Half-yearly results for six months ended 30 September 2015 10 November 2015 2015 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.
Strategic and operational overview Brian Cassin, Chief Executive Officer 2015 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.
First half results Agenda Strategic and operational review Financial overview Spotlight on North America Consumer Services 3
First half results Highlights Key financials Q1 +3%; Q2 +4% organic revenue growth Stable EBIT margin at constant currency Significant FX headwind Strategic progress Investments helping to drive growth in Credit Services and Decision Analytics Significant improvement in North America Consumer Services Exited some non-core activities Capital allocation Raised first interim dividend Extending share repurchase programme by US$200m; linked to recent disposals 4
First half results Highlights 5% 4% 3% Organic revenue momentum 3% 3% 4% Both total and organic revenue up 4% at constant currency FX headwind of 10% on revenue 2% 1% 0% 0% FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 EPS +5% at constant currency Dividend raised 2% to 12.50 US cents per share Continuing activities only. Growths for FY15 Q3, FY15 Q4 and FY16 Q1 are as reported and have not been restated to exclude the divested Baker Hill and FootFall businesses and other small discontinuing activities. Organic revenue growths are shown at constant FX currency. 5
First half results Strategic priorities update Improve Focus Growth Efficiency performance Capital optimisation 3 disposals Investments in: Significant Delivering Health Fraud prevention progress in: efficiencies to fuel growth Brazil Software Business credit + more North America Consumer Services Balancing internal investments with shareholder returns Delivering on our strategic priorities 6
First half results North America Credit Services and Decision Analytics Good levels of banking activity Industry dynamics are evolving Consumer habits changing Stringent regulatory environment for clients Heightened fraud risk for clients One Experian integrated approach to deliver more value to clients 7
First half results North America Health US healthcare industry is growing rapidly Our breadth of capability in revenue cycle management is a competitive advantage KPIs In over 50% of US hospitals On average sell 5/6 products per hospital Growth is 50:50 new:existing clients Adding Experian products to access new areas of growth e.g. fraud prevention Market trends play to our strengths 8
First half results North America Consumer Services Turnaround in progress Medium term Growing premium paid-for services Early stage freemium monetisation Engage with consumers in a new way Address new market opportunities Signs of stabilisation in affinity 9
First half results North America Consumer Services North America Consumer Services Addressable market Future potential Helping consumers Freemium lead generation Freemium transactional Today Identity protection Premium services 10
First half results North America security incident update 11
First half results 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 12
First half results UK and Ireland How we help Pre-qualification UK energy sector Consumer habits evolving Match credit offers to consumers Detect utility bill fraud Provide broader range of services Investment in new services and client-centricity 13
First half results EMEA/Asia Pacific Transformed commercial operations Enhancing quality of earnings Drive profitability Focused on big markets 14
First half results 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 15
First half results Summary Delivering on our strategic plan Underlying growth trends improving Investing in the business while delivering returns 16
Financial review Lloyd Pitchford, Chief Financial Officer 2015 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.
Financial review Highlights FY16 H1 Revenue growth Total revenue growth Organic revenue growth Constant rates 4% 4% Actual rates (6%) EBIT EBIT margin EBIT margin change from prior year 26.3% In line 25.7% (60) bps Earnings Benchmark EPS growth 5% (7%) Operating cash flow Operating cash conversion 96% 95% 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. All results are based on continuing activities. 18
Financial review Continuing activities revenue 4% growth at constant exchange rates 2,393 (33) Disposals 2,360 North America 1% Brazil UK & Ireland 6% 5% Other 8% BRL GBP Euro Other (6%) decline at actual rates FX 2,216 FY15 H1 reported revenue FY15 H1 restated revenue FY16 H1 revenue (before FX) FY16 H1 reported revenue All revenue numbers are US$m 19
Financial review Organic revenue growth trends by region 4% 0% (4%) (3%) FY15 Q3 North America 0% 0% FY15 Q4 FY16 Q1 3% FY16 Q2 8% 7% 6% 5% 4% 3% 2% 1% 0% 5% FY15 Q3 Latin America 6% FY15 Q4 7% FY16 Q1 6% FY16 Q2 6% 5% 4% 3% 2% 1% 3% 3% UK & Ireland 5% 5% 12% 10% 8% 6% 4% 2% 0% EMEA/Asia Pacific 10% 7% 6% 0% FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 (2%) (1%) FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 20
Financial review Organic revenue growth trends by segment 12% 10% Credit Services 12% 10% Decision Analytics 11% 9% 11% 8% 6% 6% 6% 7% 7% 8% 6% 4% 4% 2% 2% 1% 0% FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 0% FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 2% 1% Marketing Services 1% 1% 0% (2%) (4%) Consumer Services (2%) 0% (1%) (2%) (3%) (1%) FY15 Q3 FY15 Q4 (2%) FY16 Q1 FY16 Q2 (6%) (8%) (10%) (12%) (14%) (12%) FY15 Q3 (9%) FY15 Q4 (6%) FY16 Q1 FY16 Q2 21
Financial review EBIT margin by geography 26.2% 0.1% 0.1% (0.2)% EMEA/ 0.1% North Asia UK and Disposals America Pacific Ireland 26.3% BRL 26.3% GBP All other FX 25.7% FY15 H1 reported FY15 H1 restated EBIT FY16 H1 (before FX) FY16 H1 reported 22
Financial review North America Six months ended 30 September US$million Revenue 2015 2014 Credit Services Decision Analytics 593 75 547 74 Marketing Services Consumer Services Total revenue 195 345 1,208 200 372 1,193 At constant rates Total growth 8% (2%) (7%) 1% Organic growth 8% 2% 2% (2%) (7%) 1% Strong Credit Services performance Further progress in Consumer Services Experian.com now larger than legacy portfolio EBIT EBIT margin 364 30.1% 358 30.0% 2% Margin up 10 basis points All figures above on a continuing activities basis 2015 figures have been restated to reflect disposals during FY16 23
Financial review Latin America Six months ended 30 September US$million Revenue 2015 2014 Credit Services 306 416 Decision Analytics 17 22 Marketing Services 8 15 At constant rates Total growth 7% (19%) Organic growth 7% 9% 9% (19%) Resilient revenue growth in tough economic environment Strong underlying EBIT growth Total revenue EBIT 331 114 453 160 6% 7% 6% Adverse FX headwinds EBIT margin 34.4% 35.3% Actual EBIT down 29% All figures above on a continuing activities basis 24
Financial review UK and Ireland Six months ended 30 September US$million Revenue Credit Services Decision Analytics Marketing Services Consumer Services Total revenue EBIT EBIT margin 2015 2014 133 137 110 107 104 113 131 136 478 493 144 152 30.1% 30.8% At constant rates Total growth 5% 0% 5% 6% 3% Organic growth 4% 12% 12% (1%) 5% 5% Consistent progress Decision Analytics benefited from new ID verification service Margin reflects regulatory costs and organic investments Adverse FX headwinds Actual EBIT down 5% All figures above on a continuing activities basis 2015 figures have been restated to reflect disposals during FY16 25
Financial review EMEA/Asia Pacific Six months ended 30 September US$million Revenue Credit Services Decision Analytics Marketing Services Total revenue 2015 2014 78 94 55 54 66 73 199 221 At constant rates Total growth (3%) 8% 6% Organic growth (3%) 19% 19% 8% 6% Asia Pacific momentum strong Underlying EBIT improvements Adverse FX headwinds EBIT EBIT margin (15) (7.5%) (12) (5.4%) 4% Actual EBIT down 16% All figures above on a continuing activities basis 2015 figures have been restated to reflect disposals during FY16 26
Financial review Group Benchmark earnings Six months ended 30 September US$million 2015 2014 Growth (actual rates) Growth (constant rates) Total EBIT 576 627 (8%) 3% Net interest (35) (37) Benchmark PBT 1 Benchmark taxation Benchmark taxation rate 541 (135) 25.0% 590 (148) 25.1% (8%) 4% Benchmark PAT 406 442 Benchmark non-controlling interest - (1) Benchmark earnings 406 441 (8%) 4% Weighted average number of shares, million 966 977 Closing number of shares, million 957 976 Benchmark EPS, US cents 42.0 45.1 (7%) Dividend per share, US cents 12.50 12.25 2% 5% Growth rates at constant exchange rates are estimated. 2015 figures have been restated to reflect disposals during FY16 1 Benchmark PBT is defined as profit before amortisation and impairment of acquisition intangibles, impairment of goodwill, acquisition expenses, adjustments to contingent consideration, exceptional items, financing fair value remeasurements, tax and discontinued operations. It includes the Group s share of continuing associates pre-tax results. 27
Financial review Reconciliation of Benchmark to statutory PBT Six months ended 30 September US$million Benchmark profit before tax 2015 541 2014 590 One off items: Gain on disposal of businesses 1 63 - North America security incident related costs Amortisation and impairment of acquisition intangibles (20) - (56) (70) Acquisition expenses and adjustment to contingent considerations Financing fair value remeasurements (5) (65) (1) 15 Statutory profit before tax 458 534 1 Gain on disposal of businesses relate to the net profit on the disposals of the Baker Hill and FootFall businesses and the Moroccan credit bureau. 2015 figures have been restated to reflect disposals during FY16. 28
Financial review Cash flow performance Six months ended 30 September 2015 US$million (55) 576 (155) Capital expenditure 180 Amortisation, depreciation Working capital and other 546 (26) Net interest paid (103) Continuing tax paid (1) Dividends paid to noncontrolling interests 416 95% conversion of EBIT into operating cash flow 102% conversion of benchmark earnings into free cash flow EBIT Operating cash flow Free cash flow 29
Capital strategy Net debt reconciliation Six months ended 30 September 2015 US$million 52 3,217 (416) Free cash flow (164) Proceeds from disposals 405 Net share repurchases 261 Equity dividends paid Other 3,355 Net debt at 1 April 2015 Net debt at 30 September 2015 Net debt / EBITDA 1.9x Net debt / EBITDA 2.1x 30
Capital strategy FY16 H1 capital framework US$m 900 800 700 600 500 400 Funds from operations Organic capital investment Share repurchase programme Balancing strategic investment with shareholder returns Making strategic investments; both capital and P&L 300 200 Disposal proceeds Dividends Additional US$200m share repurchases; recycling disposal proceeds 100 0 Additional Net Debt Cash generation Other Uses of cash 1 Funds from operations is defined as free cash flow plus organic capital investment (capital expenditure). 31
Outlook Modelling considerations for FY16 Net interest Expected to be in the region of US$70m to US$75m Tax Benchmark tax rate expected to be 24-25% Capital expenditure Capital expenditure expected to be c. 8% of revenue Share repurchases Full year WANOS will be in the region of c. 960m shares FX If recent rates prevail, expect an FX headwind of c. 10-11% on EBIT including an EBIT margin impact of c. 60 bps At recent FX rates, we expect a further c. 2-3% EBIT headwind from FX in FY17 32
Financial review Financial summary and outlook Good underlying growth momentum in H1 Delivering on capital commitments Outlook for FY16, at constant FX: Mid-single digit organic revenue growth and stable margins for FY16; Further progress in Benchmark EPS 33
North America Consumer Services Guy Abramo, President, Direct to Consumer 2015 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.
North America Consumer Services Sustaining our leadership in North America Dedicated to consumers 15 years in market Currently servicing c.11 million consumers Annual average 7 million call center calls Premium propositions Free engagement Affinity solutions *North America only. Revenue as reported at actual FX. 35
North America Consumer Services Consumer demands have changed Auto Identity New solutions Health Credit data Tailored to needs Tied to life events Scores Creating differentiated propositions 36
North America Consumer Services Key accomplishments January 2015 Accomplishments Bifurcated market Introduced FICO score Moved all domains to Experian.com Launched mobile apps Affinity to reactivate New technology platform Experian.com +20% Driving higher traffic Simplicity and consistency More stickiness Supporting clients as they return Launched October 2015 37
North America Consumer Services Technology as strategic asset Successful launch of the new platform Increased speed to market Enables rapid development and simple integration Provides an actionable single-view of the consumer Leverages every touch-point to trigger customized interactions Technology developed with the consumer and client at the center 38
North America Consumer Services Strong traction with Free Access to Free Experian credit report No credit card required Upsell to FICO score and CreditTracker 1.5m new totally free members x2 Share of voice in search marketing Converting free to paid Capitalizing on brand resonance 39
North America Consumer Services Engaging the Premium Market - Experian.com High volumes of new visitors 25% using ScoreTracker app Unlimited access to Experian report and FICO Score Alert notifications of key changes Tools to track and educate on FICO score Help consumers complete their journey: Buy a car Purchase a home Self-service through mobile Enhance the customer experience and drive engagement through a greater level of utility and personalization 40
North America Consumer Services The provider of choice in the Affinity channel Client interest Why they choose Experian today Future Drives loyalty and retention More financial institutions returning Credit monitoring a top priority Compliance commitment Seamless experience Products Client-specific innovation Software as a Service (SaaS) Leverage the breadth of Experian 41
North America Consumer Services Summary Multi-year transformation...building a bigger, stronger business 42
Closing summary Brian Cassin, Chief Executive Officer 2015 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.
First half results Closing summary Sustainable growth creating value 44
Half-yearly results for six months ended 30 September 2015 10 November 2015 2015 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.
Appendix Contacts Experian Cardinal Place 80 Victoria Street London SW1E 5JL Tel: +44 (0)203 042 4200 Website: www.experianplc.com Nadia Ridout-Jamieson Director of Investor Relations Email: nadia.rjamieson@experian.com Peg Smith Executive Vice-President Email: peg.smith@experian.com Sarah Schibli Investor Relations and Communications Manager Email: sarah.schibli@experian.com 46
Appendix Event calendar 15 January 2016 Trading update, third quarter 11 May 2016 Preliminary announcement, full year 14 July 2016 Trading update, first quarter 20 July 2016 Annual General Meeting 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. 48