Overview Snapshot of Experian

Transcription

1 September 2018

2 Overview Snapshot of Experian Experian is the world s leading global information services company We use data to help people and organisations to assess, predict, plan and protect themselves We are custodians of data on over 1 billion people globally We have a diverse and growing range of clients and geographies and multiple and growing uses for our data We are the market leader in this growing market and we are securing new types of data, and finding new uses for our data We are large, stable and cash-generative: 17bn market cap* / currently FTSE top 35* Experian 16,500 employees is the / world s 39 countriesleading global information FY18: $4.7bn services revenue / $1.3bn company. Benchmark Our EBIT roots lie in assessing Highly cash generative credit risk; with high today cash conversion we do much rate more. 15.7% Return on Capital Employed (ROCE) 2 Experian Public For the year ending 31 March 2018 * At 13 July 2018

3 Overview The Experian investment case Market-leading global information business with strong market positions We are the market leader, holding the number one or two positions across our largest markets the USA, Brazil and the UK We have a diversified portfolio of businesses across different sectors and geographies Our business model is scalable, which means we can grow the business quickly with low incremental cost We drive significant synergies across our operations by combining data sources, integrating analytics and using technology to secure competitive advantage All the above creates a high barrier to entry Significant growth potential We continually invest in new product innovation to address new market opportunities We are expanding our position with existing clients and adding new ones in our more developed markets We have considerable potential to introduce and expand our services in emerging markets We are expanding our services in new industry segments, such as US healthcare Strong financial track record The revenues we generate typically have a recurring profile and this, coupled with successful growth investment, has meant we have averaged organic revenue growth* of 5% each year since we became a listed company in Our aim is to consistently grow organic revenue at a mid-single digit rate We are a highly cash generative, low capital intensity company. Our Benchmark EBIT to Operating cash flow* conversion rate has averaged 99% since demerger We make the best use of cash we generate, balancing the need for organic investment in innovation, acquisitions and returns to shareholders through dividends and share repurchases 3 Experian Public *Please refer to preliminary results or annual financial statements for definitions of organic revenue growth and Benchmark EBIT to Operating cash flow conversion

4 Overview Experian business activities our services Business-to-Business (B2B) Data US$2.6bn* Large databases Credit history data on >1bn people and 145m businesses Segmentation data on markets with 2.8bn people Automotive information 18 consumer credit bureaux 11 business credit bureaux Credit reports Analytical sandbox Decisioning US$1.2bn* Business-to-Consumer (B2C) Consumer Services US$0.9bn Advanced software and analytics Credit scores Decisioning software Data quality Fraud software Health Analytical tools Expert consulting Direct to consumer credit monitoring Credit comparison services / lead generation Identity theft protection services Affinity (white label) credit and identity monitoring services 4 Experian Public Revenue for 31 March * Reconciled for the new business segment Business-to-Business and its sub-divisions Data and Decisioning.

5 Overview Experian business activities how we help Business-to-Business We help organisations and businesses to grow their businesses and engage with their customers. We can help them to: lend effectively, manage their customer accounts, manage credit risk and minimise the risk of fraud; better understand and communicate with customers; enhance their customer s experience with them; better understand their markets and allocate resources. They benefit from easier and faster access to more information, more accurate results, and more precise decisions. Consumer Services We help people and families to: better access financial services; understand and improve their financial position; better protect against fraud and identity theft; know that their data is correct, and learn more about credit. 5 Experian Public % split of revenue shown for the year ending 31 March 2017.

6 September 2018

7 Overview Global revenue FY18 EMEA/Asia Pacific By region By business activity UK and Ireland Latin America Consumer Services 18% 17% 25% 20% 8% Decisioning 57% 55% Data North America 5% 5% Business-to-Business 80% By customer 5% 8% 3% 2% 4% 4% 13% 17% 34% Financial services Direct to consumer Health Retail Automotive Software and professional services Telco and utilities Insurance Media technology Public sector/education Other Diverse portfolio by region, business activity and customer

8 Global revenue US$m Overview Market leader with unparalleled global reach and range 5,000 4,500 4,000 3,500 3,000 2,500 4, % 3, % 2,000 1,500 1, ,743 18% 17% 57% 75% %* 83% 9% 91% Experian Equifax TransUnion D&B FICO North America Other regions 8 Experian Public 1 Year ended 31 March Year ended 31 December 2017 *US only. 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.

9 Strategic overview 9 Experian Public

10 Strategic overview FY18 results highlights Financial progress Total revenue up 8%; Organic revenue up 5% Strong growth in Q4, up 8% organic EBIT growth of 8% Double-digit Benchmark EPS growth Strategic progress Great momentum in B2B, up 8% organically, 10% Q4 New product introductions and new sources of data driving client wins Consumer Services returned to growth in Q4 in North America Capital allocation Significant growth investment, organic and inorganic US$950m returned in dividends and share repurchases Full-year dividend raised by 8% New share repurchase programme of up to US$400m Revenue growths are stated on a constant currency basis. 10 Experian Public

11 Strategic overview Megatrends shaping our industry The data and analytics explosion Key industry trends Drive towards automation Changing consumer digital norms Evolving regulatory landscape for clients 11 Experian Public

12 Strategic overview Our strategic objectives Build scale, breadth and quality of data Accelerate innovation, integrate capabilities Invest in technology to enable growth Expand into adjacent markets Engage more consumers 12 Experian Public

13 Strategic overview North America B2B Bringing innovation to market eresolve Text for Credit Experian Ascend Clarity Automotive Hyper Connect Health Coverage Discovery PowerCurve Account Management on Ascend Addressable TV Solution API Hub CrossCore Organic revenue up 9% Strong launch for Ascend Clarity exceeding buy plan Strong growth in Business Information Large One Experian client wins Growing pipelines 13 Experian Public

14 Strategic overview Linking Ascend and PowerCurve Experian Ascend Experian PowerCurve Client deployment Tools Code, manage and test Credit marketing Credit attributes Fraud attributes z Underwriting Attributes Data sources Scores Strategy design interface Strategy management and execution Account management 16-year full file Raw data Scores Decision criteria Collections Extending our lead through One Experian 14 Experian Public

15 Strategic overview North America B2B update on Clarity Exceeding buy plan + Adds credit data on over 60m thin file US consumers x3 size of its nearest competitor Superior data coverage Expanding our client engagements Significant synergy realisation 15 Experian Public

16 Strategic overview North America Consumer Services IdentityWorks CreditWorks LendingWorks Strong acquisition: c.200,000 paying members at year end Further product enhancements, higher retention Entering FY19 with strong momentum Partner Solutions Securing new contract wins Total NA Consumer Services Delivered growth in Q4; positive trajectory in FY19 16 Experian Public

17 Strategic overview Latin America building on a strong foundation Organic revenue growth of 6% Strengthening our strategic position as the economy improves Clients increasingly view us as a strategic partner Securing new agreements for Experian global products Positive data regulation clears another hurdle 17 Experian Public

18 Strategic overview Latin America Consumer and SME Further business diversification 22 million consumers enroled in free products Consumer-contributed data Converting Limpa Nome to digital service Big opportunities in SME and micro-businesses 18 Experian Public

19 Strategic overview Latin America Brazil United States Insurance EXPN Core Business Information EXPN Decision Analytics EXPN Insurance EXPN LexisNexis Business Information EXPN Decision Analytics EXPN Core Consumer Information EXPN Healthcare EXPN Core Consumer Information EXPN Automotive EXPN EXPN EXPN EXPN EXPN EXPN EXPN Others EXPN EXPN Marketing Services Fraud & ID Consumer Direct Affinity Marketing Services Fraud & ID Consumer Direct Affinity Core Small Moderate Large 19 Experian Public Positioned to capture the structural potential

20 Strategic overview UK and Ireland B2B Good momentum, organic revenue up 5% Securing client wins through innovation ExPiN PowerCurve CrossCore Launching Ascend in UK Open Banking presents new opportunities 20 Experian Public

21 Strategic overview UK Consumer Services: good progress on path to growth Moderation in CreditExpert decline, CreditMatcher growing strongly ClearScore will bring a complementary brand Significant synergies available ClearScore adds further marketing expertise Experian brings significant data and analytics expertise 21 Experian Public

22 Strategic overview EMEA/Asia Pacific Double-digit growth in EMEA/Asia Pacific Securing large client wins through One Experian PowerCurve CrossCore Innovation accelerating Improving profitability 22 Experian Public

23 Strategic overview Capital allocation Organic investment Acquisitions Minority investments APIs Ascend DataFabric PowerCurve IdentityWorks CreditMatcher 23 Experian Public

24 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 24 Experian Public

25 Recent performance 25 Experian Public

26 Recent performance Financial highlights Year ended 31 March 2018 Constant rates Actual rates Constant rates Q1 FY19 Actual rates Revenue Growth Total revenue growth Organic revenue growth 7% 5% 8% 10% 8% 9% EBIT Benchmark EBIT margin Margin progression 27.7% 0 bps 10 bps Earnings Benchmark earnings per share growth 10% 11% Operating cash flow Benchmark operating cash conversion 93% Dividend Dividend per share growth 8% 26 Experian Public Certain financial data have been rounded within this presentation. As a result of this rounding, the totals of data presented may vary slightly from the arithmetic totals of such data. Revenue, Benchmark EBIT growths and Benchmark EBIT margin are on an ongoing activities basis.

27 Recent performance Quarterly organic revenue trends 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Strong B2B growth Q1 Q2 Q3 Q4 Q1 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% -7% -8% and Consumer Services is recovering Q1 Q2 Q3 Q4 Q1 FY18 FY19 FY18 FY19 27 Experian Public B2B defined as Credit Services, Decision Analytics and Marketing Services.

28 Recent performance FY18 capital framework US$m 1,600 1,400 1,200 1, Other Increase in net debt Funds from Operations 2 Capital summary Acquisitions and minority investments Share repurchase programme Dividends Capital allocation Organic innovation investment Acquisitions in the year included Clarity and Runpath FY18 shareholder returns: Dividend growth of 8% US$566m 1 net share repurchases completed during the year Cash generated Organic capital investment Uses of cash Return on Capital Employed (ROCE) of 15.7%, up 0.2% from prior year Expect to make up to $400m of net share repurchases 1 Share repurchases as at 31 March Funds from Operations is defined as Benchmark free cash flow plus organic capital investment (capital expenditure). 28 Experian Public

29 Recent performance Net segmental FY18 business segments 1. Credit Services 2. Decision Analytics 3. Marketing Services 4. Consumer Services No changes to primary regional reporting format FY19 business segments 1. Business-to-business¹ consisting of two sub-divisions: Data² Decisioning² 2. Consumer Services (unchanged) 1 Business-to-Business disclosures will be on a revenue, Benchmark EBIT and Benchmark EBIT margin basis. 2 Disclosures for the Data and Decisioning sub-divisions will be on a revenue only basis. FY18 revenue reconciliation Year ended 31 March 2018 Data US$m Old Credit Services 2,606 plus Targeting from old Marketing Services 296 less Health (342) less Other (9) Total Data 2,551 Decisioning Old Decision Analytics 668 plus Data Quality from old Marketing Services 161 plus Health 342 plus Other 9 Total Decisioning 1,180 Total B2B 3,731 Consumer Services 926 Total revenue 4, Experian Public

30 Summary and outlook Q1 FY19: o At constant exchange rates total revenue growth of 10%, organic revenue growth of 8% Outlook for FY19: o o o Another year of strong revenue growth EBIT growth at or above rate of revenue growth Strong progress in Benchmark EPS Continued focus on investments to drive future value creation 30 Experian Public

31 This slide is intentionally blank 31 Experian Public

32 Appendix 32 Experian Public

33 Appendix Modelling considerations for FY19 Acquisitions Foreign exchange IFRS 15 Annual revenue from FY18 acquisitions is expected to be US$75m on a pro forma basis (excludes ClearScore) Based on recent rates, expect foreign exchange to have 4% impact on Benchmark EBIT growth rates. Impact expected to be c.us$78m on revenue and c.us$31m on profit after tax; later revenue recognition; no impact on cash Net interest Expected to be c.us$110m; inclusive of new share repurchase programme Tax Benchmark tax rate to be in the range of 25-26% Share repurchases Full year WANOS 1 expected to be in the region of 901m shares Capital expenditure Capital expenditure of c.9% of revenue 1 Weighted average number of shares 33 Experian Public

34 Appendix Revenue and Benchmark EBIT by region Twelve months ended 31 March US$million Q1 FY19 Revenue Total growth Organic growth Benchmark EBIT margin Organic growth North America 2,646 2,452 8% 6% 31.5% 11% Latin America % 6% 33.9% 4% UK and Ireland % 0% 31.3% 3% EMEA/Asia Pacific % 11% 2.3% 11% Total revenue ongoing activities 4,657 4,330 7% 5% 8% Benchmark EBIT ongoing activities 1,290 1,197 7% Benchmark EBIT margin 27.7% 27.6% 34 Experian Public FY17 and FY18 numbers are under IAS 18. Q1 FY19 numbers are under IFRS 15. All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates. The 2017 results have been restated for exited business activities, comprised of our Experian Public Records business.

35 Appendix North America Twelve months ended 31 March US$million Q1 FY19 Revenue Total growth Organic growth Organic growth Business-to-Business 1,891 1,713 10% 9% 12% Consumer Services % (2)% 8% Total revenue 2,646 2,452 8% 6% 11% Benchmark EBIT ongoing activities % Benchmark EBIT margin 31.5% 31.8% FY17 and FY18 numbers are under IAS 18. Q1 FY19 numbers are under IFRS 15. All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates 35 Experian Public

36 Appendix Latin America Twelve months ended 31 March US$million Q1 FY19 Revenue Total growth Organic growth Organic growth Business-to-Business % 6% 4% Benchmark EBIT ongoing activities % Benchmark EBIT margin 33.9% 34.4% FY17 and FY18 numbers are under IAS 18. Q1 FY19 numbers are under IFRS 15. All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates 36 Experian Public

37 Appendix UK and Ireland Twelve months ended 31 March US$million Q1 FY19 Revenue Total growth Organic growth Organic growth Business-to-Business % 5% 7% Consumer Services (16)% (16)% (8)% Total revenue % - 3% Benchmark EBIT ongoing activities % Benchmark EBIT margin 31.3% 30.5% FY17 and FY18 numbers are under IAS 18. Q1 FY19 numbers are under IFRS 15. All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates 37 Experian Public

38 Appendix EMEA/Asia Pacific Twelve months ended 31 March US$million Q1 FY19 Revenue Total growth Organic growth Organic growth Business-to-Business % 11% 11% Benchmark EBIT ongoing activities 9 (3) 381% Benchmark EBIT margin 2.3% (0.9)% FY17 and FY18 numbers are under IAS 18. Q1 FY19 numbers are under IFRS 15. All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates 38 Experian Public

39 Appendix Segmental Reporting Changes IAS 18 and IFRS 15 Experian Group US$million US$million Old New New Old New New Group H1 Group FY FY18 FY18 FY18 IFRS15 FY18 FY18 FY18 IFRS15 Revenue Revenue B2B 1,727 1,727 B2B 1,743 B2B 3,731 3,731 B2B 3,652 Credit Services 1,231 1,189 Data 1,209 Credit Services 2,606 2,551 Data 2,519 Decision Analytics Decisioning 534 Decision Analytics 668 1,180 Decisioning 1,133 Marketing Services 208 Marketing Services 457 Consumer Services Consumer Services 461 Consumer Services Consumer Services 927 Group Total 2,187 2,187 Group Total 2,204 Group Total 4,657 4,657 Group Total 4,579 Group H1 Group FY EBIT EBIT B2B B2B 535 B2B 1,175 1,175 B2B 1,131 Consumer Services Consumer Services 103 Consumer Services Consumer Services 194 Central activities Central activities -30 Central activities Central activities -79 Group Total Group Total 608 Group Total 1,290 1,290 Group Total 1,246 Results are excluding exited business activities which comprises of our Experian Public Records business, divested in March Experian Public

40 Appendix Segmental Reporting Changes IAS 18 and IFRS 15 North America US$million Old New New US$million Old New New North America H1 FY18 FY18 FY18 IFRS15 North America FY FY18 FY18 FY18 IFRS15 Revenue Revenue B2B B2B 893 B2B 1,891 1,891 B2B 1,862 Credit Services Data 619 Credit Services 1,484 1,315 Data 1,302 Decision Analytics Decisioning 274 Decision Analytics Decisioning 560 Marketing Services 104 Marketing Services 229 Consumer Services Consumer Services 375 Consumer Services Consumer Services 756 North America Total 1,255 1,255 North America Total 1,268 North America Total 2,646 2,646 North America Total 2,618 North America H1 North America FY EBIT North America Total North America Total 411 North America Total North America Total 821 EBIT Results are excluding exited business activities which comprises of our Experian Public Records business, divested in March Experian Public

41 Appendix Segmental Reporting Changes IAS 18 and IFRS 15 Latin America US$million Old New New US$million Old New New Latin America H1 FY18 FY18 FY18 IFRS15 FY18 FY18 FY18 IFRS15 Latin America FY Revenue Revenue B2B B2B 383 B2B B2B 778 Credit Services Data 335 Credit Services Data 668 Decision Analytics Decisioning 48 Decision Analytics Decisioning 110 Marketing Services 13 Marketing Services 31 Latin America Total Latin America Total 383 Latin America Total Latin America Total 778 Latin America H1 Latin America FY EBIT Latin America Total Latin America Total 120 Latin America Total Latin America Total 259 EBIT 41 Experian Public

42 Appendix Segmental Reporting Changes IAS 18 and IFRS 15 UK and Ireland US$million Old New New US$million Old New New UK&I H1 UK&I FY FY18 FY18 FY18 IFRS15 FY18 FY18 FY18 IFRS15 Revenue Revenue B2B B2B 288 B2B B2B 624 Credit Services Data 173 Credit Services Data 377 Decision Analytics Decisioning 115 Decision Analytics Decisioning 247 Marketing Services 70 Marketing Services 155 Consumer Services Consumer Services 86 Consumer Services Consumer Services 171 UK&I Total UK&I Total 374 UK&I Total UK&I Total 795 UK&I H1 EBIT UK&I FY EBIT UK&I Total UK&I Total 116 UK&I Total Experian Public

43 Appendix Segmental Reporting Changes IAS 18 and IFRS 15 EMEA/Asia Pacific US$million Old New New US$million Old New New EMEA/AP H1 FY18 FY18 FY18 IFRS15 FY18 FY18 FY18 IFRS15 EMEA/AP FY Revenue Revenue B2B B2B 179 B2B B2B 388 Credit Services Data 82 Credit Services Data 172 Decision Analytics Decisioning 97 Decision Analytics Decisioning 216 Marketing Services 21 Marketing Services 42 EMEA/AP Total EMEA/AP Total 179 EMEA/AP Total EMEA/AP Total 388 EMEA/AP H1 EMEA/AP FY EBIT EMEA/AP Total EMEA/AP Total -9 EMEA/AP Total 9 9 EMEA/AP Total 5 EBIT 43 Experian Public

44 Appendix Experian American Depositary Receipt (ADR) programme For ADR shareholder enquiries, please contact: Shareholder Relations BNY Mellon Shareowner Services PO Box Louisville, KY United States T: (From the US: BNY-ADRS, toll free) E: shrrelations@cpushareownerservices.com W: Experian ADR shares trade on the OTCQX under the following information: Symbol CUSIP Ratio Country EXPGY 30215C101 1 ADR : 1 ORD United Kingdom Effective Date October 11, 2006 Underlying SEDOL B19NLV4 Underlying ISIN U.S. ISIN Depositary GB00B19NLV48 US30215C1018 BNY Mellon 44 Experian Public

45 Appendix Contacts Appendix Contacts Experian Tel: +44 (0) Website: Nadia Ridout-Jamieson Chief Communications Officer Peg Smith Executive Vice-President Sarah Schibli Investor Relations and Communications Manager Adam Rachlin Financial Reporting Manager 45 Experian Public

46 Appendix Event calendar 13 November 2018 Half year financial report 46 Experian Public

47 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. 47 Experian Public