GfK. Growth from Knowledge

Transcription

CONTENTS
Th e G f K G R O U P: A N N U A L R E P O R T 2 0 0 2
K N O W L E D G E : T H E G AT E WAY T O
CUSTOMERS AND CONSUMERS
C2* The GfK Group, business divisions and regional
presence
1 Aims and strategies, highlights 2002, mission
statement
2
Members of the Supervisory Board
Report by the Supervisory Board
6 Foreword by the Chief Executive Officer:
To our shareholders and business associates
9 Renewing our core message “GfK. Growth from
Knowledge”
12
Overview of 2002
The GfK Group. Annual Report 2002
14 GfK special: the market research industry and
GfK business divisions
Knowledge: the gateway to customers and
consumers
52 GfK shares – Investor Relations:
Difficult year for GfK shareholders
58
The Management Board
* Cover pages are marked with “C”
MANAGEMENT REPORT AND FINANCIAL
S TAT E M E N T S F O R T H E G f K G R O U P
61 Management report
89 Financial statements
94 Notes to the consolidated financial statements
127 Auditors’ report
Annual Report 2002 GfK. Growth from Knowledge
Knowledge: the gateway to customers and consumers
A D D I T I O N A L I N F O R M AT I O N
129
134
C3
C3
C4
Glossaries and abbreviations
Contacts
The GfK Group: five-year overview
Index
Financial terms
THE GfK GROUP, BUSINESS DIVISIONS
Information services in four business divisions
AND REGIONAL PRESENCE
CONSUMER TRACKING
Through its Consumer Tracking division, GfK provides
clients in 24 countries throughout Europe with
information services based on continuous surveys
and analyses of consumer purchasing decisions and
behaviour. These cover consumer goods and services
of all kinds.
Established almost 70 years ago as Germany’s first market research company, with more than
120 subsidiaries, offices and participations in over 50 countries on five continents, the GfK Group
is one of the leading market research organizations. Ranked No. 1 in Germany and No. 5 in the
world, the Group employed almost 4,900 people at the end of financial year 2002, over 70 per cent
of whom are based outside Germany.
We provide clients from industry, retail, the service sector and the media with information
services, which they use for their marketing to existing and potential clients as well as
to distinguish themselves from the competition. As a company with a long tradition, we are
NON-FOOD TRACKING
careful to maintain in our work the continuity that comes with decades of success in the business.
Through its Non-Food Tracking division, GfK
provides clients in industry and retail in 44 countries
around the world with information services derived
from continuous retail sales analyses and surveys on
consumer technology markets.
At the same time, we use innovation and progress to drive our activities.
The GfK Group – worldwide presence
MEDIA
Through its Media division, GfK provides clients in
20 countries throughout Europe with information
services on the 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 new online and
offline media.
AD HOC RESEARCH
Through its Ad Hoc Research division, GfK
provides clients in 29 countries around the world
and via partnerships in another 61 countries with
information services for their operational and strategic
marketing decisions. These include tests and surveys
on product and pricing policy, brand management,
communication, distribution and customer loyalty.
Northern Europe
Denmark, Finland, Ireland, Norway, Sweden, UK
Western and
Southern Europe
Germany, Austria, Belgium, Cyprus, France, Greece, Italy,
Netherlands, Portugal, Spain, Switzerland
Central and
Eastern Europe
Azerbaijan, Bulgaria, Croatia, Czech Republic, Hungary, Poland,
Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia,
Turkey, Ukraine
Asia and
the Pacific
Australia, China, Hong Kong, India, Indonesia, Japan, Korea,
Malaysia, New Zealand, Singapore, Taiwan, Thailand, Vietnam
America
Brazil, Canada, Mexico, USA
Middle East
and Africa
Egypt, Iran, Saudi Arabia, South Africa, United Arab Emirates
Sales by regions, 20021)
7%
Sales by business division, 20021)
5%
5%
In %
In EUR m
15 %
86.0
Non-Food Tracking
25 %
137.3
Media
11 %
61.3
Ad Hoc Research
44 %
246.3
5%
28.5
100 %
559.4
5%
15 %
44 %
25 %
Consumer Tracking
35 %
Other
11%
37 %
Total
1) Rounding differences possible
11 %
In %
In EUR m
Germany
37
204.7
Northern Europe
11
59.1
Western and
Southern Europe
35
196.7
Central and
Eastern Europe
5
28.5
America
7
40.4
Asia and the Pacific
5
30.1
100
559.4
Total
1) Rounding differences possible
INDEX
THE GfK GOUP: FIVE-YEAR OVERVIEW
Accounting as per HGB (German Commercial Code)
19991)
2000
Accounting as per US GAAP
Income
statement
1998
2001
2001
Total performance
309.2
380.4
469.0
482.1
505.8
thereof Consumer Tracking3)
60.9
82.4
89.4
84.8
84.8
thereof Non-Food Tracking3)
91.1
100.9
112.9
119.5
122.2
2002
in %2)
Income
statement
559.4
+ 10.6
Sales
86.0
+ 1.4
thereof Consumer Tracking3)
137.3
+ 12.4
thereof Non-Food Tracking3)
Pro
Change
forma
thereof Media3)
thereof Ad Hoc Research3)
thereof Other3)
Proportion from outside Germany in %
Personnel expenses
Depreciation and amortization4)
40.5
47.9
53.6
56.5
62.6
61.3
– 2.1
101.8
128.4
183.5
199.6
214.5
246.3
+ 14.8
17.6
21.4
30.2
21.6
21.6
28.5
+ 31.8
49.5
56.9
62.4
60.1
62.0
63.4
131.9
166.9
206.7
209.7
223.2
244.1
+ 9.4
18.1
20.5
16.6
37.0
28.2
24.9
– 11.7
–
thereof Media3)
thereof Ad Hoc Research3)
thereof Other3)
Proportion from outside Ger in %
Personnel expenses
Depreciation and amortization
Gross cash flow
30.4
33.7
50.1
44.8
–
40.7
– 9.2
EBITDA
34.5
44.1
53.0
52.8
58.0
68.5
+ 18.2
EBITDA
EBIT
16.4
23.6
36.4
15.8
29.8
43.6
+ 46.6
EBIT
1.7
3.2
3.0
3.7
2.9
6.4
+119.6
Net income from participations
17.0
27.1
37.1
3.9
17.0
45.3
+ 165.9
10.7
13.7
25.4
– 6.1
5.5
30.0
+ 449.6
Fixed assets
75.6
97.9
77.2
208.6
–
263.8
+ 26.5
Fixed assets
Investments
54.5
44.3
35.2
108.3
–
76.6
– 29.3
Investments
45.2
39.2
23.2
31.1
–
28.6
– 8.1
9.3
5.2
11.9
77.2
–
48.0
– 37.8
Current assets
92.7
89.1
190.4
189.8
–
189.8
– 0.1
Shareholders’ equity
51.8
55.6
132.7
163.1
–
181.5
+ 11.3
Capital ratio in %
30.8
29.7
49.6
39.5
–
38.7
Borrowings5)
114.3
129.7
133.1
243.3
–
281.2
+ 15.6
Borrowings5)
Total assets
168.3
187.0
267.6
413.1
–
469.6
+ 13.7
Total assets
5.3
6.2
7.8
3.3
5.9
7.8
–
participations in %
5.9
7.0
8.4
4.0
6.5
8.9
–
Earnings per share in EUR
0.54
0.33
0.88
– 0.18
0.24
0.98
– 2.9
–
Result from ongoing
business activity
Result from ongoing
Consolidated total income
before minority interests
thereof in financial assets
–
Dividend per share in EUR
25.2
0.08/0.10
1.3
Year-end share price in EUR
–
13.0
0.13
16.5
0.15
0.17
–
14.9
+ 308.3
–
Capital ratio in %
EBIT margin in %
participations in %
Return on equity in %
0.20
+ 17.6
Dividend per share in EUR
3.4
3.9
4.4
–
5.2
+ 17.6
Total dividend
40.00
31.00
20.39
–
12.81
– 37.2
Year-end share price in EUR
20,000
21,122
26,122
26,122
–
26,122
0.0
3,111
3,676
4,212
4,396
4,653
4,879
+ 4.9
Average no. of shares
No. of employees at year-end
thereof in financial assets
Current assets
EBIT margin after income from
Total dividend
(in thousands)
thereof in tangible fixed assets
Key indicators
EBIT margin after income from
Return on equity in %
Balance sheet
Key indicators
EBIT margin in %
business activity
Balance sheet
thereof in tangible fixed assets
Free cash flow
Average no. of shares
(in thousands)
No. of employees at year-end
1) Excl. Initial Public Offering (IPO)
2) Comparison with pro forma figure
3) The figures for total performance (HGB) and sales (US GAAP) for the business divisions are based on figures from the internal Management Information System.
They differ slightly from the figures reported in the financial statements.
4) On tangible fixed assets and intangible assets
5) Provisions, liabilities and minority interests
94 ff. Accounting and
valuation methods
Acquisitions
Ad Hoc Research
Affiliated companies
Associated companies
Balance sheet
Balance sheet, notes to
Cash flow from ongoing
business activity
67, C3 Free cash flow
114 f. Consolidated financial
statements
65, 90, C3 Consolidated total
income before minority
interests
67, 92 Consolidated funds
statement
22 ff., 25, 68, 85 Consumer Tracking
113 Contingencies
4, 34, 85, 121 Corporate Governance
66, 91 Current assets
94 Currency conversion
66, 91, 101 f. Deferred taxes
56, 110, C3 Dividend
53, 80, 95, 103, C3 Earnings per share
65, 85, 90, C3 EBIT
65, 85, 90, C3 EBIT after income from
participations
65, C3 EBITDA
65, 85, 90 C3 EBITDA after income
from participations
65, 85, 90, C3 EBIT margin
80 ff., 85, 118, C3 Employees
67, 84 Financing
66, 91, 104 f. Fixed assets
95, 104 Goodwill
65, 90, 100, C3 Net income from
participations
65, 90 Income statement
100 ff. Income statement,
notes to
57 Investor Relations
67 f., 84, C3 Investment
65 f., 86, 98
46 ff., 49, 70 f., 86, 114
117, 122 ff.
99, 118, 125
66, 91, 114 f.
68 ff., 85 f., 103, 114
67, 92, C3
58 f, 82, 121 Management Board
Margin, see EBIT margin
Media
Consolidation, methods of
Consolidation, scope of
Net indebtedness
Net interest income
Non-Food Tracking
Operating income
Organic growth
Organization and
administration
65, 90 Other operating
expenses
65, 90 Other operating income
111, 116 Other provisions
114 f. Pro forma statement
110 Proposed appropriation
of profits
110 Provisions
82, 85 Purchasing
72 ff., 114 Regions
78, 85 Research and
development
65 f. Result from ongoing
business activity
76 ff. Risk report
64, 90, 92, 112 Sales
114 Segment reporting
66, 91, 93, 108 ff., C3 Shareholders’ equity
66, 91, C3 Equity ratio
C3 RoE
54 f. Shareholder structure
122 ff. Shareholdings
52 ff. Share price performance
52 ff., 90, 95, Shares, earnings per
103, C3
67 Soft facts
56, 95, 109 Stock options
1, 85 f. Strategy
2 ff., 119 ff. Supervisory Board
65, 90, 101 f. Taxes on income and
earnings
66, 91 Total assets
38 ff., 43, 70, 86
94
98, 117
67
90, 101
30 ff., 33, 69 f., 86
68 ff., 85 f.
68
82, 85
Aims and strategies, highlights 2002, mission statement
THE GfK GROUP
HIGHLIGHTS 2002
The GfK Group: number 5
in the market research industry worldwide
+
CONVINCING
C O R P O R AT E VA L U E S
• Client focus
• Our people
• Innovation
• Global expertise –
local knowledge
• Growth
+
AMBITIOUS AIMS
• The GfK Group increased its sales in 2002 by 10.6 per
cent to EUR 559.4 million, making it the number 5 in
the market research industry worldwide.
• There was an over-proportional increase in EBIT including
income from participations, which rose 53.1 per cent
to EUR 50.0 million. The EBIT margin after income
from participations also improved from 6.5 per cent to
8.9 per cent.
• Organic growth amounted to 3.5 per cent. GfK has again
outperformed the market research sector.
• GfK continued to expand its network in 2002, in particular
in Europe and Asia and the Pacific as well as in its
healthcare activities.
• Outperform sector sales growth
• Achieve attractive margins
• Lead the way through innovation
• Focus on customer loyalty
+
C L E A R S T R AT E G I E S
• Expansion in selected markets
• Excellence in added value services and
consultancy
• Leverage of our unique expertise in
M I S S I O N S TAT E M E N T
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.
consumer, healthcare, media and
retail markets
• Long-term investment in most advanced
technologies and Internet applications
=
Growth from Knowledge
1
THE SUPERVISORY BOARD
Peter Zühlsdorff
Dr. Wolfgang C. Berndt
Since 13 June 2002
Chairman of the Supervisory Board
Member of the Board of Directors,
Managing Director,
Cadbury Schweppes
Tengelmann Warenhandelsgesellschaft,
PLC, London, UK
Mülheim/Ruhr
Member of Österreichische Werbewissenschaftliche
Gesellschaft, Vienna, Austria
Managing Partner of DIH –
Deutsche Industrie Holding GmbH
Peter Danzl
Independent Works Council representative
at GfK Aktiengesellschaft
Helga Haub
2
Until 13 June 2002
Advisor to the sole Managing
Partner of Tengelmann
Warenhandelsgesellschaft, Wiesbaden
Klaus Hehl
Deputy Chairman of the Supervisory Board
Hans-Jürgen Kunert
Robert Raeber
Chairman of the CIAA (Confederation of the Food
and Drink Industries of the EU)
Hayo Riesenbeck
Since 13 June 2002
Director of McKinsey & Company,
Düsseldorf office
Dr. Karl Gerhard Schmidt
Until 13 June 2002
Chairman of the Supervisory Boards of
Greiffenberger AG, Marktredwitz, and Strenesse AG,
Nördlingen
Dieter Wilbois
Senior Specialist Software Development
Elmar Wohlgensinger
President of the Board of Administration of the
IHA Institut für Marktanalysen AG, Hergiswil,
Switzerland
THE GfK GROUP
REPORT
BY THE SUPERVISORY BOARD
In financial year 2002, 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.
In addition, at the five meetings of the Supervisory Board, individual topics were
discussed in depth. The main topics here were the strategic direction of the
GfK Group and its international acquisitions activity, discussion and approval
of the annual accounts for 2002, as well as discussion and approval of the
budget for financial year 2003.
The Supervisory Board also dealt with the status of and further implementation
of the GfK Group’s risk management system. The discussion and implementation
of corporate governance rules were also high on the agenda.
During the financial year, the Chairman of the Supervisory Board was in constant
contact with the Management Board.
The work of the Supervisory Board was supported by the Finance Committee
and Personnel Committee.
The Finance Committee, which held four meetings in 2002, 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 as well as the further development of the risk
management system and internal auditing. Other main topics were questions
pertaining to the accounting system and interim reporting for the company.
The Personnel Committee also met four times and mainly deal with the
remuneration of the Management Board and questions relating to contract
extensions for the Management Board, as well as discussing the GfK Group’s
personnel strategy.
In a difficult economic environment, the GfK Group continued its targeted global
expansion through strong organic growth and acquisitions during financial
year 2002. The expansion of its network of holdings was in line with the
Group’s strategy as developed by the Management Board and approved by
the Supervisory Board. At the end of financial year 2002, the Supervisory Board
noted that as number five in the top ten competitors in its field, the GfK Group
is in a good position.
3
4
At the Annual General Meeting on 13 June 2002, Helga Haub and Dr. Karl Gerhard
Schmidt resigned from the Supervisory Board at their own request. The Supervisory
Board would like to thank them for the many years’ of dedicated commitment to
the interests of the GfK Group. At the proposal of the Supervisory Board, the
Annual General Meeting appointed Dr. Wolfgang C. Berndt and Hayo Riesenbeck
to the Supervisory Board. The GfK Supervisory Board therefore benefits again
from two experts with many years of experience in industry and consulting. The
term of office for the new members shall run until the end of the Annual General
Meeting which approves the actions of the Supervisory Board for financial year
2005. During the last financial year, the Supervisory Board extended the contract
with Dr. Gérard Hermet, who is responsible for the Non-Food Tracking division,
in advance for a further five years until 31 December 2008.
In accordance with the resolution of the Management Board in its meeting on
9 December 2002, the Supervisory Board resolved on 19 December 2002 to
implement the recommendations of the Government Commission German
Corporate Governance Code with three deviations. GfK has issued a declaration
of compliance pursuant to § 161 of the German Stock Corporation Act (AktG),
which is published on the website at www.gfk.com.
The deviations are as follows:
The owners of the company passed a resolution on authorized capital at the
Annual General Meeting on 13 June 2002 with a 98 per cent majority, which
also included the exclusion of shareholder subscription rights. There are strict
limits to this exclusion. The authorization is intended to give the Management
Board the required flexibility to rapidly implement decisions for the good of
the company and the owners.
GfK is refraining from giving details of individual Supervisory Board and
Management Board remuneration, shares and stock options in favour of an
aggregate illustration split into Supervisory Board and Management Board.
The information will be broken down into fixed salary and variable salary
components as well as into portfolios of stock options and GfK shares. This
information is given in the Notes to this Annual Report.
The reduction in the timeframe for publishing consolidated accounts and interim
reports is a priority for the Management Board and Supervisory Board. The
Management Board has introduced measures to expedite publication of the
documentation.
THE GfK GROUP
The annual financial statements and the management report for GfK AG and the
Group for financial year 2002 have been audited by Bayerische Treuhandgesellschaft, taking into account the book-keeping, and provided with an unqualified
auditors’ report. All members of the Supervisory Board received the auditors’
reports in good time ahead of the accounts meeting. The Supervisory Board
plenum discussed these documents at length in its accounts meeting, as did
the Financial 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, and the members of the Works Council, all GfK AG staff and the staff of
affiliated companies for their hard work and commitment.
Nuremberg 11 April 2003
Peter Zühlsdorff
Chairman of the Supervisory Board
5
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
We set our sights high in 2002 and are very pleased that we not only achieved
our aims but even exceeded them:
Dr. Klaus L. Wübbenhorst
Chief Executive Officer of GfK AG
• We were able to achieve double-digit growth both in terms of sales and results
and increased our EBIT margin after income from participations from 6.5 to
8.9 per cent.
• With net organic growth of 5.3 per cent, we once again achieved growth above
the sector average.
• We further expanded our global network in 2002, focusing on creating a solid
foundation in the profitable growth market of healthcare.
6
• The growth achieved means that we are now ranked No. 5 in the worldwide
market research sector.
At the ordinary Annual General Meeting on 13 June 2003, the Management Board
and Supervisory Board will propose a dividend payment of EUR 0.20 per share.
This represents an increase of almost 18 per cent on last year’s dividend payment
of EUR 0.17 per share, and a dividend increase of 54 per cent since our IPO.
So these are the hard facts of our company’s success in 2002. Success like this
is largely based on the commitment of our employees throughout the world,
whose exceptional motivation and drive in these somewhat difficult times have
made this positive development possible.
Knowledge: the bridge to clients and consumers
Chosen as the leitmotif of this year’s Annual Report, in which four examples of
successful cooperation with clients demonstrate the importance of knowledge for
industry, retail and media, in terms of the markets in which they operate and the
consumers and users of their products and services. We show how
• brand manufacturer Unilever uses market research to position its many
global and regional brands in response to the changing requirements of Polish
consumers.
• British retail group Dixons uses market research to fulfil the expectations and
demands of the purchasers of consumer technology goods and to stay ahead of
the competition.
Foreword by the Chief Executive Officer
THE GfK GROUP
• the new Radiocontrol metering technology developed by GfK helps radio
stations, advertisers and media professionals to determine where, when, why
and how people use radio today.
• the owner of the most valuable brand in the world, Coca-Cola, uses market
research to give it the edge over its competitors in terms of product quality,
logistics, distribution and local marketing.
In an interview, Michael J. Naples, one of the most prominent and committed
personalities and experts in the world of market research, outlines how
interesting and forward-looking our business is and describes the major
challenges faced by the sector.
Corporate community: a driving force for future success
Commercial success and cooperation with our clients constitute a cornerstone
of our corporate ideas and actions. 2002 was a year of integration and
co-determination for our employees in the GfK Group global network, with the
focus on corporate culture and communications as well as social responsibility.
Our initiatives have been very successful:
• We adopted the Corporate Values developed by the Excellence team, a group of
top young high-flyers at GfK. The values provide us with a clear, strong system
founded on five principles which express how we understand our work and our
role as a provider of intelligent solutions.
• We implemented our new Corporate Design guidelines and revamped our logo
to create a contemporary and unmistakeable brand image for GfK worldwide.
• We launched our global Intranet, gfk4u, which helps our companies and
employees to share their vast knowledge and expertise throughout the world as
well as keeping GfK always a step ahead of the competition.
• We were involved in scientific, cultural and social projects, such as co-structuring
and financing a course at Erlangen-Nuremberg University; providing 10,000
advertising posters from four decades on permanent loan to the Germanisches
Nationalmuseum and sponsoring the European Children’s Theatre Festival 2002.
At the end of 2002, we also submitted a declaration of compliance with the
recommendations of the German Corporate Governance Code in order to further
strengthen your trust, as shareholders, in the GfK Group.
7
Outlook: our aims for 2003
We have also set our sights high for 2003. We intend to once again outperform
the sector in terms of organic growth, increase our margins and reinforce our
competitive international position through innovation, quality and client focus.
We intend to ensure that our employees worldwide have secure, interesting jobs
and the opportunity to develop their talents. This will of course also benefit
our clients, many of whom have cooperated with us for a great number of years.
Our continued strategy for the future is to offer them all our knowledge, expertise
and experience to help them remain successful in their respective markets.
8
We would like to extend our thanks to you, our shareholders, for your loyalty
in these turbulent times of weak stock markets and change throughout the world,
and for your trust in our work and commitment to all that we undertake.
Nuremberg, 11 April 2003
Chief Executive Officer
GfK. Growth from Kowledge
THE GfK GROUP
RENEWING OUR CORE MESSAGE
GfK. GROWTH FROM KNOWLEDGE
The letters GfK are much more than just a name. They represent a
stamp of quality and at the same time convey our core message,
which our clients worldwide associate with quality, innovation and
professionalism. In 2002, we opted to redesign our logo and revise
our Corporate Values with the aim of unifying the corporate network
and reinforcing the GfK brand in preparation of future challenges.
Our new logo – an unmistakable symbol of unity
In recent years, GfK has grown over-proportionally quickly and
considerably expanded its network. In view of this dynamic
growth, it was even more important to revise the corporate image
to highlight the essence and significance of GfK. A clear identity
is the prerequisite for credibility and trust.
As part of the process of redesigning and standardizing its corporate
image, GfK has also revamped its logo. The increased diversity
of the corporate network required a symbol which would embody
inner unity and stand out from competitors worldwide. At the same
time, it should convey the identity of GfK in an abstract way.
The new logo design had to meet high demands. It needed to be
simple but powerful, clear and unmistakable. Given the variety of
working approaches and cultures within the GfK network, this
was a major challenge. Each of the business divisions and GfK
companies has its own character and communicates using its own
language and symbolism.
But for all its diversity, GfK is one entity. And this is what the
new logo, incorporating existing and new design elements, should
convey.
9
10
Our Corporate Values
Client-driven
Our people
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.
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.
GfK. Growth from Kowledge
THE GfK GROUP
Our Corporate Values
Communicating our core message
Growth from Knowledge, the central premise of the GfK brand
advertised throughout the world, perfectly encapsulates almost
seventy years of successful GfK history. It is a core element of
our creativity, commitment and the future – both our own and that
of our clients.
The various aspects of the “Growth from Knowledge” message are
contained in the recent Corporate Values, which summarize GfK’s
strong points: client-driven, our people, innovation, global expertise
and local knowledge as well as growth.
Growth from Knowledge and the new Corporate Values give each
and every one of our employees the responsibility of proving the
claims in their dealings with our shareholders. The actions of all our
employees help to communicate the central message and associated
values of our company.
All our employees are GfK brand ambassadors.
Innovation
Global expertise – local knowledge
Growth
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.
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.
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.
11
Ratings measurements
include digital TV
channels in Germany
for the first time
AGF, the TV research
partnership to which
Majority holding in
all the major TV stations
Portugal
OVERVIEW OF 2002
in Germany belong,
The Spanish subsidiary,
commissions GfK
EMER-GfK, tops up its
Fernsehforschung
27.6 per cent stake in
to include digital
Portugal’s Intercampus
programmes alongside
to 50.01 per cent.
its research into the
Founded in 1990, the
consumption of the
company operates in
analogue channels in
the Ad Hoc Research
the AGF/GfK TV panel
division.
in future.
01
02
03
04
05
Major media contracts
GfK sponsors
Acquisition of
Consumer climate
Licences granted for
in Belgium and Austria
Panoptikum – the
Informark in Australia
in Germany falls to
Radiocontrol in Asia
record low
and the Pacific
06
12
With two major
European Children’s
Theatre Festival
Acquisition of
Informark Pty Ltd.
In April 2002, the pro-
ACNielsen Media
and Austria, GfK
Australia, which
pensity to buy indicator
International acquires
consolidates its position
specializes in retail
in Germany falls to its
a licence to use
research for consumer
lowest point in 20 years
Radiocontrol. A leading
durables. GfK expands
according to a
media research company
its leading position in
consumer climate
in the USA and Asia,
the non-food tracking
survey carried out by
ACNielsen Media
segment in Australia.
GfK for the European
International intends
At the 52nd GfK annual
Commission. The main
to use the electronic
conference on “Market
reasons for this are the
measuring technology
leadership – exploiting
Euro-inflation debate,
developed by GfK
and securing success
Stake acquired in
ongoing high levels of
company, Telecontrol,
potential”, GfK presents
M2A, France
unemployment and the
for its radio ratings
exclusive surveys on
less than rosy economic
research in 16 countries
modern branding to
outlook.
in Asia and the Pacific.
600 marketing experts
contracts in Belgium
as the leading media
research organization in
Europe. The contract in
Belgium runs from the
start of 2002 to the
end of 2008 and the
contract in Austria from
For the second time,
GfK sponsors
Panoptikum, the international children’s
theatre festival in
Nuremberg and
Augsburg.
the start of 2002 to the
end of 2004.
GfK Belgrade
GfK acquires a 35 per
founded
cent holding in M2A,
GfK launches its
business activities in
Serbia and Montenegro
through the newly
one of the leading
providers of information
services for the veterinary sector in France.
GfK annual
conference 2002:
modern branding
from all over Germany.
Guest speakers are
Dr. Rolf Kunisch,
CEO of Beiersdorf AG,
Professor Dr. h.c.
founded GfK Belgrade.
Lothar Späth, CEO of
The new company
Jenoptik AG.
is taking over the
activities of Focus
Marketing Research,
the country’s third
largest research
organization.
Overview of 2002
THE GfK GROUP
HealthCare
expanded in Germany
and Switzerland
The GfK Group takes
Award for best
over in full the business
methodology
operations of I+G
presentation
Nürnberg and its
subsidiaries GPI
Contract on
Nuremberg poster
TV ratings research
collection handed over
in the Ukraine
to the Gemanisches
Nationalmuseum
Kommunikations-
The speech on
The Ukraine Industrial
forschung and I+G
“Assessing the financial
Television Committee
A ceremony is held to
Suisse from the existing
brand value” by
commissions GfK
mark the handing over
joint venture I+G
Siegfried Högl and
subsidiary GfK-USM
of a collection of
Gesundheitsforschung
Dr. Oliver Hupp, both
to set up a TV panel in
around 10,000 posters
with NFO Europe.
of GfK, and Hamburg
the Ukraine to measure
worth EUR 1.6 million
GfK AG’s new HealthCare
marketing professor
audience ratings for
by GfK-Nürnberg e.V.
segment expands the
Dr. Hendrik Sattler was
The acquisition of
Ukraine TV stations
und the Nurembeg
offering for information
awarded the prize for
Strateji Mori in Turkey
and programmes. The
Academy for Sales
services for the medical,
best methodology pre-
makes the GfK Group
contract starts in 2003
Research on permanent
dental and veterinary
sentation at the 2002
the market leader in ad
and runs for an initial
loan to the Germani-
markets.
ESOMAR Conference.
hoc research in Turkey.
period of four years.
sches Nationalmusuem.
09
10
11
12
07
08
Strateji Mori
in Turkey
13
Significant acquired
GfK sponsors market
GfK sponsors the
First client conference
GfK Christmas card
in Belgium
information manage-
Nuremberg marathon
for Marketing
campaign
Acquisition of majority
ment faculty
Around 7,500 local
Services, South Africa
Christmas pictures
holding in Belgium
GfK-Nürnberg e.V., the
people of all ages and
Almost 100 clients from
by the children at the
based company
majority shareholder in
walks of life take part
trade and industry
state home for children
Significant. This adds
GfK AG, is providing
in the Nuremberg
attend the first client
and young people in
onto GfK’s services in
EUR 384 thousand for
marathon 2002. GfK is
conference held by
Reutersbrunnenstrasse
the Media and Ad Hoc
three years to the market
one of the main spon-
GfK Marketing Services
in Nuremberg provide
Research divisions and
information faculty at
sors and approx. 120
in South Africa.
the creative input for
puts GfK into the top
the University of
GfK employees and
5 in the industry in
Erlangen Nuremberg,
their families take part
Belgium.
which was established
in the race.
in 1999 by GfK and the
Acquisition of IFR
University. The second
15,000 GfK Christmas
New Corporate Values
for GfK
company.
Team made up of
gives one or two gradu-
in Australia on enter-
selected next gene-
GfK acquires a 51.4 per
ates the opportunity to
tainment
ration managers has
cent holding in Institut
attend the MBA course
Français de Recherche
in market research at
(IFR) in France. The
the University of
acquisition is a further
Georgia in Athens near
step in GfK’s expansion
Atlanta.
of the market leadership of its Non-Food
Tracking division in the
French market.
special GfK services,
products and innovations in the entertainment sector to some
200 guests. This is followed by the GfK Video
Awards Night attended
by around 400 guests
from TV, industry and
commerce.
are then sent to clients
and friends of the
Client conference
GfK Australia presents
gingerbread tins, which
GfK’s first Excellence
sponsoring agreement
Group in France
cards and around 5,000
been working on new
Corporate Values for
a year. Following the
presentation to the
Management Board,
the values will be
presented globally to
all GfK employees.
BUSINESS DIVISIONS SPECIAL
Knowledge:
the gateway to customers and consumers
Knowing and understanding the markets in which buyers, consumers and the users of products and
services move can be the critical factor in deciding whether a company will prosper or fail in today’s
marketplace. This applies to global market leaders as well as companies with a national, regional or
local focus. Modern market research such as that conducted by the GfK Group, specializes in providing
information on markets, buyers, consumers and users to its clients in commerce, industry and the
services sector so that they can operate successfully in their markets on a long-term basis.
An interview on the future of market research with an expert and four reports on the work of the
GfK business divisions highlight how market research can support and complement an entrepreneurial
approach.
14
Market knowledge
for market success
Interview with Michael J. Naples
Companies which operate successfully in
their markets use a range of information on
markets, customers and consumers. This
information can be internal or external, from
generally accessible or exclusive sources.
The trick in market research is to produce
customized information packages from a
broad spectrum of different information using
all the techniques and methods available
today. In this interview, Michael J. Naples,
one of the best known international figures
in the market research industry, talks about
the future demands on a market research
provider such as GfK.
Page
16
Zukunft
GfK
der
Business
Marktforschung
Divisions GGf fKK SSPPEECC II A
AL
Page
20
Consumer Tracking
Learning to think like a consumer
Consumer research for Unilever Poland
There was a rude awakening for Polish
people after the consumer boom in the first
half of the nineties – including learning
not to take the advertising promises of
brand manufacturers and retailers at face
value. The most popular brands among
Polish consumers today are those which are
Page
28
The times when retailers acted on the basis
of hunches and set up flourishing retail
chains in no time are long gone. Today,
large retailers are dependent on all kinds
of information about markets, competitors
and consumers – in day-to-day business,
logistics and short-term corporate planning
36
The future of SRG SSR idée suisse’s radio
audience research began in 2000, when
it was the first global media company to
decide to record radio reach electronically.
The Radiocontrol metering technology
developed by GfK subsidiary Telecontrol
made it all possible. Instead of relying on
44
recall of radio programmes and stations
listened to, the details of which are
then recorded in a diary, participants of
the radio reach survey carried out by
SRG SSR and its subsidiary Publica Data
wear a wristwatch which records all
radio/TV sounds in the wearer’s environment 24 hours a day.
Ad Hoc Research
Providing moments of refreshment to people – everywhere at any time
Customer satisfaction research
for Coca-Cola in the USA
Coca-Cola has been the world’s most
valuable brand for years, and with good
reason, as there is no other soft drink
drunk as frequently. Four out of the five
most frequently consumed soft drinks in
the world are produced using syrups
and concentrates manufactured by
as well as long-term, strategic decisions.
The Dixons Group, Britain’s largest
specialist consumer electronics retailer,
began using market research to support
its short, medium and long-term activities
back in the eighties.
Media
The listening watch
Radio audience research for SRG SSR idée
suisse in Switzerland
Page
regarded as offering consistent quality,
being reliable and of lasting value. The
report highlights the difficult period of
change experienced by Polish consumers
with regard to society and the economy.
It shows how the management at Unilever
Poland is responding to this change and
how it uses market research to great effect.
Non-Food Tracking
Finding the answer to the second question
Retail research for the Dixons Group
in the UK
Page
The Coca-Cola Company. This is brand
policy at its best. In addition to consistently
high product quality, there are also other
quality criteria which affect production,
distribution and marketing. The CLASS
customer satisfaction survey carried out
with bottlers in the USA gives weight to
the mission statement of the top brands of
The Coca-Cola Company.
15
Market knowledge for market success
Interview with Michael J. Naples on the future development
of a sector driven by client requirements
Michael Naples, one of the most prominent figures in the international market research industry,
describes how research has changed to meet the needs of users.
Michael J. Naples
is President of the Marketing Research
employed professional market researchers,
developing a large number of techniques that
are still in use today, and they also trained a
lot of good research specialists.
Institute International at the University of
16
Georgia, Athens, Georgia, USA, which
offers distance learning courses in market
So when did the fundamental change take
place?
research worldwide. The institute is backed
by several organizations such as the
American Marketing Association, the
Advertising Research Foundation and the
European market research association,
ESOMAR.
What do you believe have been the main
landmarks in the development of marketing
and market research?
Systematic marketing and market research
did not really become important until the early
1950s, when brand manufacturers such as
Procter&Gamble and Unilever were expanding
rapidly. That was when meeting consumer
needs became the mantra of marketing
companies.
» Market researchers are increasingly having to breathe
in the same way, move at the same speed and speak
the same language as their clients. «
The initial impetus for the growing demand for
consumer and market data came from advertising
agencies and companies’ in-house advertising
departments that dealt with all marketing issues.
They maintained large research departments and
The next era in market research began in the
1960s. Perhaps I can explain the reason with a
personal example of my own. At that time, I was
Head of the Advertising Research department
at the US company Lever Brothers, responsible
for the food, personal care and household care
segments. One day I found that we were employing
four different ad agencies to do our copy and
advertising tests. They were undoubtedly all
first-class agencies, but each of them had developed
its own advertising test. What is a client like Lever
Brothers supposed to do if four different agencies
all say their test is the best? So along with Lever
Brothers, all the big advertisers began doing their
own market research. Each wanted to find out
for itself what was valid and reliable in terms of
effective marketing. At Lever Brothers, we had
around 30 people developing a differentiated
portfolio of product development, advertising and
consumer research tests. It stayed that way until
the 1970s.
When did market research companies come
onto the scene?
At some stage, brand managers started to focus
on costs, and in the 1980s we saw a lot of
re-engineering and job cuts as American and
European companies tried to restructure and
become more productive. In-house market
research departments were no exception; they
Market research sector
GfK SPECIAL
About Michael J. Naples
From 1981 to 1996 , Michael Naples
market research sectors. The ARF honoured
specialist articles and several books on
was General Manager and President of
him by creating the Michael J. Naples
the subject of advertising frequency and
the Advertising Research Foundation in
Leadership Award for excellent entre-
advertising effectiveness. Princeton-born
New York, which, during his time there,
preneurial achievement, which is awarded
Naples began his career at the Lever
he turned into the biggest international
every two years. In addition, Michael
Brothers Company, working his way up
specialist association for companies
Naples is a leading light in American market
to Marketing Research Director.
operating in the advertising, media and
research. He has published numerous
became a lot smaller, and the research industry
profited from this. It grew mainly because it took
on more and more work previously done by
clients, particularly brand manufacturers. The
number of people employed in in-house research
departments decreased, and the focus of their
work was different from that of people in market
research companies.
How would you describe the brand industry
research situation today?
17
These days, most in-house marketing research
managers are no longer responsible for all areas
of the company’s business. They are part of the
marketing team for a product area, so they are
more involved in day-to-day business than they
used to be.
Their access to information has also grown
enormously. In the old days at Lever Brothers,
we used to get market share data for our
products every two months. They were the basis
for our business decisions. Today they get new
information every week, sometimes every day,
always tailored to their particular area of
marketing and systematically collected. The
traditional market research spectrum includes
information on product sales, causal analysis
of sales fluctuations, standardized advertising and
concept tests, analytical models of the mix used
in complex ad campaigns, continuous advertising
tracking, customer segmentation studies and
modelling analysis, experimental market tests and
model analysis used to optimize brand value and
allocation. There are countless highly developed,
effective and useful tools for market and media
research.
There are also lots of new instruments used to
prepare information. Take data mining, for
example. Companies like American Express have
information on credit card holders that can be
collated and analyzed using data mining to gain
new knowledge about consumers. It can be transferred to any type of information a company has
about its customers and markets. Using all these
» It was the information needs of increasingly
global brands that triggered globalization in the
market research industry.«
tools to gain knowledge that can be used to
manage a business and take decisions is one of the
main challenges facing today’s market research
and information directors. It is no longer about
using individual research techniques for this or
that purpose; that’s routine. It is about cleverly
combining all the available information to
make decisions which make the company more
competitive and innovative.
Would you go so far as to say that is the only
thing market research will concentrate on in
the future?
I wouldn’t go that far. Apart from support for
strategic business decisions, there will obviously
still be the traditional routines. Ideas, products
and advertising campaigns will still need to
be tested. There will always be test markets,
consumer surveys and qualitative interviews.
18
» I believe that market research has always been a
pioneer in the use of technology. It has been in the
vanguard when it comes to using portable computers,
call centre technology and the Internet to canvass
consumer views.«
But it is also about using strategic information
based on existing data for the long-term development of the business. A forward-looking in-house
market researcher combines traditional research
skills with management talent and an entrepreneurial attitude. He can only do that by having
specialist skills that go beyond the everyday and
contribute to the company’s strategic value.
What changes have there been in the
expectations of clients?
Of course there has been significant change
here too, because clients have become more
demanding. They want market researchers to
provide precise, timely information that is tailored
to their needs and allows them to think ahead
and decide in advance what their objectives are.
And they take it for granted that researchers will
understand the client’s business. It is important
for clients to trust the market research companies
they use, which means they are working with
fewer of these companies than they used to.
In the 1950s, each survey was a new project.
Today, that is no longer the case. Instead, a client
of a professional market research organization has
access to a large volume of market data. These
days, if you want to market your products successfully in a competitive environment, you need
a full range of information from internal and
external databases, and data obtained exclusively
for you. That is the key. The art of market research
companies lies in developing specific approaches
for each client, using the techniques currently
available on the market. Basically, market
researchers are increasingly having to breathe
in the same way, move at the same speed and
speak the same language as their clients.
What impact has globalization had on
market research?
Firstly, I believe that the question of whether
globalization is good or bad is not important.
I see globalization as being a fact of life – with all
its positive and negative aspects. Even ten years
ago it wasn’t a major issue, apart from for a few
companies such as Coca-Cola or Levi. In those
days, they were the only ones to commission
large numbers of surveys and use mainly market
research companies to carry out international
research in lots of different countries.
It wasn’t until large numbers of American and
European companies began operating on an
international scale that they began needing more
international market and consumer analysis. It
was the information needs of increasingly global
Market research sector
brands that triggered globalization in the market
research industry, because research companies
invested in globalization to meet the needs of brands.
Today, the world’s 25 biggest market research
organizations generate 65 per cent of the industry’s
USD 18 billion turnover. This is impressive evidence
of how much market research has been affected
by the general process of globalization. Big research
companies still have to do everything in their
power to assert themselves in the face of international competition.
How much of a role has technology played?
The fact is that technology has contributed to the
growth of the market research sector, perhaps
more so than in other industries. It has made
the business easier, both in terms of collecting,
analyzing and developing data, and of the new
forms of communication and networking which
have provided major support to the business
worldwide. I actually believe that market research
has always been a pioneer in the use of technology.
For example, it was the first segment to use supermarket scanner technology for more wide-ranging
information purposes. It has been in the vanguard
when it comes to using portable computers, call
centre technology and the Internet to canvass
consumer views.
What do you think will be the key issues
in market research over the next ten years?
The trends I’ve just mentioned will continue, and
the globalization process within the industry is not
yet complete. But in addition to an “expansive”
globalization of company networks, we are also
going to see an increasingly “qualitative” form of
globalization, towards ever more sophisticated
and globally-usable tools and services and more
comprehensive and high-performance knowledge
systems.
GfK SPECIAL
Modern technology plays a critical role in this
process. Market research has always been,
and always will be, an industry which gains
much of its impetus for growth and innovation
from the development of new information
and communication technology, and plays a
trailblazing role in its use. This applies not just
to the instruments and media used to collect
and process data, but also to the exchange of
information, both internally and with the client.
» Managing information relevant for decision-making
requires both an ability to process and correlate
a large quantity of very varied data, and a profound
understanding of business.«
Globalization and technology are dramatically
changing our clients’ businesses as well.
Their markets have become more complex, fastchanging and competitive. Market information for
short-term and long-term business decisions has
become a crucial factor of production. Managing
this information requires both an ability to process
and correlate a large quantity of very varied data,
and a profound understanding of business. Both
clients and market research companies have a
growing need for people who are able to do this.
This mixture of research and consultancy means
they have an essential part to play in clients’
decisions. Clients’ information and market research
managers are supported by their colleagues
in market research companies with a wealth
of methodological knowledge and customized
information services. This is a long-term
relationship based on the principle that market
researchers are working exclusively to achieve
market success for their clients. 19
20
Consumer Tracking
GfK SPECIAL
21
Learning to think
like a consumer
How consumer attitudes and needs changed in Poland when the iron curtain came
down and why brand manufacturer Unilever uses market research in its approach to
this change in Polish society.
GfK Polonia: research for Unilever Poland
Learning to think like a consumer
There was a rude awakening for Polish companies after the consumer boom: in the first half of
the nineties consumers grew up and became sceptical and at the same time their buying power
dwindled. With the help of professional and imaginative market research, Unilever Poland is
transforming its marketing to suit the new market conditions.
Managers from Unilever Poland hastened to take
part in a “real adventure”. Far away, in the smaller
and smallest towns of the 16 provinces, far from
the shelter of their own offices and the excitement
of life in the great metropolis, Warsaw, they were
due to spend four weeks as citizens among citizens
– without gold credit cards, mobile phones,
cars and all the other paraphernalia of the five per
cent of the population making up Poland’s top
earners. On the contrary, under the guise of being
related to local citizens, they had to manage on
the average income of a normal Polish small-town
household and experience for themselves, how to
deal with the array of consumer products on offer
on just a handful of zlotys.
22
The project was one element of a strategy programme launched globally in 2000 under the title
“Path to Growth”, which gave the management
the necessary intelligence to successfully position
Unilever brands in the Polish market. The programme included two-day visits to families in the
furthest corners of the country, as well as excursions during which current knowledge of regional
problems and peculiarities, including historic and
economic developments, could be absorbed. Time
and again, the Unilever “emissaries” sought to
speak to consumers in order to “see the world we
share through different eyes”, as one participant
recalls.
In Poland, premium brands
are on the increase despite
the recession. Consumers
appreciate their consistent
quality and lasting value.
Ana Gisa
Ana Gisa, Head of Consumer Insight/Market Research at
Unilever Poland on the change among Polish consumers:
“Consumers will no longer be bamboozled. They have
stopped chasing the dream.”
Looking for a life with dignity
Ana Gisa, consultant to the Management Board
and Head of the Consumer Insight/Market Research
department at Unilever Poland, sums up: “Target
groups can only be correctly addressed if the
marketing people know and like them and if
they don’t deal with them from their high horse,
without having even the slightest idea of how
the average person lives.” As Gisa says, they, too,
Consumer Tracking
GfK SPECIAL
Entrance to one
of Warsaw’s many
hypermarkets
are looking for a life with dignity, even if the
circumstances are difficult.
Poland is currently battling against high unemployment: around 17 per cent of the 38.7 million
population has no job. At USD 3,200, the annual
income per capita is very low compared to the
German figure of USD 28,500. Initially, the mood
of change was exuberantly positive, even leading
then President Lech Walesa to dream that Poland
might become a second Japan in the early years
after the revolution. As Ana Gisa puts it: “Everyone
was happy and looked towards the future with a
great deal of confidence,” adding: “Because of this
dream, at first, consumers were unconcerned
about spending money.”
In actual fact, at the beginning, people were simply
hungry to consume. It was as if paradise beckoned
after all those years behind the iron curtain and
the times when they could only dream about
Western brands and shopping. However, the critical
assessment of the Unilever market researcher is
that: “This was also a time characterized by a
complete loss of touch with reality. People spent
all their money including savings, believing that
in two or three years, their salaries would rise to
match their consumption. We believed ourselves
to be the future “Tiger economies” of the world,
comparable with those of Asia”.
The end of the dream of endless consumption
Many foreign companies also believed in the
dream and opened subsidiaries in Warsaw, Lodz,
Krakow and elsewhere. For example, 20 retail
chains alone have a presence, which economic
experts believe is at least twice too many, despite
the fact that Poland is a big market and a gateway
to Russia and the Ukraine.
As early as 1996, the chasm between the pace of
economic growth and private consumption had
already opened up. Consumers were living on
credit without a care in the world, as a consequence of a pent-up need to consume and also
the characteristic that “we Polish consumers have
in common with other Eastern Europeans and
A surfeit of
products means
that competition
among brands is
fierce.
that is that we suffer from a certain lack of rational
logic,” as Gisa explains.
They were completely clueless and defenceless
in the face of the new brand universe, which was
being established and promoted by companies
according to the Western model. It was difficult to
keep pace with developments and then some time
later, the consumer said: “Right … I’ve had enough!
All I want is ordinary detergent. I have no idea
what they are talking about and what they mean.”
» The GfK ConsumerScan panel is the only source
which can tell us who is buying our products.«
These insights and the economic crisis in Poland
and other Eastern European countries ushered in
the second phase of consumer behaviour. Huge
rafts of the population became impoverished, and
the overheated and over-funded consumption
23
Quality of life is
what Polish people
want and what
premium brands
can offer.
24
dropped back to a realistic level. Gisa reports:
“People suddenly understood that not only they,
but their children would not benefit from the
changes as they thought they would and that
paradise was not just around the corner. It was
the phase of disenchantment, when you simply
had to accept that after all, you were just a frog,
and not a prince.”
Honest information rather than mystification
Now people are fighting to maintain their standard
of living and their dignity.
Whilst not wishing to be counted as poor, they are
nevertheless confronting reality. For companies,
this means a massive fall in private demand, due
to consumers having less money to spend. Many
need the money to pay off what has meanwhile
become a very high level of interest: 27 per cent of
Polish households had taken out loans to buy
cars, refrigerators and other desirable top grade
consumer products. These factors now determine
the marketing policies of Polish companies, in a
landscape beset by other incidentals like price
wars, often triggered by the international retail
chains deeply embroiled in fierce competition,
and growing scepticism on the part of consumers
towards branded goods, which is a global problem.
Ana Gisa sums up: “Consumers have become
far more rational, knowledgeable and clever.
They are much more demanding, even in respect
of advertising, for example. They do not want
mystification, but honest information. This was the
second phase, which according to my assessment
lasted from 1998 to 2000.”
Using data for ongoing market monitoring
Gisa has been observing people on the markets,
who have developed product loyalty, and who no
longer try everything and anything that comes onto
the market. Premium brands in which consumers
have developed a certain trust, are still showing
growth rates frequently counted in double figures,
despite the recession. Gisa elaborates: “The crux
of the matter is consistent quality, honesty and
really giving people something of lasting value.
People won’t be bamboozled now and are not
chasing the dream any more.”
Agnieszka Sora
Agnieszka Sora is GfK Polonia’s Managing Director. For
many years, the company has been supplying Unilever
with comprehensive information on consumer behaviour
in Poland, collected from the ConsumerScan Panel.
In markets like this, market research is among the
most important instruments at the disposal of
marketing management when they are deciding on
the right products and the right positioning. This
is the reason why the demands on market research
organizations are high and why Unilever is one of
the biggest clients of GfK Polonia in Warsaw.
Consumer Tracking
GfK SPECIAL
Brief overview: Consumer Tracking
Consumers, brands and markets in the spotlight
Key services
Service details
Information services, advice and
solutions providing support for
the marketing decisions of brand
manufacturers and retailers in
the consumer goods and services
sectors.
GfK ConsumerScan: consumer
panels on fast moving consumer
goods in 24 countries; like panels
in 15 other countries, these belong
to the Europanel run in conjunction
with Taylor Nelson Sofres.
Our offering
GfK ConsumerScope: online and
mail panels for consumer goods and
services in nine countries
Information about consumer habits
and advice based on continuous
surveys and analyses of consumer
buying behaviour in household
and individual panels. Panel
participants keep a regular record of
their purchases over long periods.
GfK collects the information from
the households, processes and
collates it according to the clients’
requirements.
Clients receive comprehensive
information packages
• about changes in purchasing
behaviour with regard to
manufacturer and retail brands
in all relevant product categories
and buyer structures over time,
also on brand loyalty and shopping
outlet preference,
• about the effect of changes in
pricing policy, promotional and
advertising activities on sales
and core brands.
The aTRACKtive software developed
by GfK for the specific purpose of
analyzing consumer panel data
enables users to prepare numerous
special in-depth analyses in addition
to standard reporting.
GfK CatmanGuide: service system
for category management of FMCG
directly at the point of sale.
The advantage for clients
Clients use partly standard, partly
customized information packages to
monitor and manage their tactical
and strategic decisions on product
and pricing policy, distribution and
category management, advertising
and promotional activities. The
consulting services offered by our
team of client advisors support
clients in their decision-making.
The clients
Large multinationals as well as
SMEs and companies operating in
the consumer goods and services
markets. Our top clients include
Henkel, Unilever, Procter&Gamble
and Nestlé.
Highlights in 2002
• Europe-wide rollout of the
aTRACKtive software used by GfK
and clients for panel analyses
• Upgrading of the Internet platform
aTRACKtive.web, via which clients
have direct access to consumer
panel databases
• Development and trials of ECPO
(Electronic Consumer Panel
Online), a system for recording
purchasing data via the Internet
• Addition of 1,000 households, the
heads of which are non-German
residents, to the GfK ConsumerScan
panel in Germany
• Above-average positive development of category management
business
• Reinforcement of European
integration of the Europanel
managed together with Taylor
Nelson Sofres
• Improvement and harmonization
of reporting to international
standard in Europe
• Advancement of cost-cutting
programme
Positioning
GfK Consumer Tracking ranks 2nd in
Europe, in terms of business volume,
in the area of continuous consumer
research and No. 1 in Austria,
the Benelux countries, Germany,
Italy and Switzerland as well as
other Central and Eastern European
countries. 25
Unilever brands are
everywhere – from corner shops
to retailers and hypermarkets,
everyone sells them.
26
Gisa continues: “Like anywhere else, we need
continuous data gathering here in Poland, because
this is the only way to monitor our performance
and what is happening in the markets.” She goes
on to stress the particular significance of GfK
ConsumerScan for Unilever. The Group uses the
ongoing data sources to inform its decisionmaking processes: “We check whether purchasing
is still at the same level and this gives us the
information to forecast our market share. And of
course, this also affects pricing policy. The retail
panel data tells us how much we have sold and
the GfK ConsumerScan panel is the only source
which can tell us who is buying our products.”
» Consumers have become far more rational,
knowledgeable and clever. They are much more
demanding, even in respect of advertising, for
example. They do not want mystification, but
honest information.«
All useful information, as Ana Gisa confirms,
which can be intelligently interpreted and used
for much more than forecasting market share.
Beyond standard reporting, as a client of
GfK Polonia, Unilever is also interested in special
surveys, which can be rigorously applied for
short-term planning and category management
in the case of retail groups.
In fact, this is at the heart of the cooperation
between Unilever and GfK Polonia. Gisa gives the
reason as the fact that the survey results enable
Unilever managers to give optimum advice to
retail chains, by revealing the segments in which
they are weaker than their competitors and the
product groups in which their customers are going
to other outlets. However, the survey results also
help Unilever by identifying important consumer
facts, such as preferred pack size.
Sensing what the consumer is thinking
For Ana Gisa, of all the marketing activities a
company may engage in, category management
has a key function. Her interpretation of this is
to identify the way in which products should be
displayed and organized in a retail store in order
to be consumer-friendly and to help consumers
make satisfactory buying decisions. She is
convinced that in Poland, the large supermarkets
are still extremely consumer-unfriendly. For example,
anyone wishing to buy salt has to embark on a
hugely convoluted journey of discovery to find it,
simply because it is in a totally illogical place from
the consumer’s point of view, i.e. with the spices.
Consumers do not regard salt as a spice. Gisa
believes category management can identify what
the consumer is thinking when he or she is
shopping and this information can be used to
develop the right presentation for every category
of goods.
Unilever
A leading provider of FMCG brands and products
worldwide
Established in 1930 following the merger of British Lever
Brothers and Dutch Margarine Unie
Mission statement
“Our purpose in Unilever is to meet the everyday needs of
people everywhere – to anticipate the aspirations of our
consumers and customers and to respond creatively and
competitively with branded products and services which raise
the quality of life.”
Reach and image
Every day, consumers around the world buy 150 million
Unilever products.
According to a Financial Times survey carried out in 2003,
Unilever is the most respected company in the food and
beverage sector.
Divisions and key brands
Best Foods with the brands Becel, Bertolli, Liptons, Hellmann’s,
Knorr and Magnum ice cream
Home and Personal Care with the brands Axe, Dove, Lux,
Ponds, Brilhante, Skip and Omo.
Consumer Tracking
GfK Polonia not only delivers raw survey data,
but also complete analyses. Gisa adds: “GfK
employees have much better specialist knowledge
in these matters and are able to generate value
added, for example, by contacting Nuremberg and
consulting their colleagues, so that they achieve
results of much greater breadth and depth than we
had originally assumed. They have ideas and their
international focus means that they can bring in
helpful standard technologies and processes.”
GfK Polonia
The No. 3 Polish market research institute; offers services in
all GfK divisions
Established in 1990 as the first non-Polish private research
institute in Poland
Key clients: in addition to Unilever, Henkel, Kraft Foods,
L’Oréal, Nestlé, Procter&Gamble, Reckitt Benckiser,
Renault
Key markets: automotive, financial services, FMCG,
healthcare/pharmaceuticals, retail, IT, media, telecoms
and transport
GfK SPECIAL
Market research for on-target marketing
Unilever’s market researcher would like an
even closer working relationship between the
market research institute and the client. Because
markets are growing hardly at all in Poland, even
shrinking in terms of value in many cases, only
highly professional market research can help the
marketing effort to achieve Unilever’s ambitious
growth target.
» Because markets are growing hardly at all in
Poland, only highly professional market research
can help the marketing effort to achieve ambitious
growth targets.«
Ana Gisa’s contribution to the recipe for success is
getting to know the consumer and what he or she
wants better than anyone else. She sees her remit
of analyzing social processes as verging on consumer psychology. “Analyzing the social developments which impact on consumers provides us
with a broad overview of all the possible consumer
phenomena which might be encountered today.”
27
100 employees, 700 interviewers; own telephone and test
studios.
Angieszka Sora, Managing Director of GfK Polonia,
is pleased to hear this praise, but also knows that
there is a very special reason for the fortuitous
cooperation with Unilever: “Ana Gisa is always
open to new ideas. For instance, when we offered
her consumer analysis along the lines of the
German model, which we had carried out on our
own initiative, she showed immediate interest.
She encouraged us to do the same in Poland.“
This is why Unilever managers went out to the
people as part of the company’s strategic “Path to
Growth” campaign, in order to use the opportunity
of daily dealings to learn all about their joys and
sorrows in the private sphere. According to Ana
Gisa: “Those who took part learned a great deal
and came back as changed people.” In urban centres like
Warsaw and Krakow,
Polish history and modern
consumerism happily
co-exist.
28
Finding the answer
to the second question
How the Dixons Group, the largest consumer electronics retailer in the UK,
uses market research to meet consumer expectations and requirements and stay
ahead of the competition.
Non-Food Tracking
GfK SPECIAL
29
GfK Marketing Services UK: retail research for Dixons
Finding the answer to the second question
For years, the retail sector was run by entrepreneurs who made decisions on the basis of
hunches, and it was relatively easy to enter the market and be successful. But today, in the
face of competitive pressure, virtually interchangeable products, price wars and increasingly
well-informed consumers, retail managers have to use highly professional marketing based on
comprehensive market research data. One striking example is the cooperation between British
retail group Dixons and GfK Marketing Services UK.
30
John Clare knows how to make a virtue out of
necessity. At a time when retailers are all selling
the same brands and the same products at more
or less the same prices, he needs to be guided
by a very specific business philosophy. And as
Chief Executive of Dixons, the British retail group
specializing in consumer electronics, photographic
equipment, telecoms, computers and software,
his philosophy is give the customer what they
want.
» The different positioning of our store chains
reflects the complex ways in which people
view the apparently simple concept of customer
service.«
John Clare
John Clare is CEO of the largest specialist retail group in the UK,
which has ten brand names in eleven European countries
with 1,280 sales outlets comprising a total sales area of approx.
1 million m2.
He describes it in simple management terms:
“We want to offer our customers unsurpassed
benefits in terms of the breadth and quality of
our product ranges, competitive prices and
high standards of service.” This is based on
comprehensive expertise gained from market
research data, and an awareness that the word
“service” means different things to different
customers. “If you’re going to create differences
between yourself and the rest of the market, you
can’t just focus on price,” Clare says. “You also
have to look closely at other aspects of customer
expectations, and that means you have to start
creating customer segmentation.”
Clare’s philosphy: current market and consumer information
is a must in day-to-day business, operational planning and for
long-term strategy.
Different service for different customers
The electronics market in particular consists of
an incredible range of competing products and
systems, aimed at customers with widely varying
levels of knowledge and information needs. Dixons
therefore operates carefully differentiated store
chains in eleven European countries, including
four in the UK alone, employing some 33,550
people in 1,280 stores and generating sales of
Non-Food Tracking
GfK SPECIAL
Three of the specialist retail
chains in the Dixons Group,
all market leaders in the
UK and Ireland
around EUR 7.4 billion. All follow the same basic
precept that different customers want different
levels of service.
Currys, for example, has become Britain’s largest
retailer to specialize in TVs, hi-fi, cookers,
refrigerators, washing machines, PCs and telecoms.
“Currys sells consumer electronics to customers
who need a great deal of validation for the
purchases they make,” says CEO John Clare.
“They need support, and they want reliable
products and after-sales service where someone
installs the appliance for them and explains in
detail how it works. And they also want to be
sure that someone will come and help them if
anything goes wrong. Currys’ unique selling
proposition is that it does this.”
31
Ian McCann
Ian McCann is Managing Director of GfK Marketing Services
UK. The Dixons Group is one of the largest retail companies
in the UK and it was on their initiative that the GfK company
was established in the UK. GfK and the retail giant exchange
The Dixons chain offers a similar range of hightech products – but to a very different kind of
customer. Clare says it sells technology to people
with an almost professional interest in matters
technical. They don’t care where they buy the
product, as long as the sales staff can tell them
exactly how the technology works, what it does
and whether it is compatible with the products
they have already bought.
the latest retail information on a daily basis.
Question one is always “How much is it?”
Customers of PC World, the Dixons Group’s third
chain of stores, are true technophiles. “These
people have even more specialist knowledge than
Dixons customers. They’re real enthusiasts, and
fifty per cent of them come from small businesses.
Dixons in Oxford Street,
London, the top address for
consumer electronics, digital
photographic equipment and IT
Oxford Street in London,
a shopping street which
records some of the highest
retail sales in the world.
Five Dixons Group outlets
can be found here.
32
So PC World targets the business-to-business
and very highly informed business-to-consumer
markets.” Clare thinks this is his company’s big
advantage compared to key rivals, who sell by mail
order, the Internet and direct distribution. “With
us, the customer can talk to an expert face-to-face,
and then take the items straight home with them.”
The Link is Dixons’ fourth UK store brand,
specializing in mobile phones and communications products and established in 1994. It provides
after-sales service and offers a wide choice of
products, whereas other British mobile phone
operators are often limited to a single service
provider. Dixons’ more broadly targeted concept
seeks to get away from this, and it is working:
The Link is one of Britain’s fastest-growing mobile
phone providers.
Clare is therefore under no illusions about the
main reason why consumers decide to buy from
a particular store. “The answer is always where
you can get the item cheapest.” Once they’ve
compared prices and realized that the product
costs almost the same wherever they go, they then
ask what they regard as the second most important
The Dixons Group
Leading retailer of consumer electronics and associated
services in Europe, present in 11 countries
Established in 1937 by Charles Kalms as a photographic
business
Mission statement
“Through all our brands we aim to provide unrivalled value
to our customers by the range and quality of our products,
our competitive prices and our high standards of service.”
» Only when customers have compared prices and
realized that the product costs almost the same
wherever they go, do they ask what they regard as
the second most important question.«
Specialist retail chains in the Dixons Group
Market leaders in the UK and Ireland
Dixons: consumer electronics, Currys: household appliances,
PC World: computers and peripherals
Dixons’ specialist stores
“All the stores in our Group, and most of our
competitors, sell the same products and brands,”
says Clare. This means that whether they sell Sony
televisions, Compaq computers, JVC hi-fi systems
or Siemens washing machines, or comparable
products made by other manufacturers, retailers
have no opportunity to carve out a niche for
themselves. But consumers regard these as
expensive purchases, similar to a car, a house or
a holiday.
PC World Business: PC wholesalers, The Link: electronic
communications products and accessories, Mastercare:
distribution and after-sales
Outside the UK
Elkjöp in Scandinavia, PC City in France, Spain & Italy,
Electro World in Hungary, Uni Euro in Italy and Kotsovoloa
in Greece and Czech Republic
More than 35,000 employees in 1,280 sales outlets with
almost 1 million m2 sales area
Non-Food Tracking
GfK SPECIAL
Brief overview: Non-Food Tracking
Innovative services for the markets of the future
Key services
Information services regarding
marketing, sales and logistics in
retail and industry for companies
operating in consumer technology
markets.
In addition to market-related
information services, our offering
includes ENCODEX, the software
and item catalogue, which is a
B2B e-commerce platform.
Clients have direct access to
databases and receive regular
standardized analyses which
are used to track and manage
short, medium and long-term
planning on product and pricing
policies, advertising, distribution,
sales and logistics.
• Continuation of rollout in Europe
of ENCODEX services designed
for the B2B e-commerce segment.
Encodex currently has a catalogue
of around 100,000 products in
100 consumer durables categories,
enabling trade and industry to
conduct transactions online.
Clients new to the system in 2002
include Groupe Référence, which
has more than 550 stores in
France, Ring Photo, which has
over 2,600 stores in Germany,
Euronics, which has more than
600 stores in Spain and 700 in
Italy and Dixons.
The clients
Positioning
Manufacturers in the consumer technology sector such as multinationals,
SMEs and large companies operating
at regional and national level, as
well as retailers. Our top clients
include Carrefour, Hewlett Packard,
Matsushita, Metro, Samsung and
Sony.
The Non-Food Tracking division
is the market leader for services
relating to unit sales data on
consumer technologies in Europe,
Asia and the Pacific as well as in
the Middle East and, in conjunction
with the US company NPD, in the
USA. The advantage for clients
Our offering
Regular reports based on continuous
surveys and analyses of sales
development and product-related
characteristics for consumer
durables at the point of sale. In
addition, we offer special analyses,
in particular of new products and
new markets.
GfK works with all the major retailers
in 44 countries worldwide and the
information is generally supplied in
electronic form.
All the market-relevant product
and technical features of the
various models and items are
categorized and collated with the
sales-related information on the
S*T*A*R*T*R*A*C*K database.
We track consumer technology
markets such as consumer
electronics, IT (hardware and
software), telecommunications,
household appliances, photographic,
optical and lighting, DIY and
building materials, healthcare and
medical devices, toys, sports and
leather goods.
question. “This question will be quite different
for different people,” Clare explains. “The different
positioning of our store chains reflects the
complex ways in which people view the apparently
simple concept of customer service.”
Highlights in 2002
• Acquisition of majority stake in
Institut Français de Recherche
(IFR). Founded in 1974, the
French company collects data
on retail prices and supply
structures for products in the
field of consumer electronics and
IT in fourteen different countries
in Europe
In the world of the
consumer, price is a
top priority, but there
are others ...
33
Data also needs to be understood
The key success factors for today’s retailers are
charging the right price at the right time, and
providing each customer with the optimum level
of service. Both of these require a precise and
up-to-date knowledge of the market, and of often
fast-changing consumer attitudes and habits.
Retailers in particular have to contend with a
seemingly endless stream of figures as they deal
with more customers, employ more people, make
more sales and sell more products. “But you can
have lots of data at your fingertips and still not
understand what it means,” Clare says. “And that’s
why we’re working with GfK.”
» Dixons managers need to know on a daily basis
whether their rivals are changing their prices, and if
so by how much, so that they can decide how the
Dixons chains should respond.«
34
Retailers already know
that price is a crucial factor.
For Dixons, the second
question is key.
Ian McCann, Managing Director of GfK Marketing
Services UK, recalls that his company began
cooperating with Dixons in the 1970s on household and consumer panel data. They faced many
difficulties, because in those days few British
retailers understood the value of professional
market research or wanted to take part in panels.
“Eventually, because of their strength in the
market, Dixons and a few other large retailers got
their way. We started the electronic appliances
retail panel in the early eighties, and over the
years we’ve expanded the number of markets
we monitor. Our surveys for the Dixons Group
now cover the majority of their sales.”
Dixons managers use daily and weekly market
research data at every level of the business, to
provide the Group and its managers with the
up-to-date input they require. For example, Clare
needs to know on a daily basis whether his rivals
are changing their prices, and if so by how much,
so that he can decide how the different Dixons
chains should respond. “As soon as our competitors
change their prices, we have to change ours
as well – and this usually happens within the
hour.”
Continuous market research
In turn, competitors respond to Dixons’ price
changes, which have implications for sales of the
products and brands concerned. GfK provides
Dixons with weekly and monthly retail data and
consumer survey results as the basis for decisionmaking.
“I need the very latest information available if
I’m to take decisions like whether I can afford to
increase the price of a product in one chain,
and whether I can also do so in another. Which
groups of customers are likely to react in what
ways? And what’s the best action to take?
I might decide to revise the price at Currys but
not Dixons, or at Dixons but not at PC World.
“This is a very hectic business when it comes
to pricing policy, especially between about 7.00
and 8.30 each morning when we find out our
competitors’ prices.”
Market research data is used to support not only
short-term decision making, but also long-term
strategy. For example, Clare has to make important
decisions about which products to sell and where
to sell them; these determine what is sold, and in
what quantities, for a whole year.
“I need all the available market data if I’m to make
forecasts and say how the market is developing.”
Clare combines the results of market research with
information he receives from suppliers: what new
products they are planning to bring out, and what
forms of technology they will be using. The aim
is to decide what the different product ranges
should look like if the various Dixons chains are
to consolidate and expand their position in the
market.
Non-Food Tracking
GfK SPECIAL
The customer is king!
Establishing what customers
want is the domain of market
research – and this is where
GfK reigns supreme.
But that’s not all Clare uses market research for.
He also has to make capital-intensive business
decisions concerning the individual chains’
medium-term and long-term development. To do
this, he mainly needs information about consumers
and the market share of brand manufacturers,
broken down by retailer and by catchment area.
And finally, he needs to know all about the other
European countries into which Dixons has already
expanded – Czech Republic, Denmark, Finland,
France, Greece, Hungary, Iceland, Ireland, Italy,
Norway, Spain, Sweden – and those where the
Group could set up other chains in the future.
“GfK data helps us at every level: daily and monthly
activities, annual budgeting and long-term strategy,”
stresses Clare.
GfK Marketing Services UK,
Surrey, UK
Operating in the Non-Food Tracking division, GfK Marketing
The formula for success: a bit of luck, and a lot
of planning
This has not always been the case; like many
other leading retailers, Dixons used to be run by
big-name entrepreneurs who operated on instinct.
In the words of the founder’s son Stanley Kalms,
the company initially worked on the basis of
“fortune smiling on opportunity”. But Clare, who
joined Dixons in 1986 and has been Group Chief
Executive since 1994, says there is another element
at work. “I think that luck and chance are still
important factors in Dixons’ success – luck always
has a role to play. And creativity, adaptability and
agility as well. But there’s also a need for very
careful planning – and producing market data is a
part of that.”
» GfK data helps Dixons at every level:
daily and monthly activities, annual budgeting
and long-term strategy.«
Services UK is a leading provider of retail information services
relating to consumer electronics markets in the UK.
Established in 1984 on the basis of co-operation with the
Dixons Group and other British retailers.
Key clients include: Black & Decker, Electricity Association,
Electrolux, ICI Paints, JVC, Kodak, Merloni , Panasonic, Sharp,
Sony
Key markets: consumer electronics, DIY, furniture and
home furnishings, gardening, information technology, office
supplies, photographic and optical, utilities, household
appliances, telecommunications
179 employees
Recording of retail data in cooperation with retail partners
Last but not least, Clare’s decisions are based on
information about consumers. As the competition
becomes fiercer and products are sold in more and
more different ways, so it becomes increasingly
important to provide the right answer to the
consumer’s second question – the one they ask
after finding out how much the product
costs. 35
36
The listening watch
How the electronic measuring device, Radiocontrol, has been showing radio
stations, advertisers and media professionals in Switzerland where, when,
why and how people today are listening to the good old radio
Media
GfK SPECIAL
37
IHA-GfK, Switzerland: radio audience research
for Swiss public service broadcasters SRG SSR idée suisse
The listening watch
The system developed by GfK companies, Telecontrol and Liechti, under the name Radiocontrol
and introduced by IHA-GfK to measure radio programme consumption by means of a specially
equipped wristwatch has actually been used for the first time in Switzerland. The technology cuts
out hitherto unavoidable error sources to provide up-to-the-minute results faster than any previous
radio research has been able to offer.
Peter Brun, Head of
Programming at the oldest
– and today, the largest –
38
private radio station in
Switzerland, interviewing
a politician
For one week twice a year, a total of 22,000 Swiss
citizens aged 15+ have been given the opportunity
of revelling in unique state-of-the-art status.
They are the only ones to wear a wristwatch
which, in addition to telling them the time can
provide a conscientious and representative record
of when they are listening to the radio and if so,
to which station. Swiss GfK company, IHA-GfK,
is carrying out the research on behalf of public
service broadcasters, Schweizerische Rundfunkund Fernsehgesellschaft SRG, and SRG company,
Publica Data, which sells radio audience data to
48 private radio service providers, telling them all
they need to know on listening habits in Switzerland. The reason for this is that:
1. Broadcasters are seeking to draw conclusions
from the data for the purposes of programme
optimization and ongoing development.
2. Advertisers and their agencies can use these
radio coverage statistics to resolve the question
of what would be an appropriate cost for a radio
spot.
The watch not only represents the pinnacle of the
watchmaker’s art, but is also a masterpiece of
complex electronic data processing technology,
to which GfK has contributed both ideas and
software. A sensitive microphone is automatically
activated for four seconds in every minute to record
all ambient noise which is then transformed into
digital data consisting of character sequences
compressed 120 times. As Rolf Müller, Managing
Director of Publica Data, explains: “It makes
subsequent reconstruction of the original sounds
impossible.” This is a fact which Radiocontrol
manufacturers, Telecontrol and Liechti, have
also had confirmed by the Swiss Department of
Measuring Technology and the Federal Data
Protection Office, and indeed, the watch does comply
with all the conditions of the Data Protection Act.
Media
GfK SPECIAL
Radiocontrol, the listening
watch, records all radio and
TV sounds in the wearer’s
environment on a
minute-by-minute basis.
Tonal sequence comparison
The watch has a memory of one megabyte to store
seven days’ data and an integral “wearer check”
verifies whether the watch is really being worn
and has not just been left lying about somewhere.
After a week’s operation, the participants return
their watches to IHA-GfK, where the data is
analyzed with the help of an audio comparative
method. IHA-GfK personnel compare the tonal
sequences registered by the watch with the tonal
sequences which they have recorded from the
individual radio stations at the same times and
immediately, this identifies which stations the
participant in question was listening to during
defined units of time.
Every week, the watches are worn by a different
group. Each participant may only take part in
the survey twice a year for one week, with a gap
of 26 weeks and over a maximum period of five
years. Over a period of one year, the researchers
analyze the data from watches worn by around
22,000, of whom 20 per cent are always first-time
participants.
Knut Hackbarth, Head of Media Research at IHAGfK in Switzerland, describes the organizational
process: “Participants are notified by telephone
that they are on duty and the watch is sent to them
by post. We also ring everyone to check that the
watch has arrived and that there are no problems.
In addition, we monitor that all participants send
their watches back on time.”
» The survey method used to date relies on listener
recall, which is fraught with uncertainties when it
comes to radio research.«
Hackbarth adds: “All of them are obliged to wear
the watch on their wrist as much as possible and
only to take it off when absolutely necessary and
even then, to leave it somewhere where it is likely
to pick up a radio playing. Like in the bathroom or
in the kitchen.”
Error sources in conventional interviews
Rolf Müller
As the Head of Publica Data AG, which is a subsidiary of
Swiss public service broadcasters SRG SSR idée suisse,
he has overall responsibility for the Radiocontrol project.
He regularly supplies radio ratings information on stations
and programmes to 48 private Swiss broadcasters.
By the end of 2000, the Radiocontrol system had
replaced the method previously used by Swiss
market researchers: face-to-face interviews. Hackbarth explains: “We used to conduct 18,200 interviews per annum in Switzerland, proportionally
split over the three regional languages: French,
German and Italian. The interview would begin
with simple introductory questions on the subject
of radio, such as how often the interviewee listened
to the radio in one week or which stations were
usually listened to and this we termed the general
listening public.”
39
People listen to the
radio everywhere.
And Radiocontrol
listens everywhere too.
40
During the course of the interview, those surveyed
would give details on what they actually listened
to on the radio between five a.m. and midnight
the day before. Interviewers would ask exactly
what the interviewee had done in time units of
15 minutes each: sleeping, eating, working, driving,
at home, out for a walk, shopping, at leisure. And
the interviewee was also asked if he or she had
listened to the radio at the same time and if so, to
which stations. As Hackbarth says: “Exactly as
radio research is still conducted in Germany
today”, at the same time injecting a doubt that:
“With this form of survey, we are counting on
the interviewees’ powers of memory and this is
fraught with uncertainties, particularly in the case
of listening audience research.”
» Radiocontrol has no problem with the growing number
of radio stations, nor with the question of what stations
are really listened to and for how long.«
According to radio research experts, the danger
lies precisely here, in the fact that recall of the
duration, as well as the radio stations listened
to, can be suspect. Problems also arise in the
identification of stations which have not been
specifically chosen by interviewees themselves.
For instance, over lunch, children may be listening
to the radio station selected by their parents,
whilst in offices, people may be hearing news or
music on radio stations which people other than
the interviewee are responsible for choosing.
In restaurants, taxis or stores, too, radio stations
chosen by other people may be playing.
In such cases, the interviewees generally have no
idea as to which radio station they have been
listening to, or for how long. Hackbarth goes on:
“Unlike TV, which usually has a fixed location in
a household, a radio is extremely portable and
can be used in the most varied locations, often as
a source of background noise. This makes it
difficult for anybody to remember exact details.
Erroneous estimates and confusion in the light
of the interchangeability of some programme
formats may well occur.”
Closer to the truth: Radiocontrol data
In fact, inaccuracies may have fatal consequences,
because results obtained by these methods
influence two key statistics, which are decisive for
the existence of a station and for the advertisers’
media planning:
1. coverage and
2. listening duration.
And it is here that Hackbarth and his client, Rolf
Müller, recognize exactly what the Radiocontrol
system can provide: by comparison with the
previous survey method, Radiocontrol data reveals
a clear increase in the number of stations used and
a definite drop in the results for listening times for
particular stations. Müller says: “The improvement
Knut Hackbarth
Head of Media Research at IHA-GfK in Switzerland, manages
the Radiocontrol project. It is the first large-scale study in the
world to record radio ratings electronically.
Media
here is very real and this more than justifies the
increased cost, which is almost twice as high.
The improvement also means that the data can be
made available so much more quickly than before.”
The advantages are obvious:
1. For Radiocontrol, the growing number of stations
(some 4.6 million Swiss in the 18 Germanspeaking cantons can currently choose between
five German language SRG stations and 48
private radio stations, although in high density
population areas, several more private stations
are competing against SRG for audiences) poses
no more of a problem than the question of
which stations were really listened to and for
how long.
SRG SSR idée suisse and Publica Data AG, Berne
and Zürich, Switzerland
SRG SSR idée suisse is a public sector company and the
leading provider of electronic media in all four language
GfK SPECIAL
service station, SRG (Schweizerische Radio- und
Fernsehgesellschaft), which is financed by licence
fees, carries no advertising apart from sponsored
programmes on its radio stations, in terms of
programmes, it is a powerful opponent for the
advertising-financed private stations. In order to
survive on advertising revenue, they have to offer
attractive programming for the target groups
whom the advertisers are trying to reach.
» Advertisers and their ad agencies use the ratings
figures to estimate the reasonable costs of radio
advertising.«
And because at 3.4 per cent or 120 million Swiss
francs, only a comparatively low proportion of
ad-spend goes into radio advertising in Switzerland, convincing audience figures are required to
secure a share of the advertising cake. By way of
comparison, in Germany, the share of the media
market attributable to radio is three per cent, or
678 million Euros per annum.
41
regions in Switzerland.
Established in 1931, SRG has been trading under the name
SRG SSR idée suisse since 1999.
The media offering: seven TV and eighteen radio stations.
The national, multi-media and multi-lingual offering covers
content ranging from news, reports, political, cultural and
social background reports right through to entertainment,
including film, sitcoms, radio plays, shows, talkshows and
music.
Publica Data AG: SRG SSR subsidiary founded in 1993.
Its remit is to sell SRG SSR media and audience research –
primarily information from continuous TV and radio ratings
research. Its clients include private media companies,
advertisers as well as media and advertising agencies.
The Radiocontrol survey is a Publica Data project.
2. Reliance on the power of human recall no longer
applies. The audiometer measures every minute,
irrespective of what the participant happens
to be doing at the time. Data is recorded to the
minute, with nothing lost.
The oldest electronic
The battle for ad-spend
mass communication
4. Times during which, for example, a vacuum
cleaner is being used or other noises drown
out radio music, or the times when participants
turn the sound down because they are on the
telephone, are deducted from the listening time
recorded.
Accordingly, the stations are fighting hard for
each franc spent on advertising, especially as
Switzerland is not immune to the problems of the
global economy and the fact that media buyers
are asking for very precise justification of the cost
of advertising. Which accounts for the 48 private
stations investing in Publica Data analyses of
Radiocontrol data. SRG is perpetuating a tradition
sustained over many years by processing the raw
data supplied itself.
Given the difficult market conditions, Müller
believes that this is a good thing. While the public
However, the results supplied by the wristwatches
are just as important for programme planners and
3. Erroneous estimates of listening behaviour are
avoided.
medium, the radio, is
always present:
at home, in the car,
at work or in shopping
centres.
Satellite park on the roof
of CABLECOM, which runs
the biggest cable network
in Switzerland.
programming as for media planning. Those
responsible can read off the success or failure
of their programme formats and of individual
programmes, of whether listeners are staying with
a particular programme or switching over to other
networks during it, or for good, from the statistics
obtained and they can draw their own conclusions.
42
Publica Data boss Müller gives an example of
the effect Radiocontrol results may have on
programming.
» Radio broadcasters aim to use Radiocontrol data to
draw conclusions about how to optimize and further
develop their programmes.«
Zurich-based major local broadcaster, Radio 24,
can rely on the fact that in all its formats, it is
consistently ahead of the competition for coverage
and listening duration, except in the case of one
programme, which is broadcast late on Friday
evenings. “It was actually a fantastic programme
called ‘Ministry of Sound’, which is young, trendy,
features techno, has an English DJ, is produced in
London and marketed globally – a real recipe for
success,” reports Müller. Nevertheless: Radiocontrol
recorded figures which caused dissatisfaction
among those responsible at Radio 24.
These sort of helpful decisions are made possible
by the commitment of those people prepared to
wear the Radiocontrol watches, initially for a week
and then again for as long as the survey procedure
prescribes. For their part, they find fun in the
actual taking part, because a nice watch alone,
which they receive as a gift for participating, is not
the incentive in the long term. In fact, 86 per cent
of participants record their willingness to continue
– six per cent more than is necessary.
The very positive reception with which the Radiocontrol system has met in Switzerland and the
successful pilot studies carried out in France,
Germany and the UK, not to mention an initial
three-year contract with The Wireless Group and a
pilot project with Rajar, the association of British
radio stations which measures radio reach, are
all signs that the radio research landscape will
change worldwide in the coming years. Also in
the Asia-Pacific region, where ACNielsen Media
International has been granted the licence by GfK
to use the technology in 16 countries, the first
large-scale trials are starting. Soon, people in all
the major countries of the world will be proud to
belong to an élite distinguishable by a wristwatch
nobody else is entitled to wear. IHA GfK AG, Hergiswil, Switzerland
Radio 24 learns from Radiocontrol statistics
But instead of moaning, they looked at the results
and acknowledged that perhaps not everybody in
the large group of young people was as impressed
by the constant stream of English in the programme
as had originally been thought. The result was that
Radio 24 producers developed a new programme
with a similar format, only not quite as trendy
and with lots of event news broadcast directly from
Zurich and surroundings, and less about the
London scene or elsewhere in the world. A DJ was
brought in to chat along in Zurich dialect – and
the programme climbed from a weak market share
of 5 per cent to 11 and then up to 19 per cent.
The leading provider of market research services in Switzerland, commissioned to carry out continuous TV and radio
reach research for many years, active in all GfK business
divisions.
Established in 1959, part of the GfK Group since 1998
Key clients: in addition to SRG SSR idée suisse and Publica
Data, its client base includes Agro-Marketing Suisse AMS,
Bundesamt für Statistik, Coop Schweiz, Crédit Suisse, Die
Schweizerische Post, Feldschlösschen Getränke, Henkel,
Lever Fabergé AG and Migros.
Key markets: energy, financial services, FMCG, durables,
healthcare and pharmaceuticals, logistics, media, public
service, telecommunications
280 employees, over 500 interviewers and own telephone and
test studios.
Media
GfK SPECIAL
Brief overview: Media
Pioneering information services
on media reach and impact
Key services
The clients
Information services on media
consumer behaviour and attitudes.
Services include quantitative
analyses of viewer, reader and
listener reach and qualitative
surveys on acceptance, preference
and recall of media content.
For one part, these comprise TV and
radio stations and their existing
clients in several countries, as well
as media companies in the print and
Internet sectors and on the other,
the advertising industry and media
agencies. Major clients include AGF
(Television Research Partnership) in
Germany, ORF (Austrian radio and
TV) in Austria and SRG SSR (Swiss
radio and TV) in Switzerland, along
with many individual publishers.
Our offering
In addition to the classic media
like print, radio, TV and outdoor
advertising, GfK also surveys the
new media which have become
established thanks to the Internet,
global networking and digitization.
Service details
• Continuous electronic information
gathering on TV ratings in seven
European countries
• Regular periodic surveying of
the print, radio, TV, outdoor
advertising and Internet sectors in
20 countries throughout Europe
• Ad hoc surveying of attitudes,
acceptance and preferences
relating to media and media
content
• Continuous electronic radio
research using Radiocontrol
technology
• Hard and software for use in
media research for measuring,
data processing and analysis,
including Telecontrol TV metering
equipment and Radiocontrol for
electronic measurement of radio
reach, in addition to pc#tv TV
consumption analysis software
Media reach is the currency for TV
and radio programmes, as well as for
newspapers and magazines. Media
companies use it as the basis for
price structures for online and printed media and advertising and other
agencies use it as the basis for their
media planning. In addition to this,
information obtained from media
research is used to help shape programmes and media content.
Highlights in 2002
• Acquisition of contract to establish
a TV panel comprising 1,500 households in the Ukraine. The contract
runs over four years and includes
equipping the TV panel with TV
meters developed by GfK subsidiary Telecontrol in Switzerland.
• Extension of current contract
with AGF (Television Research
Partnership) to the end of 2004 for
measuring TV ratings in Germany,
as a result of which extension,
seven per cent of the 5,640 households which make up the AGF/GfK
TV panel will also have the
digitally broadcast programmes
they watch recorded, in addition
to those broadcast analogously.
• Radiocontrol trials in radio
listening research in France and
Germany
• Pilot project with Rajar, the
association of British radio stations
which measures radio reach
• Three-year contract with The
Wireless Group, under the terms
of which GfK will measure radio
reach throughout the UK using
Radiocontrol technology from
2003.
• Licence agreement with media
research institute, ACNielsen
Media International, regarding
the use of Radiocontrol technology
in 16 countries in Asia and the
Pacific
Positioning
Global leader in innovative electronic
metering technology in quantitative
TV and radio reach research
European market leader in quantitative TV research
Number one in overall media
research in Austria, Germany, the
Netherlands and Switzerland 43
44
Providing moments of refreshment to
people – everywhere at any time
What the world’s biggest soft-drinks manufacturer and owner of the most valuable
brand does to keep ahead of the competition in terms of product quality, logistics,
distribution and local marketing in the USA.
Ad Hoc Research
GfK SPECIAL
45
GfK Custom Research Inc., USA: research for Coca-Cola
Providing moments of refreshment to
people – everywhere at any time
“Coca-Cola” may be the world’s most widely understood word after “OK”, but Coke and its allied
brands, such as diet Coke/Coca-Cola light, Sprite, and Fanta still have to fight for market share on
a daily basis.
CLASS (Customer Loyalty And Satisfaction Study), a customer satisfaction survey conducted in
the USA for over ten years by GfK Custom Research Inc. of Minneapolis, has made a major
contribution to this process. The project derives directly from the company’s philosophy which,
despite Coca-Cola being the world’s number one brand, still works on the core principle that
The Coca-Cola Company exists to benefit and refresh everyone it touches.
46
Coca-Cola is the world’s most recognizable brand,
and with good reason. Every day, one billion of
its products refresh thirsty people from Tokyo to
San Francisco, from Cape Columbia to Cape Horn,
and from Longyearbyen to Simonstown – in close
to 200 countries around the globe.
The Coca-Cola Company’s wide-ranging brand
portfolio has an 18 % share of the global soft
drinks market. Its largest Division is North
America, which generates 32 % of revenue,
followed by Asia (26 %), Europe, Eurasia and the
Middle East (23 %), Latin America (11 %)
and Africa (6 %). The Coca-Cola brand was
created in the United States in 1886, while diet
Coke/Coca-Cola light was launched almost a
The Coca-Cola Company
distributes 300 soft drinks
in over 200 countries,
with communication,
marketing and promotional
activities securing a
global presence.
hundred years later. But the company and its
56,000 employees have established a host of other
successful brands around the world. One
is Fanta, invented in Germany in 1940, which
now comes in eight flavours and is sold in 170
countries. Others include Sprite, Cherry Coke,
Vanilla Coke, Mezzo Mix (a refreshing mix of cola
and fruit flavours), Lift Apple, Bonaqa still and
carbonated table water, Dasani purified water,
the energy drink Burn, the fitness drink Powerade,
the Cappy juice and nectar range, Kinley bitter
drinks for adults, Nestea iced tea and the fitness
drink Aquarias. In short, Coca-Cola has something
to quench the thirst of every consumer around
the world.
Ad Hoc Research
Putting the brand philosophy into practice
But turning products into real brands requires a
carefully thought-out philosophy. There are two
things that The Coca-Cola Company regards as
fundamental to its success:
1. Connecting with consumers by creating brands
they love.
2. Finding new and appealing ways to deliver
these brands to thirsty people everywhere.
GfK SPECIAL
3. Grow system profitability and capability
together with their bottling partners.
4. Serve customers with creativity and consistency
to generate growth across all channels.
5. Direct investments to highest potential areas
across markets.
6. Drive efficiency and cost-effectiveness
everywhere.
Objectives 3 and 4, in particular, show that
Coca-Cola and its bottling partners rely on
carefully planned market research projects to
help them make strategically sound decisions
and provide marketing support. The company
uses GfK Custom Research Inc. in Minneapolis
to carry out a number of these research projects,
and its very dynamic distribution system makes
the annual CLASS survey particularly important.
Each local market needs its own strategy
Bob Foley
Manager of the Local Marketing Partner Program at
The Coca-Cola Company in Atlanta, responsible for the
CLASS project (Customer Loyalty and Satisfaction Study).
This customer satisfaction survey conducted regularly in
Many leading international players proclaim their
allegiance to the principle of “Think global, act
local”. Coca-Cola used to be no exception, but
since then its view has changed. Realizing the
importance of local relevance to any market and
community, Coca-Cola believes that thinking smart
the USA for ten years by GfK Custom Research Inc. of
Minneapolis, provides local marketing support to the bottlers
of Coca-Cola products.
» Much of our success depends on the quality
and success of our bottling partners, all of whom
control their local market.«
But it also takes more than a consistent philosophy
to create successful, profitable brands. Staff in
Atlanta, and at the company’s subsidiaries across
the globe, have a precisely formulated set of
objectives which they pursue on a daily basis:
and acting smart provides the flexibility to approach
each opportunity in the appropriate manner.
Sometimes thinking globally is called for and other
times thinking locally is the right approach.
1. Accelerate carbonated soft drink growth, led
by Coca-Cola.
It all leads back to the philosophy that The Coca-Cola
Company exists to benefit and refresh everyone it
touches.
2. Selectively broaden their family of beverage
brands to drive profitable growth.
Bob Foley, Manager of the Local Marketing Partner
Program and the person at Coca-Cola responsible
for the CLASS project, explains the change
in his company’s attitude. “Much of our success
47
The Coca-Cola Company
and across the United States use CLASS to assess
customer satisfaction in an effort to assist bottling
partners to monitor their customers’ needs in the
local market.
produces syrups and
concentrates. Originally,
these were mixed up
on site in bars
“We provide bottlers with detailed information
within their particular markets, keying on the
level of satisfaction their customers have with
the services the bottler provides,” Foley says.
For example, in the foodservice industry, which
sells Coca-Cola fountain drinks as well as brands
in cold bottles and cans, CLASS tells a bottler
how well they are meeting the service needs of
these customers. “That way, bottlers can approach
the market in a targeted manner and practice good
customer relationship management.”
and restaurants.
Customer satisfaction surveys guide
local business
Recent product
innovations from the
biggest soft drink manu-
48
facturer worldwide include
Frozen Cappuccino and
Frozen Vanilla Coke.
depends on the quality and success of our bottling
partners, all of whom control their local market.
Our bottlers and their customers offer our brands
to a hugely diverse consumer base, from the
world’s biggest cities to its remotest villages. Our
bottling partners consistently play a significant
and active part in the life of the local community.”
» Coca-Cola’s managers in Atlanta and across the
United States use CLASS to assess customer satisfaction in an effort to assist bottling partners to
monitor their customers’ needs in the local market.«
Erik Andersen, Senior Vice President at GfK
Custom Research Inc., describes in detail how
this works. “Take the biggest bottler in the USA,
Coca-Cola Enterprises (CCE). They operate
bottling plants everywhere in the USA, and we
carry out our CLASS survey and analysis not just
in the individual areas, but often broken down
into two, three or four local sub-units of a CCE
bottler. With some bottling plants we even analyze
customer opinions down to the level of individual
sales centers, so that we can understand the
level of satisfaction customers have with CCE’s
service. The best way to maximize business is
to understand satisfaction at the closest point of
contact with the customer.”
“The idea is to be in the market together with
Coca-Cola bottlers and our other distributors
who implement marketing and customer support
programs to meet local customer needs. CLASS is
one of the projects that The Coca-Cola Company
uses to measure quality among the bottlers and
other distribution partners in the huge domestic
market of the United States.”
The company ships its products in the form of
syrups and concentrates to bottling partners, who
then manufacture them into the various drinks
brands and package and supply them to retailers,
restaurants, and other types of customers for sale
to consumers. Coca-Cola’s managers in Atlanta
Erik Andersen
Senior Vice President at GfK Custom Research Inc., and
his team have been in charge of the CLASS project since
its launch ten years ago. They know the business and
the local marketing conditions of the bottlers working for
The Coca-Cola Company better than anyone.
Ad Hoc Research
GfK SPECIAL
Brief overview: Ad Hoc Research
Increasing market potential in the long term
Key services
Special markets
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.
In addition, Ad Hoc Research also
offers services for specialized and
highly complex modern markets in
the business-to-business, financial
services, energy, automotive, telecommunications, capital goods,
logistics, FMCG and textiles sectors.
Our offering
A modular system of instruments
and tailor-made solutions for every
phase in the product and service
lifecycle. The system relates mainly
to services where data is gathered
through surveys and tests. Clients
can opt to take up the entire service
spectrum, or just individual modules.
Key service sectors
Market segmentation and evaluation
– market positioning – concept
and product research – packaging
optimization – price optimization –
advertising media optimization –
test market research and forecasting
– brand and campaign management
– customer loyalty research.
Many of the instruments used
have been undergoing continuous
development for decades. This has
given GfK databases, containing
tests which have already been
carried out, to serve as benchmarks
for new surveys. Today, GfK offers
services in 29 countries throughout
Europe and the USA, and works with
cooperation partners in a further
61 countries worldwide.
Clients use these services as a
basis for minimizing the risk relating
to short, medium and long term
marketing decisions and to increase
their success potential in the long
term. Surveys carried out extend
from initial business or product
ideas and pre-launch preparation
to subsequent marketing and
communication activities.
The clients
Clients are companies from industry,
retail and the service sector, as
well as advertising agencies and
other service providers in the
communications sector. Major clients
include Procter&Gamble, Kraft
Foods, Coca-Cola, DaimlerChrysler,
Bank of America, L’Oréal, Wrigley,
BMW and Deutsche Telekom.
• Successful launch of an
instrument which determines
the financial value of brands and
of GfK PackChallenger
• Implementation of international
guidelines to harmonize research
processes
• Award of the prize for best
methodology presentation at the
2002 ESOMAR Conference in
Barcelona for “Assessing the
financial brand value”.
Positioning
In terms of business volume,
GfK Ad Hoc Research is ranked No. 7
in the world and No. 5 in Europe.
GfK Ad Hoc Research is one of
the world’s leading suppliers of
information services in the image
and communication research
segments and of customer loyalty
programmes. Highlights in 2002
• Acquisition of majority shareholdings in Belgian Significant,
German MACON (market leader in
geographic and location software)
and Portuguese Intercampus, as
well as a minority shareholding
in Indicator, the No. 3 in ad hoc
research in Brazil.
• Merger of the three Italian
GfK Ad Hoc Research companies
to form GfK CBI
And Foley resumes: “Each year, based on the
results of the CLASS survey, marketing programs
are developed that can be implemented by bottlers
at the local level. This allows bottlers to provide
their customers with new ideas for promoting
Coca-Cola products in their outlet. The goal of the
Coca-Cola system is to deliver products into the
49
Jason Grubbs is one of
the fleet drivers
in the USA, who make
sure that the source of soft
market in a timely, efficient fashion and to provide
customers with top-quality marketing support.”
drinks never runs dry.
Market researchers’ advice is in high demand
Wherever you look:
50
Coca-Cola, the number one
brand today, was developed
and first sold by pharmacist
John Pemberton in Atlanta.
Each year, GfK Custom Research Inc. carries out
thousands of telephone interviews with a wide
variety of customers of U.S. bottlers. “The team
at GfK Custom Research really understands our
business,” continues Foley. “They are real experts
in customer satisfaction and loyalty, and in
addition to all their outstanding work, they have
built a database of CLASS results and associated
industry information on customer satisfaction
trends and innovations for use by all bottlers and
Coca-Cola Company employees.
“CLASS is all about understanding how well
bottlers are meeting customers’ expectations,”
Andersen goes on to say. “It’s also about
discovering where the growth opportunities lie for
the bottler. And thirdly, it’s about finding out how
to develop long-term relationships with customers,
which is why the project places so much emphasis
on customer loyalty. A large part of our analytical
work relates to what Coca-Cola and its bottlers are
doing to ensure that customers remain committed
to the brand.”
The Coca-Cola Company, Atlanta, USA
Biggest global soft-drinks manufacturer, provider of four
of the five top soft-drink brands in the world: Coca-Cola,
diet Coke, Fanta and Sprite
» CLASS is all about understanding how well bottlers
are meeting customers’ expectations. It’s also about
discovering where the growth opportunities lie for
the bottler. And thirdly, it’s about finding out how to
develop long-term customer loyalty.«
Established in 1896 in Atlanta by pharmacist John Pemberton
Mission statement
“The Coca-Cola Company exists to benefit and refresh
everyone it touches. For more than a century we have been
fulfilling this promise.”
Product range
GfK Custom Research speaks the industry’s
language. They also provide valuable and
independent assistance when we present the
results of CLASS to bottlers and are very proactive in making recommendations for process
improvement.”
As is common in early stages of any customer
satisfaction program, the bottling partners were
concerned about the CLASS results. They felt it
would only reveal their shortcomings and nobody
likes to hear bad news. Since then, they have come
to understand that satisfied and loyal customers,
at whatever level, are the lifeblood of a business
and are ambassadors of Coca-Cola with other
customers and consumers.
In addition to Coca-Cola, the world’s most recognizable brand,
which is valued at almost US$ 70 billion, the company
produces syrups and concentrates for over 300 soft-drink
brands sold in close to 200 countries around the globe.
Of the 321 million inhabitants of North America, on
average consumers will drink one beverage produced by
The Coca-Cola Company a day. The 522 million inhabitants
of Latin America drink a Coca-Cola beverage four times a
week and in the rest of the world, 1.8 billion people drink half
a beverage a week.
Ad Hoc Research
GfK Custom Research Inc., Minneapolis, USA
Provider of information services in ad hoc research,
No. 25 of all US market research companies and the
first service provider to be presented with the American
Malcolm Baldrige Award for Excellent Quality Management in 1996.
Established in 1974 by employees in the market research
division of Pillsbury
Key clients: in addition to The Coca-Cola Company,
GfK SPECIAL
the bottlers who have achieved the highest
customer satisfaction scores. And, at GfK Custom
Research Inc.’s suggestion, there is also another
award for the bottler achieving the highest
improvement in satisfaction over the previous
year. The prizes are greatly coveted, Foley reports
proudly. “Everyone in the bottling system wants
to know who came out on top. The competition
for the awards keeps everyone striving to be the
best.”
Bank of America, General Mills, LaQuinta, MasterCard,
Procter&Gamble, Perfetti Van Melle, Pfizer, Tyson Foods,
Wendy’s
Key markets: automotive, financial services, FMCG,
consumer goods, wholesale, hard and software,
pharmaceuticals, travel and leisure, telecoms
» Some time ago, the CLASS customer satisfaction
survey resulted in the creation of a complex
partnership-based program to support the local
marketing and service activities of Coca-Cola
bottling partners in the USA.«
125 employees at three branches in Minneapolis, New York
and San Francisco.
Foley mentions one instance of how CLASS has
led bottlers to rethink the way they do things.
“If they learn that customers are saying there’s
a distribution problem and products are being
delivered late or not at all, they can decide on
an approach to correct the problem. “Possible
reasons for an issue with distribution might be a
shortage of drivers or overloaded routes. A bottler
has to compete with other industries for drivers
and may decide to implement an incentive
program to attract and retain quality drivers. They
may also look at restructuring routes to allow all
deliveries to be made within the assigned day
without missing a stop or working overtime.
CLASS tells them that a way to achieve higher
customer satisfaction is to ensure that orders
arrive on time.”
Andersen says the survey results are monitored
over time. “The following year, we measure
customer satisfaction again and tell the bottler
how many points it has increased. And if there’s a
significant rise, we make a point of congratulating
them.”
Foley and Andersen agree that CLASS results
often lead to strategic changes in a bottler’s way
of servicing the marketplace. “We often find that
customer satisfaction has actually shown a marked
improvement.”
Everyone wants to be the best
Big improvements can also pay dividends of their
own, because Coca-Cola gives annual awards to
Some time ago, the customer satisfaction survey
resulted in the creation of a complex partnershipbased program to support the local marketing
and service activities of Coca-Cola bottling partners in the USA. Bob Foley summarizes: “CLASS
is no longer just our survey. It also belongs to our
bottlers, and they want to know what their customers
think of their products, services and sales support.
It gives us at The Coca-Cola Company a direct way
of keeping a finger on the pulse of our customers
through the hard work of our bottling partners.” 51
Local school children
visiting the World of
Coca-Cola in Atlanta
G f K S H A R E S – I N V E S T O R R E L AT I O N S
A D I F F I C U LT Y E A R F O R S H A R E H O L D E R S
The worldwide stock market decline that affected nearly all equities during 2002 also
impacted on the GfK share price which, by the year-end, had fallen to EUR 12.81
(–37 per cent). However, the management remains convinced that the current share
price does not present an objective reflection of the fundamentals of GfK. On the
contrary, the management believes that the GfK share is undervalued, both in relation
to the reference indices and to its competitors.
2002 – worldwide stock market decline
52
In 2002, stock markets came under pressure worldwide, with the Dow Jones in the
USA down by almost 17 per cent and the Nikkei-225 in Japan by 18 per cent. The
European bourses sustained even heavier losses, with the Dow Jones Stoxx 50, the
European index, falling by over 35 per cent in comparison with the previous year.
In Germany, the Dax and the MDax lost more in percentage terms than at any time
since their introduction in 1987.
For the third year in a row, the Dax recorded a loss, ending 2002 down 44 per cent
on 2,893 points, following its earlier losses of 19.8 per cent in 2001 and 7.5 per cent
in 2000. The MDax, on which GfK was listed, fared better, losing 30 per cent in 2002
compared with a fall of 7.5 per cent in 2001 and rising by almost 14 per cent in 2000.
The DJ Stoxx Media, which is the sector reference index for the GfK share price, saw a
sharper fall than that of the major German indices of 47 per cent in 2002.
Share price performance from January 2002 to March 2003 in EUR*
25
20
15
10
5
January 2002
April 2002
* Indexed to the GfK share price
July 2002
October 2002
GfK (XET)
Dax 30
January 2003
MDax
DJ Stoxx Media
There were various reasons for the poor performance of equities in 2002, above all
a series of accounting scandals which dented investor confidence in accounting
practices and the figures published by companies. In addition to concerns about the
economic situation, there was increasing fear later in the year about the possible
consequences of a war in Iraq. By the autumn, this combination of circumstances had
brought the stock markets to rock bottom.
GfK shares – Investor Relations
THE GfK GOUP
At the same time, the fall in the markets opened up new opportunities, with many of
the expected economic and political risks already having been factored into share
prices. For example, at the current level of the Dax, the price/earnings ratio on the
GfK share price performance comparison
in %
2002
From IPO to
31 March 2003
GfK AG
– 37.2
– 41.1*
Dax
– 43.9
– 53.9
MDax
– 30.1
– 32.0
DJ Stoxx Media
– 47.0
– 57.9
*Compared with the Initial Public Offering (IPO) price of EUR 18.50
53
basis of profit forecasts for 2004 stands at 11. By comparison, when the equity markets
peaked in March 2000, the P/E ratio based on profit forecasts for 2001 stood at nearly
30, almost three times as high.
GfK share price influenced by the market
Over the course of the year, the GfK share price fell by 37 per cent from EUR 20.39 at
the end of 2001 to EUR 12.81 at the end of 2002. Between the high of EUR 24.30 and
the low of EUR 11.50, there was a fluctuation spread of EUR 12.80. Compared with the
share price of EUR 18.50 at the time of the IPO, the price at the end of 2002 represents
a fall of 31 per cent, or an average annual reduction of 10.7 per cent.
Initial shareholders who reinvested their gross dividends, inclusive of corporation tax
credit, have seen their investment in GfK shares shrink by an average of 10.1 per cent
p. a. Over the same period, an investment in bonds would have returned an average
yield of 4.9 per cent p. a. The GfK management is not satisfied with this result. On the
contrary, it is convinced that the current share price does not provide an objective
reflection of the fundamentals of GfK and that the share is undervalued in relation to
the reference indices and to the shares of competitors.
GfK shares in the analysts’ spotlight
Despite all of the restructuring and downsizing of the research and analysts’ departments of the banks, GfK continues to be rated by thirteen well known institutions.
Although some of the smaller research firms ceased tracking GfK shares, some larger
institutions have provided ratings of GfK shares for the first time. Indeed, more than
half of the banks and brokers which now rate GfK are global players and some of them
monitor the shares from abroad.
Corporate Governance
The German Corporate Governance Code published in 2002 has laid down internationally recognized standards of good, responsible corporate management to
complement the legal requirements. GfK welcomes this step and, in accordance with
§ 161 of the German Stock Corporation Act (AktG), has disclosed the extent to which
it complies with the recommendations of the Code.
54
Existing practices largely correspond to the recommendations and suggestions of
the German Corporate Governance Code. For example, the Group has already had
rules of procedure for the Management Board and the Supervisory Board for a number
of years. Since the IPO in 1999, GfK has presented quarterly reports and provided a
webcast of its General Meeting and accounts press conference. In the past year, GfK
switched its accounting system to the international standards of US GAAP. In order to
enable private investors to exercise their voting rights more easily, GfK made a voting
representative available to its shareholders last year and this service will be further
expanded.
In its implementation of the German Corporate Governance Code, GfK will be further
extending the range of information available on the Internet.
The Management Board and Supervisory Board of GfK AG have resolved to disclose
not only deviations from the recommendations contained in the Code but also deviations
from its suggestions, even though the latter is not a legal requirement. The declaration
of conformity provided for in § 161 of the German Stock Corporation Act was made
by the Management Board on 9 December 2002 and by the Supervisory Board on
19 December 2002.
The deviations relate to the following:
At the Annual General Meeting held on 13 June 2002, the owners of the company
resolved by a 98 per cent vote authorized capital including a provision to exclude
shareholders’ subscription rights. Strict limits are laid down for this exclusion. The
authorization is intended to give the Management Board the necessary flexibility to
implement decisions quickly for the benefit of the company and the owners.
GfK will give the remuneration, shares and stock options of the members of the
Supervisory Board and the members of the Management Board as totals, covering the
Management Board and the Supervisory Board separately. The statement, which is
contained in the Notes to these accounts, is divided into fixed and variable salaries
and the portfolios of stock options and GfK shares.
The Management Board and Supervisory Board consider that it is important to reduce
the time needed for the publication of the Group annual report and the interim reports.
Accordingly, the Management Board has introduced measures to speed up publication.
GfK does not see transparency as a burdensome duty but as part and parcel of
communication with GfK shareholders and the public. Hence, as far as the company
is concerned, the deviations notified represent not an end in themselves but a step
towards further improvements.
THE GfK GOUP
Country of origin of institutional investors
in %
UK
6.8
Germany
5.4
USA
5.2
France
2.2
Other
1.8
Total
21.4
55
Free float at international level
There was no significant change in the GfK shareholder structure during the past year.
GfK-Nürnberg e.V. is the largest shareholder with a holding of 64 per cent. Of the
36 per cent free float, 33.7 per cent is held by private and institutional investors. Of
this 33.7 per cent, the bulk (21.4 per cent) is in the hands of institutional investors
(2001: 20 per cent), while 12.3 per cent is held by private investors (2001: 13.7 per
cent). The Management Board and Supervisory Board hold 2.3 per cent. The largest
group of institutional investors is from the UK with 6.8 per cent (2001: 7.8 per cent).
This is followed by Germany with 5.4 per cent (2001: 4.3 per cent), the USA with
5.2 per cent (2001: 3.8 per cent) and France with 2.2 per cent (2001: 3.2 per cent).
Current shareholder structure
12.3 %
2.3 %
64.0 %
21.4 %
Dax 100 and MDax ranking
in %
At the 2002 year-end, GfK ranked 89th in the Dax 100 in terms of volume traded
and 87th in terms of market capitalization. In 2002, the average daily trading volume
was 13,904 (2001: 14,957). During the year under review, there was a further shift
in trading away from the Dax 100 to the Xetra, bringing the volume traded on the
Xetra electronic platform to almost 85 per cent (2001: 79 per cent).
Following the change in the segmentation of equities on the Deutsche Börse in 2003,
GfK shares are now listed on the SDax instead of the MDax. With effect from 24 March
2003, the MDax was reduced from 70 to 50 stocks. In consequence, this index now
only includes the 60 largest companies in terms both of market capitalization and volume traded. According to the rankings published by the Deutsche Börse on 31 January
2003, GfK occupied 58th place on the basis of market capitalization and 68th place
on the basis of volumes traded. On the SDax, which like the MDax includes 50 stocks,
GfK is ranked 7th.
As many investors in GfK shares are industry rather than index-oriented, GfK believes
that the change will not have any significant adverse impact in the long term. For
institutional investors, the main interest in GfK is as one of the leading companies in
the field of market research.
GfK Nürnberg e.V.
64.0
Institutional investors
21.4
Private investors
12.3
Management Board and
Supervisory Board
2.3
GfK shares: key data
Unit
20012)
2002
High
EUR
35.25
24.30
Low
EUR
14.10
11.50
Close
EUR
20.39
12.81
Average daily volume traded1)
No.
14,957
13,904
Number of no-par shares
No.
26,121,998
26,121,998
EUR million
532.6
334.6
88
79
89
87
0.20
Market capitalization as at 31.12.
Rank in Dax 100
by sales
by market capitalization
Dividend
56
EUR
0.17
EUR million
4.4
5.2
Earnings per share
EUR
0.24
0.98
Free cash flow3) per share
EUR
1.72
1.55
Total dividend
1) GfK shares are officially traded on the Frankfurt stock exchange
(Reuters: GFK.DE, Bloomberg: GFK GR, ISIN: DE 0005875306, German securities code: 587530)
2) Pro forma statements
3) Before acquisitions, other investment and asset disposals
Dividend increase planned
Following a resolution of the GfK Supervisory Board, a dividend of 20 cents per share
will be proposed to the Annual General Meeting on 13 June 2003, an increase of
17.6 per cent over the dividend of 17 cents per share paid in 2002. The total dividend
will rise to EUR 5.2 million (2001: EUR 4.4 million). Since its IPO in September 1999,
GfK has continually increased its dividend by a total of 54 per cent.
Stock option programme continued
At the year-end, GfK managers again had the opportunity to exchange part of their
performance-related remuneration for stock options. Of the total of 594,117 options
offered, 476,662 were taken up, which represents an acceptance rate of 80.2 per cent.
The basis for subscription is the stock option programme newly resolved at the AGM
held on 13 June 2002. After this year’s AGM on 13 June 2003, two tranches can be
exercised: the first tranche consisting of 389,165 options at a price of EUR 55.20
and the second tranche of 375,725 options at a price of EUR 41.71. Due to the high
exercise price, neither tranche is yet in the money.
Investor Relations activities stepped up
The aim of the Investor Relations department is to provide prompt and comprehensive
information about the GfK Group and its business. GfK wishes to ensure thereby an
efficient opinion-forming process, so that investors, analysts and the financial media
are able to arrive at an appropriate assessment of the financial position of GfK and its
future prospects. Through open financial communication, the Investor Relations
department seeks to develop and strengthen confidence in GfK and in the success of
its business model in the financial community.
To position its shares in countries in which the GfK Group is a market leader, the
management has taken part in many different events with international analysts
and investors. In addition, GfK has regularly published interim reports and provided
information about important events by e-mail, fax, post and conference calls.
THE GfK GOUP
Provisional key dates in the financial calendar
30 April 2003
Accounts press conference, Nuremberg
30 April 2003
Analysts’ conference,
Frankfurt/Main
In particular, Investor Relations activities have included:
27 May 2003
• roadshows to address investors directly in Germany, the USA, the UK and France
Quarterly report as at 31 March*
• over 90 individual meetings with investors and analysts to discuss questions of
strategy, the financial situation and market forecasts
13 June 2003
• 16 conference calls with share analysts and institutional investors
27 August 2003
• 8 international conferences
Annual General Meeting, Nuremberg
Interim report as at 30 June*
• participation in INVEST 2002 in Stuttgart, where private and institutional investors
were able to inform themselves on the financial statements for 2001 and the
prospects for the year in progress.
26 November 2003
The AGM held in Nuremberg on 13 June 2002 was attended by nearly 400 shareholders and shareholder representatives holding 71.3 per cent of the share capital of
GfK. As well as the increase in the dividend, they approved the GfK strategy of further
expanding the Group’s international network.
26 February 2004
The Internet is becoming increasingly important as a means of financial communication. During the past year, more and more private and institutional investors made
use of the GfK website to call up information about the company and its shares. They
also took advantage of the opportunity to use the Internet to follow the AGM and the
accounts press conference.
Quarterly report
as at 30 September*
Provisional result for
financial year 2003*
22 April 2004
22 April 2004
Analysts’ conference,
Frankfurt/Main
27 May 2004
In future, GfK will be publishing a newsletter four times a year in order to give
investors an insight into the corporate life of the Group. The objective is to make
information about GfK and the market research industry available to a wider range
of investors than in the past. The newsletter will be issued in electronic form and
subscriptions may be taken out by e-mail ([email protected]) or by visiting
the GfK website (www.gfk.de).
15 June 2004
26 August 2004
25 November 2004
Quarterly report
as at 30 September*
* Publication is scheduled for before
the start of the trading session
57
THE MANAGEMENT BOARD
Petra Heinlein
Dr. Gérard Hermet
Responsible for the Media
business division
Responsible for the Non-Food Tracking
business division
Chief Executive Officer (CEO)
Responsible for Strategy, Investor Relations,
Public Affairs and Communications, Method
and Product Development, IT and Management
Development
née Dengler, born in Bad Staffelstein,
born in Montpellier, France,
born in Linnich,
7 October 1958
19 January 1951
23 February 1956
• Professional career
58
Since 2002 Member of the Management Board
Since 1992 Member of the Management Board,
of GfK AG, appointed until 2007
since 1998 spokesperson, and since 1999 Chief
2001 Integration management on behalf of
1998 – 2000 Chairman of the French Marketing
GfK AG for the Martin Hamblin GfK Group and
Association (AFM)
GfK Great Britain, UK
2000 Integration management on behalf of
GfK AG for GfK Custom Research Inc. in the USA
1988 – 1998 General Manager of GfK Sofema,
France
1984 – 1998 Managing Director of GfK France,
Executive Officer of GfK AG, appointed until 2007
Since 1997 Member of the Management Board,
since 2002 Chairman of the Management Board
of ADM, the working group of German market
and social research institutes
1992 – 1997 Member of the Management Board
1992-2000 Managing Director of content census
then General Manager 0f GfK Marketing Services,
in Frankfurt
France
1985 Joined GfK as project manager with
1978 – 1984 Employee of Burke Marketing
General Administration, Minority Interests,
GfK Marktforschung
Research, Paris, France
Production, IT, Data Processing
1984 Research Assistant at the ArnoldBergstraesser-Institut, Freiburg
1984 Graduated in political science from the
University of Bamberg
Financial Controlling, Personnel, Purchasing,
• Training
1978 PhD from the University of Grenoble
• Training
of GfK AG, responsible for Accounting, Finances,
1975 Graduated from the French Business School
(ICN)
of KBA-Planeta AG, Radebeul near Dresden
1984 – 1991 Employee of Bertelsmann AG,
Gütersloh, latterly as Managing Director of
Druck- & Verlagsanstalt Wiener Verlag. Ges.mbH
Nfg. KG, Himberg near Vienna
• Training
1984 PhD from the Technische Hochschule,
Darmstadt
1981 Graduated in economics from the
Universität-Gesamthochschule, Essen
The Management Board
Dr. Franz Merl
Wilhelm R. Wessels
THE GfK GROUP
Heinrich A. Litzenroth
Chief Financial Officer (CEO)
Responsible for Financial Services,
Personnel Services and Central Services
Responsible for the Consumer Tracking
business division and the HealthCare
segment
Responsible for the Ad Hoc Research
business division
born in Regenstauf,
born in Haren,
born in Mölln,
7 April 1949
12 October 1952
13 December 1951
59
1991 – 1996 Managing Director of GfK AG
1993 – 1999 Managing Director of GfK
of Bayerische Treuhandgesellschaft
Gesundheitsforschung/I+G Gruppe Gesundheits-
Marktforschung GmbH
Aktiengesellschaft, Wirtschaftsprüfungs-
und Pharmamarktforschung
gesellschaft Steuerberatungsgesellschaft, Munich
1986 – 1996 Managing Director of GPI
1988 – 2002 Partner at KPMG Deutsche
Gesellschaft für Pharma-Informationssysteme,
Treuhandgesellschaft, Berlin and Frankfurt
Nuremberg/Frankfurt
1996 – 2000 Member of the working group
Rechnungslegung von Stiftungen (accounting for
foundations) at IDW
1986 – 2002 Managing Director of RTG Revisions
und Treuhandgesellschaft mbH, Munich
1973 – 1986 RTG Revisions und Treuhandgesellschaft, Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft, Munich
• Training
1983 Qualified as auditor
1979 PhD from the University of Munich
1978 Qualified as tax consultant
University of Munich
1989 – 1999 Managing Director of GfK
Testmarktforschung GmbH
1978 – 1989 Employee of GfK, responsible for
the development of GfK BehaviorScan in
Germany and building up GfK
• Training
Testmarktforschung
University of Saarbrücken
• Training
1977 Graduated in economics from the Freie
Universität Berlin
60
MANAGEMENT REPORT
MANAGEMENT REPORT FOR THE GfK GROUP
62
1. The economy as a whole and the market
research sector
64
2. The GfK Group
Economic and financial development
68
3. Business divisions
72
68
Consumer Tracking
Growth trend continues
69
Non-Food Tracking
Leading position further extended
70
Media
Affected by the crisis in the print media
70
Ad Hoc Research
Growth achieved despite economic decline
71
Other
Providing internal services and healthcare
information services
4. Regions
72
Germany
Growth through acquisitions
73
Europe
Pleasing increase in operating income
74
America
Good progress
75
Exchange losses countered by strong growth
75
The GfK network
Further expansion
76
5. Risk report
78
6. Research and development
80
7. Employees
82
8. Organization and administration
82
9. Purchasing
83
10. Environmental protection
83
11. Social commitment
84
12. Major events since the 2002 financial statements
84
13. Outlook
61
MANAGEMENT REPORT FOR THE GfK GROUP
1. The economy as a whole and the market
research sector
Baltic countries, for example, expansion accelerated. The causes
for this positive development were rising investment activity and
increased consumer spending.
Overall economic development – modest and patchy
The global economic situation continues to be characterized
by a high level of uncertainty. Particularly in the first half of
2002, there seemed to be the first signs of a slight upturn.
However, during the second half of the year, the talk of a war in
Iraq and declining consumer confidence in the industrialized
countries made it become clear that the hoped for economic
stabilization would still be some time in coming.
62
Nevertheless, despite the weakness of the economy during the
last months of the year, real economic growth in 2002 was
estimated by the FAZ Institute to amount to 2.8 per cent (2001:
2.2 per cent). However, the development of the major regions
and national economies varied widely.
In the USA, where there had been fears of a long phase of
sluggish growth or even recession, strong economic growth
was recorded during the first half of the year. According to
the FAZ Institute, this was due to interest rate policy, active
financial policy and falling crude oil prices. This promising
start engendered expectations of a sharp upturn, which then
failed to materialize. Spectacular bankruptcies, major accounting
scandals and an increase in oil prices spurred by the wrangling
over Iraq all combined to reduce the prospect of a sustained
economic recovery during the second half of the year. According
to the estimates of the DIW (Deutsches Institut für Wirtschaftsforschung, Berlin), real growth in GDP during 2002 amounted to
2.4 per cent (2001: 2.8 per cent).
In Japan, economic experts consider that, despite another slight
fall in GDP of an estimated 0.2 per cent according to the DIW
(2001: -0.3 per cent), the development in 2002 suggests that the
country is now largely out of recession. The slight upturn that
began to emerge was generated largely by private consumer
buying of durables. However, the positive trend continues to be
fragile.
According to the DIW, economic growth was particularly
dynamic in the countries of South-East Asia, with real growth
standing at 4.5 per cent (2001: 2.6 per cent). The main causes
here were rising exports and an expansion in domestic demand.
In Central and Eastern Europe, the national economies
appeared to be largely unaffected by the weak global economy
and, according to the DIW estimate, there was above-average
growth of 3.3 per cent (2001: 3.0 per cent). In the region as a
whole, the economy remained robust during 2002 and in the
In the euro zone, the economic recovery during 2002 failed
by a long way to match the expectations of economic experts
and politicians. Indeed, quite the contrary. At 0.8 per cent, real
economic growth lagged well behind the previous year’s figure
of 1.4 per cent.
Within the euro zone, Germany was once again the tail-ender
with, according to the DIW estimate, a real increase in GDP of
just 0.2 per cent (2001: 0.6 per cent). The mood of economic
optimism which characterized the first half of the year largely
evaporated during the second half. Over the course of the year,
growth forecasts were successively revised downwards. There
were various reasons for this.
Following the intensive debate over the adverse economic
impact of the introduction of the euro, the survey conducted
by GfK for the European Commission in May 2002 showed
that consumer confidence in Germany was at its lowest figure
for 18 years. Then, during the second half of the year, German
hopes of an economic upturn vanished altogether. Crucial factors
here were unemployment and the smouldering conflicts in the
Middle East. Moreover, the crisis in the financial markets resulted
in additional uncertainty. Given the existing weakness of the
German economy, the fall in the stock markets became even
more significant. Share-owning households felt that they were
getting poorer. With the unemployment figures continuing to
rise, consumer spending was also reined back. In November,
the propensity of consumers to go out and buy reached a new
low.
Together with Japan, for the second time, Germany came in last
among the G7 countries.
The market research sector – potential for growth
The hesitant development of the overall economy did not leave
the market research sector entirely untouched. According to an
estimate by Morgan Stanley, companies in the retail, services
and media sector paid out 3 per cent more for market research
in 2002 than in the previous year (2001: in EUR, 5.8 per cent;
in USD, 2.8 per cent. Source: ESOMAR). In absolute terms, this
amounted to EUR 18.3 billion. However, unlike previous years,
the growth in the market research sector was only slightly higher
than that of the economy as a whole.
The economy as a whole and the market research sector
The regional centres in which the industry, retail and services
sector make the most intensive use of market research continue
to be America and Europe. The USA, ahead of the UK, Germany
and Japan, is the largest national consumer of market research
services.
Market research industry in comparison with GNP
and advertising industry worldwide
Index value 1991 = 1001)
1993
111
107
105
1994
124
117
109
1995
MANAGEMENT REPORT
Market research market by region and by country
In %
137
131
America
1%
113
1996
146
138
46 %
40 %
39
Asia
13
of which Japan
116
1997
159
140
121
1998
181
7
Europe
40
of which UK
10
of which Germany
9
Rest of the world
1
13 %
144
125
1999
46
of which USA
Total market volume 2002: EUR 18.3 billion
Source: ESOMAR, Morgan Stanley
198
149
129
2000
206
155
134
2001
212
150
136
20022)
218
149
140
1) Basis: value in USD
2) Estimated industry growth in 2002: 3 per cent
Market volume: EUR 18.3 billion
Source: ESOMAR, Morgan Stanley, Zenith Media
BSP
Advertising
Market Research
Nevertheless, the growth rate for the market research
sector during the past year was clearly better than that of
the advertising industry, which according to an estimate by
Zenith Media, was 0.7 per cent lower than the previous year.
This result confirms a trend that has already prevailed for
ten years, namely that market research is more dynamic and
less cyclical than advertising. One of the main causes for this is
the fact that whether the economy is strong or weak, market
research information services overall are considered to be
indispensable support for the marketing sector activities of companies from industry, retail, media and the services.
Traditionally, manufacturers of branded fast moving and slow
moving consumer goods have represented the largest group of
clients for market research services in terms of overall
sales, followed by media, pharmaceutical and retail companies.
In recent years, however, the client structure has been moving
away from the traditional branded goods industry to such sectors
as telecommunications, financial services, public and private
health services and energy supplies. The causes for this shift
include the privatization and deregulation of these sectors, as
a result of which companies have had to become customeroriented and conduct market research into their potential target
groups.
Market research volume by customer segment
In %
5%
11%
37 %
10 %
Consumer goods industry
37
Media
22
Healthcare and pharma
15
Retail
10
Telecommunications, post,
energy supply
15 %
22 %
Other segments
Total market volume 2002: EUR 18.3 billion
Source: ESOMAR, Deutsche Bank
5
11
63
The market research sector continues to offer great potential for
growth thanks to a number of factors:
2. The GfK Group:
Fierce competition between companies expanding
worldwide continues. Political, economic and technological
developments have greatly accelerated the pace of globalization
of traditional markets for goods and services over the last ten
years and have intensified the pressure of competition between
traditional, local and global companies and brands.
This year, for the first time, GfK is presenting its Group
accounts on the basis of US GAAP (United States Generally
Accepted Accounting Principles). The same principles have
also been applied to the 2001 figures.
Increasing demand for information from small and
medium-sized enterprises (SMEs). The number of SMEs
making use of the new Internet communication platforms
to operate and expand their business at local, national and
international level is increasing and their need for market
research and marketing expertise is growing in parallel.
64
New innovation-driven business and client potential.
The new communication and information technologies have
created additional opportunities and stimuli for growth. On
the basis of these new technologies, a host of new markets for
new products and services have emerged, for example in the
field of telecommunications and innovative domains such as
biochemistry and genetic technology.
New business potential in the emerging markets.
Throughout the world, increasing opportunities for growth are
resulting from trends towards liberalization and democratization.
This applies particularly to the emerging markets in Central and
Eastern Europe, Asia and the Pacific as well as Latin America.
Outsourcing of market research services by clients.
Companies are increasingly cutting down the size of their
own market research departments to a minimum and turning
instead to comprehensive services from outside market research
professionals.
In order to make the special conditions associated with the
change in accounting transparent and to facilitate comparison
with the consolidated financial statements for the previous
year, GfK has also produced pro forma statements as well
as the actual financial statements for 2001. The pro forma
statements include the results of five companies that would
not have been consolidated in 2001 under US GAAP. These are
G.E. Marketing Research and Emer-GfK, both in Spain, GfK
Portugal and METRIS, Portugal, for the full twelve months of
the previous year, as well as Intomart GfK in the Netherlands for
the first six months of the previous year. From 1 January 2002,
all five companies fulfilled the US GAAP requirements for full
consolidation.
Moreover, the additional pro forma statements for 2001
do not include the scheduled amortization on goodwill of
EUR 10.4 million reported in the actual income statement
which is to be shown in accordance with the accounting
principles of US GAAP which still applied in 2001. From
2002 onwards, there are no more scheduled amortization,
but impairment principles for goodwill amortization. This
did not result in any expenses.
The pro forma financial statements for 2001 are intended for
comparative purposes in the following1).
Sales and income – double-digit growth
In 2002, the GfK Group achieved sales of EUR 559.4 million,
up 10.6 per cent on the previous year, a result which raised
it to fifth place in the rankings of the world’s leading market
research companies. In addition to the contribution of organic
growth at a higher than average rate for the sector, a substantial
part of this increase came from companies consolidated for the
first time in the year under review. They include IFR Group,
France, Significant GfK, Belgium, GfK MACON, Germany and the
healthcare activities of the I+G Group in Germany, acquired as
part of a merger.
1) The percentages given below are all based on absolute values in thousand
euros. For ease of legibility, the absolute values are expressed in million
euros. Calculating percentages on the basis of the values expressed in million
would have led to distortions, particularly for lower numbers.
Earnings1)
In EUR million
Sales
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
+ 10.6
482.1
505.8
559.4
– 451.8
– 471.1
– 512.1
– 8.7
Operating income
30.3
34.7
47.2
+ 36.4
Other income less
other expenses
Operating costs
– 14.5
– 4.9
–3.6
+ 25.8
EBITDA
52.8
58.0
68.5
+ 18.2
as percentage of sales
10.9
11.5
12.2
–
EBIT before income
from participations
15.8
29.8
43.6
+ 46.6
3.3
5.9
7.8
–
Net income from
participations
3.7
2.9
6.4
+ 119.6
EBIT after income
from participations
19.5
32.7
50.0
+ 53.1
4.0
6.5
8.9
–
Net interest income
0.1
0.0
– 2.3
–
Net other financial
income
– 15.7
– 15.7
– 2.4
+ 84.7
Result from
ongoing business
activity
3.9
17.0
45.3
+ 165.9
Taxes on income
and earnings
– 10.2
– 11.7
– 15.3
– 30.5
Income from the
initial application
of SFAS 133
0.2
0.2
0.0
– 100.0
Consolidated total
income before
minority interests
– 6.1
5.5
30.0
+ 449.6
Minority interests’
share of total
income
1.4
0.8
– 4.3
–626.2
– 4.7
6.3
25.7
+ 308.7
Consolidated
total income
1) Rounding differences may occur
There was a pleasing increase in Operating income from
EUR 34.7 million in 2001 to EUR 47.2 million in 2002 (+36.4 per
cent) as a result of sales growth and the below average rise in
Operating costs (+8.7 per cent), which came in at almost
2 per cent under the rate of increase in sales. The personnel
cost ratio, which expresses personnel expenses in relation to
sales, came down from 44.1 per cent in 2001 to 43.6 per cent
in 2002. In absolute terms, personnel expenses amounted to
EUR 244.1 million (2001: EUR 223.2 million). Scheduled
depreciation, particularly on software and fixtures and fittings
fell from EUR 28.2 million in 2001 to EUR 24.9 million in 2002.
MANAGEMENT REPORT
The item Other income and expenses includes the balance of
other income from earlier periods amounting to EUR 0.9 million,
amortization on other intangible assets of EUR 2.6 million and
currency effects of EUR -2.1 million.
The GfK Group increased its EBIT before income from
participations by 46.6 per cent from EUR 29.8 million in
2001 to EUR 43.6 million in 2002. The EBIT margin relating to
sales also improved markedly from 5.9 per cent in 2001 to
7.8 per cent in 2002.
Net income from participations rose from EUR 2.9 million in
2001 to EUR 6.4 million in 2002. Depreciation on the shareholding
in the bwv Group in Switzerland considerably depressed net income
from participations in 2001. However, no further depreciation
was required for this shareholding in 2002. The GfK Group’s
EBIT after income from participations also increased sharply
compared with the previous year, rising by 53.1 per cent to
EUR 50.0 million in 2002. EBIT after income from participations
in relation to sales showed a correspondingly clear increase from
6.5 per cent in 2001 to 8.9 per cent in 2002.
GfK’s Net other financial income also improved from EUR –15.7
million in 2001 to EUR -2.4 million during the past financial
year. The figure essentially comprises expenses arising from the
waiver on a loan to MMXI Europe in the Netherlands of EUR
1.2 million in connection with the sale of this participation, as
well as the residual depreciation on the holding in American
company, Jupiter Media Metrix Inc. (JMXI), of EUR 0.7 million.
In 2001, net other financial income was influenced by the writedowns on loans to the bwv Group amounting to EUR 5.9 million
and the valuation allowance for JMXI shares of EUR 6.9 million.
Overall, this had a positive impact on the Result from ongoing
business activity, which rose more than one and a half times
from EUR 17.0 million in 2001 to EUR 45.3 million in 2002.
Compared with the previous year, the Income tax rate was
reduced from 68.7 per cent to 33.7 per cent. The valuation
allowance made in 2001 for the participation in JMXI was not tax
deductible. Moreover, the depreciation on the holding and the
loans to the bwv Group in Switzerland could only be recognized
to a very limited extent for tax purposes.
65
Current assets remained at the same level as in the
previous year. While there was a reduction in trade receivables
and liquid funds, there was an increase in other receivables
and assets. The main increase came from tax claims and
payment on account for the remaining shares in ENIGMA GfK
in Germany.
The GfK Group: EBIT after income from participations and consolidated
total income before minority interests
1998 – 2002 in EUR million1)
1998
18.2
10.7
19992)
26.7
13.7
2000
39.4
25.4
2001
32.7
5.5
2002
50.0
30.0
1) Up to 2000, in accordance with the German Commercial
Code (HGB). From 2001, in accordance with US GAAP.
EBIT after income from participations
66
2) Excluding IPO costs
Consolidated total income before minority interests
The GfK Group achieved an increase of EUR 24.5 million in
from EUR 5.5 million in 2001 to EUR 30.0 million in 2002.
Shareholders’ equity rose by EUR 18.4 million to EUR
181.5 million. The increase is attributable to total consolidated
income of EUR 25.7 million less the total dividend disbursement
and currency effects relating to consolidations reported under
other comprehensive income. With an increase in total assets
of EUR 56.5 million (+13.7 per cent), the Equity ratio as at
31 December 2002 amounted to 38.7 per cent (2001: 39.5 per
cent).
Development of equity ratio
in per cent, 1998-20021)
1998
30.8
Asset and capital structures continue to remain stable
19992)
Compared with the previous year, the GfK Group’s Total
assets increased by EUR 56.5 million to EUR 469.6 million.
On the assets side, this increase was almost exclusively
attributable to growth in Fixed assets. Acquisitions, the
topping-up of shareholdings and the merger of the I+G Group
with GfK in Germany increased goodwill by EUR 51.4 million
from EUR 84.2 in 2001 to EUR 135.6 million as at 31 December
2002. Software and fixtures and fittings rose by EUR 8.2 million.
With regard to financial assets, the addition resulting from the
acquisition of Indicator GfK, Brazil offset the disposal of shares
in associated companies resulting from the merger of the
I+G Group with GfK.
Balance sheet growth
31.12.2001
31.12.2002
Change
in %
Share
of total
assets
in %
Fixed assets
208.6
263.8
+ 26.5
56.2
Current assets
189.8
189.8
– 0.1
40.4
Deferred taxes
9.1
9.3
+ 2.7
2.0
Prepaid expenses
5.6
6.7
+ 20.0
1.4
In EUR million
Assets
Shareholders’ equity and liabilities
163.1
181.5
+ 11.3
38.7
Borrowings*
243.3
281.2
+ 15.6
59.9
Deferred taxes
5.3
6.0
+ 14.0
1.3
Deferred income
1.4
0.9
– 33.8
0.1
413.1
469.6
+ 13.7
100.0
Total assets
*Provisions, liabilities and minority interests
52.3
2000
2001
2002
49.6
39.5
38.7
1) Up to 2000, in accordance with the German Commercial Code (HGB). From 2001,
in accordance with US GAAP.
2) This percentage includes the change resulting from the IPO, without which the figure
would have been 29.7.
As at 31 December 2002, minority interests had risen by EUR
11.1 million to stand at EUR 17.6 million. In addition to the improvement in consolidated total income, the main reason for this
increase was the first-time consolidation of Spanish and Portuguese subsidiaries and the IFR Group in France, which also has
minority shareholders.
The following factors contributed to the increase in other
Provisions and liabilities by EUR 26.7 million to EUR 263.5
million: an increase in provisions of EUR 7.7 million, in particular
for personnel including pensions, and an increase of EUR 19.0
million in liabilities. Given the financing of newly acquired
companies and participations, the increase came mainly from
liabilities to banks.
Investment and financing
Bulk of investment covered by cash flow
In 2002, GfK’s Investment amounted to EUR 76.6 million
(2001: EUR 108.3 million). This related essentially to the
acquisition of companies and business units (EUR 47.0 million)
and the addition of participations as well as the acquisition of
software, fixtures and fittings and other tangible assets (EUR
28.6 million).
MANAGEMENT REPORT
Net indebtedness, derived from the balance of cash and
cash equivalents and short-term securities less interest bearing
liabilities and pension provisions, stood at EUR 39.6 million
(2001: EUR 23.7 million).
Gearing and net indebteness in relation
to EBIT, EBITDA, free cash flow
In %
2001
Gearing (net indebtedness/shareholders’ equity)
14.5
21.8
150.2
90.8
Net indebtedness/EBITDA
44.9
57.8
Net indebtedness/free cash flow
52.8
97.2
Net indebtedness/EBIT
Change in free cash flow
In EUR million
2001
Cash flow from ongoing
business activity
2002
Change
in %
75.9
69.3
– 8.8
– 31.1
– 28.6
– 8.1
44.8
40.7
– 9.2
Acquisitions
– 60.2
– 47.0
– 21.9
Other financial investment
– 17.0
– 1.0
– 94.1
4.1
3.4
– 17.1
– 28.3
– 3.9
+ 86.2
Capital expenditure
Free cash flow before
acquisitions, other investment
and asset disposals
Asset disposals
Free cash flow after
acquisitions, other investment
and asset disposals
The ongoing capital expenditure was fully financed from the
Cash flow from ongoing business activity of EUR 69.3 million (2001: EUR 75.9 million). Net of these expenses amounting
to EUR 28.6 million, Free cash flow of EUR 40.7 million (2001:
EUR 44.8 million) remains. This was sufficient to finance 84.9
per cent of acquisitions and other financial investment during
the past year. In 2001, the equivalent figure was 58.1 per cent
due to a higher level of investment.
Change in net indebtedness
In EUR million
Liquid funds
31.12.2001
31.12.2002
Change
in %
47.6
45.2
– 5.0
Short-term securities
8.0
7.3
– 8.7
Liquid funds and
short-term securities
55.6
52.5
– 5.6
Liabilities to banks
24.8
47.1
+ 89.9
Pension obligations
17.5
19.2
+ 10.1
Liabilities under leases
16.3
15.8
– 3.2
Other interest-bearing liabilities
20.7
10.0
– 51.3
79.3
92.1
+ 16.2
– 23.7
– 39.6
– 67.3
Interest-bearing liabilities
Net indebtedness
Gearing, which is the ratio of net indebtedness to shareholders’
equity, amounted to 21.8 per cent in 2002 (2001: 14.5 per
cent). The ratio of net indebtedness in relation to EBIT, EBITDA
and free cash flow shows that GfK is in a position to repay its borrowings in less than one year.
67
In addition to the investment reported in the balance sheet,
the GfK Group used EUR 32.2 million for Soft facts (2001:
EUR 30.2 million). These intangible assets are not capitalized
but are charged directly to the income statement. They include,
in particular, expenses for setting up and maintaining panels,
non-capitalized costs of proprietary software as well as the
costs of training and continuous professional development.
This investment is essential to securing the long-term success
of the company, as it contributes to the creation of market entry
barriers.
Expenses for soft facts
2001
2002
Change
in %
Costs of maintaining panels
(including recruitment)
17.0
19.5
+ 14.9
Software development costs
7.4
7.1
– 3.9
In EUR million
GfK was able to reduce the inflow of funds in connection
with financing activity from EUR 16.8 million in 2001 to
EUR 2.9 million in 2002.
2002
Training and continuous professional
development
5.1
5.0
– 3.6
Other
0.7
0.6
– 10.3
Total
30.2
32.2
+ 6.6
Source: Management Information System
The 14.9 per cent increase in panel costs results from the higher
maintenance payments made to panel households and retailers
and for extending panels.
3. Business divisions
The GfK Group provides services in its four business divisions
Consumer Tracking, Non-Food Tracking, Media and Ad Hoc
Research. The division Other comprises GfK AG internal services
as well as some of the activities in the healthcare segment,
which are currently being set up.
The financial data presented below comes from the Management
Information System. All of the figures reported have been
prepared in accordance with US GAAP. No account is taken of
minority interests. Net income from participations is therefore
not included in the operating income.
68
In order to improve transparency in annual comparisons, as
referred to in the presentation of the economic development of
the GfK Group, pro forma statements have also been prepared
for the divisions for 2001. The explanations below are all based
on a comparison of the figures for 2002 with those from the
pro forma statements.
Sales for the Group in all business divisions in 2002 were up
by 10.6 per cent from EUR 505.8 million to EUR 559.4 million.
While newly consolidated business activities in the GfK Group
contributed 7.8 per cent to the growth in sales, organic growth
accounted for 3.5 per cent. Excluding projects with fixed order
volumes, organic growth amounted to 5.3 per cent. Currency
effects played a minor role, reducing sales growth by 0.7 per
cent.
During the past financial year, GfK’s operating income rose
at an above average rate. The figure of EUR 48.3 million for
2002 represented a 47.9 per cent increase over the EUR 32.7
million recorded for the previous year. The margin relating
to consolidated sales improved accordingly from 6.5 per cent
to 8.6 per cent.
Share of business divisions in total sales
In EUR
million
In %
5%
15 %
44 %
25 %
Consumer Tracking
15
86.0
Non-Food Tracking
25
137.3
Media
11
61.3
Ad Hoc Research
44
246.3
Other
11%
Total
5
28.5
100
559.4
Consumer Tracking – growth trend continues
GfK’s Consumer Tracking division provides clients in 24 countries throughout Europe with information services on consumer
purchase decisions and behaviour. These cover almost all fast
moving consumer goods plus a large number of slow moving
consumer goods and services. Clients include in particular
brand manufacturers, retailers and service providers.
Consumer Tracking: key figures
GfK Group: breakdown of growth
in sales and operating income
In EUR million
Total growth
+ 10.6 %
+ 47.9 %
+ 7.8 %
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
Sales
84.8
84.8
86.0
+ 1.4
Operating income
– 0.2
– 0.2
2.4
+ 1,296.0
Margin in %
– 0.2
– 0.2
+ 2.8
–
Number of employees
788
788
863
+ 9.5
of which abroad
564
564
590
+ 4.6
+ 31.4 %
Organic growth
+ 3.5 %
+ 17.2 %
Exchange rate effects
– 0.7 %
– 0.7 %
Sales
Operating income
During financial year 2002, GfK’s Consumer Tracking division
achieved consolidated sales of EUR 86.0 million. The 1.4 per
cent increase on the previous year was almost exclusively due
to organic growth, with the GfK companies outside Germany
providing the main impetus. By contrast, sales in Germany were
slightly below the figure for the previous year.
GfK Business Divisions
Consumer Tracking: breakdown of growth
MANAGEMENT REPORT
Non-Food Tracking: key figures
In EUR million
Total growth
Sales
+ 1.4 %
+ 1,296.0 %
Operating income
Margin in %
– 0.1 %
+ 907.1 %
Organic growth
Number of employees
of which abroad
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
119.5
122.2
137.3
+ 12.4
17.5
19.7
24.5
+ 24.5
+ 14.6
+ 16.1
+ 17.8
–
1,125
1,234
1,394
+ 13.0
896
1,005
1,145
+ 13.9
+ 1.1 %
+ 405.7 %
+ 0.4 %
– 16.8 %
Sales
Operating income
There has been a clear rise in operating income. Following
EUR –0.2 million in 2001, operating income rose to
EUR 2.4 million in 2002. The margin also improved from
–0.2 per cent in 2001 to 2.8 per cent in 2002. This is mainly
attributable to the consistent restructuring measures in
the division and to cost savings brought about by using the
standard production system aTRACKtive.
At the end of 2002, the Consumer Tracking division employed
863 full-time personnel, of which 68.4 per cent working
outside Germany. The number of employees increased by
75 compared with the previous year due to the insourcing of
personnel from the data collection department of GfK Data
Services.
Non-Food Tracking - leading position further extended
GfK’s Non-Food Tracking division provides clients with
information services regarding sales of consumer durables
and services, particularly in the IT, consumer electronics,
telecommunications, household appliances and photographic
markets. Its clients are mostly global manufacturers of
consumer durables and they receive this information on
44 countries worldwide, which include thirteen countries
in Asia and the Pacific, the USA and Latin America, the
Middle East and South Africa.
During the year under review, the division succeeded in further
extending its leading position in the global markets. Sales
increased by 12.4 per cent from EUR 122.2 million in 2001 to
EUR 137.3 million in 2002, of which 8.5 per cent came from
organic growth. This was the highest organic growth rate of
all the GfK divisions. Currency effects, particularly in Asia,
depressed sales growth by 1.7 percentage points. First-time
consolidations, mainly of the IFR Group as at 1 July 2002,
contributed EUR 6.9 million to the rise in sales.
Despite considerable investment on innovations in this segment,
such as the further development of the S*T*A*R*T*R*A*C*K
analysis and production system and the ENCODEX software
used for B2B online trading in consumer durables, operating
income of the Non-Food Tracking division was up 24.5 per cent
from EUR 19.7 million to EUR 24.5 million. Around half of this
increase is attributable to companies consolidated in the GfK
Group for the first time. The remainder is mostly due to the
progress of business development in Europe. As a result of the
overproportional rise in operating income, the margin increased
from 16.1 per cent to 17.8 per cent.
Non-Food Tracking: breakdown of growth
Total growth
+ 12.4 %
+ 24.5 %
+ 5.6 %
+ 12.8 %
Organic growth
+ 8.5 %
+ 12.8 %
– 1.7 %
– 1.1 %
Sales
Operating income
69
The Non-Food Tracking division employ 28.6 per cent of the
GfK workforce. Of the 1,394 personnel, 82.1 per cent were
employees in GfK companies abroad. Compared with the 2001
figures, the number of staff in Germany increased by
20 and outside Germany by 140.
Media – affected by the crisis in the print media
The Media division provides its clients with information
services on the intensity and nature of media usage and media
acceptance. The offering covers the classic media such as
television, radio, print and outdoor advertising and the new
online and offline media. GfK conducts media research in 20
European countries and its clients are predominantly private
and public service TV and radio stations, publishing houses,
advertisers and advertising and media agencies.
70
In 2002, the Media division was unable to match the level of
sales achieved in the previous year. Consolidated sales fell
slightly by 2.1 per cent to EUR 61.3 million after EUR 62.6
million in 2001. The drop in sales at the GfK media companies
amounted to 7.9 per cent in organic terms.
Sales
Operating income
Margin in %
Media is the smallest of the GfK divisions in terms of personnel,
employing 345 people or 7.1 per cent of the total workforce.
Foreign personnel accounts for 57.7 per cent of the total.
Compared with the previous year, the number of employees in
the Media division was reduced by 6.5 per cent. The main
reason for this is that the company is pursuing a wait and see
approach with regard to filling the places of employees who have
left, given the current economic climate.
Ad Hoc Research –
growth achieved despite economic decline
Media: key figures
In EUR million
This trend is attributable in particular to the difficult print
media market caused by the weak economy, which led to
lower incoming orders. However, growth in continuous media
research was able to partially offset this decrease in orders.
The long-term contracts for TV and radio ratings research
generate around 60 per cent of the Media division’s sales.
In 2002, GfK extended two long-term TV research contracts
in Belgium and France and won a new contract in the Ukraine.
There are therefore long-term TV research surveys in place in
a total of seven different countries.
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
56.5
62.6
61.3
– 2.1
8.5
9.2
6.1
– 34.4
+ 15.0
+ 14.7
+ 9.9
–
Number of employees
369
369
345
– 6.5
of which abroad
221
221
199
– 10.0
Through its own companies, the Ad Hoc Research division provides
clients in 29 countries around the world and via partnerships
in another 61 countries with partly standard, partly customized
services, which are used for operational and strategic business
decisions. These services include tests and surveys on product
and pricing policy, brand management and valuation, communication, distribution and customer loyalty schemes as well as new
product development.
As its work is project-related, the Ad Hoc Research division is
The trend in operating income was similar. Following the high
figure achieved in 2001 of EUR 9.2 million, the Media division
generated operating income of EUR 6.1 million in 2002.
The margin consequently dropped from 14.7 per cent to 9.9
per cent.
Media: breakdown of growth in sales
and operating income
Total growth
– 2.1 %
– 34.4 %
+ 5.2 %
+ 2.9 %
Organic growth
– 7.9 %
– 38.2 %
+ 0.6 %
+ 0.9 %
Sales
Operating income
more susceptible to economic trends than the tracking business,
where the contracts are long term. It is therefore particularly
pleasing that in 2002, the Ad Hoc Research division achieved
a 14.8 per cent increase in sales to EUR 246.3 million from
EUR 214.5 million. Of this growth, 8.0 percentage points are
organic and 7.7 percentage points of the sales growth are
attributable to the expansion of the global GfK network. The
companies consolidated for the whole year for the first time in
2002 include, in particular, Martin Hamblin GfK, UK, GfK MACON,
Germany and Intercampus, Portugal. Significant GfK, Belgium
was consolidated for the first time for part of the period under
review. Currency effects reduced sales by 0.9 percentage
points.
GfK Business Divisions
Ad Hoc Research: key figures
In EUR million
Sales
Operating income
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
199.6
214.5
246.3
+ 14.8
+ 243.9
2.8
4.2
14.5
Margin in %
+ 1.4
+ 2.0
+ 5.9
–
Number of employees
1,578
1,726
1,745
+ 1.1
of which abroad
1,204
1,352
1,371
+ 1.4
During the reporting period, operating income more than tripled,
rising from EUR 4.2 million in 2001 to EUR 14.5 million. New
consolidations accounted for EUR 2.6 million, but at EUR 7.7
million the largest portion of the rise was organic. In addition to
the positive trend in sales and the restructuring of the Swedish
activities in Internet market research, strict cost management
and further measures to increase efficiency also made a decisive
contribution to the result. There was a strong increase in the
margin which rose from 2.0 per cent in 2001 to 5.9 per cent in
2002.
Ad Hoc Research: breakdown of growth
Total growth
MANAGEMENT REPORT
services for companies in the GfK Group and their business
partners. Their aim is to offer services which cover the costs
involved.
In addition to data collection, data processing and data analysis,
GfK Data Services and GfK Ad Hoc Services also supply
central IT services. As a cross-divisional unit, GfK Methodenund Produktentwicklung (Method and Product Development)
develops new procedures, methods and techniques and tests
them in market research surveys. GfK Group Services comprises
all the central administrative departments and divisions of
GfK AG, which include Financial Services, Personnel Services,
Central Services, Public Affairs and Communications, Investor
Relations and Internal Audit.
The newly acquired healthcare activities are also reported under
Other for financial year 2002. These cover Martin Hamblin
GfK Healthcare UK, which was consolidated as at 1 July 2001
for the first time and the business services, GfK HealthCare and
GPI Kommunikationsforschung, both based in Germany, and
which were acquired as part of the takeover of the business
activities of I+G, which was previously run as a joint venture
with NFO Infratest. These companies were consolidated for the
first time as at 1 July 2002.
71
Other: key figures
+ 14.8 %
+ 243.9 %
In EUR million
+ 7.7 %
+ 61.9 %
Organic growth
+ 8.0 %
+ 183.6 %
– 0.9 %
– 1.6 %
Sales
Operating income
As at 31 December 2002, the Ad Hoc Research division employed
1,745 staff, of which 1,371 in GfK companies outside Germany.
The number of employees remained virtually unchanged from
the previous year.
Other – providing internal services
The Other division primarily comprises the central services
of GfK AG as well as some of the activities being built up in
healthcare information services.
GfK Data Services, GfK Ad Hoc Services, GfK Methodenund Produktforschung and GfK Group Services provide
Sales
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
21.6
21.6
28.5
+ 31.8
Operating income
– 0.2
– 0.2
0.9
+ 484.4
Margin in %
– 1.1
– 1.1
+ 3.2
–
536
536
532
– 0.7
68
68
109
+ 60.3
Number of employees
of which abroad
In 2002, the Other division achieved consolidated sales of
EUR 28.5 million compared with EUR 21.6 million in the
previous year. The considerable reduction in services provided
by IRI/GfK, resulting from the cessation of physical data
collection in Germany, led to a drop in order volume of around
EUR 5 million for this central GfK service provider. This is
the reason for organic growth amounting to -26.8 per cent in
the period under review. However, sales by the newly acquired
companies in the healthcare segment more than compensated
for this downturn. The new companies are also largely responsible
for improving operating income from EUR –0.2 million in 2001
to EUR 0.9 million in 2002.
Number of GfK employees 1998-2002
in Germany and abroad
Other: breakdown of growth
Total
Total growth
1998
1,282
1,829
3,111
+ 31.8 %
+ 484.4 %
1999
1,366
2,310
3,676
+ 58.3 %
+ 1,299.6 %
Organic growth
2000
20011)
1,345
2,867
4,212
1,443
3,210
4,653
– 26.8 %
– 808.8 %
2002
1,465
3,414
4,879
+ 0.3 %
1) Pro forma statement
In Germany
– 6.4 %
Sales
Abroad
Operating income
Share of regions in total sales1)
As at the end of 2002, the Other division employed 532
personnel (2001: 536).
72
In %
In EUR m
Germany
37
204.7
Northern Europe
11
59.1
Western and
Southern Europe
7%
5%
5%
37 %
4. Regions
As with the presentation of the business divisions, the financial
data on regions reported below is extracted from the Management
Information System. As minority participations were not taken
into account, operating income does not include income from
participations.
35 %
11 %
35
196.7
Central and
Eastern Europe
5
28.5
America
7
40.4
5
30.1
100
559.4
Total
1) Rounding differences may occur
In order to improve transparency in annual comparisons, as
referred to initially in the presentation of the economic
development of the GfK Group, a pro forma statement has
been prepared for 2001, including for the data of the regions.
All following explanations are based on a comparison of the
values for the year 2002 with the pro forma figures.
GfK Group sales 1998-2002
in Germany and abroad in EUR million1)
Total
1998
19992)
2000
20012)
2002
156
156
312
164
217
381
177
293
470
192
314
506
205
1) From 2001 in accordance with US GAAP
2) Pro forma statement
354
559
In Germany
Abroad
Germany – growth through acquisitions
In Germany, the home country of the GfK Group and still the
most important single market for the company, GfK has fifteen
active subsidiaries and participations, ten of which have their
registered office in Nuremberg.
In 2002, the company generated 36.6 per cent of consolidated
sales in Germany. Sales increased from EUR 192.4 million
to EUR 204.7 million (+6.4 per cent). This growth was mainly
attributable to GfK MACON, GfK HealthCare and GPI
Kommunikationsforschung, which were consolidated for the
first time in 2002. In organic terms, sales fell slightly by 1.9 per
cent, primarily as a result of the approximately EUR 5 million
reduction in data collection services by IRI/GfK. In addition, the
crisis in the print media sector impacted on sales at some of
the German GfK companies. The positive business development
in Non-Food Tracking was not entirely sufficient to offset the
weaker sales in these areas.
Regions
Germany: key figures
In EUR million
Sales
2001
Actual
2001
Pro forma
2002
Actual
192.4
192.4
204.7
+ 6.4
15.1
15.1
18.0
+ 19.4
Operating income
Change
in %
Margin in %
+ 7.8
+ 7.8
+ 8.8
–
Number of employees
1,443
1,443
1,465
+ 1.5
MANAGEMENT REPORT
In Northern Europe, the GfK Group has ten subsidiaries in
Scandinavia and the UK, which generated 10.6 per cent of
consolidated sales in 2002. Compared to the previous year’s
sales of EUR 52.0 million, GfK achieved growth in 2002 of
13.8 per cent to EUR 59.1 million. The greater part of this
growth resulted from the healthcare activities acquired in
the UK. Currency effects amounted to -0.4 percentage points.
Northern Europe: key figures
During the period under review, operating income rose
from EUR 15.1 million to EUR 18.0 million (+19.4 per cent).
The companies consolidated for the first time contributed
EUR 4.3 million to this increase. However, organic growth saw
a reduction of 8.9 per cent, as the positive developments in
the Ad Hoc Research and Non-Food Tracking divisions were
insufficient to absorb the reduced income of the Media division,
which resulted from lower sales in this division. The salesrelated margin increased from 7.8 per cent to 8.8 per cent.
Germany: breakdown of growth
Total growth
+ 6.4 %
+ 19.4 %
+ 8.3 %
2001
Actual
In EUR million
2001
Pro forma
2002
Actual
Change
in %
Sales
52.0
52.0
59.1
+ 13.8
Operating income
– 3.7
– 3.7
1.9
+ 150.2
Margin in %
– 7.1
– 7.1
+ 3.2
–
528
528
500
– 5.3
Number of employees
73
Growth in operating income in the past financial year has been
very pleasing. After posting a loss of EUR 3.7 million in 2001,
the GfK companies in Northern Europe achieved positive results
of EUR 1.9 million in 2002. This is due, above all, to the success
of restructuring measures at Martin Hamblin GfK, UK and to
Orange Interactive Research which carries out Internet market
research in Sweden. The margin rose from -7.1 per cent in 2001
to 3.2 per cent in 2002. Additional measures are aimed at further
improving the margin in this region.
+ 28.3 %
Organic growth
Northern Europe: breakdown of growth
– 1.9 %
– 8.9 %
0.0 %
0.0 %
Total growth
+ 13.8 %
+ 150.2 %
Sales
Operating income
+ 14.2 %
+ 79.1 %
As at 31 December 2002, GfK employed 1,465 full-time personnel in Germany, the great majority at the Nuremberg site. The
number of employees rose by 22 compared with the previous
year. 30.0 per cent of GfK’s worldwide workforce is employed by
Group companies in Germany.
Organic growth
0.0 %
+ 72.4 %
– 0.4 %
– 1.3 %
Sales
Operating income
Europe – pleasing increase in operating income
In Northern, Southern and Western Europe, GfK has 73 subsidiaries, branches and participations in sixteen different countries.
As in Germany, GfK companies are the number one market
research organizations in Austria and Switzerland, the number
two in Sweden and the Netherlands, the number three in
Denmark and Italy and the number four in France.
At the end of 2002, the GfK Group employed 500 personnel in
Northern Europe. This represents 10.2 per cent of the total
workforce. The number of employees was down 5.3 per cent on
the previous year’s figure.
The Western and Southern Europe region which comprises
63 companies in eleven countries, represents the next important
region for the GfK Group after Germany. With sales of EUR
196.7 million, GfK generated 35.2 per cent of its consolidated
sales there. Compared to sales of EUR 171.9 million in the
previous year, this represents an increase of 14.4 per cent,
of which 6.5 percentage points were attributable to organic
growth. The companies consolidated for the first time in 2002,
which were essentially the IFR Group in France, Intercampus
in Portugal and Significant GfK in Belgium, accounted for 7.3
percentage points of sales growth. Exchange gains played a
minor role, accounting for 0.6 percentage points.
In Central and Eastern Europe, where GfK is one of the
leading providers of market research services with a total of 18
companies in 13 countries, the Group’s business development
was once again very successful. Although the region only
accounts for 5 per cent of consolidated total sales, making it the
smallest in the GfK Group, it is also one of the most dynamic and
it has grown very fast for years. The double-digit growth rates in
sales and income are purely the result of organic growth.
Central and Eastern Europe: key figures
In EUR million
Sales
Western and Southern Europe: key figures
74
In EUR million
Sales
Operating income
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
148.3
171.9
196.7
+ 14.4
Operating income
12.0
16.4
19.7
+ 20.6
Margin in %
+ 8.1
+ 9.5
+ 10.0
–
Number of employees
1,409
1,666
1,787
+ 7.3
Operating income for the region rose from EUR 16.4 million
in 2001 to EUR 19.7 million in 2002 (+ 20.6 per cent). This
increase was largely due to the first-time consolidation of the
above companies. At the same time, there was an increase
of 5.6 per cent in organic growth, thanks, in particular, to
successful restructuring measures and cost cutting programmes.
The margin increased from 9.5 per cent in 2001 to 10.0 per
cent in 2002.
Margin in %
Number of employees
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
23.5
23.5
28.5
+ 21.1
1.3
1.3
2.6
+ 97.5
+ 5.5
+ 5.5
+ 9.0
–
579
579
634
+ 9.5
In 2002, the GfK companies in Central and Eastern Europe
increased their sales from EUR 23.5 million to EUR 28.5 million
(+ 21.1 per cent).
Operating income doubled in the same period from EUR 1.3
million to EUR 2.6 million. The margin relating to sales therefore
improved from 5.5 per cent to 9.0 per cent.
Central and Eastern Europe: breakdown of growth
Total growth
+ 21.1 %
+ 97.5 %
Western and Southern Europe: breakdown of growth
0.0 %
0.0 %
Organic growth
Total growth
+ 21.8 %
+ 14.4 %
+ 20.6 %
+ 100.4 %
– 0.7 %
– 2.9 %
+ 7.3 %
+ 14.4 %
Sales
Organic growth
Operating income
+ 6.5 %
+ 5.6 %
+ 0.6 %
+ 0.6 %
Sales
At the end of the reporting period, the number of full-time
employees was 634, 55 more than at the end of 2001.
Operating income
America – good progress
As at 31 December 2002, the workforce for Western and
Southern Europe stood at 1,787 employees, 121 more than the
previous year. Over 100 personnel were taken on as a result of
the acquisition of new companies in this region.
GfK has been active in the USA through its subsidiary
GfK Custom Research, since 1999. The company is part of
GfK’s Ad Hoc Research division and specializes in surveys
on customer satisfaction and product concepts. GfK expanded
its position in the US with Martin Hamblin GfK Research, which
Regions
was acquired in mid-2001 and is active in the pharmaceutical
segment.
In this region, the GfK Group only operates in the Non-Food
Tracking segment. In 2002, sales amounted to EUR 30.1 million,
which is a rise of 3.1 per cent on the previous year. The growth
rate is seriously affected by currency effects, which reduced sales
by 6.9 percentage points. Organic growth amounted to
7.7 per cent. The only acquisition in the region, Informark in
Australia, contributed 2.3 percentage points to sales growth.
In America, the GfK Group achieved consolidated sales of
EUR 40.4 million. Compared with the previous year, this is
an increase of 9.7 per cent. Net of currency effects amounting
to -5.8 percentage points, organic growth amounted to 8.5
per cent.
Asia and the Pacific: key figures
America: key figures
In EUR million
MANAGEMENT REPORT
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
36.8
36.8
40.4
+ 9.7
Sales
Operating income
Margin in %
Number of employees
1.5
1.5
3.1
+ 112.1
+ 4.0
+ 4.0
+ 7.7
–
135
135
138
+ 2.2
In EUR million
Sales
Operating income
Margin in %
Number of employees
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
29.2
29.2
30.1
+ 3.1
2.2
2.2
3.0
+ 40.2
+ 7.4
+ 7.4
+ 10.1
–
302
302
355
+ 17.5
75
Operating income more than doubled during the period
under review. After income of EUR 1.5 million in the previous
year, this figure rose to EUR 3.1 million in 2002. The majority
of this growth was organic. Currency effects reduced the
increase in income by almost 6 percentage points. The margin
relating to consolidated sales almost doubled from 4.0 to 7.7
per cent.
Despite unfavourable exchange rates, the region improved its
operating income in the reporting year from EUR 2.2 million
to EUR 3.0 million. This pleasing increase of 40.2 per cent was
largely organic. The rise in the margin was also high, up from
7.4 per cent to 10.1 per cent.
Asia and the Pacific: breakdown of growth
America: breakdown of growth
Total growth
Total growth
+ 3.1 %
+ 40.2 %
+ 2.3 %
+ 3.5 %
+ 9.7 %
+ 112.1 %
Organic growth
+ 7.7 %
+ 7.0 %
+ 44.2 %
+ 43.1 %
Organic growth
– 6.9 %
– 7.5 %
+ 8.5 %
+ 74.7 %
Sales
Operating income
– 5.8 %
– 5.7 %
Sales
Operating income
At the year-end, the GfK Group employed 138 full-time staff
in America. The figure remained almost unchanged from the
previous year.
At the year-end, there were 355 people employed in the Asia and
Pacific region, an increase of 53 over the previous year.
The GfK network – further expansion
In 2002, the GfK Group continued to expand its international
network. The following table lists the main activities in 2002.
Asia and the Pacific –
currency effects countered by strong growth
The Asia and Pacific region comprises 17 GfK companies,
branches and participations in 13 countries including Australia,
China, Indonesia and Japan.
76
Company
Region
Division
Classification
GfK-Belgrade
Serbia and Montenegro
Central and
Eastern Europe
Consumer Tracking
Ad Hoc Research
Establishment
GfK MACON, Germany
Germany
Ad Hoc Research
Acquisition
IFR-Group, France
Western and
Southern Europe
Non-Food Tracking
Acquisition
Significant GfK,
Belgium
Western and
Southern Europe
Ad Hoc Research
Acquisition
m2A, France
Western and
Southern Europe
Other
(Healthcare)
Acquisition
Strateji GfK, Turkey
Central and
Eastern Europe
Ad Hoc Research
Acquisition
Indicator GfK, Brazil
America
Ad Hoc Research
Acquisition
Informark, Australia
Asia and
the Pacific
Non-Food Tracking
Acquisition
ORG-GfK Marketing
Services, India
Asia and
the Pacifik
Non-Food Tracking
Increase in
shareholding
Intercampus, Portugal
Western and
Southern Europe
Ad Hoc Research
Increase in
shareholding
ProCon GfK, Turkey
Central and
Eastern Europe
Non-Food Tracking
Ad Hoc Research
Increase in
shareholding
GfK HealthCare,
Germany
Germany
Other
(Healthcare)
Inclusion/
demerger
GPI Kommunikationsforschung, Germany
Germany
Other
(Healthcare)
Inclusion/
demerger
5. Risk report
The GfK Group ranks fifth among the world’s leading market
research institutes. The Group intends to carry on taking every
opportunity to improve its market position through continuous
growth. However, seizing opportunities also entails running
risks. By identifying material risks at an early stage and taking
appropriate countermeasures, GfK is in a position to make
commercially sound use of the opportunities which present
themselves.
All aspects of risk management are incorporated in a comprehensive early risk warning system, which GfK has operated for
several years and is constantly developing. As in the past, so this
year too, the Group’s auditors have confirmed the effectiveness
of this system.
Risk management system – comprehensive and integrated
Thanks to its integrated risk management system, the GfK Group
is able to identify and manage strategic and operational risks at
the level of the individual GfK companies, the level of the four
business divisions and at Group level. The core of the system is
the annual risk inventory, which covers the development of the
risks identified in the previous year, determines newly emerged
risks and lays down specific countermeasures. Exceptional risk
reporting ensures that the Management Board is kept informed
of risks at shorter intervals.
In addition, a range of planning, forecasting and reporting
instruments for early risk identification has also been in place
at the GfK Group for many years.
The relevant processes and responsibilities are laid down in
the Group’s Risk Management Manual, which was updated and
expanded in 2002.
The individual risk areas are detailed below.
Individual risks –
take precautions and weigh up the odds
Economic risks. The poor economic situation continued
throughout the period under review. Despite the difficult
economic conditions however, the GfK Group achieved its
targets in 2002 and held its own against the competition.
The weak economy led to an increase in bad debts due to
client insolvency but these remained at a low level during the
past financial year and did not affect the liquidity position of
the Group.
Sector risks. The continued poor performance of the economy
has again confirmed that the market research sector is less
prone to cyclical fluctuations than the marketing and advertising
sectors. Moreover, as GfK operates worldwide and offers a
comprehensive range of market research services, it is able to
compensate for fluctuations in orders in one area, such as the
Media division is currently experiencing in Germany due to
the difficult print media industry at the present time, through
increases in other sectors and regions.
Although GfK has many leading international manufacturers
of consumer goods as clients, its dependence on major
clients overall is quite small. GfK’s top ten customers account
for no more than around sixteen per cent of worldwide Group
sales.
The ongoing process of concentration through mergers and
company takeovers has resulted in the marketing budgets of
some clients being reduced. GfK has taken measures to counter
this by intensifying new business acquisition and extending
its range of services.
The Management Board is closely following the increasing
tendency towards concentration in the market research sector.
It assesses the potential risks and opportunities and takes
account of them in appropriate strategic measures.
Risk report
Operating risks. Qualified and motivated personnel are the
biggest asset of any successful company in the service sector.
During the past year, GfK once again introduced numerous
measures designed to increase the satisfaction and qualifications
of its employees even further. These included the employee
survey conducted once again within GfK companies in Germany,
the second project under the Excellence programme for the
promotion of young executives worldwide and EUR 5 million
invested in training and continuous professional development.
Given the economic situation, there was less pressure on the
labour market during the past year, which in turn reduced
personnel related risks by comparison with previous years.
On the other hand, cost pressures continued to intensify
during 2002. With discount competitors offering services at
dumping prices to gain a foothold in the market, clients
proved more price-sensitive than in recent years. At the same
time, there was an increasing demand for cost-intensive
consultancy services and integrated data solutions. To remain
competitive and succeed in the market, GfK responded to
these developments with continuous process optimization,
cost-cutting programmes and a high degree of innovation
throughout the Group. GfK also took account of the increasing
demand from internationally operating clients for standardized
cross-border information services by targeted expansion in
the relevant markets and regions.
Financing risks. The financing of the GfK Group is essentially
provided by GfK AG. In addition, subsidiaries have taken out
their own loans to a small extent.
Overall, net indebtedness of the GfK Group is at a low level.
GfK AG has short-term credit facilities from banks amounting to
almost EUR 100 million, only just under 20 per cent of which
had been used at the year-end. In addition, innovative GfK AG
projects were promoted by the Kreditanstalt für Wiederaufbau
(KfW) within the framework of the ERP Innovation Programme.
As at 31 December 2002, this support was valued at EUR 2.9
million. There is the possibility of calling up additional funds
from this programme.
In addition to borrowings, GfK AG has the option to obtain additional equity through its authorized capital of 8.2 million no-par
shares. Further liquid funds are available within the Group.
MANAGEMENT REPORT
Financing is therefore available on a broad and secure
basis.
As surplus liquidity is only used for near-money market
investment and a share position was completely unwound,
there are no risks from a fall in the equity markets.
Currency risks within the GfK Group remained limited in 2002,
because 63 per cent of consolidated sales was generated by
companies in the euro zone. Currency risks arising from third
party obligations exceeding a certain figure are hedged through
appropriate futures contracts.
To hedge future dividend income in Swiss francs, a crosscurrency swap was arranged which, at the reporting date,
showed a negative market value and was taken into account
under expenses.
Legal risks. The obligatory social security already introduced
for interviewers in many European countries is set to be
extended to other countries. This will increase the Group’s
cost burden.
At the present time, there are no significant risks in respect
of pending legal actions or compensation claims.
IT and other risks. The security and constant availability
of data are prerequisites for a company selling informationbased products. For that reason, GfK has taken extensive
precautions over the years to guarantee high standards of IT
security. In addition, the Group conducted a comprehensive
security check in 2002. The Chief Information Officer (CIO)
has the task of ensuring effective coordination and optimization
of IT strategies and IT security concepts throughout the Group.
GfK is currently also developing a disaster recovery plan,
which will incorporate existing security concepts and add
further components and is not limited to IT.
The acquisition of new companies and their integration into
the Group is always associated with risks. GfK prepares
for such risks by extensive due diligence checks prior to
any acquisition and by acquisition supporting measures. The
specialist team available for this purpose can be backed as
necessary by outside consultants. Comprehensive integration
plans facilitate the smooth integration of new companies into
the GfK Group.
77
Overall risk – countering economic risks
• improvement and updating of existing instruments
The main risks facing companies today stem from the
unfavourable global economy. However, even in these
difficult times, the GfK Group has held its own in the market.
Moreover, the Group’s equity ratio remains high (38.7 per
cent), contributing to a considerable reduction in the risk
position.
• development and application of multivariate analysis
methods
In summary, there are no risks at present which could
jeopardize the continued existence of the Group.
In addition, many different GfK companies have their own
departments responsible for the development, standardization
and optimization of services and survey and production
procedures.
6. Research and development
78
As one of the world’s oldest established and most successful
market research organizations, GfK has made decisive
contributions to the development of innovative methods and
instruments in this field. These range from the purchasing
power indicators, which were GfK’s first ever product and the
first standardized market research instrument used in Germany,
right up to Radiocontrol, an instrument for the electronic
measurement of radio and television ratings, which was first
used on behalf of clients worldwide in 2001.
Aims and organization – continuous innovation
For GfK, innovation and the continuous improvement of its
instruments for information gathering, analysis and delivery
are strategic goals. By these means, the Group seeks to respond
proactively to the ever increasing demands of its clients
and to stay ahead of its competitors by achieving a leading
position in terms of the quality, innovation and efficiency of its
instruments and services.
A characteristic feature of many of the GfK Group’s R&D projects
is that they are planned and implemented in cooperation with
its clients. The newly developed instruments and procedures for
these projects are then tested and validated and finally established as standard services.
GfK has a central method and product development department
(GfK Methoden- und Produktentwicklung) staffed by 18 statistics
specialists and method experts with responsibility for the following
tasks:
• development of new market research methods and services
• design and programming of production software for new
instruments
• validation and reliability testing of new instruments and
services
• advice and support for special statistical questions.
Finally, Telecontrol, a Swiss-based GfK subsidiary, specializes
in the development of hardware and software for TV and radio
ratings research.
GfK – which itself originated from the University of ErlangenNuremberg – cooperates with academic and research institutes
in Europe and the USA. Since 2001, it has been a member of
the renowned Marketing Science Institute in the USA.
As regards innovation in the field of information and
communication technology, GfK was involved in significant
new developments in 2002 in the following areas:
• data collection technology
• data analysis procedures
• market research services
• information management.
Data collection technology –
miniaturization and high-tech
The Consumer Tracking division has developed a new platform,
the Electronic Consumer Panel Online (ECPO), which is
capable of gathering information on the purchasing behaviour
of households and individuals by means of a whole range of
electronic technologies such as Internet applications, Personal
Digital Assistants (PDAs), mobile phones etc. The testing of new
applications of this kind of data collection technology is currently
in progress at GfK subsidiaries in Sweden and Switzerland.
The new procedures are all compatible with aTRACKtive, the
production platform presently being introduced throughout
Europe.
Research and development
MANAGEMENT REPORT
Data analysis procedures –
added value through data merging and integration
The Ad Hoc Research division also tested and introduced new
services in 2002, including:
During 2002, GfK was intensively involved in the further
development and testing of data merging technologies. This
Integrated Intelligence work is intended to compile the research
findings and panel information from various Group divisions,
which can then be used for complex client marketing surveys.
• a new module for the BASS (Brand ASsessment System)
service package to determine the financial value of brands.
The paper on the methodological principles of the measurement procedure was rated the best method contribution of
the year at the 2002 annual conference of ESOMAR, the
European market research association.
In addition to tried and tested instruments for analysis such
as MOVE, GfK has developed further Integrated Intelligence
instruments for detailed analysis of target groups and results
monitoring. These include, for example, the Gain and Loss
Forecast, a qualitative instrument for target group segmentation,
as well as a series of procedures for the construction of complex,
client-specific cause and effect analyses to illustrate the success
of media and marketing activities.
• two instruments developed on game theory assumptions
and procedures permitting, on the one hand, consumer goods
manufacturers to optimize the extension of brand families
and, on the other, the retail and branded article industry to
determine the key factors of satisfaction and dissatisfaction for
customer loyalty management.
79
Another innovative tool developed by GfK in the context of its
Integrated Intelligence work is the CSS® questionnaire splitting
procedure, which considerably reduces the costs associated
with oral and written surveys.
Market research services –
efficiency and added value in marketing
During the course of 2002, GfK’s Consumer Tracking division
developed and introduced a number of new services within the
framework of the ConsumerScan panel.
• Following the abolition of Germany’s Discount Act, promotions
and customer loyalty campaigns conducted directly where
consumers make their purchasing decisions are set to become
increasingly important for marketing. These activities are now
recorded and presented in ConsumerScan.
• Micro-geographical localization of ConsumerScan panel
households: electronic navigation systems are used to provide
additional information on households (e.g. to show how many
minutes it takes them to get to their nearest food retail outlet).
This information provides users with new opportunities to
build up a picture of the attractiveness and sales potential of
outlets.
• Extensive tests were carried out with ConsumerScan panel
households in Germany headed by non-German nationals
and a representative sample of 1,000 households set up which,
with effect from 2003, will be reporting on their purchases of
fast moving consumer goods.
Information management –
full service round the clock
In the year under review, GfK also continued the intensive
development of two of its core production and analysis systems
and tested these in cooperation with its clients. Both systems
are modern, complex data warehouse and software systems
that can be used on a decentralized basis. They offer clients the
possibility of direct access to GfK’s databases.
The first project, aTRACKtive.web, relates to the ConsumerScan
panel operated by GfK Consumer Tracking. Major ConsumerScan
clients are already accessing GfK’s databases directly.
The second project, S*T*A*R*T*R*A*C*K (System to Analyze
and Report on TRACKing data), relates to the administration
and analysis of information on electronic consumer goods, for
which the Non-Food Tracking division continuously gathers
retail sales data. Developed as a top priority during 2002, the
system is designed to take over all internal data management
functions with effect from 2003. In addition, it will function
as an interface for worldwide interaction with clients and the
cooperating retailers.
Launched last year and now in regular operation worldwide,
the Premium Site of the Non-Food Tracking division
(www. gfkms.com) is a web-enabled platform which provides
clients with direct access to GfK databases.
7. Employees
Number of employees – main increases abroad
At the year-end, the GfK Group employed 4,879 staff, 226 more
than in 2001 (+4.9 per cent).
Number of employees in Germany and abroad
Number of employees
(Full-time)
2001
Actual
2001
Pro forma
2002
Actual
Change
in %
In Germany
1,443
1,443
1,465
+ 1.5
Abroad
2,953
3,210
3,414
+ 6.4
Total
4,396
4,653
4,879
+ 4.9
As in previous years, the size of the workforce employed by
GfK companies rose abroad in particular, with a 6.4 per cent
increase, or 204 new employees. This was largely due to the
acquisition of the IFR Group in France in the Non-Food Tracking
division and of Significant GfK in Belgium and Intercampus in
Portugal in the Ad Hoc Research division.
80
Number of employees in Germany and abroad by region
3%
7%
13 %
In %
Full-time
Germany
30
1,465
Northern Europe
10
500
Western and
Southern Europe
37
1,787
Central and
Eastern Europe
13
634
3
138
30 %
37 %
10 %
America
Total
7
355
100
4,879
The largest increase in the number of employees (+17.5 per cent)
came in Asia and the Pacific. The causes were the acquisition
of Informark in Australia and a higher personnel requirement in
China. The next largest regional increases came in Central and
Eastern Europe (+9.5 per cent) and Western and Southern Europe
(+7.3 per cent).
Number of employees by division
11%
18 %
28 %
36 %
Staff turnover – a further reduction
The rate of staff turnover at GfK companies in Germany,
expressed as the rate of notices given by employees to the total
number of employees, was 3.6 per cent in 2002 and therefore
significantly lower that the figure of 6.5 per cent in the previous
year.
Personnel marketing in Germany –
recruiting and retaining staff
A key aspect of personnel marketing activities in 2002 was to
present GfK to graduates in a contemporary and professional
way, beginning in May 2002 with the new recruitment section on
the GfK website. This was followed by a new corporate image
brochure targeted at graduates and trainees, a new design for
job advertisements and a new presentation for fairs and other
events.
In addition, marketing efforts were intensified to cover the
Group’s medium and long-term requirement for qualified
specialist and management personnel.
As well as visiting graduate fairs, GfK acted for the first time
as sponsor of Access, a two-day marketing recruitment
workshop, directly addressing highly qualified graduates and
final year students, who have the potential to apply for junior
GfK consultant posts. Thanks to GfK’s professional approach,
interesting presentations and challenging case studies, the
Group resulted the most attractive employer represented at
the event in a subsequent poll of well over 100 participants.
Excellence – promoting young high-fliers
In %
Full-time
Consumer Tracking
18
863
Non-Food Tracking
28
1,394
Media
Ad Hoc Research
7%
Broken down by business division, at 13.0 per cent the biggest
increase in employee numbers came in Non-Food Tracking, the
main causes for the rise being the acquisition of the IFR Group
and additional recruitment in Asia. There was also a relatively
large increase in Consumer Tracking (+9.5 per cent) due to the
insourcing of 75 data recording personnel. By contrast, staff
numbers remained virtually unchanged in the Ad Hoc Research
and Other divisions. It was only in the Media division that the
number of employees decreased by 6.5 per cent.
7
345
36
1,745
Other
11
532
Total
100
4,879
To promote integration within the Group as well as cross-company
mobility and flexibility of senior executives, GfK has established
Excellence, its Improvement Program for Management and
Employees
Leadership to identify, promote and retain young high-fliers.
The intention is to intensify intercultural exchange within the
GfK Group through strategic projects across countries and
companies.
In September 2002, the first Excellence team presented to the
Management Board the GfK Group Corporate Values, which
were developed in less than a year. Since October 2002, the
second Excellence team has taken over the task of drafting
proposals for Management Guidelines.
Company Survey 2002 –
taking employees’ opinions on board
In November 2002, after a two-year interval, GfK conducted
another survey of employees throughout Germany. The
participation rate was 74 per cent, compared with 73 per
cent for the previous survey in 2000 and the overall results
were satisfying. They will be communicated throughout the
Group in spring 2003 and will be discussed in workshops.
TOPIC – supporting the management
TOPIC (Top Objectives on Personnel Improvement and
Commitment), an initiative launched in Germany, is aimed
at supporting the management in specifying qualitative
management objectives. The initiative was actively and
consistently continued in 2002. In conjunction with the
Company Survey 2002, TOPIC has helped to give important
pointers to the measures needed to promote and retain
employees of GfK companies in Germany.
PEAK – promoting employee development
To identify and promote qualified and motivated employees,
GfK Panel Services Consumer Research in Germany has
introduced a programme for work with junior marketing and
research consultants. The Personnel Encouragement and
Assessment Kit (PEAK) is intended to enhance the company’s
image as an attractive employer and to target the training
of junior marketing and research consultants effectively
towards subsequent application in a customer-facing role. An
additional focus is to develop a transparent, performance-based
promotion policy which will make junior marketing and research
consultants even more loyal to the company. After its excellent
start at GfK Panel Services Consumer Research, PEAK is now
setting an example for other GfK companies.
MANAGEMENT REPORT
SEEK – evaluating and encouraging employees
After extensive development in 2001 and 2002, GfK will
introduce a new Staff Evaluation and Encouragement Kit
(SEEK) in a pilot scheme in two major subsidiaries during
2003. Essentially, SEEK is based on a detailed list of
personal success criteria, according to which each employee
is appraised. GfK has developed this precision instrument to
enable the management to promote employees effectively.
Occupational pensions in Germany –
offering alternatives
As state pensions are set to shrink in the future, occupational
pension schemes are becoming increasingly important and
indeed have been promoted by the government since 2002.
GfK encourages its employees to make provision for their old
age, giving them the opportunity to pay part of their salary free
of tax and social security into an occupational pension scheme.
Within certain limits, GfK pays a supplement of 10 per cent on
the contributions to the pension fund. Employees have a variety
of options and combinations to choose from.
In addition, GfK employees have the possibility of opting for a
private Riester pension on favourable terms through a group life
insurance policy.
Human resources –
harmonizing personnel marketing at international level
Since 2001, the Personnel Services department has
been organizing a human resources meeting attended by
personnel managers from GfK companies in various European
companies. This initiative has two objectives, to develop a
common personnel policy and to produce guidelines on staff
exchanges. Since 2002, Personnel Services has also had an
international human resources project group available to
coordinate international activities and launch new initiatives.
Job applications – increase in online candidates
Although GfK advertised fewer posts in 2002 than the previous
year, it received almost the same number of applications. This
is one sign of the success of the marketing measures introduced
in previous years. Most of the applicants were interested in jobs
advertised on the GfK website. At the same time, the number of
unsolicited applications remained as high as ever.
81
8. Organization and administration
In addition to its 15 branches in Germany, the GfK Group has
120 subsidiaries and participations in 50 countries worldwide.
GfK AG acts both as a holding company and as an operating unit.
The Group has its head office in Nuremberg.
Management Board members and their responsibilities.
The Chief Executive Officer is responsible for Strategy, Investor
Relations, Internal Audit and Public Affairs and Communications,
as well as GfK Produkt- und Methodenentwicklung, GfK Data
Services and GfK Business Solutions & Processing. With his
appointment on 1 April 2002, the new Chief Financial Officer
took over Central Services, Financial Services and Personnel
Services, all of which were previously also headed by the CEO.
82
GfK is organized on a matrix basis, with each of the four
divisions Consumer Tracking, Non-Food Tracking, Media and
Ad Hoc Research under the responsibility of one Management
Board member. In addition, the members of the Management
Board are responsible for certain regions. The healthcare
services activities are allocated to the Management Board
member responsible for Consumer Tracking.
The managing directors report directly to the Management
Board members responsible for their area.
Each business division has its own Management Board, to which
a number of specialist international teams is assigned. The task
of the Board members is to develop divisional strategies and to
allocate resources for international projects.
Centralized services. GfK AG’s Group Services comprises the
following central administrative departments :
• the Financial Services department that includes Group
Accounting and Group Financial Controlling functions as
well as the Investor Relations and the Public Affairs and
Communications departments, all of which have global
responsibility.
• the Financial and Operational Accounting functions of the
Financial Services department, as well as Central Services
and Personnel Services have authority for Germany only.
Outside Germany, these functions are the responsibility of
the local GfK companies.
In 2002, the Group appointed a Chief Information Officer (CIO),
whose task is to harmonize the IT Services worldwide and
to develop standards to optimize costs and procedures for the
purchasing of hardware and software and for organizing the
network environment. The CIO reports to the CEO.
Sub-holdings. The GfK Group has major sub-holdings in the
following countries:
• Austria for most of the GfK companies in Central and Eastern
Europe
• Netherlands for all of the Intomart companies
• Switzerland for the companies of the IHA-GfK Group
• USA for the GfK companies incorporated there
• Singapore for all of the companies of the Non-Food Tracking
division in Asia and the Pacific.
Client base. GfK has a large number of clients worldwide,
including major manufacturers of fast moving branded consumer
goods and durables. No single client accounts for more than
3 per cent of sales. The 50 biggest clients account for 38.7 per
cent of sales. Of these top clients, 39 use GfK as a full-service
company, relying on the services of at least two of GfK’s business
divisions.
9. Purchasing
Most of GfK’s purchasing concerns project-related services and
is carried out locally. The main item is raw data bought in from
other service providers.
GfK has laid down guidelines for the procurement of goods
and services to ensure quality and cost efficiency and to make
optimum use of synergies. Multi-year leases, service and rental
agreements are regularly checked and re-tendered. The price
and quality of the services and materials purchased are constantly
monitored.
Additional cost savings have been achieved thanks to the
guidelines and recommendations on the design of brochures
and presentation and other materials implemented in 2001
and 2002.
Finally, the appointment of a Chief Information Officer for
IT services in 2002 marked an important step towards
developing worldwide standards for network organization
and the purchasing and maintenance of hardware and
software, which not only satisfy the high security and reliability
requirements for GfK operations but which also ensure optimum
cost efficiency.
Social commitment
10. Environmental protection
GfK operates a policy of positive action with regard to
environmental protection. In Germany, its environment officer,
Central Services and IT Services ensure that the GfK companies
and employees are careful and thrifty in their use of natural
resources.
As a practical implementation of this policy, GfK has opted
over recent years to switch over from paper documentation to
the use of electronic media for as many of its communications
and administrative processes as possible. These include:
• processing internal administrative procedures for purchasing,
ordering, travel and personnel management in Germany
• archiving divisional, company and project-related resources
on the Intranet
• providing clients with online access via portals to the databases
and the survey results of the Consumer Tracking, Non-Food
Tracking and Media divisions. A similar solution for the Ad Hoc
Research division is in the process of implementation.
In general, GfK seeks to comply with environmental standards
in the procurement, use and disposal of work materials and
office equipment. GfK employees are urged by means of
guidelines and recommendations to act in an efficient and
environmentally responsible manner when procuring and
disposing of materials.
11. Social commitment
Success and a sense of responsibility go hand in hand. As a
successful market research group and as a company listed in
the Prime Segment on the stock exchange, GfK is committed
first of all to its clients, employees and shareholders. Beyond
this obligation, however, GfK considers that its success also
represents a challenge to take part in initiatives which serve the
common good. As Germany’s oldest established market research
institute, which has its roots in academic research, and as one
of the oldest surviving independent market research companies
in the world, GfK focuses its commitment on the following
aspects:
• social, cultural and sports projects in the Nuremberg region,
the location in which the company was founded and has its
head office, aimed in particular at young people in schools and
public institutions.
• the promotion of academic institutions and professional
associations, particularly in relation to training, basic research
and further development in the field of market research.
MANAGEMENT REPORT
In certain areas, the GfK Group cooperates with GfK Nürnberg
e.V., the main object of which is the promotion of science. The
projects described below all illustrate GfK’s ongoing commitment
over a long period of time. No reference is made to the Group’s
one-off campaigns in response to particular events, such as the
disastrous floods in Germany, Austria and the Czech Republic last
year.
Social commitment –
active involvement and financial support
Medicine Education Africa in Tanzania. Through its
English subsidiaries, GfK has committed itself to a medical
development project in Tanga, an agricultural region of
Tanzania on the border with Kenya. The objective is to set up
and maintain a medical infrastructure in the outlying parts
of this region, which are far from any doctor or hospital. In
each village, one person is provided with basic medical training
and a small stock of medicines.
Home for children and young people at Reutersbrunnenstraße, Nuremberg. For the last three years, GfK has been
sponsoring the home for children and young people at Reutersbrunnenstrasse in Nuremberg, one of the oldest establishments
of its kind in Germany. The home provides shelter for around
50 children who are separated from their parents for various
reasons. It also has an emergency flat which can provide
temporary refuge for up to ten children.
United Way, Minneapolis, USA. For over twenty years, the
Group’s American subsidiary, GfK Custom Research, has been
supporting United Way, an organization which provides various
social and charitable services in Minneapolis. A major part of
the financial commitment comes from voluntary work by the
employees of GfK Custom Research. Every employee is given
eight working hours’ leave to devote to a charitable initiative.
Academic commitment – training market researchers
In 2002, GfK extended for a further three years the contract it
had concluded with the University of Erlangen-Nuremberg three
years earlier to provide financial and technical support to the
University’s Market Information Management department. The
funding relates to an interdisciplinary project jointly developed
by GfK and the University to prepare business administration
students for the complex requirements of modern market
research work.
83
Cultural commitment – poster art and children’s theatre
13. Outlook
Permanent loan to the Germanisches Nationalmuseum.
After a preliminary phase of three years, a collection of around
10,000 advertising posters from the period 1890-1960 in the
possession of GfK-Nürnberg e.V. and the Nürnberger Akademie
für Absatzwirtschaft was contributed to the Nuremberg Poster
Collection and placed on permanent loan with the Germanisches
Nationalmuseum.
The economy and the industry – dealing with uncertainty
Children’s theater in the Nuremberg region. In 2002, GfK
acted for the second time as chief sponsor of Panoptikum, a
children’s and young people’s theatre festival, at which 20 theatre
companies from seven European countries presented a variety of
productions in Nuremberg over a one-week period. In addition,
GfK provides a Nuremberg-based children’s and young people’s
theatre with ongoing material support.
84
Commitment to sport – Nuremberg city run
In 2002, GfK for the first time was one of the main sponsors of
the Nuremberg city run, which takes place every year through
the old town and neighbouring districts. The runners included
more than 120 GfK employees and family members.
GfK will be continuing its social, economic and cultural commitment over the coming years.
12. Major events since the 2002 financial
statements
Following the change in the segmentation of equities on the
Deutsche Börse in 2003, GfK shares are now listed on the
SDax. With effect from 24 March 2003, the MDax was reduced
from 70 to 50 stocks. According to the rankings published by
Deutsche Börse on 31 January 2003, GfK was in 58th place on
the basis of market capitalization and 68th on the basis of share
volume traded. On the SDax, which like the MDax includes 50
stocks, GfK is ranked 7th.
As many investors in GfK shares are industry rather than indexoriented, GfK does not expect that the change will have any
significant adverse impact in the long term. For institutional
investors, the main interest in GfK is as one of the leading
companies in the field of market research.
The experts are currently very cautious when it comes to
forecasting how the economy will develop in 2003. A great
deal depends on how matters develop in the Iraq conflict and
their impact on the political situation in the Middle East.
According to one forecast produced by the Deutsches Institut
für Wirtschaftsforschung (DIW), at the beginning of the year,
economic growth of 2.5 per cent in real terms is expected
for the USA, with 1.4 per cent forecast for the euro zone and
0.6 per cent for Germany.
For the market research sector, growth forecasts for the next
two years are also on the conservative side. Morgan Stanley
and Crédit Lyonnais predict growth of 3 per cent for 2003 and
4 per cent for 2004.
The situation regarding incoming ad hoc orders in the Media
division is likely to remain difficult, especially for print media,
which will probably continue to be affected by reductions in
print runs and advertising. This also includes services relating
to continuous advertising success monitoring. However, should
the economy pick up in the current year after all, it is precisely
these services which offer great potential for growth in the short
term.
Investment – investing in innovation
In order to retain its leading position as an innovative group,
GfK will once again be making major efforts in 2003 to
optimize existing processes and technologies and to develop
and implement new methods and instruments. To achieve this
strategic objective, provision has been made for replacement
and expansion investment in the order of EUR 24 million. This
figure does not include financial investment to complete the
international network, expenses for the establishment and
expansion of panels, the costs of modifying and supplementing
software and other outlays, which are charged directly to
expenses as “soft facts” at the GfK Group.
Financing and liquidity – using the optimization potential
The financing potential of the GfK Group has been placed
on a broad and solid basis. GfK AG, which is mainly responsible
for Group financing, has ample credit lines available. These
facilities are called on predominantly for short-term use and
on the basis of variable financing. For 2003, measures are in
preparation to secure the existing low level of interest over the
medium term.
Outlook
In addition to its credit lines, the GfK Group can draw on EUR
52.5 in cash and short-term securities. Measures are also in
preparation to centralize these liquid funds in order to further
improve net interest income.
Medium-term capital is required almost exclusively for financing
of acquisitions, which is matched to the relevant periods. In
this regard, apart from the credit lines, the Group has abundant
self-financing capacity from its free cash flow and authorized
capital of 8.2 million no-par shares. GfK will therefore be able to
maintain its sound equity ratio in the future.
Research and development –
integrating technological progress
During 2003 and 2004, R&D will be focusing on:
• further developing electronic measurement devices for the
continuous monitoring of consumer behaviour and media
reach
• refining data merging techniques and developing valid
standard services for clients’ new and complex marketing
issues
• improving data management and data warehousing
instruments, particularly in the Ad Hoc Research division.
Purchasing: focusing on IT and communication
In the purchasing of materials and services during 2003, GfK
will be pursuing the optimization efforts already introduced and
expanding them to the whole Group. This applies particularly
to IT and communication systems for which national and
international benchmarking processes for hardware and software
and for maintenance agreements have been introduced.
Organization –
alignment with the Corporate Governance Code
MANAGEMENT REPORT
Employees – internationalizing human resources strategy
In addition to the continuation of the national human resources
strategy, there will be a further intensification of the efforts
begun in 2002 to extend the use of the existing and jointly
developed human resources instruments in the GfK Group
worldwide. In particular, special measures will be developed to
optimize the exchange of personnel within the GfK Group.
GfK Group – outperforming sector growth
GfK sees good potential for growth within the overall economic
situation. Positive pointers in this direction are incoming
orders and the high proportion of long-term contracts already
concluded. With no change to the scope of consolidation, GfK is
expecting sales to rise by more than 5 per cent to around EUR
590 million in 2003. In addition to organic growth, GfK also
intends to generate further growth through acquisitions and the
expansion of participations.
As in the previous year, GfK expects EBIT after income from
participations to rise faster than sales. The Group is expecting to
achieve a margin of around 10 per cent.
For GfK, 2003 has got off to a promising start. As at 1 January
2003, overall orders on hand stood at EUR 167.4 million,
12.7 per cent up on the same time last year. Taking into account
the order book position for the current financial year and sales
so far recognized, GfK has already achieved 48 per cent of its
sales target of EUR 590 million. The corresponding value for last
year was 47 per cent.
Business divisions – improving margins
GfK expects to see the four business divisions Consumer
Tracking, Non-Food Tracking, Media and Ad Hoc Research
increase both their sales and their operating income.
The following figures relate only to the development of the
companies consolidated as at 31.12. 2002.
In line with the requirements of the German Corporate
Governance Code, plans are in place to optimize all measures
required to shorten the times for preparation and publication
of the financial statements of GfK AG and the Group in 2003.
For Consumer Tracking, GfK is anticipating sales growth
of around 6 per cent with a clear rise in the margin to around
4 per cent. Measures implemented in 2002 to optimize and
standardize data collection and analysis throughout Europe
using aTRACKtive will contribute to this development.
Corporate structure – strategic coordination
The activities of the GfK Group in the Healthcare segment
will come under Consumer Tracking from January 2003.
This corresponds to the existing allocation of responsibility.
The activities of Martin Hamblin GfK HealthCare in the UK
and the USA reported under the Ad Hoc Research division
As in the past, GfK will continue to pursue its integration
strategy. Following the takeover of all of the shares in the
companies acquired, these companies are consolidated into
larger efficient units and restructured into strategic groups.
and the healthcare activities reported under Other, will
85
also be reclassified accordingly. In 2002, these activities posted
sales of around EUR 32 million and a rise of around 8 per cent
is forecast for 2003. A margin of over 10 per cent is assumed.
For the Non-Food Tracking division, the company is expecting
double-digit growth in sales and a rise in the margin over
2002. In addition to expansion into new countries, the launch
of information services on new product and market segments
comprises the main focus of activity.
In the Media division, GfK is benefiting from the contracts either
extended or won in 2002 to measure TV and radio ratings. On
the other hand, the company is assuming that demand in the
print sector will remain weak. This limits growth potential in the
division. However, sales should rise by more than 3 per cent.
GfK is anticipating that the margin will be well over 10 per cent
and therefore above the margin for the previous year.
86
Adjusted for the reclassification of the healthcare activities, sales
in Ad Hoc Research may be critically affected by economic
trends. GfK is therefore expecting only a slight increase in sales.
The earnings margin should be higher than in the previous year.
The synergies arising from the companies acquired in recent
years will play a greater role here.
In the Other division, GfK is anticipating a drop in sales to
around EUR 10 million and slightly negative income from
the internal services sector. The reason here is the planned
reclassification of the healthcare activities.
Strategy – targeted expansion of the network
Thanks to being ranked number 5 among market research
institutes worldwide, the GfK Group is very well positioned.
The objective of future acquisitions is to make the best possible
use of the growth opportunities of the business divisions. In
Consumer Tracking, GfK is well placed throughout Europe and
will be looking for growth through extending its existing
alliances and expanding the healthcare services. In Non-Food
Tracking, where GfK is the world leader, the policy of global
expansion will once again be pursued. In Media, GfK intends to
expand its European network. In Ad Hoc Research, the largest
of the divisions, GfK plans to strengthen its presence above all in
North America and Europe.
As in previous years, GfK will continue its practice of initially
acquiring a stake in a company and then proceeding to gradually
take it over completely. This gradual approach ensures that
the previous owners and employees continue to work for the
development of “their company” even within the GfK network.
The fundamental aim of GfK’s acquisition strategy is to build
on its position as a “pure player” in the market research field.
To achieve this, the service range will be extended to include
consultancy services based on GfK’s extensive market research
knowledge and expertise.
Outlook
MANAGEMENT REPORT
87
88
FINANCIAL STATEMENTS AND NOTES
FOR THE GfK GROUP
90 Consolidated income statement
91 Consolidated balance sheet
92 Consolidated funds statement
93 Changes in consolidated shareholders’ equity
94 Notes to the financial statements for financial year 2002
94
General information
94
Methods of consolidation
94
Currency conversion
94
Accounting and valuation methods
98
Scope of consolidation and major acquisitions
100
Notes to the consolidated income statement
103
Notes to the consolidated balance sheet
104
Consolidated fixed assets schedule
110
Proposed appropriation of profits
114
Segment reporting
114
Pro forma statements in accordance with
SFAS 141
115
Changes on the previous year
118
Employees
119
Total remuneration and shares of the
Management Board and Supervisory Board
120
Supervisory Board
121
Management Board
121
Declaration concerning the Corporate
Governance Code
122
Shareholdings of the GfK Group
127 Auditors’ report
89
Consolidated income statement
for the period 1 January to 31 December 2002 in EUR’000
Sales
2001
23., page 114
Cost of sales
Gross income from sales
Selling and general administrative expenses
Operating income
Other income less other expenses
559,373
– 394,831
140,515
164,542
– 110,214
– 117,287
30,301
47,255
1., page 100
– 14,543
– 3,627
15,758
43,628
2., page 100
EBIT after income from participations
3,716
6,378
19,474
50,006
Net interest income
3., page 101
125
– 2,329
Net other financial income
4., page 101
– 15,674
– 2,396
3,925
45,281
– 10,215
– 15,277
Result from ongoing business activity
90
482,132
– 341,617
23., page 114
EBIT before income from participations
2002
Taxes on income and earnings
5., page 101
Income from the initial application of SFAS 133
Minority interests’ share of total income
Earnings per share, undiluted (in EUR)
The Notes below form an integral part of the consolidated financial statements.
6., page 103
136
0
– 6,154
30,004
1,413
– 4,331
– 4,741
25,673
– 0.18
0.98
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 2002 in EUR’000
31.12.2001
31.12.2002
Assets
Intangible assets
7., page 103
112,206
163,048
Tangible assets
8., page 106
64,108
69,718
Financial assets
9., page 106
32,268
31,040
page 104
208,582
263,806
1,530
1,519
10., page 107
121,769
119,336
Other accounts receivable and other assets
11., page 107
10,916
16,351
Securities
13., page 108
8,054
7,350
47,555
45,167
189,824
189,723
page 102
9,075
9,324
14., page 108
5,586
6,701
Total assets
413,067
469,554
of which short-term
196,639
197,819
Subscribed capital
66,872
66,872
Capital reserve
87,098
87,098
6,366
27,357
Fixed assets
Inventories
Trade receivables
Liquid funds
Current assets
Deferred taxes
Prepaid expenses
91
Retained earnings
Other comprehensive income
page 109
2,791
177
15., page 108
163,127
181,504
6,535
17,623
Minority interests
Provisions
16., page 110
61,945
69,636
Financial liabilities
17., page 111
53,365
72,882
Trade payables
18., page 112
33,229
36,318
52,384
56,015
Liabilities on orders in progress
Other liabilities
19., page 112
35,843
28,663
236,766
263,514
5,266
6,004
1,373
909
Total liabilities
249,940
288,050
of which short-term
189,023
203,118
413,067
469,554
Provisions and liabilities
Deferred taxes
Deferred income
page 102
Consolidated funds statement
for the period 1 January to 31 December 2002 in EUR’000
2001
2002
– 6,154
30,004
Write-down/write-up of intangible assets
17,442
8,995
Write-down/write-up of tangible assets
13,687
15,363
Write-down/write-up of financial assets
Change in deferred taxes
Income from companies valued at equity, not affecting payment
Profits/losses from the disposal of tangible assets
491
– 211
1,980
– 177
– 1,494
618
– 29
2,269
5,672
2,427
Other revenue/expenses not affecting payment
10,109
577
Increase/decrease in inventories, trade receivables and other assets,
not attributable to investment or financing activity
Net interest income affecting payment
Increase/decrease in provisions
92
8,090
– 2,786
17,106
19,622
Increase/decrease in liabilities and other liabilities,
not attributable to investment or financing activity
12,335
– 10,674
a) Cash flow from ongoing business activity
75,958
69,304
Cash outflows for investment in intangible assets
– 20,881
– 9,522
Cash outflows for investment in tangible assets
– 11,960
– 19,051
Cash outflows from the acquisition of consolidated companies and other business units
– 51,526
– 44,088
Cash outflows for investment in other financial assets
– 23,902
– 3,913
Cash inflows from disposals of intangible assets
994
83
Cash inflows from disposals of tangible assets
398
1,601
Cash inflows from the disposal of consolidated companies and other business units
244
0
2,442
1,698
– 104,191
– 73,192
– 3,918
– 4,441
Cash inflows from disposals of other financial assets
b) Cash flow from investment activity
Cash outflows to company owners
Cash inflows from/outflows to minority interests
Net interest income
– 698
– 1,703
29
– 2,269
Cash inflows from the raising of loans
28,628
34,692
Cash outflows from the repayment of loans
– 7,204
– 23,346
c) Cash flow from financing activity
16,837
2,933
Changes in financial resources affecting payment (total of a), b) and c))
Changes in financial resources owing to exchange gains/losses, scope of consolidation and valuation
– 11,396
– 955
184
– 1,433
Financial resources at the start of the period
58,767
47,555
Financial resources at the end of the period
47,555
45,167
Changes in consolidated shareholders’ equity
Changes in consolidated shareholders’ equity
for the period 1 January 2001 to 31 December 2002 in EUR’000
As at 1 January 2001
Other Comprehensive Income
No. of shares
(in thousands)
Subscribed
capital
Capital
reserve
26,122
66,872
87,098
Retained
earnings
Difference
from currency
conversion
Market
valuation of
securities
Difference
from pension
valuation
Total
14,497
2,084
– 2,785
0
167,766
Dividend
– 3,918
– 3,918
after tax
– 4,741
– 4.741
Other changes
528
As at 31 December 2001
26,122
66,872
87,098
6,366
528
730
2,796
– 34
3,492
2,814
11
– 34
163,127
Dividend
– 4,441
– 4,441
after tax
25,673
25,673
Other changes
– 241
– 241
– 2,623
– 25
34
– 2,614
191
– 14
0
181,504
93
26,122
66,872
87,098
27,357
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 2
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.
From financial year 2002 onwards, the GfK Group will no longer
prepare 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 the GfK Group is exempt from the duty to
prepare consolidated financial statements in accordance with
HGB pursuant to § 292 a HGB.
94
The published consolidated financial statements of the GfK
Group for financial year 2001 had been prepared in accordance
with the German Commercial Code (HGB). In order to allow
comparison of the US GAAP figures for financial year 2002, the
previous year's figures prepared in accordance with US GAAP
are presented with them.
The annual financial statements of the parent company, GfK AG,
have been prepared in accordance with HGB and are deposited
at the Commercial Register at the district court of Nuremberg
under HR B 9398.
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%, but over which decisive 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.
Capital consolidation is carried out in accordance with the
Statement of Financial Accounting Standards (SFAS) 141 by 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 (positive goodwill) arising
in the balance sheet is reported under fixed assets as goodwill.
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.
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. A 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.
The consolidation on transition from equity valuation to full
consolidation takes place with no impact on income but is done
separately for every part-acquisition. The acquisition costs
included in capital consolidation comprise the amortized equity
book value and the acquisition costs for the majority acquisition.
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 middle 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 profit for the year in 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:
Main currencies
Euro mean rate
on balance sheet date
Country, unit of currency
Euro average rate
during reporting period
31.12.2001
31.12.2002
2001
2002
USA, USD 1
1.13
0.96
1.12
1.05
UK, GBP 1
1.64
1.54
1.62
1.59
Japan, JPY 100
0.86
0.81
0.92
0.85
67.55
68.84
66.30
68.21
Switzerland, CHF 100
Accounting and valuation methods
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 temporis of the project (proportional performance method).
Business in the Ad Hoc division 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
Notes: accounting and valuation methods
Intangible assets
terms of amount. Where over 50% of the costs occur in the
following month, the sales are recognized with one month's
delay.
Software
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 realizable sales at the point in
time at which they can be anticipated.
The costs to be incorporated into this calculation comprise
all direct material and personnel expenses as well as pro rata
indirect costs. Provisions are formed for anticipated losses on
orders in progress when they can be anticipated.
As a rule, software developed by companies in the GfK Group
is used internally for analyzing and preparing market research
data. In some cases, it is destined for external users and is
programmed particularly to meet those users' requirements.
Precisely defined portions of the internal costs of software
development are capitalized under fixed assets. Amortization
commences on completion of the software.
In addition to proprietary software, the item software also
includes software acquired for internal use.
Goodwill
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 invoicing has taken place.
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.
Earnings per share
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.
Dilution effects arising from the exercise or issue of share
options are not taken into account.
There is no dilution effect arising from the stock options issued
as at 31 December 2002.
The GfK Group checks the recoverbility of its goodwill once a
year and when friggering events or changed circumstances arise
by making a management accounting valuation which is calculated as the mean of several valuation procedures.
Stock options for employees and management staff
of the GfK Group
Other intangible assets
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.
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.
The following table shows the effects on the consolidated total
income and the EPS which would have resulted had SFAS 123
”Accounting for Stock-Based Compensation“ been applied to all
issued options.
Plus: Personnel expenses (after tax) in connection
with stock-based compensation on application
of APB 25
2001
2002
– 4,741
25,673
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)
– 4,535
– 4,584
Pro forma consolidated total income
– 9,276
21,089
– 0.18
0.98
Pro forma earnings per share in EUR
– 0.36
0.81
Earnings per share (diluted) in EUR
– 0.18
0.98
Pro forma earnings per share (diluted) in EUR
– 0.36
0.,81
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.
95
Liquid funds
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.
96
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 equity in other comprehensive
income with no impact on income.
The liquid funds contain cash in hand and at banks as well as
liquid investments with a remaining term of less than three
months.
Deferred tax assets
The GfK Group applies SFAS 109 "Accounting for Income Taxes".
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 issued.
Deferred tax assets accordingly consist of theoretical tax balances
resulting from comparing the US GAAP balance sheet against
the local tax balance sheet, and from the theoretical tax advantage
arising from tax loss carryforwards. If it is unlikely that these
theoretical tax balances can be realized, valuation allowances are
applied.
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. They are exchange rate differences arising from
capital consolidation and equity valuation, unrealized profits
and losses from available-for-sale securities and components
of pension obligations which are not yet reported as pension
expenses.
Provisions
Inventories
Inventories are stated at acquisition or manufacturing costs, or
fair value if lower. The manufacturing costs are entered at full
cost.
Trade receivables
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 valuation of sales where the sales
to be recognized for a contract exceed the receivables already
invoiced for it.
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.
In principle, provisions are allocated when there is an obligation
to a third party which is probable and the level can be estimated
reliably. If the liability contains an interest portion, the provision
will be stated at the present value.
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.
Financial liabilities contain liabilities of a financial nature,
particularly loans from banks and other lenders, liabilities from
capital leases and long-term liabilities from the acquisition of
companies or business units. They are stated at the repayment
amounts.
Notes: accounting and valuation methods
Liabilities on orders in progress comprise payments on account
and accrued amounts from recognition of sales. Sales are
accrued within this item 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 method.
Derivative financial instruments
Derivatives are reported as assets or liabilities in the balance
sheet (SFAS 133) and carried at fair value. Changes in the
fair value of derivative financial instruments are recognized in
income on an accrual basis.
New developments in accounting
In July 2001, the Financial Accounting Standards Board
(FASB) published SFAS 141 “Business Combinations” and
SFAS 142 “Goodwill and Other Intangible Assets”. These
standards brought about a fundamental change in the
accounting rules for company acquisitions and mergers in the
consolidated financial statements, and the treatment of goodwill
and intangible assets. SFAS 141 prescribes the purchase
method for all company acquisitions after 30 June 2001. If during
the course of acquiring a company intangible assets are also
acquired, they must either be capitalized separately or included
as goodwill. The criteria for the treatment of acquired intangible
assets are defined in SFAS 141.
SFAS 142 prescribes that goodwill and intangible assets with
an indefinite useful life may no longer be subject to scheduled
amortization. Their value must be checked each year as part of
the impairment test. If there are signs of a diminution in value,
an additional unscheduled impairment test must be carried out.
Intangible assets with a limited useful life have to be amortized
on a scheduled basis according to SFAS 142 until they reach
the expected residual value. In addition, they must also be
tested for impairment of value. This is set out in SFAS 121 and
SFAS 144.
The provisions for amortization of goodwill under SFAS 142
should be applied directly to goodwill and intangible assets
acquired since 30 June 2001. Goodwill and intangible assets
acquired prior to this date require SFAS 142 to be applied for
the first time from 1 January 2002 onwards.
At the time of the first application, an impairment test for
goodwill has to be carried out. If this results in an amortization
requirement, such amortization must be stated in the income
statement as a cumulative effect of the change in accounting
rules.
The book value of the intangible assets was EUR 112,206
thousand as at 31 December 2001, including goodwill of
EUR 84,184 thousand. The scheduled amortization of goodwill
amounted to EUR 10,392 thousand during 2001.
In August 2001, SFAS 144 “Accounting for the Impairment or
Disposal of Long-lived Assets"” was published. SFAS 144
replaces SFAS 121 “Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to Be Disposed Of”, and the
accounting rules of APB Opinion No. 30 “Reporting the Result
of Operations - Discontinued Events and Extraordinary Items”.
SFAS 144 also corrects Accounting Research Bulletin (ARB) 51,
“Consolidated Financial Statements”, whereby the exceptional
rule that a subsidiary over which control will probably only
be exerted temporarily, does not have to be consolidated is
withdrawn. SFAS 144 upholds many of the fundamental rules of
SFAS 121 concerning realization and valuation of extraordinary
depreciation/amortization on fixed assets.
SFAS 144 must be applied to financial years which started after
15 December 2001.
In April 2002, the FASB published SFAS 145 “Rescission of FASB
Statements 4, 44 and 64, Amendment of FASB Statement No. 13,
and Technical Corrections”. This requires for example that profits
and losses arising from the extinguishment of debt may only be
recognized as extraordinary items if they meet the criteria in APB
30 (in other words, unusual nature and infrequent occurrence).
If only one of the two criteria is met, then profits and losses must
be shown in the result from ongoing business activity.
SFAS 145 has to be applied in financial years that commence
after 15 May 2002. Its application will not have any significant
effects on the consolidated financial statements of the GfK Group.
In July 2002, the FASB published SFAS 146 “Accounting for
Costs Associated with Exit or Disposal Activities”. According
to SFAS 146, costs connected with exits or disposals should
be recognized in the period in which they were incurred. A
reasonable estimate of their fair value must be possible. SFAS
146 is to be applied to exits or disposals that take place after
31 December 2002.
In November 2002, EITF 00-21 “Revenue Arrangements with
Multiple Deliverables” was passed by the Emerging Issues
Task Force. EITF 00-21 deals with accounting for sales transactions in which the vendor has to provide a number of
deliverables. It defines the conditions for dividing up a sales
transaction with several deliverables into separate accounting
units and prescribes how this should be done. EITF 00-21
has to be applied to financial statements for reporting periods
starting from 1 July 2003 onwards.
97
During November 2002, the FASB published FIN 45
“Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others – an interpretation of FASB Statements No. 5, 57 and
107 and Rescission of FASB Interpretation No. 34”. It defines
the disclosure requirements of the guarantor in respect of
the obligations arising from the guarantees provided. FIN 45
requires liabilities arising from the furnishing of guarantees
to be carried as liabilities. FIN 45 should be applied to reporting
periods that end after 15 December 2002, but only to guarantees
which were furnished or modified after 31 December 2002.
98
In December 2002, the FASB adopted SFAS 148 “Accounting
for Stock-Based Compensation – Transition and Disclosure – an
amendment of FASB Statement No. 123”. Supplementing SFAS
123 “Accounting for Stock-Based Compensation”, it provides
further transitional rules for the voluntary first-time application
of accounting for stock-based compensation in line with fair
values. The accounting method and resultant impact on income
and should be described in detail and highlighted in the Notes to
the financial statements according to SFAS 148. The GfK Group
is applying APB 25 for accounting for stock-based compensation
in the consolidated financial statements. There are no plans yet
for a transition to the provisions of SFAS 123.
In January 2003, the FASB published FIN 46 “Consolidation
of Variable Interest Entities – an interpretation of ARB No. 51”.
It presents the consolidation of companies in which there is
a controlling financial interest owing to voting rights or variable
shares. In such cases these Variable Interest Entities have to be
consolidated with the primary beneficiary.
The GfK Group has no participating interests in Variable Interest
Entities.
The effects of SFAS 146 and SFAS 148, EITF 00-21, FIN 45 and
FIN 46 on future consolidated financial statements of the GfK
Group are currently being considered.
Fully consolidated subsidiaries (No.)
31.12. 2001
Additions
Disposals
31.12.2002
9
2
1
10
Abroad
75
14
8
81
Total
84
16
9
91
Germany
The additions include the companies reported as associated
companies in the consolidated financial statements in accordance
with US GAAP as at 31 December 2001: EMER GfK, S.L., Valencia,
Spain (“E+G Spain”), G.E. Marketing Research, S.A., Valencia,
Spain (”G+E Spain”), GfK PORTUGAL – Marketing Services,
LDA, Lisbon, Portugal (“GfK M.S. Portugal”), and METRIS –
MÉTODOS DE RECOLHA E INVESTIGAÇÃO SOCIAL, LDA,
Lisbon, Portugal (“Metris Portugal”). By virtue of contract
changes, from 1 January 2002 onwards GfK AG has commercial
control of these companies. During the reporting year the GfK
Group acquired additional shares in INTERCAMPUS - RECOLHA,
TRATAMENTO E DISTRIBUIÇÃO DE INFORMAÇÃO, LDA,
Lisbon, Portugal (“Intercampus Portugal”), so that the company
is now consolidated.
The joint venture Infratest + GfK Gesundheitsforschung GmbH
& Co., Berlin (“IGG KG”) previously included as an associated
company has now been split and as at 1 July 2002 has been
merged pro rata into the parent companies. In connection with
this split, the GfK Group received a majority interest of 80 %
in GPI Kommunikationsforschung Gesellschaft für PharmaInformationssysteme mbH, Nuremberg (“GPI KoFo D”). These
activities are reported in the division Other.
Through the acquisition of a majority stake of 51.4 % in Institut
Français de Recherche S.A., Viroflay, France, the following
IFR Group subsidiaries as well as the parent company became
consolidated companies of the GfK Group as at 1 July 2002:
• IFR Europe Ltd., London, UK
Estimates
• IFR France S.A., Viroflay, France
To some 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 as
well as the income and expenses for the financial year. The actual
amounts concerned may deviate from such estimates.
• IFR Italia S.r.L., Milan, Italy
Scope of consolidation and major acquisitions
Fully consolidated companies
As at 31 December 2002, the scope of consolidation in
accordance with US GAAP includes ten (2001: nine) German
and 81 (2001: 75) foreign subsidiaries in addition to the parent
company.
The following table shows the changes in fully consolidated
subsidiaries between 31 December 2001 and 31 December 2002:
• IFR Marketing España S.L., Madrid, Spain
The IFR Group operates in the Non-Food Tracking segment.
As at 1 January 2002, the GfK Group acquired a 51 % stake in
GfK MACON AG, Waghäusel, Germany (“GfK Macon D”) which
operates in the Ad Hoc Research segment.
The Group also acquired a majority holding in the Ad Hoc
company Strateji GfK Research Services A.S. in Istanbul,
Turkey.
In Brussels, Belgium, the Group established Intomart GfK
Belgium N.V., which acts as a holding company for the majority
stake acquired on 1 July 2002 in Significant bvba, Heverlee,
Belgium (“Significant Belgium”) which operates in the Ad Hoc
Research segment.
Notes: scope of consolidation
In the Non-Food Tracking segment, the GfK Group acquired a
majority holding in Informark Pty. Ltd., Braddon, Australia as
of 1 January 2002.
The purchase price of the acquisitions above was EUR 41,708
thousand in total. This produced goodwill of EUR 43,118
thousand. This relates to the Non-Food Tracking (EUR 21,743
thousand), Ad Hoc Research (EUR 4,806 thousand) and Other
(EUR 16,569 thousand) segments.
GfK Marketing Services Asia Ltd., Tokyo, Japan was liquidated.
Its business operations were continued by GfK Marketing
Services Ltd., Hong Kong, China.
GfK/VCIOM/Institute for Media Research ZAO, Moscow, Russia
was liquidated. Its business operations were carried on by
GfK-RUS Gesellschaft mbH of Moscow, Russia.
SELECTA – S.r.L., Rome, Italy and GfK-Recom S.r.L., Milan, Italy
were merged with GfK-ASM S.r.L., Rome, which was renamed
GfK CONSUMER AND BUSINESS INFORMATION ITALY S.p.A.
(”GfK CBI Italy”) and moved its headquarters to Milan.
GfK InfoScan Sverige AB, Lund, Sweden (“InfoScan Sweden”),
GfK Belgium S.A., Brussels, Belgium (“GfK Belgium”), dragon
eye Ltd., Hergiswil, Switzerland (“dragon eye Switzerland”),
MMXI Switzerland GmbH, Hergiswil, Switzerland (“MMXI
Switzerland”) and PRISMA Projekt-Beratung GmbH, Hamburg
(“Prisma Projekt D”) were deconsolidated on 1 January 2002.
These companies are of minor importance for the consolidated
financial statements.
The joint ventures GfK Ad Hoc Research WORLDWIDE,
Brussels, Belgium, and GfK Stratégie et développement GIE,
Rueil-Malmaison, France, previously not reported as Group
companies, were reclassified as affiliated companies because the
GfK Group has a majority participation in these joint ventures.
GfK Testmarktforschung GmbH i.L., Nuremberg, Germany,
Exmarket + GfK Praha, spol. s.r.o., Prague, Czech Republic,
Sensory Research Laboratories Ltd., London, UK, MH Gamma
Consulting Limited, London, UK and MHIG Limited, London, UK,
which were not included in 2001 due to minor significance, were
liquidated during the reporting period.
The majority holding in I+G Infratest & GfK Gesundheitsforschung
(Suisse) GmbH, Basle, Switzerland acquired in connection
with the splitting and merging of IGG KG, is not included in the
consolidated financial statements because the company is to be
liquidated in the near future.
99
The following table shows the changes in associated companies
between 31 December 2001 and 31 December 2002:
Associated companies (No.)
31.12. 2001
Additions
Disposals
4
1
2
3
Abroad
24
8
8
24
Total
28
9
10
27
Germany
31.12. 2002
Companies of minor importance
The GfK Group did not include 31 (2001: 21) 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.
As part of the acquisition of the IFR Group in France, the
following companies were added to the GfK Group and are of
minor importance:
• CMI Field SARL, Viroflay, France
• IFR Monitoring Deutschland GmbH, Düsseldorf
• IFR Nederland B.V., Amsterdam, Netherlands
• IFR Polska Sp. z o.o., Warsaw, Poland
• IFR U.K. Ltd., London, UK
In connection with the splitting of IGG KG and its subsequent
merging into GfK AG, the GfK Group received participations
in the companies I+G Gesundheits- und Pharmaforschung Verwaltungs-GmbH, Nuremberg, and I+G Infratest Medical Research
Inc., Rhode Island, USA. These companies are not operational
and therefore are of minor significance for the GfK Group.
Through the inclusion of the company Metris Portugal, the GfK
Group obtained a majority holding in CATICALL – RECOLHA DE
INFORMAÇÃO ASSISTIDA POR COMPUTADOR, LDA, Lisbon,
Portugal, which is not consolidated.
The above companies InfoScan Sweden, GfK Belgium, dragon
eye Switzerland, MMXI Switzerland and Prisma Projekt D were
deconsolidated.
The consolidated financial accounts as at 31 December 2002
report participations in 27 (2001: 28) associated companies.
E+G Spain and G+E Spain were classified as associated
companies as at 31 December 2001 and have been included
since 1 January 2002 in the consolidated financial statements
as fully consolidated subsidiaries.
During the reporting period the GfK Group acquired participations
in m2A S.A., Saint Aubin, France and Indicorp Participações S.A.,
São Paolo, Brazil.
European Flash Surveys EEIG, Brussels, Belgium, and
GfK-Media Research Middle East AG, Hergiswil, Switzerland,
were established.
The joint ventures ConsumerSCOPE International GIE,
Nuremberg, Germany, Europanel Raw Database GIE, Brussels,
Belgium, Common Technology Centre EEIG, London, UK,
Media Focus (ARGE), Hergiswil, Switzerland, and V.O.F. Projectbureau Politiemonitor, Hilversum, Netherlands, previously not
treated as Group companies, were reclassified as associated
companies in line with participation quota.
The participation in Sensory Solutions Pty. Ltd., Castle Hill,
Australia, Digital Druck AG, Stans, Switzerland, MMXI Europe
B.V., Amsterdam, Netherlands, and Ceský Index s.r.o., Prague,
Czech Republic, were sold.
The holdings in IGG KG and Infratest + GfK Gesundheitsforschung
Verwaltungs-GmbH, Berlin, were absorbed in the course of the
above merger into GfK AG.
Miscellaneous income essentially contains income from earlier
periods (EUR 913 thousand) and income from rents and leases
(EUR 495 thousand).
The participation quota in Centrum voor Marketing Analyses
B.V., Amsterdam, Netherlands (previously Centrum Partners
B.V.) was reduced. The company is now included under other
participations in the financial statements.
Miscellaneous expenses essentially comprise amortization on
other intangible assets (EUR 2,572 thousand).
2. Net income from participations
The company Media Monitoring Switzerland AG, Berne,
Switzerland, was liquidated.
Net income from participations is as follows:
Other participations
Income from participations in affiliated
companies
During the reporting year, GfK acquired a 4% holding in
Chart-Track Limited, London, UK.
100
Following the reduction of the holding in Centrum voor Marketing
Analyses B.V., Amsterdam, Netherlands, the company, previously
reported as an associated company, was reclassified and included
under other participations.
Depreciation on participations in affiliated and
associated companies
Losses from the disposal of participations in affiliated
and associated companies
As a result, the number of other participations rose by four
compared with the end of the previous year to a total of nine.
Notes to the consolidated income statement
1. Other income less other expenses
Other income and expenses break down as follows:
Profits from the disposal of
tangible and intangible assets
2001
2002
3,102
2,166
224
197
111
188
Miscellaneous
1,631
2,473
Other income
5,068
5,024
Exchange losses
3,164
4,259
0
441
81
208
Expenses from deconsolidation
Losses from the disposal of
tangible and intangible assets
Amortization of goodwill
9,940
0
Miscellaneous
6,426
3,743
Other expenses
Other income less other expenses
Income from other participations
Expenses from loss transfer from affiliated
companies
The joint venture EUROPEAN OPINION RESEARCH GROUP
EEIG, Brussels, Belgium is now reported under other
participations.
Income from deconsolidation
Profits from the disposal of participations
in associated companies
Income from participations
In the course of acquiring a majority stake in Intercampus
Portugal, the GfK Group also obtained a holding in 10Nex
Investigação – Estudos de Mercado LDA, Lisbon, Portugal,
which is reported under other participations.
Exchange gains
Income from participations in associated
companies
19,611
8,651
– 14,543
– 3,627
2001
2002
210
55
5,174
2,846
0
3,606
371
8
5,755
6,515
0
78
2,037
35
2
24
Expenses on participations
2,039
137
3,716
6,378
The pro rata income of the I+G Group Germany was reported in
2001 within income from participations in associated companies.
As at 1 July 2002, the I+G Group was partially merged with GfK,
and results are now reported under operating income on the
income statement. In connection with the splitting of IGG KG,
a book profit of EUR 3,001 thousand arose which is included
under profits from the disposal of participations in associated
companies.
Notes: notes to the consolidated income statement
The loss from the disposal of loans to associated companies
amounting to EUR 1,194 thousand relates to the waiving of a
loan in respect of MMXI Europe NL in connection with the sale
of the participation.
3. Net interest income
Net interest income is as follows:
2001
2002
1,341
867
Interest income from receivables
692
500
Interest income from other loans
316
393
Interest income from available-for-sale securities
70
15
Interest income from affiliated companies
43
28
295
373
2,757
2,176
Interest income from bank balances
Interest income from associated companies
Interest income
Interest and similar expenses due to banks
1,255
2,885
Interest and similar expenses due to others
1,363
1,591
0
29
Interest and similar expenses due to affiliated
companies
Interest and similar expenses due to associated
companies
Interest expenses
Net interest income
14
0
2,632
4,505
125
– 2,329
During 2001, realized loss from the reclassification of securities
and losses from securities held as current assets included the
valuation allowance on a participation in Jupiter Media Metrix
Inc., USA amounting to EUR 6,907 thousand. The write-downs on
loans to associated companies related to loans to the bwv Group,
Switzerland.
5. Taxes on income and earnings
The result before income taxes is divided between Germany and
abroad as follows:
2001
2002
Germany
4,649
32,444
Abroad
– 724
12,837
3,925
45,281
2001
2002
The Group's taxes on income are as follows:
4. Net other financial income
Net other financial income breaks down as follows:
Profits from securities
held as current assets
Profits from available-for-sale securities
Current taxes
2001
2002
359
111
210
12
0
3
Realized profit from the reclassification of
securities
6
14
Other financial income
Losses from securities held as
current assets
5
2
580
142
5,722
1,331
Losses from available-for-sale securities
23
13
Realized loss from the reclassification of
securities
4,585
0
0
1,194
31
0
Losses from disposal of loans to associated
companies
Write-downs on loans to affiliated
companies
Write-downs on loans to associated
companies
Other financial expenses
Net other financial income
6,559
4,982
Abroad
6,968
10,505
13,527
15,487
Deferred taxes
Germany
Profits from disposal of loans to affiliated
companies
Write-ups on securities
Germany
5,893
0
16,254
2,538
– 15,674
– 2,396
Abroad
Taxes on income and earnings
–2,762
6,828
– 550
– 7,038
– 3,312
– 210
10,215
15,277
The tax advantage from the utilization of loss carryforwards
during financial year 2002 amounts to EUR 1,079 thousand
(2001: EUR 501 thousand). Owing to a new estimate of the
amount of deferred tax assets to be realized, the valuation
allowance for deferred tax assets existing at the start of the
year was reduced, which led to a tax advantage in the amount
of EUR 317 thousand (2001: EUR 448 thousand). National
investment tax credits reduce income tax by EUR 122 thousand
(2001: EUR 0). Adjustments in deferred taxes because of changes
in the underlying tax rates reduce tax expenses by a further
EUR 519 thousand (2001: EUR 0).
As at 31 December 2002, to calculate the deferred taxes for the
German companies with registered offices in Nuremberg a tax
rate of 41.118 % is used for deferred taxes which will probably
be reversed in 2003, and a tax rate of 39.824 % is used for the
other deferred taxes. During 2001, a uniform tax rate of 39.824 %
was used to determine the deferred taxes.
101
These tax rates comprise corporation tax of 26.5% for the
assessment period 2003 and 25% for all other assessment
periods plus the solidarity surcharge of 5.5% (2001: 5.5%) on
the corporation tax debt paid as well as the effective trade tax
rate of 13.160% (2001: 13.449%). The flood victim solidarity
law ("Flutopfersolidaritätsgesetz") passed in September 2002
caused a one-off rise in the corporation tax rate from 25% to
26.5% for financial year 2003.
The deferred taxes result from the following balance sheet items:
Intangible assets
613
Financial assets
2,804
210
Inventories
7,546
14,551
570
465
The following table contains a reconciliation of the anticipated
income tax expense to the income tax expense stated in financial
year 2002. To calculate the anticipated tax expenses, the total tax
rate valid during the financial year is multiplied by the pre-tax
result.
Total tax rate
Expected income tax
Increase/reduction in income tax debt resulting from
differences in tax rates
income from participations valued at equity,
not eligible for tax
adjustment of deferred taxes owing to changes
in tax rate
adjustment to tax charge in respect of previous periods
deviating tax base
national investment tax credits
tax-exempt income from the disposal of participations
Prepaid expenses
5
6
Provisions
2,371
3,803
Liabilities
10,744
10,031
Deferred income
Loss carryforwards and tax credits
181
122
6,684
6,232
Deferred tax assets before valuation allowance
34,610
39,629
Valuation allowance
– 1,916
– 1,691
Deferred tax assets
32,694
37,938
39.824 %
18,033
– 2,631
Intangible assets
– 1,877
– 3,774
Tangible assets
– 9,580
– 9,069
Financial assets
– 2,547
– 416
– 111
– 110
Inventories
– 451
– 519
667
441
– 122
– 1,652
other tax-exempt income
– 817
other non-deductible expenses
2,446
other
– 118
Tax expenses reported
3,596
486
Accounts receivable and other assets
2002
31.12.2002
3,219
Tangible assets
The deferred taxes of the other German companies and the
foreign companies are calculated at the respective specific tax
rates.
102
31.12.2001
Accounts receivable and other assets
– 10,737
– 17,082
Prepaid expenses
– 82
– 78
Special reserve item
– 75
0
Provisions
– 1,699
– 1,155
Liabilities
– 1,949
– 2,576
Deferred income
Deferred tax liabilities
Net deferred tax assets (liabilities)
– 228
– 358
– 28,885
– 34,618
3,809
3,320
15,277
During the previous year, the stated tax expenses of
EUR 10,215 thousand exceeded the expected income tax of
EUR 1,563 thousand by EUR 8,652 thousand. The difference
resulted essentially from non-deductible amortization on
participation book values (EUR 3,139 thousand) and on goodwill
(EUR 3,612 thousand) as well as on other non-deductible
expenses (EUR 2,722 thousand) and differences in tax rates
(EUR -596 thousand).
After netting out, the deferred taxes are reported in the balance
sheet as follows:
31.12.2001
Total
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
(liabilities)
31.12.2002
of which
long-term
Total
of which
long-term
9,075
4,210
9,324
5,097
– 5,266
– 2,542
– 6,004
– 4,084
3,809
1,668
3,320
1,013
The total income tax expenses in shareholders’ equity are as follows:
Tax expenses reported
Tax expenses contained in income due to changes
in accounting and valuation methods
Tax expenses on components of
other comprehensive income
Total income tax expenses in shareholders’ equity
2001
2002
10,215
15,277
90
0
1,700
216
12,005
15,493
Notes: notes to the consolidated balance sheet
As at 31 December 2002 the Group has domestic tax loss
carryforwards amounting to EUR 2,386 thousand (2001: EUR
2,220 thousand) and foreign tax loss carryforwards of EUR
15,875 thousand (2001: EUR 16,292 thousand). The domestic
loss carryforwards can be carried forward without restriction in
terms of date and amount. Among the foreign loss carryforwards,
the amount of EUR 9,663 thousand may be carried forward
without limit and the amount of EUR 4,383 thousand is available
for carryforward until 2013.
7. Intangible assets
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 the past results of the Group
companies and the expectations for the future, it is assumed
more likely than not that the relevant benefits of the recognized
deferred tax assets 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 1,691 thousand (2001: EUR 1,917 thousand)
was applied. The EUR 226 thousand reduction in the valuation
allowance on deferred tax assets is essentially due to the new
estimate of realizability for the deferred tax assets and to changes
in the scope of consolidation.
Other software
Deferred tax liabilities on retained earnings of foreign subsidiaries
are not included in the balance sheet because these earnings are
intended to remain permanently invested.
Software
Software breaks down as follows:
31.12.2001
31.12.2002
Software as per SFAS 86
2,249
1,985
Software as per SOP 98-1
17,502
17,502
Software
3,174
6,617
22,925
26,104
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.
The anticipated amortization expenses for software during the
coming five financial years are shown below:
103
Expected amortization expenses
2003
6,302
2004
5,380
2005
3,767
2006
1,918
2007
1,477
6. Earnings per share
Goodwill
2001
2001
Pro forma1)
2002
– 4,741
5,651
25,673
Number of shares outstanding
– non-diluted –
26,121,998
26,121,998
26,121,998
Number of shares outstanding
– diluted –
26,121,998
26,121,998
26,121,998
– 0.18
0.22
0.98
Earnings per share (diluted) in EUR
– 0.18
0.22
0.98
1) The column “2001 Pro forma” contains the theoretical values, applying SFAS 142 from
1 January 2001 onwards.
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 2002 or from that for the transition to SFAS 144.
The amortization of goodwill during financial year 2001
amounted to EUR 10,392 thousand. The following tables show
the result from ongoing business activity and the consolidated
total income as if the provisions of SFAS 142 had already come
into effect on 1 January 2001.
2001
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.
3,925
Scheduled amortization of goodwill from capital consolidation
9,693
Scheduled amortization of goodwill within equity valuation
699
Adjusted result from ongoing business activity
14,317
– 4,741
2001
Scheduled amortization of goodwill from capital consolidation
Scheduled amortization of goodwill within equity valuation
9,693
699
Adjusted consolidated total income
5,651
Adjusted earnings per share in EUR
0.22
Consolidated fixed assets schedule in EUR’000
Acquisition and manufacturing costs
Change
Brought
in scope
forward to
Currency
of consoli-
1.1.2002
effects
dation
1. Software
46,644
– 1,164
413
2. Goodwill
128,856
– 183
37,317
Reclassifi-
Equity
As at
Disposals
cations
adjustment
31.12.2002
8,838
2,197
1,385
14,204
2,999
Additions
I. Intangible
assets
3. Other intangible assets
53,919
177,195
13,326
–1,347
– 128
898
717
– 1,393
10,639
188,826
– 2,694
37,602
23,940
5,913
–8
241,753
30,240
100
139
1,594
188
112,807
– 1,161
5,416
17,457
11,849
84
122,754
26,349
– 27
943
965
712
– 76
27,442
169,396
– 1,088
6,498
20,016
12,749
8
182,081
1,384
3
1,934
2,905
1,004
5,222
181
–2
100
79
200
2,835
962
837
4,199
II. Tangible assets
1. Land, land rights and
buildings, including
buildings on land owned
by third parties
104
2. Other equipment,
fixtures and fittings
3. Leased items
31,885
III. Financial assets
1. Shares in affiliated
companies
2. Loans to affiliated
companies
3. Participations in associated
companies
18,529
– 1,270
4. Loans to associated
companies
9,794
– 121
5. Other participations
1,638
–4
– 4,922
2
118
– 389
702
14,523
6,311
389
2,143
6. Available-for-sale
securities
1,042
3
21
40
353
753
7. Other loans
9,575
7
87
18
819
8,868
42,143
– 1,384
– 2,878
6,853
7,416
702
38,020
400,365
– 5,166
41,222
50,809
26,078
702
461,854
Notes: consolidated fixed assets schedule
Cumulative depreciation/amortization
Book values
Change
Brought
in scope
forward to
Currency
of consoli-
1.1.2002
effects
dation
Additions
6,084
23,719
– 369
487
44,672
– 62
– 56
8,229
– 1,115
– 30
76,620
– 1,546
8,732
Disposals
Write-ups
2,104
Reclassi-
As at
fications
31.12.2002
–2
31.12.2002
31.12.2001
27,815
26,104
22,925
2,999
41,555
135,640
84,184
2,911
660
9,335
1,304
5,097
401
8,995
5,763
78,705
163,048
112,206
45
6
796
188
9,391
22,494
21,508
85,248
– 743
3,390
12,707
10,488
78
90,174
32,580
27,559
11,308
–9
217
1,876
518
– 76
12,798
14,644
15,041
105,288
– 707
3,613
15,379
11,194
2
112,363
69,718
64,108
1,029
3
595
495
950
1,172
4,050
355
75
–1
43
– 12
19
181
106
303
3
301
–5
14,523
18,226
7,081
95
2,943
4,233
2,078
2,713
1,520
623
118
–2
105
– 18
– 18
1,520
–3
13
– 130
– 26
36
– 130
717
1,045
8,868
9,705
9,875
100
595
508
4,081
– 17
6,980
31,040
32,268
191,783
– 2,153
4,609
24,882
21,038
– 35
198,048
263,806
208,582
Other intangible assets are as follows:
Payments on account for
intangible assets
15,383
2004
12,519
31.12.2001
31.12.2002
2005
8,608
3,683
937
2006
6,471
1,414
5,097
367
1,304
The expected amortization expenses for other intangible assets
within the next five financial years are as follows:
Expected amortization expenses
106
2003
2003
275
2004
200
2005
163
2006
132
2007
132
2007
5,439
Subsequent years
30,052
Future minimum lease payments under operating leases
78,472
b) Capital lease
The capitalized leased assets consist of buildings and tangible
fixed assets amounting to EUR 27,442 thousand (2001: EUR
26,349 thousand). Net of cumulative depreciation, the resultant
book value is EUR 14,644 thousand (2001: EUR 15,041 thousand).
The future minimum lease payments under such agreements are
due as follows as at 31 December 2002:
2003
8. Tangible assets
Leasing
The GfK Group leases office premises and business equipment
under long-term lease agreements. As a rule, the lease payments
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 substantially bears
the risks and opportunities arising from the use of the leased
assets, these are capitalized (capital lease). Otherwise the lease
payments are carried as an expense (operating lease). There are
no significant sub-leases.
a) Operating leases
The following payments under operating lease agreements were
carried as expenses:
Minimum lease payment
2001
2002
11,455
16,129
Contingent lease payment
268
544
Less sub-lease payments received
– 50
– 157
11,673
16,516
Less payments
The future minimum lease payments arising from such
agreements are due as follows as at 31 December 2002:
3,114
2004
1,782
2005
1,453
2006
1,339
2007
1,269
Subsequent years
13,158
Future minimum lease payments under capital leases
22,115
Less: incidental costs
Less: interest expenses
– 27
– 6,328
Liabilities under capital leases
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 15,760 thousand (2001:
EUR 16,282 thousand) of which EUR 2,305 thousand (2001:
EUR 1,852 thousand) has a remaining term of under one year.
9. Financial assets
The composition and development of the financial assets is
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 of the GfK Group.
The following table shows the annual results for the main
companies in the GfK Group:
15,760
Company name and registered office
Net income for the year
EMER GfK, S.L., Valencia, Spain
642
FESSEL-GfK Institut für Marktforschung
Ges.m.b.H., Vienna, Austria
578
GfK Asia Pte Ltd., Singapore, Singapore
– 133
GfK CONSUMER AND BUSINESS INFORMATION
ITALY S.p.A., Milan, Italy
The profits realized from the reclassification of available-for-sale
securities as current assets amount to EUR 14 thousand (2001:
EUR 6 thousand) for financial year 2002, with no losses (2001:
EUR 4,585 thousand).
Realized profits and losses are valued and determined separately
for each security.
– 1,632
– 194
GfK Danmark A/S, Frederiksberg, Denmark
10. Trade receivables
40
GfK Marketing Services GmbH & Co. KG, Nuremberg
5,136
GfK Marketing Services Japan Ltd., Tokyo, Japan
1,149
GfK Marketing Services Ltd., West Byfleet, Surrey, UK
2,419
GfK Marketing Services S.A., Rueil-Malmaison, France
1,791
GfK Panelservices Benelux B.V., Dongen, Netherlands
1,126
third parties
affiliated companies
associated companies
GfK Polonia Instytut Badania Opinii Sp. z o.o,
Warsaw, Poland
390
GfK Sofema International SARL, Rueil-Malmaison, France
790
GfK Sverige AB, Lund, Sweden
– 691
IHA·IMS Health GmbH, Hergiswil, Switzerland
4,541
IHA-GfK AG, Hergiswil, Switzerland
5,500
31.12.2001
31.12.2002
104,667
106,927
Invoiced trade receivables,
in respect of
other participations
106
814
5,478
2,217
72
0
110,323
109,958
Receivables from long-term contracts
not yet invoiced
to third parties
15,123
15,629
125,446
125,587
Institut de Sondage Lavialle (ISL) S.A.,
Issy les Moulineaux, France
370
Less: valuation allowance
– 3,677
– 6,251
Intomart B.V., Hilversum, Netherlands
279
Trade receivables
121,769
119,336
Martin Hamblin GfK Limited, London, UK
– 1,383
Martin Hamblin Research Inc., Hartford, Connecticut, USA
559
Media Markt Analysen GmbH & Co. KG, Frankfurt/Main
335
Loans
Of the trade receivables, an amount of EUR 57 thousand
(2001: EUR 207 thousand) has a remaining term of over one
year.
11. Other receivables and assets
Loans to affiliated and associated companies include valueadjusted loans with a disbursed amount of EUR 5,165 thousand
(2001: EUR 7,226 thousand). The accumulated write-downs on
these loans amount to EUR 4,252 thousand (2001: EUR 7,157
thousand).
Securities
The following table shows an overview of the acquisition costs,
fair value and unrealized profits of the portfolio of available-forsale securities:
Tax receivables
Amounts owed
by related parties
31.12.2001
Fair value
Unrealized profit
5,133
286
3,333
1,147
1,324
Accounts receivable from reinsurance
1,216
787
Credit balances with suppliers
420
420
Other amounts owed by affiliated
companies
984
660
739
2,363
31.12.2002
Other assets
Acquisition costs
31.12.2002
3,825
Guarantee deposits
Other amounts owed by associated
companies
Debt securities
31.12.2001
1,042
3,904
11,927
17,924
Less: valuation allowance
– 1,011
– 1,573
Other receivables and assets
10,916
16,351
753
1,045
717
9
0
The debt securities held in the portfolio at the end of the year
have a remaining term of over one year.
The proceeds from the sale of available-for-sale securities
for financial year 2002 amount to EUR 83 thousand (2001:
EUR 1,043 thousand).
3,310
Of the other receivables and assets, an amount of EUR 2,709
thousand (2001: EUR 3,448 thousand) has a remaining term of
over one year.
Other assets essentially comprise amounts owed by employees,
balances and prepayments as well as claims to refunds.
107
12. Valuation allowances
Valuation allowances developed as follows:
Trade
receivables
Other
receivables
and assets
2,385
8
185
983
As at 31.12.2000
Changes in the scope of
consolidation
Additions
1,677
26
Utilization
– 319
–6
Release
– 269
0
Currency difference
As at 31.12.2001
Changes in the scope of
consolidation
108
Additions
18
0
3,677
1,011
422
0
3,053
563
Utilization
– 301
0
Release
– 573
0
Currency difference
As at 31.12.2002
– 27
–1
6,251
1,573
13. Securities
The trading securities reported under current assets had a fair
value of EUR 7,350 thousand (2001: EUR 8,054 thousand) after
acquisition costs of EUR 8,234 thousand (2001: EUR 16,590 thousand).
14. Prepaid expenses
Prepaid expenses include prepaid pension costs in the amount of
EUR 79 thousand (2001: EUR 0).
15. Shareholders’ equity
Subscribed capital
As at 31 December 2002, the subscribed capital of GfK Aktiengesellschaft remains unchanged at EUR 66,872 thousand. The
subscribed capital is divided into 26,121,998 no-par bearer
shares. Each share represents a portion of the subscribed capital
equivalent to EUR 2.56. GfK Aktiengesellschaft does not hold
any of its own shares. As the main shareholder, GfK-NÜRNBERG
Gesellschaft für Konsum-, Markt- und Absatzforschung e.V.,
Berlin, holds 64% 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 in the subscribed capital of EUR 5,120 thousand 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
et seq. 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 or paid out as a bonus.
The number of options for the first five tranches (2000/2005,
2001/2006, 2002/2007, 2003/2008, 2004/2009) results from
division by a factor of 4.5. The option rights of the 2000/2005
tranche have a term until 31 December 2005, and options not
exercised will lapse. 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 % 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 % 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 Meeting
dated 3 September 1999 and 13 June 2002. The subscribed
capital is therefore being increased by using up the permissible
maximum amount by a further EUR 1,567,229.44 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 programme
as follows:
– Members of the Management Board of GfK AG may hold a
maximum of 30% of the option rights being granted.
– 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 General Meeting or if it is 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 %.
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.
Stock Options
Tranche
1
Fair Value information
Term
Total
options
2000/2005
389,165
Of which Exercise
Manageprice
ment Board
in EUR
76,512
Exercisable
from
to
Options
exercised
55.20
20021)
20051)
–
1)
1)
2
2001/2006
375,725
85,215
41.71
2003
2006
–
3
2002/2007
380,300
85,215
24.14
20042)
20072)
–
4
2003/2008
518,8393)
149,9993)
TBA
20052)
20082)
–
5
2004/2009
448,8624)
133,3324)
TBA
20062)
20092)
–
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) Subscribed, entitlement to options does not yet exist, options not yet issued, seven
Management Board members were entitled to subscribe.
4) Subscribed, entitlement to options does not yet exist, options not yet issued.
2001
Options
granted
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.
The fair value of the stock options issued by GfK during 2000,
2001 and 2002 has been calculated at the date of granting the
options on the basis of a Black-Scholes option price model, taking
into account the conditions of issue. The parameters used in
determining the fair value and the totals based on these were as
follows:
Tranche
1
2
3
Implicit volatility on date of issue
33 %
39 %
39 %
Risk-free investment interest1)
5.2 %
4.8 %
4.7 %
5.58
5.59
5.55
Fair value per option in EUR
16.42
12.92
7.63
Total value per programme
6,390
4,854
2,902
Term in years
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 2002 was four years (2001: 4.5 years).
The development of the stock options issued has been as
follows:
Balance at
start of year
Supplementary disclosures (valuation at fair value as at 31
December 2002)
2002
Number of
Options
Average
exercise
price
in EUR/share
Number of
Options
Average
exercise
price
in EUR/share
389,165
55.20
764,890
48.57
The following table shows the parameters and totals of the three
issued tranches when valued at the 2002 year-end:
Tranche
1
2
3
Implicit volatility on closing date
41 %
41 %
41 %
Risk-free investment interest1)
3.2 %
3.4 %
3.7 %
3
4
5
0.18
0.80
2.80
70
302
1,065
375,725
41.71
380,300
24.14
Exercised
–
–
–
–
Term in years
Expired
–
–
–
–
Fair value per option in EUR
Repayments
–
–
–
–
Total value per programme
Balance at
year-end
Exercisable
at year-end
764,890
48.57
1,145,190
40.46
_
_
389,165
55.20
During financial year 2002, the Stock Options Programme
involved no personnel expenses.
1) Swap rates with identical maturities.
As at the reporting date of 31 December 2002, 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 2002 were used for the parameters.
The changes in other comprehensive income are as follows:
Before
tax
Unrealized profits/losses from market valuation of available-for-sale securities:
Change in unrealized profits/losses
Realized profits/losses owing to reclassification
Differences from currency conversion
2001
Tax
effect
Net
Before
tax
2002
Tax
effect
Net
30
–6
24
–9
2
–7
4,579
– 1,795
2,784
– 14
5
–9
– 12
0
–12
–9
0
–9
4,597
– 1,801
2,796
– 32
7
– 25
Difference from pension valuation
– 56
22
– 34
56
– 22
34
Difference from currency translation: capital consolidation and equity valuation
650
80
730
– 2,422
– 201
– 2,623
5,191
– 1,699
3,492
– 2,398
– 216
– 2,614
Total unrealized profits/losses from available-for-sale securities
Change in other comprehensive income
109
Proposed appropriation of profits
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
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 5,224 thousand (EUR 0.20 per
no-par share) to the shareholders out of the retained profit for
2002 of EUR 32,930 thousand.
2001
Germany
31.12.2001
Total
> 1 year
Provisions for
pensions
Provisions for taxes
31.12.2002
Total
> 1 year
17,478
16,252
19,235
17,939
4,525
–
5,788
607
Other provisions
39,942
5,209
44,613
4,356
Provisions
61,945
21,461
69,636
22,902
–
530
34
547
–
–
–
– 37
– 12
2
–3
1
–
– 45
–
–
46
78
368
73
Actual return
on plan assets
Participant contributions
–
–
5
–
Benefits paid
–
– 18
–
– 20
Settlements
–
–
–
– 78
34
547
404
486
Fair value of
plan assets as at 31.12.
The following table shows the reconciliation from the financing
status of the plan assets to the amounts stated in the consolidated
balance sheet:
Provisions for pensions
The following tables provide more detailed information about the
GfK Group’s pension plans.
The projected benefit obligation (PBO) has developed as follows:
2001
Germany
Projected benefit
obligation
as at 01.01.
Price differences
14,651
Abroad
1,289
2002
Germany
Abroad
20,750
1,493
–
– 104
–
– 93
Service costs
351
165
1,098
200
Interest costs
803
41
1,096
46
2001
Germany
Extent to which the
pension plan is financed
Unrealized
actuarial
gains/losses
Non-amortized
amount from initial
application of SFAS 87
or SFAS 106
Net figure
reported
4,305
117
–3,299
– 13
Prepaid pension costs
Benefits paid
– 518
– 90
– 552
– 97
Pension provision
Plan amendments
1,226
75
–
76
– 68
–
–
–
Projected
benefit obligation
as at 31.12.
20,750
1,493
19,093
1,612
Abroad
2002
Germany
Abroad
20,716
946
18,689
1,126
– 4,067
– 110
– 519
– 84
13
– 76
11
– 67
16,662
760
18,181
975
Included in the
balance sheet
Actuarial
gains/losses
Settlements
2002
Germany
Abroad
Price differences
Employer contributions
The provisions are broken down as follows:
Abroad
Fair value of plan assets
as at 01.01.
Currency effects
16. Provisions
110
The following table shows the development of plan
assets:
Minimum pension
liability in other
comprehensive income
Net figure
reported
–
–
– 79
–
16,718
760
18,260
975
– 56
–
–
–
16,662
760
18,181
975
The following values result for pension plans in which the
accumulated benefit obligation (ABO) exceeds the fair value of
the plan assets:
2001
Germany
Accumulated benefit
Obligation (ABO)
13,268
Abroad
1,086
2002
Germany
Abroad
15,846
1,182
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 were EUR 3,758 thousand (2001:
EUR 3,885 thousand) in financial year 2002.
Other provisions
The breakdown of other provisions is as follows:
Fair value of plan assets
at the end of the reporting
period
34
547
404
486
31.12.2001
31.12.2002
25,018
29,821
Sales
2,308
3,515
Invoices outstanding
2,515
1,838
External accounting and auditing costs
1,720
1,704
304
1,275
Personnel
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):
Anticipated losses on pending transactions
Miscellaneous
Other provisions
Discount rate
Expected long-term return
on plan assets
Long-term compensation increase
2001
2002
5.8 %
5.6 %
0.5 %
2.6 %
0 % to 9 %
5.1 %
The period-related net pension expenses for financial years 2001
and 2002 contain the following items:
Components of
pension expenses
2001
Germany
Abroad
2002
Germany
Abroad
351
166
1.098
166
Interest cost
803
41
1.096
32
Amortization of
amounts from initial
application of SFAS 87
or SFAS 106
The provisions for employees comprise mainly commitments for
the payment of bonuses, holiday arrears, flexitime balances,
anniversary expenses and severance payments.
Miscellaneous other provisions mainly comprise amounts owed
to insurance companies (EUR 1,525 thousand), obligations to
households, survey respondents and interviewers (EUR 1,789
thousand), compensation risks (EUR 564 thousand) and financial
obligations (EUR 544 thousand).
17. Financial liabilities
Amounts due to banks
–3
– 11
–2
–3
–1
4
–1
4
0
0
176
9
1,150
200
2,367
208
31.12.2001
31.12.2002
14,362
24,221
1,852
2,305
0
2,013
Other financial liabilities
12,257
5,503
Short-term liabilities with a term
of up to 1 year
28,471
34,042
Amounts due to banks
10,464
22,923
(0)
(4,688)
Bills of exchange payable
Realized gains
and losses
Pension expenses (net)
6,460
44,613
Financial liabilities are as follows:
Service cost (present
value of entitlements acquired
during financial year)
Expected return
on plan assets
8,077
39,942
of which with a remaining term of over 5 years
Defined contribution plans
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
Other financial liabilities
14,430
13,455
(11,174)
(10,380)
0
2,462
(0)
(1,658)
Long-term liabilities with a term
of over 1 year
24,894
38,840
53,365
72,882
111
18. Trade payables
Other financial liabilities contain loan liabilities totalling EUR
3,605 thousand (2001: EUR 0) as at 31 December 2002, of which
EUR 3,502 thousand (2001: EUR 0) concerning related parties.
Trade payables are as follows:
Liabilities from the acquisition of participations stood at EUR
3,819 thousand (2001: EUR 12,257 thousand) as at 31 December
2002, of which EUR 344 thousand was in respect of associated
companies and EUR 2,411 thousand (2001: EUR 12,257 thousand)
in respect of other related parties.
As at 31 December 2002, the weighted average interest rate for
amounts due to banks was 4.01% (2001: 4.22%).
31.12.2001
Remaining
Total term > 1 year
Trade
payables
owed to third parties
owed to affiliated
companies
The financial liabilities become due in the next five years and
thereafter as follows:
owed to associated
companies
owed to other
participations
20031)
112
34,042
2004
8,769
2005
6,979
2006
4,138
2007
2,228
Subsequent years
16,726
72,882
Trade
payables
32,127
1,603
35,326
413
13
–
734
–
1,076
–
240
–
13
–
18
–
33,229
1,603
36,318
413
19. Other liabilities
The other liabilities comprise the following:
1) Contains current account liabilities payable on demand in the context of credit lines
Tax liabilities
As at 31 December 2002, the GfK Group had confirmed credit
lines of EUR 115,379 thousand (2001: EUR 118,171 thousand),
of which EUR 82,560 thousand (2001: EUR 105,518 thousand)
has not been used. The weighted average rate of interest on the
credit lines is 6.43% (2001: 6.16%).
31.12.2001
Amounts due to banks secured by
mortgages
14,851
15,301
deposit or pledging of securities
3,459
337
assignment of receivables
1,729
1,754
304
1,248
other collateral
Liabilities under leases secured by
transfer of movable assets
other collateral
Secured liabilities
26
543
0
124
20,369
19,307
31.12.2002
12,379
15,502
1,936
1,928
Liabilities in connection with social security
4,955
5,651
Amounts owed to employees
1,292
1,937
438
1,348
1,056
1,026
Other accounts payable
to affiliated companies
406
335
to associated companies
120
136
Accounts payable to clients
31.12.2002
31.12.2001
Wages and salaries
Reimbursement commitments
There is collateral amounting to EUR 19,307 thousand (2001:
EUR 20,369 thousand) for amounts due to banks and liabilities
under leases amounting to EUR 62,905 thousand (2001:
EUR 41,108 thousand). The collateral is broken down as follows:
31.12.2002
Remaining
Total term > 1 year
to related parties
421
24
Miscellaneous liabilities
12,840
776
Other liabilities
35,843
28,663
As at 31 December 2002, there were other liabilities amounting
to EUR 3,093 thousand (2001: EUR 3,535 thousand) with a
remaining term of over one year.
20. Related parties
During the financial year under review, significant relationships
which went beyond the normal business transactions existed with
the following persons and groups:
In respect of GfK-NÜRNBERG Gesellschaft für Konsum-, Marktund Absatzforschung e.V., Berlin, the majority shareholder of GfK
AG, there were primarily loan and other receivables in the
amount of EUR 422 thousand.
Notes: supplementary disclosures regarding the balance sheet
Mr Jürgen Ignaczak is a minority shareholder of ENIGMA Institut
für Markt- und Sozialforschung Jürgen Ignaczak GmbH,
Wiesbaden. There is a receivable in respect of him of EUR 2,911
thousand, which is a payment on account for the acquisition of
the remaining shares in the company.
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 510 thousand as at the reporting
date.
Mr Noel Muracciole is the minority shareholder in Institut
Français de Recherche S.A., Viroflay, France. There were
liabilities of EUR 1,569 thousand.
There were loan liabilities amounting to EUR 502 thousand
in respect of the members of the management of various
subsidiaries.
The receivables and liabilities in respect of related parties have a
remaining term of up to one year.
21. Contingencies and other financial commitments
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:
Ongoing investment projects
Maintenance, service and licence agreements
In case of compliance by the contract partners, payment
obligations of EUR 407 thousand will arise for the GfK Group
during the years 2003 to 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.
The GfK Group concludes transactions throughout the world in
various international currencies, which may involve currency
risks. Short-term 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 variable-rate
liabilities and to secure future payment flows. As per SFAS 133,
“Accounting for Derivative Instruments and Hedging Activities”,
the GfK Group states these at fair value on the reporting date as
assets or provisions. Any gains or losses arising from changes in
fair value are generally recognized as income or expense.
31.12.2001
Carrying
amount
Fair value
31.12.2001
31.12.2002
1,111
701
Financial instruments,
other than derivatives
619
375
Financial investments
1,315
9,016
113
The carrying amounts and fair values of the financial instruments
of the GfK Group are shown in the following table.
Commitments arising from
Furnishing collateral for third parties
In the years 2003 to 2007, purchase price payment obligations
for additional shares of EUR 24,321 thousand (2001: EUR 8,303
thousand) will result from purchase contracts concluded in
connection with acquisitions.
22. Financial instruments and derivatives
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 liabilities totalling EUR 921 thousand.
Guarantees and sureties
1,202
12,194
31.12.2002
Carrying
amount
Fair value
32,268
32,268
31,040
8,054
8,054
7,350
7,350
Liquid funds
47,555
47,555
45,167
45,167
53,365
53,365
72,882
72,882
226
226
0
0
Securities
In addition, there are the following contingencies and financial
commitments:
Derivative financial instruments
GfK Aktiengesellschaft has given a guarantee vis-à-vis The NPD
Group Inc., Port Washington, New York, USA, corresponding to
its participation in Intelect Partnership, Port Washington, New
York, USA, held since 1 January 2001 via GfK Holding, Inc.,
Wilmington, USA, to the effect that it assumes 25 % of the
liability for the contractual fulfilment of any commitments 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. and Intelect Partnership vis-à-vis the bank in favour
of NPD Intelect, L.L.C., a 99 % subsidiary of Intelect Partnership,
to secure a loan for USD 8,950 thousand. The loan commitment
as at 31 December 2002 amounted to EUR 6,301 thousand (USD
6,563 thousand) in total.
Currency hedging
contracts
31,040
Assets
Liabilities
Currency hedging
contracts
0
0
203
203
Interest rate hedging contracts
0
0
735
735
23. Segment reporting
The subdivision of the GfK Group into segments is based on the
organization of the divisions corresponding to the products and
services offered.
2002
The GfK Group provides services in the segments Consumer
Tracking, Non-Food Tracking, Media, Ad Hoc Research and
Other.
Media
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.
Non-Food Tracking: Information services regarding marketing,
sales and logistics in retail and industry for companies operating
in consumer technology markets.
114
Sales
Total
income
Depreciation
Consumer Tracking
85,987
2,416
3,515
Non-Food Tracking
137,339
24,495
4,883
Ad Hoc Research
Other
Total 2002
Reconciliation
Group 2002
2001
61,280
6,051
2,862
246,257
14,462
6,517
28,510
907
7,107
559,373
48,331
24,884
0
– 1,076
0
559,373
47,255
24,884
Sales
Total
income
Depreciation
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.
Consumer Tracking
84,799
– 202
4,971
Non-Food Tracking
119,539
17,484
6,221
Ad Hoc 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.
Other
Other: Internal services relating to IT and administration,
services in connection with data collection, processing and
analysis, method and product research and information services
for the healthcare markets.
In the GfK Group, the internal control and reporting are largely
based on the same accounting and valuation methods as the
consolidated financial statements.
Media
Ad Hoc Research
Total 2001
Reconciliation
Group 2001
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 2002 and 2001 is as
follows:
8,455
2,869
2,830
11,403
21,628
– 234
11,537
482,132
28,333
37,001
0
1,968
0
482,132
30,301
37,001
External sales by region are as follows:
Germany
Northern Europe
The Group measures the success of its segments by reference
to the operating income. The operating income of a segment
is determined on the basis of the result before financial income
(excluding other income) produced by the Management
Information System. Entries at Group level due to consolidation
are not taken into account. These are summarized in the
reconciliation to consolidated total income.
56,527
199,639
Western and Southern Europe
2001
2002
192,409
204,664
51,965
59,123
148,253
196,661
Central and Eastern Europe
23,529
28,484
America
36,801
40,366
External sales
29,175
30,075
482,132
559,373
During the reporting year and in the previous year, none of the
segments recorded sales with any single client of more than 10 %
of consolidated sales.
24. Pro forma statements in accordance with SFAS 141
Due to company acquisitions and other changes to the scope of
consolidation, the previous year’s figures cannot be compared
directly with the figures for the consolidated financial statements
as at 31.12.2002. To facilitate a comparison, the influences
resulting from changes are eliminated in the following pro forma
statements in accordance with SFAS 141.
Notes: changes since the previous year
The following pro forma statement in accordance with SFAS 141
shows selected items from the income statement for 2002 on
the assumption that all significant acquisitions and additional
acquisitions concerning affiliated companies which took place
during the last financial year, had already taken place on 1 January
2002. In the pro forma statement, the following transactions are
taken into account:
• First-time consolidation of Significant Belgium
• First-time consolidation of the IFR Group companies that have
been included
• First-time consolidation of GPI KoFo D
• Merger of the Nuremberg operations of IGG KG
with GfK AG
• Additional purchase of a 42.5% stake in GfK CBI Italy
2002
Actual
Pro forma
Sales
25. 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 2002.
26. Events after the balance sheet date
Following the change in the segmentation of equities on the
Deutsche Börse in 2003, GfK shares are now listed on the SDax.
With effect from 24 March 2003, the MDax was reduced from
70 to 50 stocks. According to the rankings published by Deutsche
Börse on 31 January 2003, GfK was in 58th place on the basis
of market capitalization and 68th on the basis of share volume
traded. On the SDax, which like the MDax includes 50 stocks,
GfK is ranked 7th.
27. Changes since the previous year
Difference
Absolute
Per cent
Accounting in accordance with US GAAP, which the GfK Group
has applied for the first time in the year under review, differs
from the previous HGB accounting. The differences that have
material effects on the GfK Group’s consolidated financial statements are described below.
559,373
575,150
15,777
2.8
Result from ongoing
business activity
45,281
48,617
3,336
7.4
30,004
32,172
2,168
7.2
Intangible assets
25,673
27,137
1,464
5.7
0.98
1.04
0.06
6.1
In accordance with HGB, only intangible assets acquired for
consideration may be capitalized. In accordance with US GAAP,
self-produced intangible assets may also be capitalized.
The income statement 2001 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 2002, had already taken
place on 1 January 2001. In addition to the above changes
in the scope of consolidation, there are the following
transactions:
Goodwill
• First-time consolidation of E+G Spain, G+E Spain, GfK M.S.
Portugal, Intercampus Portugal and Metris Portugal
• First-time consolidation of GfK Macon D
• Purchase of an additional 20 % stake in Procon GfK Arastirma
Hizmetleri A.S., Istanbul, Turkey
2001
Actual
Pro forma
Sales
Result from ongoing
business activity
Difference
Absolute
Per cent
482,132
529,264
47,132
9.8
3,925
7,017
3,092
78.8
– 6,154
– 7,208
– 1,054
– 17.1
– 4,741
– 8,591
– 3,850
– 81.2
– 0.18
– 0.33
– 0.15
– 83.3
In principle, goodwill from the first-time consolidation of
subsidiaries is determined similarly in both accounting systems.
In its consolidated financial statements in accordance with
HGB, the GfK Group made use of the HGB option to offset
goodwill against reserves with no impact on the result. In
accordance with US GAAP, up to financial year 2001, there was
the duty to amortize goodwill on a straight-line basis. In the
case of acquisitions after 30 June 2001 and in existing cases
from financial year 2002 onwards, goodwill should no longer
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.
115
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
permit the reinstatement of original values. In the GfK Group
there were no grounds for reinstating original values during
the reporting period for § 292 a HGB to be applied.
116
deemed to be quasi-permanent and are not included in the
calculation of deferred taxes. Deferred tax assets on tax loss
transfers are not permitted in accordance with HGB.
In accordance with US GAAP, deferred taxes are also formed
on quasi-permanent differences. It is obligatory to form deferred
taxes on tax loss transfers. On each balance sheet date, the
extent to which the deferred tax assets can be realized must be
assessed and a valuation allowance made if necessary.
Recognition of sales
Provisions for pensions and similar obligations
In accordance with HGB, a sale made within a sales transaction
may only be recognized when the service has been completed
and invoiced. Ongoing orders are reported as inventories until
such time.
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.
In accordance with US GAAP, the recognition of sales is
determined by the portion of the deliverable that is already
accomplished. Sales may therefore also be recognized
before the completion of the deliverable and when services
have not yet been invoiced.
Reporting unrealized profits
In accordance with HGB, the principle of prudence 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 need to be converted at the rate
of exchange on the reporting date. Exchange gains and losses
are taken to the income statement.
Securities must be valued at the fair value on the balance sheet
date, even if this value is higher than the cost of acquisition.
The price gain or loss must be recognized in the income statement, unless securities are held as fixed assets. In this case, the
valuation is only stated in the income statement for price losses
with permanent character. Otherwise, the write-up or write-down
has no impact on income. The valuation difference is stated on
the liabilities side as other comprehensive income.
HGB provides no specific provisions for the valuation of
derivative instruments, so 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 on the balance sheet date. Special rules
apply to hedging transactions.
Deferred taxes
When applying HGB, deferred taxes are formed for temporary
differences between the commercial and tax balance sheets.
Differences which only reverse after a long period of time or
following the sale of assets or liquidation of companies are
Other provisions
HGB permits the setting up of provisions for amounts owed to
third parties as well as for internal costs such as for example
maintenance (provisions for expenditure). Provisions must be
valued according to the principle of prudence.
In accordance with US GAAP, provisions for expenditure are not
permitted. Provisions must be valued at the amount that will most
probably be used. If several equally probable amounts exist, the
lowest of the range must be stated.
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 arising from 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 as well as by already
settled receivables.
Notes: changes since the previous year
Scope of consolidation
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 control of the parent company. For a company to
qualify as an associated company, a participation quota of at least
20% is required, as well as the actual exercise of determining
influence.
The following companies, which are consolidated in accordance
with HGB, are not included for US GAAP due to their minor
importance in terms of the Group’s net assets, total income and
financial position:
• Adfinders B.V., Hoofddorp, Netherlands
• Exmarket + GfK Praha spol. s.r.o., Prague, Czech Republic
• GfK Data Services GmbH, Nuremberg
• GfK Fernsehforschung GmbH, Nuremberg
In accordance with US GAAP, the consolidation of subsidiaries
depends on the control exercised by the parent company.
The rights of minority shareholders in particular have to be
examined to determine whether they hinder the control by the
parent company.
• GfK Marketing Services Verwaltungs-GmbH, Nuremberg
• GfK Marktforschung GmbH, Nuremberg
• GfK Panel Services Consumer Research GmbH, Nuremberg
A minimum participation of 20% 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.
The reconciliation of the scope of consolidation from HGB
as at 31 December 2001 to the scope of consolidation in
accordance with US GAAP as at 31 December 2001 is described
below.
Fully consolidated companies
The scope of consolidation in accordance with US GAAP as at
31 December 2001 comprised nine (HGB 18) German and 75
(HGB 86) international subsidiaries in addition to the parent
company.
• GfK Testmarktforschung GmbH i.L., Nuremberg
• Intomart DataCall B.V., Hilversum, Netherlands
• Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main
117
• MMO Media-Market-Observer GmbH, Vienna, Austria
In accordance with US GAAP, GfK Marketing Services Hong Kong
Limited, Hong Kong, China and GfK Immobilier EURL, RueilMalmaison, France, are included in the scope of consolidation as
at 31 December 2001. In accordance with HGB, the GfK Group
had not included these companies in the consolidated financial
statements due to their minor importance.
The direct parent companies of the following companies qualify
as affiliated companies for HGB purposes, but are treated as
associated companies for US GAAP purposes. The subsidiaries of
associated companies are not deemed to be Group companies.
The following table shows the differences in fully consolidated
subsidiaries between HGB and US GAAP as at 31 December
2001:
• dm-plus Direktmarketing GmbH, Nuremberg
• bwv IT solutions AG, St. Gallen, Switzerland
Reconciliation of consolidated subsidiaries
from HGB to US GAAP (No.)
• dm-plus Direktmarketing AG, St. Gallen & Rotkreuz,
Switzerland
HGB
31.12. 2001
Changes
US GAAP
31.12. 2001
Germany
18
–9
9
Abroad
86
– 11
75
104
– 20
84
Total
• dm michelotti AG, Rotkreuz, Switzerland
• definitive systems ltd., Zurich, Switzerland
• GfK PORTUGAL - Marketing Services, LDA, Lisbon, Portugal
• METRIS-MÉTODOS DE RECOLHA E INVESTIGAÇÃO SOCIAL,
LDA, Lisbon, Portugal (Metris Portugal).
Four subsidiaries which are fully consolidated in accordance
with HGB are not included in US GAAP accounting, because
they are qualified by US GAAP as associated companies.
These are:
• bwv Holding AG, St. Gallen, Switzerland (bwv Holding
Switzerland)
• EMER GfK S.L., Valencia, Spain (E+G Spain)
• Ernst und GfK Grundstücksgesellschaft, Nuremberg
(Ernst und GfK D)
• G.E. Marketing Research S.A., Valencia, Spain (G+E Spain)
Affiliated companies that were not included in the
consolidated financial statements due to minor importance
In deviation from HGB, the GfK Group did not include 21
companies (HGB 16) in the consolidated financial statements
due to their minor significance for the Group’s net assets, total
income and financial position.
The following table shows the differences in other participations
between HGB as at 31 December 2001 and US GAAP as at 31
December 2001:
The following table shows the differences between HGB as at
31 December 2001 and US GAAP as at 31 December 2001 in
associated companies:
Reconciliation of other participations
Reconciliation of associated companies
HGB
31.12. 2001
Changes
US GAAP
31.12. 2001
2
2
4
Abroad
18
6
24
Total
20
8
28
Germany
118
HGB
31.12. 2001
Changes
US GAAP
31.12. 2001
Germany
1
–1
0
Abroad
9
–4
5
10
–5
5
Total
In the consolidated financial statements in accordance with
US GAAP, the GfK Group reports participations in 28 (HGB 20)
associated companies. In accordance with HGB, the GfK Group
had included the companies Ernst und GfK D, E+G Spain, G+E
Spain and bwv Holding Switzerland as affiliated companies in
the scope of consolidation. In accordance with US GAAP, GfK
classifies these companies as associated companies.
Minority interests
Five other companies are defined as associated companies
in accordance with US GAAP, which were reported as other
participations in accordance with HGB. These are:
Personnel expenses - information pursuant to § 285 No. 8 HGB
• Caribou Lake Software, LLC, Minneapolis, USA
(Caribou Lake USA)
• INCOMA Consult s.r.o., Prague, Czech Republic
(Incoma Consult Praha)
The minority interests in accordance with HGB are included in
the consolidated shareholders’ equity. In accordance with US
GAAP, these are reported under borrowed capital.
28. Supplementary disclosures
The expense items of the income statement contain the following
personnel expenses:
Wages and salaries
Social security contributions
• Information Resources-GfK B.V., Dongen, Netherlands
(IRI/GfK Retail NL)
Personnel expenses
2001
2002
174,368
199,030
35,348
45,090
209,716
244,120
• Information Resources GfK GmbH, Nuremberg
(IRI/GfK Retail D)
• MMXI Europe B.V., Amsterdam, Netherlands
(MMXI Europe NL)
Unlike for HGB, INTERCAMPUS-RECOLHA, TRATAMENTO E
DISTRIBUIÇÃO DE INFORMAÇÃO, LDA, Lisbon, Portugal, is
not reported as a Group company in accordance with US GAAP,
because its direct parent company is classified by US GAAP
as an associated company whereas it is an affiliated company in
accordance with HGB.
Number of employees
The GfK Group employed 4,778 (2001: 4,296) 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:
2001
The consolidated financial statements as at 31 December 2001 in
accordance with US GAAP comprise participations in five (HGB
10) other participations. The five companies classified as other
participations by HGB (IRI/GfK Retail D, IRI/GfK Retail NL, MMXI
Europe NL, Incoma Consult Praha and Caribou Lake USA) are
included in the consolidated financial statements in accordance
with US GAAP as associated companies.
2002
Consumer Tracking
778
844
Non-Food Tracking
1,067
1,304
Media
Ad Hoc Research
Other
328
332
1,455
1,730
557
451
4,185
4,661
Managing Directors/Management Board members
59
71
Trainees
52
46
4,296
4,778
Full-time employees
Notes: supplementary disclosures
Total remuneration and shares of the Management Board and
Supervisory Board
The total remuneration and shares of the Management Board and
Supervisory Board are as follows:
Management Board
Fixed component
Supervisory Board
1,756
68
Variable component
766
84
Stock options (No.)
530,273
–
Shares (No.)
410,626
178,283
During financial year 2001, the total remuneration of the
Management Board, which contained one person fewer in
the previous year, totalled EUR 1,953 thousand. The total
remuneration of the Supervisory Board amounted to EUR 137
thousand.
Former members of the management of GfK GmbH, Nuremberg,
and of the Management Board of GfK AG, received total
remuneration of EUR 578 thousand (2001: EUR 494 thousand);
an amount of EUR 8,255 thousand (2001: EUR 6,813 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. Also no contingent liabilities were
incurred for this group of persons.
119
Supervisory Board
Peter Zühlsdorff
Robert Raeber
Chairman of the Supervisory Board of
Nestlé Deutschland AG, Frankfurt/Main
Blaue Quellen AG, Mainz-Weisenau
Schöller GmbH, Nuremberg
Chairman
Chief Executive Officer of Tengelmann
Warenhandelsgesellschaft,
Mülheim/Ruhr
DIH Deutsche Industrie-Holding GmbH,
Frankfurt/Main
Member of the Supervisory Board of
Maus Frères SA, Geneva, Switzerland
Member of the Board of Administration of
GfK-NÜRNBERG Gesellschaft für Konsum-,
Markt- und Absatzforschung e.V., Berlin
Chairman of the Supervisory Board of
TV Loonland AG, Munich
Escada AG, Munich
Member of the Supervisory Board
of Merck KGaA, Darmstadt
Deutz AG, Cologne
Kaiser’s Tengelmann AG, Viersen
Quelle AG, Fürth
120
Hajo Riesenbeck
Management Consultant
Since 13 June 2002 Director at McKinsey & Company,
Düsseldorf
Member of the Supervisory Board of ERI AG,
Wörgl, Austria
Chairman of the Board of Administration
of GfK-NÜRNBERG Gesellschaft für Konsum-,
Klaus Hehl
Deputy Chairman
Market Researcher
Dr. Wolfgang
Chairman of the Board of Directors
C. Berndt
of the Institute For The Future, Menlo Park,
Since 13 June 2002 California, USA
Member of the Board of Directors of Cadbury
Schweppes PLC, London, UK
Member of the Österreichische Werbewissenschaftliche Gesellschaft, Vienna, Austria
Member of the Board of Administration
Peter Danzl
Helga Haub
Until 13 June 2002
Hans-Jürgen Kunert Independent Works Council representative at
GfK Aktiengesellschaft
Chairman of the Board of Administration
of Clariant AG, Basle, Switzerland
Member of the Board of Administration
Dr. Karl Gerhard
Schmidt
Until 13 June 2002
Dieter Wilbois
Senior Specialist Software Development
Elmar
Wohlgensinger
Market Researcher
President of the Board of Administration of
Weibel Hess & Partner AG, Stans,
Switzerland
Eiphos Holding AG, Hergiswil, Switzerland
Telecontrol AG, Hergiswil, Switzerland
Modata AG, Hergiswil, Switzerland
Liechti AG, Kriegstetten, Switzerland
GfM Schweiz, Gesellschaft für Marketing,
Zurich, Switzerland
Xaver Wyss AG, Ennetbürgen, Switzerland
Hergiswiler Glas AG, Hergiswil, Switzerland
hotelguide.com, Sursee, Switzerland
Rex Sport & Freizeit-Center, Stans,
Switzerland
active light GmbH, Stans, Switzerland
Agnes Waser Immobilien AG,
Kilchberg, Switzerland
Darum Holding AG, Stansstad, Switzerland
Central Swiss Chamber of Commerce,
Lucerne, Switzerland
Notes: Supervisory Board and Management Board
Management Board
Dr. Klaus L.
Wübbenhorst
Chief Executive Officer
Deputy Chairman of the
Board of Administration of R. Oldenbourg
GmbH & Co. KG, Munich
Chairman of the Board of Directors of
GfK Holding, Inc., Wilmington, USA
Procon GfK Arastirma Hizmetleri A.S.,
Istanbul, Turkey
Petra Heinlein
Since 1 January
2002
Responsible for the
Media division
Liechti AG, Kriegsstetten, Switzerland
Dr. Gérard Hermet Responsible for the Non-Food Tracking
division
G.E. Marketing Research, S.A.,
Valencia, Spain
GfK Marketing Services S.A.,
Rueil-Malmaison, France
GfK Sofema International SARL,
Rueil-Malmaison, France
Financière ISL S.A.,
Institut de Sondage Lavialle (ISL) S.A.,
Gerhard Kirschner Until 31 March 2002
Heinrich A.
Litzenroth
Responsible for the
Ad Hoc Research division
Custom Research Inc., Minneapolis, USA
Chairman of the Board of Administration of
GFK CONSUMER AND BUSINESS INFORMATION ITALY S.p.A., Milan, Italy
Deputy Chairman of the Supervisory Board
of GfK MACON AG, Waghäusel
Member of the Board of Directors of
Indicorp Participações S.A., São Paulo,
Brazil
MarketingScan SNC, Rueil-Malmaison,
France
GfK Ad Hoc Research WORLDWIDE,
Brussels, Belgium
Dr. Franz Merl
Chief Financial Officer
Since 1 April 2002
Responsible for the Financial Services,
Central Services and Personnel Services
divisions
Wilhelm R. Wessels Responsible for the
Consumer Tracking division and
HealthCare activities
GfK Norge A/S, Oslo, Norway
IHA Italia S.p.A., Milan, Italy
Member of the Board of Directors of
GfK InfoScan Sverige AB, Lund, Sweden
Orange Interactive Research AB, Stockholm,
Sweden
m2A S.A., Saint Aubin, France
Information Resources – GfK B.V., Dongen,
Netherlands
GfK Panelservices Benelux B.V., Dongen,
Netherlands
Member of the Advisory Board of
Information Resources GfK GmbH,
Nuremberg
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.
121
Shareholdings of the GfK Group
Share in the capital Financial year
in %
Equity
EUR’000
Affiliated companies (Germany), included in the consolidated financial
statements (all details according to US GAAP commercial balance sheet II)
Contest-Census Gesellschaft für Markt- und Meinungsforschung
mit beschränkter Haftung, Frankfurt/Main
ENCODEX International GmbH, Nuremberg
ENIGMA Institut für Markt- und Sozialforschung
Jürgen Ignaczak GmbH, Wiesbaden
GfK CEE Finance GmbH, Nuremberg
GfK MACON AG, Waghäusel
2002
3961)
95.0
2002
– 421)
51.0
2002
180
100.03)
2002
3,919
51.0
2002
953
GfK Marketing Services GmbH & Co. KG, Nuremberg
100.0
2002
4,043
GfK PRISMA Institut für Handels-, Stadt- und Regionalforschung
GmbH & Co. KG, Hamburg
100.0
2002
444
80.0
2002
1,116
100.0
2002
159
3)
100.0
2002
55
ADVAL SARL, Issy les Moulineaux, France
100.03)
2002
117
Adware Media Solutions B.V., Hilversum, Netherlands
100.03)
2002
– 190
Aspemar-GfK N.V., Brussels, Belgium
100.03)
2002
– 205
AUDIMEDIA SARL, Issy les Moulineaux, France
100.03)
2002
972
77.83)
2002
483
Borell Market Research AB, Stockholm, Sweden
100.03)
2002
11
Eiphos Holding AG, Hergiswil, Switzerland
100.03)
2002
3,177
GPI Kommunikationsforschung Gesellschaft für
Pharma-Informationssysteme mbH, Nuremberg
Media Markt Analysen GmbH & Co. KG, Frankfurt/Main
Modata GmbH, Berlin
122
100.0
Affiliated companies (abroad) included in the consolidated financial
statements (all details according to US GAAP commercial balance sheet II)
Audimetrie N.V., Brussels, Belgium
EMER GfK, S.L., Valencia, Spain
Encodex B.V., Amstelveen, Netherlands
50.1
2002
2,404
100.03)
2002
– 323
3)
Encodex Japan Ltd., Osaka, Japan
63.0
2002
– 533
FESSEL-GfK Institut für Marktforschung Ges.m.b.H., Vienna, Austria
94.8
2002
8,225
Financière ISL S.A., Issy les Moulineaux, France
71.93)
2002
3,494
G.E. Marketing Research, S.A., Valencia, Spain
50.1
2002
5,622
GfK - Centar za istrazivanje trzista d.o.o., Zagreb, Croatia
78.03)
2002
– 551
GfK - MEMRB Marketing Services Limited, Nicosia, Cyprus
60.0
2002
40
100.0
2002
16,146
85.0
2002
– 715
100.0
2002
2.527
GfK (U.K.) Ltd., West Byfleet, Surrey, UK
GfK Asia Pte Ltd., Singapore, Singapore
GfK Benelux Marketing Services B.V., Amstelveen, Netherlands
GfK CONSUMER AND BUSINESS INFORMATION ITALY S.p.A.,
Milan, Italy
93.5
2002
– 708
100.03)
2002
6.178
87.0
2002
737
3)
GfK Great Britain Ltd., London, UK
100.0
2002
– 42
100.0
2002
32,233
GfK Hungaria Piackutató Kft., Budapest, Hungary
100.03)
2002
736
GfK Immobilier EURL, Rueil-Malmaison, France
100.03)
2002
–6
GfK Market Consulting (Shanghai) Co. Ltd., Shanghai, China
100.03)
2002
357
GfK Marketing Services (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia
100.03)
2002
289
49.03)
2002
– 44
100.03)
2002
1,185
GfK Marketing Services (Thailand) Limited, Bangkok, Thailand
GfK Marketing Services Australia Pty. Ltd., Sydney, Australia
1) Profit and loss pooling agreement
2) Details as per commercial balance
sheet II
3) Fully indirect shareholding
4) Partially indirect shareholding
5) Details not available
6) Details as per provisional financial statements
drawn up under national law
7) Share capital (excluding non-voting participation
certificates)
8) Newly established in 2002
9) In liquidation
Shareholdings F I N A N C I A L S T A T E M E N T S
in %
GfK Marketing Services Hong Kong Limited, Hong Kong, China
GfK Marketing Services Italia S.r.l., Milan, Italy
GfK Marketing Services Japan Ltd., Tokyo, Japan
Equity
EUR’000
85.0
2002
281
100.03)
2002
1,779
4,013
80.0
2002
GfK Marketing Services Korea Limited, Seoul, Korea
100.03)
2002
-997
GfK Marketing Services Ltd., Hong Kong, China
100.03)
2002
1,256
GfK Marketing Services Ltd., West Byfleet, Surrey, UK
100.03)
2002
13,951
2,420
GfK Marketing Services S.A., Rueil-Malmaison, France
100.0
2002
GfK Norge A/S, Oslo, Norway
100.0
2002
303
GfK Panelservices Benelux B.V., Dongen, Netherlands
100.03)
2002
3,420
GfK Panelservices Benelux Holding B.V., Dongen, Netherlands
92.4
2002
6,122
GfK Polonia Instytut Badania Opinii Sp. z o.o., Warsaw, Poland
100.03)
2002
1,510
80.03)
2002
1,316
GfK – Praha, s.r.o., Prague, Czech Republic
100.03)
2002
981
GfK Romania-Institut de Cercetare de Piata Srl, Bucharest, Romania
100.03)
2002
167
GfK Slovakia spol. s r.o., Bratislava, Slovakia
100.03)
2002
230
GfK PORTUGAL - Marketing Services, LDA, Lisbon, Portugal
GfK Sofema International SARL, Rueil-Malmaison, France
100.0
2002
4,460
100.0
2002
1,009
GfK-Bulgaria, Institut für Marktforschung EGmbH, Sofia, Bulgaria
100.03)
2002
87
GfK-RUS Gesellschaft mbH, Moscow, Russia
100.03)
2002
– 121
GfK-Ukrainian Surveys & Market Research (USM), Kiev, Ukraine
100.03)
2002
580
70.04)
2002
449
100.03)
2002
570
IFR Italia S.r.L., Milan, Italy
70.04)
2002
59
IFR Marketing España S.L., Madrid, Spain
70.04)
2002
312
100.04)
2002
674
7)
2002
32,856
60.03)
2002
201
100.03)
2002
54
Institut de Recherche d'Informations statistiques (IRDIS) SARL,
Montigny le Bretonneux, France
95.03)
2002
186
Institut de Sondage Lavialle (ISL) S.A., Issy les Moulineaux, France
99.93)
2002
2,317
Institut Français de Recherche S.A., Viroflay, France
51.4
2002
7,662
INTERCAMPUS-RECOLHA, TRATAMENTO E DISTRIBUIÇÃO DE
INFORMAÇÃO, LDA, Lisbon, Portugal
50.13)
2002
97
100.03)
2002
4,323
Intomart GfK Belgium N.V., Brussels, Belgium
100.03) 8)
2002
2,246
Intomart GfK Group B.V., Hilversum, Netherlands
100.0
2002
1,331
100.03)
2002
1,949
80.04)
IFR Europe Ltd., London, UK
IFR France S.A., Viroflay, France
100.0
INCOMA Research, s.r.o., Prague, Czech Republic
Informark Pty. Ltd., Braddon, Australia
MARKET ANALYSIS E.P.E., Athens, Greece
Martin Hamblin GfK Healthcare UK Limited, West Byfleet, Surrey, UK
2002
49
100.0
2002
12,011
51.0
2002
– 1,204
3)
2002
1,056
METRIS-MÉTODOS DE RECOLHA E INVESTIGAÇÃO SOCIAL, LDA,
Lisbon, Portugal
51.03)
2002
143
MMO Media-Market-Observer GmbH & Co KG, Vienna, Austria
54.63)
2002
– 381
100.03)
2002
844
Orange Interactive Research AB, Stockholm, Sweden
100.03)
2002
566
51.03)
2002
– 225
Martin Hamblin Research Inc., Hartford, Connecticut, USA
Oz Toys Marketing Services Pty. Ltd., Sydney, Australia
sheet II
100.0
certificates)
9) In liquidation
123
in %
Procon GfK Arastirma Hizmetleri A.S., Istanbul, Turkey
Equity
EUR’000
70.1
2002
941
PS – Martin Hamblin Limited, London, UK
100.03)
2002
29
PT GfK Marketing Services Indonesia, Jakarta, Indonesia
100.03)
2002
40
Romtec-GfK Ltd., Maidenhead, Berkshire, UK
100.03)
2002
0
Significant bvba, Heverlee, Belgium
51.23)
2002
521
Strateji GfK Research Services A.S., Istanbul, Turkey
99.63) 8)
2002
58
100.0
2002
2,452
GfK Data Services GmbH, Nuremberg
100.0
2002
286)
GfK Fernsehforschung GmbH, Nuremberg
100.0
2002
286)
GfK International Consultancy & Development GmbH, Nuremberg
100.0
2002
146)
3)
Affiliated companies (Germany), which are not included
in the consolidated financial statements
124
GfK Marketing Services Verwaltungs-GmbH, Nuremberg
100.0
2002
286)
GfK Marktforschung GmbH, Nuremberg
100.0
2002
296)
GfK Panel Services Consumer Research GmbH, Nuremberg
100.0
2002
286)
I+G Gesundheits- und Pharmaforschung Verwaltungs-GmbH, Nuremberg
100.0
2002
296)
4)
IFR Monitoring Deutschland GmbH, Düsseldorf, Germany
70.0
2002
826)
Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main
100.0
2002
286)
PRISMA Projekt-Beratung GmbH, Hamburg
100.0
2002
496)
Adfinders B.V., Hoofddorp, Netherlands
100.03)
2002
– 6546)
CATICALL – RECOLHA DE INFORMAÇÃO ASSISTIDA POR
COMPUTADOR, LDA, Lisbon, Portugal
100.03)
2002
52)
3)
2002
326)
3)
2002
05)
3)
75.6
2002
06)
GfK Belgium S.A., Brussels, Belgium
100.03)
2002
5596)
GfK Belgrade d.o.o., Belgrade, Federal Republic of Yugoslavia
100.03)
2002
492)
GfK do Brasil S/C Ltda., São Paulo, Brazil
100.0
2002
6936)
92.0
2002
786)
100.0
2002
2186)
75.0
Affiliated companies (abroad), which are not included
in the consolidated financial statements
CMI Field SARL, Viroflay, France
100.0
dragon eye Ltd., Hergiswil, Switzerland
100.0
GfK Ad Hoc Research WORLDWIDE, Brussels, Belgium
3)
GfK InfoScan Sverige AB, Lund, Sweden
GfK Marketing Services South Africa, Sandton, South Africa
GfK NPD Marketing Services Worldwide B.V., Amstelveen, Netherlands
GfK Panel Arastirma Hizmetleri A.S., Istanbul, Turkey
2002
– 226)
3)
2002
586)
3)
93.5
GfK Stratégie et développement GIE, Rueil-Malmaison, France
100.0
2002
766)
I + G Infratest Medical Research Inc., Rhode Island, USA
100.0
IFR Nederland B.V., Amsterdam, Netherlands
2002
5) 9)
4)
70.0
2002
376)
100.03)
2002
156)
IFR U.K. Ltd., London, UK
71.34)
2002
– 566)
I+G Infratest & GfK Gesundheitsforschung (Suisse) GmbH, Basle, Switzerland
85.0
IFR Polska Sp. z o.o., Warsaw, Poland
Intomart DataCall B.V., Hilversum, Netherlands
MMO Media-Market-Observer GmbH, Vienna, Austria
MMXI Switzerland GmbH, Hergiswil, Switzerland
Procon GfK Ltd., Baku, Azerbaijan
sheet II
2002
– 3966)
3)
2002
– 3376)
3)
2002
416)
3)
2002
– 7292)
3)
2002
26)
100.0
100.0
80.2
100.0
certificates)
9) In liquidation
Shareholdings
in %
Equity
EUR’000
Associated companies (Germany)
ConsumerSCOPE International GIE, Nuremberg
40.0
5)
5)
2)
Ernst und GfK Grundstücksgesellschaft, Nuremberg
50.0
2002
Information Resources GfK GmbH, Nuremberg
19.6
2002
– 11,0806)
587
66.73)
2002
– 3,0936)
3)
2002
– 5302)
3)
25.0
5)
5)
Europanel Raw Database GIE, Brussels, Belgium
50.0
5)
5)
European Flash Surveys EEIG, Brussels, Belgium
50.0
2002
5)
GfK-Media Research Middle East AG, Hergiswil, Switzerland
49.03) 8)
2002
5)
3)
2002
2312)
3)
2002
4,8622)
3)
2002
972)
3)
Associated companies (abroad)
bwv Holding AG, St. Gallen, Switzerland
Caribou Lake Software, LLC, Minneapolis, USA
Common Technology Centre EEIG, London, UK
Holden Pearmain Research Ltd., London, UK
IHA·IMS Health GmbH, Hergiswil, Switzerland
INCOMA Consult, s.r.o., Prague, Czech Republic
19.9
20.0
50.0
19.5
Indicorp Participações S.A., São Paulo, Brazil
19.9
2002
4242)
Information Resources-GfK B.V., Dongen, Netherlands
19.9
2002
– 4,2442)
17,2252)
3)
Intelect Partnership, Port Washington, New York, USA
25.3
2001/2002
Isometric Solutions, LLC, Minneapolis, USA
40.03)
2002
– 512)
Jan Schipper Compagnie B.V., Bussum, Netherlands
20.03)
2002
1306)
35.0
2002
3562)
MarketingScan SNC, Rueil-Malmaison, France
50.0
2002
2,8062)
3)
Media Focus (ARGE), Hergiswil, Switzerland
50.0
2001/2002
NET SURVEY SZONDA IPSOS és GfK Hungária Internet
Kutató Intézete Kft., Budapest, Hungary
50.03)
2002
3)
5976)
02)
ORG-GfK Marketing Services (India) Private Limited, Mumbai, India
40.0
2001/2002
263
Sports Tracking Europe B.V., Amstelveen, Netherlands
25.0
2001/2002
456)
St. Mamet Saisie Informatique (SMSI) SARL, Saint Mamet-la Salveta,
France
20.03)
2002
4822)
3)
2002
– 36)
3)
2002
5)
3)
50.0
2002
5)
49.03)
2002
5)
5.8
2002
5)
UFO Veld B.V., Amsterdam, Netherlands
50.0
Unified Fieldwork Organisation UFO V.O.F., Amsterdam, Netherlands
V.O.F. Projectbureau Politiemonitor, Hilversum, Netherlands
50.0
Other participations (abroad)
Bureau voor Reclame Statistiek Hoofddorp B.V., Hoofddorp, Netherlands
IRI Infoscan Ltd., Maidenhead, Berkshire, UK
sheet II
certificates)
9) In liquidation
125
126
Auditors’ Report
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 2002
to 31 December 2002. 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.
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 extents to the group management report
prepared by the Company’s management for the business year
from 1 January 2002 to 31 December 2002, 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
2002 to 31 December 2002 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.
127
Nuremberg, 3 April 2003
Bayerische Treuhandgesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
Kozikowski
(German Public Auditor)
Renner
(German Public Auditor)
In case of publication or transmission of the consolidated financial statements in a version different to the version confirmed by us (including translations
into other languages), in so far as our audit opinion is quoted or our review referred to, a new statement is to be obtained from us. Please refer to § 328 HGB
(German Commercial Code).
128
H RF EOS R
AM
B SACTHILOU N
SS
A Konzernbilanz
D D I T I O N A L J AI N
A D D I T I O N A L I N F O R M AT I O N
130
131
Glossary of financial terminology
Glossary of specialist marketing terms
133
List of company abbreviations used in the management report
134
Contacts
C3*
The GfK Group: five-year overview
C3*
Index
C4*
Financial calendar
*cover pages are marked with “C”
129
Glossary of financial terminology
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.
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.
Cash flow
Balance of funds inflow and outflow
affecting payment.
130
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, 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.
Deferred taxes
Tax assets or charges reported in the
balance sheet to equalize the difference
between the tax debt actually assessed
and the commercial tax burden based on
the accounting 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.
EBIT
Abbreviation for earnings before interest
and taxes calculated as operating
income plus other income less other
expenses.
EBIT margin
EBIT in relation to sales. The higher
the indicator, the higher the earnings
power.
Equity ratio
On balance sheet equity in relation to
total assets. The higher the indicator, the
lower the level of indebtedness.
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.
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 cash flow
Income for the accounting period less
shares of income attributable to minority
interests, depreciation and amortization
and write-ups, deferred tax expenses and
income, income from at equity valuations
which have no effect on payment, book
profits and losses on asset disposals, net
interest income, changes in provisions
and other expenses/income not affecting
payment.
Gross income from sales
Sales less cost of sales.
Income from participations
Contains the items income from
participations, profits and losses on
the disposal of participations and
depreciation on participations.
Majority participations
Minority participations
Generic term for associated companies
and other participations. The
participation quota is below 50 %.
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.
Operating income
Gross income from sales less
selling and general administrative
expenses. Most important internal
earnings indicator.
Other expenses
Expenses in connection with ordinary
business activities, excluding financial
expenses not attributable to cost
of sales or selling 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 ordinary business activities,
excluding financial income, which does
not represent sales. Examples are profits
on the disposal of fixed assets and
exchange gains.
Companies in which a participation is
held but on whose business policy no
decisive influence is exercised. The
participation quota is below 20 %.
Selling 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 and the price of the GfK share
must be above the exercise price.
US GAAP
Abbreviation for United States Generally
Accepted Accounting Principles.
Glossaries
ADDITIONAL INFORMATION
Glossary of specialist marketing terms
Ad Hoc Research
Systematic, empirical research, used
as the basis for marketing decisions.
Ad Hoc Research is one of GfK’s business
divisions.
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 in Germany. Founded in 1988,
the AGF now comprises the TV networks
ARD, ProSiebenSAT.1 Media AG, RTL and
ZDF.
AGF/GfK TV panel
TV panel.
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.
Audience research
Media research.
BASS (Brand ASsessment System)
Example of an instrument relating to the
Integrated Intelligence approach. This
combines data from the consumer
panel ConsumerScan and from image and brand research in order to
monitor the psychological and monetary
value of a brand; data merging, brand value.
Brand value
The value of a brand, which is determined
by considering various factors which
make a brand attractive to consumers; BASS.
Category Management
A concept whereby manufacturers and
retailers set joint targets and develop
strategies for a particular product
category and then endeavour to realize
these. The aim is to increase sales and
income.
CLASS (Customer Loyalty and
Satisfaction Study)
A study carried out on behalf of Coca-Cola
on customer loyalty.
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.
Consumer panel
A sample of households which provide
regular information on their purchases; ConsumerScope, ConsumerScan, aTRACKtive, BASS, electronic diary.
ConsumerScan
Consumer panel in which the purchasing
behaviour of households and individuals
is recorded. Covers purchases of nearly all
fast moving consumer goods. Households
record their purchases using an electronic diary; panel, household
panel, aTRACKtive, BASS.
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, ECPO.
Copy test
Survey research procedure where a
magazine or newspaper is used to
determine what the interviewee has
seen, read, recognized and retained.
CSS® (Controlled Split Survey)
GfK questionnaire splitting procedure to
reduce time and money spent on oral and
written surveys.
Customer loyalty research
Surveys to measure and improve customer
satisfaction and customer loyalty;
CLASS.
Customer segmentation
Data mining
Computer-aided data analysis used to
identify trends and correlations.
Data warehouse
Integrated system of databases used to
support business decisions, particularly
in marketing; S*T*A*R*T*R*A*C*K.
ECPO (Electronic Consumer Panel
Online)
Consumer Tracking technology used
to collect information on purchasing by
means of various electronic devices or
applications (Internet, personal digital
assistant, mobile phone).
Electronic diary
A hand-held piece of electronic equipment
used to input data, which is then
downloaded by modem. Used by the consumer panel, ConsumerScan.
ENCODEX
An interface for business-to-business
e-commerce transactions in consumer
durables.
Gain and loss forecast
Qualitative instrument developed as
part of Integrated Intelligence and
used for target group segmentation;
market segmentation.
GfK*PackChallenger®
Quantitative packaging test from
GfK Ad Hoc Research.
Household panel
A representative sample of households
which regularly report on their purchases;
Consumer Tracking, ConsumerScan,
panel.
Image research
Information gathering relating to the
image of a company or specific product or
service; BASS.
Integrated Intelligence
Service segment which specializes in
integrating data from several GfK Group
divisions and using it for complex
consumer marketing surveys covering
several areas; data merging, BASS,
gain and loss forecast.
Market segmentation.
Data merging
A statistical process whereby the features
of subjects in one sample are transferred
to those in another sample; Integrated
Intelligence, BASS, MOVE.
Internet reach
The percentage of the total population
or a given target group reached by a
website; reach, media research.
131
Mail panel
A postal survey of units of the same
sample which is repeated at regular
intervals; ConsumerScope.
Market segmentation
Divison of an overall market into submarkets using different categories.
Segmentation can be by product type,
price classes, geographic split or socioeconomic lifestyle features and value
categories; gain and loss forecast.
132
Media research
Systematic, empirical research used as
a basis for media planning by media
companies, their advertising clients, and
others. This form of research is the
responsibility of GfK’s Media business;
reach, reach research, Radiocontrol.
Media reach research
Reach research.
Modelling
Method used to illustrate a complex real
situation in simplified form taking account
of the essential elements and correlations.
The result is a model which can be used
to analyze and simulate problems and
produce forecasts.
Modelling analyses
Modelling.
MOVE
Name of a data merging project of GfK,
whereby the ConsumerScan panel of
GfK Panel Services and the TV panel
of AGF/GfK Fernsehforschung are
merged. The aim is to provide the
advertising market with improved target
group differentiation and analyses of
advertising effectiveness monitoring.
Portable people meter
Metering equipment which is used in
reach research and worn at all times.
A typical portable people meter is
Radiocontrol.
Product test, product test research
Concept test, concept test research.
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.
Ratings figures
The audience figures in terms of
households expressed as a percentage;
TV panel.
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.
Reach research
The continuous recording of media
usage; reach, portable people meter,
Radiocontrol.
Retail panel
Regular recording of sales, product
categories and products via a
representative sample of retailers with
different retail types and sales channels;
Non-Food Tracking, retail tracking.
Retail research
Non-Food Tracking
Surveys of sales of consumer durables,
carried out at regular intervals.
Non-Food Tracking is one of GfK’s
business divisions; retail tracking,
retail panel, S*T*A*R*T*R*A*C*K.
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.
Retail tracking.
Retail tracking
Continuous, systematic monitoring of
sales in consumer durables and services
markets. These product movements are
recorded in all relevant sales channels
and distribution forms in the retail trade;
tracking, Non-Food Tracking,
retail panel.
S*T*A*R*T*R*A*C*K
A host-free IT platform for the production
and analysis of data from the GfK NonFood Tracking business; data warehouse.
Target group segmentation
Market segmentation.
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 sample of households,
selected using statistical methods, whose
TV viewing is continuously metered by
GfK Fernsehforschung and used as the
basis for audience share and ratings
figures; TV meter, reach, panel.
Company abbreviations
ADDITIONAL INFORMATION
List of company abbreviations used in the Management Report
bwv Group, Switzerland
bwv Holding Ag, St. Gallen, Switzerland
bwv IT solutions AG, St. Gallen,
Switzerland
definitive systems ltd., Zurich, Switzerland
dm michelotti AG, Rotkreuz, Switzerland
dm-plus Direktmarketing AG, St. Gallen &
Rotkreuz, Switzerland
IFR Group, France
CMI Field SARL, Viroflay, France
Institut Francais de Recherce 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.L., 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·IMS Health GmbH, Hergiswil,
Switzerland
Media Monitoring Switzerland AG, Berne,
Switzerland
dragon eye Ltd., Hergiswil, Switzerland
Media Focus (ARGE), Hergiswil,
Switzerland
Modata GmbH, Berlin, Germany
Emer-GfK, Spain
EMER GfK S.L., Valencia, Spain
ENIGMA GfK, Germany
ENIGMA Institut für Markt- und
Sozialforschung Jürgen Ignaczak GmbH,
Wiesbaden, Germany
G.E. Marketing Research, Spain
G.E. Marketing Research S.A., Valencia,
Spain
GfK AG, Germany
GfK Aktiengesellschaft, Nuremberg,
Germany
GfK Custom Research, USA
GfK Custom Research Inc., Minneapolis,
USA
GfK MACON, Germany
GfK MACON AG, Waghäusel, Germany
GfK Portugal, Portugal
GfK PORTUGAL – Marketing Services
LDA, Lisbon, Portugal
GPI Kommunikationsforschung,
Germany
GPI Kommunikationsforschung
Gesellschaft für Pharma-Informationssysteme mbH, Nuremberg, Germany
I+G Group, Germany
GPI Kommunikationsforschung
Gesellschaft für PharmaInformationssysteme mbH, Nuremberg,
Germany
I+G Gesundheitsforschung GmbH & Co.,
Nuremberg, Germany
Infratest + GfK Gesundheitsforschung
GmbH & Co., Berlin, Germany
Indicator GfK, Brazil
Indicator Pesquisa de Mercado Ltda,
São Paolo, Brazil
Indicator Servicos de Informação Ltda,
São Paolo, Brazil
Indicorp Participações S.A., São Paolo,
Brazil
Informark, Australia
Informark Pty. Ltd., Braddon, Australia
Intercampus, Portugal
INTERCAMPUS-RECOLHA,
TRATAMENTO E DISTRIBUIÇÃO DE
INFORMAÇÃO LDA, Lisbon, Portugal
Intomart GfK, Netherlands
Intomart GfK Group B.V., Hilversum,
Netherlands
Aspemar-GfK N.V., Brussels, Belgium
Audimetrie N.V., Brussels, Belgium
Adware Media Solutions B.V., Hilversum,
Netherlands
IRI/GfK, Germany
Information Resources GfK GmbH,
Nuremberg, Germany
m2A, France
Martin Hamblin GfK HealthCare UK, UK
Martin Hamblin GfK Healthcare UK
Limited, West Byfleet, Surrey, UK
Martin Hamblin GfK, UK
Martin Hamblin GfK Research Inc, USA
Martin Hamblin Research Inc, Hartford,
Connecticut, USA
Metris, Portugal
METRIS-MÉTODOS DE RECOLHA E
INVESTIGAÇÃO SOCIAL LDA, Lisbon,
Portugal
Orange Interactive Research, Sweden
Orange Interactive Research AB,
Stockholm, Sweden
Significant GfK, Belgium
Significant bvba, Hervelee, Belgium
Strateji GfK, Turkey
Strateji GfK Research Services A.S.,
Istanbul, Turkey
Telecontrol, Switzerland
133
Contacts
If you wish to order further copies of the Annual Report
or have any questions, please contact:
Public Affairs and Communications
Publisher:
Dr. Ulrike Schöneberg
Fon +49 (0) 911 - 395 26 45
Fax +49 (0) 911 - 395 40 41
[email protected]
GfK AG
Nordwestring 101
90319 Nuremberg
http://www.gfk.de
Investor Relations
Special contribution:
Michael J. Naples, Princeton, New Jersey, USA
Bernhard Wolf
Fon +49 (0) 911 - 395 20 12
Fax +49 (0) 911 - 395 40 75
[email protected]
134
Editorial support services:
Medienservice Peter Reichhard, Ebersberg
Design:
Scheufele Kommunikationsagentur GmbH,
Frankfurt am Main
Photography:
Annette Frick, Frankfurt
This Annual Report is also available
in German.
The English language version is a
translation of the audited German Annual
Report.
Lithography:
Mainteam, Aschaffenburg
Translation:
AGET Limited, London, UK
Printing:
Druckerei Eugen Seubert, Nürnberg
Printed on unchlorinated bleached paper
P R O V I S I O N A L K E Y D AT E S
IN THE FINANCIAL CALENDAR
30 April 2003
30 April 2003
Analysts’ conference, Frankfurt/Main
27 May 2003
13 June 2003
27 August 2003
26 November 2003
Quarterly report as at 30 September*
26 February 2004
Provisional result for financial year 2003
22 April 2004
22 April 2004
Analysts’ conference, Frankfurt/Main
27 May 2004
15 June 2004
26 August 2004
25 November 2004
Quarterly report as at 30 September*
MISSION STATEMENT
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
* Publication is scheduled for before the start of the trading session
which we operate – in the interests of our clients, our employees, our company,
our shareholders and the general public.

GfK. Growth from Knowledge

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