Snapshot of Experian. Overview

Transcription

1 July September 2017

2 Overview Snapshot of Experian Total Revenue: US$4.3bn Benchmark EBIT: US$1.2bn Market Cap*: c. 16bn In top 50 of FTSE-100 Employees: c.16,000 Offices in 37 countries Largest markets: US, Brazil, UK Corporate headquarters: Dublin Experian is the world s leading global information services company. Our roots lie in assessing credit risk; today we do much more. 2 Experian Public For the year ending 31 March 2017 * At 14 July 2017

3 Overview The Experian investment case Market leading global information company Unique proprietary data, coupled with analytics and software 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 3 Experian Public

4 Overview Experian business activities 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 Helping clients to: Lend effectively Minimise the risk of fraud Using advanced software and analytics, and expert consulting Data quality and management Targeting relevant offers to individuals Direct to consumer credit monitoring Credit matching services / lead generation Identity theft protection services Affinity (white label) credit and identity monitoring services 55% 13% 10% 22% 4 Experian Public % split of revenue shown for the year ending 31 March 2017.

5 Overview Global revenue FY17 EMEA/Asia Pacific By region UK and Ireland Latin America 19% 17% 8% 56% North America By customer segment 5% 5% 4% 5% 3% 2% 33% Financial services Direct to consumer Healthcare Retail Automotive Marketing Services 7% 33% Telco and utilities Insurance By business activity Decision Analytics Consumer Services 13% 22% 10% 55% Credit Services 17% 19% Media technology Public sector/education Other Diverse portfolio by region, business activity and customer segment

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, , % 3, % 1, , % 17% 56% 77% %* 83% 36% 8% 64%* 92% Experian Equifax TransUnion D&B FICO Acxiom North America Other regions 1 Year ended 31 March Year ended 30 September 2016 *US only. 2 Year ended 31 December 2016 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.

7 Strategic overview 7 Experian Public

8 Strategic overview In 2014, we set a clear plan of action Focus Growth Improve performance Efficiency Capital optimisation Simplified our portfolio Growth has returned to our target range Considerably improved performance in Brazil and Marketing Services Executing on a strategic repositioning of our relationship with consumers Driven substantial efficiencies from our business, and used the funds to invest Innovation is accelerating Rigorous approach to capital allocation 8 Experian Public 8

9 Strategic overview We have enhanced our foundations to drive better performance at lower cost Superior technology Open systems Cloud computing API Hub Agile development Operating excellence across core functions Transformed call centres Introduced new standards for customer service Investment in our people Greater speed, accuracy and flexibility Improved time to market with new products Enhancing client access to our data Scaling our technology platforms across markets Enhanced consumer experience Higher client and employee retention Unmatched global footprint and offering 9 Experian Public 9

10 Strategic overview Defining the path ahead: our objectives Broaden and deepen our data assets Extend our lead in analytics and software solutions Exploit the breadth of our capabilities Accelerate pace of innovation Scale in targeted verticals and geographies Transform engagement with consumers 10 Experian Public

11 Strategic overview Building engagement with consumers in North America LendingWorks 9m free members, growing 0.5m per month; accelerate through free FICO offer Shifting further to new revenue models during FY18 LendingWorks: Over 200 card and personal loan products and growing Serves up the best offer for consumers Prescreens using lenders exact credit criteria 11 Experian Public 11

12 Strategic overview Building engagement with consumers in North America IdentityWorks Combines capabilities of Experian and CSID Best-in-class features Lower price point Proven market demand 12 Experian Public 12

13 Strategic overview Delivering innovation to meet growing new customer needs B2B customer needs Experian innovation Deliver fast, efficient services in the digital ecosphere Undertake checks in real time to ensure a smooth customer experience while managing risks Counter risks from fraud while authenticating people quickly Make sense of data across their whole organisation, to get a single view of their customer Know why a customer has missed a loan payment or is late paying a bill and deliver a better collections experience Data Data ingestion engine Alternative sources of data, including positive data Targeted digital advertising Pandora Platforms CrossCore PowerCurve Collections Analytics North America Credit Services DaaS Decision Analytics SaaS Services SerasaConnecta Digital Credit Marketing Universal Master Patient Index (UMPI) Text To Credit 13 Experian Public

14 Strategic overview Case study: digital credit marketing update 14 Experian Public 14

15 Strategic overview Case study: Text for Credit Current process Text for credit option 15 Experian Public

16 Strategic overview PowerCurve: better decisions, faster Strategy management Collections PowerCurve Over 200 installed clients Originations Customer management 16 Experian Public

17 Strategic overview Case study: PowerCurve Collections: a growing and sizeable opportunity Significant global opportunity Banking sector market c. US$0.5bn, plus telco, utilities Signed major Tier 1 bank in Australia as early adopter Pipeline growing and engagement across all regions Source: IDC Banking IT Spending Guide H (Custom Dataset for Experian), November Experian Public 17

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

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

20 Recent performance 20 Experian Public

21 Recent performance Summary of portfolio performance FY17: 5% organic Two thirds of the portfolio growing in mid-high single digit for FY17 8% 8% 9% 6% EMEA/APAC Credit Services (3%) (2%) UK&I North America Consumer Services 3% Credit Services Latin America Credit Services Global Marketing Services North America Credit Services Global Decision Analytics Q1 FY18 (9)% Total revenue 6% UK&I Consumer Services Organic revenue 4% Horizontal axis indicates share of revenue excluding CSIdentity and vertical axis indicates organic revenue. 21 Experian Public

22 Recent performance Revenue walkthrough 4,477 (313) +5% +5% Group organic revenue +9% Latin America +1% +9% UK and Ireland EMEA/ APAC +6% total revenue Acquisitions Foreign Exchange +4% 1 total revenue 4,335 CCM 4,164 North America FY16 revenue including CCM FY16 restated revenue FY17 revenue before FX FY17 reported revenue 1 At actual FX rates 22 Experian Public

23 Recent performance Capital framework 1,600 1,400 1,200 Other Increase in net debt Capital summary Acquisitions and minority investments Capital allocation Organic innovation investment Signed agreement for the sale of CCM 1, Funds from Operations 2 Share repurchase programme FY17 shareholder returns: Dividend of 4% Dividends US$353m 1 net share repurchases completed during the year Cash generated Organic capital investment Uses of cash Expect to make US$600m of share repurchases in FY18. 1 Share repurchases as at 31 March Funds from Operations is defined as Benchmark free cash flow plus organic capital investment (capital expenditure). 23 Experian Public

24 Summary Investing in the of the future Investing for a better and stronger business, well positioned for future 24 Experian Public 24

25 Appendix 25 Experian Public

26 Appendix Modelling considerations for FY18 Net interest Expected to be in the range of US$80m to US$85m Tax Benchmark tax rate between 26% and 27%. Foreign exchange Based on recent rates, expect foreign exchange to be neutral across FY18 Capital expenditure Capital expenditure of 8-9% of revenue Share repurchases Full year WANOS expected to be in the region of 920m shares. 26 Experian Public

27 Appendix Recent trends Organic revenue continues to be in our target mid-single digit organic revenue range with high single-digit B2B 8% 8% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 27 Experian Public Organic revenue s for all prior periods are as reported and have not been restated for subsequent divestments B2B defined as Credit Services, Decision Analytics and Marketing Services

28 Appendix Impact of discontinued operations Year ended 31 March 2017 as reported CCM 2017 including CCM Revenue (US$m) 4, ,643 Total revenue 1 (%) 6 6 Organic revenue 1 (%) 5 4 Continuing EBIT (US$m) 1, ,253 EBIT margin (%) Margin change vs FY bps 27.0 Benchmark EPS (US cents) Shown at constant currency 28 Experian Public

29 Appendix Benchmark EBIT margin walkthrough 0.2% (0.3)% 0.4% 27.1% 0.7% North America EMEA/ APAC Latin America (0.3)% UK and Ireland 27.4% 0.3% Foreign Exchange 27.7% 26.7% FY16 CCM restatement FY16 Benchmark EBIT margin including CCM FY16 restated Benchmark EBIT margin FY17 Benchmark EBIT margin before FX FY17 reported Benchmark EBIT margin EBIT margins calculated on an ongoing activities basis. 29 Experian Public

30 Appendix Revenue and Benchmark EBIT by business activity Twelve months ended 31 March US$million Revenue Total Organic Benchmark EBIT margin Q1 FY18 Organic Credit Services 2,389 2,240 6% 6% 34.2% 5% Decision Analytics % 9% 20.5% 13% Marketing Services % 8% 22.6% 12% Consumer Services % (4)% 25.8% (8)% Total revenue ongoing activities 4,335 4,164 6% 5% 4% Benchmark EBIT ongoing activities 1,199 1,130 7% Benchmark EBIT margin 27.7% 27.1% 30 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates. The 2016 results have been restated to reflect the /cross-channel marketing business ('CCM') reclassification as a discontinued operation.

31 Appendix Revenue and Benchmark EBIT by region Twelve months ended 31 March US$million Revenue Total % Organic % Benchmark EBIT margin Q1 FY18 Organic % North America 2,457 2, % 4% Latin America % 8% UK and Ireland % (3)% EMEA/Asia Pacific (0.9)% 7% Total revenue ongoing activities 4,335 4, % Benchmark EBIT ongoing activities 1,199 1,130 7 Benchmark EBIT margin 27.7% 27.1% 31 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates. The 2016 results have been restated to reflect the /cross-channel marketing business ('CCM') reclassification as a discontinued operation.

32 Appendix North America Twelve months ended 31 March US$million Revenue Total Organic Q1 FY18 Organic Credit Services 1,341 1,237 8% 8% 6% Decision Analytics % 0% 13% Marketing Services % 8% 18% Business-to-Business 1,718 1,598 8% 8% 8% Consumer Services % (2)% (5)% Total revenue 2,457 2,294 7% 5% 4% Benchmark EBIT ongoing activities % Benchmark EBIT margin 31.8% 30.7% 32 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates

33 Appendix Latin America Twelve months ended 31 March US$million Revenue Total Organic Q1 FY18 Organic Credit Services % 6% 5% Decision Analytics % 34% 44% Marketing Services % 39% 44% Total revenue % 9% 8% Benchmark EBIT ongoing activities % Benchmark EBIT margin 34.4% 35.8% 33 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates

34 Appendix UK and Ireland Twelve months ended 31 March US$million Revenue Total Organic Q1 FY18 Organic Credit Services % 3% 3% Decision Analytics % 5% 7% Marketing Services % 5% 0% Business-to-Business % 4% 4% Consumer Services (9)% (9)% (19)% Total revenue % 1% (3)% Benchmark EBIT ongoing activities (4)% Benchmark EBIT margin 30.5% 32.1% 34 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates

35 Appendix EMEA/Asia Pacific Twelve months ended 31 March US$million Revenue Total Organic Q1 FY18 Organic Credit Services (3)% (3)% 0% Decision Analytics % 21% 13% Marketing Services % 16% 13% Total revenue % 9% 7% Benchmark EBIT ongoing activities (3) (15) 47% Benchmark EBIT margin (0.9)% (4.8)% 35 Experian Public All results are Benchmark figures and are on an ongoing activities basis. Growth at constant exchange rates

36 Appendix Credit Services Twelve months ended 31 March US$million Revenue Total Growth Organic Q1 FY18 Organic North America 1,341 1,237 8% 8% 6% Latin America % 6% 5% UK and Ireland % 3% 3% EMEA/Asia Pacific (3)% (3)% 0% Total revenue 2,389 2,240 6% 6% 5% Benchmark EBIT % Benchmark EBIT margin 34.2% 35.3% All figures above on a ongoing activities basis Growth at constant exchange rates 36 Experian Public

37 Appendix Decision Analytics Twelve months ended 31 March US$million Revenue Total Growth Organic Q1 FY18 Organic North America % 0% 13% Latin America % 34% 44% UK and Ireland % 5% 7% EMEA/Asia Pacific % 21% 13% Total revenue % 9% 13% Benchmark EBIT % Benchmark EBIT margin 20.5% 18.4% 37 Experian Public All figures above on a ongoing activities basis Growth at constant exchange rates

38 Appendix Marketing Services Twelve months ended 31 March US$million Revenue Total Growth Organic Q1 FY18 Organic North America % 8% 18% Latin America % 39% 44% UK and Ireland % 5% 0% EMEA/Asia Pacific % 16% 13% Total revenue % 8% 12% Benchmark EBIT % Benchmark EBIT margin 22.6% 18.7% 38 Experian Public All figures above on a ongoing activities basis Growth at constant exchange rates The 2016 results have been restated to reflect the /cross-channel marketing business ('CCM') reclassification as a discontinued operation.

39 Appendix Consumer Services Twelve months ended 31 March US$million Revenue Total Organic Q1 FY18 Organic North America % (2%) (5)% UK and Ireland (9)% (9)% (19)% Total revenue % (4)% (8)% Benchmark EBIT % Benchmark EBIT margin 25.8% 25.3% All figures above on a ongoing activities basis Growth at constant exchange rates 39 Experian Public

40 Appendix Benchmark cash flow performance 1,199 (393) Working capital and other 1,149 (70) Net interest paid (144) (2) Net capital expenditure Amortisation and depreciation Tax paid on operating activities Dividends to minorities % conversion of EBIT into operating cash flow 112% conversion of Benchmark earnings into free cash flow Benchmark EBIT Benchmark operating cash flow Benchmark free cash flow 40 Experian Public

41 Appendix Net debt reconciliation (83) 3,023 (933) Equity dividends paid FX and other 3, Net share purchases Benchmark free cash flow Acquisitions and minority investments Net debt at 1 April 2016 Net debt at 31 March 2017 Net debt / Benchmark EBITDA 1.9x Net debt / Benchmark EBITDA 2.1x 41 Experian Public

42 Appendix Experian American Depositary Receipt (ADR) program 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: 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 42 Experian Public

43 Appendix Contacts Appendix Contacts Experian Cardinal Place 80 Victoria Street London Tel: +44 (0) SW1E 5JL Website: Nadia Ridout-Jamieson Peg Smith Chief Communications Officer Executive Vice-President Sarah Schibli Investor Relations and Communications Manager 43 Experian Public

44 Appendix Event calendar 20 July 2017 Annual General Meeting 15 November 2017 Half year financial report 44 Experian Public

45 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. 45 Experian Public