Nielsen Reports Second Quarter 2014 Results
July 30, 2014
Untitled Document

Nielsen N.V. announced financial results for the second quarter ended June 30, 2014.

“Our second quarter results reflect the underlying strength of our Buy and Watch businesses, the successful integration of Arbitron and our steady and consistent business model. We continue to extend our leadership positions in both retail and audience measurement with meaningful innovation and great execution. Our focus on measuring and improving performance for our clients continues to be a powerful combination and positions us well to deliver long-term value to our shareholders,” commented Mitch Barns, Chief Executive Officer of Nielsen.

Second Quarter 2014 Operating Results

Revenues for the second quarter increased 15.0% to $1,594 million, or 15.9% on a constant currency basis compared to the second quarter of 2013. Revenues, excluding the impact of the Arbitron and Harris acquisitions, increased 4.4%, or 5.2% on a constant currency basis. Revenues within the Buy segment grew 6.6%, or 7.9% on a constant currency basis, to $900 million. Excluding Harris, Buy revenues grew 4.8% on a constant currency basis, driven largely by new client wins and a 9.2% increase in developing market revenues. On a constant currency basis, Information services revenue grew 5.0%, while Insights revenue grew 17.9%, or 4.2% excluding Harris.

Revenues within the Watch segment increased 28.0%, or 28.3% on a constant currency basis, to $694 million. Excluding the Arbitron acquisition, Watch revenues increased 5.7%, or 5.9% on a constant currency basis, driven by continued strength in Audience Measurement, including accelerating demand in Digital, and Advertiser Solutions.

Adjusted EBITDA for the second quarter increased 16.2% to $460 million, or 17.9% on a constant currency basis compared, to the second quarter of 2013. Adjusted EBITDA margins grew 50 basis points on a constant currency basis due to the accretive impact of acquisitions and the benefit of ongoing productivity initiatives.

Income from continuing operations for the second quarter decreased 36.1% to $76 million, or 33.9% on a constant currency basis, compared to the second quarter of 2013. The year-over-year decline largely reflects fees related to recent refinancings of our long-term debt; year-to-date refinancing activity further improved our weighted average interest rate to approximately 3.86% as of June 30, 2014 on a pro forma basis. Income from continuing operations per share, on a diluted basis, was $0.19 compared to $0.31 in the second quarter of 2013.

Adjusted Net Income for the second quarter increased 28.3% to $240 million, or 31.1% on a constant currency basis, compared to the second quarter of 2013. Adjusted Net Income per share on a diluted basis was $0.62 compared to $0.49 in the second quarter of 2013.

Financial Position

As of June 30, 2014, cash balances were $310 million and gross debt was $6,692 million. Net debt (gross debt less cash and cash equivalents) was $6,382 million and our net debt leverage ratio was 3.66x at the end of the second quarter. Our proforma net debt leverage ratio, giving effect to Arbitron’s results for the full twelve month period ended June 30, 2014, was 3.57x at the end of the second quarter. Capital expenditures were $94 million for the second quarter of 2014 as compared to $100 million for the second quarter of 2013.

Free cash flow for the second quarter of 2014 increased to $116 million from $107 million in the second quarter of 2013 and cash flow from operations increased to $210 million in the second quarter of 2014 from $206 million in second quarter of 2013.

On May 1, 2014, the company increased the quarterly dividend by 25% to $0.25 per quarter.

In June 2014, a secondary public offering of 20.0 million shares of our common stock was completed on behalf of certain selling stockholders, primarily comprised of the Sponsor group. All proceeds went to the selling stockholders and the offering did not have a significant impact on our operating results or financial position. Subsequent to this offering, the sponsors hold approximately 20% of our common stock.

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Republic Records

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