Annual Report 2010
Contents GfK Group III Our corporate values IV GfK Group 2010 in figures 1 Preface 2 2010 at a glance 4 Report by the Supervisory Board 9 The Supervisory Board 10 Letter to the shareholders 14 The Management Board 18 Corporate Governance 27 GfK shares GfK Special: Digital 34 Online and cross-media advertising under the microscope: the GfK Media Efficiency Panel 44 Digital Day 54 Plug & Play: the Dialogatore a remote control for the digital world 60 The third dimension conquers the screen Management Report of the GfK Group 71 Management Report Financial statements of the GfK Group 103 Consolidated financial statements 110 Notes to the consolidated financial statements 157 Auditor s report Additional information 160 5-year review 164 Glossaries 170 List of GfK company abbreviations V Financial calendar VI Index VII Acknowledgements and contacts II
Our corporate values Client driven Our clients needs drive our business. We continuously seek to better understand our clients needs, improve all aspects of existing research products, offer innovative products and to be an integral part of our clients information systems. Accuracy, sound methodology, excellent client service, flexibility, timely delivery and cost effectiveness all ensure that we meet and even exceed our clients expectations. We build long-term partnerships with our clients, contributing to their success. Our people People are our main asset. Development through training, sharing ideas and sound experience is essential to our business. Our people have the freedom to explore and develop their talents and are empowered to achieve our common goals. We encourage and reward initiative, dedication and hard work. Fairness, good communication and working relationships at all levels and locations are key to our success. Innovation We recognize that investing in continuous innovation in both the process and the end product is a prerequisite to meeting clients requirements. Our aim is to be at the cutting edge with our key business activities. Clients needs, evolving markets, new technology and the expertise and ideas of our people throughout the world are what drive innovation. Global experience local knowledge We respect and learn from local business practices and cultures and provide knowledge tailored to local needs. Our global network comprises international teams, tools and products to provide multinational clients with consistent services. As proud members of the GfK Group, we share local and international expertise to continually improve all aspects of our business. Growth Profitable growth results in greater opportunities. As individuals, teams and business units, we are aware of the impact of our decisions and actions at all levels. We use financial and non-financial measurements to review and improve performance on an ongoing basis. Our growth provides investors with a fair return on the financial resources they have entrusted to us. III
GfK GrOUP 2010: in figures Change 2009 2010 in % Sales in eur m 1,164.5 1,294.2 + 11.1 ebitda in eur m 159.1 195.7 + 23.0 Adjusted operating income 1) in eur m 147.2 185.0 + 25.7 Margin 2) in % 12.6 14.3 Operating income in eur m 88.9 136.7 + 53.8 Income from ongoing business activity in eur m 75.5 124.8 + 65.3 Consolidated total income in eur m 60.5 84.0 + 38.8 Tax ratio in % 19.8 32.7 Cash flow from operating activity in eur m 134.7 172.0 + 27.7 Earnings per share eur 1.42 1.99 + 40.1 Dividend per share eur 0.30 0.48 + 60.0 Total dividend in eur m 10.8 17.4 + 61.5 Number of employees at year-end full-time 10,058 10,546 + 4.9 1) 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. >> To the GfK Mobi homepage IV
Annual Report 2010 GfK GROUP Digital. THIS WORD FROM THE WORLD OF TECHNOLOGY HAS BECOME A SYNONYM FOR HOW WE COMMUNICATE AND INTERACT WITH ONE ANOTHER. HOW WE WORK, PLAY, WATCH MOVIES, LISTEN TO MUSIC OR TAKE PHOTOGRAPHS. AND HOW WE LIVE. DIGITAL HAS BECOME A WAY OF LIFE. forward > > GfK_1
GfK GROUP 2010 at a glance 2010 at a glance 01 02 03 01 05 04 2010 at a glance 01 / January GfK Fernsehforschung marks 25 years of recording German tv audience ratings. The company s first panel data shows the tv viewing figures for January 1, 1985. Dr. Silvestre Bertolini, Managing Director of GfK Retail and Technology Italia, is elected President of the Italian market research association assirm for the second time. GfK TechTest is applied for the first time in the uk. Clients can use this tool to test a product idea or a new model of a product prior to market launch and compare it with similar products. 02 / February The Supervisory Board of GfK se extends the contract of Management Board member Debbie Pruent by five years. The new contract is effective as of January 1, 2011 and will run until December 31, 2015. GfK Retail and Technology uk surveys mobile phone sales in Ireland for the first time. The GfK Mobile Tracker now supplies information on the mobile phone market in a total of 75 countries worldwide. 03 / March The Heinrich A. Litzenroth Memorial Health Center in Kalmunai, Sri Lanka, which was built with funds raised by GfK, is officially inaugurated. GfK Panel Services Germany launches GfK Web Value, a new instrument for measuring online usage that clients can use independently offline. It is based on the findings of the German Media Efficiency Panel, which records the online surfing behavior of more than 32,000 people. The Indian government commissions Indian GfK subsidiary GfK Mode to conduct a health survey covering the entire country for the next three years (Annual Health Survey). 04 / April The British company GfK Kynetec is the only organization worldwide that maintains a global database covering the entire market for crop protection products. In addition to data on agricultural pesticides, it now also provides information on plant protection products that are not used in farming. GfK Panel Services Germany equips the members of its GfK Media Efficiency Panel with modified mobile phones that record their tv advertising exposure via sound recognition. The GfK Media Efficiency Panel enables detailed analysis of the effects of cross-media advertising campaigns on the actual purchase behavior of consumers. The us-based company GfK Mediamark Research & Intelligence (GfK mri) launches a pilot study on digital reading formats. From April to November 2010, this study tests how magazine readers can be questioned most effectively about their use of digital formats. 05 / May GfK acquires a 40 % stake in German companies SirValUse Consulting and nurago. SirValUse is Europe s largest consultancy company in the field of user experience and usability, while nurago is one of the leading providers of technologies for digital brand, media and usability research. GfK Middle East, which is based in the United Arab Emirates, becomes the first market research organization to establish an independent subsidiary in Saudi Arabia. In India, GfK increases its stake in subsidiary GfK Mode, part of the Custom Research sector, from 51 % to 100 %. With branches in 15 Indian cities and an office in Bangladesh, the company is particularly active in the areas of consumer and social research. GfK Retail and Technology East Africa opens its first subsidiary in Kenya. orf and most private Austrian radio stations extend their contracts with GfK Austria for the recording of radio audience figures in Austria until 2013. Coca-Cola North America names GfK Custom Research North America Research Partner of the Year, honoring the outstanding achievements of the GfK subsidiary in the previous year. 2_GfK < < back
GfK GROUP 2010 at a glance 06 08 09 10 11 06 / June As part of a new joint project with the Mobile Entertainment Forum (mef), an international trade organization operating in the field of mobile media, GfK Asia provides information on mobile entertainment. The GfK Mobile Content Industry Report contains download data on ringtones, music, images, videos and games for mobile phones. Following GfK s acquisition of the remaining 25 % stake in GfK Kynetec, which focuses on global market research in the areas of animal health, biotechnology and pesticides, the company is now 100 %-owned by the GfK Group. GfK TechTest is launched on the market in the usa and Germany. GfK Panel Services Benelux sets up a GfK Media Efficiency Panel. The GfK Group celebrates the 20th anniversary of its presence in Central and Eastern Europe. 07 / July French ad hoc specialists GfK isl and GfK Custom Research France complete a merger. The new company, which now operates under the name GfK isl Custom Research France, is one of the largest market research organizations in France. 08 / August The GfK Business and Technology department of GfK Custom Research North America opens a branch in San Francisco. 09 / September Dr. Gerhard Hausruckinger joins the GfK se Management Board, with responsibility for the Retail and Technology sector. He manages the sector s business together with Dr. Gérard Hermet until December 31, when the latter retires. The specialist magazine Inside Research names GfK mri the best us provider of syndicated market research for the third time. Manager Magazin names the GfK Annual Report the best in the sdax category in the Best Annual Reports competition. 10 / October Portuguese GfK subsidiary intercampus, an expert on cati, capi and Paper & Pencil surveys, celebrates its 20th anniversary. The Central Statistical Bureau of Latvia commissions GfK Custom Research Baltic to carry out the census in 2011. Mike Cooke, Global Director of Online Development at GfK nop in the uk, and Bruno Colin, Global Managing Director of Technology & Operations at GfK isl Custom Research France, are elected to the Management Board of the global market research association esomar. As of January 2011, Mike Cooke is appointed Vice President of the ten-member esomar Council. 11 / November GfK Custom Research North America acquires interscope, a us-based company specializing in brand positioning in the retail sector. GfK Retail and Technology Germany celebrates its 40th anniversary. Flemish public transport operator De Lijn extends its contract with Belgian company GfK Significant, which has been recording how satisfied users are with public transport in Belgium since 2006, by a further five years. 12 / December Launch of GfK s new brand positioning. forward > > GfK_3
GfK GROUP Report by the Supervisory Board REPORT BY THE SUPERVISORY BOARD Dr. Arno Mahlert, Chairman of the Supervisory Board of GfK se 4_GfK < < back
GfK GROUP Report by the Supervisory Board DEAR SHAREHOLDERS, In 2010, GfK was able to successfully overcome the effects of the global financial and economic crisis and to sustain the continuous growth achieved up to 2008. The fundamental basis of this success was the prompt introduction of a cost management program, clear rationalization measures, continued and uninterrupted efforts to maintain the consistently high quality of our products and services and an intensified focus on the needs and wishes of our customers. On behalf of the Supervisory Board, I should like to express my sincere thanks to all those involved, our employees, our employee representatives and the Management Board for the strength of their commitment and their hard work. Thanks and recognition are also due to the clients and business associates of the GfK Group. In the year under review, the Supervisory Board continued to discharge its obligations according to the law, the Articles of Association, the German Corporate Governance Code and the internal regulations of the company with due diligence. The Supervisory Board regularly advised the Management Board on management of the company and monitored its activities. The Supervisory Board was involved in every decision of essential importance to the company. The Management Board kept the Supervisory Board regularly and comprehensively informed of any developments relevant to its remit at the appropriate times in both written and oral form. The main issues related to the Group s business development, its income and financial position, its personnel situation, business strategy, corporate planning, investment program, compliance and risk management. Between board meetings, the ceo of the Management Board and Chairman of the Supervisory Board together discussed every issue of importance to the company. meetings of the supervisory board and its committees The Supervisory Board met in person seven times in 2010. At these sessions, the Management Board reports were exhaustively discussed, and the prospects for the Group s growth were exa mined in detail and voted on accordingly. The main topics included the annual financial statements for 2009, business development in 2010, the budget for financial year 2011, discussions on the measures taken to ensure sustainable global growth and the adaptation measures introduced to strengthen the Group s competitive position and increase its financial power. A focus of particular interest was the future development of the Group s strategic positioning and its management organization, backed by support from a wellknown international consultancy. The project, which is not yet complete, was launched in autumn 2010 under the title: Where to play and how to win. forward > > GfK_5
GfK GROUP Report by the Supervisory Board Report by the Supervisory Board Another of the core issues was managing the challenges and business opportunities generated by the digital world. One of the major initiatives being advanced in this area is the GfK nis (Network Intelligence Solutions) project in the Retail and Technology sector, by which GfK is aiming to measure internet consumption using mobile terminals in the future. The Supervisory Board has been kept regularly informed of the project s progress. In 2010, the Supervisory Board once again deliberated on the provisions of the German Corporate Governance Code and issued the declaration of compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) on December 16, 2010. The company is in compliance with the mandatory provisions with the exception of five of the requirements, and complies with all of the regulations where compliance is on a voluntary basis. The discrepancies are detailed and explained in the Corporate Governance report on pages 25ff of the present Annual Report. At the end of the financial year, and with the support of a reputable personnel management consultancy, the Supervisory Board commissioned an efficiency audit, the results of which will be available in the first quarter of 2011. To ensure its own efficiency, 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 kept regularly and exhaustively informed of the work of the Committees. The Audit Committee met eight times in the reporting period (five personal meetings and three tele-conferences) to discuss the company s business development, its income and financial position, and any planned investments. Additional focal points were issues of financing, questions pertaining to the accounting system and interim reporting, internal controlling, the internal audit, risk management and subjects relating to corporate governance and integrity. The Personnel Committee met six times (four personal meetings and two tele-conferences) and dealt intensively with ongoing development of the existing remuneration system and definition of targets for Management Board members in light of management board remuneration legislation. The details are indicated in the remuneration report on pages 21ff of the present Annual Report. The deliberations also centered on the selection of candidates to succeed the two Management Board members Dr. Gérard Hermet and Wilhelm R. Wessels. The Presidial Committee held three meetings in person as well as a series of tele-conferences. These were aimed at preparatory work for Supervisory Board meetings, in particular on the following issues: further development of corporate strategy and management organization, preparations for the efficiency audit, internet and it strategy, the 2011 budget and compliance issues. The Nominations Committee held two personal meetings and several tele-conferences concerned with the selection of candidates to succeed Stephan Gemkow and the tailoring of the Board to the requirements of the diversity regulations (diversity and balance in the composition of the Supervisory Board). 6_GfK < < back
GfK GROUP Report by the Supervisory Board annual and consolidated accounts The 2010 annual financial statements of GfK se, prepared by the Management Board in accordance with the regulations of the German Commercial Code (hgb) and the ifrs International Financial Reporting Standards, were audited and given unqualified approval by the auditor, kpmg ag. Every member of the Supervisory Board received the audited financial statements at the appropriate time. The Supervisory Board assured itself of the impartiality of the auditor and of the auditor s personnel. The Audit Committee deliberated on the accounts documents and the audit report at its session of March 18, 2011 and the Supervisory Board gave these consideration at the plenary session held during its accounts meeting on March 22, 2011. The auditors of both the annual and consolidated accounts were present at both these 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 auditor s 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 Group, 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. changes in the composition of the management board and supervisory board On September 1, 2010, the Supervisory Board appointed Dr. Gerhard Hausruckinger to the Management Board as successor to outgoing member Dr. Gérard Hermet. With the arrival of Dr. Hausruckinger, GfK is gaining a person of stature with international management experience and all the skills needed to further advance the development of the Retail and Technology sector. The Supervisory Board would like to thank Dr. Gérard Hermet for his successful efforts over a period of 26 years with GfK. His complete dedication and creative entrepreneurship, coupled with his tireless commitment to introducing new business ideas and innovations to Retail and Technology, have made this sector one of the jewels in the GfK crown. On his departure from the Management Board on January 1, 2011, Dr. Hermet will continue to be available to GfK in a consultative capacity. His remit will be mainly concerned with promoting the GfK nis project. In October 2010, Wilhelm R. Wessels advised the Chairman of the Supervisory Board of his decision not to seek an extension to his service contract, which expires at the end of September 2011. The Supervisory Board noted this decision with regret. In the year under review, the Supervisory Board had not yet made a decision concerning a possible successor. forward > > GfK_7
GfK GROUP Report by the Supervisory Board Report by the Supervisory Board In October 2010, Stephan Gemkow advised the Chairman of the Supervisory Board that the new provisions of the German Corporate Governance Code (which may restrict the number of Supervisory Board appointments held by Management Board members, if, in future, consolidated mandates are taken into consideration) were likely to compel him to resign his position on the Supervisory Board of GfK with effect from the date of the 2011 Annual General Meeting. The Supervisory Board noted this with much regret. An appropriate successor is still being sought. In February 2011, Professor Dr. Klaus L. Wübbenhorst informed the Supervisory Board that, for personal reasons, he will not be extending his current service contract, which will expire at the end of July 2012. The Supervisory Board regrets but respects Professor Wübbenhorst s decision, and has thanked him for announcing this at an early stage. In Professor Wübbenhorst s 20 years on the Management Board, GfK has developed from a company primarily focused on Germany to a world-class, international stock exchange-listed corporation. Some milestones in the development of the company under his regime were the restructuring of GfK in 1992, the stock exchange launch in 1999, the successful acquisition of nop World in 2005 and the transformation of GfK ag into GfK se in 2008. outlook Over the years, GfK has gained a superb competitive position in attractive growth markets. The Supervisory Board is of the conviction that the company is well prepared from both a financial and personnel perspective to successfully meet the challenges and opportunities which lie ahead in 2011. This applies, in particular, to the new business opportunities presented to the company by increasing market digitization. Nuremberg, March 22, 2011 Dr. Arno Mahlert 8_GfK < < back
THE SUPERVISORY BOARD GfK GROUP The Supervisory Board Dr. Arno Mahlert Chairman of the Supervisory Board Non-Executive Director Stefan Pfander Deputy Chairman of the Supervisory Board Management Consultant Dr. Christoph Achenbach Managing Director and Management Consultant Dr. Wolfgang C. Berndt Non-Executive Director Stephan Gemkow Member of the Management Board of Deutsche Lufthansa ag, Cologne Sandra Hofstetter Since May 26, 2010 Independent Works Council Representative of GfK se, Nuremberg Stephan Lindeman Research Director at Intomart GfK b.v., Hilversum, Netherlands Shani Orchard Human Resources and Facilities Director at GfK Retail and Technology uk Ltd, West Byfleet, Surrey, uk Hauke Stars 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 Stephan Gemkow, (Chairman since May 19, 2010) Dr. Christoph Achenbach, (Chairman up to May 19, 2010) Stefan Pfander Dieter Wilbois Personnel Committee Dr. Wolfgang C. Berndt (Chairman) Dr. Arno Mahlert Shani Orchard Hauke Stars Presidial Committee Dr. Arno Mahlert (Chairman) Dr. Wolfgang C. Berndt (since May 19, 2010) Stefan Pfander Hauke Stars Dieter Wilbois Nominations Committee Dr. Arno Mahlert (Chairman) Dr. Wolfgang C. Berndt Stefan Pfander forward > > GfK_9
GfK GROUP Letter to the Shareholders LETTER TO The SHAREHOLDERS Professor Dr. Klaus L. Wübbenhorst, Chief Executive Offi cer of GfK se 10_GfK < < back
GfK GROUP Letter to the Shareholders The title of our 2009 Annual Report was Courage. And our courage in dealing with the crisis has certainly paid off: from worry lines to laughter lines, and from being underworked to working overtime. More optimistic and relaxed describes the mood at the start of 2011. The uncertainties and doubts which marked the beginning of 2010 clearly receded during the course of the year, and ultimately, 2010 turned out to be an outstanding year for us. For the year just begun, there is every reason to believe that we will continue to enjoy positive development. 2010 review How did we manage to achieve this resounding success to record the best ever sales and result in the history of the company? I believe there are five reasons: First: the global recovery Our clients are once again doing better. After our industry registered negative growth in 2009 in the first ever decline recorded by our professional association, esomar, the consumer research market is again ripe for sustainable growth. This gives us the advantage of a tail wind to speed our progress, and no head wind to battle against. Second: globalization A consistent focus on the emerging economies acquisition coupled with organic growth has proved to be an engine of growth. We have increased our sales in Central and Eastern Europe by 25.2 %, in Latin America by 37.1 % and in Asia and the Pacific by 22.5 %. With the exception of North America, sales in all our regions are also above their 2008 level. Third: the digital media We are mixing just the right cocktail of acquisitions and organic growth. The SirValUse and nurago experts are growth drivers who, together with their GfK colleagues, are developing promising and innovative products across our three sectors. This gives us the capability of combining our traditional strengths with new technologies. The unique GfK Media Efficiency Panel has its origins in our household panels. The GfK WebValue Index, GfK Online Buzz Miner and GfK Ceres are further examples of developments which have set benchmark standards. GfK Network Intelligence Solutions, or GfK nis for short, represents a revolutionary new dimension in market research, and at this juncture, I can do no better than to quote one of our major shareholders: We are excited about the potential for the nis initiative. forward > > GfK_11
GfK GROUP Letter to the Shareholders Letter to the Shareholders Fourth: our biss fitness and efficiency program Thirteen of our 30 or so programs are already complete. Efficiency gains and essential expenditure are running to schedule. The moveit global it standardization program launched under the aegis of biss was virtually complete by the end of 2010. In addition to significant cost savings and quality improvements, moveit has also proved to be an important preparatory trailblazer for our Global Operations project in the Custom Research sector. Fifth: Team GfK Of course, a good workflow at the GfK Group is also demanding and places a fair degree of stress on us all. Many GfK departments are currently working at the upper limits of what is reasonable over the longer term. My opinion on this is that more work is surely better than too little work, or indeed, none at all. However, having said this, constant overworking and permanent weekend work at the cost of private life is wrong. Our shared task is to find the right balance. Striking the right balance in the next chapter of his life is something I wish for our French colleague, Dr. Gérard Hermet, who left the company at the end of 2010. He represents many of the facets which distinguish GfK: growing globalization, entrepreneurship, innovative market research and lasting success. I should like to express my sincerest thanks to him for his 26 years of dedicated service to the GfK Group in so many different places, from Azerbaijan to Yemen. I am convinced that his successor, Dr. Gerhard Hausruckinger, will also be instrumental in the continuing success story that is GfK. The future plans of my Management Board colleague Wilhelm R. Wessels also herald a change: after 32 years with GfK, he has decided not to extend his current service contract and will be leaving the company at the end of September 2011. I would also like to thank Wilhelm Wessels wholeheartedly for his many years of service to GfK, but as he will continue to be involved in steering GfK s course over the rest of this year, I will say goodbye properly at a later stage. outlook for 2011 The GfK Group is valued for the fact that it always directs its activities along clear strategic lines. In 1995, this was Fit for Going Public. Five years later, the core strategic message was the Triple Ten Initiative, and since 2005, our strategy has concentrated on the central statements contained in our 5 Star Initiative. We are now well into 2011 and the time has come to put our current strategy to the test. Quite apart from the fact that five years have gone by since it was formulated, the world is now turning so much faster: reason enough for the Management Board and Supervisory Board to initiate a new strategy project. Indeed, for the first time in many years, we resolved not to rely solely on our own deliberations, but to seek the support of external experts. 12_GfK < < back
GfK GROUP Letter to the Shareholders The project which emerged from this goes by the name of: Where to play and how to win? The key questions are: Where is there room for improvement in what we do? Where are there potential opportunities for growth in the digital media and in which regions in particular? How do we go about implementing the strategy? What are the priorities, what are the challenges we must confront and what resources are needed? The project is intended to give us the possibility of becoming even more competitive from our current position of strength, at a time when the economy has recovered. I shall keep you informed of the results of the project at the appropriate time. However, at this point, I should like to inform you of a personal decision, which, after 20 years with GfK and 13 of them as ceo, has not been an easy one for me to make. Our superb result for 2010 and the fact that I celebrated my 55th birthday in February mean that this is a good time for a change of management at GfK in the medium term, and for me personally, it is a welcome opportunity to seek fresh challenges in pastures new. It is for these reasons that I have decided not to renew my service contract beyond July 2012, when it expires. But I can promise you that until then and indeed, up to the appointment of my successor, I shall continue as before, with all my energy and total commitment to GfK. And I would certainly like to accompany GfK for a little longer on its way into the future. I have addressed an important focus of our vision for the coming years in the Annual Report under the theme Digital. The development of our digital society is both incalculably vast and dizzyingly fast. Computers and internet use are changing society, the media, consumer behavior and communications. Who are the users behind the hits? How do social networks influence brand image and buying behavior? What are the effects on society of the anywhere anytime culture of digital mobilization? It would be presumptuous to promise that we have all the right answers to these questions. However, in 2011 we are once again passionately committed to working with our clients in the search for the right questions and the appropriate answers. Sincerely yours, Prof. Dr. Klaus L. Wübbenhorst forward > > GfK_13
GfK GROUP The Management Board The MANAGEMENT BOARD Digitally connected: (from left to right) Debra A. Pruent, Dr. Gerhard Hausruckinger, Pamela Knapp, Professor Dr. Klaus L. Wübbenhorst, Wilhelm R. Wessels, Petra Heinlein, Dr. Gérard Hermet 14_GfK < < back
GfK GROUP The Management Board forward > > GfK_15
GfK GROUP The Management Board CVs of Management Board Members Professor Dr. Klaus L. Wübbenhorst born 1956 Chief Executive Officer (ceo), responsible for Strategy, Internal Audit, Marketing Sciences, Corporate Communications and it Services Pamela Knapp born 1958 Chief Financial Officer (cfo), responsible for Financial Services, Human Resources and Central Services professional career Since 1998 Spokesman and, since 1999, ceo of GfK se, Nuremberg, appointed until 2012 2005 February 2010 President of the Chamber of Industry and Commerce for Middle Franconia in Nuremberg, Honorary President since 2010 1992 1997 Member of the Management Board of GfK ag, Nuremberg, responsible for Finances, Accounting, Financial Controlling, Personnel, Purchasing, Production and it 1991 1992 Member of the Management Board of kba-planeta ag, Radebeul near Dresden 1984 1991 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 professional career Since November 2009 Member of the Management Board of GfK se, appointed until 2012 2004 2009 Member of the Group Executive Management and cfo of the Power Transmission & Distribution Group at Siemens 2000 2004 Head of Corporate Development Executives Department of the Siemens Group 1998 2000 Member of the Management Board and cfo of Siemens s.a, Belgium and Luxembourg 1994 1997 Head of Maintenance & Services of Mass Transit Vehicles of the Transportation Systems Group of Siemens 1992 1994 Head of Strategic Projects in the Transportation Systems Group of Siemens 1991 1992 m&a Consultant at Fuchs Consult GmbH 1987 1991 m&a Consultant at Deutsche Bank Morgan Grenfell GmbH education 1987 Graduated in Economics from the Free University of Berlin 16_GfK < < back
GfK GROUP The Management Board Dr. Gerhard Hausruckinger born 1961 Responsible for the Retail and Technology sector Petra Heinlein born 1958 Responsible for the Custom Research sector Dr. Gérard Hermet born 1951 Responsible for the Retail and Technology sector professional career Since September 2010 Member of the Management Board of GfK se, appointed until 2013 2008 2010 Chief Executive Officer (ceo) of Emnos GmbH, Munich 2006 2008 Managing Director of Retail segment and responsible for Management Consulting in the Product sector at Accenture, Kronberg 1994 2005 Consultant at Roland Berger Strategy Consultants in the Retail and Consumer Goods sector, Partner as of 2000, based in London and Munich 1992 1994 Project Manager for Corporate Development at Karstadt ag, Essen education 1992 Doctorate from the University of Regensburg 1988 Graduated in Business Administration from the University of Regensburg professional career Since 2002 Member of the Management Board of GfK se, appointed until 2011 2001 2001 Integration management on behalf of GfK ag 1992 2000 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 professional career 1999 December 2010 Member of the Management Board of GfK se 1988 2000 President of the French Marketing Association afm 1988 1998 Managing Director of GfK Sofema, France 1984 1998 Managing Director of GfK France; most recently General Manager of GfK Marketing Services, France 1978 1984 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 2015 2006 2007 Chief Operating Officer (coo) of GfK Custom Research North America 2005 2006 President of GfK nop Products & Services, usa 1992 2005 Employed by us automotive industry market research company Allison-Fisher International, most recently ceo 1983 1992 Various management functions with General Motors Corporation, usa 1988 1990 Extraordinary Professor of Statistics at Oakland University, usa education 1986 Graduated in Applied Statistics from Oakland University, usa 1983 Graduated 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 2011 1991 1996 Managing Director of GfK ag, Gesundheitsforschung / i + g Gruppe Gesundheitsund Pharma-Marktforschung 1986 1996 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 forward > > GfK_17
GfK GROUP Corporate Governance Corporate Governance The management of GfK is committed to increasing the value added of the company on a responsible, transparent and sustained basis. declaration of compliance without material restrictions The Management Board and the Supervisory Board issued their declarations of compliance pursuant to Section 161 of the German Stock Corporation Act (AktG) in conjunction with Art. 9 para. 1 c) (ii) of the European Company Statute Regulation (se Regulation) in December 2010. The declaration of compliance is on page 25. The company complies with all the recommendations under the German Corporate Governance Code (the Code ), apart from the exemptions mentioned in the declaration of compliance. management and control structure Pursuant to Art. 9 para. 1 c) (ii) of the se Regulation, GfK se is subject to the German Stock Corporation Act. It has a two-tier management and control structure. The Management Board consisted of six members until the end of August 2010 and seven from then until the end of year. Until the Annual General Meeting on May 19, 2010 GfK se had a Supervisory Board with nine members, which has been extended to ten since the amendment of the Articles of Association agreed at the Annual General Meeting on May 19, 2010. In the course of the change in the legal form of the company to a Societas Europaea (se), the Management Board and employee representatives agreed on regulations for the size and composition of the Supervisory Board of GfK se in an employee participation agreement. It was agreed that the Supervisory Board would be composed of ten members, of which four would be elected by the employees. For implementation of the employee participation agreement, it was decided at the Annual General Meeting on May 19, 2010 that the Articles of Association would be adapted accordingly in Article 9 (1), sentences 1 and 2. In accordance with the codes of procedure of the Supervisory Board, its representatives are independent. Alongside their activity for the GfK se Supervisory Board, the majority of the members also served on executive bodies or held senior positions in other companies during 2010. 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 should have particular expertise and experience in the application of accounting principles and internal financial controlling. The Audit Committee was chaired by Dr. Christoph Achenbach until the Annual General Meeting on May 19, 2010, and Stephan Gemkow has chaired this Committee since then. Mr Gemkow is a member of the Management Board of Deutsche Lufthansa ag and is responsible for the finance department at this company. 18_GfK < < back
GfK GROUP Corporate Governance In 2010, 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 4 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 94 onwards. transparency in communications With the aim of transparent communications, the company is pursuing its objective of providing the same information to all shareholders and interested members of the general public at the same time. All press releases and corporate communications are available via the website www.gfk.com. All publications, such as ad hoc reports, press releases, interim reports and annual reports, are also published in English. Speeches given by the ceo at the Annual General Meeting or with regard to quarterly results are recorded and available for a limited period via the GfK website. A financial calendar, which can also be viewed on the website, provides information on all important publication and event dates. Newsletters in both electronic and printed form report on the latest news from the Group. targets for management and for the composition of the supervisory board The Management Board and the Supervisory Board form the dual management and control structure pursuant to Art. 39 of the se Regulation, and work closely together in the best interests of the company. This also includes ensuring diversity in terms of the way in which management positions are filled and the composition of the Supervisory Board, whilst taking into account the specific situation of the company. The GfK Group has always set great store by diversity when filling management positions, and this principle is practiced within the Group. One of the defining features of GfK is that the diversity of its business is reflected in the composition of its executive bodies. This applies to both the internationality of its managers and to their varied professional qualifications and experience. There is also a high ratio of women both within the Group and on the Management Board. Approximately half of GfK s global workforce are women and three out of six seats on the Management Board of GfK se are occupied by women. To date, this is unique for a listed company in Germany. The members of the Supervisory Board who are shareholder representatives are appointed by the Annual General Meeting, although the Annual General Meeting is not bound by the nominations of the Supervisory Board. Employee representatives are appointed on the basis of the procedure stipulated in the employee participation agreement for the company. forward > > GfK_19
GfK GROUP Corporate Governance Corporate Governance The members of the Supervisory Board base their nominations on the requirements which are crucial for effective monitoring of the company. In terms of the staffing of the Supervisory Board, the Supervisory Board has therefore agreed the following goals for its composition in respect of Point 5.4.1 of the Corporate Governance Code: The Supervisory Board of GfK se shall be composed in such a way that qualified advising and supervision of the Management Board by the Supervisory Board is guaranteed with the aim of close cooperation between the executive bodies in the best interests of the company. The candidates recommended for election to the Supervisory Board shall, on the basis of their knowledge, abilities and professional experience, be able to perform the duties of a supervisory board member in an international corporation. Attention should be paid to their personality, integrity, commitment, professionalism and independence. The Supervisory Board shall be composed in such a way that its members together have the necessary knowledge, ability and professional experience to duly perform their tasks, especially in the following areas: finance, personnel, it, internet, market research, and any other management tasks. Given the company s international orientation, it is important to ensure that the Supervisory Board has a sufficient number of members with many years international experience. When electing new members, the aim is to at least maintain the currently existing proportion of Supervisory Board members with an international background. The Supervisory Board shall have a sufficient number of independent members. Significant, nontemporary conflicts of interest, for example due to the holding of executive positions or performing of consultancy tasks for competitors of GfK se or as a result of a business or personal relationship with the company or its Management Board, should be avoided. In addition, the members of the Supervisory Board shall, as hitherto, have sufficient time to perform their tasks, so that they can be exercised with the required regularity and diligence. The Supervisory Board should also include no more than two former members of the Management Board. Overall, the aim should be to achieve a balanced mix between managers who are still active in other companies and individuals who are no longer working in management. A suitable mix of ages should also be ensured. When submitting its nominations, the Supervisory Board shall also ensure in particular that there is an appropriate proportion of women. When screening potential candidates to elect a new member or to fill a position on the Supervisory Board that becomes vacant, qualified women should be included in the selection process and given due consideration in the nominations. There are currently three women on the ten-member GfK se Supervisory Board and the aim is to maintain at least this number when electing new members to the Supervisory Board, provided that suitable candidates are available. The standard age limit stipulated by the Supervisory Board in the codes of procedure is taken into account. The Supervisory Board will explain its nominations and the preceding search process to the Annual General Meeting in detail. 20_GfK < < back
GfK GROUP Corporate Governance remuneration report Remuneration of the Management Board The remuneration of the members of the Management Board comprises four components: a fixed element; variable, short-term remuneration (short-term incentive sti); variable, long-term remuneration (long-term incentive lti); 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 components of the remuneration that are not performancerelated comprise element and the pension commitment. The performance-related remuneration consists of earnings which are dependent upon the attainment of predefined annual targets (sti) as well as predefined long-term targets (lti). In financial year 2009, the remuneration of the Management Board was reviewed by an independent external remuneration expert for compliance with the requirements of the Act on the Appropriateness of Management Board Compensation (Vorstag), which came into force on August 5, 2009. As a result, the Supervisory Board agreed a revised system of variable remuneration elements. Structure of variable remuneration elements The short-term variable remuneration (sti) is measured by the attainment of key financial indicators and non-financial targets. In order to ensure the continued profitable growth of the GfK Group, the first part of the sti is linked to the attainment of the key financial indicators of margin and sales growth, whereby the attainment of these targets is measured at Group and at sector level. When evaluating target attainment, the two key indicators are not analyzed independently of each other, but rather predefined combinations of the two key indicators are incentivised. Payment of the bonus elements resulting from the attainment of the financial targets is also linked to compliance with a debt limit defined by the Supervisory Board. In addition to the key financial indicators, the Supervisory Board defines non-financial targets which contribute to the company s sustained development. The non-financial targets are partly the responsibility of the Management Board as a whole and partly the individual responsibility of its respective members. The non-financial targets for 2010 related to the subject areas of personnel and organizational development (in each case for the Management Board as a whole), compliance (for the ceo and cfo) and market position (for the coos). The maximum payout for elements of the variable short-term remuneration is 300 % of the target bonus, whereby amounts which exceed 200 % of the target bonus must be transferred to the variable long-term remuneration and are therefore linked to the long-term development of the company ( clawback ). The variable long-term remuneration comprises two components. The first part is linked to the roce (return on capital employed) trend over a period of four years. The bonus curve for this is derived from the wacc (weighted average cost of capital) and the roce performance of the best competitors. Payment takes place at the end of the term based on the average roce performance of the previous four years. forward > > GfK_21
GfK GROUP Corporate Governance Corporate Governance The second part of the long-term remuneration is invested in virtual shares. These shares are held for at least four years, whereby the impact of the dividends distributed to shareholders is reproduced besides the share price movement (tsr concept). After the holding period has expired, the virtual shares can be exercised within two further years. The countervalue of the virtual shares is paid out in cash. The maximum payout for both elements of the long-term remuneration is limited to 500 % of the target bonus. No discretionary powers are envisaged for the variable short-term or longterm remuneration when assessing target attainment. In accordance with the provisions of the International Financial Reporting Standards (ifrs), the expense for the Long-Term Incentive Plan (ltip) has to be spread over the term of four years up to payment of the respective tranche. A shorter time period for distribution of the expense is then set if it is certain that the contract will not be extended any further. This applied to the Management Board members Dr. Gérard Hermet and Wilhelm R. Wessels for 2010. Remuneration of the Management Board eur 000 Fixed components Variable components Long-Term Incentive Plan Total remuneration Allocated to pension plan Pension plan as at December 31, 2010 Prof. Dr. Klaus L. Wübbenhorst (ceo) 598.4 737.5 159.3 1,495.2 552.2 5,812.1 Pamela Knapp 381.7 437.4 100.5 919.6 92.0 106.6 Dr. Gerhard Hausruckinger (from September 1, 2010) 123.8 236.4 0.0 360.2 30.4 30.4 Petra Heinlein 400.2 488.1 106.2 994.5 402.7 3,121.2 Dr. Gérard Hermet (until December 31, 2010) 415.5 660.9 531.2 1.607.6 662.1 4,462.1 Debra A. Pruent 438.3 460.4 100.5 999.2 573.5 1,610.1 Wilhelm R. Wessels 397.1 436.0 242.8 1,075.9 365.6 3,950.6 Remuneration 2010 2,755.0 3,456.7 1,240.5 7,452.2 2,678.5 19,093.1 Remuneration 2009 2,510.7 2,009.9 666.7 5,187.3 3,482.7 18,044.4 Structure of pension commitments In principle, the pension contracts for Management Board members are, with the exception of Management Board members Pamela Knapp and Dr. Gerhard Hausruckinger, uniformly structured as defined benefit plans. After a member has completed 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, as 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 stipulated retirement age. After three years service as a member of the Management Board, the annual pension amounts to 30 % of the pensionable income. 22_GfK < < back