Covid-19: Nielsen makes Q4 loss

• 2020 Revenues Decreased 3.2% on a Reported Basis and 2.3% on a Constant Currency Basis, In-Line with Guidance

• 2020 GAAP Diluted Net Loss per Share of $0.02; Adjusted Earnings per Share of $1.67, Above Guidance

• Other Key Metrics In-Line to Above Guidance

• 2021 Guidance Issued for New Nielsen; Consistent with Preliminary Outlook Communicated at 2020 Investor Day

• Shareholder Approval Received for Proposed Sale of Global Connect; Transaction Expected to Close in Next 90 Days

Today, Nielsen Holdings plc announced its fourth quarter and full-year 2020 results. For the full year, revenues decreased 3.2% on a reported basis and decreased 2.3% on a constant currency basis, in line with guidance.

Adjusted EBITDA, Adjusted EPS and Free Cash Flow all exceeded guidance. Nielsen also issued 2021 guidance for the New Nielsen, which adjusts for the planned sale of Global Connect.

David Kenny, Chief Executive Officer, commented,

“Our solid results in 2020 reflect strong execution and the resiliency of Nielsen’s business model. We acted swiftly to keep our people safe and healthy, and to mitigate the impact of the global pandemic on our operations.

In parallel, we accelerated progress on our transformation, rationalizing our product portfolio including the planned sale of Global Connect, and aligning our product roadmap around two unique platforms for ads and for content.

In December, we announced our plans to launch Nielsen One, a transformative cross-media solution to drive more comparable and comprehensive metrics across platforms. I am extremely proud of all that our teams accomplished during such unprecedented times.” 

“We have now reached an inflexion point and we are focused on driving new growth from new solutions and new customers. Our 2021 guidance issued today is consistent with the detailed plan we laid out for the New Nielsen at our Investor Day in December, and we are executing as we committed.”

Fourth Quarter 2020 Results

• Fourth-quarter revenues were $1,672 million, down 1.1% on a reported basis, or 1.8% on a constant currency basis, compared to the prior year.
• Nielsen Global Media revenues decreased by 1.9% to $872 million on a reported basis, or 2.6% on a constant currency basis, compared to the prior year.
  • Audience Measurement revenues increased 0.2% on a reported basis, or a decrease of 0.2% 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 6.8% on a reported basis, or 8.1% 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 0.2% to $800 million on a reported basis, or 0.9% on a constant currency basis, compared to the prior year.
  • Measure revenues increased 0.4% on a reported basis, or a decrease of 0.2% on a constant currency basis, reflecting a modest but lessening impact of the COVID-19 pandemic.
  • Predict/Activate revenues decreased 1.6% on a reported basis, or 2.3% on a 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 fourth quarter was $35 million, compared to a net loss of $109 million in the fourth quarter of 2019. Net income per share on a diluted basis for the fourth quarter was $0.10, compared to a net loss per share on a diluted basis of $0.31 for the fourth quarter of 2019. During the fourth quarter of 2020, Nielsen recorded a non-cash charge of $131 million, or $0.36 per share, related to the impairment of intangible assets. During the fourth quarter of 2019, Nielsen settled certain pension plans obligations and recorded a non-cash charge of $170 million, or $0.48 per share.
• Adjusted earnings per share was $0.53 for the fourth quarter, compared to adjusted earnings per share of $0.41 in the prior-year period, with higher adjusted EBITDA.
• Adjusted EBITDA for the fourth quarter was $560 million, or up 13.8% on a reported and constant currency basis, compared to the prior year.
• Adjusted EBITDA margin increased 439 basis points to 33.5% on a reported basis, or an increase of 458 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.

Full Year 2020 Results

• 2020 revenues were $6,290 million, down 3.2% on a reported basis, or 2.3% on a constant currency basis, compared to the prior year.
• Nielsen Global Media revenues decreased 2.3% to $3,361 million on a reported and constant currency basis, compared to the prior year.
  • Audience Measurement revenues decreased 0.6% on a reported basis, or 0.5% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on sports and non-contracted revenue and pressure in local television.
  • Plan/Optimize revenues decreased 6.6% on a reported basis, or 6.7% on a constant currency basis, primarily reflecting the impact of the COVID-19 pandemic on sports, Gracenote auto and short-cycle revenue.
• Nielsen Global Connect revenues decreased 4.2% to $2,929 million on a reported basis, or 2.4% on a constant currency basis, compared to the prior year.
  • Measure revenues decreased 4.1% on a reported basis, or 2.0% on a constant currency basis, reflecting the impact of the COVID-19 pandemic on retail measurement services.
  • Predict/Activate revenues decreased 4.5% on a reported basis, or 3.4% on a constant currency basis, reflecting the impact of the COVID-19 pandemic, partially offset by the January 2020 acquisition of Precima.
• Net loss for the year was $6 million, compared to a net loss of $415 million in 2019. Net loss per share on a diluted basis was $0.02, compared to a net loss per share on a diluted basis of $1.17 in 2019. During 2020, Nielsen recorded impairment charges of $184 million primarily related to the impairment of intangible assets, or $0.52 per share. Net loss was also impacted by higher depreciation and amortization expense and higher restructuring charges. Net loss decreased as compared to the prior year as during 2019, Nielsen recorded an impairment charge of $1,004 million, or $2.82 per share, related to the writedown of goodwill in the Connect segment as a result of the interim impairment assessment, as well as the settlement of certain pension plans obligations resulting in a non-cash charge of $170 million, or $0.48 per share.
• Adjusted net earnings per share were $1.67, compared to $1.80 in the prior year and were above our guidance range of $1.54-$1.62 per share for the year. This reflected higher depreciation and amortization versus 2019, partially offset by higher adjusted EBITDA and lower interest expense.
• Adjusted EBITDA for the full year was $1,882 million, an increase of 1.6% compared to the prior year on a reported basis, or 2.7% on a constant currency basis.
• Adjusted EBITDA margin increased 140 basis points to 29.9% on a reported basis, or an increase of 147 basis points on a constant currency basis, compared to the prior year, as productivity initiatives were more than offset by investments in growth initiatives.

Financial Position

• As of December 31, 2020, Nielsen’s cash and cash equivalents were $610 million and gross debt was $8,307 million.
• Net debt (gross debt less cash and cash equivalents) was $7,697 million and Nielsen’s net debt leverage ratio was 4.09x at the end of the year compared to 4.24x at the end of 2019.
• Cash flow from operations decreased to $999 million for the full year of 2020, from $1,066 million in the prior year. Cash flow performance was primarily driven by higher employee annual incentive payments, higher restructuring payments, and separation-related payments, partially offset by working capital timing and lower-income tax and interest payments during the year ended December 31, 2020.
• Cash taxes were $189 million for the full year of 2020, compared to $224 million in the prior year.
• Net capital expenditures were $519 million for the full year of 2020 and 2019.
• Free cash flow was $480 million, or $598 million excluding separation-related cost cash flows, for the full year of 2020, compared to $547 million in the prior year.

Dividend

On February 4, 2021, our Board of Directors declared a quarterly dividend of $0.06 per share of Nielsen’s common stock. The dividend is payable on March 18, 2021, to shareholders of record at the close of business on March 4, 2021.