Dutch publisher VNU has this morning released slightly better than expected full-year results for 2001 but warned that ad revenues in Europe would continue to fall in 2002. Operating income at VNU grew by 14% to reach £516 million, slightly ahead of analyst predictions, although within the magazine division this fell by 30% from £99 million to £69 million.
VNU issued two profits warnings last year (see
VNU Warns On Full Year Earnings) as ad revenues in its core magazine businesses were hit by the global downturn. Since the group strengthened its marketing information services with the acquisition of AC Nielsen (see
VNU In $2.3bn Deal To Buy ACNielsen) advertising accounts for only 11% of the group’s revenue.
Rob van den Bergh, chairman of the executive board of VNU said: “2001 was for VNU a year in which essential changes took place. The acquisition of ACNielsen and the sale of the Consumer Information group and the Educational Information group formed the final phase of a dramatic strategic reorientation. Under difficult economic conditions we have taken formal leave of these two groups in a satisfactory manner.”
“Business segments which were sensitive to cyclical fluctuations have been replaced by a strong and more recession-resilient portfolio. Approximately 70% of our revenues are now achieved with marketing and media information activities… In 2001, our rebalanced portfolio provided almost complete compensation to avert the heavy beating that the Business Information group had to suffer. I have full confidence in a healthy future for VNU. The transformation has given our company more focus on growth and more recession-resilience. In 2002, the attention will be strongly focused upon the further integration of ACNielsen, the utilisation of synergy opportunities and cost control.”
Forecast
VNU is expecting advertising levels in European publishing titles to further decrease in H1 2002.
ABN Amro is forecasting a return to growth by in H2, when comparisons become easier; until then, the current 35% fall in business information ad revenues is expected to continue.
