Interim Management Statement
Experian Group Limited
16 January 2008
Experian Group Limited
Interim Management Statement, Third Quarter
Experian, the global information services company, today issues an update on
trading for the three months to 31 December 2007.
Commenting on the performance of Experian, Don Robert, Chief Executive Officer,
said:
'Experian has continued to perform well in difficult market conditions. Overall,
the business achieved revenue growth of 22% and organic revenue growth of 2%.
For the full year, we continue to target solid double-digit EBIT growth and a
profit outcome within the range of current market expectations.
'While trading conditions are not expected to improve in the fourth quarter, our
focus is on maximising profitability and we are today announcing a programme of
significant efficiency measures. These measures will give rise to a
non-recurring charge and will bring benefits in FY2009, with full annualised
benefits the year after. We continue to invest to take advantage of the
long-term growth opportunities and to position ourselves for market recovery.'
Experian Group
% change in revenue year-on-year for the three months to 31 December 2007
--------------------------------------------------------------------------------
Continuing activities Total growth Total growth Organic growth
only(1) % % %
At actual At constant At constant
exchange rates(2) exchange rates exchange rates
--------------------------------------------------------------------------------
North America 3 3 2
Latin America >100(3) >100(3) 78
UK and Ireland 12 5 -
EMEA/Asia Pacific 25 11 4
--------------------------------------------------------
Experian 22 16 2
--------------------------------------------------------------------------------
(1) Continuing activities exclude the contributions of MetaReward, UK account
processing and Loyalty Solutions
(2) Experian is reporting in US dollars
(3) Latin America total growth at actual exchange rates for the three months
ended December 2007 was 12,193% and total growth at constant exchange rates was
10,282%
In the three months to 31 December 2007, revenue from continuing activities at
Experian increased by 16% at constant exchange rates. Organic revenue growth
slowed to 2%, reflecting the impact of the credit crunch on financial services
customers. Decision Analytics improved compared to the second quarter with
organic revenue growth of 5%, while Interactive continued to perform well with
organic revenue growth of 9%. There were modest organic revenue declines at
Credit Services of 1% and at Marketing Services of 3%.
Acquisitions contributed 14% to revenue growth. Net debt at the end of the
period was $2.9bn.
Cost efficiencies
Experian has taken a number of strategic initiatives this year to improve
efficiency and reduce costs, including near-shoring activities and data centre
consolidation. These actions will benefit margins in the full year, with further
benefit expected in the financial year to March 2009.
Experian is today launching a programme of significant cost-efficiency measures.
Identified efficiencies include offshoring of development activity,
restructuring of core credit and marketing activities and infrastructure
consolidation. This programme is expected to deliver annualised cost savings of
approximately $80m, of which an estimated $40m will be realised in the financial
year ended March 2009. One-off restructuring costs associated with achieving
these cost savings will be in the region of $100m, the majority of which will be
cash costs.
While taking these actions, Experian will continue to invest for growth through
the income statement. During the current financial year such activity has been
stepped up and investment will continue in order to capitalise on future
opportunities and to position the Group strongly for recovery in its core
markets.
Transaction processing in France
As part of our strategic planning process, we are undertaking a review of our
transaction processing activities in France and their fit within the Experian
portfolio. The review is at an early stage and we will make a further
announcement when appropriate. In the year ending 31 March 2007, revenues for
these activities were $308m, with low double-digit margins.
North America
Revenue in North America in the three months to 31 December 2007 increased by 3%
in total. Organic growth was 2%, with Hitwise (acquired in June 2007)
contributing the balance.
While revenue growth at Credit Services declined by 2% in the third quarter, we
continued to gain traction in account management and collections. Decision
Analytics slowed to mid single-digit organic revenue growth, against a
background of strong comparatives and an increasingly difficult market
environment. Organic revenue growth at Marketing Services was 3%, while at
Interactive it was mid single-digit, as strength in Consumer Direct and
PriceGrabber offset continued depressed trading at LowerMyBills.
Latin America
Revenue for Latin America in the three-month period to 31 December 2007 was
$111m (prior year $1m), including contributions from Serasa (acquired in June
2007) and Informarketing (acquired in April 2007). Organic revenue growth was
78%, reflecting the performance of Decision Analytics only.
Serasa continued to perform well during the period, in line with the buy plan.
Integration is proceeding ahead of plan and is expected to be finalised in March
2008.
UK and Ireland
Revenue from continuing activities in the UK and Ireland increased by 5% in the
third quarter at constant exchange rates. Organic revenue was flat, with the
acquisitions of Tallyman (acquired in May 2007), Hitwise, The pH Group (acquired
July 2007) and N4 Solutions (acquired July 2007) contributing the difference.
During the period, the environment for UK financial services became tougher,
with significant declines in unsecured lending and mortgage approvals. Against
this backdrop, organic revenue at Credit Services saw a modest decline of 2%, as
origination volumes fell, offset by strength in the public services sector and
in business information. Decision Analytics recovered to deliver organic revenue
in line with last year, reflecting strong collections activity and some
improvement in pipeline conversion. Organic revenue at Marketing Services was
impacted by significant cutbacks in client spending, down 10%, while performance
at Interactive was very strong, with organic revenue nearly doubling
year-on-year.
EMEA/Asia Pacific
At constant exchange rates, revenue in EMEA/Asia Pacific increased by 11% in the
third quarter. Organic revenue growth was 4%, with acquisitions, mainly Emailing
Solution (acquired in May 2007), Tallyman and Hitwise, contributing the balance.
Organic revenue growth at Credit Services was low single-digit and double-digit
in Decision Analytics. Marketing Services was again strong, due to QAS.
Future announcements
Experian will issue its Second Half Trading Update on 16 April 2008 and its
Preliminary Announcement on 21 May 2008.
Enquiries
Experian
Paul Brooks Chief Financial Officer +44 (0)203 042 4215
Nadia Ridout-Jamieson Director of Investor Relations
Finsbury
Rollo Head +44 (0)207 251 3801
Don Hunter
This announcement is available on the Experian website, www.experiangroup.com.
There will be two conference calls today to discuss this update, at 9.00am and
at 3.00pm (UK time). Both will be broadcast live on the website with a recording
available later.
All financial information is based on unaudited management accounts. Certain
statements made in this Interim Management Statement 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 referred to in
these forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange