Nielsen Q2 Revenue increased 6.2% to $861M

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Global data, measurement, and analytics company, Nielsen Holdings plc announced its results for the quarter ended June 30, 2021. The Company’s second-quarter revenues increased 6.2% to $861 million on a reported basis, 4.5% on a constant currency basis, and 6.2% on an organic basis compared to the prior-year period.

Nielsen’s Audience Measurement revenues of $629 million increased 4.3% on a reported basis, 3.3% on a constant currency basis, and 4.0% on an organic basis compared to the prior-year period. Overall growth was solid, particularly in digital measurement, and local pressures have subsided.

Nielsen also increased its 2021 guidance, raising the low-end of its revenue and adjusted EBITDA ranges and raising its adjusted EBITDA margin, adjusted earnings per share (EPS), and Free Cash Flow guidance based on strong Q2 results and increased confidence in its full-year outlook.

David Kenny, Chief Executive Officer, commented,

“Our quarterly financial results demonstrate our continued strategic and operational transformation, as the global media ecosystem evolves. We have increased confidence in our full-year outlook, which is reflected in our updated 2021 guidance. We continue to see healthy renewals from existing clients, growing interest from new clients, and steady progress in our global product development.

This includes launching The Gauge as an analytic tool across streaming and linear media, expanding our outcomes portfolio into additional advertisers, and expanding Gracenote into several additional countries. We are executing well against our strategy and roadmap to create long-term value and are pleased with steady progress again this quarter.”

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Second Quarter 2021 Results

  • Outcomes & Content revenues of $232 million increased 11.5% on a reported basis, 7.9% on a constant currency basis, and 12.6% on an organic basis compared to the prior-year period. This was driven in part by improving trends in short-cycle revenue, solid growth in Content, and recovery in the Sports business.

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  • Net income from continuing operations attributable to Nielsen shareholders increased 207.1% to $86 million, compared to $28 million in the second quarter of 2020. Net income from continuing operations per share on a diluted basis for the second quarter was $0.24, compared to $0.08 in the second quarter of 2020. The improvement in net income from continuing operations was driven by strong revenue performance, the ongoing benefit of permanent cost actions from the 2020 optimization plan and lower depreciation and amortization expense in the second quarter of 2021. In addition, the second quarter of 2020 included an impairment of long-lived assets related to the exit of certain smaller, underperforming markets and non-core businesses, as well as a restructuring charge related to our 2020 optimization plan.
  • Reported EPS of $0.21 includes EPS of $0.24 from continuing operations and EPS of $(0.03) from discontinued operations.
  • Adjusted earnings per share was $0.43 for the second quarter, compared to $0.35 per share in the prior year period, reflecting higher adjusted EBITDA and lower depreciation and amortization expense year over year, offset in part by higher taxes.
  • Adjusted EBITDA was $370 million, compared to $331 million in the second quarter of 2020, up 11.8% on a reported basis and 11.1% on a constant currency basis.
  • Adjusted EBITDA margin of 43.0% increased 216 basis points on a reported basis, or an increase of 256 basis points on a constant currency basis, compared to the prior year period, reflecting the strong revenue performance and the benefit of permanent cost actions implemented during the second half of 2020.
  • Reported results were impacted by stronger currencies versus the dollar during the second quarter, which had a 170 basis point positive impact on reported revenue growth and a 70 basis point positive impact on adjusted EBITDA growth.
  • On a reported basis for the second quarter of 2021, as compared to the second quarter of 2020 (which included Global Connect for the full quarter):
    • Cash flow from operations decreased to $213 million, compared to $250 million in the prior-year period. Cash flow performance was primarily driven by the sale of Global Connect.
    • Cash taxes were $38 million, compared to $41 million in the prior-year period.
    • Net capital expenditures were 40% lower, at $72 million, compared to $120 million in the prior-year period largely due to timing and the Global Connect sale.
    • Free cash flow increased to $141 million, compared to $130 million in the prior-year period, primarily due to lower net capital expenditures related to the sale of Global Connect.
  • As it relates to continuing operations for the second quarter of 2021, as compared to the second quarter of 2020:
    • Cash flow from operations increased to $233 million, compared to $162 million in the prior-year period. Cash flow performance was primarily driven by higher adjusted EBITDA, improved working capital and lower interest payments, offset in part by higher cash taxes.
    • Cash taxes were $38 million, compared to $19 million in the prior-year period largely due to timing.
    • Net capital expenditures were relatively flat at $72 million, compared to $69 million in the prior-year period.
    • Free cash flow was $190 million compared to $86 million in the prior-year period. Free cash flow has been adjusted to exclude certain interest costs and to exclude separation-related costs. The prior-year period also includes an adjustment for cash costs to position Nielsen as a stand-alone company.

Financial Position

  • In April, Nielsen redeemed $825 million of the outstanding aggregate principal amount of the 5% senior notes due 2022.
  • In May, Nielsen refinanced $1.3 billion of debt, pushing out maturities and redeeming the $430 million outstanding principal and €530 million outstanding principal amount of senior secured term loans due 2025 and €204 million outstanding principal amount of senior secured term loans due 2023.
  • At June 30, 2021, Nielsen had cash and cash equivalents of $410 million and gross debt of $5.878 billion, resulting in net debt (gross debt less cash and cash equivalents) of $5.468 billion and a net debt leverage ratio of 3.62x.

Dividend

On July 15, 2021, Nielsen’s Board of Directors declared a quarterly dividend of $0.06 per share of Nielsen’s common stock. The $22 million estimated dividends are payable on September 2, 2021, to shareholders of record at the close of business on August 19, 2021.

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