Goldman Sachs Communacopia Conference. September 19, 2012

Transcription

1 Goldman Sachs Communacopia Conference September 19, 2012

2 Forward Looking Statements The following discussion contains forward-looking statements, including those about Nielsen s outlook and prospects, in the meaning of the Private Securities Litigation Reform Act of 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. 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 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, future events or otherwise, except as may be required by law. Our outlook is provided as of September 19, 2012 for the purpose of providing information about current expectations for This information may not be appropriate for other purposes. 2

3 Nielsen investment highlights Comprehensive understanding of what consumers buy and watch Global leader in our segments with market presence in ~100 countries Mission critical measurement and analytics embedded in client workflows Syndicated, scalable products and services Favorable market trends provide organic growth opportunities Proven track record of growth and economic resilience Accelerated earnings growth through deleveraging 3

4 Nielsen s Measurement and Analytics enable growth for large global industries What Consumers Buy What Consumers Watch Retail sales measurement of consumer goods in stores Measurement of TV viewing, online and mobile phone activity Nielsen Helps Consumer packaged goods/ Retailer clients Media/Telecom/Tech/Digital clients Examples > 80 markets worldwide > 50+ year relationship > Multi-year contract > 70+ year relationship 4

5 Trends shaping What Consumers Buy Growth of middle class Demographic shifts Projected increase in global middle class population and spending (a) Spending by middle class Population of middle class > Driven by developing markets > Major changes in global population Clients need to understand new consumers in developing markets (a) The Emerging Middle Class in Developing Countries, Organization for Economic Cooperation and Development

6 Trends shaping What Consumers Watch More choices and platforms Consumers more connected 1950s BLACK & WHITE TELEVISION Video penetration by platform, Q (a) (Percent of US population) 1960s FIRST SATELLITE BROADCAST 95% 1970s 1980s RISE OF CABLE TV MORE ADVERTISER- SUPPORTED NETWORKS 55% 1990s DIGITAL AND INTERNET REVOLUTION DVR PENETRATION OVER-THE-TOP DISTRIBUTION 12% 5:01 5:24 155:46 Monthly time spent among video users (hh:mm) Cross-platform measurement facilitates better marketing ROI (a) Nielsen Cross-Platform Report: Based on Total US Population, Persons 2+ for TV and Online, (Home and Work) 13+ for Mobile, 1 st Qtr

7 Resilient financial performance Revenue Adjusted EBITDA ($ millions) ($ millions) CAGR = 5.2% CAGR = 8.7% $4,806 $4,808 $5,126 $5,532 $1,312 $1,411 $1,546 $1, % 4.0% 6.1% 5.6% 25.1% 27.3% 27.5% 27.9% Constant currency growth Adjusted EBITDA Margin Note: Revenue and EBITDA growth rates derived on a constant currency basis; figures are as reported 7

8 Proactive balance sheet management Debt maturity profile (1) ($ millions) $2,720 $1,084 $733 $800 $341 $341 $ Deleveraging progress (2) September 2012 transaction > Unsecured $800M issue at 4.5%, 8 year term > Use of proceeds to redeem existing 11.50% senior unsecured notes and prepay 8.50% fixed rate term loan (including redemption and other prepayment costs) and for general corporate purposes (including capital expenditures and working capital) > 2012 benefit on interest: ~$10M for book and cash interest each 9.1x 7.9x 7.4x 6.2x 5.8x 4.0x 4.0x > 2013 benefit on interest: ~$45-50M book interest; $40-45M cash interest LTM6/30 > S&P upgrade of senior secured debt to BBB- (1) Reflects 06/30/12 debt balances and pro forma for new senior notes. Figures exclude $288M of mandatory convertible subordinated debt due 2013, capital leases and other financing obligations, other debt and bank overdrafts (2) Reflects net debt (gross debt minus cash), divided by Adjusted EBITDA calculated on last twelve months basis. Excludes $288M of mandatory convertible subordinated debt due 2013, but includes all other debt, including capital leases 8

9 Looking ahead Continue investment of resources in developing markets to increase the depth and breadth of Nielsen s coverage Provide clients with cross-platform solutions to optimize performance of advertising campaigns Leverage Nielsen s Buy & Watch capabilities to provide innovative solutions that measure advertising objectives 9

10 How do Advertisers know Audience & Impact? The 3 R s of Advertising ROI Reach Cost efficiently deliver ad impressions to consumers Resonance Develop creative that breaks through the clutter and communicates its message Reaction Drive incremental volume & Marketing ROI 10

11 Reach: Measuring the True Audience Online Campaign Ratings Overnight audience ratings, consistent with TV, and campaign results Cross-Platform Campaign Ratings Unduplicated ratings from Online and TV campaigns, by demographic TV Ratings Delivery against campaign objectives Verification, including Brand Safety and Viewability metrics TV Mobile Online Overnight audience ratings and live + 3 days of time-shifted viewing Delivery against campaign objectives Verification services Measurement = monetization for content owners and distributors + Same content and commercial load + Different content and commercial load 11

12 Resonance: Determining Ad Effectiveness CROSS-PLATFORM BRAND EFFECT TV Online Mobile 12

13 Reaction: Identifying Impact on Behavior Buy + Watch Media Client Example Advise Analyze Marketing & Media Effectiveness Enterprise Solutions Integrate Advise Analyze Buyer Insights TV & Online Viewing Segment + = Domestic Purchase Data > Highlights consumer purchasing power of audience for a seller Buyer Ratings Measure Measure > Enables advertisers to improve marketing ROI > Potential to increase yield of the market grow the total size 13

14 Appendix

15 Certain non-gaap measures Overview of Non-GAAP Presentations We consistently use the below non-gaap financial measures 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 or any other performance measures of operating performance or liquidity 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. 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. 15

16 Adjusted net income reconciliation: Q2 ($ in millions except per share amounts) Quarter ended June 30 (Unaudited) Net income/(loss) $ 103 $ 69 Interest expense, net Provision for income taxes Depreciation and amortization EBITDA Equity in net income of affiliates (4) (3) Other non-operating (income)/expense, net (6) 1 Restructuring charges Stock-based compensation expense 6 6 Other items (a) 3 4 Adjusted EBITDA Interest expense, net (106) (112) Depreciation and amortization (127) (135) Depreciation and amortization of acquisition-related tangible and intangible assets Cash paid for income taxes (39) (32) Stock-based compensation expense (6) (6) Interest expense attributable to mandatory convertible bonds 6 5 Adjusted net income $ 157 $ 155 Adjusted net income per share of common stock, diluted (b) $0.42 $0.41 (a) (b) See footnotes on next page 16

17 Adjusted net income reconciliation: Q2 cont d (a) Other items primarily consist of costs related to our initial public offering in 2011 and other transaction-related fees. (b) 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 weightedaverage 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. Weighted-average shares of common stock outstanding as of quarter ended June 30, 2012, basic 361,528,675 Dilutive shares of common stock from stock compensation plans 4,347,044 Shares of common stock convertible associated with the mandatory convertible bonds 10,416,700 Weighted-average shares of common stock outstanding, diluted 376,292,419 17

18 Adjusted net income reconciliation: YTD ($ in millions except per share amounts) Six months ended June 30 (Unaudited) Net income/(loss) $ 128 $ (112) Loss from discontinued operations, net -- 1 Interest expense, net Provision / (Benefit) for income taxes 45 (95) Depreciation and amortization EBITDA Equity in net income of affiliates (2) (1) Other non-operating expense, net Restructuring charges Stock-based compensation expense Other items (a) Adjusted EBITDA Interest expense, net (211) (251) Depreciation and amortization (258) (271) Depreciation and amortization of acquisition-related tangible and intangible assets (a) (b) See footnotes on next page Cash paid for income taxes (62) (63) Stock-based compensation expense (14) (10) Interest expense attributable to mandatory convertible bonds 12 9 Adjusted net income $ 270 $ 219 Adjusted net income per share of common stock, diluted (b) $0.72 $

19 Adjusted net income reconciliation: YTD cont d (a) Other items primarily consist of Sponsor Advisory Fees in 2011, costs related to our initial public offering and other transaction-related fees. (b) 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 weightedaverage 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. 19

20 Free cash flow reconciliation ($ in millions) Quarter Ended June 30 Six Months Ended June 30 Net cash provided by operating activities $116 $122 $113 $70 Capital expenditures (70) (90) (152) (142) Free Cash Flow $46 $32 $(39) $(72) Sponsor termination fees (102) Normalized Free Cash Flow $46 $32 $(39) $30 20

21 Investor Relations ir.nielsen.com