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Taylor Nelson Sofres (TNS)

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Wednesday 24 September, 2008

Taylor Nelson Sofres

Medium Term Earnings Growth

RNS Number : 2225E
Taylor Nelson Sofres PLC
24 September 2008



24 September 2008

Taylor Nelson Sofres plc ("TNS")


The Board of TNS today reaffirms the strong growth prospects for the group and commits to a medium-term annual double digit underlying earnings growth target (1). This follows the strong set of results announced by TNS for the six months ended 30 June 2008 and confirmation on 23 September 2008 that TNS' trading performance continues to be strong. Given this strong performance and positive future growth targets, in the context of the ongoing WPP Offer, the Board believes that shareholders should be fully appraised of the future potential of TNS.

In addition, TNS anticipates that this strong growth target should underpin future dividends, which are expected to grow in line with the medium-term double digit annual underlying earnings growth target.

This medium-term annual underlying earnings growth target is based on TNS' Strategic Plan and Sixth Gear efficiency programme, which are designed to continue the successful implementation of TNS' strategy. These initiatives take advantage of the structural changes and strong growth drivers in the industry to deliver superior returns to TNS shareholders, by accelerating growth and improving margins in the medium term. 

The successful implementation of TNS' strategy helped drive adjusted earnings per share growth of over 20 per cent in 2007 and for the six months ended 30 June 2008.


The Board of TNS continues to recommend that TNS shareholders reject the offer announced by WPP Group plc ("WPP") on 9 July 2008 (the "WPP Offer"). Based on the closing price of 486.5 pence per WPP share as at 23 September 2008, the WPP Offer values each TNS share at 264.9 pence. 

This price undervalues TNS and fails to take into account:

  • How well the business is performing, as evidenced by the interim results for the six months ended 30 June 2008 and the Board's confidence in the outlook for the full year;

  • TNS' position as a market leader in the fast growing market information industry;

  • The clear strategic direction the management team has established to continue to deliver growth;

  • TNS' significant investment in both globalising its offering and expanding its online and digital measurement capabilities;

  • TNS' Adjusted Operating Margin objective of over 12.5 per cent in the medium term;

  • TNS' target of medium-term annual double digit underlying earnings and dividend growth; and

  • That previous acquisitions in the sector have valued target companies above WPP's valuation of TNS.

Consequently, the Board of TNS recommends that TNS shareholders reject the WPP Offer by taking no action in response to the WPP Offer and, in particular, that they do not complete any form of acceptance that they have received with WPP's Offer document.

Donald Brydon, Chairman of TNS said:

"Notwithstanding the extreme volatility of today's financial markets, the TNS Board is very confident in TNS' ability to create substantial shareholder value. We have a sound strategy which is delivering results. We firmly believe now is not the time to sell the company."

(1) The medium-term annual double digit underlying earnings growth target does not in any way constitute a forecast of future profits.


Press enquiries to Brunswick                                       +44 20 7404 5959 

David Yelland, Jonathan Glass 

TNS                                                                           +44 20 8967 1584 

Janis Parks, Head of Investor Relations 

Deutsche Bank                                                            +44 20 7545 8000 

(Lead Financial Adviser and Joint Broker) 

Gavin Deane, Manny Chohhan 

Charles Wilkinson, Martin Pengelley (Corporate Broking) 


JPMorgan Cazenove                                                   +44 20 7588 2828 

(Financial adviser and Joint Broker) 

Malcolm Moir, Andrew Hodgkin, Hugo Baring 

Moelis & Company                                                     +44 7802 94 1847

(Financial adviser)

Kristian Bagger


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 WPP Offer 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 WPP Offer 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 WPP Offer 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 WPP Offer or any other matter referred to herein. 

Moelis & Company UK LLP are an Appointed Representative of Sturgeon Ventures LLP. Sturgeon Ventures LLP is authorised and regulated by the Financial Services Authority. Moelis & Company UK LLP is acting as financial adviser to TNS and no-one else in connection with the WPP Offer and will not be responsible to anyone other than TNS for providing the protections afforded to clients of Moelis & Company UK LLP or for providing advice in relation to the WPP Offer or any other matter referred to herein.

Underlying earnings growth

Underlying earnings growth is calculated by taking the increase in earnings excluding restructuring costs, amortisation of acquired intangible assets and deferred tax on goodwill for the current year over the prior year's pro forma earnings, at constant exchange rates. The pro forma earnings assume that any acquisitions were owned and any discontinued operations or disposals excluded, for the comparable period in the prior year.

Forward looking statements 


Certain statements contained in this announcement constitute "forward looking statements". In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. 

Such forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of TNS or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. 

Such forward looking statements are based on numerous assumptions regarding TNS' present and future business strategies and the environment in which TNS will operate in the future. These forward looking statements speak only as at the date of this announcement

Except as required by the FSA, the London Stock Exchange, the Listing Rules, the Disclosure Rules and Transparency Rules or any other applicable law, TNS expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in TNS' expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 

Nothing in this announcement should be interpreted to mean that the earnings per TNS share for the current or future financial periods will necessarily be greater (or lesser) than those for the relevant preceding financial period. 

Dealing Disclosure Requirements 

Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of TNS or WPP, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of TNS or WPP, they will be deemed to be a single person for the purpose of Rule 8.3. 


Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of TNS or WPP by TNS or WPP, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. 


A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at 

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. 


Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

This information is provided by RNS
The company news service from the London Stock Exchange