Nielsen Reports 1st Quarter 2022 Results

NEW YORK, April 28, 2022

David Kenny, Chief Executive Officer, commented, "We reported solid first quarter results, which were in line with our expectations. Our results reflect the commitment of our teams in executing on our strategy and delivering innovation in client solutions, as well as the strength of our client relationships. Nielsen remains the industry's currency of choice, providing the most accurate and verifiable measurement data in the market to guarantee this year's upfront commitments. Furthermore, we are leading the industry into the next generation of audience measurement with Nielsen ONE, our transformative cross-media solution that will serve as the metrics underpinning the more than $100 billion video advertising ecosystem. We remain confident that Nielsen is uniquely positioned to provide the global media industry with a currency-grade, cross-platform measurement solution that aligns with clients' evolving needs."

Unless indicated otherwise, the results referenced in this press release relate to Nielsen's continuing operations. Beginning in the first quarter of 2021, our Global Connect business was sold and therefore reclassified as discontinued operations for all periods presented. For comparability, non-GAAP metrics in the prior year have been adjusted to exclude certain interest costs, as if the sale of Global Connect and resulting de-levering occurred on January 1, 2021.

• First quarter revenues of $877 million increased 1.6% on a reported basis, 2.5% on a constant currency basis, and 3.4% on an organic constant currency basis compared to the prior year period.
• Measurement revenues of $645 million increased 2.1% on a reported basis, 2.7% on a constant currency basis, and 3.9% on an organic constant currency basis compared to the prior year period. Overall growth was solid, driven by strength in national and digital measurement products in the US, and in international markets. Local products grew modestly for the fourth consecutive quarter.
• Impact / Content revenues of $232 million increased 0.4% on a reported basis, 1.8% on a constant currency basis, and 2.2% on an organic constant currency basis compared to the prior year period. This was driven by improving trends in short-cycle revenue and the sports business in Impact, offset in part by a timing-related decline in Content.
• Net income from continuing operations attributable to Nielsen shareholders for the first quarter was $101 million, compared to $106 million in the first quarter of 2021. Net income from continuing operations per share on a diluted basis for the first quarter was $0.28, compared to $0.29 for the first quarter of 2021. Net income from continuing operations was primarily driven by the return of the temporary cost savings realized from actions taken in response to the COVID-19 pandemic and continued investment in our products and services, partially offset by our revenue performance and lower interest expense.
• Reported EPS on a diluted basis of $0.29 includes EPS of $0.28 from continuing operations and $0.01 from discontinued operations.
• Adjusted EPS was $0.45 for the first quarter, compared to $0.47 per share in the prior year period, reflecting lower adjusted EBITDA and higher depreciation and amortization year over year.
• Adjusted EBITDA was $372 million, compared to $388 million in the first quarter of 2021, down 4.1% on a reported basis and 3.9% on a constant currency basis, as compared to the prior year.
• Adjusted EBITDA margin of 42.4% decreased 254 basis points on a reported basis, or 279 basis points on a constant currency basis, compared to the prior year, reflecting the return of the temporary cost savings realized from actions taken in response to the COVID-19 pandemic and continued investment in our products and services, partially offset by our revenue performance.
• Reported results were impacted by weaker currencies versus the dollar during the first quarter, which had a 90 basis point negative impact on reported revenue growth and a 20 basis point negative impact on adjusted EBITDA growth.
• Cash flow from operations increased to $219 million, compared to $(45) million in the prior year (the latter included Global Connect through the closing of the sale on March 5, 2021). The improved cash flow performance was primarily driven by lower working capital outflows in 2022. Cash flow from continuing operations was $168 million in the first quarter of 2021.
• Net capital expenditures decreased to $82 million compared to $86 million in the prior year due to the absence of Global Connect in the current period, largely offset by timing. Net capital expenditures from continuing operations were $61 million in the first quarter of 2021.
• Free cash flow was $137 million compared to $115 million in the prior year. Free cash flow in the first quarter of 2021 has been adjusted to exclude certain interest costs, as if the sale of Global Connect and resulting de-levering occurred on January 1, 2021, and to exclude separation-related costs.

At March 31, 2022, we had cash and cash equivalents of $482 million and gross debt of $5.623 billion, resulting in net debt of $5.141 billion and a net debt leverage ratio of 3.49x.

On April 14, 2022, our Board of Directors declared a quarterly dividend of $0.06 per share of Nielsen's common stock. The $22 million estimated dividend is payable on June 16, 2022 to shareholders of record at the close of business on June 2, 2022.

The Company is reiterating full year 2022 guidance provided on February 28, 2022. Guidance excludes costs that are contingent on the closing of the Proposed Transaction (as described below).

On March 28, 2022, we entered into a definitive agreement (the "Transaction Agreement") to be acquired by Neptune Intermediate Jersey Limited and Neptune BidCo US Inc. (collectively, the "Purchasing Entities," and the transaction, the "Proposed Transaction") by way of a scheme of arrangement (the "Scheme") between the Company and the Scheme Shareholders (as defined in the Scheme) under Part 26 of the United Kingdom Companies Act 2006, as amended. The Purchasing Entities are controlled by a consortium of private investment funds led by Evergreen Coast Capital Corporation, an affiliate of Elliott Investment Management L.P., and Brookfield Business Partners L.P., together with institutional partners. The Transaction Agreement provides that at the effective time of the Proposed Transaction, all ordinary shares will be transferred from our shareholders to Neptune BidCo US Inc. in accordance with the provisions of the Scheme and the laws of England and Wales, and that Scheme Shareholders will receive the consideration of $28.00 in cash, without interest, per ordinary share. The Proposed Transaction is subject to approval by Nielsen shareholders, regulatory approvals, consultation with the works council and other customary closing conditions. The Proposed Transaction will also be subject to UK court approval pursuant to the Scheme. Alternatively, pursuant to the Transaction Agreement, the parties may elect instead to complete the Proposed Transaction pursuant to an agreed-upon tender offer. If the closing conditions are met, the Proposed Transaction is expected to close in the second half of 2022.