VNU Growth Falls Below Predictions

VNU expects its earnings per share and revenue growth for 2005 to fall below previous estimates, due to disappointing results in Europe, coupled with the costs of the aborted VNU/IMS Health merger. The company has also confirmed that it is currently evaluating approaches made by potential buyers.

VNU predicts that earnings per share will fall below the previous guidance of 0.85 to 0.90 Euros once the IMS Health costs are taken into account. In addition, it states that organic revenue growth will fall below the previous 6% estimate, due to 'difficult economic conditions in Europe', where ACNielsen's revenues fell short of expectations.

Organic revenues at VNU Marketing Information (MI), which includes ACNielsen, are expected to grow about 5.5% outside Europe, driven by double- digit increases in Latin America and Emerging Markets (including Eastern Europe). Including Europe, revenue growth is predicted at 3.5 to 4% - below earlier estimates of 4 to 5%.

During the year, ACNielsen completed the expansion of its consumer panel to 125,000 households in the US, while expanding its panels in Europe, Latin America and Asia Pacific.

The Media Measurement & Information (MMI) group, which includes Nielsen Media Research and Nielsen//NetRatings, is expected to achieve organic revenue growth of about 11%, in line with VNU's earlier guidance.

Successes in this group include Nielsen Media Research's expansion of its US TV audiences samples and the launch of its Local People Meter (LPM) service in seven US markets.

NetRatings, 60% owned by VNU, is expected to deliver double-digit revenue growth and move closer to break-even, due to strong demand for its Internet audience and advertising measurement services.

According to Rob van den Bergh, CEO, the company's two largest groups, MI and MMI, 'are growing in response to strong demand for our consumer, media and market information services'.

He adds: 'Despite the termination of the IMS merger, I'm convinced that we've emerged from that experience in good shape to continue our robust growth and build upon our position as the leading provider of consumer and marketplace intelligence.'

Activities to improve shareholder value
The company stated that it is considering both a share buyback program and a special dividend for shareholders. It is also working 'to achieve cost and revenue synergies on an accelerated timetable' across corporate, operations, IT and production divisions, while seeking increased revenue opportunities in the pharmaceutical market in partnership with IMS Health.

Possible takeover
The company confirmed that it has received expressions of interest regarding a possible acquisition of VNU. A statement said that the Executive Board and Supervisory Board are evaluating this possibility, but that 'there can be no assurance that this process will result in any specific transaction'.

The company is online at www.vnu.com.

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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