GfK Group exceeds target margin with successful fourth quarter of 2009
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Significant rise in sales, adjusted operating income and margin in the fourth quarter of 2009
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Annual sales of EUR 1,164 million approximately at the prior year’s level
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Margin of 12.6% for the full year exceeds expectations
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BISS fitness and efficiency program and cost-cutting measures taken prove successful
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Management and Supervisory Boards propose dividend of EUR 0.30 per share for 2009
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Forecast for 2010: sales increase of approximately 3% and growth in margin of up to 13.0%
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Supervisory Board extends contract of Management Board member Debra A. Pruent by five years
Nuremberg, February 25, 2010 – With a pleasing performance in the fourth quarter of 2009, GfK continued the positive trend of the two preceding quarters. Based on the preliminary figures, GfK achieved sales of EUR 324 million in the fourth quarter, after EUR 282.7 million in the third quarter of 2009. Adjusted operating income amounted to EUR 57 million in the fourth quarter and exceeded income for the third quarter of 2009 (EUR 38.2 million) as well as the figure for the same quarter in the prior year (EUR 54.5 million). The margin, which reflects adjusted operating income in relation to sales, rose markedly to 17.7% in the fourth quarter of 2009. This represents growth in the margin of 4.2 percentage points compared with the third quarter of 2009 (13.5%). In the fourth quarter of 2008, the margin stood at 16.2%. This positive growth at Group level is based on successful cost management coupled with the positive impact of the BISS fitness and efficiency program. In addition, the Retail and Technology sector achieved an outstanding performance in financial year 2009. In the fourth quarter of 2009, the Group recorded a revival in operating business overall.
According to the preliminary figures, GfK recorded sales totaling EUR 1,164 million in financial year 2009 and therefore achieved its outlook. Taking into account acquisitions and currency effects, sales in financial year 2009 were down by a total of 4.6%. Acquisitions boosted sales by 2.0%, while currency effects reduced sales slightly by 0.6%. The downturn in sales in organic terms amounted to 6.0%. Compared with the first nine months of 2009, during which the decline totaled 7.3%, an improvement was achieved. In the period under review, adjusted operating income amounted to EUR 147 million (prior year: EUR 158.7 million). In the fourth quarter in particular, GfK achieved a considerable increase in adjusted operating income. The margin for the full year amounted to a pleasing 12.6%, after 10.7% in the first nine months of 2009. This means that GfK has exceeded its own outlook. The company had assumed a low double-digit margin, but recorded a significantly higher figure for the full year than after the first nine months of the year, and came close to the prior year’s margin (13.0%).
All three GfK sectors substantially increased their sales, adjusted operating income and margin in the fourth quarter of 2009 compared to the third quarter of the year. The Custom Research sector, in particular, was able to continue the positive business trend of the prior quarters, despite difficult market conditions. The Retail and Technology sector recorded organic sales growth of 4.3%, up to EUR 326 million, in financial year 2009 and increased its margin from 27.2% to 29.4% compared with the prior year. The Media sector achieved robust sales as well as an increase in adjusted operating income in the fourth quarter of the year.
In the growth regions of Latin America and Asia and the Pacific, GfK achieved a marked increase in organic sales and further expanded its market position. In the regions of Germany, Western Europe/Middle East/Africa and North America, GfK built on the recovery trend of the third quarter and successfully slowed the sales downturn in organic terms further.
GfK Group: Performance compared with prior year
With regard to adjusted operating income (hereafter referred to as "income”), GfK benefited in financial year 2009 from the fitness and efficiency program BISS launched in 2008 and the cost-cutting measures taken. Furthermore, the Retail and Technology sector achieved a highly pleasing performance.
Income totaled EUR 147 million, after EUR 158.7 million in the prior year. The decline in income in organic terms amounted to 17.6% in the first nine months of 2009, whereas the downturn in income for the year as a whole was only 10.2% in organic terms. Acquisitions increased income by 3.2%. Negative currency effects slightly decreased income by 0.4%.
Similarly to its competitors, the GfK Group uses adjusted operating income as a management indicator of corporate performance. It is determined by excluding expenses and income items which distort the evaluation of operating earnings power of the business sectors and Group from operating income. These expense and income items are called highlighted items and amounted to a total of EUR -58 million in the period under review (prior year: EUR -29.8 million).
As part of the BISS fitness and efficiency program, expenses totaling EUR 16 million (prior year: EUR 5.8 million) were incurred in the reporting period.
Amortization of disclosed hidden reserves from purchase price allocation (PPA) amounted to EUR 28 million compared with EUR 24.1 million in the same period in the prior year. This figure reflects the total scheduled amortization expected of EUR 16 million (prior year: EUR 14.8 million) and the balance of impairments and write-ups of EUR 12 million (prior year: EUR 9.3 million).
Personnel expenses for share-based payment and long-term incentives amounted to EUR -3 million (prior year: EUR +1.0 million).
The balance of other operating income and outstanding other operating expenses stood at EUR -11 million in the reporting period (prior year: EUR -2.1 million). This amount is essentially attributable to expenses resulting from currency differences of EUR 5 million. It also includes redundancy payments of EUR 4 million with regard to employees leaving the company. Furthermore, GfK made additional tax payments of
EUR 2 million. These were necessary, as rewards to survey participants became subject to VAT.
In financial year 2009, operating income totaled EUR 89 million, after EUR 128.9 million in financial year 2008.
Income from participations amounted to EUR 4 million in financial year 2009 (prior year: EUR 3.9 million).
As at December 31, 2009, EBIT stood at EUR 93 million (prior year: EUR 132.8 million).
Dividend: consistent pay-out ratio of 20%
In the past, GfK has always attributed importance to making a result-based dividend pay-out. To ensure that shareholders participate appropriately in the income generated, the Supervisory Board and Management Board of GfK SE will propose a dividend of EUR 0.30 per no-par share for financial year 2009 at the Annual General Meeting on May 19, 2010 (2008: EUR 0.46). This continues the pay-out ratio of approximately 20% of consolidated total income as in the prior years. The proposal corresponds to a dividend yield of 1.6%, calculated on the basis of the average GfK share price in 2009 of EUR 18.93. Based on the total of 35,947,363 shares eligible to receive dividends on December 31, 2009, this represents a distributed amount of EUR 10.8 million (prior year: EUR 16.5 million).
Sectors: continuous rise in sales and income
Despite the prevailing difficult market conditions in financial year 2009, all three GfK sectors achieved a rise in the sales and income trend over the course of the year. The performance of the Retail and Technology sector was particularly pleasing, with strong organic sales growth and a further increase in the margin.
Contact
GfK SE
Corporate Communications
Bernhard Wolf
Tel. +49 911 395-2012
Fax +49 911 395-4075
E-Mail bernhard.wolf@gfk.com
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