news release
Interim Management Statement, third quarter
16 January 2014 ─ Experian, the global information services company, today issues an Interim Management Statement that includes an update on trading for the three months to 31 December 2013.
Commenting on the performance, Don Robert, Chief Executive Officer, said:
"We delivered good growth in the third quarter, with total revenue growth of 7% and organic revenue growth of 5%, with all regions and business lines contributing.
"Notably, our Decision Analytics business grew 16%, fuelled by fraud prevention products and strong sales of our flagship PowerCurve software platform. We have also seen improving conditions in some markets such as the UK, and we're making significant progress on the strategic investments we have made in prior years which are providing new sources of growth. As we have previously said, some of our markets have been challenged, with a weak economic environment in Brazil, and softness in US mortgage activity.
"Our recent acquisitions in fraud and healthcare have both made strong starts and we are seeing good take up with clients. Overall we have delivered another quarter of solid performance.
"Looking ahead, we expect organic revenue growth for the second half to be at least similar to that in the third quarter, while for the full year we continue to expect modestly improved margins (at constant currency) and cash flow conversion of at least 90%."
% change in revenue year-on-year for the three months to 31 December 2013
Continuing activities only1 |
Total growth % |
Total growth % |
Organic growth % |
|
At actual exchange rates2 |
At constant exchange rates |
At constant exchange rates |
North America |
8 |
8 |
5 |
Latin America |
(5) |
5 |
5 |
UK and Ireland |
8 |
7 |
7 |
EMEA/Asia Pacific |
5 |
7 |
3 |
Experian |
5 |
7 |
5 |
1 Continuing activities exclude the contributions of the Colombia document outsourcing business in Latin America, Sinotrust Market Research Services and other divested businesses in EMEA/Asia Pacific
2 Experian reports in US dollars
In the three months to 31 December 2013, total revenue from continuing activities increased by 7% at constant exchange rates. Group organic revenue growth was 5% year-on-year. The difference relates mainly to the acquisitions of 41st Parameter and Passport Health Communications. At actual exchange rates, total revenue from continuing activities increased by 5%, with the difference mainly reflecting depreciation of the Brazilian Real relative to the US dollar.
We delivered growth across all four business lines, with organic revenue growth of 4% in Credit Services, 16% in Decision Analytics, 1% in Marketing Services and 7% in Consumer Services.
North America
At constant exchange rates, total revenue growth was 8% and organic revenue growth in North America was 5%.
Organic revenue growth in Credit Services was 4%. In consumer information, we saw strong growth in prospecting, portfolio management and other credit profile product lines, which offset further sharp declines in mortgage-related volumes. The key vertical expansion areas of automotive and healthcare payments performed strongly, with healthcare benefiting from new client signings as well as product upsells. Decision Analytics performed exceptionally well, up 24% organically, as momentum built across new public sector contracts for identity authentication services and reflecting good demand for software. Marketing Services grew organically by 4%, as the pipeline for the new cross-channel marketing platform has started to convert, and reflecting good growth in the data quality business. Consumer Services delivered organic revenue growth of 4%, as we continue to transition our brand portfolio within the direct-to-consumer operations, and as we prepare to on-board affinity (white label) partners.
Latin America
At constant exchange rates, total and organic revenue growth in Latin America was 5%.
Organic revenue growth in Credit Services was 4%. Economic conditions in Brazil remain tough, reflecting weak consumer confidence and low levels of consumer lending activity. Against this backdrop, we delivered growth in Brazil, and have benefited from strong performances across our other Latin America bureau operations. Decision Analytics performed well, up 39% organically, reflecting good demand for credit risk software and new fraud prevention products. Marketing Services declined 7%, primarily reflecting weak demand for prospecting data.
UK and Ireland
At constant exchange rates, total and organic revenue growth in UK and Ireland was 7%.
In Credit Services, we delivered organic revenue growth of 3% as we gain traction from new product introductions, and reflecting good progress across small and medium enterprise customers, as well as across key verticals such as automotive and public sector. Organic revenue growth for Decision Analytics was also 3%, and we are seeing early evidence of a pick-up in credit risk software replacement activity in some client segments. And while Marketing Services declined 1%, our data quality business is back to growth and the recently introduced cross-channel marketing platform is showing good promise with an emerging pipeline of opportunities. Consumer Services performed strongly, up 23%, reflecting further growth in the membership base and improved retention rates.
EMEA/Asia Pacific
At constant exchange rates, total revenue growth for EMEA/Asia Pacific was 7%. Organic revenue growth was 3%.
In Credit Services, we delivered organic revenue growth of 2%, as bureaux in Continental Europe stabilise and reflecting good growth in business information in China and Singapore. We have been pleased with progress in Decision Analytics, up 16%, which follows successful actions to refocus operations in EMEA and Asia Pacific. As expected, there was a decline in Marketing Services, down 3% organically, principally due to the wind-down of a large contract in EMEA.
Financial position
During the quarter, Experian completed the acquisitions of 41st Parameter and Passport Health Communications. These acquisitions, as well as the maturity in December 2013 of the £334m 5.625% Euronotes, were funded from Experian's existing committed bank facilities. At 31 December 2013 Experian's borrowings totalled $4.3bn and net debt was $4.1bn. Undrawn bank facilities totalled $0.9bn. Other than as disclosed, there has been no change since 31 December 2013 to Experian's general financial position, which remains strong, and no material change to Experian's trading position to the date of this statement.
Future events
We will release our results for the full year on Wednesday, 7 May 2014.
Contact:
Experian
Nadia Ridout-Jamieson Director of Investor Relations +44 (0)20 3042 4215
James Russell Director of Corporate Communications
RLM Finsbury
Rollo Head +44 (0)20 7251 3801
Jenny Davey
This announcement is available on the Experian website at http://www.experianplc.com. There will be a conference call today to discuss this update at 9.00am (UK time), which will be broadcast live on the website with a recording available later.
All financial information in this Interim Management Statement 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.
Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
