GfK Unveils Digital Transformation and Investment Plan

GfK has announced a transformation and investment programme, aimed at sharpening its focus on customer needs, accelerating digitization and getting the company 'back on a sustainable growth path'. Plans include a 'one office per country' strategy.

In February, GfK shareholders accepted an offer from US-based private equity firm KKR (Kohlberg Kravis Roberts) to buy 18.54% of the business, following what it described as a 'difficult year', with declines in both sales and adjusted income. A month later, the firm hired Peter Feld as its new CEO, replacing Matthias Hartmann who had resigned the previous August due to 'differing views' on the long-term direction of the business. Then in May, the company reported a 2.4% drop in first quarter group sales to EUR 352m, while the profit measure EBITDA fell 34.3% to EUR 29.4m. Later that month, the firm appointed Christian Bigatà Joseph as Chief Financial Officer, succeeding Christian Diedrich.

According to a statement issued earlier today, GfK plans to invest about EUR 100m in its new strategy, which will be financed by EUR 200m in 'cost synergies' over the next two years. The aim is to transform from a 'recognized data authority' into a provider of analytics and 'forward-thinking' product solutions, with the ability to rapidly adapt to new market conditions. GfK says it will reduce its overheads by optimizing its operating costs, centralizing business processes, focusing the organization more closely on its clients, and concentrating on new target segments. In Germany, cost reductions of about 20% are expected, and the Management Board will be discussing the impacts on the workforce and possibilities for 'socially responsible solutions' with employee representative bodies.

A new sales structure is being developed which will give more responsibility to the company's individual regions. In addition, GfK plans to centralise operations in each country in one office, with its Nuremberg headquarters relocating in 2019 to a new building serving GfK's units around the world. GfK will also move away from the previous set-up of Consumer Experiences and Consumer Choices business units, and replace these with two teams: GfK Digital and GfK Research. The first is tasked with developing new concepts and will be led by Chief Marketing and Innovation Officer Christoph Erbenich, with ideas being implemented by CTO Benjamin Jones. GfK Research will be led by David Krajicek as CEO, and will focus on the company's core competencies; while Feld (pictured) will take on responsibility for the global business in the regions, in addition to his role as CEO.

Commenting on the news, Feld said: 'GfK has become too complex and has missed key trends - particularly in terms of digitization. We are aware that our transformation into a digital, agile, innovative and client-centric company will take time and will not be easy, particularly in terms of the necessary change in our corporate culture. However, the planned changes are inevitable to be able to invest in the digital transformation and to be successful in the market in a few years from now. We will bring our employees closer together, eliminate hierarchies and provide our clients with our expertise across regions. These measures will create the structure and the culture that we urgently need to become truly client-centric and to create a sustainable growth trajectory'.

Web site: www.gfk.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.