Nielsen Holdings plc (NYSE:NLSN) Q1 2018 Earnings Conference Call Transcript

Apr 26, 2018 • 08:00 am ET

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Nielsen Holdings plc (NYSE:NLSN) Q1 2018 Earnings Conference Call Transcript

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Presentation
Executive
Jamere Jackson

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Net income was $72 million and net income per share was $0.20, flat with last year. Our net income per share results were driven by revenue growth in our Watch segment, offset by planned investments in our Buy segment growth initiatives, which will taper down throughout the year.

Moving to the right side of the page, on a non-GAAP basis, total revenue was up 2.4% on a constant currency basis. Revenue was also up 2.4% on an organic basis. Watch revenue grew 7.1%, partially offset by a 2.1% decline in Buy revenue. I will provide more color on the segments in just a few moments.

Adjusted EBITDA was $423 million, down 0.7% in constant currency, and adjusted EBITDA margins were 26.3%, down 83 basis points on a constant currency basis. In the quarter, we continued to fund investments that will improve growth and profitability in our business, consistent with the Path to 2020 that we laid out at Investor Day last November.

We remain on track for 60 basis points of margin compression in 2018 on a constant currency basis with improving trends in the second half as our Buy growth initiatives ramp. Finally, we had a free cash flow usage of $245 million. As a reminder, we typically deliver nearly all of our annual free cash flow in the second, third and fourth quarters.

In this year's first quarter, we were impacted by typical seasonality as well as planned investments in retailer and other growth initiatives. We remain on track for our full-year free cash flow plan of approximately $800 million to fuel growth and return cash to our shareholders.

Our Board of directors recently approved a quarterly dividend increase of nearly 3% to $0.35 a share. I also want to highlight that we have $278 million remaining in our existing share repurchase authorization, which we plan to exhaust over the next 12 months. This provides an additional lever to return meaningful amounts of cash to shareholders. This reflects our continued commitment to drive long-term incremental shareholder value and is consistent with the long-term free cash flow allocation framework that we laid out at our Investor Day last November.

Next, I'll move to the segments, starting with Watch. Our Watch segment, which is our largest by both revenue and EBITDA, had another great quarter. Revenue was $834 million, up 7.1% constant currency. On an organic basis, Watch revenue grew 6.2%.

Audience Measurement of Video and Text was up 10.5% constant currency, helped by one month of the Gracenote acquisition and continued momentum in our Total Audience initiatives. On an organic basis, Audience Measurement of Video and Text grew 7%, led by strength in National TV and Digital.

We continued to see momentum in Digital Ad Ratings with a 55% lift in campaigns in the quarter. Digital Content Ratings continued this momentum with a number of new wins with digital publishers and we're also measuring digital content on Amazon Prime Video channels.

Audio was up just under 1%