VNU Results for 2004

Nielsen parent VNU has released its full year financial statements for 2004, showing 'solid' growth in 2004. Strong results from the Media Measurement & Information (MMI) group and most of the Marketing Information (MI) group were offset by ACNielsen Europe's protracted move to a new data factory.

The Marketing Information (MI) group delivered 7% organic revenue growth, strong overall despite the ACNielsen Europe transition. Advisory Services businesses including BASES performed well. ACNielsen has maintained or grown its market share in all regions, including Europe. VNU remains confident that the MI group's margin will improve after 2005, when its 'current investments will begin to generate positive returns, further strengthening MI's position in the marketplace'.

The Media Measurement & Information (MMI) group delivered its fourth consecutive year of record results, with organic revenues growing 8% and even stronger, double-digit organic growth of operating income. US-based Nielsen Media Research, the group's largest business unit, was a star performer with organic revenue growth of 12% despite a difficult time with the expansion of the National People Meter service and introduction of Local People Meters (LPMs). Internet audience measurement business NetRatings, 60% owned by VNU, grew revenues strongly and expanded its research panels in the US, Germany, France and the UK.

NMR International and Nielsen Entertainment saw their operating income decrease year-on-year. Organic year-on-year growth of operating income was 13%. As a result of the excellent growth of operating income, MMI's operating margin rose to 23% in 2004 from 21% in 2003.

Revenues and Operating Income of Business Groups 2003-4 excluding operating income of associates
Amounts x EUR 1 million	2004 Total revenues	2004 Operating income	2003 Total revenues	2003 Operating income
Marketing Information	1,818	213	1,765	193
Media Measurement & Information	939	214	929	197
Business Information	636	98	636	95
Other	2	1	12	-/- 14
Total excluding divested operations	3,369	526	3,342	471
Divested operations	412	162	540	172
Total including divested operations	3,781	688	3,882	643

VNU's financial position improved very significantly in 2004, mainly due to the sale of the Directories group in the fourth quarter. At year-end, cash and cash equivalents totaled EUR 2,166 million and net debt was EUR 641 million, down from EUR 2,958 million at year-end 2003. EUR 150m of the proceeds from the Directories sale were used to lower debt in 2004 and another EUR 1,170 million to retire additional debt in early 2005. The remainder is earmarked for 'targeted acquisitions in market research and trade shows'.

The group says it is confident of the outlook for 2005 but uncertain what this will mean in terms of forecasts, due to strong competitive pressures. Organic top-line growth for MMI is expected to be around the same level as in 2004 (c.8%), but pricing pressures from many CPG clients will 'make it challenging to reach the top-line growth target for the MI group of between 5 - 7%'.

Divestitures during 2004 were dominated by the sale of Directories for net cash proceeds of EUR 1,994 million. Others includes the sale of Marketing Resources Plus by MMI (Media Solutions) and of 50% of India Pharma by the MI group. Total proceeds from divestitures in 2004 amounted to EUR 2,049 million, which includes EUR 40 million received from our 2003 divestiture of Claritas Europe.

Acquisitions in 2004 included the remaining 50% of AMER Research Ltd by MI Group. Including the acquisition of 58% of Red Sheriff by NetRatings in December 2003 and accounted for by MMI in January 2004, total acquisitions by VNU in 2004 added up to EUR 83 million.

VNU's group Home Page is at www.vnu.com

Summary of VNU Group Results
Amounts x EUR 1 million	2004	2003	Reported change %	at constant currencies change % */**
Cash earnings – earnings before goodwill amortization and impairment charges	454	382	+ 19	+ 10
Cash earnings per share – earnings per share before goodwill amortization and impairment charges (x EUR 1)	1.78	1.51	+ 18	+ 9
Total revenues	3,781	3,882	-/- 3	+ 2
Operating income before goodwill amortization and impairment charges	688	643	+ 7	+ 3
Net earnings	163	130	+ 25	-/- 4
Net earnings per share (x EUR 1)	0.62	0.50	+ 24	-/- 5
Operating income of continuing operations as a percentage of total revenues	15.6	14.1	+ 150	+ 90
			Basis points
* Excluding in 2003 reorganization charges and book loss Claritas Europe ** 2004 actuals recalculated against 2003 currency exchange rates

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

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