NEWS26 February 2010

Nielsen reports 2009 revenue of $4.8bn, flat on 2008

Financials North America

US— Nielsen’s business is measuring what people watch and what people buy – and, according to results out today, business has been reasonably good in spite of the global economic downturn.

At the end of 2009, Nielsen realigned and rechristened its business lines as ‘watch’ and ‘buy’, the former reporting full-year sales growth of 10% to $1.64bn while the latter was down 2.9% (but up 2.7% on a constant currency basis) to $2.99bn.

In a conference call Nielsen finance chief Brian West said ‘watch’ revenues benefited in year-on-year comparisons from the acquisition of AGB Nielsen Media Research, its former international joint venture. Stripping out acquisition-related growth, revenue in the division was up 2.7% in constant currency, with growth derived largely from the 4.6% improvement in North American TV measurement. Online and mobile measurement had been under pressure for much of the year, though the fourth quarter saw an improvement, West said.

In the ‘buy’ segment the picture was mixed. Information services – which covers Nielsen’s retail measurement and consumer panel businesses – was down 4.7%, or 1.7% in constant currency thanks to a 7.5% rise in developing market revenues, while developed markets were flat. On the insight side – a host of analytical services and advertiser solutions – revenue was up 1.8% and 5.3% in constant currency, again due to to growth in developing markets of 8.9% versus a 2.3% decline in developed markets.

West explained that, with the realignment of the two main business lines late last year, some $300m in former media segment revenue moved into the ‘buy’ segment, coming from the likes of consumer segmentation business Claritas and some entertainment sales tracking services.

Adjusted operating income for ‘watch’ and ‘buy’ was up 20.9% and 7.6% to $338m and $400m respectively. Those figures exclude restructuring and impairment charges of $411m in ‘watch’ and $39m in ‘buy’. $402m of the ‘watch’ charges relate to goodwill impairment, and the company has also had to pay severance to employees whose jobs have become redundant because of internal operational streamlining and centralising initiatives.

In December the company said it “commenced certain specific restructuring actions attributable to defined cost reduction programs directed towards achieving increased productivity in future periods primarily through targeted employee terminations”. Some $22m has already been paid out in severance, primarily in Europe, as well as $7m in contractual termination costs and asset write-offs.

Group revenue, including Nielsen’s exhibitions business, was flat year-on-year at $4.81bn.

  • In Germany, Nielsen is planning research into how people use e-readers. The firm has entered a strategic partnership with Munich-based Visible Vibrations, which makes software for creating electronic magazines. The two companies are hoping to tap into the renewed interest in e-readers resulting from the announcement last month of Apple’s iPad. Ludger Wibbelt, director of Nielsen Media Research, said: “We want to keep abreast of this development from the very start with our research tools, to provide publishers, as well as businesses using this technology for corporate publishing, with rapid, robust results about the habits of people who use e-readers.” Nielsen will also be looking at the effectiveness of different types of content and testing out advertising formats.