17 April 2007
Experian, the global information solutions company, today issues an update on trading in the six months to 31 March 2007.
Commenting on the performance of Experian, Don Robert, Chief Executive Officer, said:
“We are pleased with the way our businesses have performed in the second half, ensuring a strong outcome for the year. This performance reflects the strength and scale of the Experian business model around the world. While we continue to face challenges in some of the markets in which we operate, we look forward to the future with confidence.”
|Continuing activities only1||Total growth %|
At actual exchange rates2
|Total growth %|
At constant exchange rates
|Organic growth %|
At constant exchange rates
|UK and Ireland||26||14||6|
In the six months to 31 March 2007, sales from continuing activities at Experian increased by 12% at constant exchange rates. Organic growth was 8%, consistent with the rate in the first half of the year (7%).
Globally in the second half, there was continued strong double-digit organic growth in Decision Analytics and Interactive, Credit Services returned to mid single-digit growth and Marketing Solutions sales were in line with last year on an organic basis. Acquisitions contributed 4% to sales growth in the period.
Experian acquired five businesses during the half – a business and consumer credit bureau in Estonia, an additional US affiliate credit bureau, a US business information distributor, Adhoc Solutions (Belgian micromarketing) and ERS, a UK-based economic research consultancy. Experian also purchased a minority stake in Sinotrust, a business information and market research company in China and, after the year end, acquired Informarketing, a direct marketing services provider in Brazil.
In dollars, sales in the Americas from continuing activities in the six months to 31 March 2007 increased by 12% in total. Organic growth was 9%, with PriceGrabber, which was acquired in mid-December 2005, generating the remaining 3%.
Credit Services saw mid single-digit organic growth in the second half, with particularly good performances in account management and collections within consumer credit and good growth elsewhere in business information and automotive. Decision Analytics again performed strongly in the second half, while sales in Marketing Solutions were marginally down year-on-year.
Organic sales growth at Interactive was slightly less than 20% in the second half of the year, with the deceleration in the fourth quarter reflecting the impact on LowerMyBills of the slowdown in the US sub-prime mortgage market. Sales at LowerMyBills were down 5% in the second half (Q3: unchanged; Q4: down 8%). The other Interactive businesses performed strongly in the period.
Sales from continuing activities in the UK and Ireland increased by 14% in the second half at constant exchange rates. Organic growth was 6%, with acquisitions, mainly ClarityBlue (acquired in January 2006) and Eiger Systems (acquired in June 2006), contributing the balance.
The environment for UK financial services companies was again challenging, which affected both Credit Services and Marketing Solutions. Credit Services showed low single-digit organic sales growth in the half. Marketing Solutions was in line with last year, including a strong organic growth performance from ClarityBlue, partly offset by the impact of major new contracts in the second half of last year at QAS. Decision Analytics delivered another consistent period of high single-digit sales growth, with continued momentum in fraud prevention. Interactive sales more than doubled in the half.
In March 2007, Experian announced its intention to integrate its UK marketing data, processing and database management activities into a single business unit. Customers will benefit from one point of contact with Experian across one technology platform. As a result, there will be a headcount reduction over time of about 100, in areas such as sales, delivery and systems. Restructuring costs, which will be charged against EBIT, are expected to be about $12m, of which about $8m has been incurred in the year ended 31 March 2007, with the balance in the current financial year.
At constant exchange rates, sales in EMEA/Asia Pacific increased by 9% in the half, of which organic growth contributed 8%. Credit Services sales accelerated in the second half, driven by stronger growth in French transaction processing. This reflects the first time contribution of contract wins during the year and continued double-digit increases from the consumer credit bureaux in Southern and Eastern Europe and South Africa. Both Decision Analytics and Marketing Solutions delivered double-digit sales growth in the period.
Experian will announce its Preliminary Results on 23 May 2007. Its First Quarter Trading Update will be announced on 12 July 2007.
|Paul Brooks||Chief Financial Officer||0203 042 4215|
|Fay Dodds||Director of Investor Relations|
|Rollo Head||0207 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 with a recording available later on the website.
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.