Experian 2010 Annual Report Download - page 14

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Experian Annual Report 2010 Business review12
Key trends
As we move forward, we see a number
of trends which will inuence our
performance over the coming year.
Within nancial services, we see •
gradual recovery across many of
the developed markets in which we
operate. In key territories such as
North America, unemployment rates
have started to level off, delinquency
rates are starting to fall, lenders are
beginning to solicit new customers
and small businesses are starting
to look for funding to expand.
Experian has a key role to play in
this recovery process, helping to
restore condence in the global retail
banking system with our world-class
data, analytics and software tools.
Across the retail sector, we see •
consumer spending driving
improvement among retailers.
We also see a steady shift to more
targeted digital advertising channels
and we are increasing our efforts
to benet from this trend as client
marketing budgets return.
And at Consumer Direct in North •
America, the new marketing strategy
for freecreditscore.com implemented
from 1 April 2010 is progressing in
line with expectations. We have had
recent dialogue with the Federal
Trade Commission regarding our
site, freecreditreport.com, and we
have made further changes to this
site through the addition of consumer
disclosures. We remain vigilant
regarding any regulatory changes
that may affect our business and will
adapt as needed.
Strategic priorities
While global economic recovery
will help our business, our goal is to
accelerate growth by creating new
market opportunities, building greater
scale and further cementing our global
leadership position. Each year, we
develop specic plans which set our
priorities and allow us to concentrate
our resources. These plans are
executed within our strategic framework
to focus on data and analytics, drive
protable growth and optimise capital
efciency. Our action plan is centred
on taking control of growth through a
series of dened initiatives:
Expanding our global reach
Geographic expansion – we see •
signicant scope to take our existing
credit and marketing products into
fast-growing markets, for example
Brazil, India, China, South Africa and
Eastern Europe.
Vertical expansion – we are further •
repurposing our data and platforms
to build scale positions in new
verticals such as the public sector,
telecoms, utilities and US healthcare
payments.
New market channels – we see •
opportunity to further expand in
underpenetrated segments, such as
small and medium enterprises.
Chief Executive’s review
This meant that we ended the year
comfortably within our target gearing
range, at 1.8x adjusted net debt to
EBITDA, including the current value
of the Serasa put option. The strength
of this performance has enabled us
again to raise our full-year dividend,
which is up 15% to 23.00 US cents per
ordinary share.
We were able to deliver this strong
performance because of the balance
in our portfolio, the strength of our
market position and strong execution
against our cost efciency programme.
We were especially pleased with the
outstanding performances across
Latin America and at Interactive, which
helped to offset the drag effect of the
global economic recession.
Progress in the year included:
strong growth in emerging markets, •
which now account for nearly one
fth of our revenue;
an increased contribution from •
non-nancial B2B verticals and the
consumer channel. We now generate
more than 60% of our revenue from
outside nancial services;
a strong contribution from products •
developed in the past ve years,
which again accounted for over 20%
of Group revenue; and
our cost efciency programme, which •
delivered savings ahead of plan.
Don Robert
Chief Executive
Experian performed well in 2010, notwithstanding
the challenges presented by the global economic
downturn. Our organic revenue growth was 2%, we
expanded our margins by 80 basis points to 24.4% and
our Benchmark EPS grew by 8% to 67.1 US cents per
ordinary share. We also delivered another strong cash
performance with free cash ow of US$818m, up 11%.
8