1ST QUARTER 2015
RESULTS
WEDNESDAY APRIL 22, 2015
8:00AM ET
NYSE: NLSN
SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS
The following discussion contains forward-looking statements, including those about Nielsen’s outlook and
prospects, that relate to the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are those which are not historical facts. These and other statements that relate to future results and
events are based on Nielsen’s current expectations as of April 22, 2015.
Our actual results in future periods may differ materially from those currently expected because of a
number of risks and uncertainties. The risks and uncertainties that we believe are material are outlined in
our disclosure filings and materials, which you can find on http://ir.nielsen.com. Please consult these
documents for a more complete understanding of these risks and uncertainties. We disclaim any intention
or obligation to update or revise any forward-looking statements, whether as a result of new information,
Copyright ©2015 The Nielsen Company.
future events or otherwise, except as may be required by law.
Our outlook is provided for the purpose of providing information about current expectations for 2015. This
information may not be appropriate for other purposes.
NLSN 1Q 2015 Results
2
AGENDA
First Quarter
Business Update
Financials and Guidance
Copyright ©2015 The Nielsen Company.
Q&A
Appendix and Reconciliations
NLSN 1Q 2015 Results
3
MITCH BARNS
CHIEF EXECUTIVE OFFICER
FIRST QUARTER 2015 OVERVIEW
Solid 1Q performance; broad-based growth and execution on Total Audience
- Revenue of $1.5 billion…up 4.4% constant currency
- Adjusted EBITDA of $380 million…up 7.3% constant currency
- Adjusted net income per share of $0.46…up 17.9% constant currency
Continued execution on our balanced capital allocation framework
- Raised quarterly dividend by 12% to $0.28; up 75% since inception
- On track to repurchase $1 billion by mid-2016
Acquisition of eXelate
- Data and technology to drive better precision in advertising
Copyright ©2015 The Nielsen Company.
- Enhancing our capability in the programmatic ecosystem
Updating 2015 guidance to reflect the impact of FX; operational guidance reaffirmed
STRONG EXECUTION…DELIVERING SHAREHOLDER VALUE
NLSN 1Q 2015 Results
5
UPDATE ON KEY GROWTH CATALYSTS
•
Watch: Total Audience Measurement progress
Total Audience: framework for comprehensive measurement of the consumer
Traction with signature-based VOD solution
Gaining critical mass in mobile measurement with SDK adoption…video and audio
Digital Ad Ratings (fka OCR) momentum and market expansion
Rollout of Digital Content Ratings (with Adobe) on track
•
•
Marketing Effectiveness: Strong growth in demand for marketing ROI products
Buy: Unmatched global presence
New client wins
Stronger discretionary spend on innovation and analytics
Copyright ©2015 The Nielsen Company.
Broad-based Emerging market growth
Progress in eCommerce: new partnerships, New Offer Advisor launch
EXECUTING AND DELIVERING
NLSN 1Q 2015 Results
6
JAMERE JACKSON
CHIEF FINANCIAL OFFICER
TOTAL NIELSEN RESULTS
($ in millions except per share amounts, growth in constant currency)
1Q 2015
1Q 2014
V%
$1,458
$1,489
4.4%
Adjusted EBITDA
$380
$376
7.3%
Adjusted EBITDA margin %
26.1%
25.3%
70 bps
Adjusted Net Income (ANI)
$173
$165
14.6%
Diluted ANI per share (a)
$0.46
$0.43
17.9%
$(1)
$13
NM
Revenues
Copyright ©2015 The Nielsen Company.
Free Cash Flow
•
Revenues +4.4%, solid growth in Watch and Buy
•
Margin expansion +70bps while reinvesting for long-term growth
•
Strong growth in earnings fueled by operating leverage and share repurchase
(a) Calculated using weighted average shares outstanding of 375.4 million for 1Q 2015 and
384.7 million for 1Q 2014. See appendix for detail
NLSN 1Q 2015 Results
8
WATCH SEGMENT RESULTS
($ in millions, growth in constant currency)
REVENUE
1Q 15
1Q 14
V%
1Q DYNAMICS
• Non-core products ~220bps drag on revenue
Total Watch
$660
$652
3.6%
Adjusted EBITDA
$278
$267
6.1%
Margin
42.1%
41.0%
99bps
PROFITABILITY
• Solid revenue growth +5.8% ex-impact:
- Audience Measurement (ex-Audio) +5.5%
- Audio +1.7%
- Marketing Effectiveness +22.7%
- Strong renewals
• Legacy rankings to be replaced by Digital
Content Ratings in Fall of 2015
Copyright ©2015 The Nielsen Company.
• Shedding non-core assets and investing in
faster growth products (eXelate)
• Margin improvement driven by continued
productivity & operating leverage
NLSN 1Q 2015 Results
9
BUY SEGMENT RESULTS
($ in millions, growth in constant currency)
REVENUE
1Q 15
1Q 14
V%
Developed
$549
$577
3.0%
Emerging
$249
$260
10.2%
Total Buy
$798
$837
5.1%
1Q DYNAMICS
• Solid revenue growth +5.1%
• Developed: investments driving growth in
analytics & subscription services
PROFITABILITY
• Emerging: broad-based growth
Adjusted EBITDA
Copyright ©2015 The Nielsen Company.
Margin
$110
13.8%
$118
14.1%
8.9%
47bps
• New client wins
• Margin improvement driven by cost out
initiatives and scaling emerging markets
NLSN 1Q 2015 Results
10
FOREIGN CURRENCY IMPACT
2014 CURRENCY PROFILE - REVENUE
PROJECTED FX IMPACT(a):
REPORTED VS CONSTANT CURRENCY
23%
3%
3%
4%
56%
(430)
11%
(650)
Copyright ©2015 The Nielsen Company.
USD
EUR
CAD
GBP
CNY
Other
No single currency is >3%,
excluding USD, CAD, EUR, CNY
& GBP
Note: we report on a constant currency basis to reflect operating performance
(620)
1Q15
(370)
(530)
(540)
(600)
(630)
(680)
(750)
2Q15E
Rev (bps)
3Q15E
4Q15E
FY15E
EBITDA (bps)
(a) Projected impact assumes rates in effect at 4/21/15 remain in effect for the balance of 2015. Also
based on company estimates for future quarters on distribution of revenue and EBITDA by currency.
NLSN 1Q 2015 Results
11
2015 GUIDANCE - APRIL 22, 2015
(Revenue and adj. EBITDA margin growth in constant currency)
Total Revenue
Adj. EBITDA margin growth
Adj. Net Income Per Share (a)
Leverage
Copyright ©2015 The Nielsen Company.
Free Cash Flow
4.0% - 6.0%
50 - 70bps
$2.60 - $2.66
~3.6x
$850 - $900M
OTHER FINANCIAL METRICS
Net book interest
$310M - $320M
Cash taxes
$160M - $170M
Cash restructuring
$50M - $75M
Est. wtd. avg. diluted shares
outstanding for FY 2015
~371M
ANI PER SHARE LOWER DUE TO FX; OPERATING GUIDANCE REAFFIRMED
(a) Prior ANI per share guidance range: $2.68 – $2.74
NLSN 1Q 2015 Results
12
Copyright ©2015 The Nielsen Company.
&
NLSN 1Q 2015 Results
13
APPENDIX
CERTAIN NON-GAAP MEASURES
Overview of Non-GAAP Presentations
We use the non-GAAP financial measures discussed below to evaluate the results of our operations. We believe that the
presentation of these non-GAAP measures provides useful information to investors regarding financial and business trends
related to our results of operations, cash flows and indebtedness and that when this non-GAAP financial information is viewed
with our GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating
performance. None of the non-GAAP measures presented should be considered as an alternative to net income or loss,
operating income or loss, cash flows from operating activities, total indebtedness or any other measures of operating
performance and financial condition, liquidity or indebtedness derived in accordance with GAAP. These non-GAAP measures
have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our
results as reported under GAAP. Our use of these terms may vary from the use of similarly-titled measures by others in our
industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
Copyright ©2015 The Nielsen Company.
Constant Currency Presentation
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation,
which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing
constant currency information provides valuable supplemental information regarding our results of operations, consistent with
how we evaluate our performance. We calculate constant currency percentages by converting our prior-period local currency
financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported
results.
Net Debt and Net Debt Leverage Ratio
The net debt leverage ratio is defined as net debt (gross debt less cash and cash equivalents) as of the balance sheet date divided
by Adjusted EBITDA for the twelve months then ended. Net debt and the net debt leverage ratio are commonly used metrics to
evaluate and compare leverage between companies and are not presentations made in accordance with GAAP.
NLSN 1Q 2015 Results
15
CERTAIN NON-GAAP MEASURES
(continued)
Adjusted EBITDA
We define Adjusted EBITDA as net income or loss from our consolidated statements of operations before interest income and
expense, income taxes, depreciation and amortization, restructuring charges, goodwill and intangible asset impairment charges,
stock-based compensation expense and other non-operating items from our consolidated statements of operations as well as
certain other items considered unusual or non-recurring in nature. We use Adjusted EBITDA to measure our performance from
period to period both at the consolidated level as well as within our operating segments, to evaluate and fund incentive
compensation programs and to compare our results to those of our competitors.
Copyright ©2015 The Nielsen Company.
Adjusted Net Income
We define Adjusted Net Income as net income or loss from our consolidated statements of operations before income taxes,
depreciation and amortization associated with acquired tangible and intangible assets, equity in net income of affiliates,
restructuring charges, goodwill and intangible asset impairment charges, other non-operating items from our consolidated
statements of operations and certain other items considered unusual or non-recurring in nature, reduced by cash paid for
income taxes.
Free Cash Flow
We define free cash flow as net cash provided by operating activities, plus the excess tax benefit on stock-based compensation,
less capital expenditures. We believe providing free cash flow information provides valuable supplemental information regarding
the cash flow that may be available for discretionary use by us. Free cash flow is not a presentation made in accordance with
GAAP.
NLSN 1Q 2015 Results
16
ADJUSTED NET INCOME RECONCILIATION: Q1
($ in millions except per share amounts)
Quarter ended March 31
(Unaudited)
Copyright ©2015 The Nielsen Company.
2015
Net income
Interest expense, net
Provision for income taxes
Depreciation and amortization
EBITDA
Equity in net income of affiliates
Other non-operating expense, net
Restructuring charges
Stock-based compensation expense
Other items (a)
Adjusted EBITDA
Interest expense, net
Depreciation and amortization
Depreciation and amortization of acquisition-related tangible and intangible
assets
Cash paid for income taxes
Stock-based compensation expense
Adjusted net income
Adjusted net income per share of common stock, diluted (b)
(a), (b) See footnotes on next page
$
$
63
72
38
142
315
-26
14
14
11
380
(72)
(142)
2014
$
55
76
33
141
305
(1)
30
24
12
6
376
(76)
(141)
50
50
(29)
(14)
173
$0.46
(32)
(12)
165
$0.43
$
NLSN 1Q 2015 Results
17
ADJUSTED NET INCOME RECONCILIATION: Q1
(continued)
(a)
For the three months ended March 31, 2015 and 2014, other items primarily consist of non-recurring
costs.
(a)
Adjusted Net Income per share of common stock presented on a diluted basis includes potential
common shares associated with stock-based compensation plans that may have been considered antidilutive in accordance with GAAP.
Copyright ©2015 The Nielsen Company.
Weighted-average shares of common stock outstanding as of quarter ended
March 31, 5015, basic
371,169,651
Dilutive shares of common stock from stock compensation plans
4,192,306
Weighted-average shares of common stock outstanding, diluted
375,361,957
NLSN 1Q 2015 Results
18
FREE CASH FLOW RECONCILIATION
($ in millions)
Copyright ©2015 The Nielsen Company.
QUARTER ENDED MARCH 31
2015
2014
Net cash provided by operating
activities
$75
$90
Plus: Excess tax benefit on stock
based compensation
$26
--
Less: Capital expenditures
(102)
(77)
Free cash flow
$(1)
$13
NLSN 1Q 2015 Results
19
REVENUE RECONCILIATION
($ in millions)
1Q 15 Reported
1Q 14 Reported
% V Reported
1Q 14 Constant
Currency
% V Constant
Currency
BUY
$798
$837
(4.7)%
$759
5.1%
WATCH
$660
$652
1.2%
$637
3.6%
TOTAL
$1,458
$1,489
(2.1)%
$1,396
4.4%
% V Constant
Currency
ADJUSTED EBITDA RECONCILIATION
Copyright ©2015 The Nielsen Company.
($ in millions)
1Q 15 Reported
1Q 14 Reported
% V Reported
1Q 14 Constant
Currency
BUY
$110
$118
(6.8)%
$101
8.9%
WATCH
$278
$267
4.1%
$262
6.1%
CORPORATE
$(8)
$(9)
NM
$(9)
NM
TOTAL
$380
$376
1.1%
$354
7.3%
NLSN 1Q 2015 Results
20
DEBT CAPITAL TABLE
($ in millions)
DEBT CAPITAL TABLE
3/31/15
12/31/14
Change
$3,489
$3,758
$(269)
4.50% Sr. Notes (10/1/20)
800
800
--
5.50% Sr. Notes (10/1/21)
625
625
--
5.00% Sr. Notes (4/15/22)
2,308
1,553
$755
125
126
($1)
Total Debt
$7,347
$6,862
$485
Less Cash
343
273
70
Net Debt
$7,004
$6,589
$415
3.8x
3.6x
0.2x
4.00%
3.79%
21 bps
Loan Debt (secured)
Capital lease/misc. debt
Copyright ©2015 The Nielsen Company.
Net Debt Ratio (a)
Weighted avg. interest rate (b)
(a) Reflects Net Debt (gross debt minus cash), divided by Adjusted EBITDA calculated on last twelve months basis
(b) Excludes capital leases
NLSN 1Q 2015 Results
21
SELECTED FINANCIAL METRICS & BALANCE SHEET ITEMS
($ in millions)
CURRENT DEBT MATURITY PROFILE – 3/31/15(b)
FINANCIAL METRICS
1Q 15
Free Cash Flow
$(1)
Capital Expenditures
$102
D&A
$142
Net Book Interest
$72
Cash Taxes
$29
Cash Restructuring
$22
Wtd. avg. diluted shares
$2,308
$1,942
$1,041
375.4
$814
$639
BALANCE SHEET – 3/31/15
Gross Debt
Copyright ©2015 The Nielsen Company.
Cash
$7,347
$343
Net Debt
$7,004
Net Debt Ratio (a)
3.80x
$73
$118
$212
2015 2016 2017 2018 2019 2020 2021 2022
(a) Reflects net debt (gross debt minus cash), divided by Adjusted EBITDA calculated on last twelve months basis
(b) Excludes Revolver ($75M), Capital Leases ($116M) and Miscellaneous Debt ($9M)
NLSN 1Q 2015 Results
22
NIELSEN INVESTOR RELATIONS
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http://ir.nielsen.com
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