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Taylor Nelson Sofres (TNS)

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Wednesday 25 June, 2008

Taylor Nelson Sofres

Trading Statement

RNS Number : 5105X
Taylor Nelson Sofres PLC
25 June 2008

25 June 2008

Taylor Nelson Sofres plc

Publication of merger documents

and trading update

Continued strong revenue growth


Progress towards Merger that will create 

a major new force in market information 

Taylor Nelson Sofres plc ("TNS"), the global market information and insight group, has today published a Circular to Shareholders and Prospectus (the "Documents"), relating to the proposed merger of GfK and TNS. The TNS General Meeting to consider the Merger will be held on 18 July 2008. The Documents include a trading update for TNS for the first five months to 31 May 2008, the text of which is given below.  

In the Circular, TNS Chairman Donald Brydon tells shareholders that the proposed merger provides a unique opportunity to create a major new force in the market information industry. The new group, GfK-TNS will provide an enhanced service designed to meet clients' changing market information needs in an increasingly global and digital environment. By bringing together the complementary geographic networks, sector specialisations and service offerings of GfK and TNS, GfK-TNS will provide a new sector-led approach for clients, integrating syndicated and custom services. This will create new, exciting opportunities for GfK-TNS employees.  

Significant new revenue opportunities

The TNS Directors believe that this enhanced offering will create significant new revenue opportunities and accelerate revenue growth by:

  • Rolling out existing products and services across the extended network

  • Leveraging the complementary client bases

  • Creating new services from shared expertise

  • Integrating the businesses' offering to provide more advisory services that deliver better understanding of the relationship between consumer attitudes and behaviour.

Opportunities for increased operational efficiencies and cost savings

As well as the significant new revenue opportunities, the TNS Directors also believe that the Merger provides opportunities for increased operational efficiencies and cost savings, which are expected to deliver annual pre-tax benefits through cost reductions to the Enlarged Group of at least €97 million (£76.3 million) by the end of the third full year following completion, representing around 4 per cent of the combined cost base.

  Delivering significant value to shareholders

The TNS Directors believe that the Merger will deliver significant value to both GfK's and TNS' shareholders, through these enhanced business opportunities and substantial operating efficiencies.  

Following the Merger, the TNS Directors expect the Merger to be earnings enhancing, before goodwill and purchase price amortisation charges and restructuring costs, from the first full year. In addition, the TNS Directors have an objective to reach an Adjusted Operating Margin for the Enlarged Group in the medium term of beyond 15 per cent.  

This statement regarding earnings enhancement and the medium term Adjusted Operating Margin is not a profit forecast and should not be interpreted to mean that GfK-TNS' future earnings per share will necessarily match or exceed the historical published earnings per share of GfK or TNS. 

Current trading of TNS



  • Actual revenue growth for the first five months of 2008 was almost 20%
  • Underlying revenue growth for the period was around 6%
  • Order book position at end of May significantly ahead of the previous year
  • Current forecasts indicate similar underlying revenue performance for year as a whole


Group: The group achieved actual revenue growth of almost 20 per cent in the first five months of 2008. Underlying revenue growth was around 6 per cent, with the impact of foreign exchange, particularly the strength of the euro, increasing actual revenue by about 10 per cent. The net impact of acquisitions and disposals added around 4 per cent. 

Europe:      Building on a strong performance in 2007, the region has exceeded the group's expectations, with underlying revenue improvement in all the main markets and a particularly strong performance in France and the Rest of Europe.


North America: As with a number of its competitors, the group had a slow start to the year in North America and, in the first five months, the region saw a revenue decline on an underlying basis. However, with client spend expected to be weighted to the second half, current forecasts indicate underlying growth in the region for the year as a whole.

Asia Pacific, Latin America, Middle East and Africa (ALM): This region continues to deliver strong underlying growth.

Sectors: Healthcare, Media and Automotive, the best performing sectors in 2007, continued to achieve strong underlying growth. While Consumer and Business Services also continued to grow, Technology was impacted by a weaker performance in the US.

Full year outlook

Current forecasts indicate that, in total, the TNS group's underlying revenue growth for the full year should be similar to that achieved in the first five months. Based on the order book for the year as a whole, underlying revenue growth should be achieved in all regions, with a continued strong performance in Europe and ALM and modest growth in North America. The order book at the end of May remains significantly ahead of the previous year.  

David Lowden, Chief Executive of TNS, said: "Trading continues to be strong for TNS, with actual growth of almost 20 per cent in the first five months. With an underlying improvement of around 6 per cent, we are ahead of estimated market growth. What is more, our current forecasts indicate that we will deliver similar levels of underlying growth for the full year. This is an exciting time for TNS, as we publish the Circular to Shareholders and Prospectus, which outline the significant new revenue opportunities we intend to pursue through the proposed merger with GfK."


Adjusted Operating Margin is calculated as Adjusted Operating Income as a percentage of revenue for the period.  

Adjusted Operating Income is calculated as operating income for the financial period before exceptional items, including: restructuring costs, goodwill impairment, amortisation of acquired intangibles and other non-recurring items. 

This announcement should be read in conjunction with the Prospectus and Circular.

The Documents have been filed with the FSA's Document Viewing Facility. Copies of the Documents can be obtained from The Company Secretary, Taylor Nelson Sofres plc, TNS House, Westgate, London W5 1UA. They will also be available via from 26 June 2008.

  Expected Timetable to Completion*

TNS General Meeting 
18 July 2008
Filing of Offer Document with BaFin 
        22 July 2008
Approval of Offer Document by BaFin/Start of Acceptance Period for Offer 
5 August 2008
Expiration of Acceptance Period 
30 September 2008
Announcement of Offer results/Start of Additional Acceptance Period
6 October 2008
Expiration of Additional Acceptance Period
20 October 2008
Announcement of final Offer results
24 October 2008
Issue of New TNS Shares to GfK Shareholders who have accepted the Offer during the Acceptance Period or Additional Acceptance Period
28 October 2008
Expected date of Admission and commencement of dealings on the London Stock Exchange in New TNS Shares
28 October 2008


(*) These dates are indicative only and assume that the requisite regulatory clearances have been obtained and other Conditions to Completion fulfilled before the estimated Completion Date set out in this Expected Timetable to Completion. In particular, this expected timetable will only apply if Phase I clearance is received from the European Commission in respect of the Merger, being no more than 35 working days from the notification of the European Commission. If any of the above times and/or dates change, the revised times and/or dates will be notified by announcement through a Regulatory Information Service.

Conference call for analysts on trading update

A conference call with Andy Boland, Finance Director, will be held at 14.30 UK time on 

Wednesday 25 June

UK dial in: 0800 073 1348

International dial in: +44 (0)1452 555 004

Conference ID: 53321595#

Thereafter a replay of the call will be available as follows:

UK dial in: 0800 953 1533

International dial in: +44 (0)1452 55 00 00

Replay access number: 53321595#

An audio file of the call will also be made available via



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

Joel Beckman, IR Director                                           +44 (0)20 8967 1384

Deutsche Bank                                                           +44 (0)20 7545 8000

Lead Financial Adviser and Joint Broker to TNS

Kristian BaggerGavin Deane, Manny Chohhan

Charles WilkinsonMartin Pengelley (corporate broking)

JPMorgan Cazenove                                                +44 (0)20 7588 2828

Financial Adviser and Joint Broker to TNS

Malcolm Moir, Andrew Hodgkin, Hugo Baring


Public Relations Adviser to TNS

UK              David YellandJonathan Glass                +44 (0)20 7404 5959

Germany    Christine Graeff                                         +49 69 24 00 55 12        

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business. Deutsche Bank AG is acting as lead financial adviser and also as joint corporate broker to TNS, and no-one else in connection with the Revised Proposal and possible merger with GfK and will not be responsible to anyone other than TNS for providing the protections afforded to the clients of Deutsche Bank AG nor for providing advice in relation to the Revised Proposal and possible merger with GfK or any matter referred to herein.

JPMorgan Cazenove, which is regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser and joint corporate broker to TNS and no-one else in connection with the Revised Proposal and possible merger with GfK and will not be responsible to anyone other than TNS for providing the protections afforded to customers of JPMorgan Cazenove or for providing advice in relation to the Revised Proposal and possible merger with GfK or any other matter referred to herein.

This announcement has been prepared by, issued by and is the sole responsibility of the management TNS and should be read in conjunction with the Prospectus and Circular. This document is an advertisement and not a prospectus and does not constitute or form part of, any offer, or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of TNS, nor shall any part of it nor the fact of its presentation or distribution form part of or be relied on in connection with any contract or investment decision or commitment relating thereto, nor does it constitute a recommendation regarding the securities of TNS.  

This announcement includes certain statements that constitute "forward-looking statements", beliefs or opinions. These statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect", "forecast" and words of similar meaning, include matters that are not historical facts and statements and reflect TNS' beliefs, intentions and current expectations regarding, among other things, TNS' results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which TNS operates. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. By their nature, forward-looking statements are subject to risks and uncertainties, including any risks and uncertainties set forth in a prospectus, that may cause TNS' actual results of operations, financial condition, liquidity, prospects, growth, strategy and the development of the industry in which TNS operate to differ materially from those described in or suggested by the forward- looking statements contained in this document. Accordingly, you are cautioned that forward-looking statements are not guarantees of future performance and that you should not place undue reliance on such forward-looking statements. In addition, even if TNS' results of operations, financial condition, liquidity, prospects, growth, strategy and the development of the industry in which TNS operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods

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