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2
Overview
The Experian investment case
Aim to sustain mid-high single digit organic growth
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
Global growth potential
By expanding geographically, in new customer segments and through innovation
Strong financial track record
High quality, recurring revenues
Highly cash generative with low capital intensity
3
Overview
Experian business segments
Large databases of information, used to manage risk
16 consumer credit bureaux
12 business credit bureaux
Automotive information
Credit Services
Value-added products
Used to convert data into valuable decisions for businesses
Provides software, scores and analytics
Decision Analytics
Sophisticated targeted marketing
Sell across c.30 countries
Segmented over 2.3bn consumers
Delivery over email, mobile, social
Marketing Services
Direct to consumer credit monitoring services
Identity theft products
Online lead generation
Interactive
44Revenue for the year to 31 March 2011
Overview
Global revenue FY11
Diverse portfolio by
geography, business
line, and customer
segment
By customer segment
Financial services
33% Direct to
consumer 20%
Retail
15%
Other
11%
Public Sector/ Education AutomotiveInsurance
Telecoms/Utilities
Media 2%
6%4%
4%5%
By business line
Credit Services
43%
Decision
Analytics
10%
Marketing
Services 19%
Interactive 28%
By geography
North America
54%
UK & Ireland
17%Latin
America 17%
EMEA/Asia
Pacific 12%
55*US onlySource: Latest full year revenue, company SEC filings
Overview
Market leader with unparalleled global reach and range
More than double the size of nearest competitor, broader range
1 Year ended 31 March 20112 Year ended 31 December 20103 Year ended 30 September 2010
55% 67%*
33%
77%*
23%
80% 86%*
14%
3,000
0
500
3,500
2,000
4,000
2,500
1,000
1,500
Glo
ba
l re
ve
nu
e U
S$
m
Other regions
North America
Experian Equifax
54%
46%
D&B Acxiom FICO
1,1611
6063
65%*
35%
75%
1,6772
25%
4,2141
80%
1,8602
20%
86%*
14% 9662
20%
80%*
TransUnion
4,500
66
Overview
Seven year revenue performance trend
Global continuing sales and EBIT only. EBIT margin excluding FARES. Operating cash conversion adjusted to exclude FARES. FY05 to FY10 EBIT adjusted to exclude FARES (discontinued operation). FY06 and FY07 sales and EBIT adjusted to exclude MetaReward. FY07 and FY08 sales and EBIT adjusted to exclude Loyalty Solutions. FY08 and FY09 sales and EBIT adjusted to exclude French Transaction Processing business and other smaller discontinuing activities. FY10 and FY11 sales and EBIT adjusted to exclude small discontinuing activities. Sales and EBIT growth shown at constant FX rates.
1,500
2,000
2,500
3,000
3,500
4,000
4,500
300
500
700
900
1,100
1,300
FY05 FY06 FY07 FY08 FY09 FY10 FY11
3,407
3,7123,790
3,803
4,214
747
15%
848
13%
896
8%
932
6%
1,046
11%Total
EBIT growth
Revenue US$m
EBIT
2,930
2,461
616
28%
490
17%
EBIT margin(direct business)
Operating cashconversion
Organic growth
21.9%
100%
8%14%
22.8%
99%
4%14%
23.6%
101%
3%8%
24.5%
100%
2%2%
24.8%
98%
8%10%Revenue growth
21.0%
102%
12%30%
20.0%
99%
9%18%
EBIT US$m
Financial
objectives:
Mid–high single
digit organic
revenue growth
Maintain or
improve margin
Convert at least
90% of EBIT into
operating cash
7
Overview
Major regional trends
North America• Gradual easing in credit
• More marketing of retail credit
• Some economic headwinds
• New regulations affecting some clients
• Shift to digital channels accelerates
Latin America
• Growth in credit demand
• Government action to contain inflation
• Strong structural underpinnings
UK & Ireland
• Banks still cautious; some signs of revival
• New banking entrants expand addressable market
• Some renewed investment in risk management platforms and value-added products
EMEA/Asia Pacific
• Rising credit penetration in emerging markets
• Growth in demand for targeted marketing
• Weak conditions in some established bureau markets
8
Overview
Organic revenue growth trends: Credit Services
(8%)
(6%)
(4%)
(2%)
0%
2%
4%
6%
8%
FY10 H1 FY10 H2 FY11 H1 FY11 H2
North America
(8%)
(7%)
(6%)
(5%)
(4%)
(3%)
(2%)
(1%)
0%
FY10 H1 FY10 H2 FY11 H1 FY11 H2
UK & Ireland
(4%)
(3%)
(2%)
(1%)
0%
1%
2%
3%
4%
5%
6%
FY10 H1 FY10 H2 FY11 H1 FY11 H2
EMEA
0%
5%
10%
15%
20%
25%
FY10 H1 FY10 H2 FY11 H1 FY11 H2
Latin America
Credit Services Credit Services exc.
authentication
9
Strategic overview
Our global strategic objectives
Extend our global lead in credit information and analytics
Create successful businesses in new customer segments
Build large-scale operations in major emerging consumer economies
Become the global leader in digital marketing services
Become the most trusted consumer brand for credit information and identity protection services
10
Strategic overview
Delivering against our strategic metrics
2010 2011
27%
64%
>10% >10%
Year to 31 March
New customer segments
% of revenue from outside Financial Services
Innovation
New products as % of global revenue1
Expanding geographically
% of revenue from outside US & UK29%
67%
1 % of global revenue developed within past five years
30-40%
>65%
>10%
2014
1111
Strategic overview
Global growth programme: key initiatives
• North America business information products
• Next-generation bureau
• New Decision Analytics platform
• New Marketing Services platforms
• Consumer protection products
• Credit bureaux:
• Colombia
• India
• Australia
• Positive data
• Marketing Services product roll-out
• Consumer Direct roll-out
• SME
• Healthcare payments
• Insurance
• Public sector
• Telecommunications
• Utilities
Product innovation Expanding geographically New customer segments
1212
Strategic overview
Progress: global growth programme
Prioritising to deliver maximum returns
• Initiatives contributed 2% to organic revenue growth in FY11
• Largest contributors were:
• Fraud and identity management
• Consumer protection
• Telecoms and utilities segments
• Small and medium enterprise segment
Focus on data and analytics
Drive profitable growth
Optimise capital
efficiency
1313
Strategic overview
New bureau expansion: Colombia
• Definitive agreement to acquire majority stake in Computec
• Market leading bureau in Colombia, with smaller bureau operations in Peru and Venezuela
• Computec is a unique asset:
• c. 60% share in consumer credit bureau
• High brand recognition
• Most extensive consumer credit data in Colombia
• Integrated into Colombian banking sector
• Financially strong
• Aim to leverage Experian global expertise
1414
Strategic overview
New bureau expansion: Australia
• Majority stake in joint venture with 6 leading Australian banks, subject to regulatory approval
• Intention to launch a credit bureau in Australia
• Australia: fourth largest economy in Asia Pacific
• Approximately 14m credit active individuals
• Positive data legislation pending
• Experian has a long track record in Australia, with critical mass
1515
Strategic overview
North America business information
• North America market is over US$1bn
• Market dominated by one operator
• Large SME opportunity
• Global customers seeking access to US business information data
• Over 3,000 clients using BusinessIQ, with growing pipeline
• Corporate linkage launched, good client response
• Consumer data linkage in beta phase
• Positioned well for recovery in small business lending
Drivers and trends Experian progress
1616
Strategic overview
Global Marketing Services
• Global leadership in email delivery
• New social media capability through Techlightenment acquisition
• New mobile delivery capabilities
• Digital advertising services
• Traction with ISPs
• New client wins
Expanding delivery platforms
New digital segmentation
services
• Strengthened leadership
• Investment in innovation
• Uniting under a common brand
Operational focus to strengthen market
proposition
1717
Strategic overview
Global technology platforms
• Investing in best-in-class technology to support revenue growth
• Projects we’re implementing:
• Value-added products platform
• Next generation bureau platform
• New Decision Analytics architecture
• New Marketing Services platforms
Sophisticated technology + data quality + service excellence = client value
1818
Financial overview
Capital expenditure
Capex uplift reflects:
• Growing scale of the business
• Investment in technology and new products to drive growth
• Expect capex/revenue of c. 9%
• Convert at least 90% of EBIT to operating cash
DatabasesTechnologySoftware
0
50
100
150
200
250
300
350
400
450
500
FY10 FY11 FY12 forecast
US$m
1919
Financial overview
Net debt/EBITDA
1 Valuation at 31 March 2011
Net debt Serasa put option Net debt to EBITDA
US$bn Net debt to
EBITDA
Target net debt to EBITDA range
FY11 net debt/EBITDA towards lower end of range
Serasa put option value US$870m1
Pro forma FY11 net debt/EBITDA of c. 2x including Computec
Share purchases in FY12 for vesting employee plans only
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
FY08 FY09 FY10 FY11
2020
Financial overview
Financial summary and outlook
6% organic revenue growth in Q1
FY12 outlook:
Expect Q2 similar to Q1
Mid–high single digit organic revenue growth for FY12
Modest margin improvement
Strong cash conversion
2121
Summary
Strong progress all round
= Sustained growth
Global growth programme
Investment
Scale
+
+
24
All figures above on continuing basis Growth at constant exchange rates2010 restated to exclude FARES (now classified as a discontinued operation) and small discontinuing activities in UK & Ireland and EMEA/AP
7%
8%
Year ended 31 MarchUS$million
Total growth
2011 2010Revenue
North America
UK and Ireland
EMEA/Asia Pacific
Total revenue
2,254
736
502
4,214
9%
3%
12%
10%
7%
2%
2,060
730
454
3,803
EBIT – continuing activities 1,046 11%932
EBIT margin 24.8% 24.5%
Latin America 722 19% 19%559
Central activities (66) (62)
EBIT before central activities 1,112 10%994
Appendix
Revenue and EBIT by geography
7%
6%
2%
4%
19%
Organic growth
FY11 Q1 FY12
25
Appendix
Group benchmark earnings
Growth at actual exchange rates. 2010 restated to exclude FARES which is now classified as a discontinued operation.1 Benchmark PBT is defined as profit before amortisation of acquisition intangibles, acquisition expenses, goodwill impairments, charges in respect of the demerger-related equity incentive plans, exceptional items, financing fair value remeasurements and tax. It includes the Group’s share of associates’ pre-tax profit.
2011 2010 Growth
(45)(52)Benchmark non-controlling interest
(162)(220)Benchmark taxation
692753Benchmark PAT
14%854973Benchmark PBT1
8%647701Benchmark earnings
12%9351,044Total EBIT
(81)(71)Net Interest
Dividend per share, US cents
Benchmark EPS, US cents
28.0
70.0 63.7
23.0
10%
22%
Year ended 31 MarchUS$million
1,002 1,015Weighted average number of shares
989 1,015Closing number of shares
19.0%22.6%Benchmark taxation rate
26
Appendix
FY12 modelling considerations (excludes Computec)
Netinterest
Net interest in the region of US$65m to US$75m, after a net pension credit of US$11m, at current rates
Capital expenditure
Capital expenditure expected to be between US$410m and US$440m, reflecting investment spend
Tax Benchmark tax rate of c.23%
Cash tax rate in the range of 12% to 15%
27
Appendix
Cash flow performance
Depreciation and
amortisation
Free cash flow
Operating cash flow
EBIT
Capital expenditure
(374)
1,044
288
Working capital
3
Retained in associate
55
1,028
98% conversion of EBIT into
operating cash flow
Net interest
(92)
Tax
(88)
Dividends to minority interests
(56)
792
Sale of fixed
assets
113% conversion of benchmark
earnings into free cash flow
Year ended 31 March 2011
US$million
12
28
Appendix
Credit Services: our business and market influences
Market
influences
Our
business
• We build and manage large databases of credit
application and payment histories of consumers and
businesses
• We help clients manage the risks associated with
lending money so they can:
• decide who to lend to
• set appropriate lending limits
• take action on overdue accounts
• Competition between lenders for new customers
• Need to monitor risk in lending portfolios
• Growth in demand in new customer segments
• Growth in credit active population in emerging markets
29All figures above on continuing basisGrowth at constant exchange rates
716
225
184
1,812
3%
(2)%
(1)%
7%
609
33.6%
687
3%
(2)%
(1)%
7%
7%
18% 18%
693
234
190
1,655
555
33.5%
538
Year ended 31 MarchUS$million
Total growth
2011 2010Revenue
North America
UK and Ireland
EMEA/Asia Pacific
Total revenue
Latin America
EBIT
EBIT margin
Appendix
Credit Services: 43% of group revenue
3%
9%
4%
(2)%
18%
Q1 FY12
Organic growth
FY11
30
Appendix
Decision Analytics: our business and market influences
Market
influences
Our
business
• Need for sophisticated prospecting and risk
management tools
• Standardisation by our clients to create single customer
experience
• Growth in demand for fraud prevention and
authentication tools
• Client willingness to invest in large software platforms
• We provide software, scores and analytics to financial
services clients
• We help clients at all stages of the lending cycle to:
• identify new customers
• segment existing customers
• manage portfolios and optimise collections
• We provide detection and fraud prevention services
31
Year ended 31 MarchUS$million
Total growth
2011 2010Revenue
North America
UK and Ireland
EMEA/Asia Pacific
Total revenue
Latin America
All figures above on continuing basisGrowth at constant exchange rates2010 restated to exclude a small discontinuing activity in UK & Ireland
9%
2%
116
9%
4%
(3)%
175
125
423
2%
(3)%
7 60% 60%
8%111
26.2%
175
135
435
113
12
118
27.1%
EBIT
EBIT margin
Appendix
Decision Analytics: 10% of group revenue
(10)%
6%
13%
9%
119%
Q1 FY12
Organic growth
FY11
4%
32
Appendix
Marketing Services: our business and market influences
Market
influences
Our
business
• Spending by retailers on marketing in US & UK
• Strong growth in emerging markets
• Secular shift from traditional to digital advertising
• Growing demand for intelligent solutions
• Growth in demand for global services
• We own unique data on consumer attributes
• We use sophisticated marketing strategies to help
organisations identify, understand, target and engage
their best customers through:
• unrivalled data on consumers
• systems, analytics & platforms that puts data to work
• ability to help clients understand and measure
effectiveness of campaigns
33
EBIT
EBIT margin
Year ended 31 MarchUS$million
Total growth
2011 2010Revenue
North America
UK and Ireland
EMEA/Asia Pacific
Total revenue
Latin America
All figures above on continuing basis Growth at constant exchange rates2010 restated to exclude small discontinuing activities in UK & Ireland, EMEA and Asia Pacific
329367
218
183
791
11%
4%
31%
14%
11%
3%
17%
11%
212
139
694
126
15.9%
47%86
12.4%
23 58% 58%14
Appendix
Marketing Services: 19% of group revenue
24%
10%
10%
1%
1%
Q1 FY12
Organic growth
FY11
34
Appendix
Interactive: our business and market influences
Market
influences
Our
business
• Rising awareness of uses of credit information
and benefits of credit monitoring
• Growth in personal identity theft
• We provide online services directly to consumers via
subscription, including:
• access to their detailed credit history
• access to their credit scores
• credit monitoring for identity protection purposes
• Our online lead generation services help businesses
target offers to consumers e.g. loans or insurance
• We provide online comparison shopping services
35
EBIT
EBIT margin
Year ended 31 MarchUS$million
Total growth
2011 2010Revenue
North America
UK and Ireland
Total revenue
All figures above on continuing basis Growth at constant exchange rates
1,058
118
15%
10%
14%
8%
10%
922
109
1,031
259
22.0%
6%242
23.5%
1,176 9%
Appendix
Interactive: 28% of group revenue
Q1 FY12Organic growthFY11
(4)%
15%
(2)%
36
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
Bank of New York Mellon
PO Box 358516
Pittsburgh
PA 15252 - 8516
United States
T: + 1 201 680 6825 (From the US: 1-888-BNY-ADRS, toll free)
W: www.adrbnymellon.com
37
Experian
Cardinal Place
80 Victoria Street
London
SW1E 5JL
Tel: +44 (0)203 042 4200
Website: www.experianplc.com
Paul Brooks Nadia Ridout-Jamieson
Chief Financial Officer Director of Investor Relations
Email: [email protected] Email: [email protected]
Peg Smith Sarah Schibli
Executive Vice-President Investor Relations Analyst
Email: [email protected] Email: [email protected]
Contacts
38
10 November 2011 Half-yearly results announcement
17 January 2012 Interim management statement, third quarter
10 May 2012 Prelims announcement, full year
Event calendar
39
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.
Disclaimer