Robert W Baird s 2011 Business Solutions Conference February 23, Peg Smith, Executive Vice-President

Transcription

1 Robert W Baird s 2011 Business Solutions Conference February 23, 2011 Peg Smith, Executive Vice-President

2 Our business Experian a snapshot Sales: $3.9 $3 9 billion Profits: $910 million Market cap: 7.9 billion¹ In top 50 of FTSE-100 Net Debt: $1.9 billion² Employees: c. c 15, Offices in 40 countries Largest markets: US, UK, Brazil Corporate headquarters: Dublin Main offices: London, Costa Mesa (US), Nottingham (UK), Sao Paulo (Bra il) (Brazil) As at 31 March 2010 unless annotated Profits is Benchmark PBT ¹January 2011 ² September

3 Overview The Experian investment case Market leading global information company Unique proprietary p 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 Aim to sustain mid-high single digit organic growth 3

4 Overview Experian business segments Credit Services Decision Analytics Marketing Services Interactive Large databases of information, used to manage risk 16 consumer credit bureaux 12 business credit bureaux Automotive information Value-added products, used to manage risk Provides software, scores and analytics Build over 300 scorecards p.a. Over 1,500 systems deployed Sophisticated targeted marketing Sell across c.30 countries c. 60% digital Segment over 1bn consumers Direct to consumer credit monitoring services Identity theft products Online lead generation 4

5 Overview Global revenue FY10 By geography By segment EMEA/Asia Pacific 12% North America 53% Latin America 15% UK & Ireland 20% Interactive 27% Marketing Services 19% Decision Analytics 11% Credit Services 43% Other 10% Retail 14% By vertical Consumer 19% Financial Services 36% 5% Automotive 5% Telecoms/utilities 5% 3% 3% Public sector/education Media Insurance Diverse portfolio by geography, business segment, and vertical markets Revenue for the year to 31 March

6 Overview Market leader with unparalleled global reach and range 4,000 3, ,500 3,000 Other regions North America Glo obal reven nue US$m 2,500 2, ,500 1, % 1, , % 23% 25% 1, % 14% 9% 10% % 35% 55% 53% 80% 77% 75% * 86% 86%* * 91% 90%* * 67% 65%* * Experian Equifax D&B Acxiom Harte- Hanks FICO More than double the size of nearest competitor, broader range 1 Year ended 31 March Year ended 31 December Year ended 31 December Year ended 30 September 2010 *US only Source: Latest full year revenue, company 10K 6

7 Overview Track record of profitable growth Revenue US$m Total growth +14% +14% +8% Direct business EBIT US$m and margin +2% Total growth +15% +13% +8% +6% Organic growth +8% +4% +3% +2% EBIT margin 3,712 3,790 3,810 3,407 2, % % 22.8% 21.9% 21.0% FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 FY11 organic revenue growth: +7% Q1, +8% Q2, +8% Q3 Global continuing sales and EBIT only. Growth at constant exchange rates and for continuing activities EBIT and EBIT margin exclude FARES. FY06 and FY07 sales and EBIT adjusted to exclude MetaReward. FY06, FY07, FY08, FY09 and FY10 sales and EBIT adjusted to exclude UK account processing, FY07 and FY08 sales and EBIT adjusted to exclude Loyalty Solutions, FY08 and FY09 sales and EBIT adjusted to exclude French transaction processing activities and other smaller discontinuing activities, FY10 sales and EBIT exclude small discontinuing activities 7

8 Overview Highly cash generative US$millio on 1,200 1, Operating cash flow as a percentage of EBIT 97% 98% 99% 98% Operating cash flow Free cash flow* FY07 FY08 FY09 FY10 >US$3bn free cash flow generated since demerger * Free cash flow is defined as operating cash flow less net interest, tax paid and dividends paid to minority shareholders. 8

9 Overview Recent growth trends by business segment 10% Credit Services 8% Decision Analytics 8% 6% 4% 2% 0% 6% 4% 2% (0%) (2%) (4%) (6%) (8%) FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 (10%) FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 12% 10% 8% 6% 4% 2% 0% (2%) FY10 Q3 Marketing Services FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 14% 12% 10% 8% 6% 4% 2% 0% Interactive FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 Growth at constant exchange rates and for continuing activities 9

10 Overview Recent growth trends: Credit Services North America 6% 25% 4% 20% 2% 15% 0% FY11 Q2 FY11 Q3 (2%) 10% (4%) FY11 Q1 FY10 Q4 5% (6%) FY10 Q3 (8%) 0% Latin America FY10 Q3 FY10 Q4 FY11 Q1 FY11 Q2 FY11 Q3 0% UK & Ireland 4% EMEA / Asia Pacific (2%) (4%) FY11 Q2 FY11 Q3 2% 0% (2%) FY10 Q3 FY11 Q2 (6%) (8%) FY10 Q3 FY10 Q4 FY11 Q1 (4%) (6%) (8%) FY11 Q1 FY11 Q3 (10%) (10%) FY10 Q4 Growth at constant exchange rates and for continuing activities 10

11 Strategic overview Our strategic planning goals Sustain and extend market leadership Leverage our unique market position global span proprietary data and analytics high cash generation Three-year strategic planning cycle invest in core take advantage of emerging opportunities Delivering growth on a sustained basis 11

12 Strategic overview Market influences New data requirements driven by regulation Accelerating shift to digital targeted marketing New segments and emerging markets adopt risk management tools Consumer need to manage own personal content 12

13 Strategic overview Our global strategic objectives To sustain and grow our market-leading position i credit in dit data d t and d value-added l dd d analytics l ti g g expansion p opportunities pp To maximise high-growth in new customer segments To build scale operations in targeted fast fast-growth growth emerging markets To establish global leadership in digital marketing services To become the leading global consumer brand for credit information and identity protection services 13

14 Strategic overview Our three year vision Year to 31 March Expanding geographically % of revenue from outside US & UK <20% >25% 30-40% New customer segments % of revenue from outside Financial Services <50% >60% >65% Innovation New products as % of global revenue 1 >10% >10% >10% Building a globally balanced portfolio 1 % of global revenue generated by products developed within the past five years 14

15 Strategic overview Sustained growth through disciplined investment process Focus on data and analytics Drive profitable growth Optimise capital efficiency Aim to deliver sustained mid-high single digit organic revenue growth Prioritise investments for maximum return Rigorous assessment of: Strategic fit Growth potential Execution risk Financial returns 15

16 Strategic overview Delivering high-impact growth sustainably Extend core Build emerging Create new business businesses opportunities Maximise opportunities within our existing markets Taking new and existing capabilities into new markets Incubate new ideas for the future Global growth programme New growth investments 16

17 Prioritising high-impact growth initiatives Extend core business NEW 1. Sales and service excellence and cross- selling Clien nts and Mark kets Decision Analytics consultancy expansion 3. New data sources in existing markets 4. Local market based growth initiatives, including NA business information 3 OLD OLD Products and Capabilities NEW Cumulative incremental revenue potential (FY12-16): >$50m 17

18 Prioritising high-impact growth initiatives Build emerging businesses NEW Clien nts and Mark kets OLD Product innovation 1. Next generation bureau 2. New Decision Analytics platform 3. New Marketing Services platforms 4. Fraud management 5. Consumer protection Expanding geographically 6. India credit bureau 7. New bureau initiatives and positive data 8. Marketing Services product rollout 9. Consumer Direct geographic rollout 3 New customer segments 10. SME 11. Healthcare payments 12. Insurance OLD Products and Capabilities NEW 13. Public Sector 14. Telecommunications Cumulative incremental revenue potential (FY12-16): >$50m 15. Utilities 3 18

19 Prioritising high-impact growth initiatives Incubate new ideas for the future NEW Product innovation: 1. Various initiatives Clien nts and Mark kets New customer segments: 2. Various initiatives 3 OLD OLD Products and Capabilities NEW Cumulative incremental revenue potential (FY12-16): >$50m 19

20 Prioritising high-impact growth initiatives FY11 achievements Results of global growth programme increasingly apparent Expect c.2% contribution to organic revenue growth in FY11 Top contributors: Fraud management and authentication Consumer protection Telecommunication i vertical Utilities vertical SME market 20

21 Strategic overview Investing to grow: organic investment trends Organic investment to fund future growth investmen nt ($m) P&L CAPEX ($ $m) Modest step-up to support global growth programme Goal is to at least maintain i or improve margins P&L investment Capital expenditure Supplement organic investment with targeted acquisitions 21

22 Strategic overview Summary Strategy to sustain and grow Experian s leading global l market position Three-year vision to: increase exposure to high growth markets establish scale in new customer segments lead through innovation Aim to deliver sustained mid-high single digit organic revenue growth of premium quality Investment t for growth through h defined d programme is delivering and set to grow Create value for shareholders on a sustained basis 22

23 Robert W Baird s 2011 Business Solutions Conference February 23, 2011 Peg Smith, Executive Vice-President