Experian (200)Experian appears to be settling down for lower organic growth according to its recent investor day presentations.  When demand for credit is not growing, it quickly impacts the demand for consumer credit information.  Marketing services, undergoing structural changes, and consumer services are not performing any better.

Signalling that single-digit growth is becoming a reallity is prudent to avoide false expectations:  CEO Brian Cassin and his team indicated:

  • Medium-term target of organic revenue growth in the mid-single digit range;
  • The “ambition” of double-digit organic growth in newer business such as healthcare and fraud and identity management
  • Lower aspirations for Marketing Services and services sold direct to consumers;
  • No expectation of a big rebound in the economy of its third-biggest market, Brazil.

Experian announced a US$ 600 million share repurchasing program, increasing dividends and to boost EBITDA to appease investors.

Experian 2014 vs 2010 geographic footprintExperian 2014 vs 2010 business line footprintAlthough the possibility of geographic expansion was downplayed, Experian was always good for surprises in hauling in a rare catch such as Serasa.  Market entries often come by chance when foreign investment restrictions are lifted as it happened in India, or when a market opens up for private sector involvement as it is happening in China right now.  The market for credit information in China will be huge.  There will be plenty of opportunities for fraud prevention and other value added services.

Technology often plays a role when shareholders of incumbents do not want to make the necessary investments and decide to sell the business.  In this case the first choice of a potential buyer is Experian according to a comment made at the investor day.

Source: Experian Investor Day