GfK’s motto for this fiscal year was “Shape for Growth”. This involved growth in various business divisions, raising productivity and further development of performance as an integrated business: “One GfK”. GfK has made significant progress in these areas. Nonetheless, the challenges in what is still a highly dynamic market environment have not diminished. The Supervisory Board continues to back up the Management Board in keeping up the innovative pace despite the additional expenses involved. Together with the Management Board, in 2015 the Supervisory Board decided to adapt the company’s structure to make the company even more strongly positioned for the future.
In the Consumer Experiences sector, the focus was on stabilizing sales. The transformation towards more profitable activities and digital products was continued, while purely local and less profitable ad hoc research projects were scaled back. In view of these adjustments, we did not expect growth in the Consumer Experiences sector, and even a small decline in sales could not be ruled out. In fact, organic sales growth fell only slightly by –1.2 percent (2014: –5.4 percent). The sales share of global products has grown from 38 percent in 2014 to over 44 percent, while data acquisition is now 75 percent digitized.
In the Consumer Choices sector, we intended to further expand the core business POS Measurement and to open up additional sales and income potential through new panels. The sales target was achieved with stronger growth than in the previous year. 2015 was particularly important for the sector’s Media Measurement. In Brazil, GfK began supplying data for TV ratings. In four other countries, including two in Asia, the technical prerequisites have been created after successful contract acquisition to generate sales in the 2016 fiscal year. The Supervisory Board closely followed the progress of the panel set-up as well as the technical infrastructure and kept itself up to date with the measures to overcome initial difficulties, which had negatively impacted income and deferred sales in Brazil to 2016. It supports the Management Board in its goal to further expand this business.
Also in 2015, the Supervisory Board got a comprehensive picture of the company’s strategy and of the acceptance of the company’s transformation. The Supervisory Board was particularly concerned that the Group’s new direction was essentially endorsed and successfully implemented by management and staff as well as supported by external stakeholders. To this end, they obtained an explanation of the employee survey results, as well as talking to our clients and seeking direct exchanges with institutional shareholders. The Supervisory Board also attended the “Think future” managers’ conference again. Overall, the Supervisory Board concluded that there is constructive and target-oriented cooperation within the company.
„GfK’s motto for this fiscal year was “Shape for Growth”. This involved growth in various business Fields, raising productivity and further development as an integrated business: “One GfK”. GfK has made significant progress in all these areas.“
The Supervisory Board would like to take this opportunity to thank our staff, employee representatives and the Management Board for the work performed. Our thanks and acknowledgment also go to the GfK Group’s clients and business partners. They placed their trust in our company and its services, contributing with many suggestions to the further improvement of our portfolio in 2015.
In the past year, the Supervisory Board introduced two new positions to the Management Board which have been in effect since January 1, 2016. In both cases, the Supervisory Board called on experienced external consultants. The in-depth requirement profiles were defined for each position with both internal and external candidates included in the search.
For the successor to Debra A. Pruent, who was responsible for the Consumer Experiences sector, the Supervisory Board placed emphasis on long-term international experience with a comparable service company that has reformed its business model thoroughly, as GfK is doing. Debra A. Pruent decided to retire and therefore not to extend her contract with GfK, which was due to expire at the end of 2015. Debra A. Pruent worked for GfK for over 11 years. In 2008, she was appointed to the Management Board and played a key role in transforming GfK. During this time she standardized GfK’s products and solutions, promoted the scaling of the business, introduced new digital products and implemented a uniform global client service model. She was instrumental in developing and driving the “Own the Future” strategy.
In its meeting on September 11, 2015, the Supervisory Board decided to appoint David Krajicek to the Management Board as Chief Commercial Officer for Consumer Experiences. David Krajicek has been employed with GfK since the acquisition of the American market research company Arbor back in 2004. In this period, his management responsibilities ranged from the management of a local Brand and Customer Experience product team as well as the responsibility for the Technology industry in the United States through to successful transformation of the Consumer Experiences sector in his capacity as Regional Chief Operating Officer (Regional COO) responsible for North America. He has over 20 years’ experience in market research.
The second personnel change was the creation of a new Management Board role integrating the operations of the two GfK sectors. For this purpose, the Supervisory Board appointed Alessandra Cama for the newly created position of Chief Operations Officer. She will be responsible for all local and global operations functions across GfK. Through this position, GfK wants to increase the productivity of its operations by increasing automated processes, the use of economies of scale and efficiency. Alessandra Cama has been employed with GfK since 2011. Since then she has worked at all levels of the GfK matrix organization. She was globally responsible for Fast Moving Consumer Goods (FMCG); as managing director of the German Panel Service she assumed responsibility at the local level; and up to the end of 2015, she was as Regional Chief Operating Officer (Regional COO) responsible for Asia and the Pacific. Prior to joining GfK, Ms. Cama was a manager at Roland Berger Strategy Consultants and worked in the consumer goods industry.
In Alessandra Cama and David Krajicek, we have developed two excellent leaders for our company, who will help us to drive the business forward and to deliver clear added value to our clients.
As part of this change and because of the new position of the member of the Management Board, Alessandra Cama, the Supervisory Board has decided to change the titles of two members of the Management Board. The two members of the Management Board responsible for the sectors, Dr. Gerhard Hausruckinger and David Krajicek, will carry the title of Chief Commercial Officer (CCO) from January 1, 2016. They will continue to be fully responsible for business success in their sectors. Alessandra Cama is the Chief Operations Officer (COO) responsible for operations in both sectors.
The past year also saw changes in the Supervisory Board. Since the Annual General Assembly in 2015, Shani Orchard is no longer a member of the Supervisory Board. Ms. Orchard has constructively represented the interests of the company’s employees in the Supervisory Board since 2009 and has always worked to maintain balance between the needs of the company. The Supervisory Board thanks her for her long-standing commitment. Martina Heřmanská has been delegated to the Supervisory Board as Ms. Orchard’s successor. We look forward to working with her.
In the 2015 fiscal year, the Supervisory Board continued to discharge its obligations with due diligence according to the law, the Articles of Association, the German Corporate Governance Code (DCGK) and the internal regulations of the company. The Supervisory Board regularly advised the Management Board on management issues and monitored its activities. The Supervisory Board was involved in every decision of essential importance to the company.
„Among the main issues discussed were the implementation and development of the strategy, the Group’s business development, its income and financial position, personnel situation, organizational development, business policy, corporate planning, investment program, compliance and risk management.“
The Management Board kept the Supervisory Board regularly and comprehensively informed of any matters relevant to its remit at the appropriate times in both written and oral form. Among the main issues discussed were the implementation and development of the strategy, the Group’s business development, its income and financial position, personnel situation, organizational development, business policy, corporate planning, investment program, compliance and risk management. Intended acquisitions and increased shareholdings were additional topics for review, detailed information on both of which was provided to the Supervisory Board by the Management Board, including on transactions that did not require consent. Investments made in recent years and the impact of political and economic developments were also assessed.
Between Board meetings, the CEO and his colleagues on the Management Board discussed every issue of importance to the company with the Chairman of the Supervisory Board. The Deputy Chairman of the Supervisory Board and the Chairmen of both the Audit and Personnel Committees were also in constant contact with the Management Board.
The Supervisory Board held five ordinary and four extraordinary meetings (including two telephone conferences) in the 2015 fiscal year. Two members were present at least 67 percent of the time and nine members at least 89 percent. They discussed the respective Management Board reports and the Group’s development prospects in depth. As well as our 2014 annual financial statements, the issues discussed included the development of business in 2015, our 2016 budget, HR issues and the implementation of our “Own the Future” strategy. Investment and innovation measures to ensure sustainable and above-average growth, risk management and compliance issues were also discussed.
Special importance was ascribed to the sale of the Animal and Crop Health division, and to the new structure of the cooperation with The NPD Group, Inc., USA. The Supervisory Board was continuously informed by the Management Board about the state of negotiations and approved both transactions. The Supervisory Board supports the Management Board in adapting the participations portfolio to the changed requirements of the market.
In 2015, the Supervisory Board’s September meeting, which is generally held in different regions, took place in Warsaw, Poland. These meetings aim to enhance the understanding of local markets, clients and local management. Local managers gave reports and presentations, providing the Supervisory Board with a detailed picture of current business focal points, innovations, strengths and weaknesses. Another focus was on the preparation and adoption of the new Management Board structure, which came into effect on January 1, 2016. With the aim of promoting the further integration of the company (“One GfK”), both the Supervisory Board and the Management Board place the focus on achieving better integration of the two sectors. The aim is to create additional and cross-sector business. Therefore, from 2016, responsibility for the regions at Management Board level has been redefined, and the subsequent reporting level has been streamlined. In the future, no two managers from the two sectors will be responsible for the same region. Instead, one manager in each region will be responsible for both sectors and, in this function, will report directly to a member of the Management Board. The assignment of roles has also been simplified for the industries: One manager will be responsible for each industry and will report to a member of the Management Board. The newly created Management Board Operations function has overall responsibility for the global service centers, the processes of the Operations function, shared services, global panel management, and a region. These functions were previously assigned to the two sectors. The Supervisory Board expects that this reorganization will further increase the efficiency of our services and promote customer focus in both sectors.
In 2015, the Supervisory Board once again deliberated on the provisions of the German Corporate Governance Code (DCGK) and issued the declaration of compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) in December. GfK is in compliance with the mandatory regulations, with the exception of one requirement, and the rules that can be met voluntarily. The discrepancies are detailed and explained in the corporate governance report, which is published at www.gfk.com.
Once again, the Supervisory Board called in outside consultants to review the effectiveness of its work. We review this every two years and did so again in 2015. Overall, the report makes a positive assessment of the Supervisory Board’s work. The final report confirms that the Supervisory Board and its committees collaborate in a trusting and efficient manner. According to the report, the supervision and strategic monitoring of the Management Board is carried out professionally, confidently and efficiently, and in line with best practice requirements. It also states that the Supervisory Board has created a culture and atmosphere of respectful interaction which allows the Board to perform its duties in full.
To ensure our own efficiency, the Supervisory Board is supported by four committees and receives regular and comprehensive updates concerning their work. The minutes of each committee meeting are available to every member of the Supervisory Board.
The Audit Committee met eight times in the reporting period, in person on four occasions and by telephone conferencing on four other occasions. Average attendance was 97 percent, with attendance of at least 88 percent in one case. The Audit Committee examined business performance, the income and financial position and the Group’s upcoming investment projects. It also looked at financial issues (in particular the refinancing bonds that will expire in April 2016), accounting and valuation, including interim reports, the internal control system, internal audits, risk management, corporate governance and integrity. In May 2015, the role of the chairperson of the Audit Committee was handed over by Dr. Wolfgang C. Berndt to Dr. Bernhard Düttmann.
The Personnel Committee met four times, dealing intensively with the payment system for the members of the Management Board under the Management Board Remuneration Act and the continued development of the existing system. Details can be found in the remuneration report in Section 4.8 of the Group Management Report. The Personnel Committee also discussed the systems and progress of HR development work, including the detailed assessment of potential management candidates and young talent. A great deal of time was dedicated to selecting Debra A. Pruent’s successor as well as the appointment process of the member of the Management Board for Operations, with a number of candidates considered by the Personnel Committee in a multistage process. As provided for in the Act on Equal Opportunities for Women and Men in Top Management Positions in Private Industry and Public Sector, the Supervisory Board has set gender quotas for the Supervisory Board and the Management Board, according to which at least 30 percent of members of the Supervisory Board and at least 20 percent of members of the Management Board shall be women. Attendance at the meetings was 75 percent in one case, the other four members’ attendance was 100 percent.
The Presidial Committee met twice in the past year, with attendance levels of 50 percent for one member and 100 percent for all of the other four members. Beyond this, several discussions took place between the Chairman and individual committee members. This activity was aimed at preparatory work for the Supervisory Board meetings, primarily on the following issues: implementation of the corporate strategy and further development of the management organization, monitoring and analysis of the efficiency audit, online and IT strategy, the budget for 2016 and compliance issues. Another focus was on the agreement of topics for the training of Supervisory Board members. This training includes external advanced training courses. However, it mainly comprises background information about specific business developments at GfK and in the relevant market environment. This also encompasses webcasts, used to inform the Supervisory Board at an early stage of any new products.
As members of the Supervisory Board will step down from their position at the Annual General Assembly 2016 the Nominations Committee met three times in the past year, with all members present, discussing the future composition of the Supervisory Board in detail. The discussion took place in view of fundamental changes in market research and new competitive conditions. The aim was to recruit outstanding representatives with industry experience in the digital world and social networks to GfK’s Supervisory Board. The Nominations Committee ceased its discussions in December 2015 after majority shareholder GfK Nürnberg e.V. notified the Supervisory Board Chairman that they wished to nominate their own candidates for appointment to the Supervisory Board at the Annual General Assembly on May 20, 2016. At the time of printing the Annual Report on March 14, 2016, the Supervisory Board was unable to take a decision on the majority shareholder’s proposal as the list of candidates was not yet available.
The annual financial statements prepared by the Management Board in accordance with the regulations of the German Commercial Code (HGB), the management report of GfK SE and the consolidated financial statements and Group Management Report prepared in accordance with the International Financial Reporting Standards (IFRS) for the 2015 fiscal year were audited and given unqualified approval by the auditor, KPMG Wirtschaftsprüfungsgesellschaft. Every member of the Supervisory Board received a copy of the audit reports at the appropriate time. The Supervisory Board assured itself of the impartiality of the auditor and the auditors’ personnel. The Supervisory Board verified the financial statements and related documents as well as the audit reports in conformity with its duties.
In its meeting on March 9, 2016, the Audit Committee deliberated on the results of its audit and reported its findings to the plenary session of the Supervisory Board at the accounts meeting held on March 11, 2016. The signatory auditors of both the annual and consolidated financial statements were present at both meetings. They reported on the audit in general and on aspects specified as key elements of the audit as defined in the audit plan. Beyond this, they responded in detail to questions from members of the Audit Committee and the Supervisory Board. The Supervisory Board noted and approved the audit reports and, having examined the annual financial statements prepared by the Management Board as well as the consolidated financial statements, gave its approval to discharge the accounts. With this, the accounts were approved. In light of the current and anticipated financial position of the Group, the Supervisory Board deliberated on the proposal for appropriation of the profits put forward by the Management Board and, having found it to be appropriate, gave its approval.
Nuremberg, March 11, 2016