nielsen investor-day-consolidated-deck full
TRANSCRIPT
This artwork was created using Nielsen data.
Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
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WELCOME AND AGENDA
SARA GUBINS
Senior Vice President – Investor Relations
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FORWARD-LOOKING STATEMENTSThe following discussion contains forward-looking statements, including those about Nielsen’s outlook and prospects, within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those which are not historical
facts and may be identified by words such as ‘will’, “intend” “expect”, “estimates,” ‘anticipates’, ‘should’, ‘could’, ‘shall’ and
similar expressions. These and other statements that relate to future results and events are based on Nielsen’s current
expectations as of November 9, 2017.
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, general economic conditions, 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 specific risk factors discussed in press releases and public filings made by
Nielsen (including those described in the forward-looking statements can be found under the section entitled “Part I—Item 1A.
Risk Factors” of the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and our other filings
with the Securities and Exchange Commission). This list of factors is not intended to be exhaustive. Such forward-looking
statements only speak as of the date of these materials, 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.
Our outlook is provided for the purpose of providing information about current expectations for 2017, 2018 and our long term
framework.
NON-GAAP INFORMATION
The following discussion contains certain non-GAAP financial measures. See the Appendix for additional information regarding
the definition and use of these measures, including a reconciliation of these measures to financial information presented in
accordance with GAAP.
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AGENDA
7:45AM - 8:15AM Breakfast and Nielsen Product Demos
Welcome & Agenda Sara Gubins, Senior Vice President – Investor Relations
Nielsen: Today, Tomorrow & 2020 Mitch Barns, Chief Executive Officer
Financial Goals and Capital Allocation Jamere Jackson, Chief Financial Officer
Q&A #1 Mitch Barns, Jamere Jackson
9:30AM - 9:50AM Break
Technology & Operations: A Gold Mine of Opportunity John Tavolieri, Chief Technology and Operations Officer
Global Buy: Capitalizing on Market TransformationSteve Hasker, President & Chief Operating Officer
Andrew Somosi, Executive Vice President – Product Leadership
Watch: Driving Growth and Efficiency Megan Clarken, President – Media
Q&A #2Mitch Barns, Jamere Jackson, John Tavolieri,
Steve Hasker, Megan Clarken
Closing Remarks Mitch Barns, Chief Executive Officer
12:00PM - 2:00PM Lunch, Tours and Nielsen Product Demos
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OUR GIFT TO YOUWorld Food Programme (WFP)
Image: © WFP/Aditya Arya
Source: http://www1.wfp.org/
Mission: As the food aid arm of the UN, WFP uses its food
to meet emergency needs and support economic & social
development
Nielsen remains committed to serving the communities in
which we live and work and helping our neighbors at home
and abroad recover from recent natural disasters
Each year WFP serves
Over 80 million
people
82 countries
Each day food is delivered by
5,000 trucks
50 aircraft
30 shipsNielsen has supported the World Food
Programme’s work since 2012 through projects
focused on food pricing data, data collection
systems, survey methodologies, brand awareness,
and more.
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NIELSEN PRODUCT DEMOSYour chance to experience Nielsen’s innovation
NIELSEN’S BUY BUSINESS
Nielsen
Connected
System
NIELSEN’S WATCH BUSINESS
Connected
Partner:
Pivotstream
Connected
Apps
Audience-based
BuyingGracenote
Advanced
Panel Data
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MITCH BARNS
Chief Executive Officer
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NIELSENToday, Tomorrow & 2020
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KEY MESSAGES
STRONGER, HIGHER MARGIN BUSINESS
DELIVERING VALUE FOR CLIENTS AND SHAREHOLDERS
Open Approach to Innovation
Uniquely Better Products
Fundamental Strengths
Efficiency: A Gold Mine of Opportunity
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FUNDAMENTAL STRENGTHS
90+ YEARS, CONTINUOUS INNOVATION, MARKET LEADERSHIP
Global, including strong presence in faster growing emerging markets
Complete coverage of the consumer, Watch & Buy
Wealth of meta-data: video, audio, sports, FMCG
Open approach to innovation: partnerships, acquisitions, incubator
Broad, diverse client base, including all major players
Proven track record of execution
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MARKET DYNAMICS
CREATING OPPORTUNITIES Driving growth and efficiency as our markets evolve
LEVERAGING CHANGE AS A MEANS FOR PROGRESS
• Media fragmentation
• Ad spend shifting to digital
• Audience-based buying
• Growth in emerging markets
• Cost focus in developed markets
• Shift toward “always on” analytics
WATCH: Total Audience
BUY: Connected System
OPERATIONS: Automation
KEY STRATEGIC INITIATIVES
BUY
WATCH
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UNIQUELY BETTER PRODUCTS DRIVING CONTINUED GROWTH
UNIQUELY BETTER PRODUCTS
• Person-level measurement of ads and content, comparable across platforms
• Truly representative of all population segments
• Granular, currency quality, at scale
• Best-in-class technology (hardware, software) and data collection methods
• Leading-edge solutions for audience-based buying, addressability, attribution, ROI
• “One Source of Truth” aligns metrics across all client user groups
• Automated analytics built-in
• Standardized cross-country data: crucial for global players, more scalable and useful
• True cloud-based solution: more efficient, more flexible
• Open: Connected Partner Program apps amplify the value of our core data
CONNECTED SYSTEM
TOTAL AUDIENCE
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OPEN APPROACH TO INNOVATION
SUPPORTS OUR COMMITMENT TO UNIQUELY BETTER PRODUCTS
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DRIVING GROWTH WITH THE WORLD’S
LARGEST RETAILER
DRAMATICALLY EXPANDED
RELATIONSHIP
SHARPER VIEW OF
E-COMMERCE
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DEPLOYING MARKET-TESTED, PROVEN CAPABILITIES
Automate data collection
Increased efficiency, speed, quality
EFFICIENCY: A GOLD MINE OF OPPORTUNITY
What are we doing? How are we doing it?
Automate data operations
Nano Meter, remote monitoring
Consolidate operations & platforms
Greater use of machine learning
$400M in annualized operations
& technology cost savings
by 2020
Automate Buy Data Collection
Super Hubs & Platforms
Connected System
Client Service Transformation
Centers of ExcellenceSG&A Efficiencies
Automate Watch Operations
$100Min annualized SG&A
cost savings by 2020
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ATTRACTIVE LONG-TERM FINANCIAL PROFILE
THIS IS NIELSEN
Mid-single digit revenue growth
Consistent margin expansion
Balanced approach to capital allocation
Double-digit EPS growth
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THE PATH TO 2020
GROWTH AND MARGIN EXPANSION FOR NIELSEN
DELIVERING INCREMENTAL VALUE FOR CLIENTS AND SHAREHOLDERS
Fundamental StrengthsUniquely Better
ProductsIncreased Efficiency
• Total Audience
• Connected System
• Integrated Analytics
• Gracenote
• Continuous innovation
• Automation
• Machine learning
• Super hubs
• Headcount productivity
• More scalable growth
• Global
• Complete coverage
• Wealth of metadata
• Unmatched client base
• Open approach
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NIELSENFinancial Goals and Capital Allocation
JAMERE JACKSON
Chief Financial Officer
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AGENDA
Historical Financial Performance
Guidance: 2017 and 2018
Path to 2020
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2012-2017E FINANCIAL PERFORMANCE
Note: revenue CAGR represented in constant currency
REVENUE GROWTH
• 6% CAGR
• 46 quarters of consecutive growth
• Investing in growth platforms
FREE CASH FLOW
• 16% CAGR
• ~$4.3B generated 2012-2017E
DELIVERING STRONG RETURNS
CAPITAL ALLOCATION
• ~$3.6B returned to shareholders
• Tremendous flexibility to invest in growth
– Tuck-in M&A
– New product launches
MARGIN EXPANSION
• ~3.1 pts of EBITDA margin expansion
• Disciplined pricing
• Efficiency and cost out
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REITERATING 2017 GUIDANCE(Revenue and adj. EBITDA margin growth in constant currency)
Total Revenue ~4%
Total Revenue Core ~6%
Total Revenue Core (ex Gracenote) ~3%
Adj. EBITDA margin growth ~20 bps
GAAP Net Income Per Share $1.40 - $1.46
Net Debt Leverage Ratio ~3.8x
Free Cash Flow ~$900M
Net book interest $365M - $375M
GAAP Tax Rate 38.0% - 38.5%
Restructuring ~$85M
Cash restructuring $100M - $110M
D&A ~$650M
Est. wtd. avg. diluted shares outstanding for FY 2017
~359M
OTHER FINANCIAL METRICS
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2018 BUY REVENUE FRAMEWORK(Percentages reflected as constant currency)
Emerging Markets: 8-10%
+ Coverage and penetration
+ Strong market demographic and income trends
+ Local and multinationals are investing
Developed Markets: (2)% to (4)%
- Low growth environment for large manufacturers
- Competitive environment pressuring clients
○ Hard discounters
○ Smaller brands gaining share
+ More investment in retail data and analytics
Corporate: ~(50)%
- Carryover from 2017 pruning activities
KEY DYNAMICS
(1)% to 1%
2017E
~$3.2B
2018E: TOTAL BUY (1)% TO 1%
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2018 WATCH REVENUE FRAMEWORK(Percentages reflected as constant currency)
Audience Measurement: 5.5-6.5%
+ Total Audience momentum
+ New product offerings
+/- Local
Marketing Effectiveness: 15-20%
+ New product offerings
+ Demand for ROI metrics
Audio: ~Flat
Corporate/Other Watch: (10)% to (15)%
2018E: TOTAL WATCH 5-6%
2017E
~$3.3B5-6%
KEY DYNAMICS
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2018 MARGIN DRIVERS
2017E
Adj. EBITDA
Margin
2018E
Adj. EBITDA
Margin
RETAILER
INVESTMENTS
(140) bps
Walmart
E-Commerce
PRODUCT
INVESTMENTS
(30) bps
Total Audience
Connected System
110 bps
Automation
Super Hubs
Digitizing data
collection
NET EFFICIENCY
INVESTING FOR EFFICIENCY AND GROWTH
~(60) bps
constant currency
GROWTH INITIATIVES
~31%
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2018 GUIDANCE(Revenue and adj. EBITDA margin growth in constant currency)
Net Book Interest $385M - $395M
GAAP Tax Rate 38.0% - 38.5%
Restructuring $85M - $95M
Cash Restructuring $85M - $95M
D&A $640M - $660M
Est. wtd. avg. diluted shares outstanding for FY 2018
~358M
Total Revenue ~3%
Total Revenue Core ~4%
Adj. EBITDA margin growth ~(60) bps
GAAP Net Income Per Share $1.40 - $1.46
Net Debt Leverage Ratio ~3.8x
Free Cash Flow ~$800M
OTHER FINANCIAL METRICS
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~$2
2017E 2020E
~31%
~35%
2017E 2020E
$1.40 - $1.46
Grow revenue
• Drive mid-single digit growth
• Execute on growth initiatives
Expand margins… Efficiency
• ~+4pts by 2020
• Consolidate operations centers
• Automation and innovation
• Reduce SG&A
Deploy capital to create value
• Bolster growth via tuck-in M&A & capex
• Grow dividend in line with earnings
• Deploy excess capital to share repurchase
THE PATH TO 2020
Note: CAGR represented in constant currency
THREE PILLARSREVENUE
CUMULATIVE FREE CASH FLOW GAAP EPS Double-digit
CAGR
EBITDA MARGINS~4%
CAGR
~+4
points
~$3B
2018E - 2020E
2017E 2020E
~$6.6B
~$7.4BI.
II.
III.
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BUY
• Emerging Markets: high-single digit growth
• Developed Markets: return to growth
– Connected System
– Retailers
– Coverage: e-commerce
WATCH
• AM of Video & Text: mid-single digit growth
– Total Audience Measurement
– Digital Currency
– Audience Based Buying
• Marketing Effectiveness: double-digit growth
– New product launches
– Tuck-in M&A
• Audio: flat
THE PATH TO 2020: GROW REVENUE(Percentages reflected as constant currency) GROWTH PLAYBOOK
2017E 2020E
WATCH BUY
~$6.6B
~$7.4B ~4%
CAGR
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2017E 2020E
THE PATH TO 2020: EXPAND MARGINS
~$500M in annualized cost savings by 2020E
~$280M cumulative restructuring from 2018E-2020E
OPERATIONS & TECHNOLOGY: ~$400M in cost out
• Automation/innovation
• Platforms and Super Hubs
SG&A: ~$100M in cost out
• Connected System + Client Service transformation
• Reduce corporate costs
• Leverage shared centers of excellence
SEGMENT DYNAMICS
• Watch: ~+2-2.5 points by 2020
• Buy: ~+4 points by 2020
DRIVING EFFICIENCY… WELL-DEFINED PROJECTS... FULL MANAGEMENT COMMITMENT
Adjusted EBITDA marginPERMANENTLY
REDUCING OPERATING COSTS
~31%
~35%
~+4
points
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Leverage shared services
• Software robotics & automation
• Machine learning
• Domain expertise
Building transactions hubs
Driving scale & efficiency
DRIVING EFFICIENCYFinance Centers of Excellence Client Services Gracenote
SIGNIFICANT SAVINGS OPPORTUNITIES
Connected System
• DaaS/SaaS vs. PaaS
Simplify go-to market
• Automated tools & processes
• Streamlined engagement model
Automated machine driven processes
• Content editing
• Content catalog growth
Speed, efficiency, less human touches
~30% throughput improvement
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DEPLOY CAPITAL TO CREATE VALUE
1. Fund growth initiatives
• Total Audience
• Marketing Effectiveness
• Emerging Markets
• Connected System
• Coverage / Total Consumer
• Tuck-in M&A
2. Grow dividend in line with earnings
3. Deploy excess capital to share repurchase
PRIORITIESLONG TERM FCF
DEPLOYMENT
Repurchase/
Tuck-in M&A
~40%
Dividend
~45%
Mandatory
Debt
~15%
CUMULATIVE FCF
~$3B
2018E - 2020E
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LONG TERM FRAMEWORK
Revenue Drive mid-single digit growth
Adj EBITDA Margin ~50 bps
Free Cash Flow Conversion 45-50% Adj EBITDA
Capital AllocationGrow dividend in line with earnings
Flex between M&A and share repurchase
THIS IS NIELSEN
GAAP EPS Double-digit growth
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TECHNOLOGY& OPERATIONSA Gold Mine of Opportunity
JOHN TAVOLIERI
Chief Technology & Operations Officer
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Automate Buy Data Collection
Proven track record of execution
KEY MESSAGES
Focus on three key buckets of opportunity
Automate Watch Operations
Platforms & Super Hubs
Drive $400M in annualized cost savings by 2020
INVESTING IN INNOVATION FOR EFFICIENCY AND GROWTH
Leverage Machine Learning
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Watch Buy
100K
people report
daily on all TV
viewing
30K
stores
counted
daily
Data Collection Data Enrichment Data Delivery
COMPLEXITY CREATES OPPORTUNITY
ONLY NIELSEN CAN BRING IT ALL TOGETHER LOCALLY AND GLOBALLY
TB = Terabyte
5TB
of data
compressed
daily from
digital products
4TB
of transcoded TV
content received
over satellite daily
& recorded to
video library
9B
digital
impressions
collected daily
85K
store scan
sales input
files received
daily
15K
new items
“added” daily
55K
stores
measured
daily
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Daily TV Ratings
Market
Research
Surveys
Market
Share Radio Index TV Index
COMPLEXITY IS ACCELERATING
NIELSEN MEASUREMENT
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
New Product SvcUPC Scanning
HomeVideo Index
People Meter
Household Scanner
Soundscan
Internet Usage
Active/Passive Meter
Time-Shifted Viewing
Game Consoles
Extended Screen
Neuroscience
Nielsen Catalina Solutions
Mobile Measurements
Online Campaign Ratings
Digital Program Ratings
Social TV
Ratings
Total
Audience
Marketing
Cloud
Radio TV SatelliteTV
UPC Barcode
VCR
Walkman CD
Cell phone
Personal
computer
Internet
Amazon & eBay
Online banking
DVR
iPod
XBOX
VOD
Smartphone
Netflix
Youtube
IBM Watson
Streaming radio
iPad
CONSUMER TECHNOLOGY
~1,000 DATA SCIENTISTS HELP DRIVE INNOVATIONWE HOLD 2,800 GLOBAL PATENTS
2020
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2008-2013
GLOBALIZE
2014-2016
RE-IMAGINE
2017-2020
TRANSFORM
PROVEN TRACK RECORD OF EXECUTION
● Functionalize
the business
● Standardize
operating
procedures
● Offshore
● Digitize
● Automate
● Consolidate● End-to-end
orientation
● Emerging market
growth
● Simplify the
business
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DRIVING $400M IN ANNUALIZED COST SAVINGS BY 2020
Automate Buy
Data Collection
Automate Watch
Operations
Platforms
& Super Hubs
Consolidate AutomateAutomate
TRANSFORMING OPERATIONS
Leveraging Machine Learning
Improved Capabilities
Better Quality
Real-Time Reporting Increased Speed
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AUTOMATE BUY DATA COLLECTION
Zero Touch Validation
Quality Control Tower
e-Collections
Moving from In-store Audit to Scan
REAL-TIMEDIGITIZATION AUTOMATION
Tech Enabled Data Collection Platform
& Four Strategic Programs
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Data Collection Cost as a
percent of Buy Measurement RevenueTech Enabled Data
Collection Platform
15% less time spent in-field travel
22% greater data throughput
Zero Touch ValidationSix processes automated
37% FTE reduction
Audit to ScanEliminates 100% of manual audits
7% FTE reduction
Quality Control Tower
AUTOMATE BUY DATA COLLECTION
BRAZIL EXAMPLE
2016 YTD’17
70% FTE reduction
Double span of control
eCollectionDriving towards 40% reduction
in-store time for collection
Buy Revenue: +7%
Buy Cost: (8)%
END-TO-END TRANSFORMATION DRIVES EFFICIENCY & QUALITY
21%
25%
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AUTOMATE BUY DATA COLLECTION
MOMENTUM IS BUILDING
TECH ENABLED
DATA COLLECTION
PLATFORM
E-COLLECTION
ZERO-TOUCH
VALIDATION
QUALITY CONTROL
TOWER
AUDIT TO SCAN
PERCENT OF MARKETS
2017 2018 2019 2020
13% 37% 65% 95%
PERCENT OF MARKETS
2017 2018 2019 2020
11% 26% 55% 100%
PERCENT OF MARKETS
2017 2018 2019 2020
70% 83% 88% 89%
PERCENT OF MARKETS
2017 2018 2019 2020
13% 37% 65% 95%
PERCENT OF MARKETS
2017 2018 2019 2020
50% 53% 76% 83%
Nielsen operates in 106 markets.
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PLATFORMS & SUPER HUBS
OPERATIONAL EFFICIENCIES THROUGH 2020 AND BEYOND
• From 8+ factory platforms to 1
• Replatforming driven by Connected System
• Value driver for multi-nationals
• Globally converged delivery centers
• Typical size: 400-800 employees
• Driving automation and speed of innovation
Malaysia
Poland
Mexico
WHAT’S HAPPENING?
WHY?WHAT
NEXT?
DATA
EXCHANGE
PLATFORMS SUPER HUBS
THE CONNECTED SYSTEM
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AUTOMATE WATCH OPERATIONS
Nano Meter Remote MaintenanceAutomation and
Machine Learning
● vBrand example:
Nielsen Sports live
in 2018
● Data capture FTEs
from 600 to 300
● Qterics: Real time
maintenance
● Improved quality
and efficiency
● Eliminate 70K
annual home visits
● Deployed in U.S.
test market
● Live in an
international market
● Simpler, faster
installs
INNOVATING FOR EFFICIENCY, IMPROVING PANELIST EXPERIENCE
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PLATFORM FOR EFFICIENCY AND GROWTH BEYOND 2020
DRIVING SUSTAINABLE EFFICIENCIES
AUTOMATION
EFFICIENCY
CONSOLIDATION
CAPABILITY
$400M
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GLOBAL BUYCapitalizing on Market Transformation
STEVE HASKER, Global President and Chief Operating Officer
ANDREW SOMOSI, EVP – Product Leadership
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KEY MESSAGES
Growing strength in Emerging Markets
Connected System positioned to drive growth and efficiency
Expanding coverage through Total Consumer initiatives
Transformative wins enhancing value for retailers/manufacturers
INVESTING IN INNOVATION FOR GROWTH AND EFFICIENCY
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GLOBAL FMCG INDUSTRY SALES TRENDS
Nominal Value Growth
Source: Regional Nielsen “Q2 Growth Reporter” reports (US, EU, LATAM, APAC, MENAP, etc.)
EMERGING MARKETS DEVELOPED MARKETS
5.4%
4.3% 4.3% 4.3%4.7%
6.3%
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17
1.6%1.2% 1.2% 1.1%
-0.3%
1.7%
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17
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STRENGTH IN EMERGING MARKETS
MULTINATIONAL & LOCAL GIANTS DRIVING GROWTH
EXPANDING MARGINSIN EMERGING MARKETS
GROWING FASTER THAN THE FMCG MARKET IMPORTANT GROWTH DRIVEREmerging Markets: 36% of Buy Revenue
32%
36%
2014 2017E
5.4%
4.3% 4.3% 4.3%4.7%
6.3%
10.0%
8.9%8.5%
7.2%
9.9% 10.0%
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
Market Nielsen Revenue Growth (CC)
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SIGNIFICANT U.S. GROWTH OPPORTUNITIES
* Retail measurement, Marketing Effectiveness, Sales Effectiveness, Innovation, Supply Chain
Source: 2015 McKinsey Global Media Report, eMarketer, Internal Competitive Intelligence
$7.5BTOTAL MARKET*
Significant expansion opportunity into data integration & connected analytics
16%
84%
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INNOVATING TO CAPITALIZE ON MARKET
TRANSFORMATION
KEY MARKET TRENDS
1. Long-tail and store brands growth
2. Shift to green/organic
3. Retail disruption: e-commerce,
omni-channel, discounters
4. Personalization driving analytics
& data integration
5. Zero-based budgeting
WHAT’S HAPPENING?
WHY?WHAT NEXT?
DATA EXCHANGE
THE CONNECTED SYSTEM
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CONNECTED SYSTEM
BUSINESS INTELLIGENCE & VISUALIZATION APPSWhat’s
Happening
& Why?
DATA ENRICHMENT & INTEGRATION APPS
API
DATA
NIELSEN
CONNECTED
PARTNER DATA
TOTAL
CONSUMER
TOTAL
AUDIENCE
CLIENT
DATA
PUBLIC
DATA
ECOSYSTEM
What’s
Next?PLANNING, SIMULATION & ACTIVATION APPS
What’s
Happening?
Data
Exchange
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CONNECTED SYSTEM:
MEETING CLIENT NEEDS
FROM TO
Proprietary, disconnected data Open, integrated data
(Nielsen, client, Connected Partner)
Project-based, disconnected
analytics
Automated one source of truth
analytics
Power-user tools Tools built for multiple user needs
80% of time analyzing business
performance
80% of time making decisions and
taking action
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CONNECTED SYSTEM: DASHBOARD
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CONNECTED SYSTEM: WHAT’S NEXT
WHAT’S NEXT
100 clients engaged by end of 2018
Expanding geographic footprint
beyond initial 3 countries
Launching additional apps:
Assortment, Innovation, Marketing,
Price and Promotion Analytics
Growing Connected Partner
portfolio
2017 ACCOMPLISHMENTS
5 charter clients in US/UK/France
25 clients engaged by year-end
152 clients accessing Connected
System components
Launched Everyday Analytics: Sales
Planner, Price Explorer, Media
Budget Explorer
Expanded to 36 Connected Partners
Connected System driving key client
retention and client win decisions
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TOTAL CONSUMER
E-COMMERCE SHARE OF SALES2017 ACCOMPLISHMENTS
eCommerce launched in the US
eCommerce measurement available
in 17 countries by year-end
Expanded traditional trade coverage
Measuring discount channel
with consumer-sourced data
27%
26%
13%
11%
9%
3%
2%
2%
1%
1%
1%
1%
Beauty Care
Pet Care
Health Care
Personal Care
Household Care
Packaged Grocery
Produce
Meat
Dairy
Beer and Wine
Bakery
Frozen Foods
NON-FOOD
FOOD & BEVERAGE
Source: Nielsen e-commerce measurement, 52 weeks ending July 1, 2017. Projected from ~1MM e-commerce FMCG consumers and cooperating ePOS retailers based on
reported commodity groups that may not match prior custom or syndicated category definitions.
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CONNECTED SYSTEM: UNIQUELY BETTER
“This is a game
changer”
“Leapfrogs the
competition”
“The Connected System
will save time... it brings
everyone in the
organization up to a new
level”
“More of our
decision-makers
have access to
analytics”
“Your open
approach to data is
refreshing”
“The Connected
System is an integral
part of our overall
tech strategy”
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CONNECTED SYSTEM: RETURNING
DEVELOPED BUY MARKETS TO GROWTH
Client Wins
Connected
Partner
Program
Increased
Analytics
Penetration
(Europe)
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CONNECTED SYSTEM:
DRIVING EFFICIENCY
GO TO MARKET
• Streamlined client delivery
and support
PRODUCT MIX
• Greater mix of higher margin
syndicated products
• High margin Connected
Partner revenue
TECHNOLOGY
& OPERATIONS
• Aligning costs with value
to client
• Shutdown legacy platforms
over time
• Product convergence post-
2020
STRONGER, HIGHER MARGIN BUSINESS
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DRAMATICALLY EXPANDED
RELATIONSHIP
SHARPER VIEW OF
E-COMMERCE
DRIVING GROWTH WITH THE WORLD’S
LARGEST RETAILER
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KEY MESSAGES
Growing strength in Emerging Markets
Connected System positioned to drive growth and efficiency
Expanding coverage through Total Consumer initiatives
Transformative wins enhancing value for retailers/manufacturers
THIS IS NIELSEN BUY 2020
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WATCHDriving Growth and Efficiency
MEGAN CLARKEN
President, Watch
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KEY MESSAGES
Nielsen will be the digital currency
Nielsen will further expand the definition of TV currency in 2018
Nielsen has invested in key areas to drive future high-margin growth
INVESTING IN INNOVATION FOR GROWTH AND EFFICIENCY
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Weekly time spent based on the total US population based on Qtr 2, P18+
CONSUMERS ARE SPENDING MORE TIME WITH MEDIA
Source: Nielsen Total Audience Report and Audience Insights Analysis
0
7
14
21
28
36
43
50
57
64
72
79
86
2002 2007 2012 2017
Tablet
Smartphone
PC
Multimedia Device
VCR
Game Console
DVD / Blu-Ray
Time-Shifted TV
Live TV
Radio
Ho
urs
pe
r W
ee
k
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Source: Nielsen Comparable Metrics Report Q2 2017
WATCHING LESS TRADITIONAL TV, CONSUMING MORE DIGITAL VIDEOWeekly video time spent among Adults 18+
32:41 32:32 31:06
3:24 3:584:27
1:30 1:49 2:19
Q2 2015 Q2 2016 Q2 2017
Tablet Video
Smartphone Video
PC Video
TV-Connected Devices
TV
38:00 39:00 39:02
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ON-TARGET
DELIVERYREACH CROSS-PLATFORM
WALLED
GARDENS
A CLEAR PATH TO DIGITAL CURRENCY
ON-TARGET
DELIVERY
WALLED
GARDENS
VIEWABILITY FRAUD OUTCOMES BRAND SAFETY
REACH CROSS-PLATFORM
THIS IS NIELSEN’S TO WIN!
VIEWABILITY OUTCOMESFRAUD
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CONTINUED GROWTH OPPORTUNITYIN DIGITAL
VALUE
VOLUMESHARE
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FRAGMENTING MEDIA MONETIZATION PROVIDES OPPORTUNITIES FOR GROWTH
Sources: 1eMarketer, 2eMarketer, 3Statista, 4Polar
Linear TVgoing from $71 billion in 2017
to $74 billion in 20201
Addressable
Marketa $43 billion market in 2017
growing to $73 billion in 20212
Subscription
Marketexpected to double from about $8 billion in 2015
to about $16 billion in 20213
Branded
Integrationa $6 billion market in 2017 growing
to $20 billion in 20214
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NIELSEN HAS ALIGNED TO SERVE THE MODERN MEDIA ECOSYSTEM
TRADITIONAL/REACH ADVERTISING
(LINEAR BUYS)
COMPARABLE CROSS PLATFORM REACH (POPULATION)
EFFECTIVENESS & ROI
AUDIENCE VALIDATION
TARGETED ADVERTISING
(AUDIENCE BUYS)
MEDIA OWNER AGENCY ADVERTISER
NO ADVERTISING
(SUBSCRIPTIONS)
Subscriber
DISTRIBUTOR
AD
BRANDED INTEGRATIONS
(PRODUCT PLACEMENT)
CONTENT (AD)CONTENT
Pet-Lover
AD
Beer Drinker
AD
Avid Hiker
AD
Car Buyer
[
AD+ + +
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WE HAVE MADE RELENTLESS PROGRESS IN TOTAL AUDIENCE MEASUREMENT…
Complete:
• Build of scalable
architecture and
software
Grow Coverage:
• VOD ~40 networks
(11 of 14
measureable network
groups)
• Digital ~25 networks
(internal reporting
only)
Milestones:
• DCR Syndicated
(Sept. ’16)
• TCR publisher
release (Aug. ‘16)
Ongoing:
• Continued eval (DCR); Create “critical
mass”
• Comparable metrics / Currency progress
Milestones:
• TCR Limited Commercial release (Jan. ‘17)
• DTVR Crediting from Hulu, YouTube (Jul.
‘17)
• DCR Crediting Publisher-Distributed Video
Content on FB, Hulu, YouTube (Aug ‘17)
• Create access to all Total Audience data in
Media Impact (focus on VOD)
• Launched SVOD
Certified SDKs Reporting Live Data
• 36 clients receiving Nielsen ratings data for
digital video; enables measurement for 60+
originators/sub-brands
Transact:
• DAR: Hulu, Snap, Twitter,
brands
• DTVR: CBS, ABC,
ESPN/ESPN2, YouTube TV,
Hulu
• SVOD: CBS Corp., Disney-
ABC, Lionsgate, NBCU, A&E,
Warner Bros., Showtime
• OOH: FOX, Turner, ESPN,
CBS, NFL Network, NBCU
• DCR: Group Nine, Mic,
BuzzFeed using externally
• TCR: CBS, extensive internal
industry use
EXECUTE (2015) EVALUATE (2016) EVALUATE > ADOPT (2017) TRANSACT (ONGOING)
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…AND SIGNIFICANT STRIDES IN EVOLVING
THE TV CURRENCY
Original Broadcast: Linear, Full Ad Load
Digital App: Subset of Linear ads + additional Dynamic Ad Insertion
Linear Ads Dynamic Ads
Telecast measured
via C7
Each spot and
impression measured
via DAR
A B C A B C A B C
A X X A X X A X X
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AUDIENCE BUYING IN LINEAR TV DEPENDS ON NIELSEN DATA…
AUDIENCE
SEGMENTS
AUDIENCE
MEASUREMENT
TV
INVENTORY
Other 3rd Parties
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…AND WE HAVE INVESTED TO SUPPORT AUDIENCE BUYING IN DIGITAL
REACH VALIDATION ROI MEASUREMENTPLANNING & ACTIVATION
DIGITAL AD
RATINGS
MARKETING CLOUD
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IN SUBSCRIPTION VOD, NETFLIX ACCOUNTS
FOR ALMOST HALF OF STREAMING
Source: Custom Streaming Meter Usage Report, Sum of Daily Streaming Minutes – Unweighted, P2+, 6/26/17 – 9/17/17, OTT Capable Households
48%
10%
7%
6%
29%
Netflix
Youtube
Hulu
Amazon
Others
Video Streaming % Distribution
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NIELSEN SVOD
MEASUREMENT
NOW A
REALITY
Broadcast Date Originator Program NameEpisode/
Telecast Details
Live + 7
Average
Audience %
Live + 7
Projected
(000)
08/20/17 HBO Prime Game of Thrones 9:04 PM 6.31 8,100
08/15/17 NBC America's Got Talent-Tue 8:00 PM 3.73 4,781
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E1 3.36 4,305
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E2 2.92 3,745
08/16/17 NBC America's Got Talent-Wed 8:00 PM 2.83 3,635
08/20/17 Adult Swim Rick & Morty 11:30 PM 2.74 3,521
08/17/17 CBS Big Brother-Thu 9:00 PM 2.58 3,305
08/16/17 CBS Big Brother-Wed 8:00 PM 2.51 3,216
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E3 2.48 3,182
08/20/17 CBS Big Brother-Sun 8:00 PM 2.40 3,081
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E4 2.26 2,895
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E5 2.21 2,841
08/14/17 ABC Bachelor in Paradise 8:00 PM 2.19 2,804
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E6 2.08 2,665
08/18/17 CBS Big Brother-Fri 8/18 Sp 8:00 PM 2.06 2,643
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E7 1.98 2,536
08/17/17 NBC SNL Wknd Update-Prime 9:00 PM 1.91 2,454
08/18/2017 -
08/25/2017SVOD Programs Marvels the Defenders S1 E8 1.84 2,362
08/15/17 ABC Bachelor in Paradise-Tue 8:00 PM 1.76 2,262
08/14/17 NBC American Ninja Warrior 8:00 PM 1.71 2,188
Demo P18-49
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BRANDED CONTENT
MEASUREMENT
IS REAL
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KEY MESSAGES
ONLY NIELSEN CAN
Nielsen will be the digital currency
Nielsen will further expand the definition of TV currency in 2018
Nielsen has invested in key areas to drive future high-margin growth
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CLOSING REMARKS
MITCH BARNS
Chief Executive Officer
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APPENDIX
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CERTAIN NON-GAAP MEASURESOverview of Non-GAAP PresentationsWe use the non-GAAP financial measures discussed below to evaluate our results of operations, financial condition, liquidity and indebtedness.
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 valuable supplemental information regarding our results of operations, thereby facilitating
period-to-period comparisons of our business performance and is consistent with how management evaluates the company’s operating
performance and liquidity. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and
investors and, in order to assure that all investors have access to similar data the Company has determined that it is appropriate to make this
data available to all investors. 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 PresentationWe 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, thereby facilitating period-to-period comparisons of our business
performance and is consistent with how management evaluates the company’s 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. No adjustment has been made to foreign currency exchange transaction gains or losses in the calculation of
constant currency net income.
Net Debt and Net Debt Leverage RatioThe 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, stock-based compensation expense and other non-operating items from our
consolidated statements of operations as well as certain other items that arise outside the ordinary course of our continuing operations. 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.
Free Cash FlowWe define free cash flow as net cash provided by operating activities, plus contributions to the Nielsen Foundation, less capital expenditures,
net. We believe providing free cash flow information provides valuable supplemental liquidity information regarding the cash flow that may be
available for discretionary use by us in areas such as the distributions of dividends, repurchase of common stock, voluntary repayment of debt
obligations or to fund our strategic initiatives, including acquisitions, if any. However, free cash flow does not represent residual cash flows
entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is not deducted from free cash flow. Key
limitations of the free cash flow measure include the assumptions that we will be able to refinance our existing debt when it matures and meet
other cash flow obligations from financing activities, such as principal payments on debt. Free cash flow is not a presentation made in
accordance with GAAP.
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FOREIGN CURRENCY IMPACT
Note: We report on a constant currency basis to reflect operating performance(a) Projected impact assumes rates in effect at 11/7/17 remain in effect for the balance
of 2017 and 2018. Based on company estimates for future periods on distribution of
revenue and Adj. EBITDA by currency.
2017E CURRENCY PROFILE - REVENUE PROJECTED FX IMPACT(a):
REPORTED VS CONSTANT CURRENCY
59%
10%
3%
3%
3%
22%
USD EUR CAD GBP CNY Other
180
3040
160
60
0
4Q17E FY17E FY18E
Rev (bps) EBITDA (bps)
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ADJUSTED EBITDA RECONCILIATION
(a) Other represents certain expenses that arise outside the ordinary course of our continuing operations. Such costs primarily include legal settlements, acquisition related
expenses, business optimization costs and other transaction costs
($ in millions. Year ended December 31 for all years.)
Net income attributable to Nielsen stockholders $500-525 $500-$525
Interest expense, net 385-395 365-375
Provision for income taxes 310-330 310-330
Depreciation and amortization 640-660 ~650
Restructuring charges 85-95 ~85
Stock-based compensation expense and other(a) 100-110 100-105
Adjusted EBITDA $2,040-$2,060 $2,030-$2,050
2017E2018E
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GUIDANCE NON-GAAP RECONCILIATION
($ in millions. Year ended December 31 for all years.)
Total Revenue ~$6,580 ~4% $6,327
Total Revenue Core ~$6,300 ~6% $5,944
Total Revenue Core (ex. Gracenote) ~$6,120 ~3% $5,944
2016 Constant Currency2017 Guidance % V Constant Currency
Total Revenue ~$6,805 ~3% $6,608
Total Revenue Core ~$6,580 ~4% $6,327
2017 Constant Currency2018 Guidance % V Constant Currency
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FREE CASH FLOW RECONCILIATION
($ in millions. Year ended December 31 for all years.)
Net cash provided by operating activities $1,296 $1,209 $1,093 $901 $784
Nielsen Foundation contribution 36 – – – –
One-time Arbitron costs – – – 46 –
Capital expenditures, net (391) (401) (412) (374) (358)
Free Cash Flow $941 $808 $681 $573 $426
20122016 2014 20132015
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FREE CASH FLOW RECONCILIATION (continued)
($ in millions. Year ended December 31 for all years.)
Net cash provided by operating activities ~ $1,300 ~$1,340
Capital expenditures, net ~(500) ~(440)
Free Cash Flow ~$800 ~$900
2017E 2018E
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GUIDANCE NET DEBT AND NET DEBT LEVERAGE RATIO RECONCILIATION
($ in millions. Year ended December 31 for all years.)
Gross debt ~$8,440 ~$8,430
Less: cash and cash equivalents ~600 ~600
Net debt ~$7,840 ~$7,830
Adjusted EBITDA $2,040-$2,060 $2,030-$2,050
Net debt leverage ratio ~3.8x ~3.8x
2018E 2017E
This artwork was created using Nielsen data.
Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.