Nielsen Holdings NV's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Nielsen Holdings NV (NLSN)

Q1 2012 Earnings Call

April 25, 2012 08:30 a.m. ET

Executives

Liz Zale – SVP, IR

David Calhoun – CEO

Brian West – CFO

Analysts

Brian Karimzad – Goldman Sachs

Michael Meltz – JP Morgan

Suzanne Stein – Morgan Stanley

Eric Boyer – Wells Fargo

Sara Gubins – Bank of America/Merill Lynch

Doug Arthur – Evercore

Matt Chesler – Deutsche Bank

Kelly Flynn – Credit Suisse

William Warmington – Raymond James

Robert Riggs – William Blair

William Bird – Lazard

Ashwin Shirvaikar – Citibank

Bishop Sheen – Wells Fargo

Presentation

Operator

Ladies and gentlemen, thank you for holding, and welcome to this conference call on the First Quarter 2012 Results for Nielsen Holdings NV. Please note all lines are in listen-only mode at this time.

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

Liz Zale

Thank you. Good morning, everyone, and thank for joining us to discuss Nielsen’s first quarter financial performance. Joining me on the call today from Nelson is David Calhoun, Chief Executive Officer; and Brian West, Chief Financial Officer. Before we begin our prepared remarks, I’d like to remind all of you that the following discussion contains forward-looking statements within the meaning of Safe Harbor provisions of the Private Securities Litigation Reform of Act of 1995.

These forward-looking statements may include comments about Nielsen’s outlook, expectations and prospects. These and other statements that relate to future financial results and events are based on Nielsen’s view as of today April 25, 2012. 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 Nielsen’s 2011 Form 10-K and other filings and materials, which you can find on ir.nielsen.com. We encourage you to 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 securities laws. A slide presentation that we’ll use on this call is available under the event section of our website at ir.nielsen.com.

We use certain non-GAAP measures to evaluate the results of our operations. We believe these non-GAAP measures provide useful information to investors regarding financial and business trends when viewed in conjunction with our GAAP results of operations. Further definition and a reconciliation of these non-GAAP measures to our results under GAAP is available at the end of our press release within the appendix of the webcast slide presentation and also on our IR website.

And now to start the call, I’d like to introduce our CEO, David Calhoun.

David Calhoun

Hi. Good morning, everyone. We’ll start off with the big numbers in the first quarter. Revenue grew 3% on a reported basis, 4% in the constant currency basis, adjusted EBITDA grew 4% on a reported basis and 5% in the constant currency basis.

Net debt leverage of four times and we completed a secondary offering and guess everyone knows increasing our flow 34.5 million shares. With respect to business conditions, in light of what I consider to be the toughest comp we would face at least since I’ve been here and the pause related to, of course, the incorporation of Walmart data, I feel very good about the business and about the revenue performance. I consider both resilient and positive with respect to client points of view.

If you break down growth, you’ll see our developing markets grew roughly a 11%, that’s versus a 19% comp a year ago. It was interesting. If there is any phenomena going on there that might take that number down a bit relative to the past and it’s hard to actually put your finger on it, it would be the global multinationals are just a little more selective than they have been about country and category combinations as they continue their global development. But I don’t see them lightening up at all, it’s just being selective.

With respect to investing for growth, we remain very much on track. Walmart continues to go well. Most of the operational risks related to the data in incorporation into our metric, all those things that we’re doing with and for Walmart for their insight and benefit are going very well. We continue to be on plan. And I’d say most of those risks are behind us. Global reach and read we continued with vesting very strongly. This again hits whole China, whole India and broadly in Africa and momentum in those markets continues to support those investments.

We continue to invest in online campaign ratings. It’s going very well. I’ll talk about that a little later and in market effectiveness, which is really feeds our insight practices and combines the watch and buy data that we have across our enterprise.

All in all, I feel very good about, again, the revenue performance, where we are situated with clients and the prospects on the year ahead. We will reaffirm both our revenue and adjusted EBITDA for the year and raise our earnings per share $0.06.

With respect to key initiatives, I mentioned the U. S. retail expansion, which is Walmart, which is the single biggest coverage expansion we’ve had in certainly my history, but I think over a couple of decades. It is still on track for late second quarter delivery. With respect to manufacturing negotiations and customer negotiations, we are complete and that’s reflected in our 2012 guidance. And importantly, as I mentioned on the last call, we are beginning to see the re-emergence of insight opportunities related to the incorporation of that data.

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