Nielsen Raises Guidance Targets

• Revenues of $1,563 million decreased 3.3% on a reported basis and decreased 3.0% on a constant currency basis- Optimization plan contributing meaningfully to profit growth
• Raising adjusted EBITDA and adjusted EBITDA margin and Free Cash Flow guidance ranges
• Diluted net earnings per share of $0.02 and adjusted earnings per share of $0.43
• Announced agreement to sell Nielsen Global Connect business to Advent International, in partnership with Jim Peck, former CEO of TransUnion, for $2.7 billion; proceeds to be used primarily for debt reduction as well as for general corporate purposes, strengthening the balance sheet

Today, Nielsen Holdings plc announced its results for the quarter ended September 30, 2020. 

David Kenny

David Kenny, Chief Executive Officer, commented, "We delivered strong results in the third quarter, building on our track record of successful execution. All key metrics for both Media and Connect were in-line or ahead of expectations. Our teams moved swiftly to enact our optimization plan, driving operational efficiencies and permanent cost savings. This, in addition to actions taken earlier in the year in response to COVID-19 related revenue pressure, enabled us to drive strong adjusted EBITDA growth and higher free cash flow. We have confidence in our ability to deliver on our objectives and guidance for the full year 2020. We also announced the sale of the Nielsen Global Connect business yesterday, which we believe will deliver substantial value to our shareholders sooner than was anticipated through the planned spin-off and create more certainty for all stakeholders.

Kenny continued, "We made strong progress on key initiatives in the quarter, particularly cross-media measurement with expansion of our Connected TV footprint to now include YouTube and YouTubeTV. We continue to focus on expanding our role in the ecosystem, enabling content and measuring outcomes across key advertising categories. As we look forward, we remain focused on executing on our growth strategies that will enable us to better serve our clients."

Third Quarter 2020 Results

• 3rd quarter revenues were $1,563 million, down 3.3% on a reported basis, or down 3.0% on a constant currency basis, compared to the prior year.
• Nielsen Global Media revenues decreased 3.9% to $836 million on a reported basis, or a decrease of 4.2% on a constant currency basis, compared to the prior year.
• Audience Measurement revenues decreased 1.3% on a reported basis, or a decrease of 1.6% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenue and ongoing pressure in local television.
• Plan/Optimize revenues decreased 10.4% on a reported basis, or a decrease of 10.8% on a constant currency basis, primarily reflecting the continued impact of the COVID-19 pandemic on sports, Gracenote auto and short-cycle revenue.
• Nielsen Global Connect revenues decreased 2.5% to $727 million on a reported basis, or a decrease of 1.6% on a constant currency basis.
• Measure revenues decreased 1.9% on a reported basis, or a decrease of 0.6% on a constant currency basis, reflecting some continued but lessening impact of the COVID-19 pandemic.
• Predict/Activate revenues decreased 4.2% on a reported and constant currency basis, reflecting the impact of the COVID-19 pandemic, particularly in custom insights, partially offset by the January 2020 acquisition of Precima.
• Net income for the third quarter was $7 million on a reported basis, compared to a net loss of $472 million in the third quarter of 2019. Net income per share on a diluted basis was $0.02 per share, compared to a net loss per share on a diluted basis of $(1.33) per share for the third quarter of 2019. Net income increased compared to the prior year as the third quarter of 2019 included an impairment charge of $1,004 million, related to the writedown of goodwill in our Connect segment. This was partially offset by higher restructuring charges and higher depreciation and amortization expense compared to the prior year.
• Adjusted earnings per share was $0.43 per share, compared to $0.51 per share in the prior year, due to higher taxes and higher depreciation and amortization expense, partially offset by higher adjusted EBITDA.
• Adjusted EBITDA for the third quarter increased 5.3% to $501 million on a reported basis, or an increase of 6.1% on a constant currency basis, compared to the prior year. Adjusted EBITDA margin increased 259 basis points to 32.1% on a reported basis, or 277 basis points on a constant currency basis compared to the prior year, reflecting temporary actions taken in response to the COVID-19 pandemic and the benefit of permanent cost actions from the optimization plan, partially offset by revenue pressures in both segments from the COVID-19 pandemic.

Yesterday, Nielsen announced a definitive agreement under which Advent International, one of the largest and most experienced global private equity investors, in partnership with James "Jim" Peck, former Chief Executive Officer of TransUnion, will acquire the Nielsen Global Connect business for $2.7B.