Experian reports total revenue growth from continuing activities was 3% at constant exchange rates, with organic revenue up 1%. At actual exchange rates, total revenue from continuing activities rose 1% reflecting adverse foreign exchange movements.
Total EBIT from continuing activities rose 4% at constant exchange rates. At actual exchange rates, total EBIT was unchanged year-on-year at US$1,306m. EBIT margin from continuing activities was 27.2%, up 10 basis points before the impact of foreign exchange movements, down 20 basis points year-on-year. Benchmark profit before tax was US$1,231m, up 4% at constant exchange rates, unchanged at actual rates. Profit before tax of US$1,006m (2014: US$1,049m).
Brian Cassin, Chief Executive Officer, commented: “We have accomplished a lot in what has been an important year of transition for Experian. We delivered strong growth across many parts of the business, have made further progress with earnings and are increasing returns to shareholders. We finished the year well, with organic growth improving as we exited the year. We are also executing well on the five strategic priorities we outlined earlier this year. Regionally, we saw particularly good performances from our operations in North America Credit Services, UK and Ireland, Asia Pacific and Brazil where we continue to outperform a weak economy.”
“As we look ahead, we will continue to execute on our plans to achieve our medium-term goals of mid single-digit organic revenue growth and strong growth in Benchmark earnings per share. In the coming year, we expect organic revenue growth to progress as we focus on our growth initiatives and as we continue to transform North America Consumer Services. While foreign exchange is a headwind, at constant currency we expect margins for the year to be stable and to deliver further progress in Benchmark earnings per share.”
Regional highlights North America
In North America, we made further progress across Credit Services and Decision Analytics; Marketing Services was stable and we’ve taken a number of important steps to reposition Consumer Services. Our core consumer bureau continued to perform well as the environment for lending improved with steady expansion in volumes. Performance was further boosted by strong growth across the non-consumer bureau component, now accounting for around 40% of Credit Services revenue in North America. Business information recovered well, following the actions we’ve taken to strengthen and refocus our activities. Automotive had another outstanding year as we increase market penetration with dealers, manufacturers and auto-lenders, and I’m delighted with the progress we’ve made in health, where Passport has exceeded our expectations. The integration of Passport has gone smoothly and we’re seeing significant growth in both bookings and implementations as we expand our position with existing hospital and physician clients and add new ones. We’re also laying foundations to expand our product range, to address new healthcare segments in the future.
Decision Analytics had another solid year, fuelled by significant software deals, and we’re making considerable progress in analytics, as lending activity picks up and clients seek tools to refine their decision-making and ability to segment the market effectively.
In Marketing Services, we saw strong growth in cross-channel marketing offset by some attrition on legacy email products. We’re making steady progress in cross-channel, with a good pipeline of prospects which we’ll seek to convert over the coming year.
We’re encouraged by progress in North America Consumer Services. Whilst uncertainty remains and we continue to invest in the brand and products to move the business forward, we believe we have passed the peak rate of decline. Our strategy is focused on transforming our consumer offering by differentiating ourselves as a data owner and providing a compelling consumer experience, while also using our firepower in consumer marketing to make Experian.com the principal brand for consumers. Key milestones in the year included making FICO scores available to consumers through Experian.com, which we launched in December 2014. Response rates since have been favourable, with an increase in membership revenue for Experian.com of 14% year-on-year in Q4.
A further development took place in March when we successfully migrated freecreditreport.com customers to Experian.com. This was an important step as we seek to simplify our platforms and to generate operational efficiencies. Over the coming year we expect to introduce additional functionality in order to further enhance the consumer experience, and with this we expect the transition to make further steady progress throughout FY16 in North America Consumer Services.
In Latin America, growth was driven largely by our own efforts as the macroeconomic backdrop continues to be weak, particularly in Brazil. During the year we implemented a series of measures in Brazil to direct our efforts at market segments where growth is available. This helped sustain momentum in business information where we’ve seen good growth through the introduction of new features and scores which help to enhance the value of our offers. We also continue to develop services for consumers, through products such as Limpa Nome (Clean My Name) which, while still small in terms of revenue contribution, are establishing our credentials as a provider of services to consumers in Brazil. We’re also investing in talent and propositions to address emerging growth opportunities in areas like data quality and fraud prevention. These efforts, together with strong growth in our other Latin American markets, helped us withstand softer conditions in the Brazilian retail lending sector, where clients are focusing more on risk mitigation strategies than on originating new loans. We have also done a lot to enhance operational efficiency, which will help us address new growth markets more effectively while keeping a tight control on costs.
In the UK and Ireland we delivered growth across all business lines and strong progression in EBIT margins. After a period of significant investment in Credit Services, we’re seeing good levels of growth in both business and consumer information. Business information is benefiting as we expand in the small and medium enterprise channel, and as we increase the sophistication of our product set for larger customers. We see further potential for growth from the provision of international data, as we leverage our new platform, called the Global Data Network. These measures, coupled with the success we’ve met with in newer areas such as credit pre-qualification in consumer information, have contributed to a good outcome for the year and bode well for the future. The UK was a promising market for 41st Parameter deployments (part of our fraud detection suite), where we’ve had a number client wins, several of which are now starting to go live, and our pipeline of prospects is building. There were also encouraging signs in Marketing Services, where our cross-channel marketing platform saw good rates of adoption, and Consumer Services delivered further growth in memberships, even as it compared against an exceptionally strong performance in the previous year.
We’ve made good progress in EMEA/Asia Pacific. We saw a much improved performance in Asia Pacific, which returned to double-digit organic revenue growth. We also delivered steady underlying progress in EMEA, masked by the one-off item that we’ve previously referenced. Momentum is building across some of our key product lines. We had a very strong year for cross-channel marketing new business wins and saw continuing momentum for PowerCurve, our flagship credit decisioning platform.
EBIT margins: We faced a number of margin headwinds this year, specifically from higher legal and regulatory costs, the dilutive effect of recent acquisitions and the reduction in revenue in North America Consumer Services. Even so, at constant exchange rates we sustained margins due to the strength of performance in the UK and Ireland, an improving outcome in EMEA/Asia Pacific and a focus on cost containment across the Group. At constant currency, EBIT margins were up 10 basis points to 27.5%. Foreign exchange translation had an adverse effect on reported margins and at actual rates EBIT margins reduced by 20 basis points to 27.2%, mainly due to the weakening of the Brazilian real relative to the US dollar, and the depreciation of the euro relative to the US dollar.
Source: Experian Earnings Release