Post on 18-Jun-2020
1© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
FIRST HALF 2016 RESULTS
ANALYST CALL
Matthias Hartmann, CEO
Christian Diedrich, CFO
GfK SE, August 12, 2016
2© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
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.
Disclaimer
3© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Agenda
Business Highlights
Matthias Hartmann, CEO
Financial Results
Christian Diedrich, CFO
1
2
Guidance
Matthias Hartmann, CEO3
Q&A
Matthias Hartmann, CEO
Christian Diedrich, CFO
4
4© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Business Highlights Matthias Hartmann, CEO
5© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Sales growth in % for HY1 2016
1 Data Investment Management segment isolated. Comprises Kantar, TNS, Millward Brown and The Futures Company, among others. Comparison analysis on revenue basis
GfK and Peers
-1.5
-3.4
-1.1
4.5
2.4
n/a0.1
3.3
n/a
6.1
0.5
5.0
Data Investment Management1
Ipsos does not report
growth at constant
FX rates
Nielsen does not report
organic growth
Total Organic At constant currency
HY1 will be released
August 24, 2016
as of March 31, 2016
6© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Consumer Choices Highlights in HY1 2016
Consumer
Choices
(CC)
Sales and margin development• Organic growth of 6.7%; FX effect -1.5%
• Margin down -3.8 pts
Point of Sales Measurement• Overall solid organic sales and profit growth
• Divestment of 'Crop Protection and Animal Health Business' closed in April
• Growth initiatives partially delayed
Media MeasurementBrazil:
• Setup of TAM services on track to deliver all contractual KPIs by year end. Current
progress ahead of agreed ramp-up schedule
• Start of commercialization on July 1. First two new clients on board
• Accreditation by local association CENP achieved
• Provisions taken for potential risks
Kingdom of Saudi-Arabia:
• Data delivery to customer and revenue recognition since January 2016
• Start-up losses impact profitability
7© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Consumer Experiences Highlights in HY1 2016
Consumer
Experiences
(CE)
Sales and margin development
• Organic growth of -7.8%; FX effect -3.0%
• Margin down by 0.9 pts
• Weak order book from 2015 and low order intake in first 5 months impacting growth
Business performance
• Overall heterogeneous performance across markets and products in HY1 2016
• Growth achieved for the new On Demand solutions but could not make up for the significant
decline in order intake for non-branded custom solutions
• Weak performance in the mature markets and China only partially offset by ongoing solid
performance in Latin America and CEE
• Satisfactory development in Consumer Goods & Retail and Financial Services industries
but declines seen in Automotive, Media and Technology
• Newly acquired Netquest business performing nicely to plan
Restructuring actions implemented to improve performance• Push sales of new products and speed up digital transformation
• Step up resource and cost reductions
• Right-size underperforming markets
• Increase utilization and leverage GSC to improve productivity
8© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Financial Results HY1 2016Christian Diedrich, CFO
9© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
GfK Group – Y/Y deterioration in revenue, AOI and margin
• Organic revenue decline of -1.5% driven by sector Consumer Experiences
• Recently acquired NORM and Netquest driving inorganic growth, partially offset by divestiture of ‘Crop Protection and Animal
Health Business’
• Headwind from foreign exchange rate of -2.4%
• Adjusted operating income down -12.3 m€ Y/Y resulting in a margin deterioration of -1.4pts
• Consumer Choices margin down -3.8pts driven by TAM Brazil, TAM KSA and ‘Crop Protection and Animal Health Business’
• Consumer Experiences margin down -0.9pts driven by weak revenue performance
Sales
D Din m€ 2016 vs 2015 2016 vs 2015
Consumer
Choices335.8 3.6% 6.7% -1.6% -1.5% 48.6 -10.8 14.5% -3.8pts
Consumer
Experiences385.6 -8.5% -7.8% 2.3% -3.0% 16.1 -5.5 4.2% -0.9pts
Other 0.2 - - - - -5.8 4.0 - -
Group 721.7 -3.4% -1.5% 0.4% -2.4% 58.9 -12.3 8.2% -1.4pts
ActualActual Total Organic Inorganic FX effect Actual
HY1 2016Growth rate in % AOI Margin in %
10© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Sales in m€
Organic growth in Latin America & CEE/META, Northern Europe flat,
other regions declining
62
2North America
Latin America
139 m€
33 m€
Northern Europe 267 m€
Southern & Western Europe 131 m€
CEE/META 60 m€
Asia and the Pacific 91 m€
In % Q1 Q2 HY1
Total -2.6 -13.6 -8.2
Organic -3.2 -10.7 -7.0
FX 0.2 -0.9 -0.3
In % Q1 Q2 HY1
Total -1.9 -3.7 -2.8
Organic -0.7 0.2 -0.2
FX -1.6 -2.2 -1.9
In % Q1 Q2 HY1
Total 0.0 -4.5 -2.4
Organic 7.1 2.5 4.7
FX -7.1 -7.0 -7.1
In % Q1 Q2 HY1
Total 19.5 -6.6 5.4
Organic 44.9 1.3 21.1
FX -29.5 -14.7 -21.2
In % Q1 Q2 HY1
Total 0.4 -4.1 -2.0
Organic -2.9 -8.0 -5.6
FX - - -
In % Q1 Q2 HY1
Total -1.2 -4.9 -3.1
Organic 1.4 -3.3 -1.0
FX -2.6 -1.4 -2.0
11© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
AOI bridge GfK Group
HY1 2016
8.2
Mix/Other
0.5
Restructuring/
Utilization
0.5
CE revenue
deterioration
-0.6
Acquisitions/
Divestitures
-0.40.3
Media
Measurement
-1.6
HY1 2015
9.5
POS
business
HY1 2016 AOI margin compared to HY1 2015 (in pts)
12© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Group – Staff Development
186
70
-1%
GSC ramp-up
and Other
Acquisitions /
Divestitures
Sector
CE
-315
Sector
CC
-131
YE 2015
13,485
13,295
Q1 2016
Productivity and Capacity management Scope of consolidation and GSC
-190
13© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Consolidated income statement
In m€
2015
HY1
2016
HY1
2016 vs. 2015
Changes in %
Sales 747.2 721.7 -3.4
Gross income from sales 227.5 197.9 -13.0
SGA expenses -163.0 -145.5 +10.7
Other operating expenses (net) -6.4 -150.9 -
Highlighted items 13.1 157.5 -
Adjusted operating income 71.2 58.9 -17.3
AOI Margin 9.5% 8.2% -1.4pts
Highlighted items -13.1 -157.5 -
Operating income 58.1 -98.6 -
Income from participations 0.7 -1.0 -
EBIT 58.7 -99.5 -
EBIT Margin 7.9% -13.8% -21.7pts
Financial result -9.8 -5.9 +39.8
Income before tax 48.9 -105.4 -
Tax on income -20.0 -27.3 -36.5
Tax rate 40.9% -25.9% -
Consolidated total income 28.9 -132.8 -
Earnings per share 0.63 -3.68 -
Tax rate distorted by goodwill
impairment which has no tax effect
Incl. -141.2 m€ goodwill impairment
-1.5% organic “growth”,
-2.4% currency effect
+0.4% from acquisitions
14© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Consolidated income statement w/o goodwill impairment
In m€
2015
HY1
2016
HY1
2016 vs. 2015
Changes in %
Sales 747.2 721.7 -3.4
Gross income from sales 227.5 197.9 -13.0
SGA expenses -163.0 -145.5 +10.7
Other operating expenses (net) -6.4 -9.7 -52.2
Highlighted items 13.1 16.3 +24.1
Adjusted operating income 71.2 58.9 -17.3
AOI Margin 9.5% 8.2% -1.4pts
Highlighted items -13.1 -16.3 -24.1
Operating income 58.1 42.6 -26.6
Income from participations 0.7 -1.0 -
EBIT 58.7 41.6 -29.1
EBIT Margin 7.9% 5.8% -2.1pts
Financial result -9.8 -5.9 +39.8
Income before tax 48.9 35.7 -27.0
Tax on income -20.0 -27.3 -36.5
Tax rate 40.9% 76.5% +35.6pts
Consolidated total income 28.9 8.4 -70.9
Earnings per share 0.63 0.19 -70.9
Increase mainly from deferred tax, e.g.
due to valuation of deferred tax assets
resulting from risk provision
Increase from risk provisions regarding
Media Measurement business and costs
related to divestment of ‘Crop Protection
and Animal Health Business’
See next slide
Interest expenses and FX effect
improved
15© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Highlighted items
In m€
2015
HY1
2016
HY1
Goodwill impairment - -141.2 *)
Write-ups and write-downs of additional assets
identified on acquisitions-2.5 -3.5
Income and expenses in connection
with share and asset deals-0.1 1.6
Income and expenses in connection
with reorganization and improvement projects-8.2 -4.9
Personnel expenses for share-based incentive payments -1.9 -2.1
Currency conversion differences -0.7 1.9
Income and expenses related to one-off effects
and other exceptional circumstances0.4 -9.4
Total highlighted items -13.1 -157.5
Total highlighted items w/o goodwill impairment -13.1 -16.3
Sector CE; all six regions affected
Includes provisions for potential risks
in Media Measurement business;
PY: Gain from sale of real estate in
Switzerland
Severances decreased by 0.9 m€;
SAP rollout costs (“REACH”)
reduced by 1.3 m€
+5.1 m€ income from the
deconsolidation of ‘Crop Protection
and Animal Health Business’
*) goodwill impairment reflected in the balance sheet: -139.2 m€
(average FX rates vs. spot rates)
16© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Cash flow
In m€
2015
HY1
2016
HY12016 vs. 2015Changes in m€
Consolidated total income 28.9 -132.8 -161.7
Amortization (incl. reversal) 31.6 184.0 +152.4
Changes in inventories, receivables, payables -4.3 6.3 +10.7
Others -18.7 15.0 +33.7
Interest result 8.2 6.6 -1.5
Taxes paid -14.2 -22.3 -8.1
Cash flow from operating activity 31.4 56.9 +25.5
CAPEX -42.7 -37.5 +5.2
Acquisitions, other financial investments
and asset disposals-2.7 -3.0 -0.3
Free cash flow after acquisitions,
other investments and asset disposals-14.0 16.4 +30.4
Cash flow from financing activity 10.8 -21.1 -31.9
Incl. 141.2 m€ goodwill impairment
Operating working capital improved
PY: Turkey tax and penalty
payment -16.2m€
PY: High investments in tangible
fixed assets (TAM meters)
Net borrowing reduced by 35.1 m€
Includes balance of Netquest
acquisition and divestiture of ‘Crop
Protection and Animal Health
Business’
PY: Benefit from French tax group
(tax repayment); Δ -5.3 m€
17© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
GuidanceMatthias Hartmann, CEO
18© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Guidance 2016
Sales coverage as at the end of June 2016 reached 78.1% of predicted annual sales (2015:
81.3%), which is within the historic range of 77% to 81% over the last 5 years.
While the Company will continue to aggressively drive its transformation initiatives and will do its
utmost to improve results, it is possible that sales growth will remain below market and that the
margin will be below prior year's level. This will depend on the development of the order intake in
the Consumer Experiences sector and the progress of the growth initiatives in the Consumer
Choices sector.
2016
Guidance
19© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Q&AMatthias Hartmann, CEO
Christian Diedrich, CFO
20© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
GfK Investor Relations Team
investor.relations@gfk.com
http://twitter.com/GfK
+49 911 395 – 2012
STAY IN TOUCH WITH US
21© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Key financial dates to remember
Q3/ Nine Months Results 2016 November 14, 2016 Available online on gfk.com
Trading Statement January 31, 2017 Available online on gfk.com
Annual Report 2016
Accounts Press conferenceMarch 14, 2017 Available online on gfk.com
Q1/ First Quarter Results 2017 May 15, 2017 Available online on gfk.com
Annual General Meeting May 18, 2017 Fuerth
H1/ Half Year Results 2017 August 14, 2017 Available online on gfk.com
Q3/ Nine Months Results 2017 November 13, 2017 Available online on gfk.com
Please contact investor.relations@gfk.com for further information on any of the publications or events
22© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Events to remember
Roadshow, Hauck & Aufhäuser August 16, 2016 London
Commerzbank Sector Conference September 1, 2016 Frankfurt
Berenberg/Goldman Sachs Conference September 20, 2016 Munich
Baader Investment Conference September 21, 2016 Munich
Roadshow San Francisco September 22/23, 2016 San Francisco
TMT Conference Morgan Stanley November 17/18, 2016 Barcelona
Capital Markets Day February 9/10, 2017 Frankfurt
Please contact investor.relations@gfk.com for further information on any of the publications or events
23© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
Back-up
24© GfK 2016 | HY1 2016 Results Presentation | August 12, 2016
GfK Group – Single Q2 2016
• Organic revenue decline of -3.7% driven by sector Consumer Experiences
• Recently acquired NORM and Netquest driving inorganic growth, offset by divestiture of ‘Crop Protection and Animal Health
Business’
• Headwind from foreign exchange rate of -2.3%
• Adjusted operating income down -17.1 m€ Y/Y resulting in a margin deterioration of -4.0pts
• Consumer Choices margin down -6.5pts driven by TAM Brazil, TAM KSA, and ‘Crop Protection and Animal Health Business’
• Consumer Experiences margin down -2.8pts driven by weak revenue performance
Sales
D Din m€ 2016 vs 2015 2016 vs 2015
Consumer
Choices165.9 -0.7% 3.7% -3.1% -1.3% 21.2 -11.1 12.8% -6.5pts
Consumer
Experiences195.2 -10.0% -9.5% 2.6% -3.1% 8.4 -7.1 4.3% -2.8pts
Other 0.1 - - - - -2.8 1.1 - -
Group 361.2 -6.1% -3.7% -0.1% -2.3% 26.8 -17.1 7.4% -4.0pts
Actual Actual
Single Q2
2016
Growth rate in % AOI Margin in %
Actual Total Organic Inorganic FX effect