January / February 2015...©2015 Experian plc. All rights reserved. Experian Public. Revenue: US$4.8...

©2014 Experian plc. All rights reserved. Experian Public.

January / February 2015


Revenue: US$4.8 bn EBIT: US$1.3 bn Market Cap*: c.£11 bn In top 50 of FTSE-100 Employees: c.16,000 Offices in 39 countries Largest markets: US, Brazil, UK Corporate headquarters: Dublin

OverviewSnapshot of Experian

For the year ending 31 March 2014* At 15 January 2015

Leading global information services company,providing data and analytical tools to clients around the world

Leading global information services company,providing data and analytical tools to clients around the world

1


OverviewThe Experian investment case

Focus on data & analytics | Drive profitable growth | Use cash wisely

Market leading global information company Unique proprietary data, coupled with value-added analytics Scalable business model

Strong market positions No. 1 or 2 position across our largest markets High barriers to entry

Global growth potential By expanding geographically, in new customer

segments and through innovation

Strong financial track record High quality, recurring revenues Highly cash generative with low capital intensity

2


OverviewExperian business segments

Large databases of information, used to manage risk

19 consumer credit bureaux

13 business credit bureaux

Automotive information

Credit Services

Credit Services

Value-added products

Used to convert data into valuable decisions for businesses

Provides expert consulting, analytical tools and software

Decision AnalyticsDecision Analytics

Sophisticated cross-channel marketing

Sell across c.30 countries

Delivery over email, internet, mobile, social

Marketing Services

Marketing Services

Direct to consumer credit monitoring services

Identity theft protection services

Consumer Services

Consumer Services

19%12%47% 22%

Percentages above are proportion of global revenue for the year ended 31 March 2014 3


OverviewGlobal revenue FY14

Diverse portfolio by geography, business

line and customer segment

Credit Services 47%

Decision Analytics

12%

Marketing Services 19%

Consumer Services 22%

By business lineBy region

EMEA/Asia Pacific 11%

UK & Ireland 20% North America

50%Latin America

19%

By customer segmentFinancial services

31%Direct to

consumer 22%

Retail

Other 15%

Public Sector/Education 2%

AutomotiveInsurance

Telecoms/Utilities

Media /Technology

5%3% 4% 5%Healthcare 3%

10%

4


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Experian Equifax D&B TransUnion Acxiom FICO

50% 85%*

Glo

bal r

even

ue U

S$m

Other regionsNorth America

50%

1,0981

7433

60%*40%

75%

1,6552

25%

4,7721

83%

2,2972

17%

15%1,1832

13%

87%*

*US only. Source: Latest full year revenue, company SEC filings

1 Year ended 31 March 20142 Year ended 31 December 2013

3 Year ended 30 September 2013

More than double the size of nearest competitor, broader range

OverviewMarket leader with unparalleled global reach and range

5


Financial overviewNine year performance trend

Global continuing activities revenue and EBIT only. EBIT margin excluding FARES. Operating cash conversion adjusted to exclude FARES. FY06 to FY10 EBIT adjusted to exclude FARES (discontinued operation). FY06 and FY07 revenue and EBIT adjusted to exclude MetaReward. FY07 and FY08 revenue and EBIT adjusted to exclude Loyalty Solutions. FY08 and FY09 revenue and EBIT adjusted to exclude French Transaction Processing business and other smaller discontinuing activities. FY10 and FY11 revenue and EBIT adjusted to exclude small discontinuing activities. FY11 revenue, EBIT and operating cash conversion adjusted to exclude the comparison shopping and lead generation businesses that are now discontinued. FY12 adjusted to exclude small discontinuing activities in EMEA/Asia Pacific. FY13 adjusted to exclude discontinuing activities in Latin America and EMEA/Asia Pacific.Revenue and EBIT growth shown at constant FX rates. Growths are not restated.

3,4073,712 3,790 3,803 3,859

4,456 4,582 4,772

2,930

EBIT margin

Operating cash conversion

21.9%

100%

22.8%

99%

23.6%

101%

24.5%

100%

25.7%

98%

Organic revenue growth

26.2%

96%

8% 4% 3% 2% 8% 10%

27.1%

94%

8%

27.4%

101%

5%

21.0%

102%

12%

Revenue US$m

EBIT US$m

FY07 FY08 FY09 FY10 FY11 FY12 FY13

747 848 896 932 991 1,169 1,244 1,309

FY14FY06

616

6


Financial overviewFirst half performance

• Total revenue growth of 5% at actual rates, up 4% at constant currency, flat organic revenue

• EBIT up 3% at constant currency

• EPS +6% at actual rates

• Dividend raised 7% to 12.25 US cents per share

• Operating cash flow up 17%

Global continuing activities revenue and EBIT only. FY12 H1 revenue, EBIT and EBIT margin adjusted to exclude the discontinued comparison shopping and lead generation businesses and small discontinuing activities. FY13 H1 revenue, EBIT and EBIT margin adjusted to exclude the divested Sinotrust Market Research Services business and other small discontinuing activities. FY14 H1 revenue, EBIT and EBIT margin adjusted to exclude the divested Colombia document outsourcing business in Latin America, and other small discontinuing activities. Organic revenue growths are shown at constant FX rates and have not been restated.

FY12 H1 FY13 H1 FY14 H1 FY15 H1

EBIT (US$m), and EBIT margin %

FY12 H1 FY13 H1 FY14 H1 FY15 H1

2,1512,260

627553 588

-%

6%8%

Revenue (US$m), and organic revenue growth %

26.2%25.7% 26.0%

2,289

6%

26.6%

6102,393

7


FY15 Q1

Financial overviewFirst half organic revenue momentum

8

FY15 Q2

(14%)

North America Consumer Services

(1%)

GlobalMarketing Services

GlobalDecisionAnalytics

2%

UK&I and EMEA/AP

Credit Services

3%

Latin AmericaCredit Services

4% 6%

North AmericaCredit Services

9%

UK&I Consumer Services

(10%)(2%)

GlobalMarketing Services

GlobalDecisionAnalytics

0%

UK&I & EMEA/AP

Credit Services

4% 6%

North AmericaCredit Services

13%

UK&IConsumer Services

(2%)

Horizontal axis indicates share of revenueVertical axis indicates organic revenue growth

Latin AmericaCredit ServicesNorth America

Consumer Services


Financial overviewFirst half EBIT margin by geography

9

26.0%

0.6%

26.6%

0.5%

(0.3%)0.2%

0.2%

27.2%

(0.8%)

(0.2%)

26.2%

FY14 H1Reported

EMEA/ Asia Pacific

North America

Latin America

FY15 H1(Before acquisitions

and FX)

UK and Ireland

FY15H1

FX

Acquisitions

Disposals made after FY14 H1

FY14 H1Restated


First half resultsRegional highlights – North America

• Credit Services and Decision Analytics:

• Robust environment for consumer and business lending

• Significant appetite for fraud and identity management

• Verticals performing well

• Marketing Services:

• 22 wins in North America of 46 new contracts globally for cross-channel

10


• Significant progress, Experian.com performed well

• Delivering greater value to consumers:

• Creating new highly differentiated products

• Leveraging strength of position as content owner

• FICO agreement is one part of the new product strategy

• FICO scores will be incorporated into Experian products, marketed under Experian brand

• Most commonly used credit score in US; well-known consumer brand

First half resultsNorth America Consumer Services – brand transition

Responding to high consumer demand for FICO scores

11


• H1 performance lower than anticipated

• Clear market leader serving many blue-chip clients and adding new deals

• Roll-out of pilot with top 5 retail bank has commenced, nationwide roll out expected

• Core legacy partners not actively marketing currently

• No material change expected in H2

First half resultsNorth America Consumer Services – affinity partners

12


First half resultsNorth America Consumer Services – summary

1. North America Consumer Services, 6 months ended 30 September 2014

Free sites

Experian.com

Affinity, data breach & other

H1 revenue growth1

c.30%

Total

c.15%

c.5%

c.12%

% of NA CS revenue H11

c.30%

c.20%

c.50%

Transition on track and benefit of actions become visible through FY16

13


First half resultsRegional highlights – Latin America

• Brazil improved throughout Q2

• Macro environment subdued but stable

• Driving growth in Brazil:

• Investing in promising areas

• Transforming sales model

• Greater emphasis on vertical markets

• Re-engineering costs

• Colombia and Peru: investing for growth

Positioning strongly for future growth

14


UK and Ireland EMEA/Asia Pacific

First half resultsRegional highlights

• Improved positioning in EMEA and Asia Pacific

• Aim to drive more sustainable, profitable growth in Asia Pacific

Good• Lenders prioritising spend in

regulatory compliance and fraud prevention

• Further vertical progress

• New cross-channel wins

Significant progress

15


First half resultsProgress of acquisitions

• Executing well against plan

• Winning new clients and larger contracts

• Industry dynamics highly positive

• Potential to introduce wider Experian product set

Passport 41st Parameter

• In build-mode; progressing well

• Rapidly globalising

• Investing to secure substantial market opportunity

• Important addition to existing capabilities

Over 20% pro forma H1 revenue growth

Over 20% pro forma H1 revenue growth

16


Strategy Our priorities

• Successful business with strong track record

• Leading market positions

• Many opportunities for growth

• Early in globalisation efforts

• Some scope for performance improvements

• Aim to deliver attractive earnings growth and superior returns

• Balance investment needs with shareholder returns

17


Strategy Our strategic priorities

Focus on our key strengths

Deliver performance improvements

Seize attractive growth opportunities

Rigorously optimise capital

1122334455

Drive operational efficiency and productivity

18


Strategy1. Focus on our key strengths

• Prioritise where we sustain differentiation

• Data, analytics and platforms in combination drive success

• Avoid spreading investments too thinly

• Rationalise peripheral activities

19


Strategy2. Deliver performance improvements

• Invest in brand and products• New features • More usability • New consumer experiences,

e.g. BillGuard• Move beyond reports and scores

20

Transform consumers’ interaction with credit and identity

• Now more digitally-oriented• Inconsistent performance driven by:

• Some mature products• Execution issues

• Significant structural growth available

Focus where we can win

ConsumerServices

Marketing Services

20


Strategy2. Deliver performance improvements: regulation

• New industry regulatory environment

• We are:

• Enhancing data accuracy

• Increasing transparency

• Becoming more consumer-centric

• Aim to mitigate additional expenses with increased operational efficiency

Strengthens our organisation –raises barriers to entry, improves

stance with consumers21


Strategy3. Seize attractive growth opportunities

Expand global platformsExpand global platforms

Biggest opportunities lie where we also have scope for the greatest differentiation

New opportunities in existing markets

New opportunities in existing markets Higher-growth marketsHigher-growth markets

• PowerCurve and PowerCurve on-demand

• Global value-added platform

• Cross-channel marketing

• Global Data Network

• New credit bureau products

• Big data analytics

• Address larger market in business information

• Healthcare services

• Fraud and identity management

22


Strategy 4. Drive operational efficiency and productivity

• Funding a number of initiatives

• Potential to improve operation efficiency:

• Eliminate duplicated costs

• Increase automation of processes

• Streamlining overheads

Free up resources to put back into the business and deliver

earnings growth

23


Strategy5. Rigorously optimise capital

• Capital strategy set alongside business strategy

• Core principles:

• Drive growth

• Investments generate value over medium and longer term

• Balance business investment with rewards to shareholders

24


1.00

1.25

1.50

1.75

2.00

2.25

2.50

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

FY13 FY FY14 H1 FY14 FY FY15 H1 FY15 FY

US$bn Net debt /EBITDA

Net debt Net debt to EBITDA

Target net debt to EBITDA range of 1.75 – 2.0

Capital strategyNet debt/EBITDA

25


Summary

26

Evolving Experian for maximum opportunity

26


Appendix


(3%)

(1%)

0%

5%

Q3 organicgrowth

3%

(2%)

1%

0%

0%

Organicgrowth

5%

2014 EBIT margin

30.1%

(4.3%)

35.3%

30.5%

1,207

498

235

2,393

627

26.2%

453

2014

665

(38)

1,150

435

229

2,289

610

26.6%

475

2013

648

(38)

5%

6%

3%

4%

3%

0%

Total growth

3%

All figures above on a continuing activities basisGrowth at constant exchange rates2013 restated to exclude the divested Colombia document outsourcing business in Latin America as well as the movement of some small Marketing Services businesses to discontinuing activities in EMEA/Asia Pacific

AppendixRevenue and EBIT by geography

North America

UK and Ireland

EMEA/Asia Pacific

Total revenue

Latin America

Revenue

EBIT – continuing activities

EBIT margin

Six months ended 30 SeptemberUS$million

Central activities

EBIT before central activities

28


6%

(12%)

0%

1%

Q3 organicgrowth

(1%)

4%

(7%)

0%

1%

Organicgrowth

(1%)

2014 EBIT margin

35.7%

28.9%

13.7%

12.9%

1,195

419

508

2,393

627

26.2%

271

2014

665

(38)

1,090

411

536

2,289

610

26.6%

252

2013

648

(38)

11%

0%

(7%)

4%

3%

5%

Total growth

3%

on a continuing activities basisnt exchange ratesexclude the divested Colombia document outsourcing business as well as some other small discontinuing activities in Marketing Services

AppendixRevenue and EBIT by business line

Credit Services

Marketing Services

Consumer Services

Total revenue

Decision Analytics

Revenue

EBIT – continuing activities

EBIT margin


Central activities

EBIT before central activities

29


Benchmark non-controlling interest

Benchmark taxation

Benchmark PAT

Benchmark PBT1

Benchmark earnings

Total EBITNet Interest

Benchmark EPS, US cents

Weighted average number of shares, millionClosing number of shares, million

Benchmark taxation rate

2014

(1)

(148)

442

590

441

627(37)

45.1

977976

25.1%

2013

(1)

(154)

419

573

418

608(35)

42.5

983979

26.9%

Growth(actual rates)

3%

6%

3%

6%

Growth(constant rates)

4%

6%

4%

7%


Growths at constant exchange rates are estimated.1 Benchmark PBT is defined as profit before amortisation and impairment of acquisition intangibles, impairment of goodwill, acquisition expenses, adjustments to contingent consideration, exceptional items, financing fair value remeasurements, tax and discontinued operations. It includes the Group’s share of continuing associates’ pre-tax results.

AppendixGroup Benchmark earnings

30


2014

547

200

372

1,207

363

30.1%

88

Total growth

22%

(1%)

(12%)

5%

3%

15%

2013

447

203

423

1,150

351

30.5%

77

Organicgrowth

6%

(12%)

(2%)

4%

(2%)

7%

(18%)

(3%)

2%

Q3 organicgrowth

(1%)

All figures above on a continuing activities basisGrowth at constant exchange rates

AppendixNorth America

Revenue


Credit Services

Marketing Services

Consumer Services

Total revenue

Decision Analytics

EBIT

EBIT margin

31


6%

5%

(4%)

Q3 organicgrowth

(6%)

2014

416

15

453

160

35.3%

22

Total growth

1%

(2%)

0%

(4%)

(12%)

2013

432

17

475

176

37.1%

26

Organicgrowth

1%

0%

(12%)

(2%)

AppendixLatin America

Revenue


Credit Services

Marketing Services

Total revenue

Decision Analytics

EBIT

EBIT margin

All figures above on a continuing activities basisGrowth at constant exchange rates2013 restated to exclude the divested Colombia document outsourcing business in Marketing Services

32


2014

137

118

136

498

152

30.5%

107

Total growth

6%

3%

11%

6%

9%

3%

2013

119

106

113

435

129

29.7%

97

Organicgrowth

3%

11%

5%

2%

2%

3%

6%

3%

3%

Q3 organicgrowth

2%


AppendixUK and Ireland

Revenue


Credit Services

Marketing Services

Consumer Services

Total revenue

Decision Analytics

EBIT

EBIT margin

33


2014

95

86

235

(10)

(4.3%)

54

Total growth

5%

(1%)

3%

(2%)

4%

2013

92

85

229

(8)

(3.5%)

52

Organicgrowth

5%

1%

2%

(4%)

4%

(1%)

(3%)

Q3 organicgrowth

(4%)

AppendixEMEA/Asia Pacific

All figures above on a continuing activities basisGrowth at constant exchange rates2013 restated for the movement of some small Marketing Services businesses to discontinuing activities

Revenue


Credit Services

Marketing Services

Decision Analytics

Total revenue

EBIT

EBIT margin

34


22%

6%

5%

11%

14%

1%

Total growth

547

137

95

1,195

427

35.7%

416

2014

447

119

92

1,090

382

35.0%

432

2013

6%

5%

4%

1%

Organicgrowth

3%

7%

4%

6%

6%

Q3 organicgrowth

3%


North America

UK and Ireland

EMEA/Asia Pacific

Total revenue

Latin America

Revenue

EBIT

EBIT margin


AppendixCredit Services

35


15%

3%

4%

5%

(19%)

(12%)

Total growth

88

107

54

271

37

13.7%

22

2014

77

97

52

252

44

17.5%

26

2013

4%

2%

1%

(12%)

Organicgrowth

2%

2%

(3%)

1%

(4%)

Q3 organicgrowth

3%


North America

UK and Ireland

EMEA/Asia Pacific

Total revenue

Latin America

Revenue

EBIT

EBIT margin


AppendixDecision Analytics

36


(1%)

3%

(1%)

0%

(1%)

(2%)

Total growth

200

118

86

419

54

12.9%

15

2014

203

106

85

411

54

13.1%

17

2013

(2%)

(4%)

(1%)

(2%)

Organicgrowth

2%

(1%)

(4%)

(1%)

(6%)

Q3 organicgrowth

2%

All figures above on a continuing activities basisGrowth at constant exchange rates2013 restated to exclude the divested Colombia document outsourcing business in Latin America and other small discontinuing activities in EMEA/Asia Pacific

North America

UK and Ireland

EMEA/Asia Pacific

Total revenue

Latin America

Revenue

EBIT

EBIT margin


AppendixMarketing Services

37


(12%)

(7%)

(15%)

11%

Total growth

(12%)

(7%)

11%

Organicgrowth

372

508

147

28.9%

136

2014

423

536

168

31.3%

113

2013

(18%)

(12%)

6%

Q3 organicgrowth


North America

Total revenue

UK and Ireland

Revenue

EBIT

EBIT margin


AppendixConsumer Services

38


• Benchmark tax rate now expected to be c.25%

• Now expected to be in the region of US$75m to US$80m

Capital expenditure

Capital expenditure

• Capital expenditure expected to be in the lower half of the US$400m to US$425m range

Netinterest

Netinterest

TaxTax

WANOSWANOS • Expect weighted average number of shares to be c.977m for the full year

Foreign exchangeForeign

exchange• If current rates prevail, expect FX headwind of c.1.5% for the

full year

AppendixOther modelling considerations for FY15

39



AppendixCash flow performance

40

EBIT Operating cash flow

Working capital

Capital expenditure

Depreciation and

amortisation

Dividends paid to non-controlling interests

Free cash flow

Net interest paid

95% conversion of EBIT into

operating cash flow

113% conversion of benchmark

earnings into free cash flow

Tax

(X)

627

(176) 192

(45)

598

(36)(62) (1)

499


AppendixSave the date

Wednesday, 28 January 2015London, with webcast

4141


AppendixExperian American Depositary Receipt (ADR) program

Experian ADR shares trade on the OTCQX under the following information:

Symbol EXPGYCUSIP 30215C101Ratio 1 ADR : 1 ORDCountry United KingdomEffective Date October 11, 2006Underlying SEDOL B19NLV4Underlying ISIN GB00B19NLV48U.S. ISIN US30215C1018Depositary BNY Mellon

For ADR shareholder enquiries, please contact:

Shareholder RelationsBNY Mellon Depositary ReceiptsPO Box 30170College StationTX 77842-3170United States

T: + 1 201 680 6825 (From the US: 1-888-BNY-ADRS, toll free)E: [email protected]: www.mybnymdr.com

42


AppendixContacts

ExperianCardinal Place80 Victoria StreetLondonSW1E 5JL

Tel: +44 (0)203 042 4200Website: www.experianplc.com

Nadia Ridout-Jamieson Peg SmithDirector of Investor Relations Executive Vice-PresidentEmail: [email protected] Email: [email protected]

Sarah SchibliInvestor Relations and Communications ManagerEmail: [email protected]

43


AppendixEvent calendar

28 January 2015 Investor seminar, London

12 May 2015 Preliminary announcement, full year

16 July 2015 Interim management statement, first quarter

22 July 2015 Annual General Meeting

44


AppendixDisclaimer

This presentation is being made only to, and is only directed at, persons to whom this presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

Information in this presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments.

This presentation does not constitute or form part of, and should not be construed as, an offering of securities or otherwise constitute an invitation, inducement or recommendation to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Experian group (the “Group”).

Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results expressed or implied in these forward-looking statements. Forward-looking statements speak only as of the date of this presentation.

This presentation contains certain non-GAAP financial information. The Group’s management believes that these measures provide valuable additional information in understanding the performance of the Group or the Group’s businesses because they provide measures used by the Group to assess performance. Although these measures are important in the management of the business, they should not be viewed as replacements for, but rather as complementary to, the GAAP measures.

45

January / February 2015...©2015 Experian plc. All rights reserved. Experian Public. Revenue: US$4.8...

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Transcript of January / February 2015...©2015 Experian plc. All rights reserved. Experian Public. Revenue: US$4.8...