Nielsen has completed its strategic review, and announced plans to spin off its Global Connect business (similar, but not identical to the former 'Buy' segment), creating two independent publicly traded companies. The company also posted a respectable 2.4% constant currency revenue rise for Q3.
The two new companies will be known as Nielsen Global Media and Nielsen Global Connect.
Last year, hedge fund Elliott Management Corp acquired an 8.4% stake in Nielsen Holdings, with the aim of putting pressure on the Nielsen Board to sell the company. Nielsen then initiated the review, after its 'Buy' division saw consecutive revenue declines and share prices plummeted. Options considered included continuing to operate as a public, independent company; a separation of either the Buy or Watch segment; or a sale of the company. Nielsen says the approach it has chosen will enable each business to drive results with a single focus and a structure that will allow for faster decision-making; while implementing distinct 'fit-for-purpose' capital structures aligned with growth plans.
Nielsen Global Media will provide media and advertising clients with metrics to define exactly who they want to reach; and Nielsen Global Connect will provide consumer packaged goods manufacturers and retailers with information and a complete picture of the marketplace. As the company prepares for the separation, it has been developing capital structure targets for both businesses, and the Board of Directors has approved a reduction in its quarterly cash dividend payment, with the goal of strengthening the two prospective balance sheets ahead of the separation. The plan is to complete the transaction in nine to twelve months.
With the completion of the review, James Attwood (pictured) resumes his role as Chairman of the Board, after serving as Executive Chairman, overseeing the review and CEO search. After the separation is complete, current Chief Executive David Kenny will serve as the CEO of Nielsen's Global Media business, and the firm has now begun a search for a CEO for the Global Connect business. Attwood comments: 'Our decision to separate the Global Media and Global Connect marks a milestone in our strategic evolution and will best position each to serve the specific needs of their clients and successfully address rapidly changing dynamics in the marketplace'.
Separately, for the third quarter, Nielsen's revenues rose 1% to $1.6 billion (or 2.4% on a constant currency basis) compared to the prior year. Global Media revenues increased 3.9% to $870m (or 4.6% on a constant currency basis); while Global Connect revenues fell 2.2% to $746m, flat on a constant currency basis. Net loss for the third quarter was $472m, compared to net income of $96m in the third quarter of 2018; and during the third quarter of 2019, the company recorded an impairment charge of more than $1 billion, related to the write-down of goodwill in its Connect segment. Adjusted EBITDA increased 1.1% to $476m.
Web site: www.nielsen.com .
All articles 2006-19 written and edited by Mel Crowther and/or Nick Thomas.