 137.8 %
Currency effects
– 0.5 %
0.0 %
Sales
Operating profit
Operating profit in this business division was also down on its
2003 level. At eur 3.4 million, the loss was almost double that
of the previous year. This was mainly attributable to expenses
relating to the switch to ifrs accounting and the introduction
of optimized information systems for clients and employees. The
early departure of the cfo and the associated use of consultancy
services also generated additional expenses.
In 2004, this division employed 443 full-time staff (2003: 458),
mainly in Germany.
Other:
key figures
In eur million
2003
2004
Change
in %
Sales
10.4
7.9
– 24.3
Operating profit
– 1.4
– 3.4
– 137.8
– 13.9
– 43.5
– 29.62)
Margin in %1)
Number of employees
458
443
– 3.3
of which abroad
106
105
– 0.9
GfK_91
5. Regions
Regional breakdown of total sales 2004
In 2004, all regions increased their sales and, with the exception
of Northern Europe, their operating profit compared to the
previous year.
GfK Group sales 2000 – 2004
in Germany and abroad in eur million 1)
2000
192
35.2
236.3
32.1
215.7
Northern Europe
8.3
55.6
6.0
40.1
12.6
84.8
Total
39.3
671.7
In %
In eur
million
506
354
559
222
2003
595
Regional breakdown of
operating profit
672
Germany
31.9
27.5
37.2
32.0
3.4
2.9
373
236
2004
436
1) 2000 in accordance with hgb, from 2001 in accordance with us gaap
Germany
2) Figure calculated in the pro forma statements (reconciliation hgb to 2001 us gaap)
Abroad
Northern Europe
GfK Group employees 2000 – 2004
Germany and abroad
Total
1,345
20011)
2002
2003
2004
America
2,867
4,212
1,443
3,210
5.2
4.5
14.3
12.3
8.0
6.9
Total
100
86.1
4,653
1,465
3,414
4,879
1,459
3,607
5,066
1,502
4,037
Germany
Regional margins
in % 1)
Germany
11.6
Northern Europe
Germany: significant increase in operating profit
and margin
5,539
1) Figure calculated in the pro forma statements (reconciliation hgb to
us gaap)
Abroad
In Germany, the home country of the GfK Group and still its most
important market in sales terms, there are 23 (13 active operating)
subsidiaries. 12 of these are based in Nuremberg, where GfK was
founded in 1934. For many years, GfK has been by far the largest
market research company in Germany with a market share well in
excess of 25 per cent.
Germany:
key figures
14.8
5.2
2003
2004
Sales
221.7
236.3
+ 6.6
22.9
27.5
+ 20.2
+ 10.3
+ 11.6
+ 1.32)
1,459
1,502
+ 2.9
Operating profit
11.2
14.5
Number of employees
17.6
Change
in %
In eur million
Margin in %1)
America
92_GfK
5.8
100
314
205
2002
2000
Germany
293
470
20012)
In eur
million
America
Total
177
In %
Regions
In 2004, GfK achieved sales of eur 236.3 million in Germany
(2003: eur 221.7 million). This represents a 6.6 per cent
increase on the previous year and 35.2 per cent of total sales
at the GfK Group. 5.5 percentage points of growth was of an
organic nature. In line with expectations, sales growth was
depressed by the decline in business at GfK Business Solutions
& Processing for the company, Information Resources, Germany.
Germany: breakdown of growth in sales
MANAGEMENT REPORT
solidation of m2a, France, led to acquisition-based sales
growth of 0.8 per cent. Currency effects reduced growth by
Western and Southern Europe:
key figures
2003
2004
Sales
204.7
215.7
+ 5.4
27.5
32.0
+ 16.4
+ 13.4
+ 14.8
+ 1.42)
1,810
1,849
+ 2.2
Operating profit
Margin in %1)
Number of employees
Total growth
+ 6.6 %
+ 20.2 %
Change
in %
In eur million
+ 1.1 %
+ 4.0 %
Operating profit was up by 16.4 per cent to eur 32.0 million
(2003: eur 27.5 million), a similar level as in Germany, with a
Organic growth
+ 5.5 %
+ 16.2 %
Currency effects
0.0 %
0.0 %
Sales
Operating profit
One pleasing factor was the 20.2 per cent increase in
operating profit in Germany to eur 27.5 million (2003:
eur 22.9 million). In percentage terms, this was around
three times the level of sales growth. Most of the growth in
profit (16.2 percentage points), to which all business
divisions contributed, was organic. The sales-related margin
increased sharply from 10.3 to 11.6 per cent.
percentage increase three times as high as sales. 15.2 percentage
points of growth was organic. As in 2003, this was mainly due
to the success of the Custom Research, Retail and Technology
and Consumer Tracking divisions. 1.5 percentage points of
profit growth resulted from the new consolidation of m2a,
France. Currency effects reduced operating profit by 0.3 per
cent. The margin increased considerably from 13.4 to 14.8 per
cent.
Western and Southern Europe: breakdown of growth in sales
Total growth
+ 5.4 %
+ 16.4 %
At the year-end, the German GfK companies employed a
workforce of 1,502. This corresponds to 27.1 per cent of
the total number of staff employed by the GfK Group. The
number of permanent employees rose by 43.
+ 0.8 %
+ 1.5 %
Organic growth
+ 4.9 %
+ 15.2 %
Europe: mainly very positive growth
In the European countries outside Germany, GfK was represented by 89 (67 active operating) subsidiaries in 29 countries in
2004.
western and southern europe which comprises 56 (44 active
operating) subsidiaries in 9 countries, is the second largest
region after Germany for the GfK Group in terms of sales.
GfK increased sales in this region by 5.4 per cent from
eur 204.7 million to eur 215.7 million. Most of the growth
(4.9 percentage points) is organic in nature. The new con-
Currency effects
– 0.3 %
– 0.3 %
Sales
Operating profit
A total of 1,849 staff (2003: 1,810) was employed in Western and
Southern Europe at year-end. This represents 33.4 per cent of
GfK’s total staff complement.
northern europe comprises 14 (8 active operating) subsidiaries
in Denmark, the uk, Norway and Sweden. Sales in this region
rose from eur 54.1 million to eur 55.6 million. This represents
growth of 2.7 per cent, of which organic growth accounts for
1.6 percentage points. Currency effects boosted sales growth by
GfK_93
Northern Europe:
key figures
In eur million
Sales
Operating profit
Margin in %1)
Number of employees
2003
2004
Change
in %
54.1
55.6
+ 2.7
3.2
2.9
– 9.0
+ 5.9
+ 5.2
– 0.72)
486
484
– 0.4
particularly dynamic growth for many years and achieved the
highest sales growth in organic terms of all the GfK regions
in 2004.
Central and Eastern Europe:
key figures
In eur million
Sales
Operating profit
Margin in %1)
Number of employees
Operating profit of eur 2.9 million in Northern Europe was down
by 9.0 per cent on the 2003 level of eur 3.2 million. Organically,
profit decreased by 11.2 per cent. Currency effects partially offset
the decline by 2.2 percentage points. The decrease in profit
resulted mainly from the ongoing restructuring of GfK Martin
Hamblin in the uk. The sales-related margin was down accordingly
from 5.9 per cent in 2003 to 5.2 per cent.
Northern Europe: breakdown of growth in sales
Total growth
2003
2004
Change
in %
31.8
40.1
+ 26.0
3.7
4.5
+ 21.7
+ 11.6
+ 11.2
– 0.42)
697
826
+ 18.5
Operating profit also rose by a pleasing 21.7 per cent from
eur 3.7 million to eur 4.5 million in 2004. Of this, 22.3
percentage points were organic in nature. Currency effects
reduced profit growth by 0.6 percentage points. The
sales-related margin stood at 11.2 per cent (2003: 11.6 per
cent). The slight decline was mainly attributable to additional
expenses for innovative projects and quality enhancing
measures.
+ 2.7 %
– 9.0 %
Central and Eastern Europe: breakdown of growth in sales
0.0 %
0.0 %
Total growth
Organic growth
+ 26.0 %
+ 21.7 %
+ 1.6 %
– 11.2 %
Currency effects
0.0 %
0.0 %
+ 1.1 %
+ 2.2 %
Organic growth
Sales
Operating profit
+ 26.9 %
+ 22.3 %
Currency effects
The virtually unaltered number of employees compared to
2003 was 484, or 8.8 per cent of GfK’s total workforce.
– 0.9 %
– 0.6 %
Sales
In central and eastern europe, where GfK had a presence in
14 countries with a total of 19 (15 active operating) subsidiaries
in 2004, the company once again performed very well.
Sales at GfK subsidiaries in the region increased by a very
healthy 26.0 per cent to eur 40.1 million in 2004 (2003:
eur 31.8 million). Of this, organic growth accounted for
26.9 percentage points. Currency effects reduced sales growth
by 0.9 percentage points. Accounting for 6.0 per cent of total
sales, Central and Eastern Europe is one of the GfK Group’s
smaller regions. However, the region has been showing
94_GfK
Operating profit
At the year-end, 826 people were employed in the companies
in this region (2003: 697). This is 18.5 per cent more than in the
previous year and 14.9 per cent of GfK’s total workforce.
America: acquisitions create new market potential
In 2004, GfK had 12 (7 active operating) subsidiaries in South
America and the usa.
Regions
MANAGEMENT REPORT
Asia and the Pacific: highest organic operating profit growth
in the GfK Group
America:
key figures
In eur million
2003
Sales
Operating profit
Margin in %1)
Number of employees
2004
Change
in %
48.6
84.8
+ 74.5
4.4
12.3
+ 176.1
+ 9.2
+ 14.5
+ 5.32)
204
367
+ 79.9
In financial year 2004, GfK expanded sales in the America
region very strongly from eur 48.6 million to eur 84.8 million.
America has therefore become the GfK Group’s third largest
region. Despite the weak dollar, which reduced growth by
8.5 percentage points, the region achieved sales growth of
74.5 per cent. Of this, 3.4 percentage points was attributable
to organic growth. Acquisition-driven growth accounted for
79.6 percentage points. In addition to the majority acquisition
of v2 GfK in 2003, which was consolidated for a whole year for
the first time in 2004, GfK Arbor, usa and GfK Indicator, Brazil
also contributed.
In Asia and the Pacific, there are 15 (13 active operating)
subsidiaries, which provide services for 15 countries, including
Australia, China, Japan and South Korea. The companies supply
information and advisory services exclusively in Retail and
Technology.
Last year, the companies in this region achieved a considerable
sales increase of 14.3 per cent to eur 39.3 million (2003:
eur 34.3 million). With 17.3 percentage points, the major
proportion of the growth was organic in nature. The success
was attributable to dynamic growth, particularly in the Chinese
market, and the introduction of new information services.
Currency effects reduced growth by 3.6 percentage points.
Asia and the pacific:
key figures
In eur million
Sales
Operating profit
Margin in %1)
Number of employees
America: breakdown of growth in sales
Change
in %
2003
2004
34.3
39.3
+ 14.3
5.6
6.9
+ 24.0
+ 16.3
+ 17.6
+ 1.32)
410
511
+ 24.6
Total growth
+ 74.5 %
+ 176.1 %
+ 79.6 %
+ 192.3 %
Organic growth
+ 3.4 %
– 7.6 %
Operating profit in the region increased by 24.0 per cent
from eur 5.6 million to eur 6.9 million. Of this, organic growth
accounted for 27.9 percentage points, which represents the
highest organic profit growth in the GfK Group. Currency effects
reduced growth by 3.9 percentage points. The margin improved
from 16.3 per cent in 2003 to 17.6 per cent in 2004.
Currency effects
– 8.5 %
– 8.6 %
Sales
Asia and the Pacific: breakdown of growth in sales
Operating profit
Total growth
+ 14.3 %
With growth of 176.1 per cent to eur 12.3 million, in percentage
terms, operating profit in America rose by more than double
the level of sales growth. This extraordinary rate of increase was
due to acquisitions, which generated profit growth of 192.3 per
cent for GfK in this region. Currency effects reduced growth by
8.6 percentage points. In organic terms, profit decreased by
7.6 per cent as a result of the continuing difficult order situation
at GfK Martin Hamblin in the usa. However, the margin improved
significantly from 9.2 to 14.5 per cent.
As at 31 December 2004, the company had 367 employees in
America, which was an increase of 163 on the previous year.
This represents 6.6 per cent of GfK’s overall staff complement.
+ 24.0 %
+ 0.6 %
+ 0.0 %
Organic growth
+ 17.3 %
+ 27.9 %
Currency effects
– 3.6 %
– 3.9 %
Sales
Operating profit
At the end of the last financial year, the staff complement of 511
in the region was up 101 on the 2003 level. The total proportion
of the GfK Group’s workforce employed in Asia and the Pacific
was 9.2 per cent.
GfK_95
GfK network: further expansion
6. Research and development
In 2004, the GfK Group continued to expand its international
network. The table below gives details of the activities:
GfK provides its clients with information and consultancy
services which lead the sector in terms of methodology
and content. This was demonstrated by the fact that the
British Market Research Association (bmra) and the Market
Research Society (mrs) in the uk awarded GfK Media uk
the 2004 innovation prize for its services in the field of
electronic radio research. The award speech emphasized
that the information on listener behaviour provided by the new
technology had offered significant value added, particularly
for the users of the information such as the media, advertisers
and advertising and media agencies, compared with traditional
survey techniques.
Company
Classification
Shareholding
acquired/
altered in %
Business
division(s)
Region
GfK Arbor, usa
Acquisition
100
Custom Research
America
Decision Shop,
renamed
GfK Bosnia
Herzegovina
Acquisition
and
establishment
100
Custom Research,
Consumer
Tracking
Central
and
Eastern
Europe
GfK Market
Analysis,
Greece
Shareholding
increased
from 80 to
99.5
Custom Research
Western
and
Southern
Europe
GfK Martin
Hamblin,
uk
Shareholding
increased
from 51 to 100
Custom Research,
HealthCare
Northern
Europe,
America
ifr GfK
Shareholding
increased
from 51.4 to
75.7
Retail and
Technology
Western
and
Southern
Europe
GfK Morocco,
Morocco
Establishment
99.98
Retail and
Technology
via
Cyprus:
Western
and
Southern
Europe
GfK Latinoamerica Holding,
Spain
Establishment
64.99
Retail and
Technology
Western
and
Southern
Europe
GfK ms Ltda
Brasil, Brazil
Establishment
100
Retail and
Technology
America
GfK ms Chile,
Chile
Establishment
100
Retail and
Technology
America
GfK Indicator
Brazil
Shareholding
increased
from 19.9 to
95
Custom Research
America
GfK Panelservices
Benelux,
Netherlands
Shareholding
increased
from 92.4 to
100
Consumer
Tracking
Western
and
Southern
Europe
iri GfK,
Divestment
from 49.5 to 0
Consumer
Tracking
Germany
Divestment
from 19.9 to 0
Consumer
Tracking
Western
and
Southern
Europe
Shareholding
increased
from 35 to 100
HealthCare
Western
and
Southern
Europe
Germany
iri GfK,
Netherlands
m2a, France
In December, the GfK Group and the American company
Information Resources Inc. completed the process of separating
their joint activities in Germany and the Benelux countries.
GfK returned its shares in the German and Dutch participations
to the American company. At the same time, the remaining
7.6 per cent stake in GfK Panelservices Benelux, Netherlands,
was transferred to GfK.
96_GfK
Aims and focus: develop innovative instruments
and technologies
Innovative methods and the further development of existing
research instruments are at the centre of the GfK Group’s
strategy and aims. GfK’s research and development projects
are mainly developed and implemented in cooperation with
clients, but also with university institutions and management
consultancy companies. Development projects are carried
out on a centralized basis at GfK’s head office and on a
decentralized basis at GfK subsidiaries.
GfK’s central method and product development department
(GfK Methoden- und Produktentwicklung) is staffed by 16
statisticians and method specialists, who are responsible for
particularly complex cross-divisional projects and standard
research methods. In addition, the team advise GfK subsidiaries
and their clients on the development of new services and the
processing of orders involving new types of research methods
and requirements.
In 2004, GfK had three main focuses: firstly, basic projects,
secondly, the development of research instruments for new
surveys, and thirdly, the development and updating of hardware
and software used to collect, process, store and analyze data.
Basic projects: new research methods
In 2004, GfK Methoden- und Produktentwicklung (Method and
Product Developement) set up two basic projects which are
helping to develop further the range of survey and analysis
instruments used in market research:
Employees
Firstly, in conjunction with experts from McKinsey management
consultants and the University of Hohenheim, the company
is working on the further development of a multivariate process
for conjoint analysis. The aim is to develop instruments
which are capable of simulating reality more effectively and
correspondingly provide more valid results.
Secondly, the company has developed a new process to optimize
survey samples. This involves enhancing a process for the optimization of survey samples developed by an American, Neyman,
and a Russian, Tschuprow. The results of the new approach have
been published in the Statistical Journal.
Evaluation instruments: focus on new surveys
In 2004, GfK Methoden- und Produktentwicklung worked on a
series of new instruments:
The department has developed the ProductChallenger
Volumetric, a combined instrument consisting of product
and price tests, which can be used to forecast the sales
volume of new products launched on the market.
The GfK Brand Simulator, development of which by the
department had already started in 2003, was completed.
This is a model used to analyze the marketing mix, based
on raw data provided by the ConsumerScan panel.
GfK’s Consumer Tracking division increased the sample used
in its ConsumerScan panel in Germany from 14,000 to 17,000
households, and in Italy from 6,000 to 7,000.
GfK Methoden- und Produktentwicklung and its clients have
also worked on developing further consumer segmentation
models, where data from various scale levels is processed
simultaneously.
In March 2004, 30 GfK statisticians from 18 countries gathered
in Switzerland to discuss the topic of market segmentation. The
Japanese Wagner Kamakura, who is regarded as the leading expert
worldwide on segmentation and who teaches at Duke University
in Durham, North Carolina, usa, took part in the symposium and
workshop.
MANAGEMENT REPORT
Metering technology: smaller and more powerful
In 2004, GfK introduced and used two newly developed metering
instruments for the first time.
One of these was the ScanIT. This enables members of the
ConsumerScan household panel in the Consumer Tracking
division to collect information on the purchase of fast moving
consumer goods by using a pen scanner and to transmit this
information to GfK via the Internet. The technology is currently
being used in Denmark, Germany and Sweden.
In mid-2004, GfK presented its new multitalent, the MediaWatch,
to an audience of 200 media research experts from all regions
of the world attending Media Week in Geneva, which is hosted
by the European Market Research Association and the
Advertising Research Foundation, usa. The metering instrument,
which is worn as a watch, collects large amounts of information
on media consumption, to which the user is exposed on a
daily basis. The device records the wearer’s exposure to the
electronic media of tv, radio, and cinema, as well as poster
advertising and print media. GfK can download the data daily
by modem.
7. Employees
Number of employees: main growth outside Germany
GfK’s workforce amounted to 5,539 at the end of 2004,
representing a 9.3 per cent increase on the previous year.
Number of employees in Germany and abroad
Number of employees
(full-time)
2003
Actual
2004
Actual
Change
in %
Germany
1,459
1,502
+ 2.9
Abroad
3,607
4,037
+ 11.9
Total
5,066
5,539
+ 9.3
The staff number rose in Germany and abroad. The 2.9 per cent
increase in Germany was of a purely organic nature. In contrast,
around 40 per cent of the 11.9 per cent growth in the number
of employees at GfK abroad resulted from the acquisition of GfK
Arbor, m2a and GfK Indicator. 73 per cent of the GfK workforce
was employed in companies outside Germany.
GfK_97
Staff turnover: particularly low in Germany
Number of employees by region 2004
In %
Full-time
Germany
27.1
1,502
33.4
1,849
8.8
484
Northern Europe
14.9
826
America
6.6
367
9.2
511
100
5,539
Total
As in the previous year, staffing levels in 2004 increased most
in America. The 367 employees represented a 79.9 per cent
increase on the year-end 2003 (204). The number of employees
in Asia and the Pacific also showed an above-average increase
of 24.6 per cent to 511 (2003: 410), mainly due to dynamic
business growth in China. As a result of the boom in business
in Russia and the Ukraine and the further expansion of GfK’s
own interviewer organization in Turkey, Central and Eastern
Europe also recorded a significant rise of 18.5 per cent in the
workforce to 826 (2003: 697).
Number of employees by division 2004
In %
Full-time
Custom Research
35.4
1,961
30.6
1,692
Consumer Tracking
15.3
849
Media
6.3
348
HealthCare
4.4
246
Other
8.0
443
Total
100
5,539
Of the business divisions, the workforce in Custom Research
showed a particularly sharp increase of 14.9 per cent to 1,961
(2003: 1,706). Around two thirds of this increase was attributable
to the new acquisitions in the usa and South America. Thanks
to growth at the Asian subsidiaries, the staff complement in the
Retail and Technology division also showed above-average growth
of 11.5 per cent from 1,517 employees in 2003 to 1,692 in 2004.
98_GfK
Staff turnover at the GfK Group, expressed as the ratio of
employee resignations to the total number of employees, rose
from 7.7 per cent in 2003 to 8.7 per cent in the past financial
year. In Asia, in particular, the dynamic market conditions
impacted on this trend. Conversely, staff turnover in Germany
was down from 2.4 per cent in 2003 to 1.7 per cent.
Human resources strategy and Corporate Management
Principles
In 2004, the Management Board resolved a forward-looking,
international human resources strategy. The strategy, which
was developed by a team of human resources managers from
various selected GfK companies, is in line with the GfK Group’s
strategic goals and the Corporate Values introduced throughout
the company in 2003.
From 2005 onwards, the new human resources strategy will
be implemented worldwide. It specifies the elements that
should be present worldwide in relation to leadership and staff
development. The new strategy sets the standards which every
company must meet. The aim is to give countries the greatest
possible freedom to take into account existing concepts and
cultural features. The strategy is to be fully implemented by the
end of 2006.
The human resources strategy will provide all managers
worldwide with the necessary means to apply the Corporate
Management Principles developed by the Excellence Team II
and agreed by the Management Board in 2004. These highlight
in the form of five guidelines – respect, profit management,
people management, change management, and leadership –
what is expected of GfK managers. From 2005 onwards,
all managers worldwide will be assessed accordingly by their
superiors.
GfK regards the introduction of the human resources strategy
and of the Management Principles as essential strategic steps
towards translating the company’s guiding principle of Our
People into daily working practice.
Organization and administration
8. Organization and administration
With its business model as a “pure” market research company,
GfK offers information services to the consumer goods industry,
the pharmaceutical sector, retail, the media and service providers.
The company has consistently geared its organization and
administration to the crucial elements of global growth. These
include the decentralization of functions which guarantee and
promote an optimum business performance at the individual
companies.
In addition to the parent company, the GfK Group’s network
comprises 23 affiliated companies and a participation in
Germany as well as a total of 148 subsidiaries and participations
in another 43 countries. GfK ag acts both as a holding company
and as an active operating unit. The Group is based in Nuremberg.
management board and divisional executive bodies.
In 2004, until the departure of the Chief Financial Officer (cfo),
the company was run by a Management Board consisting of
six members. The Chief Executive Officer (ceo) is responsible
for Strategy, Investor Relations, Internal Audit, Product and
Method Development, Public Affairs and Communications
and it Services. Until his departure in April 2004, the cfo
was responsible for Financial Services, Human Resources and
Central Services. These tasks are being managed temporarily
by the ceo until a new cfo is appointed.
GfK is organized on a matrix basis. In 2004, each of the four
members of the Management Board responsible for the
operating business was responsible for one business division
and certain companies. The same member of the Management
Board was responsible for the Consumer Tracking and HealthCare
divisions.
MANAGEMENT REPORT
centralized services. GfK AG’s Group Services comprise
the following centralized, administrative departments:
Investor Relations, Public Affairs and Communications and
the Financial Services department which includes Group
Accounting, Group Controlling, Treasury, Tax and Mergers
and Acquisitions; all of these have global responsibility.
The Financial Accounting and Operational Accounting departments
of Financial Services as well as Central Services and Human
Resources are responsible for most of the companies in
Germany.
Outside Germany, responsibility for the functions of the latter
departments rests with the individual GfK companies.
sub-holdings. As locally-based centres, sub-holdings assume
national or international functions for the operating business.
Since the expansion of the alliance with the npd group in the
Retail and Technology division, GfK has set up three regionallybased holding companies and a Coordination Board to regulate
international cooperation:
1. for Europe, Asia and the Middle East (share of the GfK Group:
95 per cent),
2. for the usa, Canada and Mexico (share of the GfK Group:
25 per cent) and
3. for Latin America, i. e. mainly Brazil, Chile and Argentina
(share of the GfK Group: 65 per cent).
The Coordination Board is responsible for developing global
concepts for business policy and services as well as coordinating
relationships between clients and partner companies within each
regional holding company.
GfK also has other sub-holdings.
Each business division also has its own executive body
consisting of the responsible member of the Management
Board and selected managing directors. The members of
the executive bodies are tasked with developing divisional
strategies on a global basis and allocating resources for
international projects.
Sales and operating profit are collated along divisional and
regional lines. Hurdle rates for operating profit in relation to
sales are set as target and management indicators for each
business division. These are used as set targets at divisional
level. The Chief Information Officer (cio), who reports directly
to the ceo, is tasked with advising the Management Board on the
global harmonization of it Services – in particular, standards for
optimizing procedures and costs for the purchase of hardware
and software and the organization of the network.
GfK_99
9. Purchasing
As one of the leading international market research companies,
GfK essentially purchases raw data and additional services.
The anonymous data provided by retail companies and private
households is either retrieved electronically at intervals or,
depending on the task in hand, gathered using other methods
such as surveys or studies.
In a series of guidelines, GfK has stated what criteria should be
applied by GfK employees when purchasing data and other goods
and services. Regular monitoring of purchasing procedures
ensures that the guidelines are followed.
GfK also monitors the quality and price of services and materials
purchased and existing lease and service level agreements,
which are re-tendered on a regular basis.
10. Environmental protection
In line with the company’s proactive approach, all GfK employees
are urged to comply with environmental and recycling standards
when purchasing, using and disposing of work materials and
office equipment. The GfK environmental officer and Central
Services and it Services support employees in this endeavour.
key account management and new business. A series of
cross-divisional marketing activities include the position of Global
Head of Strategic Accounts and Client Development in GfK’s
Custom Research division, which was created in 2004. This is
intended to underpin the expansion of business with major
existing clients and new clients. The tasks focus primarily
on the increasing demand for international market research
surveys by a growing number of clients. In 2004, the position of
Business Development Manager cee was also created in Central
and Eastern Europe, with the aim of developing strategies for
new client business and marketing geared to conditions in this
dynamic growth region.
conferences and other events. The trade conferences and
client events organized by GfK, and the company’s active
participation in events hosted by German and international
marketing and market research associations, play a key role in
maintaining contact with existing clients and establishing
relationships with potential new clients. Examples of events
organized or co-organized by GfK in 2004 are:
the GfK Annual Conference in Nuremberg on the theme
“Time – brake or motor for consumption”,
the Best Brands event in Munich organized together with
WirtschaftsWoche, Serviceplan, Seven One Media and the
German branded goods association, for which GfK Marktforschung produced a special report to determine the
prizewinners for the categories of best corporate brand,
most dynamic brand and strongest product brand,
the Research Summit in Milan organized by GfK Custom
Research Worldwide,
the Financial Markets Conference in Vienna organized by
Fessel-GfK,
the Client Conference hosted by GfK-rus and the Retail and
Technology division in Moscow,
the Indicator GfK International Meeting in São Paulo and
the Australian dvd & Video Awards in Sydney organized by
the national Association for the Entertainment Industry, to
which GfK contributes information used to select prizewinners.
These departments also ensure that used materials and equipment are recycled appropriately.
11. Marketing and corporate communications
For companies providing market information services to clients
from the consumer goods and pharmaceutical industries,
retail, the media and the services sector, regular, direct contact
with existing and potential new clients is the most important
marketing instrument. Accordingly, all GfK subsidiaries and
their departments, which are organized as profit centres, are
responsible for their own marketing activities. The high degree
of decentralization is aimed at giving the GfK subsidiaries the
necessary flexibility to carry out client-oriented marketing
appropriate to the respective market environment and local
factors.
In addition, the GfK Academies in the Custom Research and
Consumer Tracking divisions offered their clients a total of
more than 20 seminars and workshops on special instruments
and services. Finally, both the GfK Group and individual GfK
companies contributed to numerous conferences, sector events
and trade fairs, delivering specialist lectures and company
presentations.
100_GfK
Risk
public affairs and communications. In 2004, the activities
of Public Affairs and Communications, which is tasked with
corporate communications at Group level, focused on the
completion of the redesigned Intranet. The navigation structure,
functions and design are new and the Intranet can now be
used globally. An associated development was setting up a
flexible system to update employees promptly on the GfK Group,
its subsidiaries, participations and partners as well as the
market research sector in general and regarding client markets.
Given the increasing internationalization and differentiation, in
recent years, GfK has invested substantial effort in developing
the GfK umbrella brand. Following the approval of the redesigned
logo in 2003, the Corporate Design guidelines, which apply
to all subsidiaries, were revised and new work materials and
templates for documents and presentations were designed in
2004. The company also set up an extensive digital picture
library consisting of more than 5,000 images. All material can
now be accessed by anyone at any time via the Intranet.
In 2004, GfK also developed its first international image
campaign, which communicates the GfK. Growth from
Knowledge slogan at emotional level. The campaign, which
can be extended by adding motifs, is designed for use by GfK
companies worldwide.
MANAGEMENT REPORT
Risk management system: identifying and assessing risks
principles of risk management policy. As a basis for positive
risk management, the GfK Group applies principles of risk
management policy, on which the risk management systems in
all the divisions must be based. The main principles are:
You can only manage known risks:
As a result of constantly changing circumstances and demands,
identifying risks is one of the ongoing tasks which form an
integral part of daily working practices. Risk management acts
as an early warning system which enables appropriate measures
to be implemented at an early stage to avert any negative impact
on business growth. GfK’s flat organizational structure and the
culture of open communications also increase transparency and
facilitate the management of potential risks.
Risks are systematically assessed:
Public Affairs and Communications carry out national and
international press services for the German GfK subsidiaries
and the GfK Group as a whole from the company’s headquarters. The department advises GfK companies based
outside Germany on the structure of their pr activities.
The international communications strategy resolved by the
Management Board also defines the pr criteria to be taken
into account by the subsidiaries in their work.
Not all risks are of equal importance. To ensure efficient risk
management, any risks identified must be assessed systematically
in terms of the potential damage and the probability of the risk
occurring. The potential damage is measured in terms of the
negative impact on the company’s results over the next two
years. The aim of the risk assessment is to establish which risks
could fundamentally jeopardize the company’s success. To this
end, GfK has specified standard quantitative and qualitative
threshold values for all business divisions. In addition to the
materiality of a risk, another criterion is whether a risk might
endanger the company’s survival. By applying the threshold
values, it is possible to define when such a risk would be present
for the GfK Group.
12. Risk
Risk management is everyone’s responsibility:
As the number 5 market research organization worldwide, in
future GfK will continue to actively exploit opportunities to
enhance its market position. However, opportunities also carry
risks. The early identification, assessment and professional
management of risks enable GfK to take a commercially sound
approach when seizing opportunities.
It is the responsibility of every employee to avert potential
damage to the company. In addition to a fundamental knowledge
of the risk management system, this requires a high level of
risk awareness among employees. GfK uses targeted information
material and workshops to raise risk awareness among its
workforce.
All aspects of risk management at the GfK Group are integrated
in a comprehensive early warning system, which is being
developed further on a continuous basis. As in previous years,
in 2004 the Group’s external and internal auditors confirmed
the effectiveness of the system.
responsibilities and functions. As part of its overall
responsibility for the risk management system, the Management
Board has appointed a risk management committee which
continually extends the Group’s arrangements for efficient and
effective risk management. This committee is responsible not
only for the planning and ongoing methodical development of
the system, but also for ensuring its effectiveness. Its key tasks
GfK_101
include identifying risks relevant to the Group and informing the
Management and Supervisory Boards about the current risk
situation in the Group.
As a result of the Group’s decentralized structure, direct
responsibility for the early identification, management and
communication of risks rests locally with the operating
management of the individual GfK companies. Risk management
coordinators at the companies ensure that the central regulations
are applied in the respective organization and promote risk
awareness. For every risk identified, a risk owner is appointed
to take and implement the decisions necessary to overcome the
risk.
processes. In order to take full account of risks, the GfK Group
applies an integrated risk management approach. This involves
identifying and managing strategic and operating risks at the
level of the various companies and at regional, divisional and
Group level.
information to the Management Board at an early stage about
any possible risks to the business trend.
A continuously updated set of guidelines, which includes all
mandatory approval processes, also forms part of the internal
controlling process.
Reporting system
Risk management
handbook
Risk inventory
Exceptional risk
reporting
Guidelines
Other
(e. g. security standards,
integration concepts etc.)
Company level
Group level
GfK integrated
risk management
system
The Internal Audit department regularly monitors the concept
Division level
The core of the risk management system is the annual risk
inventory carried out by the risk management coordinators,
which covers developments relating to risks identified in the
previous year and new risks that emerge. Using a checklist which
contains all the areas to be monitored in terms of risk, risks are
assessed according to the probability of their occurrence and the
extent of potential damage, so that concrete measures can be
planned and specified to manage them. If new risks emerge
during the year, or if the risk situation changes significantly, ad
hoc reporting ensures that the Management Board is informed
immediately.
In addition, a standardized reporting system, which is based
on Group-wide criteria, has also guaranteed for many years
that financial risks relating to current and future business trends
are monitored. Based on the commercial data provided by
the various business units of the company, Group Controlling
produces monthly internal reports, which provide comprehensive
102_GfK
documentation and monitoring. All principles, functions
and processes of the GfK Group’s risk management system are
documented in a handbook which applies throughout the Group.
Every employee can access the handbook on the Intranet.
and functionality of the risk management system. Risk
management is also assessed as part of all audits carried
out at subsidiaries in Germany and abroad. The findings of
such audits, combined with advice from the auditors, help
to improve the early warning risk management system on an
ongoing basis.
Risk situation: company growth not affected
economic risks. The upturn in the global economy, which
already started in 2003, continued in 2004. Generally, and in
almost all regions and countries, the sales growth at the GfK
Group outperformed general economic growth and the market
research sector.
Bad debts due to insolvency were minimal and did not affect
the Group’s liquidity.
GfK assumes that the economy has passed its lowest point and
that slightly positive economic growth will provide additional
impetus in the next financial year. According to internal forecasts, sales growth will outpace growth in the market research
sector as a whole.
Risk
GfK does not therefore currently foresee any fundamental
risks resulting from the economic situation which might cause
a marked drop in orders or a decline in sales at Group level.
sector risks. The last few decades have shown that, unlike
other segments of the marketing and advertising sector, market
research is relatively unaffected by economic fluctuations. In
terms of sales and income growth, the GfK Group has positioned
itself well in recent years when economic growth has been
less dynamic. As a full-service provider offering a vast range of
services and on the basis of its global corporate network, GfK
is in a position to compensate for regional and sector-related
fluctuations in orders.
The risks detailed below relating to the individual business
divisions do not therefore pose any major threat to the
GfK Group’s performance.
The segment of the market research sector in which the
custom research division provides services is characterized
by the presence of a few large, international suppliers and a
much larger number of smaller, local companies. Market entry
barriers are significantly lower on account of the much lower
investment costs compared to continuous consumer, media
user and retail panel research. Economic trends also impact on
order books. As in previous years, this division took considerable
precautions in 2004 to minimize the potential risk in this segment
by systematically standardizing instruments used internationally
and introducing key account management for major clients,
as well as through the targeted expansion of the network and
consistent cost-cutting programmes.
The retail and technology division’s excellent market
position in the countries where it today operates its own
companies, makes a major contribution to the overall success
of the GfK Group. GfK is by far the leading supplier of
information on consumer durables markets worldwide. The
division’s strength lies in the vast market knowledge, the
competence of the local management and the availability of
cutting edge instruments, enabling it to provide global clients
with comprehensive and up-to-date services. The systematic
expansion into economically relevant countries in all regions
of the world and the consistent broadening of the range of
services are the strategic cornerstones for further enhancing
this market position.
With newly developed services and an extensive cost-cutting
programme, the consumer tracking division achieved another
marked increase in earnings in the year under review. However,
fierce international competition is persisting and making market
conditions difficult. GfK is confident that, in the countries where
it is active, Consumer Tracking is strategically well placed and is
providing essential services to clients.
MANAGEMENT REPORT
The slow rise in demand for advertising in print media is
boosting demand for media research services again. In the
past financial year, the media division booked considerably
more orders in this segment. Major sporting events such as
the Olympic Games in Athens and the European Football
Championships in Portugal generated additional impetus.
However, 58 per cent of sales in this division resulted from
long-term contracts with fixed order volumes relating to
continuous tv and radio ratings research. For example, the
seven-year tv research contract in Germany was extended
in financial year 2004.
The expansion of the healthcare division, which was set
up in 2003, is still ongoing. The risk associated with setting
up a new business division remains small thanks to the sector
knowledge acquired over decades by the companies in the
HealthCare division and GfK’s experience in integrating new
acquisitions into the company. The HealthCare Board, whose
members are all managers from the companies in this division,
has developed an action programme to optimize the range
of services offered by the company network and establish
HealthCare as a highly profitable business division. Compared
to other sectors, HealthCare operates in a tightly regulated
market. This presents both risks and opportunities for the
division.
Mergers and takeovers involving clients affect all business
divisions, as they result in a process of concentration. As a result,
there is a risk of marketing budgets being reduced, however,
such a situation also presents an opportunity to increase existing
budgets. GfK has responded to the concentration process by
strengthening business with new clients and its key account
management, as well as further developing services,
innovative technology and methods. This also includes consistent
quality management. GfK’s overall dependence on major clients
remains generally low. As in in the previous year, the share of
global Group sales attributable to the top 10 clients amounted to
around 15 per cent.
operating risks. The pressure resulting from costs has
increased at all the GfK companies. In addition to the growing
number of discount suppliers, who use dumping prices to
gain a foothold in the market or attempt to squeeze competition
out of the market, customers are very price-conscious. The
demand for more cost-intensive advisory services and integrated
information solutions has also risen. As in previous years, GfK
continued to invest substantially in the ongoing optimization of
processes, cost-cutting programmes and innovations, aimed at
boosting competitiveness in 2004. To meet increasing demand
for international or global market surveys, GfK is carrying out a
targeted expansion into economically relevant product markets
and regions.
GfK_103
GfK monitors the progress of major, cost-intensive innovation
projects by means of regular reporting. At present, no major
risks associated with research and development activities have
been identified.
Operating risks are restricted by the fact that no more than
10 per cent of consolidated Group sales is transacted with a
single client in any of the divisions. The GfK Group’s global
presence ensures that no regional dependencies emerge which
could represent a relevant risk.
personnel risks. GfK’s success depends largely on the
qualifications, motivation and performance of its employees.
In order to attract, integrate and retain specialists and
managers, GfK offers a differentiated qualification and
continued professional development programme. The Group
constantly optimizes remuneration and personnel concepts.
As the German economy picks up, the currently low rate
of staff turnover could increase again. GfK is counteracting
this risk with systematic staff recruitment and retention
programmes.
financial risks. The Group is mainly financed by GfK ag.
Loans from GfK subsidiaries are repaid on schedule. GfK’s
net indebtedness amounts to eur 31.7 million and has risen by
only eur 6.8 million on the previous year (eur 24.9 million),
despite acquisitions worth eur 59.6 million. One of the reasons
for this was the increased utilization of internal financing and
further optimization resulting from a centralized cash pooling
system.
In terms of interest rates, almost 90 per cent of GfK ag’s
bank liabilities are secured as at the reporting date. The low,
medium-term fixed rate of interest provides GfK ag with a
secure basis for calculation. Since, in 2004, acquisitions in the
usa were financed in us dollars as a natural hedge, GfK ag
has benefited considerably from the low exchange rate of the
American dollar at the year-end.
Despite the consolidation process in the banking sector, GfK ag
had access to short-term credit lines of an amount just under the
three-digit million mark. GfK ag had utilized around 10 per cent
of these credit lines as at the year-end.
In addition to external borrowing, GfK ag has access to authorized
capital of 4.9 million no-par shares, which may be used to
increase the equity base as required. Further liquid funds are
available from the Group.
Financing is therefore available on a broad and secure basis.
There are currently no risks in this respect.
104_GfK
Since 61 per cent of consolidated sales is generated by
companies within the euro-zone, currency risks have only a
limited impact on the GfK Group. The weak dollar versus the
euro and other exchange rate effects depressed the Group’s
sales and profit growth by around one per cent in the last
financial year.
legal risks. The concept of “apparent self-employment” is still
a matter of debate in many countries. This is associated with
the risk that social security payments would have to be made
for interviewers and other freelance staff working for GfK, which
would result in costs for GfK. GfK’s response to this situation
is to adjust terms of employment in line with the respective
developments.
At present, there are no significant risks relating to compensation
claims or pending legal actions which are not already covered by
provisions.
risks of acquisitions. The acquisition of new companies and
their integration into the Group is associated with risks. GfK
prepares for such risks with extensive due diligence checks prior
to any acquisitions and through measures which support the
acquisition process. GfK maintains its own team of specialists for
this purpose, supported by external consultants as required.
Comprehensive acquisition programmes also ensure the gradual
integration of new companies into the GfK Group.
The Supervisory Board of GfK ag actively monitors acquisitions
on a regular basis.
it and other risks. Setting up, maintaining and developing
security measures to protect information systems and the
data stored on them is crucial for a company which provides
information on markets, consumers and brands. Precautions
to secure information technology and associated applications
have always been given the highest priority. In the years 2002
to 2004, GfK carried out additional security checks at its head
office in Nuremberg as well as systematic checks as part of
routine audits at other GfK subsidiaries. In 2004, mandatory
it security standards were drawn up for all companies and an
it Security Policy was developed based on British Standard
7799. These are being implemented across the Group in 2005
and 2006. The Chief Information Officer (cio) coordinates and
optimizes Group-wide it strategies and security concepts.
As part of its disaster recovery plan, GfK monitors other risks
arising outside the it division on a continuous basis.
Major events
In 2004, GfK reviewed the insurance cover of all its companies
worldwide. In order to guarantee and optimize this, at the
year-end, GfK took out Group-wide umbrella insurance to cover
compensation claims and liability risks and made additional
recommendations. These measures largely rule out possible
financial consequences of risks which may arise.
pursuing a consistent market philosophy,
underpinning the conditions required for growth and
profitability,
creating comparable areas of responsibility in terms of sales,
consistently pooling information and advisory services in line
with the needs and requirements of clients and
amalgamating comparable data collection instruments and
metering technology and exploiting the resulting synergies.
No major it or other risks have currently been identified within
the GfK Group.
assessment of overall risk. An assessment of GfK’s overall
risk situation shows that the risks are limited and manageable
and do not materially affect the assets, financial position and
profit or loss of the GfK Group. No lasting damage to business
growth at the GfK Group is currently anticipated due to individual
risks, or the interaction or accumulation of risks.
The Group’s above-average equity ratio of 44.3 per cent reduces
the overall risk considerably. Compared to previous years, the
GfK Group’s total risk position remains virtually unchanged at a
low level.
In summary, there are at present no risks which could endanger
the continued existence of the GfK Group.
13. Major events since the 2004 financial
statements
personnel changes and restructuring of the management board. Heinrich A. Litzenroth, the member of the
Management Board responsible for the Custom Research division,
was identified as a victim of the tsunami which hit South East
Asia on 26 December 2004. Until the body of Heinrich A. Litzenroth was identified, the Management Board adopted an interim
solution, which meant that Mr Litzenroth’s daily tasks were divided
between the various Management Board members. At its meeting
on 22 February 2005, the Supervisory Board accepted the
Management Board’s proposal to revoke Heinrich A. Litzenroth’s
appointment and restructure responsibilities for GfK’s operating
business. This change has now been completed.
Following the appointment of a new cfo, the reorganization
of responsibilities in the operating business is aimed at creating
a team of five Management Board members. In line with the
decisions taken by the Supervisory Board and the Personnel
Committee, GfK’s operating business, which is organized in
five business divisions, will in future comprise three areas of
responsibility. This is intended to optimize conditions for the
realization of the Management Board’s ambitious targets and
strategies of
MANAGEMENT REPORT
The new structure is as follows:
custom research. This business division focuses essentially on
tailormade information and advisory services, comprising the
whole life cycle of products, brands, marketing and customer
loyalty concepts as well as the attitudes and lifestyles of the
target groups at which companies aim their product, brand,
marketing and communication policies.
Petra Heinlein, who was previously responsible for the Media
business division, will take over Heinrich A. Litzenroth’s role as
head of this division.
retail and technology. This business division provides clients
with information and consultancy services relating to trends in
prices, supply and sales structures in the dynamic markets for
technical consumer goods. Information required by industry and
the retail sector is collected directly from the retail sector. This
division will continue to be run by Dr. Gérard Hermet.
consumer tracking, media und healthcare. The Consumer
Tracking and Media divisions are involved in gathering information
about the decisions and behaviour of consumers and media
users in specific purchasing situations. The information is mainly
collected electronically. The specialist field of HealthCare also
forms part of this division.
Wilhelm R. Wessels, previously head of Consumer Tracking and
HealthCare, will in future also assume responsibility for the Media
division.
chief financial officer (cfo). The Supervisory Board has
appointed Christian Weller von Ahlefeld, 46, as the new Chief
Financial Officer. Mr Weller von Ahlefeld will take up his
appointment on 1 June 2005 and his contract will run until 2008.
In future, he will take responsibility for the following areas:
Financial Services, Human Resources and Central Services.
chief executive officer (ceo). Professor Dr. Klaus L.
Wübbenhorst will continue to act as ceo and, as soon as the
new cfo has taken up his post, will again concentrate on the
following tasks: GfK Group strategy, contact with committees
and boards, Research and Development, Public Affairs and
Communications, Investor Relations, it Services and management development strategy.
GfK_105
investment and divestment. With effect from 1 January 2005,
GfK acquired 100 per cent of the shares in Beyen Marktforschung.
The company specializes in continuous retail pricing research in
the electronic consumer goods industry, in particular concerning
price-related advertising and promotional activities. It supports the
Retail and Technology division.
In Germany, the scene is set for a modest economic revival.
Experts believe that two factors could contribute to growth:
firstly, an increase in investment demand in 2005 following
years of restraint, and secondly, a possible upturn in private
consumption. The fact that the economies of other European
countries are stabilizing will also have a positive impact.
In January 2005, GfK sold its 50 per cent stake in iha-ims
Health in Switzerland. At the same time, the Group increased
its shareholding in the German company, gpi Kommunikationsforschung, from 80 per cent to 100 per cent. The aim of this
transaction is to focus the HealthCare business on its core
competence. The positive net effect on the GfK Group’s income
from participations in 2005 will total around eur 22 million.
market research sector. Irrespective of the subdued economic
At the beginning of February 2005, GfK announced the acquisition
of further shares in the American company, Caribou Lake Software, increasing its stake from 19.9 per cent to 69.8 per cent
with effect from 1 January 2005. This company strengthens
GfK’s presence in the dynamically growing markets of database
marketing and customer relationship management in the usa.
proposed dividend increase. The Management and
Supervisory Boards will propose to the Annual General Meeting
a 42.9 per cent increase in the dividend of eur 0.21 (adjusted
following the capital increase in 2004 as per the Annual General
Meeting on 15 June 2004) to eur 0.30. This would increase the
total payout from eur 6.5 million to eur 9.4 million. Since it
went public in September 1999, GfK has steadily increased
its dividend by a total of more than 170 per cent. The latest
increase reflects the performance-related dividend policy, which
enables shareholders to benefit from the very positive growth
in GfK’s business last year.
14. Outlook
development of recent years, the market research sector remains
a growth market with above-average potential. The main growth
drivers are:
Tougher competition in many national markets between global
and locally-based companies as a result of globalization
Continued growing demand from smes for market information
Demand for information on new markets for products and
services, which have emerged mainly as a result of innovative
communication and information technology
Rising demand for market research services in the Central and
Eastern European countries and in the emerging markets of
Latin America and Asia.
Experts forecast sector growth of four to five per cent in 2005.
Employees: slight growth
Based on an unchanged scope of consolidation, GfK expects
the number of employees to increase slightly in 2005.
Human Resources will focus on optimizing organizational
structures and processes in personnel administration and
ensuring the systematic use of sap standards. Another focus
is the launch of the implementation process relating to the
international Human Resources strategy and Management
Principles at GfK subsidiaries.
Economic conditions: stabilization continues
the economy in general. According to economic research
institutes, following a weaker second half of 2004, the global
economy will regain stability in the current financial year and
will also remain stable in 2006. However, growth in the usa
may be lower given the lower level of private consumption
and a further increase in the savings ratio. In contrast, the
national economies in Europe will stabilize and gain momentum.
Growth in Asia is expected to slow down, but will remain
above-average compared to the rest of the world. The future
exchange rate of the dollar to other currencies and oil prices
will continue to represent risk factors.
106_GfK
Research and development: electronic metering technology
gaining ground
Over the coming years, Research and Development will
concentrate on the further fine-tuning of processes used to
merge and integrate data from various sources and on
optimizing their measurement and forecasting quality. In
addition, the ongoing development of electronic metering
technology and analysis software takes high priority. Another
focus is the further development of information systems
and analysis instruments available to clients, which will
provide clients with increasingly flexible option for carrying
out analysis by directly accessing GfK’s databases.
Outlook
Organization and administration: focus on Corporate
Governance
From 2005 onwards, GfK will adhere to the deadlines specified
in the German Corporate Governance Code in relation to the
publication of quarterly results. The company also plans to
publish its annual report earlier in order to meet the deadline
here too. GfK is also preparing to switch its accounting to the
International Financial Reporting Standards (ifrs), which will
be applied with effect from financial year 2005.
Purchasing: optimization continues
GfK will develop further and optimize the regulations on
purchasing materials, data and supplementary services.
In particular, this will include ongoing harmonization and
benchmarking processes within the Group for the purchase
of hardware and software and the structuring of service level
agreements.
Corporate communications and marketing: international
harmonization continues
The continued development of the newly designed image
campaign and the review of an updated, uniform international
Internet presence for GfK will be given priority in 2005.
Investment and financing:
driving forward promising projects
In the years ahead, GfK will invest in new, promising projects,
securing a profitable future. In order to strengthen its leadership
position as an innovative Group, GfK will continue to focus on
the development of innovative instruments and methods. However,
the consistent further development of existing technologies and
instruments is also a high priority. To this end, capital expenditure
of eur 20 million is planned for 2005 and the two subsequent
years. As in previous years, this figure does not include financial
investment in the expansion of the GfK network. Nor does it
include any expenditure on the expansion and enhancement
of panels or the completion and upgrading of production and
evaluation software. The GfK Group still books such expenses
directly under soft facts.
The only potential additional capital requirement is for the
possible financing of potential acquisitions. As before, GfK
aims to structure this financing at matching maturities, utilizing
the free cash flow and existing credit lines. With authorized
capital of 4.9 million no-par shares, the Group also has sufficient
self-financing capacity.
MANAGEMENT REPORT
Corporate growth at the GfK Group: securing good margins
By the end of February 2005, GfK had already invoiced, or
recorded as existing or incoming orders, 45 per cent of
this year’s sales target. This figure is virtually unchanged on
the previous year, based on the actual sales figure achieved
in 2004.
In 2005 the GfK Group aims to significantly increase sales
and income again and outperform the market research sector.
With an unchanged scope of consolidation, GfK expects to
achieve sales of eur 710 million, which represents an increase
of 5.8 per cent.
GfK also anticipates consolidated sales to increase as more
acquisitions are made.
In addition, the GfK Group will continue to work towards achieving
higher growth in ebit including income from participations than
in organic sales. The company is seeking to increase the margin,
i.e. the ratio of ebit including income from participations to sales,
to almost 17 per cent. This includes eur 22 million from the
disposal of the 50 per cent stake in iha-ims Health, Switzerland,
and the increased shareholding in the German company, gpiKommunikationsforschung, from 80 to 100 per cent. Excluding
these factors, GfK aims to improve its margin on the previous
year’s level.
Divisional trends: optimization and integration
GfK expects all five business divisions to increase sales and
income. The details below relate solely to organic growth.
The company anticipates the following individual trends:
In the custom research division, GfK expects an increase in
sales of more than 5.5 per cent. Two tasks are top of the agenda
in 2005: firstly, GfK plans to harmonize its extensive range of
services and integrate the services in a service system. Secondly,
the company plans to drive forward expansion in regions outside
Europe.
In the retail and technology division, GfK expects sales to
increase by around 7 per cent and the margin to around 24 per
cent. Opportunities in this business division are based mainly
on innovation and the dynamic growth of consumer technology
markets. Accordingly, GfK plans to extend its range of services in
this division.
In the consumer tracking division, GfK expects sales to be up
by around 5 per cent, with a margin in the region of 6 per cent.
Sales growth is to be achieved by expanding and optimizing the
business. Additional advisory services and further differentiation
of product group information will make a positive contribution.
GfK_107
In the media division, GfK anticipates that sales will increase
by around 4 per cent and that the margin will improve to more
than 13 per cent. Long-term contracts for continuous tv and
radio research provide a good order basis for the media division.
The trend in ad hoc media research in the current financial
year will depend on the extent of the recovery in the print media
market, which has shown signs of economic weakness for some
years.
In the healthcare division, GfK aims to increase sales by
around 8 per cent and achieve a margin of more than 13 per
cent. In addition, the aim is to strengthen GfK’s presence in
the global pharmaceutical markets of the usa and Europe and
launch activities in Asia.
In the other division, GfK expects a decrease in sales of
around eur 1 million and a loss. The reason for this is the
further reduction in data collection services for external
clients.
Strategy: sights set on global markets
Two of GfK’s key strategic aims are the expansion into new
countries and regions and broadening its range of services
to meet changing client requirements. Since its ipo in 1999,
GfK has reached important stages in achieving these aims and
has paved the way for a promising future. The following aims
will be top priorities in 2005:
strengthening and expanding the us presence. In recent
years, GfK has established and systematically expanded its
presence in the usa, the largest single market research market
in the world. In the financial year under review, GfK generated
almost 13 per cent of Group sales in the usa and ranked number
15 among us market research companies. In the current financial
year, GfK expects to achieve more than 14 per cent of forecast
total Group sales in this region.
rapid establishment of activities of retail and technology
division in south america. In 2004, GfK progressed the
establishment of retail panels in South America and will continue
to give this project high priority this year. The aim is to be the
top provider of information on the technical consumer goods
markets for retail and industry in this currently fast growing
region.
key account management and harmonized, integrated
services. In all business divisions, top priority is given to
setting up and further developing key account management,
harmonized service offerings and optimized information systems
and instruments for clients, which are based on cutting edge
technology. In 2005, the most important task for the HealthCare
division will be to harmonize the range of services of the
108_GfK
companies which belong to the international HealthCare network
and expand the integrated client management system.
divisional expansion strategies. In 2005, the Europe-based
Consumer Tracking division will continue to advance the
optimization of business processes at the companies which
belong to the network. The globally orientated business divisions
of Custom Research, Retail and Technology, and HealthCare
will use any acquisition potential available to continue the
expansion into all economically relevant regions of the world.
The Media division will focus its acquisition and new business
activities on Europe.
gradual acquisition and integration strategy. GfK will
essentially maintain the gradual acquisition strategy it has
used for many years. Based on this strategy, GfK generally aims
to acquire a stake in excess of 50 per cent in a company at
the outset. A future increase in the shareholding to 100 per cent
is already agreed when the acquisition contract is signed. The
stage at which the further acquisition of shares takes place
depends on the extent to which sales and income targets are
achieved. This means that GfK can pursue two targets. Firstly,
the strategy minimizes the acquisition risk. Secondly, it enables
GfK to motivate the management, owners and employees of the
newly acquired company to enhance the performance of their
company and promote its integration in the GfK network.
focus on market research business. GfK is confident that
it is excellently placed as a specialist market research company,
and regards its focus on the provision of related services as a
crucial competitive advantage. The company intends to fully
exploit and extend market opportunities.
Prof. Dr. Klaus L. Wübbenhorst
Petra Heinlein
Dr. Gérard Hermet
Wilhelm R. Wessels
FINANCIAL
S TAT E M E N T S
FINANCIAL STATEMENTS
FOR THE GfK GROUP
110 Consolidated income statement
111 Consolidated balance sheet
112 Consolidated funds statement
113 Changes in consolidated shareholders’ equity
114 Consolidated fixed assets schedule
116 Notes to the consolidated financial statements for 2004
116
General information
116
Methods of consolidation
116
Currency conversion
116
Accounting and valuation methods
120
Scope of consolidation and major acquisitions
121
Notes to the consolidated income statement
125
Notes to the consolidated balance sheet
130
Proposed appropriation of profits
135
Segment reporting
136
Pro forma statements in accordance with sfas 141
137
Changes since the previous year
138
Number of employees
138
Total remuneration and shares of the
Management Board and Supervisory Board
140
Supervisory Board
141
Management Board
142
Shareholdings of the GfK Group
GfK_109
Consolidated income statement
for the period 1 January to 31 December 2004 in eur’000
Sales
2003
24, p. 135
Cost of sales
Gross income from sales
Selling and general administrative expenses
Operating income
Other income less other expenses
24, p. 135
1, p. 121
ebit before income from participations
Net income from participations
2, p. 122
595,282
671,735
– 402,585
– 447,199
192,697
224,536
– 125,412
– 138,447
67,285
86,089
– 925
778
66,360
86,867
3,108
4,275
69,468
91,142
– 2,689
Net interest income
3, p. 122
– 2,020
Net other financial income
4, p. 122
– 1,179
2,091
66,269
90,544
Result from ongoing business activity
Taxes on income and earnings
5, p. 123
– 25,208
– 31,080
Net extraordinary income
6, p. 124
–
4,038
41,061
63,502
Minority interests’ share of total income
– 7,739
– 10,910
33,322
52,592
Earnings per share, undiluted (in eur)
7, p. 124
1.061)
1.68
Earnings per share, diluted (in eur)
7, p. 124
1.061)
1.67
1) The number of shares for the previous year has been corrected to take account of the capital increase from company funds.
The Notes below form an integral part of the consolidated financial statements.
GfK_110
2004
Consolidated balance sheet
F I N A N C I A L S TAT E M E N T S
Consolidated balance sheet
as at 31 December 2004 in eur’000
31.12.2003
31.12.2004
245,640
Assets
Intangible assets
8, p. 125
189,136
Tangible assets
9, p. 125
66,095
64,621
Financial assets
10, p. 126
29,760
23,942
p. 114
284,991
334,203
1,406
1,172
11, p. 127
125,487
138,128
Other accounts receivable and other assets
12, p. 127
13,197
16,239
Securities
14, p. 127
7,538
6,488
Fixed assets
Inventories
Trade receivables
Liquid funds
53,241
48,697
200,869
210,724
8,327
7,962
7,816
7,406
Total assets
502,003
560,295
of which short-term
210,352
218,474
Subscribed capital
66,872
133,734
Capital reserve
87,098
89,196
Retained earnings
53,062
33,730
p. 130
– 2,887
– 8,221
15, p. 127
204,145
248,439
25,488
16,347
Current assets
Deferred taxes
p. 123
Prepaid expenses
Shareholders’ equity and liabilities
Other comprehensive income
Minority interests
Provisions
16, p. 130
74,742
84,949
Financial liabilities
17, p. 132
66,607
66,853
Trade payables
18, p. 133
Liabilities on orders in progress
Other liabilities
19, p. 133
Provisions and liabilities
Deferred taxes
Deferred income
p. 123
28,156
30,444
62,677
66,286
30,515
33,047
262,697
281,579
9,088
13,759
585
171
Total liabilities
297,858
311,856
of which short-term
198,178
204,592
Total shareholders’ equity and liabilities
502,003
560,295
GfK_111
Consolidated funds statement
Net extraordinary income not affecting payment
Ordinary consolidated total income before minority interests
Write-down/write-up of intangible assets
2004
41,061
63,502
0
– 4,038
41,061
59,464
8,846
7,623
Write-down/write-up of tangible assets
15,931
14,393
Write-down/write-up of financial assets
3,508
– 1,799
Change in deferred taxes
3,831
4,756
– 154
– 619
– 1,651
– 399
Income from companies valued at equity, not affecting payment
Profit/loss from the disposal of fixed assets
Net interest income affecting payment
1,715
2,778
Increase/decrease in provisions
6,024
10,100
301
– 4,020
– 10,715
– 9,054
Other expenses/revenue not affecting payment
Increase/decrease in inventories, receivables and other assets,
not attributable to investment or financing activity
Increase/decrease in liabilities and other liabilities,
not attributable to investment or financing activity
524
9,075
a) Cash flow from ongoing business activity
69,221
92,298
Cash outflows for investment in intangible assets
– 9,576
– 8,767
Cash outflows for investment in tangible assets
– 11,390
– 14,065
Cash outflows for the acquisition of consolidated companies and other business units
– 22,481
– 59,136
– 4,270
– 3,121
Cash outflows for investment in other financial assets
Cash inflows from disposal of intangible assets
337
26
Cash inflows from disposal of tangible assets
476
681
Cash inflows from disposal of consolidated companies and other business units
1,404
0
Cash inflows from disposal of other financial assets
2,755
1,339
– 42,745
– 83,043
b) Cash flow from investment activity
Cash inflows from equity capital contributions
0
2,628
Cash outflows to company owners
– 5,224
– 6,530
Cash inflows from/outflows to minority interests
– 3,011
– 6,711
Net interest income
– 1,715
– 2,778
Cash inflows from the raising of loans
11,392
30,053
Cash outflows from the repayment of loans
– 17,664
– 28,779
c) Cash flow from financing activity
– 16,222
– 12,117
Changes in liquid funds affecting payment (total of a), b) and c))
10,254
– 2,862
Changes in liquid funds owing to exchange gains/losses, scope of consolidation and valuation
– 2,180
– 1,682
Liquid funds at the start of the period
45,167
53,241
Liquid funds at the end of the period
53,241
48,697
112_GfK
2003
Changes in consolidated shareholders’ equity
Changes in consolidated shareholders’ equity
As at 1 January 2003
Number of shares
(in thousand)
Subscribed
capital
Capital
reserve
Retained
earnings
Difference
from
currency
conversion
26,122
66,872
87,098
27,357
191
Market
valuation
of
securities
Valuation
of
cash flow
hedges
Total
– 14
0
181,504
Dividend
– 5,224
Consolidated total income after tax
33,322
33,322
Other changes
– 2,393
– 2,393
As at 31 December 2003
26,122
66,872
87,098
53,062
– 5,224
– 3,205
51
90
– 3,064
– 3,014
37
90
204,145
Dividend
– 6,530
– 6,530
Consolidated total income after tax
52,592
52,592
Capital increase from company funds
Other changes
5,225
66,337
128
525
31,475
133,734
– 66,337
0
2,098
943
3,566
89,196
33,730
– 5,207
– 11
– 116
– 5,334
– 8,221
26
– 26
248,439
GfK_113
Consolidated fixed assets schedule in eur’000
(Appendix to the Notes)
acquisition and manufacturing costs
Change
Brought
in scope
forward to
Currency
of con-
Reclassi-
Equity
As at
1.1. 2004
effects
solidation
Additions
Disposals
fications
adjustment
31.12. 2004
1. Software
57,461
– 321
117
8,390
1,738
616
64,525
2. Goodwill
203,067
– 2,159
35,684
23,344
650
– 700
258,586
I. Intangible
assets
3. Other intangible
assets
12,789
78
8
1,201
7,916
76
6,236
273,317
– 2,402
35,809
32,935
10,304
–8
329,347
32,105
252
– 1,115
302
74
– 122
31,348
124,107
– 229
124
13,812
6,413
394
131,795
27,991
– 27
870
507
– 264
28,063
184,203
–4
– 991
14,984
6,994
8
191,206
7,016
–5
– 2,639
760
367
150
–3
– 100
2,790
486
13,689
– 470
– 1,613
401
6
II. Tangible assets
1. Land, land rights and
buildings, including
buildings on land owned
by third parties
2. Other equipment,
fixtures and fittings
3. Leased items
III. Financial assets
1. Shares in affiliated
companies
2. Loans to affiliated
companies
3. Participations in associated
companies
4. Loans to associated
companies
6,355
42
5. Other participations
1,800
–2
6. Payment on account
for shareholdings
161
7. Available-for-salesecurities
764
8. Other loans
1) Contains write-ups of eur 1,872 thousand
2) Contains unrealized profits of eur 55 thousand
114_GfK
829
4,765
4,068
6,419
620
– 4,068
1,500
11
– 160
1
96
12,621
1,809
1
96
26
7912)
10,227
3
– 8,084
2
195
40,162
– 434
– 12,596
4,086
1,884
620
29,954
1,953
497,682
– 2,840
22,222
52,005
19,182
620
550,507
Consolidated fixed assets schedule
cumulative depreciation/amortization
book values
Change
Brought
in scope
forward to
Currency
of con-
1.1. 2004
effects
solidation
Additions
Disposals
34,719
– 248
190
6,717
1,085
41,294
869
8,168
36
84,181
– 212
9,968
85
1,059
As at
fications
31.12. 2004
31.12. 2004
31.12. 2003
40,293
24,232
22,742
42,106
216,480
161,773
– 57
906
7,859
7,623
8,944
848
74
12,298
1,247
57
1,308
4,928
4,621
83,707
245,640
189,136
–9
10,818
20,530
22,137
5,727
186
101,155
30,640
29,977
450
– 177
14,612
13,451
13,981
94,130
– 126
14,010
– 18
118,108
– 59
394
14,393
6,251
126,585
64,621
66,095
3,005
3
– 1,513
74
367
1,202
3,563
4,011
12
–2
– 12
2,356
4,063
138
12,621
13,689
881
619
540
1,520
289
280
96
161
5,815
394
Reclassi-
486
– 36
2,0541)
1,520
50
3
2,844
– 2,844
53
738
714
1,953
10,227
10,402
– 35
– 1,525
77
2,907
6,012
23,942
29,760
212,691
– 306
– 72
22,093
18,102
216,304
334,203
284,991
GfK_115
N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2 0 0 4
General information
The consolidated financial statements of GfK Aktiengesellschaft
(GfK ag) include the company itself and all consolidated subsidiaries
(the GfK Group). The statements have been prepared in accordance
with the United States Generally Accepted Accounting Principles
(us gaap) and all figures are given in eur thousand, unless
specified otherwise. The income statement has been prepared
using the cost of sales accounting format.
Since financial year 2002, the GfK Group has no longer prepared
its consolidated financial statements in compliance with the
accounting principles of the German Commercial Code (hgb).
The us gaap consolidated financial statements are supplemented
by a management report and other required information, so
that, pursuant to § 292 a hgb, the GfK Group is exempt from the
duty to prepare consolidated financial statements in accordance
with hgb.
The annual financial statements of the parent company, GfK ag,
have been prepared in accordance with hgb and are filed with
the Commercial Register at the district court of Nuremberg
under hr b 9398.
Pursuant to § 264b hgb, GfK Marketing Services GmbH & Co. kg,
Nuremberg, is exempt from preparing annual financial statements
and a management report, having these audited and disclosing
these in accordance with the provisions for corporations under
§§ 264 et seq.
Methods of consolidation
The annual financial statements of GfK ag and all material
subsidiaries over which control is exercised directly or indirectly
are included in the consolidated financial statements of GfK ag.
Companies in which the GfK Group has a participation of not
more than 50 per cent, but over which significant influence can
be exercised, are generally accounted for at equity as associated
companies. All other companies in the GfK Group are reported
at acquisition cost.
Shares in the equity capital and in the subsidiaries’ results
attributable to minority interests are reported as a separate item
in the annual financial statements.
Currency conversion
The balance sheets of foreign subsidiaries which were not
prepared in euros are translated into euros at the mean rates
on the balance sheet date in line with the concept of the
functional currency. The annual average euro exchange rate
for these currencies, determined as the mean of all monthly
closing rates, is applied to the income statements of these
subsidiaries.
Differences arising between the conversion of assets and
liabilities at the rate on the reporting date and their conversion
at the rate on the previous reporting date, and differences
arising from conversion of the income for the year on the
balance sheet (rate on reporting date) and income statement
(average rate) are recorded in equity with no impact on income.
Differences in exchange rates arising from capital consolidation
are reported in equity within other comprehensive income.
All monetary assets and the short-term non-monetary assets
and liabilities of subsidiaries in countries with high inflation are
converted at the rate on the reporting date, whilst long-term
assets and liabilities along with the equity capital are translated
at historic prices. Any resultant exchange rate differences are
reported and recognized as income on the income statement.
The exchange rates of the main currencies used as a basis for
currency translation in the GfK Group’s consolidated financial
statements are as follows:
Capital consolidation is carried out in accordance with the
Statement of Financial Accounting Standards (sfas) 141 on the
basis of the purchase accounting method, whereby the acquisition
costs of the participation are charged against the parent company’s
pro rata share in the newly valued equity capital of the subsidiary
at the time of purchase. Any difference arising on the assets side is
reported under fixed assets as goodwill.
Main currencies
Euro mean rate on
balance sheet date
Country, unit of currency
All transactions and balances between the companies of the
GfK Group which are included in the consolidated financial
statements are eliminated when preparing the consolidated
financial statements. Differences arising from debt consolidation
are treated as income. Intercompany results and asset movements
are eliminated with impact on the income statement if they are
significant.
Switzerland, chf 100
Associated companies that are included at equity (one-line
consolidation) are generally included for the first time at the
time of acquisition. The initial valuation takes place similarly
to full consolidation. Any difference on the assets side arising
from offsetting the book value of the participation against the
pro rata equity capital at initial valuation is added to the equity
book value.
116_GfK
The consolidation on transition from equity valuation to full
consolidation takes place with no impact on income but is carried
out separately for every part-acquisition. The acquisition costs
included in capital consolidation comprise the equity net book
value and the acquisition costs for the majority acquisition.
Euro average rate during
reporting period
31.12.2003
31.12.2004
2003
2004
usa, usd 1
0.80
0.74
0.88
0.80
uk, gbp 1
1.42
1.41
1.44
1.47
Japan, jpy 100
0.75
0.71
0.76
0.75
64.11
64.70
65.65
64.75
Accounting and valuation methods
GfK has applied the same accounting and valuation methods as
used in the previous year’s consolidated financial statements.
Recognition of sales
The method of recognizing sales depends on the nature of the
underlying transaction. For business involving panels, the GfK
Group recognizes its sales according to the progress pro rata
Notes: accounting and valuation methods
temporis of the project (proportional performance method).
Business in ad hoc research is valued by the percentage of
completion method.
In the case of the proportional performance method, the
sales for a project are distributed evenly over its duration.
Each month during the term of a contract the same sales are
recognized in terms of amount. Where over 50 per cent of the
costs occur in the following month, the sales are recognized
with one month’s delay.
When applying the percentage of completion method, the sales
are recognized in accordance with the actual progress of the
project. Progress on the project is determined as the ratio of
the actual costs incurred to the costs expected overall for the
project. The estimate of total cost is continuously checked
during the life of the project. Changes in the estimate of total
cost flow into the calculation of recognizable sales at the point
in time at which they can be anticipated.
The costs to be included in this calculation comprise all direct
cost of sales and personnel expenses as well as pro rata indirect
costs. Provisions are set up for anticipated losses on orders in
progress when they can be anticipated.
Plus: personnel expenses (after tax) in connection
with stock-based compensation on application
of apb 25
2003
2004
33,322
52,592
0
0
Less: total personnel expenses (after tax) in
connection with stock-based compensation
on application of the accounting method based
on fair values (sfas 123)
– 3,466
– 3,391
Pro forma consolidated total income
29,856
49,201
Earnings per share in eur
1.061)
1.68
Pro forma earnings per share in eur
0.951)
1.57
Earnings per share (diluted) in eur
1.061)
1.67
Pro forma earnings per share (diluted) in eur
0.951)
1.57
1) Taking into account the increase in subscribed capital
Intangible assets
Software
In all other business transactions the completed contract method
is used, according to which sales are only recognized once the
work has been completed and invoiced.
As a rule, software developed by companies in the GfK Group is
used internally for analyzing and processing market research data.
In some cases, it is destined for external users and was written
specifically to meet user requirements.
Earnings per share
Precisely defined portions of the internal costs of software
development are capitalized under fixed assets. Amortization
commences on completion of the software.
The earnings per share (eps) reported in the consolidated
income statement show the proportion of consolidated total
income which theoretically relates to each share issued.
In addition to proprietary software, the item software also includes
software acquired for internal use.
As at 31 December 2004, there was a dilution effect amounting
to eur –0.01 per share arising from the stock options issued.
Goodwill
Stock options for employees and executives of
the GfK Group
The GfK Group applies apb (Accounting Principles Board)
Opinion No. 25 and associated interpretations to depict the
existing Stock Option Plan in the consolidated financial
statements. According to apb 25, expenditure for employee
stock options with no intrinsic value on the balance sheet date
cannot be recognized.
The following table shows the effects on consolidated total
income and the eps which would have resulted had sfas 123,
“Accounting for Stock-Based Compensation” been applied to all
issued options.
Goodwill arising from capital consolidation of subsidiaries and
that transferred from subsidiaries’ financial statements into the
consolidated financial statements is reported by the GfK Group
under intangible assets.
Goodwill arising from first-time consolidations prior to
1 July 2001 and that transferred from company financial
statements has been amortized over its useful life until
31 December 2001. According to sfas 142, such goodwill
is no longer subject to regular amortization after 31 December
2001. Goodwill arising after 1 July 2001 is also not subject to
scheduled amortization.
The GfK Group checks the valuation of its goodwill as part
of an impairment test once a year or when triggering events
or changed circumstances arise by making a management
accounting valuation.
GfK_117
Other intangible assets
Trade receivables
In addition to other intangible assets, this item includes payments
on account for intangible assets. Apart from the payments on
account, the other intangible assets are subject to scheduled
straight-line amortization. The amortization period is governed
by the contract term or the useful life, applying the shorter of
the two periods.
Trade receivables include both invoiced and non-invoiced
receivables. They are stated at nominal value or, in the case
of specific risks, at the lower attributable value. Non-invoiced
receivables can arise in the context of the valuation of sales.
Tangible assets
Tangible assets are valued at acquisition or manufacturing costs,
less cumulative depreciation. Cumulative depreciation includes
scheduled straight-line depreciation up to the balance sheet date
and any extraordinary depreciation recorded. The depreciation
period corresponds to the useful life. Payments on account and
assets in the course of construction are not subject to regular
depreciation.
The GfK Group normally applies the following useful life
periods:
Asset
Software and other
intangible assets
Useful life in years
3 to 10
Administrative buildings
it equipment
50
3 to 5
Cars and other vehicles
Office equipment
Office furniture
5
3 to 5
10 to 13
In cases involving a capital lease, the leased asset is capitalized
and a corresponding lease commitment is carried as a liability.
The period of depreciation is equivalent to the shorter of the
contract period and useful life.
Securities held as current assets
Securities held as current assets represent the trading securities
destined for short-term sale. They are valued at fair value on
the balance sheet date. Unrealized profits and losses are taken
to income and reported under net other financial income on the
income statement.
Liquid funds
The liquid funds contain cash on hand and in banks as well as
liquid investments with a remaining term of less than three
months.
Deferred tax assets
According to the asset-and-liability method described
in sfas 109, the respective local tax balance sheet is
compared with the us gaap balance sheet and the differences
ascertained. Future tax effects arising from the differences
are entered in the form of deferred tax assets or liabilities.
The effects on deferred taxes of changes in tax legislation are
recognized as income from the date on which the tax legislation
is passed.
Deferred tax assets accordingly consist of theoretical tax
balances resulting from comparing the us gaap balance sheet
with the local tax balance sheet, and from the theoretical tax
advantage arising from tax loss carryforwards. If it is unlikely
that these theoretical tax credits can be realized, valuation
allowances are applied.
Available-for-sale securities
Available-for-sale securities are valued at fair value on the
balance sheet date. Each security is considered individually.
These are securities which are not treated as part of the trading
securities. The GfK Group only shows trading securities under
current assets; all other securities are reported under fixed
assets as available-for-sale securities.
In the case of lasting impairment of value, available-for-sale
securities are written down and charged to income under net
other financial income on the income statement. In the case
of a temporary fall or rise in value, the new valuation of these
securities is reported as other comprehensive income within
equity with no impact on income.
Inventories
Inventories are stated at acquisition or manufacturing costs,
or fair value if lower. The manufacturing costs are entered at
full cost.
118_GfK
Shareholders’ equity – other comprehensive income
Other comprehensive income contains changes in the Group’s
equity which have no impact on income and do not comprise
contributions by shareholders or dividends paid to shareholders.
These changes are a result of exchange rate differences
arising from capital consolidation and equity valuation,
unrealized profits and losses from available-for-sale securities,
as well as unrealized profits and losses from derivative financial
instruments.
Provisions
In principle, provisions are set up when there is an obligation to
a third party which is likely to be enforced and the level can be
estimated reliably. If the obligation contains an interest portion,
the provision will be stated at the present value.
Notes: accounting and valuation methods F I N A N C I A L S T A T E M E N T S
Provisions for pensions according to sfas 87 are valued in
accordance with the projected unit credit method, in which
future compensation increases are taken into account.
This item contains liabilities relating to financing, particularly
loans from banks and other lenders, liabilities under capital
leases and liabilities resulting from the acquisition of companies
or business units. They are stated at the repayment amounts.
Liabilities on orders in progress comprise payments on account
and accrued amounts from the recognition of sales. Within
this item, sales are accrued which have arisen from contractually
agreed invoices for prepayments or payments in advance,
but cannot yet be recognized as sales according to the above
described sales recognition methods.
Derivative financial instruments
The GfK Group concludes transactions throughout the world
in various international currencies, which may involve currency
risks. Short-term financial investments, investment in securities
and borrowing from banks take place in various currencies and
can result in risks due to changes in exchange rates, rates of
interest and market prices.
Derivative instruments are selectively used to hedge variablerate liabilities and to secure future payment flows. As per
sfas 133 “Accounting for Derivative Instruments and Hedging
Activities”, in conjunction with sfas 149 “Amendment of
Statement 133 on Derivative Instruments and Hedging Activities”,
the GfK Group states these at fair value on the reporting date
as assets or liabilities. Depending on their type, changes in the
fair value of the derivative financial instruments are recognized
in the relevant period either in income or – without affecting
income – in other comprehensive income.
The counterparty risk resulting from the positive fair values of
the derivatives is deemed to be insignificant, as transactions are
only carried out with banks with top ratings.
Consolidated funds statement
The funds statement shows the changes to the balance sheet item
liquid funds resulting from cash flows from ongoing business
activity, investment activity and financing activity.
Some entries in the consolidated funds statement are derived
indirectly from changes to balance sheet entries. These are adjusted
for the effects of currency translations and changes in the scope
of consolidation. As a consequence, only a limited reconciliation is
possible between the changes in the balance sheet items according
to the consolidated funds statement and the arithmetical changes
in the consolidated balance sheet, the fixed assets schedule and
other information from the notes to the financial statements.
New developments in accounting
In February 2004, the sec published sab No. 105, “Application
of Accounting Principles to Loan Commitments”. It concerns
the valuation of loan commitments which, in accordance with
sfas 133, “Accounting for Derivative Instruments and Activities”,
are to be valued at the fair value. In addition, sab 105 requires
that accounting policy in relation to these loan commitments be
disclosed and the assumptions and estimations which determine
the fair value be described. This guideline applies to all loan
commitments which were agreed after 31 March 2004 and are
treated as derivative financial instruments. It has no impact
within the GfK Group.
In March 2004, eitf Issue No. 04-8, “The Effect of Contingently
Convertible Instruments on Diluted Earnings per Share”, was
published. It deals with the inclusion of convertible financial
instruments in the calculation of diluted earnings per share.
Definitions and examples of such instruments are given. The
guideline applies to reporting periods ending after 15 December
2004. It does not affect the consolidated financial statements
of GfK.
In April 2004, the fasb published Staff Position fas 129-1,
“Disclosure of Information about Capital Structure, Relating
to Contingently Convertible Securities”. It is intended to
supplement Statement No. 129 regarding disclosure requirements for contingently convertible securities. These cover
aspects such as the exercise terms of the securities and
possible effects of the conversion. This statement has no
effect on the present consolidated financial statements.
Topic No. d-108, “Use of the Residual Method to Value Acquired
Assets Other Than Goodwill” was published in September 2004.
This announcement sets out in concrete terms fasb Statement
No. 141 by making clear that intangible assets (other than
goodwill) have to be valued separately and directly using the
fair value and not using the residual value method. This approach
was already being practised by the GfK Group and therefore has
no impact.
eitf Issue 03-1-1, “Effective Date of Paragraphs 10-20 of
eitf Issue 03-1, ‘The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments’” was
also issued in September. It suspends the validity of Issue 03-1
until further notice and specifies transitional provisions. This
also has no impact on the financial statements of the GfK Group.
Finally, eitf 04-10, “Determining Whether to Aggregate
Operating Segments That Do Not Meet the Quantitative
Thresholds”, was also published in September. It clarifies
the conditions under which segments may be aggregated.
eitf 04-10 makes reference to sfas 131, “Disclosures about
Segments of an Enterprise and Related Information”, and
clarifies how the criteria for aggregating segments in
sfas 131.17 are to be interpreted in compliance with the
requirements of sfas 131.19. The consolidated financial
statements of the GfK Group are not affected by eitf 04-10.
In November 2004, the fasb published Statement No. 151,
“Inventory Costs – an amendment of arb No. 43, Chapter 4”.
The aim was to achieve harmonization of the provisions of
arb 43 and ias 2. While both standards require the recording of
unusual expenses in relation to inventories as period-specific
GfK_119
expenses, differences in linguistic usage provided scope for
different interpretations. This divergence has now been removed.
This has no impact on the consolidated financial statements.
In December 2004, Statement No. 153, “Exchanges of
Nonmonetary Assets – an amendment of apb Opinion No. 29”
was published. According to Opinion No. 29, in a barter
transaction, the assets concerned were reported at their fair
value. There were, however, exemptions from this. These
have now been replaced by the general exemption that assets
which have no “commercial substance”, i.e. do not significantly
change the future cash flows of the company, would not be
reported at fair value. This Statement is also intended to
harmonize the rules with the ias. It does not have any effect
on the consolidated financial statements of GfK.
fasb Statement No. 123 r (revised 2004), “Share-Based
Payment” also appeared in December. It replaces Statement
123, “Accounting for Stock-Based Compensation”, and apb
Opinion No. 25, “Accounting for Stock Issued to Employees”.
The aim is again the convergence of international standards,
in this case, with the ifrs 2. The core of the Statement is that
the costs which arise due to a share option programme have
to be accounted for in the financial statements through the
income statement. These costs are measured by the fair value
of the share options. This discontinued the method of valuation
according to the internal value taken from Opinion No. 25,
which was still valid. The fair value must be redetermined on
each reporting date and the changes in the period disclosed
as costs. For the GfK Group, this standard will become valid in
the first reporting period beginning after 15 June 2005, which
is the third quarter of 2005.
Estimates
To a certain extent, estimates and assumptions cannot be
avoided in the consolidated financial statements. They may
affect assets and liabilities as well as contingencies on the
balance sheet date and the income and expenses for the
financial year. The actual amounts concerned may deviate
from such estimates.
GfK Arbor, llc, Media, usa was first consolidated on 1 January
2004. It operates in the Custom Research division. Its holding
company, GfK us Custom Research Holding GmbH, Nuremberg
(previously GfK International Consultancy & Development GmbH),
was also included in the consolidated financial statements for the
first time on 1 January 2004. It was not previously consolidated.
The participation in m2a s.a., Saint Aubin, France was increased.
The company operates in the HealthCare division. It was
previously classified as an associated company and was first
consolidated on 1 January 2004.
Also consolidated for the first time on 1 January 2004 was GfK
Marketing Services South Africa (Proprietary), Sandton, South
Africa, which operates in the Retail and Technology division.
In June 2004, GfK-Memrb Marketing Services fz-llc, Dubai,
United Arab Emirates, which falls within the Retail and Technology division, was founded.
The previously non-consolidated gfk do brasil ltda., São
Paulo, Brazil, was consolidated for the first time on 1 July 2004.
The company functions as a holding company for the participation,
increased on 1 July 2004, in indicorp participações s.a.,
São Paulo, Brazil, which had previously been carried as an
associated company. This company and its Brazilian subsidiaries
indicator gfk ltda., São Paulo, and indicator gfk consultoria
e processamento de informações ltda., Santana do Parnaíba,
were first consolidated on 1 July 2004. They operate in the
Custom Research division.
var finance et reinvestissement – v.f.r. sas, La Valettedu-Var, France, in which a participation was acquired in
July 2004, was first consolidated on 1 July 2004. This company
holds a participation in the holding company of the ifr Group,
which operates throughout Europe in the Retail and Technology
field.
GfK Great Britain Ltd., London, uk, and Romtec-GfK Limited,
Maidenhead, Berkshire, uk, were deconsolidated on 1 January
2004. Both companies no longer conduct operational business.
In the reporting period, the purchase price for the acquisitions
stated amounted to a total of eur 44,865 thousand. This
resulted in goodwill of eur 37,142 thousand, which relates to
the Custom Research, Retail and Technology and HealthCare
segments.
Scope of consolidation and major acquisitions
Fully consolidated companies
As at 31 December 2004, the scope of consolidation in accordance
with us gaap includes thirteen (2003: twelve) German and 87
(2003: 80) foreign subsidiaries in addition to the parent company.
The following table shows the changes in fully consolidated
subsidiaries between 1 January 2004 and 31 December 2004:
The GfK Group did not include 42 (2003: 35) companies in
the consolidated financial statements during the reporting year
because they were only of minor significance for the net assets,
financial position and results of operations of the Group.
In the year under review, the following companies were founded,
which due to their minor importance, are not included in the
consolidated financial statements:
Fully consolidated subsidiaries (No.)
120_GfK
Companies of minor importance
1.1. 2004
Additions
Disposals
31.12.2004
Germany
12
1
0
13
Abroad
80
9
2
87
Total
92
10
2
100
Notes: scope of consolidation F I N A N C I A L S T A T E M E N T S
The participations in m2a s.a., Saint Aubin, France, and
indicorp participações s.a., São Paulo, Brazil, were increased
in the year under review. The companies are now fully consolidated.
– GfK bh d.o.o., Sarajevo, Bosnia Herzegovina
– GfK Marketing Services Eastern Europe Holding spol. z o. o.,
Warsaw, Poland
– GfK Erste Vermögensverwaltungs GmbH, Nuremberg
The participation in bwv Holding ag, St. Gallen, Switzerland,
was increased. Consolidation of the company was waived due to
its minor importance.
– gfk latinoamerica holding, s.l., Valencia, Spain
– GfK memrb Marketing Services Maroc, Casablanca, Morocco
– GfK Marketing Service Chile Limitada, Santiago, Chile
Other participations
– gfk marketing services ltda., São Paulo, Brazil
The number of other participations rose by comparison with the
previous year from seven to eight.
The companies GfK Great Britain Ltd., London, and RomtecGfK Limited, Maidenhead, Berkshire, both in the uk, were
deconsolidated in the year under review because they are no
longer conducting operational business.
The addition is a minority participation in Phononet ag, Zurich,
Switzerland.
The participation in bwv Holding ag, St. Gallen, Switzerland,
was increased to 100 per cent. It is not included, however,
due to its minor importance. The same applies to its subsidiary,
dm-plus Direktmarketing GmbH, Nuremberg.
GfK us Custom Research Holding GmbH, Nuremberg, GfK
Marketing Services South Africa (Proprietary), Sandton,
South Africa, and gfk do brasil ltda., São Paulo, Brazil, were
consolidated for the first time in the year under review.
Notes to the consolidated income statement
The breakdown of sales by region and segment is shown as part
of the segment reporting (section 24).
1. Other income less other expenses
The breakdown of other income and expenses is as follows:
Borell Market Research Aktiebolag, Stockholm, Sweden was
wound up in 2004.
Exchange gains
2003
2004
6,219
6,536
Associated companies
Income from previous reporting periods
280
1,350
The following table shows the changes in associated companies
between 1 January 2004 and 31 December 2004:
Income from rental and lease agreements
500
553
Profits from the disposal of tangible
and intangible assets
213
63
Income from deconsolidation
447
21
Miscellaneous
811
555
Other income
8,470
9,078
Exchange losses
6,246
3,942
Associated companies (No.)
Germany
1.1. 2004
Additions
Disposals
31.12.2004
3
0
2
1
Abroad
24
1
5
20
Total
27
1
7
21
Expenses from previous reporting periods
Expenses from indemnity payments
The consolidated financial statements as at 31 December 2004
report on participations in 21 (2003: 27) associated companies.
A minority participation was acquired in Media Services agb
d.o.o., Ljubljana, Slovenia.
The participations in Information Resources GfK GmbH,
Nuremberg, and in Information Resources-GfK b.v., Dongen,
Netherlands, were sold.
Consumerscope International gie, Nuremberg, and net survey
szonda ipsos és GfK Hungária Internet Kutató Intézete Kft.,
Budapest, Hungary, were liquidated.
Expenses under rental and lease agreements
Losses from the disposal of tangible
and intangible assets
Expenses from deconsolidation
303
1,893
0
1,077
370
284
391
107
1,237
68
848
929
Other expenses
9,395
8,300
Other income less other expenses
– 925
778
Miscellaneous
Miscellaneous other income essentially contains income from
further offsetting and transitory items (eur 203 thousand) and
insurance recoveries (eur 151 thousand).
Miscellaneous other expenses essentially comprise bank charges
(eur 265 thousand), expenses for public authorities (eur 121
thousand) and charitable donations (eur 101 thousand).
GfK_121
2. Net income from participations
4. Net other financial income
Net income from participations is as follows:
Net other financial income breaks down as follows:
Income from participations in associated companies
Income from other participations
Income from participations in affiliated companies
2003
2004
4,167
4,528
21
21
18
16
Profits from the disposal of participations
1,569
5
Income from participations
5,775
4,570
Expenses from loss transfer from
affiliated companies
55
221
Depreciation on participations in
2,550
74
Losses from the disposal of participations in
affiliated and associated companies
62
0
Expenses on participations
2,667
295
3,108
4,275
Write-ups on loans to associated
companies
Profits from disposal of loans to
Depreciation of participations in affiliated companies relates to
GfK Panel Arastirma Hizmetleri a.s., Istanbul, Turkey.
Net interest income is as follows:
2003
2004
Interest income from bank balances
736
884
Interest income from receivables
182
294
Interest income from other loans
292
176
Income from derivative financial instruments
178
61
Interest income from affiliated companies
Interest income from associated companies
9
16
339
215
1,777
1,655
Interest and similar expenses due to banks
2,306
2,924
Interest and similar expenses due to others
1,410
1,364
Interest and similar expenses
due to affiliated companies
29
33
Miscellaneous interest expenses
52
23
Net interest income
122_GfK
4
46
Interest income
Interest expenses
0
1,872
0
486
156
73
Write-ups on securities held as current assets
123
21
Income from derivative financial instruments
616
0
Other financial income
895
2,452
0
292
98
69
Expenses from derivative financial instruments
Losses from securities held as current assets
Write-downs on loans to associated
companies
Miscellaneous other financial expenses
Net other financial income
1,940
0
36
0
2,074
361
– 1,179
2,091
The profits from the disposal of loans to affiliated companies
relate, as do the write-ups, to loans to bwv Holding ag,
St. Gallen, Switzerland.
The expenses from derivative financial instruments essentially
result from the balance sheet date valuation of hedging
transactions in connection with covering of foreign-currency
intercompany loans. The item contains the adjustment of positive
fair values of hedging transactions to the lower level compared
to the previous year.
3. Net interest income
Interest income from
available-for-sale securities
2004
Profits from securities held as current assets
Other financial expenses
Profits from the disposal of participations essentially comprise in
the previous year the profit from the disposal of the participation
in Centrum voor Marketing Analyses b.v., Amsterdam,
Netherlands.
2003
3,797
4,344
– 2,020
– 2,689
The depreciation on loans to associated companies of eur 1,940
thousand reported in the previous year related to loans to the
bwv Group, Switzerland and to Caribou Lake Software, llc,
Minneapolis, usa.
Notes: consolidated income statement
5. Taxes on income and earnings
The result before income taxes is divided between Germany and
abroad as follows:
2003
2004
Germany (after consolidation measures)
19,130
47,928
Abroad (after consolidation measures)
47,139
42,616
Result from ongoing business activity
66,269
90,544
Since 1 January 2004, a change in tax legislation has meant
that gains from disposals of participations in corporations as
well as dividends from German companies are no longer exempt
from tax. These gains now incur tax at 5 per cent. Losses on
disposals remain non tax deductible. This amendment in tax
legislation has not given rise to any material impact on the
present consolidated financial statements of the GfK Group.
The deferred taxes of the remaining German companies and the
foreign companies are calculated according to the respective
country-specific tax rates.
The following table contains a reconciliation of the anticipated
income tax expense and the income tax expense stated in
financial year 2004. To calculate the anticipated tax expenses,
the tax rate of the parent company, GfK ag, valid during the
financial year is multiplied by the pre-tax result.
The Group’s taxes on income are as follows:
2003
2004
Current taxes
Germany (before consolidation measures)
Abroad (before consolidation measures)
8,061
8,947
13,442
17,475
Total tax rate
21,503
26,422
Expected income tax
11,698
Increase/reduction in income tax debt resulting from
differences in tax rates
Deferred taxes
Germany
Abroad
Taxes on income and earnings
2,576
1,129
– 7,040
3,705
4,658
25,208
31,080
The tax advantage from the utilization of loss carryforwards
during financial year 2004 amounts to eur 636 thousand
(2003: eur 1,401 thousand). Adjustments in deferred taxes
because of changes in the underlying tax rates reduced tax
expenses by a further eur 54 thousand (2003: eur 156 thousand).
Deferred tax assets existing at the start of the year were revalued
by eur 29 thousand (2003: eur 0 thousand) to take account of
the reassessment of the probability that deferred tax assets would
be recognized. As in the previous year, government investment
tax credits had no impact on income tax.
The rates used to calculate taxes for the German companies
with registered offices in Nuremberg comprise corporation tax
of 25 per cent (2003: 26.5 per cent) plus the unchanged solidarity
surcharge of 5.5 per cent on the corporation tax debt paid as
well as the unchanged effective trade tax rate of 13.449 per
cent. The flood victim solidarity law (Flutopfersolidaritätsgesetz)
passed in September 2002 had caused a one-off rise in the
corporation tax rate from 25 per cent to 26.5 per cent for financial
year 2003. This results in a tax rate of 39.824 per cent as at
31 December 2004 (2003: 41.118 per cent).
2003
2004
41.118 %
39.824 %
27,248
36,059
– 4,281
– 5,101
other tax-exempt income
– 803
– 1,935
additional tax payments or refunds
from previous years
1,303
– 475
income from participations valued at equity,
not eligible for tax
78
– 179
adjustment of deferred tax due to tax rate
changes
– 156
– 92
tax-exempt income from the disposal of
participations
– 552
0
change in valuation allowance for deferred
tax assets
change in permanent differences
consolidation of taxable income from
participations
298
72
– 3,021
208
315
330
4,184
523
deviating tax base
617
1,094
other
– 22
576
25,208
31,080
other non-deductible expenses
Tax expenses reported
GfK_123
The deferred taxes result from the following balance sheet items:
31.12.2003
31.12.2004
2,872
2,870
Tangible assets
713
844
Financial assets
567
192
1,641
1,345
214
193
Intangible assets
Inventories
Accounts receivable and other assets
Prepaid expenses
19
8
Provisions
3,670
3,469
Liabilities
20,896
19,576
Deferred income
Loss carryforwards and tax credits
60
0
5,249
6,111
Deferred tax assets before valuation allowance
35,901
34,608
Valuation allowance
– 1,780
– 1,895
Deferred tax assets
34,121
32,713
Intangible assets
– 5,403
– 9,054
Tangible assets
– 8,777
– 8,521
Financial assets
– 180
– 113
Inventories
– 210
– 92
– 17,196
– 16,951
Prepaid expenses
– 112
– 189
Special reserve item
– 402
– 381
Provisions
– 1,156
– 1,090
Liabilities
– 1,414
– 2,022
Accounts receivable and other assets
Deferred income
Deferred tax liabilities
Net deferred tax liabilities
– 32
– 97
– 34,882
– 38,510
– 761
– 5,797
After netting out, the deferred taxes are reported in the balance
sheet as follows:
31.12.2003
Deferred tax assets
Deferred tax liabilities
Net deferred
tax liabilities
Total
Total
of which
long-term
8,327
4,822
7,962
4,605
– 9,088
– 5,490
– 13,759
– 10,573
– 668
– 5,797
Tax expenses reported
Tax expenses on components of the other
comprehensive income
Total income tax expenses in shareholders’ equity
2003
2004
25,208
31,080
66
– 68
25,274
31,012
As at 31 December 2004, the Group had domestic tax loss
carryforwards amounting to eur 1,944 thousand (2003:
eur 2,106 thousand) and foreign tax loss carryforwards of
eur 16,797 thousand (2003: eur 14,344 thousand). The
domestic loss carryforwards can be carried forward without
restriction in terms of date and amount. Among the foreign tax
loss carryforwards, the amount of eur 10,739 thousand may
be carried forward without limit or for a period of more than
15 years, and the amount of eur 6,058 thousand is available
for carryforward until 2014.
The estimate of their future realizability governs the valuation
of deferred tax assets. This is dependent on the creation of
future taxable profits during accounting periods in which tax
valuation differences are reversed and tax loss carryforwards can
be applied. In view of expected future performance, it is assumed
more likely than not that the relevant benefits of the recognized
deferred tax credits will be realized according to the provisions
of us gaap. For the portion of deferred tax assets not covered
by these assumptions, a corresponding valuation allowance
amounting to eur 1,895 thousand (2003: eur 1,780 thousand)
was applied. The eur 115 thousand increase in the valuation
allowance on deferred tax assets is essentially due to the change
in deferred tax assets at the affected companies.
6. Net extraordinary income
The net extraordinary income of eur 4,038 thousand stems from
the repurchase of profit-sharing certificates of iha-GfK ag,
Hergiswil, Switzerland.
7. Earnings per share
31.12.2004
of which
long-term
– 761
The total income tax expenses in shareholders’ equity are as
follows:
– 5,968
2003
2003
adjusted1)
2004
33,322
33,322
52,592
Weighted average of shares outstanding
– non-diluted –
26,121,998
31,346,397
31,366,611
Weighted average of shares outstanding
– diluted –
26,121,998
31,346,397
31,411,022
1.28
1.06
1.68
Earnings per share (diluted) in eur
1.28
1.06
1.67
1) The number of shares of the previous year has been corrected to take account of the bonus stock
issued in 2004, so as to ensure the comparability of the previous year's figures.
124_GfK
Notes: consolidated income statement
The expected amortization expenses for intangible assets within
the next five financial years are as follows:
Notes to the consolidated balance sheet
A breakdown of the fixed assets and their development during
the reporting period is given in the fixed assets schedule, which
is attached as an appendix to these Notes.
Non-scheduled depreciation of eur 74 thousand was incurred.
This relates exclusively to write-downs of financial assets.
Further details are set out in the above explanatory comment
on net income from participations. The basis for the write-down
is that the expected discounted future cash flows from this
financial asset are less than the book value.
Expected amortization expenses
2005
6,268
2006
4,164
2007
3,664
2008
2,123
2009
1,856
8. Intangible assets
9. Tangible assets
Software
Leasing
Software breaks down as follows:
The GfK Group leases office premises and business equipment
under long-term lease agreements. As a rule, the lease rates
consist of a minimum lease payment plus a contingent lease
payment whose level is governed by the level of use of the leased
assets. In cases in which the GfK Group bears the risks and
opportunities arising from the use of the leased assets to a
substantial extent, these are capitalized (capital lease). Otherwise
the lease payments are carried as an expense (operating lease).
There are no significant sub-leases.
31.12.2003
Software as per sfas 86
Software as per sop 98-1
Other software
Software
31.12.2004
391
1,570
16,734
17,717
5,617
4,945
22,742
24,232
sfas 86 applies to software which is to be sold, leased or otherwise
marketed. sop 98-1 applies to software specifically developed for
internal use. The item other software contains standard software
for internal use.
Goodwill
a) Operating leases
The following payments under operating lease agreements were
carried as expenses:
Minimum lease payment
An impairment test is carried out in accordance with sfas 142
each year to determine the extent to which there is an extraordinary amortization requirement for existing goodwill. No
requirements for amortization resulted from the impairment test
for 2004.
Contingent lease payment
Less sub-lease payments received
Lease payments
2003
2004
15,092
15,887
391
368
– 469
– 528
15,014
15,727
The future minimum lease payments arising from such agreements are due as follows as at 31 December 2004:
Other intangible assets are as follows:
31.12.2003
Miscellaneous intangible assets
3,510
31.12.2004
3,436
2005
14,905
2006
11,793
2007
8,901
6,069
Payments on account for intangible
assets
1,111
1,492
2008
4,621
4,928
2009
4,560
Subsequent years
9,384
Future minimum lease payments under operating leases
55,612
GfK_125
b) Capital lease
Company name and registered office
The capitalized leased assets comprise eur 15,717 thousand
(unchanged) in respect of buildings and eur 12,347 thousand
(2003: eur 12,275 thousand) in respect of tangible assets. Net of
cumulative depreciation, the resultant book value is eur 11,464
thousand (2003: eur 11,862 thousand) for buildings and eur
1,987 thousand (2003: eur 2,119 thousand) for tangible assets.
The future minimum lease payments under such agreements are
due as follows as at 31 December 2004:
Net income for
the year
fessel-GfK Institut für Marktforschung Ges.m.b.H.,
Vienna, Austria
1,535
GfK Arbor, llc, Media, usa
5,511
GfK Asia Pte Ltd., Singapore, Singapore
1,937
GfK Custom Research Inc., Minneapolis, usa
1,124
GfK Danmark a/s, Frederiksberg, Denmark
122
gfk emer ad hoc research, s.l., Valencia, Spain
888
g.f.k. marketing services france sas, Rueil-Malmaison,
France
2,680
8,281
2005
2,380
GfK Marketing Services GmbH & Co. kg, Nuremberg
2006
2,073
GfK Marketing Services Italia S.r.l., Milan, Italy
1,740
2007
1,862
GfK Marketing Services Japan k.k., Tokyo, Japan
1,744
2008
1,719
GfK Marketing Services Ltd., West Byfleet, Surrey, uk
2009
1,597
GfK Martin Hamblin Limited, London, uk
3,310
– 1,390
Subsequent years
11,568
GfK Panelservices Benelux b.v., Dongen, Netherlands
1,343
Future minimum lease payments under capital leases
21,199
GfK Sofema International sarl, Rueil-Malmaison, France
1,021
Less: (interest expenses in particular)
– 4,808
GfK Sverige Aktiebolag, Lund, Sweden
Liabilities under capital leases
16,391
71
5,442
Institut de Sondage Lavialle (isl) s.a., Issy les Moulineaux,
France
In April 1992, GfK ag entered into a sale-and-leaseback
agreement for part of the office building at Nordwestring 101,
Nuremberg, which qualifies as a capital lease. The lease was
concluded for 30 years with an original obligation amounting to
eur 13,012 thousand. The lease agreement can be terminated
from March 2012 onwards with the option to acquire the building
for eur 7,533 thousand. If the lease continued over the remaining
10 years, the purchase value in March 2022 would amount to
eur 5,028 thousand.
The capital lease liability is eur 16,391 thousand (2003: eur
17,087 thousand) of which eur 1,582 thousand (2003: eur 1,491
thousand) has a remaining term of under one year.
581
Institut Français de Recherche-ifr s.a., Viroflay, France
4,044
Intomart b.v., Hilversum, Netherlands
– 285
v2 GfK llc, Blue Bell, Pennsylvania, usa
5,538
Loans
Loans to affiliated and associated companies include value-adjusted
loans with a disbursed amount of eur 5,080 thousand (2003:
eur 6,455 thousand). The accumulated write-downs on these loans
amount to eur 3,237 thousand (2003: eur 5,827 thousand).
Securities
10. Financial assets
The composition and development of the financial assets are
shown in the consolidated fixed assets schedule. Further
information on the GfK Group’s participations in affiliated and
associated companies and other participations is provided in
the list of shareholdings.
The following table shows the annual results for the main
companies in the GfK Group:
The following table shows an overview of the acquisition costs,
fair values and unrealized profits and losses of the portfolio of
available-for-sale securities:
Bearer instruments
31.12.2003
734
736
Fair value
714
738
29
55
Unrealized profit
Each security is valued separately.
The bearer instruments held in the portfolio at the end of the
year have a remaining term of up to one year.
No proceeds were obtained from the sale of available-for-sale
securities for financial year 2004 (2003: eur 5 thousand).
During the year under review, there were, as in the previous
year, no reclassifications of securities from fixed assets to
current assets.
126_GfK
31.12.2004
Acquisition costs
Notes: consolidated balance sheet
13. Valuation allowances
11. Trade receivables
Valuation allowances developed as follows:
31.12.2003
31.12.2004
Invoiced trade receivables, in respect of
third parties
associated companies
other participations
109,694
118,063
477
1,277
1,485
308
127
334
111,783
119,982
20,036
23,109
131,819
Less: valuation allowance
Trade receivables
Changes in the scope
of consolidation
Additions
Utilization
Receivables not yet invoiced
to third parties
As at 31.12. 2002
143,091
Release
Reclassification
– 6,332
– 4,963
Currency difference
125,487
138,128
As at 31.12. 2003
Changes in the scope
of consolidation
Of the trade receivables, an amount of eur 48 thousand
(2003: eur 63 thousand) has a remaining term of over
one year.
Additions
Utilization
Release
Reclassification
12. Other receivables and assets
Currency difference
As at 31.12. 2004
31.12.2003
Other
receivables
and assets
6,251
1,573
10
0
2,212
26
– 604
– 10
– 1,495
0
11
0
– 53
–1
6,332
1,588
10
0
1,459
39
– 592
–5
– 2,293
– 560
42
0
5
2
4,963
1,064
31.12.2004
Receivables from tax and other authorities
4,121
8,169
Receivables from insurance companies
1,839
2,292
Guarantee deposits
1,429
1,528
Other amounts owed by affiliated companies
1,210
1,350
Other assets
1,261
1,127
Other amounts owed by associated companies
2,088
634
Advance payments, credit balances
and refund claims
708
567
Amounts owed by related parties
909
554
Amounts owed by employees
496
520
Other receivables under share and asset deals
382
339
Stationery and office supplies and gifts
Trade
receivables
342
223
14,785
17,303
Less: valuation allowance
– 1,588
– 1,064
Other receivables and assets
13,197
16,239
Of the other receivables and assets, an amount of eur 2,842
thousand (2003: eur 2,192 thousand) has a remaining term of
over one year.
The advance payments, credit balances and refund claims
essentially comprise amounts owed by households, suppliers
and employees.
14. Securities
The trading securities reported under current assets are carried
at fair value. During the year under review, write-downs of
eur 69 thousand (2003: eur 98 thousand) and write-ups of
eur 21 thousand (2003: eur 123 thousand) were booked to the
income statement.
15. Shareholders’ equity
Subscribed capital
The subscribed capital of GfK Aktiengesellschaft was increased
on the basis of the capital increase from company funds resolved
by the General Meeting on 15 June 2004 and the accompanying
issue of bonus shares in the ratio 5:1 from eur 66,872 thousand
to eur 133,209 thousand. In order to establish the issue ratio of
5:1, the shareholding was cut by three no-par shares through the
acquisition of the shares (with a total fair value at the time of the
acquisition of eur 80.40). These shares were called in.
In accordance with the option terms 2002/2007, the holders of
option rights were entitled, prior to the capital increase from
company funds, to acquire new no-par shares in GfK ag in the
ratio 1:1 at the price of eur 24.14 per share against submission
of the option rights. By the date of registration of the capital
increase, 11,530 options were exercised and the same number
of new no-par shares issued.
On the basis of the capital increase from company funds resolved
by the General Meeting of Shareholders on 15 June 2004 and
the accompanying issue of bonus shares, the subscription ratio
pursuant to § 216 Para. 3 of the German Stock Corporation Act for
the issue and exercise of share option rights was adjusted. After the
GfK_127
capital increase from company funds becomes effective, each
subscriber is entitled to acquire 1.2 no-par ordinary bearer shares
in GfK Aktiengesellschaft at the similarly adjusted exercise price
against submission of an option right.
Of those eligible, 97,166 option rights were submitted, in respect
of which 116,598 new no-par ordinary bearer shares were issued.
As a result of the measures mentioned above, the capital and
the number of no-par ordinary bearer shares issued developed
as follows:
As at 1 January 2004
Subscribed
capital
eur’000
Number of
no-par shares
issued
66,872
26,121,998
–
–3
66,337
5,224,399
29
11,530
Redemption of 3 shares
Capital increase from company
funds and issue of new shares
in the ratio of 5 :1
Issue of new shares through
conversion of options before
capital increase
Issue of new shares through
conversion of options after
capital increase
496
116,598
133,734
31,474,522
GfK Aktiengesellschaft does not hold any of its own shares. As the
main shareholder, GfK-nürnberg Gesellschaft für Konsum-, Marktund Absatzforschung e.V., Berlin holds 64 per cent of the shares.
Authorized and contingent capital
The Management Board is authorized, subject to the approval
of the Supervisory Board, to increase the company’s subscribed
capital on one or more occasions up to 12 June 2007, by issuing
new no-par shares in return for cash or non-cash contributions
up to a maximum amount of eur 21,000 thousand.
In June 1999, the shareholders passed a resolution for a contingent
increase of eur 5,120 thousand in the company’s subscribed
capital by issuing up to 2,000,000 new no-par bearer shares. At
the Extraordinary General Meeting of 3 September 1999, a
resolution was passed to relate profit entitlement to the start of
the financial year in which options are exercised. The aim of the
contingent capital increase is to grant option rights to the senior
management team of the company and its affiliated companies
in terms of §§ 15 ff. of the German Stock Corporation Act. The
prerequisite for acquiring option rights is the achievement of
a minimum target, to be agreed with each individual entitled
person, for their immediate area of responsibility. The number of
options available to each entitled person is based on the variable
salary component advised to each entitled person in an individual
letter. By waiving a portion of the promised bonus in the ratio
of 1:2.5, this component can be replaced by options. The actual
number of options for the first six tranches (2000/2005, 2001/
2006, 2002/2007, 2003/2008, 2004/2009, 2005/2010) results
from division of this figure by a factor of 4.5. The option rights
of the 2000/2005 tranche have a term ending on 31 December 2005.
Thereafter, options not exercised will expire from this tranche.
128_GfK
The option right can be exercised at the earliest two years after
issue and only within the defined exercise windows. The exercise
price is 120 per cent of the average price of GfK shares in the
Xetra closing auction on the five trading days prior to the issue
of the option rights, or 120 per cent of the price of GfK shares
in the Xetra closing auction on the date of issue if this is higher
than the aforementioned average price.
In June 2002, the shareholders consented to cancel the
existing authorization to grant option rights and approved a
new authorization and an adjustment of the contingent capital.
The contingent capital so far permitted, which amounts to
eur 2,000 thousand, is insufficient to service all the options
which can be issued based on the authorization of the General
Meetings dated 3 September 1999 and 13 June 2002. The
subscribed capital is therefore being increased by a further
eur 1,567,229.44, using up the permissible maximum amount,
by issuing up to 612,199 no-par bearer shares (contingent
capital II). The shares are being issued to the holders of
option rights based on the resolutions of the company dated
3 September 1999 and 13 June 2002.
The new option terms deviate from those of the first two
tranches of the programme as follows:
– Members of the Management Board of GfK ag may hold
a maximum of 30 per cent of the option rights being granted
(previously 20 per cent).
– Options may not be exercised during the 14 days before
publication of quarterly, half-yearly, annual or provisional
annual figures. In addition, the company may set further
periods at its discretion during which options may not
be exercised. For each of the tranches to be issued, the
exercise price to acquire a share is the share’s average
Xetra price between the respective previous accounts press
conference and the Annual General Meeting or, if higher,
the price of the share in the Xetra closing auction on the
trading day on which the respective tranche is issued, plus
a premium of 5 per cent. Trading days are those days on
which the Frankfurt stock exchange determines a price for
the company’s shares.
The application of the new option terms has been resolved
for tranche 3 (issue and exercise) and for all subsequent
tranches.
Together with the resolutions regarding the increase in share
capital, the General Meeting authorized the Supervisory Board
on 15 June 2004 to effect the automatic increase in contingent
capital which accompanies the capital increase. As a result of
this procedure, the contingent capital was increased through
use of the new accounting par value of a share from eur 2.56 to
eur 4.25 per share. In addition, the conditionally negotiable
shares rose by 520,133 shares as a result of the issue of bonus
shares in the ratio 5:1.
Between the General Meeting and the time of registration of
the capital increase, 11,530 options were exercised and new
shares issued. After the registration of the capital increase in
the Commercial Register on 27 July 2004, a further 116,598
new shares were issued by the year end due to the exercise of
options. The contingent capital of the company amounts as at
31 December 2004 to eur 12,768 thousand, corresponding to
3,004,204 no-par bearer shares.
At the same General Meeting, the shareholders approved, in
respect of continuation of the stock option plan (tranche 7),
a further authorization of up to 780,000 new option rights for
the senior management team of the company.
During financial year 2004, the stock option programme involved
no personnel expenses.
Fair value information
If the accounts were drawn up according to sfas 123 “Accounting
for Stock Based Compensation”, the fair value would be used in
valuing the stock options.
Stock options
As a result of the capital increase from company funds and the
issue of bonus shares in the ratio 5:1, the subscription right in
respect of the issued options of tranches one to six increased
from one share to 1.2 shares per option. The exercise prices
were adjusted accordingly.
The following details of the stock options, with regard to the
values of the previous year, have been adjusted where necessary
to the change in number of shares brought about by the issue of
bonus shares.
Tranche
Term
1
2000/05
Total
options
380,130
of which
Manage- Exercise
ment price in
Board
eur
76,512
46.00
exercisable
from
to
20021)
Options
exercised
20051)
–
Shares
issued
–
2
2001/06
366,690
85,215
34.75
20031)
20061)
–
–
3
2002/07
380,300
85,215
20.11
20042)
20072)
108,696
128,128
4
2003/08
457,319
149,9993)
15.44
20052)
20082)
–
–
5
2004/09
419,720
128,110
25.81
20062)
20092)
–
–
6
2005/10
489,8914)
122,2214)
TBA
20072)
20102)
–
–
7
2006/11
596,2084)
146,6644)
TBA
20082)
20112)
–
–
1) Exercise of options commences after the General Meeting. Options may be exercised during the
following periods: from the third trading day on the Frankfurt stock exchange after the General
Meeting of GfK ag until 30 June (inclusive) and from the first day after publication of the half-yearly
figures until 30 September (inclusive) and from the first day after publication of q3 figures until
14 days before the financial year ends (inclusive).
2) Exercise of options commences after the General Meeting. Options may not be exercised during the
14 days before publication of quarterly, half-yearly, annual or preliminary annual figures. The company
may set further periods during which options may not be exercised.
3) Including members of the Management Board who have since left the company.
4) Subscribed; entitlement to options does not yet exist; options not yet issued.
The development of the stock options issued has been as
follows:
The fair value of the stock options issued by GfK during 2000, 2001,
2002, 2003 and 2004 has been calculated at the date of granting
the options on the basis of a Black-Scholes option pricing model,
taking into account the terms of issue. The parameters used in
determining the fair value and the totals based on these were as
follows:
Tranche
Options
granted
4
5
33 %
39 %
39 %
42 %
22 %
4.8 %
4.7 %
2.8 %
3.9 %
5.54
Term in years
5.58
5.59
5.55
5.55
Fair value per option in eur
16.42
12.92
7.63
7.30
8,19
Total value per programme
6,390
4,854
2,902
3,399
3,455
1) Yields on German public sector bearer bonds outstanding with average remaining terms of over
five to six years inclusive.
The average weighted remaining term of the stock options as at
31 December 2004 was 3.1 years (2003: 3.6 years).
Supplementary disclosures (valuation at fair value
as at 31 December 2004)
The following table shows the parameters and totals of the five
issued tranches when valued at the 2004 year-end:
Tranche
1
2
3
4
5
Implicit volatility on closing date
18 %
18 %
18 %
18 %
18 %
Risk-free investment interest 1)
2.4 %
2.6 %
2.8 %
3.0 %
3.2 %
1
2
3
4
5
0.02
1.77
12.54
18.02
9.87
8
665
4,769
8,390
4,163
Total value per programme
Balance at
start of year
3
5.2 %
Term in years
2004
2
Risk-free investment interest 1)
Fair value per option in eur
2003
1
Implicit volatility
on date of issue
1) Swap rates with identical maturities.
Number of
options
Average
exercise price
in eur/share
Number of
options
Average
exercise price
in eur/share
1,145,190
33.72
1,610,764
28.43
25.81
465,574
15.44
421,805
Exercised
–
–
108,696
20.11
Expired
–
–
28,410
32.56
Repayments
–
–
–
–
Balance
at year end
1,610,764
28.43
2,169,675
27.55
Exercisable
at year end
764,890
40.48
1,018,424
35.04
As at the reporting date of 31 December 2004, the option value
is calculated taking into account the remaining terms of the
individual tranches. Market rates as at the balance sheet date of
31 December 2004 were used for the parameters.
GfK_129
The changes in other comprehensive income are as follows:
Before
tax
2003
tax
effect
29
–9
31
0
Unrealized profits/losses from market valuation
of available-for-sale securities:
Change in unrealized profits/losses
Differences from currency conversion
Total unrealized profits/losses from available-for-sale securities
Change in unrealized profits/losses from derivative financial instruments
2004
tax
effect
20
21
–7
14
31
– 25
0
– 25
Net
Net
60
- 9
51
–4
–7
– 11
149
- 59
90
– 192
76
– 116
Difference from currency conversion
– 3,207
2
– 3,205
– 5,206
–1
– 5,207
Change in other comprehensive income
– 2,998
– 66
– 3,064
– 5,402
68
– 5,334
Proposed appropriation of profits
Pension provisions
In accordance with the German Stock Corporation Act, the
dividend that may be distributed is determined by the
retained profit reported in the annual financial statements of
GfK ag. These are prepared under the provisions of the German
Commercial Code (hgb). A proposal will be made to the General
Meeting to distribute a dividend of eur 9,442 thousand (eur 0.30
per no-par share) to shareholders out of the retained profit for
2004 of eur 41,105 thousand and to carry forward eur 31,663
thousand.
The following tables provide more detailed information about
the GfK Group’s pension plans.
The projected benefit obligation (pbo) has developed as
follows:
2003
Germany
Projected benefit
obligation as at 1.1.
1,612
19,334
1,695
– 93
–
– 69
Service costs
447
188
717
213
Interest costs
941
48
946
46
–
9
–
–
739
190
2,339
167
– 1,881
– 259
– 597
– 80
–
–
– 494
–
–4
–
–
–
19,334
1,695
22,245
1,972
The breakdown of provisions is as follows:
31.12.2004
Total
> 1 year
Pension provisions
19,045
18,470
19,998
19,424
Provisions for taxes
9,651
0
13,543
0
Other provisions
46,046
5,517
51,408
7,385
Provisions
74,742
23,987
84,949
26,809
2004
Germany
Abroad
–
Price differences
31.12.2003
Total
> 1 year
Abroad
19,092
16. Provisions
Participant contributions
130_GfK
Before
tax
Actuarial gains/losses
Benefits paid
Cuts in benefits
Settlements
Projected benefit
obligation as at 31.12.
The following values result for pension plans in which the
accumulated benefit obligation (abo) exceeds the fair value of
the plan assets:
The following table shows the development of
plan assets:
2003
Germany
Abroad
2004
Germany
Abroad
Fair value of plan
assets as at 1.1.
404
486
93
371
Price differences
–
– 34
–
– 22
Actual return on
plan assets
10
–2
6
–2
Employer contributions
16
71
5
62
Benefits paid
Settlements
Fair value of plan assets
as at 31.12.
–
– 51
–
– 13
– 337
– 99
–
– 43
93
371
104
353
The measurement date for plan assets in Germany is 31 December 2004. The anticipated contributions for the following year
amount to eur 5 thousand. Due to the minor importance of the
German pension fund, the supplementary disclosures according
to sfas 132 have not been provided.
The following table shows the reconciliation from the financing
status of the plan assets to the amounts stated in the consolidated
balance sheet:
2003
Germany
Extent to which the
pension plan is financed
Unrealized actuarial
gains/losses
Unrealized service cost
relating to previous years
Non-amortized amount
from initial application
of sfas 87 or sfas 106
Net figure
reported
Included in the balance
sheet: pension provisions
19,241
Abroad
1,324
2004
Germany
Abroad
22,141
1,619
– 1,230
– 242
– 1,396
– 360
–
–
– 1,963
–
10
18,021
18,021
– 58
1,024
1,024
9
18,791
18,791
– 52
1,207
1,207
2003
Germany
Accumulated benefit
obligation (abo)
Abroad
2004
Germany
Abroad
16,394
1,097
20,286
1,090
93
371
104
353
Fair value of plan assets
at the end of the reporting
period
The assumptions regarding the discount rate and compensation
trends as well as long-term return on the plan assets used to
calculate the pbo vary depending on the general economic
conditions of the country for which the pension plan has been
set up. The actuarial calculation of value is based on the following
assumptions (weighted averages):
2003
2004
5.2 %
4.7 %
Expected long-term return on plan assets
1.2 %
2.3 %
Long-term compensation increase
4.5 %
3.4 %
Discount rate
The period-related net pension expenses for financial years 2003
and 2004 contain the following items:
Components of
pension expenses
2003
Germany
Abroad
2004
Germany
Abroad
Service cost (present value
of entitlement acquired
during financial year)
447
188
717
213
Interest cost
941
48
946
46
Expected return
on plan assets
–4
–2
–4
–2
Amortization of amounts
from initial application
of sfas 87 or sfas 106
–1
3
–1
8
Realized gains and losses
–
21
–2
47
Amortization of service
cost relating to previous
years
–
–
218
–
–
–
– 494
–
1,383
258
1,380
312
Profit from the curtailment
or discontinuation of the
pension plan
Pension expenses (net)
GfK_131
Defined contribution plans
17. Financial liabilities
Some companies within the GfK Group offer their staff defined
contribution plans. The concrete benefits can vary depending
on the legal, tax and economic framework conditions of the
country concerned. The basis of assessment for contributions
to such plans is mainly the length of service with the company
and the wage or salary level of the employee. The pension
expenses of defined contribution plans amounted to eur 3,159
thousand (2003: eur 4,367 thousand) in financial year 2004.
Financial liabilities are as follows:
Amounts due to banks
31.12.2003
31.12.2004
17,014
9,865
1,491
1,582
Other financial liabilities
3,617
4,446
22,122
15,893
Short-term liabilities with a term of
up to 1 year
Other provisions
The breakdown of other provisions is as follows:
Amounts due to banks
(of which with a remaining term of over 5 years)
Personnel
31.12.2003
31.12.2004
31,337
36,362
Invoices outstanding
2,882
3,369
Commitments to authorities and insurance
companies
2,885
2,801
External accounting and auditing costs
1,930
2,482
Sales
2,223
2,347
Commitments to households,
respondents etc.
1,065
1,339
693
897
Lawyers’ and consultants’ fees
Financial instruments
686
453
Anticipated losses on pending transactions
122
158
Commitments arising out of letters of comfort
Miscellaneous
Other provisions
700
0
1,523
1,200
46,046
51,408
Other financial liabilities
27,948
35,490
(4,898)
(3,161)
15,596
14,809
(11,158)
(10,155)
941
661
(0)
(236)
Long-term liabilities with a term of
over 1 year
44,485
50,960
66,607
66,853
Other financial liabilities contain loan liabilities totalling eur
5,043 thousand (2003: eur 4,444 thousand) as at 31 December
2004, of which eur 4,417 thousand (2003: eur 3,588 thousand)
concerned related parties.
As at 31 December 2004, the weighted average interest rate for
amounts due to banks was 3.73 per cent (2003: 3.71 per cent).
The financial liabilities become due in the next five years and
thereafter as follows:
The provisions for employees comprise mainly commitments
for the payment of bonuses (eur 13,158 thousand), holiday
arrears (eur 8,301 thousand), severance payments (eur 7,370
thousand), partial retirement (eur 2,119 thousand) anniversary
expenses (eur 1,834 thousand) and flexitime balances (eur 1,589
thousand).
Miscellaneous other provisions mainly comprise amounts owed
to suppliers (eur 747 thousand) and obligations to related
parties (eur 109 thousand).
20051)
15,893
2006
8,261
2007
7,743
2008
16,042
2009
13,554
66,853
1) Contains current account liabilities payable on demand in the context of credit lines.
As at 31 December 2004, the GfK Group had confirmed credit
lines of eur 142,635 thousand (2003: eur 162,800 thousand),
of which eur 95,430 thousand (2003: eur 116,015 thousand)
has not been used. The weighted average rate of interest on the
credit lines is 3.79 per cent (2003: 3.91 per cent).
132_GfK
5,360
Subsequent years
Notes: additional information
19. Other liabilities
There is collateral amounting to eur 9,112 thousand (2003:
eur 17,172 thousand) for amounts due to banks and liabilities
under leases amounting to eur 61,746 thousand (2003:
eur 62,049 thousand). The collateral breakdown is as follows:
31.12.2003
Other liabilities comprise the following:
31.12.2004
Amounts due to banks secured by
mortgages
deposit or pledging of securities
assignment of receivables
other collateral
12,752
5,821
451
–
1,313
1,200
258
–
Liabilities under leases secured by
transfer of movable assets
173
113
assignment of receivables
2,150
1,978
other collateral
Secured liabilities
75
–
17,172
9,112
Tax liabilities
7,088
Wages and salaries
1,922
2,857
Accounts payable to clients
1,673
2,464
Other accounts payable under share and
asset deals
459
2,040
Other accounts payable to households, respondents,
interviewers
657
930
12
664
Accruals and deferrals
Accounts payable to insurance companies
700
633
Accounts payable to employees
520
369
Other accounts payable to affiliated
companies
476
238
2,463
194
138
79
18. Trade payables
Trade payables are as follows:
Other accounts payable to other
participations
Miscellaneous liabilities
Trade payables
owed to third parties
owed to affiliated
companies
owed to associated
companies
owed to other
participations
Trade payables
26,690
–
28,800
443
1,147
–
1,188
–
319
–
427
–
–
–
29
–
28,156
0
30,444
443
14,664
6,436
Other accounts payable to associated
companies
31.12.2004
Remaining
term
Total
> 1 year
31.12.2004
14,171
Liabilities in connection with social security
Other accounts payable to related
parties
31.12.2003
Remaining
term
Total
> 1 year
31.12.2003
Other liabilities
48
0
840
827
30,515
33,047
As at 31 December 2004, there were other liabilities amounting
to eur 966 thousand (2003: eur 133 thousand) with a remaining
term of over one year.
20. Notes to the consolidated funds statement
Of the cash flow from ongoing business activity of eur 92,298
thousand (2003: eur 69,221 thousand), an amount of eur
85,089 thousand (2003: eur 47,717 thousand) was invested,
of which eur 59,136 thousand (2003: eur 22,481 thousand)
related to the acquisition of affiliated companies and other
business units. Dividends totalling eur 13,241 thousand (2003:
eur 8,235 thousand) were paid to shareholders of GfK ag
and to minority shareholders in subsidiaries. The liquid funds
in the balance sheet fell by eur 4,544 thousand (2003: up by
eur 8,074 thousand).
21. Related parties
During the year under review, significant relationships going
beyond the normal course of business existed with the following
persons and groups:
On the basis of loans to GfK Group companies, there were
liabilities to The npd Group, Inc., Port Washington, New York,
usa, amounting to eur 515 thousand as at the reporting date.
This figure includes a loan obligation of eur 132 thousand
with a remaining term of more than one year. In the reporting
year, interest on loans totalled eur 38 thousand.
GfK_133
There were mainly loan obligations amounting to eur 2,010
thousand due to GfK-nürnberg, Gesellschaft für Konsum-,
Markt- und Absatzforschung e.V., Berlin, the majority owner
of GfK ag. The corresponding interest expenses amounted to eur
39 thousand.
In January 2004, Arbor Inc., Media, usa granted GfK Arbor,
llc, Media, usa an interest-free operating loan of usd 2.5
million (eur 1,838 thousand) with a term of two years. Some
top managers have posts in both companies.
that may arise for The npd Group, Inc. from the credit guarantee
issued to a bank. This credit guarantee was given by The npd
Group, Inc. vis-à-vis the bank in favour of npd Intelect, l.l.c.,
to secure a loan for usd 8,950 thousand. The loan commitment
as at 31 December 2004 amounted to eur 2,083 thousand (usd
2,834 thousand).
At GfK Danmark a/s, Frederiksberg, Denmark, there is the risk of
a payment of taxes for prior years of approx. eur 188 thousand
(dkk 1,400 thousand) arising from non-deductible expenses of
eur 631 thousand (dkk 4,700 thousand) to 31.12. 2004.
Ms Elcin Üner and Mr Ali Levent Orhun are minority shareholders and managing directors of Procon GfK Arastirma
Hizmetleri a.s., Istanbul, Turkey. On the reporting date, there
were other loans with a remaining term of more than one
year of eur 858 thousand in each case. The interest income
on these amounted to eur 33 thousand in each case.
At GfK – Centar za istrazivanje trzista d. o. o., Zagreb, Croatia,
there are contingent liabilities of eur 60 thousand (hrk 450
thousand) to eur 182 thousand (hrk 1,361 thousand) arising
from disputes under employment law.
Ms Margaret Martin, Mr Derek Martin and Mr Allan Bowditch
are minority shareholders and managing directors of GfK
Martin Hamblin Limited, London, uk. Prior to the additional
acquisition of the remaining shares in GfK Martin Hamblin
Limited, London, uk by GfK ag, there were other loans totalling
eur 8,084 thousand relating to these minority shareholders
and managing directors, with a remaining term of more than
one year. The interest income from these amounted to eur 55
thousand in respect of Ms Margaret Martin, eur 47 thousand in
respect of Mr Derek Martin and eur 34 thousand in respect of
Mr Allan Bowditch.
There were loan liabilities amounting to eur 421 thousand
in respect of the members of the management and minority
shareholders of various subsidiaries.
In the years 2005 to 2009, purchase price payment obligations
for additional shares and purchase price adjustments of eur
66,326 thousand (2003: eur 54,173 thousand) will result from
purchase contracts concluded in connection with the acquisition
of participations.
In case of compliance by the contractual parties, payment
obligations of eur 40 thousand will arise for the GfK Group in 2005
as a result of competition agreements that have been concluded.
The future commitments arising from lease agreements are
described in the section on leases.
23. Financial instruments and derivatives
The carrying amounts and fair values of the financial instruments
of the GfK Group are shown in the following table.
The receivables and liabilities in respect of related parties
have a remaining term of up to one year, unless indicated
otherwise.
31.12. 2003
Carrying
amount
Fair value
22. Contingencies and other financial commitments
Financial instruments other
than derivatives
The contingencies and other financial commitments that are
not carried as liabilities in the consolidated balance sheet
are reported at nominal values and represent the following
amounts:
Financial assets
guarantees and sureties
order commitments
29,760
29,760
23,942
7,538
7,538
6,488
6,488
Liquid funds
53,241
53,241
48,697
48,697
66,607
66,607
66,853
66,853
19
19
33
33
167
167
2
2
17
17
199
199
181
181
254
254
Securities
31.12.2003
31.12.2004
8,784
6,738
573
131
2,010
2,574
Commitments arising from
maintenance, service and licence agreements
31.12. 2004
Carrying
amount
Fair value
23,942
Derivative financial instruments
Assets
Currency hedging contracts
Interest rate hedging
contracts
Liabilities
In addition, there are the following contingencies and financial
commitments:
GfK Aktiengesellschaft has given a guarantee vis-à-vis The npd
Group, Inc., Port Washington, New York, usa, corresponding
to its participation in npd Intelect l.l.c., Port Washington,
New York, usa, held since 1 January 2001 via GfK Holding,
Inc., Wilmington, usa, to the effect that it assumes 25 per cent
of the liability for the contractual fulfilment of any commitments
134_GfK
Currency hedging contracts
Interest rate hedging
contracts
The derivative financial instruments are valued on a marking-tomarket basis by the respective banks.
Notes: segment reporting
As at 31 December 2004, the GfK Group’s portfolio included
currency hedging contracts to hedge against the Japanese yen,
the Hungarian forint, the uk pound, the Polish zloty, the Swiss
franc and the us dollar. The nominal amount of the currency
hedging contracts totalled eur 11,337 thousand, of which eur 42
thousand had a residual term of over one year.
In addition, as at the end of the financial year, the GfK Group
had contracts to hedge against interest rate risks with a total
nominal value of eur 26,260 thousand with a residual term of
over one year. Of this amount, a nominal volume of eur 17,175
thousand relates to interest rate swaps with a residual term of
3.5 to 5 years, which are classified as cash flow hedges.
In the case of derivatives utilised for cash flow hedging,
fluctuations in fair value are reported as other comprehensive
income. For the year under review, the amount booked under
other comprehensive income totalled eur 192 thousand before
taxes.
Gains or losses from derivative financial instruments which are
not reported as part of the hedge accounting are booked in net
interest income or net other financial income.
In total, the income from these financial instruments amounted to
eur 61 thousand, while expenses amounted to eur 292 thousand.
24. Segment reporting
The primary classification of the GfK Group into segments is based
on the organization of the divisions corresponding to the products
and services offered. The secondary classification is by region.
The GfK Group provides services in the segments Custom Research
(previously: Ad Hoc Research), Retail and Technology (previously:
Non-Food Tracking), Consumer Tracking, Media, HealthCare and
Other.
Custom Research: information services for developing, positioning
and maintaining products and services, aimed at optimizing the
mix of marketing policy activities and managing product and
corporate brands and customer loyalty.
Retail and Technology: information services regarding
marketing, sales, logistics in retail and industry for companies
operating in consumer technology markets.
Consumer Tracking: information services regarding market
and marketing matters relating to day-to-day consumer buying
decisions and habits, providing information on almost all fast
moving consumer goods plus a large number of slow moving
consumer goods and services.
Media: information services on media consumer behaviour
and attitudes. Services include quantitative analyses of viewer,
reader and listener reach and qualitative surveys on acceptance,
preferences and recall of media content.
HealthCare: information services relating to product development, communication, image and price control of medicines,
market positioning and customer satisfaction, measuring
the unit number and sales of materials and products used by
dentists and laboratories as well as measuring the consumption
of veterinary medicines.
Other: internal services relating to it and administration,
services in connection with data collection, processing and
analysis, method and product research.
In the GfK Group, the internal control and reporting are largely
based on the same accounting and valuation methods as the
consolidated financial statements.
The Group measures the success of its segments by reference
to the operating profit. The operating profit of a segment
is determined on the basis of the result before financial income
(excluding other income) produced by the Management
Information System.
As a rule, internal Group transactions are carried out at market
prices. Sales are attributed to the countries in accordance with
the principle of country of origin.
The segment information for financial years 2003 and 2004 is as
follows:
Sales
2003
Operating
profit
Depreciation
Sales
2004
Operating
profit
Custom Research
220,824
15,423
4,265
252,096
21,243
4,341
166,700
36,071
6,235
187,001
46,878
4,583
Consumer Tracking
89,764
3,499
3,354
94,405
5,881
2,329
Media
58,293
7,480
3,073
62,237
7,780
2,757
HealthCare
49,269
6,258
1,503
68,094
7,746
1,662
Other
10,432
– 1,446
6,346
7,902
– 3,439
6,344
Group
595,282
67,285
24,776
671,735
86,089
22,016
Depreciation
GfK_135
Sales by region are as follows:
Germany
Northern Europe
2003
2004
221,696
236,337
54,131
55,584
204,735
215,720
31,792
40,053
America
48,601
84,787
34,327
39,254
595,282
671,735
Group
During the reporting year and in the previous year, none of the
segments recorded sales with any single client exceeding 10 per
cent of consolidated sales.
Due to company acquisitions and other changes in the scope of
consolidation, the previous year’s figures cannot be compared
directly with the figures for the consolidated financial statements
as at 31 December 2004. To facilitate a comparison, the influences resulting from changes are eliminated in the following pro
forma statements in accordance with sfas 141.
The following pro forma statement prepared in accordance
with sfas 141 shows selected items from the income statement
for 2004 on the assumption that all significant acquisitions and
additional acquisitions concerning affiliated companies which
took place during the financial year under review had already
taken place on 1 January 2004. In the pro forma statement, the
following transactions are taken into account:
First-time consolidation of indicator gfk ltda., São Paulo,
Brazil
First-time consolidation of the 48 per cent share in Institut
Français de Recherche-ifr s.a., Viroflay, France (held by the
first-time consolidated var finance et reinvestissement –
v.f.r. sas, La Valette-du-Var, France)
Additional acquisition of 20.12 per cent of iha-GfK ag,
Hergiswil, Switzerland
Additional acquisition of 49 per cent of GfK Martin Hamblin
Limited, London, uk
Sales
Result from ongoing
business activity
Difference
Absolute
Per cent
671,735
673,605
1,870
0.3
90,544
89,942
– 602
– 0.7
63,502
63,036
– 466
– 0.7
52,592
52,946
354
0.7
1.68
1.69
0.01
0.7
136_GfK
First-time consolidation of GfK Marketing Services South
Africa (Proprietary), Sandton, South Africa
First-time consolidation of GfK Arbor, llc, Media, usa
Additional acquisition of 65 per cent of m2a s.a., Saint Aubin,
France
2003
Actual
Pro forma
Sales
Result from ongoing
business activity
25. Pro forma statements in accordance with sfas 141
2004
Actual
Pro forma
The income statement 2003 is the basis for the following pro
forma statement in accordance with sfas 141. It has been assumed that all material changes in the scope of consolidation that
took place in 2004, had already taken place on 1 January 2003.
In addition to the above-mentioned changes in the scope of
consolidation, the following transactions were also taken into
account:
Difference
Absolute
Per cent
595,282
623,825
28,543
4.8
6,496
9.8
66,269
72,765
41,061
45,336
4,275
10.4
33,322
39,762
6,440
19.3
1.06
1.27
0.21
19.3
26. Pending litigation and claims for compensation
Neither GfK ag nor any of its subsidiaries were involved in any
significant legal disputes as at 31 December 2004.
27. Events after the balance sheet date
Heinrich A. Litzenroth, the member of the Management Board
responsible for the Custom Research division, was identified
in Khaolak, Thailand as a victim of the tsunami in South East
Asia of 26 December 2004. On 1 March 2005, Mr Litzenroth’s
membership of the Management Board was revoked for legal
reasons. His previously held responsibility for the Custom Research
division is being taken over by Petra Heinlein. The Media division,
for which she was previously responsible, is being taken over
by Wilhelm Wessels in addition to Consumer Tracking and
HealthCare divisions.
Also on 1 March, Mr Christian Weller von Ahlefeld was appointed
as the new Chief Financial Officer. He will be responsible for
the Financial Services, Central Services and Human Resources
Services departments. Mr von Ahlefeld will commence his work
on 1 June 2005 and has been appointed in the post until 2008.
With effect from 1 January 2005, GfK has acquired full ownership
of Beyen Marktforschung. The company, which is represented
in Germany, the usa and Canada, is a specialist in continuous
pricing research in the electronic consumer goods market,
particularly in the area of price-related advertising and promotional
activities. This will strengthen the Retail and Technology division.
Notes: supplementary disclosures
In January 2005, GfK sold its 50 per cent participation in iha•ims
Health GmbH in Switzerland. At the same time, the holding in
the German gpi Kommunikationsforschung Gesellschaft für
Pharma-Informationssysteme mbH was increased from 80 per
cent to 100 per cent. The goal of these transactions is to focus
HealthCare business on its core competency.
At the start of February 2005, GfK announced an increase in
its shareholding in the American company Caribou Lake
Software, llc from 19.9 per cent to 69.8 per cent with effect
from 1 January 2005. The company operates in the Custom
Research segment.
28. Changes since the previous year
The accounting and valuation methods used in the consolidated
financial statements for the previous year have been retained.
The changes in the scope of consolidation have already been
outlined above.
29. Notes to the consolidated financial statements pursuant
to § 292 a HGB
Accounting in accordance with us gaap, the method applied by
the GfK Group, differs from accounting under hgb (German
Commercial Code). Any differences which have a material impact
on the consolidated financial statements of the GfK Group are
explained below.
Intangible assets
In accordance with hgb, only intangible assets acquired for
consideration may be capitalized. In accordance with us gaap,
proprietary intangible assets must be capitalized in specific
circumstances (especially software).
Goodwill
In principle, goodwill from the first-time consolidation of
subsidiaries is determined in the same way for both accounting
systems. In accordance with hgb, there is the option to either
offset goodwill against reserves with no impact on the result
and disclose this, or to write down over the anticipated useful
life or over four years by means of regular amortization. In
accordance with us gaap, goodwill should not be subject to
regular amortization but should be subject to an annual impairment test, which may involve the application of extraordinary
amortization.
Leases
The criteria, in accordance with which, in hgb accounting, a
leased asset must be capitalized by the lessee, are based on
taxation rules. They therefore differ from the criteria of us gaap.
As a result, capitalization duties for the lessee under us gaap
(capital leases) are more extensive than under hgb.
Reinstatement of original values
In certain cases, it is prescribed in accordance with hgb that
write-downs of an asset to a lower attributable value must be
reversed by reinstating the original value when the reasons
for the earlier write-down cease to exist. us gaap does not, in
principle, permit the reinstatement of original values.
Recognition of sales
In accordance with hgb, a sale may only be recognized when
the service has been completed and invoiced. Ongoing orders
are reported as inventories until such time. In accordance with
us gaap, the recognition of sales is determined by the portion of
the service that has already been delivered. Sales may therefore
also be recognized before the completion of the service to be
delivered and when the services have not yet been invoiced.
Reporting unrealized profits
In accordance with hgb, the principle of imparity does not
permit the inclusion of unrealized profits, but requires unrealized
losses to be stated as soon as they can be anticipated. us gaap
permits the inclusion of unrealized profits.
For assets and liabilities in foreign currencies, this means that,
in accordance with us gaap, these must be converted at the rate
of exchange on the reporting date. In principle, exchange gains
and losses are included on the income statement.
hgb provides no specific rules for the valuation of derivative
instruments, which means that the general principles of valuation
at acquisition cost and of the principle of prudence apply. In
accordance with us gaap, derivative instruments must be valued
at their fair value as at the balance sheet date. Special rules
apply to hedging transactions.
Provisions for pensions and similar obligations
In accordance with hgb, the valuation of pension obligations is
largely carried out applying the partial value method pursuant
to § 6 a EStG (German Income Tax Act), but other methods are
also permissible. In accordance with us gaap, the application of
the projected unit credit method is mandatory. In contrast with
hgb, future salary rises of the person entitled to the pension are
taken into account. Entitlements in respect of pension funds
are offset against the provision. In accordance with us gaap, an
allocation to the pension provisions that initially has no impact
on income is possible in some cases.
Other provisions
hgb permits the setting up of provisions for amounts owed
to third parties and for internal costs such as maintenance
(provisions for operating expenditure). Provisions must be
valued according to the principle of prudence. In accordance
with us gaap, provisions for operating expenditure are not
permitted. Provisions must be valued at the amount most likely
to be used. If several equally probable amounts exist, the lowest
of the range must be stated.
GfK_137
Number of employees
In accordance with hgb, invoices for prepayments or payments
on account which have not been paid by the balance sheet
date may not be stated as payments on account received. The
underlying receivable must also be eliminated, because this
is a pending transaction for both sides. Given the different way
of realizing sales, receivables from pending transactions may
be reported in accordance with us gaap. Liabilities on orders
in progress include accrued sales which have resulted from
invoices for prepayments or payments on account, but cannot
yet be recognized as sales in accordance with the method of
realizing sales. The accrued amounts may be matched both by
open and already settled receivables.
The GfK Group employed 5,417 (2003: 5,000) staff on average
during the year under review. The average number of employees
over the year was determined on the basis of full-time employees.
The calculation of the average was carried out using the key
dates 31 March, 30 June, 30 September and 31 December.
The employees were distributed over the divisions as follows:
2003
2004
Custom Research
1,663
1,862
1,457
1,612
Consumer Tracking
834
834
Scope of consolidation
Media
326
330
In accordance with hgb, subsidiaries are included in the
consolidated financial statements if the parent company
holds the majority of the voting rights or if the companies
are under the uniform management of the parent company.
A company is assumed to be an associated company if, in
the event of a participation quota of at least 20 per cent, a
determining influence is actually exercised on its business
and financial policies. In accordance with us gaap, the
consolidation of subsidiaries depends on the possibility of
control being exercised by the parent company. The rights
of minority shareholders in particular have to be examined
to determine whether they hinder the control of the parent
company. A minimum participation of 20 per cent in accordance
with us gaap is not a precondition for qualification as an
associated company. By contrast with the corresponding hgb
provision, it is only a question of the possibility of exercising
a determining influence.
HealthCare
192
238
Other
409
405
Minority interests
The minority interests in accordance with hgb are included
in the consolidated shareholders’ equity. In accordance with
us gaap, these are reported in a separate item between
shareholders’ equity and liabilities.
4,881
5,281
Managing Directors/Management Board members
75
84
Trainees
44
52
5,000
5,417
Full-time employees
Total remuneration and shares of the Management Board and
Supervisory Board
The total remuneration and shares of the Management Board are
as follows:
In eur’000
Fixed
remuneration
The expense items of the income statement contain the following
personnel expenses:
Wages and salaries
Social security contributions
Personnel expenses
138_GfK
2003
2004
210,180
232,633
46,464
48,053
256,644
280,686
Number
of stock
options
443.9
700.3
1,144.2
33,333
Petra Heinlein
262.2
350.3
612.5
22,222
Dr. Gérard Hermet
307.3
520.3
827.6
22,222
Heinrich Litzenroth
298.8
370.3
669.1
22,222
96.2
191.3
287.5
–
300.7
360.3
661.0
22,222
2004
1,709.1
2,492.8
4,201.9
122,221
2003
1,882.3
1,119.0
3,001.3
128,110
Wilhelm Wessels
Personnel expenses – information pursuant to § 314
Para. 1 No. 4 hgb (German Commercial Code)
Total
remuneration
Professor Dr. Klaus L.
Wübbenhorst (ceo)
Professor Dr. Franz Merl
(until 30.04.2004)
30. Supplementary disclosures
Variable
remuneration
Notes: supplementary disclosures
The total remuneration of the Supervisory Board amounts to:
In eur’000
Fixed
Variable
Total
remuneration remuneration1) remuneration
Hajo Riesenbeck (Chairman)
8.4
19.5
27.9
Dr. Arno Mahlert (Deputy Chairman)
3.7
8.5
12.2
6.5
15.0
21.5
Jörg Bandt
6.5
15.0
21.5
6.5
15.0
21.5
Kerstin Döpfert
6.5
15.0
21.5
Klaus Hehl
4.9
10.3
15.2
Werner Spinner
3.6
8.2
11.8
Dieter Wilbois
6.5
15.0
21.5
Elmar Wohlgensinger
3.3
6.8
10.1
Peter Zühlsdorff
12.7
29.3
42.0
2004
69.1
157.6
226.7
2003
68.3
99.7
168.0
1) Subject to the resolution on the appropriation of profits at the 2005 Annual General Meeting
In total, the Management Board holds 464,113 shares and,
inclusive of the options listed in the table, 528,728 options to
shares.
The Supervisory Board owns 11,987 shares. The members of the
Supervisory Board hold no options to shares.
Former members of the management of GfK GmbH, Nuremberg,
and of the Management Board of GfK ag, received total
remuneration including indemnity payments of eur 1,901 thousand
(2003: eur 716 thousand); an amount of eur 8,538 thousand
(2003: eur 8,458 thousand) was set aside by GfK ag for pension
commitments to former members of the Management Board and
Managing Directors.
There were no loans or advances to members of the Management
Board or Supervisory Board, and no contingent liabilities were
incurred for this group.
GfK_139
Supervisory Board
Hajo Riesenbeck
Chairman (from 16 December 2004)
Kerstin Döpfert
Management Consultant
Director at McKinsey & Company,
Düsseldorf
Vice President of GfK-nürnberg
Gesellschaft für Konsum-, Markt- und
Absatzforschung e.V., Berlin
Dr. Arno Mahlert Deputy Chairman
(from 15 June 2004) (from 16 December 2004)
Member of the Management Board of
Tchibo Holding ag, Hamburg
Klaus Hehl
Deputy Chairman
(until 15 June 2004)
Werner Spinner
Management Consultant
(from 15 June 2004) Chairman of the Supervisory Board of
Biotest ag, Dreieich
Member of the Supervisory Board of
csm n.v., Diemen, Netherlands
Merz GmbH Holding, Frankfurt/Main
Springer Science + Business Media s.a.,
Luxembourg
Deputy Chairman of the Supervisory Board of
Saarbrücker Zeitung GmbH, Saarbrücken
Member of the Board of Administration of
GfK-nürnberg Gesellschaft für Konsum-,
Markt- und Absatzforschung e.V., Berlin
Dieter Wilbois
Beiersdorf ag, Hamburg
Dr. Christoph
Achenbach
KarstadtQuelle ag, Essen
Karstadt Warenhaus ag, Essen
Neckermann Versand ag,
Frankfurt am Main
Quelle Aktiengesellschaft, Fürth
Thomas Cook ag, Oberursel
Jörg Bandt
Data Collection Manager at
GfK Aktiengesellschaft, Nuremberg
Dr. Wolfgang
C. Berndt
Chairman of the Board of Directors of the
Institute For The Future, Menlo Park,
California, usa
Member of the Board of Directors of
Cadbury Schweppes plc, London, uk
Lloyds tsb Bank plc, London, uk
Lloyds tsb Group plc, London, uk
140_GfK
Independent Works Council representative at
Independent Works Council representative
(Chairman) at
Elmar
Wohlgensinger
(until 15 June 2004)
Peter Zühlsdorff
Honorary Chairman (from 16 December 2004)
Chairman (until 16 December 2004)
Managing shareholder of
dih Deutsche Industrie-Holding GmbH,
Frankfurt/Main
Duales System Deutschland ag, Cologne
President of GfK-nürnberg Gesellschaft für
Konsum-, Markt- und Absatzforschung e.V.,
Berlin
Merck kgaa, Darmstadt
Escada ag, Munich
Deutz ag, Cologne
Kaiser’s Tengelmann ag, Viersen
tv Loonland ag, Munich
Member of the Advisory Board of
Tengelmann Verwaltungs- und Beteiligungs
GmbH, Mülheim/Ruhr
Member of the Board of
The New Germany Fund, New York, usa
Notes: Supervisory Board and Management Board
Management Board
Prof. Dr. Klaus L.
Wübbenhorst
Chief Executive Officer
Declaration on the German Corporate Governance Code
The declaration prescribed by § 161 of the
German Stock Corporation Act has been
given by the Management Board and
Supervisory Board and has been made
accessible to shareholders.
Deputy Chairman of the Supervisory Board of
bu Holding GmbH & Co. kg, Nuremberg
Neckermann Versand ag,
Frankfurt/Main
Quelle ag, Fürth
Petra Heinlein
Responsible for the Media division
Dr. Gérard Hermet Responsible for the Retail and Technology
division
Prof. Dr. Klaus L. Wübbenhorst
Petra Heinlein
Heinrich A.
Litzenroth
Responsible for the Custom Research
division
(deceased on December 2004, in Khaolak,
Thailand)
Prof. Dr. Franz X. Chief Financial Officer
Merl
Responsible for the Financial Services,
(until 30 April 2004) Central Services and Human Resources
divisions
Dr. Gérard Hermet
Wilhelm R. Wessels
Christian Weller
Chief Financial Officer
von Ahlefeld
Responsible for the Financial Services,
(from 1 June 2005)
Central Services and Human Resources
Services divisions
Wilhelm R.
Wessels
Responsible for the Consumer Tracking
and HealthCare divisions
Information Resources – GfK b.v.,
Zaltbommel, Netherlands
GfK_141
Shareholdings of the GfK Group
Share in the capital
in %
Financial year
95.0
2004
Equity
eur’000
Affiliated companies (Germany) included in the consolidated financial
statements (all details according to hgb commercial balance sheet I)
encodex International GmbH, Nuremberg
– 55 1)
enigma GfK Medien- und Marketingforschung GmbH, Wiesbaden
100.0
2004
673
GfK cee Finance GmbH, Nuremberg
100.0 3)
2004
3,289
51.0
2004
GfK macon ag, Waghäusel
3)
878 2)
GfK Marketing Services GmbH & Co. kg, Nuremberg
100.0
2004
560
GfK Non-Food Tracking Holding GmbH, Nuremberg
95.0
2004
135,459
GfK prisma Institut für Handels-, Stadt- und Regionalforschung
GmbH & Co. kg, Hamburg
100.0
2004
405
GfK u.s. Equity GmbH, Nuremberg
100.0
2004
3,427 1)
GfK us Custom Research Holding GmbH, Nuremberg
100.0
2004
6,158 1)
gpi Kommunikationsforschung Gesellschaft für PharmaInformationssysteme mbH, Nuremberg
80.0
2004
872
media control GfK international GmbH, Baden-Baden
51.0 4)
2004
1,360 2)
Media Markt Analysen GmbH & Co. kg, Frankfurt/Main
100.0
2004
25
Modata GmbH, Berlin
100.0 3)
2004
99 2)
Adware Media Solutions b.v., Hilversum, Netherlands
100.0 3)
2004
Aspemar-GfK n.v., Brussels, Belgium
100.0 3)
2004
– 87
audimedia sarl, Issy les Moulineaux, France
100.0 3)
2004
1,363
Audimetrie n.v., Brussels, Belgium
100.03)
2004
796
100.0 3)
2004
4,790
Encodex Japan k.k., Osaka, Japan
63.0 3)
2004
– 215
fessel-GfK Institut für Marktforschung Ges.m.b.H., Vienna, Austria
94.8
2004
9,223
Financière isl Société Anonyme, Issy les Moulineaux, France
71.9 3)
2004
3,314
GfK - Centar za istrazivanje trzista d.o.o., Zagreb, Croatia
100.0 3)
2004
373
GfK - memrb Marketing Services Limited, Nicosia, Cyprus
60.0 3)
2004
412
100.0 3)
2004
7,021
Affiliated companies (abroad) included in the consolidated financial
statements (all details according to us gaap commercial balance sheet II)
GfK (u.k.) Ltd., West Byfleet, Surrey, uk
GfK Animal Healthcare Limited, West Byfleet, Surrey, uk
100.0
2004
10,928
GfK Arbor, llc, Media, usa
100.03)
2004
26,068
89.5 3)
2004
2,776
3)
2004
3,110
GfK consumer and business information italy S.p.A.,
Milan, Italy
100.0
2004
– 505
GfK Custom Research Inc., Minneapolis, usa
100.0 3)
2004
4,387
GfK Asia Pte Ltd., Singapore, Singapore
GfK Benelux Marketing Services b.v., Amstelveen, Netherlands
GfK Danmark a/s, Frederiksberg, Denmark
gfk do brasil ltda., São Paulo, Brazil
gfk emer ad hoc research, s.l., Valencia, Spain
100.0
87.0
2004
824
100.04)
2004
4,406
50.1
2004
3,014
GfK Holding, Inc., Wilmington, usa
100.0
2004
26,156
GfK Hungaria Piackutató Kft., Budapest, Hungary
100.0 3)
2004
1,223
GfK Immobilier Société a responsabilité limitée, Rueil-Malmaison,
France
100.0 3)
2004
32
99.54)
2004
– 66
GfK Market Research (Shanghai) Co. Ltd., Shanghai, China
100.0 3)
2004
393
GfK Marketing Services (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia
100.0 3)
2004
316
49.0 3)
2004
20
100.0 3)
2004
1,334
GfK market analysis e.p.e., Athens, Greece
GfK Marketing Services (Thailand) Limited, Bangkok, Thailand
GfK Marketing Services Australia Pty. Ltd., Sydney, Australia
1) Profit and loss transfer agreement
2) Details as per commercial balance
sheet II
3) Fully indirect shareholding
142_GfK
– 190
4) Partially indirect shareholding
5) Details not available
6) Details as per provisional financial statements
drawn up under national law
7) Newly established in 2004
8) In liquidation
Notes: shareholdings
in %
Financial year
Equity
eur’000
50.13)
2004
6,976
100.03)
2004
3,884
89.5 3)
2004
203
GfK Marketing Services Indonesia, pt, Jakarta, Indonesia
100.03)
2004
42
GfK Marketing Services Italia S.r.l., Milan, Italy
100.0 3)
2004
2,877
84.2 3)
2004
5,972
100.0 3)
2004
– 1,002
GfK Marketing Services Ltd., Hong Kong, China
100.0 3)
2004
1,152
GfK Marketing Services Ltd., West Byfleet, Surrey, uk
100.0 3)
2004
6,297
GfK Marketing Services South Africa (Proprietary), Sandton, South Africa
100.03)
2004
– 98
GfK Martin Hamblin Inc., Hartford, Connecticut, usa
100.03)
2004
298
GfK Martin Hamblin Limited, London, uk
100.0
2004
– 2,135
– 501
gfk marketing services españa, sociedad anonima, Valencia, Spain
g.f.k. marketing services france sas, Rueil-Malmaison, France
GfK Marketing Services Hong Kong Limited, Hong Kong, China
GfK Marketing Services Japan k.k., Tokyo, Japan
GfK Marketing Services Korea Limited, Seoul, Korea
GfK Media Ltd., London, uk
100.0
2004
GfK Norge a/s, Oslo, Norway
100.0
2004
370
GfK Panelservices Benelux b.v., Dongen, Netherlands
100.0 3)
2004
5,924
GfK Panelservices Benelux Holding b.v., Dongen, Netherlands
100.0
2004
6,242
GfK Polonia Sp. z o.o., Warsaw, Poland
100.0 3)
2004
2,031
80.0 3)
2004
1,906
100.0 3)
2004
140
GfK portugal – Marketing Services, Limitada, Lisbon, Portugal
GfK Romania-Institut de Cercetare de Piata Srl, Bucharest, Romania
GfK Slovakia Inštitút pre prieskum trhu s r.o., Bratislava,
Slovakia
100.0 3)
2004
345
GfK Sofema International sarl, Rueil-Malmaison, France
100.0
2004
6,423
GfK Sverige Aktiebolag, Lund, Sweden
100.0
2004
1,042
GfK-Bulgaria, Institut für Marktforschung EGmbH, Sofia, Bulgaria
100.0 3)
2004
184
GfK-Memrb Marketing Services fz-llc, Dubai,
United Arab Emirates
100.03) 7)
2004
81
GfK-Praha, spol s r.o., Prague, Czech Republic
3)
100.0
2004
1,504
GfK-rus Gesellschaft mbH, Moscow, Russia
100.0 3)
2004
439
GfK-Ukrainian Surveys & Market Research (usm), Kiev, Ukraine
100.0 3)
2004
755
85.0 4)
2004
451
100.0 3)
2004
1,051
85.0 4)
2004
485
71.0 4)
2004
356
100.0 3)
2004
2
100.0
2004
37,126
75.0 3)
2004
187
indicator gfk consultoria e processamento de informações ltda.,
Santana do Parnaíba, Brazil
100.03)
2004
– 127
indicator gfk ltda., São Paulo, Brazil
100.03)
2004
161
3)
2004
660
Inform Business Development Pty. Ltd., Sydney, Australia
100.0 3)
2004
1,257
Informark Pty. Ltd., Braddon, Australia
100.0 3)
2004
187
Institut de Recherche d’Informations statistiques (irdis) sarl,
Montigny le Bretonneux, France
95.0 3)
2004
186
Institut de Sondage Lavialle (isl) s.a., Issy les Moulineaux, France
99.9 3)
2004
2,757
100.04)
2004
10,415
50.1 3)
2004
355
Intomart b.v., Hilversum, Netherlands
100.0 3)
2004
4,526
Intomart GfK Belgium n.v., Brussels, Belgium
100.0 3)
2004
2,241
incoma Research, s.r.o., Prague, Czech Republic
indicorp participações s.a., São Paulo, Brazil
Institut Français de Recherche-ifr s.a., Viroflay, France
intercampus-recolha, tratamento e distribuição
de informação, Limitada, Lisbon, Portugal
sheet II
95.0
8) In liquidation
GfK_143
in %
Financial year
Equity
eur’000
Intomart GfK Group b.v., Hilversum, Netherlands
100.0
2004
2,893
100.0 3)
2004
2,211
m2a s.a., Saint Aubin, France
100.0
2004
382
metris-métodos de recolha e investigação social, lda,
Lisbon, Portugal
51.0 3)
2004
435
mmo Media-Market-Observer GmbH & Co kg, Vienna, Austria
54.6 3)
2004
– 530
100.0 3)
2004
456
Orange Interactive Research ab, Stockholm, Sweden
100.0 3)
2004
501
Oz Toys Marketing Services Pty. Ltd., Sydney, Australia
51.0 3)
2004
– 230
Procon GfK Arastirma Hizmetleri a.s., Istanbul, Turkey
70.1
2004
1,333
Significant GfK bvba, Heverlee, Belgium
83.73)
2004
1,106
Strateji GfK Research Services a.s., Istanbul, Turkey
99.6 3)
2004
168
100.0 3)
2004
2,164
Telecontrol ag, Hergiswil, Switzerland
v2 GfK llc, Blue Bell, Pennsylvania, usa
51.0 3)
2004
5,096
var finance et reinvestissement – v.f.r. sas, La Valette-du-Var, France
50.0
2004
543
dm-plus Direktmarketing GmbH, Nuremberg
100.03)
2004
63
GfK Data Services GmbH, Nuremberg
100.0
2004
29
GfK Erste Vermögensverwaltungs GmbH, Nuremberg
100.07)
2004
25 1)
GfK Fernsehforschung GmbH, Nuremberg
100.0
2004
29
GfK Marketing Services Verwaltungs-GmbH, Nuremberg
100.03)
2004
29
GfK Marktforschung GmbH, Nuremberg
100.0
2004
30
GfK Panel Services Deutschland GmbH, Nuremberg
100.0
2004
29
GfK prisma Verwaltungs-GmbH, Hamburg
100.0
2004
34
ifr Monitoring Deutschland GmbH, Düsseldorf
100.03)
2004
85 6)
Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main
100.0
2004
29 6)
Adfinders b.v., Hoofddorp, Netherlands
100.0 3)
2004
– 654 6)
3)
100.0
2004
– 1,083 6)
caticall – recolha de informação assistida por
computador, lda., Lisbon, Portugal
100.0 3)
2004
5 2)
100.0
3)
2004
43 6)
100.0
3)
2004
– 259 6)
Affiliated companies (Germany), not included in the consolidated financial
statements (all details according to hgb commercial balance sheet I)
Affiliated companies (abroad), not included
in the consolidated financial statements
GfK - european opinion research centre eeig, Brussels, Belgium
GfK Ad Hoc Research worldwide gie, Brussels, Belgium
GfK Belgium s.a., Brussels, Belgium
5)
2004
0 6)
3)
2004
617 6)
2004
119 2)
2004
56 6)
3)
2004
0 6)
65.0
4) 7)
2004
132 6)
99.0
3) 7)
2004
35 6)
81.0
100.0
GfK Belgrade d.o.o., Belgrade, Federal Republic of Yugoslavia
100.0 3)
GfK BH d.o.o., Sarajevo, Bosnia Herzegovina
100.0 3)
GfK Great Britain Ltd., London, uk
100.0
GfK latinoamerica holding, s.l., Valencia, Spain
GfK Marketing Service Chile Limitada, Santiago, Chile
GfK Marketing Services Eastern Europe Holding spol. z o. o.,
Warsaw, Poland
GfK marketing services ltda., São Paulo, Brazil
GfK Marknadsundersökning Sverige ab, Lund, Sweden
GfK memrb Marketing Services Maroc, Casablanca, Morocco
sheet II
144_GfK
2004
4)
85.0
100.0 3)
7)
7)
2004
5)
3) 7)
2004
257 6)
100.0
3)
2004
69 2)
100.0
3) 7)
2004
– 99 6)
99.0
8) In liquidation
Notes: shareholdings F I N A N C I A L S T A T E M E N T S
in %
Financial year
75.0
Equity
eur’000
2004
23 6)
3)
2004
34 6)
100.0 3)
2004
80 6)
100.0
3)
2004
359 6)
70.0
4)
2004
41 6)
100.0
3)
2004
16 6)
4)
2004
– 13 6)
100.0
3)
2004
– 337 6)
Media Control ag, Zurich, Switzerland
100.0
3)
2004
35
Media Control Marketing Research España, s.l., Madrid, Spain
100.0 3)
2004
– 51 6)
mmo Media-Market-Observer GmbH, Vienna, Austria
100.0 3)
2004
41 6)
80.23)
2004
444 6)
100.0 3)
2004
0 6)
100.0
3)
2004
– 73 6)
100.0
3)
2004
GfK npd Marketing Services Worldwide b.v., Amstelveen, Netherlands
GfK Panel Arastirma Hizmetleri a.s., Istanbul, Turkey
GfK Stratégie et développement Groupement d'intérêt Economique,
Rueil-Malmaison, France
gral-iteo tržne raziskave d.o.o., Ljubljana, Slovenia
ifr Nederland b.v., Amsterdam, Netherlands
ifr u.k. Ltd., London, uk
93.5
85.1
Intomart DataCall b.v., Hilversum, Netherlands
mmxi Switzerland GmbH, Hergiswil, Switzerland
Procon GfK Ltd., Baku, Azerbaijan
ps - Martin Hamblin Limited, London, uk
Romtec-GfK Limited, Maidenhead, Berkshire, uk
0 6) 8)
Associated companies (Germany) (all details according
to hgb commercial balance sheet I)
Ernst und GfK Grundstücksgesellschaft, Nuremberg
50.0
2004
587
Associated companies (abroad)
Brand Index vof, Hilversum, Netherlands
33.3 3)
3)
5)
Caribou Lake Software, llc, Minneapolis, usa
19.9
Common Technology Centre eeig, London, uk
25.0 3)
5)
5)
Europanel Raw Database gie, Brussels, Belgium
50.0
5)
5)
50.0
5)
European Flash Surveys eeig, Brussels, Belgium
3)
GfK-Media Research Middle East ag, Hergiswil, Switzerland
49.0
i + g Infratest Medical Research Inc., Rhode Island, usa
50.0
2004
5)
2004
iha·ims Health GmbH, Hergiswil, Switzerland
50.0
2004
incoma Consult, s.r.o., Prague, Czech Republic
19.5 3)
2004
20.0
3)
38
4,917
2)
5) 8)
59 2)
5)
MarketingScan snc, Rueil-Malmaison, France
50.0
2004
Media Focus (arge), Hergiswil, Switzerland
50.0 3)
2003/2004
Media Services agb d.o.o., Ljubljana, Slovenia
21.0 3)
npd Intelect, l.l.c., Port Washington, New York, usa
5)
2)
5)
3)
Jan Schipper Compagnie b.v., Bussum, Netherlands
– 294
2)
5)
5)
2,726
2)
387 2)
5)
3)
2003/2004
14,893 6)
3)
2003/2004
311 6)
2003/2004
67 2)
2004
534 2)
25.0
org-GfK Marketing Services (India) Private Limited, Mumbai, India
40.0
Sports Tracking Europe b.v., Amstelveen, Netherlands
25.0
St. Mamet Saisie Informatique (smsi) sarl, Saint Mamet-la Salveta,
France
20.0 3)
50.0
3)
5)
5)
50.0
3)
5)
5)
50.0
3)
5)
5)
49.0 3)
5)
5)
iri Infoscan Ltd., Maidenhead, Berkshire, uk
5.84)
5)
5)
sheet II
8) In liquidation
ufo Veld b.v., Amsterdam, Netherlands
Unified Fieldwork Organisation ufo v.o.f., Amsterdam, Netherlands
v.o.f. Projectbureau Politiemonitor, Hilversum, Netherlands
Other participations (abroad)
Bureau voor Reclame Statistiek Hoofddorp b.v., Hoofddorp, Netherlands
GfK_145
AUDITORS’ REPORT
We have audited the consolidated financial statements, comprising
the balance sheet, the income statement and the statements of
changes in shareholders’ equity and cash flows as well as the
notes to the financial statements prepared by the GfK Aktiengesellschaft, Nuremberg for the business year from 1 January 2004
to 31 December 2004. The preparation and the content of the
consolidated financial statements in accordance with Accounting
Principles Generally Accepted in the United States of America
(us gaap) are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit of the consolidated financial statements
in accordance with German auditing regulations and German
generally accepted standards for the audit of financial statements
promulgated by the Institut der Wirtschaftsprüfer (idw). Those
standards require that we plan and perform the audit such that
it can be assessed with reasonable assurance whether the
consolidated financial statements are free of material misstatements.
Knowledge of the business activities and the economic and
legal environment of the Group and evaluations of possible
misstatements are taken into account in the determination of
audit procedures. The evidence supporting the amounts
and disclosures in the consolidated financial statements is
examined on a test basis within the framework of the audit.
The audit includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial
statements. We believe that our audit provides a reasonable
basis for our opinion.
146_GfK
In our opinion, the consolidated financial statements give a
true and fair view of the net assets, financial position, results of
operations and cash flows of the Group for the business year
in accordance with Accounting Principles Generally Accepted in
the United States of America.
Our audit, which also extends to the group management report
prepared by the Company’s management for the business year
from 1 January 2004 to 31 December 2004, has not led to any
reservations. In our opinion, on the whole, the group management
report provides a suitable understanding of the Group’s position
and suitably presents the risks of future development. In addition,
we confirm that the consolidated financial statements and the
group management report for the business year from 1 January
2004 to 31 December 2004 satisfy the conditions required for
the Company’s exemption from its duty to prepare consolidated
financial statements and the group management report in
accordance with German law.
kpmg Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Kozikowski
(German Public Auditor)
Renner
(German Public Auditor)
ADDITIONAL
I N F O R M AT I O N
148
150
152
V
VI
VII
VII
GfK Group: five-year overview
Glossary of financial terminology
Glossary of specialist GfK terms
List of GfK company abbreviations used in the
management report
Index
Financial calendar
Contacts
GfK_147
G f K G RO U P: F IV E -Y E A R OV E RV I E W
Financial reporting for 2000 as per hgb, from 2001 as per us gaap
2000
2001
eur million
Key indicators – balance sheet
Fixed assets
77.2
Change in % on previous year
Current assets
208.6
2001
2002
2003
2004
Change
Pro
in
forma1)
%
–
263.8
285.0
334.2
eur million
Key indicators – balance sheet
+ 17.3
Fixed assets
– 21.2
170.1
–
26.5
8.0
17.3
–
190.4
189.8
–
189.8
200.9
210.7
+ 4.9
7.4
– 0.3
–
– 0.1
5.9
4.9
–
Current assets
2)
Asset structure in %
40.6
109.9
–
139.0
141.9
158.6
+ 16.7
Asset structure in %
Investments
35.2
108.3
–
76.6
47.7
85.1
+ 78.4
Investments
23.2
31.1
–
28.6
20.9
22.8
+ 8.9
thereof in tangible assets 3)
thereof in financial assets
Equity ratio in %
Borrowings
Gearing ratio in %
Total assets
Net indebtedness
Liquidity ratio I in %
11.9
77.2
–
48.0
26.8
62.3
+ 132.7
132.7
163.1
–
181.5
204.1
248.4
+ 21.7
49.6
39.5
–
38.7
40.7
44.3
133.1
243.3
–
281.2
288.2
297.9
49.7
58.9
–
59.9
57.4
53.2
thereof in tangible assets 3)
thereof in financial assets
+ 3.62)
+ 3.4
Equity ratio in %
Borrowings
– 4.22)
Gearing ratio in %
267.6
413.1
–
469.6
502.0
560.3
+ 11.6
Total assets
–
– 23.7
–
– 39.6
– 24.9
– 31.7
+ 27.3
Net indebtedness
62.6
–
52.4
59.0
48.8
– 10.22)
2)
136.9
Liquidity ratio II in %
257.5
127.5
–
122.4
137.6
143.3
+ 5.7
Liquidity ratio III in %
268.0
131.1
–
125.2
140.1
146.1
+ 5.92)
eur million
Key indicators –
income statement
Liquidity ratio I in %
Liquidity ratio II in %
Liquidity ratio III in %
eur million
Key indicators –
income statement
Total performance (from 2001 sales)
469.0
482.1
505.8
559.4
595.3
671.7
+ 12.8
Total performance (from 2001 sales)
183.5
199.6
214.5
224.5
220.8
252.1
+ 14.2
thereof Custom Research4)
112.9
119.5
122.2
137.3
166.7
187.0
+ 12.2
thereof Retail and Technology4)
89.4
84.8
84.8
86.0
89.8
94.4
+ 5.1
thereof Consumer Tracking4)
53.6
56.5
62.6
61.3
58.3
62.2
+ 6.7
thereof Media4)
–
–
–
35.8
49.3
68.1
+ 38.1
thereof HealthCare4)
30.2
21.6
21.6
14.5
10.4
7.9
– 23.6
thereof Other4)
62.4
60.1
62.0
63.4
62.8
64.8
+ 2.02)
Proportion from outside
Germany in %
206.7
209.7
223.2
244.1
256.6
280.7
+ 9.4
Personnel expenses
44.1
43.5
44.1
43.6
43.1
41.8
– 1.32)
Depreciation/amortization
on tangible assets3)
16.6
37.0
28.2
24.9
24.8
22.0
– 11.3
ebitda
53.0
52.8
58.0
68.5
91.2
108.9
+ 19.5
thereof Custom Research4)
thereof Retail and Technology4)
4)
thereof Consumer Tracking
4)
thereof Media
thereof HealthCare4)
4)
thereof Other
Proportion from outside
Germany in %
Personnel expenses
Personnel cost ratio in %
ebitda margin in %
Personnel cost ratio in %
Depreciation/amortization
on tangible assets3)
ebitda
2)
11.3
10.9
11.5
12.2
15.3
16.2
+ 0.9
36.4
15.8
29.8
43.6
66.4
86.9
+ 30.9
ebit
3.0
3.7
2.9
6.4
3.1
4.3
+ 37.5
39.4
19.5
32.7
50.0
69.5
91.1
+ 31.2
8.4
4.0
6.5
8.9
11.7
13.6
activity
37.1
3.9
17.0
45.3
66.3
90.5
+ 36.6
Result from ongoing business
activity
25.4
– 6.1
5.5
30.0
41.1
63.5
+ 54.7
Tax ratio in %
28.0
260.3
68.7
33.7
38.0
34.3
22.9
– 4.7
6.3
25.7
33.3
52.6
ebit
ebit margin in %5)
+ 1.92)
Result from ongoing business
GfK_148
– 3.72)
+ 57.8
ebitda margin in %
ebit margin in %5)
Tax ratio in %
Five-year overview
OT H E R I N F O R M AT I O N
G f K G RO U P: F IV E -Y E A R OV E RV I E W
Financial reporting for 2000 as per hgb, from 2001 as per us gaap
2000
2001
eur million
Key indicators – funds statement
business activity
Cash flow from
investment activity
Cash flow from
financing activity
Free cash flow
2001
2002
2003
2004
Change
Pro
in
forma1)
%
eur million
Key indicators – funds statement
24.8
76.0
–
69.3
69.2
92.3
+ 33.3
business activity
– 31.1
– 104.2
–
– 73.2
– 42.7
– 83.0
+ 94.3
Cash flow from
investment activity
– 4.7
16.8
–
2.9
– 16.2
– 12.1
– 25.3
Cash flow from
financing activity
5.7
44.8
–
40.7
48.3
69.5
+ 44.0
Free cash flow
Key indicators – profitability
Key indicators – profitability
Capex as a percentage
of sales
4.1
6.5
–
5.1
3.5
3.4
– 0.12)
Capex as a percentage
of sales
Return on equity in %
19.6
– 3.3
–
14.9
17.3
23.2
+ 6.02)
Return on equity in %
Return on capital employed in %
14.5
5.7
–
11.3
14.3
17.2
+ 2.82)
Return on capital employed in %
Profit to sales ratio in %
5.4
– 1.3
–
5.4
6.9
9.5
+ 2.62)
Profit to sales ratio in %
to cash flow, in years
–
0.5
–
1.0
0.5
0.5
–
–
20.2
19.5
17.9
Pay-out ratio in %
17.0
to cash flow, in years
– 11.5
– 1.62)
Pay-out ratio in %
Key indicators –
company valuation
Key indicators –
company valuation
Earnings per share in eur 6)
Cash flow per share in eur
6)
0.73
– 0.15
0.18
1.43
0.20
0.82
1.06
1.68
+ 57.8
Earnings per share in eur 6)
–
1.30
1.54
2.22
+ 44.0
Cash flow per share in eur 6)
Gearing in %
–
14.5
–
21.8
12.2
12.7
+ 0.52)
Gearing in %
Net indebtedness in relation to:
ebit in %7)
–
150.2
–
90.8
37.5
36.5
– 1.0 2)
Net indebtedness in relation to:
ebit in %7)
ebitda in %
–
44.9
–
57.8
27.3
29.1
+ 1.8 2)
Free cash flow in %
–
52.8
–
97.2
51.5
45.6
– 5.9 2)
Dividend per share in eur 6)
0.13
0.14
–
0.17
0.217))
0.30
+ 42.9
Total dividend 6)
3.9
4.4
–
5.2
6.5
9.4
+ 44.8
Dividend yield in % 6)
Year-end share price in eur
6)
Average number of shares
(in thousand) 6)
Number of employees
at year-end
0.48
0.83
–
1.56
1.10
1.05
25.83
16.99
–
10.68
19.02
28.65
31,346
31,346
–
31,346
31,346
31,367
4,212
4,396
4,879
5,066
5,539
4,653
ebitda in %
Free cash flow in %
Dividend per share in eur 6)
Total dividend 6)
2)
– 0.05
+ 25.5
–
+ 9.3
Dividend yield in % 6)
Year-end share price in eur 6)
Average number of shares
(in thousand) 6)
Number of employees
at year-end
1) The pro forma statements for 2001 are for the purpose of comparability of the figures for 2001 with those for subsequent years.
3) On tangible and intangible assets
4) The figures for total performance (hgb) and sales (us gaap) for the business divisions are based on figures from the Management Information System.
They may differ from the figures reported in the income statement.
5) ebit after income from participations in relation to total performance until 2000 and to sales from 2001.
6) These represent adjusted values for 2000 to 2003, which result from the capital increase from company funds.
7) Before income from participations
GfK_149
GLOSSARY OF FINANCIAL TERMINOLOGY
A
D
G
Affiliated companies
Companies which are controlled by the
parent company. As a rule, the parent
company holds the majority of the voting
rights and capital of the company.
Deferred taxes
Tax assets or liabilities reported in the
balance sheet to equalize the difference
between the tax debt actually assessed
and the commercial tax burden based on
the financial reporting in accordance with
us gaap for the commercial balance
sheet. The basis for determining deferred
taxes is the difference between the value
of the assets and liabilities reported in the
balance sheet in accordance with us gaap
and the local tax balance sheet.
Gearing
Ratio of net indebtedness to shareholders’
equity.
Asset structure
The asset structure describes the
relationship between fixed assets and
current assets. It is determined by
multiplying the ratio of fixed assets to
current assets by 100.
Associated companies
Minority participations in companies
on whose business or company policy a
decisive, but not controlling influence is
exercised. Associated companies are in
principle valued at equity.
C
Cash flow
Balance of funds inflow and outflow
affecting payment.
Cost of sales
All types of operating costs which can be
directly allocated to clients’ orders. These
include in particular costs for external data
procurement, and costs for interviewees
and interviewers.
Cost of sales accounting
Form of income statement which shows
the income achieved in the market during
the accounting period. Opposite: total
cost accounting. Here the total operating
income for the period is shown, whereby
the sales and changes in inventories are
shown against the total cost. Both forms of
accounting produce the same income for
the accounting period.
Current assets
Assets intended for short-term use in
business operations.
Dividend yield
Dividend per share in relation to the
annual closing price.
E
ebit
Abbreviation for earnings before interest
and taxes calculated as operating
income plus other income less other
expenses.
ebitda
Earnings before interest, taxes, depreciation
and amortization, calculated as ebit plus
depreciation and amortization charges.
ebit margin
ebit in relation to sales. The higher the
indicator, the higher the earnings power.
Equity ratio
Balance sheet equity in relation to total
assets. The higher the indicator, the lower
the level of indebtedness.
F
Fixed assets
Assets intended for ongoing use in business
operations.
Free cash flow
Cash flow from ongoing business activity
less capex.
Free float
Free float is the portion of shares in a joint
stock company measured in terms of the
total number of shares issued, which is
not held by major shareholders. At GfK,
36 % of the share capital is in free float.
150_GfK
Goodwill
Intangible business asset that represents
the value of the existing organization,
its image, client base etc. at the time of
acquisition of a company. Calculation:
purchase price of the company less pro
rata net worth.
Gross income from sales
Sales less cost of sales.
I
Income from participations
Contains the items income from participations, profits and losses on the
disposal of participations and depreciation
on participations.
L
Liquidity ratio I
Financial resources and securities held
as current assets in relation to short-term
liabilities.
Liquidity ratio II
Total from financial resources, securities
held as current assets and short-term
receivables and assets in relation to
the total from short-term liabilities and
liabilities from work in progress.
Liquidity level III
Current assets in relation to the total from
short-term liabilities and liabilities from
work in progress.
M
Majority participations
Affiliated companies
Minority participations
Generic term for associated companies
and other participations. The participation
quota is below 50 %.
Glossaries
N
Net indebtedness
Financial resources and securities held as
current assets less pension liabilities and
financial liabilities.
Net interest income
Interest income less interest expenses.
This item includes interest income and
expenses on bank credits and liabilities,
loans, securities, liabilities under leases
and other accounts receivable and
payable.
O
Operating income
Gross income from sales less sales
and general administrative expenses.
Operating profit
Sales less operating costs according to the
Management Information System. The
most important internal income indicator.
Other expenses
Expenses in connection with ongoing
business activity, excluding financial
expenses not attributable to cost of
sales or sales and general administrative
expenses. Examples are losses from the
disposal of fixed assets and exchange
losses.
Other financial income
Financial income which is not attributable
to income from participations or net
interest income. Examples are profits or
losses on the disposal of securities and
write-downs on loans.
Other income
Income from ongoing business activity,
excluding financial income, which does
not represent sales. Examples are profits
on the disposal of fixed assets and
exchange gains.
Profit to sales ratio
Consolidated total income before minority
interests in relation to sales.
R
Ratio of net indebtedness to cash flow
Net indebtedness in relation to free cash
flow.
Return on equity
Consolidated total income in relation to
average shareholders’ equity.
S
Sales and general administrative
expenses
Operating costs which are not directly
related to individual client orders such as
costs for general marketing measures and
for accounting.
Stock option programme
Profit-sharing programme for managers,
whereby managers waive variable salary
components and instead receive options.
Options can be exercised at the earliest
after two years within set periods. In order
for options to be received, the managers
entitled must achieve individually agreed
targets.
T
Tax rate
Taxes on income and earnings in relation
to income from ongoing business activity.
ebit after income from participations in
relation to average total assets.
U
us gaap
Abbreviation for United States Generally
Accepted Accounting Principles.
Other participations
Companies in which a participation is held
but on whose business policy no decisive
influence is exercised. The participation
quota is below 20 %.
P
Pay-out ratio
Total dividend in relation to consolidated
total income.
GfK_151
GLOSSARY OF SPECIALIST GfK TERMS
A
Ad Hoc Research
Custom Research.
Advertising effectiveness research
Analysis of the success of an advertising
measure in terms of brand awareness,
advertising recall and, in the case of
recalled elements, media-specific
advertising recall and attitudes towards
the advertised product.
Advertising test
Testing of ads, commercials and other
advertising media before or after they are
published or shown.
agf – Television Research Partnership
The body for which GfK Fernsehforschung
carries out continuous television audience
research ( tv panel) in Germany.
Founded in 1988, the agf now comprises
the tv networks ard, ProSiebensat.1
Media ag, rtl and zdf.
aTRACKtive
A software package used to carry out standard and one-off analyses of data from the
consumer panel ConsumerScan.
aTRACKtive*web is the Internet-compatible
version of aTRACKtive, giving clients and
employees anywhere in the world access
to the ConsumerScan databases at any
time.
B
Brand and campaign controlling
Standard instrument for the continuous
measurement of the advertising
effectiveness of campaigns, generally
broken down into advertising resonance,
advertising recall, brand awareness,
ad awareness, recall of advertising details
for individual brands, slogans, images etc.
Advertising effectiveness research.
Brand Equity Monitor
Instrument used to assess and monitor
brand value.
152_GfK
Brand Simulator
A model based on consumer panel data,
used to optimize the marketing mix.
C
Car clinics
A method used to evaluate cars, e. g. prototypes and accessories, prior to or just after
market launch by asking drivers to assess
these in a competitive market environment.
Category Management
A concept whereby manufacturers and
retailers set joint marketing targets and
develop strategies for a particular product
category and then endeavour to realize
these. The aim is to increase sales and
income. CatmanGuide.
CatmanGuide
System of services for Category
Management of fast moving consumer
goods.
Communication research
Surveys and tests used to assess the
effectiveness and impact of advertising
and marketing communication.
Concept Challenger
Concept test against competitive brands
with market share forecasts.
Concept test, concept test research
Tools used to assess acceptance of a new
product or advertising campaign based on
a verbal description or picture, carried out
before a product test.
Conjoint analysis
The latest statistical analysis method.
Consumer panel
A sample of households which provide
regular information on their purchases.
ConsumerScope ConsumerScan
aTRACKtive.
ConsumerScan
Consumer panel in which the purchasing
behaviour of households and individuals
is recorded. Covers purchases of nearly
all fast moving consumer goods. Panel
household panel aTRACKtive.
ConsumerScope
Mail panel, carrying out continuous surveys of purchases of consumer goods with
slower-moving acquisition cycles and the
use of services. Consumer panel.
Consumer Tracking
A survey of households and individual
consumers that is repeated at regular
intervals: Consumer Tracking is one of
GfK’s business divisions. Tracking
panel household panel.
Customer segmentation
Market segmentation.
Custom Research
Systematic, empirical research used as the
basis for marketing decisions. Custom
Research is one of GfK’s business divisions
(formerly Ad Hoc Research).
D
Data merging
A statistical process whereby the features
of subjects in one sample are transferred
to those in another sample. Single
source.
H
HealthCare
Specialist area of market research for
pharmaceutical companies and companies
in the healthcare sector operating in
human, dental and veterinary medicine.
HealthCare has been a GfK business
division since August 2003.
Household panel
A representative sample of households
which regularly report on their purchases.
Consumer Tracking ConsumerScan
panel
I
Image and brand research
Information gathering relating to the
image of a company or specific product
or service.
Glossaries
M
P
Mail panel
A postal survey of units of the same
sample which is repeated at regular
intervals. ConsumerScope.
Panel
A survey of individuals, households,
companies etc. to obtain data on a
single subject at regular intervals over a
longer period, using the same sample
and carried out using the same methods
each time tv panel ConsumerScan
ConsumerScope household panel
tracking.
Marketing mix
Specific combination of marketing tools and
individual campaign parameters derived
from product, distribution, contractual and
communications policy.
Market segmentation
Division of an overall market into
sub-markets using different categories.
Segmentation can be by product type,
price classes, geographic split or
socio-economic lifestyle features and
value categories.
Media planning
Media planning involves decisions
about what advertising media to use
in marketing communication by
selecting the media that best match
the intended marketing aims and
creating the optimum mix based on
the use of different techniques. The aim
of all media planning is to find the ideal
solution for one or more communication
aims.
Media research
Systematic, empirical research used as a
basis for media planning by media companies and their advertising clients. This
form of research is the responsibility of
GfK’s Media business division. Reach
reach research Radiocontrol.
MediaWatch
An electronic metering device incorporated
into a wristwatch, used to measure usage
of various electronic and print media.
Radiocontrol reach research
media research portable people
meter.
Multivariate analysis
Method which is used to analyze a
minimum of three features (variables)
at the same time.
Portable people meter
Metering devices which are used in
reach research and worn at all times.
A typical portable people meter is
Radiocontrol.
Pre-concept clinics
Car clinics
PriceChallenger
International price simulation model,
which is used to quantify consumer
response to changes in prices.
Price test, price test research
Tests used in establishing the optimum
price. PriceChallenger.
ProductChallenger Volumetric
Test used to estimate the potential sales
volume of new products in relation to
price.
Product test, product test research
Concept test, concept research
R
Radiocontrol
Electronic meter, incorporated into a
wristwatch, that measures radio listening.
Reach reach research media
research portable people meter.
Radio research
Measuring the listening habits of radio
listeners. Radiocontrol.
Reach
The percentage of the total population
or a specific target group reached by
a medium. A central concept in media
planning and media research. Reach
research tv panel Radiocontrol.
Business division which provides retail
information about consumer technology
markets. Formerly Non-Food Tracking.
retail tracking retail panel
startrack.
Retail panel
Regular recording of sales, product
categories and products via a
representative sample of retailers with
different retail types and sales channels
Retail tracking.
Retail tracking, retail research
Continuous, systematic monitoring of
sales in the markets of consumer
technology goods and services. These
product movements are recorded in all
relevant sales channels and distribution
forms in the retail trade. Retail panel.
S
Sample
The observation data and/or survey units
which are selected from all of the units
and included in a specific survey.
ScanIT
Pen scanner used to record purchases.
Segmentation
Market segmentation.
Single source
Survey to gather information about
various behavioural aspects using the
same sample.
startrack
SysTem to Analyse and Report on
tracking data. A host-free it platform
for the production and analysis of data
from the GfK Retail and Technology
division. Data warehouse.
Store test
Test carried out in selected, real stores to
make subsequent recommendations for
new products, product changes and other
measures such as placement, promotion
and price changes. The test includes
measuring unit sales.
Reach research
The continuous recording of media usage;
part of media research. Reach
portable people meter Radiocontrol.
GfK_153
T
Telecontrol xl
The latest generation of tv meters
produced by GfK subsidiary, Telecontrol.
Tracking
Surveys of individuals, households and
companies, repeated at regular intervals
and using the same interview method
each time. Unlike a panel, the data is
not necessarily collected from the same
sources each time, but the structure of
the sample is the same in each case.
Consumer Tracking retail tracking.
tv meter
An electronic instrument that measures
a person’s tv viewing at regular intervals;
in Germany and Austria this is done on
a second-by-second basis. tv panel
Telecontrol xl.
tv panel
A representative group of households
whose tv viewing is continuously
metered by GfK Fernsehforschung and
used as the basis for audience share and
ratings figures. tv meter reach panel.
154_GfK
27.04.2005
19:16 Uhr
Seite 1
B
success.
Germany.
OUR PEOPLE
C
market.
usa.
F
Fessel-GfK, Austria
G
GfK arbor usa
GfK Asia, Singapore
Change
I N N O VAT I O N
671.7
+ 12.8
ebitda
in eur million
91.2
108.9
+ 19.5
2)
Tax rate
business.
in eur million
66.4
86.9
+ 30.9
in eur million
69.5
91.1
+ 31.2
in %
11.7
13.6
+ 1.9 3)
in eur million
41.1
63.5
+ 54.7
in %
38.0
34.3
–
in eur million
33.3
52.6
+ 57.8
Earnings per share
in eur
1.06
1.68
+ 57.8
Dividend per share
in eur
0.214)
0.305)
+ 42.9
GROWTH
business activity
in eur million
Investment
92.3
+ 33.3
in eur million
47.7
85.1
+ 78.4
in %
17.3
23.2
+ 6.0 3)
in %
14.3
17.2
+ 2.8 3)
Sales return
in eur million
6.9
9.5
+ 2.6 3)
Net indebtedness
in eur million
– 24.9
– 31.7
+ 27.3
in years
0.5
0.5
– 11.5
44.3
+ 3.6
3)
+ 0.5
3)
Gearing
1)
2)
3)
4)
5)
IV
69.2
Return on equity
to cash flow
III
in %
595.3
ebit after income
from participations
2004
in eur million
Margin
2003
Sales
ebit before income
from participations
in %
40.7
INDEX
in %
12.2
12.7
full-time
5,066
5,539
Percentage points
+ 9.3
Herzegovina
Herzegovina.
Germany
Germany.
usa.
Belgium
Brussels, Belgium.
Nuremberg, Germany.
Services, Germany.
Valencia, Spain.
Greece.
Australia
Sydney, Australia.
Germany.
GfK Media, uk
GfK MS Chile, Chile
Santiago, Chile.
Brazil.
Netherlands
Netherlands.
GfK Rus, Russia
Russia.
GfK-usm, Ukraine
Germany
methods
I
ifr GfK, France
Ad Hoc Research
see Custom Research
ifr Group, France
Viroflay, France
Netherlands
Switzerland
Switzerland
62ff., 69, 94f., 136 America
IV, 12, 84, 148 Margin
3, 92, 108, 135 Media
income
Non-Food Tracking
2f., 87ff., 105f., 108,
See also
Cash flow
activity
statements:
Consolidation
134 Contingencies
2f., 84, 87ff., 92ff.,
administration
V Pay-out ratio
profits
86, 111, 118f., 130f. Provisions
100, 107 Purchasing
cash flow
92ff., 136 Regions
Germany
Nuremberg, Germany.
Switzerland.
Return, see Margin
101ff. Risk report
IV, 84, 110, 116f., 148 Sales
Segment report,
Regions
IV, 13, 25, 130, 148 Dividend
ebit
participations
participations
IRI/GfK, Germany
Nuremberg, Germany.
12, 21ff.
IV, 23, 110, 124, 149
23, 149
22f.
Shares
Earnings per share
Key indicators
85, 111, 113, 118,
127f., 148, IV
85, 148
IV, 149
equity
Equity ratio
RoE
IV, 84, 110, 148 ebitda
M
ebit margin
see Margin
m2a, France
IV, 97f., 106, 138, 149 Employees
Germany
85, 111, 114f., 150 Fixed assets
86, 112, 119, 133, 149 Funds statement
IV, 86, 149 Gearing
T
30ff., 37, 92f., 136 Germany
117, 125 Goodwill
3, 90f., 105, 135, 148 HealthCare
business activity
V
v2 GfK, usa
statement
V
regions
Staff
see Employees
earnings
Europe
VI
27.04.2005
19:16 Uhr
Seite 1
B
success.
Germany.
OUR PEOPLE
C
market.
usa.
F
Fessel-GfK, Austria
G
GfK arbor usa
GfK Asia, Singapore
Change
I N N O VAT I O N
671.7
+ 12.8
ebitda
in eur million
91.2
108.9
+ 19.5
2)
Tax rate
business.
in eur million
66.4
86.9
+ 30.9
in eur million
69.5
91.1
+ 31.2
in %
11.7
13.6
+ 1.9 3)
in eur million
41.1
63.5
+ 54.7
in %
38.0
34.3
–
in eur million
33.3
52.6
+ 57.8
Earnings per share
in eur
1.06
1.68
+ 57.8
Dividend per share
in eur
0.214)
0.305)
+ 42.9
GROWTH
business activity
in eur million
69.2
92.3
+ 33.3
Investment
in eur million
47.7
85.1
+ 78.4
Return on equity
in %
17.3
23.2
+ 6.0 3)
in %
14.3
17.2
+ 2.8 3)
Sales return
in eur million
6.9
9.5
+ 2.6 3)
Net indebtedness
in eur million
– 24.9
– 31.7
+ 27.3
in years
0.5
0.5
– 11.5
44.3
+ 3.6
3)
+ 0.5
3)
to cash flow
Gearing
1)
2)
3)
4)
5)
III
in %
595.3
ebit after income
from participations
2004
in eur million
Margin
2003
Sales
ebit before income
from participations
IV
in %
40.7
INDEX
in %
12.2
12.7
full-time
5,066
5,539
Percentage points
+ 9.3
Herzegovina
Herzegovina.
Germany
Germany.
usa.
Belgium
Brussels, Belgium.
Nuremberg, Germany.
Services, Germany.
Valencia, Spain.
Greece.
Australia
Sydney, Australia.
Germany.
GfK Media, uk
GfK MS Chile, Chile
Santiago, Chile.
Brazil.
Netherlands
Netherlands.
GfK Rus, Russia
Russia.
GfK-usm, Ukraine
Germany
methods
I
ifr GfK, France
Ad Hoc Research
see Custom Research
ifr Group, France
Viroflay, France
Netherlands
Switzerland
Switzerland
62ff., 69, 94f., 136 America
IV, 12, 84, 148 Margin
3, 92, 108, 135 Media
income
Non-Food Tracking
2f., 87ff., 105f., 108,
See also
Cash flow
activity
statements:
Consolidation
134 Contingencies
2f., 84, 87ff., 92ff.,
administration
V Pay-out ratio
profits
86, 111, 118f., 130f. Provisions
100, 107 Purchasing
cash flow
92ff., 136 Regions
Germany
Nuremberg, Germany.
Switzerland.
Return, see Margin
101ff. Risk report
IV, 84, 110, 116f., 148 Sales
Segment report,
Regions
IV, 13, 25, 130, 148 Dividend
ebit
participations
participations
IRI/GfK, Germany
Nuremberg, Germany.
12, 21ff.
IV, 23, 110, 124, 149
23, 149
22f.
IV, 84, 110, 148 ebitda
M
ebit margin
see Margin
m2a, France
IV, 97f., 106, 138, 149 Employees
Germany
85, 111, 114f., 150 Fixed assets
86, 112, 119, 133, 149 Funds statement
IV, 86, 149 Gearing
T
30ff., 37, 92f., 136 Germany
117, 125 Goodwill
3, 90f., 105, 135, 148 HealthCare
business activity
V
v2 GfK, usa
statement
V
Shares
Earnings per share
Key indicators
85, 111, 113, 118,
127f., 148, IV
85, 148
IV, 149
equity
Equity ratio
RoE
regions
Staff
see Employees
earnings
Europe
VI
27.04.2005
19:22 Uhr
Seite 1
CONTENTS
11 April 2005
11 April 2005
13 May 2005
24 May 2005
12 August 2005
15 November 2005
28 February 2006
11 April 2006
11 April 2006
15 May 2006
21 GfK shares
23 May 2006
14 August 2006
14 November 2006
decision-making
4 2004 at a glance
local knowledge
30 Germany
C O N TA CT S
please contact:
Tel. +49 (0) 911 - 395 26 45
Fax +49 (0) 911 - 395 40 41
[email protected]
Investor Relations
Bernhard Wolf
Tel. +49 (0) 911 - 395 20 12
Fax +49 (0) 911 - 395 40 75
[email protected]
Publisher:
GfK ag
Nordwestring 101
D-90319 Nuremberg
http://www.gfk.de
Design:
Frankfurt/Main
Photography:
Lithography:
Translation:
Printing:
46 Northern Europe
62 America
Annual Report 2004
150 Glossaries
management report
VI Index
VII Contacts
VII
II
27.04.2005
19:22 Uhr
Seite 1
CONTENTS
11 April 2005
11 April 2005
13 May 2005
24 May 2005
12 August 2005
15 November 2005
28 February 2006
11 April 2006
11 April 2006
15 May 2006
21 GfK shares
23 May 2006
14 August 2006
14 November 2006
decision-making
4 2004 at a glance
local knowledge
30 Germany
C O N TA CT S
please contact:
Tel. +49 (0) 911 - 395 26 45
Fax +49 (0) 911 - 395 40 41
[email protected]
Investor Relations
Bernhard Wolf
Tel. +49 (0) 911 - 395 20 12
Fax +49 (0) 911 - 395 40 75
[email protected]
Publisher:
GfK ag
Nordwestring 101
D-90319 Nuremberg
http://www.gfk.de
Design:
Frankfurt/Main
Photography:
Lithography:
Translation:
Printing:
46 Northern Europe
62 America
Annual Report 2004
150 Glossaries
management report
VI Index
VII Contacts
VII
II

sights set on global markets

Transcription

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