10 October 2007
Experian, the global information solutions company, today issues an update on trading for the six months to 30 September 2007.
Commenting on the performance of Experian, Don Robert, Chief Executive Officer, said:
“Our business has delivered a robust performance in the first half, against a more challenging market backdrop in the US and the UK, and particularly for LowerMyBills. While the revenue environment is tougher, we remain focused on delivering profit in line with our expectations for the year as a whole.”
|Continuing activities only1||Total growth %|
At actual exchange rates
|Total growth %|
At constant exchange rates
|Organic growth %|
At constant exchange rates
|UK and Ireland||18%||9%||5%|
In the six months to 30 September 2007, sales from continuing activities at Experian increased by 14% at constant exchange rates, including the first time contribution of Serasa, the market leading credit bureau in Brazil. Organic sales growth was 6%. Excluding LowerMyBills, which was affected by the slowdown in the US mortgage market, group organic sales growth would have been 2 percentage points higher in the half.
Overall organic sales growth reflects robust performance across Credit Services, where organic sales growth was 4%. Decision Analytics sales increased by 6%, held back by timing-issues in the UK. There was good progress in Marketing Solutions, up 3%, reflecting the ongoing repositioning and organic sales growth at Interactive was 12%. Acquisitions contributed 8% to sales growth.
Experian acquired a number of businesses in the period, with total acquisition spend of $1.7bn, and agreed the disposal of one business. In addition to the majority stake in Serasa, Experian acquired Hitwise, a leading online market intelligence company; Informarketing, a direct marketing services provider in Brazil; Tallyman, a collections management software business; Emailing Solution, a leading French permission-based email marketing company; The pH Group, a UK business-to-business marketing analytics provider; and N4 Solutions, a UK-based mortgage sector and financial services software provider. Experian also agreed the sale of Loyalty Solutions, a leading German point-of-sale network provider.
Sales in North America in the six months to 30 September 2007 increased by 6% in total. Organic growth was 5%, with Hitwise (acquired in June 2007) contributing the balance.
At Credit Services, growth in non-mortgage activities, account management and collections offset accelerating decline in mortgage origination. Organic sales growth was low single-digit demonstrating the resilience of the business model through economic cycles. Decision Analytics delivered double-digit organic growth against very strong comparatives, while performance in Marketing Solutions further improved, with low single-digit organic growth. Organic sales growth at Interactive slowed to high single-digit, reflecting the impact on LowerMyBills of the US sub-prime mortgage market where the outlook remains challenging. Across the remainder of Interactive, growth continues to be strong.
Following the acquisition of Serasa, Latin America is now reported as a separate geographical segment. It includes the Credit Services activities acquired with Serasa, and Marketing Solutions activities acquired with Informarketing, as well as Experian’s Latin American Decision Analytics activities.
Sales for Latin America for the six month period to 30 September 2007 were $102m (prior year $2m), including contributions from Serasa (acquired in June 2007) and Informarketing (acquired in April 2007). Organic growth at constant exchange rates was 46%, reflecting the performance of Decision Analytics only.
The integration of Serasa is on track and the business performed well in the period following acquisition, in line with the acquisition buy-plan.
Sales from continuing activities in the UK and Ireland increased by 9% in the six months to 30 September 2007 at constant exchange rates. Organic sales growth was 5%, with the acquisitions of Eiger Systems (acquired in June 2006), Tallyman (acquired in May 2007), Hitwise, The pH Group (acquired July 2007) and N4 Solutions (acquired July 2007) contributing the balance.
The market environment for UK financial services is challenging, affecting Experian’s credit and marketing-related activities. Notwithstanding this, Credit Services performed well, with low single-digit organic sales growth in the half. Due to timing issues, sales at Decision Analytics were broadly in line with last year, but given a strong pipeline a return to growth is expected in the second half. Marketing Solutions delivered a resilient performance, with low single-digit organic sales growth and Interactive continues to perform very strongly, with sales doubling in the period.
At constant exchange rates, sales in EMEA/Asia Pacific increased by 14% in the first half. Organic sales growth was 8%, with acquisitions, mainly Emailing Solution (acquired in May 2007), Tallyman and Hitwise, contributing the balance. Credit Services performed well, delivering mid single-digit organic sales growth, while there was double-digit organic sales growth at Decision Analytics, reflecting particularly good performance in Asia. Marketing Solutions also performed strongly, with double-digit organic sales growth in the period.
Experian will issue its Half-Yearly Report for the six months to 30 September 2007 on 15 November 2007.
|Paul Brooks||Chief Financial Officer||+44 (0)203 042 4215|
|Nadia Ridout-Jamieson||Director of Investor Relations|
|Rollo Head||+44 (0)207 251 3801|
This announcement is available on the Experian website, www.experiangroup.com. There will be a conference call to discuss this update at 3.00pm today (UK time), which will be broadcast live on the website with a recording available later.
All financial information is based on unaudited management accounts. Certain statements made in this Trading Update 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.