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Taylor Nelson Sofres (TNS)

  Print      Mail a friend       Annual reports

Monday 05 March, 2007

Taylor Nelson Sofres

Final Results

Taylor Nelson Sofres PLC
05 March 2007

Press information for release at 07.00                              5 March 2007

                            Taylor Nelson Sofres plc

                             Full year results 2006


   • Underlying revenue growth of 2.5%; majority of business performed well
   • Excluding US custom, group achieved underlying revenue growth of around
     5% and margin improvement of around 50 basis points
   • Group restructuring largely complete; US custom recovery on track
   • Net debt reduced to £278.5m (2005 £295.4m) after £34.8m spent on share
     buy back
   • Increase of 15.0% in total dividend indicates board confidence in
     delivery against strategy

Business performance*                   2006             2005           Change %

Revenue                             £1,004.2m          £999.0m             0.5

Adjusted operating profit              £99.5m          £108.1m            (8.0)

Adjusted operating margin                9.9%            10.8%

Adjusted profit before tax             £84.5m           £93.3m            (9.4)

Adjusted earnings per share             12.7p            13.7p            (7.3)

Total dividend per share                 4.6p             4.0p            15.0

Statutory results

Operating profit                       £74.4m           £99.8m           (25.5)

Profit before tax                      £59.4m           £85.0m           (30.1)

Earnings per share                       8.4p            11.8p           (28.8)

*Adjusted results exclude restructuring costs, goodwill impairment, amortisation
of acquired intangible assets and pension curtailment credit. Adjusted earnings
per share are also shown before deferred tax on goodwill. Underlying revenue is
defined on page 7. Adjusted results are reconciled to reported results on pages
13 and 18.

Chief Executive, David Lowden, said:

"In 2006, TNS recorded very good growth in the emerging markets and across our
syndicated services, with steady growth in our European custom business but a
disappointing performance in US custom. The group reported underlying revenue
growth of 2.5 per cent and operating margin of 9.9 per cent.

The changes that we have made in 2006 place us in a strong position for the
future, with the organisation clearly aligned with our strategy. Also, we have
taken significant strides in turning round our US custom business. The group saw
an improvement in revenue growth in the fourth quarter of 2006 and, while early
in the year, levels of new business activity going into 2007 are good.

Our commitment to shareholder returns is evidenced by our increased dividend,
share repurchase programme and determined focus on execution of the group's

On 5 March, all enquiries to +44 (0)20 7404 5959


David Lowden, Chief Executive                                +44 (0)20 8967 4950
Andy Boland, Finance Director                                +44 (0)20 8967 4950
Janis Parks, Head of Investor Relations                      +44 (0)20 8967 1584
Lucie Anne Brailsford/Ash Spiegelberg, Brunswick             +44 (0)20 7404 5959

Email to:

A webcast of the results presentation made to analysts will be broadcast live on
the Investors section of the group's website, at, from 9.00am
on Monday 5 March 2007.

An interview with David Lowden, CEO is available in video, audio and text on and

Note to editors

About TNS

TNS is a global market insight and information group.

Our strategic goal is to be recognised as the global leader in delivering
value-added information and insights that help our clients to make more
effective decisions.

As industry thought leaders, our people deliver innovative thinking and
excellent service to global organisations and local clients worldwide.  We work
in partnership with our clients, meeting their needs for high-quality
information, analysis and foresight across our network of over 70 countries.

We are the world's foremost provider of custom research and analysis, combining
in-depth industry sector understanding with world-class expertise in the areas
of new product development, segmentation and positioning research, brand and
advertising research and stakeholder management.  We are a major supplier of
consumer panel, media intelligence and internet, TV and radio audience
measurement services.

TNS is the sixth sense of business.


In 2006, TNS recorded very good growth in the emerging markets and across our
syndicated services, with steady growth in our European custom business but a
disappointing performance in US custom. The group reported underlying revenue
growth of 2.5 per cent and an adjusted operating margin of 9.9 per cent.
Excluding US custom, underlying revenue growth for the group would have been
around 5 per cent, in line with most forecasts of industry growth, with an
improvement in adjusted operating margin of around 50 basis points. Appropriate
steps to turn the US business round were taken during the year and we are
confident that it is on track for progressive recovery in 2007. The 15 per cent
increase in total dividend reflects the board's confidence that we will deliver
against our strategy in the US and the rest of the group.

Delivering against our strategy across the group

Performance in our European custom business in 2006 varied by market, with
stronger underlying growth in France, Southern and Eastern Europe, offset by
Germany and the UK, which were softer. Much of our strategic focus in terms of
global accounts, sector specialisation, cost efficiency and innovation is aimed
at improving growth in the more mature markets. During the year, the group
completed an operational review across the custom research business in Europe,
to drive this implementation faster. Also, we have recently appointed Judith
Passingham, formerly Managing Director of Worldpanel, as the new head of our
European custom business.

Once again, our performance in the emerging markets of Asia Pacific, Latin
America and Middle East and Africa (ALM) has been exceptional. The market
dynamics in this region remain strong, especially in China and India. However,
TNS is able to grow faster than the market due to emphasis on our Areas of
Expertise and a well-established regionally co-ordinated approach to both
operations and client service, all of which should continue to provide us with
sustainable competitive advantage.

The group's three syndicated services performed well in 2006. Growth is being
driven by our strong market positions and the value that these services provide
for our clients. Our investment in new services is designed to leverage
technology and provide greater analysis to extend these positions. In TNS Media
Intelligence we launched new digital Creative Services that integrate
advertising creative and expenditure information. TNS Worldpanel has introduced
the use of SMS to monitor snacking habits in the UK, a hot topic for Consumer
clients. In internet, TV and radio audience measurement (iTRAM), we have
successfully commercialised our digital audience measurement offering and we now
collect, process and analyse return-path data for cable and satellite
broadcasters in the UK, US and Asia Pacific.

Turn around of US custom business on track

As reported in September, we have made significant changes to improve the
performance of our custom research business in the US. At that time, I
identified three key areas for improvement - management and organisation,
business processes, and increasing our focus on the value-added areas of the
market. In May, we appointed Kimberly Till as new President and under her
leadership, we have made good progress in each of these areas. We have recruited
several new high-calibre people to the management team, improved our operational
processes and realigned our client servicing. In the second half of 2006, we
have achieved good traction with clients in the US, with wins in the Technology
and Financial Services sectors with clients such as Sun Microsystems and Visa. I
am pleased to report that we met our revised forecast for the US custom business
in 2006 and entered 2007 with an order book ahead of last year.

Market developments

The market in which TNS operates is undergoing dynamic change. While the
industry continues to grow at healthy levels, the make up of that growth is
changing in terms of the nature of research, and by region and sector. In terms
of the nature of research, clients are increasingly looking to spend more of
their marketing budgets on insights and analysis, less on just data. By region,
we are witnessing the increasing importance of the emerging markets as our
clients' need for a global view of their markets grows. By sector, there is
stronger growth from industries such as Technology and Financial Services, as
those companies become more advanced in their marketing requirements.

Significant changes within TNS

In response to these trends, at the start of 2006, I introduced a new, single
strategic goal for TNS - to be recognised as the global leader in delivering
value-added information and insights that help our clients make more effective
business decisions. This goal is supported by four core principles: client
orientation; service excellence and cost efficiency; expertise and innovation;
and people development.

At the time of our interim results in September 2006, I reported on some of the
significant organisational and operational changes that have been made to allow
us to deliver more effectively against our strategy. This progress continued in
the second half of the year and into 2007.

Client orientation

At the start of 2006, Pedro Ros joined the board as Managing Director - Global
Clients and Sectors, to put a new structure in place to allow the better
execution of our global account and sector strategy. This revolves around three
areas. We have created 13 Global Partnership Accounts, based on their potential
to purchase services on a global basis.

Our focus is to increase our "share of wallet" with these clients and drive
overall growth. For each of these clients, we have a dedicated account team and
global account director, who has responsibility for revenue and profit. In 2006,
these Global Partnership Accounts represented 15 per cent of custom revenues.
Although the process of upgrading our global account programme has been in place
for less than a year, growth in these accounts was 7.5 per cent. Our goal is
that they represent 20 per cent of custom revenues in three to five years time.

We have also given greater emphasis to our specialist industry sectors, to act
as revenue drivers by supporting international projects and developing new
products and services tailored to industry verticals and our partnership
accounts. Finally, we have put in place a dedicated team to allow us to pitch
and price for multi-country projects more effectively, working from four
regional service centres.

Service excellence and cost efficiency

As clients look for more value for money, we are continuing to reduce our
overall unit cost of data collection and production with several initiatives.
Telephone surveys remain our most frequently used method of data collection.
During 2006, we continued to achieve more efficient utilisation of our call
centres across the group. We have also made substantial progress in increasing
the proportion of surveys we perform online through our managed access panels.
Revenue from data collected online now represents over 20 per cent of our total
data collection in custom research and increased by over 13 per cent in the last
year. Over the longer term, our goal is for this proportion to rise to more than
40 per cent. In 2006, we doubled the level of data processing and production
that we undertake in our offshore centre in India and we see the potential to
increase off-shoring to India and other lower cost centres by four times.
Finally, we have also undertaken a major project to rationalise our client
delivery platforms and property portfolio worldwide. At the same time, we have
introduced a number of initiatives aimed at delivering the quality of data
collection that our clients expect.

Expertise and innovation

Last year I also placed emphasis on the need to improve the level of insight and
analysis we provide to our clients. In 2006, we have launched several new
products and services to support our Areas of Expertise, each aimed at
delivering more added-value. We developed InnoSuite(TM), a new complete set of
services in the area of New Product Development. In Positioning and
Segmentation, our new FutureView(TM) service has been extremely popular and has
now been used in over 70 projects and 19 countries across the TNS network. We
have recently acquired Sorensen Associates, which accelerates our offering in
the fast growing area of Retail and Shopper Insights. In 2007, we will continue
to develop our existing capabilities and launch more services to meet new
opportunities being created by changes in our clients' marketing.

People development

In 2006, we continued to build training programmes for our employees to ensure
that they have the appropriate skills to help us deliver our strategic goal. We
have also put in place a new programme to improve leadership capability among
senior managers across the group. Following the completion of a major employee
commitment survey, in 2006 we focused on developing action plans to address
areas which need improvement and to enhance existing strength areas. We also ran
a follow-up survey which measured progress against the action plans. We have had
great success in attracting high-calibre people across the group. We are
committed to building employee engagement and in 2007 will be extending our
activities, including running the second "Look Inside" employee survey.

In what has been a year of substantial change for TNS, I would like to take this
opportunity to thank all of our people for their hard work, support and

More efficient capital structure

As well as the significant operational changes, we also reviewed our financial
structure. TNS continues to be a cash generative business. In 2006, we commenced
a £100 million open-market share buy back, in order to maintain an efficient
capital structure, while at the same time retaining the flexibility to invest in
the business, both organically and through strategic acquisitions. The buy back
has progressed well, with almost £35 million of shares re-purchased in 2006. We
now expect to repurchase the remaining £65 million of shares in 2007.


The changes that we have made in 2006 place us in a strong position for the
future, with the organisation clearly aligned with our strategy. We have taken
significant strides in turning round our US custom business and expect 2007 to
be a year of rebuilding as we continue working to make that business successful
again. Across the rest of the group, we will continue to execute aggressively
against our strategy. The group saw an improvement in revenue growth in the
fourth quarter of 2006 and, while early in the year, levels of new business
activity going into 2007 are good.

The group anticipates that the growth in syndicated services - Worldpanel, Media
Intelligence and iTRAM - will continue to be healthy. In custom research, the US
custom business is expected to recover progressively through the year. Revenue
growth in Europe is expected to be steady, with another strong performance
expected from the ALM (Asia Pacific, Latin America, Middle East and Africa)
region. Overall, the group expects to achieve improvement in both underlying
revenue growth and operating margin in 2007.

Our commitment to shareholder returns is evidenced by our increased dividend,
share repurchase programme and determined focus on execution of the group's



Underlying revenue growth was 2.5 per cent. The net effect of acquisitions and
disposals was to reduce reported revenue growth by 1.7 per cent. Foreign
exchange movements also had a negative impact of 0.3 per cent on reported
revenue. Reported revenue increased by 0.5 per cent to £1,004.2 million (2005
£999.0 million).

Calculation of underlying revenue growth

The group's calculation of underlying revenue growth remains consistent with
that published in 2005. Underlying revenue growth is calculated by taking the
increase in 2006 revenue over 2005 pro forma revenue, at constant exchange
rates. The pro forma revenue assumes that any acquisitions were owned and any
discontinued operations or disposals excluded, for the comparable period in the
prior year.

Definition of adjusted results

To assist understanding of the underlying performance of the business, operating
profit, profit before tax and earnings per share are disclosed on an adjusted
basis. Adjusted operating profit and adjusted profit before tax exclude
restructuring costs, goodwill impairment and amortisation of acquired intangible
assets. Adjusted earnings per share also excludes deferred tax on goodwill (see
Taxation below).

Operating profit and margin

Adjusted operating profit decreased by 8.0 per cent to £99.5 million (2005
£108.1 million). Adjusted operating margin was 9.9 per cent, down from 10.8 per
cent in 2005, reflecting the underperformance of the US custom business.
Reported operating profit declined by 25.5 per cent to £74.4 million (2005 £99.8

Restructuring costs

The charge associated with the group's restructuring activities in 2006 was
£17.8 million, consisting of restructuring costs in the US custom business and
as a result of the review in the rest of the group's operations. Total
restructuring costs are expected to be approximately £22 million, with the
remainder of the restructuring costs expected to be taken in 2007. As previously
announced, approximately £4 million of the total restructuring cost relates to a
reassessment of the group's property portfolio, which are mostly non-cash items.
Total savings from the restructuring activities are expected to be £20 million.
The actions taken by the end of 2006 will lead to annualised savings of £15
million. A proportion of the savings is being reinvested in people, new products
and services, in line with group strategy.

Goodwill impairment

Goodwill impairment was £6.4 million (2005 £10.3 million), recorded against TES,
the group's cinema advertising monitoring unit in the US.


Despite interest rate increases in major markets such as the US, net interest
was similar to the previous year at £15.4 million (2005 £15.2 million),
reflecting reduced debt levels. Interest cover against adjusted EBITDA,
excluding other finance charges, was 8.2x (2005 8.9x), calculated on an adjusted
EBITDA of £126.4 million (2005 £135.5 million). Adjusted EBITDA is calculated as
operating profit, adding back depreciation, amortisation, restructuring costs
and goodwill impairment.


Income from associates was £0.4 million, in line with the previous year.

Profit before tax

Adjusted profit before tax declined by 9.4 per cent to £84.5 million (2005 £93.3
million). Reported profit before tax decreased by 30.1 per cent to £59.4 million
(2005 £85.0 million).


Excluding deferred tax on goodwill, the tax charge for the year was £19.6
million (2005 £30.1 million), representing an underlying tax rate, before
goodwill impairment, of 30.0 per cent (2005 31.6 per cent). The charge comprises
£20.3 million of overseas tax (2005 £27.0 million), offset by a £0.7 million
credit (2005 £3.1 million charge) in the UK. Under IFRS, where goodwill is
deductible against tax, a deferred tax liability is recognised, even if such a
liability would only unwind on the eventual sale or impairment of the business
in question. This has led to a benefit for deductible goodwill of £0.1 million
for the year (2005 £0.1 million charge). Including this item, the total reported
tax charge was £19.5 million (2005 £30.2 million).

Minority interests

Minority interests increased to £2.8 million (2005 £2.7 million).

Earnings and dividend per share

Based on a weighted average of 442.4 million shares, adjusted earnings per share
were 12.7 pence (2005 13.7 pence). Based on a fully diluted weighted average of
452.8 million shares, adjusted earnings per share on a fully diluted basis were
12.4 pence (2005 13.4 pence). Reported earnings per share were 8.4 pence (2005
11.8 pence), a decline of 28.8 per cent. See note 3.

The board remains confident about the future prospects of the group and
accordingly has declared an increase of 16.4 per cent in final dividend per
share, to 3.2 pence (2005 2.75 pence), giving a 15.0 per cent increase in total
dividend for the year to 4.6 pence (2005 4.0 pence). Dividend cover remains
strong, with the total dividend covered by 2.8x adjusted earnings per share. The
final dividend will be paid on 6 July 2007 to shareholders on the register at 25
May 2007.

Share buy back

The group purchased 16.8 million of its own shares for a value of £34.8 million
in 2006. As part of the continued share buy back programme, approximately £65
million of shares are expected to be repurchased in 2007.

Cash flow and net debt

Net debt at 31 December 2006 was £278.5 million compared with £295.4 million in
2005 and £287.2 million at 30 June 2006. Net debt is defined as bank borrowings
net of arrangement fees, overdrafts and obligations under finance leases, less
cash and cash equivalents. The movement in working capital generated a small
outflow of £5.4 million in 2006. Operating cash flow was £119.6 million (2005
£128.4 million). Net capital expenditure was £26.9 million (2005 £20.7 million).
Net debt to adjusted EBITDA at 31 December 2006 was 2.2x (2005 2.2x), calculated
on adjusted EBITDA of £126.4 million.

Regional revenue performance
                         Year to 31 December                   Change      
                          2006           2005       Reported        Underlying
                            £m             £m              %                 %
                        ---------------------      -----------------------------
   UK                    151.1          159.1          (5.0)              (0.8)
   France                145.5          147.4          (1.3)               6.1
   Rest of Europe        366.4          354.3           3.4                3.7
                      ----------      ---------
Europe                   663.0          660.8           0.3                3.2
Americas                 226.7          238.7          (5.0)              (4.7)
Asia Pacific             114.5           99.5          15.1               15.9
                      ----------      ---------
Total                  1,004.2          999.0           0.5                2.5
                      ----------      ---------

Europe (including Middle East and Africa)

Underlying revenue growth for Europe as a whole was 3.2 per cent, which
represents an acceptable performance given slower market growth in developed
markets in Western Europe.

In the UK, TNS Worldpanel continued to grow, benefiting from the expansion of
the consumer panel to 25,000 households. Media Intelligence in the UK also
delivered steady growth, based on the launch of new digital services and good
demand for editorial content and analysis. Market conditions in UK custom remain
challenging, primarily in the Consumer sector. Despite good performance in the
Technology sector in the second half, some delays in project completions at the
end of 2006 led to a small decline in underlying revenue of 0.8 per cent.

Underlying revenue growth in France continued to be strong at 6.1 per cent,
reflecting very good performances in both Media Intelligence and custom
research. In custom research, TNS Sofres continues to benefit from the strength
of its market position, strong relationships with key clients and a relatively
high level of multi-country projects.

In the Rest of Europe, underlying revenue growth was 3.7 per cent. Operations in
most of the region have performed well, especially in Southern Europe, Russia
and Eastern Europe, offsetting a weaker performance in Germany.


Underlying revenue in the Americas declined by 4.7 per cent for the year, due to
the underperformance of the US custom business. Under the new management team,
extensive progress has been made to restructure and reorganise the business. In
the second half, the US custom business met revised expectations, given in July
2006. Latin America performed strongly and, in 2006, the group further extended
its position in the region with the acquisition of a leading custom research
company in Chile.

Asia Pacific

Underlying revenue growth in Asia Pacific was 15.9 per cent, representing
another strong performance across the region. In iTRAM, the group won new TV
audience measurement contracts in Singapore, Hong Kong and the Philippines and
also extended the panel in China to 40 cities. In custom research, the group
continues to benefit from having the strongest network in Asia Pacific and a
co-ordinated regional approach.

Sector revenue performance

                        Year to 31 December                    Change
                         2006             2005      Reported         Underlying
                           £m               £m             %                  %
                      --------------------------     ---------------------------
Consumer                313.8            334.6         (6.2)              (1.8)
Media                   206.3            191.8          7.6                5.9
Business Services       138.9            131.8          5.4                5.1
Technology              105.5            111.0         (5.0)              (3.6)
Healthcare               96.5             87.4         10.4               10.5
Other                   143.2            142.4          0.6                5.1
                      ---------         --------
Total                 1,004.2            999.0          0.5                2.5
                      ---------         --------


Underlying revenue in the Consumer sector as a whole declined by 1.8 per cent
for the year, largely as a result of the continued challenging market conditions
in Consumer custom research in the developed markets of Western Europe and
underperformance in the US. Growth in TNS Worldpanel was good, particularly in
the emerging markets, based on continuing demand for the data and analysis that
TNS can provide.


With good growth in TNS Media Intelligence and a strong performance in iTRAM,
the Media sector overall grew by 5.9 per cent in 2006. TNS Media Intelligence
performed well across most markets, especially France, Spain, Russia and in the
emerging markets. iTRAM had a very good year, winning several contracts in Asia
Pacific and contracts for new digital measurement services in the US and other
markets. The outlook for the Media sector overall remains positive, based on the
impact of media fragmentation and the emergence of new technologies;
developments from which TNS is well placed to benefit.

Business Services

Business Services continued to perform well, showing underlying revenue growth
of 5.1 per cent for the year. Financial Services is a fast growing segment of
the market information industry. TNS performed well in Financial Services in
2006, benefiting from a globally managed sector approach and good progress with
clients in Europe and the emerging markets.


The Technology sector remains one of the fastest growing parts of the market. In
2006, TNS performed exceptionally well in Asia Pacific. However, performance of
the sector overall was impacted by the US and declined by 3.6 per cent for the
year. Excluding the specific impact of one client in the US, growth in the
sector would have been in excess of 6 per cent and highlights the leadership
position TNS has in this sector.


With a pick up in the second half, underlying growth in Healthcare was 10.5 per
cent, representing a strong performance. This has been driven by the sector's
globally managed approach, good traction with major international clients and
the launch of new services in the area of brand performance.


The Automotive sector remains variable by region. Polling and Social research
has been strong across all major markets, driven by elections in several
countries in Europe and Latin America. Additional contracts have also been won
with the World Bank and the European Commission.


The results of the group are shown on the following pages.

For the year ended 31 December

Continuing operations                                          2006       2005
                                                    Notes        £m         £m

Revenue                                               2     1,004.2      999.0
Direct costs                                                 (283.9)    (280.6)

Gross profit                                                  720.3      718.4
Administrative expenses                                      (645.9)    (618.6)
Operating profit before exceptional items                      99.5      108.1
Restructuring costs                                           (17.8)         -
Goodwill impairment                                            (6.4)     (10.3)
Amortisation of intangibles identified on
acquisitions                                                   (0.9)      (0.9)
Pension curtailment credit                                        -        2.9

Operating profit                                      2        74.4       99.8

Finance income                                                  1.2        1.0
Finance costs                                                 (16.6)     (16.2)

Share of post tax profit of associates                          0.4        0.4

Profit before taxation                                         59.4       85.0
Taxation - excluding deferred tax on goodwill                 (19.6)     (30.1)
Taxation - deferred tax on goodwill                             0.1       (0.1)
Taxation                                                      (19.5)     (30.2)

Profit for the year                                            39.9       54.8
                                                             ========   ========
Attributable to:
   Equity holders of the parent company                        37.1       52.1
   Minority interests                                           2.8        2.7
                                                               39.9       54.8

Basic earnings per share attributable to
equity holders of the
company                                               3         8.4p      11.8p

Diluted earnings per share attributable to
equity holders of the company                         3         8.2p      11.6p
Dividends proposed for the year were £20.4m (2005 £17.6m). Dividends paid in the
year were £18.4m (2005 £16.0m).

At 31 December                                                       Restated
                                                     2006             (note 7)
                                                       £m                 2005
Non-current assets
Goodwill                                            378.1                393.6
Intangible assets                                    16.2                 16.6
Plant, property and equipment                        68.8                 73.1
Investments in associates                             2.9                  2.5
Investment in subsidiaries                              -                    -
Available for sale investments                        0.4                  0.4
Deferred tax assets                                  32.4                 29.6
                                                    498.8                515.8

Current assets
Inventories                                          48.8                 55.3
Trade and other receivables                         256.2                260.1
Current tax receivable                                3.7                  2.5
Available for sale investments                        0.3                  0.8
Cash and cash equivalents                            61.8                 45.8
Total current assets                                370.8                364.5
Total assets                                        869.6                880.3

Current liabilities
Borrowings                                          (23.3)                (0.5)
Trade and other payables                           (293.3)              (298.7)
Current tax payable                                 (32.2)               (27.0)
Provisions                                          (16.8)               (13.5)
Total current liabilities                          (365.6)              (339.7)
Net current assets                                    5.2                 24.8

Non-current liabilities
Borrowings                                         (316.9)              (340.7)
Trade and other payables                             (1.9)                (2.3)
Deferred tax liabilities                            (25.7)               (27.0)
Retirement benefit obligations                      (12.9)               (15.3)
Provisions                                          (19.5)               (13.0)
Total non-current liabilities                      (376.9)              (398.3)
Total liabilities                                  (742.5)              (738.0)
Total net assets                                    127.1                142.3

Issued share capital                                 22.1                 22.4
Share premium                                       134.2                126.7
Other reserves                                        0.4                  1.8
Retained earnings                                   (37.8)               (18.6)
Total parent shareholders' equity                   118.9                132.3
Minority interests in equity                          8.2                 10.0

Total equity                                        127.1                142.3

For the year ended 31 December
                                                                2006      2005
                                                       Notes      £m        £m

Cash flows from operating activities
Cash generated from operations                           4     119.6     128.4
Income tax paid                                                (21.3)    (24.2)

Net cash generated from operating activities                    98.3     104.2
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)       4     (16.7)     (5.7)
Sale of subsidiaries (net of cash disposed)                      1.6       0.7
Sale of associates and investments                               0.5         -
Proceeds from sale of property, plant and equipment              0.7       2.6
Purchase of property, plant and equipment                      (21.0)    (20.0)
Purchase of intangible assets                                   (6.6)     (3.3)
Purchase of associates and investments                             -      (0.8)
Interest received                                                1.2       1.0
Dividends received                                                 -         -

Net cash used in investing activities                          (40.3)    (25.5)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital                5.7       2.5
Dividends paid to company's shareholders                       (18.4)    (16.0)
Dividends paid to minority interests                            (2.7)     (1.7)
Arrangement fee paid on restructuring group finance                -      (1.4)
Increase/(decrease) in debt                                      1.8     (66.2)
Interest paid                                                  (16.4)    (13.9)
Purchase of company shares                                     (34.8)        -

Net cash used in financing activities                          (64.8)    (96.7)

Net decrease in cash, cash equivalents and overdrafts           (6.8)    (18.0)

Cash, cash equivalents and overdrafts at beginning of
year                                                            45.3      63.3

Cash, cash equivalents and overdrafts at end of year            38.5      45.3

Net debt*                                                4     278.5     295.4

* Net debt is defined as bank borrowings including overdrafts net of arrangement
fees and obligations under finance leases, less cash and cash equivalents.


For the year ended 31 December
                                                                2006      2005
                                                                  £m        £m

Profit for the year                                             39.9      54.8

Actuarial gains/(losses) on pensions                             1.3      (5.4)
Tax on actuarial gains/(losses) on pensions                     (0.2)      1.6

(Loss)/gain in fair value of financial instruments              (0.3)      1.8
Translation differences on foreign currency net investments
less translation differences on foreign currency loans taken
out to fund those investments                                  (10.7)      6.0
Tax on gains on the above item                                     -      (1.4)
Net gains and losses not recognised in the income statement     (9.9)      2.6

Total recognised income and expense relating to the year        30.0      57.4

Prior period adjustment (note 7)                                (5.6)        -

Total recognised income and expense since last annual report    24.4      57.4

Attributable to:
Equity holders of the parent company                            21.5      54.7
Minority interests                                               2.9       2.7
                                                                24.4      57.4

1. Basis of preparation

These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations endorsed by the European Union
(EU) and with those parts of the Companies Act 1985 applicable to companies
reporting under IFRS. The financial statements have been prepared under the
historical cost convention as modified by the revaluation of available for sale
investments, financial assets and liabilities held for trading.

Changes in accounting policy

The principal accounting policies adopted in the preparation of these financial
statements, published on the group's website,, on 5 March
2007, have been consistently applied to all years presented.

Financial information

The preliminary results were approved by the board on 5 March 2007. The
financial information contained in this announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2005, together with an
unqualified auditors' report thereon, have been delivered to the Registrar of
Companies. Statutory accounts for the year ended 31 December 2006 have not yet
been delivered to the Registrar of Companies. The group's annual report and
accounts for 2006 will be delivered to shareholders in early April and will be
filed with the Registrar of Companies, together with an unqualified auditors'
report thereon, following the annual general meeting. It will be available
electronically from the Investor section of the group's website at in early April.

2. Segmental reporting
Primary reporting format - geographic segments
                    Revenue                                        Operating profit
                 2006     2005                         2006                                   2005
              -------------------    -----------------------------------------------------------------------------------
                                           Pre                      Post          Pre                      Post
                                   exceptional  Exceptional  exceptional  exceptional  Exceptional  exceptional
                                         items        items        items        items        items        items
                   £m       £m              £m           £m           £m           £m           £m           £m

Europe          663.0    660.8            79.7         (9.3)        70.4         72.0          0.7         72.7
Americas        226.7    238.7             6.3        (15.7)        (9.4)        23.7         (8.8)        14.9
Asia Pacific    114.5     99.5            13.5         (0.1)        13.4         12.4         (0.2)        12.2
             -------------------      ----------------------------------------------------------------------------------
Total         1,004.2    999.0            99.5        (25.1)        74.4        108.1         (8.3)        99.8
             ====================     ==================================================================================

The exceptional items in 2006 and 2005 are broken out on the face of the
consolidated income statement appended to this press release.  The costs in 2006
relate to restructuring, goodwill impairment and amortisation of intangible
assets.  In 2005, the costs related to goodwill impairment, amortisation of
intangible assets and a pension curtailment credit.

3. Earnings per share

Basic earnings per share of 8.4p (2005 11.8p) have been calculated on the profit
for the year attributable to equity holders of the parent company of £37.1m
(2005 £52.1m) and on 442.4 million shares (2005 441.6 million), being the
weighted average number of shares in issue during the year, excluding those held
in the ESOP and the EBT, which are treated as cancelled.

The diluted earnings per share of 8.2p (2005 11.6p) have been calculated in
accordance with the provisions of IAS 33, 'Earnings Per Share', with the
weighted average number of shares in issue being adjusted to assume conversion
of all dilutive potential shares for the period they were outstanding. Shares
held by the ESOP and the EBT, which are under performance-based options, are
included in the diluted weighted average number of shares, as the performance
conditions are deemed to have been met for the purposes of this calculation.

The weighted average number of ordinary shares in issue during the year for the
purpose of these calculations is as follows:
                                                           2006           2005
                                                       millions       millions
Share capital                                             450.7          447.4
Shares held in Treasury                                    (3.5)             -
Shares held by ESOP                                        (0.2)          (0.4)
Shares held by EBT                                         (4.6)          (5.4)
Basic earnings per share denominator                      442.4          441.6
Dilutive effect of share options                           10.4            8.3
Diluted earnings per share denominator                    452.8          449.9

An adjusted earnings per share using an adjusted profit for the year
attributable to equity holders of the parent company is also presented, as the
directors believe that this assists in understanding the underlying performance
of the group. The adjusted earnings per share is based on the profit as adjusted
for the items shown below.
                                                           2006           2005
                                                             £m             £m
Profit for the year attributable to equity
holders of the parent company                              37.1           52.1
Adjusted for exceptional items:
Restructuring costs                                        17.8              -
Goodwill impairment                                         6.4           10.3
Amortisation of intangibles identified on
acquisitions                                                0.9            0.9
Pension curtailment credit                                    -           (2.9)
                                                           25.1            8.3
Tax on exceptional items at 32%                            (5.9)             -
Deferred tax on goodwill                                   (0.1)           0.1
                                                           19.1            8.4
Adjusted profit for the year attributable to
equity holders of the parent company                       56.2           60.5
Adjusted earnings per share                                12.7           13.7

                    Profit used for    Weighted average                     
                       EPS purposes    number of shares    Earnings per share
                   2006        2005      2006      2005       2006       2005
                     £m          £m  millions  millions          p          p
Basic              37.1        52.1     442.4     441.6        8.4       11.8
Diluted            37.1        52.1     452.8     449.9        8.2       11.6
Adjusted           56.2        60.5     442.4     441.6       12.7       13.7

4. Cash flow
                                                                 2006     2005
                                                                Total    Total
Reconciliation of operating profit to cash generated from          £m       £m
Operating profit                                                 74.4     99.8
Amortisation of intangible assets                                 6.4      5.8
Impairment of goodwill                                            6.4     10.3
Depreciation of property, plant and equipment                    21.4     19.6
Loss/(profit) on sale of property, plant and equipment            0.1     (1.2)
Profit on disposal of investments in subsidiaires                   -        -
Share based payments                                              5.0      4.5
Decrease in inventories                                           3.0     16.0
(Increase)/decrease in trade and other receivables               (9.0)    (2.8)
Increase/(decrease) in trade and other payables                   0.6    (21.6)
Decrease in pension liabilities                                  (0.4)    (3.4)
Increase in provisions                                           11.7      1.4
Cash generated from operations                                  119.6    128.4

Cash generated from operations includes an outflow of £9.5m (2005 £nil) relating
to restructuring costs.

Reconciliation of net cash flow to movement in net debt                    £m

Decrease in cash, cash equivalents and bank overdrafts in the year       (6.8)                                  
Cash inflow from increase in debt                                        (1.8)
Change in net debt resulting from cash flows                             (8.6)
Translation difference                                                   26.0
Non-cash movement                                                        (0.5)
Movement in net debt in the year                                          16.9
At 1 January 2006                                                       (295.4)
At 31 December 2006                                                     (278.5)

                          At 1 Cash flow  Exchange   Non-cash           At 31  
                       January            movement  movements        December
                          2006                                           2006

Analysis of net debt       £m         £m        £m         £m              £m

Cash and cash
equivalents               45.8       16.0         -          -            61.8
Bank overdrafts           (0.5)     (22.8)        -          -           (23.3)
after more
than 1 year             (340.7)      (1.7)     26.0       (0.5)         (316.9)
under finance
leases                       -       (0.1)        -          -            (0.1)
                        (295.4)      (8.6)     26.0       (0.5)         (278.5)

The net non-cash movement represents the amortisation of arrangement fees of
£0.2m (2005 £0.8m) and movements in the fair value of financial instruments of
£0.3m (2005 £0.6m).

5. Acquisitions

On 9 June 2006, the group acquired the French media research business Exactitude
S.A. On 21 December 2006 the group acquired the UK Media Intelligence business
Presswatch Media Limited. These acquisitions contributed revenues of £0.3m and
operating profit of £0.1m to the group for the year to 31 December 2006.

On 31 March 2006, the group acquired a further 8% of its AISA subsidiary in the
Czech Republic and on 11 July 2006 a further 12% of its subsidiary in Russia,
TNS Gallup Oy. On 15 December 2006, the group acquired the remaining 25% of its
subsidiary in South Africa, CEC SA.

On 15 December 2006, the group acquired control of its joint venture in Japan,
TNS NRC, when that company merged with another Japanese market research
business, Infoplan. The group has a 59% interest in the combined entity, TNS
Infoplan, which has been fully consolidated from the acquisition date.

6. Currency conversion

The 2006 consolidated income statement has been prepared using, among other
currencies, an average exchange rate of US$1.8437 to the pound (2005 US$1.8195)
and €1.4663 to the pound (2005 €1.4624).

The consolidated balance sheet as at 31 December 2006 has been prepared using
the exchange rate on that day of US$1.9588 to the pound (2005 US$1.7211) and
€1.4833 to the pound (2005 €1.4531).

7. Statement of changes in shareholders' equity
              Share capital  Share premium  Other reserves  Retained    Total   Minority  Total equity
                                                            earnings           interests
Group                    £m             £m              £m        £m       £m         £m            £m

balance at             22.3          123.8             1.5     (57.3)    90.3        9.1          99.4
1 January 2005

Prior period
adjustment *              -              -               -      (5.6)    (5.6)         -          (5.6)

balance at 1
January 2005           22.3          123.8             1.5     (62.9)    84.7        9.1          93.8
Profit for the
year                      -              -               -      52.1     52.1        2.7          54.8

losses on
pensions net
of tax                    -              -               -      (3.8)    (3.8)         -          (3.8)

net of tax                -              -               -       4.6      4.6          -           4.6

gain in
fair value of
instruments               -              -               -       1.2      1.2          -           1.2

fair value
taken to
statement                 -              -               -       0.6      0.6          -           0.6

New share
capital issued
net of
expenses                0.1            2.9               -         -      3.0          -           3.0

dividends and
disposals                 -              -               -         -        -       (1.8)         (1.8)

Net movements
on exercise of
options                   -              -             0.3       1.1      1.4          -           1.4

Share based
payments                  -              -               -       4.5      4.5          -           4.5

dividends                 -              -               -     (16.0)   (16.0)         -         (16.0)

balance at 31
December 2005          22.4          126.7             1.8     (18.6)   132.3       10.0         142.3

Profit for the
year                      -              -               -      37.1     37.1        2.8          39.9

gains on
pensions net
of tax                    -              -               -       1.1      1.1          -           1.1

net of tax                -              -               -     (10.7)   (10.7)       0.1         (10.6)

gain in
fair value of
instruments               -              -               -       0.3      0.3          -           0.3

fair value
taken to
statement                 -              -               -      (0.6)    (0.6)         -          (0.6)

New share
capital issued
net of
expenses                0.2            7.5               -         -      7.7          -           7.7

Purchase of
own shares                -              -               -     (34.8)   (34.8)         -         (34.8)

cancelled              (0.5)             -             0.5         -        -          -             -

interests in
acquisitions              -              -               -         -        -        0.6           0.6

purchased                 -              -               -         -        -       (2.6)         (2.6)

dividends                 -              -               -         -        -       (2.7)         (2.7)

Net movements
on exercise of
options                   -              -            (1.9)      1.8     (0.1)         -          (0.1)

Share based
payments                  -              -               -       5.0      5.0          -           5.0

dividends                 -              -               -     (18.4)   (18.4)         -         (18.4)
At 31 December
2006                   22.1          134.2             0.4     (37.8)   118.9        8.2         127.1

*The prior period adjustment refers to a re-evaluation of overheads absorbed
into inventory of £3.8m and restatement of panel incentive provisions of £1.8m.
Further details are included in the group's principal accounting policies at These adjustments have no effect on the income statement in
the prior period, and result in a charge of £0.2m in the current period.

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