GfK collates by dominic.cecilia


									Annual Report 2002   GfK. Growth from Knowledge
                     Knowledge: the gateway to customers and consumers

Th e G f K G R O U P: A N N U A L R E P O R T 2 0 0 2

C2* The GfK Group, business divisions and
    regional presence

   1 Aims and strategies, highlights 2002,
     mission statement

   2   Members of the Supervisory Board
       Report by the Supervisory Board

   6 Foreword by the Chief Executive Officer:
     To our shareholders and business associates

   9 Renewing our core message “GfK. Growth from

 12    Overview of 2002

 14 GfK special: the market research industry and
    GfK business divisions
    Knowledge: the gateway to customers and

 52 GfK shares – Investor Relations:
    Difficult year for GfK shareholders

 58    The Management Board

* Cover pages are marked with “C”


 61    Management report
 89    Financial statements
 94    Notes to the consolidated financial statements
127    Auditors’ report


129    Glossaries and abbreviations
134    Contacts
 C3    The GfK Group: five-year overview
 C3    Index
 C4    Financial terms
Information services in four business divisions


Through its Consumer Tracking division, GfK provides
clients in 24 countries throughout Europe with
information services based on continuous surveys
and analyses of consumer purchasing decisions and
behaviour. These cover consumer goods and services
of all kinds.


Through its Non-Food Tracking division, GfK
provides clients in industry and retail in 44 countries
around the world with information services derived
from continuous retail sales analyses and surveys on
consumer technology markets.


Through its Media division, GfK provides clients in
20 countries throughout Europe with information
services on the intensity and nature of media usage
and media acceptance. The offering covers both
the classic media such as television, radio, print and
outdoor advertising as well as the new online and
offline media.


Through its Ad Hoc Research division, GfK
provides clients in 29 countries around the world
and via partnerships in another 61 countries with
information services for their operational and strategic
marketing decisions. These include tests and surveys
on product and pricing policy, brand management,
communication, distribution and customer loyalty.

Sales by business division, 20021)

                                                                    In %   In EUR m
                         15 %        Consumer Tracking             15 %        86.0

                                     Non-Food Tracking             25 %       137.3
44 %
                                     Media                         11 %        61.3

                                     Ad Hoc Research               44 %       246.3
                       25 %
                                     Other                          5%         28.5
                   11%               Total                         100 %      559.4
                                1) Rounding differences possible

Established almost 70 years ago as Germany’s first market research company, with more than
120 subsidiaries, offices and participations in over 50 countries on five continents, the GfK Group
is one of the leading market research organizations. Ranked No. 1 in Germany and No. 5 in the
world, the Group employed almost 4,900 people at the end of financial year 2002, over 70 per cent
of whom are based outside Germany.
We provide clients from industry, retail, the service sector and the media with information
services, which they use for their marketing to existing and potential clients as well as
to distinguish themselves from the competition. As a company with a long tradition, we are
careful to maintain in our work the continuity that comes with decades of success in the business.
At the same time, we use innovation and progress to drive our activities.

              The GfK Group – worldwide presence

                      Northern Europe        Denmark, Finland, Ireland, Norway, Sweden, UK

                      Western and            Germany, Austria, Belgium, Cyprus, France, Greece, Italy,
                      Southern Europe        Netherlands, Portugal, Spain, Switzerland

                      Central and            Azerbaijan, Bulgaria, Croatia, Czech Republic, Hungary, Poland,
                      Eastern Europe         Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia,
                                             Turkey, Ukraine

                      Asia and               Australia, China, Hong Kong, India, Indonesia, Japan, Korea,
                      the Pacific            Malaysia, New Zealand, Singapore, Taiwan, Thailand, Vietnam

                      America                Brazil, Canada, Mexico, USA

                      Middle East            Egypt, Iran, Saudi Arabia, South Africa, United Arab Emirates
                      and Africa

                      Sales by regions, 20021)

                                                                                      In %   In EUR m
                      7%                                Germany                        37       204.7
                      5%                                Northern Europe                11        59.1
                                            37 %
                                                        Western and
                                                        Southern Europe                35       196.7

                                                        Central and
                                                        Eastern Europe                  5        28.5

                                                        America                         7        40.4
                       35 %                 11 %
                                                        Asia and the Pacific            5        30.1

                                                        Total                         100       559.4
                                                   1) Rounding differences possible
                                               Aims and strategies, highlights 2002, mission statement   THE GfK GROUP

                                                               HIGHLIGHTS 2002
                                                               The GfK Group: number 5
                                                               in the market research industry worldwide

    C O R P O R AT E VA L U E S                                • The GfK Group increased its sales in 2002 by 10.6 per
                                                                 cent to EUR 559.4 million, making it the number 5 in
    • Client focus                                               the market research industry worldwide.

    • Our people                                               • There was an over-proportional increase in EBIT including
    • Innovation                                                 income from participations, which rose 53.1 per cent
                                                                 to EUR 50.0 million. The EBIT margin after income
    • Global expertise –                                         from participations also improved from 6.5 per cent to
      local knowledge                                            8.9 per cent.
    • Growth                                                   • Organic growth amounted to 3.5 per cent. GfK has again
                                                                 outperformed the market research sector.                     1

                                                               • GfK continued to expand its network in 2002, in particular
                                                                 in Europe and Asia and the Pacific as well as in its
+   AMBITIOUS AIMS                                               healthcare activities.

    • Outperform sector sales growth
    • Achieve attractive margins
    • Lead the way through innovation                          M I S S I O N S TAT E M E N T
    • Focus on customer loyalty                                Companies need to make decisions.
                                                               Knowledge is the basis for decision-making.

+   C L E A R S T R AT E G I E S                               Our business information services provide the essential
                                                               knowledge that industry, retail, the service sector and the
    • Expansion in selected markets                            media need in order to make their decisions. As a knowledge
                                                               provider, we aim to be at the top in all the global markets
    • Excellence in added value services and
                                                               in which we operate – in the interests of our clients, our
      consultancy                                              employees, our company, our shareholders and the general
    • Leverage of our unique expertise in                      public.

      consumer, healthcare, media and
      retail markets
    • Long-term investment in most advanced
      technologies and Internet applications

=   Growth from Knowledge

                Peter Zühlsdorff                       Dr. Wolfgang C. Berndt
                                                       Since 13 June 2002
                Chairman of the Supervisory Board
                                                       Member of the Board of Directors,
                Managing Director,                     Cadbury Schweppes
                Tengelmann Warenhandelsgesellschaft,   PLC, London, UK
                Mülheim/Ruhr                           Member of Österreichische Werbewissenschaftliche
                                                       Gesellschaft, Vienna, Austria
                Managing Partner of DIH –
                Deutsche Industrie Holding GmbH        Peter Danzl
                                                       Independent Works Council representative
                                                       at GfK Aktiengesellschaft

                                                       Helga Haub
2                                                      Until 13 June 2002
                                                       Advisor to the sole Managing
                                                       Partner of Tengelmann
                                                       Warenhandelsgesellschaft, Wiesbaden

                                                       Klaus Hehl
                                                       Deputy Chairman of the Supervisory Board

                                                       Hans-Jürgen Kunert
                                                       Independent Works Council representative
                                                       at GfK Aktiengesellschaft

                                                       Robert Raeber
                                                       Chairman of the CIAA (Confederation of the Food
                                                       and Drink Industries of the EU)

                                                       Hayo Riesenbeck
                                                       Since 13 June 2002
                                                       Director of McKinsey & Company,
                                                       Düsseldorf office

                                                       Dr. Karl Gerhard Schmidt
                                                       Until 13 June 2002
                                                       Chairman of the Supervisory Boards of
                                                       Greiffenberger AG, Marktredwitz, and Strenesse AG,

                                                       Dieter Wilbois
                                                       Senior Specialist Software Development
                                                       at GfK Aktiengesellschaft

                                                       Elmar Wohlgensinger
                                                       President of the Board of Administration of the
                                                       IHA Institut für Marktanalysen AG, Hergiswil,
                                                                         Report by the Supervisory Board   THE GfK GROUP


In financial year 2002, the Supervisory Board kept itself informed on a regular basis of the
GfK Group’s business development, income and financial position, its personnel situation and
impending investments. It has monitored and advised on the activities of the company’s
Management Board and discussed all significant business events with the Management Board.

                 In addition, at the five meetings of the Supervisory Board, individual topics were
                 discussed in depth. The main topics here were the strategic direction of the
                 GfK Group and its international acquisitions activity, discussion and approval
                 of the annual accounts for 2002, as well as discussion and approval of the
                 budget for financial year 2003.                                                                           3

                 The Supervisory Board also dealt with the status of and further implementation
                 of the GfK Group’s risk management system. The discussion and implementation
                 of corporate governance rules were also high on the agenda.

                 During the financial year, the Chairman of the Supervisory Board was in constant
                 contact with the Management Board.

                 The work of the Supervisory Board was supported by the Finance Committee
                 and Personnel Committee.

                 The Finance Committee, which held four meetings in 2002, dealt with the
                 company’s business development, income and financial position as well as
                 impending investments. Additional focal points were the investment policy
                 for the company’s liquid funds as well as the further development of the risk
                 management system and internal auditing. Other main topics were questions
                 pertaining to the accounting system and interim reporting for the company.

                 The Personnel Committee also met four times and mainly deal with the
                 remuneration of the Management Board and questions relating to contract
                 extensions for the Management Board, as well as discussing the GfK Group’s
                 personnel strategy.

                 In a difficult economic environment, the GfK Group continued its targeted global
                 expansion through strong organic growth and acquisitions during financial
                 year 2002. The expansion of its network of holdings was in line with the
                 Group’s strategy as developed by the Management Board and approved by
                 the Supervisory Board. At the end of financial year 2002, the Supervisory Board
                 noted that as number five in the top ten competitors in its field, the GfK Group
                 is in a good position.
    At the Annual General Meeting on 13 June 2002, Helga Haub and Dr. Karl Gerhard
    Schmidt resigned from the Supervisory Board at their own request. The Supervisory
    Board would like to thank them for the many years’ of dedicated commitment to
    the interests of the GfK Group. At the proposal of the Supervisory Board, the
    Annual General Meeting appointed Dr. Wolfgang C. Berndt and Hayo Riesenbeck
    to the Supervisory Board. The GfK Supervisory Board therefore benefits again
    from two experts with many years of experience in industry and consulting. The
    term of office for the new members shall run until the end of the Annual General
    Meeting which approves the actions of the Supervisory Board for financial year
    2005. During the last financial year, the Supervisory Board extended the contract
    with Dr. Gérard Hermet, who is responsible for the Non-Food Tracking division,
4   in advance for a further five years until 31 December 2008.

    In accordance with the resolution of the Management Board in its meeting on
    9 December 2002, the Supervisory Board resolved on 19 December 2002 to
    implement the recommendations of the Government Commission German
    Corporate Governance Code with three deviations. GfK has issued a declaration
    of compliance pursuant to § 161 of the German Stock Corporation Act (AktG),
    which is published on the website at

    The deviations are as follows:

    The owners of the company passed a resolution on authorized capital at the
    Annual General Meeting on 13 June 2002 with a 98 per cent majority, which
    also included the exclusion of shareholder subscription rights. There are strict
    limits to this exclusion. The authorization is intended to give the Management
    Board the required flexibility to rapidly implement decisions for the good of
    the company and the owners.

    GfK is refraining from giving details of individual Supervisory Board and
    Management Board remuneration, shares and stock options in favour of an
    aggregate illustration split into Supervisory Board and Management Board.
    The information will be broken down into fixed salary and variable salary
    components as well as into portfolios of stock options and GfK shares. This
    information is given in the Notes to this Annual Report.

    The reduction in the timeframe for publishing consolidated accounts and interim
    reports is a priority for the Management Board and Supervisory Board. The
    Management Board has introduced measures to expedite publication of the
                                                                       Report by the Supervisory Board   THE GfK GROUP

The annual financial statements and the management report for GfK AG and the
Group for financial year 2002 have been audited by Bayerische Treuhandgesell-
schaft, taking into account the book-keeping, and provided with an unqualified
auditors’ report. All members of the Supervisory Board received the auditors’
reports in good time ahead of the accounts meeting. The Supervisory Board
plenum discussed these documents at length in its accounts meeting, as did
the Financial Committee of the Supervisory Board at its preparatory meeting.
Both these meetings were attended by the auditors who signed the annual and
consolidated financial statements. They reported on the audit in general and on
the key points stipulated in the audit mandate, and gave detailed responses to
questions from the members of the Supervisory Board.
The Supervisory Board has noted the audit report and, following its own
examination of the annual financial statements drawn up by the Management
Board, has given its approval. The financial statements are therefore adopted.
The Supervisory Board has seconded the proposal of the Management Board
for appropriation of the profits.

The Supervisory Board would like to thank the members of the Management
Board, and the members of the Works Council, all GfK AG staff and the staff of
affiliated companies for their hard work and commitment.

Nuremberg 11 April 2003

Peter Zühlsdorff
Chairman of the Supervisory Board
    T O O U R S H A R E H O L D E R S A N D B U S I N E S S A S S O C I AT E S

                                        We set our sights high in 2002 and are very pleased that we not only achieved
                                        our aims but even exceeded them:

                                        • We were able to achieve double-digit growth both in terms of sales and results
                                          and increased our EBIT margin after income from participations from 6.5 to
    Dr. Klaus L. Wübbenhorst
    Chief Executive Officer of GfK AG
                                          8.9 per cent.

                                        • With net organic growth of 5.3 per cent, we once again achieved growth above
                                          the sector average.

                                        • We further expanded our global network in 2002, focusing on creating a solid
                                          foundation in the profitable growth market of healthcare.
                                        • The growth achieved means that we are now ranked No. 5 in the worldwide
                                          market research sector.

                                        At the ordinary Annual General Meeting on 13 June 2003, the Management Board
                                        and Supervisory Board will propose a dividend payment of EUR 0.20 per share.
                                        This represents an increase of almost 18 per cent on last year’s dividend payment
                                        of EUR 0.17 per share, and a dividend increase of 54 per cent since our IPO.

                                        So these are the hard facts of our company’s success in 2002. Success like this
                                        is largely based on the commitment of our employees throughout the world,
                                        whose exceptional motivation and drive in these somewhat difficult times have
                                        made this positive development possible.

                                        Knowledge: the bridge to clients and consumers

                                        Chosen as the leitmotif of this year’s Annual Report, in which four examples of
                                        successful cooperation with clients demonstrate the importance of knowledge for
                                        industry, retail and media, in terms of the markets in which they operate and the
                                        consumers and users of their products and services. We show how

                                        • brand manufacturer Unilever uses market research to position its many
                                          global and regional brands in response to the changing requirements of Polish

                                        • British retail group Dixons uses market research to fulfil the expectations and
                                          demands of the purchasers of consumer technology goods and to stay ahead of
                                          the competition.
                                                                     Foreword by the Chief Executive Officer   THE GfK GROUP

• the new Radiocontrol metering technology developed by GfK helps radio
  stations, advertisers and media professionals to determine where, when, why
  and how people use radio today.

• the owner of the most valuable brand in the world, Coca-Cola, uses market
  research to give it the edge over its competitors in terms of product quality,
  logistics, distribution and local marketing.

In an interview, Michael J. Naples, one of the most prominent and committed
personalities and experts in the world of market research, outlines how
interesting and forward-looking our business is and describes the major
challenges faced by the sector.                                                                                                7

Corporate community: a driving force for future success

Commercial success and cooperation with our clients constitute a cornerstone
of our corporate ideas and actions. 2002 was a year of integration and
co-determination for our employees in the GfK Group global network, with the
focus on corporate culture and communications as well as social responsibility.

Our initiatives have been very successful:

• We adopted the Corporate Values developed by the Excellence team, a group of
  top young high-flyers at GfK. The values provide us with a clear, strong system
  founded on five principles which express how we understand our work and our
  role as a provider of intelligent solutions.

• We implemented our new Corporate Design guidelines and revamped our logo
  to create a contemporary and unmistakeable brand image for GfK worldwide.

• We launched our global Intranet, gfk4u, which helps our companies and
  employees to share their vast knowledge and expertise throughout the world as
  well as keeping GfK always a step ahead of the competition.

• We were involved in scientific, cultural and social projects, such as co-structuring
  and financing a course at Erlangen-Nuremberg University; providing 10,000
  advertising posters from four decades on permanent loan to the Germanisches
  Nationalmuseum and sponsoring the European Children’s Theatre Festival 2002.

At the end of 2002, we also submitted a declaration of compliance with the
recommendations of the German Corporate Governance Code in order to further
strengthen your trust, as shareholders, in the GfK Group.
    Outlook: our aims for 2003

    We have also set our sights high for 2003. We intend to once again outperform
    the sector in terms of organic growth, increase our margins and reinforce our
    competitive international position through innovation, quality and client focus.

    We intend to ensure that our employees worldwide have secure, interesting jobs
    and the opportunity to develop their talents. This will of course also benefit
    our clients, many of whom have cooperated with us for a great number of years.
    Our continued strategy for the future is to offer them all our knowledge, expertise
    and experience to help them remain successful in their respective markets.
8   We would like to extend our thanks to you, our shareholders, for your loyalty
    in these turbulent times of weak stock markets and change throughout the world,
    and for your trust in our work and commitment to all that we undertake.

    Nuremberg, 11 April 2003

    Dr. Klaus L. Wübbenhorst
    Chief Executive Officer
                                       GfK. Growth from Knowledge   THE GfK GROUP


               The letters GfK are much more than just a name. They represent a
               stamp of quality and at the same time convey our core message,
               which our clients worldwide associate with quality, innovation and
               professionalism. In 2002, we opted to redesign our logo and revise
               our Corporate Values with the aim of unifying the corporate network
               and reinforcing the GfK brand in preparation of future challenges.

               Our new logo – an unmistakable symbol of unity

               In recent years, GfK has grown over-proportionally quickly and
               considerably expanded its network. In view of this dynamic              9
               growth, it was even more important to revise the corporate image
               to highlight the essence and significance of GfK. A clear identity
               is the prerequisite for credibility and trust.

               As part of the process of redesigning and standardizing its corporate
               image, GfK has also revamped its logo. The increased diversity
               of the corporate network required a symbol which would embody
               inner unity and stand out from competitors worldwide. At the same
               time, it should convey the identity of GfK in an abstract way.

               The new logo design had to meet high demands. It needed to be
               simple but powerful, clear and unmistakable. Given the variety of
               working approaches and cultures within the GfK network, this
               was a major challenge. Each of the business divisions and GfK
               companies has its own character and communicates using its own
               language and symbolism.

               But for all its diversity, GfK is one entity. And this is what the
               new logo, incorporating existing and new design elements, should

     GfK. Growth from Knowledge

     Our Corporate Values

                             Client-driven                            Our people

                             Our clients’ needs drive our business.   People are our main asset.
                             We continuously seek to better under-    Development through training,
                             stand our clients’ needs, improve all    sharing ideas and sound experience
                             aspects of existing research products,   is essential to our business. Our
                             offer innovative products and to         people have the freedom to explore
                             be an integral part of our clients’      and develop their talents and are
                             information systems. Accuracy,           empowered to achieve our common
                             sound methodology, excellent client      goals. We encourage and reward
                             service, flexibility, timely delivery    initiative, dedication and hard work.
                             and cost effectiveness all ensure that   Fairness, good communication and
                             we meet and even exceed our clients’     working relationships at all levels
                             expectations. We build long-term         and locations are key to our success.
                             partnerships with our clients,
                             contributing to their success.
                                                                                      GfK. Growth from Knowledge     THE GfK GROUP

                                                           Our Corporate Values
                                                           Communicating our core message

                                                           Growth from Knowledge, the central premise of the GfK brand
                                                           advertised throughout the world, perfectly encapsulates almost
                                                           seventy years of successful GfK history. It is a core element of
                                                           our creativity, commitment and the future – both our own and that
                                                           of our clients.

                                                           The various aspects of the “Growth from Knowledge” message are
                                                           contained in the recent Corporate Values, which summarize GfK’s
                                                           strong points: client-driven, our people, innovation, global expertise    11
                                                           and local knowledge as well as growth.

                                                           Growth from Knowledge and the new Corporate Values give each
                                                           and every one of our employees the responsibility of proving the
                                                           claims in their dealings with our shareholders. The actions of all our
                                                           employees help to communicate the central message and associated
                                                           values of our company.

                                                           All our employees are GfK brand ambassadors.

Innovation                              Global expertise – local knowledge     Growth

We recognize that investing in          We respect and learn from local        Profitable growth results in greater
continuous innovation in both the       business practices and cultures and    opportunities. As individuals, teams
process and the end product is a        provide knowledge tailored to local    and business units, we are aware of
prerequisite to meeting clients’        needs. Our global network comprises    the impact of our decisions and
requirements. Our aim is to be at the   international teams, tools and         actions at all levels. We use financial
cutting edge with our key business      products to provide multinational      and non-financial measurements
activities. Clients’ needs, evolving    clients with consistent services. As   to review and improve performance
markets, new technology and the         proud members of the GfK Group,        on an ongoing basis. Our growth
expertise and ideas of our people       we share local and international       provides investors with a fair return
throughout the world are what drive     expertise to continually improve all   on the financial resources they have
innovation.                             aspects of our business.               entrusted to us.
                                                                                                                                            Ratings measurements
                                                                                                                                            include digital TV
                                                                                                                                            channels in Germany
                                                                                                                                            for the first time

                                                                                                                                            AGF, the TV research
                                                                                                                                            partnership to which
                                                                                      Majority holding in
                                                                                                                                            all the major TV stations
                                                                                                                                            in Germany belong,
                                                                                      The Spanish subsidiary,                               commissions GfK
                                                                                      EMER-GfK, tops up its                                 Fernsehforschung
                                                                                      27.6 per cent stake in                                to include digital
                                                                                      Portugal’s Intercampus                                programmes alongside
                                                                                      to 50.01 per cent.                                    its research into the
                                                                                      Founded in 1990, the                                  consumption of the
                                                                                      company operates in                                   analogue channels in
                                                                                      the Ad Hoc Research                                   the AGF/GfK TV panel
                                                                                      division.                                             in future.
     OVERVIEW OF 2002

     01                          02                         03                        04                         05                         06

     Major media contracts       GfK sponsors               Acquisition of            Consumer climate           Licences granted for
     in Belgium and Austria      Panoptikum – the           Informark in Australia    in Germany falls to        Radiocontrol in Asia
                                 European Children’s                                  record low                 and the Pacific
     With two major                                         Acquisition of
                                 Theatre Festival
     contracts in Belgium                                   Informark Pty Ltd.        In April 2002, the pro-    ACNielsen Media
     and Austria, GfK                                       Australia, which          pensity to buy indicator   International acquires
     consolidates its position                              specializes in retail     in Germany falls to its    a licence to use
                                 For the second time,
     as the leading media                                   research for consumer     lowest point in 20 years   Radiocontrol. A leading
                                 GfK sponsors                                                                                               GfK annual
     research organization in                               durables. GfK expands     according to a             media research company
                                 Panoptikum, the inter-                                                                                     conference 2002:
     Europe. The contract in                                its leading position in   consumer climate           in the USA and Asia,
                                 national children’s                                                                                        modern branding
     Belgium runs from the                                  the non-food tracking     survey carried out by      ACNielsen Media
                                 theatre festival in
     start of 2002 to the                                   segment in Australia.     GfK for the European       International intends      At the 52nd GfK annual
                                 Nuremberg and
     end of 2008 and the                                                              Commission. The main       to use the electronic      conference on “Market
     contract in Austria from                                                         reasons for this are the   measuring technology       leadership – exploiting
     the start of 2002 to the                                                         Euro-inflation debate,     developed by GfK           and securing success
     end of 2004.                Stake acquired in                                    ongoing high levels of     company, Telecontrol,      potential”, GfK presents
                                 M2A, France                                          unemployment and the       for its radio ratings      exclusive surveys on
                                                                                      less than rosy economic    research in 16 countries   modern branding to
     GfK Belgrade                GfK acquires a 35 per
                                                                                      outlook.                   in Asia and the Pacific.   600 marketing experts
     founded                     cent holding in M2A,
                                                                                                                                            from all over Germany.
                                 one of the leading
     GfK launches its                                                                                                                       Guest speakers are
                                 providers of information
     business activities in                                                                                                                 Dr. Rolf Kunisch,
                                 services for the veteri-
     Serbia and Montenegro                                                                                                                  CEO of Beiersdorf AG,
                                 nary sector in France.
     through the newly                                                                                                                      Professor Dr. h.c.
     founded GfK Belgrade.                                                                                                                  Lothar Späth, CEO of
     The new company                                                                                                                        Jenoptik AG.
     is taking over the
     activities of Focus
     Marketing Research,
     the country’s third
     largest research
                                                                                                               Overview of 2002         THE GfK GROUP

expanded in Germany
and Switzerland

The GfK Group takes                                     Award for best
over in full the business                               methodology
                                                                                                              Contract on                 Nuremberg poster
operations of I+G                                       presentation
                                                                                                              TV ratings research         collection handed over
Nürnberg and its
                                                                                                              in the Ukraine              to the Gemanisches
subsidiaries GPI
Kommunikations-                                         The speech on                                         The Ukraine Industrial
forschung and I+G                                       “Assessing the financial                              Television Committee        A ceremony is held to
Suisse from the existing                                brand value” by                                       commissions GfK             mark the handing over
joint venture I+G                                       Siegfried Högl and                                    subsidiary GfK-USM          of a collection of
Gesundheitsforschung                                    Dr. Oliver Hupp, both                                 to set up a TV panel in     around 10,000 posters
                                                                                   Strateji Mori
with NFO Europe.                                        of GfK, and Hamburg                                   the Ukraine to measure      worth EUR 1.6 million
                                                                                   in Turkey
GfK AG’s new HealthCare                                 marketing professor                                   audience ratings for        by GfK-Nürnberg e.V.
segment expands the                                     Dr. Hendrik Sattler was    The acquisition of         Ukraine TV stations         und the Nurembeg
offering for information                                awarded the prize for      Strateji Mori in Turkey    and programmes. The         Academy for Sales
services for the medical,                               best methodology pre-      makes the GfK Group        contract starts in 2003     Research on permanent
dental and veterinary                                   sentation at the 2002      the market leader in ad    and runs for an initial     loan to the Germani-
markets.                                                ESOMAR Conference.         hoc research in Turkey.    period of four years.       sches Nationalmusuem.

07                          08                          09                         10                         11                          12

Significant acquired        GfK sponsors market                                    GfK sponsors the           First client conference     GfK Christmas card
in Belgium                  information manage-                                    Nuremberg marathon         for Marketing               campaign
                            ment faculty                                                                      Services, South Africa
Acquisition of majority                                                            Around 7,500 local                                     Christmas pictures
holding in Belgium          GfK-Nürnberg e.V., the                                 people of all ages and     Almost 100 clients from     by the children at the
based company               majority shareholder in                                walks of life take part    trade and industry          state home for children
Significant. This adds      GfK AG, is providing                                   in the Nuremberg           attend the first client     and young people in
onto GfK’s services in      EUR 384 thousand for                                   marathon 2002. GfK is      conference held by          Reutersbrunnenstrasse
the Media and Ad Hoc        three years to the market                              one of the main spon-      GfK Marketing Services      in Nuremberg provide
Research divisions and      information faculty at                                 sors and approx. 120       in South Africa.            the creative input for
puts GfK into the top       the University of                                      GfK employees and                                      15,000 GfK Christmas
5 in the industry in        Erlangen Nuremberg,                                    their families take part                               cards and around 5,000
                                                                                                              New Corporate Values
Belgium.                    which was established                                  in the race.                                           gingerbread tins, which
                                                                                                              for GfK
                            in 1999 by GfK and the                                                                                        are then sent to clients
                            University. The second                                                            GfK’s first Excellence      and friends of the
Acquisition of IFR
                            sponsoring agreement                                   Client conference          Team made up of             company.
Group in France
                            gives one or two gradu-                                in Australia on enter-     selected next gene-
GfK acquires a 51.4 per     ates the opportunity to                                tainment                   ration managers has
cent holding in Institut    attend the MBA course                                                             been working on new
                                                                                   GfK Australia presents
Français de Recherche       in market research at                                                             Corporate Values for
                                                                                   special GfK services,
(IFR) in France. The        the University of                                                                 a year. Following the
                                                                                   products and innova-
acquisition is a further    Georgia in Athens near                                                            presentation to the
                                                                                   tions in the entertain-
step in GfK’s expansion     Atlanta.                                                                          Management Board,
                                                                                   ment sector to some
of the market leader-                                                                                         the values will be
                                                                                   200 guests. This is fol-
ship of its Non-Food                                                                                          presented globally to
                                                                                   lowed by the GfK Video
Tracking division in the                                                                                      all GfK employees.
                                                                                   Awards Night attended
French market.
                                                                                   by around 400 guests
                                                                                   from TV, industry and

     the gateway to customers and consumers
     Knowing and understanding the markets in which buyers, consumers and the users of products and
     services move can be the critical factor in deciding whether a company will prosper or fail in today’s
     marketplace. This applies to global market leaders as well as companies with a national, regional or
     local focus. Modern market research such as that conducted by the GfK Group, specializes in providing
     information on markets, buyers, consumers and users to its clients in commerce, industry and the
     services sector so that they can operate successfully in their markets on a long-term basis.

     An interview on the future of market research with an expert and four reports on the work of the
     GfK business divisions highlight how market research can support and complement an entrepreneurial


                                                                         Market knowledge                                Page
                                                                         for market success                              16
                                                                         Interview with Michael J. Naples

                                                                         Companies which operate successfully in
                                                                         their markets use a range of information on
                                                                         markets, customers and consumers. This
                                                                         information can be internal or external, from
                                                                         generally accessible or exclusive sources.
                                                                         The trick in market research is to produce
                                                                         customized information packages from a
                                                                         broad spectrum of different information using
                                                                         all the techniques and methods available
                                                                         today. In this interview, Michael J. Naples,
                                                                         one of the best known international figures
                                                                         in the market research industry, talks about
                                                                         the future demands on a market research
                                                                         provider such as GfK.
                                                                                         GfK Business Divisions  fK
                                                                                    Zukunft der Marktforschung GG f K SSP E C II A L
                                                                                                                         PEC A

Page   Consumer Tracking
20     Learning to think like a consumer

       Consumer research for Unilever Poland          regarded as offering consistent quality,
                                                      being reliable and of lasting value. The
       There was a rude awakening for Polish          report highlights the difficult period of
       people after the consumer boom in the first    change experienced by Polish consumers
       half of the nineties – including learning      with regard to society and the economy.
       not to take the advertising promises of        It shows how the management at Unilever
       brand manufacturers and retailers at face      Poland is responding to this change and
       value. The most popular brands among           how it uses market research to great effect.
       Polish consumers today are those which are

Page   Non-Food Tracking
28     Finding the answer to the second question

       Retail research for the Dixons Group           as well as long-term, strategic decisions.
       in the UK                                      The Dixons Group, Britain’s largest
                                                      specialist consumer electronics retailer,
       The times when retailers acted on the basis    began using market research to support
       of hunches and set up flourishing retail                                                                                        15
                                                      its short, medium and long-term activities
       chains in no time are long gone. Today,        back in the eighties.
       large retailers are dependent on all kinds
       of information about markets, competitors
       and consumers – in day-to-day business,
       logistics and short-term corporate planning

Page   Media
36     The listening watch

       Radio audience research for SRG SSR idée       recall of radio programmes and stations
       suisse in Switzerland                          listened to, the details of which are
                                                      then recorded in a diary, participants of
       The future of SRG SSR idée suisse’s radio      the radio reach survey carried out by
       audience research began in 2000, when          SRG SSR and its subsidiary Publica Data
       it was the first global media company to       wear a wristwatch which records all
       decide to record radio reach electronically.   radio/TV sounds in the wearer’s environ-
       The Radiocontrol metering technology           ment 24 hours a day.
       developed by GfK subsidiary Telecontrol
       made it all possible. Instead of relying on

Page   Ad Hoc Research
44     Providing moments of refreshment to people – everywhere at any time

       Customer satisfaction research                 The Coca-Cola Company. This is brand
       for Coca-Cola in the USA                       policy at its best. In addition to consistently
                                                      high product quality, there are also other
       Coca-Cola has been the world’s most            quality criteria which affect production,
       valuable brand for years, and with good        distribution and marketing. The CLASS
       reason, as there is no other soft drink        customer satisfaction survey carried out
       drunk as frequently. Four out of the five      with bottlers in the USA gives weight to
       most frequently consumed soft drinks in        the mission statement of the top brands of
       the world are produced using syrups            The Coca-Cola Company.
       and concentrates manufactured by
                     Market knowledge for market success
                     Interview with Michael J. Naples on the future development
                     of a sector driven by client requirements

                     Michael Naples, one of the most prominent figures in the international market research industry,
                     describes how research has changed to meet the needs of users.

                                                                                   employed professional market researchers,
                                                                                   developing a large number of techniques that
                                    Michael J. Naples                              are still in use today, and they also trained a
                                    is President of the Marketing Research
                                                                                   lot of good research specialists.
                                    Institute International at the University of
16                                  Georgia, Athens, Georgia, USA, which
                                                                                   So when did the fundamental change take
                                    offers distance learning courses in market
                                    research worldwide. The institute is backed
                                    by several organizations such as the           The next era in market research began in the
                                    American Marketing Association, the            1960s. Perhaps I can explain the reason with a
                                    Advertising Research Foundation and the        personal example of my own. At that time, I was
                                    European market research association,
                                                                                   Head of the Advertising Research department
                                                                                   at the US company Lever Brothers, responsible
                                                                                   for the food, personal care and household care
                                                                                   segments. One day I found that we were employing
                                                                                   four different ad agencies to do our copy and
                                                                                   advertising tests. They were undoubtedly all
                     What do you believe have been the main
                                                                                   first-class agencies, but each of them had developed
                     landmarks in the development of marketing
                                                                                   its own advertising test. What is a client like Lever
                     and market research?
                                                                                   Brothers supposed to do if four different agencies
                     Systematic marketing and market research                      all say their test is the best? So along with Lever
                     did not really become important until the early               Brothers, all the big advertisers began doing their
                     1950s, when brand manufacturers such as                       own market research. Each wanted to find out
                     Procter&Gamble and Unilever were expanding                    for itself what was valid and reliable in terms of
                     rapidly. That was when meeting consumer                       effective marketing. At Lever Brothers, we had
                     needs became the mantra of marketing                          around 30 people developing a differentiated
                     companies.                                                    portfolio of product development, advertising and
                                                                                   consumer research tests. It stayed that way until
     » Market researchers are increasingly having to breathe                       the 1970s.
       in the same way, move at the same speed and speak
       the same language as their clients. «                                       When did market research companies come
                                                                                   onto the scene?
                     The initial impetus for the growing demand for
                                                                                   At some stage, brand managers started to focus
                     consumer and market data came from advertising
                                                                                   on costs, and in the 1980s we saw a lot of
                     agencies and companies’ in-house advertising
                                                                                   re-engineering and job cuts as American and
                     departments that dealt with all marketing issues.
                                                                                   European companies tried to restructure and
                     They maintained large research departments and
                                                                                   become more productive. In-house market
                                                                                   research departments were no exception; they
                                                                                                             Market research sector   GfK SPECIAL

About Michael J. Naples

From 1981 to 1996 , Michael J. Naples      market research sectors. The ARF honoured      specialist articles and several books on
was General Manager and President of       him by creating the Michael J. Naples          the subject of advertising frequency and
the Advertising Research Foundation in     Leadership Award for excellent entre-          advertising effectiveness. Princeton-born
New York, which, during his time there,    preneurial achievement, which is awarded       Naples began his career at the Lever
he turned into the biggest international   every two years. In addition, Michael          Brothers Company, working his way up
specialist association for companies       Naples is a leading light in American market   to Marketing Research Director.
operating in the advertising, media and    research. He has published numerous

became a lot smaller, and the research industry
profited from this. It grew mainly because it took
on more and more work previously done by
clients, particularly brand manufacturers. The
number of people employed in in-house research
departments decreased, and the focus of their
work was different from that of people in market
research companies.

How would you describe the brand industry
research situation today?                                                                                                                           17

These days, most in-house marketing research
managers are no longer responsible for all areas
of the company’s business. They are part of the
marketing team for a product area, so they are
more involved in day-to-day business than they
used to be.

Their access to information has also grown
enormously. In the old days at Lever Brothers,
we used to get market share data for our
products every two months. They were the basis
for our business decisions. Today they get new
information every week, sometimes every day,
always tailored to their particular area of
marketing and systematically collected. The
traditional market research spectrum includes
                                                                   information on credit card holders that can be
information on product sales, causal analysis
                                                                   collated and analyzed using data mining to gain
of sales fluctuations, standardized advertising and
                                                                   new knowledge about consumers. It can be trans-
concept tests, analytical models of the mix used
                                                                   ferred to any type of information a company has
in complex ad campaigns, continuous advertising
                                                                   about its customers and markets. Using all these
tracking, customer segmentation studies and
modelling analysis, experimental market tests and
model analysis used to optimize brand value and                      » It was the information needs of increasingly
allocation. There are countless highly developed,                      global brands that triggered globalization in the
effective and useful tools for market and media                        market research industry.«
                                                                   tools to gain knowledge that can be used to
There are also lots of new instruments used to
                                                                   manage a business and take decisions is one of the
prepare information. Take data mining, for
                                                                   main challenges facing today’s market research
example. Companies like American Express have
                                                                   and information directors. It is no longer about
                                                                   using individual research techniques for this or
                                                                   that purpose; that’s routine. It is about cleverly
                     combining all the available information to             In the 1950s, each survey was a new project.
                     make decisions which make the company more             Today, that is no longer the case. Instead, a client
                     competitive and innovative.                            of a professional market research organization has
                                                                            access to a large volume of market data. These
                                                                            days, if you want to market your products success-
                     Would you go so far as to say that is the only
                                                                            fully in a competitive environment, you need
                     thing market research will concentrate on in           a full range of information from internal and
                     the future?                                            external databases, and data obtained exclusively
                                                                            for you. That is the key. The art of market research
                     I wouldn’t go that far. Apart from support for
                                                                            companies lies in developing specific approaches
                     strategic business decisions, there will obviously
                                                                            for each client, using the techniques currently
                     still be the traditional routines. Ideas, products
                                                                            available on the market. Basically, market
                     and advertising campaigns will still need to
                                                                            researchers are increasingly having to breathe
                     be tested. There will always be test markets,
                                                                            in the same way, move at the same speed and
                     consumer surveys and qualitative interviews.
                                                                            speak the same language as their clients.

     » I believe that market research has always been a
       pioneer in the use of technology. It has been in the                 What impact has globalization had on
       vanguard when it comes to using portable computers,                  market research?
       call centre technology and the Internet to canvass                   Firstly, I believe that the question of whether
       consumer views.«                                                     globalization is good or bad is not important.
                                                                            I see globalization as being a fact of life – with all
                     But it is also about using strategic information       its positive and negative aspects. Even ten years
                     based on existing data for the long-term develop-      ago it wasn’t a major issue, apart from for a few
                     ment of the business. A forward-looking in-house       companies such as Coca-Cola or Levi. In those
                     market researcher combines traditional research        days, they were the only ones to commission
                     skills with management talent and an entre-            large numbers of surveys and use mainly market
                     preneurial attitude. He can only do that by having     research companies to carry out international
                     specialist skills that go beyond the everyday and      research in lots of different countries.
                     contribute to the company’s strategic value.
                                                                            It wasn’t until large numbers of American and
                                                                            European companies began operating on an
                     What changes have there been in the                    international scale that they began needing more
                     expectations of clients?                               international market and consumer analysis. It
                                                                            was the information needs of increasingly global
                     Of course there has been significant change
                     here too, because clients have become more
                     demanding. They want market researchers to
                     provide precise, timely information that is tailored
                     to their needs and allows them to think ahead
                     and decide in advance what their objectives are.
                     And they take it for granted that researchers will
                     understand the client’s business. It is important
                      for clients to trust the market research companies
                     they use, which means they are working with
                     fewer of these companies than they used to.
                                                                                            Market research sector   GfK SPECIAL

brands that triggered globalization in the market        Modern technology plays a critical role in this
research industry, because research companies            process. Market research has always been,
invested in globalization to meet the needs of brands.   and always will be, an industry which gains
                                                         much of its impetus for growth and innovation
Today, the world’s 25 biggest market research
                                                         from the development of new information
organizations generate 65 per cent of the industry’s
                                                         and communication technology, and plays a
USD 18 billion turnover. This is impressive evidence
                                                         trailblazing role in its use. This applies not just
of how much market research has been affected
                                                         to the instruments and media used to collect
by the general process of globalization. Big research
                                                         and process data, but also to the exchange of
companies still have to do everything in their
                                                         information, both internally and with the client.
power to assert themselves in the face of inter-
national competition.                                                                                                              19
                                                           » Managing information relevant for decision-making
                                                             requires both an ability to process and correlate
How much of a role has technology played?                    a large quantity of very varied data, and a profound
The fact is that technology has contributed to the           understanding of business.«
growth of the market research sector, perhaps
more so than in other industries. It has made            Globalization and technology are dramatically
the business easier, both in terms of collecting,        changing our clients’ businesses as well.
analyzing and developing data, and of the new            Their markets have become more complex, fast-
forms of communication and networking which              changing and competitive. Market information for
have provided major support to the business              short-term and long-term business decisions has
worldwide. I actually believe that market research       become a crucial factor of production. Managing
has always been a pioneer in the use of technology.      this information requires both an ability to process
For example, it was the first segment to use super-      and correlate a large quantity of very varied data,
market scanner technology for more wide-ranging          and a profound understanding of business. Both
information purposes. It has been in the vanguard        clients and market research companies have a
when it comes to using portable computers, call          growing need for people who are able to do this.
centre technology and the Internet to canvass            This mixture of research and consultancy means
consumer views.                                          they have an essential part to play in clients’
                                                         decisions. Clients’ information and market research
                                                         managers are supported by their colleagues
What do you think will be the key issues
                                                         in market research companies with a wealth
in market research over the next ten years?
                                                         of methodological knowledge and customized
The trends I’ve just mentioned will continue, and        information services. This is a long-term
the globalization process within the industry is not     relationship based on the principle that market
yet complete. But in addition to an “expansive”          researchers are working exclusively to achieve
globalization of company networks, we are also           market success for their clients.
going to see an increasingly “qualitative” form of
globalization, towards ever more sophisticated
and globally-usable tools and services and more
comprehensive and high-performance knowledge
                                                     Consumer Tracking   GfK SPECIAL


Learning to think
          like a consumer
     How consumer attitudes and needs changed in Poland when the iron curtain came
     down and why brand manufacturer Unilever uses market research in its approach to
     this change in Polish society.
                                   GfK Polonia: research for Unilever Poland

                                   Learning to think like a consumer

                                   There was a rude awakening for Polish companies after the consumer boom: in the first half of
                                   the nineties consumers grew up and became sceptical and at the same time their buying power
                                   dwindled. With the help of professional and imaginative market research, Unilever Poland is
                                   transforming its marketing to suit the new market conditions.

                                   Managers from Unilever Poland hastened to take
                                   part in a “real adventure”. Far away, in the smaller
                                   and smallest towns of the 16 provinces, far from
                                   the shelter of their own offices and the excitement
22                                 of life in the great metropolis, Warsaw, they were
                                   due to spend four weeks as citizens among citizens
                                   – without gold credit cards, mobile phones,
                                   cars and all the other paraphernalia of the five per
                                   cent of the population making up Poland’s top
                                   earners. On the contrary, under the guise of being
                                   related to local citizens, they had to manage on
                                   the average income of a normal Polish small-town
                                   household and experience for themselves, how to           Ana Gisa
                                   deal with the array of consumer products on offer         Ana Gisa, Head of Consumer Insight/Market Research at
                                   on just a handful of zlotys.                              Unilever Poland on the change among Polish consumers:
                                                                                             “Consumers will no longer be bamboozled. They have
                                   The project was one element of a strategy pro-
                                                                                             stopped chasing the dream.”
                                   gramme launched globally in 2000 under the title
                                   “Path to Growth”, which gave the management
                                   the necessary intelligence to successfully position
                                   Unilever brands in the Polish market. The pro-         Looking for a life with dignity
                                   gramme included two-day visits to families in the
                                                                                          Ana Gisa, consultant to the Management Board
                                   furthest corners of the country, as well as excur-
                                                                                          and Head of the Consumer Insight/Market Research
                                   sions during which current knowledge of regional
                                                                                          department at Unilever Poland, sums up: “Target
                                   problems and peculiarities, including historic and
                                                                                          groups can only be correctly addressed if the
                                   economic developments, could be absorbed. Time
                                                                                          marketing people know and like them and if
                                   and again, the Unilever “emissaries” sought to
                                                                                          they don’t deal with them from their high horse,
                                   speak to consumers in order to “see the world we
                                                                                          without having even the slightest idea of how
                                   share through different eyes”, as one participant
                                                                                          the average person lives.” As Gisa says, they, too,

     In Poland, premium brands
     are on the increase despite
      the recession. Consumers
     appreciate their consistent
      quality and lasting value.
                                                                                                 Consumer Tracking   GfK SPECIAL

                                         Entrance to one
                                       of Warsaw’s many

are looking for a life with dignity, even if the
circumstances are difficult.

Poland is currently battling against high unemploy-
ment: around 17 per cent of the 38.7 million
population has no job. At USD 3,200, the annual
income per capita is very low compared to the
German figure of USD 28,500. Initially, the mood
of change was exuberantly positive, even leading
then President Lech Walesa to dream that Poland
might become a second Japan in the early years                                                                       A surfeit of
after the revolution. As Ana Gisa puts it: “Everyone                                                                                    23
                                                                                                                     products means
was happy and looked towards the future with a                                                                       that competition
great deal of confidence,” adding: “Because of this                                                                  among brands is
dream, at first, consumers were unconcerned                                                                          fierce.
about spending money.”

In actual fact, at the beginning, people were simply
hungry to consume. It was as if paradise beckoned
after all those years behind the iron curtain and
the times when they could only dream about
Western brands and shopping. However, the critical
assessment of the Unilever market researcher is
that: “This was also a time characterized by a
complete loss of touch with reality. People spent
all their money including savings, believing that
in two or three years, their salaries would rise to        that is that we suffer from a certain lack of rational
match their consumption. We believed ourselves             logic,” as Gisa explains.
to be the future “Tiger economies” of the world,
                                                           They were completely clueless and defenceless
comparable with those of Asia”.
                                                           in the face of the new brand universe, which was
                                                           being established and promoted by companies
The end of the dream of endless consumption                according to the Western model. It was difficult to
                                                           keep pace with developments and then some time
Many foreign companies also believed in the
                                                           later, the consumer said: “Right … I’ve had enough!
dream and opened subsidiaries in Warsaw, Lodz,
                                                           All I want is ordinary detergent. I have no idea
Krakow and elsewhere. For example, 20 retail
                                                           what they are talking about and what they mean.”
chains alone have a presence, which economic
experts believe is at least twice too many, despite
the fact that Poland is a big market and a gateway           » The GfK ConsumerScan panel is the only source
to Russia and the Ukraine.                                     which can tell us who is buying our products.«
As early as 1996, the chasm between the pace of
                                                           These insights and the economic crisis in Poland
economic growth and private consumption had
                                                           and other Eastern European countries ushered in
already opened up. Consumers were living on
                                                           the second phase of consumer behaviour. Huge
credit without a care in the world, as a conse-
                                                           rafts of the population became impoverished, and
quence of a pent-up need to consume and also
                                                           the overheated and over-funded consumption
the characteristic that “we Polish consumers have
in common with other Eastern Europeans and
        Quality of life is
     what Polish people
         want and what       dropped back to a realistic level. Gisa reports:         become a very high level of interest: 27 per cent of
       premium brands        “People suddenly understood that not only they,          Polish households had taken out loans to buy
               can offer.    but their children would not benefit from the            cars, refrigerators and other desirable top grade
                             changes as they thought they would and that              consumer products. These factors now determine
24                           paradise was not just around the corner. It was          the marketing policies of Polish companies, in a
                             the phase of disenchantment, when you simply             landscape beset by other incidentals like price
                             had to accept that after all, you were just a frog,      wars, often triggered by the international retail
                             and not a prince.”                                       chains deeply embroiled in fierce competition,
                                                                                      and growing scepticism on the part of consumers
                                                                                      towards branded goods, which is a global problem.
                             Honest information rather than mystification
                                                                                      Ana Gisa sums up: “Consumers have become
                             Now people are fighting to maintain their standard
                                                                                      far more rational, knowledgeable and clever.
                             of living and their dignity.
                                                                                      They are much more demanding, even in respect
                             Whilst not wishing to be counted as poor, they are       of advertising, for example. They do not want
                             nevertheless confronting reality. For companies,         mystification, but honest information. This was the
                             this means a massive fall in private demand, due         second phase, which according to my assessment
                             to consumers having less money to spend. Many            lasted from 1998 to 2000.”
                             need the money to pay off what has meanwhile

                                                                                      Using data for ongoing market monitoring

                                                                                      Gisa has been observing people on the markets,
                                                                                      who have developed product loyalty, and who no
                                                                                      longer try everything and anything that comes onto
                                                                                      the market. Premium brands in which consumers
                                                                                      have developed a certain trust, are still showing
                                                                                      growth rates frequently counted in double figures,
                                                                                      despite the recession. Gisa elaborates: “The crux
                                                                                      of the matter is consistent quality, honesty and
                                                                                      really giving people something of lasting value.
                                                                                      People won’t be bamboozled now and are not
                                                                                      chasing the dream any more.”
                             Agnieszka Sora
                                                                                      In markets like this, market research is among the
                             Agnieszka Sora is GfK Polonia’s Managing Director. For   most important instruments at the disposal of
                             many years, the company has been supplying Unilever      marketing management when they are deciding on
                             with comprehensive information on consumer behaviour     the right products and the right positioning. This
                             in Poland, collected from the ConsumerScan Panel.        is the reason why the demands on market research
                                                                                      organizations are high and why Unilever is one of
                                                                                      the biggest clients of GfK Polonia in Warsaw.
                                                                               Consumer Tracking   GfK SPECIAL

Brief overview: Consumer Tracking
Consumers, brands and markets in the spotlight

Key services                            Service details                        • Development and trials of ECPO
                                                                                 (Electronic Consumer Panel
Information services, advice and        GfK ConsumerScan: consumer
                                                                                 Online), a system for recording
solutions providing support for         panels on fast moving consumer
                                                                                 purchasing data via the Internet
the marketing decisions of brand        goods in 24 countries; like panels
manufacturers and retailers in          in 15 other countries, these belong    • Addition of 1,000 households, the
the consumer goods and services         to the Europanel run in conjunction      heads of which are non-German
sectors.                                with Taylor Nelson Sofres.               residents, to the GfK ConsumerScan
                                                                                 panel in Germany
                                        GfK ConsumerScope: online and
Our offering                            mail panels for consumer goods and     • Above-average positive develop-
                                        services in nine countries               ment of category management
Information about consumer habits
and advice based on continuous          GfK CatmanGuide: service system
surveys and analyses of consumer        for category management of FMCG        • Reinforcement of European
buying behaviour in household           directly at the point of sale.           integration of the Europanel
and individual panels. Panel                                                     managed together with Taylor         25
participants keep a regular record of                                            Nelson Sofres
                                        The advantage for clients
their purchases over long periods.
GfK collects the information from                                              • Improvement and harmonization
                                        Clients use partly standard, partly
the households, processes and                                                    of reporting to international
                                        customized information packages to
collates it according to the clients’                                            standard in Europe
                                        monitor and manage their tactical
requirements.                           and strategic decisions on product     • Advancement of cost-cutting
                                        and pricing policy, distribution and     programme
Clients receive comprehensive
                                        category management, advertising
information packages
                                        and promotional activities. The
• about changes in purchasing           consulting services offered by our     Positioning
  behaviour with regard to              team of client advisors support        GfK Consumer Tracking ranks 2nd in
  manufacturer and retail brands        clients in their decision-making.      Europe, in terms of business volume,
  in all relevant product categories                                           in the area of continuous consumer
  and buyer structures over time,                                              research and No. 1 in Austria,
                                        The clients
  also on brand loyalty and shopping                                           the Benelux countries, Germany,
  outlet preference,                    Large multinationals as well as        Italy and Switzerland as well as
                                        SMEs and companies operating in        other Central and Eastern European
• about the effect of changes in
                                        the consumer goods and services        countries.
  pricing policy, promotional and
                                        markets. Our top clients include
  advertising activities on sales
                                        Henkel, Unilever, Procter&Gamble
  and core brands.
                                        and Nestlé.
The aTRACKtive software developed
by GfK for the specific purpose of
analyzing consumer panel data           Highlights in 2002
enables users to prepare numerous
                                        • Europe-wide rollout of the
special in-depth analyses in addition
                                          aTRACKtive software used by GfK
to standard reporting.
                                          and clients for panel analyses

                                        • Upgrading of the Internet platform
                                          aTRACKtive.web, via which clients
                                          have direct access to consumer
                                          panel databases
                Unilever brands are
     everywhere – from corner shops
      to retailers and hypermarkets,
               everyone sells them.

                                       Gisa continues: “Like anywhere else, we need           Sensing what the consumer is thinking
                                       continuous data gathering here in Poland, because
                                                                                              For Ana Gisa, of all the marketing activities a
                                       this is the only way to monitor our performance
                                                                                              company may engage in, category management
                                       and what is happening in the markets.” She goes
                                                                                              has a key function. Her interpretation of this is
                                       on to stress the particular significance of GfK
                                                                                              to identify the way in which products should be
                                       ConsumerScan for Unilever. The Group uses the
                                                                                              displayed and organized in a retail store in order
                                       ongoing data sources to inform its decision-
                                                                                              to be consumer-friendly and to help consumers
                                       making processes: “We check whether purchasing
                                                                                              make satisfactory buying decisions. She is
                                       is still at the same level and this gives us the
                                                                                              convinced that in Poland, the large supermarkets
                                       information to forecast our market share. And of
                                                                                              are still extremely consumer-unfriendly. For example,
26                                     course, this also affects pricing policy. The retail
                                                                                              anyone wishing to buy salt has to embark on a
                                       panel data tells us how much we have sold and
                                                                                              hugely convoluted journey of discovery to find it,
                                       the GfK ConsumerScan panel is the only source
                                                                                              simply because it is in a totally illogical place from
                                       which can tell us who is buying our products.”
                                                                                              the consumer’s point of view, i.e. with the spices.
                                                                                              Consumers do not regard salt as a spice. Gisa
              » Consumers have become far more rational,                                      believes category management can identify what
                knowledgeable and clever. They are much more                                  the consumer is thinking when he or she is
                demanding, even in respect of advertising, for                                shopping and this information can be used to
                example. They do not want mystification, but                                  develop the right presentation for every category
                honest information.«                                                          of goods.

                                       All useful information, as Ana Gisa confirms,
                                       which can be intelligently interpreted and used
                                       for much more than forecasting market share.              A leading provider of FMCG brands and products
                                       Beyond standard reporting, as a client of                 worldwide

                                       GfK Polonia, Unilever is also interested in special       Established in 1930 following the merger of British Lever
                                       surveys, which can be rigorously applied for              Brothers and Dutch Margarine Unie
                                       short-term planning and category management               Mission statement
                                       in the case of retail groups.
                                                                                                 “Our purpose in Unilever is to meet the everyday needs of
                                       In fact, this is at the heart of the cooperation          people everywhere – to anticipate the aspirations of our

                                       between Unilever and GfK Polonia. Gisa gives the          consumers and customers and to respond creatively and
                                                                                                 competitively with branded products and services which raise
                                       reason as the fact that the survey results enable
                                                                                                 the quality of life.”
                                       Unilever managers to give optimum advice to
                                       retail chains, by revealing the segments in which         Reach and image

                                       they are weaker than their competitors and the            Every day, consumers around the world buy 150 million
                                       product groups in which their customers are going         Unilever products.

                                       to other outlets. However, the survey results also        According to a Financial Times survey carried out in 2003,
                                       help Unilever by identifying important consumer           Unilever is the most respected company in the food and
                                       facts, such as preferred pack size.                       beverage sector.

                                                                                                 Divisions and key brands

                                                                                                 Best Foods with the brands Becel, Bertolli, Liptons, Hellmann’s,
                                                                                                 Knorr and Magnum ice cream

                                                                                                 Home and Personal Care with the brands Axe, Dove, Lux,
                                                                                                 Ponds, Brilhante, Skip and Omo.
                                                                                                     Consumer Tracking   GfK SPECIAL

GfK Polonia not only delivers raw survey data,                   Market research for on-target marketing
but also complete analyses. Gisa adds: “GfK
                                                                 Unilever’s market researcher would like an
employees have much better specialist knowledge
                                                                 even closer working relationship between the
in these matters and are able to generate value
                                                                 market research institute and the client. Because
added, for example, by contacting Nuremberg and
                                                                 markets are growing hardly at all in Poland, even
consulting their colleagues, so that they achieve
                                                                 shrinking in terms of value in many cases, only
results of much greater breadth and depth than we
                                                                 highly professional market research can help the
had originally assumed. They have ideas and their
                                                                 marketing effort to achieve Unilever’s ambitious
international focus means that they can bring in
                                                                 growth target.
helpful standard technologies and processes.”

                                                                   » Because markets are growing hardly at all in
GfK Polonia                                                          Poland, only highly professional market research
                                                                     can help the marketing effort to achieve ambitious
The No. 3 Polish market research institute; offers services in
                                                                     growth targets.«
all GfK divisions

Established in 1990 as the first non-Polish private research
                                                                 Ana Gisa’s contribution to the recipe for success is
institute in Poland
                                                                 getting to know the consumer and what he or she
Key clients: in addition to Unilever, Henkel, Kraft Foods,
                                                                 wants better than anyone else. She sees her remit
L’Oréal, Nestlé, Procter&Gamble, Reckitt Benckiser,
                                                                 of analyzing social processes as verging on con-
                                                                 sumer psychology. “Analyzing the social develop-                                    27
Key markets: automotive, financial services, FMCG,
                                                                 ments which impact on consumers provides us
healthcare/pharmaceuticals, retail, IT, media, telecoms
                                                                 with a broad overview of all the possible consumer
and transport
                                                                 phenomena which might be encountered today.”
100 employees, 700 interviewers; own telephone and test
studios.                                                         This is why Unilever managers went out to the
                                                                 people as part of the company’s strategic “Path to
                                                                 Growth” campaign, in order to use the opportunity
Angieszka Sora, Managing Director of GfK Polonia,                of daily dealings to learn all about their joys and
is pleased to hear this praise, but also knows that              sorrows in the private sphere. According to Ana
there is a very special reason for the fortuitous                Gisa: “Those who took part learned a great deal
cooperation with Unilever: “Ana Gisa is always                   and came back as changed people.”
open to new ideas. For instance, when we offered
her consumer analysis along the lines of the
German model, which we had carried out on our
own initiative, she showed immediate interest.
She encouraged us to do the same in Poland.“

                                                                                                                         In urban centres like
                                                                                                                         Warsaw and Krakow,
                                                                                                                         Polish history and modern
                                                                                                                         consumerism happily

     Finding the answer
          to the second question
          How the Dixons Group, the largest consumer electronics retailer in the UK,
          uses market research to meet consumer expectations and requirements and stay
          ahead of the competition.
Non-Food Tracking   GfK SPECIAL

                     GfK Marketing Services UK: retail research for Dixons

                     Finding the answer to the second question

                     For years, the retail sector was run by entrepreneurs who made decisions on the basis of
                     hunches, and it was relatively easy to enter the market and be successful. But today, in the
                     face of competitive pressure, virtually interchangeable products, price wars and increasingly
                     well-informed consumers, retail managers have to use highly professional marketing based on
                     comprehensive market research data. One striking example is the cooperation between British
                     retail group Dixons and GfK Marketing Services UK.

                     John Clare knows how to make a virtue out of
                     necessity. At a time when retailers are all selling
                     the same brands and the same products at more
                     or less the same prices, he needs to be guided
                     by a very specific business philosophy. And as
                     Chief Executive of Dixons, the British retail group
                     specializing in consumer electronics, photographic
                     equipment, telecoms, computers and software,
                     his philosophy is give the customer what they

     » The different positioning of our store chains                         John Clare
       reflects the complex ways in which people
                                                                             John Clare is CEO of the largest specialist retail group in the UK,
       view the apparently simple concept of customer
                                                                             which has ten brand names in eleven European countries
                                                                             with 1,280 sales outlets comprising a total sales area of approx.
                                                                             1 million m2.
                     He describes it in simple management terms:
                                                                             Clare’s philosphy: current market and consumer information
                     “We want to offer our customers unsurpassed             is a must in day-to-day business, operational planning and for
                     benefits in terms of the breadth and quality of         long-term strategy.
                     our product ranges, competitive prices and
                     high standards of service.” This is based on
                     comprehensive expertise gained from market
                                                                           Different service for different customers
                     research data, and an awareness that the word
                     “service” means different things to different         The electronics market in particular consists of
                     customers. “If you’re going to create differences     an incredible range of competing products and
                     between yourself and the rest of the market, you      systems, aimed at customers with widely varying
                     can’t just focus on price,” Clare says. “You also     levels of knowledge and information needs. Dixons
                     have to look closely at other aspects of customer     therefore operates carefully differentiated store
                     expectations, and that means you have to start        chains in eleven European countries, including
                     creating customer segmentation.”                      four in the UK alone, employing some 33,550
                                                                           people in 1,280 stores and generating sales of
                                                                                                     Non-Food Tracking   GfK SPECIAL

                                                                                                                         Three of the specialist retail
                                                                                                                         chains in the Dixons Group,
                                                                                                                         all market leaders in the
                                                                                                                         UK and Ireland

around EUR 7.4 billion. All follow the same basic
precept that different customers want different
levels of service.

Currys, for example, has become Britain’s largest
retailer to specialize in TVs, hi-fi, cookers,
refrigerators, washing machines, PCs and telecoms.
“Currys sells consumer electronics to customers
who need a great deal of validation for the
purchases they make,” says CEO John Clare.
“They need support, and they want reliable
products and after-sales service where someone                                                                                                            31
installs the appliance for them and explains in
                                                       Ian McCann
detail how it works. And they also want to be
sure that someone will come and help them if           Ian McCann is Managing Director of GfK Marketing Services

anything goes wrong. Currys’ unique selling            UK. The Dixons Group is one of the largest retail companies
                                                       in the UK and it was on their initiative that the GfK company
proposition is that it does this.”
                                                       was established in the UK. GfK and the retail giant exchange
The Dixons chain offers a similar range of high-       the latest retail information on a daily basis.
tech products – but to a very different kind of
customer. Clare says it sells technology to people
with an almost professional interest in matters
technical. They don’t care where they buy the        Question one is always “How much is it?”
product, as long as the sales staff can tell them    Customers of PC World, the Dixons Group’s third
exactly how the technology works, what it does       chain of stores, are true technophiles. “These
and whether it is compatible with the products       people have even more specialist knowledge than
they have already bought.                            Dixons customers. They’re real enthusiasts, and
                                                     fifty per cent of them come from small businesses.

                                                                                                                         Dixons in Oxford Street,
                                                                                                                         London, the top address for
                                                                                                                         consumer electronics, digital
                                                                                                                         photographic equipment and IT
       Oxford Street in London,
        a shopping street which
     records some of the highest     So PC World targets the business-to-business           Clare is therefore under no illusions about the
        retail sales in the world.   and very highly informed business-to-consumer          main reason why consumers decide to buy from
      Five Dixons Group outlets      markets.” Clare thinks this is his company’s big       a particular store. “The answer is always where
             can be found here.      advantage compared to key rivals, who sell by mail     you can get the item cheapest.” Once they’ve
32                                   order, the Internet and direct distribution. “With     compared prices and realized that the product
                                     us, the customer can talk to an expert face-to-face,   costs almost the same wherever they go, they then
                                     and then take the items straight home with them.”      ask what they regard as the second most important

                                     The Link is Dixons’ fourth UK store brand,
                                     specializing in mobile phones and communica-             The Dixons Group
                                     tions products and established in 1994. It provides
                                                                                              Leading retailer of consumer electronics and associated
                                     after-sales service and offers a wide choice of
                                                                                              services in Europe, present in 11 countries
                                     products, whereas other British mobile phone
                                     operators are often limited to a single service          Established in 1937 by Charles Kalms as a photographic
                                     provider. Dixons’ more broadly targeted concept
                                     seeks to get away from this, and it is working:          Mission statement

                                     The Link is one of Britain’s fastest-growing mobile      “Through all our brands we aim to provide unrivalled value
                                     phone providers.                                         to our customers by the range and quality of our products,
                                                                                              our competitive prices and our high standards of service.”

          » Only when customers have compared prices and                                      Specialist retail chains in the Dixons Group

            realized that the product costs almost the same                                   Market leaders in the UK and Ireland
            wherever they go, do they ask what they regard as                                 Dixons: consumer electronics, Currys: household appliances,
            the second most important question.«                                              PC World: computers and peripherals

                                                                                              Dixons’ specialist stores

                                     “All the stores in our Group, and most of our            PC World Business: PC wholesalers, The Link: electronic
                                                                                              communications products and accessories, Mastercare:
                                     competitors, sell the same products and brands,”
                                                                                              distribution and after-sales
                                     says Clare. This means that whether they sell Sony
                                     televisions, Compaq computers, JVC hi-fi systems         Outside the UK
                                                                                              Elkjöp in Scandinavia, PC City in France, Spain & Italy,
                                     or Siemens washing machines, or comparable
                                                                                              Electro World in Hungary, Uni Euro in Italy and Kotsovoloa
                                     products made by other manufacturers, retailers
                                                                                              in Greece and Czech Republic
                                     have no opportunity to carve out a niche for
                                     themselves. But consumers regard these as                More than 35,000 employees in 1,280 sales outlets with
                                                                                              almost 1 million m2 sales area
                                     expensive purchases, similar to a car, a house or
                                     a holiday.
                                                                                                   Non-Food Tracking   GfK SPECIAL

                  Brief overview: Non-Food Tracking
                  Innovative services for the markets of the future

                  Key services                             In addition to market-related           • Continuation of rollout in Europe
                                                           information services, our offering        of ENCODEX services designed
                  Information services regarding
                                                           includes ENCODEX, the software            for the B2B e-commerce segment.
                  marketing, sales and logistics in
                                                           and item catalogue, which is a            Encodex currently has a catalogue
                  retail and industry for companies
                                                           B2B e-commerce platform.                  of around 100,000 products in
                  operating in consumer technology
                                                                                                     100 consumer durables categories,
                                                                                                     enabling trade and industry to
                                                           The advantage for clients
                                                                                                     conduct transactions online.
                  Our offering                             Clients have direct access to             Clients new to the system in 2002
                                                           databases and receive regular             include Groupe Référence, which
                  Regular reports based on continuous                                                has more than 550 stores in
                                                           standardized analyses which
                  surveys and analyses of sales                                                      France, Ring Photo, which has
                                                           are used to track and manage
                  development and product-related                                                    over 2,600 stores in Germany,
                                                           short, medium and long-term
                  characteristics for consumer                                                       Euronics, which has more than
                                                           planning on product and pricing
                  durables at the point of sale. In                                                  600 stores in Spain and 700 in
                                                           policies, advertising, distribution,
                  addition, we offer special analyses,                                               Italy and Dixons.                           33
                                                           sales and logistics.
                  in particular of new products and
                  new markets.
                                                           The clients                             Positioning
                  GfK works with all the major retailers
                  in 44 countries worldwide and the        Manufacturers in the consumer tech-     The Non-Food Tracking division
                  information is generally supplied in     nology sector such as multinationals,   is the market leader for services
                  electronic form.                         SMEs and large companies operating      relating to unit sales data on
                                                           at regional and national level, as      consumer technologies in Europe,
                  All the market-relevant product                                                  Asia and the Pacific as well as in
                                                           well as retailers. Our top clients
                  and technical features of the                                                    the Middle East and, in conjunction
                                                           include Carrefour, Hewlett Packard,
                  various models and items are                                                     with the US company NPD, in the
                                                           Matsushita, Metro, Samsung and
                  categorized and collated with the                                                USA.
                  sales-related information on the
                  S*T*A*R*T*R*A*C*K database.
                                                           Highlights in 2002
                  We track consumer technology
                  markets such as consumer                 • Acquisition of majority stake in
                  electronics, IT (hardware and              Institut Français de Recherche
                  software), telecommunications,             (IFR). Founded in 1974, the
                  household appliances, photographic,        French company collects data
                  optical and lighting, DIY and              on retail prices and supply
                  building materials, healthcare and         structures for products in the
                  medical devices, toys, sports and          field of consumer electronics and
                  leather goods.                             IT in fourteen different countries
                                                             in Europe

question. “This question will be quite different                                                                       In the world of the

for different people,” Clare explains. “The different                                                                  consumer, price is a
                                                                                                                       top priority, but there
positioning of our store chains reflects the
                                                                                                                       are others ...
complex ways in which people view the apparently
simple concept of customer service.”
                                       Data also needs to be understood                     Dixons managers use daily and weekly market
                                                                                            research data at every level of the business, to
                                       The key success factors for today’s retailers are
                                                                                            provide the Group and its managers with the
                                       charging the right price at the right time, and
                                                                                            up-to-date input they require. For example, Clare
                                       providing each customer with the optimum level
                                                                                            needs to know on a daily basis whether his rivals
                                       of service. Both of these require a precise and
                                                                                            are changing their prices, and if so by how much,
                                       up-to-date knowledge of the market, and of often
                                                                                            so that he can decide how the different Dixons
                                       fast-changing consumer attitudes and habits.
                                                                                            chains should respond. “As soon as our competitors
                                       Retailers in particular have to contend with a
                                                                                            change their prices, we have to change ours
                                       seemingly endless stream of figures as they deal
                                                                                            as well – and this usually happens within the
                                       with more customers, employ more people, make
                                       more sales and sell more products. “But you can
                                       have lots of data at your fingertips and still not
                                       understand what it means,” Clare says. “And that’s   Continuous market research
                                       why we’re working with GfK.”
                                                                                            In turn, competitors respond to Dixons’ price
                                                                                            changes, which have implications for sales of the
           » Dixons managers need to know on a daily basis                                  products and brands concerned. GfK provides
             whether their rivals are changing their prices, and if                         Dixons with weekly and monthly retail data and
             so by how much, so that they can decide how the                                consumer survey results as the basis for decision-
             Dixons chains should respond.«                                                 making.
34                                                                                          “I need the very latest information available if
                                       Ian McCann, Managing Director of GfK Marketing
                                                                                            I’m to take decisions like whether I can afford to
                                       Services UK, recalls that his company began
                                                                                            increase the price of a product in one chain,
                                       cooperating with Dixons in the 1970s on house-
                                                                                            and whether I can also do so in another. Which
                                       hold and consumer panel data. They faced many
                                                                                            groups of customers are likely to react in what
                                       difficulties, because in those days few British
                                                                                            ways? And what’s the best action to take?
                                       retailers understood the value of professional
                                                                                            I might decide to revise the price at Currys but
                                       market research or wanted to take part in panels.
                                                                                            not Dixons, or at Dixons but not at PC World.
                                       “Eventually, because of their strength in the
                                                                                            “This is a very hectic business when it comes
                                       market, Dixons and a few other large retailers got
                                                                                            to pricing policy, especially between about 7.00
                                       their way. We started the electronic appliances
                                                                                            and 8.30 each morning when we find out our
                                       retail panel in the early eighties, and over the
                                                                                            competitors’ prices.”
                                       years we’ve expanded the number of markets
          Retailers already know       we monitor. Our surveys for the Dixons Group         Market research data is used to support not only
     that price is a crucial factor.   now cover the majority of their sales.”              short-term decision making, but also long-term
          For Dixons, the second                                                            strategy. For example, Clare has to make important
                  question is key.
                                                                                            decisions about which products to sell and where
                                                                                            to sell them; these determine what is sold, and in
                                                                                            what quantities, for a whole year.

                                                                                            “I need all the available market data if I’m to make
                                                                                            forecasts and say how the market is developing.”
                                                                                            Clare combines the results of market research with
                                                                                            information he receives from suppliers: what new
                                                                                            products they are planning to bring out, and what
                                                                                            forms of technology they will be using. The aim
                                                                                            is to decide what the different product ranges
                                                                                            should look like if the various Dixons chains are
                                                                                            to consolidate and expand their position in the
                                                                                                        Non-Food Tracking   GfK SPECIAL

                                                                                                                            The customer is king!
                                                                                                                            Establishing what customers
                                                                                                                            want is the domain of market
                                                                                                                            research – and this is where
                                                                                                                            GfK reigns supreme.

But that’s not all Clare uses market research for.                 The formula for success: a bit of luck, and a lot
He also has to make capital-intensive business                     of planning
decisions concerning the individual chains’
                                                                   This has not always been the case; like many
medium-term and long-term development. To do
                                                                   other leading retailers, Dixons used to be run by
this, he mainly needs information about consumers
                                                                   big-name entrepreneurs who operated on instinct.
and the market share of brand manufacturers,
                                                                   In the words of the founder’s son Stanley Kalms,
broken down by retailer and by catchment area.
                                                                   the company initially worked on the basis of
And finally, he needs to know all about the other
                                                                   “fortune smiling on opportunity”. But Clare, who
European countries into which Dixons has already
                                                                   joined Dixons in 1986 and has been Group Chief
expanded – Czech Republic, Denmark, Finland,
                                                                   Executive since 1994, says there is another element
France, Greece, Hungary, Iceland, Ireland, Italy,                                                                                                          35
                                                                   at work. “I think that luck and chance are still
Norway, Spain, Sweden – and those where the
                                                                   important factors in Dixons’ success – luck always
Group could set up other chains in the future.
                                                                   has a role to play. And creativity, adaptability and
“GfK data helps us at every level: daily and monthly
activities, annual budgeting and long-term strategy,”              agility as well. But there’s also a need for very
stresses Clare.                                                    careful planning – and producing market data is a
                                                                   part of that.”

GfK Marketing Services UK,                                           » GfK data helps Dixons at every level:
Surrey, UK
                                                                       daily and monthly activities, annual budgeting
Operating in the Non-Food Tracking division, GfK Marketing             and long-term strategy.«
Services UK is a leading provider of retail information services
relating to consumer electronics markets in the UK.
                                                                   Last but not least, Clare’s decisions are based on
Established in 1984 on the basis of co-operation with the          information about consumers. As the competition
Dixons Group and other British retailers.                          becomes fiercer and products are sold in more and
Key clients include: Black & Decker, Electricity Association,      more different ways, so it becomes increasingly
Electrolux, ICI Paints, JVC, Kodak, Merloni , Panasonic, Sharp,    important to provide the right answer to the
Sony                                                               consumer’s second question – the one they ask
                                                                   after finding out how much the product
Key markets: consumer electronics, DIY, furniture and
home furnishings, gardening, information technology, office
supplies, photographic and optical, utilities, household
appliances, telecommunications

179 employees

Recording of retail data in cooperation with retail partners

     The listening watch
          How the electronic measuring device, Radiocontrol, has been showing radio
          stations, advertisers and media professionals in Switzerland where, when,
          why and how people today are listening to the good old radio

                                   IHA-GfK, Switzerland: radio audience research
                                   for Swiss public service broadcasters SRG SSR idée suisse

                                   The listening watch

                                   The system developed by GfK companies, Telecontrol and Liechti, under the name Radiocontrol
                                   and introduced by IHA-GfK to measure radio programme consumption by means of a specially
                                   equipped wristwatch has actually been used for the first time in Switzerland. The technology cuts
                                   out hitherto unavoidable error sources to provide up-to-the-minute results faster than any previous
                                   radio research has been able to offer.

           Peter Brun, Head of
     Programming at the oldest
      – and today, the largest –

38      private radio station in
     Switzerland, interviewing
                    a politician

                                   For one week twice a year, a total of 22,000 Swiss     2. Advertisers and their agencies can use these
                                   citizens aged 15+ have been given the opportunity         radio coverage statistics to resolve the question
                                   of revelling in unique state-of-the-art status.           of what would be an appropriate cost for a radio
                                   They are the only ones to wear a wristwatch
                                   which, in addition to telling them the time can        The watch not only represents the pinnacle of the
                                   provide a conscientious and representative record      watchmaker’s art, but is also a masterpiece of
                                   of when they are listening to the radio and if so,     complex electronic data processing technology,
                                   to which station. Swiss GfK company, IHA-GfK,          to which GfK has contributed both ideas and
                                   is carrying out the research on behalf of public       software. A sensitive microphone is automatically
                                   service broadcasters, Schweizerische Rundfunk-         activated for four seconds in every minute to record
                                   und Fernsehgesellschaft SRG, and SRG company,          all ambient noise which is then transformed into
                                   Publica Data, which sells radio audience data to       digital data consisting of character sequences
                                   48 private radio service providers, telling them all   compressed 120 times. As Rolf Müller, Managing
                                   they need to know on listening habits in Switzer-      Director of Publica Data, explains: “It makes
                                   land. The reason for this is that:                     subsequent reconstruction of the original sounds
                                                                                          impossible.” This is a fact which Radiocontrol
                                   1. Broadcasters are seeking to draw conclusions
                                                                                          manufacturers, Telecontrol and Liechti, have
                                      from the data for the purposes of programme
                                                                                          also had confirmed by the Swiss Department of
                                      optimization and ongoing development.
                                                                                          Measuring Technology and the Federal Data
                                                                                          Protection Office, and indeed, the watch does comply
                                                                                          with all the conditions of the Data Protection Act.
                                                                                                                     Media   GfK SPECIAL

                                        Radiocontrol, the listening
                                       watch, records all radio and
                                         TV sounds in the wearer’s
                                                  environment on a
                                           minute-by-minute basis.

Tonal sequence comparison

The watch has a memory of one megabyte to
store seven days’ data and an integral “wearer
check” verifies whether the watch is really being
worn and has not just been left lying about
somewhere. After a week’s operation, the
participants return their watches to IHA-GfK,
where the data is analyzed with the help of an
audio comparative method. IHA-GfK personnel
                                                                      Knut Hackbarth, Head of Media Research at IHA-
compare the tonal sequences registered by the
                                                                      GfK in Switzerland, describes the organizational                     39
watch with the tonal sequences which they
                                                                      process: “Participants are notified by telephone
have recorded from the individual radio stations
                                                                      that they are on duty and the watch is sent to them
at the same times and immediately, this
                                                                      by post. We also ring everyone to check that the
identifies which stations the participant in
                                                                      watch has arrived and that there are no problems.
question was listening to during defined units
                                                                      In addition, we monitor that all participants send
of time.
                                                                      their watches back on time.”
Every week, the watches are worn by a different
group. Each participant may only take part in                           » The survey method used to date relies on listener
the survey twice a year for one week, with a gap                          recall, which is fraught with uncertainties when it
of 26 weeks and over a maximum period of five                             comes to radio research.«
years. Over a period of one year, the researchers
analyze the data from watches worn by around
                                                                      Hackbarth adds: “All of them are obliged to wear
22,000, of whom 20 per cent are always first-time
                                                                      the watch on their wrist as much as possible and
                                                                      only to take it off when absolutely necessary and
                                                                      even then, to leave it somewhere where it is likely
                                                                      to pick up a radio playing. Like in the bathroom or
                                                                      in the kitchen.”

                                                                      Error sources in conventional interviews

                                                                      By the end of 2000, the Radiocontrol system had
                                                                      replaced the method previously used by Swiss
                                                                      market researchers: face-to-face interviews. Hack-
                                                                      barth explains: “We used to conduct 18,200 inter-
                                                                      views per annum in Switzerland, proportionally
                                                                      split over the three regional languages: French,
Rolf Müller                                                           German and Italian. The interview would begin
                                                                      with simple introductory questions on the subject
As the Head of Publica Data AG, which is a subsidiary of
                                                                      of radio, such as how often the interviewee listened
Swiss public service broadcasters SRG SSR idée suisse,
he has overall responsibility for the Radiocontrol project.
                                                                      to the radio in one week or which stations were
He regularly supplies radio ratings information on stations           usually listened to and this we termed the general
and programmes to 48 private Swiss broadcasters.                      listening public.”
        People listen to the   During the course of the interview, those surveyed     a source of background noise. This makes it
          radio everywhere.    would give details on what they actually listened      difficult for anybody to remember exact details.
          And Radiocontrol
                               to on the radio between five a.m. and midnight         Erroneous estimates and confusion in the light
     listens everywhere too.
                               the day before. Interviewers would ask exactly         of the interchangeability of some programme
                               what the interviewee had done in time units of         formats may well occur.”
40                             15 minutes each: sleeping, eating, working, driving,
                               at home, out for a walk, shopping, at leisure. And
                                                                                      Closer to the truth: Radiocontrol data
                               the interviewee was also asked if he or she had
                               listened to the radio at the same time and if so, to   In fact, inaccuracies may have fatal consequences,
                               which stations. As Hackbarth says: “Exactly as         because results obtained by these methods
                               radio research is still conducted in Germany           influence two key statistics, which are decisive for
                               today”, at the same time injecting a doubt that:       the existence of a station and for the advertisers’
                               “With this form of survey, we are counting on          media planning:
                               the interviewees’ powers of memory and this is
                                                                                      1. coverage and
                               fraught with uncertainties, particularly in the case
                               of listening audience research.”                       2. listening duration.

                                                                                      And it is here that Hackbarth and his client, Rolf
     » Radiocontrol has no problem with the growing number                            Müller, recognize exactly what the Radiocontrol
       of radio stations, nor with the question of what stations                      system can provide: by comparison with the
       are really listened to and for how long.«                                      previous survey method, Radiocontrol data reveals
                                                                                      a clear increase in the number of stations used and
                               According to radio research experts, the danger        a definite drop in the results for listening times for
                               lies precisely here, in the fact that recall of the    particular stations. Müller says: “The improvement
                               duration, as well as the radio stations listened
                               to, can be suspect. Problems also arise in the
                               identification of stations which have not been
                               specifically chosen by interviewees themselves.
                               For instance, over lunch, children may be listening
                               to the radio station selected by their parents,
                               whilst in offices, people may be hearing news or
                               music on radio stations which people other than
                               the interviewee are responsible for choosing.
                               In restaurants, taxis or stores, too, radio stations
                               chosen by other people may be playing.

                               In such cases, the interviewees generally have no
                                                                                         Knut Hackbarth
                               idea as to which radio station they have been
                               listening to, or for how long. Hackbarth goes on:         Head of Media Research at IHA-GfK in Switzerland, manages
                               “Unlike TV, which usually has a fixed location in         the Radiocontrol project. It is the first large-scale study in the
                               a household, a radio is extremely portable and            world to record radio ratings electronically.

                               can be used in the most varied locations, often as
                                                                                                               Media   GfK SPECIAL

here is very real and this more than justifies the            service station, SRG (Schweizerische Radio- und
increased cost, which is almost twice as high.                Fernsehgesellschaft), which is financed by licence
                                                              fees, carries no advertising apart from sponsored
The improvement also means that the data can be
                                                              programmes on its radio stations, in terms of
made available so much more quickly than before.”
                                                              programmes, it is a powerful opponent for the
The advantages are obvious:                                   advertising-financed private stations. In order to
                                                              survive on advertising revenue, they have to offer
1. For Radiocontrol, the growing number of stations
                                                              attractive programming for the target groups
   (some 4.6 million Swiss in the 18 German-
                                                              whom the advertisers are trying to reach.
   speaking cantons can currently choose between
   five German language SRG stations and 48
                                                                » Advertisers and their ad agencies use the ratings
   private radio stations, although in high density
   population areas, several more private stations                figures to estimate the reasonable costs of radio
   are competing against SRG for audiences) poses                 advertising.«
   no more of a problem than the question of
   which stations were really listened to and for             And because at 3.4 per cent or 120 million Swiss
   how long.                                                  francs, only a comparatively low proportion of
                                                              ad-spend goes into radio advertising in Switzer-
                                                              land, convincing audience figures are required to
SRG SSR idée suisse and Publica Data AG, Berne                secure a share of the advertising cake. By way of
and Zürich, Switzerland                                       comparison, in Germany, the share of the media
                                                              market attributable to radio is three per cent, or                                41
SRG SSR idée suisse is a public sector company and the
leading provider of electronic media in all four language     678 million Euros per annum.
regions in Switzerland.

Established in 1931, SRG has been trading under the name
SRG SSR idée suisse since 1999.

The media offering: seven TV and eighteen radio stations.
The national, multi-media and multi-lingual offering covers
content ranging from news, reports, political, cultural and
social background reports right through to entertainment,
including film, sitcoms, radio plays, shows, talkshows and

Publica Data AG: SRG SSR subsidiary founded in 1993.
Its remit is to sell SRG SSR media and audience research –
primarily information from continuous TV and radio ratings
research. Its clients include private media companies,
advertisers as well as media and advertising agencies.

The Radiocontrol survey is a Publica Data project.

2. Reliance on the power of human recall no longer
   applies. The audiometer measures every minute,
   irrespective of what the participant happens
                                                              The battle for ad-spend                                  The oldest electronic
   to be doing at the time. Data is recorded to the
                                                                                                                       mass communication
   minute, with nothing lost.                                 Accordingly, the stations are fighting hard for          medium, the radio, is
3. Erroneous estimates of listening behaviour are             each franc spent on advertising, especially as           always present:

   avoided.                                                   Switzerland is not immune to the problems of the         at home, in the car,
                                                              global economy and the fact that media buyers            at work or in shopping
4. Times during which, for example, a vacuum                  are asking for very precise justification of the cost    centres.
   cleaner is being used or other noises drown                of advertising. Which accounts for the 48 private
   out radio music, or the times when participants            stations investing in Publica Data analyses of
   turn the sound down because they are on the                Radiocontrol data. SRG is perpetuating a tradition
   telephone, are deducted from the listening time            sustained over many years by processing the raw
   recorded.                                                  data supplied itself.
Given the difficult market conditions, Müller                 However, the results supplied by the wristwatches
believes that this is a good thing. While the public          are just as important for programme planners and
      Satellite park on the roof
     of CABLECOM, which runs
     the biggest cable network
                in Switzerland.

                                   programming as for media planning. Those               These sort of helpful decisions are made possible
                                   responsible can read off the success or failure        by the commitment of those people prepared to
                                   of their programme formats and of individual           wear the Radiocontrol watches, initially for a week
                                   programmes, of whether listeners are staying with      and then again for as long as the survey procedure
                                   a particular programme or switching over to other      prescribes. For their part, they find fun in the
                                   networks during it, or for good, from the statistics   actual taking part, because a nice watch alone,
                                   obtained and they can draw their own conclusions.      which they receive as a gift for participating, is not
                                                                                          the incentive in the long term. In fact, 86 per cent
                                   Publica Data boss Müller gives an example of
                                                                                          of participants record their willingness to continue
                                   the effect Radiocontrol results may have on
                                                                                          – six per cent more than is necessary.
42                                 programming.
                                                                                          The very positive reception with which the Radio-
        » Radio broadcasters aim to use Radiocontrol data to                              control system has met in Switzerland and the
          draw conclusions about how to optimize and further                              successful pilot studies carried out in France,
          develop their programmes.«                                                      Germany and the UK, not to mention an initial
                                                                                          three-year contract with The Wireless Group and a
                                                                                          pilot project with Rajar, the association of British
                                   Zurich-based major local broadcaster, Radio 24,
                                                                                          radio stations which measures radio reach, are
                                   can rely on the fact that in all its formats, it is
                                                                                          all signs that the radio research landscape will
                                   consistently ahead of the competition for coverage
                                                                                          change worldwide in the coming years. Also in
                                   and listening duration, except in the case of one
                                                                                          the Asia-Pacific region, where ACNielsen Media
                                   programme, which is broadcast late on Friday
                                                                                          International has been granted the licence by GfK
                                   evenings. “It was actually a fantastic programme
                                                                                          to use the technology in 16 countries, the first
                                   called ‘Ministry of Sound’, which is young, trendy,
                                                                                          large-scale trials are starting. Soon, people in all
                                   features techno, has an English DJ, is produced in
                                                                                          the major countries of the world will be proud to
                                   London and marketed globally – a real recipe for
                                                                                          belong to an élite distinguishable by a wristwatch
                                   success,” reports Müller. Nevertheless: Radiocontrol
                                                                                          nobody else is entitled to wear.
                                   recorded figures which caused dissatisfaction
                                   among those responsible at Radio 24.
                                                                                             IHA GfK AG, Hergiswil, Switzerland

                                   Radio 24 learns from Radiocontrol statistics              The leading provider of market research services in Switzer-
                                                                                             land, commissioned to carry out continuous TV and radio
                                   But instead of moaning, they looked at the results
                                                                                             reach research for many years, active in all GfK business
                                   and acknowledged that perhaps not everybody in            divisions.
                                   the large group of young people was as impressed
                                                                                             Established in 1959, part of the GfK Group since 1998
                                   by the constant stream of English in the programme
                                   as had originally been thought. The result was that       Key clients: in addition to SRG SSR idée suisse and Publica
                                                                                             Data, its client base includes Agro-Marketing Suisse AMS,
                                   Radio 24 producers developed a new programme
                                                                                             Bundesamt für Statistik, Coop Schweiz, Crédit Suisse, Die
                                   with a similar format, only not quite as trendy
                                                                                             Schweizerische Post, Feldschlösschen Getränke, Henkel,
                                   and with lots of event news broadcast directly from
                                                                                             Lever Fabergé AG and Migros.
                                   Zurich and surroundings, and less about the
                                                                                             Key markets: energy, financial services, FMCG, durables,
                                   London scene or elsewhere in the world. A DJ was
                                                                                             healthcare and pharmaceuticals, logistics, media, public
                                   brought in to chat along in Zurich dialect – and
                                                                                             service, telecommunications
                                   the programme climbed from a weak market share
                                                                                             280 employees, over 500 interviewers and own telephone and
                                   of 5 per cent to 11 and then up to 19 per cent.
                                                                                             test studios.
                                                                                                   Media     GfK SPECIAL

Brief overview: Media
Pioneering information services
on media reach and impact

Key services                            The clients                              • Pilot project with Rajar, the
                                                                                   association of British radio stations
Information services on media           For one part, these comprise TV and
                                                                                   which measures radio reach
consumer behaviour and attitudes.       radio stations and their existing
Services include quantitative           clients in several countries, as well    • Three-year contract with The
analyses of viewer, reader and          as media companies in the print and        Wireless Group, under the terms
listener reach and qualitative          Internet sectors and on the other,         of which GfK will measure radio
surveys on acceptance, preference       the advertising industry and media         reach throughout the UK using
and recall of media content.            agencies. Major clients include AGF        Radiocontrol technology from
                                        (Television Research Partnership) in       2003.
                                        Germany, ORF (Austrian radio and
Our offering                                                                     • Licence agreement with media
                                        TV) in Austria and SRG SSR (Swiss
                                                                                   research institute, ACNielsen
In addition to the classic media        radio and TV) in Switzerland, along
                                                                                   Media International, regarding
like print, radio, TV and outdoor       with many individual publishers.
                                                                                   the use of Radiocontrol technology
advertising, GfK also surveys the                                                                                          43
                                                                                   in 16 countries in Asia and the
new media which have become
                                        The advantage for clients                  Pacific
established thanks to the Internet,
global networking and digitization.     Media reach is the currency for TV
                                        and radio programmes, as well as for     Positioning
                                        newspapers and magazines. Media
Service details                                                                  Global leader in innovative electronic
                                        companies use it as the basis for
                                                                                 metering technology in quantitative
• Continuous electronic information     price structures for online and prin-
                                                                                 TV and radio reach research
  gathering on TV ratings in seven      ted media and advertising and other
  European countries                    agencies use it as the basis for their   European market leader in quanti-
                                        media planning. In addition to this,     tative TV research
• Regular periodic surveying of         information obtained from media
  the print, radio, TV, outdoor         research is used to help shape pro-      Number one in overall media
  advertising and Internet sectors in   grammes and media content.               research in Austria, Germany, the
  20 countries throughout Europe                                                 Netherlands and Switzerland

• Ad hoc surveying of attitudes,        Highlights in 2002
  acceptance and preferences
  relating to media and media           • Acquisition of contract to establish
  content                                 a TV panel comprising 1,500 house-
                                          holds in the Ukraine. The contract
• Continuous electronic radio             runs over four years and includes
  research using Radiocontrol             equipping the TV panel with TV
  technology                              meters developed by GfK subsi-
• Hard and software for use in            diary Telecontrol in Switzerland.
  media research for measuring,         • Extension of current contract
  data processing and analysis,           with AGF (Television Research
  including Telecontrol TV metering       Partnership) to the end of 2004 for
  equipment and Radiocontrol for          measuring TV ratings in Germany,
  electronic measurement of radio         as a result of which extension,
  reach, in addition to pc#tv TV          seven per cent of the 5,640 house-
  consumption analysis software           holds which make up the AGF/GfK
                                          TV panel will also have the
                                          digitally broadcast programmes
                                          they watch recorded, in addition
                                          to those broadcast analogously.

                                        • Radiocontrol trials in radio
                                          listening research in France and

     Providing moments of refreshment to
     people – everywhere at any time
            What the world’s biggest soft-drinks manufacturer and owner of the most valuable
            brand does to keep ahead of the competition in terms of product quality, logistics,
            distribution and local marketing in the USA.
Ad Hoc Research   GfK SPECIAL

                                   GfK Custom Research Inc., USA: research for Coca-Cola

                                   Providing moments of refreshment to
                                   people – everywhere at any time

                                   “Coca-Cola” may be the world’s most widely understood word after “OK”, but Coke and its allied
                                   brands, such as diet Coke/Coca-Cola light, Sprite, and Fanta still have to fight for market share on
                                   a daily basis.

                                   CLASS (Customer Loyalty And Satisfaction Study), a customer satisfaction survey conducted in
                                   the USA for over ten years by GfK Custom Research Inc. of Minneapolis, has made a major
                                   contribution to this process. The project derives directly from the company’s philosophy which,
                                   despite Coca-Cola being the world’s number one brand, still works on the core principle that
                                   The Coca-Cola Company exists to benefit and refresh everyone it touches.

                                   Coca-Cola is the world’s most recognizable brand,   hundred years later. But the company and its
                                   and with good reason. Every day, one billion of     56,000 employees have established a host of other
                                   its products refresh thirsty people from Tokyo to   successful brands around the world. One
                                   San Francisco, from Cape Columbia to Cape Horn,     is Fanta, invented in Germany in 1940, which
                                   and from Longyearbyen to Simonstown – in close      now comes in eight flavours and is sold in 170
                                   to 200 countries around the globe.                  countries. Others include Sprite, Cherry Coke,
                                                                                       Vanilla Coke, Mezzo Mix (a refreshing mix of cola
                                   The Coca-Cola Company’s wide-ranging brand
                                                                                       and fruit flavours), Lift Apple, Bonaqa still and
                                   portfolio has an 18 % share of the global soft
                                                                                       carbonated table water, Dasani purified water,
                                   drinks market. Its largest Division is North
                                                                                       the energy drink Burn, the fitness drink Powerade,
                                   America, which generates 32 % of revenue,
                                                                                       the Cappy juice and nectar range, Kinley bitter
                                   followed by Europe, Eurasia and the Middle East
                                                                                       drinks for adults, Nestea iced tea and the fitness
                                   (27%), Asia (26 %), Latin America (11 %)
                                                                                       drink Aquarias. In short, Coca-Cola has something
                                   and Africa (4%). The Coca-Cola brand was
                                                                                       to quench the thirst of every consumer around
                                   created in the United States in 1886, while diet
                                                                                       the world.
                                   Coke/Coca-Cola light was launched almost a

      The Coca-Cola Company
     distributes 300 soft drinks
         in over 200 countries,
          with communication,
     marketing and promotional
           activities securing a
               global presence.
                                                                                                       Ad Hoc Research   GfK SPECIAL

Putting the brand philosophy into practice                      3. Grow system profitability and capability
                                                                   together with their bottling partners.
But turning products into real brands requires a
carefully thought-out philosophy. There are two                 4. Serve customers with creativity and consistency
things that The Coca-Cola Company regards as                       to generate growth across all channels.
fundamental to its success:
                                                                5. Direct investments to highest potential areas
1. Connecting with consumers by creating brands                    across markets.
   they love.
                                                                6. Drive efficiency and cost-effectiveness
2. Finding new and appealing ways to deliver                       everywhere.
   these brands to thirsty people everywhere.
                                                                Objectives 3 and 4, in particular, show that
                                                                Coca-Cola and its bottling partners rely on
                                                                carefully planned market research projects to
                                                                help them make strategically sound decisions
                                                                and provide marketing support. The company
                                                                uses GfK Custom Research Inc. in Minneapolis
                                                                to carry out a number of these research projects,
                                                                and its very dynamic distribution system makes
                                                                the annual CLASS survey particularly important.

                                                                Each local market needs its own strategy

                                                                Many leading international players proclaim their
Bob Foley                                                       allegiance to the principle of “Think global, act
                                                                local”. Coca-Cola used to be no exception, but
Manager of the Local Marketing Partner Program at
                                                                since then its view has changed. Realizing the
The Coca-Cola Company in Atlanta, responsible for the
                                                                importance of local relevance to any market and
CLASS project (Customer Loyalty and Satisfaction Study).
This customer satisfaction survey conducted regularly in
                                                                community, Coca-Cola believes that thinking smart
the USA for ten years by GfK Custom Research Inc. of
Minneapolis, provides local marketing support to the bottlers     » Much of our success depends on the quality
of Coca-Cola products.                                              and success of our bottling partners, all of whom
                                                                    control their local market.«
But it also takes more than a consistent philosophy
                                                                and acting smart provides the flexibility to approach
to create successful, profitable brands. Staff in
                                                                each opportunity in the appropriate manner.
Atlanta, and at the company’s subsidiaries across
                                                                Sometimes thinking globally is called for and other
the globe, have a precisely formulated set of
                                                                times thinking locally is the right approach.
objectives which they pursue on a daily basis:
                                                                It all leads back to the philosophy that The Coca-Cola
1. Accelerate carbonated soft drink growth, led
                                                                Company exists to benefit and refresh everyone it
   by Coca-Cola.
2. Selectively broaden their family of beverage
                                                                Bob Foley, Manager of the Local Marketing Partner
   brands to drive profitable growth.
                                                                Program and the person at Coca-Cola responsible
                                                                for the CLASS project, explains the change
                                                                in his company’s attitude. “Much of our success
       The Coca-Cola Company                                                              and across the United States use CLASS to assess
           produces syrups and                                                            customer satisfaction in an effort to assist bottling
       concentrates. Originally,
                                                                                          partners to monitor their customers’ needs in the
          these were mixed up
                                                                                          local market.
                 on site in bars
               and restaurants.                                                           “We provide bottlers with detailed information
                                                                                          within their particular markets, keying on the
                                                                                          level of satisfaction their customers have with
                                                                                          the services the bottler provides,” Foley says.
                                                                                          For example, in the foodservice industry, which
                                                                                          sells Coca-Cola fountain drinks as well as brands
                                                                                          in cold bottles and cans, CLASS tells a bottler
                                                                                          how well they are meeting the service needs of
                                                                                          these customers. “That way, bottlers can approach
                                                                                          the market in a targeted manner and practice good
                                                                                          customer relationship management.”

                                                                                          Customer satisfaction surveys guide
                Recent product                                                            local business
           innovations from the
       biggest soft drink manu-
                                                                                          Erik Andersen, Senior Vice President at GfK
48                                                                                        Custom Research Inc., describes in detail how
     facturer worldwide include
       Frozen Cappuccino and                                                              this works. “Take the biggest bottler in the USA,
           Frozen Vanilla Coke.                                                           Coca-Cola Enterprises (CCE). They operate
                                                                                          bottling plants everywhere in the USA, and we
                                   depends on the quality and success of our bottling
                                                                                          carry out our CLASS survey and analysis not just
                                   partners, all of whom control their local market.
                                                                                          in the individual areas, but often broken down
                                   Our bottlers and their customers offer our brands
                                                                                          into two, three or four local sub-units of a CCE
                                   to a hugely diverse consumer base, from the
                                                                                          bottler. With some bottling plants we even analyze
                                   world’s biggest cities to its remotest villages. Our
                                                                                          customer opinions down to the level of individual
                                   bottling partners consistently play a significant
                                                                                          sales centers, so that we can understand the
                                   and active part in the life of the local community.”
                                                                                          level of satisfaction customers have with CCE’s
                                                                                          service. The best way to maximize business is
         » Coca-Cola’s managers in Atlanta and across the                                 to understand satisfaction at the closest point of
           United States use CLASS to assess customer satis-                              contact with the customer.”
           faction in an effort to assist bottling partners to
           monitor their customers’ needs in the local market.«

                                   “The idea is to be in the market together with
                                   Coca-Cola bottlers and our other distributors
                                   who implement marketing and customer support
                                   programs to meet local customer needs. CLASS is
                                   one of the projects that The Coca-Cola Company
                                   uses to measure quality among the bottlers and
                                   other distribution partners in the huge domestic
                                   market of the United States.”

                                   The company ships its products in the form of
                                   syrups and concentrates to bottling partners, who         Erik Andersen
                                   then manufacture them into the various drinks
                                                                                             Senior Vice President at GfK Custom Research Inc., and
                                   brands and package and supply them to retailers,
                                                                                             his team have been in charge of the CLASS project since
                                   restaurants, and other types of customers for sale        its launch ten years ago. They know the business and
                                   to consumers. Coca-Cola’s managers in Atlanta             the local marketing conditions of the bottlers working for
                                                                                             The Coca-Cola Company better than anyone.
                                                                                                     Ad Hoc Research    GfK SPECIAL

            Brief overview: Ad Hoc Research
            Increasing market potential in the long term

            Key services                             Special markets                          • Successful launch of an
                                                                                                instrument which determines
            Information services for developing,     In addition, Ad Hoc Research also
                                                                                                the financial value of brands and
            positioning and maintaining products     offers services for specialized and
                                                                                                of GfK PackChallenger
            and services, aimed at optimizing the    highly complex modern markets in
            mix of marketing policy activities and   the business-to-business, financial      • Implementation of international
            managing product and corporate           services, energy, automotive, tele-        guidelines to harmonize research
            brands and customer loyalty.             communications, capital goods,             processes
                                                     logistics, FMCG and textiles sectors.
            Our offering                                                                      • Award of the prize for best
                                                     The advantage for clients                  methodology presentation at the
            A modular system of instruments
                                                                                                2002 ESOMAR Conference in
            and tailor-made solutions for every      Clients use these services as a
                                                                                                Barcelona for “Assessing the
            phase in the product and service         basis for minimizing the risk relating
                                                                                                financial brand value”.
            lifecycle. The system relates mainly     to short, medium and long term
            to services where data is gathered       marketing decisions and to increase      Positioning
            through surveys and tests. Clients       their success potential in the long                                              49
                                                                                              In terms of business volume,
            can opt to take up the entire service    term. Surveys carried out extend
                                                                                              GfK Ad Hoc Research is ranked No. 7
            spectrum, or just individual modules.    from initial business or product
                                                                                              in the world and No. 5 in Europe.
                                                     ideas and pre-launch preparation
            Key service sectors
                                                     to subsequent marketing and              GfK Ad Hoc Research is one of
            Market segmentation and evaluation       communication activities.                the world’s leading suppliers of
            – market positioning – concept                                                    information services in the image
                                                     The clients
            and product research – packaging                                                  and communication research
            optimization – price optimization –      Clients are companies from industry,     segments and of customer loyalty
            advertising media optimization –         retail and the service sector, as        programmes.
            test market research and forecasting     well as advertising agencies and
            – brand and campaign management          other service providers in the
            – customer loyalty research.             communications sector. Major clients
                                                     include Procter&Gamble, Kraft
            Many of the instruments used
                                                     Foods, Coca-Cola, DaimlerChrysler,
            have been undergoing continuous
                                                     Bank of America, L’Oréal, Wrigley,
            development for decades. This has
                                                     BMW and Deutsche Telekom.
            given GfK databases, containing
            tests which have already been            Highlights in 2002
            carried out, to serve as benchmarks
                                                     • Acquisition of majority share-
            for new surveys. Today, GfK offers
                                                       holdings in Belgian Significant,
            services in 29 countries throughout
                                                       German MACON (market leader in
            Europe and the USA, and works with
                                                       geographic and location software)
            cooperation partners in a further
                                                       and Portuguese Intercampus, as
            61 countries worldwide.
                                                       well as a minority shareholding
                                                       in Indicator, the No. 3 in ad hoc
                                                       research in Brazil.

                                                     • Merger of the three Italian
                                                       GfK Ad Hoc Research companies
                                                       to form GfK CBI

And Foley resumes: “Each year, based on the                their customers with new ideas for promoting
results of the CLASS survey, marketing programs            Coca-Cola products in their outlet. The goal of the
are developed that can be implemented by bottlers          Coca-Cola system is to deliver products into the
at the local level. This allows bottlers to provide
          Jason Grubbs is one of
                 the fleet drivers
          in the USA, who make       market in a timely, efficient fashion and to provide   “CLASS is all about understanding how well
      sure that the source of soft   customers with top-quality marketing support.”         bottlers are meeting customers’ expectations,”
          drinks never runs dry.                                                            Andersen goes on to say. “It’s also about
                                                                                            discovering where the growth opportunities lie for
                                     Market researchers’ advice is in high demand
             Wherever you look:
                                                                                            the bottler. And thirdly, it’s about finding out how
50   Coca-Cola, the number one       Each year, GfK Custom Research Inc. carries out        to develop long-term relationships with customers,
     brand today, was developed      thousands of telephone interviews with a wide          which is why the project places so much emphasis
     and first sold by pharmacist    variety of customers of U.S. bottlers. “The team       on customer loyalty. A large part of our analytical
     John Pemberton in Atlanta.      at GfK Custom Research really understands our          work relates to what Coca-Cola and its bottlers are
                                     business,” continues Foley. “They are real experts     doing to ensure that customers remain committed
                                     in customer satisfaction and loyalty, and in           to the brand.”
                                     addition to all their outstanding work, they have
                                     built a database of CLASS results and associated
                                     industry information on customer satisfaction             The Coca-Cola Company, Atlanta, USA

                                     trends and innovations for use by all bottlers and        Biggest global soft-drinks manufacturer, provider of four
                                     Coca-Cola Company employees.                              of the five top soft-drink brands in the world: Coca-Cola,
                                                                                               diet Coke, Fanta and Sprite

          » CLASS is all about understanding how well bottlers                                 Established in 1896 in Atlanta by pharmacist John Pemberton

            are meeting customers’ expectations. It’s also about                               Mission statement
            discovering where the growth opportunities lie for                                 “The Coca-Cola Company exists to benefit and refresh
            the bottler. And thirdly, it’s about finding out how to                            everyone it touches. For more than a century we have been
            develop long-term customer loyalty.«                                               fulfilling this promise.”

                                                                                               Product range
                                     GfK Custom Research speaks the industry’s                 In addition to Coca-Cola, the world’s most recognizable brand,
                                     language. They also provide valuable and                  which is valued at almost US$ 70 billion, the company
                                     independent assistance when we present the                produces syrups and concentrates for over 300 soft-drink
                                     results of CLASS to bottlers and are very pro-            brands sold in close to 200 countries around the globe.
                                     active in making recommendations for process              Of the 321 million inhabitants of North America, on
                                     improvement.”                                             average consumers will drink one beverage produced by
                                                                                               The Coca-Cola Company a day. The 522 million inhabitants
                                     As is common in early stages of any customer
                                                                                               of Latin America drink a Coca-Cola beverage four times a
                                     satisfaction program, the bottling partners were
                                                                                               week and in the rest of the world, 1.8 billion people drink half
                                     concerned about the CLASS results. They felt it
                                                                                               a beverage a week.
                                     would only reveal their shortcomings and nobody
                                     likes to hear bad news. Since then, they have come
                                     to understand that satisfied and loyal customers,
                                     at whatever level, are the lifeblood of a business
                                     and are ambassadors of Coca-Cola with other
                                     customers and consumers.
                                                                                                 Ad Hoc Research   GfK SPECIAL

                                                           the bottlers who have achieved the highest
GfK Custom Research Inc., Minneapolis, USA                 customer satisfaction scores. And, at GfK Custom
                                                           Research Inc.’s suggestion, there is also another
Provider of information services in ad hoc research,
No. 25 of all US market research companies and the
                                                           award for the bottler achieving the highest
first service provider to be presented with the American   improvement in satisfaction over the previous
Malcolm Baldrige Award for Excellent Quality Manage-       year. The prizes are greatly coveted, Foley reports
ment in 1996.                                              proudly. “Everyone in the bottling system wants
Established in 1974 by employees in the market research    to know who came out on top. The competition
division of Pillsbury                                      for the awards keeps everyone striving to be the
Key clients: in addition to The Coca-Cola Company,
Bank of America, General Mills, LaQuinta, MasterCard,
Procter&Gamble, Perfetti Van Melle, Pfizer, Tyson Foods,     » Some time ago, the CLASS customer satisfaction
Wendy’s                                                        survey resulted in the creation of a complex
Key markets: automotive, financial services, FMCG,             partnership-based program to support the local
consumer goods, wholesale, hard and software,                  marketing and service activities of Coca-Cola
pharmaceuticals, travel and leisure, telecoms                  bottling partners in the USA.«
125 employees at three branches in Minneapolis, New York
and San Francisco.                                         Some time ago, the customer satisfaction survey
                                                           resulted in the creation of a complex partnership-
                                                           based program to support the local marketing
Foley mentions one instance of how CLASS has                                                                                               51
                                                           and service activities of Coca-Cola bottling part-
led bottlers to rethink the way they do things.
                                                           ners in the USA. Bob Foley summarizes: “CLASS
“If they learn that customers are saying there’s
                                                           is no longer just our survey. It also belongs to our
a distribution problem and products are being
                                                           bottlers, and they want to know what their customers
delivered late or not at all, they can decide on
                                                           think of their products, services and sales support.
an approach to correct the problem. “Possible
                                                           It gives us at The Coca-Cola Company a direct way
reasons for an issue with distribution might be a
                                                           of keeping a finger on the pulse of our customers
shortage of drivers or overloaded routes. A bottler
                                                           through the hard work of our bottling partners.”
has to compete with other industries for drivers                                                                   Local school children
and may decide to implement an incentive                                                                           visiting the World of
program to attract and retain quality drivers. They                                                                Coca-Cola in Atlanta
may also look at restructuring routes to allow all
deliveries to be made within the assigned day
without missing a stop or working overtime.
CLASS tells them that a way to achieve higher
customer satisfaction is to ensure that orders
arrive on time.”

Andersen says the survey results are monitored
over time. “The following year, we measure
customer satisfaction again and tell the bottler
how many points it has increased. And if there’s a
significant rise, we make a point of congratulating

Foley and Andersen agree that CLASS results
often lead to strategic changes in a bottler’s way
of servicing the marketplace. “We often find that
customer satisfaction has actually shown a marked

Everyone wants to be the best

Big improvements can also pay dividends of their
own, because Coca-Cola gives annual awards to
        G f K S H A R E S – I N V E S T O R R E L AT I O N S
        A D I F F I C U LT Y E A R F O R S H A R E H O L D E R S

     The worldwide stock market decline that affected nearly all equities during 2002 also
     impacted on the GfK share price which, by the year-end, had fallen to EUR 12.81
     (–37 per cent). However, the management remains convinced that the current share
     price does not present an objective reflection of the fundamentals of GfK. On the
     contrary, the management believes that the GfK share is undervalued, both in relation
     to the reference indices and to its competitors.

                                          2002 – worldwide stock market decline

                                          In 2002, stock markets came under pressure worldwide, with the Dow Jones in the
                                          USA down by almost 17 per cent and the Nikkei-225 in Japan by 18 per cent. The
                                          European bourses sustained even heavier losses, with the Dow Jones Stoxx 50, the
                                          European index, falling by over 35 per cent in comparison with the previous year.
                                          In Germany, the Dax and the MDax lost more in percentage terms than at any time
                                          since their introduction in 1987.

                                          For the third year in a row, the Dax recorded a loss, ending 2002 down 44 per cent
                                          on 2,893 points, following its earlier losses of 19.8 per cent in 2001 and 7.5 per cent
                                          in 2000. The MDax, on which GfK was listed, fared better, losing 30 per cent in 2002
                                          compared with a fall of 7.5 per cent in 2001 and rising by almost 14 per cent in 2000.
                                          The DJ Stoxx Media, which is the sector reference index for the GfK share price, saw a
                                          sharper fall than that of the major German indices of 47 per cent in 2002.

                                          Share price performance from January 2002 to March 2003 in EUR*





                                          January 2002                   April 2002   July 2002   October 2002         January 2003

                                          * Indexed to the GfK share price                        GfK (XET)   Dax 30      MDax        DJ Stoxx Media

                                          There were various reasons for the poor performance of equities in 2002, above all
                                          a series of accounting scandals which dented investor confidence in accounting
                                          practices and the figures published by companies. In addition to concerns about the
                                          economic situation, there was increasing fear later in the year about the possible
                                          consequences of a war in Iraq. By the autumn, this combination of circumstances had
                                          brought the stock markets to rock bottom.
                                                                                   GfK shares – Investor Relations   THE GfK GROUP

At the same time, the fall in the markets opened up new opportunities, with many of
the expected economic and political risks already having been factored into share
prices. For example, at the current level of the Dax, the price/earnings ratio on the

   GfK share price performance comparison
   in %                                                                    2002      From IPO to
                                                                                   31 March 2003
   GfK AG                                                                 – 37.2          – 41.1*
   Dax                                                                    – 43.9           – 53.9
   MDax                                                                   – 30.1           – 32.0
   DJ Stoxx Media                                                         – 47.0           – 57.9
   * Compared with the Initial Public Offering (IPO) price of EUR 18.50

basis of profit forecasts for 2004 stands at 11. By comparison, when the equity markets
peaked in March 2000, the P/E ratio based on profit forecasts for 2001 stood at nearly
30, almost three times as high.

GfK share price influenced by the market

Over the course of the year, the GfK share price fell by 37 per cent from EUR 20.39 at
the end of 2001 to EUR 12.81 at the end of 2002. Between the high of EUR 24.30 and
the low of EUR 11.50, there was a fluctuation spread of EUR 12.80. Compared with the
share price of EUR 18.50 at the time of the IPO, the price at the end of 2002 represents
a fall of 31 per cent, or an average annual reduction of 10.7 per cent.

Initial shareholders who reinvested their gross dividends, inclusive of corporation tax
credit, have seen their investment in GfK shares shrink by an average of 10.1 per cent
p. a. Over the same period, an investment in bonds would have returned an average
yield of 4.9 per cent p. a. The GfK management is not satisfied with this result. On the
contrary, it is convinced that the current share price does not provide an objective
reflection of the fundamentals of GfK and that the share is undervalued in relation to
the reference indices and to the shares of competitors.

GfK shares in the analysts’ spotlight

Despite all of the restructuring and downsizing of the research and analysts’ depart-
ments of the banks, GfK continues to be rated by thirteen well known institutions.
Although some of the smaller research firms ceased tracking GfK shares, some larger
institutions have provided ratings of GfK shares for the first time. Indeed, more than
half of the banks and brokers which now rate GfK are global players and some of them
monitor the shares from abroad.

Corporate Governance

The German Corporate Governance Code published in 2002 has laid down inter-
nationally recognized standards of good, responsible corporate management to
     complement the legal requirements. GfK welcomes this step and, in accordance with
     § 161 of the German Stock Corporation Act (AktG), has disclosed the extent to which
     it complies with the recommendations of the Code.

     Existing practices largely correspond to the recommendations and suggestions of
     the German Corporate Governance Code. For example, the Group has already had
     rules of procedure for the Management Board and the Supervisory Board for a number
     of years. Since the IPO in 1999, GfK has presented quarterly reports and provided a
     webcast of its General Meeting and accounts press conference. In the past year, GfK
     switched its accounting system to the international standards of US GAAP. In order to
     enable private investors to exercise their voting rights more easily, GfK made a voting
     representative available to its shareholders last year and this service will be further

     In its implementation of the German Corporate Governance Code, GfK will be further
     extending the range of information available on the Internet.

     The Management Board and Supervisory Board of GfK AG have resolved to disclose
     not only deviations from the recommendations contained in the Code but also deviations
     from its suggestions, even though the latter is not a legal requirement. The declaration
     of conformity provided for in § 161 of the German Stock Corporation Act was made
     by the Management Board on 9 December 2002 and by the Supervisory Board on
     19 December 2002.

     The deviations relate to the following:

     At the Annual General Meeting held on 13 June 2002, the owners of the company
     resolved by a 98 per cent vote authorized capital including a provision to exclude
     shareholders’ subscription rights. Strict limits are laid down for this exclusion. The
     authorization is intended to give the Management Board the necessary flexibility to
     implement decisions quickly for the benefit of the company and the owners.

     GfK will give the remuneration, shares and stock options of the members of the
     Supervisory Board and the members of the Management Board as totals, covering the
     Management Board and the Supervisory Board separately. The statement, which is
     contained in the Notes to these accounts, is divided into fixed and variable salaries
     and the portfolios of stock options and GfK shares.

     The Management Board and Supervisory Board consider that it is important to reduce
     the time needed for the publication of the Group annual report and the interim reports.
     Accordingly, the Management Board has introduced measures to speed up publication.

     GfK does not see transparency as a burdensome duty but as part and parcel of
     communication with GfK shareholders and the public. Hence, as far as the company
     is concerned, the deviations notified represent not an end in themselves but a step
     towards further improvements.
                                                                             GfK shares – Investor Relations    THE GfK GROUP

   Country of origin of institutional investors

                                                                                      in %
   UK                                                                                    6.8
   Germany                                                                               5.4
   USA                                                                                   5.2
   France                                                                                2.2
   Other                                                                                  1.8
   Total                                                                                21.4

Free float at international level

There was no significant change in the GfK shareholder structure during the past year.
GfK-Nürnberg e.V. is the largest shareholder with a holding of 64 per cent. Of the
36 per cent free float, 33.7 per cent is held by private and institutional investors. Of         Current shareholder structure
this 33.7 per cent, the bulk (21.4 per cent) is in the hands of institutional investors
(2001: 20 per cent), while 12.3 per cent is held by private investors (2001: 13.7 per
                                                                                                       12.3 %                  2.3 %
cent). The Management Board and Supervisory Board hold 2.3 per cent. The largest
group of institutional investors is from the UK with 6.8 per cent (2001: 7.8 per cent).
                                                                                                                                       64.0 %
This is followed by Germany with 5.4 per cent (2001: 4.3 per cent), the USA with
5.2 per cent (2001: 3.8 per cent) and France with 2.2 per cent (2001: 3.2 per cent).
                                                                                                      21.4 %

Dax 100 and MDax ranking
                                                                                                                                                in %
At the 2002 year-end, GfK ranked 89th in the Dax 100 in terms of volume traded                       GfK Nürnberg e.V.                          64.0
and 87th in terms of market capitalization. In 2002, the average daily trading volume                Institutional investors                    21.4
was 13,904 (2001: 14,957). During the year under review, there was a further shift                   Private investors                          12.3
in trading away from the Dax 100 to the Xetra, bringing the volume traded on the                     Management Board and
Xetra electronic platform to almost 85 per cent (2001: 79 per cent).                                 Supervisory Board                           2.3

Following the change in the segmentation of equities on the Deutsche Börse in 2003,
GfK shares are now listed on the SDax instead of the MDax. With effect from 24 March
2003, the MDax was reduced from 70 to 50 stocks. In consequence, this index now
only includes the 60 largest companies in terms both of market capitalization and volu-
me traded. According to the rankings published by the Deutsche Börse on 31 January
2003, GfK occupied 58th place on the basis of market capitalization and 68th place
on the basis of volumes traded. On the SDax, which like the MDax includes 50 stocks,
GfK is ranked 7th.

As many investors in GfK shares are industry rather than index-oriented, GfK believes
that the change will not have any significant adverse impact in the long term. For
institutional investors, the main interest in GfK is as one of the leading companies in
the field of market research.
     GfK shares: key data                                                                       Unit          20012)        2002
     High                                                                                       EUR           35.25        24.30
     Low                                                                                        EUR           14.10        11.50
     Close                                                                                      EUR           20.39        12.81
     Average daily volume traded1)                                                                  No.      14,957       13,904
     Number of no-par shares                                                                        No.   26,121,998   26,121,998
     Market capitalization as at 31.12.                                               EUR million             532.6        334.6
     Rank in Dax 100
       by sales                                                                                                  88           89
       by market capitalization                                                                                  79           87
     Dividend                                                                                   EUR             0.17        0.20
56   Total dividend                                                                   EUR million                4.4          5.2
     Earnings per share                                                                         EUR            0.24         0.98
     Free cash flow3) per share                                                                 EUR             1.72         1.55

     1) GfK shares are officially traded on the Frankfurt stock exchange
        (Reuters: GFK.DE, Bloomberg: GFK GR, ISIN: DE 0005875306, German securities code: 587530)

     2) Pro forma statements

     3) Before acquisitions, other investment and asset disposals

     Dividend increase planned

     Following a resolution of the GfK Supervisory Board, a dividend of 20 cents per share
     will be proposed to the Annual General Meeting on 13 June 2003, an increase of
     17.6 per cent over the dividend of 17 cents per share paid in 2002. The total dividend
     will rise to EUR 5.2 million (2001: EUR 4.4 million). Since its IPO in September 1999,
     GfK has continually increased its dividend by a total of 54 per cent.

     Stock option programme continued

     At the year-end, GfK managers again had the opportunity to exchange part of their
     performance-related remuneration for stock options. Of the total of 594,117 options
     offered, 476,662 were taken up, which represents an acceptance rate of 80.2 per cent.

     The basis for subscription is the stock option programme newly resolved at the AGM
     held on 13 June 2002. After this year’s AGM on 13 June 2003, two tranches can be
     exercised: the first tranche consisting of 389,165 options at a price of EUR 55.20
     and the second tranche of 375,725 options at a price of EUR 41.71. Due to the high
     exercise price, neither tranche is yet in the money.

     Investor Relations activities stepped up

     The aim of the Investor Relations department is to provide prompt and comprehensive
     information about the GfK Group and its business. GfK wishes to ensure thereby an
     efficient opinion-forming process, so that investors, analysts and the financial media
     are able to arrive at an appropriate assessment of the financial position of GfK and its
                                                                             GfK shares – Investor Relations    THE GfK GROUP

future prospects. Through open financial communication, the Investor Relations
department seeks to develop and strengthen confidence in GfK and in the success of               Provisional key dates in the financial calendar
its business model in the financial community.

To position its shares in countries in which the GfK Group is a market leader, the               30 April 2003
management has taken part in many different events with international analysts                   Accounts press conference, Nuremberg
and investors. In addition, GfK has regularly published interim reports and provided
                                                                                                 30 April 2003
information about important events by e-mail, fax, post and conference calls.
                                                                                                 Analysts’ conference,
In particular, Investor Relations activities have included:
                                                                                                 27 May 2003
• roadshows to address investors directly in Germany, the USA, the UK and France                 Quarterly report as at 31 March*
• over 90 individual meetings with investors and analysts to discuss questions of                13 June 2003
  strategy, the financial situation and market forecasts                                         Annual General Meeting, Nuremberg

• 16 conference calls with share analysts and institutional investors                            27 August 2003
                                                                                                 Interim report as at 30 June*
• 8 international conferences
                                                                                                 26 November 2003
• participation in INVEST 2002 in Stuttgart, where private and institutional investors
                                                                                                 Quarterly report
  were able to inform themselves on the financial statements for 2001 and the
                                                                                                 as at 30 September*
  prospects for the year in progress.
                                                                                                 26 February 2004
The AGM held in Nuremberg on 13 June 2002 was attended by nearly 400 share-
                                                                                                 Provisional result for
holders and shareholder representatives holding 71.3 per cent of the share capital of
                                                                                                 financial year 2003*
GfK. As well as the increase in the dividend, they approved the GfK strategy of further
expanding the Group’s international network.                                                     22 April 2004
                                                                                                 Accounts press conference, Nuremberg
The Internet is becoming increasingly important as a means of financial communi-
cation. During the past year, more and more private and institutional investors made             22 April 2004
use of the GfK website to call up information about the company and its shares. They             Analysts’ conference,
also took advantage of the opportunity to use the Internet to follow the AGM and the             Frankfurt/Main
accounts press conference.
                                                                                                 27 May 2004
In future, GfK will be publishing a newsletter four times a year in order to give                Quarterly report as at 31 March*
investors an insight into the corporate life of the Group. The objective is to make
                                                                                                 15 June 2004
information about GfK and the market research industry available to a wider range
                                                                                                 Annual General Meeting, Nuremberg
of investors than in the past. The newsletter will be issued in electronic form and
subscriptions may be taken out by e-mail ( or by visiting              26 August 2004
the GfK website (                                                                    Interim report as at 30 June*

                                                                                                 25 November 2004
                                                                                                 Quarterly report
                                                                                                 as at 30 September*

                                                                                                 * Publication is scheduled for before
                                                                                                   the start of the trading session

           Petra Heinlein                                     Dr. Gérard Hermet                                   Dr. Klaus L. Wübbenhorst

     Responsible for the Media                          Responsible for the Non-Food Tracking               Chief Executive Officer (CEO)
     business division                                  business division                                   Responsible for Strategy, Investor Relations,
58                                                                                                          Public Affairs and Communications, Method
                                                                                                            and Product Development, IT and Management

     née Dengler, born in Bad Staffelstein,             born in Montpellier, France,                        born in Linnich,
     7 October 1958                                     19 January 1951                                     23 February 1956

     • Professional career                              • Professional career                               • Professional career

       Since 2002 Member of the Management Board          Since 1999 Member of the Management Board           Since 1992 Member of the Management Board,
       of GfK AG, appointed until 2007                    of GfK AG, appointed until 2008                     since 1998 spokesperson, and since 1999 Chief
                                                                                                              Executive Officer of GfK AG, appointed until 2007
       2001 Integration management on behalf of           1998 – 2000 Chairman of the French Marketing
       GfK AG for the Martin Hamblin GfK Group and        Association (AFM)                                   Since 1997 Member of the Management Board,
       GfK Great Britain, UK                                                                                  since 2002 Chairman of the Management Board
                                                          1988 – 1998 General Manager of GfK Sofema,
                                                                                                              of ADM, the working group of German market
       2000 Integration management on behalf of           France
                                                                                                              and social research institutes
       GfK AG for GfK Custom Research Inc. in the USA
                                                          1984 – 1998 Managing Director of GfK France,
                                                                                                              1992 – 1997 Member of the Management Board
       1992-2000 Managing Director of content census      then General Manager 0f GfK Marketing Services,
                                                                                                              of GfK AG, responsible for Accounting, Finances,
       in Frankfurt                                       France
                                                                                                              Financial Controlling, Personnel, Purchasing,
       1985 Joined GfK as project manager with            1978 – 1984 Employee of Burke Marketing             General Administration, Minority Interests,
       GfK Marktforschung                                 Research, Paris, France                             Production, IT, Data Processing

       1984 Research Assistant at the Arnold-                                                                 1991 – 1992 Member of the Management Board
       Bergstraesser-Institut, Freiburg                 • Training                                            of KBA-Planeta AG, Radebeul near Dresden

                                                          1978 PhD from the University of Grenoble            1984 – 1991 Employee of Bertelsmann AG,
     • Training                                                                                               Gütersloh, latterly as Managing Director of
                                                          1975 Graduated from the French Business School
                                                                                                              Druck- & Verlagsanstalt Wiener Verlag. Ges.mbH
       1984 Graduated in political science from the       (ICN)
                                                                                                              Nfg. KG, Himberg near Vienna
       University of Bamberg

                                                                                                            • Training

                                                                                                              1984 PhD from the Technische Hochschule,

                                                                                                              1981 Graduated in economics from the
                                                                                                              Universität-Gesamthochschule, Essen
                                                                                                  The Management Board      THE GfK GROUP

      Dr. Franz Merl                                       Wilhelm R. Wessels                                   Heinrich A. Litzenroth

Chief Financial Officer (CEO)                        Responsible for the Consumer Tracking                Responsible for the Ad Hoc Research
Responsible for Financial Services,                  business division and the HealthCare                 business division
Personnel Services and Central Services              segment                                                                                               59

born in Regenstauf,                                  born in Haren,                                       born in Mölln,
7 April 1949                                         12 October 1952                                      13 December 1951

• Professional career                                • Professional career                                • Professional career

  Since 2002 Member of the Management Board            Since 1996 Member of the Management Board            Since 2000 Member of the Management Board
  of GfK AG, appointed until 2007                      of GfK AG, appointed until 2006                      of GfK AG, appointed until 2004

  1990 – 2002 Member of the Management Board           1991 – 1996 Managing Director of GfK AG              1993 – 1999 Managing Director of GfK
  of Bayerische Treuhandgesellschaft                   Gesundheitsforschung/I+G Gruppe Gesundheits-         Marktforschung GmbH
  Aktiengesellschaft, Wirtschaftsprüfungs-             und Pharmamarktforschung
                                                                                                            1989 – 1999 Managing Director of GfK
  gesellschaft Steuerberatungsgesellschaft, Munich
                                                       1986 – 1996 Managing Director of GPI                 Testmarktforschung GmbH
  1988 – 2002 Partner at KPMG Deutsche                 Gesellschaft für Pharma-Informationssysteme,
                                                                                                            1978 – 1989 Employee of GfK, responsible for
  Treuhandgesellschaft, Berlin and Frankfurt           Nuremberg/Frankfurt
                                                                                                            the development of GfK BehaviorScan in
  1996 – 2000 Member of the working group                                                                   Germany and building up GfK
  Rechnungslegung von Stiftungen (accounting for     • Training                                             Testmarktforschung
  foundations) at IDW
                                                       1977 Graduated in economics from the
  1986 – 2002 Managing Director of RTG Revisions       University of Saarbrücken                          • Training
  und Treuhandgesellschaft mbH, Munich
                                                                                                            1977 Graduated in economics from the Freie
  1973 – 1986 RTG Revisions und Treuhand-                                                                   Universität Berlin
  gesellschaft, Wirtschaftsprüfungsgesellschaft
  Steuerberatungsgesellschaft, Munich

• Training

  1983 Qualified as auditor

  1979 PhD from the University of Munich

  1978 Qualified as tax consultant

  1973 Graduated in economics from the
  University of Munich
                            MANAGEMENT REPORT


62   1. The economy as a whole and the market
        research sector
64   2. The GfK Group
        Economic and financial development
68   3. Business divisions
          68      Consumer Tracking
                  Growth trend continues
          69      Non-Food Tracking
                  Leading position further extended            61

          70      Media
                  Affected by the crisis in the print media
          70      Ad Hoc Research
                  Growth achieved despite economic decline
          71      Other
                  Providing internal services and healthcare
                  information services
72   4. Regions
          72      Germany
                  Growth through acquisitions
          73      Europe
                  Pleasing increase in operating income
          74      America
                  Good progress
          75      Asia and the Pacific
                  Exchange losses countered by strong growth
          75      The GfK network
                  Further expansion
76   5. Risk report
78   6. Research and development
80   7. Employees
82   8. Organization and administration
82   9. Purchasing
83   10. Environmental protection
83   11. Social commitment
84   12. Major events since the 2002 financial statements
84   13. Outlook

     1. The economy as a whole and the market                            Baltic countries, for example, expansion accelerated. The causes
        research sector                                                  for this positive development were rising investment activity and
                                                                         increased consumer spending.
     Overall economic development – modest and patchy
                                                                         In the euro zone, the economic recovery during 2002 failed
     The global economic situation continues to be characterized
                                                                         by a long way to match the expectations of economic experts
     by a high level of uncertainty. Particularly in the first half of
                                                                         and politicians. Indeed, quite the contrary. At 0.8 per cent, real
     2002, there seemed to be the first signs of a slight upturn.
                                                                         economic growth lagged well behind the previous year’s figure
     However, during the second half of the year, the talk of a war in
                                                                         of 1.4 per cent.
     Iraq and declining consumer confidence in the industrialized
     countries made it become clear that the hoped for economic          Within the euro zone, Germany was once again the tail-ender
     stabilization would still be some time in coming.                   with, according to the DIW estimate, a real increase in GDP of
                                                                         just 0.2 per cent (2001: 0.6 per cent). The mood of economic
     Nevertheless, despite the weakness of the economy during the
                                                                         optimism which characterized the first half of the year largely
     last months of the year, real economic growth in 2002 was
                                                                         evaporated during the second half. Over the course of the year,
     estimated by the FAZ Institute to amount to 2.8 per cent (2001:
                                                                         growth forecasts were successively revised downwards. There
     2.2 per cent). However, the development of the major regions
                                                                         were various reasons for this.
62   and national economies varied widely.
                                                                         Following the intensive debate over the adverse economic
     In the USA, where there had been fears of a long phase of
                                                                         impact of the introduction of the euro, the survey conducted
     sluggish growth or even recession, strong economic growth
                                                                         by GfK for the European Commission in May 2002 showed
     was recorded during the first half of the year. According to
                                                                         that consumer confidence in Germany was at its lowest figure
     the FAZ Institute, this was due to interest rate policy, active
                                                                         for 18 years. Then, during the second half of the year, German
     financial policy and falling crude oil prices. This promising
                                                                         hopes of an economic upturn vanished altogether. Crucial factors
     start engendered expectations of a sharp upturn, which then
                                                                         here were unemployment and the smouldering conflicts in the
     failed to materialize. Spectacular bankruptcies, major accounting
                                                                         Middle East. Moreover, the crisis in the financial markets resulted
     scandals and an increase in oil prices spurred by the wrangling
                                                                         in additional uncertainty. Given the existing weakness of the
     over Iraq all combined to reduce the prospect of a sustained
                                                                         German economy, the fall in the stock markets became even
     economic recovery during the second half of the year. According
                                                                         more significant. Share-owning households felt that they were
     to the estimates of the DIW (Deutsches Institut für Wirtschafts-
                                                                         getting poorer. With the unemployment figures continuing to
     forschung, Berlin), real growth in GDP during 2002 amounted to
                                                                         rise, consumer spending was also reined back. In November,
     2.4 per cent (2001: 2.8 per cent).
                                                                         the propensity of consumers to go out and buy reached a new
     In Japan, economic experts consider that, despite another slight    low.
     fall in GDP of an estimated 0.2 per cent according to the DIW
                                                                         Together with Japan, for the second time, Germany came in last
     (2001: -0.3 per cent), the development in 2002 suggests that the
                                                                         among the G7 countries.
     country is now largely out of recession. The slight upturn that
     began to emerge was generated largely by private consumer
     buying of durables. However, the positive trend continues to be     The market research sector – potential for growth
                                                                         The hesitant development of the overall economy did not leave
     According to the DIW, economic growth was particularly              the market research sector entirely untouched. According to an
     dynamic in the countries of South-East Asia, with real growth       estimate by Morgan Stanley, companies in the retail, services
     standing at 4.5 per cent (2001: 2.6 per cent). The main causes      and media sector paid out 3 per cent more for market research
     here were rising exports and an expansion in domestic demand.       in 2002 than in the previous year (2001: in EUR, 5.8 per cent;
                                                                         in USD, 2.8 per cent. Source: ESOMAR). In absolute terms, this
     In Central and Eastern Europe, the national economies
                                                                         amounted to EUR 18.3 billion. However, unlike previous years,
     appeared to be largely unaffected by the weak global economy
                                                                         the growth in the market research sector was only slightly higher
     and, according to the DIW estimate, there was above-average
                                                                         than that of the economy as a whole.
     growth of 3.3 per cent (2001: 3.0 per cent). In the region as a
     whole, the economy remained robust during 2002 and in the
                                                                            The economy as a whole and the market research sector      MANAGEMENT REPORT

                                                                                               The regional centres in which the industry, retail and services
Market research industry in comparison with GNP
and advertising industry worldwide
                                                                                               sector make the most intensive use of market research continue
                                         Index value 1991 = 1001)                              to be America and Europe. The USA, ahead of the UK, Germany
1993                                         111                                               and Japan, is the largest national consumer of market research
                                            107                                                services.
1994                                              124
                                                117                                                Market research market by region and by country
1995                                                       137                                                                                                                     In %
                                                         131                                                                               America                                   46
                                               113                                                        1%
                                                                                                                              46 %         of which USA                              39
1996                                                         146                                   40 %
                                                                                                                                           Asia                                      13
                                                   116                                                                                     of which Japan                             7
1997                                                                 159                                                                   Europe                                    40
                                                                                                                                           of which UK                               10
                                                                                                                                           of which Germany                           9
1998                                                                       181                                         13 %
                                                               144                                                                         Rest of the world                          1   63
                                                     125                                                                              Total market volume 2002: EUR 18.3 billion
1999                                                                             198                                                  Source: ESOMAR, Morgan Stanley
2000                                                                               206
                                                                                               Traditionally, manufacturers of branded fast moving and slow
                                                                  155                          moving consumer goods have represented the largest group of
                                                                                               clients for market research services in terms of overall
2001                                                                                   212
                                                                                               sales, followed by media, pharmaceutical and retail companies.
                                                          136                                  In recent years, however, the client structure has been moving
20022)                                                                                  218    away from the traditional branded goods industry to such sectors
                                                                                               as telecommunications, financial services, public and private
1) Basis: value in USD
                                                                                               health services and energy supplies. The causes for this shift
2) Estimated industry growth in 2002: 3 per cent                             BSP
                                                                                               include the privatization and deregulation of these sectors, as
   Market volume: EUR 18.3 billion
   Source: ESOMAR, Morgan Stanley, Zenith Media                              Market Research   a result of which companies have had to become customer-
                                                                                               oriented and conduct market research into their potential target
       Nevertheless, the growth rate for the market research
       sector during the past year was clearly better than that of
       the advertising industry, which according to an estimate by                                 Market research volume by customer segment
       Zenith Media, was 0.7 per cent lower than the previous year.
                                                                                                                                                                                   In %
       This result confirms a trend that has already prevailed for                                                   11%
                                                                                                   5%                                    Consumer goods industry                     37
       ten years, namely that market research is more dynamic and                                                             37 %
                                                                                                                                         Media                                       22
       less cyclical than advertising. One of the main causes for this is                          10 %
                                                                                                                                         Healthcare and pharma                       15
       the fact that whether the economy is strong or weak, market
                                                                                                                                         Retail                                      10
       research information services overall are considered to be
                                                                                                                                         Telecommunications, post,
       indispensable support for the marketing sector activities of com-                                                                 energy supply                                5
       panies from industry, retail, media and the services.                                       15 %                       22 %       Other segments                              11
                                                                                                                                     Total market volume 2002: EUR 18.3 billion
                                                                                                                                     Source: ESOMAR, Deutsche Bank
     The market research sector continues to offer great potential for   2. The GfK Group:
     growth thanks to a number of factors:                                  Economic and financial development
     Fierce competition between companies expanding                      This year, for the first time, GfK is presenting its Group
     worldwide continues. Political, economic and technological          accounts on the basis of US GAAP (United States Generally
     developments have greatly accelerated the pace of globalization     Accepted Accounting Principles). The same principles have
     of traditional markets for goods and services over the last ten     also been applied to the 2001 figures.
     years and have intensified the pressure of competition between
                                                                         In order to make the special conditions associated with the
     traditional, local and global companies and brands.
                                                                         change in accounting transparent and to facilitate comparison
     Increasing demand for information from small and                    with the consolidated financial statements for the previous
     medium-sized enterprises (SMEs). The number of SMEs                 year, GfK has also produced pro forma statements as well
     making use of the new Internet communication platforms              as the actual financial statements for 2001. The pro forma
     to operate and expand their business at local, national and         statements include the results of five companies that would
     international level is increasing and their need for market         not have been consolidated in 2001 under US GAAP. These are
     research and marketing expertise is growing in parallel.            G.E. Marketing Research and Emer-GfK, both in Spain, GfK
                                                                         Portugal and METRIS, Portugal, for the full twelve months of
64   New innovation-driven business and client potential.
                                                                         the previous year, as well as Intomart GfK in the Netherlands for
     The new communication and information technologies have
                                                                         the first six months of the previous year. From 1 January 2002,
     created additional opportunities and stimuli for growth. On
                                                                         all five companies fulfilled the US GAAP requirements for full
     the basis of these new technologies, a host of new markets for
     new products and services have emerged, for example in the
     field of telecommunications and innovative domains such as          Moreover, the additional pro forma statements for 2001
     biochemistry and genetic technology.                                do not include the scheduled amortization on goodwill of
                                                                         EUR 10.4 million reported in the actual income statement
     New business potential in the emerging markets.
                                                                         which is to be shown in accordance with the accounting
     Throughout the world, increasing opportunities for growth are
                                                                         principles of US GAAP which still applied in 2001. From
     resulting from trends towards liberalization and democratization.
                                                                         2002 onwards, there are no more scheduled amortization,
     This applies particularly to the emerging markets in Central and
                                                                         but impairment principles for goodwill amortization. This
     Eastern Europe, Asia and the Pacific as well as Latin America.
                                                                         did not result in any expenses.
     Outsourcing of market research services by clients.
                                                                         The pro forma financial statements for 2001 are intended for
     Companies are increasingly cutting down the size of their
                                                                         comparative purposes in the following1).
     own market research departments to a minimum and turning
     instead to comprehensive services from outside market research
     professionals.                                                      Sales and income – double-digit growth

                                                                         In 2002, the GfK Group achieved sales of EUR 559.4 million,
                                                                         up 10.6 per cent on the previous year, a result which raised
                                                                         it to fifth place in the rankings of the world’s leading market
                                                                         research companies. In addition to the contribution of organic
                                                                         growth at a higher than average rate for the sector, a substantial
                                                                         part of this increase came from companies consolidated for the
                                                                         first time in the year under review. They include IFR Group,
                                                                         France, Significant GfK, Belgium, GfK MACON, Germany and the
                                                                         healthcare activities of the I+G Group in Germany, acquired as
                                                                         part of a merger.

                                                                         1) The percentages given below are all based on absolute values in thousand
                                                                            euros. For ease of legibility, the absolute values are expressed in million
                                                                            euros. Calculating percentages on the basis of the values expressed in million
                                                                            would have led to distortions, particularly for lower numbers.
                                                                              Economic and financial development   MANAGEMENT REPORT

                                                                               The item Other income and expenses includes the balance of
                                                                               other income from earlier periods amounting to EUR 0.9 million,
                                     2001          2001    2002     Change     amortization on other intangible assets of EUR 2.6 million and
In EUR million                      Actual    Pro forma   Actual      in %
                                                                               currency effects of EUR -2.1 million.
Sales                                482.1       505.8     559.4     + 10.6
Operating costs                     – 451.8     – 471.1   – 512.1     – 8.7    The GfK Group increased its EBIT before income from
Operating income                      30.3         34.7      47.2    + 36.4    participations by 46.6 per cent from EUR 29.8 million in
Other income less                                                              2001 to EUR 43.6 million in 2002. The EBIT margin relating to
other expenses                       – 14.5       – 4.9     –3.6     + 25.8    sales also improved markedly from 5.9 per cent in 2001 to
EBITDA                                52.8         58.0     68.5     + 18.2    7.8 per cent in 2002.
as percentage of sales                10.9         11.5     12.2         –
EBIT before income                                                             Net income from participations rose from EUR 2.9 million in
from participations                   15.8         29.8     43.6     + 46.6    2001 to EUR 6.4 million in 2002. Depreciation on the shareholding
as percentage of sales                  3.3         5.9       7.8        –     in the bwv Group in Switzerland considerably depressed net income
Net income from                                                                from participations in 2001. However, no further depreciation
participations                          3.7         2.9       6.4   + 119.6
                                                                               was required for this shareholding in 2002. The GfK Group’s
EBIT after income
from participations                   19.5         32.7     50.0     + 53.1    EBIT after income from participations also increased sharply
as percentage of sales                  4.0         6.5       8.9        –     compared with the previous year, rising by 53.1 per cent to
Net interest income                     0.1         0.0     – 2.3        –     EUR 50.0 million in 2002. EBIT after income from participations
Net other financial                                                            in relation to sales showed a correspondingly clear increase from
income                               – 15.7      – 15.7     – 2.4    + 84.7    6.5 per cent in 2001 to 8.9 per cent in 2002.
Result from
ongoing business                                                               GfK’s Net other financial income also improved from EUR –15.7
activity                                3.9        17.0     45.3    + 165.9    million in 2001 to EUR -2.4 million during the past financial
Taxes on income                                                                year. The figure essentially comprises expenses arising from the
and earnings                         – 10.2      – 11.7    – 15.3    – 30.5
                                                                               waiver on a loan to MMXI Europe in the Netherlands of EUR
Income from the
initial application                                                            1.2 million in connection with the sale of this participation, as
of SFAS 133                             0.2         0.2       0.0   – 100.0    well as the residual depreciation on the holding in American
Consolidated total                                                             company, Jupiter Media Metrix Inc. (JMXI), of EUR 0.7 million.
income before
minority interests                    – 6.1         5.5     30.0    + 449.6    In 2001, net other financial income was influenced by the write-
Minority interests’                                                            downs on loans to the bwv Group amounting to EUR 5.9 million
share of total                                                                 and the valuation allowance for JMXI shares of EUR 6.9 million.
income                                  1.4         0.8     – 4.3   –626.2
Consolidated                                                                   Overall, this had a positive impact on the Result from ongoing
total income                          – 4.7         6.3     25.7    + 308.7
                                                                               business activity, which rose more than one and a half times
1) Rounding differences may occur
                                                                               from EUR 17.0 million in 2001 to EUR 45.3 million in 2002.

                                                                               Compared with the previous year, the Income tax rate was
     There was a pleasing increase in Operating income from
                                                                               reduced from 68.7 per cent to 33.7 per cent. The valuation
     EUR 34.7 million in 2001 to EUR 47.2 million in 2002 (+36.4 per
                                                                               allowance made in 2001 for the participation in JMXI was not tax
     cent) as a result of sales growth and the below average rise in
                                                                               deductible. Moreover, the depreciation on the holding and the
     Operating costs (+8.7 per cent), which came in at almost
                                                                               loans to the bwv Group in Switzerland could only be recognized
     2 per cent under the rate of increase in sales. The personnel
                                                                               to a very limited extent for tax purposes.
     cost ratio, which expresses personnel expenses in relation to
     sales, came down from 44.1 per cent in 2001 to 43.6 per cent
     in 2002. In absolute terms, personnel expenses amounted to
     EUR 244.1 million (2001: EUR 223.2 million). Scheduled
     depreciation, particularly on software and fixtures and fittings
     fell from EUR 28.2 million in 2001 to EUR 24.9 million in 2002.
                                                                                                                Current assets remained at the same level as in the
      The GfK Group: EBIT after income from participations and consolidated
      total income before minority interests                                                                    previous year. While there was a reduction in trade receivables
      1998 – 2002 in EUR million1)                                                                              and liquid funds, there was an increase in other receivables
      1998                                              18.2                                                    and assets. The main increase came from tax claims and
                                    10.7                                                                        payment on account for the remaining shares in ENIGMA GfK
      19992)                                                          26.7                                      in Germany.
      2000                                                                                    39.4              Shareholders’ equity rose by EUR 18.4 million to EUR
                                                                                                                181.5 million. The increase is attributable to total consolidated
      2001                                                                       32.7
                                                                                                                income of EUR 25.7 million less the total dividend disbursement
      2002                                                                                               50.0
                                                                                                                and currency effects relating to consolidations reported under
                                                                             30.0                               other comprehensive income. With an increase in total assets
      1) Up to 2000, in accordance with the German Commercial                2) Excluding IPO costs             of EUR 56.5 million (+13.7 per cent), the Equity ratio as at
         Code (HGB). From 2001, in accordance with US GAAP.
                                                                                                                31 December 2002 amounted to 38.7 per cent (2001: 39.5 per
         EBIT after income from participations           Consolidated total income before minority interests

             The GfK Group achieved an increase of EUR 24.5 million in
66                                                                                                                 Development of equity ratio
             Consolidated total income before minority interests                                                   in per cent, 1998-20021)
             from EUR 5.5 million in 2001 to EUR 30.0 million in 2002.

                                                                                                                   1998                                                    30.8
             Asset and capital structures continue to remain stable
                                                                                                                   19992)                                                                                    52.3
             Compared with the previous year, the GfK Group’s Total
             assets increased by EUR 56.5 million to EUR 469.6 million.                                            2000                                                                                 49.6

             On the assets side, this increase was almost exclusively
                                                                                                                   2001                                                                 39.5
             attributable to growth in Fixed assets. Acquisitions, the
             topping-up of shareholdings and the merger of the I+G Group                                           2002                                                                38.7
             with GfK in Germany increased goodwill by EUR 51.4 million
                                                                                                                   1) Up to 2000, in accordance with the German Commercial Code (HGB). From 2001,
             from EUR 84.2 in 2001 to EUR 135.6 million as at 31 December                                             in accordance with US GAAP.
             2002. Software and fixtures and fittings rose by EUR 8.2 million.                                     2) This percentage includes the change resulting from the IPO, without which the figure
             With regard to financial assets, the addition resulting from the                                         would have been 29.7.

             acquisition of Indicator GfK, Brazil offset the disposal of shares
             in associated companies resulting from the merger of the                                           As at 31 December 2002, minority interests had risen by EUR
             I+G Group with GfK.                                                                                11.1 million to stand at EUR 17.6 million. In addition to the impro-
                                                                                                                vement in consolidated total income, the main reason for this
     Balance sheet growth                                                                          Share        increase was the first-time consolidation of Spanish and Portu-
                                                                                                  of total
                                                                                                                guese subsidiaries and the IFR Group in France, which also has
                                      31.12.2001           31.12.2002           Change             assets
     In EUR million                                                               in %               in %       minority shareholders.
                                                                                                                The following factors contributed to the increase in other
     Fixed assets                           208.6               263.8               + 26.5             56.2
                                                                                                                Provisions and liabilities by EUR 26.7 million to EUR 263.5
     Current assets                         189.8               189.8                – 0.1             40.4
                                                                                                                million: an increase in provisions of EUR 7.7 million, in particular
     Deferred taxes                               9.1               9.3              + 2.7              2.0
                                                                                                                for personnel including pensions, and an increase of EUR 19.0
     Prepaid expenses                             5.6               6.7             + 20.0              1.4
                                                                                                                million in liabilities. Given the financing of newly acquired
                                                                                                                companies and participations, the increase came mainly from
     Shareholders’ equity and liabilities
                                                                                                                liabilities to banks.
     Shareholders’ equity                   163.1                181.5              + 11.3             38.7
     Borrowings*                            243.3                281.2              + 15.6             59.9
     Deferred taxes                               5.3               6.0             + 14.0              1.3
     Deferred income                              1.4               0.9             – 33.8              0.1
     Total assets                           413.1               469.6               + 13.7            100.0

     *Provisions, liabilities and minority interests
                                                                          Economic and financial development          MANAGEMENT REPORT

     Investment and financing                                              Net indebtedness, derived from the balance of cash and
     Bulk of investment covered by cash flow                               cash equivalents and short-term securities less interest bearing
                                                                           liabilities and pension provisions, stood at EUR 39.6 million
     In 2002, GfK’s Investment amounted to EUR 76.6 million                (2001: EUR 23.7 million).
     (2001: EUR 108.3 million). This related essentially to the
     acquisition of companies and business units (EUR 47.0 million)           Gearing and net indebteness in relation
     and the addition of participations as well as the acquisition of         to EBIT, EBITDA, free cash flow

     software, fixtures and fittings and other tangible assets (EUR           In %                                                     2001        2002

     28.6 million).                                                           Gearing (net indebtedness/shareholders’ equity)           14.5       21.8
                                                                              Net indebtedness/EBIT                                    150.2       90.8
                                                                              Net indebtedness/EBITDA                                   44.9        57.8
Change in free cash flow
                                                                Change        Net indebtedness/free cash flow                           52.8        97.2
In EUR million                            2001         2002       in %
Cash flow from ongoing
business activity                          75.9         69.3      – 8.8
                                                                           Gearing, which is the ratio of net indebtedness to shareholders’
Capital expenditure                      – 31.1       – 28.6      – 8.1
                                                                           equity, amounted to 21.8 per cent in 2002 (2001: 14.5 per
Free cash flow before
                                                                           cent). The ratio of net indebtedness in relation to EBIT, EBITDA                67
acquisitions, other investment
and asset disposals                        44.8         40.7      – 9.2    and free cash flow shows that GfK is in a position to repay its bor-
Acquisitions                             – 60.2       – 47.0     – 21.9    rowings in less than one year.
Other financial investment               – 17.0        – 1.0     – 94.1    In addition to the investment reported in the balance sheet,
Asset disposals                             4.1          3.4     – 17.1    the GfK Group used EUR 32.2 million for Soft facts (2001:
Free cash flow after                                                       EUR 30.2 million). These intangible assets are not capitalized
acquisitions, other investment
and asset disposals                      – 28.3        – 3.9     + 86.2    but are charged directly to the income statement. They include,
                                                                           in particular, expenses for setting up and maintaining panels,
                                                                           non-capitalized costs of proprietary software as well as the
     The ongoing capital expenditure was fully financed from the           costs of training and continuous professional development.
     Cash flow from ongoing business activity of EUR 69.3 mil-             This investment is essential to securing the long-term success
     lion (2001: EUR 75.9 million). Net of these expenses amounting        of the company, as it contributes to the creation of market entry
     to EUR 28.6 million, Free cash flow of EUR 40.7 million (2001:        barriers.
     EUR 44.8 million) remains. This was sufficient to finance 84.9
     per cent of acquisitions and other financial investment during
                                                                              Expenses for soft facts
     the past year. In 2001, the equivalent figure was 58.1 per cent
     due to a higher level of investment.                                     In EUR million                                2001       2002      in %
                                                                              Costs of maintaining panels
     GfK was able to reduce the inflow of funds in connection
                                                                              (including recruitment)                           17.0    19.5    + 14.9
     with financing activity from EUR 16.8 million in 2001 to
                                                                              Software development costs                         7.4     7.1       – 3.9
     EUR 2.9 million in 2002.
                                                                              Training and continuous professional
                                                                              development                                        5.1     5.0       – 3.6
                                                                              Other                                              0.7     0.6      – 10.3
Change in net indebtedness
                                                                              Total                                             30.2    32.2       + 6.6
In EUR million                       31.12.2001   31.12.2002      in %        Source: Management Information System
Liquid funds                               47.6         45.2      – 5.0
Short-term securities                       8.0          7.3      – 8.7
Liquid funds and
                                                                           The 14.9 per cent increase in panel costs results from the higher
short-term securities                      55.6         52.5      – 5.6    maintenance payments made to panel households and retailers
Liabilities to banks                       24.8         47.1     + 89.9    and for extending panels.
Pension obligations                        17.5         19.2     + 10.1
Liabilities under leases                   16.3         15.8      – 3.2
Other interest-bearing liabilities         20.7         10.0     – 51.3
Interest-bearing liabilities               79.3         92.1     + 16.2
Net indebtedness                         – 23.7       – 39.6     – 67.3
          3. Business divisions                                                      During the past financial year, GfK’s operating income rose
                                                                                     at an above average rate. The figure of EUR 48.3 million for
          The GfK Group provides services in its four business divisions
                                                                                     2002 represented a 47.9 per cent increase over the EUR 32.7
          Consumer Tracking, Non-Food Tracking, Media and Ad Hoc
                                                                                     million recorded for the previous year. The margin relating
          Research. The division Other comprises GfK AG internal services
                                                                                     to consolidated sales improved accordingly from 6.5 per cent
          as well as some of the activities in the healthcare segment,
                                                                                     to 8.6 per cent.
          which are currently being set up.

          The financial data presented below comes from the Management                  Share of business divisions in total sales
          Information System. All of the figures reported have been                                                                                        In %         In EUR
          prepared in accordance with US GAAP. No account is taken of                                       5%
                                                                                                                   15 %           Consumer Tracking             15        86.0
          minority interests. Net income from participations is therefore
                                                                                                                                  Non-Food Tracking             25       137.3
          not included in the operating income.                                         44 %
                                                                                                                                  Media                         11        61.3
          In order to improve transparency in annual comparisons, as                                                              Ad Hoc Research               44       246.3
                                                                                                                   25 %
          referred to in the presentation of the economic development of                                                          Other                          5        28.5
          the GfK Group, pro forma statements have also been prepared                                          11%                Total                        100       559.4
68        for the divisions for 2001. The explanations below are all based
          on a comparison of the figures for 2002 with those from the
          pro forma statements.
                                                                                     Consumer Tracking – growth trend continues
          Sales for the Group in all business divisions in 2002 were up
                                                                                     GfK’s Consumer Tracking division provides clients in 24 coun-
          by 10.6 per cent from EUR 505.8 million to EUR 559.4 million.
                                                                                     tries throughout Europe with information services on consumer
          While newly consolidated business activities in the GfK Group
                                                                                     purchase decisions and behaviour. These cover almost all fast
          contributed 7.8 per cent to the growth in sales, organic growth
                                                                                     moving consumer goods plus a large number of slow moving
          accounted for 3.5 per cent. Excluding projects with fixed order
                                                                                     consumer goods and services. Clients include in particular
          volumes, organic growth amounted to 5.3 per cent. Currency
                                                                                     brand manufacturers, retailers and service providers.
          effects played a minor role, reducing sales growth by 0.7 per
                                                                                        Consumer Tracking: key figures

     GfK Group: breakdown of growth                                                                                     2001               2001        2002           Change
     in sales and operating income                                                      In EUR million                 Actual         Pro forma       Actual            in %
                                                                                        Sales                             84.8             84.8        86.0              + 1.4
     Total growth                                                                       Operating income                  – 0.2           – 0.2          2.4         + 1,296.0
                                             + 10.6 %
                                                                                        Margin in %                       – 0.2           – 0.2        + 2.8                 –
                                                                          + 47.9 %
                                                                                        Number of employees                788             788          863              + 9.5
     Growth through acquisitions
                                          + 7.8 %                                       of which abroad                    564             564          590              + 4.6
                                                               + 31.4 %
     Organic growth
                                       + 3.5 %                                       During financial year 2002, GfK’s Consumer Tracking division
                                                    + 17.2 %
                                                                                     achieved consolidated sales of EUR 86.0 million. The 1.4 per
     Exchange rate effects
                             – 0.7 %
                                                                                     cent increase on the previous year was almost exclusively due
                             – 0.7 %                                                 to organic growth, with the GfK companies outside Germany
       Sales        Operating income                                                 providing the main impetus. By contrast, sales in Germany were
                                                                                     slightly below the figure for the previous year.
                                                                                        GfK Business Divisions       MANAGEMENT REPORT

Consumer Tracking: breakdown of growth                                        Non-Food Tracking: key figures
in sales and operating income
                                                                                                                  2001            2001           2002       Change
Total growth                                                                  In EUR million                     Actual      Pro forma          Actual        in %
                                  + 1.4 %                                     Sales                              119.5            122.2          137.3       + 12.4
                                                             + 1,296.0 %
                                                                              Operating income                     17.5            19.7              24.5    + 24.5
Growth through acquisitions
                                                                              Margin in %                        + 14.6          + 16.1         + 17.8           –
                        – 0.1 %
                                                             + 907.1 %        Number of employees                 1,125           1,234          1,394       + 13.0
Organic growth                                                                of which abroad                      896            1,005          1,145       + 13.9
                                  + 1.1 %
                                                            + 405.7 %
Exchange rate effects                                                      During the year under review, the division succeeded in further
                                  + 0.4 %
    – 16.8 %
                                                                           extending its leading position in the global markets. Sales
                                                                           increased by 12.4 per cent from EUR 122.2 million in 2001 to
  Sales        Operating income
                                                                           EUR 137.3 million in 2002, of which 8.5 per cent came from
                                                                           organic growth. This was the highest organic growth rate of
     There has been a clear rise in operating income. Following            all the GfK divisions. Currency effects, particularly in Asia,                             69
     EUR –0.2 million in 2001, operating income rose to                    depressed sales growth by 1.7 percentage points. First-time
     EUR 2.4 million in 2002. The margin also improved from                consolidations, mainly of the IFR Group as at 1 July 2002,
     –0.2 per cent in 2001 to 2.8 per cent in 2002. This is mainly         contributed EUR 6.9 million to the rise in sales.
     attributable to the consistent restructuring measures in
     the division and to cost savings brought about by using the           Despite considerable investment on innovations in this segment,
     standard production system aTRACKtive.                                such as the further development of the S*T*A*R*T*R*A*C*K
                                                                           analysis and production system and the ENCODEX software
     At the end of 2002, the Consumer Tracking division employed           used for B2B online trading in consumer durables, operating
     863 full-time personnel, of which 68.4 per cent working               income of the Non-Food Tracking division was up 24.5 per cent
     outside Germany. The number of employees increased by                 from EUR 19.7 million to EUR 24.5 million. Around half of this
     75 compared with the previous year due to the insourcing of           increase is attributable to companies consolidated in the GfK
     personnel from the data collection department of GfK Data             Group for the first time. The remainder is mostly due to the
     Services.                                                             progress of business development in Europe. As a result of the
                                                                           overproportional rise in operating income, the margin increased
     Non-Food Tracking – leading position further extended                 from 16.1 per cent to 17.8 per cent.

     GfK’s Non-Food Tracking division provides clients with
                                                                              Non-Food Tracking: breakdown of growth
     information services regarding sales of consumer durables                in sales and operating income
     and services, particularly in the IT, consumer electronics,
     telecommunications, household appliances and photographic                Total growth
                                                                                                                              + 12.4 %
     markets. Its clients are mostly global manufacturers of
                                                                                                                                          + 24.5 %
     consumer durables and they receive this information on                   Growth through acquisitions
     44 countries worldwide, which include thirteen countries                                                        + 5.6 %
     in Asia and the Pacific, the USA and Latin America, the                                                                + 12.8 %
                                                                              Organic growth
     Middle East and South Africa.
                                                                                                                          + 8.5 %
                                                                                                                               + 12.8 %
                                                                              Exchange rate effects
                                                                                                      – 1.7 %
                                                                                                       – 1.1 %

                                                                                Sales        Operating income
          The Non-Food Tracking division employ 28.6 per cent of the                           This trend is attributable in particular to the difficult print
          GfK workforce. Of the 1,394 personnel, 82.1 per cent were                            media market caused by the weak economy, which led to
          employees in GfK companies abroad. Compared with the 2001                            lower incoming orders. However, growth in continuous media
          figures, the number of staff in Germany increased by                                 research was able to partially offset this decrease in orders.
          20 and outside Germany by 140.                                                       The long-term contracts for TV and radio ratings research
                                                                                               generate around 60 per cent of the Media division’s sales.
                                                                                               In 2002, GfK extended two long-term TV research contracts
          Media – affected by the crisis in the print media
                                                                                               in Belgium and France and won a new contract in the Ukraine.
          The Media division provides its clients with information                             There are therefore long-term TV research surveys in place in
          services on the intensity and nature of media usage and media                        a total of seven different countries.
          acceptance. The offering covers the classic media such as
                                                                                               Media is the smallest of the GfK divisions in terms of personnel,
          television, radio, print and outdoor advertising and the new
                                                                                               employing 345 people or 7.1 per cent of the total workforce.
          online and offline media. GfK conducts media research in 20
                                                                                               Foreign personnel accounts for 57.7 per cent of the total.
          European countries and its clients are predominantly private
                                                                                               Compared with the previous year, the number of employees in
          and public service TV and radio stations, publishing houses,
                                                                                               the Media division was reduced by 6.5 per cent. The main
          advertisers and advertising and media agencies.
70                                                                                             reason for this is that the company is pursuing a wait and see
          In 2002, the Media division was unable to match the level of                         approach with regard to filling the places of employees who have
          sales achieved in the previous year. Consolidated sales fell                         left, given the current economic climate.
          slightly by 2.1 per cent to EUR 61.3 million after EUR 62.6
          million in 2001. The drop in sales at the GfK media companies
                                                                                               Ad Hoc Research –
          amounted to 7.9 per cent in organic terms.
                                                                                               growth achieved despite economic decline

     Media: key figures                                                                        Through its own companies, the Ad Hoc Research division provides
                                                                                               clients in 29 countries around the world and via partnerships
                                        2001            2001              2002       Change    in another 61 countries with partly standard, partly customized
     In EUR million                    Actual      Pro forma             Actual        in %
                                                                                               services, which are used for operational and strategic business
     Sales                              56.5              62.6                61.3     – 2.1
                                                                                               decisions. These services include tests and surveys on product
     Operating income                     8.5              9.2                 6.1    – 34.4
                                                                                               and pricing policy, brand management and valuation, communi-
     Margin in %                       + 15.0         + 14.7              + 9.9           –
                                                                                               cation, distribution and customer loyalty schemes as well as new
     Number of employees                 369              369                 345      – 6.5
                                                                                               product development.
     of which abroad                     221              221                 199     – 10.0
                                                                                               As its work is project-related, the Ad Hoc Research division is
                                                                                               more susceptible to economic trends than the tracking business,
          The trend in operating income was similar. Following the high
                                                                                               where the contracts are long term. It is therefore particularly
          figure achieved in 2001 of EUR 9.2 million, the Media division
                                                                                               pleasing that in 2002, the Ad Hoc Research division achieved
          generated operating income of EUR 6.1 million in 2002.
                                                                                               a 14.8 per cent increase in sales to EUR 246.3 million from
          The margin consequently dropped from 14.7 per cent to 9.9
                                                                                               EUR 214.5 million. Of this growth, 8.0 percentage points are
          per cent.
                                                                                               organic and 7.7 percentage points of the sales growth are
                                                                                               attributable to the expansion of the global GfK network. The
     Media: breakdown of growth in sales
     and operating income                                                                      companies consolidated for the whole year for the first time in
                                                                                               2002 include, in particular, Martin Hamblin GfK, UK, GfK MACON,
     Total growth                                                                              Germany and Intercampus, Portugal. Significant GfK, Belgium
                                                – 2.1 %                                        was consolidated for the first time for part of the period under
             – 34.4 %
                                                                                               review. Currency effects reduced sales by 0.9 percentage
     Growth through acquisitions
                                                                    + 5.2 %
                                                                 + 2.9 %
     Organic growth
                                        – 7.9 %
        – 38.2 %
     Exchange rate effects
                                                            + 0.6 %
                                                            + 0.9 %

       Sales        Operating income
                                                                                              GfK Business Divisions      MANAGEMENT REPORT

                                                                                   services for companies in the GfK Group and their business
Ad Hoc Research: key figures
                                                                                   partners. Their aim is to offer services which cover the costs
                                    2001             2001      2002    Change
In EUR million                     Actual       Pro forma     Actual     in %
                                                                                   In addition to data collection, data processing and data analysis,
Sales                              199.6              214.5   246.3     + 14.8
                                                                                   GfK Data Services and GfK Ad Hoc Services also supply
Operating income                      2.8               4.2    14.5    + 243.9
                                                                                   central IT services. As a cross-divisional unit, GfK Methoden-
Margin in %                         + 1.4             + 2.0    + 5.9         –
                                                                                   und Produktentwicklung (Method and Product Development)
Number of employees                1,578              1,726   1,745       + 1.1
                                                                                   develops new procedures, methods and techniques and tests
of which abroad                    1,204              1,352   1,371       + 1.4
                                                                                   them in market research surveys. GfK Group Services comprises
                                                                                   all the central administrative departments and divisions of
     During the reporting period, operating income more than tripled,              GfK AG, which include Financial Services, Personnel Services,
     rising from EUR 4.2 million in 2001 to EUR 14.5 million. New                  Central Services, Public Affairs and Communications, Investor
     consolidations accounted for EUR 2.6 million, but at EUR 7.7                  Relations and Internal Audit.
     million the largest portion of the rise was organic. In addition to
                                                                                   The newly acquired healthcare activities are also reported under
     the positive trend in sales and the restructuring of the Swedish
                                                                                   Other for financial year 2002. These cover Martin Hamblin
     activities in Internet market research, strict cost management                                                                                              71
                                                                                   GfK Healthcare UK, which was consolidated as at 1 July 2001
     and further measures to increase efficiency also made a decisive
                                                                                   for the first time and the business services, GfK HealthCare and
     contribution to the result. There was a strong increase in the
                                                                                   GPI Kommunikationsforschung, both based in Germany, and
     margin which rose from 2.0 per cent in 2001 to 5.9 per cent in
                                                                                   which were acquired as part of the takeover of the business
                                                                                   activities of I+G, which was previously run as a joint venture
                                                                                   with NFO Infratest. These companies were consolidated for the
Ad Hoc Research: breakdown of growth
in sales and operating income                                                      first time as at 1 July 2002.

Total growth                                                                          Other: key figures
                                                  + 14.8 %
                                                                       + 243.9 %
                                                                                                                   2001             2001    2002    Change
Growth through acquisitions                                                           In EUR million              Actual       Pro forma   Actual     in %
                                            + 7.7 %
                                                                                      Sales                            21.6         21.6    28.5        + 31.8
                                                                       + 61.9 %
                                                                                      Operating income             – 0.2           – 0.2      0.9   + 484.4
Organic growth
                                            + 8.0 %                                   Margin in %                      – 1.1       – 1.1    + 3.2           –
                                                                       + 183.6 %      Number of employees              536          536      532         – 0.7
Exchange rate effects
                                                                                      of which abroad                    68          68      109        + 60.3
                         – 0.9 %
                        – 1.6 %

  Sales        Operating income
                                                                                   In 2002, the Other division achieved consolidated sales of
                                                                                   EUR 28.5 million compared with EUR 21.6 million in the
     As at 31 December 2002, the Ad Hoc Research division employed                 previous year. The considerable reduction in services provided
     1,745 staff, of which 1,371 in GfK companies outside Germany.                 by IRI/GfK, resulting from the cessation of physical data
     The number of employees remained virtually unchanged from                     collection in Germany, led to a drop in order volume of around
     the previous year.                                                            EUR 5 million for this central GfK service provider. This is
                                                                                   the reason for organic growth amounting to -26.8 per cent in
                                                                                   the period under review. However, sales by the newly acquired
     Other – providing internal services
                                                                                   companies in the healthcare segment more than compensated
     The Other division primarily comprises the central services                   for this downturn. The new companies are also largely responsible
     of GfK AG as well as some of the activities being built up in                 for improving operating income from EUR –0.2 million in 2001
     healthcare information services.                                              to EUR 0.9 million in 2002.

     GfK Data Services, GfK Ad Hoc Services, GfK Methoden-
     und Produktforschung and GfK Group Services provide
                                                                                                     Number of GfK employees 1998-2002
     Other: breakdown of growth                                                                      in Germany and abroad
     in sales and operating income
                                                                                                                     1,282                1,829
     Total growth                                                                                    1998
                                                                  + 31.8 %
                                                                                     + 484.4 %                        1,366                       2,310
     Growth through acquisitions
                                                                                + 58.3 %                              1,345                               2,867
                                                                                   + 1,299.6 %                                                                                            4,212

     Organic growth                                                                                         1)
                                                                                                                      1,443                                  3,210
                          – 26.8 %                                                                                                                                                        4,653
     – 808.8 %                                                                                                        1,465                                       3,414
     Exchange rate effects                                                                                                                                                                4,879
                                                  + 0.3 %                                            1) Pro forma statement                                               In Germany      Abroad
                                       – 6.4 %

       Sales        Operating income

                                                                                                     Share of regions in total sales1)
            As at the end of 2002, the Other division employed 532
72                                                                                                   7%                                                                         In %   In EUR m
            personnel (2001: 536).                                                                                            5%
                                                                                                     5%                                            Germany                       37       204.7

                                                                                                                                   37 %            Northern Europe               11        59.1
            4. Regions                                                                                                                             Western and
                                                                                                                                                   Southern Europe               35       196.7
            As with the presentation of the business divisions, the financial                                                                      Central and
            data on regions reported below is extracted from the Management                                                                        Eastern Europe                 5        28.5

            Information System. As minority participations were not taken                              35 %                        11 %            America                        7        40.4

            into account, operating income does not include income from                                                                            Asia and the Pacific           5        30.1

            participations.                                                                                                                        Total                        100       559.4
                                                                                                                                            1) Rounding differences may occur
            In order to improve transparency in annual comparisons, as
            referred to initially in the presentation of the economic
            development of the GfK Group, a pro forma statement has
                                                                                                  Germany – growth through acquisitions
            been prepared for 2001, including for the data of the regions.
            All following explanations are based on a comparison of the                           In Germany, the home country of the GfK Group and still the
            values for the year 2002 with the pro forma figures.                                  most important single market for the company, GfK has fifteen
                                                                                                  active subsidiaries and participations, ten of which have their
     GfK Group sales 1998-2002                                                                    registered office in Nuremberg.
     in Germany and abroad in EUR million1)
                                                                                          Total   In 2002, the company generated 36.6 per cent of consolidated
                         156              156                                                     sales in Germany. Sales increased from EUR 192.4 million
                                                                                           312    to EUR 204.7 million (+6.4 per cent). This growth was mainly
                          164                    217
     19992)                                                                                       attributable to GfK MACON, GfK HealthCare and GPI
                                                                                                  Kommunikationsforschung, which were consolidated for the
                             177                       293
     2000                                                                                         first time in 2002. In organic terms, sales fell slightly by 1.9 per

                             192                            314                                   cent, primarily as a result of the approximately EUR 5 million
                                                                                                  reduction in data collection services by IRI/GfK. In addition, the
                               205                                354
     2002                                                                                         crisis in the print media sector impacted on sales at some of
                                                                                                  the German GfK companies. The positive business development
     1) From 2001 in accordance with US GAAP                            In Germany       Abroad
     2) Pro forma statement                                                                       in Non-Food Tracking was not entirely sufficient to offset the
                                                                                                  weaker sales in these areas.
                                                                                                                        Regions      MANAGEMENT REPORT

                                                                                         In Northern Europe, the GfK Group has ten subsidiaries in
Germany: key figures
                                                                                         Scandinavia and the UK, which generated 10.6 per cent of
                                   2001             2001               2002    Change
                                                                                         consolidated sales in 2002. Compared to the previous year’s
In EUR million                    Actual       Pro forma              Actual     in %    sales of EUR 52.0 million, GfK achieved growth in 2002 of
Sales                              192.4              192.4           204.7      + 6.4   13.8 per cent to EUR 59.1 million. The greater part of this
Operating income                    15.1               15.1            18.0     + 19.4   growth resulted from the healthcare activities acquired in
Margin in %                         + 7.8             + 7.8            + 8.8        –    the UK. Currency effects amounted to -0.4 percentage points.
Number of employees                1,443              1,443           1,465      + 1.5

                                                                                            Northern Europe: key figures

     During the period under review, operating income rose
                                                                                                                                2001           2001    2002    Change
     from EUR 15.1 million to EUR 18.0 million (+19.4 per cent).                            In EUR million                     Actual     Pro forma   Actual     in %
     The companies consolidated for the first time contributed                              Sales                                 52.0         52.0     59.1     + 13.8
     EUR 4.3 million to this increase. However, organic growth saw                          Operating income                    – 3.7         – 3.7      1.9    + 150.2
     a reduction of 8.9 per cent, as the positive developments in                           Margin in %                           – 7.1       – 7.1    + 3.2          –
     the Ad Hoc Research and Non-Food Tracking divisions were                               Number of employees                   528          528      500       – 5.3
     insufficient to absorb the reduced income of the Media division,                                                                                                      73
     which resulted from lower sales in this division. The sales-
                                                                                         Growth in operating income in the past financial year has been
     related margin increased from 7.8 per cent to 8.8 per cent.
                                                                                         very pleasing. After posting a loss of EUR 3.7 million in 2001,
                                                                                         the GfK companies in Northern Europe achieved positive results
Germany: breakdown of growth
                                                                                         of EUR 1.9 million in 2002. This is due, above all, to the success
in sales and operating income
                                                                                         of restructuring measures at Martin Hamblin GfK, UK and to
Total growth
                                                                                         Orange Interactive Research which carries out Internet market
                                          + 6.4 %                                        research in Sweden. The margin rose from -7.1 per cent in 2001
                                                        + 19.4 %                         to 3.2 per cent in 2002. Additional measures are aimed at further
Growth through acquisitions
                                                                                         improving the margin in this region.
                                            + 8.3 %
                                                                   + 28.3 %
Organic growth
                                                                                            Northern Europe: breakdown of growth
                      – 1.9 %                                                               in sales and operating income
               – 8.9 %
Exchange rate effects
                                  0.0 %                                                     Total growth
                                  0.0 %                                                                                                    + 13.8 %
                                                                                                                                                               + 150.2 %
  Sales        Operating income
                                                                                            Growth through acquisitions
                                                                                                                                           + 14.2 %
                                                                                                                                                               + 79.1 %
     As at 31 December 2002, GfK employed 1,465 full-time person-                           Organic growth
     nel in Germany, the great majority at the Nuremberg site. The                                                             0.0 %
                                                                                                                                                               + 72.4 %
     number of employees rose by 22 compared with the previous
                                                                                            Exchange rate effects
     year. 30.0 per cent of GfK’s worldwide workforce is employed by                                                 – 0.4 %
     Group companies in Germany.                                                                                    – 1.3 %

                                                                                              Sales        Operating income

     Europe – pleasing increase in operating income
                                                                                         At the end of 2002, the GfK Group employed 500 personnel in
     In Northern, Southern and Western Europe, GfK has 73 subsidia-
                                                                                         Northern Europe. This represents 10.2 per cent of the total
     ries, branches and participations in sixteen different countries.
                                                                                         workforce. The number of employees was down 5.3 per cent on
     As in Germany, GfK companies are the number one market
                                                                                         the previous year’s figure.
     research organizations in Austria and Switzerland, the number
     two in Sweden and the Netherlands, the number three in
     Denmark and Italy and the number four in France.
          The Western and Southern Europe region which comprises                         In Central and Eastern Europe, where GfK is one of the
          63 companies in eleven countries, represents the next important                leading providers of market research services with a total of 18
          region for the GfK Group after Germany. With sales of EUR                      companies in 13 countries, the Group’s business development
          196.7 million, GfK generated 35.2 per cent of its consolidated                 was once again very successful. Although the region only
          sales there. Compared to sales of EUR 171.9 million in the                     accounts for 5 per cent of consolidated total sales, making it the
          previous year, this represents an increase of 14.4 per cent,                   smallest in the GfK Group, it is also one of the most dynamic and
          of which 6.5 percentage points were attributable to organic                    it has grown very fast for years. The double-digit growth rates in
          growth. The companies consolidated for the first time in 2002,                 sales and income are purely the result of organic growth.
          which were essentially the IFR Group in France, Intercampus
          in Portugal and Significant GfK in Belgium, accounted for 7.3                     Central and Eastern Europe: key figures
          percentage points of sales growth. Exchange gains played a
          minor role, accounting for 0.6 percentage points.                                                                    2001         2001           2002    Change
                                                                                            In EUR million                    Actual   Pro forma          Actual     in %
                                                                                            Sales                               23.5        23.5           28.5      + 21.1
     Western and Southern Europe: key figures
                                                                                            Operating income                     1.3         1.3             2.6     + 97.5
                                                                                            Margin in %                        + 5.5       + 5.5           + 9.0          –
                                        2001          2001             2002    Change
74   In EUR million                    Actual    Pro forma            Actual     in %       Number of employees                  579        579             634       + 9.5
     Sales                              148.3          171.9          196.7     + 14.4
     Operating income                    12.0           16.4           19.7     + 20.6
                                                                                         In 2002, the GfK companies in Central and Eastern Europe
     Margin in %                        + 8.1          + 9.5          + 10.0        –
                                                                                         increased their sales from EUR 23.5 million to EUR 28.5 million
     Number of employees                1,409          1,666          1,787      + 7.3
                                                                                         (+ 21.1 per cent).

                                                                                         Operating income doubled in the same period from EUR 1.3
          Operating income for the region rose from EUR 16.4 million
                                                                                         million to EUR 2.6 million. The margin relating to sales therefore
          in 2001 to EUR 19.7 million in 2002 (+ 20.6 per cent). This
                                                                                         improved from 5.5 per cent to 9.0 per cent.
          increase was largely due to the first-time consolidation of the
          above companies. At the same time, there was an increase
          of 5.6 per cent in organic growth, thanks, in particular, to                      Central and Eastern Europe: breakdown of growth
                                                                                            in sales and operating income
          successful restructuring measures and cost cutting programmes.
          The margin increased from 9.5 per cent in 2001 to 10.0 per
                                                                                            Total growth
          cent in 2002.                                                                                                                       + 21.1 %
                                                                                                                                                                   + 97.5 %

     Western and Southern Europe: breakdown of growth                                       Growth through acquisitions
     in sales and operating income                                                                                            0.0 %
                                                                                                                              0.0 %
                                                                                            Organic growth
     Total growth
                                                                                                                                               + 21.8 %
                                                     + 14.4 %
                                                                                                                                                                   + 100.4 %
                                                           + 20.6 %
                                                                                            Exchange rate effects
     Growth through acquisitions
                                                                                                                   – 0.7 %
                                             + 7.3 %
                                                                                                                 – 2.9 %
                                                    + 14.4 %
     Organic growth                                                                           Sales        Operating income

                                           + 6.5 %
                                           + 5.6 %
     Exchange rate effects                                                               At the end of the reporting period, the number of full-time
                                       + 0.6 %                                           employees was 634, 55 more than at the end of 2001.
                                       + 0.6 %

       Sales        Operating income
                                                                                         America – good progress

          As at 31 December 2002, the workforce for Western and                          GfK has been active in the USA through its subsidiary
          Southern Europe stood at 1,787 employees, 121 more than the                    GfK Custom Research, since 1999. The company is part of
          previous year. Over 100 personnel were taken on as a result of                 GfK’s Ad Hoc Research division and specializes in surveys
          the acquisition of new companies in this region.                               on customer satisfaction and product concepts. GfK expanded
                                                                                         its position in the US with Martin Hamblin GfK Research, which
                                                                                                                    Regions     MANAGEMENT REPORT

     was acquired in mid-2001 and is active in the pharmaceutical                     In this region, the GfK Group only operates in the Non-Food
     segment.                                                                         Tracking segment. In 2002, sales amounted to EUR 30.1 million,
                                                                                      which is a rise of 3.1 per cent on the previous year. The growth
     In America, the GfK Group achieved consolidated sales of
                                                                                      rate is seriously affected by currency effects, which reduced sales
     EUR 40.4 million. Compared with the previous year, this is
                                                                                      by 6.9 percentage points. Organic growth amounted to
     an increase of 9.7 per cent. Net of currency effects amounting
                                                                                      7.7 per cent. The only acquisition in the region, Informark in
     to -5.8 percentage points, organic growth amounted to 8.5
                                                                                      Australia, contributed 2.3 percentage points to sales growth.
     per cent.

                                                                                         Asia and the Pacific: key figures
America: key figures

                                                                                                                            2001              2001      2002        Change
                                   2001            2001        2002      Change          In EUR million                    Actual        Pro forma     Actual         in %
In EUR million                    Actual      Pro forma       Actual       in %
                                                                                         Sales                                29.2             29.2      30.1          + 3.1
Sales                              36.8               36.8     40.4        + 9.7
                                                                                         Operating income                      2.2              2.2       3.0         + 40.2
Operating income                     1.5                1.5      3.1     + 112.1
                                                                                         Margin in %                        + 7.4              + 7.4   + 10.1              –
Margin in %                        + 4.0              + 4.0    + 7.7              –
                                                                                         Number of employees                  302               302      355          + 17.5
Number of employees                 135                135      138        + 2.2

                                                                                      Despite unfavourable exchange rates, the region improved its
     Operating income more than doubled during the period
                                                                                      operating income in the reporting year from EUR 2.2 million
     under review. After income of EUR 1.5 million in the previous
                                                                                      to EUR 3.0 million. This pleasing increase of 40.2 per cent was
     year, this figure rose to EUR 3.1 million in 2002. The majority
                                                                                      largely organic. The rise in the margin was also high, up from
     of this growth was organic. Currency effects reduced the
                                                                                      7.4 per cent to 10.1 per cent.
     increase in income by almost 6 percentage points. The margin
     relating to consolidated sales almost doubled from 4.0 to 7.7
     per cent.                                                                           Asia and the Pacific: breakdown of growth
                                                                                         in sales and operating income

America: breakdown of growth                                                             Total growth
in sales and operating income
                                                                                                                              + 3.1 %
                                                                                                                                                                + 40.2 %
Total growth                                                                             Growth through acquisitions
                                            + 9.7 %                                                                         + 2.3 %
                                                                        + 112.1 %                                            + 3.5 %
Growth through acquisitions                                                              Organic growth
                                       + 7.0 %                                                                                       + 7.7 %
                                                                       + 43.1 %                                                                                    + 44.2 %
Organic growth                                                                           Exchange rate effects
                                           + 8.5 %                                                        – 6.9 %
                                                                        + 74.7 %                          – 7.5 %
Exchange rate effects
                                                                                           Sales        Operating income
                 – 5.8 %
                 – 5.7 %

  Sales        Operating income                                                       At the year-end, there were 355 people employed in the Asia and
                                                                                      Pacific region, an increase of 53 over the previous year.
     At the year-end, the GfK Group employed 138 full-time staff
     in America. The figure remained almost unchanged from the                        The GfK network – further expansion
     previous year.
                                                                                      In 2002, the GfK Group continued to expand its international
                                                                                      network. The following table lists the main activities in 2002.
     Asia and the Pacific –
     currency effects countered by strong growth

     The Asia and Pacific region comprises 17 GfK companies,
     branches and participations in 13 countries including Australia,
     China, Indonesia and Japan.
                                                                                    risks and lays down specific countermeasures. Exceptional risk
     Company                 Region            Division            Classification
                                                                                    reporting ensures that the Management Board is kept informed
     GfK-Belgrade            Central and       Consumer Tracking   Establishment
     Serbia and Montenegro   Eastern Europe    Ad Hoc Research
                                                                                    of risks at shorter intervals.
     GfK MACON, Germany      Germany           Ad Hoc Research     Acquisition      In addition, a range of planning, forecasting and reporting
     IFR-Group, France       Western and       Non-Food Tracking   Acquisition      instruments for early risk identification has also been in place
                             Southern Europe
                                                                                    at the GfK Group for many years.
     Significant GfK,        Western and       Ad Hoc Research     Acquisition
     Belgium                 Southern Europe
                                                                                    The relevant processes and responsibilities are laid down in
     m2A, France             Western and       Other               Acquisition
                             Southern Europe   (Healthcare)
                                                                                    the Group’s Risk Management Manual, which was updated and
     Strateji GfK, Turkey    Central and       Ad Hoc Research     Acquisition
                                                                                    expanded in 2002.
                             Eastern Europe
                                                                                    The individual risk areas are detailed below.
     Indicator GfK, Brazil   America           Ad Hoc Research     Acquisition
     Informark, Australia    Asia and          Non-Food Tracking   Acquisition
                             the Pacific
                                                                                    Individual risks –
     ORG-GfK Marketing       Asia and          Non-Food Tracking   Increase in
     Services, India         the Pacifik                           shareholding
                                                                                    take precautions and weigh up the odds
     Intercampus, Portugal   Western and       Ad Hoc Research     Increase in      Economic risks. The poor economic situation continued
                             Southern Europe                       shareholding
                                                                                    throughout the period under review. Despite the difficult
     ProCon GfK, Turkey      Central and       Non-Food Tracking   Increase in
                             Eastern Europe    Ad Hoc Research     shareholding     economic conditions however, the GfK Group achieved its
     GfK HealthCare,         Germany           Other               Inclusion/       targets in 2002 and held its own against the competition.
     Germany                                   (Healthcare)        demerger
     GPI Kommunikations-     Germany           Other               Inclusion/
                                                                                    The weak economy led to an increase in bad debts due to
     forschung, Germany                        (Healthcare)        demerger         client insolvency but these remained at a low level during the
                                                                                    past financial year and did not affect the liquidity position of
                                                                                    the Group.

         5. Risk report                                                             Sector risks. The continued poor performance of the economy
                                                                                    has again confirmed that the market research sector is less
         The GfK Group ranks fifth among the world’s leading market
                                                                                    prone to cyclical fluctuations than the marketing and advertising
         research institutes. The Group intends to carry on taking every
                                                                                    sectors. Moreover, as GfK operates worldwide and offers a
         opportunity to improve its market position through continuous
                                                                                    comprehensive range of market research services, it is able to
         growth. However, seizing opportunities also entails running
                                                                                    compensate for fluctuations in orders in one area, such as the
         risks. By identifying material risks at an early stage and taking
                                                                                    Media division is currently experiencing in Germany due to
         appropriate countermeasures, GfK is in a position to make
                                                                                    the difficult print media industry at the present time, through
         commercially sound use of the opportunities which present
                                                                                    increases in other sectors and regions.
                                                                                    Although GfK has many leading international manufacturers
         All aspects of risk management are incorporated in a compre-
                                                                                    of consumer goods as clients, its dependence on major
         hensive early risk warning system, which GfK has operated for
                                                                                    clients overall is quite small. GfK’s top ten customers account
         several years and is constantly developing. As in the past, so this
                                                                                    for no more than around sixteen per cent of worldwide Group
         year too, the Group’s auditors have confirmed the effectiveness
         of this system.
                                                                                    The ongoing process of concentration through mergers and
                                                                                    company takeovers has resulted in the marketing budgets of
         Risk management system – comprehensive and integrated
                                                                                    some clients being reduced. GfK has taken measures to counter
         Thanks to its integrated risk management system, the GfK Group             this by intensifying new business acquisition and extending
         is able to identify and manage strategic and operational risks at          its range of services.
         the level of the individual GfK companies, the level of the four
                                                                                    The Management Board is closely following the increasing
         business divisions and at Group level. The core of the system is
                                                                                    tendency towards concentration in the market research sector.
         the annual risk inventory, which covers the development of the
                                                                                    It assesses the potential risks and opportunities and takes
         risks identified in the previous year, determines newly emerged
                                                                                    account of them in appropriate strategic measures.
                                                                                          Risk report   MANAGEMENT REPORT

Operating risks. Qualified and motivated personnel are the           Financing is therefore available on a broad and secure
biggest asset of any successful company in the service sector.       basis.
During the past year, GfK once again introduced numerous
                                                                     As surplus liquidity is only used for near-money market
measures designed to increase the satisfaction and qualifications
                                                                     investment and a share position was completely unwound,
of its employees even further. These included the employee
                                                                     there are no risks from a fall in the equity markets.
survey conducted once again within GfK companies in Germany,
the second project under the Excellence programme for the            Currency risks within the GfK Group remained limited in 2002,
promotion of young executives worldwide and EUR 5 million            because 63 per cent of consolidated sales was generated by
invested in training and continuous professional development.        companies in the euro zone. Currency risks arising from third
                                                                     party obligations exceeding a certain figure are hedged through
Given the economic situation, there was less pressure on the
                                                                     appropriate futures contracts.
labour market during the past year, which in turn reduced
personnel related risks by comparison with previous years.           To hedge future dividend income in Swiss francs, a cross-
                                                                     currency swap was arranged which, at the reporting date,
On the other hand, cost pressures continued to intensify
                                                                     showed a negative market value and was taken into account
during 2002. With discount competitors offering services at
                                                                     under expenses.
dumping prices to gain a foothold in the market, clients
proved more price-sensitive than in recent years. At the same        Legal risks. The obligatory social security already introduced
time, there was an increasing demand for cost-intensive              for interviewers in many European countries is set to be
consultancy services and integrated data solutions. To remain        extended to other countries. This will increase the Group’s
competitive and succeed in the market, GfK responded to              cost burden.
these developments with continuous process optimization,
                                                                     At the present time, there are no significant risks in respect
cost-cutting programmes and a high degree of innovation
                                                                     of pending legal actions or compensation claims.
throughout the Group. GfK also took account of the increasing
demand from internationally operating clients for standardized       IT and other risks. The security and constant availability
cross-border information services by targeted expansion in           of data are prerequisites for a company selling information-
the relevant markets and regions.                                    based products. For that reason, GfK has taken extensive
                                                                     precautions over the years to guarantee high standards of IT
Financing risks. The financing of the GfK Group is essentially
                                                                     security. In addition, the Group conducted a comprehensive
provided by GfK AG. In addition, subsidiaries have taken out
                                                                     security check in 2002. The Chief Information Officer (CIO)
their own loans to a small extent.
                                                                     has the task of ensuring effective coordination and optimization
Overall, net indebtedness of the GfK Group is at a low level.        of IT strategies and IT security concepts throughout the Group.

GfK AG has short-term credit facilities from banks amounting to      GfK is currently also developing a disaster recovery plan,
almost EUR 100 million, only just under 20 per cent of which         which will incorporate existing security concepts and add
had been used at the year-end. In addition, innovative GfK AG        further components and is not limited to IT.
projects were promoted by the Kreditanstalt für Wiederaufbau
                                                                     The acquisition of new companies and their integration into
(KfW) within the framework of the ERP Innovation Programme.
                                                                     the Group is always associated with risks. GfK prepares
As at 31 December 2002, this support was valued at EUR 2.9
                                                                     for such risks by extensive due diligence checks prior to
million. There is the possibility of calling up additional funds
                                                                     any acquisition and by acquisition supporting measures. The
from this programme.
                                                                     specialist team available for this purpose can be backed as
In addition to borrowings, GfK AG has the option to obtain addi-     necessary by outside consultants. Comprehensive integration
tional equity through its authorized capital of 8.2 million no-par   plans facilitate the smooth integration of new companies into
shares. Further liquid funds are available within the Group.         the GfK Group.
     Overall risk – countering economic risks                               • improvement and updating of existing instruments

     The main risks facing companies today stem from the                    • development and application of multivariate analysis
     unfavourable global economy. However, even in these                      methods
     difficult times, the GfK Group has held its own in the market.
                                                                            • validation and reliability testing of new instruments and
     Moreover, the Group’s equity ratio remains high (38.7 per
     cent), contributing to a considerable reduction in the risk
     position.                                                              • advice and support for special statistical questions.

     In summary, there are no risks at present which could                  In addition, many different GfK companies have their own
     jeopardize the continued existence of the Group.                       departments responsible for the development, standardization
                                                                            and optimization of services and survey and production
     6. Research and development
                                                                            Finally, Telecontrol, a Swiss-based GfK subsidiary, specializes
     As one of the world’s oldest established and most successful
                                                                            in the development of hardware and software for TV and radio
     market research organizations, GfK has made decisive
                                                                            ratings research.
     contributions to the development of innovative methods and
     instruments in this field. These range from the purchasing             GfK – which itself originated from the University of Erlangen-
     power indicators, which were GfK’s first ever product and the          Nuremberg – cooperates with academic and research institutes
     first standardized market research instrument used in Germany,         in Europe and the USA. Since 2001, it has been a member of
     right up to Radiocontrol, an instrument for the electronic             the renowned Marketing Science Institute in the USA.
     measurement of radio and television ratings, which was first
                                                                            As regards innovation in the field of information and
     used on behalf of clients worldwide in 2001.
                                                                            communication technology, GfK was involved in significant
                                                                            new developments in 2002 in the following areas:
     Aims and organization – continuous innovation
                                                                            • data collection technology
     For GfK, innovation and the continuous improvement of its
                                                                            • data analysis procedures
     instruments for information gathering, analysis and delivery
     are strategic goals. By these means, the Group seeks to respond        • market research services
     proactively to the ever increasing demands of its clients
                                                                            • information management.
     and to stay ahead of its competitors by achieving a leading
     position in terms of the quality, innovation and efficiency of its
     instruments and services.                                              Data collection technology –
                                                                            miniaturization and high-tech
     A characteristic feature of many of the GfK Group’s R&D projects
     is that they are planned and implemented in cooperation with           The Consumer Tracking division has developed a new platform,
     its clients. The newly developed instruments and procedures for        the Electronic Consumer Panel Online (ECPO), which is
     these projects are then tested and validated and finally estab-        capable of gathering information on the purchasing behaviour
     lished as standard services.                                           of households and individuals by means of a whole range of
                                                                            electronic technologies such as Internet applications, Personal
     GfK has a central method and product development department
                                                                            Digital Assistants (PDAs), mobile phones etc. The testing of new
     (GfK Methoden- und Produktentwicklung) staffed by 18 statistics
                                                                            applications of this kind of data collection technology is currently
     specialists and method experts with responsibility for the following
                                                                            in progress at GfK subsidiaries in Sweden and Switzerland.
                                                                            The new procedures are all compatible with aTRACKtive, the
     • development of new market research methods and services              production platform presently being introduced throughout
     • design and programming of production software for new
                                                                              Research and development   MANAGEMENT REPORT

Data analysis procedures –                                             The Ad Hoc Research division also tested and introduced new
added value through data merging and integration                       services in 2002, including:

During 2002, GfK was intensively involved in the further               • a new module for the BASS (Brand ASsessment System)
development and testing of data merging technologies. This               service package to determine the financial value of brands.
Integrated Intelligence work is intended to compile the research         The paper on the methodological principles of the measure-
findings and panel information from various Group divisions,             ment procedure was rated the best method contribution of
which can then be used for complex client marketing surveys.             the year at the 2002 annual conference of ESOMAR, the
                                                                         European market research association.
In addition to tried and tested instruments for analysis such
as MOVE, GfK has developed further Integrated Intelligence             • two instruments developed on game theory assumptions
instruments for detailed analysis of target groups and results           and procedures permitting, on the one hand, consumer goods
monitoring. These include, for example, the Gain and Loss                manufacturers to optimize the extension of brand families
Forecast, a qualitative instrument for target group segmentation,        and, on the other, the retail and branded article industry to
as well as a series of procedures for the construction of complex,       determine the key factors of satisfaction and dissatisfaction for
client-specific cause and effect analyses to illustrate the success      customer loyalty management.
of media and marketing activities.
Another innovative tool developed by GfK in the context of its         Information management –
Integrated Intelligence work is the CSS® questionnaire splitting       full service round the clock
procedure, which considerably reduces the costs associated
                                                                       In the year under review, GfK also continued the intensive
with oral and written surveys.
                                                                       development of two of its core production and analysis systems
                                                                       and tested these in cooperation with its clients. Both systems
Market research services –                                             are modern, complex data warehouse and software systems
efficiency and added value in marketing                                that can be used on a decentralized basis. They offer clients the
                                                                       possibility of direct access to GfK’s databases.
During the course of 2002, GfK’s Consumer Tracking division
developed and introduced a number of new services within the           The first project, aTRACKtive.web, relates to the ConsumerScan
framework of the ConsumerScan panel.                                   panel operated by GfK Consumer Tracking. Major ConsumerScan
                                                                       clients are already accessing GfK’s databases directly.
• Following the abolition of Germany’s Discount Act, promotions
  and customer loyalty campaigns conducted directly where              The second project, S*T*A*R*T*R*A*C*K (System to Analyze
  consumers make their purchasing decisions are set to become          and Report on TRACKing data), relates to the administration
  increasingly important for marketing. These activities are now       and analysis of information on electronic consumer goods, for
  recorded and presented in ConsumerScan.                              which the Non-Food Tracking division continuously gathers
                                                                       retail sales data. Developed as a top priority during 2002, the
• Micro-geographical localization of ConsumerScan panel
                                                                       system is designed to take over all internal data management
  households: electronic navigation systems are used to provide
                                                                       functions with effect from 2003. In addition, it will function
  additional information on households (e.g. to show how many
                                                                       as an interface for worldwide interaction with clients and the
  minutes it takes them to get to their nearest food retail outlet).
                                                                       cooperating retailers.
  This information provides users with new opportunities to
  build up a picture of the attractiveness and sales potential of      Launched last year and now in regular operation worldwide,
  outlets.                                                             the Premium Site of the Non-Food Tracking division
                                                                       (www. is a web-enabled platform which provides
• Extensive tests were carried out with ConsumerScan panel
                                                                       clients with direct access to GfK databases.
  households in Germany headed by non-German nationals
  and a representative sample of 1,000 households set up which,
  with effect from 2003, will be reporting on their purchases of
  fast moving consumer goods.
            7. Employees                                                                         Broken down by business division, at 13.0 per cent the biggest
                                                                                                 increase in employee numbers came in Non-Food Tracking, the
            Number of employees – main increases abroad
                                                                                                 main causes for the rise being the acquisition of the IFR Group
            At the year-end, the GfK Group employed 4,879 staff, 226 more                        and additional recruitment in Asia. There was also a relatively
            than in 2001 (+4.9 per cent).                                                        large increase in Consumer Tracking (+9.5 per cent) due to the
                                                                                                 insourcing of 75 data recording personnel. By contrast, staff
     Number of employees in Germany and abroad                                                   numbers remained virtually unchanged in the Ad Hoc Research
                                                                                                 and Other divisions. It was only in the Media division that the
     Number of employees            2001                2001           2002          Change      number of employees decreased by 6.5 per cent.
     (Full-time)                   Actual          Pro forma          Actual           in %
     In Germany                        1,443             1,443        1,465             + 1.5
     Abroad                            2,953             3,210        3,414            + 6.4     Staff turnover – a further reduction
     Total                             4,396             4,653        4,879            + 4.9
                                                                                                 The rate of staff turnover at GfK companies in Germany,
                                                                                                 expressed as the rate of notices given by employees to the total
            As in previous years, the size of the workforce employed by                          number of employees, was 3.6 per cent in 2002 and therefore
            GfK companies rose abroad in particular, with a 6.4 per cent                         significantly lower that the figure of 6.5 per cent in the previous
            increase, or 204 new employees. This was largely due to the                          year.
            acquisition of the IFR Group in France in the Non-Food Tracking
            division and of Significant GfK in Belgium and Intercampus in
                                                                                                 Personnel marketing in Germany –
            Portugal in the Ad Hoc Research division.
                                                                                                 recruiting and retaining staff

                                                                                                 A key aspect of personnel marketing activities in 2002 was to
     Number of employees in Germany and abroad by region
                                                                                                 present GfK to graduates in a contemporary and professional
                                                                           In %      Full-time   way, beginning in May 2002 with the new recruitment section on
                        7%                     Germany                          30      1,465    the GfK website. This was followed by a new corporate image
                                               Northern Europe                  10        500    brochure targeted at graduates and trainees, a new design for
     13 %                       30 %
                                               Western and                                       job advertisements and a new presentation for fairs and other
                                               Southern Europe                  37      1,787
                                               Central and
                                               Eastern Europe                   13        634    In addition, marketing efforts were intensified to cover the
     37 %                       10 %
                                               America                           3        138    Group’s medium and long-term requirement for qualified
                                               Asia and the Pacific              7        355    specialist and management personnel.
                                               Total                           100      4,879
                                                                                                 As well as visiting graduate fairs, GfK acted for the first time
                                                                                                 as sponsor of Access, a two-day marketing recruitment
            The largest increase in the number of employees (+17.5 per cent)                     workshop, directly addressing highly qualified graduates and
            came in Asia and the Pacific. The causes were the acquisition                        final year students, who have the potential to apply for junior
            of Informark in Australia and a higher personnel requirement in                      GfK consultant posts. Thanks to GfK’s professional approach,
            China. The next largest regional increases came in Central and                       interesting presentations and challenging case studies, the
            Eastern Europe (+9.5 per cent) and Western and Southern Europe                       Group resulted the most attractive employer represented at
            (+7.3 per cent).                                                                     the event in a subsequent poll of well over 100 participants.

     Number of employees by division                                                             Excellence – promoting young high-fliers

                                                                           In %      Full-time   To promote integration within the Group as well as cross-company
            11%                 18 %           Consumer Tracking                18        863    mobility and flexibility of senior executives, GfK has established
                                               Non-Food Tracking                28      1,394    Excellence, its Improvement Program for Management and
     36 %                       28 %           Media                             7        345

                                               Ad Hoc Research                  36      1,745

                                               Other                            11        532

                           7%                  Total                           100      4,879
                                                                                       Employees    MANAGEMENT REPORT

Leadership to identify, promote and retain young high-fliers.     SEEK – evaluating and encouraging employees
The intention is to intensify intercultural exchange within the
                                                                  After extensive development in 2001 and 2002, GfK will
GfK Group through strategic projects across countries and
                                                                  introduce a new Staff Evaluation and Encouragement Kit
                                                                  (SEEK) in a pilot scheme in two major subsidiaries during
In September 2002, the first Excellence team presented to the     2003. Essentially, SEEK is based on a detailed list of
Management Board the GfK Group Corporate Values, which            personal success criteria, according to which each employee
were developed in less than a year. Since October 2002, the       is appraised. GfK has developed this precision instrument to
second Excellence team has taken over the task of drafting        enable the management to promote employees effectively.
proposals for Management Guidelines.

                                                                  Occupational pensions in Germany –
Company Survey 2002 –                                             offering alternatives
taking employees’ opinions on board
                                                                  As state pensions are set to shrink in the future, occupational
In November 2002, after a two-year interval, GfK conducted        pension schemes are becoming increasingly important and
another survey of employees throughout Germany. The               indeed have been promoted by the government since 2002.
participation rate was 74 per cent, compared with 73 per                                                                              81
                                                                  GfK encourages its employees to make provision for their old
cent for the previous survey in 2000 and the overall results
                                                                  age, giving them the opportunity to pay part of their salary free
were satisfying. They will be communicated throughout the
                                                                  of tax and social security into an occupational pension scheme.
Group in spring 2003 and will be discussed in workshops.
                                                                  Within certain limits, GfK pays a supplement of 10 per cent on
                                                                  the contributions to the pension fund. Employees have a variety
TOPIC – supporting the management                                 of options and combinations to choose from.

TOPIC (Top Objectives on Personnel Improvement and                In addition, GfK employees have the possibility of opting for a
Commitment), an initiative launched in Germany, is aimed          private Riester pension on favourable terms through a group life
at supporting the management in specifying qualitative            insurance policy.
management objectives. The initiative was actively and
consistently continued in 2002. In conjunction with the
                                                                  Human resources –
Company Survey 2002, TOPIC has helped to give important
                                                                  harmonizing personnel marketing at international level
pointers to the measures needed to promote and retain
employees of GfK companies in Germany.                            Since 2001, the Personnel Services department has
                                                                  been organizing a human resources meeting attended by
                                                                  personnel managers from GfK companies in various European
PEAK – promoting employee development
                                                                  companies. This initiative has two objectives, to develop a
To identify and promote qualified and motivated employees,        common personnel policy and to produce guidelines on staff
GfK Panel Services Consumer Research in Germany has               exchanges. Since 2002, Personnel Services has also had an
introduced a programme for work with junior marketing and         international human resources project group available to
research consultants. The Personnel Encouragement and             coordinate international activities and launch new initiatives.
Assessment Kit (PEAK) is intended to enhance the company’s
image as an attractive employer and to target the training
                                                                  Job applications – increase in online candidates
of junior marketing and research consultants effectively
towards subsequent application in a customer-facing role. An      Although GfK advertised fewer posts in 2002 than the previous
additional focus is to develop a transparent, performance-based   year, it received almost the same number of applications. This
promotion policy which will make junior marketing and research    is one sign of the success of the marketing measures introduced
consultants even more loyal to the company. After its excellent   in previous years. Most of the applicants were interested in jobs
start at GfK Panel Services Consumer Research, PEAK is now        advertised on the GfK website. At the same time, the number of
setting an example for other GfK companies.                       unsolicited applications remained as high as ever.
     8. Organization and administration                                  Sub-holdings. The GfK Group has major sub-holdings in the
                                                                         following countries:
     In addition to its 15 branches in Germany, the GfK Group has
     120 subsidiaries and participations in 50 countries worldwide.      • Austria for most of the GfK companies in Central and Eastern
     GfK AG acts both as a holding company and as an operating unit.       Europe
     The Group has its head office in Nuremberg.
                                                                         • Netherlands for all of the Intomart companies
     Management Board members and their responsibilities.
                                                                         • Switzerland for the companies of the IHA-GfK Group
     The Chief Executive Officer is responsible for Strategy, Investor
     Relations, Internal Audit and Public Affairs and Communications,    • USA for the GfK companies incorporated there
     as well as GfK Produkt- und Methodenentwicklung, GfK Data
                                                                         • Singapore for all of the companies of the Non-Food Tracking
     Services and GfK Business Solutions & Processing. With his
                                                                           division in Asia and the Pacific.
     appointment on 1 April 2002, the new Chief Financial Officer
     took over Central Services, Financial Services and Personnel
     Services, all of which were previously also headed by the CEO.
                                                                         Client base. GfK has a large number of clients worldwide,
     GfK is organized on a matrix basis, with each of the four           including major manufacturers of fast moving branded consumer
82   divisions Consumer Tracking, Non-Food Tracking, Media and           goods and durables. No single client accounts for more than
     Ad Hoc Research under the responsibility of one Management          3 per cent of sales. The 50 biggest clients account for 38.7 per
     Board member. In addition, the members of the Management            cent of sales. Of these top clients, 39 use GfK as a full-service
     Board are responsible for certain regions. The healthcare           company, relying on the services of at least two of GfK’s business
     services activities are allocated to the Management Board           divisions.
     member responsible for Consumer Tracking.

     The managing directors report directly to the Management            9. Purchasing
     Board members responsible for their area.
                                                                         Most of GfK’s purchasing concerns project-related services and
     Each business division has its own Management Board, to which       is carried out locally. The main item is raw data bought in from
     a number of specialist international teams is assigned. The task    other service providers.
     of the Board members is to develop divisional strategies and to
                                                                         GfK has laid down guidelines for the procurement of goods
     allocate resources for international projects.
                                                                         and services to ensure quality and cost efficiency and to make
     Centralized services. GfK AG’s Group Services comprises the         optimum use of synergies. Multi-year leases, service and rental
     following central administrative departments :                      agreements are regularly checked and re-tendered. The price
                                                                         and quality of the services and materials purchased are constantly
     • the Financial Services department that includes Group
       Accounting and Group Financial Controlling functions as
       well as the Investor Relations and the Public Affairs and         Additional cost savings have been achieved thanks to the
       Communications departments, all of which have global              guidelines and recommendations on the design of brochures
       responsibility.                                                   and presentation and other materials implemented in 2001
                                                                         and 2002.
     • the Financial and Operational Accounting functions of the
       Financial Services department, as well as Central Services        Finally, the appointment of a Chief Information Officer for
       and Personnel Services have authority for Germany only.           IT services in 2002 marked an important step towards
       Outside Germany, these functions are the responsibility of        developing worldwide standards for network organization
       the local GfK companies.                                          and the purchasing and maintenance of hardware and
                                                                         software, which not only satisfy the high security and reliability
     In 2002, the Group appointed a Chief Information Officer (CIO),
                                                                         requirements for GfK operations but which also ensure optimum
     whose task is to harmonize the IT Services worldwide and
                                                                         cost efficiency.
     to develop standards to optimize costs and procedures for the
     purchasing of hardware and software and for organizing the
     network environment. The CIO reports to the CEO.
                                                                                     Social commitment   MANAGEMENT REPORT

10. Environmental protection                                           In certain areas, the GfK Group cooperates with GfK Nürnberg
                                                                       e.V., the main object of which is the promotion of science. The
GfK operates a policy of positive action with regard to
                                                                       projects described below all illustrate GfK’s ongoing commitment
environmental protection. In Germany, its environment officer,
                                                                       over a long period of time. No reference is made to the Group’s
Central Services and IT Services ensure that the GfK companies
                                                                       one-off campaigns in response to particular events, such as the
and employees are careful and thrifty in their use of natural
                                                                       disastrous floods in Germany, Austria and the Czech Republic last
As a practical implementation of this policy, GfK has opted
over recent years to switch over from paper documentation to
                                                                       Social commitment –
the use of electronic media for as many of its communications
                                                                       active involvement and financial support
and administrative processes as possible. These include:
                                                                       Medicine Education Africa in Tanzania. Through its
• processing internal administrative procedures for purchasing,
                                                                       English subsidiaries, GfK has committed itself to a medical
  ordering, travel and personnel management in Germany
                                                                       development project in Tanga, an agricultural region of
• archiving divisional, company and project-related resources          Tanzania on the border with Kenya. The objective is to set up
  on the Intranet                                                      and maintain a medical infrastructure in the outlying parts
                                                                       of this region, which are far from any doctor or hospital. In
• providing clients with online access via portals to the databases
                                                                       each village, one person is provided with basic medical training
  and the survey results of the Consumer Tracking, Non-Food
                                                                       and a small stock of medicines.
  Tracking and Media divisions. A similar solution for the Ad Hoc
  Research division is in the process of implementation.               Home for children and young people at Reutersbrunnen-
                                                                       straße, Nuremberg. For the last three years, GfK has been
In general, GfK seeks to comply with environmental standards
                                                                       sponsoring the home for children and young people at Reuters-
in the procurement, use and disposal of work materials and
                                                                       brunnenstrasse in Nuremberg, one of the oldest establishments
office equipment. GfK employees are urged by means of
                                                                       of its kind in Germany. The home provides shelter for around
guidelines and recommendations to act in an efficient and
                                                                       50 children who are separated from their parents for various
environmentally responsible manner when procuring and
                                                                       reasons. It also has an emergency flat which can provide
disposing of materials.
                                                                       temporary refuge for up to ten children.

                                                                       United Way, Minneapolis, USA. For over twenty years, the
11. Social commitment                                                  Group’s American subsidiary, GfK Custom Research, has been
Success and a sense of responsibility go hand in hand. As a            supporting United Way, an organization which provides various
successful market research group and as a company listed in            social and charitable services in Minneapolis. A major part of
the Prime Segment on the stock exchange, GfK is committed              the financial commitment comes from voluntary work by the
first of all to its clients, employees and shareholders. Beyond        employees of GfK Custom Research. Every employee is given
this obligation, however, GfK considers that its success also          eight working hours’ leave to devote to a charitable initiative.
represents a challenge to take part in initiatives which serve the
common good. As Germany’s oldest established market research
                                                                       Academic commitment – training market researchers
institute, which has its roots in academic research, and as one
of the oldest surviving independent market research companies          In 2002, GfK extended for a further three years the contract it
in the world, GfK focuses its commitment on the following              had concluded with the University of Erlangen-Nuremberg three
aspects:                                                               years earlier to provide financial and technical support to the
                                                                       University’s Market Information Management department. The
• social, cultural and sports projects in the Nuremberg region,
                                                                       funding relates to an interdisciplinary project jointly developed
  the location in which the company was founded and has its
                                                                       by GfK and the University to prepare business administration
  head office, aimed in particular at young people in schools and
                                                                       students for the complex requirements of modern market
  public institutions.
                                                                       research work.
• the promotion of academic institutions and professional
  associations, particularly in relation to training, basic research
  and further development in the field of market research.
     Cultural commitment – poster art and children’s theatre               13. Outlook
     Permanent loan to the Germanisches Nationalmuseum.                    The economy and the industry – dealing with uncertainty
     After a preliminary phase of three years, a collection of around
                                                                           The experts are currently very cautious when it comes to
     10,000 advertising posters from the period 1890-1960 in the
                                                                           forecasting how the economy will develop in 2003. A great
     possession of GfK-Nürnberg e.V. and the Nürnberger Akademie
                                                                           deal depends on how matters develop in the Iraq conflict and
     für Absatzwirtschaft was contributed to the Nuremberg Poster
                                                                           their impact on the political situation in the Middle East.
     Collection and placed on permanent loan with the Germanisches
                                                                           According to one forecast produced by the Deutsches Institut
                                                                           für Wirtschaftsforschung (DIW), at the beginning of the year,
     Children’s theater in the Nuremberg region. In 2002, GfK              economic growth of 2.5 per cent in real terms is expected
     acted for the second time as chief sponsor of Panoptikum, a           for the USA, with 1.4 per cent forecast for the euro zone and
     children’s and young people’s theatre festival, at which 20 theatre   0.6 per cent for Germany.
     companies from seven European countries presented a variety of
                                                                           For the market research sector, growth forecasts for the next
     productions in Nuremberg over a one-week period. In addition,
                                                                           two years are also on the conservative side. Morgan Stanley
     GfK provides a Nuremberg-based children’s and young people’s
                                                                           and Crédit Lyonnais predict growth of 3 per cent for 2003 and
     theatre with ongoing material support.
84                                                                         4 per cent for 2004.

                                                                           The situation regarding incoming ad hoc orders in the Media
     Commitment to sport – Nuremberg city run
                                                                           division is likely to remain difficult, especially for print media,
     In 2002, GfK for the first time was one of the main sponsors of       which will probably continue to be affected by reductions in
     the Nuremberg city run, which takes place every year through          print runs and advertising. This also includes services relating
     the old town and neighbouring districts. The runners included         to continuous advertising success monitoring. However, should
     more than 120 GfK employees and family members.                       the economy pick up in the current year after all, it is precisely
                                                                           these services which offer great potential for growth in the short
     GfK will be continuing its social, economic and cultural commit-
     ment over the coming years.

                                                                           Investment – investing in innovation
     12. Major events since the 2002 financial
         statements                                                        In order to retain its leading position as an innovative group,
                                                                           GfK will once again be making major efforts in 2003 to
     Following the change in the segmentation of equities on the
                                                                           optimize existing processes and technologies and to develop
     Deutsche Börse in 2003, GfK shares are now listed on the
                                                                           and implement new methods and instruments. To achieve this
     SDax. With effect from 24 March 2003, the MDax was reduced
                                                                           strategic objective, provision has been made for replacement
     from 70 to 50 stocks. According to the rankings published by
                                                                           and expansion investment in the order of EUR 24 million. This
     Deutsche Börse on 31 January 2003, GfK was in 58th place on
                                                                           figure does not include financial investment to complete the
     the basis of market capitalization and 68th on the basis of share
                                                                           international network, expenses for the establishment and
     volume traded. On the SDax, which like the MDax includes 50
                                                                           expansion of panels, the costs of modifying and supplementing
     stocks, GfK is ranked 7th.
                                                                           software and other outlays, which are charged directly to
     As many investors in GfK shares are industry rather than index-       expenses as “soft facts” at the GfK Group.
     oriented, GfK does not expect that the change will have any
     significant adverse impact in the long term. For institutional
                                                                           Financing and liquidity – using the optimization potential
     investors, the main interest in GfK is as one of the leading
     companies in the field of market research.                            The financing potential of the GfK Group has been placed
                                                                           on a broad and solid basis. GfK AG, which is mainly responsible
                                                                           for Group financing, has ample credit lines available. These
                                                                           facilities are called on predominantly for short-term use and
                                                                           on the basis of variable financing. For 2003, measures are in
                                                                           preparation to secure the existing low level of interest over the
                                                                           medium term.
                                                                                              Outlook   MANAGEMENT REPORT

In addition to its credit lines, the GfK Group can draw on EUR        Employees – internationalizing human resources strategy
52.5 in cash and short-term securities. Measures are also in
                                                                      In addition to the continuation of the national human resources
preparation to centralize these liquid funds in order to further
                                                                      strategy, there will be a further intensification of the efforts
improve net interest income.
                                                                      begun in 2002 to extend the use of the existing and jointly
Medium-term capital is required almost exclusively for financing      developed human resources instruments in the GfK Group
of acquisitions, which is matched to the relevant periods. In         worldwide. In particular, special measures will be developed to
this regard, apart from the credit lines, the Group has abundant      optimize the exchange of personnel within the GfK Group.
self-financing capacity from its free cash flow and authorized
capital of 8.2 million no-par shares. GfK will therefore be able to
                                                                      GfK Group – outperforming sector growth
maintain its sound equity ratio in the future.
                                                                      GfK sees good potential for growth within the overall economic
                                                                      situation. Positive pointers in this direction are incoming
Research and development –
                                                                      orders and the high proportion of long-term contracts already
integrating technological progress
                                                                      concluded. With no change to the scope of consolidation, GfK is
During 2003 and 2004, R&D will be focusing on:                        expecting sales to rise by more than 5 per cent to around EUR
                                                                      590 million in 2003. In addition to organic growth, GfK also          85
• further developing electronic measurement devices for the
                                                                      intends to generate further growth through acquisitions and the
  continuous monitoring of consumer behaviour and media
                                                                      expansion of participations.
                                                                      As in the previous year, GfK expects EBIT after income from
• refining data merging techniques and developing valid
                                                                      participations to rise faster than sales. The Group is expecting to
  standard services for clients’ new and complex marketing
                                                                      achieve a margin of around 10 per cent.
                                                                      For GfK, 2003 has got off to a promising start. As at 1 January
• improving data management and data warehousing
                                                                      2003, overall orders on hand stood at EUR 167.4 million,
  instruments, particularly in the Ad Hoc Research division.
                                                                      12.7 per cent up on the same time last year. Taking into account
                                                                      the order book position for the current financial year and sales
Purchasing: focusing on IT and communication                          so far recognized, GfK has already achieved 48 per cent of its
                                                                      sales target of EUR 590 million. The corresponding value for last
In the purchasing of materials and services during 2003, GfK
                                                                      year was 47 per cent.
will be pursuing the optimization efforts already introduced and
expanding them to the whole Group. This applies particularly
to IT and communication systems for which national and                Business divisions – improving margins
international benchmarking processes for hardware and software
                                                                      GfK expects to see the four business divisions Consumer
and for maintenance agreements have been introduced.
                                                                      Tracking, Non-Food Tracking, Media and Ad Hoc Research
                                                                      increase both their sales and their operating income.
Organization –                                                        The following figures relate only to the development of the
alignment with the Corporate Governance Code                          companies consolidated as at 31.12. 2002.

In line with the requirements of the German Corporate                 For Consumer Tracking, GfK is anticipating sales growth
Governance Code, plans are in place to optimize all measures          of around 6 per cent with a clear rise in the margin to around
required to shorten the times for preparation and publication         4 per cent. Measures implemented in 2002 to optimize and
of the financial statements of GfK AG and the Group in 2003.          standardize data collection and analysis throughout Europe
                                                                      using aTRACKtive will contribute to this development.

Corporate structure – strategic coordination                          The activities of the GfK Group in the Healthcare segment
                                                                      will come under Consumer Tracking from January 2003.
As in the past, GfK will continue to pursue its integration
                                                                      This corresponds to the existing allocation of responsibility.
strategy. Following the takeover of all of the shares in the
                                                                      The activities of Martin Hamblin GfK HealthCare in the UK
companies acquired, these companies are consolidated into
                                                                      and the USA reported under the Ad Hoc Research division
larger efficient units and restructured into strategic groups.
                                                                      and the healthcare activities reported under Other, will
     also be reclassified accordingly. In 2002, these activities posted      As in previous years, GfK will continue its practice of initially
     sales of around EUR 32 million and a rise of around 8 per cent          acquiring a stake in a company and then proceeding to gradually
     is forecast for 2003. A margin of over 10 per cent is assumed.          take it over completely. This gradual approach ensures that
                                                                             the previous owners and employees continue to work for the
     For the Non-Food Tracking division, the company is expecting
                                                                             development of “their company” even within the GfK network.
     double-digit growth in sales and a rise in the margin over
     2002. In addition to expansion into new countries, the launch           The fundamental aim of GfK’s acquisition strategy is to build
     of information services on new product and market segments              on its position as a “pure player” in the market research field.
     comprises the main focus of activity.                                   To achieve this, the service range will be extended to include
                                                                             consultancy services based on GfK’s extensive market research
     In the Media division, GfK is benefiting from the contracts either
                                                                             knowledge and expertise.
     extended or won in 2002 to measure TV and radio ratings. On
     the other hand, the company is assuming that demand in the
     print sector will remain weak. This limits growth potential in the
     division. However, sales should rise by more than 3 per cent.
     GfK is anticipating that the margin will be well over 10 per cent
     and therefore above the margin for the previous year.
     Adjusted for the reclassification of the healthcare activities, sales
     in Ad Hoc Research may be critically affected by economic
     trends. GfK is therefore expecting only a slight increase in sales.
     The earnings margin should be higher than in the previous year.
     The synergies arising from the companies acquired in recent
     years will play a greater role here.

     In the Other division, GfK is anticipating a drop in sales to
     around EUR 10 million and slightly negative income from
     the internal services sector. The reason here is the planned
     reclassification of the healthcare activities.

     Strategy – targeted expansion of the network

     Thanks to being ranked number 5 among market research
     institutes worldwide, the GfK Group is very well positioned.
     The objective of future acquisitions is to make the best possible
     use of the growth opportunities of the business divisions. In
     Consumer Tracking, GfK is well placed throughout Europe and
     will be looking for growth through extending its existing
     alliances and expanding the healthcare services. In Non-Food
     Tracking, where GfK is the world leader, the policy of global
     expansion will once again be pursued. In Media, GfK intends to
     expand its European network. In Ad Hoc Research, the largest
     of the divisions, GfK plans to strengthen its presence above all in
     North America and Europe.


 90 Consolidated income statement
 91 Consolidated balance sheet
 92 Consolidated funds statement
 93 Changes in consolidated shareholders’ equity
 94 Notes to the financial statements for financial year 2002
 94       General information
 94       Methods of consolidation
 94       Currency conversion
 94       Accounting and valuation methods
 98       Scope of consolidation and major acquisitions
100       Notes to the consolidated income statement
103       Notes to the consolidated balance sheet
104            Consolidated fixed assets schedule
110            Proposed appropriation of profits
114            Segment reporting
114            Pro forma statements in accordance with
               SFAS 141
115            Changes since the previous year
118            Employees
119            Total remuneration and shares of the
               Management Board and Supervisory Board
120            Supervisory Board
121            Management Board
121            Declaration concerning the Corporate
               Governance Code
122       Shareholdings of the GfK Group
127 Auditors’ report
     Consolidated income statement
     for the period 1 January to 31 December 2002 in EUR’000                                               2001        2002

     Sales                                                                             23., page 114    482,132     559,373
     Cost of sales                                                                                     – 341,617   – 394,831
     Gross income from sales                                                                            140,515     164,542

     Selling and general administrative expenses                                                       – 110,214   – 117,287
     Operating income                                                                  23., page 114     30,301       47,255

     Other income less other expenses                                                   1., page 100    – 14,543     – 3,627
     EBIT before income from participations                                                              15,758      43,628

     Net income from participations                                                     2., page 100      3,716       6,378
     EBIT after income from participations                                                               19,474      50,006

     Net interest income                                                                3., page 101        125      – 2,329
     Net other financial income                                                         4., page 101    – 15,674     – 2,396
     Result from ongoing business activity                                                                3,925      45,281

     Taxes on income and earnings                                                       5., page 101    – 10,215    – 15,277
     Income from the initial application of SFAS 133                                                        136           0
     Consolidated total income before minority interests                                                 – 6,154     30,004

     Minority interests’ share of total income                                                             1,413     – 4,331
     Consolidated total income                                                                           – 4,741     25,673

     Earnings per share, undiluted (in EUR)                                             6., page 103      – 0.18        0.98

     The Notes below form an integral part of the consolidated financial statements.
                                                                        Consolidated balance sheet   F I N A N C I A L S TAT E M E N T S

Consolidated balance sheet
as at 31 December 2002 in EUR’000                                                                              31.12.2001      31.12.2002

Intangible assets                                                                             7., page 103        112,206         163,048
Tangible assets                                                                              8., page 106           64,108         69,718
Financial assets                                                                             9., page 106          32,268           31,040
Fixed assets                                                                                     page 104         208,582         263,806

Inventories                                                                                                          1,530           1,519
Trade receivables                                                                           10., page 107         121,769         119,336
Other accounts receivable and other assets                                                  11., page 107          10,916          16,351
Securities                                                                                  13., page 108            8,054           7,350
Liquid funds                                                                                                        47,555         45,167
Current assets                                                                                                    189,824         189,723

Deferred taxes                                                                                   page 102            9,075           9,324

Prepaid expenses                                                                            14., page 108            5,586           6,701

Total assets                                                                                                      413,067         469,554
of which short-term                                                                                               196,639         197,819

Shareholders’ equity and liabilities
Subscribed capital                                                                                                 66,872          66,872
Capital reserve                                                                                                     87,098          87,098
Retained earnings                                                                                                    6,366          27,357
Other comprehensive income                                                                       page 109            2,791             177
Shareholders’ equity                                                                        15., page 108         163,127         181,504

Minority interests                                                                                                   6,535          17,623

Provisions                                                                                  16., page 110           61,945         69,636
Financial liabilities                                                                       17., page 111          53,365          72,882
Trade payables                                                                              18., page 112          33,229          36,318
Liabilities on orders in progress                                                                                  52,384          56,015
Other liabilities                                                                           19., page 112          35,843          28,663
Provisions and liabilities                                                                                        236,766         263,514

Deferred taxes                                                                                   page 102            5,266           6,004

Deferred income                                                                                                      1,373             909

Total liabilities                                                                                                 249,940         288,050
of which short-term                                                                                               189,023         203,118

Shareholders’ equity and liabilities                                                                              413,067         469,554

The Notes below form an integral part of the consolidated financial statements.
     Consolidated funds statement
     for the period 1 January to 31 December 2002 in EUR’000                                                   2001       2002

     Consolidated total income before minority interests                                                     – 6,154    30,004
     Write-down/write-up of intangible assets                                                                17,442      8,995
     Write-down/write-up of tangible assets                                                                  13,687     15,363
     Write-down/write-up of financial assets                                                                  8,090        491
     Change in deferred taxes                                                                                – 2,786     – 211
     Income from companies valued at equity, not affecting payment                                            1,980      – 177
     Profits/losses from the disposal of tangible assets                                                     – 1,494       618
     Net interest income affecting payment                                                                      – 29     2,269
     Increase/decrease in provisions                                                                          5,672      2,427
     Other revenue/expenses not affecting payment                                                            10,109        577
     Increase/decrease in inventories, trade receivables and other assets,
     not attributable to investment or financing activity                                                     17,106    19,622
     Increase/decrease in liabilities and other liabilities,
     not attributable to investment or financing activity                                                    12,335    – 10,674
     a) Cash flow from ongoing business activity                                                             75,958     69,304

     Cash outflows for investment in intangible assets                                                     – 20,881     – 9,522
92   Cash outflows for investment in tangible assets                                                        – 11,960   – 19,051
     Cash outflows from the acquisition of consolidated companies and other business units                  – 51,526   – 44,088
     Cash outflows for investment in other financial assets                                                – 23,902     – 3,913
     Cash inflows from disposals of intangible assets                                                           994         83
     Cash inflows from disposals of tangible assets                                                             398      1,601
     Cash inflows from the disposal of consolidated companies and other business units                          244          0
     Cash inflows from disposals of other financial assets                                                    2,442      1,698
     b) Cash flow from investment activity                                                                 – 104,191   – 73,192

     Cash outflows to company owners                                                                         – 3,918    – 4,441
     Cash inflows from/outflows to minority interests                                                         – 698     – 1,703
     Net interest income                                                                                         29     – 2,269
     Cash inflows from the raising of loans                                                                  28,628     34,692
     Cash outflows from the repayment of loans                                                               – 7,204   – 23,346
     c) Cash flow from financing activity                                                                    16,837      2,933

     Changes in financial resources affecting payment (total of a), b) and c))                              – 11,396     – 955
     Changes in financial resources owing to exchange gains/losses, scope of consolidation and valuation        184     – 1,433
     Financial resources at the start of the period                                                          58,767     47,555
     Financial resources at the end of the period                                                            47,555     45,167

     The Notes below form an integral part of the consolidated financial statements.
                                                               Changes in consolidated shareholders’ equity   F I N A N C I A L S TAT E M E N T S

Changes in consolidated shareholders’ equity                                                    Other Comprehensive Income
for the period 1 January 2001 to 31 December 2002 in EUR’000

                                                                                            Difference        Market         Difference
                               No. of shares     Subscribed    Capital     Retained     from currency     valuation of    from pension
                              (in thousands)         capital   reserve     earnings        conversion       securities        valuation        Total

As at 1 January 2001                 26,122          66,872    87,098       14,497              2,084         – 2,785                0       167,766

Dividend                                                                    – 3,918                                                          – 3,918
Consolidated total income
after tax                                                                   – 4,741                                                          – 4.741
Other changes                                                                  528                                                                  528
Other comprehensive income                                                                        730           2,796             – 34         3,492

As at 31 December 2001               26,122          66,872    87,098         6,366             2,814              11             – 34       163,127
Dividend                                                                    – 4,441                                                          – 4,441
Consolidated total income
after tax                                                                   25,673                                                            25,673
Other changes                                                                 – 241                                                            – 241
Other comprehensive income                                                                    – 2,623            – 25               34       – 2,614
As at 31 December 2002               26,122          66,872    87,098        27,357               191            – 14                0       181,504

The Notes below form an integral part of the consolidated financial statements.
     N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2 0 0 2

     General information                                                    The consolidation on transition from equity valuation to full
                                                                            consolidation takes place with no impact on income but is done
     The consolidated financial statements of GfK Aktiengesellschaft
                                                                            separately for every part-acquisition. The acquisition costs
     (GfK AG) include the company itself and all consolidated
                                                                            included in capital consolidation comprise the amortized equity
     subsidiaries (the GfK Group). The statements have been prepared
                                                                            book value and the acquisition costs for the majority acquisition.
     in accordance with the United States Generally Accepted
     Accounting Principles (US GAAP) and all figures are given in           Shares in the equity capital and in the subsidiaries' results
     EUR thousand, unless specified otherwise. The income statement         attributable to minority interests are reported as a separate item
     has been prepared using the cost of sales accounting format.           in the annual financial statements.
     From financial year 2002 onwards, the GfK Group will no longer
     prepare its consolidated financial statements in compliance            Currency conversion
     with the accounting principles of the German Commercial Code
                                                                            The balance sheets of foreign subsidiaries which were not
     (HGB). The US GAAP consolidated financial statements are
                                                                            prepared in euros are translated into euros at the middle rates on
     supplemented by a management report and other required
                                                                            the balance sheet date in line with the concept of the functional
     information, so that the GfK Group is exempt from the duty to
                                                                            currency. The annual average euro exchange rate for these
     prepare consolidated financial statements in accordance with
                                                                            currencies, determined as the mean of all monthly closing rates,
     HGB pursuant to § 292 a HGB.
                                                                            is applied to the income statements of these subsidiaries.
     The published consolidated financial statements of the GfK
                                                                            Differences arising between the conversion of assets and liabilities
94   Group for financial year 2001 had been prepared in accordance
                                                                            at the rate on the reporting date and their conversion at the
     with the German Commercial Code (HGB). In order to allow
                                                                            rate on the previous reporting date, and differences arising from
     comparison of the US GAAP figures for financial year 2002, the
                                                                            conversion of the profit for the year in the balance sheet (rate
     previous year's figures prepared in accordance with US GAAP
                                                                            on reporting date) and income statement (average rate) are
     are presented with them.
                                                                            recorded in equity with no impact on income. Differences in
     The annual financial statements of the parent company, GfK AG,         exchange rates arising from capital consolidation are reported
     have been prepared in accordance with HGB and are deposited            in equity within other comprehensive income.
     at the Commercial Register at the district court of Nuremberg
                                                                            All monetary assets and the short-term non-monetary assets
     under HR B 9398.
                                                                            and liabilities of subsidiaries in countries with high inflation are
                                                                            converted at the rate on the reporting date, whilst long-term
     Methods of consolidation                                               assets and liabilities along with the equity capital are translated
                                                                            at historic prices. Any resultant exchange rate differences are
     The annual financial statements of GfK AG and all material
                                                                            reported and recognized as income on the income statement.
     subsidiaries over which control is exercised directly or indirectly
     are included in the consolidated financial statements of GfK AG.       The exchange rates of the main currencies used as a basis for
     Companies in which the GfK Group has a participation of not            currency translation in the GfK Group's consolidated financial
     more than 50%, but over which decisive influence can be                statements are as follows:
     exercised, are generally accounted for at equity as associated
     companies. All other companies in the GfK Group are reported
                                                                               Main currencies             Euro mean rate            Euro average rate
     at acquisition cost.
                                                                                                           on balance sheet date     during reporting period
     Capital consolidation is carried out in accordance with the
                                                                               Country, unit of currency   31.12.2001   31.12.2002         2001         2002
     Statement of Financial Accounting Standards (SFAS) 141 by the
     purchase accounting method, whereby the acquisition costs of              USA, USD 1                        1.13         0.96         1.12          1.05
     the participation are charged against the parent company’s pro            UK, GBP 1                         1.64         1.54         1.62          1.59
     rata share in the newly valued equity capital of the subsidiary           Japan, JPY 100                    0.86         0.81         0.92          0.85
     at the time of purchase. Any difference (positive goodwill) arising       Switzerland, CHF 100             67.55        68.84        66.30         68.21
     in the balance sheet is reported under fixed assets as goodwill.
     All transactions and balances between the companies of the
     GfK Group which are included in the consolidated financial
     statements are eliminated when preparing the consolidated              Accounting and valuation methods
     financial statements. Differences arising from debt consolidation
                                                                            Recognition of sales
     are treated as income. Intercompany results and asset move-
     ments are eliminated with impact on the income statement if            The method of recognizing sales depends on the nature of
     they are significant.                                                  the underlying transaction. For business involving panels, the
                                                                            GfK Group recognizes its sales according to the progress pro
     Associated companies that are included at equity (one-line
                                                                            rata temporis of the project (proportional performance method).
     consolidation) are generally included for the first time at the
                                                                            Business in the Ad Hoc division is valued by the percentage of
     time of acquisition. The initial valuation takes place similarly to
                                                                            completion method.
     full consolidation. A difference on the assets side arising from
     offsetting the book value of the participation against the pro         In the case of the proportional performance method, the sales
     rata equity capital at initial valuation is added to the equity book   for a project are distributed evenly over its duration. Each month
     value.                                                                 during the term of a contract the same sales are recognized in
                                                                         Notes: accounting and valuation methods   F I N A N C I A L S TAT E M E N T S

    terms of amount. Where over 50% of the costs occur in the                    Intangible assets
    following month, the sales are recognized with one month's
                                                                                 As a rule, software developed by companies in the GfK Group
    When applying the percentage of completion method, the sales
                                                                                 is used internally for analyzing and preparing market research
    are recognized in accordance with the actual progress of the
                                                                                 data. In some cases, it is destined for external users and is
    project. Progress on the project is determined as the ratio of
                                                                                 programmed particularly to meet those users' requirements.
    the actual costs incurred to the costs expected overall for the
    project. The estimate of total cost is continuously checked                  Precisely defined portions of the internal costs of software
    during the life of the project. Changes in the estimate of total             development are capitalized under fixed assets. Amortization
    cost flow into the calculation of realizable sales at the point in           commences on completion of the software.
    time at which they can be anticipated.
                                                                                 In addition to proprietary software, the item software also
    The costs to be incorporated into this calculation comprise                  includes software acquired for internal use.
    all direct material and personnel expenses as well as pro rata
    indirect costs. Provisions are formed for anticipated losses on
    orders in progress when they can be anticipated.
                                                                                 Goodwill arising from capital consolidation of subsidiaries and
    In all other business transactions the completed contract method
                                                                                 that transferred from subsidiaries' financial statements into the
    is used, according to which sales are only recognized once the
                                                                                 consolidated financial statements is reported by the GfK Group
    work has been completed and invoicing has taken place.                                                                                               95
                                                                                 under intangible assets.
                                                                                 Goodwill arising from first-time consolidations prior to 1 July
    Earnings per share
                                                                                 2001 and that transferred from company financial statements has
    The earnings per share (EPS) reported in the consolidated                    been amortized over its useful life until 31 December 2001.
    income statement show the proportion of consolidated total                   According to SFAS 142, such goodwill is no longer subject to
    income which theoretically relates to each share issued.                     regular amortization after 31 December 2001. Goodwill arising
    Dilution effects arising from the exercise or issue of share                 after 1 July 2001 is also not subject to scheduled amortization.
    options are not taken into account.
                                                                                 The GfK Group checks the recoverbility of its goodwill once a
    There is no dilution effect arising from the stock options issued            year and when friggering events or changed circumstances arise
    as at 31 December 2002.                                                      by making a management accounting valuation which is calculat-
                                                                                 ed as the mean of several valuation procedures.
    Stock options for employees and management staff
    of the GfK Group                                                             Other intangible assets
    The GfK Group applies APB (Accounting Principles Board)                      In addition to other intangible assets this item includes payments
    Opinion No. 25 and associated interpretations to depict the                  on account for intangible assets. Apart from the payments on
    existing Stock Option Plan in the consolidated financial                     account, the other intangible assets are subject to scheduled
    statements. According to APB 25, expenditure for employee                    straight-line amortization. The amortization period is governed
    stock options with no intrinsic value on the balance sheet date              by the contract term or the useful life, applying the shorter of the
    cannot be recognized.                                                        two periods.
    The following table shows the effects on the consolidated total
    income and the EPS which would have resulted had SFAS 123                    Tangible assets
    ”Accounting for Stock-Based Compensation“ been applied to all
                                                                                 Tangible assets are valued at acquisition or manufacturing costs,
    issued options.
                                                                                 less cumulative depreciation. Cumulative depreciation includes
                                                                                 scheduled straight-line depreciation up to the balance sheet date
                                                             2001      2002      and any extraordinary depreciation recorded. The depreciation
Consolidated total income                                  – 4,741   25,673      period corresponds to the useful life. Payments on account and
                                                                                 assets in the course of construction are not subject to regular
Plus: Personnel expenses (after tax) in connection
with stock-based compensation on application                                     depreciation.
of APB 25                                                       0         0
Less: Total personnel expenses (after tax) in connection
with stock-based compensation on application
of the accounting method based on fair values
(SFAS 123)                                                 – 4,535   – 4,584
Pro forma consolidated total income                        – 9,276   21,089
Earnings per share in EUR                                   – 0.18     0.98
Pro forma earnings per share in EUR                         – 0.36     0.81
Earnings per share (diluted) in EUR                         – 0.18     0.98
Pro forma earnings per share (diluted) in EUR               – 0.36     0.,81
          The GfK Group normally applies the following useful life                  Liquid funds
                                                                                    The liquid funds contain cash in hand and at banks as well as
                                                                                    liquid investments with a remaining term of less than three
     Asset                                                   Useful life in years   months.
     Software and other
     intangible assets                                                   3 to 10    Deferred tax assets
     Administrative buildings                                                 50    The GfK Group applies SFAS 109 "Accounting for Income Taxes".
     IT equipment                                                         3 to 5    According to the asset-and-liability method described in SFAS
     Cars and other vehicles                                                   5    109, the respective local tax balance sheet is compared with the
     Office equipment                                                     3 to 5    US GAAP balance sheet and the differences ascertained. Future
                                                                                    tax effects arising from the differences are entered in the form of
     Office furniture                                                  10 to 13
                                                                                    deferred tax assets or liabilities. The effects on deferred taxes of
                                                                                    changes in tax legislation are recognized as income from the date
                                                                                    on which the tax legislation is issued.
          In cases involving a capital lease, the leased asset is capitalized
          and a corresponding lease commitment is carried as a liability.           Deferred tax assets accordingly consist of theoretical tax balances
          The period of depreciation is equivalent to the shorter of the            resulting from comparing the US GAAP balance sheet against
          contract period and useful life.                                          the local tax balance sheet, and from the theoretical tax advantage
96                                                                                  arising from tax loss carryforwards. If it is unlikely that these
                                                                                    theoretical tax balances can be realized, valuation allowances are
          Available-for-sale securities
          Available-for-sale securities are valued at fair value on the
          balance sheet date. Each security is considered individually.
                                                                                    Shareholders’ equity – other comprehensive income
          These are securities which are not treated as part of the trading
          securities. The GfK Group only shows trading securities under             Other comprehensive income contains changes in the
          current assets; all other securities are reported under fixed             Group's equity which have no impact on income and do not
          assets as available-for-sale securities.                                  comprise contributions by shareholders or dividends paid to
                                                                                    shareholders. They are exchange rate differences arising from
          In the case of lasting impairment of value, available-for-sale
                                                                                    capital consolidation and equity valuation, unrealized profits
          securities are written down and charged to income under
                                                                                    and losses from available-for-sale securities and components
          “net other financial income” on the income statement. In the
                                                                                    of pension obligations which are not yet reported as pension
          case of a temporary fall or rise in value, the new valuation of
          these securities is reported as equity in other comprehensive
          income with no impact on income.
          Inventories                                                               In principle, provisions are allocated when there is an obligation
                                                                                    to a third party which is probable and the level can be estimated
          Inventories are stated at acquisition or manufacturing costs, or
                                                                                    reliably. If the liability contains an interest portion, the provision
          fair value if lower. The manufacturing costs are entered at full
                                                                                    will be stated at the present value.
                                                                                    Provisions for pensions according to SFAS 87 are valued in
                                                                                    accordance with the projected unit credit method, in which
          Trade receivables
                                                                                    future compensation increases are taken into account.
          Trade receivables include both invoiced and non-invoiced
          receivables. They are stated at nominal value or, in the case
                                                                                    Financial liabilities
          of specific risks, at the lower attributable value. Non-invoiced
          receivables can arise in the valuation of sales where the sales           Financial liabilities contain liabilities of a financial nature,
          to be recognized for a contract exceed the receivables already            particularly loans from banks and other lenders, liabilities from
          invoiced for it.                                                          capital leases and long-term liabilities from the acquisition of
                                                                                    companies or business units. They are stated at the repayment
          Securities held as current assets
          Securities held as current assets represent the trading securities
          destined for short-term sale. They are valued at fair value on
          the balance sheet date. Unrealized profits and losses are taken
          to income and reported under net other financial income on the
          income statement.
                                                                 Notes: accounting and valuation methods   F I N A N C I A L S TAT E M E N T S

Liabilities on orders in progress                                        The book value of the intangible assets was EUR 112,206
                                                                         thousand as at 31 December 2001, including goodwill of
Liabilities on orders in progress comprise payments on account
                                                                         EUR 84,184 thousand. The scheduled amortization of goodwill
and accrued amounts from recognition of sales. Sales are
                                                                         amounted to EUR 10,392 thousand during 2001.
accrued within this item which have arisen from contractually
agreed invoices for prepayments or payments in advance,                  In August 2001, SFAS 144 “Accounting for the Impairment or
but cannot yet be recognized as sales according to the above             Disposal of Long-lived Assets"” was published. SFAS 144
described sales recognition method.                                      replaces SFAS 121 “Accounting for the Impairment of Long-lived
                                                                         Assets and for Long-lived Assets to Be Disposed Of”, and the
                                                                         accounting rules of APB Opinion No. 30 “Reporting the Result
Derivative financial instruments
                                                                         of Operations - Discontinued Events and Extraordinary Items”.
Derivatives are reported as assets or liabilities in the balance         SFAS 144 also corrects Accounting Research Bulletin (ARB) 51,
sheet (SFAS 133) and carried at fair value. Changes in the               “Consolidated Financial Statements”, whereby the exceptional
fair value of derivative financial instruments are recognized in         rule that a subsidiary over which control will probably only
income on an accrual basis.                                              be exerted temporarily, does not have to be consolidated is
                                                                         withdrawn. SFAS 144 upholds many of the fundamental rules of
                                                                         SFAS 121 concerning realization and valuation of extraordinary
New developments in accounting
                                                                         depreciation/amortization on fixed assets.
In July 2001, the Financial Accounting Standards Board
                                                                         SFAS 144 must be applied to financial years which started after
(FASB) published SFAS 141 “Business Combinations” and                                                                                            97
                                                                         15 December 2001.
SFAS 142 “Goodwill and Other Intangible Assets”. These
standards brought about a fundamental change in the                      In April 2002, the FASB published SFAS 145 “Rescission of FASB
accounting rules for company acquisitions and mergers in the             Statements 4, 44 and 64, Amendment of FASB Statement No. 13,
consolidated financial statements, and the treatment of goodwill         and Technical Corrections”. This requires for example that profits
and intangible assets. SFAS 141 prescribes the purchase                  and losses arising from the extinguishment of debt may only be
method for all company acquisitions after 30 June 2001. If during        recognized as extraordinary items if they meet the criteria in APB
the course of acquiring a company intangible assets are also             30 (in other words, unusual nature and infrequent occurrence).
acquired, they must either be capitalized separately or included         If only one of the two criteria is met, then profits and losses must
as goodwill. The criteria for the treatment of acquired intangible       be shown in the result from ongoing business activity.
assets are defined in SFAS 141.
                                                                         SFAS 145 has to be applied in financial years that commence
SFAS 142 prescribes that goodwill and intangible assets with             after 15 May 2002. Its application will not have any significant
an indefinite useful life may no longer be subject to scheduled          effects on the consolidated financial statements of the GfK Group.
amortization. Their value must be checked each year as part of
                                                                         In July 2002, the FASB published SFAS 146 “Accounting for
the impairment test. If there are signs of a diminution in value,
                                                                         Costs Associated with Exit or Disposal Activities”. According
an additional unscheduled impairment test must be carried out.
                                                                         to SFAS 146, costs connected with exits or disposals should
Intangible assets with a limited useful life have to be amortized
                                                                         be recognized in the period in which they were incurred. A
on a scheduled basis according to SFAS 142 until they reach
                                                                         reasonable estimate of their fair value must be possible. SFAS
the expected residual value. In addition, they must also be
                                                                         146 is to be applied to exits or disposals that take place after
tested for impairment of value. This is set out in SFAS 121 and
                                                                         31 December 2002.
SFAS 144.
                                                                         In November 2002, EITF 00-21 “Revenue Arrangements with
The provisions for amortization of goodwill under SFAS 142
                                                                         Multiple Deliverables” was passed by the Emerging Issues
should be applied directly to goodwill and intangible assets
                                                                         Task Force. EITF 00-21 deals with accounting for sales trans-
acquired since 30 June 2001. Goodwill and intangible assets
                                                                         actions in which the vendor has to provide a number of
acquired prior to this date require SFAS 142 to be applied for
                                                                         deliverables. It defines the conditions for dividing up a sales
the first time from 1 January 2002 onwards.
                                                                         transaction with several deliverables into separate accounting
At the time of the first application, an impairment test for             units and prescribes how this should be done. EITF 00-21
goodwill has to be carried out. If this results in an amortization       has to be applied to financial statements for reporting periods
requirement, such amortization must be stated in the income              starting from 1 July 2003 onwards.
statement as a cumulative effect of the change in accounting
     During November 2002, the FASB published FIN 45
     “Guarantor's Accounting and Disclosure Requirements for                  Fully consolidated subsidiaries (No.)
     Guarantees, Including Indirect Guarantees of Indebtedness of                                 31.12. 2001         Additions   Disposals   31.12.2002
     Others – an interpretation of FASB Statements No. 5, 57 and              Germany                        9               2           1           10
     107 and Rescission of FASB Interpretation No. 34”. It defines            Abroad                       75               14           8           81
     the disclosure requirements of the guarantor in respect of
                                                                              Total                        84               16           9           91
     the obligations arising from the guarantees provided. FIN 45
     requires liabilities arising from the furnishing of guarantees
     to be carried as liabilities. FIN 45 should be applied to reporting
     periods that end after 15 December 2002, but only to guarantees       The additions include the companies reported as associated
     which were furnished or modified after 31 December 2002.              companies in the consolidated financial statements in accordance
                                                                           with US GAAP as at 31 December 2001: EMER GfK, S.L., Valencia,
     In December 2002, the FASB adopted SFAS 148 “Accounting               Spain (“E+G Spain”), G.E. Marketing Research, S.A., Valencia,
     for Stock-Based Compensation – Transition and Disclosure – an         Spain (”G+E Spain”), GfK PORTUGAL – Marketing Services,
     amendment of FASB Statement No. 123”. Supplementing SFAS              LDA, Lisbon, Portugal (“GfK M.S. Portugal”), and METRIS –
     123 “Accounting for Stock-Based Compensation”, it provides            MÉTODOS DE RECOLHA E INVESTIGAÇÃO SOCIAL, LDA,
     further transitional rules for the voluntary first-time application   Lisbon, Portugal (“Metris Portugal”). By virtue of contract
     of accounting for stock-based compensation in line with fair          changes, from 1 January 2002 onwards GfK AG has commercial
     values. The accounting method and resultant impact on income          control of these companies. During the reporting year the GfK
98   should be described in detail and highlighted in the Notes to the     Group acquired additional shares in INTERCAMPUS - RECOLHA,
     financial statements according to SFAS 148. The GfK Group             TRATAMENTO E DISTRIBUIÇÃO DE INFORMAÇÃO, LDA,
     is applying APB 25 for accounting for stock-based compensation        Lisbon, Portugal (“Intercampus Portugal”), so that the company
     in the consolidated financial statements. There are no plans yet      is now consolidated.
     for a transition to the provisions of SFAS 123.
                                                                           The joint venture Infratest + GfK Gesundheitsforschung GmbH
     In January 2003, the FASB published FIN 46 “Consolidation             & Co., Berlin (“IGG KG”) previously included as an associated
     of Variable Interest Entities – an interpretation of ARB No. 51”.     company has now been split and as at 1 July 2002 has been
     It presents the consolidation of companies in which there is          merged pro rata into the parent companies. In connection with
     a controlling financial interest owing to voting rights or variable   this split, the GfK Group received a majority interest of 80 %
     shares. In such cases these Variable Interest Entities have to be     in GPI Kommunikationsforschung Gesellschaft für Pharma-
     consolidated with the primary beneficiary.                            Informationssysteme mbH, Nuremberg (“GPI KoFo D”). These
     The GfK Group has no participating interests in Variable Interest     activities are reported in the division Other.
     Entities.                                                             Through the acquisition of a majority stake of 51.4 % in Institut
     The effects of SFAS 146 and SFAS 148, EITF 00-21, FIN 45 and          Français de Recherche S.A., Viroflay, France, the following
     FIN 46 on future consolidated financial statements of the GfK         IFR Group subsidiaries as well as the parent company became
     Group are currently being considered.                                 consolidated companies of the GfK Group as at 1 July 2002:
                                                                           • IFR Europe Ltd., London, UK
     Estimates                                                             • IFR France S.A., Viroflay, France
     To some extent estimates and assumptions cannot be avoided in         • IFR Italia S.r.L., Milan, Italy
     the consolidated financial statements. They may affect assets and
     liabilities as well as contingencies on the balance sheet date as     • IFR Marketing España S.L., Madrid, Spain
     well as the income and expenses for the financial year. The actual    The IFR Group operates in the Non-Food Tracking segment.
     amounts concerned may deviate from such estimates.
                                                                           As at 1 January 2002, the GfK Group acquired a 51 % stake in
                                                                           GfK MACON AG, Waghäusel, Germany (“GfK Macon D”) which
     Scope of consolidation and major acquisitions                         operates in the Ad Hoc Research segment.

     Fully consolidated companies                                          The Group also acquired a majority holding in the Ad Hoc
                                                                           company Strateji GfK Research Services A.S. in Istanbul,
     As at 31 December 2002, the scope of consolidation in                 Turkey.
     accordance with US GAAP includes ten (2001: nine) German
     and 81 (2001: 75) foreign subsidiaries in addition to the parent      In Brussels, Belgium, the Group established Intomart GfK
     company.                                                              Belgium N.V., which acts as a holding company for the majority
                                                                           stake acquired on 1 July 2002 in Significant bvba, Heverlee,
     The following table shows the changes in fully consolidated           Belgium (“Significant Belgium”) which operates in the Ad Hoc
     subsidiaries between 31 December 2001 and 31 December 2002:           Research segment.
                                                                     Notes: scope of consolidation    F I N A N C I A L S TAT E M E N T S

In the Non-Food Tracking segment, the GfK Group acquired a         The joint ventures GfK Ad Hoc Research WORLDWIDE,
majority holding in Informark Pty. Ltd., Braddon, Australia as     Brussels, Belgium, and GfK Stratégie et développement GIE,
of 1 January 2002.                                                 Rueil-Malmaison, France, previously not reported as Group
                                                                   companies, were reclassified as affiliated companies because the
The purchase price of the acquisitions above was EUR 41,708
                                                                   GfK Group has a majority participation in these joint ventures.
thousand in total. This produced goodwill of EUR 43,118
thousand. This relates to the Non-Food Tracking (EUR 21,743        GfK Testmarktforschung GmbH i.L., Nuremberg, Germany,
thousand), Ad Hoc Research (EUR 4,806 thousand) and Other          Exmarket + GfK Praha, spol. s.r.o., Prague, Czech Republic,
(EUR 16,569 thousand) segments.                                    Sensory Research Laboratories Ltd., London, UK, MH Gamma
                                                                   Consulting Limited, London, UK and MHIG Limited, London, UK,
GfK Marketing Services Asia Ltd., Tokyo, Japan was liquidated.
                                                                   which were not included in 2001 due to minor significance, were
Its business operations were continued by GfK Marketing
                                                                   liquidated during the reporting period.
Services Ltd., Hong Kong, China.
                                                                   The majority holding in I+G Infratest & GfK Gesundheitsforschung
GfK/VCIOM/Institute for Media Research ZAO, Moscow, Russia
                                                                   (Suisse) GmbH, Basle, Switzerland acquired in connection
was liquidated. Its business operations were carried on by
                                                                   with the splitting and merging of IGG KG, is not included in the
GfK-RUS Gesellschaft mbH of Moscow, Russia.
                                                                   consolidated financial statements because the company is to be
SELECTA – S.r.L., Rome, Italy and GfK-Recom S.r.L., Milan, Italy   liquidated in the near future.
were merged with GfK-ASM S.r.L., Rome, which was renamed
                                                                   Associated companies                                                                   99
(”GfK CBI Italy”) and moved its headquarters to Milan.
                                                                   The following table shows the changes in associated companies
GfK InfoScan Sverige AB, Lund, Sweden (“InfoScan Sweden”),
                                                                   between 31 December 2001 and 31 December 2002:
GfK Belgium S.A., Brussels, Belgium (“GfK Belgium”), dragon
eye Ltd., Hergiswil, Switzerland (“dragon eye Switzerland”),
MMXI Switzerland GmbH, Hergiswil, Switzerland (“MMXI                  Associated companies (No.)
Switzerland”) and PRISMA Projekt-Beratung GmbH, Hamburg
                                                                                                   31.12. 2001   Additions   Disposals      31.12. 2002
(“Prisma Projekt D”) were deconsolidated on 1 January 2002.
These companies are of minor importance for the consolidated          Germany                               4           1            2               3
financial statements.                                                 Abroad                               24           8            8              24
                                                                      Total                                28           9          10               27
Companies of minor importance
The GfK Group did not include 31 (2001: 21) companies in the       The consolidated financial accounts as at 31 December 2002
consolidated financial statements during the reporting year        report participations in 27 (2001: 28) associated companies.
because they were only of minor significance for the net assets,   E+G Spain and G+E Spain were classified as associated
financial position and results of operations of the Group.         companies as at 31 December 2001 and have been included
As part of the acquisition of the IFR Group in France, the         since 1 January 2002 in the consolidated financial statements
following companies were added to the GfK Group and are of         as fully consolidated subsidiaries.
minor importance:                                                  During the reporting period the GfK Group acquired participations
• CMI Field SARL, Viroflay, France                                 in m2A S.A., Saint Aubin, France and Indicorp Participações S.A.,
                                                                   São Paolo, Brazil.
• IFR Monitoring Deutschland GmbH, Düsseldorf
                                                                   European Flash Surveys EEIG, Brussels, Belgium, and
• IFR Nederland B.V., Amsterdam, Netherlands                       GfK-Media Research Middle East AG, Hergiswil, Switzerland,
• IFR Polska Sp. z o.o., Warsaw, Poland                            were established.

• IFR U.K. Ltd., London, UK                                        The joint ventures ConsumerSCOPE International GIE,
                                                                   Nuremberg, Germany, Europanel Raw Database GIE, Brussels,
In connection with the splitting of IGG KG and its subsequent      Belgium, Common Technology Centre EEIG, London, UK,
merging into GfK AG, the GfK Group received participations         Media Focus (ARGE), Hergiswil, Switzerland, and V.O.F. Project-
in the companies I+G Gesundheits- und Pharmaforschung Ver-         bureau Politiemonitor, Hilversum, Netherlands, previously not
waltungs-GmbH, Nuremberg, and I+G Infratest Medical Research       treated as Group companies, were reclassified as associated
Inc., Rhode Island, USA. These companies are not operational       companies in line with participation quota.
and therefore are of minor significance for the GfK Group.
                                                                   The participation in Sensory Solutions Pty. Ltd., Castle Hill,
Through the inclusion of the company Metris Portugal, the GfK      Australia, Digital Druck AG, Stans, Switzerland, MMXI Europe
Group obtained a majority holding in CATICALL – RECOLHA DE                                                  y
                                                                   B.V., Amsterdam, Netherlands, and Cesk´ Index s.r.o., Prague,
INFORMAÇÃO ASSISTIDA POR COMPUTADOR, LDA, Lisbon,                  Czech Republic, were sold.
Portugal, which is not consolidated.
The above companies InfoScan Sweden, GfK Belgium, dragon
eye Switzerland, MMXI Switzerland and Prisma Projekt D were
          The holdings in IGG KG and Infratest + GfK Gesundheitsforschung      Miscellaneous income essentially contains income from earlier
          Verwaltungs-GmbH, Berlin, were absorbed in the course of the         periods (EUR 913 thousand) and income from rents and leases
          above merger into GfK AG.                                            (EUR 495 thousand).
          The participation quota in Centrum voor Marketing Analyses           Miscellaneous expenses essentially comprise amortization on
          B.V., Amsterdam, Netherlands (previously Centrum Partners            other intangible assets (EUR 2,572 thousand).
          B.V.) was reduced. The company is now included under other
          participations in the financial statements.
                                                                               2. Net income from participations
          The company Media Monitoring Switzerland AG, Berne,
                                                                               Net income from participations is as follows:
          Switzerland, was liquidated.

                                                                                                                                             2001    2002
          Other participations
                                                                                  Income from participations in affiliated
          During the reporting year, GfK acquired a 4% holding in                 companies                                                   210      55
          Chart-Track Limited, London, UK.                                        Income from participations in associated
                                                                                  companies                                                  5,174   2,846
          Following the reduction of the holding in Centrum voor Marketing
          Analyses B.V., Amsterdam, Netherlands, the company, previously          Profits from the disposal of participations
                                                                                  in associated companies                                       0    3,606
          reported as an associated company, was reclassified and included
          under other participations.                                             Income from other participations                            371       8
                                                                                  Income from participations                                 5,755   6,515
          In the course of acquiring a majority stake in Intercampus
          Portugal, the GfK Group also obtained a holding in 10Nex
          Investigação – Estudos de Mercado LDA, Lisbon, Portugal,                Expenses from loss transfer from affiliated
                                                                                  companies                                                     0      78
          which is reported under other participations.
                                                                                  Depreciation on participations in affiliated and
          The joint venture EUROPEAN OPINION RESEARCH GROUP                       associated companies                                       2,037     35
          EEIG, Brussels, Belgium is now reported under other                     Losses from the disposal of participations in affiliated
          participations.                                                         and associated companies                                      2      24

          As a result, the number of other participations rose by four            Expenses on participations                                 2,039    137
          compared with the end of the previous year to a total of nine.          Net income from participations                             3,716   6,378

          Notes to the consolidated income statement
                                                                               The pro rata income of the I+G Group Germany was reported in
          1. Other income less other expenses                                  2001 within income from participations in associated companies.
                                                                               As at 1 July 2002, the I+G Group was partially merged with GfK,
          Other income and expenses break down as follows:                     and results are now reported under operating income on the
                                                                               income statement. In connection with the splitting of IGG KG,
                                                          2001         2002
                                                                               a book profit of EUR 3,001 thousand arose which is included
                                                                               under profits from the disposal of participations in associated
      Exchange gains                                      3,102        2,166
      Income from deconsolidation                          224          197
      Profits from the disposal of
      tangible and intangible assets                       111          188
      Miscellaneous                                       1,631        2,473
      Other income                                        5,068        5,024

      Exchange losses                                     3,164        4,259
      Expenses from deconsolidation                           0         441
      Losses from the disposal of
      tangible and intangible assets                         81         208
      Amortization of goodwill                            9,940            0
      Miscellaneous                                       6,426        3,743
      Other expenses                                     19,611        8,651
      Other income less other expenses                 – 14,543     – 3,627
                                                                Notes: notes to the consolidated income statement   F I N A N C I A L S TAT E M E N T S

     3. Net interest income                                                      The loss from the disposal of loans to associated companies
                                                                                 amounting to EUR 1,194 thousand relates to the waiving of a
     Net interest income is as follows:
                                                                                 loan in respect of MMXI Europe NL in connection with the sale
                                                                                 of the participation.
                                                        2001          2002
                                                                                 During 2001, realized loss from the reclassification of securities
Interest income from bank balances                      1,341          867       and losses from securities held as current assets included the
Interest income from receivables                         692           500       valuation allowance on a participation in Jupiter Media Metrix
Interest income from other loans                         316           393       Inc., USA amounting to EUR 6,907 thousand. The write-downs on
Interest income from available-for-sale securities        70             15      loans to associated companies related to loans to the bwv Group,
Interest income from affiliated companies                 43             28
Interest income from associated companies                295           373
                                                                                 5. Taxes on income and earnings
Interest income                                        2,757          2,176
                                                                                 The result before income taxes is divided between Germany and
Interest and similar expenses due to banks              1,255         2,885      abroad as follows:
Interest and similar expenses due to others             1,363         1,591
Interest and similar expenses due to affiliated                                                                                                2001         2002
companies                                                  0             29         Germany                                                    4,649      32,444
Interest and similar expenses due to associated                                     Abroad                                                     – 724      12,837
companies                                                 14              0
                                                                                    Result from ongoing business activity                      3,925      45,281
Interest expenses                                      2,632          4,505
Net interest income                                      125        – 2,329

                                                                                 The Group's taxes on income are as follows:

     4. Net other financial income
                                                                                                                                               2001         2002
     Net other financial income breaks down as follows:                             Current taxes
                                                                                    Germany                                                    6,559       4,982
                                                        2001          2002          Abroad                                                     6,968      10,505
Profits from securities                                                                                                                      13,527       15,487
held as current assets                                   359           111
                                                                                    Deferred taxes
Profits from available-for-sale securities               210             12
                                                                                    Germany                                                   –2,762       6,828
Profits from disposal of loans to affiliated
companies                                                  0              3         Abroad                                                     – 550      – 7,038

Realized profit from the reclassification of                                                                                                 – 3,312       – 210
securities                                                 6             14         Taxes on income and earnings                             10,215       15,277
Write-ups on securities                                    5              2
Other financial income                                   580           142
                                                                                 The tax advantage from the utilization of loss carryforwards
                                                                                 during financial year 2002 amounts to EUR 1,079 thousand
Losses from securities held as
current assets                                         5,722          1,331
                                                                                 (2001: EUR 501 thousand). Owing to a new estimate of the
                                                                                 amount of deferred tax assets to be realized, the valuation
Losses from available-for-sale securities                 23             13
                                                                                 allowance for deferred tax assets existing at the start of the
Realized loss from the reclassification of                                       year was reduced, which led to a tax advantage in the amount
securities                                             4,585              0
                                                                                 of EUR 317 thousand (2001: EUR 448 thousand). National
Losses from disposal of loans to associated                                      investment tax credits reduce income tax by EUR 122 thousand
companies                                                  0          1,194
                                                                                 (2001: EUR 0). Adjustments in deferred taxes because of changes
Write-downs on loans to affiliated                                               in the underlying tax rates reduce tax expenses by a further
companies                                                 31              0
                                                                                 EUR 519 thousand (2001: EUR 0).
Write-downs on loans to associated
companies                                              5,893              0      As at 31 December 2002, to calculate the deferred taxes for the
Other financial expenses                              16,254          2,538      German companies with registered offices in Nuremberg a tax
                                                                                 rate of 41.118 % is used for deferred taxes which will probably
Net other financial income                           – 15,674       – 2,396
                                                                                 be reversed in 2003, and a tax rate of 39.824 % is used for the
                                                                                 other deferred taxes. During 2001, a uniform tax rate of 39.824 %
                                                                                 was used to determine the deferred taxes.
          These tax rates comprise corporation tax of 26.5% for the             The deferred taxes result from the following balance sheet items:
          assessment period 2003 and 25% for all other assessment
          periods plus the solidarity surcharge of 5.5% (2001: 5.5%) on
                                                                                                                                                 31.12.2001   31.12.2002
          the corporation tax debt paid as well as the effective trade tax
          rate of 13.160% (2001: 13.449%). The flood victim solidarity             Intangible assets                                                 3,219           3,596
          law ("Flutopfersolidaritätsgesetz") passed in September 2002             Tangible assets                                                     486            613
          caused a one-off rise in the corporation tax rate from 25% to            Financial assets                                                  2,804            210
          26.5% for financial year 2003.                                           Inventories                                                       7,546       14,551
          The deferred taxes of the other German companies and the                 Accounts receivable and other assets                                570            465
          foreign companies are calculated at the respective specific tax          Prepaid expenses                                                      5              6
                                                                                   Provisions                                                        2,371           3,803
          The following table contains a reconciliation of the anticipated         Liabilities                                                      10,744       10,031
          income tax expense to the income tax expense stated in financial         Deferred income                                                     181            122
          year 2002. To calculate the anticipated tax expenses, the total tax
                                                                                   Loss carryforwards and tax credits                                6,684           6,232
          rate valid during the financial year is multiplied by the pre-tax
          result.                                                                  Deferred tax assets before valuation allowance                   34,610       39,629
                                                                                   Valuation allowance                                              – 1,916      – 1,691
                                                                                   Deferred tax assets                                              32,694       37,938
102                                                                    2002
      Total tax rate                                               39.824 %
                                                                                   Intangible assets                                                – 1,877      – 3,774
      Expected income tax                                            18,033
                                                                                   Tangible assets                                                 – 9,580       – 9,069
      Increase/reduction in income tax debt resulting from
          differences in tax rates                                   – 2,631       Financial assets                                                – 2,547           – 416
         income from participations valued at equity,                              Inventories                                                       – 111           – 110
         not eligible for tax                                         – 451
                                                                                   Accounts receivable and other assets                           – 10,737      – 17,082
         adjustment of deferred taxes owing to changes
                                                                                   Prepaid expenses                                                   – 82            – 78
         in tax rate                                                  – 519
                                                                                   Special reserve item                                               – 75              0
         adjustment to tax charge in respect of previous periods        667
                                                                                   Provisions                                                       – 1,699      – 1,155
         deviating tax base                                             441
                                                                                   Liabilities                                                      – 1,949      – 2,576
         national investment tax credits                              – 122
                                                                                   Deferred income                                                   – 228           – 358
         tax-exempt income from the disposal of participations       – 1,652
                                                                                   Deferred tax liabilities                                       – 28,885     – 34,618
         other tax-exempt income                                      – 817
         other non-deductible expenses                                2,446
                                                                                   Net deferred tax assets (liabilities)                             3,809           3,320
         other                                                        – 118
      Tax expenses reported                                          15,277

                                                                                After netting out, the deferred taxes are reported in the balance
                                                                                sheet as follows:
          During the previous year, the stated tax expenses of
          EUR 10,215 thousand exceeded the expected income tax of
          EUR 1,563 thousand by EUR 8,652 thousand. The difference                                                          31.12.2001                  31.12.2002
          resulted essentially from non-deductible amortization on                                                                   of which                   of which
          participation book values (EUR 3,139 thousand) and on goodwill                                                   Total   long-term          Total   long-term
          (EUR 3,612 thousand) as well as on other non-deductible                  Deferred tax assets                     9,075         4,210        9,324          5,097
          expenses (EUR 2,722 thousand) and differences in tax rates
                                                                                   Deferred tax liabilities             – 5,266      – 2,542        – 6,004      – 4,084
          (EUR -596 thousand).
                                                                                   Net deferred tax assets
                                                                                   (liabilities)                           3,809         1,668        3,320          1,013

                                                                                The total income tax expenses in shareholders’ equity are as follows:

                                                                                                                                                      2001           2002
                                                                                   Tax expenses reported                                            10,215       15,277
                                                                                   Tax expenses contained in income due to changes
                                                                                   in accounting and valuation methods                                  90              0
                                                                                   Tax expenses on components of
                                                                                   other comprehensive income                                        1,700            216
                                                                                   Total income tax expenses in shareholders’ equity                12,005       15,493
                                                                              Notes: notes to the consolidated balance sheet   F I N A N C I A L S TAT E M E N T S

     As at 31 December 2002 the Group has domestic tax loss                                7. Intangible assets
     carryforwards amounting to EUR 2,386 thousand (2001: EUR
     2,220 thousand) and foreign tax loss carryforwards of EUR                             Software
     15,875 thousand (2001: EUR 16,292 thousand). The domestic
                                                                                           Software breaks down as follows:
     loss carryforwards can be carried forward without restriction in
     terms of date and amount. Among the foreign loss carryforwards,
     the amount of EUR 9,663 thousand may be carried forward                                                                                            31.12.2001      31.12.2002
     without limit and the amount of EUR 4,383 thousand is available                           Software as per SFAS 86                                         2,249        1,985
     for carryforward until 2013.
                                                                                               Software as per SOP 98-1                                        17,502      17,502
     The estimate of their future realizability governs the valuation                          Other software                                                   3,174       6,617
     of deferred tax assets. This is dependent on the creation of                              Software                                                     22,925         26,104
     future taxable profits during accounting periods in which tax
     valuation differences are reversed and tax loss carryforwards
     can be applied. In view of the past results of the Group
                                                                                           SFAS 86 applies to software which is to be sold, leased or
     companies and the expectations for the future, it is assumed
                                                                                           otherwise marketed. SOP 98-1 applies to software specifically
     more likely than not that the relevant benefits of the recognized
                                                                                           developed for internal use. The item other software contains
     deferred tax assets will be realized – according to the provisions
                                                                                           standard software for internal use.
     of US GAAP. For the portion of deferred tax assets not covered
     by these assumptions, a corresponding valuation allowance                             The anticipated amortization expenses for software during the                             103
     amounting to EUR 1,691 thousand (2001: EUR 1,917 thousand)                            coming five financial years are shown below:
     was applied. The EUR 226 thousand reduction in the valuation
     allowance on deferred tax assets is essentially due to the new
                                                                                               Expected amortization expenses
     estimate of realizability for the deferred tax assets and to changes
     in the scope of consolidation.                                                            2003                                                                         6,302
                                                                                               2004                                                                         5,380
     Deferred tax liabilities on retained earnings of foreign subsidiaries
                                                                                               2005                                                                         3,767
     are not included in the balance sheet because these earnings are
     intended to remain permanently invested.                                                  2006                                                                         1,918
                                                                                               2007                                                                         1,477

     6. Earnings per share

                                                                  2001                     Goodwill
                                                    2001    Pro forma1)          2002
                                                                                           An impairment test is carried out in accordance with
Consolidated total income                        – 4,741          5,651        25,673      SFAS 142 each year to determine the extent to which there
Number of shares outstanding                                                               is an extraordinary amortization requirement for existing
– non-diluted –                              26,121,998     26,121,998     26,121,998      goodwill. No requirements for amortization resulted from the
Number of shares outstanding                                                               impairment test for 2002 or from that for the transition to SFAS 144.
– diluted –                                  26,121,998     26,121,998     26,121,998
                                                                                           The amortization of goodwill during financial year 2001
Earnings per share in EUR                          – 0.18          0.22           0.98
                                                                                           amounted to EUR 10,392 thousand. The following tables show
Earnings per share (diluted) in EUR                – 0.18          0.22           0.98
                                                                                           the result from ongoing business activity and the consolidated
1) The column “2001 Pro forma” contains the theoretical values, applying SFAS 142 from     total income as if the provisions of SFAS 142 had already come
   1 January 2001 onwards.                                                                 into effect on 1 January 2001.

     Notes to the consolidated balance sheet                                                   Result from ongoing business activity                                        3,925
     A breakdown of the fixed assets and their development during                              Scheduled amortization of goodwill from capital consolidation                9,693
     the reporting period is given in the fixed assets schedule.                               Scheduled amortization of goodwill within equity valuation                     699
                                                                                               Adjusted result from ongoing business activity                              14,317

                                                                                               Consolidated total income                                                   – 4,741
                                                                                               Scheduled amortization of goodwill from capital consolidation                9,693
                                                                                               Scheduled amortization of goodwill within equity valuation                     699
                                                                                               Adjusted consolidated total income                                           5,651
                                                                                               Adjusted earnings per share in EUR                                            0.22
      Consolidated fixed assets schedule in EUR’000

                                        Acquisition and manufacturing costs

                                           Brought                  in scope
                                         forward to   Currency    of consoli-                           Reclassifi-       Equity       As at
                                           1.1.2002     effects       dation    Additions   Disposals      cations    adjustment   31.12.2002

      I. Intangible

      1. Software                          46,644     – 1,164           413       8,838       2,197        1,385                    53,919
      2. Goodwill                         128,856       – 183       37,317       14,204       2,999                                177,195
      3. Other intangible assets           13,326     –1,347         – 128          898         717      – 1,393                    10,639
                                          188,826     – 2,694       37,602       23,940       5,913           –8                   241,753

      II. Tangible assets

      1. Land, land rights and
         buildings, including
         buildings on land owned
         by third parties                  30,240         100           139       1,594         188                                  31,885
104   2. Other equipment,
         fixtures and fittings            112,807     – 1,161        5,416       17,457      11,849            84                  122,754
      3. Leased items                      26,349        – 27           943         965         712          – 76                    27,442
                                          169,396     – 1,088        6,498       20,016      12,749              8                 182,081

      III. Financial assets

      1. Shares in affiliated
         companies                          1,384            3        1,934       2,905       1,004                                   5,222
      2. Loans to affiliated
         companies                            181          –2                       100           79                                    200
      3. Participations in associated
         companies                         18,529     – 1,270      – 4,922        2,835         962        – 389           702      14,523
      4. Loans to associated
         companies                          9,794       – 121                       837       4,199                                   6,311
      5. Other participations               1,638          –4              2        118                       389                     2,143
      6. Available-for-sale
         securities                         1,042            3           21           40        353                                     753
      7. Other loans                        9,575            7           87           18        819                                   8,868
                                           42,143     – 1,384      – 2,878        6,853       7,416                        702      38,020
                                          400,365     – 5,166       41,222       50,809      26,078                        702     461,854
                                                           Notes: consolidated fixed assets schedule     F I N A N C I A L S TAT E M E N T S

Cumulative depreciation/amortization                                                                                Book values

     Brought                  in scope
   forward to   Currency    of consoli-                                           Reclassi-            As at
     1.1.2002     effects       dation    Additions   Disposals    Write-ups       fications    31.12.2002             31.12.2002    31.12.2001

     23,719       – 369           487       6,084       2,104                           –2        27,815                 26,104        22,925
    44,672         – 62          – 56                   2,999                                     41,555               135,640         84,184
      8,229     – 1,115          – 30       2,911         660                                      9,335                  1,304         5,097
    76,620      – 1,546           401       8,995       5,763                           –2        78,705               163,048       112,206

      8,732          45              6        796         188                                      9,391                 22,494        21,508
    85,248        – 743        3,390       12,707      10,488          – 18             78        90,174                 32,580        27,559
     11,308          –9           217       1,876         518                         – 76        12,798                 14,644        15,041
   105,288        – 707        3,613       15,379      11,194          – 18               2     112,363                  69,718        64,108

      1,029            3          595         495         950                                      1,172                  4,050           355

          75         –1                                     43         – 12                             19                  181           106

        303            3                                  301            –5                                              14,523        18,226

      7,081          95                                 2,943                                      4,233                  2,078         2,713
      1,520                                                                                        1,520                    623           118

         –3                                     13        – 26                                          36                  717         1,045
      – 130                                             – 130                                                             8,868         9,705
      9,875         100           595         508       4,081          – 17                        6,980                 31,040        32,268
   191,783      – 2,153        4,609       24,882      21,038          – 35                     198,048                263,806       208,582
          Other intangible assets
          Other intangible assets are as follows:
                                                                                   2003                                                           15,383
                                                                                   2004                                                           12,519
                                                      31.12.2001   31.12.2002      2005                                                            8,608
      Other intangible assets                             3,683          937       2006                                                            6,471
      Payments on account for                                                      2007                                                            5,439
      intangible assets                                   1,414          367
                                                                                   Subsequent years                                               30,052
      Other intangible assets                             5,097        1,304
                                                                                   Future minimum lease payments under operating leases           78,472

          The expected amortization expenses for other intangible assets
          within the next five financial years are as follows:
                                                                                b) Capital lease
                                                                                The capitalized leased assets consist of buildings and tangible
      Expected amortization expenses
                                                                                fixed assets amounting to EUR 27,442 thousand (2001: EUR
      2003                                                               275    26,349 thousand). Net of cumulative depreciation, the resultant
      2004                                                               200    book value is EUR 14,644 thousand (2001: EUR 15,041 thousand).
106   2005                                                               163    The future minimum lease payments under such agreements are
      2006                                                               132    due as follows as at 31 December 2002:
      2007                                                               132

                                                                                   2003                                                            3,114
          8. Tangible assets                                                       2004                                                            1,782
                                                                                   2005                                                            1,453
          Leasing                                                                  2006                                                            1,339
          The GfK Group leases office premises and business equipment              2007                                                            1,269
          under long-term lease agreements. As a rule, the lease payments          Subsequent years                                               13,158
          consist of a minimum lease payment plus a contingent lease
                                                                                   Future minimum lease payments under capital leases             22,115
          payment whose level is governed by the level of use of the leased
                                                                                   Less: incidental costs                                           – 27
          assets. In cases in which the GfK Group substantially bears
          the risks and opportunities arising from the use of the leased           Less: interest expenses                                        – 6,328
          assets, these are capitalized (capital lease). Otherwise the lease       Liabilities under capital leases                               15,760
          payments are carried as an expense (operating lease). There are
          no significant sub-leases.
                                                                                In April 1992, GfK AG entered into a sale-and-leaseback
                                                                                agreement for part of the office building at Nordwestring 101,
          a) Operating leases
                                                                                Nuremberg, which qualifies as a capital lease. The lease was
          The following payments under operating lease agreements were          concluded for 30 years with an original obligation amounting to
          carried as expenses:                                                  EUR 13,012 thousand. The lease agreement can be terminated
                                                                                from March 2012 onwards with the option to acquire the
                                                                                building for EUR 7,533 thousand. If the lease continued over
                                                           2001         2002
                                                                                the remaining 10 years, the purchase value in March 2022 would
      Minimum lease payment                              11,455       16,129    amount to EUR 5,028 thousand.
      Contingent lease payment                              268          544
                                                                                The capital lease liability is EUR 15,760 thousand (2001:
      Less sub-lease payments received                     – 50        – 157    EUR 16,282 thousand) of which EUR 2,305 thousand (2001:
      Less payments                                      11,673       16,516    EUR 1,852 thousand) has a remaining term of under one year.

                                                                                9. Financial assets
          The future minimum lease payments arising from such
          agreements are due as follows as at 31 December 2002:                 The composition and development of the financial assets is
                                                                                shown in the Consolidated Fixed Assets Schedule. Further
                                                                                information on the GfK Group's participations in affiliated and
                                                                                associated companies and other participations is provided in
                                                                                the list of shareholdings of the GfK Group.
                                                                                The following table shows the annual results for the main
                                                                                companies in the GfK Group:
                                                                       Notes: notes to the consolidated balance sheet      F I N A N C I A L S TAT E M E N T S

                                                                                     The profits realized from the reclassification of available-for-sale
Company name and registered office                      Net income for the year      securities as current assets amount to EUR 14 thousand (2001:
EMER GfK, S.L., Valencia, Spain                                             642      EUR 6 thousand) for financial year 2002, with no losses (2001:
FESSEL-GfK Institut für Marktforschung                                               EUR 4,585 thousand).
Ges.m.b.H., Vienna, Austria                                                 578
                                                                                     Realized profits and losses are valued and determined separately
GfK Asia Pte Ltd., Singapore, Singapore                                   – 133
                                                                                     for each security.
ITALY S.p.A., Milan, Italy                                               – 1,632
GfK Custom Research Inc., Minneapolis, USA                                – 194
                                                                                     10. Trade receivables
GfK Danmark A/S, Frederiksberg, Denmark                                      40
GfK Marketing Services GmbH & Co. KG, Nuremberg                           5,136                                                                  31.12.2001      31.12.2002

GfK Marketing Services Japan Ltd., Tokyo, Japan                            1,149        Invoiced trade receivables,
                                                                                        in respect of
GfK Marketing Services Ltd., West Byfleet, Surrey, UK                     2,419
                                                                                            third parties                                          104,667         106,927
GfK Marketing Services S.A., Rueil-Malmaison, France                      1,791
                                                                                            affiliated companies                                       106             814
GfK Panelservices Benelux B.V., Dongen, Netherlands                        1,126
                                                                                            associated companies                                      5,478          2,217
GfK Polonia Instytut Badania Opinii Sp. z o.o,
Warsaw, Poland                                                              390             other participations                                        72               0

GfK Sofema International SARL, Rueil-Malmaison, France                      790                                                                    110,323         109,958    107
GfK Sverige AB, Lund, Sweden                                              – 691         Receivables from long-term contracts
                                                                                        not yet invoiced
IHA·IMS Health GmbH, Hergiswil, Switzerland                               4,541
                                                                                            to third parties                                         15,123         15,629
IHA-GfK AG, Hergiswil, Switzerland                                        5,500
                                                                                                                                                   125,446         125,587
Institut de Sondage Lavialle (ISL) S.A.,
Issy les Moulineaux, France                                                 370         Less: valuation allowance                                   – 3,677         – 6,251

Intomart B.V., Hilversum, Netherlands                                       279         Trade receivables                                          121,769         119,336

Martin Hamblin GfK Limited, London, UK                                   – 1,383
Martin Hamblin Research Inc., Hartford, Connecticut, USA                    559
                                                                                     Of the trade receivables, an amount of EUR 57 thousand
Media Markt Analysen GmbH & Co. KG, Frankfurt/Main                          335
                                                                                     (2001: EUR 207 thousand) has a remaining term of over one

    Loans                                                                            11. Other receivables and assets
    Loans to affiliated and associated companies include value-
    adjusted loans with a disbursed amount of EUR 5,165 thousand                                                                                 31.12.2001      31.12.2002
    (2001: EUR 7,226 thousand). The accumulated write-downs on
                                                                                        Tax receivables                                               3,825          5,133
    these loans amount to EUR 4,252 thousand (2001: EUR 7,157
                                                                                        Amounts owed
                                                                                        by related parties                                             286           3,333
                                                                                        Guarantee deposits                                            1,147          1,324
    Securities                                                                          Accounts receivable from reinsurance                          1,216            787
    The following table shows an overview of the acquisition costs,                     Credit balances with suppliers                                 420             420
    fair value and unrealized profits of the portfolio of available-for-                Other amounts owed by affiliated
    sale securities:                                                                    companies                                                      984             660
                                                                                        Other amounts owed by associated
                                                                                        companies                                                      739           2,363
Debt securities                                          31.12.2001   31.12.2002
                                                                                        Other assets                                                  3,310          3,904
Acquisition costs                                            1,042          753
                                                                                                                                                     11,927         17,924
Fair value                                                   1,045          717
                                                                                        Less: valuation allowance                                   – 1,011         – 1,573
Unrealized profit                                                9            0
                                                                                        Other receivables and assets                                10,916          16,351

    The debt securities held in the portfolio at the end of the year                 Of the other receivables and assets, an amount of EUR 2,709
    have a remaining term of over one year.                                          thousand (2001: EUR 3,448 thousand) has a remaining term of
    The proceeds from the sale of available-for-sale securities                      over one year.
    for financial year 2002 amount to EUR 83 thousand (2001:                         Other assets essentially comprise amounts owed by employees,
    EUR 1,043 thousand).                                                             balances and prepayments as well as claims to refunds.
           12. Valuation allowances                                              issuing up to 2,000,000 new no-par bearer shares. At the Extra-
                                                                                 ordinary General Meeting of 3 September 1999, a resolution was
           Valuation allowances developed as follows:
                                                                                 passed to relate profit entitlement to the start of the financial year
                                                                                 in which options are exercised. The aim of the contingent capital
                                                                        Other    increase is to grant option rights to the senior management team
                                                  Trade           receivables    of the company and its affiliated companies in terms of §§ 15
                                            receivables            and assets
                                                                                 et seq. of the German Stock Corporation Act. The prerequisite
      As at 31.12.2000                           2,385                     8     for acquiring option rights is the achievement of a minimum
      Changes in the scope of                                                    target, to be agreed with each individual entitled person, for
      consolidation                                185                   983     their immediate area of responsibility. The number of options
      Additions                                  1,677                    26     available to each entitled person is based on the variable salary
      Utilization                                – 319                    –6     component advised to each entitled person in an individual letter.
      Release                                    – 269                     0
                                                                                 By waiving a portion of the promised bonus in the ratio of 1:2.5,
                                                                                 this component can be replaced by options or paid out as a bonus.
      Currency difference                           18                     0
                                                                                 The number of options for the first five tranches (2000/2005,
      As at 31.12.2001                           3,677                  1,011    2001/2006, 2002/2007, 2003/2008, 2004/2009) results from
                                                                                 division by a factor of 4.5. The option rights of the 2000/2005
      Changes in the scope of                                                    tranche have a term until 31 December 2005, and options not
      consolidation                                422                     0     exercised will lapse. The option right can be exercised at the
108                                                                              earliest two years after issue and only within the defined exercise
      Additions                                  3,053                   563
      Utilization                                – 301                     0
                                                                                 windows. The exercise price is 120 % of the average price of
                                                                                 GfK shares in the Xetra closing auction on the five trading days
      Release                                    – 573                     0
                                                                                 prior to the issue of the option rights, or 120 % of the price of
      Currency difference                         – 27                    –1     GfK shares in the Xetra closing auction on the date of issue if this
      As at 31.12.2002                           6,251                  1,573    is higher than the aforementioned average price.
                                                                                 In June 2002, the shareholders consented to cancel the
                                                                                 existing authorization to grant option rights and approved a new
           13. Securities                                                        authorization and an adjustment of the contingent capital.
           The trading securities reported under current assets had a fair       The contingent capital so far permitted which amounts to EUR
           value of EUR 7,350 thousand (2001: EUR 8,054 thousand) after          2,000 thousand is insufficient to service all the options which
           acquisition costs of EUR 8,234 thousand (2001: EUR 16,590 thou-       can be issued based on the authorization of the General Meeting
           sand).                                                                dated 3 September 1999 and 13 June 2002. The subscribed
                                                                                 capital is therefore being increased by using up the permissible
                                                                                 maximum amount by a further EUR 1,567,229.44 by issuing up
           14. Prepaid expenses
                                                                                 to 612,199 no-par bearer shares (contingent capital II). The
           Prepaid expenses include prepaid pension costs in the amount of       shares are being issued to the holders of option rights based
           EUR 79 thousand (2001: EUR 0).                                        on the resolutions of the company dated 3 September 1999 and
                                                                                 13 June 2002.
           15. Shareholders’ equity                                              The new option terms deviate from those of the first programme
                                                                                 as follows:
           Subscribed capital
                                                                                 – Members of the Management Board of GfK AG may hold a
           As at 31 December 2002, the subscribed capital of GfK Aktien-           maximum of 30% of the option rights being granted.
           gesellschaft remains unchanged at EUR 66,872 thousand. The
                                                                                 – Options may not be exercised during the 14 days before
           subscribed capital is divided into 26,121,998 no-par bearer
                                                                                   publication of quarterly, half-yearly, annual or provisional
           shares. Each share represents a portion of the subscribed capital
                                                                                   annual figures. In addition, the company may set further
           equivalent to EUR 2.56. GfK Aktiengesellschaft does not hold
                                                                                   periods at its discretion during which options may not be
           any of its own shares. As the main shareholder, GfK-NÜRNBERG
                                                                                   exercised. For each of the tranches to be issued the exercise
           Gesellschaft für Konsum-, Markt- und Absatzforschung e.V.,
                                                                                   price to acquire a share is the share's average Xetra price
           Berlin, holds 64% of the shares.
                                                                                   between the respective previous accounts press conference
                                                                                   and the General Meeting or if it is higher, the price of the
           Authorized and contingent capital                                       share in the Xetra closing auction on the trading day on which
                                                                                   the respective tranche is issued, plus a premium of 5 %.
           The Management Board is authorized, subject to the approval of
                                                                                   Trading days are those days on which the Frankfurt stock
           the Supervisory Board, to increase the company’s subscribed
                                                                                   exchange determines a price for the company's shares.
           capital on one or more occasions up to 12 June 2007, by issuing
           new no-par shares in return for cash or non-cash contributions        The application of the new option terms has been resolved for
           up to a maximum amount of EUR 21,000 thousand.                        tranche 3 (issue and exercise) and for all subsequent tranches.
           In June 1999, the shareholders passed a resolution for a contingent
           increase in the subscribed capital of EUR 5,120 thousand by
                                                                                    Notes: notes to the consolidated balance sheet          F I N A N C I A L S TAT E M E N T S

     Stock Options                                                                                Fair Value information
                                                                                                  If the accounts were drawn up according to SFAS 123 “Accounting
                                       Of which Exercise                                          for Stock Based Compensation”, the fair value would be used in
Tranche         Term        Total      Manage-     price             Exercisable      Options
                          options    ment Board  in EUR           from        to    exercised
                                                                                                  valuing the stock options.
1         2000/2005      389,165         76,512      55.20      20021)   20051)            –      The fair value of the stock options issued by GfK during 2000,
                                                                                                  2001 and 2002 has been calculated at the date of granting the
2         2001/2006      375,725         85,215      41.71      20031)   20061)            –
                                                                                                  options on the basis of a Black-Scholes option price model, taking
3         2002/2007     380,300          85,215      24.14      20042)   20072)            –
                                                                                                  into account the conditions of issue. The parameters used in
4         2003/2008     518,8393)      149,9993)         TBA    20052)   20082)            –      determining the fair value and the totals based on these were as
5         2004/2009     448,8624)      133,3324)         TBA    20062)   20092)            –      follows:
1) Exercise of options commences after the General Meeting. Options may be exercised
   during the following periods: from the third trading day on the Frankfurt stock exchange          Tranche                                                  1            2              3
   after the General Meeting of GfK AG until 30 June (inclusive) and from the first day              Implicit volatility on date of issue                 33 %         39 %          39 %
   after publication of the half-yearly figures until 30 September (inclusive) and from the
   first day after publication of Q3 figures until 14 days before the financial year ends (in-       Risk-free investment interest1)                     5.2 %        4.8 %         4.7 %
   clusive).                                                                                         Term in years                                         5.58         5.59          5.55
2) Exercise of options commences after the General Meeting. Options may not be exercised
   during the 14 days before publication of quarterly, half-yearly, annual or preliminary            Fair value per option in EUR                         16.42        12.92           7.63
   annual figures. The company may set further periods during which options may not be               Total value per programme                            6,390        4,854         2,902
3) Subscribed, entitlement to options does not yet exist, options not yet issued, seven              1) Yields on German public sector bearer bonds outstanding with average remaining terms
   Management Board members were entitled to subscribe.                                                 of over five to six years inclusive.
4) Subscribed, entitlement to options does not yet exist, options not yet issued.

                                                                                                  The average weighted remaining term of the stock options as at
     The development of the stock options issued has been as                                      31 December 2002 was four years (2001: 4.5 years).
                                                                                                  Supplementary disclosures (valuation at fair value as at 31
                                2001                                     2002                     December 2002)
                                            Average                                  Average
                                            exercise                                 exercise     The following table shows the parameters and totals of the three
                       Number of               price           Number of                price     issued tranches when valued at the 2002 year-end:
                         Options       in EUR/share              Options        in EUR/share
Balance at
start of year            389,165                55.20            764,890               48.57         Tranche                                                  1            2              3

Options                                                                                              Implicit volatility on closing date                  41 %         41 %          41 %
granted                  375,725                41.71            380,300               24.14         Risk-free investment interest1)                     3.2 %        3.4 %         3.7 %
Exercised                        –                   –                   –                 –         Term in years                                            3            4              5
Expired                         –                    –                   –                 –         Fair value per option in EUR                          0.18         0.80          2.80
Repayments                       –                   –                   –                 –         Total value per programme                               70          302         1,065
Balance at
                                                                                                     1) Swap rates with identical maturities.
year-end                 764,890                48.57           1,145,190              40.46
at year-end                     _                    _           389,165               55.20      As at the reporting date of 31 December 2002, the option value
                                                                                                  is calculated taking into account the remaining terms of the
                                                                                                  individual tranches. Market rates as at the balance sheet date of
     During financial year 2002, the Stock Options Programme                                      31 December 2002 were used for the parameters.
     involved no personnel expenses.
                                                                                                  Other comprehensive income
                                                                                                  The changes in other comprehensive income are as follows:

                                                                                                                              2001                                     2002
                                                                                                            Before             Tax                      Before          Tax
                                                                                                               tax           effect             Net        tax        effect           Net
Unrealized profits/losses from market valuation of available-for-sale securities:
   Change in unrealized profits/losses                                                                           30            –6                24         –9            2             –7
    Realized profits/losses owing to reclassification                                                        4,579         – 1,795           2,784         – 14           5             –9
    Differences from currency conversion                                                                       – 12              0              –12         –9            0             –9
Total unrealized profits/losses from available-for-sale securities                                           4,597         – 1,801           2,796         – 32           7           – 25
Difference from pension valuation                                                                              – 56             22              – 34        56         – 22             34
Difference from currency translation: capital consolidation and equity valuation                               650              80              730     – 2,422       – 201        – 2,623
Change in other comprehensive income                                                                         5,191         – 1,699           3,492      – 2,398       – 216        – 2,614
           Proposed appropriation of profits                                       The following table shows the development of plan
           In accordance with the German Stock Corporation Act, the
           dividend that may be distributed is determined by the retained
           profit reported in the annual financial statements of GfK AG                                                  2001                   2002
           prepared under the provisions of the German Commercial Code                                            Germany       Abroad   Germany     Abroad
           (HGB). A proposal will be made to the General Meeting to                   Fair value of plan assets
           distribute a dividend of EUR 5,224 thousand (EUR 0.20 per                  as at 01.01.                      –         530         34          547
           no-par share) to the shareholders out of the retained profit for           Price differences                 –            –          –        – 37
           2002 of EUR 32,930 thousand.                                               Actual return
                                                                                      on plan assets                 – 12           2         –3            1

           16. Provisions                                                             Currency effects                  –         – 45          –           –
                                                                                      Employer contributions           46          78        368           73
           The provisions are broken down as follows:
                                                                                      Participant contributions         –            –         5            –
                                                                                      Benefits paid                     –         – 18          –        – 20
                                       31.12.2001               31.12.2002
                                                                                      Settlements                       –            –          –        – 78
                                      Total     > 1 year      Total     > 1 year
                                                                                      Fair value of
      Provisions for
                                                                                      plan assets as at 31.12.         34         547        404          486
      pensions                       17,478      16,252      19,235      17,939
      Provisions for taxes            4,525           –       5,788         607
      Other provisions               39,942       5,209      44,613       4,356
                                                                                   The following table shows the reconciliation from the financing
      Provisions                     61,945      21,461      69,636      22,902
                                                                                   status of the plan assets to the amounts stated in the consolidated
                                                                                   balance sheet:

           Provisions for pensions                                                                                       2001                   2002
                                                                                                                  Germany       Abroad   Germany     Abroad
           The following tables provide more detailed information about the
           GfK Group’s pension plans.                                                 Extent to which the
                                                                                      pension plan is financed     20,716         946      18,689        1,126
           The projected benefit obligation (PBO) has developed as follows:           Unrealized
                                                                                      gains/losses                 – 4,067       – 110      – 519        – 84
                                        2001                      2002
                                 Germany         Abroad    Germany     Abroad         Non-amortized
                                                                                      amount from initial
      Projected benefit                                                               application of SFAS 87
      obligation                                                                      or SFAS 106                      13         – 76        11         – 67
      as at 01.01.                   14,651       1,289      20,750       1,493
                                                                                      Net figure
      Price differences                   –       – 104           –        – 93       reported                     16,662         760      18,181         975
      Service costs                    351          165       1,098         200
      Interest costs                   803           41       1,096          46       Included in the
                                                                                      balance sheet
      gains/losses                    4,305         117      –3,299        – 13       Prepaid pension costs             –            –       – 79           –

      Benefits paid                   – 518        – 90       – 552        – 97       Pension provision            16,718         760      18,260         975

      Plan amendments                 1,226          75           –          76       Minimum pension
                                                                                      liability in other
      Settlements                      – 68           –           –           –       comprehensive income           – 56            –          –           –
      Projected                                                                       Net figure
      benefit obligation                                                              reported                     16,662         760      18,181         975
      as at 31.12.                   20,750       1,493      19,093       1,612
                                                                     Notes: notes to the consolidated balance sheet      F I N A N C I A L S TAT E M E N T S

     The following values result for pension plans in which the                    concerned. The basis of assessment for contributions to such
     accumulated benefit obligation (ABO) exceeds the fair value of                plans is mainly the length of service with the company and the
     the plan assets:                                                              wage or salary level of the employee. The pension expenses of
                                                                                   defined contribution plans were EUR 3,758 thousand (2001:
                                        2001                    2002               EUR 3,885 thousand) in financial year 2002.
                                 Germany       Abroad    Germany     Abroad
Accumulated benefit                                                                Other provisions
Obligation (ABO)                  13,268        1,086      15,846       1,182
Fair value of plan assets                                                          The breakdown of other provisions is as follows:
at the end of the reporting
period                                34         547          404        486
                                                                                                                                               31.12.2001      31.12.2002
                                                                                      Personnel                                                   25,018          29,821
     The assumptions regarding the discount rate and compensation                     Sales                                                         2,308          3,515
     trends as well as long-term return on the plan assets used to                    Invoices outstanding                                          2,515          1,838
     calculate the PBO vary depending on the general economic
                                                                                      External accounting and auditing costs                        1,720          1,704
     conditions of the country for which the pension plan has been set
                                                                                      Anticipated losses on pending transactions                     304           1,275
     up. The actuarial calculation of value is based on the following
     assumptions (weighted averages):                                                 Miscellaneous                                                 8,077          6,460
                                                                                      Other provisions                                            39,942          44,613    111

                                                             2001       2002
Discount rate                                               5.8 %      5.6 %       The provisions for employees comprise mainly commitments for
Expected long-term return                                                          the payment of bonuses, holiday arrears, flexitime balances,
on plan assets                                              0.5 %      2.6 %       anniversary expenses and severance payments.
Long-term compensation increase                         0 % to 9 %     5.1 %
                                                                                   Miscellaneous other provisions mainly comprise amounts owed
                                                                                   to insurance companies (EUR 1,525 thousand), obligations to
                                                                                   households, survey respondents and interviewers (EUR 1,789
     The period-related net pension expenses for financial years 2001
                                                                                   thousand), compensation risks (EUR 564 thousand) and financial
     and 2002 contain the following items:
                                                                                   obligations (EUR 544 thousand).

Components of                           2001                    2002
pension expenses                 Germany       Abroad    Germany     Abroad        17. Financial liabilities
Service cost (present                                                              Financial liabilities are as follows:
value of entitlements acquired
during financial year)               351         166        1.098        166
Interest cost                        803          41        1.096         32                                                                   31.12.2001      31.12.2002

Expected return                                                                       Amounts due to banks                                        14,362          24,221
on plan assets                        –3         – 11          –2         –3          Liabilities under capital leases                              1,852          2,305
Amortization of                                                                       Bills of exchange payable                                         0          2,013
amounts from initial
application of SFAS 87                                                                Other financial liabilities                                 12,257           5,503
or SFAS 106                           –1            4          –1           4         Short-term liabilities with a term
Realized gains                                                                        of up to 1 year                                             28,471          34,042
and losses                             0           0          176           9
Pension expenses (net)              1,150        200        2,367        208          Amounts due to banks                                        10,464          22,923
                                                                                      of which with a remaining term of over 5 years                  (0)         (4,688)
                                                                                      Liabilities under capital leases                            14,430          13,455
     Defined contribution plans                                                       of which with a remaining term of over 5 years             (11,174)        (10,380)

     Some companies within the GfK Group offer their staff defined                    Other financial liabilities                                       0          2,462
     contribution plans. The concrete benefits can vary depending on                  of which with a remaining term of over 5 years                  (0)         (1,658)
     the legal, tax and economic framework conditions of the country                  Long-term liabilities with a term
                                                                                      of over 1 year                                              24,894          38,840
                                                                                      Financial liabilities                                       53,365          72,882
      Other financial liabilities contain loan liabilities totalling EUR                               18. Trade payables
      3,605 thousand (2001: EUR 0) as at 31 December 2002, of which
                                                                                                       Trade payables are as follows:
      EUR 3,502 thousand (2001: EUR 0) concerning related parties.
      Liabilities from the acquisition of participations stood at EUR
      3,819 thousand (2001: EUR 12,257 thousand) as at 31 December                                                                           31.12.2001                  31.12.2002
                                                                                                                                                      Remaining                 Remaining
      2002, of which EUR 344 thousand was in respect of associated                                                                          Total term > 1 year       Total term > 1 year
      companies and EUR 2,411 thousand (2001: EUR 12,257 thousand)
      in respect of other related parties.                                                                payables
      As at 31 December 2002, the weighted average interest rate for                                          owed to third parties       32,127           1,603    35,326            413
      amounts due to banks was 4.01% (2001: 4.22%).                                                           owed to affiliated
                                                                                                              companies                        13             –        734              –
      The financial liabilities become due in the next five years and
      thereafter as follows:                                                                                  owed to associated
                                                                                                              companies                     1,076             –        240              –
                                                                                                              owed to other
                                                                                                              participations                   13             –         18              –
      20031)                                                                              34,042          Trade
                                                                                                          payables                        33,229           1,603    36,318            413
      2004                                                                                  8,769
112   2005                                                                                 6,979
      2006                                                                                  4,138
      2007                                                                                 2,228       19. Other liabilities
      Subsequent years                                                                    16,726       The other liabilities comprise the following:
      Financial liabilities                                                               72,882

      1) Contains current account liabilities payable on demand in the context of credit lines
                                                                                                                                                                   31.12.2001   31.12.2002
                                                                                                          Tax liabilities                                             12,379       15,502
      As at 31 December 2002, the GfK Group had confirmed credit                                          Wages and salaries                                           1,936        1,928
      lines of EUR 115,379 thousand (2001: EUR 118,171 thousand),                                         Liabilities in connection with social security               4,955        5,651
      of which EUR 82,560 thousand (2001: EUR 105,518 thousand)
                                                                                                          Amounts owed to employees                                    1,292        1,937
      has not been used. The weighted average rate of interest on the
      credit lines is 6.43% (2001: 6.16%).                                                                Reimbursement commitments                                      438        1,348
                                                                                                          Accounts payable to clients                                  1,056        1,026
      There is collateral amounting to EUR 19,307 thousand (2001:
                                                                                                          Other accounts payable
      EUR 20,369 thousand) for amounts due to banks and liabilities                                       to affiliated companies                                        406          335
      under leases amounting to EUR 62,905 thousand (2001:
                                                                                                          Other accounts payable
      EUR 41,108 thousand). The collateral is broken down as follows:                                     to associated companies                                        120          136
                                                                                                          Other accounts payable
                                                                      31.12.2001      31.12.2002          to related parties                                             421           24

      Amounts due to banks secured by                                                                     Miscellaneous liabilities                                   12,840          776

      mortgages                                                           14,851          15,301          Other liabilities                                           35,843       28,663

      deposit or pledging of securities                                     3,459                337
      assignment of receivables                                             1,729           1,754
                                                                                                       As at 31 December 2002, there were other liabilities amounting
      other collateral                                                        304           1,248
                                                                                                       to EUR 3,093 thousand (2001: EUR 3,535 thousand) with a
                                                                                                       remaining term of over one year.
      Liabilities under leases secured by
      transfer of movable assets                                               26                543
                                                                                                       20. Related parties
      other collateral                                                           0               124
      Secured liabilities                                                 20,369          19,307       During the financial year under review, significant relationships
                                                                                                       which went beyond the normal business transactions existed with
                                                                                                       the following persons and groups:
                                                                                                       In respect of GfK-NÜRNBERG Gesellschaft für Konsum-, Markt-
                                                                                                       und Absatzforschung e.V., Berlin, the majority shareholder of GfK
                                                                                                       AG, there were primarily loan and other receivables in the
                                                                                                       amount of EUR 422 thousand.
                                                       Notes: supplementary disclosures regarding the balance sheet     F I N A N C I A L S TAT E M E N T S

     Mr Jürgen Ignaczak is a minority shareholder of ENIGMA Institut           In the years 2003 to 2007, purchase price payment obligations
     für Markt- und Sozialforschung Jürgen Ignaczak GmbH,                      for additional shares of EUR 24,321 thousand (2001: EUR 8,303
     Wiesbaden. There is a receivable in respect of him of EUR 2,911           thousand) will result from purchase contracts concluded in
     thousand, which is a payment on account for the acquisition of            connection with acquisitions.
     the remaining shares in the company.
                                                                               In case of compliance by the contract partners, payment
     On the basis of loans to GfK Group companies, there were                  obligations of EUR 407 thousand will arise for the GfK Group
     liabilities to The NPD Group, Inc., Port Washington, New York,            during the years 2003 to 2005 as a result of competition
     USA, amounting to EUR 510 thousand as at the reporting                    agreements that have been concluded.
                                                                               The future commitments arising from lease agreements are
     Mr Noel Muracciole is the minority shareholder in Institut                described in the section on leases.
     Français de Recherche S.A., Viroflay, France. There were
     liabilities of EUR 1,569 thousand.
                                                                               22. Financial instruments and derivatives
     Ms Elcin Üner and Mr Ali Levent Orhun are minority share-
                                                                               The GfK Group concludes transactions throughout the world in
     holders and managing directors of Procon GfK Arastirma
                                                                               various international currencies, which may involve currency
     Hizmetleri A.S., Istanbul, Turkey. On the reporting date, there
                                                                               risks. Short-term investments, investment in securities and
     were other liabilities totalling EUR 921 thousand.
                                                                               borrowing from banks take place in various currencies and can
     There were loan liabilities amounting to EUR 502 thousand                 result in risks due to changes in exchange rates, rates of interest
     in respect of the members of the management of various                    and market prices.                                                                           113
                                                                               Derivative instruments are selectively used to hedge variable-rate
     The receivables and liabilities in respect of related parties have a      liabilities and to secure future payment flows. As per SFAS 133,
     remaining term of up to one year.                                         “Accounting for Derivative Instruments and Hedging Activities”,
                                                                               the GfK Group states these at fair value on the reporting date as
                                                                               assets or provisions. Any gains or losses arising from changes in
     21. Contingencies and other financial commitments
                                                                               fair value are generally recognized as income or expense.
     The contingencies and other financial commitments that are
                                                                               The carrying amounts and fair values of the financial instruments
     not carried as liabilities in the consolidated balance sheet
                                                                               of the GfK Group are shown in the following table.
     are reported at nominal values and represent the following
                                                                                                                           31.12.2001                  31.12.2002
                                                                                                                      Carrying                   Carrying
                                                  31.12.2001   31.12.2002                                              amount       Fair value    amount       Fair value
Commitments arising from                                                           Financial instruments,
Guarantees and sureties                                1,111         701           other than derivatives

Furnishing collateral for third parties                 619          375           Financial investments               32,268         32,268      31,040         31,040

Ongoing investment projects                            1,315        1,202          Securities                           8,054          8,054        7,350          7,350

Maintenance, service and licence agreements            9,016      12,194           Liquid funds                        47,555         47,555      45,167         45,167
                                                                                   Financial liabilities               53,365         53,365      72,882         72,882

     In addition, there are the following contingencies and financial              Derivative financial instruments
     commitments:                                                                  Assets
     GfK Aktiengesellschaft has given a guarantee vis-à-vis The NPD                Currency hedging
     Group Inc., Port Washington, New York, USA, corresponding to                  contracts                              226             226           0              0
     its participation in Intelect Partnership, Port Washington, New
     York, USA, held since 1 January 2001 via GfK Holding, Inc.,                   Liabilities
     Wilmington, USA, to the effect that it assumes 25 % of the                    Currency hedging
     liability for the contractual fulfilment of any commitments that              contracts                                 0              0         203            203
     may arise for The NPD Group, Inc. from the credit guarantee                   Interest rate hedging contracts           0              0         735            735
     issued to a bank. This credit guarantee was given by The NPD
     Group, Inc. and Intelect Partnership vis-à-vis the bank in favour
     of NPD Intelect, L.L.C., a 99 % subsidiary of Intelect Partnership,
     to secure a loan for USD 8,950 thousand. The loan commitment
     as at 31 December 2002 amounted to EUR 6,301 thousand (USD
     6,563 thousand) in total.
      23. Segment reporting
                                                                                                                                    Total        Depre-
      The subdivision of the GfK Group into segments is based on the          2002                                      Sales     income         ciation
      organization of the divisions corresponding to the products and         Consumer Tracking                        85,987      2,416          3,515
      services offered.
                                                                              Non-Food Tracking                       137,339     24,495          4,883
      The GfK Group provides services in the segments Consumer                Media                                    61,280      6,051          2,862
      Tracking, Non-Food Tracking, Media, Ad Hoc Research and                 Ad Hoc Research                         246,257     14,462          6,517
                                                                              Other                                    28,510        907          7,107
      Consumer Tracking: Information services regarding market and            Total 2002                              559,373     48,331         24,884
      marketing matters relating to day-to-day consumer buying
                                                                              Reconciliation                               0      – 1,076             0
      decisions and habits, providing information on almost all fast
                                                                              Group 2002                              559,373     47,255         24,884
      moving consumer goods plus a large number of slow moving
      consumer goods and services.
      Non-Food Tracking: Information services regarding marketing,
      sales and logistics in retail and industry for companies operating                                                            Total        Depre-
      in consumer technology markets.                                         2001                                      Sales     income         ciation
                                                                              Consumer Tracking                        84,799      – 202          4,971
      Media: Information services on media consumer behaviour
      and attitudes. Services include quantitative analyses of viewer,        Non-Food Tracking                       119,539     17,484          6,221
      reader and listener reach and qualitative surveys on acceptance,        Media                                    56,527      8,455          2,869
      preferences and recall of media content.                                Ad Hoc Research                         199,639      2,830         11,403

      Ad Hoc Research: Information services for developing, positioning       Other                                    21,628      – 234         11,537
      and maintaining products and services, aimed at optimizing              Total 2001                              482,132     28,333         37,001
      the mix of marketing policy activities and managing product and         Reconciliation                               0       1,968              0
      corporate brands and customer loyalty.
                                                                              Group 2001                              482,132     30,301         37,001
      Other: Internal services relating to IT and administration,
      services in connection with data collection, processing and
      analysis, method and product research and information services       External sales by region are as follows:
      for the healthcare markets.
      In the GfK Group, the internal control and reporting are largely                                                              2001          2002
      based on the same accounting and valuation methods as the
                                                                              Germany                                            192,409     204,664
      consolidated financial statements.
                                                                              Northern Europe                                     51,965         59,123
      The Group measures the success of its segments by reference             Western and Southern Europe                        148,253     196,661
      to the operating income. The operating income of a segment
                                                                              Central and Eastern Europe                          23,529         28,484
      is determined on the basis of the result before financial income
      (excluding other income) produced by the Management                     America                                             36,801         40,366
      Information System. Entries at Group level due to consolidation         Asia and the Pacific                                29,175         30,075
      are not taken into account. These are summarized in the                 External sales                                     482,132     559,373
      reconciliation to consolidated total income.
      As a rule, internal Group transactions are carried out at market
      prices. Sales are attributed to the countries in accordance with     During the reporting year and in the previous year, none of the
      the principle of country of origin.                                  segments recorded sales with any single client of more than 10 %
                                                                           of consolidated sales.
      The segment information for financial years 2002 and 2001 is as
                                                                           24. Pro forma statements in accordance with SFAS 141
                                                                           Due to company acquisitions and other changes to the scope of
                                                                           consolidation, the previous year’s figures cannot be compared
                                                                           directly with the figures for the consolidated financial statements
                                                                           as at 31.12.2002. To facilitate a comparison, the influences
                                                                           resulting from changes are eliminated in the following pro forma
                                                                           statements in accordance with SFAS 141.
                                                                       Notes: changes since the previous year   F I N A N C I A L S TAT E M E N T S

    The following pro forma statement in accordance with SFAS 141            25. Pending litigation and claims for compensation
    shows selected items from the income statement for 2002 on
                                                                             Neither GfK AG nor any of its subsidiaries were involved in any
    the assumption that all significant acquisitions and additional
                                                                             significant legal disputes as at 31 December 2002.
    acquisitions concerning affiliated companies which took place
    during the last financial year, had already taken place on 1 January
    2002. In the pro forma statement, the following transactions are         26. Events after the balance sheet date
    taken into account:
                                                                             Following the change in the segmentation of equities on the
    • First-time consolidation of Significant Belgium                        Deutsche Börse in 2003, GfK shares are now listed on the SDax.
                                                                             With effect from 24 March 2003, the MDax was reduced from
    • First-time consolidation of the IFR Group companies that have
                                                                             70 to 50 stocks. According to the rankings published by Deutsche
      been included
                                                                             Börse on 31 January 2003, GfK was in 58th place on the basis
    • First-time consolidation of GPI KoFo D                                 of market capitalization and 68th on the basis of share volume
                                                                             traded. On the SDax, which like the MDax includes 50 stocks,
    • Merger of the Nuremberg operations of IGG KG
                                                                             GfK is ranked 7th.
      with GfK AG
    • Additional purchase of a 42.5% stake in GfK CBI Italy
                                                                             27. Changes since the previous year
                                                                             Accounting in accordance with US GAAP, which the GfK Group
                                   2002                 Difference
                              Actual   Pro forma   Absolute     Per cent
                                                                             has applied for the first time in the year under review, differs         115
                                                                             from the previous HGB accounting. The differences that have
Sales                       559,373      575,150     15,777          2.8
                                                                             material effects on the GfK Group’s consolidated financial state-
Result from ongoing                                                          ments are described below.
business activity            45,281       48,617      3,336          7.4
Consolidated total income
before minority interests    30,004       32,172      2,168          7.2     Intangible assets
Consolidated total income    25,673       27,137      1,464          5.7     In accordance with HGB, only intangible assets acquired for
Earnings per share in EUR      0.98         1.04        0.06         6.1     consideration may be capitalized. In accordance with US GAAP,
                                                                             self-produced intangible assets may also be capitalized.

    The income statement 2001 is the basis for the following
    pro forma statement in accordance with SFAS 141. It
    has been assumed that all material changes in the scope                  In principle, goodwill from the first-time consolidation of
    of consolidation that took place in 2002, had already taken              subsidiaries is determined similarly in both accounting systems.
    place on 1 January 2001. In addition to the above changes                In its consolidated financial statements in accordance with
    in the scope of consolidation, there are the following                   HGB, the GfK Group made use of the HGB option to offset
    transactions:                                                            goodwill against reserves with no impact on the result. In
                                                                             accordance with US GAAP, up to financial year 2001, there was
    • First-time consolidation of E+G Spain, G+E Spain, GfK M.S.
                                                                             the duty to amortize goodwill on a straight-line basis. In the
      Portugal, Intercampus Portugal and Metris Portugal
                                                                             case of acquisitions after 30 June 2001 and in existing cases
    • First-time consolidation of GfK Macon D                                from financial year 2002 onwards, goodwill should no longer
                                                                             be subject to regular amortization but should be subject to an
    • Purchase of an additional 20 % stake in Procon GfK Arastirma
                                                                             annual impairment test, which may involve the application of
      Hizmetleri A.S., Istanbul, Turkey
                                                                             extraordinary amortization.

                                   2001                 Difference           Leases
                              Actual   Pro forma   Absolute     Per cent
Sales                       482,132      529,264     47,132          9.8
                                                                             The criteria in accordance with which in HGB accounting a leased
                                                                             asset must be capitalized by the lessee are based on taxation
Result from ongoing
business activity             3,925        7,017      3,092        78.8
                                                                             rules. They therefore differ from the criteria of US GAAP. As a
                                                                             result, capitalization duties for the lessee under US GAAP (capital
Consolidated total income
before minority interests    – 6,154     – 7,208    – 1,054       – 17.1
                                                                             leases) are more extensive than under HGB.
Consolidated total income    – 4,741     – 8,591    – 3,850       – 81.2
Earnings per share in EUR     – 0.18      – 0.33     – 0.15       – 83.3
      Reinstatement of original values                                       deemed to be quasi-permanent and are not included in the
                                                                             calculation of deferred taxes. Deferred tax assets on tax loss
      In certain cases, it is prescribed in accordance with HGB that
                                                                             transfers are not permitted in accordance with HGB.
      write-downs of an asset to a lower attributable value must
      be reversed by reinstating the original value when the reasons         In accordance with US GAAP, deferred taxes are also formed
      for the earlier write-down cease to exist. US GAAP does not            on quasi-permanent differences. It is obligatory to form deferred
      permit the reinstatement of original values. In the GfK Group          taxes on tax loss transfers. On each balance sheet date, the
      there were no grounds for reinstating original values during           extent to which the deferred tax assets can be realized must be
      the reporting period for § 292 a HGB to be applied.                    assessed and a valuation allowance made if necessary.

      Recognition of sales                                                   Provisions for pensions and similar obligations
      In accordance with HGB, a sale made within a sales transaction         In accordance with HGB, the valuation of pension obligations is
      may only be recognized when the service has been completed             largely carried out applying the partial value method pursuant to
      and invoiced. Ongoing orders are reported as inventories until         § 6 a EStG (German Income Tax Act), but other methods are also
      such time.                                                             permissible. In accordance with US GAAP, the application of the
                                                                             projected unit credit method is mandatory. In contrast with HGB,
      In accordance with US GAAP, the recognition of sales is
                                                                             future salary rises of the person entitled to the pension are taken
      determined by the portion of the deliverable that is already
                                                                             into account. Entitlements in respect of pension funds are offset
      accomplished. Sales may therefore also be recognized
116                                                                          against the provision. In accordance with US GAAP, an allocation
      before the completion of the deliverable and when services
                                                                             to the pension provisions that initially has no impact on income is
      have not yet been invoiced.
                                                                             possible in some cases.

      Reporting unrealized profits
                                                                             Other provisions
      In accordance with HGB, the principle of prudence does not permit
                                                                             HGB permits the setting up of provisions for amounts owed to
      the inclusion of unrealized profits, but requires unrealized losses
                                                                             third parties as well as for internal costs such as for example
      to be stated as soon as they can be anticipated. US GAAP permits
                                                                             maintenance (provisions for expenditure). Provisions must be
      the inclusion of unrealized profits.
                                                                             valued according to the principle of prudence.
      For assets and liabilities in foreign currencies, this means that in
                                                                             In accordance with US GAAP, provisions for expenditure are not
      accordance with US GAAP these need to be converted at the rate
                                                                             permitted. Provisions must be valued at the amount that will most
      of exchange on the reporting date. Exchange gains and losses
                                                                             probably be used. If several equally probable amounts exist, the
      are taken to the income statement.
                                                                             lowest of the range must be stated.
      Securities must be valued at the fair value on the balance sheet
      date, even if this value is higher than the cost of acquisition.
                                                                             Liabilities on orders in progress
      The price gain or loss must be recognized in the income state-
      ment, unless securities are held as fixed assets. In this case, the    In accordance with HGB, invoices for prepayments or payments
      valuation is only stated in the income statement for price losses      on account which have not been paid by the balance sheet
      with permanent character. Otherwise, the write-up or write-down        date may not be stated as payments on account received. The
      has no impact on income. The valuation difference is stated on         underlying receivable must also be eliminated, because this is a
      the liabilities side as other comprehensive income.                    pending transaction for both sides.
      HGB provides no specific provisions for the valuation of               Given the different way of realizing sales, receivables from
      derivative instruments, so that the general principles of valuation    pending transactions may be reported in accordance with
      at acquisition cost and of the principle of prudence apply. In         US GAAP. Liabilities arising from orders in progress include
      accordance with US GAAP, derivative instruments must be                accrued sales which have resulted from invoices for prepayments
      valued at their fair value on the balance sheet date. Special rules    or payments on account, but cannot yet be recognized as sales
      apply to hedging transactions.                                         in accordance with the method of realizing sales. The accrued
                                                                             amounts may be matched both by open as well as by already
                                                                             settled receivables.
      Deferred taxes
      When applying HGB, deferred taxes are formed for temporary
      differences between the commercial and tax balance sheets.
      Differences which only reverse after a long period of time or
      following the sale of assets or liquidation of companies are
                                                                       Notes: changes since the previous year   F I N A N C I A L S TAT E M E N T S

    Scope of consolidation                                                   The following companies, which are consolidated in accordance
                                                                             with HGB, are not included for US GAAP due to their minor
    In accordance with HGB, subsidiaries are included in the
                                                                             importance in terms of the Group’s net assets, total income and
    consolidated financial statements if the parent company holds
                                                                             financial position:
    the majority of the voting rights or if the companies are under
    the uniform control of the parent company. For a company to              • Adfinders B.V., Hoofddorp, Netherlands
    qualify as an associated company, a participation quota of at least
                                                                             • Exmarket + GfK Praha spol. s.r.o., Prague, Czech Republic
    20% is required, as well as the actual exercise of determining
    influence.                                                               • GfK Data Services GmbH, Nuremberg
    In accordance with US GAAP, the consolidation of subsidiaries            • GfK Fernsehforschung GmbH, Nuremberg
    depends on the control exercised by the parent company.
                                                                             • GfK Marketing Services Verwaltungs-GmbH, Nuremberg
    The rights of minority shareholders in particular have to be
    examined to determine whether they hinder the control by the             • GfK Marktforschung GmbH, Nuremberg
    parent company.
                                                                             • GfK Panel Services Consumer Research GmbH, Nuremberg
    A minimum participation of 20% in accordance with US GAAP
                                                                             • GfK Testmarktforschung GmbH i.L., Nuremberg
    is not a precondition for qualification as an associated company.
    By contrast with the corresponding HGB provision, it is only a           • Intomart DataCall B.V., Hilversum, Netherlands
    question of the possibility of exercising a determining influence.
                                                                             • Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main
    The reconciliation of the scope of consolidation from HGB                                                                                         117
                                                                             • MMO Media-Market-Observer GmbH, Vienna, Austria
    as at 31 December 2001 to the scope of consolidation in
    accordance with US GAAP as at 31 December 2001 is described
    below.                                                                   In accordance with US GAAP, GfK Marketing Services Hong Kong
                                                                             Limited, Hong Kong, China and GfK Immobilier EURL, Rueil-
                                                                             Malmaison, France, are included in the scope of consolidation as
    Fully consolidated companies
                                                                             at 31 December 2001. In accordance with HGB, the GfK Group
    The scope of consolidation in accordance with US GAAP as at              had not included these companies in the consolidated financial
    31 December 2001 comprised nine (HGB 18) German and 75                   statements due to their minor importance.
    (HGB 86) international subsidiaries in addition to the parent
                                                                             The direct parent companies of the following companies qualify
                                                                             as affiliated companies for HGB purposes, but are treated as
    The following table shows the differences in fully consolidated          associated companies for US GAAP purposes. The subsidiaries of
    subsidiaries between HGB and US GAAP as at 31 December                   associated companies are not deemed to be Group companies.
                                                                             • dm-plus Direktmarketing GmbH, Nuremberg
                                                                             • bwv IT solutions AG, St. Gallen, Switzerland
Reconciliation of consolidated subsidiaries
from HGB to US GAAP (No.)                                                    • dm-plus Direktmarketing AG, St. Gallen & Rotkreuz,
                                            HGB                US GAAP
                                     31.12. 2001    Changes   31.12. 2001    • dm michelotti AG, Rotkreuz, Switzerland
Germany                                        18       –9             9     • definitive systems ltd., Zurich, Switzerland
Abroad                                         86      – 11           75
                                                                             • GfK PORTUGAL - Marketing Services, LDA, Lisbon, Portugal
Total                                         104      – 20           84
                                                                             • METRIS-MÉTODOS DE RECOLHA E INVESTIGAÇÃO SOCIAL,
                                                                               LDA, Lisbon, Portugal (Metris Portugal).
    Four subsidiaries which are fully consolidated in accordance
    with HGB are not included in US GAAP accounting, because
                                                                             Affiliated companies that were not included in the
    they are qualified by US GAAP as associated companies.
                                                                             consolidated financial statements due to minor importance
    These are:
                                                                             In deviation from HGB, the GfK Group did not include 21
    • bwv Holding AG, St. Gallen, Switzerland (bwv Holding
                                                                             companies (HGB 16) in the consolidated financial statements
                                                                             due to their minor significance for the Group’s net assets, total
    • EMER GfK S.L., Valencia, Spain (E+G Spain)                             income and financial position.
    • Ernst und GfK Grundstücksgesellschaft, Nuremberg
      (Ernst und GfK D)
    • G.E. Marketing Research S.A., Valencia, Spain (G+E Spain)
          Associated companies                                                 The following table shows the differences in other participations
                                                                               between HGB as at 31 December 2001 and US GAAP as at 31
          The following table shows the differences between HGB as at
                                                                               December 2001:
          31 December 2001 and US GAAP as at 31 December 2001 in
          associated companies:
                                                                                  Reconciliation of other participations
                                                                                  from HGB to US GAAP (No.)
      Reconciliation of associated companies
      from HGB to US GAAP (No.)
                                                                                                                              HGB               US GAAP
                                                                                                                       31.12. 2001   Changes   31.12. 2001
                                                HGB               US GAAP
                                         31.12. 2001   Changes   31.12. 2001      Germany                                       1        –1             0

      Germany                                     2          2            4       Abroad                                        9        –4             5

      Abroad                                     18          6           24       Total                                        10        –5             5

      Total                                      20          8           28

          In the consolidated financial statements in accordance with          Minority interests
118       US GAAP, the GfK Group reports participations in 28 (HGB 20)         The minority interests in accordance with HGB are included in
          associated companies. In accordance with HGB, the GfK Group          the consolidated shareholders’ equity. In accordance with US
          had included the companies Ernst und GfK D, E+G Spain, G+E           GAAP, these are reported under borrowed capital.
          Spain and bwv Holding Switzerland as affiliated companies in
          the scope of consolidation. In accordance with US GAAP, GfK
          classifies these companies as associated companies.                  28. Supplementary disclosures

          Five other companies are defined as associated companies             Personnel expenses - information pursuant to § 285 No. 8 HGB
          in accordance with US GAAP, which were reported as other
          participations in accordance with HGB. These are:                    The expense items of the income statement contain the following
                                                                               personnel expenses:
          • Caribou Lake Software, LLC, Minneapolis, USA
            (Caribou Lake USA)
                                                                                                                                        2001         2002
          • INCOMA Consult s.r.o., Prague, Czech Republic
                                                                                  Wages and salaries                                 174,368     199,030
            (Incoma Consult Praha)
                                                                                  Social security contributions                       35,348       45,090
          • Information Resources-GfK B.V., Dongen, Netherlands
                                                                                  Personnel expenses                                 209,716       244,120
            (IRI/GfK Retail NL)
          • Information Resources GfK GmbH, Nuremberg
            (IRI/GfK Retail D)
          • MMXI Europe B.V., Amsterdam, Netherlands                           Number of employees
            (MMXI Europe NL)                                                   The GfK Group employed 4,778 (2001: 4,296) staff on average
          Unlike for HGB, INTERCAMPUS-RECOLHA, TRATAMENTO E                    during the year under review. The average number of employees
          DISTRIBUIÇÃO DE INFORMAÇÃO, LDA, Lisbon, Portugal, is                over the year was determined on the basis of full-time employees.
          not reported as a Group company in accordance with US GAAP,          The calculation of the average was carried out using the key
          because its direct parent company is classified by US GAAP           dates 31 March, 30 June, 30 September and 31 December.
          as an associated company whereas it is an affiliated company in      The employees were distributed over the divisions as follows:
          accordance with HGB.

                                                                                                                                        2001         2002
          Other participations
                                                                                  Consumer Tracking                                     778           844
          The consolidated financial statements as at 31 December 2001 in         Non-Food Tracking                                    1,067         1,304
          accordance with US GAAP comprise participations in five (HGB
                                                                                  Media                                                 328           332
          10) other participations. The five companies classified as other
          participations by HGB (IRI/GfK Retail D, IRI/GfK Retail NL, MMXI        Ad Hoc Research                                      1,455         1,730
          Europe NL, Incoma Consult Praha and Caribou Lake USA) are               Other                                                 557           451
          included in the consolidated financial statements in accordance                                                              4,185         4,661
          with US GAAP as associated companies.                                   Managing Directors/Management Board members             59           71
                                                                                  Trainees                                                52           46
                                                                                  Full-time employees                                  4,296         4,778
                                                                      Notes: supplementary disclosures   F I N A N C I A L S TAT E M E N T S

    Total remuneration and shares of the Management Board and
    Supervisory Board
    The total remuneration and shares of the Management Board and
    Supervisory Board are as follows:

                              Management Board    Supervisory Board
Fixed component                           1,756                 68
Variable component                         766                  84
Stock options (No.)                     530,273                   –
Shares (No.)                            410,626            178,283

    During financial year 2001, the total remuneration of the
    Management Board, which contained one person fewer in
    the previous year, totalled EUR 1,953 thousand. The total
    remuneration of the Supervisory Board amounted to EUR 137                                                                                  119
    Former members of the management of GfK GmbH, Nuremberg,
    and of the Management Board of GfK AG, received total
    remuneration of EUR 578 thousand (2001: EUR 494 thousand);
    an amount of EUR 8,255 thousand (2001: EUR 6,813 thousand)
    was set aside by GfK AG for pension commitments to former
    members of the Management Board and managing directors.
    There were no loans or advances to members of the Management
    Board or Supervisory Board. Also no contingent liabilities were
    incurred for this group of persons.
      Supervisory Board                                                 Robert Raeber      Chairman of the Board of Administration
                                                                                           of Clariant AG, Basle, Switzerland
                                                                                           Chairman of the Supervisory Board of
      Peter Zühlsdorff    Chairman
                                                                                           Nestlé Deutschland AG, Frankfurt/Main
                          Chief Executive Officer of Tengelmann                            Blaue Quellen AG, Mainz-Weisenau
                          Warenhandelsgesellschaft,                                        Schöller GmbH, Nuremberg
                                                                                           Member of the Supervisory Board of
                          DIH Deutsche Industrie-Holding GmbH,
                                                                                           Maus Frères SA, Geneva, Switzerland
                                                                                           Member of the Board of Administration of
                          Chairman of the Supervisory Board of
                                                                                           GfK-NÜRNBERG Gesellschaft für Konsum-,
                          TV Loonland AG, Munich
                                                                                           Markt- und Absatzforschung e.V., Berlin
                          Escada AG, Munich
                          Member of the Supervisory Board
                                                                        Hajo Riesenbeck    Management Consultant
                          of Merck KGaA, Darmstadt
                          Deutz AG, Cologne                             Since 13 June 2002 Director at McKinsey & Company,
                          Kaiser’s Tengelmann AG, Viersen                                  Düsseldorf
                          Quelle AG, Fürth
                                                                                           Member of the Supervisory Board of ERI AG,
120                       Chairman of the Board of Administration                          Wörgl, Austria
                          of GfK-NÜRNBERG Gesellschaft für Konsum-,
                                                                                           Member of the Board of Administration
                          Markt- und Absatzforschung e.V., Berlin
                                                                                           of GfK-NÜRNBERG Gesellschaft für Konsum-,
                                                                                           Markt- und Absatzforschung e.V., Berlin
      Klaus Hehl          Deputy Chairman
                          Market Researcher
                                                                        Dr. Karl Gerhard   Until 13 June 2002
                          Member of the Board of Administration of      Schmidt
                          GfK-NÜRNBERG Gesellschaft für Konsum-,
                          Markt- und Absatzforschung e.V., Berlin       Dieter Wilbois     Senior Specialist Software Development
                                                                                           at GfK Aktiengesellschaft
      Dr. Wolfgang       Chairman of the Board of Directors
      C. Berndt          of the Institute For The Future, Menlo Park,   Elmar              Market Researcher
      Since 13 June 2002 California, USA                                Wohlgensinger
                                                                                           President of the Board of Administration of
                          Member of the Board of Directors of Cadbury                      IHA-GfK AG, Hergiswil, Switzerland
                          Schweppes PLC, London, UK                                        Weibel Hess & Partner AG, Stans,
                          Member of the Österreichische Werbewissen-
                                                                                           Eiphos Holding AG, Hergiswil, Switzerland
                          schaftliche Gesellschaft, Vienna, Austria
                                                                                           Telecontrol AG, Hergiswil, Switzerland
                          Member of the Board of Administration                            Modata AG, Hergiswil, Switzerland
                          of GfK-NÜRNBERG Gesellschaft für Konsum-,                        Liechti AG, Kriegstetten, Switzerland
                          Markt- und Absatzforschung e.V., Berlin                          GfM Schweiz, Gesellschaft für Marketing,
                                                                                           Zurich, Switzerland
                                                                                           Xaver Wyss AG, Ennetbürgen, Switzerland
      Peter Danzl         Independent Works Council representative
                          at GfK Aktiengesellschaft                                        Member of the Board of Administration of
                                                                                           Hergiswiler Glas AG, Hergiswil, Switzerland
                                                                                 , Sursee, Switzerland
      Helga Haub          Until 13 June 2002                                               Rex Sport & Freizeit-Center, Stans,
      Hans-Jürgen Kunert Independent Works Council representative at                       active light GmbH, Stans, Switzerland
                         GfK Aktiengesellschaft                                            Agnes Waser Immobilien AG,
                                                                                           Kilchberg, Switzerland
                                                                                           Darum Holding AG, Stansstad, Switzerland
                                                                                           Central Swiss Chamber of Commerce,
                                                                                           Lucerne, Switzerland
                                                                                           GfK-NÜRNBERG Gesellschaft für Konsum-,
                                                                                           Markt- und Absatzforschung e.V., Berlin
                                                     Notes: Supervisory Board and Management Board   F I N A N C I A L S TAT E M E N T S

Management Board                                                     Dr. Franz Merl     Chief Financial Officer
                                                                     Since 1 April 2002 Responsible for the Financial Services,
                                                                                        Central Services and Personnel Services
Dr. Klaus L.       Chief Executive Officer
                   Deputy Chairman of the
                   Board of Administration of R. Oldenbourg          Wilhelm R. Wessels Responsible for the
                   GmbH & Co. KG, Munich                                                Consumer Tracking division and
                                                                                        HealthCare activities
                   Chairman of the Board of Directors of
                   GfK Holding, Inc., Wilmington, USA                                     Chairman of the Board of Directors of
                   Procon GfK Arastirma Hizmetleri A.S.,                                  GfK Norge A/S, Oslo, Norway
                   Istanbul, Turkey                                                       GfK Sverige AB, Lund, Sweden
                                                                                          GfK Danmark A/S, Frederiksberg, Denmark
Petra Heinlein     Responsible for the                                                    Member of the Board of Administration of
Since 1 January    Media division                                                         IHA-GfK AG, Hergiswil, Switzerland
2002                                                                                      IHA Italia S.p.A., Milan, Italy
                   Member of the Board of Administration of
                   Telecontrol AG, Hergiswil, Switzerland                                 Member of the Board of Directors of
                   Liechti AG, Kriegsstetten, Switzerland                                 GfK InfoScan Sverige AB, Lund, Sweden
                   Modata AG, Hergiswil, Switzerland                                      Orange Interactive Research AB, Stockholm,       121
                                                                                          m2A S.A., Saint Aubin, France
Dr. Gérard Hermet Responsible for the Non-Food Tracking
                  division                                                                Member of the Supervisory Board of
                                                                                          Information Resources – GfK B.V., Dongen,
                   Member of the Supervisory Board of
                   G.E. Marketing Research, S.A.,
                                                                                          GfK Panelservices Benelux B.V., Dongen,
                   Valencia, Spain
                   GfK Marketing Services S.A.,
                   Rueil-Malmaison, France                                                Member of the Advisory Board of
                   GfK Sofema International SARL,                                         Information Resources GfK GmbH,
                   Rueil-Malmaison, France                                                Nuremberg
                   Financière ISL S.A.,
                   Issy les Moulineaux, France
                   Institut de Sondage Lavialle (ISL) S.A.,
                   Issy les Moulineaux, France
                                                                     Declaration on the German Corporate Governance Code
                                                                                          The declaration prescribed by § 161 of
Gerhard Kirschner Until 31 March 2002
                                                                                          the German Stock Corporation Act has
                                                                                          been given by the Management Board
Heinrich A.        Responsible for the
                                                                                          and Supervisory Board and has been
Litzenroth         Ad Hoc Research division
                                                                                          made accessible to shareholders.
                   Chairman of the Board of Directors of
                   Custom Research Inc., Minneapolis, USA
                   Chairman of the Board of Administration of
                   MATION ITALY S.p.A., Milan, Italy
                   Deputy Chairman of the Supervisory Board
                   of GfK MACON AG, Waghäusel
                   Member of the Board of Directors of
                   GfK Holding, Inc., Wilmington, USA
                   Indicorp Participações S.A., São Paulo,
                   Member of the Supervisory Board of
                   MarketingScan SNC, Rueil-Malmaison,
                   GfK Ad Hoc Research WORLDWIDE,
                   Brussels, Belgium
      Shareholdings of the GfK Group
      As at 31 December 2002
      Company name and registered office                                                     Share in the capital Financial year                        Equity
                                                                                                    in %                                               EUR’000

      Affiliated companies (Germany), included in the consolidated financial
      statements (all details according to US GAAP commercial balance sheet II)

      Contest-Census Gesellschaft für Markt- und Meinungsforschung
      mit beschränkter Haftung, Frankfurt/Main                                                         100.0                     2002                      3961)
      ENCODEX International GmbH, Nuremberg                                                             95.0                     2002                     – 421)
      ENIGMA Institut für Markt- und Sozialforschung
      Jürgen Ignaczak GmbH, Wiesbaden                                                                   51.0                     2002                       180
      GfK CEE Finance GmbH, Nuremberg                                                                  100.03)                   2002                     3,919
      GfK MACON AG, Waghäusel                                                                           51.0                     2002                       953
      GfK Marketing Services GmbH & Co. KG, Nuremberg                                                  100.0                     2002                     4,043
      GfK PRISMA Institut für Handels-, Stadt- und Regionalforschung
      GmbH & Co. KG, Hamburg                                                                           100.0                     2002                       444
      GPI Kommunikationsforschung Gesellschaft für
      Pharma-Informationssysteme mbH, Nuremberg                                                         80.0                     2002                     1,116
      Media Markt Analysen GmbH & Co. KG, Frankfurt/Main                                               100.0                     2002                       159
      Modata GmbH, Berlin                                                                              100.0                     2002                        55

122   Affiliated companies (abroad) included in the consolidated financial
      statements (all details according to US GAAP commercial balance sheet II)

      ADVAL SARL, Issy les Moulineaux, France                                                          100.03)                   2002                       117
      Adware Media Solutions B.V., Hilversum, Netherlands                                              100.03)                   2002                     – 190
      Aspemar-GfK N.V., Brussels, Belgium                                                              100.03)                   2002                     – 205
      AUDIMEDIA SARL, Issy les Moulineaux, France                                                      100.03)                   2002                       972
      Audimetrie N.V., Brussels, Belgium                                                                77.83)                   2002                       483
      Borell Market Research AB, Stockholm, Sweden                                                     100.03)                   2002                        11
      Eiphos Holding AG, Hergiswil, Switzerland                                                        100.03)                   2002                     3,177
      EMER GfK, S.L., Valencia, Spain                                                                   50.1                     2002                     2,404
      Encodex B.V., Amstelveen, Netherlands                                                            100.03)                   2002                     – 323
      Encodex Japan Ltd., Osaka, Japan                                                                  63.0                     2002                     – 533
      FESSEL-GfK Institut für Marktforschung Ges.m.b.H., Vienna, Austria                                94.8                     2002                     8,225
      Financière ISL S.A., Issy les Moulineaux, France                                                  71.93)                   2002                     3,494
      G.E. Marketing Research, S.A., Valencia, Spain                                                    50.1                     2002                     5,622
      GfK - Centar za istrazivanje trzista d.o.o., Zagreb, Croatia                                      78.03)                   2002                     – 551
      GfK - MEMRB Marketing Services Limited, Nicosia, Cyprus                                           60.0                     2002                        40
      GfK (U.K.) Ltd., West Byfleet, Surrey, UK                                                        100.0                     2002                   16,146
      GfK Asia Pte Ltd., Singapore, Singapore                                                           85.0                     2002                     – 715
      GfK Benelux Marketing Services B.V., Amstelveen, Netherlands                                     100.0                     2002                     2.527
      Milan, Italy                                                                                      93.5                     2002                     – 708
      GfK Custom Research Inc., Minneapolis, USA                                                       100.03)                   2002                     6.178
      GfK Danmark A/S, Frederiksberg, Denmark                                                           87.0                     2002                       737
      GfK Great Britain Ltd., London, UK                                                               100.0                     2002                      – 42
      GfK Holding, Inc., Wilmington, USA                                                               100.0                     2002                   32,233
      GfK Hungaria Piackutató Kft., Budapest, Hungary                                                  100.03)                   2002                       736
      GfK Immobilier EURL, Rueil-Malmaison, France                                                     100.03)                   2002                        –6
      GfK Market Consulting (Shanghai) Co. Ltd., Shanghai, China                                       100.03)                   2002                       357
      GfK Marketing Services (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia                              100.03)                   2002                       289
      GfK Marketing Services (Thailand) Limited, Bangkok, Thailand                                      49.03)                   2002                      – 44
      GfK Marketing Services Australia Pty. Ltd., Sydney, Australia                                    100.03)                   2002                     1,185

      1) Profit and loss pooling agreement        4) Partially indirect shareholding                                7) Share capital (excluding non-voting participation
      2) Details as per commercial balance        5) Details not available                                             certificates)
         sheet II                                 6) Details as per provisional financial statements                8) Newly established in 2002
      3) Fully indirect shareholding                 drawn up under national law                                    9) In liquidation
                                                                                                    Shareholdings F I N A N C I A L S T A T E M E N T S

Company name and registered office                                                    Share in the capital Financial year                        Equity
                                                                                             in %                                               EUR’000

GfK Marketing Services Hong Kong Limited, Hong Kong, China                                       85.0                     2002                       281
GfK Marketing Services Italia S.r.l., Milan, Italy                                              100.03)                   2002                     1,779
GfK Marketing Services Japan Ltd., Tokyo, Japan                                                  80.0                     2002                     4,013
GfK Marketing Services Korea Limited, Seoul, Korea                                              100.03)                   2002                     – 997
GfK Marketing Services Ltd., Hong Kong, China                                                   100.03)                   2002                     1,256
GfK Marketing Services Ltd., West Byfleet, Surrey, UK                                           100.03)                   2002                   13,951
GfK Marketing Services S.A., Rueil-Malmaison, France                                            100.0                     2002                     2,420
GfK Norge A/S, Oslo, Norway                                                                     100.0                     2002                       303
GfK Panelservices Benelux B.V., Dongen, Netherlands                                             100.03)                   2002                     3,420
GfK Panelservices Benelux Holding B.V., Dongen, Netherlands                                      92.4                     2002                     6,122
GfK Polonia Instytut Badania Opinii Sp. z o.o., Warsaw, Poland                                  100.03)                   2002                     1,510
GfK PORTUGAL - Marketing Services, LDA, Lisbon, Portugal                                         80.03)                   2002                     1,316
GfK – Praha, s.r.o., Prague, Czech Republic                                                     100.03)                   2002                       981
GfK Romania-Institut de Cercetare de Piata Srl, Bucharest, Romania                              100.03)                   2002                       167
GfK Slovakia spol. s r.o., Bratislava, Slovakia                                                 100.03)                   2002                       230
GfK Sofema International SARL, Rueil-Malmaison, France                                          100.0                     2002                     4,460
GfK Sverige AB, Lund, Sweden                                                                    100.0                     2002                     1,009
GfK-Bulgaria, Institut für Marktforschung EGmbH, Sofia, Bulgaria                                100.03)                   2002                        87            123
GfK-RUS Gesellschaft mbH, Moscow, Russia                                                        100.03)                   2002                     – 121
GfK-Ukrainian Surveys & Market Research (USM), Kiev, Ukraine                                    100.03)                   2002                       580
IFR Europe Ltd., London, UK                                                                      70.04)                   2002                       449
IFR France S.A., Viroflay, France                                                               100.03)                   2002                       570
IFR Italia S.r.L., Milan, Italy                                                                  70.04)                   2002                        59
IFR Marketing España S.L., Madrid, Spain                                                         70.04)                   2002                       312
IHA Italia S.p.A., Milan, Italy                                                                 100.04)                   2002                       674
IHA-GfK AG, Hergiswil, Switzerland                                                              100.07)                   2002                   32,856
INCOMA Research, s.r.o., Prague, Czech Republic                                                  60.03)                   2002                       201
Informark Pty. Ltd., Braddon, Australia                                                         100.03)                   2002                        54
Institut de Recherche d'Informations statistiques (IRDIS) SARL,
Montigny le Bretonneux, France                                                                   95.03)                   2002                       186
Institut de Sondage Lavialle (ISL) S.A., Issy les Moulineaux, France                             99.93)                   2002                     2,317
Institut Français de Recherche S.A., Viroflay, France                                            51.4                     2002                     7,662
INFORMAÇÃO, LDA, Lisbon, Portugal                                                                50.13)                   2002                        97
Intomart B.V., Hilversum, Netherlands                                                           100.03)                   2002                     4,323
Intomart GfK Belgium N.V., Brussels, Belgium                                                    100.03) 8)                2002                     2,246
Intomart GfK Group B.V., Hilversum, Netherlands                                                 100.0                     2002                     1,331
Liechti AG, Kriegstetten, Switzerland                                                           100.03)                   2002                     1,949
MARKET ANALYSIS E.P.E., Athens, Greece                                                           80.04)                   2002                        49
Martin Hamblin GfK Healthcare UK Limited, West Byfleet, Surrey, UK                              100.0                     2002                   12,011
Martin Hamblin GfK Limited, London, UK                                                           51.0                     2002                   – 1,204
Martin Hamblin Research Inc., Hartford, Connecticut, USA                                        100.03)                   2002                     1,056
Lisbon, Portugal                                                                                 51.03)                   2002                       143
MMO Media-Market-Observer GmbH & Co KG, Vienna, Austria                                          54.63)                   2002                     – 381
Modata AG, Hergiswil, Switzerland                                                               100.03)                   2002                       844
Orange Interactive Research AB, Stockholm, Sweden                                               100.03)                   2002                       566
Oz Toys Marketing Services Pty. Ltd., Sydney, Australia                                          51.03)                   2002                     – 225

1) Profit and loss pooling agreement       4) Partially indirect shareholding                                7) Share capital (excluding non-voting participation
2) Details as per commercial balance       5) Details not available                                             certificates)
   sheet II                                6) Details as per provisional financial statements                8) Newly established in 2002
3) Fully indirect shareholding                drawn up under national law                                    9) In liquidation
      Company name and registered office                                                   Share in the capital Financial year                        Equity
                                                                                                  in %                                               EUR’000

      Procon GfK Arastirma Hizmetleri A.S., Istanbul, Turkey                                          70.1                     2002                       941
      PS – Martin Hamblin Limited, London, UK                                                        100.03)                   2002                        29
      PT GfK Marketing Services Indonesia, Jakarta, Indonesia                                        100.03)                   2002                        40
      Romtec-GfK Ltd., Maidenhead, Berkshire, UK                                                     100.03)                   2002                           0
      Significant bvba, Heverlee, Belgium                                                             51.23)                   2002                       521
      Strateji GfK Research Services A.S., Istanbul, Turkey                                           99.63) 8)                2002                        58
      Telecontrol AG, Hergiswil, Switzerland                                                         100.03)                   2002                     2,452

      Affiliated companies (Germany), which are not included
      in the consolidated financial statements

      GfK Data Services GmbH, Nuremberg                                                              100.0                     2002                       286)
      GfK Fernsehforschung GmbH, Nuremberg                                                           100.0                     2002                       286)
      GfK International Consultancy & Development GmbH, Nuremberg                                    100.0                     2002                       146)
      GfK Marketing Services Verwaltungs-GmbH, Nuremberg                                             100.0                     2002                       286)
      GfK Marktforschung GmbH, Nuremberg                                                             100.0                     2002                       296)
      GfK Panel Services Consumer Research GmbH, Nuremberg                                           100.0                     2002                       286)
      I+G Gesundheits- und Pharmaforschung Verwaltungs-GmbH, Nuremberg                               100.0                     2002                       296)
124   IFR Monitoring Deutschland GmbH, Düsseldorf, Germany                                            70.04)                   2002                       826)
      Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main                                          100.0                     2002                       286)
      PRISMA Projekt-Beratung GmbH, Hamburg                                                          100.0                     2002                       496)

      Affiliated companies (abroad), which are not included
      in the consolidated financial statements

      Adfinders B.V., Hoofddorp, Netherlands                                                         100.03)                   2002                   – 6546)
      COMPUTADOR, LDA, Lisbon, Portugal                                                              100.03)                   2002                         52)
      CMI Field SARL, Viroflay, France                                                               100.0                     2002                       326)
      dragon eye Ltd., Hergiswil, Switzerland                                                        100.0                     2002                         05)
      GfK Ad Hoc Research WORLDWIDE, Brussels, Belgium                                                75.6                     2002                         06)
      GfK Belgium S.A., Brussels, Belgium                                                            100.0                     2002                      5596)
      GfK Belgrade d.o.o., Belgrade, Federal Republic of Yugoslavia                                  100.0                     2002                       492)
      GfK do Brasil S/C Ltda., São Paulo, Brazil                                                     100.0                     2002                      6936)
      GfK InfoScan Sverige AB, Lund, Sweden                                                           92.0                     2002                       786)
      GfK Marketing Services South Africa, Sandton, South Africa                                     100.0                     2002                      2186)
      GfK NPD Marketing Services Worldwide B.V., Amstelveen, Netherlands                              75.0                     2002                     – 226)
      GfK Panel Arastirma Hizmetleri A.S., Istanbul, Turkey                                           93.53)                   2002                       586)
      GfK Stratégie et développement GIE, Rueil-Malmaison, France                                    100.0                     2002                       766)
                                                                                                                                                            5) 9)
      I + G Infratest Medical Research Inc., Rhode Island, USA                                       100.0                     2002
      IFR Nederland B.V., Amsterdam, Netherlands                                                      70.0                     2002                       376)
      IFR Polska Sp. z o.o., Warsaw, Poland                                                          100.0                     2002                       156)
      IFR U.K. Ltd., London, UK                                                                       71.3                     2002                     – 566)
      I+G Infratest & GfK Gesundheitsforschung (Suisse) GmbH, Basle, Switzerland                      85.0                     2002                   – 3966)
      Intomart DataCall B.V., Hilversum, Netherlands                                                 100.03)                   2002                   – 3376)
      MMO Media-Market-Observer GmbH, Vienna, Austria                                                100.03)                   2002                       416)
      MMXI Switzerland GmbH, Hergiswil, Switzerland                                                   80.23)                   2002                   – 7292)
      Procon GfK Ltd., Baku, Azerbaijan                                                              100.03)                   2002                         26)

      1) Profit and loss pooling agreement      4) Partially indirect shareholding                                7) Share capital (excluding non-voting participation
      2) Details as per commercial balance      5) Details not available                                             certificates)
         sheet II                               6) Details as per provisional financial statements                8) Newly established in 2002
      3) Fully indirect shareholding               drawn up under national law                                    9) In liquidation
                                                                                                 Shareholdings      F I N A N C I A L S TAT E M E N T S

Company name and registered office                                                   Share in the capital Financial year                       Equity
                                                                                            in %                                              EUR’000

Associated companies (Germany)
                                                                                                                           5)                         5)
ConsumerSCOPE International GIE, Nuremberg                                                     40.0
Ernst und GfK Grundstücksgesellschaft, Nuremberg                                               50.0                     2002                      587
Information Resources GfK GmbH, Nuremberg                                                      19.6                     2002                – 11,0806)

Associated companies (abroad)

bwv Holding AG, St. Gallen, Switzerland                                                        66.73)                   2002                 – 3,0936)
Caribou Lake Software, LLC, Minneapolis, USA                                                   19.9                     2002                   – 5302)
                                                                                                      3)                   5)                         5)
Common Technology Centre EEIG, London, UK                                                      25.0
                                                                                                                           5)                         5)
Europanel Raw Database GIE, Brussels, Belgium                                                  50.0
European Flash Surveys EEIG, Brussels, Belgium                                                 50.0                     2002
GfK-Media Research Middle East AG, Hergiswil, Switzerland                                      49.03) 8)                2002                          5)

Holden Pearmain Research Ltd., London, UK                                                      20.0                     2002                      2312)
IHA·IMS Health GmbH, Hergiswil, Switzerland                                                    50.03)                   2002                   4,8622)
INCOMA Consult, s.r.o., Prague, Czech Republic                                                 19.53)                   2002                       972)
Indicorp Participações S.A., São Paulo, Brazil                                                 19.9                     2002                      4242)
Information Resources-GfK B.V., Dongen, Netherlands                                            19.9                     2002                 – 4,2442)
Intelect Partnership, Port Washington, New York, USA                                           25.3                  2001/2002                17,2252)
Isometric Solutions, LLC, Minneapolis, USA                                                     40.03)                   2002                     – 512)
Jan Schipper Compagnie B.V., Bussum, Netherlands                                               20.0                     2002                      1306)
m2A S.A., Saint Aubin, France                                                                  35.0                     2002                      3562)
MarketingScan SNC, Rueil-Malmaison, France                                                     50.0                     2002                   2,8062)
Media Focus (ARGE), Hergiswil, Switzerland                                                     50.0                  2001/2002                    5976)
NET SURVEY SZONDA IPSOS és GfK Hungária Internet
Kutató Intézete Kft., Budapest, Hungary                                                        50.03)                   2002                         02)
ORG-GfK Marketing Services (India) Private Limited, Mumbai, India                              40.0                  2001/2002                     263
Sports Tracking Europe B.V., Amstelveen, Netherlands                                           25.0                  2001/2002                     456)
St. Mamet Saisie Informatique (SMSI) SARL, Saint Mamet-la Salveta,
France                                                                                         20.03)                   2002                      4822)
UFO Veld B.V., Amsterdam, Netherlands                                                          50.03)                   2002                       – 36)
Unified Fieldwork Organisation UFO V.O.F., Amsterdam, Netherlands                              50.03)                   2002                          5)

V.O.F. Projectbureau Politiemonitor, Hilversum, Netherlands                                    50.03)                   2002                          5)

Other participations (abroad)

Bureau voor Reclame Statistiek Hoofddorp B.V., Hoofddorp, Netherlands                          49.03)                   2002                          5)

IRI Infoscan Ltd., Maidenhead, Berkshire, UK                                                    5.8                     2002

1) Profit and loss pooling agreement      4) Partially indirect shareholding                               7) Share capital (excluding non-voting participation
2) Details as per commercial balance      5) Details not available                                            certificates)
   sheet II                               6) Details as per provisional financial statements               8) Newly established in 2002
3) Fully indirect shareholding               drawn up under national law                                   9) In liquidation
                                                                                                     Auditors’ Report     F I N A N C I A L S TAT E M E N T S


We have audited the consolidated financial statements, comprising                    In our opinion, the consolidated financial statements give a true
the balance sheet, the income statement and the statements                           and fair view of the net assets, financial position, results of
of changes in shareholders’ equity and cash flows as well as the                     operations and cash flows of the Group for the business year in
notes to the financial statements prepared by the GfK Aktien-                        accordance with Accounting Principles Generally Accepted in
gesellschaft, Nuremberg for the business year from 1 January 2002                    the United States of America.
to 31 December 2002. The preparation and the content of the
                                                                                     Our audit, which also extents to the group management report
consolidated financial statements in accordance with Accounting
                                                                                     prepared by the Company’s management for the business year
Principles Generally Accepted in the United States of America
                                                                                     from 1 January 2002 to 31 December 2002, has not led to any
(US GAAP) are the responsibility of the Company’s management.
                                                                                     reservations. In our opinion on the whole the group management
Our responsibility is to express an opinion on these consolidated
                                                                                     report provides a suitable understanding of the Group’s position
financial statements based on our audit.
                                                                                     and suitably presents the risks of future development. In addition,
We conducted our audit of the consolidated financial statements                      we confirm that the consolidated financial statements and the
in accordance with German auditing regulations and German                            group management report for the business year from 1 January
generally accepted standards for the audit of financial statements                   2002 to 31 December 2002 satisfy the conditions required for
promulgated by the Institut der Wirtschaftsprüfer (IDW). Those                       the Company’s exemption from its duty to prepare consolidated
standards require that we plan and perform the audit such                            financial statements and the group management report in
that it can be assessed with reasonable assurance whether                            accordance with German law.
the consolidated financial statements are free of material
misstatements. Knowledge of the business activities and the                                                                                                       127
economic and legal environment of the Group and evaluations
of possible misstatements are taken into account in the                              Nuremberg, 3 April 2003
determination of audit procedures. The evidence supporting the
amounts and disclosures in the consolidated financial statements                     Bayerische Treuhandgesellschaft
is examined on a test basis within the framework of the audit.                       Aktiengesellschaft
The audit includes assessing the accounting principles used and                      Wirtschaftsprüfungsgesellschaft
significant estimates made by management, as well as evaluating                      Steuerberatungsgesellschaft
the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our                        Kozikowski                           Renner
opinion.                                                                             (German Public Auditor)              (German Public Auditor)

In case of publication or transmission of the consolidated financial statements in a version different to the version confirmed by us (including translations
into other languages), in so far as our audit opinion is quoted or our review referred to, a new statement is to be obtained from us. Please refer to § 328 HGB
(German Commercial Code).
                             A Konzernbilanz L J A N R E SR MS CT ILO N S
                               DDITIONA          I H FO AB A H US


130    Glossary of financial terminology
131    Glossary of specialist marketing terms
133    List of company abbreviations used in the management report
134    Contacts

C3*    The GfK Group: five-year overview
C3*    Index
C4*    Financial calendar
* Cover pages are marked with “C”
      Glossary of financial terminology

      Affiliated companies                           Equity ratio                                  Other expenses
      Companies which are controlled by the          On balance sheet equity in relation to        Expenses in connection with ordinary
      parent company. As a rule, the parent          total assets. The higher the indicator, the   business activities, excluding financial
      company holds the majority of the voting       lower the level of indebtedness.              expenses not attributable to cost
      rights and capital of the company.                                                           of sales or selling and general
                                                     Free float                                    administrative expenses. Examples are
      Associated companies                           Free float is the portion of shares in a      losses from the disposal of fixed assets
      Minority participations in companies on        joint stock company measured in terms of      and exchange losses.
      whose business or company policy a             the total number of shares issued, which
      decisive, but not controlling influence is     is not held by major shareholders. At GfK,    Other financial income
      exercised. Associated companies are in         36% of the share capital is in free float.    Financial income which is not attributable
      principle valued at equity.                                                                  to income from participations or net
                                                     Goodwill                                      interest income. Examples are profits or
      Cash flow                                      Intangible business asset that represents     losses on the disposal of securities and
      Balance of funds inflow and outflow            the value of the existing organization, its   write-downs on loans.
      affecting payment.                             image, client base etc. at the time of
                                                     acquisition of a company. Calculation:        Other income
      Cost of sales                                  purchase price of the company less pro        Income from ordinary business activities,
      All types of operating costs which can be      rata net worth.                               excluding financial income, which does
      directly allocated to clients’ orders. These                                                 not represent sales. Examples are profits
      include in particular costs for external       Gross cash flow                               on the disposal of fixed assets and
      data procurement, costs for interviewees       Income for the accounting period less         exchange gains.
      and interviewers.                              shares of income attributable to minority
                                                     interests, depreciation and amortization      Other participations
      Cost of sales accounting                       and write-ups, deferred tax expenses and      Companies in which a participation is
      Form of income statement which shows           income, income from at equity valuations      held but on whose business policy no
      the income achieved in the market during       which have no effect on payment, book         decisive influence is exercised. The
      the accounting period. Opposite: total cost    profits and losses on asset disposals, net    participation quota is below 20 %.
      accounting. Here the total operating           interest income, changes in provisions
      income for the period is shown, whereby        and other expenses/income not affecting       Selling and general administrative
      the sales and changes in inventories are       payment.                                      expenses
      shown against the total cost. Both forms                                                     Operating costs which are not directly
      of accounting produce the same income          Gross income from sales                       related to individual client orders such as
      for the accounting period.                     Sales less cost of sales.                     costs for general marketing measures and
                                                                                                   for accounting.
      Deferred taxes                                 Income from participations
      Tax assets or charges reported in the          Contains the items income from                Stock option programme
      balance sheet to equalize the difference       participations, profits and losses on         Profit-sharing programme for managers,
      between the tax debt actually assessed         the disposal of participations and            whereby managers waive variable salary
      and the commercial tax burden based on         depreciation on participations.               components and instead receive options.
      the accounting in accordance with                                                            Options can be exercised at the earliest
      US GAAP for the commercial balance             Majority participations                       after two years within set periods. In order
      sheet. The basis for determining deferred       Affiliated companies                         for options to be received, the managers
      taxes is the difference between the value                                                    entitled must achieve individually agreed
      of the assets and liabilities reported in      Minority participations                       targets and the price of the GfK share
      the balance sheet in accordance with           Generic term for associated companies         must be above the exercise price.
      US GAAP and the local tax balance sheet.       and other participations. The
                                                     participation quota is below 50 %.            US GAAP
      EBIT                                                                                         Abbreviation for United States Generally
      Abbreviation for earnings before interest      Net interest income                           Accepted Accounting Principles.
      and taxes calculated as operating              Interest income less interest expenses.
      income plus other income less other            This item includes interest income and
      expenses.                                      expenses on bank credits and liabilities,
                                                     loans, securities, liabilities under leases
      EBIT margin                                    and other accounts receivable and
      EBIT in relation to sales. The higher          payable.
      the indicator, the higher the earnings
      power.                                         Operating income
                                                       Gross income from sales less
                                                       selling and general administrative
                                                     expenses. Most important internal
                                                     earnings indicator.
                                                                                            Glossaries   ADDITIONAL INFORMATION

Glossary of specialist marketing terms

Ad Hoc Research                              CLASS (Customer Loyalty and                      Data mining
Systematic, empirical research, used         Satisfaction Study)                              Computer-aided data analysis used to
as the basis for marketing decisions.        A study carried out on behalf of Coca-Cola       identify trends and correlations.
Ad Hoc Research is one of GfK’s business     on customer loyalty.
divisions.                                                                                    Data warehouse
                                             Concept test, concept test research              Integrated system of databases used to
Advertising test                             Tools used to assess acceptance of a new         support business decisions, particularly
Testing of ads, commercials and other        product or advertising campaign based on         in marketing; S*T*A*R*T*R*A*C*K.
advertising media before or after they are   a verbal description or picture, carried out
published or shown.                          before a product test.                           ECPO (Electronic Consumer Panel
AGF (Television Research Partnership)        Consumer panel                                      Consumer Tracking technology used
The body for which GfK Fernsehforschung      A sample of households which provide             to collect information on purchasing by
carries out continuous television audience   regular information on their purchases;          means of various electronic devices or
research in Germany. Founded in 1988,        ConsumerScope, ConsumerScan,                     applications (Internet, personal digital
the AGF now comprises the TV networks        aTRACKtive, BASS, electronic diary.              assistant, mobile phone).
ARD, ProSiebenSAT.1 Media AG, RTL and
ZDF.                                         ConsumerScan                                     Electronic diary
                                                Consumer panel in which the purchasing        A hand-held piece of electronic equipment
AGF/GfK TV panel                             behaviour of households and individuals          used to input data, which is then            131
  TV panel.                                  is recorded. Covers purchases of nearly all      downloaded by modem. Used by the
                                             fast moving consumer goods. Households           consumer panel, ConsumerScan.
aTRACKtive                                   record their purchases using an
A software package used to carry out         electronic diary; panel, household               ENCODEX
standard and one-off analyses of data from   panel,    aTRACKtive, BASS.                      An interface for business-to-business
the consumer panel ConsumerScan.                                                              e-commerce transactions in consumer
aTRACKtive*web is the Internet-compatible    ConsumerScope                                    durables.
version of aTRACKtive, giving clients and       Mail panel, carrying out continuous
employees anywhere in the world access       surveys of purchases of consumer goods           Gain and loss forecast
to the ConsumerScan databases at any         with slower-moving acquisition cycles and        Qualitative instrument developed as
time.                                        the use of services; consumer panel.             part of Integrated Intelligence and
                                                                                              used for target group segmentation;
Audience research                            Consumer Tracking                                  market segmentation.
  Media research.                            A survey of households and individual
                                             consumers that is repeated at regular            GfK*PackChallenger®
BASS (Brand ASsessment System)               intervals: Consumer Tracking is one of           Quantitative packaging test from
Example of an instrument relating to the     GfK’s business divisions; tracking,              GfK Ad Hoc Research.
   Integrated Intelligence approach. This    panel, household panel,      ECPO.
combines data from the consumer                                                               Household panel
panel ConsumerScan and from                  Copy test                                        A representative sample of households
image and brand research in order to         Survey research procedure where a                which regularly report on their purchases;
monitor the psychological and monetary       magazine or newspaper is used to                    Consumer Tracking, ConsumerScan,
value of a brand; data merging,              determine what the interviewee has                  panel.
brand value.                                 seen, read, recognized and retained.
                                                                                              Image research
Brand value                                  CSS® (Controlled Split Survey)                   Information gathering relating to the
The value of a brand, which is determined    GfK questionnaire splitting procedure to         image of a company or specific product or
by considering various factors which         reduce time and money spent on oral and          service; BASS.
make a brand attractive to consumers;        written surveys.
BASS.                                                                                         Integrated Intelligence
                                             Customer loyalty research                        Service segment which specializes in
Category Management                          Surveys to measure and improve customer          integrating data from several GfK Group
A concept whereby manufacturers and          satisfaction and customer loyalty;               divisions and using it for complex
retailers set joint targets and develop         CLASS.                                        consumer marketing surveys covering
strategies for a particular product                                                           several areas; data merging, BASS,
category and then endeavour to realize       Customer segmentation                               gain and loss forecast.
these. The aim is to increase sales and        Market segmentation.
income.                                                                                       Internet reach
                                             Data merging                                     The percentage of the total population
                                             A statistical process whereby the features       or a given target group reached by a
                                             of subjects in one sample are transferred        website; reach, media research.
                                             to those in another sample; Integrated
                                             Intelligence, BASS, MOVE.
      Mail panel                                    Portable people meter                         Target group segmentation
      A postal survey of units of the same          Metering equipment which is used in             Market segmentation.
      sample which is repeated at regular              reach research and worn at all times.
      intervals; ConsumerScope.                     A typical portable people meter is            Telecontrol XL
                                                       Radiocontrol.                              The latest generation of TV meters
      Market segmentation                                                                         produced by GfK subsidiary, Telecontrol.
      Divison of an overall market into sub-        Product test, product test research
      markets using different categories.             Concept test, concept test research.        Tracking
      Segmentation can be by product type,                                                        Surveys of individuals, households and
      price classes, geographic split or socio-     Radiocontrol                                  companies, repeated at regular intervals
      economic lifestyle features and value         Electronic meter, incorporated into a         and using the same interview method
      categories; gain and loss forecast.           wristwatch, that measures radio listening;    each time. Unlike a panel, the data is
                                                       reach reach research media                 not necessarily collected from the same
      Media research                                research, portable people meter.              sources each time, but the structure of
      Systematic, empirical research used as                                                      the sample is the same in each case;
      a basis for media planning by media           Radio research                                   Consumer Tracking, retail tracking.
      companies, their advertising clients, and     Measuring the listening habits of radio
      others. This form of research is the          listeners; Radiocontrol.                      TV meter
      responsibility of GfK’s Media business;                                                     An electronic instrument that measures a
132      reach, reach research, Radiocontrol.       Ratings figures                               person’s TV viewing at regular intervals;
                                                    The audience figures in terms of              in Germany and Austria this is done on
      Media reach research                          households expressed as a percentage;         a second-by-second basis; TV panel,
       Reach research.                                TV panel.                                      Telecontrol XL.

      Modelling                                     Reach                                         TV panel
      Method used to illustrate a complex real      The percentage of the total population or     A representative sample of households,
      situation in simplified form taking account   a specific target group reached by a          selected using statistical methods, whose
      of the essential elements and correlations.   medium. A central concept in media            TV viewing is continuously metered by
      The result is a model which can be used       planning and media research; reach            GfK Fernsehforschung and used as the
      to analyze and simulate problems and          research, TV panel, Radiocontrol.             basis for audience share and ratings
      produce forecasts.                                                                          figures; TV meter, reach, panel.
                                                    Reach research
      Modelling analyses                              The continuous recording of media
       Modelling.                                   usage; reach, portable people meter,
      Name of a data merging project of GfK,
      whereby the ConsumerScan panel of             Retail panel
      GfK Panel Services and the TV panel           Regular recording of sales, product
      of AGF/GfK Fernsehforschung are               categories and products via a
      merged. The aim is to provide the             representative sample of retailers with
      advertising market with improved target       different retail types and sales channels;
      group differentiation and analyses of            Non-Food Tracking, retail tracking.
      advertising effectiveness monitoring.
                                                    Retail research
      Non-Food Tracking                               Retail tracking.
      Surveys of sales of consumer durables,
      carried out at regular intervals.             Retail tracking
      Non-Food Tracking is one of GfK’s             Continuous, systematic monitoring of
      business divisions; retail tracking,          sales in consumer durables and services
        retail panel, S*T*A*R*T*R*A*C*K.            markets. These product movements are
                                                    recorded in all relevant sales channels
      Panel                                         and distribution forms in the retail trade;
      A survey of individuals, households,             tracking, Non-Food Tracking,
      companies etc. to obtain data on a single        retail panel.
      subject at regular intervals over a longer
      period, using the same sample and             S*T*A*R*T*R*A*C*K
      carried out using the same methods each       A host-free IT platform for the production
      time; TV panel, ConsumerScan,                 and analysis of data from the GfK Non-
      ConsumerScope, household panel, -             Food Tracking business; data ware-
      tracking.                                     house.
                                                                               Company abbreviations   ADDITIONAL INFORMATION

List of company abbreviations used in the Management Report

bwv Group, Switzerland                         GfK Custom Research, USA                     m2A, France
bwv Holding Ag, St. Gallen, Switzerland        GfK Custom Research Inc., Minneapolis,       m2A S.A., Saint Aubin, France
bwv IT solutions AG, St. Gallen,               USA
Switzerland                                                                                 Martin Hamblin GfK HealthCare UK, UK
definitive systems ltd., Zurich, Switzerland   GfK MACON, Germany                           Martin Hamblin GfK Healthcare UK
dm michelotti AG, Rotkreuz, Switzerland        GfK MACON AG, Waghäusel, Germany             Limited, West Byfleet, Surrey, UK
dm-plus Direktmarketing AG, St. Gallen &
Rotkreuz, Switzerland                          GfK Portugal, Portugal                       Martin Hamblin GfK, UK
                                               GfK PORTUGAL – Marketing Services            Martin Hamblin GfK Limited, London, UK
IFR Group, France                              LDA, Lisbon, Portugal
CMI Field SARL, Viroflay, France                                                            Martin Hamblin GfK Research Inc, USA
Institut Francais de Recherce S.A.,            GPI Kommunikationsforschung,                 Martin Hamblin Research Inc, Hartford,
Viroflay, France                               Germany                                      Connecticut, USA
IFR Europe Ltd., London, UK                    GPI Kommunikationsforschung
IFR France S.A., Viroflay, France              Gesellschaft für Pharma-Informations-        Metris, Portugal
IFR Italia S.r.L., Milan, Italy                systeme mbH, Nuremberg, Germany              METRIS-MÉTODOS DE RECOLHA E
IFR Marketing España S.L., Madrid, Spain                                                    INVESTIGAÇÃO SOCIAL LDA, Lisbon,
IFR Monitoring Deutschland GmbH,               I+G Group, Germany                           Portugal
Düsseldorf, Germany                            GPI Kommunikationsforschung
IFR Nederland B.V., Amsterdam,                 Gesellschaft für Pharma-                     Orange Interactive Research, Sweden      133
Netherlands                                    Informationssysteme mbH, Nuremberg,          Orange Interactive Research AB,
IFR Polska Sp. z.o.o., Warsaw, Poland          Germany                                      Stockholm, Sweden
IFR U.K. Ltd., London, UK                      I+G Gesundheitsforschung GmbH & Co.,
                                               Nuremberg, Germany                           Significant GfK, Belgium
IHA-GfK-Group, Switzerland                     Infratest + GfK Gesundheitsforschung         Significant bvba, Hervelee, Belgium
bwv Holding AG, St. Gallen, Switzerland        GmbH & Co., Berlin, Germany
Eiphos Holding AG, Hergiswil,                                                               Strateji GfK, Turkey
Switzerland                                    Indicator GfK, Brazil                        Strateji GfK Research Services A.S.,
IHA-GfK AG, Hergiswil, Switzerland             Indicator Pesquisa de Mercado Ltda,          Istanbul, Turkey
IHA·IMS Health GmbH, Hergiswil,                São Paolo, Brazil
Switzerland                                    Indicator Servicos de Informação Ltda,       Telecontrol, Switzerland
IHA Italia S.p.A., Milan, Italy                São Paolo, Brazil                            Telecontrol AG, Hergiswil, Switzerland
Liechti AG, Kriegstetten, Switzerland          Indicorp Participações S.A., São Paolo,
Media Monitoring Switzerland AG, Berne,        Brazil
dragon eye Ltd., Hergiswil, Switzerland        Informark, Australia
Media Focus (ARGE), Hergiswil,                 Informark Pty. Ltd., Braddon, Australia
Modata AG, Hergiswil, Switzerland              Intercampus, Portugal
Modata GmbH, Berlin, Germany                   INTERCAMPUS-RECOLHA,
Telecontrol AG, Hergiswil, Switzerland         TRATAMENTO E DISTRIBUIÇÃO DE
                                               INFORMAÇÃO LDA, Lisbon, Portugal
Emer-GfK, Spain
EMER GfK S.L., Valencia, Spain                 Intomart GfK, Netherlands
                                               Intomart GfK Group B.V., Hilversum,
ENIGMA GfK, Germany                            Netherlands
ENIGMA Institut für Markt- und                 Intomart B.V., Hilversum, Netherlands
Sozialforschung Jürgen Ignaczak GmbH,          Aspemar-GfK N.V., Brussels, Belgium
Wiesbaden, Germany                             Audimetrie N.V., Brussels, Belgium
                                               Adware Media Solutions B.V., Hilversum,
G.E. Marketing Research, Spain                 Netherlands
G.E. Marketing Research S.A., Valencia,
Spain                                          IRI/GfK, Germany
                                               Information Resources GfK GmbH,
GfK AG, Germany                                Nuremberg, Germany
GfK Aktiengesellschaft, Nuremberg,

      If you wish to order further copies of the Annual Report
      or have any questions, please contact:

      Public Affairs and Communications            Publisher:

      Dr. Ulrike Schöneberg                        GfK AG
      Fon +49 (0) 911 - 395 26 45                  Nordwestring 101
      Fax +49 (0) 911 - 395 40 41                  90319 Nuremberg              

                                                   Special contribution:
      Investor Relations                           Michael J. Naples, Princeton, New Jersey, USA
      Bernhard Wolf                                Editorial support services:
      Fon +49 (0) 911 - 395 20 12                  Medienservice Peter Reichard, Ebersberg
      Fax +49 (0) 911 - 395 40 75                         Design:
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134                                                Frankfurt am Main

                                                   Annette Frick, Frankfurt
      This Annual Report is also available         Lithography:
      in German.                                   Mainteam, Aschaffenburg

      The English language version is a            AGET Limited, London, UK
      translation of the audited German Annual
      Report.                                      Printing:
                                                   Druckerei Eugen Seubert, Nuremberg

                                                   Printed on unchlorinated bleached paper
               Accounting as per HGB (German Commercial Code)                       Accounting as per US GAAP

Income                                            1998      19991)      2000         2001       2001        2002      Change       Income
statement                                                                                        Pro                   in %2)      statement
Total performance                                309.2      380.4       469.0       482.1       505.8      559.4       + 10.6      Sales
  thereof Consumer Tracking3)                     60.9        82.4       89.4         84.8       84.8       86.0         + 1.4        thereof Consumer Tracking3)
  thereof Non-Food     Tracking3)                 91.1      100.9       112.9       119.5       122.2      137.3       + 12.4         thereof Non-Food Tracking3)
  thereof Media3)                                 40.5        47.9       53.6         56.5       62.6       61.3         – 2.1        thereof Media3)
  thereof Ad Hoc Research3)                      101.8      128.4       183.5       199.6       214.5      246.3       + 14.8         thereof Ad Hoc Research3)
  thereof Other3)                                 17.6        21.4       30.2         21.6       21.6       28.5       + 31.8         thereof Other3)
Proportion from outside Germany in %              49.5        56.9       62.4         60.1       62.0       63.4           –       Proportion from outside Ger in %
Personnel expenses                               131.9      166.9       206.7       209.7       223.2      244.1         + 9.4     Personnel expenses
Depreciation and amortization4)                   18.1        20.5       16.6         37.0       28.2       24.9        – 11.7     Depreciation and amortization
Gross cash flow                                   30.4        33.7       50.1         44.8         –        40.7         – 9.2     Free cash flow
EBITDA                                            34.5        44.1       53.0         52.8       58.0       68.5       + 18.2      EBITDA
EBIT                                              16.4        23.6       36.4         15.8       29.8       43.6       + 46.6      EBIT
Net income from participations                      1.7        3.2        3.0          3.7        2.9         6.4      +119.6      Net income from participations
Result from ongoing                                                                                                                Result from ongoing
business activity                                 17.0        27.1       37.1          3.9       17.0       45.3      + 165.9      business activity
Consolidated total income                                                                                                          Consolidated total income
before minority interests                         10.7        13.7       25.4        – 6.1        5.5       30.0      + 449.6      before minority interests

Balance sheet                                                                                                                      Balance sheet
Fixed assets                                      75.6        97.9       77.2       208.6          –       263.8       + 26.5      Fixed assets
Investments                                       54.5        44.3       35.2       108.3          –        76.6        – 29.3     Investments
  thereof in tangible fixed assets                45.2        39.2       23.2         31.1         –        28.6         – 8.1        thereof in tangible fixed assets
  thereof in financial assets                       9.3        5.2       11.9         77.2         –        48.0        – 37.8        thereof in financial assets
Current assets                                    92.7        89.1      190.4       189.8          –       189.8         – 0.1     Current assets
Shareholders’ equity                              51.8        55.6      132.7       163.1          –       181.5       + 11.3      Shareholders’ equity
Capital ratio in %                                30.8        29.7       49.6         39.5         –        38.7           –       Capital ratio in %
Borrowings5)                                     114.3      129.7       133.1       243.3          –       281.2       + 15.6      Borrowings5)
Total assets                                     168.3      187.0       267.6       413.1          –       469.6       + 13.7      Total assets

Key indicators                                                                                                                     Key indicators
EBIT margin in %                                    5.3        6.2        7.8          3.3        5.9         7.8          –       EBIT margin in %
EBIT margin after income from                                                                                                      EBIT margin after income from
participations in %                                 5.9        7.0        8.4          4.0        6.5         8.9          –       participations in %
Earnings per share in EUR                           0.54       0.33       0.88       – 0.18       0.24        0.98    + 308.3      Earnings per share in EUR
Return on equity in %                             25.2        13.0       16.5        – 2.9         –        14.9           –       Return on equity in %
Dividend per share in EUR                       0.08/0.10      0.13       0.15         0.17        –          0.20     + 17.6      Dividend per share in EUR
Total dividend                                      1.3        3.4        3.9          4.4         –          5.2      + 17.6      Total dividend
Year-end share price in EUR                         –         40.00      31.00        20.39        –        12.81       – 37.2     Year-end share price in EUR
Average no. of shares                                                                                                              Average no. of shares
(in thousands)                                  20,000      21,122     26,122       26,122         –      26,122           0.0     (in thousands)
No. of employees at year-end                      3,111      3,676      4,212        4,396      4,653       4,879        + 4.9     No. of employees at year-end

1) Excl. Initial Public Offering (IPO)
2) Comparison with pro forma figure
3) The figures for total performance (HGB) and sales (US GAAP) for the business divisions are based on figures from the internal Management Information System.
   They differ slightly from the figures reported in the financial statements.
4) On tangible fixed assets and intangible assets
5) Provisions, liabilities and minority interests

                94 ff. Accounting and                               94 Consolidation, methods of
                       valuation methods
                                                               98, 117 Consolidation, scope of
         65 f., 86, 98 Acquisitions
                                                                    67 Net indebtedness
46 ff., 49, 70 f., 86, 114 Ad Hoc Research
                                                               90, 101 Net interest income
          117, 122 ff. Affiliated companies
                                                     30 ff., 33, 69 f., 86 Non-Food Tracking
         99, 118, 125 Associated companies
                                                            68 ff., 85 f. Operating income
        66, 91, 114 f. Balance sheet
                                                                    68 Organic growth
68 ff., 85 f., 103, 114 Balance sheet, notes to
                                                                 82, 85 Organization and
           67, 92, C3 Cash flow from ongoing                            administration
                      business activity
                                                                 65, 90 Other operating
               67, C3 Free cash flow                                    expenses
                114 f. Consolidated financial                    65, 90 Other operating income
                                                              111, 116 Other provisions
           65, 90, C3 Consolidated total
                                                                 114 f. Pro forma statement
                      income before minority
                      interests                                    110 Proposed appropriation
                                                                       of profits
               67, 92 Consolidated funds
                      statement                                    110 Provisions
     22 ff., 25, 68, 85 Consumer Tracking                        82, 85 Purchasing
                  113 Contingencies                          72 ff., 114 Regions
       4, 34, 85, 121 Corporate Governance                       78, 85 Research and
               66, 91 Current assets
                                                                  65 f. Result from ongoing
                   94 Currency conversion
                                                                        business activity
        66, 91, 101 f. Deferred taxes
                                                                  76 ff. Risk report
          56, 110, C3 Dividend
                                                        64, 90, 92, 112 Sales
  53, 80, 95, 103, C3 Earnings per share
                                                                   114 Segment reporting
       65, 85, 90, C3 EBIT
                                                  66, 91, 93, 108 ff., C3 Shareholders’ equity
       65, 85, 90, C3 EBIT after income from
                                                             66, 91, C3 Equity ratio
                                                                    C3 RoE
               65, C3 EBITDA
                                                                  54 f. Shareholder structure
        65, 85, 90 C3 EBITDA after income
                      from participations                       122 ff. Shareholdings
       65, 85, 90, C3 EBIT margin                                 52 ff. Share price performance
   80 ff., 85, 118, C3 Employees                          52 ff., 90, 95, Shares, earnings per
                                                                 103, C3
               67, 84 Financing
                                                                    67 Soft facts
        66, 91, 104 f. Fixed assets
                                                            56, 95, 109 Stock options
              95, 104 Goodwill
                                                                1, 85 f. Strategy
      65, 90, 100, C3 Net income from
                      participations                       2 ff., 119 ff. Supervisory Board
               65, 90 Income statement                    65, 90, 101 f. Taxes on income and
               100 ff. Income statement,
                       notes to                                  66, 91 Total assets
                   57 Investor Relations
         67 f., 84, C3 Investment
         58 f, 82, 121 Management Board
                       Margin, see EBIT margin
     38 ff., 43, 70, 86 Media

30 April 2003
Accounts press conference, Nuremberg

30 April 2003
Analysts’ conference, Frankfurt/Main

27 May 2003
Quarterly report as at 31 March*

13 June 2003
Annual General Meeting, Nuremberg

27 August 2003
Interim report as at 30 June*

26 November 2003
Quarterly report as at 30 September*

26 February 2004
Provisional result for financial year 2003

22 April 2004
Accounts press conference, Nuremberg

22 April 2004
Analysts’ conference, Frankfurt/Main

27 May 2004
Quarterly report as at 31 March*

15 June 2004
Annual General Meeting, Nuremberg

26 August 2004
Interim report as at 30 June*

25 November 2004
Quarterly report as at 30 September*

* Publication is scheduled for before the start of the trading session
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As a knowledge provider, we aim to be at the top in all the global markets in
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