GfK Lowers Sights for 2016 as First Half Disappoints

GfK has announced that its results for the first six months of the year are 'below prior year's financials for the same reporting period', and warns it is no longer likely that group sales growth will outperform the market.

In the first half of 2016, sales in the Consumer Experiences sector fell short of the company's expectations as a result of 'weak order intake' in traditional research areas. GfK says resource and cost reduction actions could not fully off-set the resulting AOI decline, and due to this and a reduced outlook for the Consumer Experiences sector, GfK will book a goodwill impairment of approximately Euro 139m in the second quarter.

While the Consumer Choices sector had 'strong' organic growth driven both by point-of-sales measurement and media measurement, GfK says margin was under pressure due to delays in a number of growth initiatives in these two areas. In addition, the sector margin was impacted by the poor performance of the crop protection and animal health business, which was sold at the end of April.

According to the statement, preliminary organic sales growth is at -1.5%, and the AOL margin (adjusted operating income in relation to sales) is down from 9.5% to 8.2%. 'While the company will continue to aggressively drive its transformation initiatives and will do its utmost to improve results, it is possible that sales growth will remain below market and that the margin will be below prior year's level. This will depend on the development of the order intake in the Consumer Experiences sector and the progress of the growth initiatives in the Consumer Choices sector'.

The firm's half-year report will be published next Friday - August 12th.

Web site: www.gfk.com .