2 © GfK 2015 | Capital Market Day 2015 | January 2015
Friday, January 23, 2015
08:30 AM
09:00 AM
09:10 AM
09:50 AM
10:30 AM
11:00 AM
Registration and coffee
Introduction
Bernhard Wolf, Head of Investor Relations
Presentation and Q&A
Matthias Hartmann, CEO
Presentation and Q&A
Debra A. Pruent, COO Consumer Experiences
Coffee Break
Presentation and Q&A
Dr. Gerhard Hausruckinger, COO Consumer Choices
3 © GfK 2015 | Capital Market Day 2015 | January 2015
Friday, January 23, 2015
11:40 AM
12:20 PM
12:30 PM
13:40 PM
06:00 PM
Presentation and Q&A
Christian Diedrich, CFO
Closing remarks
Matthias Hartmann, CEO
Lunch Break
Optional: Meetings with Board Members according to personal schedule
In parallel: A look into the machine room – Presentation of GfK projects and products
End of Capital Market Day
4 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK CAPITAL MARKET DAY 2015
SHAPING OUR FUTURE Matthias Hartmann, CEO
January 2015
5 © GfK 2015 | Capital Market Day 2015 | January 2015
Consumer behavior is constantly evolving
Mobile as a
catalyst for
change:
always on
Rise of digital
with growing
number of
touch points
Accelerating
speed
of innovation
Increasingly
complex
consumer
experiences
6 © GfK 2015 | Capital Market Day 2015 | January 2015
Resulting in a new and unstructured data landscape
Then Today
7 © GfK 2015 | Capital Market Day 2015 | January 2015
Consequently, our clients needs are changing
Clients want speed and fast results
Clients want insights with impact
Clients want data from all sources,
but need integration
Clients want proof of
ROI to justify investments
8 © GfK 2015 | Capital Market Day 2015 | January 2015
We have transformed GfK rapidly
Then Today
Decentral research network
with
Customized local client solutions
based on
Local operations and data collection, with duplicated systems and IT
focusing on
Local profit optimization on back of increasing investment backlog
leading to
Lack of scale and reach
Global consistent matrix organization
Globally standardized product portfolio
Global operations in centers, based on harmonized processes, systems and platforms
Optimization of global P&L and long term investment plan
Globally scaling business model
with
based on
focusing on
leading to
9 © GfK 2015 | Capital Market Day 2015 | January 2015
One GfK: Business Model for Global Scale & Results
And established our business model for the future
Consumer
Choices
(WHAT)
Consumer
Experiences
(WHY)
Retail
Measurement
Audience
Measurement
Mobile
Measurement
Cross-Media
Measurement
Brand &
Consumer
Experience
User Experience
Measurement
Communications
Measurement
Market
Opportunity
& Innovation
Digital
Market
Intelligence
Data
Partnerships
Data
Integration Platforms
Data &
Marketing Science
Delivering on clients' needs
Speed – Insights with Impact – Data from all Sources – Proven ROI
10 © GfK 2015 | Capital Market Day 2015 | January 2015
Data Integration as differentiator
A core panel and integration platform that serves
as calibration tool, as link between various data
sources and for data enrichment of external and
internal data sources
The GfK Reference Layer …
Proprietary, customer and third party data
Data Sources …
Defines the client needs that are current
or potential future opportunities for GfK
Insights that Matter
Consumer
Profiles
Measuring
Technology
Data Integration
Platform
enriched by
enabled by
11 © GfK 2015 | Capital Market Day 2015 | January 2015
Powered by an integrated and agile IT platform
Delivered
through
Integrated
within
Powered
by
Servicing GfK Clients
Infr
astr
uctu
re &
Pla
tform
as a
Serv
ice
GfK Cloud
GfK
Data Lake
Client Business
Applications Consumer
Profiles
Measuring
Technology
Data Integration
Platform
enriched by
enabled by
12 © GfK 2015 | Capital Market Day 2015 | January 2015
Working on approach for new markets
Proofpoint: Global Google partnership announced
Partnership with Google in which we provide our knowledge
and data regarding cross-media behavior to help power
research into media consumption across different screens
Now signed global framework agreement with Google
to explore an expansion into new markets
Extensions to current contract base in Netherlands & Germany
13 © GfK 2015 | Capital Market Day 2015 | January 2015
Making the scale shift in the desired direction
Less …
More!
Consumer Choices: Set up for Growth!
• Retail Tracking
• New Panels & Markets
• Audience Measurement
Consumer Experiences: Portfolio Shift!
• Standardized products
• Passive measurement
• User Experience
• Automation
Cross Sector: More synergies!
• Mobile Measurement
• Cross Media
• Data Platforms
Consumer Experiences: Portfolio shift!
• Primary data collection
• Ad Hoc
• Local Operations
14 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK CAPITAL MARKET DAY 2015
CONSUMER EXPERIENCES Debra A. Pruent, COO
January 2015
15 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Custom research relevance and client needs
2. How have we prepared ourselves for this "new world"?
3. Business area opportunities
4. How will we continue to drive profitability?
16 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Custom research relevance and client needs
2. How have we prepared ourselves for this "new world"?
3. Business area opportunities
4. How will we continue to drive profitability?
17 © GfK 2015 | Capital Market Day 2015 | January 2015
Consumer Experiences – What do we do for clients?
A lot more than survey data collection!
Our
data
assets
Other
data
assets
Your
data
assets
Unique data Innovation & expertise
Big data,
digital, real-time
analytics
Innovative
technology
platforms
Industry
expertise
Proven market
research
expertise
Smart decisions
• Winning strategies
• Business opportunities
Insights
18 © GfK 2015 | Capital Market Day 2015 | January 2015
Consumer Experience provides the “why” behind the “what” of
behavioral measurement data for client's products and services
Why …
… do customers like my competitors
new product better than mine?
… isn't my target market gaining awareness
of my product through my campaign?
… is the time spent
by consumers on
my website so short?
… are customers not repurchasing
my product/service?
… are customers
returning my product?
… isn't demand
being generated?
… should these certain product features
be included in my product?
… will "this" be the next big
innovation in my market?
… do customers like/dislike
my product, service, website?
19 © GfK 2015 | Capital Market Day 2015 | January 2015
The most significant disruption to our business model …
Then Today
20 © GfK 2015 | Capital Market Day 2015 | January 2015
Has also created multiple sources of secondary data
21 © GfK 2015 | Capital Market Day 2015 | January 2015
Consumers now have the power to quickly influence the success
or failure of brands circumventing traditional product launch and
marketing plans
Source: Altimeter Group 2013, Sprout social index, Dec 2013
72% of visitors to a
travel review site were
influenced
by a review
22 © GfK 2015 | Capital Market Day 2015 | January 2015
Client needs have evolved
Clients want speed and fast results
Clients want insights with impact
Clients want data from all sources,
but need integration
Clients want proof of
ROI to justify investments
23 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Custom research relevance and client needs
2. How have we prepared ourselves for this "new world"?
3. Business area opportunities
4. How will we continue to drive profitability?
24 © GfK 2015 | Capital Market Day 2015 | January 2015
Our Transformational Focus Areas
Product
Portfolio
Commercial
Excellence
Operational
Performance
25 © GfK 2015 | Capital Market Day 2015 | January 2015
Product Portfolio
BaCE = Brand and Customer Experience | DMI = Digital Marketing Intelligence | MOI = Market Opportunity and Innovation | UX = User Experience
Global Branded Products: Blockbusters Other Global Branded Products
Established core
global product groups
Developed and launched
global modernized portfolio
Defined Product Management
& Innovation process
Interlock of Product
and Industry functions
Investment and
integration of Digital
MOI
• GfK Innovation
Roadmap
BaCE
• GfK Experience
Effects
• GfK Echo
UX
• UX Product Suite
BaCE
• GfK Brand Vivo
• GfK Customer
Harmonics
MOI
• GfK FuturePath
• GfK FutureWave
• GfK MarketBuilder DDS
9 "Blockbuster"
products
38% of sales from
Global branded products
8 products in the
Pipeline for 2015
MOI
• GfK Smart Discovery
• GfK Smart Creative
• Disease Atlas
BaCE
• GfK AD*VANTAGE/Express
• GfK Exposure Effects
• GfK Loyalty Plus
DMI
• GfK Purchase Journey
20 new products
launched
DMI
• GfK SMI Getting it done
2012 2013 2014
Key Blockbusters
only launched in late 2014
26 © GfK 2015 | Capital Market Day 2015 | January 2015
Operational Performance
2012 2013 2014
Prioritized product & process launches in
key markets: US, Germany, UK & BRICs
Global operational performance
management system and metrics
Financial performance improvement focus
for selected markets (CE Taskforce)
Targeted expansion
into new markets
Launching GfK
resource marketplace
Evaluation and preparation of non-performing
markets and non-core businesses for divestment
Ramp of offshoring hubs (ROC:
Resource Optimization Centers)
Global common process
and quality roll out
ROC end-to-end support
for new global Products
Global Online panel platform (Atlas)
and central sampling
Investment in end-to-end
Drive technology platform
Global common data-collection
platform strategy
+10% increase
in share of ROC
hours vs 2012
59% of sales covered by Global
Operational Performance
Management System resulting
in marked AOP improvement
vs. previous year (excluding Swiss
Pension effect)
16 data collection
software platforms
migrated to 2 standard
global platforms
Getting it done
Further integration of products on DRIVE behind
schedule
27 © GfK 2015 | Capital Market Day 2015 | January 2015
Commercial Excellence
Established Global
Industry Groups
Introduction of Sales Support for
key opportunities
Introduction of
Early Solution Calls
Full launch of
global CRM
Full launch of
Account Planning
Launch of Consultative
Sales Training
Strengthened Global
Marketing function
Launch of
Negotiation Training
Launch new sales force
profile and incentive structure
19 current
Global Key
accounts
60% revenue
now covered by
planned
accounts
6% reduction of
overall number
of clients
(unprofitable
“long tail”)
Global CRM + 4
new steering
systems in place
Sales and
Negotiation
training for key
account roles
Getting it done
2012 2013 2014
5% Sales decline
from Global Key
accounts in 2014
(driven by Tech
sector changes
and price
erosion)
Tracker revenue
(not profit) down
due to shift to
tech platforms
28 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Custom research relevance and client needs
2. How have we prepared ourselves for this "new world"?
3. Business area opportunities
4. How will we continue to drive profitability?
29 © GfK 2015 | Capital Market Day 2015 | January 2015
Need to
understand
Consumers'
Experiences
Digital User
Experience
Our future business will be driven by three key areas
30 © GfK 2015 | Capital Market Day 2015 | January 2015
We will continue to help clients improve their performance in key
business areas while delivering on new client needs
Speed
Data Integration
Provocative Insight
Prediction/ROI
Develop strategic
opportunities
Grow
relations
Create
experiences
& forecast
Optimize in-market
experiences
31 © GfK 2015 | Capital Market Day 2015 | January 2015
Technology and Data integration will play a much bigger role
…addresses client needs but slows near-term revenue growth
Addressing Client
business questions
Leveraging Integrated
Data Sources
Powered by
Servicing GfK Clients
Infr
astr
uctu
re &
Pla
tform
as a
Serv
ice
GfK Cloud
GfK Data Lake
DRIVE-powered Consumer Experiences Products
32 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK Brand Vivo delivers on new client needs
Tracks how consumers experience, connect and engage
with brands
Delivered via DRIVE platform
Unique and validated KPIs measuring
how brand experiences build relationships
Survey data + social media + sales & other client
data sources
KPIs impact on behavior and sales
Using GfK's Consumer Brand Relationships model (CBR)
• Featured in Harvard Business Review:
• Winner of ARF Great Minds Innovation Award
33 © GfK 2015 | Capital Market Day 2015 | January 2015
"Buying experiences
makes people happier,
with a greater sense of
well-being than purchas-
ing goods."
"Businesses will live or
die not by the attributes
they promise but by the
brand experiences and
value they offer."
"We need new industry
models that truly integrate
all our communications, to
make sure that consumers
engage with brands that
offer a consistent message
and brand experience." Pine and Gilmore
Welcome to the Experience Economy
Hauser and Lenderman
AdWeek
Keith Weed
Unilever CMO
Our BaCE Portfolio addresses “The Experience Economy” trend
BaCE = Brand and Customer Experience
34 © GfK 2015 | Capital Market Day 2015 | January 2015
Our Digital portfolio will continue to bring overall growth
GfK Digital
Helping clients understand how consumers use digital to gain awareness of, evaluate,
shop and purchase products and services … NOT online surveys, digital reporting (e.g. dashboards)
Key GfK Products
• GfK Purchase Journey
• GfK Social Media Intelligence (SMI)
• GfK Opinion Planet
• GfK Exposure Effects
• + joint effort with Consumer Choices:
• GXL, Mobile Insights, Location Insights, Mobile Ad Effectiveness
• Social TV Dashboard
Our Key Strengths
• Ad hoc behavioral analysis (LEOtrace metering)
• GfK Social Media Intelligence (SMI)
• GXL
Coca Cola feedback after a SMI presentation:
"… we all agree with what you are saying and
we completely agree with your POV. None of the
other BIG agencies are delivering this message"
35 © GfK 2015 | Capital Market Day 2015 | January 2015
User Experience is a new and growing area where GfK
is the only global provider
User Experience (UX)
Helping clients understand how consumers "use" products and websites to 1) improve usability and
success of early stage design and 2) optimize already launched products
Key GfK Products
• UX Design Test
• UX Measurement (UX Score, UX Tracker)
Our Key Strengths
• Unique global offering with offices in 13 markets around the world with 25+ user
research labs
• Key link to GfK’s competencies in Technology, Retail and Health sectors
• Leverages strengths in mobile and online
36 © GfK 2015 | Capital Market Day 2015 | January 2015
Our business mix will continue to change over time
“Traditional CE”
Slow/measured growth with
planned increase in share of
Branded Products vs Non Branded
Products from 38% to 75%
Doubled current business and
expect continued strong growth
High future growth potential User Experience (UX)
Digital
Branded
Products
Non-Branded
Products
Grow to consistent double-digit
(technology, operational
efficiency gains)
Grow to strong double-digit
(after investment phase)
Double digit, stable
Expect continued declines Lower but stable
(eliminate low-profitable work)
Business growth Opportunity Margin Potential
37 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Custom research relevance and client needs
2. How have we prepared ourselves for this "new world"?
3. Business area opportunities
4. How will we continue to drive profitability?
38 © GfK 2015 | Capital Market Day 2015 | January 2015
Now Shape ConsumerExperiences Portfolio
Productivity Manage Cost Base Future
Continued focus on key measures driving margin growth SCHEMATIC
10+%
• Country Portfolio
• Product Portfolio
• Client Portfolio
• Utilization/
Resource/
Capacity
Management
• Procurement
• Shared Services
• Global Production
Hubs
39 © GfK 2015 | Capital Market Day 2015 | January 2015
Summary
Consumer Experience remains very relevant to clients
Speed, provocative insights, data integration and predictive
analytics are the key deliverables to drive business
Consumer Experience has significantly transformed
and is ready to seize the opportunities
Profit growth remains our key focus!
40 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK CAPITAL MARKET DAY 2015
CONSUMER CHOICES Gerhard Hausruckinger, COO
January 2015
41 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Overview achievements Consumer Choices 2012 – 2014
2. World-class technological infrastructure: Example Audience Measurement
3. Unique industry offerings: Example GfK Supply Chain Management Insights
4. Perspectives for Consumer Choices
42 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Overview achievements Consumer Choices 2012 – 2014
2. World-class technological infrastructure: Example Audience Measurement
3. Unique industry offerings: Example GfK Supply Chain Management Insights
4. Perspectives for Consumer Choices
43 © GfK 2015 | Capital Market Day 2015 | January 2015
• Consistent organic growth
of 3 – 4%
• Strong margin despite
significant investments
• New panels/businesses
• Systems
• Transformation of low-per-
forming/critical businesses
• Improvement of working
capital
• Maintained good momentum
in Retail Tracking
• Core and new panels
• Emerging markets
• New industries/client
segments
• Successfully transformed
Audience Measurement
• Achieved market readiness
for Mobile & Location Insights
• Designed and built
highly modern IT and BA
infrastructure, e.g.
• StarTrack
• Evogenius
• TV/Online meters
• Improved our quality
• Established globally
consistent processes
• Built high-performance
organization
Main achievements Consumer Choices 2012 – 2014:
Well positioned to further accelerate our growth
Financials Driving growth Securing the basis
44 © GfK 2015 | Capital Market Day 2015 | January 2015
• One CRM
• Global/local BI
• KPI Dashboard Ops
• NewBiz Tracking
• SRM
• Training Programs
• Negotiation
• Project Management
• Sales Excellence
• Succession Management
• Consistent incentive schemes
• Global Staff Metrics
• StarTrack Modernization
• Executive Dashboards
• Evogenius
• Portals/Dashboards
• Music
• GXL
• Mobile Insights
Examples for supporting initiatives:
Our prerequisites are in place
• Coding Competence Centers
• Standardized Global Processes
• 2d2w Initiative
• Sample Expansion
• Automatic Text Recognition
Levers for
enabling the
CC organi-
zation
45 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Overview achievements Consumer Choices 2012 – 2014
2. World-class technological infrastructure: Example Audience Measurement
3. Unique industry offerings: Example GfK Supply Chain Management Insights
4. Perspectives for Consumer Choices
46 © GfK 2015 | Capital Market Day 2015 | January 2015
The media industry is in massive transformation:
Both challenge and opportunity for our industry
Audience fragmentation Change in technology
Future growth opportunities New business models
• Increasing media usage
• Digital natives
• Proliferation of devices and channels
• Personalization
• Explosion of digital consumer traces
• Superfast distribution of content
via IP, also wireless
• Media Servers in
the Cloud & in-home
• Large, intelligent multi-purpose screens
• Continued market need to measure
media consumption
• Neutral, objective third-party
measurement becoming even
more important
• New technologies and
methods required
• Contract expansions possible
• Synchronized content
across all screens
• TV ad servers allow targeting
and creative optimization
• Advertising on EPG
• Transactional use by micro-payments
and subscriptions
47 © GfK 2015 | Capital Market Day 2015 | January 2015
Only very few MR companies fulfill the success
factors to cope with these developments
Independency Portable and
residential
people meter
Granularity
(data integration)
Out of Home Quality
Single Source End to End
Software
Software to
measure digital
Speed
Key success factors
48 © GfK 2015 | Capital Market Day 2015 | January 2015
We have created a unique integrated package
to address the evolving market needs
GfK Value Proposition
GfK Package: Mandatory for single source and cross media measurement
Independency
Meter Technology
Able to measure second
by second covering all devices
Real Time Ratings
Continuous data delivery
IT-/Operational Infrastructure
(e.g. Mongo Database) Enabling the
management of big and different data sets
End-to-End Software
One platform for production,
reporting and advertising
Unique
GfK
Package
Key
Requirements
Granularity Speed Quality
49 © GfK 2015 | Capital Market Day 2015 | January 2015
We continue to invest in state-of-the art technology to stay
relevant for our clients and keep our competitive edge
Further enhancement and completion
of device measurement
To deliver granular and robust insights
for niche services and long tail
To assign usage information from external and
inhomogeneous data sources without individual
usage and demographic information
Router
technology
Return Path Data
Integration
Viewer
Ascription Modelling
50 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Overview achievements Consumer Choices 2012 – 2014
2. World-class technological infrastructure: Example Audience Measurement
3. Unique industry offerings: Example GfK Supply Chain Management Insights
4. Perspectives for Consumer Choices
51 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK Supply Chain Management Insights for the IT industry:
Navigating successfully the end-to-end value chain
Navigating the end-to-end value chain
GfK Supply Chain
Management Insights
GfK Product Catalogs
In depth "Information Management" on SKU
Level along the end-to-end Supply Chain (Vendor,
Distributor, Reseller, Retailer, End–Customer)
GfK Distribution
"Order Management & Logistics Optimization"
for driving an efficient go-to-market strategy
on SKU Level
GfK Point of Sales
"Sales Management & Marketing Optimization"
for managing margins & demand
GfK Forecasting
"Volume Management & Sales Planning"
across categories & countries for optimizing
order behavior and stock levels
31
52 © GfK 2015 | Capital Market Day 2015 | January 2015
The different players in the IT industry benefit from integrated
insights and services across the whole value chain
GfK Product
Catalogs
GfK
Distribution
GfK Point
of Sales
GfK
Forecasting 31
OEM/Vendor
Sell-through pricing POS premium Stock levels "Fiscal year effects"
B2B/Customers B2B/Large Enterprice SOHO&SME
E-
Commerce
Mass-
Merchan-
diser
CE
Stores
Telecom
Retailer
Office
Retailer
Computer
Retailer
SH
SME
Se
ll-O
ut
Se
ll-T
hro
ugh
Sell-In
Customer demand Street pricing Seasonal effects Channel structures
SH
Large
Enterprice
Assortment structures
Order behavior
Distribution & Sub-Distribution (Broadliners, Special-Distributors, Value-Added-Distributors)
53 © GfK 2015 | Capital Market Day 2015 | January 2015
The industry we are targeting with this innovative
offering is highly attractive
54 © GfK 2015 | Capital Market Day 2015 | January 2015
3D Accessories, 3D Printing Devices, Amplifier, Analog Cameras, Audio
Conferencing Systems, Audio Home Systems, Audio Tapes, AV Mounting Solutions
and Furn, Bags and Cases, Battery Charger, Binoculars, Broadband/Voice, Cables,
Calculators, Camera Docking Station, Camcorder, Car Audio, Car Navigation, Car
Speakers, Car Vision, Cartridgespd, Cassette Decks, CD Rec Media, CD-Player, Coated
Paper, Comm. Cards, Communication Device, Copiers, CRT-TV, DATA-/Video-
Projector, Desk Computing, Dictation Systems, Digital Cameras, Digital TV
Accessories, Digital TV Sub., Disc Printers, Docking/Mini Speaker, Document
Shredders, DVD Recording Media, Electronic Flash, Energy Monitors, Ergonomic
Accessories., Facsimile, Films, Finisher, Games Software, Gaming & Leisure
Devices, GPS Receiver, Headphones, Headsets, Housings, Image Displays, Imaging
Accessories, Imaging Projector, Indoor TV Aerials, Interchangeable Lenses,
Keyboards/Piano , Keying Devices , Le isure GPS, Let ter ing Machines ,
Loudspeakers, Mainboards, M-Broadband Sticks, MD Rec Media, Media
Gateways, Mediadevices, Media Tablets, Memory Cards, Memory Modules, MFD,
Microphones, Multimedia-Devices, Mobile Computing, Mobile Enhancement,
Mobile Gaming, Mobile Tariffs, Monitors, Multidisc Drive Total, Music
Downloads, Office Paper, Personal Stereo, Phablets, Phone Device, PMP
Accessor ies , Po in t ing Dev, Portable Media Player , Por tab le -TV,
Powermanagement, Powerpacks, Printing Devices, Processor, PTV/Flat,
Radio Devices, RC Replacement, Receiver, Ringtone Downl., Scanners,
SEC-Devices, Scanners, SEC-Devices, SET-TOP-Boxes, Smart-Mobilephones,
Software, Storage, Telefonsystems, Tuner, Turntable, Universal RC, USB Memory,
VCR, Video Gaming Consoles, Video Player/Recorder, Video Tapes, Visual Cams
We were able to achieve a lot in 2014
More than 160 distributors are already
cooperating with GfK – more to come!
More than 600,000 different SKUs are processed
continuously covering 35 countries week by week
More than 400 technology categories are tracked
& available on SKU level on a weekly basis
Online & customized reporting is available
(all markets & categories) for clients & distributors
Benchmark reporting is set up for data-
providing distribution partners
Dynamic confidentiality rules guaranteeing privacy
protection following ADM & ESOMAR standards
+
55 © GfK 2015 | Capital Market Day 2015 | January 2015
These insights allow us to provide unique benefits to our
clients for marketing, sales and supply chain optimization
56 © GfK 2015 | Capital Market Day 2015 | January 2015
Content
1. Overview achievements Consumer Choices 2012 – 2014
2. World-class technological infrastructure: Example Audience Measurement
3. Unique industry offerings: Example GfK Supply Chain Management Insights
4. Perspectives for Consumer Choices
57 © GfK 2015 | Capital Market Day 2015 | January 2015
Perspectives for Consumer Choices:
A clearly defined roadmap
Short-term Mid-term
Retail
Tracking
Audience
Measurement &
Mobile Insights
Innovate Our Core Offerings
Scale Our Growth Initiatives
Transform Processes
& Systems
• Close gaps in emerging markets
• Provide unique integrated client solutions
• Roll out new businesses globally
• Explore further attractive industries
• Automate and streamline core processes
• Leverage modern infrastructure and BA landscape
Launch new growth markets
(Brazil, KSA …)
Launch GfK Crossmedia Link
Get traction on initial MLI markets
Convert and further grow sales pipeline
Establish GXL in core markets
Secure additional markets/partnerships
58 © GfK 2015 | Capital Market Day 2015 | January 2015
Summary: We are convinced to have strong growth
perspectives in all segments of Consumer Choices
Growth levers for Consumer Choices SCHEMATIC
Today Retail Tracking AudienceMeasurement
Mobile & Locationinsights
Mid-term future
AM/
MLI
Retail
Tracking
Core Panels
• Innovation
• Gap-filling
New Panels
• Launch
• Rollout
M&A
Core Markets
• Innovation
• Digital/Mobile
New Markets
• Currency
Business
• GXL
Digital Factory
Geographic expansion
• Core markets
• Different operators
Combination of
measurement
approaches
• Network-centric
• User/device-centric
• Content-centric
Integration
with other data
59 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK CAPITAL MARKET DAY 2015
SHAPE FOR GROWTH BASED ON
SOLID FINANCIALS Christian Diedrich, CFO
January 2015
60 © GfK 2015 | Capital Market Day 2015 | January 2015
Sustainable profitable growth targets supported
by solid financials
Risk management
Managing risk appetite and risk exposure
• Investment grade rating
• Maturity profile
• FX sensitivities
• Hedging strategy
Competitive cost structure Resource allocation
Drive profitable growth
• Sector CC through investment in new business
• Sector CE through shift to higher
margin global products
Portfolio management
Shape
for growth
based on solid
financials Driving profitability improvement
• Global standardization
• Supply chain
• Capacity/Utilization
• Management by affordability
• Offshoring
Shift from top line to bottom line focus
• Acquisitions
• Strategy focus on organic growth
• Asset based targets
• Divestitures
• Sale/Closure of non strategic/
underperforming units
61 © GfK 2015 | Capital Market Day 2015 | January 2015
GfK aims for a balance sheet and a finance structure
corresponding to an investment grade rating
• No official rating of GfK, but since 2010 banks are considering GfK as “investment grade”
• Equity and long-term liabilities are covering around 90-100% of the long-term assets of GfK
Guiding rules for investments, M&A and dividends
• Deviations from investment grade KPIs only acceptable for 1 year
• IFRS Net Debt/EBITDA under 2.5 (investment grade)
• Dividend payout ratio within the corridor of 25% – 35% of consolidated income
Investment grade
EBITDA interest coverage 21.5
Non-Investment grade
11.3 7.0 4.9 2.2
AA A BBB BB B
IFRS Net Debt/EBITDA 1.0 1.6 2.3 3.3 5.3
Long-term Debt – EMEA Median
3-y average 2010 – 2012
S&P – adjusted key industrial financial ratios
12.4 1.85 GfK as of 9/14 IFRS
62 © GfK 2015 | Capital Market Day 2015 | January 2015
Net debt further decreased in 2014
2009 2010 2011 2012 2013
2014 (q3
estimate)
CAPEX in € m 49 49 63 71 80 <100
M&A in € m 58 41 15 107 38 10
IFRS Net Debt EBITDA
IFRS Net Debt/EBITDA 3.14 2.19 1.63 2.40 1.90 <2.00
500 429
364 467 428
159 196 223 195 225
Net debt to EBITDA (IFRS) should not exceed 2.50 – investment grade
63 © GfK 2015 | Capital Market Day 2015 | January 2015
Maturity profile has been improved by Schuldschein transaction
and extension of Revolving Credit Facility (2019/2021)
Debt maturity schedule and total available funding
• Currently the Revolving Credit Facility of € 200m is used as backup line
• Long term funding via € 125m Schuldschein > 5 Years
• Renegotiation of Bond (€ 200m) or equivalent funding alternative will start in 2015
• Refinancing cost of Bond will be reduced due to lower interest rate and credit margin
Bond Bank loans Schuldschein floating Schuldschein fix Available lines/RCF
0
250
500
750
2014 2015 04/2016 2016 2017 2018 2019 2020
64 © GfK 2015 | Capital Market Day 2015 | January 2015
FX sensitivities: How do moving exchange rates affect
GfK‘s top line?
1 Please note that sales in a currency do not necessarily reflect sales in the respective country as contracts are not always based on local currencies
What a 10% rise of a currency means for GfK’s sales figure
2013 Sales in € m1 Influence of 10% rise
Group 1.495
EUR 697 -
USD 261 1.7%
GBP 150 1.0%
CNY 42 0.3%
CHF 39 0.3%
JPY 37 0.2%
RUB 30 0.2%
BRL 25 0.2%
• Only USD and GBP influence GfK‘s top line by 1% or more
• 75% of GfK’s sales are in EUR, USD or GBP
Update on Russia – Risk Mitigation
Around 2% of total sales are in Russia
Early 2014, local cash was transferred
to GfK SE via dividends or €- loans
Approx. 20% of the cash is kept in RUB
to cover local costs, 80% in EUR or USD,
to cover international costs (natural hedge)
International contracts should be negotiated
in EUR or USD
65 © GfK 2015 | Capital Market Day 2015 | January 2015
Policy for hedging of FX- Exposure
FX- Hedging principles in place
Natural hedges or net investment hedges whenever possible
Currency adjustment clauses to be negotiated
No speculation no Treasury transaction without an underlying business transaction
Concentration of FX- Exposure at Group level, centrally hedged
Translation risk is not hedged
Transaction risk hedged above € 100k equivalent per invoice, below € 100k no hedge
necessary
Hedging costs exceeding 5% p.a. subject to review
66 © GfK 2015 | Capital Market Day 2015 | January 2015
We reduce the complexity of our company network
End
Number of legal entities
Reduction Expansion Entities as at Dec. 31st
1
-21%
-20%
228 221 218
209
224
209 203 201
189 180
20
17 16
22 6
8 10 11
4
27 20
25 7
21
14 12
23
13
150
165
180
195
210
225
240
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
In 2015 we plan to eliminate further 12 legal entities
67 © GfK 2015 | Capital Market Day 2015 | January 2015
Big TAM contracts won in 2013 have required
significant investments
• TAM-contracts in Brazil and
KSA needed significant invest-
ment in panel build-up in 2014
• New business fields in CC
continue to trigger investment
• Continuous high level of
investment for IT-infrastructure
for ERP and CC business
• M&A placeholder at € 50m
(without "white elephants"
which are not foreseeable)
In line with strategy to focus
on organic growth
38 52
70 60
50
32 28
30 30
30
113
38 10
50 50
2012 2013 2014e 2015e 2016e
183
118 <110
~140 ~130
Business Expansion Replacement Financial (M&A)
[in €m]
68 © GfK 2015 | Capital Market Day 2015 | January 2015
Regular depreciation will continue to increase
due to investments
OT CE CC
16% 22% 35% 30% 26%
54% 54%
48% 57% 61% 30% 24%
17%
14% 13%
47 ~54
~60
~70 ~80
2012 2013 2014e 2015e 2016e
In 2015 – 2016 significantly
higher depreciation is expected
in CC due to
• Audience Measurement
projects
• StarTrack/Neo investment
of the past
• New business projects, e.g.
MI/LI
Higher depreciation in Sector
Other reflects investment in ERP
and IT-infrastructure as well as a
revised reporting logic from 2014
onwards
[in €m]
69 © GfK 2015 | Capital Market Day 2015 | January 2015
Procurement
Savings
Pipeline
Management
Utilization/
Resource/
Capacity
Management
Offshoring
Country
Portfolio
Product
Globalization
Project
Portfolio
Client
Development
Project Scope
Management
Project
Costing
&
Pricing
Management
by
Affordability
CE
Shape
Portfolio
Profes-
sionalize
Key
Practices
Manage
Cost Base
How we drive Sector performance in a challenging environment
Execution of
TAM
Projects
New
Business
RT Core
Business
Data &
Technology
Star Track
Process
Automation
and
Reengineering
Restructuring
of low
Margin
Businesses
CC
Focus
on growth
Profes-
sionalize
Key
Practices
Manage
Cost Base
70 © GfK 2015 | Capital Market Day 2015 | January 2015
Shape for growth based on a solid financial framework
– Aspiration
ONE GfK
Continuous improvement over time and relative to market and competitors
Operating profit margins
AOI margin 2016: 14 – 15%
Sectors
Growth Capital efficiency and structure Group
Outperforming organic
revenue growth
(GfK growth ≥ market growth)
Return on capital
ROCE 10 – 15%
M&A hurdle rates
payback period/IRR
Financial indebtedness
(IFRS Net Debt/EBITDA) <2.5
Dividend payout ratio
25 – 35%
Sector CC Focus on investment to drive growth
Secure high margin
Sector CE Focus on margin improvement
Stabilize top line
72 © GfK 2015 | Capital Market Day 2015 | January 2015
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