Nielsen Global Consumer Confidence Q1 2012

CONSUMER CONFIDENCE, CONCERNS AND SPENDING INTENTIONSAROUND THE WORLD

QUARTER 1, 2012

2 Copyright © 2012 The Nielsen Company.

Global consumer confidence increased five index points to 94 in Q1 2012, according to global consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.

In the latest round of the survey, conducted between February 10 and February 27, 2012, overall confidence rose in 68 percent of global markets measured, compared to Q4 2011 where confidence increased in 21 percent of global markets. Confidence in Q1 2012 increased in 38 out of 56 markets, fell in 16 markets and remained flat in two.

Confidence increased in 16 of 27 European markets

Discretionary spending and saving increased across all sectors reviewed

Concern for the economy remained a top worry among 19% of global respondents

China confidence increased 2 points to 110

Global consumer confidence increased five points to 94

U.S. consumer confidence index increased 9 points to 92

More than half of global respondents (57%) said they are in a recession, down from 64% in Q4 2011

OVERALL CONFIDENCE LEVELS ROSE IN 68% OF GLOBAL MARKETS MEASURED

Copyright © 2012 The Nielsen Company. 3

Index levels above and below 100 indicate degrees of optimism/pessimism

Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q1 2012

Nielsen Global Consumer Confidence Index—56 countries, three month trend

Q1 2012 vs. Q4 2011

No change

Increase

Decrease

+1123

INDIA

+6119

SAUDI ARABIA

+1118

INDONESIA

+1118

PHILIPPINES

+2110

CHINA

-2110

BRAZIL

+3107

THAILAND

+6107

MALAYSIA

0105

UNITED ARAB EMIRATES

+4103

HONGKONG

+6101

PERU+499

COLOMBIA

+199

NORWAY

+597

EGYPT

+296

SINGAPORE

+1196

CHILE

+695

DENMARK

-895

AUSTRALIA

-594

VIETNAM

-393

CANADA

+992

UNITED STATES

+291

PAKISTAN

+491

ARGENTINA

+191

NEW ZEALAND

+390

ISRAEL

+390

GERMANY+989

VENEZUELA

-587

SWITZERLAND

+ or - Change from Q4 2011

+594

GLOBAL AVERAGE

+487

TURKEY

+186

NETHERLANDS

-486

AUSTRIA

+1384

TAIWAN

084

RUSSIA

-781

SWEDEN

-180

MEXICO

+280

SOUTHAFRICA

+677

UNITEDKINGDOM

-373

FINLAND

+672

ESTONIA

+371

LATVIA

+170

LITHUANIA

-770

BELGIUM

+469

CZECH REPUBLIC

-466

UKRAINE

+464

IRELAND

-864

POLAND

+160

ROMANIA

+258

JAPAN

-353

SPAIN

-550

FRANCE

+349

SOUTHKOREA

-445

ITALY

+245

CROATIA

+339

PORTUGAL

-437

GREECE

*Survey is based on respondents with Internet access. Index levels above and below 100 indicate degrees of optimism/pessimism

Mid Tier Countries 100 to 90

Low Tier Countries 89 to 30 (more pessimism)

Top Tier Countries 101 and Higher (more optimism)

+232

HUNGARY

Conditions are improved, but still fragile“Households around the globe experienced a brighter personal situation in terms of jobs and personal finances last quarter, especially in the U.S. and in Asia, which was reflected in the improved consumer confidence and higher discretionary spending,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “While global economic conditions are more stable than in the depths of the European sovereign debt crisis late last year, underlying economic conditions are still fragile and fluid in many parts of the world, which could affect consumer confidence and spending momentum for the coming quarter.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

More than half of global respondents (57%) said they are in a recession, down from 64% in Q4 2011



Discretionary spending and saving increased across all sectors

GLOBAL AVERAGE

How to utilize spare cash after covering essential living expenses

45

3232

46

Q2 2011

Q3 2011

Q4 2011

Q1 2012

48

Don’t know/

undecided

Putting into

savings

Out ofhome

entertainment

Newclothes

Holidays/vacations

New technology

products

Paying off debts/

credit cards/loans

Investing in shares of

stock/mutual funds

Home improvements/

decorating

Retirement fund

I have no spare cash

2829 29

3133

22 2222

32

28 2826

28 27

23

19 19 19 191817

22

1310

99

13

161615

233 2

3131 3134

50

Consistent good news outweighed the badIn Nielsen’s Q1 survey, while more than half (57%) of consumers around the world indicated they were in a recession, that sentiment was down from 64 percent in Q4 2011. Regionally, online respondents who believed they were in a recession showed declines in Asia-Pacific (44% compared to 53% in Q4), North America (80% compared to 86% in Q4) and Europe (72% compared to 74% in Q4), while a slightly growing number of online respondents in Latin America (48% compared to 47% in Q4) and Middle East/Africa (75% compared to 74% in Q4) believed they were in a recession.

More than half (55%) of online consumers surveyed described their personal finances for the next 12 months as excellent/good, up from 52 percent in Q4 2011, while one-third indicated it was a good time to buy the things wanted and needed. Local job prospects improved globally by six percentage points in Q1, yet less than half (48%) perceived the outlook for the upcoming year as favorable.

Intended discretionary spending and saving increased in Q1 across all sectors reviewed. Half of consumers around the world plan to put spare cash into savings, up from 48 percent in Q4 2011. Thirty four percent intend to buy new clothes, up from 31 percent the previous quarter and 33 percent expect to spend spare cash on holidays and vacations—a rise of seven percentage points from Q4 2011. Planned spending on technology also increased, with 28 percent of global online consumers intending a purchase, up from 22 percent in Q4.

“Improved confidence led to more discretionary spending from consumers around the world in the past quarter,” said Dr. Bala. “The survey evidence suggests that while consumers are neither as confident or comfortable with the economy as they would like it to be, they are expressing a pent-up demand to spend as they did prior to the recession. Such a desire for psychological release through the various forms of discretionary consumption reported in the Nielsen survey—all of which act as stress-relievers—is understandable after three years of relentless belt-tightening and uncertainty.”


Economy and job security remained top concernsConsumer concern for the economy remained a top worry among one-in-five global respondents (19%)—up from 18 percent in Q4 2011. Job security (15%), work/life balance (10%), health (8%), and increasing food prices (7%) were other key concerns cited, which remained unchanged from the previous quarter results.

While job security fears abated some in North America, dropping four percentage points to 12 percent compared to Q4 2011, they rose two points in Latin America to 18 percent and one point in Middle East/Africa to 21 percent. Anxiety over the

economy increased four percentage points in Asia-Pacific to 22 percent and three points in Europe to 14 percent compared to the previous quarter.

In Europe, increasing utility bills (electricity, gas, heating, etc.) rose by one point to 10 percent and in North America, increasing fuel prices and food prices increased by three and two points, respectively. Work/life balance and political stability worries increased two and one point(s), respectively in the Middle East/Africa.


Top 5 concerns over the next 6 months

Percent concerned and (change vs. Q4 2011)

EUROPEECONOMY +4

JOB SECURITY +1

WORK/LIFE BALANCE -2

HEALTH N/C

INCREASING FOOD PRICES -1

22%

15%

13%

9%

9%

ECONOMY +3

JOB SECURITY -1

INCREASING UTILITY BILLS +1

HEALTH N/C

INCREASING FOOD PRICES N/C

14%

15%

10%

9%

5%

JOB SECURITY +2

ECONOMY N/C

HEALTH +1

WORK/LIFE BALANCE -2

CRIME N/C

18%

11%

8%

11%

9%

ASIA PACIFIC

ECONOMY N/C

JOB SECURITY +1

POLITICAL STABILITY +1

WORK/LIFE BALANCE +2

PARENTS’ WELFARE +1

21%

12%

11%

7%

6%

MIDDLEEAST/AFRICA ECONOMY -1

DEBT -2

JOB SECURITY -4

INCREASING FUEL PRICES +3

INCREASING FOOD PRICES +2

26%

13%

12%

8%

6%

NORTHAMERICA

LATINAMERICA


Overall consumer confidence increased across the regionsOverall consumer confidence rose in all global regions, with North America posting the biggest regional gain, up eight index points to an index of 92. Asia-Pacific posted an index of 103, up four points, and Middle East/Africa rose two points to 97. Confidence in Europe rose one point to 72 and Latin America remained flat at 98 index points.

According to the latest survey, Asians were most optimistic about job prospects, Latin Americans were most confident about personal finances and North Americans were most positive about immediate spending intentions.


Overall consumer confidence increased across the regions

98 9898979199 10397

EUROPE

ASIA PACIFIC MIDDLEEAST/AFRICA

NORTHAMERICA GLOBALAVERAGE

LATINAMERICA

97959694

8172717471

84 9279

94898889

Q2 2011 Q3 2011 Q4 2011 Q1 2012


A divergence of confidence/recovery is seen in some regions The biggest quarterly confidence gains last quarter came from Taiwan, Chile, the United States, Venezuela, United Kingdom, Estonia, Malaysia, Peru, Denmark and Saudi Arabia.

The biggest quarterly declines came from Poland, Australia, Belgium, Sweden, France, Switzerland, Vietnam, Ukraine, Greece, and Italy.

There is a divergence of confidence across global regions, as well as a divergence of recovery within some regions. The Eurozone, which had eight of the top 10 most pessimistic markets in Q1 fell back into recession as manufacturing contracted and unemployment reached a 15-year high, while in the Americas and Asia, manufacturing activity alongside domestic growth and recovery picked up steam.


Top 10 countries with biggest gains/declines vs. Q4 2011

13

G

AIN

S

D

ECLI

NESUNITED STATES

VENEZUELA

UNITED KINGDOM

ESTONIA

MALAYSIA

PERU

DENMARK

SAUDI ARABIA

POLAND

AUSTRALIA

BELGIUM

SWEDEN

FRANCE

SWITZERLAND

VIETNAM

UKRAINE

GREECE

ITALY

TAIWAN

1199666666

8

8

7

75

554

4

4

CHILE+ -


Powerhouse economies showed growth In the U.S., consumer confidence rose nine points to 92, its highest level since before the recession, while China’s consumer confidence increased two points to 110, its highest rank since the inception of Nielsen’s index in 2005. And after three quarters of stagnation, Germany’s consumer confidence index climbed three points to 90.

“The jump in U.S. confidence is not entirely surprising given respectable job gains in the past quarter,” said James Russo, vice president, Global Consumer Insights, Nielsen. “However, this is not yet a rising tide raising all ships as the U.S. was dealt a below expectations March job report, followed by a spike in new unemployment claims in April. Furthermore, according to Nielsen’s analysis, consumer households earning over $100,000 continue to generate gains in consumer spending and shopping trips, while nearly 50 percent of Americans in the lower income brackets struggle. The near-term outlook for the American consumer will be heavily impacted by how the labor market behaves, especially for middle-class and lower income consumers.”

“Major economic indicators in China are still at reasonable levels, while the global economic condition is complicated,” said Yan Xuan, president, Nielsen Greater China. “The government’s firm support for small- and medium-sized enterprises through the expansion of credit, a policy shift to create domestic consumption and demand, and the continued enforcement of restrictions designed to deflate the real estate bubble are all contributing to the Chinese consumer optimism.”

“German consumers feel confident about their personal perspectives for the moment, especially with regard to their personal finances and buying intentions,” said Petra Kacnik, Director Consumer Research Germany, Austria & Switzerland. “Apart from the economy, the main concerns for German consumers include rising utility bills and fuel prices. Indeed, unemployment in Germany is low and expected to go down further. As a result, German consumers, at least for the short-term, plan to spend their spare cash on new clothes and on holidays and invest in quality of life purchases as the impact of the looming Euro crisis is top-of-mind.”

100

90

110

80

70

China U.S. Germany

Q1 Q3 2005

Q1 Q3 2006

Q1 Q3 2007

Q1 Q3 2008

Q1 Q2 Q3 Q4 2009

Q1 Q2 Q3 Q4 2010

Q1 Q2 Q3 Q4 2011

+2

+9

+3

Consumer confidence rises in United States, China and Germany



Optimism fueled the outlook in Asia-Pacific, Middle East and Latin America India, despite an eight point index year-on-year decrease, remained the world’s most optimistic market for the ninth consecutive quarter with a one point quarterly consumer confidence increase to 123, followed by Saudi Arabia at 119, with Indonesia and the Philippines at 118 index points. High index levels were also reported in Brazil (110), Thailand and Malaysia (107 each), United Arab Emirates (105), Hong Kong (103) and Peru (101).

“India once again topped the global index indicating a high level of confidence amongst consumers, who are optimistic yet cautious,” said Justin Sargent, managing director, Nielsen India. “This optimism is reflected in Indian consumers’ increased confidence in job prospects, which is a good sign for the economy. However, job security is still a cause for concern and consumers are still cautious when it comes to spending spare cash. Similar to previous consecutive quarters, saving cash is still a priority for Indians. On the other hand, the personal digital revolution and experimentation by consumers who are now spoiled with affordable choices, is driving the increase in intention to spend on technology. Along with this, a growing affinity for branded apparel and organized retailing is likely to attract a growing proportion of discretionary spending despite economic volatility in the near term.”

While regional instability persists in Saudi Arabia, indications of a provisional, albeit timid, easing of the Euro crisis is alleviating immediate concern over global demand for oil,” said Arslan

Ashraf, managing director, Nielsen Saudi Arabia. “Despite the uncertainties, the Kingdom’s favorable demographics and a strong economy enhanced by the government’s generous stimulus package are driving a positive consumer outlook. With greater investments in skills development and a resurgent drive to increase employment among nationals, Saudis are feeling more confident about their job prospects. The overall sentiment is further strengthened by the near record high Saudi crude production reported earlier this year and substantial price increases.”

In Latin America, Chile and Venezuela showed quarterly consumer confidence increases of 11 and nine points, respectively. And Brazil, despite a two point quarterly decline to an index of 110, posted the strongest year-on-year confidence gain of 15 index points.

“Brazil’s consumer confidence remains at high levels, reflecting the optimism of the population, especially compared to other Latin American neighbors,” said Eduardo Ragasol, country manager, Nielsen Brazil. “Brazilians are confident in the economy and have a positive perception of their finances. However, consumers are now more concerned about paying off debts and loans acquired in the recent past. Brazilians will likely slow down their spending during the months ahead as the consumption in Brazil is changing and consumers are more careful about purchases, which is supported by Nielsen retail insights that show sales volume slowing down and sales value going up.


Top 11 consumer confidence countries

Asia-PacificMiddle East

Latin America

INDEX (change vs. Q4 2011)INDIA

SAUDI ARABIA

INDONESIA

PHILIPPINES

CHINA

BRAZIL

THAILAND

MALAYSIA


HONG KONG

PERU

123 (+1)119 (+6)

105 (N/C)

118 (+1)

118 (+1)

110 (+2)

107 (+3)

107 (+6)

103 (+4)

110 (-2)

101 (+6)


Recovery gap widened in Europe Confidence increased in 16 of 27 European markets as the economic and recovery gap widened between debt-ridden southern European nations and strengthening central and northern Europe. In addition to Germany’s three point quarterly increase to 90, Denmark (95) and the United Kingdom (77) posted quarterly confidence gains of six points each.

Hungary, despite a two point quarterly gain, remained the most pessimistic country at 32 index points, followed by Greece, where confidence fell to a low of 37 and Portugal at 39. Southern European nations of Italy, France and Spain fell to low confidence levels as the job outlook declined and personal finances and spending intentions remained restrained for the upcoming year. Steep quarterly declines were also reported in Poland (-8), and Belgium (-7).

“Greek consumer confidence has reached an all-time low, as Greek consumers remained pessimistic for the future of the Greek economy,” said Vicky Grigoriadou, client service director, Nielsen Greece. “The Greek fiscal crisis has been looming for some time, but there have been no signs of recovery. Consumers continue to doubt that Greece will manage to escape the recession any time soon and expectations for economic growth seem to have vanished.”

“In Italy, changes in the government and the consequent reforms are not yet generating positive effects on consumer expectations and 26 percent of Italians are still concerned about job security,” said Roberto Pedretti, managing director, Nielsen Italy. “Moreover, net income has been further penalized by additional local taxes shrinking the purchasing power of Italian families. While government actions focused on public debt and trust from global investors are positive signals for a recovery path, it is still not powered by clear political action.”

“The purchasing power in France is even weaker at the start of 2012 than it was last year, with both existing and new taxes increasing,” said Laurent Zeller, managing director, Nielsen France. “While food prices are in a stabilized rhythm, they are still on the rise and with high petrol prices, hypermarket, supermarket and discount store visits are impacted showing a year-over-year drop in sales volume of -1.5 percent in January.”

“Spain is showing record unemployment rates, which is expected to grow during the year creating uncertainty among the Spanish population,” said Jose-Luis Garcia Fuentes, managing director, Nielsen Spain. “Despite rising taxes and reduced disposable income, current fast-moving consumer goods trends do not show a decline as they cover basic needs.”


Divided Europe – Improving north and struggling south

Asia-Pacific

INDEX (change vs. Q4 2011)

INDIASAUDI ARABIA

INDONESIA

PHILIPPINES

BRAZIL

THAILAND

MALAYSIA


HONG KONG

PERU

123 (+1)119 (+6)

118 (+1)

118 (+1)

110 (-2)

NORTHERNEUROPE

NETHERLANDS

SWEDEN

UNITED KINGDOM

FINLAND

ESTONIA

LATVIA

LITHUANIA

BELGIUM

IRELAND

NORWAY DENMARK

86 (+1)

81 (-7)

77 (+6)

73 (-3)

72 (+6)

71 (+3)

70 (+1)

70 (-7)

64 (+4)

99 (+1) 95 (+6)

SOUTHERNEUROPE

GREECE

PORTUGAL

ITALY

CROATIA

SPAIN

ROMANIA

37 (-3)

39 (+3)

45 (-4)

45 (+2)

53 (-2)

60 (+1)


For more information visit www.nielsen.com

Country abbreviations: Argentina ARAustralia AUAustria ATBelgium BEBrazil BRCanada CAChina CNChile CLColombia COCroatia HRCzech Republic CZDenmark DKEgypt EGEstonia EEFinland FIFrance FRGermany DEGreece GRHong Kong HKHungary HUIndia INIndonesia IDIreland IE

Israel ILItaly IT Japan JPLatvia LVLithuania LTMalaysia MYMexico MXNetherlands NLNew Zealand NZNorway NOPakistan PKPeru PEPhilippines PHPoland PLPortugal PTRomania RORussia RUSaudi Arabia SASingapore SGSouth Africa SASouth Korea KOSpain ESSweden SE

About the Nielsen Global Survey

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between February 10 and February 27, 2012 and polled more than 28,000 online consumers in 56 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.

Switzerland CHTaiwan TWThailand THTurkey TRUnited Arab Emirates AEGreat Britain GBUkraine UAUnited States USVenezuela VEVietnam VN

Region abbreviations:AP Asia-PacificEU EuropeLA Latin AmericaMEAP Middle East, Africa, PakistanNA North America

Copyright © 2012 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service

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