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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
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