In this presentation we provide material on Experian’s global business, strategy and financial results for FY12.We intend this to overlay and complement regionally-focused communications. The presentation is aimed at helping our people better understand our global business and gain a greater sense of engagement with Experian globally.The material in this presentation is publicly available and can therefore be used to support external as well as internal communications, for example:Employee communicationsClient communicationsSupplier communicationsIn support of acquisitions
We are a leading global information services company. Our business has annual sales of around $4.5bn. In the year to March 2012, our last reported year, we delivered profits of almost $1.2bn.We have offices in 44 countries and deliver services to clients in many more countries around the world.Our headquarters are in Dublin, Ireland and our three largest operating centres are in Nottingham (UK), Costa Mesa (California - US) and Sao Paulo (Brazil).Our shares have been quoted on the London Stock Exchange since October 2006, when we demerged from GUS
This chart shows the Experian share price versus the FTSE-100 and the average share price of three of our main listed competitors (which are Equifax, Fair Isaac and Dun & Bradstreet).Experian is in blue, the FTSE-100 is in green and the average of our competitors is in brownOverall, since the demerger in 2006, the Experian share price has grown by 62%And since January 2009, Experian shares have steadily outperformed both the FTSE-100 and our competitors. This has been due to the strength of the Group’s financial performance and as it delivers on its growth objectives.[SPEAKER NOTE – THIS CHART IS CURRENT TO JUNE 2012. PLEASE CONTACT INVESTOR RELATIONS FOR THE LATEST UPDATE]
This slide shows Experian’s ranking in the FTSE-100. [TheFTSE-100 is an index of the top 100 companies (by market size) on the London Stock Exchange].Experian is ranked in the top half of the index, at number 40, with a market capitalisation of around £9bn [at c. 900p share price].[SPEAKER NOTE – THIS CHART IS CURRENT TO JUNE 2012. PLEASE CONTACT INVESTOR RELATIONS FOR THE LATEST UPDATE]
This chart shows our sales globally compared to our peers.We are the global leader in our field.We are more than twice the size of our next largest peer.We generate just over half of our sales outside North America, making us far more international than our competitors - a point that is important both for serving global clients and seizing new opportunities to grow.Furthermore, our market lead has grown and extended over the past three years.
We provide information, analytical tools and marketing services to organisations around the world.We report across four geographic regions(although we run the business across five). Our regions areNorth America – which is just under half of the business. Latin America – now 21% of our business.UK and Ireland – now 18%.Europe, Middle East & Africa and Asia Pacific, which combined now make up 14% of our business.Our business activities are grouped into Credit Services, Decision Analytics, Marketing Services and Consumer Services business lines:Credit Services makes up just under half of our business and provides software, tools and consulting to turn data into actionable decisions. Decision Analytics is 11% of our business and enables clients with large customer bases to manage and automate large volumes of day-to-day decisions. Marketing Services is 21% of our business and helps clients to target and engage customers effectively, while delivering improved return on investment. Consumer Services is also 21% of our business and enables consumers to monitor the accuracy of their credit report online, to check their credit score and protect themselves against identity theft.We also have a wide spread of clients,with revenue from our top 10 clients accounting for just under 10% of the business, and our top 50 clients accounting for just over 20% of revenues.Vertical splitWe serve many thousands of clients around the world in a range of industry sectorsJust under one third of our revenue is from clients in Financial ServicesAnd about 20% of our revenue comes from consumers, the balance comes from a diverse range of industries including retail, automotive, telecoms and utilities, insurance, public sector and media.
Financially our business is very strong.This chart sets out our performance trends over the last 7 years.Sales The red-line shows our total revenue in US dollars. During a period that encompasses the financial crisis and recession, we’ve averaged 7% organic sales growth per annum, and virtually doubled our profits.And recently we were very pleased to report 10% organic revenue growth for the year ended 31 March 2012, the first time we’ve reported double-digit organic growth since demerger.[Organic sales growth is the underlying growth of a company and does not include growth from acquisitions during the year in which they were acquired] ProfitThe green bars show our profit (EBIT), which have grown every year.We have also improved margins every year, and by over 5% (or 500 basis points) in total over the past seven years. CashAnd we have a very cash generative business, over the 7 year period we have converted virtually all of our profits into operating cash.
We have offices in 44 countries, as well as selling to clients in many countries around the world.And one of our strategic objectives is to continue to expand our global reach.
These are the services that we are currently providing into each country.
Looking at our four business lines in closer detail: Credit Services Makes up almost half of our revenue This is where we help organisations to manage the risks associated with extending credit and preventing fraud.Globally we operate 19 consumer credit and 14 business credit bureaux.These bureaux between them hold credit payment data on more than 740 million consumers and 70 million businesses globally. We also have historical data on 650 million vehicles.
So if Credit Services is the data, then Decision Analytics is the intelligence that sits on top of it, and is 11% of our business.We provide software and analytical tools such as scores, as well as consulting, helping clients to take action and make intelligent lending decisions right through the customer lifecycle. And we provide fraud prevention and authentication services.
Marketing Services is 21% of our business.This is where we help clients to understand their customers better and to communicate with them effectively deliver targeted marketing messages.We provide data andpredictive models to our clients to help themprofile and segment the market by consumers circumstances and preferencesWe help our clients to deliver their targeted marketing messages via direct mail, or increasingly via email, mobile, television, social, internet display and mobile devicesExperian now has a Marketing Services presence in some of the largest economies around the world, including Australia, Brazil, China, France, Germany, Japan, the UK, and the US, allowing us to service large regional and multi-national businesses.Globally we hold demographic data on 500 million individuals in 250 million householdsAnd we have classified more than 2.2 billion consumers in 28 countriesTo put this into context:
And finally, Consumer Services, whichis also 21% of our business.This is where we provide credit monitoring and identity protection services directly to millions of consumers in the US and the UK. Our key brands are: [for UK presentation mention] :CreditExpert.co.uk,ProtectMyID.co.uk[for US presentation mention]: FreeCreditScore.com, CreditReport.com, ProtectMyID.comThisallows consumers to access their complete credit history for a monthly subscription fee – effectively allowing them to see the same information that is available to lenders.Typically a consumer will subscribe to Experian when: they have a major life event, such as when obtaining a loan, and they want to feel more confident when applying. or when there is a life change, such as getting married or moving city and they need to take a more in-depth look at their financial situation.
We have five strategic goals that encapsulate what we aim to achieve as a business: We’re the global leaders in credit information and analytics and we aim to extend that lead through a whole range of measures –from data enhancements through introduction of new technology We want to drive greater growth from new customer segments – solving problems that are universal to a whole range of industries, like fraud avoidance We want to build scale and profitability in major emerging consumer economies like Turkey, South Africa, India and China We see big opportunities in digital marketing and we’re very well positioned in that space And we want to further strengthen our position as the brand consumers turn to for credit information and identity protection servicesWe’re pursuing growth through both organic investment in the business and highly selective acquisitions.
To achieve our global strategic objectives we are investing in a range of areas through our global growth programme. This slide shows the key initiatives that we are investing in through our growth programme, which, combined, contributed 4% to our organic revenue growth in the last financial year (FY12).
This slide shows the progress we have made over the past three years - we are extending our global lead through geographic expansion, product innovation and further building out and penetrating into new customer segments.We are growing strongly in the high-growth regions of Latin America, Asia Pacific and emerging Europe broadening our spread beyond the US & UK.Financial services, remains one of the most important vertical sectors of our revenue base. But as we’ve successfully diversified the business, we’ve become less dependent on this sector for growth. With above-average growth in new customer segments, this trend is set to continue.Continuous investment in new product innovation sets us apart from our competitor group, and that rate of investment continues, both through the P&L* and through capital expenditure. This portfolio breadth creates new opportunities for growth, reduces our exposure to any single market or client and is a big, big benefit of being global.*[P&L = profit & loss statement]
To summarise:FY12 was a year of significant progress for us.Our global growth programme is coming of age now as it moves into its third year with future benefits yet to come from a lot of the investments that we have made and will continue to make.We are seeing tangible results in new customer segments, which are growing in scale and materiality.Geographically, we are focused on replicating our Experian model in places like Brazil and Colombia, and this is a great base from which to grow.Combined, we see these factors driving further premiumgrowth in FY13 and beyond.