Earnings before
extraordinary items + 2% + 19%*) to EUR 112 million Earnings before
amortization of
goodwill and
extraordinary items + 10% + 19%*) to EUR 138 million Net earnings + 1% + 18%*) to EUR 110 million *) Earnings for the first half of 1998 have been restated by approximately EUR 16 million and EUR 10 million to reflect amortization of goodwill due to the one-time positive effect relating to the shorter consolidation period of World Directories from its date of acquisition (February 19, 1998). Accordingly, the seasonal loss in January 1998 is not reflected in our earnings, because this loss has not been for the account of VNU. Contributing factors include lower interest expenses, reduced amortization of goodwill and higher operating income. In comparing the first half results with 1998, the reader should consider the above mentioned one-time positive effects, as we already mentioned in the 1998 first half year report. Restated earnings before extraordinary items as well as restated earnings before amortization of goodwill and extraordinary items both increased by 19%. In the first half of 1999, earnings before extraordinary items increased by 2% to EUR 112 million from EUR 110 million. Net earnings increased by 1% to EUR 110 million. Restated net earnings increased by 18%. -- Total operating income
before amortization
of goodwill + 19% to EUR 260 million -- Operating income after
amortization of
goodwill + 16% to EUR 235 million -- Net revenues + 10% to EUR 1,276 million -- Operating income to 18.9% from 17.8% of net revenues Operating income including equity in operating income of non- consolidated subsidiaries increased by 19% to EUR 260 million from EUR 219 million. Operating income as a percentage of net revenues increased to 18.9% from 17.8%. Net revenues increased by 10% to EUR 1,276 million from EUR 1,164 million. Growth in existing activities amounted to 4%. Foreign currency rate effects were negligible. Review Most groups contributed to the improvement in results. Operating income at our consumer magazines, newspapers, telephone directories and information services increased substantially. Advertising revenues of our consumer magazines and newspapers increased. Newspapers mainly experienced a higher level of recruitment advertising. With regard to telephone directories and information services, the previously mentioned one-time positive effect should be considered. Nevertheless, results increased due to favorable market conditions, the cooperation with Belgacom, a Belgian telecommunications company, and the earlier publication of some of our directories compared to last year. Operating income of Business Information Europe equalled last year's level despite higher start-up costs related to the Internet operations and lower advertising revenues in the United Kingdom. Recruitment advertising specifically accounted for this decline. In addition, start-up costs relating to the introduction of marketing information services in Europe increased and we launched new activities in Poland, Austria and Switzerland. At Business Information USA contribution from acquisitions was restricted as a result of seasonal effects. At marketing information services income shifted to the second half of the year. As a result of these factors, operating income increased slightly. VNU made acquisitions of about EUR 188 million in the first half of 1999, primarily related to business information in the United States. Internet operations VNU has streamlined some Internet operations in Europe by forming a central Internet business unit under the name VNU Internet Publishing. The primary tasks of this business unit include Internet projects involving several divisions, starting new projects and providing support for existing Internet activities within VNU. Total number of page views to VNU Internet sites were over 100 million in the second quarter of 1999. Development costs relating to the Internet operations are expected to be EUR 30 million in 1999. Total number of employees (full-time equivalents) who are involved in the Internet operations amounted to approximately 200 in mid 1999. Interim dividend For the financial year 1999, VNU will pay an interim dividend of EUR 0.11 per common share compared to an interim dividend of EUR 0.1089 in 1998. For the 7% preferred shares a dividend of EUR 0.64 will be paid. The interim dividend, which is not indicative of the amount of our final dividend, and the dividend on preferred shares will be paid on October 6, 1999. Tender offer for Nielsen Media Research On August 16, 1999, VNU announced that it has entered into a definitive merger agreement with Nielsen Media Research Inc., in which VNU intends to acquire all of Nielsen's common shares at $37.75 for a total cash purchase price of approximately $2.5 billion (EUR 2.4 billion). The transaction is expected to close in the Autumn, 1999. The tender offer for the common shares of Nielsen commenced on August 20, and is conditioned upon VNU receiving at least a majority of Nielsen's shares. Approximately half of the purchase price will be financed through an equity offering. In addition, VNU intends to review the strategic position of its newspaper division. Prospects Barring unforeseen events and foreign currency rate effects, we expect for 1999 as a whole, our growth in earnings before extraordinary items will amount to approximately 10%. In the first half of 1999, earnings before extraordinary items, restated for the EUR 16 million one-time positive effect, increased by 19%. For the full year we expect restated earnings before extraordinary items, as well as restated earnings before amortization of goodwill and extraordinary items, to increase by approximately the same percentage. VNU is a Netherlands-based international publishing and information company, whose operations include consumer and professional magazines, newspapers, telephone directories and information services, educational textbooks, marketing information services, trade shows and entertainment. Worldwide the company employs approximately 15,000 people and has annual revenues of more than NLG 5.3 billion (EUR 2.4 billion). ots Original Text Service: VNU Internet: http://www.newsaktuell.de Contact: Maarten Schikker of VNU, +31-23-546-3600; or Melanie Morrison of Taylor Rafferty Associates, +44-171-606-1149 Web site: http://www.vnu.com