first half 2016 results - gfk...aug 12, 2016 · © gfk 2016 | hy1 2016 results presentation |...

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


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


Agenda

Business Highlights


Financial Results


1

2

Guidance

Matthias Hartmann, CEO3

Q&A



4


Business Highlights Matthias Hartmann, CEO


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


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


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


Financial Results HY1 2016Christian Diedrich, CFO


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 %


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


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)


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


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


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


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)


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€


GuidanceMatthias Hartmann, CEO


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


Q&AMatthias Hartmann, CEO



GfK Investor Relations Team

[email protected]

http://twitter.com/GfK

+49 911 395 – 2012

STAY IN TOUCH WITH US

mailto:[email protected]


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 [email protected] for further information on any of the publications or events


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 [email protected] for further information on any of the publications or events


Back-up


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

first half 2016 results - gfk...aug 12, 2016 · © gfk 2016 | hy1 2016 results presentation |...

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