GfK Group: Annual Report GfK. Growth from Knowledge

Transcription

1 GfK Group: Annual Report 2009 GfK. Growth from Knowledge

2 Contents GfK Group II GfK Group 2009 in figures 1 Preface at a glance 4 The Supervisory Board 5 Report by the Supervisory Board 8 Letter to the shareholders 12 The Management Board 15 Corporate Governance 24 GfK shares GfK Special 32 Consumption in the crisis 40 In search of a better place the number to trust 50 Illuminating the future 54 Under pressure game changer 60 I can t believe it! Management report of the GfK Group 65 Management report Financial statements of the GfK Group 97 Consolidated financial statements 104 Notes to the consolidated financial statements 149 Auditors report Additional information year overview 156 Glossaries 161 List of GfK companies mentioned 162 Financial calendar III Acknowledgements and contacts IV Our corporate values V Index VI

3 GfK Group 2009 in figures Change in % Sales in eur m 1, , ebitda in eur m Adjusted operating income 1) in eur m Margin 2) in % Operating income in eur m Income from ongoing business activity in eur m Consolidated total income in eur m Tax ratio in % Cash flow from operating activity in eur m Earnings per share eur Dividend per share eur Total dividend in eur m Number of employees at year-end full-time 9,692 10, ) Adjusted operating income is derived from the operating income. The following expenses and income have been excluded: expenses and income in connection with reorganization and business combinations, write-ups and write-downs of additional assets identified on acquisitions, personnel expenses for share-based payments and long-term incentives and remaining other operating income and expenses, in particular, currency effects resulting from the reporting date valuation. 2) Adjusted operating income in relation to sales. II

4 Courage This GfK Special focuses on various expressions of courage. + The courage to show resilience + The courage to defy the crisis + The courage to tread new paths + The courage to come to terms with one s fate + The courage to initiate change + The courage to risk one s own life for others

5 2009 has been a difficult year. The financial and economic crisis has caused turbulence in the global order. All this demanded one quality above all courage. A modest word, but one which embodies a world of different meanings: strength, bravery, determination and also defiance and conviction. These different aspects of courage form the focus of the image section of our Annual Report. Allow us to present to you the stories of the people who have mastered 2009 with courage. GfK GROUP GfK_1

6 GfK GROUP 2009 at a glance _GfK

7 2009 at a glance GfK GROUP 2009 at a glance + 01 / January GfK Retail and Technology completes a full takeover of French company ifop Music and as a consequence becomes the leading market research company for the French entertainment industry. Following the expansion of its household panel from 20,000 to 30,000 households, GfK Panel Services Germany now maintains the largest panel sample in Europe. The companies GfK Market Measures, GfK Strategic Marketing and GfK v2 amalgamate to form GfK Healthcare and combine their services for the us market / February The conversion of GfK ag into a Societas Europaea is completed and the company subsequently operates under the name GfK se. This development is accompanied by the internationalization of employee representation on the Supervisory Board. Employee delegates from the individual countries elect one British, one Dutch and one German representative to the Board. GfK increases its stake in British market research organization dmrkynetec by 49 %, to 75 % / June From this date on, the GfK Group offers all the products and services of its subsidiaries Encodex and Etilize under the joint brand name Etilize / July In the Media sector, the GfK Group holds a 25 % stake in Cypriot company Watch Media. GfK Retail and Technology increases its stake in the Indian joint venture with The Nielsen Company from 40.0 % to 50.1%. The company subsequently operates under the name GfK-Nielsen India / August With the acquisition of 51% of shares in the Peruvian company Conecta Asociados, which subsequently trades under the name GfK-Conecta, the GfK Group expands its activities in the Latin American region in the Custom Research sector. The GfK Association, which is the majority shareholder of GfK se, celebrates its 75th anniversary / March GfK increases its shares in the globally active ifr Monitoring Group to 100 %. GfK establishes the joint venture GfK Custom Research Middle East in conjunction with the market research company Median Group. GfK is a Silver Sponsor at the arf conference in New York, and wins two Great Mind Awards, which both go to GfK Custom Research North America. The prizes are awarded for the extraordinary achievements of young, talented people in the market research industry and for a particularly innovative market research tool / April The GfK Group completes a full takeover of British market research organization Ascent Market Intelligence, which collects retail information on the leisure and travel market outside the uk. GfK supports the esomar conference Asia Pacific in Beijing as Gold Sponsor / May At the first Annual General Meeting of GfK se, shareholders elect Stephan Gemkow, member of the Executive Board of Deutsche Lufthansa ag, and Hauke Stars, General Manager of Hewlett-Packard Schweiz GmbH, as new members of the Supervisory Board. GfK Custom Research Brasil launches a retail panel comprising 1,100 pharmacies, which monitors the market for over-the-counter medicines and body care products / September GfK appears as Silver Sponsor at the Annual Congress of market research association esomar in Montreux / October The GfK Group hives off business in the Custom Research sector into a joint venture, GfK Custom Research Japan, thereby offering more efficient structures on the Japanese market. GfK is the main sponsor at the industry trade fair Research & Results in Munich / November Pamela Knapp is appointed the new cfo and Human Resources Director of GfK se. GfK Austria is contracted by Arbeitsgemeinschaft Teletest (agtt) to monitor tv reaches in Austria for a further three years / December GfK donates eur 18,000 from the proceeds of its Christmas campaign selling traditional Nuremberger spicy gingerbread Lebkuchen in tins decorated by children and Christmas cards to the home for children and young people in Reutersbrunnenstraße and other welfare institutions in Nuremberg, Germany. Helen Zeitoun, Managing Director of GfK Custom Research France and member of the GfK Global Custom Research Board, is elected President of the French marketing organization Association Française du Marketing (afm). GfK_3

8 GfK GROUP The Supervisory Board The Supervisory Board + Dr. Arno Mahlert Chairman of the Supervisory Board Business Executive + Stefan Pfander Deputy Chairman of the Supervisory Board Management Consultant + Dr. Christoph Achenbach Managing Director and Partner of the intes-group, Bonn + Dr. Wolfgang C. Berndt Non-Executive Director + Kerstin Döpfert Up to February 2, 2009 Independent Works Council Representative of GfK se, Nuremberg + Stephan Gemkow Since May 20, 2009 Member of the Management Board of Deutsche Lufthansa ag, Cologne + Stephan Lindeman Since February 2, 2009 Research Director at Intomart GfK b.v., Hilversum, Netherlands + Shani Orchard Since February 2, 2009 Human Resources Director at GfK Retail and Technology uk Ltd, West Byfleet/Surrey, uk + Jürgen Schreiber Up to May 20, 2009 ceo and President of Shoppers Drug Mart, Toronto, Canada + Hauke Stars Since May 20, 2009 General Manager of Hewlett-Packard Schweiz GmbH, Dübendorf, Switzerland + Dieter Wilbois Independent Works Council Representative of GfK se, Nuremberg Chairman of the Group Works Council and the European se Works Council Audit Committee Dr. Christoph Achenbach (Chairman) Stephan Gemkow, since May 20, 2009 Stefan Pfander Dieter Wilbois Personnel Committee Dr. Wolfgang C. Berndt (Chairman) Dr. Arno Mahlert Shani Orchard Jürgen Schreiber, up to May 20, 2009 Hauke Stars, since May 20, 2009 Presidial Committee Dr. Arno Mahlert (Chairman) Dr. Wolfgang C. Berndt, up to May 20, 2009 Stefan Pfander Hauke Stars, since May 20, 2009 Dieter Wilbois Nominations Committee Dr. Arno Mahlert (Chairman) Dr. Wolfgang C. Berndt Stefan Pfander + Sandra Hofstetter Up to February 2, 2009 Independent Works Council Representative of GfK se, Nuremberg + Dr. Raimund Wildner From January 8, 2009 to May 20, 2009 Managing Director and Vice President of the GfK Association, Nuremberg 4_GfK

9 Report by the Supervisory Board GfK GROUP Report by the Supervisory Board + Dr. Arno Mahlert Chairman of the Supervisory Board + In 2009, the Supervisory Board discharged its obligations according to the law, the Articles of Association, the German Corporate Governance Code and the internal regulations of the company. The Management Board kept the Supervisory Board regularly and comprehensively informed at the appropriate times in written and verbal form of the Group s business development, income and financial position, its personnel situation, business strategy, corporate planning, planned investments and risk management. The Supervisory Board monitored and advised on the activities of the Management Board and discussed all significant business developments with it. Between board meetings, the ceo of the Management Board and Chairman of the Supervisory Board together discussed every issue of importance to the company. The Supervisory Board met seven times in At these sessions, the Management Board reports were intensively discussed, and the prospects for the Group s growth were examined in detail and voted on accordingly. The main topics included discussions on the strategic direction of the GfK Group, its international acquisition activities, the annual financial statements for 2008, the development of business in 2009 and the budget for financial year The impact of the financial and economic crisis on the company and the business environment was discussed in detail. Approval was given to the adaptation measures taken by the Management Board to strengthen the Group s competitive position and increase its financial power. The Supervisory Board deliberated on the provisions of the Corporate Governance Code and issued a declaration of compliance in accordance with Article 161 of the German Stock Corporation Act on December 10, The company is in complete compliance with the mandatory provisions with the exception of six of the requirements and all bar one of the regulations, where compliance is on a voluntary basis. These discrepancies are detailed and explained on page 15 of the present Annual Report under the Corporate Governance section. GfK_5

10 GfK GROUP Report by the Supervisory Board + Report by the Supervisory Board: Dr. Arno Mahlert The Supervisory Board is supported in its work by four committees: the Audit Committee, the Personnel Committee, the Presidial Committee and the Nominations Committee. The Supervisory Board was regularly informed of the work of the Committees. The Audit Committee met six times in the reporting period (four personal meetings and two teleconferences) to discuss the company s business development, the income and financial position and planned investments by the company. Additional focal points were issues of financing, questions pertaining to the accounting system and interim reporting, the internal audit and subjects relating to Corporate Governance and Compliance. The Personnel Committee met five times in the period under review (four personal meetings and one tele-conference) to discuss the successor to the cfo and hr Director and the development of a new remuneration system for the Management Board. The cfo and hr Director, Christian Weller von Ahlefeld, left the company on December 31, 2009, to take up new career challenges. The Supervisory Board expresses its thanks to Mr. von Ahlefeld for his dedication to the company over the past five years. On November 1, 2009 Pamela Knapp took up her appointment to the position of cfo and hr Director. A graduate in economics, she brings many years of experience in all major management aspects as well as in Human Resources and in a capacity as cfo to the post. Her career began in 1987 at Deutsche Bank ag, where she held the position of m&a Consultant at db Morgan Grenfell from 1988 to Her most recent post was as a member of the Departmental Management Board and cfo of the Power Transmission & Distribution Division at Siemens ag in Erlangen. The Supervisory Board is delighted to have engaged an experienced management executive with the appointment of Mrs Knapp. The Personnel Committee dealt intensively with the ongoing development of the Management Board remuneration system in light of management remuneration legislation. In this context, the Committee sought the advice of an internationally experienced consultancy. The new variable remuneration scheme is intended to gain, retain and motivate outstanding Management Board members for the purposes of ensuring viable organic sales growth, growth by acquisition, as well as to assuring the future sustainability of the GfK Group and at the same time enable the management to share in the success of the company. The scheme will provide an incentive for the achievement of financial targets at both Group and sector level and also for the attainment of qualitative goals. At year-end, the consultations and negotiations had not yet reached completion. In two personal meetings and a series of telephone conferences, the Presidial Committee concentrated mainly on the following subjects: crisis scenarios and adaptation measures, it strategy, Internet strategy, budget discussions and compliance issues. At the beginning of the year, the Nominations Committee held a tele-conference and a number of personal discussions concerned with the selection of candidates for the two vacant Supervisory Board posts. After an intensive search, the Committee resolved to propose Hauke Stars, General Manager of Hewlett-Packard Schweiz GmbH, and Stephan Gemkow, a member of the Management Board of Deutsche Lufthansa ag, as the new Supervisory Board members for election by the Annual General Meeting. The Supervisory Board approved and accepted these proposals. The appointments were necessitated by the resignation of Supervisory Board Chairman Hajo Riesenbeck with effect from November 27, 2008, and by the request for discharge from Jürgen Schreiber as of the date of the Annual General Meeting on May 20, For the interim period from January 8, 2009 up to the 6_GfK

11 GfK GROUP Report by the Supervisory Board next election, being the Annual General Meeting for 2009, Dr. Raimund Wildner was appointed by statutory resolution to replace Hajo Riesenbeck on the Supervisory Board. The Supervisory Board would like to express its gratitude to Dr. Raimund Wildner for his cooperation and willingness to provide interim support to the Supervisory Board. Jürgen Schreiber has been a member of the Supervisory Board since June 29, 2006, to whose work he has contributed his international expertise and the Supervisory Board thanks him for his efforts. The arrival of new members Hauke Stars and Stephan Gemkow on the Supervisory Board represents a further enhancement of the competence and internationality of the Board, in particular in the areas of it and Internet, as well as in finance, accounting, Corporate Governance and Compliance. The 2009 annual financial statements of GfK se and the GfK Group were audited and given unqualified approval by the auditors, kpmg ag. Every member of the Supervisory Board received the audited financial statements at the appropriate time. The Audit Committee deliberated on these documents in a preparatory session and the Supervisory Board gave them consideration at the plenary session held during its accounts meeting on March 25, The auditors of the annual and consolidated accounts were present at both meetings. They reported on the audit in general and on particular aspects specified as mandatory for the issue of the auditor s certificate. 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 auditors report, and having examined the financial statements prepared by the Management Board, gave its approval to discharge the accounts. In light of the current and anticipated financial position of the company, 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. In spite of the difficulties in the markets occasioned by the financial and economic crisis, the GfK Group was able to return a good result for financial year This is due to the swift introduction of adaptation measures and to the outstanding combined efforts of employees, board members and Works Council representatives of the GfK Group. The Supervisory Board would like to express its grateful thanks to all those involved for their commitment and hard work. The cooperation of everyone involved has been particularly invaluable in 2009, a year shaped by many changes. Thanks and appreciation are also due to clients and business associates of the GfK Group. The Supervisory Board has no doubt that the company is well positioned to confront the continuing challenges of the markets in 2010, from both a personnel as well as a financial perspective. Nuremberg, March 25, 2010 Dr. Arno Mahlert GfK_7

12 GfK GROUP Letter to the shareholders Letter to the shareholders + Professor Dr. Klaus L. Wübbenhorst Chief Executive Officer of GfK se + 8_GfK

13 GfK GROUP Letter to the shareholders The past year has been challenging, and perhaps even the toughest period which GfK has ever experienced. However, we can look back with pride at all that we have achieved together. A little courage was required to make it through the year, to believe in our goals and hold on to them. Financial year 2009 has been an unusual experience for our dynamic GfK Group, which has thrown down the gauntlet of a new set of challenges: reduced sales, less profit, lower dividend. Yet the key financial data actually proved better than originally feared at the beginning of the year and anticipated towards the end of the year. In light of this, my first task is to express my thanks. These go to the more than 10,000 colleagues and employees all over the world, to whom I am grateful for their trust, their constructive cooperation, their total commitment and their willingness to make savings. Thanks are also due to our customers, who have remained loyal to us during this period and who are navigating stormy waters with our help, and to the Supervisory Board, which has supported us with constructive criticism throughout a difficult year. I should also like to thank our shareholders and in particular, our majority shareholder, the GfK Association, whose key focus was not our short-term interim results, but whose contribution supported our longer term strategy and the necessary crisis management measures to be taken. Glancing back at the year 2009 makes it evident that our response to prevailing global difficulties has been measured. We have confronted the crisis with courage and determination. We have taken the necessary steps without losing sight of the future and in our biss fitness and efficiency program, we have launched a project which will support us not only during crisis year 2009, but beyond. With the 75-year history of GfK comes the obligation to manage the crisis and shape the future. Our three sectors and individual companies have achieved varying degrees of success during the difficult past year. Both management and staff have been inexhaustible in their efforts to obtain contracts and to maintain a consistent cost-reduction program. The Retail and Technology sector and associated network of companies has performed superbly well at international level. However, our Custom Research sector had been battling a sea of troubles in virtually every region of the world and the Media sector has also been unable to achieve the prior year s results. GfK_9

14 GfK GROUP Letter to the shareholders + Letter to the shareholders: Professor Dr. Klaus L. Wübbenhorst Our biss fitness and efficiency program has achieved successful results. By the end of 2009, the projects introduced were significantly ahead of schedule and making a greater contribution to earnings than had been forecast in the budget. The solidarity of individual companies in different locations has been an inspiration. In this arena, capacities were offset across various different companies, and a high degree of working hour flexibility was achieved by the joint cooperation of management and employee representatives. However, despite all the efforts and endeavors, individual companies have been unable to avoid making some painful adjustments to their staff complement. caution and optimism for 2010 There are a number of conflicting forecasts for the global economy in Virtually every possible scenario, from a strong recovery of the economy in real terms to a long winter of growth, has been depicted and reasoned in detail. For the purposes of our company, let us adopt the attitude that the glass is half full: in other words, we should not be overly optimistic, but we should not be resigned to the worst either. In this context, while there will be no relaxation of the cost budget, and we shall continue to maintain a tight grip on our expenses, on the other hand, we shall not be delaying investments which are appropriate. esomar, the international market research association, is of the opinion that sector sales for the year 2010 will remain stable and not decline any further. It is particularly in difficult economic times that market research is essential for our clients and we are very aware that the crisis also presents us with opportunities. It is in this knowledge and backed by good products, innovative technology and efficient cost structures that we aim to build on the success of previous years. Our forecast has made it abundantly clear that we are aiming to offset the dip in our 2009 sales and earnings and that we have our sights set on achieving the results recorded in financial year In accordance with this, we anticipate increasing our organic sales by up to 3% and our margin by up to 13%. This requires both internal and external measures. Within the company, we shall be continuing to concentrate on biss for the rest of the year in an attempt to trim down and optimize our downstream processes. Here, the speed of implementation still needs to be accelerated somewhat. Custom Research, in particular, is aiming to achieve considerable synergies with its Global Operations project for the global standardization of data collection. The subject of social media remains an exciting one. The crisis has prompted us to discover new approaches to market research. The demand for social media analysis of all the issues associated with social networking, Internet forums and blogs is set to rise in the future. As a result, the Internet will not only continue to gain ground as a survey platform, but will also become increasingly important as a source of information. And we shall be investing in this exciting and pioneering arena. 10_GfK

15 GfK GROUP Letter to the shareholders With all the current changes taking place, I should like to emphasize what remains the core of our business. Our work is driven by people: their thoughts, their sentiments, their behavior and their consumption habits. Our remit is to provide our clients with a complete picture of the people who are most important to them: their customers. Or as Professor Dr. Wilhelm Vershofen, one of our founding fathers, once put it, our task is to: Allow the voice of the consumer to be heard. This was valid at the time of the founding of GfK in 1934 and it still holds true at the start of the new decade of the new millennium. I would be delighted to have your continued support in the future and thank you for your confidence. Sincerely yours, Prof. Dr. Klaus L. Wübbenhorst GfK_11

16 GfK GROUP The Management Board The Management Board» The past year has been challenging, and perhaps even the toughest period which GfK has ever experienced. A little courage was required to make it through the year, to believe in our goals and hold on to them. «12_GfK

17 GfK GROUP The Management Board + From left to right: Dr. Gérard Hermet, Debra A. Pruent, Professor Dr. Klaus L. Wübbenhorst, Petra Heinlein, Wilhelm R. Wessels, Pamela Knapp GfK_13

18 GfK GROUP The Management Board CVs of Management Board members Professor Dr. Klaus L. Wübbenhorst Pamela Knapp born 1956 born 1958 Petra Heinlein born 1958 Chief Executive Officer (ceo), responsible for Strategy, Internal Audit, Method and Product Development, Corporate Communications and it Services professional career Since 1998 Spokesman and, since 1999, ceo of GfK se, Nuremberg, appointed until February 2010 President of the Chamber of Industry and Commerce for Middle Franconia in Nuremberg Member of the Management Board of GfK ag, Nuremberg, responsible for Finances, Accounting, Financial Controlling, Personnel, Purchasing, Production and it Member of the Management Board of kba-planeta ag, Radebeul near Dresden Employee of Bertelsmann ag, Gütersloh; most recently Managing Director of Druck- und Verlagsanstalt Wiener Verlag, Himberg near Vienna education 2005 Awarded the title of Honorary Professor by Friedrich-Alexander University in Erlangen-Nuremberg 1984 Doctorate from the Technische Hochschule, Darmstadt 1981 Graduated in Business Administration from the University/Gesamthochschule, Essen Chief Financial Officer (cfo) and Human Resources Director, responsible for Financial Services, Human Resources and Central Services professional career Since November 2009 Member of the Management Board of GfK se, appointed until Member of the Group Executive Management and cfo of the Power Transmission & Distribution Group at Siemens ag Head of Corporate Development Executives Department of the Siemens Group Member of the Management Board and cfo of Siemens s.a. Belgium and Luxembourg Head of Maintenance & Services of Mass Transit Vehicles of the Transportation Systems Group of Siemens ag Head of Strategic Projects in the Transportation Systems Group of Siemens ag m&a Consultant at Fuchs Consult GmbH m&a Consultant at Deutsche Bank Morgan Grenfell GmbH education 1987 Graduated in Economics from the Free University of Berlin Responsible for the Custom Research sector professional career Since 2002 Member of the Management Board of GfK se, appointed until Integration management on behalf of GfK ag Managing Director of contest census in Frankfurt 1985 Joined GfK as Project Manager with GfK Marktforschung 1984 Research Assistant at the Arnold-Bergstraesser Institute, Freiburg im Breisgau education 1984 Graduated in Political Science from the University of Bamberg Dr. Gérard Hermet born 1951 Responsible for the Retail and Technology sector professional career Since 1999 Member of Management Board of GfK se, appointed until Managing Director of GfK Sofema, France Managing Director of GfK France; most recently General Manager of GfK Marketing Services, France Employed by Burke Marketing Research, France education 1978 Doctorate from the University of Grenoble 1975 mba from the French Business School (icn) Debra A. Pruent born 1961 Responsible for the Custom Research sector professional career Since 2008 Member of the Management Board of GfK se, appointed until Chief Operating Officer (coo) of GfK Custom Research North America President of GfK nop Products & Services, usa Employed by us automotive industry market research company Allison-Fisher International, most recently as ceo Various management functions with General Motors Corporation, usa Extraordinary Professor of Statistics at Oakland University, usa education 1986 Degree in Applied Statistics from Oakland University, usa 1983 Degree in Mathematics and Computer Science from Wayne State University, usa Wilhelm R. Wessels born 1952 Responsible for the Custom Research and Media sectors professional career Since 1996 Member of the Management Board of GfK se, appointed until Managing Director of GfK ag, Gesundheitsforschung/i+g Gruppe Gesundheits- und Pharma-Marktforschung Managing Director of gpi, Gesellschaft für Pharma-Informationssysteme, Nuremberg/ Frankfurt 1978 Joined GfK as Research Associate education 1977 Graduated in Business Administration from the University of Saarbrücken 14_GfK

19 Corporate Governance GfK GROUP Corporate Governance The management of GfK is committed to increasing the value added of the company on a responsible, transparent and sustained basis. This is documented by almost total compliance with the Corporate Governance principles. declaration of compliance without material restrictions The Management Board and the Supervisory Board issued their declarations of compliance pursuant to Section 161 of the Joint Stock Corporation Act (AktG) in December The declaration of compliance is on page 21 onwards. The company complies with all the recommendations under the Corporate Governance Code apart from those mentioned below and in the declaration of compliance. For all other affiliated or associated companies, the company publishes their share of the capital and their own equity capital, but not the respective income from the preceding financial year. The decisive factor here is that transparency at the individual company level could be disadvantageous to the company s competitiveness. GfK also complies with virtually all of the non-binding suggestions in the Corporate Governance Code. There is only one point where compliance is restricted. This relates to the contactability of the appointed proxy representative for the execution of shareholders voting rights in accordance with instructions during the Annual General Meeting. This should guarantee that shareholders can issue instructions to the company via their representative even during the Annual General Meeting. This shall be secured from the Annual General Meeting in 2010 onwards. management and control structure GfK se is subject to the German Stock Corporation Act and has a two-tier management and control structure comprising a Management Board consisting of six persons and a Supervisory Board with nine members. Two thirds of the members of the Supervisory Board are shareholder representatives and one third employee representatives. In accordance with the standing rules of the Supervisory Board, its representatives are independent. Alongside their activity for the GfK Supervisory Board, the majority of the members also held senior positions in other companies during The Supervisory Board advises and monitors the Management Board in the management of business operations. Consequently, expertise from trade, industry and the financial sector at both national and international levels should be represented in the composition of the Supervisory Board. The Supervisory Board has formed four independent committees: the Presidial Committee, the Nominations Committee, the Personnel Committee and the Audit Committee. The Corporate Governance Code recommends that the Chairman of the Audit Committee has particular expertise and experience in the application of accounting principles and internal financial controlling. The Audit Committee is chaired by Dr. Christoph Achenbach. Dr. Achenbach is a partner and shareholder in Intes Beratung für Familienunternehmen. Dr. Achenbach has many years operational experience in various senior positions. He was previously Spokesman for the Klingel Group s management. GfK_15

20 GfK GROUP Corporate Governance + Corporate Governance In 2009, there were no consultancy and other service and works contracts between members of the Supervisory Board and the company. Further details of the activities of the Supervisory Board are given in the detailed Report by the Supervisory Board on page 5 onwards. The company has taken out a d&o insurance policy with an appropriate deductible for members of the Management and Supervisory Boards. responsible risk management Systematic risk management has been in place at the company for many years and has been reviewed by the year-end auditors. Details are provided in the Risk Report on page 88 onwards. transparency in communications With the aim of transparent communications, the company is pursuing its objective of providing the same information to all the interested parties at the same time. All press releases and corporate communications are available via the website Newsletters in both electronic and printed form report on the latest news from the Group, and the survey results from the three sectors provide the findings from market research. remuneration report Remuneration of the Management Board The remuneration of the members of the Management Board comprises four components: a fixed element, a bonus (variable, short-term remuneration), the 5 Star Incentive Program (variable, long-term remuneration) and the pension commitment. The structure of the remuneration system is reviewed regularly by the Supervisory Board in line with the recommendations of the Personnel Committee. The remuneration is based on the respective remits of members of the Management Board, their personal performance and that of the full Management Board. The non-performancerelated remuneration components comprise a fixed element and the pension commitment. The variable remuneration components comprise variable components dependent upon annual performance targets (short-term components) and stock options or a claim under the 5 Star Long- Term Incentive Program (long-term components). 5 Star Incentive Program The 5 Star Incentive Program continues on the basis of a stock option program, without issuing new shares. The remuneration is based on cash benefit. The aim is to bind the management to long-term operational and strategic corporate goals. The term of each tranche is three years. Participation in the program is dependent on individually-agreed performance targets. The contractually-agreed remuneration component creates an entitlement to virtual shares on attainment of individual performance targets. The number of virtual shares is calculated with reference to the amount of remuneration divided by the price of the virtual shares. For every 16_GfK

21 GfK GROUP Corporate Governance virtual GfK share acquired, the Management Board also receives a performance share. The development of the long-term remuneration, composed of the virtual shares and performance shares, depends on the development of the share price and attainment of two performance targets: the Total Shareholder Return (tsr) of the GfK share, by comparison with the tsr of the shares of companies in the Dow Jones Euro Stoxx Media Index, and the increase in the operating income of GfK over a three-year period. The operating income index is measured as an actual rise in the operating income over an expected rise of this parameter. The expectation is stipulated by the Supervisory Board of GfK on an individual basis for each tranche of the program. The Supervisory Board derives its performance targets from the expected capital-market income to companies from the index noted above. The performance shares granted by GfK shall lapse, reduce or increase, depending on attainment of both targets. Under terms of the Corporate Governance Code, the increase in value of a tranche is limited. Structure of pension commitments In principle, the pension contracts for Management Board members are, with the exception of the new member of the Management Board, Pamela Knapp, uniformly structured as defined benefit plans. After three years service as a member of the Management Board (waiting period), the company grants a retirement pension, an early retirement pension, a disability pension and a widows /widowers and orphans pension. The fixed annual remuneration of the beneficiary, agreed in the contract of employment, is deemed to be the pensionable income. Beneficiaries receive a retirement pension, when they leave the service of the company upon reaching the normal retirement age. After three years service as a member of the Management Board, the annual pension amounts to 30% of the pensionable income. This increases by three percentage points for each additional full year. The retirement pension is limited to 60% of pensionable income. The retirement pension is granted on leaving the company at the age of 62. A reduced, early-retirement pension may be provided at the age of 60. If pension beneficiaries leave the service of the company before their 62 nd birthday due to a partial or complete reduction in earning capacity, they receive a disability pension for the duration of the partial or complete reduction in earning capacity. If the reduction in earning capacity still applies upon reaching the normal retirement age, the pension continues to be paid as a life-long pension. The disability pension is calculated in the same way as the retirement pension, albeit only the service years until the beneficiary leaves the company are included in the calculation, which is based on the pensionable income at the time membership of the Management Board ends. In the calculation it is assumed that the beneficiary has been a member of the Management Board for ten years. If he or she has been a member for more than ten years, the beneficiary s disability pension will equal the entitlement acquired up to leaving the company. There is a different arrangement for Management Board member Debra A. Pruent, in whose calculation the entitlement to a disability pension assumes that she has been a member of the Management Board for three years. If she is a member for more than three years, her disability pension will be equal to that acquired up to leaving the company. The widows /widowers pension amounts to 60% of the retirement pension or disability pension last paid; the orphans pension amounts to 30% for full orphans and 15% for half orphans. After the commencement of the pension, the current pension is increased annually by two percentage points. The company can grant higher adjustments, if the consumer price index shows a higher increase in prices. GfK_17

22 GfK GROUP Corporate Governance + Corporate Governance The new member of the Management Board, Pamela Knapp, and all members of the Management Board who are employed by the company in the future, shall receive retirement benefits in the form of defined contribution plans instead of defined benefit plans. Entitlement to contributions shall be accrued upon joining the company. The sum of the benefit shall be based upon the contributions paid. In addition, under the contribution-based system, entitlement to disability pension and widows /widowers and orphans pension payments shall accrue upon commencement of the employment contract, wherein in the event of entitlement to the benefit prior to the completion of three years service, it shall be assumed that the beneficiary has already served as a member of the Management Board for three full years. Remuneration of the Management Board eur 000 Annual salary Fixed salary Variable Components 5 Star Incentive Program Pensions Number of shares (units) Value at time of issue Total Liquidation of / allocation to pension provisions Pension plan as at December 31, 2009 Earnings for termination of activity Prof. Dr. Klaus L. Wübbenhorst (ceo) , , ,259.9 Pamela Knapp (from Nov 1, 2009) Christian Weller von Ahlefeld (until Oct 31, 2009) , ,261.0 Petra Heinlein , ,718.5 Dr. Gérard Hermet , , ,799.9 Debra A. Pruent , ,036.6 Wilhelm R. Wessels , ,585.0 Remuneration , , , , , , ,261.0 Remuneration , , ,686 1, , , A member of the Management Board made share transactions subject to mandatory reporting requirements involving a total of 50,000 shares in the previous financial year. As at December 31, 2009, the Management Board held a total of 324,287 shares and 219,997 options for GfK shares. No loans or advances were issued to members of the Management Board. Former members of the management of GfK GmbH, Nuremberg, and of the Management Board of GfK ag, Nuremberg, and their dependents received a total remuneration of eur 0.9 million. There are provisions of eur 13.5 million for pension obligations to former Management Board members, their dependents and Managing Directors. 18_GfK

23 GfK GROUP Corporate Governance Remuneration of the Supervisory Board The newly constituted Supervisory Board of GfK se came into being as a result of the change in the legal form from GfK ag to GfK se on February 2, The term of this first Supervisory Board shall end with the Ordinary Annual General Meeting scheduled to be held on May 19, As regards the remuneration of the Supervisory Board for the financial year 2009, this shall result in a distinction being made between the period up until the entry into force of the change in legal form (January 1, 2009 to February 2, 2009) and the subsequent period (February 2, 2009 to December 31, 2009). Remuneration for the first period (January 1, 2009 to February 2, 2009) shall be paid in accordance with Section 16 of the Articles of Association of GfK ag, which shall be applied on a pro rata basis. The Provision stipulated in Section 16 of the Articles of Association of GfK ag essentially comprises the following components: In addition to expenses, members of the Supervisory Board receive a fixed remuneration of eur 9, payable at the end of the financial year. They also receive annual remuneration, which is performance-linked and contingent on income per share. This payment is linked to attainment of a minimum value, which is calculated as follows: a performance-related remuneration of eur is paid for every eur 0.10 income per share above the threshold value of eur 0.30 income per share established in 2005, as shown in the consolidated financial statement in accordance with the International Financial Reporting Standards (ifrs). The amount of eur 0.30 is increased annually by eur 0.10, so that the minimum value for the financial year 2009 is therefore eur The average income per share over the current financial year and the two preceding years is used as a basis for the calculation. Performance-related remuneration may only amount to one and a half times the fixed annual remuneration. The Chairman of the Supervisory Board receives two and a half times the fixed and variable amounts mentioned above; the Deputy Chairman receives one and a half times this amount. The remuneration increases by 25% for membership of the Personnel Committee, the Presidial Committee and the Audit Committee, and by 50% per chair of one of these two committees up to a maximum of 100% of the fixed and variable remuneration. GfK compensates every Supervisory Board member for any vat applying to their remuneration and the reimbursement of expenses. Supervisory Board members, who have only held their position for part of the financial year, are compensated on a pro rata basis. Remuneration for members of the first Supervisory Board (period from February 2, 2009 onwards) shall be paid on a pro rata basis, in accordance with the new regulations regarding remuneration of the Supervisory Board of GfK se decided during the Annual General Meeting held on May 20, 2009, in accordance with Section 16 of the Articles of Association of GfK se. In accordance with the view which is partially represented in legal literature, the remuneration of the first Supervisory Board is subject to agreement by the Annual General Meeting, which is responsible for resolving on whether to grant discharge from liability to the first Supervisory Board. By way of precaution, this matter shall therefore be brought before the Annual General Meeting on May 19, GfK_19

24 GfK GROUP Corporate Governance + Corporate Governance The new regulations regarding remuneration are set out in Section 16 of the Articles of Association of GfK se and stipulate the following: 1. In addition to expenses, members of the Supervisory Board shall receive a fixed remuneration of eur 12, payable at the end of the financial year. 2. A sum of eur 1, shall be granted for attendance at a Supervisory Board meeting. Remuneration shall be paid for attendance at a maximum of six Supervisory Board meetings. 3. The Chairman of the Supervisory Board shall receive two and a half times the amount of the sums stipulated in Points 1 and 2. The Deputy Chairman shall receive one and a half times the amount. 4. The remuneration shall increase by eur 10, for membership of a committee, and by eur 20, per chair of a committee. Committee remuneration shall be calculated exclusively on the basis of the respective function on the relevant committee (simple membership or chair), whichever receives the highest remuneration. 5. The company shall compensate every Supervisory Board member for any vat applying to their remuneration and the reimbursement of expenses. 6. Supervisory Board members who have only held their position for part of the financial year shall be compensated on a pro rata basis. This gives the following remuneration for the financial year 2009: Remuneration of the Supervisory Board eur 000 Fixed components (regulations from February 2 onwards) Fixed components (regulations until February 1) Variable components (regulations until February 1) Total remuneration Dr. Arno Mahlert (Chairman) Stefan Pfander (Deputy Chairman) Dr. Christoph Achenbach Dr. Wolfgang C. Berndt Stephan Gemkow (since May 20, 2009) Stephan Lindemann (since February 2, 2009) Shani Orchard (since February 2, 2009) Hauke Stars (since May 20, 2009) Dieter Wilbois Kerstin Döpfert (until February 2, 2009) Sandra Hofstetter (until February 2, 2009) Jürgen Schreiber (until May 20, 2009) Dr. Raimund Wildner (from January 8 to May 20, 2009) As at December 31, 2009, the Supervisory Board held a total of 3,762 shares. Members of the Supervisory Board hold no share options. 20_GfK

25 GfK GROUP Corporate Governance Details of individual transactions by members of the Supervisory Board and the Management Board are published in accordance with the provisions of the Securities Trading Act and the German Corporate Governance Code. Details can also be found on the company s website. The remuneration report forms part of the consolidated financial statements and the Group management report. declaration of the management board and supervisory board pursuant to section 161 german stock corporation act (aktg) Pursuant to Section 161 of the German Stock Corporation Act (AktG), the Management and Supervisory Boards of listed companies must declare each year the extent to which they have complied and will continue to comply with the recommendations of the Government Commission of the German Corporate Governance Code, published by the Germany Ministry of Justice in the official section of the online German Federal Gazette, and which recommendations have not or will not be complied with. This declaration must be made available to shareholders at all times. The German Corporate Governance Code (the Codex ) contains regulations, some of which are binding. In addition to outlining prevailing company law, it also includes recommendations from which companies may deviate, although in this case, they are obliged to publish information on and substantiate such deviations every year. The Code also proposes suggestions, from which companies may deviate, without the necessity for this to be disclosed. Details of deviations from recommendations or suggestions have been published since These are reported separately below: declaration of compliance for 2009 I. Recommendation The Management and Supervisory Boards of GfK se declare that they have complied with and will continue to comply with the recommendations of the Government Commission German Corporate Governance Codex in the version of June 6, 2008 published by the German Ministry of Justice on August 08, 2008 in the official section of the online Federal Gazette and the recommendations in the version of June 18, 2009 published on August 05, Only the following recommendations have not been and will not be complied with: 1) Point (in its version of June 6, 2008, applicable for the time period until August 05, 2009 only) Point of the Codex deals with variable remuneration components for the Management Board. With regard to stock options, the requirements include the Supervisory Board shall agree a limitation option (cap) for extraordinary, unforeseeable developments. GfK se s stock option program expired on December 31, 2004 and no cap is provided for this program. Tranches issued to date may be exercised up to and including December 31, The Management and Supervisory Boards agreed on a new program on December 12 and December 14, 2005 which complies with the requirements of point GfK_21