Experian 2010 Annual Report Download - page 38

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Experian Annual Report 2010 Business review36
Risk area Potential impact Mitigation strategies
Exposure to material
adverse litigation
The Group is regularly involved in a
number of pending and threatened
litigation claims, including a number
of class actions in the United States.
As is inherent in all legal proceedings,
litigation outcomes cannot be predicted
with certainty and there is a risk of
unfavourable outcomes to the Group.
The Group vigorously defends all
pending and threatened litigation claims.
The Group employs internal counsel and
engages external counsel to assist in
the effective management and disposal
of litigation proceedings. Insurance
coverage is maintained against litigation
risks where such coverage is feasible and
appropriate.
Exposure to country and
regional risk (political,
nancial, economic,
social) particularly in North
America and
United Kingdom
The Group’s global footprint subjects its
businesses to economic, political and
other risks associated with international
sales and operations. A variety of
factors, including changes in a specic
country’s or region’s political, economic,
or regulatory requirements, as well as
the potential for geopolitical turmoil,
including terrorism and war, could result
in loss of services, prevent our ability
to respond to agreed service levels or
full other obligations. These risks
are generally outside the control of the
Group.
The Group’s portfolio is diversied by
geography, by product, by sector and by
client in order to protect itself against
many of these uctuations, especially
those that are restricted to individual
territories and market sectors. The
Group operates in over 90 countries and
derives 73% of its revenue from North
America and the United Kingdom.
Acquisitions may not meet
expectations
The Group assesses all acquisitions
rigorously, using both in-house
experts and professional advisers. In
addition, the Group conducts extensive
post-acquisition reviews to ensure
performance remains consistent with the
acquisition business plan.
The Group’s acquisitions, strategic
alliances, joint ventures and divestitures
may result in nancial outcomes that are
different than expected.
Exposure to consolidation
among clients and markets
The nancial services, mortgage, retail
and telecommunications industries are
intensely competitive and have been
subject to consolidation. Consolidation
in these and other industries could result
in reductions in the Group’s revenue and
prots through price compression from
combined service agreements or through
a reduced number of clients.
No single client accounts for more
than 1% of the Group’s revenue, which
reduces the probability of this potential
risk having a signicant impact on the
Group’s business. In addition, the Group
continues to expand in other vertical
markets such as the public sector,
telecoms, utilities and healthcare,
as well as invest in a wide range of
countercyclical products and solutions,
across all relevant business lines.
Other risks
Exposure to the
unpredictability of nancial
markets (foreign exchange,
interest rate and other
nancial risks)
As the Group operates on an
international basis, it is exposed to the
risk of currency uctuations and the
unpredictability of nancial markets in
which it operates. Please refer to the
nancial review section of this report for
a detailed description of these nancial
related risks.
The Group’snancial risk management
focuses on the unpredictability of
nancial markets and seeks to minimise
potentially adverse effects on the
Group’s nancial performance. Please
refer to the nancial review section of this
report for a detailed description of the
Group’s mitigation strategies.
Related Group strategy:
– Focus on data and analytics
– Drive protable growth
Related Group strategy:
– Drive protable growth
Related Group strategy:
– Drive protable growth
Related Group strategy:
– Drive protable growth
Related Group strategy:
– Optimise capital efciency
– Drive protable growth
42 42
Risks and uncertainties (continued)
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