November - December 2016

Transcription

1 November - December Experian plc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian plc. Other products and company names mentioned may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without prior written permission of Experian plc. Experian public.

2 Overview Snapshot of Experian Revenue: US$4.6bn EBIT: US$1.2bn Market Cap*: c. 14bn In top 50 of FTSE-100 Employees: c.17,000 Offices in 37 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 2016 * At 9 November

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 growth 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 17 consumer credit bureaux 11 business credit bureaux Automotive information Health Value-added products Used to convert data into valuable decisions for businesses Provides expert consulting, analytical tools and software Data quality Targeting Cross-channel marketing suite Direct to consumer credit monitoring services Identity theft protection services Affinity (white label) credit and identity monitoring services 50% 1 16% 21% Percentages above are proportion of global revenue for the year ended 31 March

5 Overview Global revenue FY16 By region By business line EMEA/Asia Pacific 9% UK & Ireland 22% Latin America 14% North America 55% Consumer Services 21% Marketing Services 16% Decision Analytics 1 Credit Services 50% By customer segment Other 17% Public Sector /Education 2% Media /Technology Insurance Financial services 31% Direct to consumer 19% 4% 5% 5% Telecoms /Utilities Health Automotive Retail 6% 8% Diverse portfolio by region, business line and customer segment 5

6 Global revenue US$m Overview Market leader with unparalleled global reach and range 5,000 4,500 4,000 3,500 4, % Other regions North America 3,000 2,500 2, % 2,000 1,500 1, % 1, % 1, % 40% 55% 8 81% 86%* 91%* 60%* Experian Equifax D&B TransUnion Acxiom FICO 1 Year ended 31 March Year ended 30 September 2015 *US only. 2 Year ended 31 December 2015 Source: Latest full year revenue, company SEC filings This analysis covers traditional competitors that are publicly listed. It does not include companies where a single division competes against Experian. 6

7 Overview Sustainable organic revenue growth 8% 6% 4% Target range 4% 6% 5% 5% +5% +7% Latin America 7% +1% UK and Ireland +8% EMEA/ Asia Pacific +5% Organic growth 2% North America 0% FY16 H1 FY16 H2 FY17 H1 FY16 H1 restated revenue FY17 H1 revenue One-off contribution All growths are organic. All growths in the left-hand chart are as reported and FY16 H1 growth has not been restated for any divestments made during FY16 H2. Chart on the right is not to scale. 7

8 Strategic overview 8

9 Strategic overview Strategy update Focus Growth Improve performance Efficiency Capital optimisation Investment in customer service, agile development, technology, security and innovation Aimed at sustainable growth public. 9

10 Strategic overview Outcome of portfolio review Portfolio review Focus on bigger businesses with scale advantages Create competitive differentiation through synergies Actions last year resulted in six disposals; the /cross-channel marketing business will be the largest ONE EXPERIAN Targeting Proprietary data asset driving digital advertising Data also used across Experian business units Fraud detection Consumer Services Credit Services Future use health Data Quality Data clean-up: consistent, accurate and complete data for every consumer Front end to data loading across Experian businesses Embedded in products like DataArc 360 public. 10

11 Strategic overview /cross-channel marketing business; prospective divestment Limited synergies with Experian portfolio; pursuing disposal Invested to improve performance and capture optionality value: Launched world-class cross-channel platform; triple digit CAGR over 3 years to c. US$90 million (US$290m total) Stabilised platform and improved delivery Back on path to sustainable growth with good long-term prospects public. 11

12 Strategic overview Building enduring relationships with consumers Our approach Data and services Data Consumers Business and Public Sector Data Data and services Developing longlasting relationships with the 1 billion people whose data we hold on file public. 12

13 NA Consumer Services: RightOffer solution Differentiated approach to lead generation Preapproved offers utilising Experian s decisioning capabilities Rank-orders offers based on fit with consumer needs, not highest bounty paid Beta system in production, optimising performance before adding more lenders Providing a better consumer experience results in a stronger relationship with lenders public. 13

14 NA Consumer Services: partnering for growth Affinity, data breach and CSID Revitalising our approach to affinity and data breach Credit and identity offers Products, platforms and mobile apps Expanding beyond financial services partners Early wins in data breach, already benefitting from CSID Broader distribution to engage with millions more consumers public. 14

15 Consumer Services: strategy update Building relationships with consumers in our biggest credit markets US Rapidly expanding base of free and premium members Free membership of over 6.5 million people 170,000 upgrades and downgrades each month UK Free for life score offer Over 700,000 enrolments Credit Matcher price comparison gaining traction Brazil Launched free report offer, building out consumer propositions; 1.6 million enrolments Online collection of positive data opt-ins; 4.2 million to date Enhanced Limpa Nome debt resolution public. 15

16 Strategic overview - One Experian Case study: Decisioning-as-a-Service Instant Credit moving beyond reports and scores Data Attributes Scores PowerCurve decision engine Deliver decision Combining the full resources of Credit Services and Decision Analytics Delivering decisions in less than one second public. 16

17 Strategic overview - One Experian Case study: solving the challenges of digital credit marketing One Experian team Credit Services Bureau data, Data quality Decision Analytics Fraud and Identity, DaaS scores Marketing Services Targeting Data Lab Data insights Consumer Services Online partners, RightOffer pre-screen offers Re-targeting offers on display advertising Digital prescreen on authenticated sites public. 17

18 Strategic overview Latin America Brazil United States Business Information Insurance Business Information Decision Analytics Insurance EXPN Core Business Information EXPN Decision Analytics EXPN EXPN LexisNexis EXPN D&B EXPN Core Consumer Information EXPN EXPN Healthcare Core Consumer Information EXPN EXPN Automotive EXPN EXPN EXPN EXPN EXPN Others EXPN EXPN EXPN Fraud & ID Consumer Direct Affinity Marketing Services Fraud & ID Consumer Direct Affinity Marketing Services Core Small Moderate Large Positioned to capture the structural potential 18

19 Capital strategy Our medium-term financial framework Organic business Operating cash flow application Structural growth Strong cash generation Strong core and portfolio optionality Organic investment Portfolio Shareholder returns Mid single-digit organic growth Optimised capital allocation Strong growth in Benchmark earnings per share 19

20 Recent performance 20

21 Recent performance Summary of portfolio performance FY17 H1: +5% organic growth EMEA/APAC Credit Services (2%) 0% 5% 8% 8% 10% 10% (5)% UK&I Consumer Services North America Consumer Services Global Marketing Services UK&I Credit Services Latin America Credit Services Global Decision Analytics North America Credit Services FY16 H1: +4% organic growth EMEA/APAC Credit Services () 0% 4% 5% 7% 8% 10% (7%) Global Marketing Services UK&I UK&I Credit Consumer Services Services Latin America Credit Services North America Credit Services Global Decision Analytics North America Consumer Services Horizontal axis indicates share of revenue excluding CSIdentity and vertical axis indicates organic revenue growth. Share of revenue in both charts has been calculated at the same exchange rate. FY16 growth rates not restated for disposals. 21

22 Recent performance Benchmark EBIT margin by geography 0.5% 0.1% EMEA/ APAC (0.5)% 25.7% 0.1% Disposals 25.8% North America Latin America (0.2)% UK and Ireland 25.7% FY16 H1 reported EBIT margin FY16 H1 restated EBIT margin FY17 H1 reported EBIT margin Chart is not to scale. EBIT margins calculated on a Benchmark and ongoing activities basis. 22

23 Recent performance Net debt reconciliation Six months ended 30 September 2016 US$million 260 (40) FX and other 3,278 3,023 (436) Net share purchases Equity dividends paid Benchmark free cash flow Acquisitions and minority investments Net debt at 1 April 2016 Net debt / EBITDA 1.9x Net debt at 30 September 2016 Net debt / EBITDA 2.1x Chart not to scale. EBITDA used for calculating net debt/ebitda is based on the trailing twelve months. 23

24 Recent performance Capital framework US$m H1 capital summary Capital allocation 1, Other Increase in net debt Acquisitions and minority investments Organic investment in key strategic initiatives Acquisitions and minority investments Funds from Operations * Share repurchase programme Dividends Completed US$79m of planned US$400m share purchase programme Cash generated Organic capital investment Uses of cash Raised first interim dividend by 4% /cross-channel marketing business Anticipated revenue of US$290m in FY17 * Funds from Operations is defined as Benchmark free cash flow plus organic capital investment (capital expenditure). 24

25 Recent performance FY16 post tax Return on Capital Employed (ROCE) (0.1)% (0.1)% 14.9% (0.1%) FX 14.8% Disposals (0.1%) 0.7% Organic growth 15.4% FY15 ROCE* FY15 ROCE (FX adjusted) FY16 ROCE *Post Tax 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. Graph not to scale. 25

26 Summary Good progress executing against our strategy, focussing on biggest opportunities and innovating across the business Delivering organic growth within our target range Creating greater value for shareholders public. 26

27 Appendix

28 Appendix Modelling considerations for FY17 Net interest Expected to be in the region of US$80m Tax Benchmark tax rate expected to be around 26% Foreign exchange If recent rates prevail, we expect foreign exchange to be a 2% headwind to revenue and 1% headwind to Benchmark EBIT for the full year Capital expenditure Capital expenditure expected to be 8-9% of revenue Share repurchases Full year WANOS expected to be in the region of c. 942m shares 28

29 Appendix Benchmark cash flow performance Six months ended 30 September 2016 US$million 574 (174) 172 (71) Net capital expenditure Amortisation and depreciation Working capital and other 501 (28) Net interest paid (37) Tax paid on operating activities 436 Benchmark EBIT Chart not to scale. Benchmark operating cash flow Benchmark free cash flow 29

30 Appendix Revenue and EBIT by region Six months ended 30 September US$million Revenue Total growth Organic growth EBIT margin North America 1,262 1,186 6% 5% 31.2% Latin America % 7% 31. UK and Ireland % 1% 28.6% EMEA/Asia Pacific % 8% (5.7)% Total revenue 2,236 2,179 5% 5% Benchmark EBIT ongoing activities % Benchmark EBIT margin 25.7% 25.8% All figures above on a ongoing activities basis Growth at constant exchange rates 30

31 Appendix Revenue and EBIT by business line Six months ended 30 September US$million Revenue Total growth Organic growth 2016 EBIT margin Credit Services 1,158 1,108 7% 7% 33.4% Decision Analytics % 8% 13.0% Marketing Services % Consumer Services % (1)% 28.4% Total revenue 2,236 2,179 5% 5% Benchmark EBIT ongoing activities % Benchmark EBIT margin 25.7% 25.8% All figures above on a ongoing activities basis Growth at constant exchange rates 31

32 Appendix North America Six months ended 30 September US$million Revenue At constant rates Organic growth Total growth Credit Services Decision Analytics Marketing Services Consumer Services % % 0% 10% 0% 4% Total revenue 1,262 1,186 5% 6% EBIT EBIT margin 31.2% 30.4% All results are Benchmark figures and are on an ongoing activities basis. Six months ended 30 September 2015 figures have been restated to reflect disposals during the six months ended 31 March

33 Appendix Latin America Six months ended 30 September US$million Revenue At constant rates Organic growth Total growth Credit Services Decision Analytics Marketing Services % % % 5% 28% 32% Total revenue % 7% EBIT EBIT margin % All results are Benchmark figures and are on an ongoing activities basis.. 33

34 Appendix UK and Ireland Six months ended 30 September US$million Revenue At constant rates Organic growth Total growth Credit Services Decision Analytics Marketing Services Consumer Services (5)% (5)% Total revenue % 1% EBIT EBIT margin 28.6% 30.1% All results are Benchmark figures and are on an ongoing activities basis. Six months ended 30 September 2015 figures have been restated to reflect disposals during the six months ended 31 March

35 Appendix EMEA/Asia Pacific Six months ended 30 September US$million Revenue At constant rates Organic growth Total growth Credit Services Decision Analytics Marketing Services (2)% % % (2)% 18% 11% Total revenue % 8% EBIT (12) (15) EBIT margin (5.7)% (7.8)% All results are Benchmark figures and are on an ongoing activities basis. Six months ended 30 September 2015 figures have been restated to reflect disposals during the six months ended 31 March

36 Appendix Credit Services Six months ended 30 September US$million Revenue Total growth Organic growth North America % 10% Latin America % 5% UK and Ireland EMEA/Asia Pacific (2)% (2)% Total revenue 1,158 1,108 7% 7% Benchmark EBIT ongoing activities % Benchmark EBIT margin 33.4% 34.9% All figures above on a ongoing activities basis Growth at constant exchange rates 36

37 Appendix Decision Analytics Six months ended 30 September US$million Revenue Total growth Organic growth North America Latin America % 28% UK and Ireland EMEA/Asia Pacific % 18% Total revenue % 8% Benchmark EBIT ongoing activities % Benchmark EBIT margin 13.0% 12.5% All figures above on a ongoing activities basis Growth at constant exchange rates 37

38 Appendix Marketing Services Six months ended 30 September US$million Revenue Total growth Organic growth North America % 0% Latin America % 32% UK and Ireland EMEA/Asia Pacific % 11% Total revenue Benchmark EBIT ongoing activities % Benchmark EBIT margin 16.0% 14.2% All figures above on a ongoing activities basis Growth at constant exchange rates 38

39 Appendix Consumer Services Six months ended 30 September US$million Revenue Total growth Organic growth North America % 0% UK and Ireland (5)% (5)% Total revenue % (1)% Benchmark EBIT ongoing activities Benchmark EBIT margin % % 4% All figures above on a ongoing activities basis Growth at constant exchange rates 39

40 Appendix Group Benchmark earnings Six months ended 30 September US$million Growth (actual rates) Growth (constant rates) Benchmark EBIT from ongoing activities % 5% Benchmark EBIT - exited business activities - 13 Benchmark EBIT % 2% Net interest (35) (35) Benchmark PBT % 2% Benchmark taxation (140) (135) Benchmark taxation rate 26.0% 25.0% Total Benchmark earnings For owners of Experian plc (1)% 1% For non-controlling interest (1) - Weighted average number of shares, million Benchmark EPS, US cents % 1 Benchmark PBT is defined as profit before amortisation and impairment of acquisition intangibles, impairment of goodwill, acquisition and disposal 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. 40

41 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: 41

42 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 Andy Simms Head of Investor Relations Sarah Schibli Investor Relations and Communications Manager 42

43 Appendix Event calendar 18 January 2017 Trading update, third quarter 18 May 2017 Preliminary announcement, full year 18 July 2017 Trading update, first quarter 20 July 2017 Annual General Meeting 43

44 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. 44