HSBC S 13TH EQUITY CONFERENCE

Transcription

1 HSBC S 13TH EQUITY CONFERENCE Bernhard Wolf, Head Investor Relations Paris, April 1, 2015 GfK 2015 HSBC April 1,

2 Making research matter we deliver for 80 years GfK 2015 HSBC April 1,

3 GfK - Growth from Knowledge GfK makes research matter by delivering the future. In a digitized world, we are the trusted source of relevant market and consumer information that empowers our clients to make smarter decisions. As thought leaders in our industry, we have a deep understanding of consumer experiences and choices. We are more than 13,000 passionate experts with over 80 years of data science experience and German heritage. We deliver globally with vital insights into local markets in 100 countries. We turn research into business opportunities. Through innovative systems and partnerships, we integrate on- and offline data to support Growth from Knowledge. Our goal is simple: enable our clients to create winning strategies to enrich consumers lives. GfK 2015 HSBC April 1,

4 The two sectors are reflecting our client needs and address the WHAT, the WHY and the HOW From client needs to strong GfK offerings... grouped in two sectors WHAT do consumers buy WHEN and WHERE? WHAT do consumers WATCH/HEAR/READ? Retail Panels Audience Tracking Consumer Choices Market sizing/currency Convergent media and sales channels 43% of sales, 77% of income 1 : Sales AOI 1 Adjusted operating income, w/o sector other WHY do consumers buy and WHAT do they want? HOW do consumer (segments) behave and buy? Custom Research Consumer Panels Consumer Experiences Attitudinal information Sustainable access to consumers 57% of sales, 32% of income 1 : Sales AOI 1 Adjusted operating income, w/o sector other GfK 2015 HSBC April 1,

5 GfK turns clients questions into clients benefits: examples for our services Clients questions GfK products and services Clients benefit Media providers: How to price advertisement space? GfK is providing audience measurement for TV, radio, print and online in more than 20 countries. Data provided by a neutral arbiter allows pricing of advertisement space. Car manufacturers: What do my customers want in future models? With car clinics GfK explores customer's perception of prototypes in comparison to competing models. Product development can be aligned to meet customer's demands. Consumer electronics manufacturers: What is my market share? GfK tracks sales out data from more than 450,000 outlets worldwide and offers access to an integrated database. GfK provides unique POS data helping to plan manufacturing, logistics and pricing and to measure performance of business units. Consumer goods industries: How is my brand perceived? GfK measures brand perception worldwide. Basis for brand management decisions. Public authority: How to manage my reputation? GfK SMI aligns and integrates global social media insights from qualitative and quantitative research and analyzes social media discussions. Identify tension points and where social media can best be leveraged to boost reputation. GfK 2015 HSBC April 1,

6 Our clients needs are changing Clients want speed and fast results Clients want insights with impact Clients want proof of ROI to justify investments Clients want data from all sources, but need integration GfK 2015 HSBC April 1,

7 GfK Crossmedia Link GfK 2015 HSBC April 1,

8 Consumer Panel Mobile Insights TAM Retail & Techn Big Data GfK Crossmedia Link delivers standalone products for strategic markets, also supports existing GfK business GfK Crossmedia Link supports cross media audience measurement and strategic media planning for global and local media groups Brands and advertisers use GfK Cross-media Link data to evaluate campaign effectiveness across different media Web site and mobile site owners use GfK Crossmedia Link to understand their digital customer journey In combination with purchasing data and other data sources, will support GfK TAM and GfK Mobile Insights Longitudinal data will be accumulated over time. Raw data feeds are available, including for Big Data driven analysis. Allows client data integration, attribution and calibration GfK Crossmedia Link 1. Single Source cross media panel measures TV, internet and mobile 2. Contributes data to GfK products and existing industry segments 3. Enables big data attribution, calibration and data fusion Television Internet Mobile Tablet GfK 2015 HSBC April 1,

9 Four strategic imperatives drive GfK Crossmedia Link Track the digital consumer for our clients Enter strategic markets Scale our software and processes Build a multipurpose data asset Capability allowing GfK to offer a range of different products and services around the digital consumer In addition to three existing markets, capabilities are being established in at least six additional strategic markets, all part of Wave I Contribution to GfK Nurago fixed cost base Operational hub in Bulgaria improves quality and robustness of GfK data services > 1m p.a. to build and maintain a top-class technology platform to manage data assets GfK 2015 HSBC April 1,

10 With increasing digitization, our clients have growing gaps in understanding who their customers are. Understanding the digital consumer example queries Social Media Strategy How and what should I communicate with my customers? Digital Media Effectiveness What is the most effective digital media advertising strategy? Customer Analytics What customer segments do I have, which are important for growth, which for profitability? Offline/Online Convergence How do my customers interact via offline and online channels? Who is my customer? What media does she use? Why and how does she buy my products? Digital Media Optimization Can I continuously improve my advertising campaign based on near real time data? Digital Purchase Journeys What journeys are my customers taking and how can I accompany them? GfK 2015 HSBC April 1,

11 GfK Crossmedia Link measures consumer behavior on up to four screens in a single source panel GfK Crossmedia Link single source panels Smart phones PC TV 1 Who is my customer? What media does she use? Why and how does she buy my products? + GfK Roper Consumer Styles typology of panel members + Survey capabilities in selected countries Tablets 1 In selected countries. GfK 2015 HSBC April 1,

12 On a standalone basis, GfK Crossmedia Link provides three different client benefits 01 Digital purchase journeys 02 Cross media reach 03 Efficiency of media Service Understanding digital purchase journeys and crossover points to offline sales Client example A financial services company is interested in it's customer's online research regarding insurance options Continuous capture of incremental reach of target audiences across different digital media (plus in some countries TV) A digital media platform seeks to demonstrate the reach capability of its advertising inventory to it's clients Allowing accurate measurement of advertising effectiveness across different media for campaign planning, optimization and evaluation Ecommerce fashion company requires transparency over how its different advertising investments perform as part of a cross media campaign GfK 2015 HSBC April 1,

13 GXL is based on several unique assets GfK has assembled. Our audience measurement solutions are adapted to each device ensuring robust data collection with minimal human interaction Our single source cross media panels offer unique source of media measurement Devices Vector META LATAM Bulgaria APAC Collect Process Code Monitor Report Query Our central and regional operational and coding hubs allow scaling of our services across the globe Our workflow and data management software platform supports data quality & accountability, increases automation and allows rapid turnaround of data delivery GfK 2015 HSBC April 1,

14 Wave I roll-out will increase GXL coverage from currently three to up to 10 countries. Established base and GfK Crossmedia Link Wave I rollout Active countries Roll-out 2014 Plan 2015 Germany Netherlands Poland Turkey South Africa United Kingdom Russia Italy Indonesia Brazil Launch Television Meter Meter Survey Survey Survey Survey Survey Meter Survey Meter Purchase Data Yes Yes Yes Yes Yes - Yes Yes - - GfK 2015 HSBC April 1,

15 2014 Key figures of the financial year GfK 2015 HSBC April 1,

16 Key figures for 2014 Growth Organic growth -2,0% Overall growth due to currency effects -2.8% Sales 1,453 million Income Cash Flow & Investment Adjusted operating income of 179 million Margin of 12.3% (prior year: 12.1%) Consolidated income 19.4 million (2013: -42.1) Strong rise in Cash flow from operating activity to million (+20%) Investments amounting to 99 million M&A reduced to 8 million GfK 2015 HSBC April 1,

17 Despite significant sales decline Margin improved to prior year (excluding Swiss pension impact) In m Sales Growth rate in % AOI Margin in % Actual D Actual D D Acquisitions Actual vs 2013 Total FX effect Organic vs vs Consumer Experiences Consumer Choices % -0.9% -5.4% 0.0% % +0.3 pts % -0.8% 3.2% 0.2% % -1.7 pts Other Total 1, % -0.9% -2.0% 0.1% % -0.4 pts Challenging market environment in ad hoc research and Consumer Experiences' portfolio shifts resulted in higher than expected revenue decline of 2.0% Foreign exchange revenue impact reduced to -0.9 pts Despite revenue decline total margin up +0.2 pts (adjusted for one time Swiss pension impact) Consumer Experiences achieved margin improvement despite revenue decline due to portfolio shift to higher margin global products and focused cost management Consumer Choices continued on growth path - margin impacted by investment in new business opportunities GfK 2015 HSBC April 1,

18 Strong organic growth in CEE/META, APAC and LatAm, challenging markets in Europe and North America Sales in m Fiscal Year 2014 North America in m Northern Europe 62 2 in m CEE/META in m In % FY In % FY In % FY Total -1.1 Organic Total -5.4 Organic -7.0 Total -0.1 Organic FX FX FX Latin America in m Southern & Western Europe in m Asia and the Pacific in m In % FY In % FY In % FY Total -8.0 Organic Total -2.6 Organic Total +4.3 Organic FX FX FX GfK 2015 HSBC April 1,

19 FX sensitivities: How do moving exchange rates affect GfK's top line? What a 10% change of a currency means for GfK's sales figure 2014 Sales in m 1 of 10% change Influence Group 1,453 EUR 678 USD % GBP % CNY % CHF % JPY % RUB % FX-Exposure EUR, USD and GBP dominate GfK s topline and count for 74% of Group sales Natural hedge: costs and income in the same currency International contracts should be negotiated in EUR or USD Transaction risks above EUR 100k onwards will be hedged Translational risks not hedged 2014: Negative FX effect got lower through the year from -3.1% in Q1 to -0.9% for the full year 2015: Tailwind from weak EUR will support GfK sales and income performance BRL % 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 GfK 2015 HSBC April 1,

20 Better operational performance could level out higher depreciation and higher cost of transformation 2013 AOI margin compared to 2014 (in pts) ramp-up 2013 Swiss Pension impact 2013 Product ramp-up Systems ramp-up Depreciation Productivity improvements 2014 GfK 2015 HSBC April 1,

21 GfK Group: Income Statement In m 2013 Actual 2014 Actual 2014 vs Changes in % Sales 1, , Gross income from sales SGA expenses Other operating expenses (net) Highlighted items Adjusted operating income AOI Margin 12.7% 12.3% Highlighted items Operating income Income from participations EBIT EBIT Margin 1.9% 5.0% Financial result Income before tax ,044.5 Tax on income Tax rate 1,111.5% 59.3% Tax rate w/o goodwill impairment 38.9% 26.3% Consolidated total income Earnings per share Incl. goodwill impairment of 59.5 m (2013: m, Δ 55.1 m ) Turkey irregularities Δ 6.5 m (2013: 5.6 m, 2014: 12.1 m ) Incl m Swiss pension benefit in 2013; 0.7 pts of margin Positive effects: New tax group in France, deferred tax assets on loss carryforward USA now recognized. Tax expense reduced by 18 m GfK 2015 HSBC April 1,

22 GfK Group: Details of Highlighted items In m 2013 Actual 2014 Actual Goodwill impairment Write-ups and write-downs of additional assets identified on acquisitions Income and expenses in connection with share and asset deals Income and expenses in connection with reorganization and improvement projects Personnel expenses for share-based incentive payments Currency conversion differences Income and expenses related to one-off effects and other exceptional circumstances Total highlighted items Goodwill impairment Turkey irregularities Total highlighted items w/o Goodwill impairment and Turkey irregularities -43,7-39,3 Goodwill in income statement = 59.5 m, calculated at average rates (12 months 2014). GfK 2015 HSBC April 1,

23 GfK s strategy, the changing market environment and the effect on Goodwill Goodwill In m CE CC CE goodwill impairment -113m Group: FX effect -29m CE goodwill impairment -63m Group: FX effect +53m "Internationalization" of GfK pre 2012 Focus on acquisitions to achieve a global footprint Strong growth of market research industry Competitive M&A environment drove high multiples Strong increase of Goodwill GfK managed as Holding company with independent local entities Globalization and integration" of GfK post 2012 New strategy focusing on organic growth. Selective technology driven acquisitions Decelerated growth, price pressure and commoditization in Custom Research market Changed environment makes transformation on GfK s business model necessary. Shift from local, low margin product portfolio to global, high margin offerings accepting overall reduced volumes Impairment test based on current market conditions and the new GfK business model Goodwill impairment is cash neutral and therefore has no effect on investments and future business success Pre new strategy Post new strategy Equity ratio % Goodwill impairment in Balance sheet: 62.5 m, FX rate as of 31. December 2014; Goodwill impairment in Income Statement: 59.5 m, FX rate 12m 2014 average FX difference on 3.0 m is recognized as OCI, not in the Income Statement GfK 2015 HSBC April 1,

24 GfK Group: Cash flow statement In m 2013 Actual 2014 Actual Changes Consolidated total income Amortization (incl. reversal) Changes in inventories, receivables, payables Others (non-cash items) Goodwill impairment Δ m, amort. other intangibles Δ -8.0 m Trade receivables Δ m FX effects, Turkey irregularities Interest result Taxes (cash out > expense) Cash flow from operating activity CAPEX Acquisitions, other investments and asset disposals Free cash flow after acquisitions, other investments and asset disposals Cash flow from financing activity GfK 2015 HSBC April 1,

25 Ongoing investment in organic business expansion [in m] 183 ~140 ~ e 2016e TAM-contracts in Brazil and KSA needed significant investment in panel build-up in 2014 New business fields in Consumer Choices continue to trigger investment Continuous high level of investment for IT-infrastructure, in Consumer Choices sector in particular M&A placeholder at 50m (without "white elephants" which are not foreseeable). In line with strategy to focus on organic growth Financial (M&A) Replacement Business Expansion GfK 2015 HSBC April 1,

26 Regular depreciation will continue to increase due to investments in new product development and business transformation [in m] ~ % 54 24% 57 22% ~70 17% 58% 13% 61% In significantly higher depreciation is expected in Consumer Choices due to Audience Measurement projects StarTrack/Neo investment New business projects 54% 54% 53% Higher depreciation in Sector Other reflects investment in Information Technology 16% 22% 25% 25% 26% e 2016e Consumer Experiences Consumer Choices Other GfK 2015 HSBC April 1,

27 Dividend proposal: EUR 0.65 per share, unchanged Dividend in EUR Pay-out ratio 1) , % 40% 32.7% , % , % , % 20.7% 17.6% 17.8% , , ,10 Dividend proposal 35% 30% 25% 20% 15% 10% 05% Net Debt / EBITDA ,00 EPS (excl. Impairments) % Dividend per share Range of pay-out ratio Pay-out ratio 1) 1) Pay-out ratio as percentage of consolidated total income, adjusted by Goodwill Depreciation 114,596k (2013) resp. 59,498k (2014) GfK 2015 HSBC April 1,

28 GfK Group: Balance sheet Assets in m Changes Share 2014 in % Goodwill Other long-term assets Long-term assets 1, , Trade receivables Other short-term assets Goodwill impairment of 62.5m offset by FX increase of 53.5m Net increase of: Software 15.6m Panels 10.4m TAM Brazil 15.6m Short-term assets Total assets 1, , Equity and liabilities in m Changes Share 2014 in % Equity Long-term financial liabilities Other long-term liabilities Long-term liabilities Operating liabilities Other short-term liabilities Short-term liabilities Total equity and liabilities 1, , GfK 2015 HSBC April 1,

29 Debt reduced, refinancing leverages lower interes rates Net Debt (IFRS), in m Net Debt/EBITDA (IFRS) / Schuldschein fix Schuldschein floating Bank loans Bond Available lines/rcf Rounding differences possible 1 Always as of year end, incl. extension option of RCF GfK 2015 HSBC April 1,

30 We reduce the complexity of our company network Number of legal entities -21% % End In 2015 we plan to eliminate further 12 legal entities Reduction Expansion Entities as at Dec. 31 st GfK 2015 HSBC April 1,

31 Group Staff development , , Actual 2013 Productivity and Capacity Management Investment in Hubs New TAM Business (Brazil) Scope of Consolidation and Insourcing Actual 2014 GfK 2015 HSBC April 1,

32 2015 GfK in the future and guidance GfK 2015 HSBC April 1,

33 2015 GfK is well-positioned for the rapid change We will not stand still GfK Group Renew product portfolio with innovations. Focus on data and integration Drive new digital products Keep investments on previous year's level. Focus on organic growth Increase productivity further Expand partnerships Consumer Experiences Transform to more profitable business and global, digital products Stabilize sales level compared to 2014 Continue moderate margin improvement Consumer Choices Continue expansion of core business globally and innovate Complete panel set-up in Audience Measurement and expand into new regions Drive strong growth and stable margin GfK 2015 HSBC April 1,

34 Guidance 2015 and Return to moderate organic growth Adjusted operating income is expected to improve. Margin should increase to a level of 12.4% and 12.8% The year started in line with expectations. Sales coverage as at the end of January 2015 reached 39.2% of planned annual sales (2014: 42.0%), which is well in line with historic range of 33% to 42% GfK aims at: Outpacing the market in terms of organic growth AOI margin of 14% to 15% GfK 2015 HSBC April 1,

35 Appendix GfK 2015 HSBC April 1,

36 Shareholder structure Mgmt. Board and Supervisory Board 0.03% GfK Verein 56.40% Institutional Europe (w/o Investors Germany) 34.35% 7.19% UK & Ireland 20.23% Germany 1.48% Rest of the World 0.12 % Retail 9.22% North America 5.33% Retail investors in Germany only Figures arise from a total outstanding no. of shares: 36,503,896 Source: NASDAQ OMX - Data as at January 31 st 2015 GfK 2015 HSBC April 1,

37 STAY IN TOUCH WITH US GfK Investor Relations Available on itunes: GfK s Investor Relations ipad App. Download now. GfK SE, March 2015 GfK 2015 HSBC April 1,

38 Key Financial Dates to Remember Q1 Results May 2015 Available online on gfk.com Annual General Meeting 28 May 2015 Stadthalle Fuerth and online on gfk.com Half Year Results August 2015 Available online on gfk.com Q3/ First Nine Months Results November 2015 Available online on gfk.com Please contact for further information on any of the publications or events GfK 2015 HSBC April 1,