Nielsen : Reports First Quarter 2021 Results

News Release

Investor Relations: Sara Gubins, [phone]

Media Relations: Meg Chari, [phone]

NIELSEN REPORTS 1st QUARTER 2021 RESULTS

• Completed the sale of Nielsen Global Connect on March 5, 2021; reported as discontinued operations as of Q1'21
• Revenues of $863 million increased 2.5% on a reported basis, 1.3% on a constant currency basis & 2.3% organic
• Net income per share of $0.29 (diluted, from continuing operations); Adjusted EPS of $0.47
• Raising key elements of 2021 guidance

New York, USA - May 6, 2021 - Today, Nielsen Holdings plc (NYSE: NLSN) announced its results for the quarter ended March 31, 2021. These results reflect the March 5, 2021 sale of the Global Connect business for $2.4 billion in net proceeds, which resulted in a $542 million preliminary gain on sale, net of taxes, recognized in the quarter. Of the net proceeds, $2.28 billion were used for debt reduction in March and April 2021. Beginning in the first quarter of 2021, Global Connect results were reclassified to discontinued operations for all periods presented.

David Kenny, Chief Executive Officer, commented, "We delivered a solid first quarter, as our teams executed incredibly well. We closed on the sale of Global Connect in March and are now singularly focused as the global essential data, measurement, and analytics provider for the entire media ecosystem. We are investing in our future and we are well-positioned to drive new growth from new solutions across all of our end markets globally. In particular, we are pleased with the advances we've made in Audience Measurement, Outcomes and Gracenote Content Services. We are executing as planned and we are increasing key elements of our 2021 guidance."

First Quarter 2021 Results

Unless indicated otherwise, the results referenced in this press release relate to Nielsen's continuing operations.

• First quarter revenues increased 2.5% to $863 million on a reported basis, 1.3% on a constant currency basis, and 2.3% on an organic basis compared to the prior year.
  o Audience Measurement revenues of $632 million increased 2.8% on a reported basis, 1.9% on a constant currency basis, and 2.3% on an organic basis compared to the prior year, with overall solid growth, most notably in digital measurement and with local pressures subsiding.
  o Outcomes & Content revenues of $231 million increased 1.8% on a reported basis, decreased 0.4% on a constant currency basis, and grew 2.2% on an organic basis compared to the prior year, driven in part by improving trends in short-cycle revenues and solid growth in Content.
• Net income from continuing operations increased 89% to $106 million, compared to $56 million in the first quarter of 2020. Net income from continuing operations per share on a diluted basis for the first quarter was $0.29, compared to $0.16 for the first quarter of 2020. Net income from continuing operations was driven by strong revenue performance, the benefit of permanent cost actions from the 2020 optimization plan, lower depreciation and amortization expense and lower restructuring charges.
• Adjusted earnings per share on a New Nielsen basis, which assumes the Connect transaction closed on January 1, 2020, was $0.47 for the first quarter, compared to $0.36 per share in the prior year period, reflecting higher adjusted EBITDA and lower depreciation and amortization expense year over year.
• Adjusted EBITDA was $388 million, compared to $326 million in the first quarter of 2020, up 19.0% on a reported basis and 18.3% on a constant currency basis, as compared to the prior year.
• Adjusted EBITDA margin of 45.0% increased 624 basis points on a reported basis, or an increase of 646 basis points on a constant currency basis, compared to the prior year, reflecting the strong revenue performance and the benefit of permanent cost actions implemented during the second half of 2020.
• Our reported results were impacted by stronger currencies versus the dollar during the first quarter, which had a 120 basis point positive impact on reported revenue growth and a 70 basis point positive impact on adjusted EBITDA growth.

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• Reported EPS of $1.59 includes EPS of $0.29 from continuing operations and EPS of $1.30 from discontinued operations. This $1.30 includes the preliminary gain on the sale of Global Connect of $1.50, net of taxes, partially offset by an $0.21 Global Connect net loss during the quarter (through the date of sale).
• On a reported basis for the first quarter of 2021 (which included Global Connect through the closing of the sale on March 5, 2021), as compared to the first quarter of 2020 (which included Global Connect for the full quarter):
• • Cash flow from operations decreased to $(45) million, compared to $(5) million in the prior year. Cash flow performance was primarily driven by higher separation-related cash costs.
  • Cash taxes were $38 million, compared to $52 million in the prior year, during which time some additional payments were made in anticipation of the Global Connect separation.
  • Net capital expenditures were 23% lower, at $86 million, compared to $112 million in the prior year largely due to timing and Global Connect.
  • Free cash flow decreased to ($131) million, compared to ($117) million in the prior year, primarily due to separation-related cash costs.
• As it relates to continuing operations for the first quarter of 2021, as compared to the first quarter of 2020:
• • Cash flow from operations increased to $168 million, compared to $121 million in the prior year. Cash flow performance was primarily driven by higher adjusted EBITDA and one-time costs in the prior year.
  • Cash taxes were $17 million, compared to $13 million in the prior year largely due to higher estimated tax payments and the absence of US net operating losses.
  • Net capital expenditures were 12% lower, at $61 million, compared to $69 million in the prior year largely due to timing.
  • New Nielsen free cash flow was $115 million compared to $22 million in the prior year. Free cash flow has been adjusted to exclude certain interest costs, as if the sale of Global Connect and resulting de-levering occurred on January 1, 2020, and to exclude separation-related costs. The prior year also includes cash costs to position Nielsen as a stand-alone company, as if the sale occurred on January 1, 2020.

Financial Position

• We used proceeds from the sale of Global Connect to de-lever in March, as follows: o $1.039 billion partial prepayment of the senior secured term loans due 2023
  o $265 million partial prepayment of the senior secured term loans due 2025, and o $150 million redemption of 5.500% senior notes due 2021.
• In April, we redeemed $825 million of outstanding aggregate principal amount of the 5.000% senior notes due 2022.
• At March 31, 2021, we had cash and cash equivalents of $1.197 billion and gross debt of $6.752 billion, resulting in net debt (gross debt less cash and cash equivalents) of $5.555 billion and a net debt leverage ratio of 3.77x.

Dividend

On April 22, 2021, our Board of Directors declared a quarterly dividend of $0.06 per share of Nielsen's common stock. The $21 million estimated dividend is payable on June 17, 2021 to shareholders of record at the close of business on June 3, 2021.

2021 New Nielsen Full Year Guidance

The Company is updating full year 2021 guidance as highlighted below:

• Total revenue growth on a constant currency basis: 2.0% to 3.0%
• Organic revenue growth on a constant currency basis: 3.5% to 4.5%
• Adjusted EBITDA margin: 42.25% to 42.5%
• Adjusted EBITDA: $1,470 - $1,490 million (previously $1,460 - $1,480 million)
• Adjusted earnings per share: $1.47 - $1.58 (previously $1.43 - $1.54)
• Free cash flow: $595 - $645 million (previously $580 - $630 million)

These estimates reflect the New Nielsen as if the sale of Global Connect occurred on January 1, 2020. The estimates exclude $220 - $240 million of separation-related costs related to the sale.

2021 New Nielsen Guidance Non-GAAP Reconciliations

These reconciliations include preliminary forecasts based on current expectations and include certain assumptions on the classification and timing of certain separation-related costs and the tax deductibility of such costs. These estimates reflect the New Nielsen as if the sale of Global Connect occurred on January 1, 2020.

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The below table presents 2021 growth rate guidance, based on 2020 revenue on a constant currency basis.

(IN MILLIONS;				2021 Growth
REVENUE & GROWTH ON A CONSTANT CURRENCY BASIS)		2020 Revenue		Rate Guidance
Constant Currency Revenue	~$3,390		2.0% to 3.0%
Organic Revenue	~$3,330		3.5% to 4.5%

The below table presents a reconciliation from Net Income from continuing operations to Adjusted EBITDA for our 2021 guidance:

(IN MILLIONS)
Net income from continuing operations ............................	$350 - $380
Interest expense, net .............................................................	~290
Provision for income taxes ...................................................	~135
Depreciation and amortization ..............................................	~575
Restructuring charges ...........................................................	~30
Share-based compensation expense and Other ......................		~90
Adjusted EBITDA ..............................................................	$1,470 - $1,490

The below table presents a reconciliation from Net Income from Continuing Operations Attributable to Nielsen Shareholders to Adjusted Net Income used to calculate Adjusted Earnings per Share (diluted) for our 2021 guidance:

(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
Net income from continuing operations
attributable to Nielsen shareholders ...............................	$335	- $365
Depreciation and amortization associated with
acquisition-related tangible and intangible assets ...............	~150
Restructuring charges ...........................................................	~30
Share-based compensation expense and Other ......................	~90
Tax effect of above items ......................................................		(~70)
Adjusted Net Income .........................................................		$530	- $570
Adjusted EPS .....................................................................		$1.47	- $1.58

The below table presents a reconciliation from New Nielsen Net Cash Provided by Operating Activities to Free Cash Flow for our 2021 guidance. The estimates exclude $220 - $240 million of separation-related costs related to the sale.

(IN MILLIONS)
Net cash provided by operating activities .............................	$900 - $950
Less: Capital expenditures, net .............................................		(~305)
Free cash flow ......................................................................		$595 - $645

Conference Call and Webcast

Nielsen will hold a conference call to discuss today's announcements at 8:00 a.m. U.S. Eastern Time (ET) on May 6, 2021. The audio and slides for the call can be accessed live by webcast at http://nielsen.com/investors or by registering for the call using the registration link below. Once registered, participants will receive an email with dial-in information along with a unique access code and PIN used to enter the call. Participant Online Registration: https://www.incommglobalevents.com/registration/client/7438/q1-2021-nielsen-holdings-plc-earnings-conference-call/

A replay of the event will be available on Nielsen's Investor Relations website, http://nielsen.com/investors from 11:00 a.m. Eastern Time, May 6, 2021 until 11:59 p.m. Eastern Time, May 13, 2021. The replay can be accessed Participant Conference

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Replay Access: https://www.incommglobalevents.com/replay/5903/q1-2021-nielsen-holdings-plc-earnings-conference-call/

Replay Access Code: 948806

Forward-looking Statements

This communication includes information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements include those set forth below relating to "2021 New Nielsen Full Year Guidance" as well as those that may be identified by words such as "will," "intend," "expect," "anticipate," "should," "could" and similar expressions. These statements are subject to risks and uncertainties, and actual results and events could differ materially from what presently is expected. Factors leading thereto may include, without limitation, the risks related to the COVID-19 pandemic on the global economy and financial markets, the uncertainties relating to the impact of the COVID-19 pandemic on Nielsen's business, the final calculation of the gain on the sale with respect to our Global Connect business, which is currently pending finalization of various estimates, the failure of our new business strategy in accomplishing our objectives, conditions in the markets Nielsen is engaged in, behavior of customers, suppliers and competitors, technological developments, as well as legal and regulatory rules affecting Nielsen's business and other specific risk factors that are out lined in our disclosure filings and materials, which you can find on http://www.nielsen.com/investors, such as our 10-K,10-Q and 8-K reports that have been filed with the Securities and Exchange Commission. Please consult these documents for a more complete understanding of these risks and uncertainties. This list of factors is not intended to be exhaustive. Such forward-looking statements only speak as of the date of this communication, and we assume no obligation to update any written or oral forward- looking statement made by us or on our behalf as a result of new information, future events or other factors, except as required by law.

About Nielsen

Nielsen Holdings plc (NYSE: NLSN) is a leading global data and analytics company that provides a holistic and objective understanding of the media industry. With offerings spanning audience measurement, audience outcomes and content, Nielsen offers its clients and partners simple solutions to complex questions and optimizes the value of their investments and growth strategies. It is the only company that can offer de-duplicatedcross-media audience measurement. Audience is Everything™ to Nielsen and its clients, and Nielsen is committed to ensuring that every voice counts.

An S&P 500 company, Nielsen offers measurement and analytics service in nearly 60 countries. Learn more at www.nielsen.com or www.nielsen.com/investors and connect with us on twitter.com/Nielsen, linkedin.com/company/nielsen, facebook.com/Nielsen and instagram.com/lifeatnielsen.

Condensed Consolidated Financial Statements

The following sets forth our unaudited financial statements for the periods indicated:

• Condensed Consolidated Statements of Operations
• Condensed Consolidated Balance Sheets
• Condensed Consolidated Statements of Cash Flows

These financial statements are unaudited, but in our opinion contain necessary adjustments for a fair presentation in accordance with GAAP. Given the sale of our Connect business in the quarter, Connect amounts are presented in separate discontinued operations line items in the Statements of Operations and in the Balance Sheets. The Condensed Consolidated Statement of Cash Flows presents combined cash flows from continuing operations with cash flows from discontinued operations within each cash flow statement category.

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Results of Operations

The following table sets forth, for the periods indicated, the amounts included in our condensed consolidated statements of operations:

		Three Months Ended
		March 31,
		(Unaudited)
(IN MILLIONS, EXCEPT SHARE AND PER SHARE
DATA)		2021			2020
Revenues	$	863		$	842
Cost of revenues		277			324
Selling, general and administrative expenses		206			202
Depreciation and amortization		127			136
Restructuring charges		-		3
Operating income		253			177
Interest income		-		1
Interest expense		(80)		(83)
Foreign currency exchange transaction losses, net		(4)		(9)
Other expense, net		-		(1)
Income from continuing operations before income taxes and
equity in net income/(loss) of affiliates		169			85
Provision for income taxes		(60)		(25)
Net income from continuing operations		109			60
Net income/(loss) from discontinued operations, net of
income taxes		467			(73)
Net income/(loss)		576			(13)
Net income attributable to noncontrolling interests		3			5
Net income/(loss) attributable to Nielsen shareholders	$	573		$	(18)
Net income/(loss) per share of common stock, basic
Net income from continuing operations attributable to
Nielsen shareholders	$	0.30		$	0.16
Net income/(loss) from discontinued operations attributable
to Nielsen shareholders	$	1.30		$	(0.21)
Net income/(loss) attributable to Nielsen shareholders	$	1.60		$	(0.05)
Net income/(loss) per share of common stock, diluted
Net income from continuing operations attributable to
Nielsen shareholders	$	0.29		$	0.16
Net income/(loss) from discontinued operations attributable
to Nielsen shareholders	$	1.30		$	(0.21)
Net income/(loss) attributable to Nielsen shareholders	$	1.59		$	(0.05)
Weighted-average shares of common stock outstanding, basic		357,944,731			356,389,022
Dilutive shares of common stock		2,244,591			1,272,358
Weighted-average shares of common stock outstanding,
diluted		360,189,322			357,661,380

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