Experian reported total revenues of US$4.335bn representing a 6% revenue growth, 5% organic revenue growth at constant currency.  On an ongoing activities basis Benchmark EBIT margin was up 60 basis points to 27.7%1 , up 30 basis points at constant currency and Benchmark EBIT growth was 7% at constant currency.

Regional highlights

North America: Experian delivered a solid performance in North America, with total revenue growth of 7% and organic revenue growth of 5%, reflecting strength in B2B partially offset by the transition we are undertaking in Consumer Services.

We saw good progress across our B2B activities reflecting generally stable conditions for consumer and business lending as well as a good reception by clients for some of our newly introduced services. These include new propositions which help lenders to target and acquire customers more efficiently in the digital sphere, new decisioning services which greatly accelerate the speed at which risk and fraud prevention analysis can be conducted, and as we introduce additional functionality to help our clients address the credit needs of a broader spectrum of consumers and businesses.

Our strategy to expand in newer market segments continues to produce results, with strong growth in health fuelled by new deals with healthcare providers and as we secure further growth from existing clients through cross-selling. For the year as a whole we delivered further growth in automotive, with some tightening of credit standards evident towards the latter part of the year.

In Consumer Services, we are growing a substantial audience of consumers by offering free access to credit monitoring and scores.  Free memberships reached 9 million at the end of the year, out of a total of approximately 11 million members, and up from 3 million free members in the previous year.  We have recently launched a major marketing campaign to introduce a new premium identity protection service called IdentityWorks, which is based on the CSIdentity (‘CSID’) platform we acquired earlier in the year. We are also starting to scale LendingWorks, by adding more lenders, more loan and card offers and new features to 4 help consumers easily compare prices for credit offers.   While organic revenue declined modestly as a whole, referral fees have started to grow rapidly from a small base.

Latin America: We delivered another year of strong progress in Latin America, with organic revenue growth of 9%. The performance of our business in Brazil has been outstanding, delivering good growth despite a very difficult market. At the same time we have undertaken a significant programme of investment in Brazil to position ourselves for economic recovery to build on our leadership position in B2B while establishing new services for consumers. Growth in the year was driven by a number of factors, including counter-cyclical products such as delinquency notifications, expansion of our position with a number of the largest Brazilian banks and the introduction of additional services for small and medium enterprises. We also launched free services to help consumers better manage their credit, including the Serasa Score which helps to educate consumers about the benefits of positive data and improve consumer access to credit.

Regulatory changes are being discussed in Brazil which could accelerate the adoption of positive data by dropping the requirement for consumers to opt-in and instead allowing consumers to opt-out of the positive data collection process. We believe this would benefit Brazilian consumers and would provide new opportunities for better credit risk assessment through more widespread use of data. In anticipation of this regulatory change, we are accelerating development of products which incorporate positive data.

UK and Ireland:  In the UK and Ireland, organic revenue increased 1%, reflecting a robust performance in B2B which offset a decline in direct-to-consumer. The breadth of our offer in B2B is a major advantage, expanding our position within our traditional client base in financial services and opening up new opportunities for growth in areas such as energy, price comparison, wealth and pensions and financial technology services (fintech). During the year we introduced services which help lenders to pre-qualify consumers for credit, credit software which assists with account opening and customer management and new fraud prevention products. We also secured our first client wins for CrossCore, our new fraud detection and prevention platform. We benefited from strong take up of new digital marketing tools which use data and analytics to help clients advertise more effectively across social media and other digital platforms.

We took a number of important steps during the year to reposition Consumer Services. We are using the power of the Experian brand to drive consumer interest and engagement in our free score offer. We have attracted 1.7 million free customers since launch which is helping to drive awareness and usage of CreditMatcher, our price comparison service. Having initially launched CreditMatcher, which helps consumers to compare credit card offers, we have recently introduced an energy switching service as an extension to our offer.  Early signs are encouraging, although the scale of our new offers is not yet sufficient to offset declines in our traditional credit monitoring subscription services and we expect this part of our business to decline during the coming year, with the rate of decline expected to moderate somewhat in the second half.

EMEA/Asia Pacific:  EMEA/Asia Pacific performed strongly, delivering organic growth of 9%.

Strategically we have placed considerable emphasis on tightening the focus of our activities in EMEA/Asia Pacific. Having divested a number of businesses over the past two years we are now concentrated on fewer scalable markets. This more focused approach is yielding good results and we secured many significant wins during the year, ending the year with good momentum across both EMEA and Asia Pacific. This has given rise to strong revenue growth and significant progress towards profitability, even as we continue to invest to secure longer term opportunities in markets such as India and South East Asia.

Strategy update: Having successfully executed on many aspects of our strategy our portfolio is stronger and is growing faster with improved profitability. As we look ahead we are evolving our focus in order to capture new opportunities. We are aligning our strategy ever more closely to emerging client needs to deliver better digital customer experiences, to manage risks as effectively as possible and to protect against fraud, while also helping consumers to protect and manage their financial lives. These needs mean our customers seek new ways to combine, integrate and analyse data, which plays to Experian’s strengths.

As part of our strategy we are:

  • broadening and deepening our data assets through a range of data investments and partnerships;
  • investing to extend our lead in enhanced analytics and advanced decisioning technologies to greatly enhance client experiences by providing quicker, more frictionless decision-making;
  • transforming our relationships with consumers by enhancing the user experience and introducing new offers with greater choice of products which fit their individual needs; accelerating the rate and the pace at which we innovate, and will introduce a wide range of new and enhanced products over the coming 12-18 months;
  • continuing to add scale in selected verticals and targeted geographies;
  • continuing to invest in the foundations of our business including agile technology, client service excellence, our brand, talent and our One Experian approach.

The combination of our strategic priorities and the strength of our business foundations will help us to realise our ambition to deliver premium earnings growth and to deliver further value to all our stakeholders.

Source: Experian Earnings Release