experianOn an actual exchange rate basis Latin America growth was down (26%), UK and Ireland down (2%) and EMEA/Asia Pacific down (6%).  Total corporation revenue was down (4%).

Chief Executive Officer’s review:

Brian-CassinExperian has made significant progress against our strategic objectives over the past year.  We delivered organic revenue growth within our mid single-digit target range and enhanced the efficiency of our business, whilst rigorously applying our robust capital framework. As we look forward, we’re investing in a range of initiatives to enable us to deliver good growth consistently. Highlights this year include:

  • We made significant progress on the five strategic priorities we outlined last year, having: o backed a range of new organic investments in health, business information, decisioning software, fraud prevention and in other areas; o made good progress in repositioning our North America Consumer Services business and returning it to growth in the second half; o taken steps to enhance our operating model to fully leverage synergies between businesses and drive greater efficiencies; o sold six non-core activities; and o returned US$972m in total to shareholders through dividends and net share repurchases.
  • We delivered organic revenue growth of 5% for the year, with sequential improvement throughout the year (4% in H1 and 6% in H2). This reflected strong growth in Credit Services and Decision Analytics and improved trends in North America Consumer Services. Foreign exchange effects were a significant headwind and total revenue from continuing activities declined by 4% as a result.
  • We maintained margins at constant currency. We benefited from positive operating leverage, counterbalanced by organic investment initiatives. Foreign exchange was a significant headwind, causing the EBIT margin to decline overall to 26.7% at actual rates.
  • After the year end we announced a definitive agreement to acquire CSIdentity Corporation (‘CSID’), a leading provider of consumer identity management and fraud detection services, further accelerating the execution of our Consumer Services strategy and enabling us to address a broader spectrum of the consumer market. (The acquisition is subject to HartScott-Rodino regulatory approval in the US and is expected to complete during H1).

                                                                                    ————————————–

Experian 2016 vs 2015 full year AWhile Experian made progress on organic and constant currency results the effect of exchange losses was quite significant:  The Group reports its financial results in US dollars and therefore the weakness of the Group’s other trading currencies (primarily the Brazilian real) against the US dollar during the year decreased our total revenue by US$412m and Total EBIT by US$137m, with an adverse impact on EBIT margin of 60 basis points.

Segment results were as follows:  

North America:  Total revenue from continuing activities in North America was US$2,471m, up 3% on both a total and organic basis.


Credit Services:
Total and organic revenue growth was 10%, with strong performances from all business activities. Across both our consumer and business credit bureaux, credit prospecting, origination and customer management volumes were strong, and we secured new business wins in financial services and other segments, as we execute on our strategy. Experian 2016 vs 2015 full year bAutomotive performed well as strength in vehicle unit sales drove demand for vehicle history reports and strength in credit volumes. In health we continue to see rapid growth, driving strength in client bookings and expansion of total contract value amongst existing hospital and physician customers.

Decision Analytics: Total and organic revenue declined 2%, as weakness in public sector more than offset strength in fraud prevention.

Marketing Services: Both total revenue and organic revenue declined by 2%. We saw further growth in cross-channel marketing, driven by new client wins and by expansion within existing clients. Data quality also delivered growth, as did our data targeting business, helped by growth in digital advertising channels. These factors were offset by further attrition in email marketing.

Consumer Services: Both total revenue and organic revenue declined by 3% for the year. There was significant improvement as the year progressed, as the business returned to growth delivering organic revenue growth of 2% in the second half. This reflected continued strong growth in our premium brand, Experian.com and on-boarding of a new affinity partner. These factors offset contraction in the legacy direct-to-consumer (‘D2C’) portfolio.

EBIT and EBIT margin:  For continuing activities, North America EBIT was US$755m, up 2%. The EBIT margin was 30.6%, (2015: 31.0%), reflecting ongoing investment in key strategic growth areas.

Latin America: Total revenue from continuing activities in Latin America was US$633m, with both total and organic revenue growth of 7% at constant exchange rates.

Credit Services: At constant exchange rates, total and organic revenue growth in Credit Services was 7%, with good growth across both consumer and business information. In Brazil, consumer information was helped by strong volumes of counter-cyclical products, particularly delinquency notifications and collections, while business information was driven by higher volumes and good demand for new scores and analytics from small and medium enterprise customers. In our other Latin American markets growth was strong, with progress in business information as we continue to build our product range for small and medium enterprises.

Decision Analytics: Total and organic revenue growth was 10% at constant exchange rates. After a weak start, we benefited from considerable momentum, particularly in our Spanish Latin America markets. We have secured several multi-year relationships with larger customers as we integrate credit risk management software with credit data.

Marketing Services: Total and organic revenue at constant exchange rates declined 4%. While the year started weakly, there was a significant improvement in the second half driven by cross-channel marketing and data quality in Brazil.

EBIT and EBIT margin: For Latin America, EBIT increased by 7% at constant currency. The depreciation of the Brazilian real relative to the US dollar had a significant impact on reported EBIT, which decreased to US$226m (2015: US$313m). Foreign exchange movements also had a significant impact on the reported EBIT margin, which was 35.7% compared to 36.6% in the prior year.

UK and Ireland: In the UK and Ireland, total revenue from continuing activities was US$956m, with total and organic revenue growth of 5% at constant exchange rates.

Credit Services: Total and organic revenue growth at constant exchange rates was 6%, with growth across consumer information, business information and automotive. Consumer information growth was driven by new business wins, strength in credit reference volumes, a strong performance from credit pre-qualification services and momentum in key verticals such as financial services. In business information, we are making good progress on our key initiatives including the expansion of the small and medium enterprise channel through products such as BusinessExpress, as well as new business wins from large clients.

Decision Analytics: At constant exchange rates, both total and organic revenue rose 12%. We saw strength across a variety of sectors and products in a strong year for wins from banking clients and elsewhere. There was a one-off boost in identity management from the successful roll-out of a new verification service in the UK public sector, as well as strong demand from banks for credit risk management and fraud prevention software and analytics.

Marketing Services: At constant exchange rates, total revenue growth in Marketing Services was flat and organic revenue declined by 1%. We delivered growth in data, which has benefited from investments we’ve made in targeted advertising in digital channels, and in cross-channel marketing. This offset softness in email marketing. We also continue to see good forward bookings for our data quality business.

Consumer Services: At constant exchange rates total and organic revenue growth was 4%. Growth was driven by higher D2C memberships for Experian CreditExpert in the first half of the year.

EBIT and EBIT margin: For the UK and Ireland, EBIT from continuing activities was US$300m, up 4% at constant exchange rates. The EBIT margin was 31.4% (2015: 31.7%), reflecting organic investment in growth initiatives, higher legal and regulatory costs and the impact of foreign exchange.

Market Leaders 2016 ExpandedEMEA/Asia Pacific: Total revenue from continuing activities in EMEA/Asia Pacific was US$417m, with total and organic revenue both up 7% at constant exchange rates.

Credit Services: Total and organic revenue at constant exchange rates decreased by 3%. Growth in Asia Pacific was strong, particularly in Japan and India, which partially offset a decline across our bureaux in EMEA. The decline in EMEA was primarily due to weak conditions in some markets such as the Nordics and South Africa.

Decision Analytics: Total and organic revenue growth at constant exchange rates were both 18%. There was significant growth momentum, driven by a number of new client wins for credit risk management software, other credit decisioning tools and fraud prevention.

Marketing Services: Total and organic revenue growth at constant exchange rates were both 10% as we benefited from new client wins for integrated data and cross-channel marketing capabilities.

EBIT and EBIT margin: Losses in EMEA/Asia Pacific were significantly reduced to US$(4)m (2015: US$(10)m). EBIT margin improved to (1.0)% from (2.3)% at actual exchange rates, as operating efficiencies were partially offset by foreign exchange headwinds.

Source: Experian Earnings Release