Nielsen Holdings N.V. (



Q2 2011 Earnings Conference Call

July 28, 2011 8:00 AM EST


Liz Zale – SVP of IR

Dave Calhoun – CEO

Brian West – CFO


Sara Gubins – Bank of America Merrill Lynch

Michael Meltz – JPMorgan

Suzy Stein – Morgan Stanley

Brian Karimzad

Matt Chesler – Deutsche Bank

Eric Boyer – Wells Fargo

Kelly Flynn – Credit Suisse

Aaron Watts – Deutsche Bank

Bishop Sheen – Wells Fargo



Ladies and gentlemen, thank you for holding, and welcome to this conference call on the second quarter 2011 results for Nielsen Holdings N.V.

Please note all lines are in listen-only mode at this time.

I will now turn the call over to the host, Liz Zale, the Senior Vice President of Investor Relations. Ms. Zale, please proceed.

Liz Zale

Thank you. Good morning, everyone. Thanks for joining us for our second quarter results call.

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The following discussion contains forward-looking statements including those about Nielsen’s outlook and prospects that relates to Private Securities Litigation Reform Act of 1995. Forward-looking statements are those which are not historical facts. These and other statements that relates to future results and events are based on Nielsen’s current expectations as of July 28


, 2011.

Our actual results in future periods may differ materially from those currently expected because of a number of risk and uncertainties. The risks and uncertainties that we believe are material are outlined in our disclosure filings and materials which you can find on 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 maybe required by law. Our outlook is provided for the purpose of providing information about current expectations for 2011. This information may not be appropriate for other purposes.

And, with that, I will turn the call over to our CEO, Dave Calhoun.



Good morning, everyone. I’ll give a quick overview of course results for second quarter and then turn it over to Brian, and then get back to Q&A.

We had a very solid quarter. Revenue for the quarter grew at 10%. That’s 5% on a constant currency basis. Adjusted EBITDA grew at a 11%, at 7% on a constant currency basis. And, importantly, we have continued to fund investments for the future at roughly the same pace we left at the end of first quarter.

Two consistent themes driving our business; first and foremost growth of middleclass consumers in the developing markets. That part of our business now is over $1 billion. On a rolling basis it has grew in this quarter at 17% on a constant currency basis. Second major theme, more ways to watch than ever before, and bringing together those variety of screens, our best available screen for consumers continues to represent opportunity for Nielsen.

Geographic representation on growth, slowest growth and planned slowest growth still remains Western Europe; most resilient for sure the United States; and then high growth developing world, developing markets.

Very significant event just occurred, of course, which we announced, and that is having been named preferred provide for the Wal-Mart US business. It’s very hard to overstate the significance to Nielsen, its franchise, the industry, and the client North American base. It’s a big deal. I’ll be happy to take questions towards the end of this. But, again, at least on my watch, probably the most significant event to date.

Key product initiatives remain on track. We’re optimistic. Our Nielsen online campaigns rating product has been through some very thorough beta testing, with lots of advertising clients. It’s resilient. We try to break it everyday. So far we’ve been unable to do so. And we feel good about the progress we’re making. We still have a lot of industry players to educate as we move through this process, but again remain optimistic.

And then, secondly reach and read, which is the extension of our Buy side footprint across the world, China, India, and Africa, we continue to fund and feel good about the potential of both the markets. And, of course, our ability to measure difficult developing economies.

And then, finally, just again a reaffirmation of the guidance that we provided for the course of the year including the recent win here with Wal-Mart.

So, with that, I’m going to turn this over to Brian, and let him run you through some more detail.

Brian West

Thanks Dave. And, we’ll go to the total Nielsen results, that’s page seven of the webcast. For the second quarter, revenue came in at $1.396 billion, that’s up 5% constant currency; and the adjusted EBITDA came in at $386 million, that’s up 7% constant currency versus last year; and our adjusted EBITDA margins on a constant currency basis grew 53 basis points year-over-year. Adjusted net income came in at a $155 million and our diluted ANI per share came in at $0.41.

Couple of things I’d point out is that year-to-date revenue has grown 6% constant currency; our EBITDA growth has been up 8% constant currency; and adjusted net income has come in over $200 million through the first six months. The one point that I’d point to and Dave mentioned it, the FX benefit in the quarter was big, 10% reported for the top line. This time last year, the dollar was the strongest. So I would just remind everyone that as we go through the second half of the year that increment benefit of FX is not going to be so great. If rates stay where they are today, we will get a lift in the second half, but it won’t be nearly as big as it was in the quarter.

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