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Taylor Nelson Sofres (TNS)

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Thursday 08 January, 2004

Taylor Nelson Sofres

Pre-close Trading Update

Taylor Nelson Sofres PLC
08 January 2004

For release at 07.00
                                                               8 January 2004

                            Taylor Nelson Sofres plc

                            Pre-close trading update

In line with current market practice, Taylor Nelson Sofres plc (TNS), a world
leader in market information, issues the following trading and integration
update ahead of its full year results announcement on 8 March 2004.  As the
integration proceeds, the distinction between the original TNS business and
NFO's activities is becoming progressively blurred, but it is still possible to
discuss the trends in the two businesses during 2003.

In summary, for the enlarged group:

•   On track to meet the group's expectations for 2003 turnover

•   Operating margin for 2003, inclusive of synergies but before integration 
    costs, expected to be around 10 per cent

•   Integration progressing well; with annualised cost synergies higher
    than anticipated for 2004

•   Growth expected to be broadly in line with the market in 2004;
    outperformance in the longer term.


The markets in which the group operates have continued to progress along the
lines indicated at the time of the group's interim results announcement in
September 2003.

With respect to the original TNS business, US custom activities maintained good
growth in a market that continued to be flat.  Despite weak economic conditions
in Europe, the group is anticipating some improvement in the region in the
second half.  Growth in Asia Pacific was slower than in the first six months of
the year, impacted by the distraction of the integration, which was implemented
at a rapid pace.

Syndicated services, in particular TNS Worldpanel, maintained their steady
growth in the second half, although Media Intelligence remained under pressure.
Turnover from consumer customised activities improved in most regions and IT/
Telecoms should achieve good growth, despite a strong performance in the
comparative period of 2002.  Impacted by difficult market conditions, primarily
resulting from a slowdown in new product approvals, Healthcare remained under
pressure but is expected to have achieved growth in the second half.  Ongoing
softness in economic conditions continued to impact Business Services.

The NFO turnover performance was broadly flat.  The US access panel maintained
its good performance, benefiting from key client relationships and expanded
online research.  The Healthcare business in the US was affected by the
challenging conditions in that sector and by the uncertainty caused by the NFO
sale process, which had weakened the business during the first half.  Germany is
expected to have been broadly flat, but the UK and Asia Pacific are anticipated
to have been slightly down in the second half.

Although the integration process has had an impact on some activities during the
period, overall, the enlarged group's expectations for turnover in 2003 remain
on track.

Operating margin

While the speed of the integration process has had an impact on the business
during the second half, the 2003 operating margin for the enlarged group,
inclusive of synergies but before integration costs, is expected to be around 10
per cent.

Cash performance

The group continues to show strong cash generation and is steadily reducing net
debt which, as at the end of the year, was well below £400m.

Integration update

The merger of NFO with the TNS businesses is proceeding well.

The operating model for North America has been established and, with senior
management appointments made, the new teams are working effectively.  The merged
businesses, together with US media intelligence activities, will be supported by
shared services for the back office functions.  Data collection that was
previously handled externally is being brought in-house, ensuring full
utilisation of the access panel and other fieldwork services.  With the
increased use of the internet for data collection and the transfer of telephone
interviewing to Canada, three call centres in the US have been closed.

All the country Managing Directors in Asia Pacific have been appointed and the
integration was almost complete by the end of 2003.  Rationalisation of data
collection and support services across the region is taking place.

The focus in both regions is now on pursuing the opportunities that will create
value in the longer term and the newly established teams are winning contracts
based on the additional strengths of the combined offering.  The group's new
portfolio of business solutions, which marries the best features of both
companies' products, forms an integral part of this drive for revenue growth.

The integration in Europe was brought forward but started later than in the
other regions.  The joint approach is already winning new business.  The
planning process in this region is complete and the operating model has been
established.  Country Managing Directors have been appointed and the integration
is being effected on a country-by-country basis.  While this will involve
consultation with Work Councils in a number of countries, good progress is being

As it progresses with the integration implementation, the group has identified
that it can achieve more cost synergies than originally anticipated.

The expectation for savings in 2003 remains unchanged, with operating cost and
tax synergies, of approximately £2 million and £1 million respectively, bringing
the effective tax rate for the year to around 32 per cent.

For 2004, initial guidance was for operating cost and tax synergies of £10
million.  The group now believes that, primarily as a result of bringing forward
the integration in Europe, operating cost synergies alone in 2004 should amount
to at least £15 million, while the tax synergies should continue to deliver a
tax rate of around 32 per cent.  With further synergies expected to show through
in 2005, the annualised total for operating cost synergies could rise to around
£20 million.

Integration costs to realise these synergies are expected to be in the region of
£14 million, of which approximately £8-9 million is being charged in 2003 and
the balance in 2004.

The group believes that there may be potential to achieve a higher level of
synergies, in which case the annualised total and associated costs would rise


With the US market showing some signs of recovery and expectations of a marginal
upturn in Europe as well as a positive environment in Asia Pacific, the group
anticipates that the worldwide market for market information will continue its
gradual improvement during 2004.  Encouraged by the level of new orders coming
through towards the end of 2003, the group expects that its own performance in
2004 will be broadly in line with the market.  Further improvement in the
operating margin for the enlarged group is expected.

Given the rapid progress that continues to be made with the integration and
taking into account the revenue synergies that are expected to emerge
progressively, the group is well positioned to meet its longer-term objective of
winning share of a growing market.

For further information, please contact:

David Lowden, Chief Operating Officer                     +44 (0)20 8967 4009

Janis Parks, Head of Investor Relations                   +44 (0) 20 8967 1584

Margaret George, Citigate Dewe Rogerson                   +44 (0)20 7638 9571

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Note to editors

About TNS

TNS is one of the world's leading market information groups.  We provide market
measurement, analysis and insight through our global network of operating
companies in 70 countries.  Working with national and multi-national
organisations, we help our clients to develop effective business strategies and
enhance relationships with their customers.  In July 2003, the group completed
the acquisition of NFO WorldGroup, Inc.  Further information on TNS can be found

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            The company news service from the London Stock Exchange