July-September Experian plc. All rights reserved. Experian Public.

Transcription

1 July-September 2016

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 12 July

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% 13% 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 13% Credit Services 50% By customer segment Other 17% Public Sector /Education 2% 3% 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% 83% 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 Financial highlights 8% Organic revenue growth 6% For FY17 we expect: 4% Target range Organic revenue growth in mid singledigits 2% 0% 0% FY15 Q1 0% 0% FY15 Q2 FY15 Q3 3% FY15 Q4 3% 3% FY16 Q1 4% FY16 Q2 6% 6% FY16 Q3 FY16 Q4 5% FY17 Q1 Stable margins Further progress in Benchmark EPS One-off contribution All growths are organic and stated at constant currency. All growths are as reported and have not been restated for any divestments made during FY16. 7

8 Strategic overview 8

9 Strategic overview Delivering on our five strategic priorities Focus Growth Improve performance Efficiency Capital optimisation Expanding data assets Investing in innovation Transforming parts of the business Investing in biggest growth opportunities 9

10 Strategic overview Expanding through new data sources Adding new data sources, expanding coverage Positive data in Brazil Consumers in control through opt-ins Collecting opt-ins through multiple channels Branch offices Partnerships with retailers Financial Services Receiving positive data on 3 million consumers, with plans to accelerate Well positioned to sustain good growth 10

11 Strategic overview Focus on innovation Digital credit marketing Redefining preapproved credit offers New fraud platform Integrating a full range of fraud solutions Audience Engine Delivering on promise of addressable advertising Patient Estimates Providing consumers with clear picture of out-of-pocket healthcare costs Organic investment in innovation supporting future growth 11

12 Strategic overview North America Consumer Services North America Consumer Services Addressable market Future potential Helping consumers Freemium lead generation Freemium transactional Experian plc. All rights reserved. Experian Public. Today Identity protection Premium services 12

13 Strategic overview - North America Consumer Services Enriching the consumer offering Strategy Enrich consumer experience Greater consumer engagement Diversify and expand revenue sources Delivery Experian.com new tools, mobile apps and industryspecific scores Free channel attracted 3.5 million members Affinity product refreshes with largest clients Continuing our transformation 13

14 Strategic overview - North America Consumer Services Definitive agreement to acquire CSID Next step in transformation of Consumer Services Strategic rationale Enrich our consumer offer Distribute through wholesale partnerships, direct sales and affinity partners Global roll-out potential Supports sustainable growth in Consumer Services Experian plc. All rights reserved. Experian Public. 14

15 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 15

16 Strategic overview EMEA/Asia Pacific Transformed commercial operations Enhancing quality of earnings Drive profitability Focused on big markets Experian plc. All rights reserved. Experian Public. 16

17 Strategic overview Marketing Services Step 1 Step 2 Step 3 Portfolio management Data quality investment Marketing Suite focus Exit activities with low Group synergies Data quality accounts for 4% of Group revenues Growth with high margins Significant synergies with rest of Experian Addressing past stability issues Momentum now building in crosschannel Created Marketing Suite 17

18 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 18

19 Recent performance 19

20 Recent performance Financial highlights 8% Organic revenue growth 6% 4% Target range Organic growth in target range since Q2 FY16 FY16 results: 2% 0% 0% FY15 Q1 0% 0% FY15 Q2 FY15 Q3 3% FY15 Q4 3% 3% FY16 Q1 4% FY16 Q2 6% 6% FY16 Q3 FY16 Q4 5% FY17 Q1 EBIT margin stable at constant FX Continuing EPS +7% Strong cash conversion of 105% One-off contribution All growths are organic and stated at constant currency. All growths are as reported and have not been restated for any divestments made during FY16. 20

21 Recent performance Recent focus areas: organic revenue growth 4% 2% North America Consumer Services 3% 1% 1% 9% 8% Brazil 8% 8% 0% (2)% (4)% (6)% (8)% (5)% 7% 6% 5% 4% 3% 2% 2% 5% 5% 6% 6% 6% (10)% (12)% (14)% (16)% (18)% (20)% (10)% FY15 Q1 (14)% FY15 Q2 (18)% FY15 Q3 (14)% FY15 Q4 (10)% FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY17 Q1 1% 0% (1)% (2)% (3)% (4)% (5)% (4)% FY15 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY17 Q1 Underlying growth excluding one-off contribution All growths are organic and stated at constant currency. All growths are as reported and have not been restated for any divestments made during FY16. 21

22 Recent performance FY16 EBIT margin by geography Flat margins at constant currency 0.1% 27.3% (0.2)% 0.3% 27.3% (0.6)% 27.2% Disposals North America (0.1)% UK and Ireland 0.0% Latin America EMEA/ Asia Pacific Foreign exchange 26.7% FY15 reported EBIT margin FY15 restated EBIT margin FY16 EBIT margin (before FX) FY16 reported EBIT margin Graph is not to scale. 22

23 Recent performance Net debt reconciliation Twelve months ended 31 March 2016 US$million FY16 net debt including CSID 62 CSID (1,065) 380 Other 3,217 Free cash flow (163) Net proceeds from disposals 592 Net share repurchases Equity dividends paid 3,023 Net debt at 1 April 2015 Net debt / EBITDA 1.9x Graph not to scale. Net debt at 31 March 2016 Net debt / EBITDA 1.9x Proforma net debt at 31 March 2016 Net debt / EBITDA 2.1x 23

24 Recent performance Capital framework US$m FY16 capital summary Capital priorities for FY17 1,600 1,400 1,200 1,000 Net proceeds from disposals Funds from operations 1 Organic capital investment Share repurchase programme Organic investment of 8-9% of revenue US$360m agreement to acquire CSID 800 Expect US$400m of share repurchases in FY Dividends Target leverage range of x net debt/ebitda 200 Reduction in net debt 0 Cash generated Other Uses of cash 1 Funds from operations is defined as 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 Delivered growth within target range Growth investments making a difference Continuing execution of strategic priorities 26

27 Appendix

28 Appendix Modelling considerations for FY17 CSID acquisition Acquisition expected to be completed during H2 Expected contribution of c.1% to Group revenue in FY17 Net interest Expected to be in the region of US$80m to US$85m Tax Benchmark tax rate expected to be c. 25% Capital expenditure Capital expenditure expected to be 8-9% of revenue Share repurchases FX Full year WANOS will be in the region of c. 940m shares FX continues to be volatile, based on recent exchange rates, we expect a headwind to EBIT of c.1% for FY17, weighted to the first half 28

29 Appendix Cash flow performance Twelve months ended 31 March 2016 US$million 1,210 (325) Net capital expenditure 353 Amortisation & depreciation 32 Working capital and other 1,270 (66) Net interest paid (136) (3) Tax paid on operating activities Dividends paid to noncontrolling interests 1, % conversion of EBIT into operating cash flow 125% conversion of Benchmark earnings into free cash flow EBIT Operating cash flow Free cash flow 29

30 Appendix Revenue and EBIT by region Twelve months ended 31 March US$million Revenue At constant rates Organic growth 2016 EBIT margin Q1 FY17 Organic growth North America 2,471 2,390 3% 30.6% 5% Latin America % 35.7% 8% UK and Ireland % 31.4% 1% EMEA/Asia Pacific % (1.0)% 9% Total revenue 4,477 4,658 5% 5% EBIT continuing activities 1,195 1,271 EBIT margin 26.7% 27.3% All figures are on a continuing activities basis only. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

31 Appendix Revenue and EBIT by business line Twelve months ended 31 March US$million Revenue At constant rates Organic growth 2016 EBIT margin Q1 FY17 Organic growth Credit Services 2,240 2,360 8% 35.3% 8% Decision Analytics % 18.4% 6% Marketing Services % 19.6% 2% Consumer Services (1)% 25.3% 0% Total revenue 4,477 4,658 5% 5% EBIT continuing activities 1,195 1,271 EBIT margin 26.7% 27.3% All figures are on a continuing activities basis only. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

32 Appendix North America Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth Credit Services Decision Analytics 1,237 1,125 10% (2)% 11% (1)% Marketing Services (2)% (2)% Consumer Services (3)% 1% Total revenue 2,471 2,390 3% 5% EBIT EBIT margin 30.6% 31.0% All figures above on a continuing activities basis. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

33 Appendix Latin America Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth Credit Services Decision Analytics % % 6% 36% Marketing Services (4)% 40% Total revenue % 8% EBIT EBIT margin 35.7% 36.6% All figures above on a continuing activities basis. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

34 Appendix UK and Ireland Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth Credit Services Decision Analytics % % 6% (2)% Marketing Services (1)% 2% Consumer Services % (1)% Total revenue % 1% EBIT EBIT margin 31.4% 31.7% All figures above on a continuing activities basis. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

35 Appendix EMEA/Asia Pacific Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth Credit Services Decision Analytics (3)% % (4)% 27% Marketing Services % 11% Total revenue % 9% EBIT EBIT margin (4) (1.0)% (10) (2.3)% All figures above on a continuing activities basis. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

36 Appendix Credit Services Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth North America 1,237 1,125 10% 11% Latin America % 6% UK and Ireland % 6% EMEA/Asia Pacific (3)% (4)% Total revenue 2,240 2,360 8% 8% EBIT EBIT margin 35.3% 35.8% All figures are on a continuing activities basis only. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

37 Appendix Decision Analytics Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth North America (2)% (1)% Latin America % 36% UK and Ireland % (2)% EMEA/Asia Pacific % 27% Total revenue % 6% EBIT EBIT margin 18.4% 17.9% All figures are on a continuing activities basis only. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

38 Appendix Marketing Services Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth North America (2)% (2)% Latin America (4)% 40% UK and Ireland (1)% 2% EMEA/Asia Pacific % 11% Total revenue % 2% EBIT EBIT margin 19.6% 17.1% All figures are on a continuing activities basis only. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

39 Appendix Consumer Services Twelve months ended 31 March US$million Revenue At constant rates Organic growth Q1 FY17 Organic growth North America (3)% 1% UK and Ireland % (1)% Total revenue (1)% 0% EBIT EBIT margin 25.3% 28.3 % All figures are on a continuing activities basis only. 39

40 Appendix Group Benchmark earnings Twelve months ended 31 March US$million Growth (actual rates) Growth (constant rates) Total EBIT 1,210 1,306 (7)% 3% Net interest (74) (75) Benchmark PBT 1 1,136 1,231 (8)% 3% Benchmark taxation (283) (300) Benchmark taxation rate 24.9% 24.4% Overall Benchmark earnings For owners of Experian plc (8)% 3% For non-controlling interest (1) 1 Weighted average number of shares, million Closing number of shares, million Benchmark EPS, US cents (6)% 5% Benchmark (continuing activities) EPS 7% 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. Growth rates at constant exchange rates are estimated. Twelve months ended 31 March 2015 figures have been restated to reflect disposals during the twelve months ended 31 March

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 20 July 2016 Annual General Meeting 9 November 2016 Interim results announcement, half year 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