‘We do not see things getting any better anytime soon' – West

27 March 2009

Bleak forecast from Nielsen's finance chief as the research giant reports 2008 results

US-- Nielsen finance chief Brian West issued a bleak forecast for the year ahead today, as the research group reported 2008 revenue of $5bn.

Revenue was up 4.5% on a constant currency basis – which excludes the impact of exchange rate fluctuations – but 2008 was a year of two very different halves, West said.

In the first six months the business grew at 7%, however the rate dropped to just 2% in the second part of the year as the company was affected by “a pronounced slowdown” in the consumer research segment, with clients reigning in discretionary spending. Client budgets also came under pressure in the media sector, West said.

Speaking to analysts this morning, he said: “As we sit here today we do not see things getting any better anytime soon. Like everyone else, we are looking for signs of stability in the economy and in the market, and we just can't tell whether we are at the bottom yet or not.”

Nielsen has been preparing to weather the economic storm by cutting costs. It axed approximately 2,700 employees over the course of the year – with severance payments accounting for the bulk of the $120m in reported restructuring costs.

Stripping out these costs and $432m in impairment charges, Nielsen reported adjusted operating income of $670m, up 12.5% on 2007.

In the consumer services segment, revenue was up 3.8% to $2.84bn with adjusted operating income up 6.8% to $334m. Breaking revenue down by service type, retail measurement was up 3.5%, consumer panel work up 1.2% and customised research up 5.9%. The Bases business was down 1% but West flagged analytical consulting as a particular bright spot for the segment, with revenue for that business line up 22%.

In the media research segment, revenue increased by 10% to $1.74bn while adjusted operating income was up 25.9% to $333m. TV ratings business Nielsen Media US was up 8.5% while Nielsen Media International grew 9.8%. Online revenue was up 15.7%, but media solutions and entertainment revenues were down 5% and 6% respectively.

Finally, Nielsen's business media publications and events revenue was down 10.5% to $440m with adjusted operating income flat year-on-year at $88m.

(NB: all the above referenced growth rates are on a constant currency basis.)

Author: Brian Tarran

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