Experian 2012 Annual Report Download - page 31

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Governance Financial statementsBusiness reviewBusiness overview
Overview
Total revenue growth from continuing
activities was 15%, at constant currency, and
organic revenue growth was 10% (H1 9%,
H2 10%). We delivered an increase in EBIT
from continuing activities of 18% at constant
currency, and further enhanced our EBIT
margin, up 50 basis points to 26.2%. We
delivered strong growth in Benchmark EPS,
up 18% to 78.9 US cents per share and have
raised the full-year dividend by 14% to 32.00
US cents per share.
•We delivered good growth across all
regions, with organic revenue growth of
23% in Latin America, 8% in the UK and
Ireland, 7% in EMEA/Asia Pacific and 6% in
North America.
•We delivered good growth across our
four global business lines, with organic
revenue growth of 12% in Credit Services,
9% in Marketing Services, 8% in Decision
Analytics and 7% in Interactive.
•We met or exceeded each of our financial
objectives, namely to deliver mid-high
single digit organic revenue growth,
maintain or improve margin and deliver
cash flow conversion of over 90%.
•We executed well on our global growth
programme, positioning us strongly for
the future.
I would like to thank the people of Experian
whose inspiration, creativity and dedication
make these achievements possible.
Impact of agreement to divest
non-core activities
Over the past four years, our strategic focus
has been on extending our global lead in
credit information and analytics, digital
marketing services and direct-to-consumer
services. We have signed an agreement to
divest our comparison shopping and North
America lead generation businesses, which
were non-core to Experian. We expect to
complete the transaction within the first
half of this fiscal year, subject to successful
completion of various conditions and events.
For the purposes of these results, these
businesses have been treated as discontinued
operations. On a like-for-like basis, including
these businesses, revenue was US$4.8bn,
with organic revenue growth of 7% (H1 6%,
H2 8%), EBIT was US$1,195m, up 14%, EBIT
margin was 25.1% and Benchmark EPS was
80.0 US cents per share.
Our core Consumer Direct activities are
not affected by the agreed divestment. In
view of this, we will change the name of the
Interactive business segment to Consumer
Services, to more appropriately reflect
the continuing operations of the business
segment. We will adopt the new segment
name in our financial reporting for the year
ending 31 March 2013.
Financial and strategic highlights
In North America, we saw good
performances in Credit Services and
Decision Analytics. There was steady
recovery in lending and we started to
benefit from investments made in recent
years. This is driving volume increases in
consumer information, as well as demand
for our new sources of data, analytics
and software. We are also delighted
by the progress that we are making
across business information, automotive
and healthcare payments, all of which
delivered strong growth in the year and
are well-positioned for future expansion.
Medical Present Value, the acquisition
which extends our presence in the US
healthcare payments vertical, is performing
strongly. While the external environment
for Marketing Services was tepid, we have
continued to benefit from extending our
presence in the digital marketing space.
Consumer Direct grew as we successfully
migrate into our new brands. More recently,
we have made good progress towards
expanding the white label (affinity) channel,
which will benefit our prospects in the latter
part of FY13 and beyond.
We made excellent progress in Latin
America during the year, with the region now
accounting for over 20% of Group revenue.
Our business in Brazil delivered very strong
organic growth, as we invested in new
sources of data, broadened our product
range and further penetrated new customer
segments. We continue to see significant
prospects for growth in Brazil as we leverage
our scale and the full extent of the Experian
portfolio. We also made good strategic
progress in Marketing Services, with the
acquisition of the leading email marketing
business in the country. This provides us with
an important new platform for driving growth
in targeted digital marketing in Brazil.
Also in Latin America, we were delighted
to complete the acquisition of Computec
in November, which has extended our
credit bureau footprint to Colombia, Peru
and Venezuela. Computec has performed
strongly since acquisition, in line with the
acquisition buy plan. On an underlying basis,
revenue growth was approximately 20% for
the year. We are in the process of integrating
back office functions and we are developing
plans to launch Experian’s full product range
into these new markets.
We were pleased to deliver a good
performance in the UK and Ireland. Credit
Services returned to growth and Decision
Analytics performed strongly. We have
benefited from new client engagements
in the financial services sector and have
extended further into non-financial
verticals. We also completed two bolt-on
acquisitions, which extend our presence
in the high growth fraud prevention sector
and bolster our position in the small and
medium enterprise market. Weak economic
conditions had some impact on Marketing
Services, where growth was fairly modest.
Interactive by contrast performed very
strongly, helped by a good reception for
our bundled consumer product. We also
took an important step to expand further
into consumer identity protection with the
acquisition of Garlik.
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