GfK. Growth from Knowledge
GfK. Growth from Knowledge Dr. Gerhard Hausruckinger, COO Retail and Technology Deutsche Bank German & Austrian Corporate Conference Frankfurt, May 19, 2011
GfK Group
GfK. Growth from Knowledge
Agenda
1
Market research drivers
2
GfK successfully started in the first quarter 2011
3
Growth driver Retail and Technology
4
Outlook
May 2011
GfK Group
GfK. Growth from Knowledge
1
Market research drivers
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
The driving forces in the market research industry 4
Technology
Customers
Digital increases complexity
Globalization of brands
New sources of information (e.g. social media)
Demand fueled by needs in emerging markets
New research methods
Broadening of research demands: Value-adding
Consumers Exploding data availability – consumers and markets Increasing complexity of consumer habits Market environment is in favor of global players with a broad portfolio who can “connect the dots” innovation and technology leaders
GfK Group
GfK. Growth from Knowledge
May 2011
GfK transforming data into knowledge 5
From data collecting
Data
From raw data, low margin
Information Findings Conclusions Knowledge GfK’s value generation To navigation through a sea of data
To market expertise, high margin
GfK Group
GfK. Growth from Knowledge
May 2011
6
2
GfK successfully started in the first quarter 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Top figures for organic growth and margin 7
Q1 2011
Q1 2010 EUR 280.9 m
Sales
5.2%
Organic growth
EUR 25.3 m
Adjusted operating income
9.0%
Margin
EUR 9.8 m
Consolidated total income
EUR 7.1 m
Cash flow from operating activity
EUR 0.23
Basic earnings per share
EUR 310.2 m 8.0% EUR 30.5 m 9.8% EUR 15.0 m EUR 9.1 m EUR 0.32
GfK Group
GfK. Growth from Knowledge
May 2011
GfK takes the lead vs. competitors 8
Organic sales growth
GfK
Nielsen
Synovate
7.3
7.3
Ipsos
Kantar
in %
8.0 6.2
3.8
Q1 2011
Source: Companies’ publications
GfK Group
GfK. Growth from Knowledge
May 2011
Development of earnings 9
published
Q1 2010
adjusted3)
Q1 2011
Change in %
280.9
280.9
310.2
10.4
Gross income from sales
81.0
81.0
91.4
12.8
EBITDA
30.9
31.2
38.8
24.4
Adjusted operating income
25.3
25.3
30.5
20.5
9.0
9.0
9.8
-
Operating income
18.4
18.7
24.9
32.8
EBIT
19.1
19.3
26.4
36.5
Other financial income / expenses
-4.5
-4.8
-0.8
-82.5
Consolidated total income
9.8
9.8
15.0
52.5
Cash flow from operating activity
7.1
7.1
9.1
27.6
-1.7
-1.7
-2.2
34.4
In EUR million17 Sales
Margin in per cent1)
Free cash flow
Q1 2010
Basic earnings per share in EUR
0.23
0.23
0.32
39.1
Adjusted earnings per share in EUR2)
0.42
0.41
0.48
17.1
Rounded 1) Adjusted operating income in relation to sales 2) Consolidated income attributable to equity holders of the parent company plus highlighted items in relation to the weighted average number of shares 3) Starting from Q1/2011, currency exchange gains and losses resulting from financial transactions are reclassified from other operating income / expenses to other financial income / expenses; the previous year's figures have been adjusted in the same way
GfK Group
GfK. Growth from Knowledge
May 2011
BISS: Effects from fitness and efficiency program 10
in EUR million
1)
Q1 2010
2)
Q1 2011
Additional sales
3.1
2.7
Cost savings
8.2
10.1
Project expenses (excl. depreciation)
-3.6
-3.8
Depreciation
-0.1
-0.2
Project EBIT contribution
7.6
8.8
Reorganization costs (add back)
1.3
1.3
Adjusted operating income
8.9
10.1
Comments: 1) Real FX Rates 03-2010 2) Real FX Rates 03-2011
GfK Group
GfK. Growth from Knowledge
May 2011
Comfortable financial headroom 11
Q1 2010
Q1 2011
305
173
313
1.63
2.26
1.66
2008
2009
2010
Net Debt Headroom:
233
162
Net Debt/ EBITDA1):
2.01
2.27
375
376
In EUR million
(< 3,25)
Net Debt1):
399
EBITDA1):
327
309
187
166
189
1) EBITDA and Net Debt are calculated according to bank covenant definition on rolling four quarter basis
176
197
GfK Group
GfK. Growth from Knowledge
May 2011
April 2011: GfK places bond issue with a volume of EUR 200 million 12
Highlights
Distribution by investor type (allocation)
GfK SE issued bond to improve maturity profile of financial liabilities The bond was heavily oversubscribed
Terms Issuer:
GfK SE
Ratings:
No rating
Documentation:
Standalone
Issue date:
April 11, 2011
Settlement date:
April 14, 2011
Maturity date:
April 14, 2016
Amount:
€200 million
Coupon:
5.000%
Reoffer spread vs. mid-swaps: € Mid-swaps + 195 bps Joint bookrunners:
Deutsche Bank, UniCredit
Subsequent events after the reporting date March 31, 2011 Source: Deutsche Bank Global Markets
Distribution by geography (allocation)
GfK Group
GfK. Growth from Knowledge
May 2011
Regions: Emerging Markets excellent 13
Sales
In EUR million Q1 2010 Germany
Growth rate in % Q1 2011
Total
Organic
Acquisitions
75.2
83.4
10.9
8.2
2.8
104.8
118.3
12.9
10.8
0.0
Central and Eastern Europe
18.4
20.5
11.4
11.2
0.0
North America
50.4
48.5
-3.6
-4.6
2.2
Latin America
10.1
12.6
24.4
18.9
0.0
Asia and the Pacific
22.0
26.9
22.0
15.1
0.1
280.9
310.2
10.4
8.0
1.1
Western Europe / Middle East / Africa
Total
Figures from the Management Information System – rounded
GfK Group
GfK. Growth from Knowledge
May 2011
Sectors: Good start in 2011 14
In EUR million
Sales
Adjusted operating income
Growth rate in %
Q1 2010
Q1 2011
167.2
186.0
11.2
8.2
1.9
3.9
6.3
2.3
3.4
Retail and Technology
79.6
90.4
13.5
11.5
0.0
19.6
22.8
24.6
25.2
Media
32.8
32.6
-0.6
-1.1
0.0
3.8
3.4
11.7
10.5
Other
1.3
1.2
n. m.
n. m.
n. m.
-2.0
-2.0
n. m.
n. m.
280.9
310.2
10.4
8.0
1.1
25.3
30.5
9.0
9.8
Custom Research
Total
Figures from the Management Information System – rounded
Total
Organic
Acquisitions
Margin in %
Q1 2010 Q1 2011 Q1 2010 Q1 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Custom Research with strong income and sales growth 15
Sales up 11.2% on the first quarter of 2010 Adjusted operating income surges 60.1% against the first quarter of 2010 Key growth drivers are the Western Europe / Middle East / Africa and Germany regions Business with telecommunication customers advances strongly In Japan the impact of the disaster is being felt on the Custom Research business, although the extent can be coped with GfK increased its stake in GfK SirValUse and nurago (total 60%) for a better position regarding knowledge about internet user experience, digital brands, media and usability research worldwide GfK increased its stake from 51% to 100% in GfK Skopje, the market leader in Macedonia and Kosovo in Custom Research sector with clients like Coca-Cola, Heineken Group, Imperial Tobacco and Nestlé
GfK Group
GfK. Growth from Knowledge
May 2011
Media gains and extends international orders 16
Sales at the level of the previous year Higher sales in the Central and Eastern European region by additional contracts in the scope of the existing panels on television reach research in the Ukraine and contracts renewed in Poland Adjusted operating income lagged behind expectations Income higher at GfK MRI, USA, as a result of expanding the print media research business in particular with the new instrument GfK AdMeasure GfK Audimetrie in Belgium again won the contract to measure the reach of all the country’s 150 radio stations from January 2011 to December 2013 GfK Portugal signed a contract for electronic television reach research for the first time with the newly developed Universal Meter System (UMS), a comprehensive media measurement tool of GfK which creates new possibilities for media research; the panel runs from 2012 to 2016
GfK Group
GfK. Growth from Knowledge
May 2011
Retail and Technology develops positively in all areas 17
Sales up 13.5% against the first quarter of 2010 Sales rose in all regions Adjusted operating income 16.4% higher than the first quarter of 2010 International contracts with large customers were renewed with considerably higher order volumes, with new business also developing very well Core business developed in a positive fashion in all areas Above-average rises in the areas of Small and Major Domestic Appliances as well as Telecom The new business areas of Fashion Life and Tourism generated double-digit growth rates The Retail and Technology sector increased its stake in GfK-MEMRB Marketing Services, a joint venture between GfK SE and MEMRB International, from 60% to 100%; the company group records retail data in 21 countries of the Middle East and Africa
GfK Group
GfK. Growth from Knowledge
3
Growth driver Retail and Technology
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
The driving forces in Retail and Technology 19
Client Groups Consumer electronics, domestic appliances, IT, photo, entertainment, optics, gardening, telecommunication, fashion and tourism
Key services Sales information using POS data on a global, regional and country level
Client benefit Information via direct access to databases allowing product-, pricing-, advertising-, distribution- and logistic decisions
Presence In more than 90 countries
USP World leader in point-of-sales (POS) information for non-food products Setting the industry standard Real-time sales from over 340,000 retailers worldwide Comparable data through unique global database GfK StarTrack
GfK Group
GfK. Growth from Knowledge
May 2011
Retail and Technology continuous the success story 20
The global Retail and Technology business is in excellent shape and can build on a very strong basis for the future - Sales growth more than tripled within the last ten years - Margin increase from approx. 14% in 2000 to 30.7% in 2010 - Presence in more than 90 countries globally with very strong competitive position - Globally consistent methodologies and systems in place - More than 4,000 highly motivated and competent people in our team
In order to continue this impressive success story, we must - further strengthen our basis in all key areas - remain highly responsive to market changes and our clients’ needs - take advantage of major technological developments & trends - keep the entrepreneurial spirit in our sector and build a high-performance global team
GfK Group
GfK. Growth from Knowledge
May 2011
Global widespread client base of Retail and Technology 21
Bosch
Nokia
Brother
Olympus
Canon
Philips
Clarion
Procter & Gamble
Hewlett Packard
Samsung
Hitachi
Siemens
LG Electronics
Sharp
Matsushita (Panasonic)
Sony
Microsoft
Toshiba
Miele
Whirlpool
Motorola
And many more…
Sorted alphabetically
GfK Group
GfK. Growth from Knowledge
May 2011
Global presence of GfK Retail and Technology 22
GfK Retail and Technology is the world's leading market researcher, tracking sales in technical consumer goods markets. Our global presence provides a strong basis for future growth and restricts competitor entry to markets.
North America: Canada Mexico USA
Latin America: Argentina Bolivia (IFR) Brazil Chile Colombia Costa Rica (IFR) Dominican Rep. Ecuador (IFR) El Salvador (IFR) Guatemala (IFR) Panama (IFR) Peru Uruguay Venezuela (IFR)
Africa: Algeria Cameroun D.R. Congo Egypt Ethiopia Ghana Ivory Coast Kenya Libya Morocco Mozambique Nigeria Senegal South Africa Tanzania Tunisia Uganda
Europe West:
Europe East:
Austria Belgium Denmark Finland France Germany Greece IFR Group Ireland Italy Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland UK
Bulgaria Croatia Czech Republic Estonia Hungary Kazakhstan Latvia Lithuania Poland Romania Russia Serbia Slovakia Slovenia Ukraine
Middle East:
Asia/Pacific:
Bahrain Israel Iran Iraq Jordan Kuwait Lebanon Oman Pakistan Qatar Saudi Arabia Sudan Syria Turkey UAE Yemen
Australia Bangladesh Cambodia China Hong-Kong India Indonesia Japan Korea Macau Malaysia New Zealand Philippines Singapore Taiwan Thailand Vietnam
100 countries covered 58 countries with offices
GfK Group
GfK. Growth from Knowledge
May 2011
Markets monitored by Retail and Technology 23
Consumer Electronics
IT
Entertainment
Fashion
Stationery
DIY/ Lighting
MDA/SDA/ Cookware
Photo
Optics
Telecom
Mobile Content
Gardening
Tourism
Automotive
More than 300 product groups monitored in 340.000 outlets in more than 35 channels of distribution to represent the sales of more than 1.600.000 outlets
GfK Group
GfK. Growth from Knowledge
May 2011
Main focus is on technology products and domestic appliances 24
Consumer Electronics
20%
IT
15%
Telecom
11%
Photo
5%
Entertainment
7%
MDA/SDA
23%
Others
19%
Converging Technology 58%
GfK Group
GfK. Growth from Knowledge
May 2011
Competence: A wide spread of data delivery 25
340.000 shops worldwide deliver data every month/week to represent a universe of 1.6 million shops
Only examples; Retailers of North-America are not included
GfK Group
GfK. Growth from Knowledge
May 2011
Competence: Worldwide database and services 26
GfK Retail and Technology database & offers
GfK StarTrack
Retail panel monthly
Weekly monitor
Digital convergence
340,000 audited shops 5 million audited products 7,500 product features 87 countries, 5 continents 450 product groups, SKU level
Insurance service
Retail analytics
Equity research
StarTrack portal Price & promotion tracking IFR
GfK Group
GfK. Growth from Knowledge
May 2011
Example Etilize: the world’s largest source of product information 27
Data on over 7 million products from 20,000 manufacturers in 30 countries and in 20 languages Our customer segments span multiple industries: Information technology Consumer electronics Household appliances Photography Home & garden/ Do-It-Yourself Data capture and point of sale Telecommunications Custom SKU development to fit individual needs
GfK Group
GfK. Growth from Knowledge
May 2011
Example GfK NIS: a new instrument to monetise the mobile Internet 28
Tracking of mobile Internet usage and user behaviour Mobile network-centric approach for census data collection Comprehensive coverage of Internet activities and metrics Real-time reporting possibility Irreversible real-time anonymization to guarantee privacy Fully automated end-to-end data production process Data enrichment through socio-demographics, website and apps categorization, and mobile handset features Powerful reporting with GfK StarTrack Future-proof with mobile network evolution Possibility to measure the three screens
GfK Group
GfK. Growth from Knowledge
May 2011
Example GfK Digital World Report: worldwide electronics industry 29
The GfK Digital World Report is a pioneering service from GfK Retail and Technology, in partnership with the CEA, that gives the industry comprehensive insight into the worldwide electronics industry.
Global sales measurement for IT, Telecom and Consumer Electronics Unique database providing real-time sales for over 450,000 retailers worldwide Global reports with drill-down to top level function World, regional and country information Report delivery on yearly, quarterly or monthly basis Annual global forecasts by product, region and country
GfK Group
GfK. Growth from Knowledge
4
Outlook
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Economic recovery continues 31
Economic stabilization The International Monetary Fund (IMF) is forecasting global economic growth of 4.4% this year The global upturn is being driven primarily by emerging and developing economies
Although global economic output continues to grow, the risks such as staggering commodity prices, ongoing budget consolidation and currency fluctuation are rising The driving forces in the market research industry Customers: Globalization of brands, demand fueled by needs in emerging markets, broadening of research demands (value-adding) Consumers: Exploding data availability, increasing complexity of consumer habits Technology: Digital increases complexity, new sources of information (e.g. social media), new research methods Market environment is in favor of global players with a broad portfolio, who can “connect the dots”, innovation and technology
GfK Group
GfK. Growth from Knowledge
May 2011
GfK Group: High expectations for 2011 32
Sales growth of 5% to 6% Margin of at least 14.3% All sectors contribute to sales and income growth Investment in growth regions and the digital field Order book As at the end of April 2011, the order book covered a total of 65.4% of expected sales for the year (previous year: 62.8%)
GfK Group
GfK. Growth from Knowledge
May 2011
Disclaimer 33
This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of GfK SE or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. The presentation or any part thereof should not form the basis for a contract for the purchase or subscription of securities of GfK SE or any of the companies that are members of the Group or represent a guarantee in connection with such contract. All the information contained in this presentation has been established with care. Nevertheless, we cannot guarantee its reliability or completeness and the information contained herein should not be deemed as a guarantee in this respect. The information contained in this presentation may be supplemented, amended and updated. Certain statements made herein may express future expectations, which are based on current opinions and assumptions of the management and are subject to foreseeable and unforeseeable risks and uncertainties. Actual results, performance and events may differ considerably from the statements expressed in the present information, partly due to changing business or market conditions and to the growth prospects forecast by the management of GfK SE. These and other factors may have an unfavorable impact on the results and financial consequences described in this presentation. GfK SE does not undertake to update or revise statements on future developments, on the basis of new information, future events or for other reasons. You should not rely on statements made about future developments, which simply express expectations as of the date of this presentation. This document does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities‘ Act of 1933 in its currently valid form.
GfK. Growth from Knowledge Dr. Gerhard Hausruckinger, COO Retail and Technology Deutsche Bank German & Austrian Corporate Conference Frankfurt, May 19, 2011
GfK Group
GfK. Growth from Knowledge
Agenda
1
Market research drivers
2
GfK successfully started in the first quarter 2011
3
Growth driver Retail and Technology
4
Outlook
May 2011
GfK Group
GfK. Growth from Knowledge
1
Market research drivers
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
The driving forces in the market research industry 4
Technology
Customers
Digital increases complexity
Globalization of brands
New sources of information (e.g. social media)
Demand fueled by needs in emerging markets
New research methods
Broadening of research demands: Value-adding
Consumers Exploding data availability – consumers and markets Increasing complexity of consumer habits Market environment is in favor of global players with a broad portfolio who can “connect the dots” innovation and technology leaders
GfK Group
GfK. Growth from Knowledge
May 2011
GfK transforming data into knowledge 5
From data collecting
Data
From raw data, low margin
Information Findings Conclusions Knowledge GfK’s value generation To navigation through a sea of data
To market expertise, high margin
GfK Group
GfK. Growth from Knowledge
May 2011
6
2
GfK successfully started in the first quarter 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Top figures for organic growth and margin 7
Q1 2011
Q1 2010 EUR 280.9 m
Sales
5.2%
Organic growth
EUR 25.3 m
Adjusted operating income
9.0%
Margin
EUR 9.8 m
Consolidated total income
EUR 7.1 m
Cash flow from operating activity
EUR 0.23
Basic earnings per share
EUR 310.2 m 8.0% EUR 30.5 m 9.8% EUR 15.0 m EUR 9.1 m EUR 0.32
GfK Group
GfK. Growth from Knowledge
May 2011
GfK takes the lead vs. competitors 8
Organic sales growth
GfK
Nielsen
Synovate
7.3
7.3
Ipsos
Kantar
in %
8.0 6.2
3.8
Q1 2011
Source: Companies’ publications
GfK Group
GfK. Growth from Knowledge
May 2011
Development of earnings 9
published
Q1 2010
adjusted3)
Q1 2011
Change in %
280.9
280.9
310.2
10.4
Gross income from sales
81.0
81.0
91.4
12.8
EBITDA
30.9
31.2
38.8
24.4
Adjusted operating income
25.3
25.3
30.5
20.5
9.0
9.0
9.8
-
Operating income
18.4
18.7
24.9
32.8
EBIT
19.1
19.3
26.4
36.5
Other financial income / expenses
-4.5
-4.8
-0.8
-82.5
Consolidated total income
9.8
9.8
15.0
52.5
Cash flow from operating activity
7.1
7.1
9.1
27.6
-1.7
-1.7
-2.2
34.4
In EUR million17 Sales
Margin in per cent1)
Free cash flow
Q1 2010
Basic earnings per share in EUR
0.23
0.23
0.32
39.1
Adjusted earnings per share in EUR2)
0.42
0.41
0.48
17.1
Rounded 1) Adjusted operating income in relation to sales 2) Consolidated income attributable to equity holders of the parent company plus highlighted items in relation to the weighted average number of shares 3) Starting from Q1/2011, currency exchange gains and losses resulting from financial transactions are reclassified from other operating income / expenses to other financial income / expenses; the previous year's figures have been adjusted in the same way
GfK Group
GfK. Growth from Knowledge
May 2011
BISS: Effects from fitness and efficiency program 10
in EUR million
1)
Q1 2010
2)
Q1 2011
Additional sales
3.1
2.7
Cost savings
8.2
10.1
Project expenses (excl. depreciation)
-3.6
-3.8
Depreciation
-0.1
-0.2
Project EBIT contribution
7.6
8.8
Reorganization costs (add back)
1.3
1.3
Adjusted operating income
8.9
10.1
Comments: 1) Real FX Rates 03-2010 2) Real FX Rates 03-2011
GfK Group
GfK. Growth from Knowledge
May 2011
Comfortable financial headroom 11
Q1 2010
Q1 2011
305
173
313
1.63
2.26
1.66
2008
2009
2010
Net Debt Headroom:
233
162
Net Debt/ EBITDA1):
2.01
2.27
375
376
In EUR million
(< 3,25)
Net Debt1):
399
EBITDA1):
327
309
187
166
189
1) EBITDA and Net Debt are calculated according to bank covenant definition on rolling four quarter basis
176
197
GfK Group
GfK. Growth from Knowledge
May 2011
April 2011: GfK places bond issue with a volume of EUR 200 million 12
Highlights
Distribution by investor type (allocation)
GfK SE issued bond to improve maturity profile of financial liabilities The bond was heavily oversubscribed
Terms Issuer:
GfK SE
Ratings:
No rating
Documentation:
Standalone
Issue date:
April 11, 2011
Settlement date:
April 14, 2011
Maturity date:
April 14, 2016
Amount:
€200 million
Coupon:
5.000%
Reoffer spread vs. mid-swaps: € Mid-swaps + 195 bps Joint bookrunners:
Deutsche Bank, UniCredit
Subsequent events after the reporting date March 31, 2011 Source: Deutsche Bank Global Markets
Distribution by geography (allocation)
GfK Group
GfK. Growth from Knowledge
May 2011
Regions: Emerging Markets excellent 13
Sales
In EUR million Q1 2010 Germany
Growth rate in % Q1 2011
Total
Organic
Acquisitions
75.2
83.4
10.9
8.2
2.8
104.8
118.3
12.9
10.8
0.0
Central and Eastern Europe
18.4
20.5
11.4
11.2
0.0
North America
50.4
48.5
-3.6
-4.6
2.2
Latin America
10.1
12.6
24.4
18.9
0.0
Asia and the Pacific
22.0
26.9
22.0
15.1
0.1
280.9
310.2
10.4
8.0
1.1
Western Europe / Middle East / Africa
Total
Figures from the Management Information System – rounded
GfK Group
GfK. Growth from Knowledge
May 2011
Sectors: Good start in 2011 14
In EUR million
Sales
Adjusted operating income
Growth rate in %
Q1 2010
Q1 2011
167.2
186.0
11.2
8.2
1.9
3.9
6.3
2.3
3.4
Retail and Technology
79.6
90.4
13.5
11.5
0.0
19.6
22.8
24.6
25.2
Media
32.8
32.6
-0.6
-1.1
0.0
3.8
3.4
11.7
10.5
Other
1.3
1.2
n. m.
n. m.
n. m.
-2.0
-2.0
n. m.
n. m.
280.9
310.2
10.4
8.0
1.1
25.3
30.5
9.0
9.8
Custom Research
Total
Figures from the Management Information System – rounded
Total
Organic
Acquisitions
Margin in %
Q1 2010 Q1 2011 Q1 2010 Q1 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Custom Research with strong income and sales growth 15
Sales up 11.2% on the first quarter of 2010 Adjusted operating income surges 60.1% against the first quarter of 2010 Key growth drivers are the Western Europe / Middle East / Africa and Germany regions Business with telecommunication customers advances strongly In Japan the impact of the disaster is being felt on the Custom Research business, although the extent can be coped with GfK increased its stake in GfK SirValUse and nurago (total 60%) for a better position regarding knowledge about internet user experience, digital brands, media and usability research worldwide GfK increased its stake from 51% to 100% in GfK Skopje, the market leader in Macedonia and Kosovo in Custom Research sector with clients like Coca-Cola, Heineken Group, Imperial Tobacco and Nestlé
GfK Group
GfK. Growth from Knowledge
May 2011
Media gains and extends international orders 16
Sales at the level of the previous year Higher sales in the Central and Eastern European region by additional contracts in the scope of the existing panels on television reach research in the Ukraine and contracts renewed in Poland Adjusted operating income lagged behind expectations Income higher at GfK MRI, USA, as a result of expanding the print media research business in particular with the new instrument GfK AdMeasure GfK Audimetrie in Belgium again won the contract to measure the reach of all the country’s 150 radio stations from January 2011 to December 2013 GfK Portugal signed a contract for electronic television reach research for the first time with the newly developed Universal Meter System (UMS), a comprehensive media measurement tool of GfK which creates new possibilities for media research; the panel runs from 2012 to 2016
GfK Group
GfK. Growth from Knowledge
May 2011
Retail and Technology develops positively in all areas 17
Sales up 13.5% against the first quarter of 2010 Sales rose in all regions Adjusted operating income 16.4% higher than the first quarter of 2010 International contracts with large customers were renewed with considerably higher order volumes, with new business also developing very well Core business developed in a positive fashion in all areas Above-average rises in the areas of Small and Major Domestic Appliances as well as Telecom The new business areas of Fashion Life and Tourism generated double-digit growth rates The Retail and Technology sector increased its stake in GfK-MEMRB Marketing Services, a joint venture between GfK SE and MEMRB International, from 60% to 100%; the company group records retail data in 21 countries of the Middle East and Africa
GfK Group
GfK. Growth from Knowledge
3
Growth driver Retail and Technology
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
The driving forces in Retail and Technology 19
Client Groups Consumer electronics, domestic appliances, IT, photo, entertainment, optics, gardening, telecommunication, fashion and tourism
Key services Sales information using POS data on a global, regional and country level
Client benefit Information via direct access to databases allowing product-, pricing-, advertising-, distribution- and logistic decisions
Presence In more than 90 countries
USP World leader in point-of-sales (POS) information for non-food products Setting the industry standard Real-time sales from over 340,000 retailers worldwide Comparable data through unique global database GfK StarTrack
GfK Group
GfK. Growth from Knowledge
May 2011
Retail and Technology continuous the success story 20
The global Retail and Technology business is in excellent shape and can build on a very strong basis for the future - Sales growth more than tripled within the last ten years - Margin increase from approx. 14% in 2000 to 30.7% in 2010 - Presence in more than 90 countries globally with very strong competitive position - Globally consistent methodologies and systems in place - More than 4,000 highly motivated and competent people in our team
In order to continue this impressive success story, we must - further strengthen our basis in all key areas - remain highly responsive to market changes and our clients’ needs - take advantage of major technological developments & trends - keep the entrepreneurial spirit in our sector and build a high-performance global team
GfK Group
GfK. Growth from Knowledge
May 2011
Global widespread client base of Retail and Technology 21
Bosch
Nokia
Brother
Olympus
Canon
Philips
Clarion
Procter & Gamble
Hewlett Packard
Samsung
Hitachi
Siemens
LG Electronics
Sharp
Matsushita (Panasonic)
Sony
Microsoft
Toshiba
Miele
Whirlpool
Motorola
And many more…
Sorted alphabetically
GfK Group
GfK. Growth from Knowledge
May 2011
Global presence of GfK Retail and Technology 22
GfK Retail and Technology is the world's leading market researcher, tracking sales in technical consumer goods markets. Our global presence provides a strong basis for future growth and restricts competitor entry to markets.
North America: Canada Mexico USA
Latin America: Argentina Bolivia (IFR) Brazil Chile Colombia Costa Rica (IFR) Dominican Rep. Ecuador (IFR) El Salvador (IFR) Guatemala (IFR) Panama (IFR) Peru Uruguay Venezuela (IFR)
Africa: Algeria Cameroun D.R. Congo Egypt Ethiopia Ghana Ivory Coast Kenya Libya Morocco Mozambique Nigeria Senegal South Africa Tanzania Tunisia Uganda
Europe West:
Europe East:
Austria Belgium Denmark Finland France Germany Greece IFR Group Ireland Italy Luxembourg Netherlands Norway Portugal Spain Sweden Switzerland UK
Bulgaria Croatia Czech Republic Estonia Hungary Kazakhstan Latvia Lithuania Poland Romania Russia Serbia Slovakia Slovenia Ukraine
Middle East:
Asia/Pacific:
Bahrain Israel Iran Iraq Jordan Kuwait Lebanon Oman Pakistan Qatar Saudi Arabia Sudan Syria Turkey UAE Yemen
Australia Bangladesh Cambodia China Hong-Kong India Indonesia Japan Korea Macau Malaysia New Zealand Philippines Singapore Taiwan Thailand Vietnam
100 countries covered 58 countries with offices
GfK Group
GfK. Growth from Knowledge
May 2011
Markets monitored by Retail and Technology 23
Consumer Electronics
IT
Entertainment
Fashion
Stationery
DIY/ Lighting
MDA/SDA/ Cookware
Photo
Optics
Telecom
Mobile Content
Gardening
Tourism
Automotive
More than 300 product groups monitored in 340.000 outlets in more than 35 channels of distribution to represent the sales of more than 1.600.000 outlets
GfK Group
GfK. Growth from Knowledge
May 2011
Main focus is on technology products and domestic appliances 24
Consumer Electronics
20%
IT
15%
Telecom
11%
Photo
5%
Entertainment
7%
MDA/SDA
23%
Others
19%
Converging Technology 58%
GfK Group
GfK. Growth from Knowledge
May 2011
Competence: A wide spread of data delivery 25
340.000 shops worldwide deliver data every month/week to represent a universe of 1.6 million shops
Only examples; Retailers of North-America are not included
GfK Group
GfK. Growth from Knowledge
May 2011
Competence: Worldwide database and services 26
GfK Retail and Technology database & offers
GfK StarTrack
Retail panel monthly
Weekly monitor
Digital convergence
340,000 audited shops 5 million audited products 7,500 product features 87 countries, 5 continents 450 product groups, SKU level
Insurance service
Retail analytics
Equity research
StarTrack portal Price & promotion tracking IFR
GfK Group
GfK. Growth from Knowledge
May 2011
Example Etilize: the world’s largest source of product information 27
Data on over 7 million products from 20,000 manufacturers in 30 countries and in 20 languages Our customer segments span multiple industries: Information technology Consumer electronics Household appliances Photography Home & garden/ Do-It-Yourself Data capture and point of sale Telecommunications Custom SKU development to fit individual needs
GfK Group
GfK. Growth from Knowledge
May 2011
Example GfK NIS: a new instrument to monetise the mobile Internet 28
Tracking of mobile Internet usage and user behaviour Mobile network-centric approach for census data collection Comprehensive coverage of Internet activities and metrics Real-time reporting possibility Irreversible real-time anonymization to guarantee privacy Fully automated end-to-end data production process Data enrichment through socio-demographics, website and apps categorization, and mobile handset features Powerful reporting with GfK StarTrack Future-proof with mobile network evolution Possibility to measure the three screens
GfK Group
GfK. Growth from Knowledge
May 2011
Example GfK Digital World Report: worldwide electronics industry 29
The GfK Digital World Report is a pioneering service from GfK Retail and Technology, in partnership with the CEA, that gives the industry comprehensive insight into the worldwide electronics industry.
Global sales measurement for IT, Telecom and Consumer Electronics Unique database providing real-time sales for over 450,000 retailers worldwide Global reports with drill-down to top level function World, regional and country information Report delivery on yearly, quarterly or monthly basis Annual global forecasts by product, region and country
GfK Group
GfK. Growth from Knowledge
4
Outlook
May 2011
GfK Group
GfK. Growth from Knowledge
May 2011
Economic recovery continues 31
Economic stabilization The International Monetary Fund (IMF) is forecasting global economic growth of 4.4% this year The global upturn is being driven primarily by emerging and developing economies
Although global economic output continues to grow, the risks such as staggering commodity prices, ongoing budget consolidation and currency fluctuation are rising The driving forces in the market research industry Customers: Globalization of brands, demand fueled by needs in emerging markets, broadening of research demands (value-adding) Consumers: Exploding data availability, increasing complexity of consumer habits Technology: Digital increases complexity, new sources of information (e.g. social media), new research methods Market environment is in favor of global players with a broad portfolio, who can “connect the dots”, innovation and technology
GfK Group
GfK. Growth from Knowledge
May 2011
GfK Group: High expectations for 2011 32
Sales growth of 5% to 6% Margin of at least 14.3% All sectors contribute to sales and income growth Investment in growth regions and the digital field Order book As at the end of April 2011, the order book covered a total of 65.4% of expected sales for the year (previous year: 62.8%)
GfK Group
GfK. Growth from Knowledge
May 2011
Disclaimer 33
This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of GfK SE or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. The presentation or any part thereof should not form the basis for a contract for the purchase or subscription of securities of GfK SE or any of the companies that are members of the Group or represent a guarantee in connection with such contract. All the information contained in this presentation has been established with care. Nevertheless, we cannot guarantee its reliability or completeness and the information contained herein should not be deemed as a guarantee in this respect. The information contained in this presentation may be supplemented, amended and updated. Certain statements made herein may express future expectations, which are based on current opinions and assumptions of the management and are subject to foreseeable and unforeseeable risks and uncertainties. Actual results, performance and events may differ considerably from the statements expressed in the present information, partly due to changing business or market conditions and to the growth prospects forecast by the management of GfK SE. These and other factors may have an unfavorable impact on the results and financial consequences described in this presentation. GfK SE does not undertake to update or revise statements on future developments, on the basis of new information, future events or for other reasons. You should not rely on statements made about future developments, which simply express expectations as of the date of this presentation. This document does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities‘ Act of 1933 in its currently valid form.
GfK. Growth from Knowledge Dr. Gerhard Hausruckinger, COO Retail and Technology Deutsche Bank German & Austrian Corporate Conference Frankfurt, May 19, 2011
