esomar financial statements 2017 · 4 abbreviated consolidated financial statements 2017 management...

Abbreviated consolidated financial statements 2017

3Abbreviated consolidated financial statements 2017

Management report

Management review

Besides the Management Team the ESOMAR office has

employees active in the following teams Membership,

Directory, Government Affairs and Professional Standards,

Global Market Research Analysis, Global Events, Development

& Education, Sales, Marketing & communication, Finance

and Web.

Within ESOMAR all employees are bound by the standards of

performance and behaviour at work, which are written down

in the Personnel Manual that also contains paragraphs with

regard to valuing diversity and dignity at work. The Personnel

Manual is being updated annually.

It is a “cliché” that growth objectives and results are

influenced by market turbulence, which in itself is frequently

caused by sudden and dramatic political and technological

shifts. Nowadays, companies need to be prepared to move

fast, work agile and maintain a willingness to adapt. This is even

more applicable to a global market research organisation like

ESOMAR; the results from our fiscal year 2017, the investments

made and the projects developed during the year proved

once again that ESOMAR continues to anticipate and adapt

to, the Market Research industry’s needs.

While we had hoped to improve our top line revenue for the

7th consecutive year, we in fact ended up with a marginal

decline due to a drop in revenue from print advertising in

our Research World magazine. However, strict cost control

on our operational and general expenditure ensured that

our operating result before financial results and council

approved expenses, showed a very small improvement on

our 2016 result (EUR 101K vs. EUR 98K).

Investment and development projects are always designed

and selected to build for the future of ESOMAR, the Market

Research industry in general, and also for the new generation.

This year, less investment funds were needed, as we began

to benefit from the projects started in previous years. The

realisation of these projects is never possible without the

wonderful support, initiative and involvement of our Membership

community, together with the very many contributors,

ESOMAR representatives, supporters, advisors, advocates

outside of our membership – to all of whom the ESOMAR

Council, Board and Team would like to extend a very warm

and very sincere “Thank You”.

2017 was a year when ESOMAR continued to invest in, and

monitor, a wide range of initiatives, best practices, standards

and thought leadership exercises that will continue to shape and

Management report

In thousands of euro 2015 2016 2017

Revenue 5,572 5,670 5,609

Operational expenditure (4,149) (3,997) (3,941)

Total General expenditure (1,402) (1,575) (1,567)

Subtotal 21 98 101

Financial results (incl. Assets portfolio, etc.) 115 108 80

Operating results before special expenses 136 206 181

Council approved expenses (175) (110) (75)

Impairment of tangible fixed assets - - (53)

Donation to ESOMAR Foundation (35) - -

Net results (before tax) (74) 96 53

4 Abbreviated consolidated financial statements 2017

Management report

influence our industry. As you all know, ESOMAR’s focus is

to involve the next generation more and more, along with

the start-up community, so that together we can create the

movement towards the next Market Research Revolution.

This led – this year – to ESOMAR participating in Tech

summit programmes (together with partners and sponsors),

to evangelise to data players outside the MR sector, the

importance of our industry, professions and standards.

For consecutive years, the ESOMAR Council has implemented

on-going strategic growth plans for our association, with a

focus on increasing our audience of key data players within

(and without) our industry, based on the founding elements

of quality, innovation, new technology, youth and clients.

The Council continues to believe that technology, research

and development, in combination with what ESOMAR does

from code updates to political lobbying and showcasing

cutting edge content at conferences are the keys of driving

the success of our Community.

The performance of the ESOMAR asset portfolio in 2017

highlighted again (for the second consecutive year), the fragility

of the investment market: this year, the portfolio generated EUR

80K vs EUR 108K in 2016. While the conservative composition

of the portfolio does limit the risk of underperforming on value,

it nevertheless needs to be carefully monitored, going forward.

Despite this drop in the value of our financial assets, ESOMAR

registered a positive result after taxes of EUR 30K vs. EUR 26K

for the previous year.

In thousands of euro 2017 2016

Revenue 5,609 5,670

Operational expenditure (4,001) (4,094)

General expenditure

Overhead costs, salaries and social charges (408) (461)

Office expenses (501) (485)

Other expenses (163) (186)

Amortisation/depreciation of tangible fixed assets (510) (456)

Total general expenditure (1,582) (1,588)

Total result (excluding special and financial results) 26 (12)

Impairment of tangible fixed assets (53) -

Financial result 80 108

Tax (23) (70)

Net result to accumulated funds 30 26


Management report

Highlights 2017

2017 was ESOMAR’s 70th Anniversary! It is fair to say that not

many organisations can claim as long and as successful a

history, and so the year focussed on celebrating the initiatives

taken in the past, and planned for the future, to keep this

industry at the forefront of business intelligence.

Throughout 2017 ESOMAR analysed, defined, and continued to

implement a series of initiatives designed to move the industry

forward, in the context of what we believe the future will hold

in attracting the youth, sharing knowledge, advocating our

profession and creating constructive debate at every possible

opportunity. We believe that is the way to offer the best service

to our Members.

A selection of some of the key activities implemented during

the past 18 months are:

ESOMAR Anniversary• 5 surprise “Golden” tickets were sent to members for

attendance at our Events

• A campaign of 70 Tweets was instituted, with reasons for

being a Member

• Birthday parties were held at each of our regional events

• Honorary YES memberships were awarded to outstanding

young presenters

• A programme of client-only events were instituted, to

recognise the research buyer community

• A re-modelled Congress was hosted in Amsterdam, with

over 1,200 delegates. In financial terms, the initiatives

mentioned above during our 70th anniversary celebration

ensured that the Congress recorded a turnover figure of

EUR 1,361K, an increase of EUR 238K compared to New

Orleans (EUR 1,123K) and a result that was 147K better

than Congress 2016

• ESOMAR attended a series of Tech industry events (incl

The Web Summit), to promote more widely the value and

application of our revised Code of Ethics

ESOMAR Membership Corporate Membership continued to show healthy growth; at

the end of 2017, we had 569 Corporate Members - agencies

and clients; this represented an increase of 34 corporate

members on 2016, and many of these were research buyers

– attracted by our client-only focus.

In parallel with Corporate Membership, the Membership

Community overall increased from 4,886 individual members in

2016 to 5,807 – an increase of almost 1,000 individual members,

coming from 135 countries. In addition, with the current

community of corporate members, we believe we can now

reach more than 40,000 practitioners across the world.

Young ESOMAR Society (YES)Our Young ESOMAR Society – targeted at young professionals

to increase their knowledge of, exposure to, and networking in,

our sector grew from 97 to 439 and the number of members

aged under 36 doubled from 591 to 1,173 – so that they now

represent more than 20% of our total member base).

Code and guidelines • The updated International Code on Market, Opinion and

Social Research and Data Analytics came into force as

of 1 January 2017, and has since been translated into

Czech, German, French, Russian and Spanish while more

translations are underway. As of 31 December 2017, 38

national and regional research associations have adopted

or endorsed the revised Code.

• A new ESOMAR/GRBN Guideline on Mobile Research was

launched as well as an updated Data Protection Checklist.

• A project was started, jointly with EFAMRO, to develop an EU

approved Code of Conduct that is certifiable under the GDPR,

and which will interpret how GDPR requirements should

apply to the data, research and insights sector, strengthen

adherence to higher ethical and professional standards than

those set in the law, and offers a more accessible means for

research companies and their clients to demonstrate their

compliance with the EU GDPR.

• A new Clients Standards Sounding Board has been initiated

to ensure the guidance issued by ESOMAR Professional

Standards Committee is also fit for purpose for research

buyers. The Sounding Board currently includes members

from leading brands Mars, Microsoft, Oath, P&G, and Roche

Pharma.


Management report

Advocacy & Public Affairs• ESOMAR organised the 1st European Associations

Summit in Brussels, attended by ~100 attendees from EU

stakeholders, inluding members of European Parliament

and senior European Commission officials. This strengthened

the presence of ESOMAR in the EU and reinforced the

links with stakeholders by highlighting how data, research

and insights is part of the wider research community.

A campaign of 70 Tweets was instituted, with reasons for

being a Member

• ESOMAR joined a 23 organisations strong Copyright

coalition which defends the right to Text and Data Mining,

which is a critical aspect for (e.g.) social media research.

Honorary YES memberships were awarded to outstanding

young presenters

• ESOMAR brought together 12 organisations (AGOF, EBU,

EGTA, ESOMAR, EFAMRO, EGTA, FEBELMAR, MLE, MOA,

NME, SYNTEC, and WAN IFRA) to defend the interests of

online measurement in new European draft ePrivacy

Regulation which has resulted in a more enabling environment

for the placement of online audience measurement

cookies in the latest draft texts

• On the fringes of the 2017 Congress in Amsterdam the

Legal Affairs and Professional Standards Committees jointly

organised an athering on Future of Privacy and Standards,

which was attended by ~50 people. ESOMAR attended

a series of Tech industry events (incl. The Web Summit),

to promote more widely the value and application of our

revised Code of Ethics

• ESOMAR defended the interest of market research apps in

the Android Play Store, after Google threatened to restrict

access to measure respondent behaviour resulting in an

exemption for market research

• ESOMAR continued its ongoing efforts to ensure the

freedom to conduct opinion and election polls; 2017 saw

the wpublication of FAQs for journalists, a blog series on

RWConnect covering analyses of pre-election polls, as

well as a number of in-market events supporting national

associations (most notably Greece, Uruguay, and Russia).

Guidance to ESOMAR membersThe team answered 122 queries (+15% compared to 2016)

coming from 30 countries. About 75% of these questions

were answered within a week.

Five webinars were organised, covering the new ICC/

ESOMAR International Code, support and guidance on the

GDPR, as well as general updates from Government Affairs

and Professional Standards.

Disciplinary24 new complaints were processed in 2017, and 14 complaints

were successfully closed.

Continued unprofessional behaviour of a former ESOMAR

Corporate Member resulted in a public notification warning

members that multiple complaints have been made against

a non-member company regarding the company’s failure to

fulfil its payment obligations on a timely basis.

Legal action has been taken against non-members that

displayed the ESOMAR member mark, which in one case

led successfully to the withdrawal of the website.

AssociationsESOMAR launched a Partnership Programme to strengthen

the links with, and to increase and improve the service level

offered to, national associations; 11 Partnership Agreements

were signed as of 31 December 2017.

ESOMAR Livestream. As travel continues to be a cost that companies are obliged

to reduce, ESOMAR is faced with the challenge of how

best to ensure that its content reaches the widest possible

audience.

Our livestream audience continues to grow at each event;

in 2017 we achieved almost 1,200 delegates onsite at our

conference, and 9,650 viewers on-line! This has undoubtedly

helped us to continue to grow both our individual and corporate

membership numbers, as many more people get exposed

to our content and thought leadership.


Management report

Education

Career development continues to play an important part

in ESOMAR’s activities, as we engage the next generation

of potential researchers in professional development

opportunities. The Career events of 2017 added a further

(just under) 400 new contacts to the ESOMAR databases

and profiled the data, research and insights industry to

more than 800 young people around the world.

2017 saw another successful Summer Academy which

comprised over 120 registrations from 27 countries, with

38% of attendee’s being members and 40% end-clients of

research.

The Academy training concept was adapted for the USA in

2017 and called the ESOMAR Bootcamp – a first step 2 day

workshop run in Seattle on the West coast. 86 registrations

from 9 countries with 63% members and 23% end clients

attended this well reviewed event.

Webinars continued to bring in a huge amount of registrations

and contacts to ESOMAR with almost 7,000 registrations

through the platform. Going forward this information will be

centralized by ESOMAR so that better communications and

follow up on questions and queries can be done.

PublishingESOMAR continues to invest in its artificial intelligence online

library powered by ANA, with almost 15,000 papers, recordings,

magazines, codes and guidelines now catalogued and

searchable in the tool.

Searches saw a big increase in 2017 as the second version

of the platform was released with over 22,000 searches

from September to December 2017. Going forward v3 will

be released in 2018, which will be even more intuitive and

‘intelligent’ than v2.

An additional points of note As the community of ESOMAR members and practitioners

continues to increase, we should all be aware – and proud

of the fact – that this attraction to membership underscores

companies willingness to adopt and abide by the Code,

irrespective of their size in terms of FTE’s or turnover, and

allow them to reinforce their links with local associations who

also endorse or accept the principles embodied by the Code.

With the advent of GDPR and additional data protection

obligations, our Code and Ethics will never again be as

important.


Management report

Financial position and overview

RevenueIn 2017, the Society registered a turnover of EUR 5,609K,

compared to EUR 5,670K in 2016, EUR 5,572K in 2015, EUR

5,522K in 2014 and EUR 5,123K in 2013.

(1) Our events in 2017 saw an overall increase on commercial

revenue, but a lower contribution form delegate registration

due to the “competition” of our annual flagship event,

Congress in Amsterdam, where we celebrated our 70th

anniversary.

(2) Back in our hometown Amsterdam for the celebration of

our 70th anniversary our Congress saw almost 300 more

participants as in comparison with 2016. With almost

20% of our delegates being under 36 it was good to see

that our profession is attractive to the young generation.

From a financial perspective Congress 2017 exceeded our

budget expectations.

(3) Membership revenue for 2017 increased by EUR 5K

(after re-allocation to other activities). Looking back at

the last five years, the 2017 result is the best recorded

since 2013:(2017: EUR 1,765K vs. 2016: EUR 1,760K vs.

2015 – EUR 1,736K vs. 2014 – EUR 1,513K vs. 2013 – EUR

1,500K).

(4) The impact of corporate membership subscriptions has

not only benefited the membership numbers but has

also contributed significantly to the Directory results for

2016. 40% of all Directory revenue comes from corporate

membership subscriptions vs. 35% in 2016 and 32% in

2015. Total Directory revenue decreased slightly from

EUR 1,476K in 2016 to EUR 1,455K in 2017.

(5) Education (comprising summer academy, Bootcamp

USA, webinars and workshops) contributed positively to

the 2017 accounts, generating a surplus of EUR 20K vs.

EUR 8K in 2016, whilst conference related workshops

were provided free of charge.

(6) Research World Advertising and ESOMAR publications

also contributed positively to the surplus result, by EUR 37K

compared to EUR 83K in 2016. The lower contribution

in 2017 is mostly due to the drop in Research World

Advertising revenue.

ExpenditureGeneral Expenditure as per the table presented on page 4

decreased slightly compared to 2016 and increased compared

to 2015 due to costs related to the new investment absorbed

such as CRM system being it either direct costs or amortization/

depreciation costs of the system itself: 2017 – EUR (1,582)K

vs. 2016 – EUR (1,588)K vs. 2015 – EUR (1,451)K vs. 2014 –

EUR (1,470)K vs. 2013 – EUR (1,470)K.

The operating result for 2017, before impairment of tangible

fixed assets, registered a positive result of EUR 26K compared

to 2016 of (12)K.

The ESOMAR portfolio registered a beneficial result of EUR

80K in 2017 vs. EUR 110K in 2016 vs. EUR 119K in 2015 vs.

EUR 322K in 2014.

The solvency of ESOMAR is, as always, very good with

a 61% score. With a total of cash and equivalent of EUR

3,286K at year end 2017 there is limited risk ESOMAR will

not be able to cover their bills.

Financial risk management

OverviewThe Group has exposure to credit, liquidity and market risk,

from its use of financial instruments.

This note presents information about the Group’s exposure

to each of the above risks, the Group’s objectives, policies

and processes for measuring and managing risk, and the

Group’s management capital. Further quantitative

disclosures are included throughout these consolidated

financial statements.

Credit riskCredit risk is the risk of financial loss to the Group if a

customer or counterparty to a financial instrument fails to

meet its contractual obligations. Principally it arises from

the Group’s receivables from investment securities and

customers.

InvestmentsThe Group limits its exposure to credit risk by mainly

investing in triple-A rated bonds and securities (Standard &

Poor’s) and A from Moody’s. Given these high credit ratings,

management does not expect any counterparty to fail to

meet its obligations.

Trade and other receivablesThe Group’s exposure to credit risk is influenced mainly by

each customer’s individual characteristics.

The Group establishes an impairment allowance that represents

its estimate of incurred losses regarding trade and other

receivables and investments. The allowance consists of a

specific loss component that relates to individually significant

exposures.

Liquidity riskLiquidity risk is the risk that the Group will not be able to

meet its financial obligations as they fall due. The Group’s

approach to managing liquidity is to ensure, as far as

possible, that it will always have sufficient liquidity to meet

its liabilities when due, under both normal and stressed

conditions, without incurring unacceptable losses or risking

damage to the Group’s reputation.

The Group ensures that it has sufficient cash on demand to meet

expected operational expenses for the current period. This

is done by preparing cash flow budgets or the coming year and

the current cash position (including cash position as part of asset

management) is sufficient to cover the operational expenses.

This excludes the potential impact of extreme circumstances

that cannot reasonably be predicted.

Market riskMarket risk is the risk that changes in market prices, such as

foreign exchange rates, interest rates and equity prices will

affect the Group’s income or the value of its financial instruments

holdings. The objective of market risk management is to manage

and control market risk exposures within acceptable parameters,

while optimizing the return on risk investment.

The Group has mandated ABN AMRO Asset management

to buy and sell securities and to maintain cash balances for

investment purposes. All such transactions are carried out

within the risk profile set by the Council of the Society of

ESOMAR.

In order to manage market risks, the asset management

portfolio performance is reviewed on a monthly basis by the

management of ESOMAR.

Currency riskThe Group is exposed to currency risk on investments and

purchases that are denominated in a currency other than

the Euro.

Based on the risk assessment performed by the Group, the

net exposure of the currency risk is kept to an acceptable level

and therefore no hedge instruments are applied to manage the

currency risk on investments and trade payables denominated

in a foreign currency.

Interest rate riskThe risk of fluctuations in value of fixed income assets is not

hedged.


Management report


Management report

Other market price riskThe primary goal of the Group’s investment strategy is to

maximize investment returns, keeping in mind the defined

strategic mix agreed by Council and the management of

ESOMAR. In accordance with this strategy all investments

are designated at fair value through profit or loss since their

performance is actively monitored and they are managed

on a fair value basis.

Capital managementThe Group monitors its capital which comprises all components

of accumulated funds attributable to the members of the society.

The Group’s objective when maintaining capital is to safeguard

the Group ability to continue as a going concern, so that it can

continue to meet its strategy and benefits for other stakeholders.

The Group sets the amount of capital it requires in proportion

to risk. The Group manages its capital structure and makes

adjustments to it in the light of changes in economic conditions

and the risk characteristics of the underlying assets. Following

the capital management structure, the Group’s strategy is to

preserve a strong cash base and to have a spread investment

portfolio.


Management report

Industry outlook 2018: 2017 saw a number of interesting developments, noting that

change manifests itself in different ways, every year!

GfK saw a substantive change in management and ownership;

Kantar experienced some shareholder disquiet (which has led

to Kantar now being for sale), and 2017 saw continued success

for the smaller, nimbler and more agile companies, as well as

the continued growth in tech and data-literate start-ups.

Geo-political and economic influences also played their part…a

change in the US administration has created some uncertainty

regarding the market there, and most prominently, the trend

of fake news and unvalidated opinions and criticism continues

to take up a lot of air-time and space. I will repeat myself and

say again that never before has it been as important for us to

support, publicise and advocate for the myriad good things

our industry does, the rigour it applies to all we do, and the

many societal, legislative and commercial benefits that good

research brings.

As more and more data becomes available, our profession

sees the rise of two main groups….the first comprises those

who leverage tech and concentrate on efficiency – usually

with a resultant price advantage; the second are the “expert

consultants” (often self-proclaimed) who leverage their

seniority and access to top management on the buying side.

However, neither of these groups have the knowledge or

appreciation of the increasing need for rigour and validation

of data and information – this must become our mantra…

there is simply NO profession better at understanding and

analysing data than ours, and ESOMAR will continue to provide

as many platforms as we can to highlight and showcase this

unique expertise.

From a financial perspective, 2018 may be a challenging

year – particularly as more and more of the tech-enabled

“efficiencies” play a role in the selection and determination

of budgets and suppliers. Exchange rates will also have an

impact, as geo-political tensions rise and fall; nonetheless,

I do believe that the value of our unique knowledge will

remain appreciated, and that this time next year, we will

continue to report on the positive evolution of our profession.

Please also remember that any success we can report in

achieving these objectives, is simply a reflection of your

input and your support; none of our accomplishments can

be achieved without your thoughts, contributions, critiques

and debate; these have all guided us in our work and have

facilitated the generation of those key ideas that will influence

the industry over the next 20 years. To all our contributors,

supporters, advisors and advocates, actual and future, we

wish to extend one more time our most sincere “Thank You”.


Management report

A new era of Data protectionOur role is now to broaden the appeal and the relevance of

this Code to the wider business intelligence community, so

that its benefits become clear to, and can entice, the next

generation of data curation companies, who have a wide range

of new, passive, and in some cases, unseen, mechanisms

for collecting and analyzing information.

As data is now ubiquitous, the sources of information of large

data sets is often unclear or unseen, and in the eyes of the

public, clandestine. Against this background, it is perhaps

worth reminding ourselves that the research industry has an

unparalleled record in appreciating and safekeeping, data.

This has always laid at the heart of our ethical code(s), and our

industry has been recognised as an exemplary proponent

of self-regulation.

Nonetheless, not every industry can claim the same track-record,

and thus the EU instituted the General Data Protection

Regulation to try and ensure that a similar appreciation of data

privacy be implemented across all industries. Having played

an extensive role in the drafting of the Regulation, I am very

happy to say that this Regulation is good for our industry

and good for our ethical practices.

The new ICC/ESOMAR Code tackles many of the challenges

that the new data sources raise, and translates the principles

to which our profession has successfully abided into today’s

digital data context. Along the way, it has garnered the support

of many legislators, and it is now our focus to communicate the

benefits of suchj a Code to the next generation of data curation

companies, who have a wide range of new, passive, and in

some cases, unseen, mechanisms for collecting and analyzing

information.

In parallel with this initiative, and in partnership with EFAMRO,

we are now also developing an EU approved Code of Conduct,

that will be certifiable under the GDPR, and which will interpret

how GDPR requirements should apply to the data, research

and insights sector in real practical terms. It will also strengthen

adherence to higher ethical and professional standards than

those set in the law, and will offer (firstly) a more accessible

means for research companies and their clients to demonstrate

their compliance with the EU GDPR, and secondly, will

potentially allow for a truly globally recognised certification

of Data Protection for our sector.

Any individual or company who chooses to join our association,

sign up to the Code and invest in the future of this profession,

demonstrates a clear and distinct desire to set themselves

apart as a responsible, distinguished provider of insights.

ESOMAR promises to support and develop that distinction

with all that it does.

As always, we look forward enormously to welcoming you

– irrespective of whether you are a member or non-member –

to join us, to chat with us, to participate in an event with us,

or to contribute in some other way with us, so that we may

all truly celebrate and advance the cause of research.

Amsterdam, 17 August 2018

The Board of Management,

Finn Raben Marie-Agnès Mourot de Lathyle

Director General Chief Finance & Operations Officer

Abbreviated Consolidated statement of the financial positionAs at 31 December 2017


Non-current assets

Intangible assets 582 494

Property, plant and equipment 1,058 881

Financial fixed assets 5,397 5,367

Total non-current assets 7,037 6,742

Current assets

Inventory 6 7

Receivables

Debtors 214 952

Prepaid expenses and other receivables 361 480

Accrued income 55 56

630 1,488

Cash and cash equivalents 461 896

461 896

Total current assets 1.097 2,391

Total assets 8,134 9,133

Current liabilities

Payables and accrued expenses 530 729

Income tax payable 34 11

Deferred income 2,066 2,919

Total current liabilities 2,630 3,659

Total assets less current liabilities 5,504 5,474

Financed by: accumulated funds attributable to the members of the Society

5,504 5,474


Management report


Management report

Abbreviated Consolidated statement of profit or lossFor the year ended 31 December 2017


Professional standards and membership

Membership and entrances fee 1,765 1,760

Local meetings 7 20

Membership expenditure (415) (445)

1,357 1,335

Directory entries 1,455 1,476

Directory expenditure (588) (592)

867 884

Other corporate and representation expenditure (995) (966)

Subtotal gross margin professional standards and membership 1,229 1,253

Professional development and events

Congress revenue 1,361 1,123

Congress expenditure (1,112) (1,021)

249 102

Conferences revenue 664 885

Conferences expenditure (591) (755)

73 130

Education (workshops) revenue 110 84

Education (workshops) expenditure (90) (76)

20 8

Publishing revenue 247 322

Publishing expenditure (210) (239)

37 83

Subtotal gross margin professional development and events 379 323

Total gross profit 1,608 1,576

General expenditure

Overhead costs, salaries and social charges (408) (461)

Office expenses (501) (485)

Other expenses (163) (186)

Amortisation and depreciation on intangible and tangible assets (563) (456)

Total general expenditure (1,635) (1,588)

Operating result (carry forward) (27) (12)

For the year ended 31 December 2017In thousands of euro 2017 2016

Operating result (carried forward) (27) (12)

Finance income 111 138

Finance expenses (31) (30)

Net finance income / (expense) 80 108

Net result before tax 53 96

Income tax (23) (70)

Net result and comprehensive income attributable to the members of the Society 30 26


Management report

Abbreviated Consolidated cash flow statement For the year ended 31 December 2017


Operating result (27) (12)

Amortisation of intangible assets 174 191

Disposal of property, plant and equipment 53 -

Depreciation property, plant and equipment 336 265

536 444

Changes in inventory 1 3

Changes in debtors (175) (55)

Changes in prepaid expenses, other receivables and accrued income 119 (151)

Changes in payables and accrued expenses (198) 252

Income taxes (23) (29)

Changes in deferred income 60 (70)

Net cash flow from operations 320 394

Income tax paid - -

Net cash flow from operating activities 320 394

Cash flows from investing activities

Interest received 30 39

Other financial movements - 6

Dividends received 53 52

Asset management fee (26) (26)

Proceeds from sale of financial fixed assets 833 760

Acquisitions of investments (634) (778)

Acquisitions of intangible assets (262) (216)

Acquisition of property, plant and equipment (566) (405)

Net cash flow from/(used) in investing activities (572) (566)

Net cash from/(used) in financing activities - -

Net movement in cash and cash equivalents (252) (172)

Cash and cash equivalents at 1 January 3,538 3,710

Cash and cash equivalents at 31 December 3,286 3,538

Reconciliation of cash and cash equivalents

Cash and cash equivalents 461 896

Cash component of Asset Management 2,825 2,642

Cash and equivalent at 31 December 3,286 3,538

Abbreviated Consolidated statement of changes in equityFor the year ended 31 December 2017

In thousands of euro

Balance as at 1 January 2016 5,448

Net result for the year 2016 26

Balance as at 1 January 2017 5,474

Net result for the year 2017 30

Balance at 31 December 2017 5,504


Notes to the abbreviated consolidated financial statements for the year 2017

1 Reporting entity

ActivitiesESOMAR is the world organisation for enabling better research

into markets, consumers and societies. With 5,807 (of which

117 applicants) members in 135 countries, ESOMAR’s aim is to

promote the value of market and opinion research in illuminating

real issues and bringing about effective decision-making.

In addition to the 5,807 individual members we are proud to

have more 569 corporate members, (of which 38 applicants)

representing more than 40,000 employees, as part of our

member base.

To facilitate this on-going dialogue, ESOMAR creates and

manages a comprehensive programme of industry specific and

thematic conferences, publications and communication as well

as actively advocating self-regulation and the worldwide

code of practice.

Registered officeESOMAR was founded in 1948 as the European Society for

Opinion and Marketing Research (ESOMAR or “the Society”).

The registered office of the Society is in Amsterdam, the

Netherlands. Operations are managed from the office, which is

located at Atlas Arena, Hoogoorddreef 5, 1101 BA Amsterdam,

The Netherlands. The Society has a 100% subsidiary: ESOMAR

B.V., which is registered in the Netherlands.

Basis of consolidationThe abbreviated consolidated financial statements include

the financial statements of the Society and its subsidiary

ESOMAR B.V. (“the Group”), using the full consolidation

method.

All material inter-company income and expenses, balances,

transactions and profits and losses resulting from intra-group

transactions are eliminated on consolidation. The Society has

a 100% subsidiary: ESOMAR B.V., which is registered in the

Netherlands.

Use of estimates and judgementsThe preparation of abbreviated consolidated financial

statements in compliance with Dutch GAAP requires

management to make judgements, estimates and assumptions

that affect the application of policies and reported amounts of

assets and liabilities, income and expenses. The estimates and

associated assumptions are based on historical experience

and various other factors that are believed to be reasonable

under the circumstances, the results of which form the basis

of making the judgements about carrying values of assets

and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on

an on-going basis.

Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision affects

only that period or in the period of the revision and future

periods if the revision affects both current and future period.

The estimates and assumptions that have a significant risk

of causing a material adjustment to the carrying amounts

of assets and liabilities within the next financial year are

discussed below:

• Impairment allowance for doubtful debtors (refer to note 9);

• Useful lives of intangible assets and property plant and

equipment (refer to note 5 and 6).


2 General accounting policies

Basis of measurementThe abbreviated consolidated financial statements are

prepared under the historical cost convention except for the

following assets and liabilities, which are stated at fair value:

derivative financial instruments, financial instruments and

assets held for trading.

Functional and presentation currencyThe abbreviated consolidated financial statements are

presented in Euro thousands and rounded as such, which

is equal to the functional currency.

Foreign currency transactionsTransactions in foreign currencies are translated to the

respective functional currencies of Group entities at exchange

rates at the dates of the transactions. Monetary assets and

liabilities denominated in foreign currencies at the reporting date

are retranslated to the functional currency at the exchange rate

at that date. The foreign currency gain or loss on monetary items

is the difference between amortised cost in the functional

currency at the beginning of the year, adjusted for effective

interest and payments during the year, and the amortised

cost in foreign currency translated at the exchange rate at the

end of the year.

Non-monetary assets and liabilities denominated in foreign

currencies that are measured at fair value are retranslated

to the functional currency at the exchange rate at the date

that the fair value was determined. Non-monetary items in

a foreign currency that are measured in terms of historical

cost are translated using the exchange rate at the date of

the transaction. Foreign currency differences arising on

retranslation are recognised in profit or loss, except for

differences arising on the retranslation of available-for-sale

equity investments, a financial liability designated as a hedge

of the net investment in a foreign operation that is effective,

or qualifying cash flow hedges, which are recognised in other

comprehensive income.





3 Accounting policies applied to the valuation of assets and liabilities

Intangible assets Intangible assets are stated at cost less accumulated

amortisation and impairment losses.

Amortisation is charged to the income statement using the

straight-line amortisation method with no residual value

over the estimated useful life of the assets (5 years).

Property, plant and equipment Property, plant and equipment are stated at cost less

accumulated depreciation and impairment losses.

Depreciation is charged to the income statement using the

straight-line depreciation method with no residual value over

the estimated useful lives of the assets mainly as follows:

• Office renovation: 10 years

• Office equipment and furniture: 5 years

• Software: 3 years

• License fees: 2 years

Financial instruments

Non-derivate financial assets The Group initially recognises loans and receivables and

deposits on the date that they are originated. All other

financial assets (including assets designated at fair value

through profit or loss) are recognised initially on the trade

date, which is the date that the Group becomes a party to

the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual

rights to the cash flows from the asset expire, or it transfers

the rights to receive the contractual cash flows on the financial

asset in a transaction in which substantially all the risks and

rewards of ownership of the financial asset are transferred.

Any interest in transferred financial assets that is created or

retained by the Group is recognised as a separate asset or

liability.

Financial assets and liabilities are offset, and the net amount

presented in the statement of financial position when, and

only when, the Group has a legal right to offset the amounts

and intends either to settle on a net basis or to realise the

asset and settle the liability simultaneously.

The Group classifies non-derivative financial assets into the

following categories: financial assets at fair value through

profit or loss, held-to-maturity financial assets, loans and

receivables and available-for-sale financial assets.

Financial assets at fair value through profit or lossA financial asset is classified at fair value through profit or loss if it

is classified as held for trading or is designated as such upon

initial recognition. Financial assets are designated at fair value

through profit or loss if the Group manages such investments

and makes purchase and sale decisions based on their fair value

in accordance with the Group’s documented risk management

or investment strategy. Attributable transaction costs are

recognised in profit or loss as incurred. Financial assets at

fair value through profit or loss are measured at fair value,

and changes therein are recognised in profit or loss.

Financial assets designated at fair value through profit or

loss comprise equity securities that otherwise would have

been classified as available for sale.

Loans and receivablesLoans and receivables are financial assets with fixed or

determinable payments that are not quoted in an active

market. Such assets are recognised initially at fair value plus

any directly attributable transaction costs. Subsequent to

initial recognition, loans and receivables are measured at

amortised cost using the effective interest method, less any

impairment losses.

Loans and receivables comprise cash and cash equivalents,

and trade and other receivables, including service concession

receivables.

Cash and cash equivalentsCash and cash equivalents comprise cash balances and

call deposits with original maturities of three months or less.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial

assets that are designated as available for sale or are not

classified in any of the above categories of financial assets.

Subsequent to initial recognition, they are measured at fair

value and changes therein, other than impairment losses

and foreign currency differences on available-for-sale debt

instruments, are recognised in other comprehensive income

and presented in the fair value reserve in equity. When an

investment is derecognised, the gain or loss accumulated

in equity is reclassified to profit or loss.

Available-for-sale financial assets comprise equity securities

and debt securities.

Non-derivative financial liabilitiesThe Group initially recognises debt securities issued and

subordinated liabilities on the date that they are originated.

All other financial liabilities (including liabilities designated

at fair value through profit or loss) are recognised initially on

the trade date, which is the date that the Group becomes a

party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual

obligations are discharged, cancelled or expire. The Group

classifies non-derivative financial liabilities into the other

financial liabilities category. Such financial liabilities are

recognised initially at fair value plus any directly attributable

transaction costs. Subsequent to initial recognition, these

financial liabilities are measured at amortised cost using the

effective interest method.

Other financial liabilities comprise loans and borrowings,

and trade and other payables.

InventoryInventories are stated at the lowest of cost and net

realisable value. The cost of inventory is based on the FIFO

method.

ImpairmentAn assessment is made at each balance sheet date whether

there is an indication that an asset may be impaired. If any

such indication exists, an estimate of the asset’s recoverable





amount is made. An asset’s recoverable amount is the highest

of its fair value less selling costs to sell and its value in use and

is determined for an individual asset, unless the asset does

not generate cash inflows that are largely independent of those

from other assets or groups of assets. When the carrying

amount of an asset exceeds its recoverable amount, the asset

is considered impaired and is written down to its recoverable

amount. Impairment losses are recognised in the income

statement.

Recognition of Income, other than eventsThis represents revenues from third parties, mainly members

of the Society.

• Membership fees are recognised in the income statement

of the period to which they relate. Membership entrance

fee is invoiced to new members only and recognised at

invoice date.

• Directory income is recognised in the income statement

of the period to which the fees relate.

• Publishing revenue is recognised in the income statement

at shipment date.

Recognition of Income and expenses from events (Congress, Conferences and Education)Congress, Conferences and Education revenue is recognised

in the income statement on the date when the event takes

place.

Deferred incomeAs far as revenue is presented on the balance sheet under

Deferred income the amounts relate to the sum of what has

been invoiced throughout the reporting year with regard to

revenue to be recognised in the income statement of the

following reporting year.

ExpenditureExpenditure is directly allocated to activities where possible;

salaries are allocated based on the number of staff working

for specific activities.

Defined contribution plansCommitments for defined contributions to pension plans are

recognised as expenditure in the income statement as incurred.

The pension premiums payable as per balance sheet relate

to the Group’s contribution to the pension scheme.

Financial income netInterest income is recognised in the income statement as

it accrues. Dividend income is recognised in the income

statement on the date the entity’s right to receive payment

is established. Furthermore, the financial expenditure

comprises interest payable and management fees for Asset

Management.

Income taxIncome tax on result is calculated by applying the current

Dutch tax rate to the taxable result of the 100% subsidiary

ESOMAR B.V.

No tax is due on the result of the Society, as these activities

are tax exempt in The Netherlands.

Cash flow statementThe abbreviatedconsolidated cash flow statement, which

has been prepared according to the indirect method, shows

the cash flow from operating activities, investing activities,

financing activities and the cash position at the beginning

and at the end of the year. Cash flow from operating activities

is stated as operating result adjusted for non-cash operating

items and working capital movements. Cash flow from

investing activities comprises investments and divestments

of intangible, tangible and financial assets.

Abbreviated consolidated statement of profit and loss for the year 2017

RevenueTotal revenues decreased by 1% from EUR 5,670K in 2016 to

EUR 5,609K in 2017. Revenues can be analysed as follows:

Membership and entrance fees EUR 1,765K (2016: EUR

1,760K), Local meetings EUR 7K (2016: EUR 20K), Directory

entries EUR 1,455K (2016: EUR 1,476K), Conferences and

education EUR 2,135K (2016: EUR 2,092K) and Publishing

EUR 247K (2016: EUR 322K).

Revenue related expenditureTotal revenue related expenditure decreased by 4% from

EUR 3,128K in 2016 to EUR 3,006K in 2017. Expenditure can

be analysed as follows: Membership EUR 399K (2016: EUR

425K), Local meetings EUR 16K (2016: EUR 20K), Directory

EUR 588K (2016: EUR 592K), Conferences and education

EUR 1,793K (2016: EUR 1,852K) and Publishing EUR 210K

(2016: EUR 239K).



2016

2017

Euro

’s 0

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Euro

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Mem

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6

5

4

3

2

1

0

3,5

3,0

2,5

2,0

1,5

1,0

0,5

0,0

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Revenue Revenue related expenditure



Other corporate expenditure and representationCorporate expenditure and representation can be specified as follows:


Governance (Council and committees) 101 99

Public Relations and Representation 212 133

Self-regulation 198 264

Market Research and Development projects 86 97

Other Industry Initiatives 59 38

Allocated salaries 339 335

995 966

Overhead costs, salaries and social chargesOverhead costs, salaries and social charges can be specified as follows:


Overhead costs, salaries and social charges

Salaries 1,760 1,773

Bonus accrual 63 32

Sickness benefit (56) (10)

Salaries and sickness benefit 1,767 1,795

Social security charges 277 274

Pension charges 150 148

Insurances 37 44

Travel allowance 40 45

Other salaries related costs 504 511

Salary cost allocated to events, publishing and other activities (1,863) (1,845)

Total 408 461

The pension charges relate to a defined contribution plan. The insurances charges relate to insurances of ESOMAR staff.

The average number of FTE taking into account part-timers converted during the year was 35 (2016: 37).



Office expensesThe office expenses can be specified as follows:


General office and personnel costs 82 56

Rental and lease costs 131 122

Telephone, internet and fax 38 38

Computer consultancy and license fees (*) 210 228

Cleaning 12 14

Electricity and gas 21 23

Other 7 4

501 485

(*) License fees that are being depreciated over more than 12 months have been moved from office expenses to the intangible

fixed assets.



Other expensesThe other expenses can be specified as follows:


Brand/General Promotion 28 30

Website/CRM 69 74

Advisory costs: tax, legal, etc. 25 20

Audit fees 45 38

Training personnel 21 24

Grant to ESOMAR Foundation - -

Release provision bad debtors (25) -

163 186

Net finance income / (expense)The net finance expense can be specified as follows:


Interest income on bank deposits - -

Other income/financial results 1 (3)

Interest income on financial assets 29 39

Dividend income on financial assets 53 52

Net gain on disposal of financial assets 23 70

Change in fair value of financial assets 5 (20)

Finance income 111 138

Change in fair value of financial assets - -

Management fees (26) (26)

Bank charges (5) (4)

Finance expenses (31) (30)

Net finance income / (expense) 80 108




Short-term employee benefits 363 348

Post-employment benefits 33 32

Total 396 380

Related parties

Compensation of key management The Board of Management is the group’s key management.

The following table summarises the compensation received

by key management:

The Society members elect a Council, voluntary unpaid

non-executive directors who act in accordance with the

statutes of the Society, on behalf of the members.

The Society reimbursed the expenses incurred by Council

members amounting to EUR 10K (2016: EUR 23K).

Amsterdam, 17 August 2018

The Board of Management,

Finn Raben Marie-Agnès Mourot de Lathyle

Director General Director Finance & Services


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