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8-K - FORM 8-K - Nielsen CO B.V.d383204d8k.htm

Exhibit 99.1

 

LOGO

News Release

Investor Relations: Liz Zale, +1 646 654 4593

Media Relations: Kristie Bouryal, +1 646 654 5577

NIELSEN REPORTS SECOND QUARTER 2012 RESULTS

 

   

Revenues for the quarter declined 1% to $1,385 million, up 4% in constant currency

 

   

Adjusted EBITDA for the quarter grew 1% to $389 million, up 5% in constant currency

 

   

Net income for the quarter increased to $103 million from $69 million in 2011

 

   

Adjusted Net Income for the quarter increased to $157 million from $155 million in 2011

New York, USA – July 25, 2012 – Nielsen Holdings N.V. (NYSE: NLSN), a leading global provider of information and insights into what consumers buy and watch, today announced financial results for the second quarter and six months ended June 30, 2012.

“Nielsen delivered solid second quarter results that reflect the reliable growth and stability of our businesses,” said David Calhoun, Chief Executive Officer of Nielsen. “We continue to benefit from the value we create for our clients and their confidence in our unique ability to serve the media and consumer goods industries across the globe”.

Second Quarter 2012 Operating Results

Revenues for the second quarter decreased 1% to $1,385 million, while increasing 4% on a constant currency basis compared to the second quarter of 2011. Our revenue performance was driven by a 3% decrease within our Buy segment (3% increase on a constant currency basis) and a 2% increase within our Watch segment (4% on a constant currency basis) as we continue to see increases in customer spending on our information services businesses. Revenues in our Expositions segment were flat during the period.

Adjusted EBITDA for the second quarter increased 1% to $389 million, or 5% on a constant currency basis compared to the second quarter of 2011, as we continue to balance productivity efforts with investments in strategic growth initiatives.

Net income for the second quarter increased to $103 million compared to $69 million in the second quarter of 2011, driven by an overall reduction in costs. Net income per share, on a diluted basis, was $0.28 compared to $0.19 in the second quarter of 2011.

Adjusted Net Income for the second quarter increased to $157 million compared to $155 million in the second quarter of 2011. Adjusted Net Income per share was $0.42 compared to $0.41 in the second quarter of 2011.

 

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Six Months Ended June 2012 Operating Results

Revenues for the first half of 2012 increased 1% to $2,725 million, or 4% on a constant currency basis compared to the first half of 2011. Revenues within our Buy segment were flat (4% increase on a constant currency basis), revenues within our Watch segment increased 2% (3% on a constant currency basis) and revenues within our Expositions segment increased 5% (5% on a constant currency basis).

Adjusted EBITDA for the first half of 2012 increased 2% to $721 million, or 5% on a constant currency basis compared to the first half of 2011.

Net income for the first half of 2012 was $128 million compared to a net loss of $112 million for the first half of 2011. The 2011 first half results included charges of $206 million, net of tax, associated with the IPO. Net income per share, on a diluted basis, was $0.35 compared to a net loss per share of $0.33 in the first half of 2011.

Adjusted Net Income for the first half of 2012 increased to $270 million compared to $219 million in the first half of 2011. Adjusted Net Income per share was $0.72 compared to $0.61 in the first half of 2011.

Financial Position

As of June 30, 2012, cash balances were $283 million and gross debt was $6,555 million, excluding the $288 million mandatory convertible subordinated bonds due 2013. Net debt (gross debt less cash and cash equivalents) at the end of the quarter was $6,272 million and our net debt leverage ratio was 4.0x. Capital expenditures were $152 million for the first half of 2012 as compared to $142 million for the first half of 2011.

Conference Call and Webcast

Nielsen will hold a conference call to discuss second quarter results at 8:30 a.m. U.S. Eastern Time (ET) on July 25, 2012. The audio and slides for the call can be accessed live by webcast at http://ir.nielsen.com or by dialing 1-866-652-5200. Callers outside the U.S. and Canada can dial +1-412-317-6060. The passcode for the call is “Nielsen.” An archive 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, 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, 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.

 

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Results of Operations—(Three and Six Months Ended June 30, 2012 and 2011)

The following table sets forth, for the periods indicated, the amounts included in our Condensed Consolidated Statements of Operations:

 

    

Three Months Ended

June 30,

(Unaudited)

   

Six Months Ended

June 30,

(Unaudited)

 

(IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)

   2012     2011     2012     2011  

Revenues

   $ 1,385      $ 1,396      $ 2,725      $ 2,698   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

     564        570        1,129        1,119   

Selling, general and administrative expenses

     441        450        894        993   

Depreciation and amortization

     127        135        258        271   

Restructuring charges

     16        23        53        46   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     237        218        391        269   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest income

     1        2        2        3   

Interest expense

     (107     (114     (213     (254

Loss on derivative instruments

     —          —          —          (1

Foreign currency exchange transaction losses, net

     (4     (10     (13     (3

Other income/(expense), net

     10        9        4        (221
  

 

 

   

 

 

   

 

 

   

 

 

 

Income/(loss) from continuing operations before income taxes and equity in net income of affiliates

     137        105        171        (207

(Provision)/benefit for income taxes

     (38     (39     (45     95   

Equity in net income of affiliates

     4        3        2        1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income/(loss) from continuing operations

     103        69        128        (111

Loss from discontinued operations, net of tax

     —          —          —          (1
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss)

     103        69        128        (112

Net (loss)/income attributable to noncontrolling interests

     (1     —          (1     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) attributable to Nielsen stockholders

   $ 104      $ 69      $ 129      $ (113
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) per share of common stock, basic and diluted

        

Income/(loss) from continuing operations

   $ 0.28      $ 0.19      $ 0.35      $ (0.33

Net income/(loss) attributable to Nielsen stockholders

   $ 0.28      $ 0.19      $ 0.35      $ (0.33

Weighted-average shares of common stock outstanding, basic

     361,528,675        358,792,103        361,205,184        345,100,814   

Dilutive shares of common stock

     4,347,044        5,411,316        4,665,666        —     

Weighted-average shares of common stock outstanding, diluted

     365,875,719        364,203,419        365,870,850        345,100,814   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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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 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 performance measures of operating performance, 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 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. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA 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. 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 mandatory convertible subordinated bonds due 2013. 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 anti-dilutive in accordance with GAAP. The amount also includes the weighted-average amount of shares of common stock convertible associated with the mandatory convertible bonds based upon the average price of our common stock during the period.

 

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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/(loss) 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 and six months ended June 30, 2012 and 2011, respectively:

 

    

Three Months Ended

June 30,

(Unaudited)

   

Six Months Ended

June 30,

(Unaudited)

 

(IN MILLIONS EXCEPT SHARE AND PER SHARE DATA)

   2012     2011     2012     2011  

Net income/(loss)

   $ 103      $ 69      $ 128      $ (112

Loss from discontinued operations, net of tax

     —          —          —          1   

Interest expense, net

     106        112        211        251   

Provision/(benefit) for income taxes

     38        39        45        (95

Depreciation and amortization

     127        135        258        271   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     374        355        642        316   

Equity in net income of affiliates

     (4     (3     (2     (1

Other non-operating (income)/expense, net

     (6     1        9        225   

Restructuring charges

     16        23        53        46   

Stock-based compensation expense

     6        6        14        10   

Other items(a)

     3        4        5        110   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     389        386        721        706   

Interest expense, net

     (106     (112     (211     (251

Depreciation and amortization

     (127     (135     (258     (271

Depreciation and amortization associated with acquisition-related tangible and intangible assets

     40        49        82        99   

Cash paid for income taxes

     (39     (32     (62     (63

Stock-based compensation expense

     (6     (6     (14     (10

Interest expense attributable to mandatory convertible bonds

     6        5        12        9   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

   $ 157      $ 155      $ 270      $ 219   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income per share of common stock, diluted

   $ 0.42      $ 0.41      $ 0.72      $ 0.61   

Weighted-average shares of common stock outstanding, basic

     361,528,675        358,792,103        361,205,184        345,100,814   

Dilutive shares of common stock

     4,347,044        5,411,316        4,665,666        4,999,486   

Shares of common stock convertible associated with the mandatory convertible bonds

     10,416,700        10,416,700        10,416,700        8,704,129   

Weighted-average shares of common stock outstanding, diluted

     376,292,419        374,620,119        376,287,550        358,804,429   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Other items primarily consist of Sponsor Advisory Fees (including termination payments of $102 million for the six months ended June 30, 2011), costs related to public offerings and other transaction-related costs.

 

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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 June 30, 2012 is as follows:

 

(IN MILLIONS)  

Total indebtedness as of June 30, 2012

   $ 6,843   

Less: mandatory convertible subordinated bonds due 2013

     288   
  

 

 

 

Gross debt as of June 30, 2012

     6,555   

Less: cash and cash equivalents as of June 30, 2012

     283   
  

 

 

 

Net debt as of June 30, 2012

   $ 6,272   

Adjusted EBITDA for the year ended December 31, 2011

   $ 1,546   

Less: Adjusted EBITDA for the six months ended June 30, 2011

     706   

Add: Adjusted EBITDA for the six months ended June 30, 2012

     721   
  

 

 

 

Adjusted EBITDA for the twelve months ended June 30, 2012

   $ 1,561   

Net debt leverage ratio

     4.0

 

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