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NIELSEN 2014 ANALYST DAY
DECEMBER 9, 2014
WELCOME AND AGENDA
KATE VANEK SVP, Investor Relations
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FORWARD LOOKING STATEMENT
The following discussion contains forward-looking statements, including those about Nielsen’s outlook and prospects, in the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those which are not historical facts. These and other statements that relate to future results and events are based on Nielsen’s current expectations as of December 9, 2014.
Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. The risks and uncertainties that we believe are material are outlined in our disclosure filings and materials, which you can find on http://ir.nielsen.com. Please consult these documents for a more complete understanding of these risks and uncertainties. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
Our outlook is provided for the purpose of providing information about current expectations for 2014 and 2015. This information may not be appropriate for other purposes.
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AGENDA
7:45am Breakfast & Nielsen Experience Lounge
8:15am Welcome & Agenda Kate Vanek, SVP Investor Relations
8:20am Opening Remarks: The Nielsen of Today & Tomorrow Mitch Barns, Chief Executive Officer
8:35am Long Term Financial Goals and Framework for Future Growth Jamere Jackson, Chief Financial Officer
8:50am The Nielsen Advantage: Leveraging Our Global Platform Brian West, Chief Operating Officer
9:05am Q&A
CAPTURING THE TOTAL AUDIENCE 9:20am Measuring the Consumer in a Changing Video Landscape Steve Hasker, Global President
9:35am Bringing Clarity to a Complex Ecosystem Megan Clarken, EVP – Global Product Leadership, Watch
9:55am Q&A
10:10am Total Audience Panel Discussion David Fischer (Facebook), Jeremy Helfand (Adobe), Dave Morgan (Simulmedia), & Howard Shimmel (Turner Broadcasting)
10:45am Break
GLOBAL OPPORTUNITIES & WHERE WATCH MEETS BUY 11:05am Global Buy: The Opportunities Ahead John Lewis, Global President
11:20am Winning in Southeast Asia: A Local Perspective Cheong Tai Leung, President, Southeast Asia, North Asia and Pacific
11:30am Marketing Effectiveness: A Growth Driver John Burbank, President, Strategic Initiatives
11:45am Q&A
12:00pm Closing Remarks Mitch Barns, Chief Executive Officer
12:05pm Lunch & Nielsen Experience Lounge (concludes at 2:00pm)
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NIELSEN EXPERIENCE LOUNGE
REACTION REACH RESONANCE
• Total Audience: - Online Campaign Ratings - Digital Content Ratings - Digital Audio - VOD/ Programmatic - Measurement Science - Privacy
• Local Markets & Local Buyer Reach
• E-Commerce – Omni Channel
• Nielsen Answers® On-Demand & Global Track Complete
• Nielsen Social
• Brand Effect Suite
• Nielsen Fourier One Headset (Neurofocus)
• Marketing Mix Modeling
• Multi-touch Attribution
• Nielsen Catalina Solutions
• Nielsen Buyer Insights
A VIEW OF OUR DIFFERENTIATED GLOBAL VALUE PROPOSITION
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KEEPING PACE WITH THE CHANGING LANDSCAPE
Download the Nielsen Analyst Day App!
THE NIELSEN OF TODAY & TOMORROW
MITCH BARNS Chief Executive Officer
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2014 HIGHLIGHTS
AUDIENCE MEASUREMENT: 6%+ GROWTH
DIGITAL PROGRESS: MOBILE, OCR, CONTENT
ADVERTISER SOLUTIONS: DOUBLE-DIGIT GROWTH
EMERGING MARKETS: GROWTH ACCELERATING
KEY ACQUISITIONS: FULLY INTEGRATED
PARTNERSHIPS: ADDING VALUE
CAPITAL ALLOCATION: BIG YEAR
BIGGER, STRONGER…WELL-POSITIONED FOR 2015
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THE NIELSEN VALUE PROPOSITION
CONSUMER FOCUS
PERFORMANCE MANAGEMENT
POWERFUL BUSINESS MODEL DRIVES CONSISTENT PERFORMANCE
GLOBAL PRESENCE
BROADCASTTV
CABLE SATELLITE TV
TIME SHIFTING
DIGITAL
WATCH
MOBILE
BUY
GROCERY MASS RETAIL
DRUG STORE
CLUB OUTLETS
SPECIALTY STORE
E-COMMERCE
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CONSISTENT PERFORMANCE THROUGH THE CYCLES
$167 $229
$528 $635
$770
'09 '10 '11 '12 '13 '14E
$4.6 $4.9
$5.3 $5.4 $5.7
~ $6.3
'09 '10 '11 '12 '13 '14E
$1.2 $1.3
$1.5 $1.5 $1.6
'09 '10 '11 '12 '13 '14E
5% CAGR(a) 9%
CAGR
42% CAGR
Note: Revenue, Adjusted EBITDA and Adjusted Net Income growth rates derived on a constant currency basis; figures are as reported. (a) Revenue CAGR excludes Audio and Harris acquisitions; figures are as reported. (b) Reflects Net Debt (gross debt minus cash), divided by Adjusted EBITDA calculated on last twelve months. 2013 is ProForma and includes nine months of Arbitron Adjusted EBITDA of $117 million. 2011 and 2012 exclude $288M of mandatory convertible subordinated debt. (c) Excludes impact of 2011 Sponsor Termination Fees ($102M) and 2013 one-time Arbitron deal-related costs ($46M).
~$1.8 -$1.9 ~$970
6.2x 5.8x
4.0x 3.8x 3.5xPF
'09 '10 '11 '12 '13 '14E
~3.5x
$235 $209
$376 $426
$573
'09 '10 '11 '12 '13 '14E
~$700
24% CAGR
REVENUE ($B) ADJUSTED EBITDA ($B) ADJUSTED NET INCOME ($M)
NET DEBT LEVERAGE RATIO(b) FREE CASH FLOW ($M)(c)
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STRONG LEADERSHIP TEAM
Steve Hasker Global President
Megan Clarken EVP, Global Product
Leadership, Watch
Cheong Tai Leung President, SEANAP
John Lewis Global President
Kate Vanek SVP, Investor Relations
Brian J. West Chief Operating Officer
Jamere Jackson Chief Financial Officer
John Burbank President,
Strategic Initiatives
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KEY THEMES FOR TODAY
THE GROWING VALUE OF INDEPENDENT, 3RD PARTY MEASUREMENT
TOTAL AUDIENCE: ONLY NIELSEN
THE KEY TO OUR ACCELERATING GROWTH IN EMERGING MARKETS
IMPROVING THE VALUE OF ADVERTISING
THE DRIVERS OF OUR CONSISTENT PERFORMANCE THROUGH THE CYCLES
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THE FUTURE OF NIELSEN
LONG TERM PERSISTENT TAILWINDS DRIVING GROWTH
INDEPENDENT 3RD PARTY MEASUREMENT GROWS EVEN MORE VALUABLE
GROWING ROLE OF TECHNOLOGY DRIVES…
• CLOSER LINKAGES WITH CLIENTS • SPEED AND PRODUCTIVITY • DIFFERENTIATION
CONSISTENT GROWTH, EXPANDING MARGINS, AND INCREMENTAL VALUE
THE NIELSEN ADVANTAGE: LEVERAGING OUR GLOBAL PLATFORM
BRIAN WEST Chief Operating Officer
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DATA ENRICHMENT Reference Data
DATA SCIENCE Market Projection
DATA INTERCHANGE Integration Services
ANALYTICS Advanced Algorithms
OUR STRONG FOUNDATION
Video Audio Online
Social Media
Point of Sale
Payments
Panel Survey
VAST DATA ASSETS UNIQUE VALUE ADD PERFORMANCE MANAGEMENT
OUR CLIENTS Measurement Improvement
WELL-POSITIONED FOR TODAY’S NECESSITIES AND TOMORROW’S OPPORTUNITIES
Mobile
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INTELLECTUAL PROPERTY GROWTH STRENGTHENS COMPETITIVE ADVANTAGES
TOTAL AUDIENCE INTELLECTUAL PROPERTY
Proprietary Gold Standard Panels
Third Party Data Sets
Media Ratings Council (MRC) accredited
>2,000 measurement scientists and engineers
>2,200 patents granted worldwide
4x increase since 2006
INTELLECTUAL PROPERTY TO ACCELERATE INNOVATION
Advanced Mobile Capabilities
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RETURN PATH TV SETS
TUNING DATA
SURFING BEHAVIOR
SET TOP BOX DATASET
COMPREHENSIVE PANEL DEMOGRAPHICS INFORM BIG DATASETS
NIELSEN QUALITY & PRIVACY STANDARDS
DEEPER GRANULARITY
GREATER STABILITY
NIELSEN HOUSEHOLD PANELIST
BIG DATA AND THE PANEL
AGE GENDER EDUCATION
INCOME
PRESENCE OF CHILDREN MARITAL
STATUS
PHONE/ INTERNET PROVIDER
LAN
GU
AG
E
SPO
KEN
OCCUPATION
ETHNICITY
GAMING CONSOLE
# TV SETS
# SMARTPHONES
# TABLETS SVOD&VOD VISITORS
PET OWNER
AUT
OS
(#/T
YPE)
HOME
OWNER
DVDs DVRs
HDTVs
PCs
CO
NSU
MER
SE
GM
ENT
VISITORS
CALIBRATION
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CLIENTS’ VIEW OF DATA TODAY
Panel Data
Macroeconomic Indicators
Other Third Party
Shipments
Financial
Inventory
AN OPPORTUNITY FOR NIELSEN
Point of Sale Data
Other Third Party
Audience - Reach
Customer Relationship Management
Planning & Optimization
DISTRIBUTION DATA CONSUMPTION DATA MARKETING DATA
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ENABLING AND INTEGRATING DATA FOR CLIENTS
LOWERING SYSTEM COSTS & UNLOCKING GROWTH THROUGH TECHNOLOGY
Panel Harmonization
Financial Inventory
Other Third Party
Macroeconomic Indicators
Shipments
Customer Relationship Management
Point of Sale
Audience - Reach
Application Protocol Interfaces (API’s)
Master Data Management
Planning & Optimization
Harmonization
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RUNWAY FOR FUTURE PRODUCTIVITY
4,000 applications
~2,000 applications
<1,000 applications
50% revenue generated by
electronic data collection
SHARED SERVICES for 45% of operations
SHARED SERVICES for 9% of operations
SHARED SERVICES for 75% of operations
75% revenue generated by
electronic data collection
95% revenue generated by
electronic data collection
REGENERATIVE PRODUCTIVITY GAINS
2007 2014 2017
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FOCUSING AT THE ENTERPRISE LEVEL
IDENTIFY DEMAND
ENGAGE CHANNELS &
CONTENT
Measurement
ACTIVATE AT POINT OF SALE
MANAGE Performance analytics
MOBILIZE Accountability metrics
MEASURE Right analytics from prospect to conversion
MODEL Algorithm enabled modeling at scale
PROVIDING CLIENTS WITH END-TO-END SOLUTIONS
Consumer Data
Performance Management
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THE NIELSEN ADVANTAGE
PROPRIETARY DATA ASSETS AND UNIQUE VALUE ADD
UNLOCKING VALUE FOR CLIENTS THROUGH PERFORMANCE MANAGEMENT
ACCELERATING INNOVATION WITH OUR PEOPLE AND TECHNOLOGY
OPPORTUNITY FOR CONTINUED MARGIN IMPROVEMENT THROUGH PRODUCTIVITY
ENABLEMENT THROUGH PARTNERSHIPS
MEASURING THE CONSUMER IN A CHANGING VIDEO LANDSCAPE
STEVE HASKER Global President
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PREVAILING TRENDS IN VIDEO
AUDIENCE FRAGMENTATION IS ACCELERATING
MEDIA COMPANIES ARE EXPLORING NEW BUSINESS MODELS
MEASUREMENT NEEDS ARE EXPANDING BEYOND C3/C7
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THE EVOLUTION OF MEDIA
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OVERALL MEDIA USAGE IS INCREASING
Source: Nielsen
0
4
9
14
19
24
28
33
38
43
48
52
2002 2004 2009 2014
Tablet
Smartphone
Online
Multimedia Device
VCR
Game Console
DVD / Blu-Ray
Time-Shifted TV
Live TV
HO
UR
S P
ER W
EEK
WEEKLY TIME SPENT
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THE VIDEO VIEWING LANDSCAPE
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
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THE VIDEO VIEWING LANDSCAPE - 2007
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
C3
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THE VIDEO VIEWING LANDSCAPE - 2011
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
C3
Online Campaign
Ratings
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THE VIDEO VIEWING LANDSCAPE - 2015
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
C3/C7
Online Campaign Ratings
Digital Content Ratings
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NIELSEN’S MISSION IS TO MEASURE TOTAL AUDIENCE FOR CONTENT AND CAMPAIGNS
VIDEO
AUDIO
TEXT
HOW DID IT CHANGE BEHAVIOR?
• Nielsen Catalina Solutions
• Buyer Insights
• Marketing Mix Modeling / Multi-Touch Attribution
REACTION
• Nielsen Social
• Brand Effect
• Nielsen Neuro
RESONANCE HOW DID IT CHANGE ATTITUDES?
• Total Audience for Content
• Total Audience for Campaigns
REACH WHAT TOTAL AUDIENCE DID I REACH?
ENABLING DIRECT AND PROGRAMMATIC AD MODELS
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THE DIGITAL OPPORTUNITY
$83B
AD SPEND MEASUREMENT SPEND
WHAT WE SAID LAST DECEMBER…
$15B ~2%
$18B
<1%
~$300M opportunity
~$200M opportunity
2017 Digital Video (incl. Mobile) Spend 2017 Digital Display Spend 2013-2017 CAGR: 25% 2013-2017 CAGR: 11%
2%
2013 TV/Radio Spend 2013-2017 CAGR: 4%
AD SPEND MEASUREMENT SPEND
AD SPEND MEASUREMENT SPEND
U.S. INDUSTRY OUTLOOK
WHERE WE ARE TODAY...
ON-TRACK – GROWING RAPIDLY
18 OUT OF TOP 25 ADVERTISERS ENDORSE OCR
PUBLISHER CLIENTS – SEEING INCREASED DEMAND FOR OCR IN RFPs
DIGITAL CONTENT RATINGS – A GAME CHANGER FOR DIGITAL PLANNING
Source: PwC Media & Entertainment Outlook 2013, e-Marketer, Nielsen financials; Excludes Display Mobile
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WELL-POSITIONED TO TAKE ADVANTAGE OF PREVAILING TRENDS IN VIDEO
AUDIENCE FRAGMENTATION IS ACCELERATING…FRAGMENTATION IS OUR FRIEND
MEDIA COMPANIES ARE EXPLORING NEW BUSINESS MODELS…CREATING DEMAND FOR ONE STANDARD
MEASUREMENT NEEDS ARE EXPANDING BEYOND C3/C7…TOTAL AUDIENCE
BRINGING CLARITY TO A COMPLEX ECOSYSTEM
MEGAN CLARKEN EVP – Global Product Leadership, Watch
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MEASURING WHAT NO ONE ELSE CAN
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
2015
2015
VOD and SVOD
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MEASURING WHAT NO ONE ELSE CAN
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
yna
mic
2015
2015
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DIFFERENTIATED CROSS PLATFORM ARCHITECTURE
TWO TYPES OF CONTENT
Native Digital Content
HARDWARE METER
Linear Ratings
GOLD STANDARD PROCESS
ONE ENCODING PROCESS
COMPARABLE OVERNIGHT RATING
Digital Ratings
Cross Platform
Traditional Linear Content
MRC ACCREDITED UNIVERSAL
BIG DATA ENABLED MEASUREMENT
HARDWARE & SOFTWARE
METER
ONE CLIENT-SIDE IMPLEMENTATION
SDKs
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NIELSEN AND ADOBE
Adobe Analytics
Nielsen Content Ratings
Seamless Integration • Instant Market Coverage • Consistency and Alignment
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THE ONLY TOTAL AUDIENCE MEASUREMENT
Programs & Ads
Content
Ads
TV OTT PC TABLET SMARTPHONE
linea
r d
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mic
TOTAL AUDIENCE FOR MEDIA OWNERS
TOTAL AUDIENCE
FOR ADVERTISERS
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OUR PANEL IS THE SINGLE SOURCE OF TRUTH
World’s first multi-screen
sample quality and granularity +
Big data through return path data
=
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OUR ONGOING ROLE IN A CHANGING ADVERTISING LANDSCAPE
3000+ unique
segments
OCR validation
MALE 18-24
WATCHES SPORTS BUYS SALTY SNACKS INCOME $50-55K
programmatic marketplace
on-target accountability
reporting
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BRINGING CLARITY TO A COMPLEX ECOSYSTEM
TOTAL AUDIENCE AND SINGLE SOURCE OF TRUTH
FUELING THE BUYING/SELLING ECOSYSTEM
STRONG PROGRESS ON EXECUTION
MEASURING THE TOTAL CONSUMER FOR OUR CLIENTS
GLOBAL BUY: THE OPPORTUNITIES AHEAD
JOHN LEWIS Global President
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WHY WE WIN
GLOBAL
NEW BUSINESS WINS AND GROWTH FUELED BY COMPETITIVE ADVANTAGES
INTEGRATED MEASUREMENT &
ANALYTICS
COVERAGE & GRANULARITY
PARTNERSHIPS
WATCH + BUY
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BIG, GLOBAL TRENDS DRIVING NEW OPPORTUNITIES
WE’RE WELL-POSITIONED TO CAPITALIZE ON THESE TRENDS
Positive long-term CPG outlook
Emerging Markets: Population growth, rising middle class
Rise of e-commerce Shift in traditional
retail
Developed Markets: Low growth,
aging population
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OUR GLOBAL FOOTPRINT
106 COUNTRIES 90+% OF GLOBAL POPULATION AND GDP
Emerging Priority TIER I EMERGING
DEVELOPED
TIER II EMERGING
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REGIONS % OF GLOBAL POPULATION STRATEGIC FOCUS
11% MANAGING PERFORMANCE IN LOW-GROWTH ENVIRONMENT
28% COVERAGE
50% COVERAGE
INVEST AHEAD OF CURVE
MULTIPLE OPPORTUNITIES FOR NIELSEN
TIER I EMERGING
DEVELOPED
TIER II EMERGING
A SEGMENTED APPROACH TO OPPORTUNITY
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NIELSEN GLOBAL INSIGHTS DRIVE BIG OUTCOMES
INSIGHTS AMPLIFIES MEASUREMENT
MEASUREMENT MEASUREMENT + INSIGHTS
NIELSEN CAPABILITIES
ACQUIRED CAPABILITIES
ASSORTMENT & SHELF OPTIMIZATION
US SURVEY-BASED INSIGHTS
MARKETING TECHNOLOGY PLATFORM ENHANCING INNOVATION
ECONOMIC MODELING & FORECASTING
PLANNING MEASUREMENT
EXECUTION
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PROGRESS IN E-COMMERCE
CONVERGING WATCH & BUY CLIENT ACTIVITY PRODUCTS
• Alibaba (China)
• Amazon (U.S.)
• Lazada (Thailand)
• Read of sales in e-commerce channel
• Harmonized read of total sales online and offline
• E-commerce sales analytics
• Not only retail but also as media and marketing platforms
• Individual and mobile measurement capabilities
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OUR BUY SEGMENT: POSITIONED FOR GLOBAL GROWTH
INCREASING COVERAGE
EXPANDING ANALYTICAL CAPABILITIES
WINNING NEW CLIENTS BOTH LOCAL AND GLOBAL
BUILDING MOMENTUM IN EMERGING MARKETS
FUTURE IS BRIGHT WITH E-COMMERCE
WINNING IN SOUTHEAST ASIA: A LOCAL PERSPECTIVE
CHEONG TAI LEUNG President, Southeast Asia, North Asia and Pacific
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SOUTHEAST ASIA ON THE RISE
LARGE, DIVERSE REGION
THAILAND
LAOS
VIETNAM
MALAYSIA SINGAPORE
PHILIPPINES
INDONESIA
CAMBODIA
TODAY 600M people
190M middle class
6M high net worth individuals
IN 2025 930M people
400M middle class
28M high net worth individuals
9th largest economy in the world
$583B business infrastructure slated
4th largest exporting region
$2T GDP
Increasing to $3.4T by 2020, growing at 8% per annum
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EXPANDING THE NIELSEN PORTFOLIO
Source: Nielsen
40%
27%
33% LOCAL GIANTS
ASIAN GIANTS
GLOBAL GIANTS
TOTAL 2014 CPG SALES IN SOUTHEAST ASIA
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SNAPSHOT: INDONESIA
Middle class to
TRIPLE TO 170M by 2020
GDP per capita to
DOUBLE to $9K by 2020
• ME-GENERATION
• BIG ON TRAVEL
• FORWARD LOOKING
• TERTIARY EDUCATED
YOUNG, ONLINE AND READY TO BUY
WORLD’S MOST CONFIDENT CONSUMERS
7th largest economy
by 2030 IKA
CASE STUDY: MAYORA
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1977 1990 1990s / early 2000’s 2014 and beyond
Home-based, home-made
biscuit business
Listed on Jakarta Stock Exchange
Established facilities in
Southeast Asia
Rapid ASEAN expansion
Taking the global stage
>
2003
Trusted business advisor
FROM HUMBLE BEGINNINGS TO INTERNATIONAL ASPIRATIONS
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At home and beyond ENABLING THE EVOLUTION OF A LOCAL GIANT
TRANSACTIONAL
STRATEGIC
INSTINCTS INSIGHTS
INDONESIA
VIETNAM AFRICA
EASTERN EUROPE
BRAZIL
MINIMIZING RISK, MAXIMIZING GROWTH
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OUR DIFFERENTIATED APPROACH
STRONG PARTNERSHIPS AND GROWTH OPPORTUNITIES WITH GLOBAL, LOCAL AND ASIAN GIANTS
SEGMENTED APPROACH TO OPPORTUNITY
GLOBAL VIEW OF MARKETS AND CONSUMERS
MARKETING EFFECTIVENESS: A GROWTH DRIVER JOHN BURBANK President, Strategic Initiatives
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ADVERTISER SOLUTIONS MARKETING EFFECTIVENESS
ADDRESS THE QUESTION OF HOW TO BUILD BRANDS IN AN INCREASINGLY COMPLICATED ADVERTISING AND PROMOTIONAL ENVIRONMENT
BRING OUR LANGUAGE IN LINE WITH THE INDUSTRY
WHY THE CHANGE TO MARKETING EFFECTIVENESS?
HOW DID IT CHANGE BEHAVIOR?
REACTION RESONANCE HOW DID IT CHANGE ATTITUDES?
REACH WHAT TOTAL AUDIENCE DID I REACH?
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MORE TECHNOLOGY, MORE CONSUMER DATA
SOCIAL NETWORKS AND VIDEO APPS
MOBILE COMMERCE AND PAYMENTS
SMART HOMES AND APPLIANCES
WEARABLES
IP CONNECTED AUTOS
IN-STORE AND LOCATION-BASED SERVICES
MORE DATA, MORE COMPLEXITY? CONSUMER PRIVACY? DATA SECURITY?
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CREDIT/DEBIT
LOYALTY
MOBILE
BUY DATA TRANSFORMATION
LOTS OF 1ST PARTY DATA – BUT WITHOUT OUR PANEL, DIFFICULT TO SEE THE TOTAL VIEW
Cash-based, anonymous transactions make way for “traceable” transactions
TIME
PANEL
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WATCH DATA TRANSFORMATION Anonymous, broadcast distribution replaced by digital delivery
REGISTRATION
DEVICE IDs
COOKIES
TIME
PANEL
LOTS OF 1ST PARTY DATA – BUT WITHOUT OUR PANEL, DIFFICULT TO SEE THE TOTAL VIEW
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NIELSEN SOLUTION Nielsen integrates with 1st party datasets to provide total view
SHIFT MEDIA PLANNING FROM DEMOGRAPHICS TO DEMOS+
Match 1ST party data to Nielsen total audience measurement
PLANNING
ENABLE MARKETERS TO MAKE ADJUSTMENTS TO PLANS INFLIGHT
OPTIMIZATION Integrate daily total audience reach within overall marketing data sets
ROI Assemble longitudinal view of all marketing elements and actual sales
OUR CAPABILITIES IMPACT
DRIVE HIGHER ROI / BUILD STRONGER BRANDS
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NIELSEN IS UNIQUELY POSITIONED
• 90+ years with retailers, media and manufacturers • Independent 3rd party • Sterling reputation with regard to consumer privacy
• Most experienced measurement scientists anywhere • Proprietary panels – the source of truth • Reference data and hierarchies across Watch & Buy
• Combine with Nielsen’s industry standard datasets • Embed in systems across the ecosystem
DATA OWNERS TRUST NIELSEN
UNIQUE ABILITY TO ENRICH DATA
CONNECT AND ACTIVATE
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MARKETING EFFECTIVENESS: GROWTH OPPORTUNITIES
NO DATA SET ON ITS OWN WILL TELL THE COMPLETE STORY…OUR PANEL IS CRUCIAL
THE VOLUME AND GRANULARITY OF WATCH AND BUY DATA WILL CONTINUE TO EXPAND
WE ARE UNIQUELY TRUSTED TO PROTECT CONSUMER PRIVACY AND THE DATA OWNER’S SECURITY
WE CAN EXTEND BEYOND CPG TO VIRTUALLY ANY CONSUMER CATEGORY
NIELSEN IS THE ONLY COMPANY POSITIONED TO ASSEMBLE THE TOTAL VIEW
MARKETING WILL CONTINUE TO GROW MORE COMPLEX
CLOSING REMARKS
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THE NIELSEN VALUE PROPOSITION
CONSUMER FOCUS
GLOBAL PRESENCE
PERFORMANCE MANAGEMENT
POWERFUL BUSINESS MODEL DRIVES CONSISTENT PERFORMANCE
APPENDIX
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CERTAIN NON-GAAP MEASURES
Overview of Non-GAAP Presentations We use the non-GAAP financial measures discussed below to evaluate the results of our operations. We believe that the presentation of these non-GAAP measures provides useful information to investors regarding financial and business trends related to our results of operations, cash flows and indebtedness and that when this non-GAAP financial information is viewed with our GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance. None of the non-GAAP measures presented should be considered as an alternative to net income or loss, operating income or loss, cash flows from operating activities, total indebtedness or any other measures of operating performance and financial condition, liquidity or indebtedness derived in accordance with GAAP. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Our use of these terms may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. Constant Currency Presentation We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results. Net Debt and Net Debt Leverage Ratio The net debt leverage ratio is defined as net debt (gross debt less cash and cash equivalents) as of the balance sheet date divided by Adjusted EBITDA for the twelve months then ended. Net debt and the net debt leverage ratio are commonly used metrics to evaluate and compare leverage between companies and are not presentations made in accordance with GAAP.
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CERTAIN NON-GAAP MEASURES (continued)
Adjusted EBITDA We define Adjusted EBITDA as net income or loss from our consolidated statements of operations before interest income and expense, income taxes, depreciation and amortization, restructuring charges, goodwill and intangible asset impairment charges, stock-based compensation expense and other non-operating items from our consolidated statements of operations as well as certain other items considered unusual or non-recurring in nature. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments, to evaluate and fund incentive compensation programs and to compare our results to those of our competitors. Adjusted Net Income We define Adjusted Net Income as net income or loss from our consolidated statements of operations before income taxes, depreciation and amortization associated with acquired tangible and intangible assets, restructuring charges, goodwill and intangible asset impairment charges, other non-operating items from our consolidated statements of operations and certain other items considered unusual or non-recurring in nature, reduced by cash paid for income taxes. Also excluded from Adjusted Net Income is interest expense attributable to the mandatorily convertible subordinated bonds converted on February 1, 2013. Adjusted Net Income per share of common stock presented on a diluted basis includes the weighted-average amount of shares of common stock convertible associated with the mandatorily convertible bonds based upon the average price of our common stock during the periods beginning on or before February 1, 2013. Such shares are considered anti-dilutive in accordance with GAAP for the periods presented. Free Cash Flow We define free cash flow as net cash provided by operating activities, normalized for non-recurring Arbitron transaction costs, less capital expenditures. We believe providing free cash flow information provides valuable supplemental information regarding the cash flow that may be available for discretionary use by us. Free cash flow is not a presentation made in accordance with GAAP.
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ADJUSTED NET INCOME RECONCILIATION ($ in millions except per share amounts. Year ended December 31 for all years.)
(a) Other items primarily consist of transaction-related fees.
Net income $736 $272 $87 $133 $(489) (Income)/ loss from discontinued operations, net of tax (305) (30) (26) 13 132
Interest expense, net 307 386 443 614 598 Provision / (benefit) for income taxes 91 122 6 (54) (152)
Depreciation and amortization 510 493 502 530 519 EBITDA 1,339 1,243 1,012 1,236 608
Impairment of goodwill and intangible – – – – 402 Equity in net (income)/ loss of affiliates (2) (5) (3) (5) 22 Other non-operating loss/(income), net 34 135 219 (28) 84
Restructuring charges 119 85 83 59 60 Stock-based compensation expense 47 34 27 18 14
Other items (a) 80 12 112 44 36
Adjusted EBITDA 1,617 1,504 1,450 1,324 1,226 Interest expense, net (307) (386) (443) (614) (598)
Depreciation and amortization (510) (493) (502) (530) (519) Depreciation and amortization of acquisition-related
tangible and intangible assets 162 145 161 196 211
Cash paid for income taxes (147) (124) (132) (129) (139) Stock-based compensation expense (47) (34) (27) (18) (14)
Interest expense attributable to mandatory convertible bonds 2 23 21 – –
Adjusted net income 770 635 528 229 167 Adjusted net income per share of common stock, diluted $2.02 $1.69 $1.44 $0.82 $0.61
2013 2012 2011 2010 2009
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ADJUSTED NET INCOME RECONCILIATION
Weighted-average shares of common stock outstanding as of December 31, basic 375,797,629 361,787,868 352,469,181 276,499,073 273,905,810
Dilutive shares of common stock from stock compensation plans 5,130,337 4,523,116 5,032,773 3,153,513 –
Shares of common stock convertible associated with the mandatory convertible bonds 896,994 10,416,700 9,531,994 – –
Shares of common stock convertible associated with the mandatory convertible bonds 381,824,960 376,727,684 367,033,948 279,652,586 273,905,810
2009 2013 2011 2010 2012
(continued) ($ in millions except per share amounts. Year ended December 31 for all years.)
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FREE CASH FLOW REECONCILIATION ($ in millions. Year ended December 31 for all years.)
Net cash provided by operating activities $901 $784 $641 $543 $517
Sponsor termination fee – – 102 – –
One-time Arbitron costs 46 – – – –
Capital expenditures (374) (358) (367) (334) (282)
Free Cash Flow $573 $426 $376 $209 $235
2009 2013 2011 2010 2012
