- 1Q’14 revenues increased 12.9% to $1,489 million, up 15.1% in
constant currency
- Adjusted EBITDA for the quarter grew 19.4% to $376 million, up
22.9% in constant currency
- Income from continuing operations per share on a diluted basis for
1Q’14 was $0.15, up 150.0% compared to $0.06 in 1Q’13
- Adjusted Net Income per share on a diluted basis for 1Q’14 was
$0.43, up 38.7% compared to $0.31 in 1Q’13
NEW YORK -- (Business Wire)
Nielsen Holdings N.V. (NYSE:NLSN), a leading global provider of
information and insights into what consumers watch and buy, today
announced financial results for the first quarter ended March 31, 2014.
“Nielsen delivered a solid first quarter,” said Mitch Barns, Chief
Executive Officer of Nielsen. “Our underlying business performance,
which was marked by broad-based revenue growth and strong profitability,
was enhanced by the ongoing successful integration of Arbitron. Our
clear focus on the key business priorities of our diverse global client
base continues to produce steady and consistent results while delivering
long-term value for our shareholders.”
First Quarter 2014 Operating Results
Revenues for the first quarter increased 12.9% to $1,489 million, or
15.1% on a constant currency basis compared to the first quarter of
2013. Revenues, excluding the impact of the Arbitron and Harris
acquisitions, increased 2.8%, or 4.8% on a constant currency basis. The
Buy segment grew 3.2%, or 5.9% on a constant currency basis, to $837
million. Excluding Harris, revenues grew 3.9% on a constant currency
basis, driven in large part by a 7.6% increase in developing market
revenues. Information services revenue grew 4.0% on a constant currency
basis, due to increased demand for retail measurement around the globe.
Insights revenue grew 13.8% on a constant currency basis, or 3.8%
excluding Harris, driven by strength in developed and developing markets.
Revenues within the Watch segment increased 28.3%, or 29.4% on a
constant currency basis, to $652 million. Excluding the Arbitron
acquisition, Watch revenues increased 5.3%, or 6.2% on a constant
currency basis, driven by continued strength in audience measurement,
including momentum in Digital, and Advertiser Solutions.
Adjusted EBITDA for the first quarter increased 19.4% to $376 million,
or 22.9% on a constant currency basis compared to the first quarter of
2013. In addition to the accretive impact from acquisitions, the growth
in Adjusted EBITDA reflects the ongoing benefits of our productivity
initiatives, as well as the strength and scalability of our business
model.
Income from continuing operations for the first quarter increased 150.0%
to $55 million, or 243.8% on a constant currency basis, compared to the
first quarter of 2013. Income from continuing operations per share, on a
diluted basis, was $0.15 compared to $0.06 in the first quarter of 2013.
Adjusted Net Income for the first quarter increased 42.2% to $165
million, or 48.6% on a constant currency basis, compared to the first
quarter of 2013. Adjusted Net Income per share on a diluted basis was
$0.43 compared to $0.31 in the first quarter of 2013.
Financial Position
As of March 31, 2014, cash balances were $301 million and gross debt was
$6,646 million. Net debt (gross debt less cash and cash equivalents) was
$6,345 million and our net debt leverage ratio was 3.78x at the end of
the first quarter. Our proforma net debt leverage ratio, giving effect
to Arbitron’s results for the full twelve month period ended March 31,
2014, was 3.61x at the end of the first quarter. Capital expenditures
were $77 million for the first quarter of 2014 as compared to $70
million for the first quarter of 2013.
Free cash flow for the first quarter of 2014 increased to $13 million
from $(15) million in the first quarter of 2013 and cash flow from
operations increased to $90 million in the first quarter of 2014 from
$54 million in first quarter of 2013. The increases were driven by
stronger operating performance and favorable interest payments.
In March 2014, a secondary public offering of 30.0 million shares of our
common stock was completed on behalf of certain selling stockholders,
primarily comprised of the Sponsor group. All proceeds went to the
selling stockholders and the offering did not have a significant impact
on our operating results or financial position. Subsequent to this
offering, the sponsors hold approximately 25% of our common stock.
Nielsen remains focused on strengthening its balance sheet by
opportunistically taking advantage of the credit and capital markets. In
late March and early April, the company refinanced portions of its
capital structure at attractive rates, extending the weighted average
life to maturity and enhancing financial flexibility.
Conference Call and Webcast
Nielsen will hold a conference call to discuss first quarter 2014
results at 8:30 a.m. U.S. Eastern Time (ET) on April 24, 2014. The audio
and slides for the call can be accessed live by webcast at http://nielsen.com/investors
or by dialing +1-877-201-0168. Callers outside the U.S. can dial
+1-647-788-4901. The passcode for the call is “28690878.” An audio
replay and transcript will be available on the investor relations
website after the call.
Forward-looking Statements
This news release includes information that could constitute
forward-looking statements made pursuant to the safe harbor provision of
the Private Securities Litigation Reform Act of 1995. These statements
may be identified by words such as ‘will’, ‘expect’, ‘should’, ‘could’,
‘shall’ and similar expressions. These statements are subject to risks
and uncertainties, and actual results and events could differ materially
from what presently is expected. Factors leading thereto may include
without limitations general economic conditions, conditions in the
markets Nielsen is engaged in, behavior of customers, suppliers and
competitors, technological developments, the integration of Arbitron, as
well as legal and regulatory rules affecting Nielsen’s business and
specific risk factors discussed in other releases and public filings
made by the Company (including the Company’s filings with the Securities
and Exchange Commission). This list of factors is not intended to be
exhaustive. Such forward-looking statements only speak as of the date of
this press release, and we assume no obligation to update any written or
oral forward-looking statement made by us or on our behalf as a result
of new information, future events, or other factors.
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 and mobile measurement. 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.
From time to time, Nielsen may use its website and social media outlets
as channels of distribution of material company information. Financial
and other material information regarding the company is routinely posted
and accessible on our website at http://www.nielsen.com/investors,
our Twitter account at http://twitter.com/NielsenIR
and our iPad App, NielsenIR, available on the App Store.
Results of Operations—(Three Months Ended March 31, 2014 and 2013)
The following table sets forth, for the periods indicated, the amounts
included in our Condensed Consolidated Statements of Operations:
|
|
| Three Months Ended March 31, (Unaudited) |
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA) |
| 2014 |
| 2013 |
Revenues
| |
$
|
1,489
|
|
|
$
|
1,319
|
|
| | |
| |
Cost of revenues
| | |
642
| | | |
579
| |
Selling, general and administrative expenses
| | |
489
| | | |
442
| |
Depreciation and amortization
| | |
141
| | | |
121
| |
Restructuring charges
| |
|
24
|
|
|
|
35
|
|
| | | |
|
Operating income
| |
|
193
|
|
|
|
142
|
|
| | | |
|
Interest income
| | |
1
| | | |
1
| |
Interest expense
| | |
(77
|
)
| | |
(78
|
)
|
Foreign currency exchange transaction losses, net
| | |
(27
|
)
| | |
(12
|
)
|
Other expense, net
| |
|
(3
|
)
|
|
|
(12
|
)
|
| | | |
|
Income from continuing operations before income taxes and
equity in net income/(loss) of affiliates
| | |
87
| | | |
41
| |
Provision for income taxes
| | |
(33
|
)
| | |
(18
|
)
|
Equity in net income/(loss) of affiliates
| |
|
1
|
|
|
|
(1
|
)
|
| | | |
|
Income from continuing operations
| | |
55
| | | |
22
| |
Income from discontinued operations, net of tax
| |
|
—
|
|
|
|
12
|
|
| | | |
|
Net income
| | |
55
| | | |
34
| |
Net loss attributable to noncontrolling interests
| |
|
(3
|
)
|
|
|
(1
|
)
|
| | | |
|
Net income attributable to Nielsen stockholders
| |
$
|
58
|
|
|
$
|
35
|
|
| | | |
|
Net income per share of common stock, basic
| | | | |
Income from continuing operations
| |
$
|
0.15
| | |
$
|
0.06
| |
Income from discontinued operations
| |
$
|
—
| | |
$
|
0.03
| |
Net income attributable to Nielsen stockholders
| |
$
|
0.15
| | |
$
|
0.09
| |
Net income per share of common stock, diluted
| | | | |
Income from continuing operations
| |
$
|
0.15
| | |
$
|
0.06
| |
Income from discontinued operations
| |
$
|
—
| | |
$
|
0.03
| |
Net income attributable to Nielsen stockholders
| |
$
|
0.15
| | |
$
|
0.09
| |
| | | |
|
Weighted-average shares of common stock outstanding, basic (a)
| | |
379,012,826
| | | |
370,583,217
| |
Dilutive shares of common stock
| |
|
5,726,773
|
|
|
|
4,973,804
|
|
Weighted-average shares of common stock outstanding, diluted
| |
|
384,739,599
|
|
|
|
375,557,021
|
|
| | | |
|
(a)
|
|
On February 1, 2013, the mandatory convertible subordinated bonds
were converted into 10,416,700 shares of Nielsen’s common stock at a
conversion rate of 1.8116 shares per $50.00 principal amount of the
bonds.
|
| |
|
Certain Non-GAAP Measures
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.
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.
Adjusted EBITDA and Adjusted Net Income
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.
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, 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. Also excluded from
Adjusted Net Income is interest expense attributable to the mandatorily
convertible subordinated bonds converted on February 1, 2013. Adjusted
Net Income per share of common stock presented on a diluted basis
includes the weighted-average amount of shares of common stock
convertible associated with the mandatorily convertible bonds based upon
the average price of our common stock during the periods beginning on or
before February 1, 2013. Such shares are considered anti-dilutive in
accordance with GAAP for the periods presented.
Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per share
of common stock are not presentations made in accordance with GAAP.
The below table presents a reconciliation from net income to Adjusted
EBITDA and Adjusted Net Income and a reconciliation from
weighted-average shares outstanding on a GAAP basis to diluted shares
outstanding for the three months ended March 31, 2014 and 2013:
|
| |
| |
| | Three Months Ended March 31, (Unaudited) |
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA) |
| 2014 |
| 2013 |
Net income | |
$
|
55
| | |
$
|
34
| |
Income from discontinued operations, net of tax
| | |
—
| | | |
(12
|
)
|
Interest expense, net
| | |
76
| | | |
77
| |
Provision for income taxes
| | |
33
| | | |
18
| |
Depreciation and amortization
| |
|
141
|
|
|
|
121
|
|
| | | |
|
EBITDA
| | |
305
| | | |
238
| |
Equity in net (income)/loss of affiliates
| | |
(1
|
)
| | |
1
| |
Other non-operating expense, net
| | |
30
| | | |
24
| |
Restructuring charges
| | |
24
| | | |
35
| |
Stock-based compensation expense
| | |
12
| | | |
10
| |
Other items(a) | |
|
6
|
|
|
|
7
|
|
| | | |
|
Adjusted EBITDA | | |
376
| | | |
315
| |
Interest expense, net
| | |
(76
|
)
| | |
(77
|
)
|
Depreciation and amortization
| | |
(141
|
)
| | |
(121
|
)
|
Depreciation and amortization associated with acquisition-related
tangible and intangible assets
| | |
50
| | | |
36
| |
Cash paid for income taxes
| | |
(32
|
)
| | |
(29
|
)
|
Stock-based compensation expense
| | |
(12
|
)
| | |
(10
|
)
|
Interest expense attributable to mandatorily convertible bonds
| |
|
—
|
|
|
|
2
|
|
| | | |
|
Adjusted net income | |
$
|
165
|
|
|
$
|
116
|
|
| | | |
|
Adjusted net income per share of common stock, diluted | |
$
|
0.43
|
|
|
$
|
0.31
|
|
| | | |
|
Weighted-average shares of common stock outstanding, basic
| | |
379,012,826
| | | |
370,583,217
| |
Dilutive shares of common stock from stock compensation plans
| | |
5,726,773
| | | |
4,973,804
| |
Shares of common stock convertible associated with the
mandatory convertible bonds
| |
|
—
|
|
|
|
3,587,974
|
|
| | | |
|
Weighted-average shares of common stock outstanding, diluted
| |
|
384,739,599
|
|
|
|
379,144,995
|
|
| | | |
|
(a)
|
|
For the three months ended March 31, 2014, other items primarily
consist of transaction related costs. For the three months ended
March 31, 2013, other items primarily consist of the write down of
uninsured deposits in Cyprus and transaction related costs.
|
| |
|
Free Cash Flow
We define free cash flow as net cash provided by operating activities,
normalized for non-recurring Arbitron transaction costs, 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. The following table presents
a reconciliation from net cash provided by operating activities to free
cash flow:
|
| |
| | Three Months Ended March 31, (Unaudited) |
(IN MILLIONS) |
| 2014 |
| 2013 |
Net cash provided by operating activities
| |
$
|
90
| |
|
$
|
54
| |
Plus: One-time Arbitron costs
| | |
-
| | | |
1
| |
Less: Capital expenditures
| |
|
(77
|
)
|
|
|
(70
|
)
|
Free cash flow
| |
$
|
13
|
|
|
$
|
(15
|
)
|
| | | |
|
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. The calculation of net debt and the net debt leverage ratio
as of March 31, 2014 is as follows:
|
(IN MILLIONS) |
Gross debt as of March 31, 2014
|
|
$
|
6,646
|
Less: cash and cash equivalents as of March 31, 2014
| |
$
|
301
|
| |
|
Net debt as of March 31, 2014 | | $ | 6,345 |
| |
|
Adjusted EBITDA for the year ended December 31, 2013
| |
$
|
1,617
|
Less: Adjusted EBITDA for the three months ended March 31, 2013
| |
$
|
315
|
Add: Adjusted EBITDA for the three ended March 31, 2014
| |
$
|
376
|
Adjusted EBITDA for the twelve months ended March 31, 2014
| |
$
|
1,678
|
Net debt leverage ratio as of March 31, 2014 | | 3.78x |
| |
|
Proforma net debt leverage ratio as of March 31, 2014(1) | | 3.61x |
| |
|
(1)
|
|
Proforma net debt leverage ratio includes Arbitron Adjusted EBITDA
of $80 million for the six month period of April 1, 2013 to
September 30, 2013, the date on which the Arbitron acquisition was
completed.
|
Contacts:
Nielsen Holdings N.V.
Investor Relations:
Kate Vanek, +1
646-654-4593
or
Media Relations:
Jennifer Frighetto, +1
847-605-5686
Source: Nielsen Holdings N.V.
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