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Matthias Hartmann, Chief Executive Officer (CEO), GfK SE
Matthias Hartmann, Chief Executive Officer (CEO), GfK SE

Letter to the Shareholders

Ladies and Gentleman,

Despite a challenging environment, we have consistently developed, adapted and improved GfK during 2015 – and we aimed for growth: our motto for the year was “Shape for Growth”. 

In 2015, GfK’s sales improved. We recorded organic growth of 1.1 percent. A helpful tail wind from currency effects led to overall growth of 6.2 percent.

According to the global industry organization ESOMAR, the market grew overall by 0.7 percent in 2012 and 2013, while 2014 saw total growth of just 0.1 percent. We assume that market growth was not more substantial in 2015. In view of the market and our major competitors, we can be pleased with GfK’s growth.  

Digitalization and globalization

The global market research sector will continue to be shaped by the trends of digitalizatons and globalization.

We have consistently driven forward the digitalization of our business and further consolidated our position as one of the leading global suppliers in the field of “digital ecosystems”. 

„We have consistently driven forward the digitalization of our business and further consolidated our position as one of the leading global suppliers in the field of “digital ecosystems”.“

Matthias Hartmann, Chief Executive Officer (CEO), GfK SE

Our DRIVE platform, which we use as basis for global, standardized digital products, supported the further expansion of scalable products. In this way, clients can use GfK Echo to measure customer satisfaction, GfK Brand Vivo to measure brand metrics and GfK Experience Effects to measure and manage brand communications in addition to obtaining relevant data which can be immediately used when making business decisions.

In acquiring NORM, specialists in digital methods in the field of consumer research, we can use virtual test environments to not only quickly supply clients anywhere in the world with relevant information on consumer behavior, but also help them to optimize product placements, prices and planograms. We can integrate the respective data with our comprehensive consumer panel data. These connections create significant added value for our clients.

The acquisition of Netquest, which was initiated in 2015 before being completed at the beginning of 2016, exemplifies our strategic approach in the field of digital data sources. This will benefit both sectors. Consumer Experiences will benefit from Netquest’s access panels with continual access to tens of thousands of registered panelists in studies and passive measurement. With this focus on digital data and panels, we further pursue our data strategy and are constantly developing our Consumer Experiences sector. The Consumer Choices sector will be boosted by this acquisition as it drives the global expansion of GfK Crossmedia Link. Furthermore, GfK now boasts the world’s two leading measurement technology platforms in its service portfolio: our Nurago technology has been supplemented by Wakoopa technology following the acquisition. 

„With this focus on digital data and panels, we further pursue our data strategy and are constantly developing our Business.“

Matthias Hartmann, Chief Executive Officer (CEO), GfK SE

At the same time, the globalization of our service portfolio has been significantly advanced by further projects and products. For example, GfK’s Television Audience Measurement business has been established on two more continents with major projects in the Kingdom of Saudi Arabia and Brazil. Just a few years ago, this business was predominantly centered in Germany and Europe, and the business model was not scalable. The project in Brazil has contributed to GfK’s sales since the end of the reporting year. Nevertheless, we faced quite some challenges in establishing the panels in both markets. However, our local teams and those at our headquarters have shown great commitment to overcome these obstacles in close cooperation with our clients. We are now supplying our data in both countries. 

Closely linked teams were also a characteristic in the work of our further expanded Global Service Centers in 2015. Here, over 1,000 GfK employees are working together with the respective client or product teams right across the world. The objective: increased efficiency, quality and speed in operations of our panel-based business and ad hoc research projects. To achieve this, we bundle our expertise and implementation capacities in the Centers and rely on increased automation – always in combination with market research experience and skill, of course. This allows us to launch innovative solutions more quickly and in a more standardized manner. Furthermore, the Operations function on Management Board level, which was created when we realigned the setup of the Management Board, will drive forward the expansion of the successful Global Service Center approach. 

 

As mentioned above, sales rose by 1.1 percent organically or by 6.2 percent overall. However, at 12.2 percent, we did not quite achieve our margin target. Above all, delays in the major audience measurement contracts played a role in this. Adjusted operating income rose by 4.9 percent. Consolidated total income practically doubled year on year. 

„In 2016, we anticipate a modest organic growth higher than in the previous year and above that of the market research sector. The AOI margin should increase considerably. “

Matthias Hartmann, Chief Executive Officer (CEO), GfK SE

Looking ahead

In 2016, the Consumer Choices sector will continue to systematically pursue new growth and margin opportunities. The core business, POS Measurement, will be expanded further with new product categories, industries and services as well as online evaluation options. In Media Measurement, the setup of new panels to measure TV audiences is expected to make a significant contribution to sales. Our GfK Crossmedia Link product will be launched and evolved into a key digital product in additional countries. We assume that the sector will again achieve significant growth. Its revenue share, based on Group sales, will increase further. The margin should improve considerably against the previous year.

In the Consumer Experiences sector, the focus is on optimizing and streamlining the company’s operations. On the market side, we will focus on customer orientation. The objective is to speed up the launch of multichannel products, strengthen the sales team and become more professional. The market environment for ad hoc business will remain challenging in 2016. In light of this, the Consumer Experiences sector is expected to make a growth contribution at market level in 2016. On the operations side, we will further increase efficiency. We intend to modestly improve the margin with these measures.

In 2016, we anticipate a modest organic growth higher than in the previous year and above that of the market research sector. The AOI margin (adjusted operating income against sales) should increase considerably.

More than 13,000 employees around the world reliably support us as we strive to achieve these objectives. Also on behalf of the Management Board, I would like to extend my thanks to them all for actively embracing the implementation of necessary changes. Despite all the new technology and digitization, market research remains a business in which experience, thorough industry expertise and an understanding of current and future client challenges are critical success factors.

I would like to take this opportunity to thank you, our shareholders, not only on behalf of the Management Board, but also on behalf of our global teams, for your trust in this challenging journey toward globalization and digitization, which GfK was on last year and will continue, together with you, in 2016. 

Yours, 

Matthias Hartmann, Chief Executive Officer (CEO), GfK SE
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