15 January 2010
Experian, the global information services company, today issues an Interim Management Statement that includes an update on trading for the three months to 31 December 2009.
Commenting on the performance of Experian, Don Robert, Chief Executive Officer, said:
“I am pleased to announce that Experian delivered growth in line with our expectations during the third quarter. At constant exchange rates, total revenue growth for the quarter was 2%, with organic revenue growth of 1%.
“Looking ahead across our major businesses, we see further stabilisation in parts of North America, we are still cautious on the UK, while the outlook for Latin America is robust. For the fourth quarter, we expect modest improvement in organic revenue growth. For the year as a whole we remain on track to grow profits at constant currency and deliver strong free cash flow.”
|Continuing activities only1||Total growth %|
At actual exchange rates2
|Total growth %|
At constant exchange rates
|Organic growth %|
At constant exchange rates
|UK and Ireland||5||(3)||(2)|
In the three months to 31 December 2009, revenue from continuing activities at Experian increased by 2% at constant exchange rates. Group organic revenue growth was 1% year-on-year. By principal activity, organic revenue increased 8% at Interactive and 2% at Credit Services. Organic revenue declined 1% at Marketing Services and 9% at Decision Analytics.
Since 30 September 2009, Experian has acquired United MailSolutions and A-Care Systems, and has received cash proceeds from certain disposals relating to its FARES associate. Net inflows to the date of this statement from these transactions totalled approximately US$60m.
Total revenue from continuing activities in North America was flat, with organic revenue down 1%. The difference relates to SearchAmerica, which annualised in the quarter (acquired in December 2008).
Organic revenue at Credit Services declined 6%. There were good performances within business information and automotive, which benefited from product enhancements and new business wins. These helped to offset a decline in consumer information revenue, attributable to a reduction in origination revenues, including mortgage. Organic revenue declined 3% at Decision Analytics, reflecting slow pipeline conversion in the period.
Compliance with the Credit Card Reform Act comes into effect on 22 February 2010 and is impacting clients’ resources and slowing decision making. Final rules were issued this week regarding the requirement to assess a consumer’s ability to repay, with the Federal Reserve Board specifically allowing the use of modelled data for income estimation. Experian’s new income models address this requirement. We are awaiting final rules on other provisions of the Act, including the requirements for further disclosure in advertising at Consumer Direct.
At Marketing Services, organic revenue declined 5%. New media activities delivered good growth, while the rate of decline in traditional media moderated, helped by stabilisation in some end-markets. Organic revenue growth at Interactive was 6%. There were good performances at lead generation and PriceGrabber, helped by market recovery. As expected, Consumer Direct was broadly flat, reflecting an exceptionally strong prior-year comparable.
Revenue for Latin America increased 16% at constant exchange rates. Organic revenue growth was also 16%.
Organic revenue at Credit Services rose 18%. Growth was driven by higher origination volumes, increased contribution from premium products, strong penetration in the small and medium enterprise channel, as well as growth in authentication revenue.
At constant exchange rates, total revenue in UK and Ireland declined 3%. Organic revenue declined 2%.
Organic revenue at Credit Services declined 5%. Credit origination revenues within financial services remained weak, mitigated by good performances across non-financial verticals and risk management activities. At Decision Analytics, organic revenue declined 13%, reflecting lower transaction volumes and client capital expenditure constraints. There was some moderation in the rate of decline at Marketing Services, where organic revenue was down 2%. New media performed well, helping to offset declines in traditional media. Interactive delivered strong growth, up 27%.
At constant exchange rates, total revenue for EMEA/Asia Pacific increased 7%. Organic revenue growth increased 2%. The acquisition contribution related principally to KreditInform in South Africa (acquired in December 2008) and United MailSolutions in Germany (acquired October 2009).
Organic revenue growth at Credit Services was 3%, with strength across emerging markets and robust performances within established markets. At Decision Analytics, organic revenue declined 6%, impacted by adverse phasing of software deliveries. At Marketing Services, organic revenue growth was 10%, reflecting new business development.
Other than as disclosed in this Interim Management Statement, there has been no change since 30 September 2009 to Experian’s general financial position, which remains strong, and no material change to Experian’s trading position to the date of this statement.
Experian will issue its second half trading update on 15 April 2010.
|Paul Brooks||Chief Financial Officer||+44 (0)20 3042 4215|
|Nadia Ridout-Jamieson||Director of Investor Relations|
|James Russell||Public Relations Director|
|Rollo Head||+44 (0)20 7251 3801|
This announcement is available on the Experian website, www.experianplc.com. There will be a conference call today to discuss this update at 9.00am (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 Interim Management Statement 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.
Total growth: this is the year-on-year change in the performance of Experian’s activities. Total growth at constant exchange rates removes the translational foreign exchange effects arising on consolidation of Experian’s activities.
Organic growth: this is the year-on-year change in continuing activities revenue, at constant transactional and translation exchange rates, excluding acquisitions (other than affiliate credit bureaux) until the first anniversary date of consolidation.
Experian is the leading global information services company, providing data and analytical tools to clients in more than 65 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2009 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.
For more information, visit www.experianplc.com.