Experian – a portfolio of opportunities John...

©Experian 2005. All rights reserved. Confidential and proprietary. 11

Experian – a portfolio of opportunities

John SaundersChief Executive, Global Operations

Stephens Conference9 June 2005


Experian introductionExperian introduction

�� What we doWhat we do

�� Our competitive advantagesOur competitive advantages

�� Growth opportunities in Experian InternationalGrowth opportunities in Experian International


ExperianExperianWhat we doWhat we do

Experian is the global Experian is the global leader in leader in its sectorits sector

We help organizations We help organizations to find and develop to find and develop

new customersnew customers

We help consumers to We help consumers to make informed make informed

financial decisionsfinancial decisions


Experian Experian Balanced portfolioBalanced portfolio

InformationInformation46%46%

SolutionsSolutions32%32%

OutsourcingOutsourcing10%10%

InteractiveInteractive12%12%

North North AmericaAmerica

54%54%

InternationalInternational46%46%

Year to March 2005 ($2.5bn)Year to March 2005 ($2.5bn)

* Excluding discontinued activities

Sales*Sales*


ExperianExperianBuilding shareholder valueBuilding shareholder value

20022002 20032003 20042004 20052005 20022002 20032003 20042004 20052005

+12%+12%+14%+14% +18%+18%

+20%+20%+20%+20%

+16%+16%

1,5941,594 1,8621,862 2,1862,186 2,5202,520 321321 397397 480480 589589

Sales Sales –– $ millions $ millions Operating profit Operating profit –– $ millions $ millions

Growth rates at constant exchange rates and in 2004 and 2005 for continuing activities only

Year to MarchYear to March Year to MarchYear to March


ExperianExperianUnique offerUnique offer

No single competitor offers as many products and solutions No single competitor offers as many products and solutions in as many countriesin as many countries

$2.5 billion$2.5 billion

18x18x 20x20x 24x24x22x22x

20x20x

Global sales revenueGlobal sales revenue

InternationalInternational

North AmericaNorth America

ExperianExperianMarch 05March 05

D&BD&BDec 04Dec 04

EquifaxEquifaxDec 04Dec 04

AcxiomAcxiomMar 05Mar 05

HarteHarte--HanksHanksDec 04Dec 04

Fair IsaacFair IsaacSep 04Sep 04

All figures are for last full year of actualsNumber on top of bar represents prospective PE ratingExchange rate £1:$1.85

Source: Company accountsReuters Estimates


UK UK 59%59%

Rest of World*Rest of World*41%41%

* Continental Europe, Eastern Europe, South Africa, Latin America, Asia Pacific

SalesSales12 months to March 200512 months to March 2005

$1.2bn$1.2bn

Experian InternationalExperian International

�� Founded in 1980Founded in 1980

�� Strong organic growth Strong organic growth

�� Supported by Supported by complementary complementary acquisitionsacquisitions

�� Wide product rangeWide product range

�� Wide geographic reachWide geographic reach


Experian InternationalExperian International

CAGR of 20% sales and 23% profitCAGR of 20% sales and 23% profit

00

300300

600600

900900

00

5050

100100

150150

£m£m £m£m

20052005200420042003200320022002200120012000200019991999199819981997199719961996199519951994199419931993

Sales (LHS)Sales (LHS) EBIT (RHS)EBIT (RHS)

Year to MarchYear to March


Experian InternationalExperian InternationalReasons for our successReasons for our success

�� Strong global presenceStrong global presence

�� Unequalled product offerUnequalled product offer

�� Successful business modelSuccessful business model

�� Client relationshipsClient relationships

�� Investment in infrastructureInvestment in infrastructure

�� Experienced management teamExperienced management team


Experian InternationalExperian InternationalDeveloping client relationshipsDeveloping client relationshipsHBOS contractHBOS contract

�� Over £40 million fiveOver £40 million five--year contractyear contract

�� Experian offers a unique combination Experian offers a unique combination of servicesof services

�� Credit information Credit information ––Credit solutionsCredit solutions

�� Marketing information Marketing information ––Marketing solutionsMarketing solutions

�� Experian selling new products, Experian selling new products, such as fraud preventionsuch as fraud prevention

�� Experian supporting HBOS across Experian supporting HBOS across its product groups, e.g. mortgage, its product groups, e.g. mortgage, credit cardscredit cards


�� Operate eleven consumer credit bureauxOperate eleven consumer credit bureaux

�� Operate seven business credit bureauxOperate seven business credit bureaux

�� Interface with over 70 credit bureaux globally Interface with over 70 credit bureaux globally

�� Classify over a billion consumers worldwideClassify over a billion consumers worldwide

�� Provide detailed economic forecasts Provide detailed economic forecasts for 25 countriesfor 25 countries

�� Deliver billions of customer decisions annually Deliver billions of customer decisions annually

Experian International Experian International Unequalled product offerUnequalled product offer

Experian InternationalExperian InternationalInvestment in infrastructure Investment in infrastructure –– new data centrenew data centre

�� 6 acre site6 acre site

�� 78,000 square feet building78,000 square feet building

�� 38,000 square feet of raised floor38,000 square feet of raised floor


CanadaCanadaChinaChinaDenmarkDenmarkFinlandFinlandFranceFrance

SingaporeSingaporeSouth AfricaSouth AfricaSouth KoreaSouth KoreaSpainSpainSwedenSweden

Countries Countries where we where we have offices:have offices:

GermanyGermanyGreeceGreeceHong KongHong KongIrelandIrelandItalyItaly

JapanJapanMonacoMonacoNetherlandsNetherlandsNorwayNorwayRussiaRussia

ArgentinaArgentinaAustraliaAustraliaAustriaAustriaBrazilBrazilBulgariaBulgaria

TurkeyTurkeyUnited KingdomUnited KingdomUnited StatesUnited States

Experian International Experian International Strong global presenceStrong global presence

Experian operates in over 60 countries around the worldExperian operates in over 60 countries around the world


Experian in UK Experian in UK ––Total solutions providerTotal solutions provider

�� Clear market leader in Information and SolutionsClear market leader in Information and Solutions

�� Offering the widest range of servicesOffering the widest range of services

�� Principal supplier to nine of the top 10 UK banksPrincipal supplier to nine of the top 10 UK banks

�� Future growth driven byFuture growth driven by

�� Product innovation, e.g. authentication; fraud detectionProduct innovation, e.g. authentication; fraud detection

�� Deeper client relationships, e.g. HBOSDeeper client relationships, e.g. HBOS

�� New sectors, e.g. government; directNew sectors, e.g. government; direct--toto--consumerconsumer


Experian in UKExperian in UKPublic sectorPublic sector

Forecasting economic Forecasting economic and demographic trends and demographic trends for local and national for local and national governmentgovernment

Reducing fraudulent Reducing fraudulent benefit claimsbenefit claims

Supporting collection of Supporting collection of local and national taxeslocal and national taxes

Improving accuracy of Improving accuracy of data held on individualsdata held on individuals

Enabling instant Enabling instant confirmation of valid confirmation of valid vehicle insurancevehicle insurance

Complying with Complying with antianti--money laundering money laundering regulationsregulations

Helping police allocate Helping police allocate resources by postcode resources by postcode risk indexrisk index

Apply skills developed in financial services to public sectorApply skills developed in financial services to public sector


Experian in FranceExperian in France

�� Largest market outside the UKLargest market outside the UK

�� 2,500 people 2,500 people

�� About 60% of sales from card and payment About 60% of sales from card and payment processing processing

�� Other activities includeOther activities include

�� BackBack--office processingoffice processing

�� Decision solutionsDecision solutions

�� Business informationBusiness information

�� Strong relationships with financial services Strong relationships with financial services and other clientsand other clients


Enter withEnter withscoring / scoring / decisiondecision

EstablishEstablishcredit credit

bureaubureau

MarketingMarketingServicesServices

acquisitionacquisition

Start credit Start credit card card

processing for processing for US clientUS client

Launch Launch MOSAIC MOSAIC consumer consumer

segmentationsegmentation

Add fraud Add fraud prevention / prevention / antianti--money money launderinglaundering

Experian in SpainExperian in Spain

Experian Spain now has the widest endExperian Spain now has the widest end--toto--end range of solutionsend range of solutions

CCI contractCCI contractextends toextends to

20102010

19941994 19991999 20012001 20022002 20032003 20042004 20052005


Experian in ItalyExperian in ItalyStrong doubleStrong double--digit organic growth digit organic growth businessbusiness

Over 200 people based in Rome and MilanOver 200 people based in Rome and Milan

Principal activities:Principal activities:

Consumer credit bureauConsumer credit bureau

Business credit bureauBusiness credit bureau

Decision supportDecision support

Application processingApplication processing

Fraud solutionsFraud solutions

Micromarketing and economic Micromarketing and economic forecastingforecasting

Marketing servicesMarketing services

Supported by recent acquisition of Data Supported by recent acquisition of Data Services businessServices business

Clients include the top Clients include the top three retail banksthree retail banks


Experian in the NetherlandsExperian in the Netherlands

Established consumer credit Established consumer credit marketmarket

Experian presence for 20 yearsExperian presence for 20 years

Delivering a full range of services, Delivering a full range of services, including: including:

Consumer credit bureauConsumer credit bureau



Micromarketing and economic Micromarketing and economic forecastingforecasting

Marketing servicesMarketing services

Providing enterprise wide Providing enterprise wide customer level customer level decisioning decisioning for the for the largest retail banklargest retail bank

Clients include the top Clients include the top five retail banks and the topfive retail banks and the top

four four telecomstelecoms companiescompanies


Experian in TurkeyExperian in Turkey

Developing consumer credit Developing consumer credit marketmarket

Future accession to European Future accession to European UnionUnion

Principal activities:Principal activities:




Developed bureau solution for Developed bureau solution for Kredi Kayit BurosuKredi Kayit Burosu (KKB), formed (KKB), formed by 11 Turkish banks in 1996; the by 11 Turkish banks in 1996; the first and only consumer credit first and only consumer credit bureau in this marketbureau in this market

Clients include the top Clients include the top four retail banksfour retail banks


Experian in Latin AmericaExperian in Latin AmericaOffering a full range of decision support Offering a full range of decision support solutions, including:solutions, including:

Strategy managementStrategy management


Consulting servicesConsulting services

Analytical modelsAnalytical models

Strategy optimisationStrategy optimisation

Intelligent business reportingIntelligent business reporting

Supporting clients in 12 countries Supporting clients in 12 countries throughout the regionthroughout the region

Providing authentication services and Providing authentication services and customer management solutions for customer management solutions for Brazil’s largest stateBrazil’s largest state--owned bankowned bank

Clients include the top Clients include the top five five telecomstelecoms companies and companies and

the largest private and the largest private and state owned banksstate owned banks


Experian InternationalExperian InternationalEmerging marketsEmerging markets

�� Excellent growth Excellent growth opportunities in opportunities in emerging marketsemerging markets

�� Serving both local Serving both local and global clientsand global clients

�� Often enter via Often enter via decision solutionsdecision solutions


Experian InternationalExperian InternationalAsia Pacific expansionAsia Pacific expansion

Expanding from established Expanding from established bases in Australia and Hong bases in Australia and Hong Kong into:Kong into:

�� ChinaChina

�� IndonesiaIndonesia

�� JapanJapan

�� KoreaKorea

�� MalaysiaMalaysia

�� PhilippinesPhilippines

�� SingaporeSingapore

�� TaiwanTaiwan

�� ThailandThailand


Experian in KoreaExperian in Korea

Experian now serves six of the seven largest Experian now serves six of the seven largest Korean banksKorean banks

http://eng.wooribank.com/eng/eng_index.jsp


Experian InternationalExperian InternationalEastern Europe expansionEastern Europe expansion

�� BulgariaBulgaria

�� CroatiaCroatia

�� Czech RepublicCzech Republic

�� HungaryHungary

�� KazakhstanKazakhstan

�� PolandPoland

�� RussiaRussia

�� RomaniaRomania

�� SlovakiaSlovakia

�� SloveniaSlovenia


Experian InternationalExperian InternationalExperian in RussiaExperian in Russia

�� Large, growing marketLarge, growing market

�� JV signed in April 2005 with JV signed in April 2005 with InterfaxInterfax, Russia’s leading , Russia’s leading provider of information and provider of information and services to the financial services to the financial marketmarket

�� Launch first national credit Launch first national credit bureau in Summer 2005bureau in Summer 2005

�� Already selling decision Already selling decision solutions to five of the top solutions to five of the top banksbanks

�� Over 20 clients have agreed Over 20 clients have agreed to join the bureauto join the bureau

�� WellWell--positioned for positioned for longlong--term growthterm growth


Experian InternationalExperian InternationalSummarySummary

�� 46% of Experian global sales46% of Experian global sales

�� By far the largest information solutions provider By far the largest information solutions provider outside North Americaoutside North America

�� Tailor the offer to local environmentTailor the offer to local environment

�� Strong growth opportunities throughout Strong growth opportunities throughout Europe and Rest of WorldEurope and Rest of World

�� Extending product offer across the regionExtending product offer across the region

�� In new sectors In new sectors

�� In emerging marketsIn emerging markets


Experian GlobalExperian GlobalGrowth driversGrowth drivers

�� Increase in credit and plastic usage Increase in credit and plastic usage

�� Growth in emerging markets Growth in emerging markets

�� Growth in demand for information in new sectors, e.g. Growth in demand for information in new sectors, e.g. automotive, insurance, businessautomotive, insurance, business--toto--business, governmentbusiness, government

�� Growth in fraud, especially over the Internet Growth in fraud, especially over the Internet

�� Growth in directGrowth in direct--toto--consumer marketconsumer market

�� Move to multiMove to multi--channel marketingchannel marketing

Appendix

Experian – what we do

Outsourcing

e.g. chequeprocessing

Solutions

Credit

Marketing

e.g. databasemanagement

e.g. credit scoring

Information

Credit

Marketing

e.g. marketingdatabases

e.g. consumer credit databases

Interactive

e.g. online leadgeneration

3030

Experian - Information

Key characteristics

– Acquire, compile, manage and deliver large databases

Core skill

– Steady growth– Large market– Regulated

Market type

– Data sell– Salesforce-led– Contract, licences– Ad-hoc purchases (marketing only)– Revenue earned per transaction

Sales channel

– Volume-driven pricing– Country specific– Capital intensive– Online, real-time delivery

Product characteristics

3131

Experian - Solutions

Key characteristics

– Specialist analytical and software development skills

Core skill

– Good growth– Many niche competitors– Strategic for clients

Market type

– Executive level sponsorship– Software/IT sell– Sell to client specialists– Consultancy-led– Long-term relationships– Revenue earned per transaction and by fees

Sales channel

– Highly customised– Value-added pricing– Global products – Global alliances– Intellectual property rights


3232

Experian - Outsourcing

Key characteristics

– Process and logistics knowledgeCore skill

– Steady growth– Many competitors, including clients’ in-

house offers

Market type

– Capacity sell– Service-led– Long-term relationships– Revenue earned per transaction

Sales channel

– Generic process; customised delivery– Cost-based pricing– Volume-driven; scale is key– Country specific (France)– Labour intensive


3333

Experian - Interactive

Key characteristics

– Online consumer marketingCore skill

– High growth– Large and growing market

Market type

– Partnerships with major Internet portals, advertisers and web publishers

– Leverages core financial services client relationships

Sales channel

– White label– Pay-per-performance– Country specific


3434

Credit

53%Marketing

25%

Outsourcing

10%

North America

54%

International

46%

Experian – balanced portfolio

Information

46%Solutions

32%

Outsourcing

10%

SalesYear to March 2005

Continuing activities only

Interactive

12%

Interactive

12%

3535

Financial services

53%

Direct-to-consumer

12%

Telecom/utilities/ insurance

8%

Other6%

Government 3%Automotive 3%

• Over 50,000 clients in more than 60 countries

• Top 10 clients account for about 25% of sales

• At least 85% of top 50 clients dealt with Experian for over five years

Year to March 2005

% of sales by vertical market

Clients include:• AOL Time Warner• BNP Paribas• Barclays• Citigroup• Ford• HBOS

• MBNA• McDonald’s• Microsoft• Morgan Stanley• Orange• Société Générale

Experian – broad offering

Retail/home shopping

13%

Publishing/media 2%

3636

Experian - products by region

Decision support (Global)

Application processing (Global)

Fraud solutions (Global)

Consumer information

Business information

Account processing

Automotive information

Property information

Insurance information

Micromarketing

Economic analysis and forecasting

List enhancement

Database hosting

Cheque/debit processing

Direct-to-consumer credit information

Global services

•••

•

•••

•

Aust

ralia

/

•••

•

Can

ada

•••

Cen

••••■•

•

•

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•••••

••••

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Mid

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Eas

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•

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••

••

•••■

Turk

ey

•••••••••••••

•

UK

•••••

•▼

••••

•

US

••••

•

South

•• Service offered ■ Service offered via third party bureau ▼Service offered via JV with First American Real Estate (FARES)

3737

Asi

a

NZ

tral

& E

aste

rn

Euro

pe

France

/Bel

giu

m/

Nort

h A

fric

a

Ger

man

y/Aust

ria

Latin A

mer

ica

Net

her

lands

Nord

ic R

egio

n

Rep

ublic

of Ir

elan

d

Spai

n/P

ort

ugal

Afr

ica

Experian – building shareholder value

* Growth rates at constant exchange rates and in 2004 and 2005 for continuing activities only

Sales*£m

2000 2001 2002 2003 2004 2005

Operating profit*£m

2000 2001 2002 2003 2004 2005

Year to March Year to March

949 1,018 1,115 1,201 1,286 201 217 224 256 282

+2% +5%+12%

+14%

+3% +3%

+20%

+20%+18%

1,362

+16%

318

3838

Operating profit- direct business* 284.0 243.9 16- FARES 63.8 63.2 1

347.8 307.1 13Operating margin* 21.2% 21.6%

2005 2004 Growth$m $m %

Experian North America

• Sales up 19%, of which 8% from corporate acquisitions

• Good sales growth from both Credit and Marketing

• 37% sales growth from Experian Interactive

• Operating margin reflects impact of mix and FACTA–related costs

• FARES benefiting from complementary acquisitions and cost control

12 months to 31 March

* Continuing activities only; operating margin excludes FARES

Sales* 1,337 1,128 19

3939

• Sales up 17%, of which 10% from acquisitions

• Good growth across all business units, especially in value-added products and non-traditional sectors

• Operating margin up a further 50 basis points, reflecting mix and tight cost control

• Acquisitions performing well

2005 2004 Growth#

£m £m %

128.6 107.3 2020.7% 20.2%

Experian International

Operating profit*

Operating margin*

12 months to 31 March

* Continuing activities only# At constant exchange rates

Sales* 620 532 17

4040

Experian - cost profile

GlobalCosts are for the year to March 2005. Direct businesses only, excluding discontinued activities. Depreciation and data amortisation: 9% of sales in North America and 6% of sales in International. R&D: about 5% of sales in both businesses. ‘Other’ includes marketing (mainly Experian Interactive in North America), other depreciation, occupancy, royalties and voice telecommunications

North America International

100% of sales 100% of sales 100% of sales

19%

7%

7%

46%

21%

24%

9%

7%

39%

21%

13%

3%

9%

54%

21%

Other

IT

Data

Labour

EBIT

Other

IT

Data

Labour

EBIT

Other

ITData

Labour

EBIT

4141

Experian Global - cash flow

Year to March2005 2004 2003£m £m £m

Operating profit – continuing acti

Operating profit – discontinued activities

Total operating profit

Depreciation/amortisation

Capital expenditure

Working capital

Dividend from associates, less share of profit

Operating cash flow

vities 254 288 255

2 (6) 1

256 282 256

118 119 118

(128) (102) (128)

34 2 34

(10) (3) (10)

270 298 270

4242

Transforming the portfolio - Experian North America

• Complementary portfolio of businesses

• Experian Interactive now accounts for c. 30% of North America sales

– 2005 pro forma sales growth of over 50%

– Leading position in very fast growing market

Pro forma salesYear to March 2005

SalesYear to March 2002

Outsourcing10%

MarketingSolutions

15%

MarketingInformation

15%

CreditInformation50%

ConsumerDirect1%

Credit Solutions

9%

ConsumerDirect14%

CreditInformation38%

LeadGeneration15%

Credit Solutions

9%

MarketingInformation

11%

MarketingSolutions

13%

4343

What is Experian Interactive?

Credit reports andmonitoring services

Onlinelead generation

4444

How do we help consumers?

• Become a trusted and preferred source for consumers when making key financial decisions

• Offer a wide range of products that assist consumers in managing the financial aspects of key life events

Check my credit

Enroll in onlineeducation programmes

Apply formortgages

Shop forcredit card offers

4545

What is our competitive strength?

• Leading position in Internet space

– Over 30 million visitors to Experian Interactive websites each month

– Fifteenth largest Internet company in US

• Strong advertising presence on Internet via portals and other websites

– Buying scale and reach

– Delivering high volumes of quality leads

• World class Internet marketing organisation

• Synergies with Experian’s Credit and Marketing businesses

4646

Consumer Direct - strong organic growth

• Leading player in selling credit products to consumers

• Sales grew by 33% in 2005

• Growth drivers

– Increased Internet usage

– Awareness of credit importance

– ID theft protection

– Product development

4747

LowerMyBills.com

• One-stop financial portal for consumers to get better deals on their recurring monthly expenses

– Current focus on home loans

– Platform can be extended to other financial verticals

• Financial service providers pay Experian a fee for providing leads

– $22bn spent by mortgage lenders on acquiring customers

– $1bn of this spent online

– Online spend growing at c. 30% per annum

• Synergies with other parts of Experian

4848

US mortgage market

% of Experian North America sales to mortgage sector

0%

2%

4%

6%

8%

10%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

% of total ENA sales

Year to March 2003 Year to March 2004 Year to March 2005

4949

US mortgage market

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05F

06F

07F

Purchase originations Refinance originations

$bnUS mortgage originations

Year to December

Source: Mortgage Bankers Association – April 2005 5050

Financial calendar

14 June 2005 - IFRS restatement

20 July 2005 - AGM

- First Quarter Trading Update

12 October 2005 - First Half Trading Update

17 November 2005 - Interim Results

January 2006 - Third Quarter Trading Update

April 2006 - Second Half Trading Update

24 May 2006 - Preliminary Results

5151

Contacts

GUS plcOne Stanhope GateLondonW1K 1AFTel: +44 20 7495 0070Fax: +44 20 7495 1567Website: www.gusplc.com

David TylerFinance DirectorTel: +44 20 7318 6204Fax: +44 20 7318 6257Email: [email protected]

Fay DoddsDirector of Investor RelationsTel: +44 20 7318 6245Fax: +44 20 7318 6253Email: [email protected]

Peter BlytheDirector of FinanceTel: +44 20 7318 6215Fax: +44 20 7318 6253Email: [email protected]

Stuart FordInvestor Relations ManagerTel: +44 20 7318 6245Fax: +44 20 7318 6253Email: [email protected]

5252

Certain statements made in this announcement are forward lookingstatements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future results in forward looking statements.

5353

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