May/June Experian plc. All rights reserved. Experian Public.

Transcription

1 May/June 2015

2 Overview Snapshot of Experian Revenue: US$4.8 bn EBIT: US$1.3 bn Market Cap*: c. 12 bn In top 50 of FTSE-100 Employees: c.17,000 Offices in 39 countries Largest markets: US, Brazil, UK Corporate headquarters: Dublin Leading global information services company, providing data and analytical tools to clients around the world For the year ending 31 March 2015 * At 12 May

3 Overview The Experian investment case 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 Significant potential By bringing our assets together to access new market opportunities Strong financial track record High quality, recurring revenues Highly cash generative with low capital intensity Our strategy is grounded in leveraging key strengths and a sustained focus on the core 3

4 Overview Experian business segments Credit Services Decision Analytics Marketing Services Consumer Services Large databases of information, used to manage risk 19 consumer credit bureaux 13 business credit bureaux Automotive information Value-added products Used to convert data into valuable decisions for businesses Provides expert consulting, analytical tools and software Sophisticated cross-channel marketing Sell across c.30 countries Delivery over , internet, mobile, social Direct to consumer credit monitoring services Identity theft protection services Health 49% 12% 18% 21% Percentages above are proportion of global revenue for the year ended 31 March

5 Overview Global revenue FY15 By region By business line EMEA/Asia Pacific 10% UK & Ireland 21% Latin America 18% North America 51% Marketing Services 18% Consumer Services 21% Decision Analytics 12% Credit Services 49% By customer segment Other 16% Public Sector /Education 2% Media /Technology Insurance Financial services 30% Direct to consumer 20% Retail 4% Health 9% 4% 5% 5% 5% Telecoms /Utilities Automotive Diverse portfolio by geography, business line and customer segment 5

6 Overview Market leader with unparalleled global reach and range Global revenue US$m 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, , , % Other regions North America 2, % 1, % 1, % 13% % 51% 81% 74% 85%* 87%* 58%* Experian Equifax D&B TransUnion Acxiom FICO More than double the size of nearest competitor, broader range 1 Year ended 31 March Year ended 31 December Year ended 31 March Year ended 30 September 2014 *US only. Source: Latest full year revenue, company SEC filings 6

7 Financial overview Ten year performance trend Revenue US$m EBIT US$m 4,456 4,582 4,772 4,810 2,930 3,407 3,712 3,790 3,803 3, ,169 1,244 1,309 1,306 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Organic revenue 12% 8% 4% 3% 2% 8% 10% 8% 5% 1% Operating cash conversion 102% 100% 99% 101% 100% 98% 96% 94% 101% 104% Benchmark EPS n/a n/a 1% 8% 8% 10% 18% 9% 8% 4% Dividend per share n/a n/a 9% 8% 15% 22% 14% 9% 8% 5% Global continuing activities revenue and EBIT only. Excluding rates, FY06 to FY13 revenue, EBIT and operating cash conversion may have been adjusted to exclude various discontinuing activities and discontinued operations for further information refer to the respective Annual Reports available on Benchmark EPS shown as initially reported. EPS and dividend rates are shown from FY08, the first year in which comparable prior year figures were available, following IPO in FY07. Revenue shown 7 at constant FX rates. Growth rates are not restated.

8 Strategic overview 8

9 Strategic overview Strategic priorities Focus Growth Improve performance Efficiency Capital optimisation Bigger businesses Consumer Information Brazil Effectiveness and operating model Selective business investment Scale advantage Business Information Consumer Services Resource optimisation Returns focus Competitive differentiation Health Marketing Services Shareholder returns Fraud & ID Software and analytics Executing against our priorities: positioning for 9

10 Strategic overview Adapting to changing market influences Technology Data Our response Combine our expertise in data, analytics, technology and consultancy Our response Growing the value of our unique data Consumers Regulation Our response Putting consumers at the heart of our business Our response Helping clients to navigate new requirements 10

11 Strategic overview Focus on core activities FOCUS GROWTH IMPROVE PERFORMACE EFFICIENCY CAPITAL OPTIMISATION US$m Revenue by geography (FY15) 3,000 Prioritise Core countries: 87% of global revenue Invest Prioritisation of: Next 14 countries: 10% of global revenue Evaluate Other: 3% of global revenue most important geographies core business lines 0 United States United Kingdom Brazil Tier 2 Other Enhance strategic alignment and reduce complexity 11

12 Strategic overview What we will achieve: FOCUS GROWTH IMPROVE PERFORMACE EFFICIENCY CAPITAL OPTIMISATION Consumer Information Sustain and grow data leadership, while maximising benefits of scale in technology deployment Business Information Expand our portfolio, become a leading global provider Health Broaden capability set to address opportunities beyond revenue cycle management Fraud and identity Aspire to market leadership Software and analytics Extend our leadership position into new market segments 12

13 Strategic overview What we will achieve: performance improvements FOCUS GROWTH IMPROVE PERFORMACE EFFICIENCY CAPITAL OPTIMISATION Consumer Services Empower and protect consumers; fundamentally change the market Marketing Services Focus on where we can win to fuel Brazil Reinforce leadership, with the ambition of returning to high single-digit 13

14 Strategic overview Improving how we operate FOCUS GROWTH IMPROVE PERFORMACE EFFICIENCY CAPITAL OPTIMISATION We are making changes to: Increase speed of decision making Better serve our customers Promote cross-collaboration Place the client at the heart of everything we do Increase innovation Reduce costs Eliminate unnecessary complexity Optimise our operating model Driving for 14

15 Strategic objectives Medium-term revenue ambitions Organic revenue 3 year CAGR FY15-FY18 Health Fraud and identity management Software and analytics Consumer Information Brazil Business Information Marketing Services Consumer Services Double-digit Mid to high single-digit Low to mid single-digit Goal: at a substantial pace 15

16 FOCUS GROWTH Capital framework IMPROVE PERFORMACE Our model EFFICIENCY CAPITAL OPTIMISATION Focus on best and highest quality opportunities Efficiency Drive with efficiency Flexibility to invest Scrutiny plus a prominent focus on returns A balanced approach Experian Experian plc. plc. All All rights rights reserved. reserved. Experian Experian Public. Public. Prudence Substantial funding to satisfy goals Progressive dividend Return surpluses 16

17 Recent performance 17

18 Recent performance Organic revenue momentum Group organic revenue improved to 3% in Q4 Normalised +2% in Q4 7% 6% 5% 4% 3% 2% 1% 0% Group excl. North America Consumer Services 2% 3% 4% 6% Q1 Q2 Q3 Q4 2% North America Consumer Services 6% Brazil 5% 5% (2%) (6%) 4% 2% 2% (10%) 0% (14%) (10%) (2%) (14%) (14%) (18%) (4%) (18%) (22%) (6%) (4%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18

19 Recent performance Organic revenue trends by segment 8% 6% Credit Services 5% 6% 6% 12% 10% 8% Decision Analytics 11% 4% 2% 0% 6% 2% 4% 2% 2% 1% 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2% 1% 0% Marketing Services 1% 0% (2%) (4%) (6%) (5%) Consumer Services (1%) (2%) (3%) (1%) (1%) (2%) Q1 Q2 Q3 Q4 (8%) (10%) (12%) (14%) (9%) (9%) (12%) Q1 Q2 Q3 Q4 19

20 Recent performance EBIT margin by geography 0.1% (0.1%) 0.3% EMEA/ Asia Pacific Latin America (0.4%) 0.2% UK and Ireland Acquisitions North America 27.9% (0.3%) 27.5% FX 27.4% 27.2% FY14 Reported FY15 (Before acquisitions and FX) FY15 (After acquisitions, before FX) FY15 20

21 Regional update: North America Consumer Services Experian.com FY15 revenue Free sites FY15 revenue decline Q3 Q4 +9% +14% -32% -26% Q3 Q4 21

22 Regional update: North America Consumer Services We are here Launched Experian FICO Migrated freecreditreport.com customers to Experian.com Launch of mobile apps Beta launch of new technology platform Enhancing the consumer experience Dec 2014 March 2015 April 2015 May 2015 FY16 22

23 Regional update: North America Consumer Services: Experian apps Secure your data with a passcode Learn how your financial behaviours drive your FICO Score On-the-go alerts for changes to your credit 23

24 Regional update: North America Health Revenue cycle Fraud Revenue Cycle Management Pro forma Passport revenue +20% New client wins, growing pipeline, rising average order value Healthcare Strategic development Investing in Fraud and ID Data and analytics Current Experian Health product concentration by sub-vertical High Low Direct to consumer Integrated PreciseID into EPIC hospitals Evaluating organic expansion opportunities in new client segments 24

25 Regional update: Latin America Update on strategy in Brazil Implemented series of organisational measures Investing in areas of structural : Addressing new verticals Building presence in fraud and identity Strengthening reputation for analytics Introducing data quality capability Enhancing operational efficiency Executing well in a tough environment 25

26 Regional update: UK and Ireland Spotlight on consumer and business information Consumer information Business information Strong reception for credit pre-qualification Healthy product roadmap for FY16: ExPIN Statement exchange Rental Global investment initiative Growth areas: Sophisticated products SME International data B2B marketing Focus on biggest businesses is yielding good results 26

27 Regional update EMEA/Asia Pacific Significant progress in EMEA/Asia Pacific: Focus on fewer markets in Asia Pacific Strengthening go-to-market in EMEA Drive to improve profitability while continuing to back strategic investments Continue to evaluate footprint to focus on core Goal: improve profitability 27

28 Capital strategy FY15 Capital framework US$m 1,600 1,400 1,200 1, Other Funds from operations 1 Debt reduction Dividends Buyback Substantial funds available to meet strategic goals Targeting investments in specific areas Progressed dividend ahead of earnings Cash generated Cash generated Organic capital investment Uses of Uses cashof cash Acquisitions 11% of US$600m share repurchase programme completed in FY15 1 Funds from operations is defined as free cash flow plus organic capital investment (capital expenditure). 28

29 Summary Executing on our strategy Generating value for shareholders 29

30 Appendix

31 Appendix Modelling considerations for FY16 Net interest Expected to be in the region of US$80m to US$90m Tax Benchmark tax rate expected to be in the range 24% to 25% Capital expenditure Capital expenditure expected to be c. 8% of revenue Share repurchases Share purchases in the region of US$540m, of which <$100m relates to employee shares. WANOS in region of 964m shares FX If current rates prevail, expect an FX headwind of c. 6% on EBIT 31

32 Appendix North America Year ended 31 March US$million Revenue Total Organic Credit Services 1, % 7% Decision Analytics % 4% Marketing Services % 0% Consumer Services (14%) (14%) Total revenue 2,468 2,404 3% (2%) EBIT % EBIT margin 30.8% 31.5% All figures above on a continuing activities basis Growth at constant exchange rates 32

33 Appendix Latin America Year ended 31 March US$million Revenue Total Organic Credit Services % 3% Decision Analytics (2%) (2%) Marketing Services (4%) (4%) Total revenue % 3% EBIT % EBIT margin 36.5% 37.2% All figures above on a continuing activities basis Growth at constant exchange rates 33

34 Appendix UK and Ireland Year ended 31 March US$million Revenue Total Organic Credit Services % 3% Decision Analytics % 3% Marketing Services % 1% Consumer Services % 8% Total revenue % 4% EBIT % EBIT margin 31.4% 30.1% All figures above on a continuing activities basis Growth at constant exchange rates 34

35 Appendix EMEA/Asia Pacific Year ended 31 March US$million Revenue Total Organic Credit Services % 4% Decision Analytics % 9% Marketing Services (1%) (3%) Total revenue % 3% EBIT (1) 7 30% EBIT margin (0.2%) 1.4% All figures above on a continuing activities basis Growth at constant exchange rates 35

36 Appendix Credit Services Year ended 31 March US$million Revenue Total Organic North America 1, % 7% Latin America % 3% UK and Ireland % 3% EMEA/Asia Pacific % 4% Total revenue 2,366 2,244 10% 5% EBIT % EBIT margin 35.8% 35.9% All figures above on a continuing activities basis Growth at constant exchange rates 36

37 Appendix Decision Analytics Year ended 31 March US$million Revenue Total Organic North America % 4% Latin America (2%) (2%) UK and Ireland % 3% EMEA/Asia Pacific % 9% Total revenue % 4% EBIT % EBIT margin 19.2% 21.2% All figures above on a continuing activities basis Growth at constant exchange rates 37

38 Appendix Marketing Services Year ended 31 March US$million Revenue Total Organic North America % 0% Latin America (4%) (4%) UK and Ireland % 1% EMEA/Asia Pacific (1%) (3%) Total revenue % (1%) EBIT (2%) EBIT margin 17.1% 17.7% All figures above on a continuing activities basis Growth at constant exchange rates 38

39 Appendix Consumer Services Year ended 31 March US$million Revenue Total Organic North America (14%) (14%) UK and Ireland % 8% Total revenue 980 1,071 (9%) (9%) EBIT (11%) EBIT margin 28.3% 28.8% All figures above on a continuing activities basis Growth at constant exchange rates 39

40 Appendix Revenue and EBIT by geography Year ended 31 March US$million Revenue Total Organic 2015 EBIT margin North America 2,468 2,404 3% (2%) 30.8% Latin America % 3% 36.5% UK and Ireland % 4% 31.4% EMEA/Asia Pacific % 3% (0.2%) Total revenue 4,810 4,772 3% 1% EBIT before central activities 1,387 1,392 3% Central activities (81) (83) EBIT continuing activities 1,306 1,309 4% EBIT margin 27.2% 27.4% All figures above on a continuing activities basis Growth at constant exchange rates 40

41 Appendix Revenue and EBIT by business line Year ended 31 March US$million Revenue Total Organic 2015 EBIT margin Credit Services 2,366 2,244 10% 5% 35.8% Decision Analytics % 4% 19.2% Marketing Services % (1%) 17.1% Consumer Services 980 1,071 (9%) (9%) 28.3% Total revenue 4,810 4,772 3% 1% EBIT before central activities 1,387 1,392 3% Central activities (81) (83) EBIT continuing activities 1,306 1,309 4% EBIT margin 27.2% 27.4% All figures above on a continuing activities basis Growth at constant exchange rates 41

42 Appendix Group Benchmark earnings Year ended 31 March US$million Growth (actual rates) Growth (constant rates) Total EBIT 1,306 1,306 0% 4% Net interest (75) (74) Benchmark PBT 1 1,231 1,232 0% 4% Benchmark taxation (300) (329) Benchmark taxation rate 24.4% 26.7% Benchmark PAT Benchmark non-controlling interest (1) (4) Benchmark earnings % 8% Weighted average number of shares, million Closing number of shares, million Benchmark EPS, US cents % Dividend per share, US cents % 8% 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. 42

43 Appendix Cash flow performance Year ended 31 March 2015 US$million 1,306 (380) 384 Capital expenditure Amortisation and depreciation 104% conversion of EBIT into operating cash flow 49 Working capital and other 1,359 (74) Net interest paid (145) Continuing tax paid (5) Dividends paid to noncontrolling interests 122% conversion of benchmark earnings into free cash flow 1,135 EBIT Operating cash flow Free cash flow 43

44 Appendix Net debt reconciliation Year ended 31 March 2015 US$million (1,135) 374 (74) Other 3,809 Free cash flow Acquisitions and disposals Net share purchases Equity dividends paid 3,217 US$592m excess cash flow used to reduce net debt Net debt at 1 April 2014 Net debt / EBITDA equal to 2.27x Net debt at 31 March 2015 Net debt / EBITDA equal to 1.9x 44

45 Appendix Return on Capital Employed (ROCE) (1.8%) 1.5% 15.6% FY14 Acquisitions 13.8% (0.4%) North America Consumer Services Rest of Group 14.9% FY14 Proforma FY14 FY15 US$m FY12 FY13 FY14 FY15 EBIT less tax Average capital employed 5,410 5,748 6,098 6,638 ROCE* 15.1% 15.5% 15.6% 14.9% * ROCE is defined as EBIT less tax at the Benchmark rate divided by a 3 point average of capital employed over the period, adjusted for non-controlling interests. 45

46 Appendix Experian American Depositary Receipt (ADR) program Experian ADR shares trade on the OTCQX under the following information: Symbol EXPGY CUSIP 30215C101 Ratio 1 ADR : 1 ORD Country United Kingdom Effective Date October 11, 2006 Underlying SEDOL B19NLV4 Underlying ISIN GB00B19NLV48 U.S. ISIN US30215C1018 Depositary BNY Mellon For ADR shareholder enquiries, please contact: Shareholder Relations BNY Mellon Depositary Receipts PO Box College Station TX United States T: (From the US: BNY-ADRS, toll free) E: shrrelations@cpushareownerservices.com W: 46

47 Appendix Contacts Experian Cardinal Place 80 Victoria Street London SW1E 5JL Tel: +44 (0) Website: Nadia Ridout-Jamieson Director of Investor Relations Peg Smith Executive Vice-President Sarah Schibli Investor Relations and Communications Manager 47

48 Appendix Event calendar 16 July 2015 Trading update, first quarter 22 July 2015 Annual General Meeting 10 November 2015 Interim results announcement, half year 48

49 Appendix Disclaimer 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. 49