VNU Reeling From Ad Revenue Drop
Dutch Publisher VNU NV, announced during an Oct. 5 conference call that its earnings per share will fall by 5 percent, primarily due to its sinking U.S. ad revenues. Those revenues were down 25 percent for the first half of the year from a year earlier, and are expected to be down more than 30 percent for the second half of the year from a year earlier.
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Dutch Publisher VNU NV, announced during an Oct. 5 conference call that
its earnings per share will fall by 5 percent, primarily due to its
sinking U.S. ad revenues. Those revenues were down 25 percent for the
first half of the year from a year earlier, and are expected to be down
more than 30 percent for the second half of the year from a year
VNU is the parent company of Outdoor Retailer, Sporting Goods Business,
Bicycle Retailer, Fly Fishing Retailer, and Health & Fitness
Business magazines, as well as the Outdoor Retailer Summer Market,
Outdoor Retailer Winter Market, Interbike, Fly Fishing Retailer, and
Health & Fitness Business trade shows.
In addition to ad revenue drops, trade show income is also affected for
this year. Frans Cremers, VNU chief financial officer informed market
analysts and media during the conference call that VNU’s “operating
income for trade shows in the United States will drop to $52 million
from $60 million” as a result of three trade shows being cancelled and
one having to close early.
Cremer indicated although VNU does not anticipate any further impacts
to the trade show business for this year or in 2002, the company is
“making adjustments to our cost structure, in terms of hotel room
bookings and food and beverage guarantees.”
In response to analysts’ queries regarding reorganization charges and
which parts of the business division were most affected, Cremer
indicated that it was with the trade journals, not the trade show
business or the media and marketing division, where the greatest impact
was being felt by VNU.
“Trade journals are particularly affected,” said Cremer, who went on to
indicate a number of cost-cutting actions being taken and considered
including a hiring freeze, cheaper office locations, shutting down
titles, and combining titles, to name a few.
Some of that consolidation has already occurred with VNU shutting down
its Dallas offices and consolidating staff and operations to Atlanta.
To find out how the belt-tightening at VNU is affecting members of the
Sports Group, SNEWSÂ® contacted Outdoor Retailer and Bicycle Retailer
magazine publisher Marc Sani who told us, “Overall, not much is
changing at BRAIN (Bicycle Retailer and Industry News) and OR. BRAIN is
looking very good for 2002.
“At Interbike, attendance was down, but not by much and the drop was
primarily due to non-essential staff not attending. The quality
customer was there. The buzz coming off the show was very good, and the
magazine is reflecting that energy. Our November ads are on target with
the established ad budget if not above and the same is true for
“OR is in a much different position. There is no doubt that the
extremely early dates for the show are causing problems with our
November and December issues — it will be tough. Our new look will
launch with the January issue and will be at the OR show. Everyone is
very excited about that. Barring unforeseen incidents, we will have the
February issue out for distribution at SIA.”
No official word from SGB about the state of business there, but
insiders tell SNEWSÂ® that October and November are looking healthy, with
December especially strong since that issue is capitalizing on the
early Winter Market show dates. At Health & Fitness Business, the
magazine’s last issue is this month, and management has declined to say
how — or if — it will continue until budget meetings conclude this