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ofce
Annual Report 2013

Table of contents

  • Page 1
    Annual Report 2013

  • Page 2
    ... in North America, Latin America, UK and Ireland and EMEA/Asia Pacific. Activities in these regions are grouped into four business lines: Credit Services; Decision Analytics; Marketing Services and Consumer Services. Business overview Business review Governance REVENUE BY REGION North America 40...

  • Page 3
    ...11 1,253m 1,175m 991m US$1.3bn Full year dividend 13 12 11 34.75c 32.00c 28.00c Business review BUSINESS REVIEW 32 36 38 40 42 44 52 Chief Executive's review North America Latin America UK and Ireland EMEA/Asia Pacific Financial review Corporate responsibility 34.75 US cents Benchmark PBT 13...

  • Page 4
    ... to market and also plans to expand into new geographies. Every year our appetite for innovation grows. We are investing in data and analytics and are pioneering new products. This is part of the very fabric of Experian. Earlier this year, we launched PowerCurve, our new customer management software...

  • Page 5
    ... and processes in place in this regard, and to support the Group's growth strategy. You will read later in the corporate governance report about our governance activities during the year, including the Board evaluation process, the induction of our new nonexecutive directors and the activities of...

  • Page 6
    4 Experian Annual Report 2013 Business overview What we do We hold and manage a vast amount of data and develop analytics, software and platforms using our industry experts around the world, to help consumers and organisations derive insights and make informed decisions. Data Data Management ...

  • Page 7
    ...over 17,000 employees. Our global network enables us to support and service clients locally and share best practice and innovation across our regions and business lines. We provide data, data management, analytics, platforms and our expertise in North America, Latin America, UK and Ireland, and EMEA...

  • Page 8
    6 Experian Annual Report 2013 Business overview How we help our clients We help our clients make more informed decisions when interacting with their customers and help consumers to manage credit and the risk of fraud in their daily lives. We provide a wide range of data, analytics, software and ...

  • Page 9
    ... to what's going on in customers' lives and create ways to be more relevant. MANAGE We help our clients to improve customer loyalty, from enhancing retention rates through to encouraging faster payments. We help consumers manage and improve their financial status and protect against identity theft.

  • Page 10
    8 Experian Annual Report 2013 Business overview How we are organised Our regions and global business lines are organised in a matrix structure. Each of these has a leadership team responsible for operations, strategy and development. This allows for effective communication across the Group, ...

  • Page 11
    9 Business overview MARKETING SERVICES CONSUMER SERVICES COMPETITIVE POSITION (Global revenue US$m) Experian 48% Equifax 83% 17% 2,1602 Dun & Bradstreet 74% 26% 1,6632 TransUnion 85%5 Acxiom 86%5 Fair Isaac 61%5 39% 6764 North America Other regions Source: Latest annual revenue, from company and...

  • Page 12
    10 Experian Annual Report 2013 Business overview Our strategy for growth We seek to create value by investing in our business for growth. At the heart of our strategy is the global growth programme through which we extend our presence into new customer segments, expand geographically and invest in...

  • Page 13
    .../Asia Pacific. Financial statements We are investing in new decision management software, new fraud and identity management products, crosschannel marketing capabilities, new technology to support our expansion into affinity services for consumers, and new business information and credit bureau...

  • Page 14
    12 Experian Annual Report 2013 Business overview CREDIT SERVICES DECISION ANALYTICS MARKETING SERVICES CONSUMER SERVICES Business lines: Credit Services Credit Services manages extensive databases containing the credit application and repayment histories of millions of consumers and businesses ...

  • Page 15
    ..., the UK and in a number of other markets. In the US, we are second to Dun & Bradstreet, which is the only global competitor in this field. Market influences See page 14 for market influences on Credit Services and Decision Analytics. Business overview Business review Altru NEW CUSTOMER SEGMENTS...

  • Page 16
    14 Experian Annual Report 2013 Business overview CREDIT SERVICES DECISION ANALYTICS MARKETING SERVICES CONSUMER SERVICES Business lines: Decision Analytics Decision Analytics unlocks the value of our vast databases of credit and marketing information, as well as our clients' data, applying expert...

  • Page 17
    ... Insights and Controlling Director e of at Turkcell, says: "Experian's proven experience rket working in the global telecommunications market ulting and the combination of its analytics and consulting ery means that we can now communicate with every er, using single one of our customers, with the...

  • Page 18
    16 Experian Annual Report 2013 Business overview CREDIT SERVICES DECISION ANALYTICS MARKETING SERVICES CONSUMER SERVICES Business lines: Marketing Services Marketing Services provides data, data quality, analytics and cross-channel campaign management to help our clients better interact with ...

  • Page 19
    ... data into one place and use our multi-channel marketing campaign management software to create targeted marketing campaigns based on each customer's purchasing tendencies. To create an even more engaging experience for its customers, ZUJI selected Experian CheetahMail, our email marketing service...

  • Page 20
    18 Experian Annual Report 2013 Business overview CREDIT SERVICES DECISION ANALYTICS MARKETING SERVICES CONSUMER SERVICES Business lines: Consumer Services Consumer Services provides credit monitoring, fraud protection and identity management to 12.8 million consumers in the US and UK. We enable ...

  • Page 21
    ...objective was simple - to ensure that every Vanquis customer can be offered immediate protection. Working closely with Vanquis, our Consumer Services business introduced our pioneering Active Web Monitoring tool, which enables customers' personal and financial information to be protected from online...

  • Page 22
    ...Experian Annual Report 2013 Business overview Our people With over 17,000 employees located in 40 countries operating across four different global business lines, our people strategy needs to be diverse and comprehensive. Our people objectives are fundamental to executing Experian's global strategy...

  • Page 23
    ... regionally our leaders held events, workshops and employee communication sessions to spread the word and gather feedback on the Heart of Experian. This feedback helped identify further initiatives to enhance local work environments. Governance 5 our commitment to Corporate Social Responsibility...

  • Page 24
    22 Experian Annual Report 2013 Business overview Our people continued Employee engagement - listening to our people Our global people survey, carried out every 18 months, provides valuable insights into the views of employees and their level of engagement with the business. Our last global people ...

  • Page 25
    ... agenda and we continue to have traction with a number of global talent programmes which are supporting the accelerated development of top talent: Labour 55% IT 8% Data 12% Marketing 11% Other 12% Central Activities 2% Business review Experian Business Network ('EBN') This development forum for...

  • Page 26
    ... are three financial metrics specifically linked to management remuneration. FINANCIAL KEY PERFORMANCE INDICATORS Total revenue growth In the year ended 31 March 2013, total revenue from continuing activities increased by 10% at constant exchange rates. Total continuing revenue increased by US$257m...

  • Page 27
    .... Our next full survey takes place in May 2013, with the results to be included in next year's annual report. 11 10 75% 72% 84% 84% Governance See the full corporate responsibility report for details, calculation methods and further information on how Experian is minimising its impact on the...

  • Page 28
    ... with our strategic objectives, risk appetite, corporate responsibility strategy and the long-term drivers in the business. PRINCIPAL FEATURES OF THE RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS TONE AT THE TOP Sustaining a culture of integrity and ethical values BUSINESS STRATEGY Commitment to...

  • Page 29
    ... WE COMMUNICATE RISK AND CONTROL RESULTS? • Monthly finance reports to the Board including Group financial summary, Group results, forecasts and sales trends, investor relations analysis and detailed business trading summaries. • Quarterly Regional and Executive Risk Management Committee reports...

  • Page 30
    ... Experian Annual Report 2013 Business overview WHAT ADDITIONAL INTERNAL CONTROLS SUPPORT FINANCIAL REPORTING? Detailed policies and procedures are in place to ensure the accuracy and reliability of financial reporting and the preparation of consolidated financial statements. A comprehensive Group...

  • Page 31
    ... 2013 update We continue to invest strongly in new data sources and new analytical products, together with the platforms that support their worldwide delivery. Over 10% of our revenues come from new products developed in the past five years. In addition, 20% of our global costs are in information...

  • Page 32
    ... We also monitor potential pandemic threats and adjust action plans. Change from 2012 Stable 2013 update Continuity of services is a core focus and built into the development of new and existing products. While we experienced limited disruptions during the fiscal year, events such as the London 2012...

  • Page 33
    ... new customers or retain existing ones. How we manage this risk We are committed to continued research and investment in new data sources, people, technology and products to support our strategic plan. Change from 2012 Stable 2013 update We continue to focus on the development of new products that...

  • Page 34
    ...% in Latin America, 7% in North America, 5% in the UK and Ireland and 3% in EMEA/Asia Pacific. • We delivered good growth across our four global business lines, with organic revenue growth of 9% in both Credit Services and Consumer Services, and 5% in both Decision Analytics and Marketing Services...

  • Page 35
    ... year of a new credit bureau in Australia. Financial and strategic highlights by region P36 P38 Our business in North America is performing strongly. This reflects the progress we are making across our credit-related activities and in particular a growing contribution from our recent investment...

  • Page 36
    ...Experian Annual Report 2013 Business review Chief Executive's review continued Revenue and EBIT by geography Revenue EBIT Growth2 % 2013 US$m 20121 US$m Growth2 % Year ended 31 March North America Latin America UK and Ireland EMEA/Asia Pacific Sub total Central Activities - central corporate costs...

  • Page 37
    ...step down as Chairman and as a director of Experian plc by our annual general meeting to be held in July 2014. Sir John was a founder of our business, having joined the Group in 1969 when it was part of GUS plc. Conscious from the very early days of the value of information, he had the foresight and...

  • Page 38
    36 Experian Annual Report 2013 Business review NORTH AMERICA LATIN AMERICA UK AND IRELAND EMEA/ASIA PACIFIC Region: North America Total revenue from continuing activities in North America was US$2,258m, up 8%, with organic revenue growth of 7%. The difference relates primarily to the acquisitions...

  • Page 39
    ... In the past year in our North America region we significantly increased the number of volunteers and hours supporting local organisations and charities; employee volunteer efforts during working hours more than tripled across business units in North America. We continue to invest in organisations...

  • Page 40
    38 Experian Annual Report 2013 Business review NORTH AMERICA LATIN AMERICA UK AND IRELAND EMEA/ASIA PACIFIC Region: Latin America Total revenue in Latin America was US$1,001m, up 21% at constant exchange rates, with organic revenue growth of 14%. The difference relates to the acquisitions of ...

  • Page 41
    ... ('Real Dreams') financial education volunteer programme continues to grow and improve, this year engaging employees working across our branch office network as part of a planned development to reach more communities. This has complemented our outreach work with consumers; Serasa Experian partnered...

  • Page 42
    40 Experian Annual Report 2013 Business review NORTH AMERICA LATIN AMERICA UK AND IRELAND EMEA/ASIA PACIFIC Region: UK and Ireland In the UK and Ireland, revenue was US$873m, up 7% at constant exchange rates. Organic revenue growth was 5%. The acquisition contribution relates to LM Group (...

  • Page 43
    ... Credit Services Decision Analytics Marketing Services Consumer Services Total continuing activities Discontinuing activities Total UK and Ireland EBIT Total UK and Ireland EBIT margin 1. Growth at constant exchange rates. 2013 US$m 2012 US$m Total growth1 Organic growth1 % % Business overview...

  • Page 44
    ... Annual Report 2013 Business review NORTH AMERICA LATIN AMERICA UK AND IRELAND EMEA/ASIA PACIFIC Regions: EMEA /Asia Pacific Total revenue from continuing activities in EMEA/ Asia Pacific was US$581m, up 4% at constant exchange rates, with organic revenue growth of 3%. The difference relates...

  • Page 45
    ... as case studies in the Group's 2013 Corporate Responsibility Report and between the two projects we reached 17,000 young people and helped make them more aware of money management and risk issues. Volunteering figures for EMEA/ Asia Pacific have increased 27% by comparison with the prior year with...

  • Page 46
    ... the financial highlights of the year and to further develop the story behind these numbers. Further financial information is provided in the Group financial statements. We also use this review to draw out the key elements within our accounting and risk management policies and explain formally why...

  • Page 47
    ... items - continuing operations Year ended 31 March Restructuring costs Loss/(gain) on disposal of businesses Interest income on legacy tax balances Total exceptional charge/(credit) P32 2013 US$m 2012 US$m 54 12 - 66 - (8) (4) (12) Foreign exchange The principal exchange rates used to...

  • Page 48
    46 Experian Annual Report 2013 Business review Financial review continued Capital expenditure Capital expenditure was US$460m (2012: US$453m) including data and software to support future growth. An analysis by operating segment is given in note 9(a) to the Group financial statements. Later in ...

  • Page 49
    ... exchange The principal exchange rates used to translate assets and liabilities at the year end are shown in the table opposite. Share price and market capitalisation The share price of Experian ranged from a low of £8.70 to a high of £11.85 during the year. On 31 March 2013, the midmarket price...

  • Page 50
    48 Experian Annual Report 2013 Business review Financial review continued Accounting policies and developments The principal accounting policies used are shown in note 5 to the Group financial statements and these have been applied consistently. Two significant strategic transactions have been ...

  • Page 51
    ... in the preparation of the Group and the parent company financial statements. COMPARISON OF CAPITAL EXPENDITURE AND DEPRECIATION/AMORTISATION 2013 Capital expenditure (US$m) 134 211 115 460 2013 Depreciation/amortisation (US$m) 80 168 81 329 Software Databases Property, plant and equipment Total 76...

  • Page 52
    50 Experian Annual Report 2013 Business review Financial review continued Income statement analysis - continuing operations 2013 Benchmark Nonbenchmark1 US$m Total US$m Benchmark US$m 2012 Nonbenchmark1 US$m Total US$m Year ended 31 March Revenue Labour costs Data and information technology costs...

  • Page 53
    ... Business overview Revenue, EBIT and EBIT margin by business segment 2013 20121 US$m Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services Consumer Services Total - continuing activities Discontinuing activities3 Total EBIT Credit Services Decision Analytics Marketing...

  • Page 54
    ... for products and service offerings and ways of engaging as a team beyond the conference. See the Corporate ' Responsibility Report 2013 ('CR Report') at www.experianplc.com/crreport for more detail including a short video. New global CR working groups A key outcome from Mumbai's global management...

  • Page 55
    ... Exchange Service. This will offer a secure and compliant way to include a tenant's rental payment history in credit reports, with their permission. Rental payment information is not currently included on credit reports. This year we have invested further and worked with the social housing landlords...

  • Page 56
    ... Annual Report 2013 Business review Corporate Responsibility continued Linking to our business strategy Corporate responsibility for Experian is an essential element of our business growth strategy and supports our drive towards product innovation, geographic expansion and work in new customer...

  • Page 57
    ... improving the capture of local business unit charitable payments and investments. • Develop global policies for match funding, volunteering and payroll giving and set goals for implementation taking account of regional limitations. Improved data capture processes are in place and the increase in...

  • Page 58
    ...Governance Code relating to the role and effectiveness of the Board during the financial year. Board role The Board, through the Nomination and Corporate Governance Committee, receives updates on corporate governance developments, to assist in ensuring that the Board and its committees can meet best...

  • Page 59
    .... Business review Governance UK Corporate Governance Code It is the Board's view that the Company has been compliant with the provisions of the UK Corporate Governance Code, published by the UK Financial Reporting Council in 2010, throughout the year ended 31 March 2013. The corporate governance...

  • Page 60
    ... Managing Director - Greenhill & Co. Baring Brothers International. London Stock Exchange Twenty years' experience in the corporate advisory sector, and very familiar with the Experian business having acted as a strategic advisor to former parent company, GUS plc, in the lead up to demerger in 2006...

  • Page 61
    ... Officer, Group Chief Information Officer - HSBC Holdings plc. Non-executive director - MacDonald Dettwiler Information technology, global resourcing and an operational background are invaluable at a large global business like Experian where issues around server technology and information security...

  • Page 62
    60 Experian Annual Report 2013 Governance Corporate governance report Governance framework: Advice, review, recommendation, monitoring, executive forum Delegated authority flow Board committees Group Operating Committee The remit of this executive group includes identifying, debating and ...

  • Page 63
    ...Approval of Group policies - including, for example, an anti-corruption policy, a gifts and hospitality policy, a global code of conduct and a global compliance policy. BALANCE OF MALE AND FEMALE DIRECTORS AT 31 MARCH 2013 0-5 years Over 5 years * Company listed in October 2006 Chairman Executive...

  • Page 64
    ... to the Italian market. • Approved the disposal of the Group's price comparison shopping business (PriceGrabber) and North American online lead generation activities. • Conducted post-investment reviews on the 2010 acquisitions of the assets of Mighty Net (online credit monitoring services) and...

  • Page 65
    ...corporate development), growth programmes, investor relations, audit, legal and regulatory, talent, governance and risk, information security and brand. Products and Propositions - details of strategic accounts/clients, each of the global business lines and demonstrations on a number of the Experian...

  • Page 66
    ... the following: North America - presentations and product demonstrations on the four global business lines, presentations on marketing, human resources, regulatory and legal issues and informal meetings with top talent. UK and Ireland - an overview from the Managing Director, UK and Ireland, as well...

  • Page 67
    ...affect) each director's judgment. Business review Chairman and Chief Executive Officer Chairman's responsibilities include: The effective running of the Board, and ensuring that the Board as a whole plays a full and constructive part in the development and determination of the Group's strategy and...

  • Page 68
    ... direction and detailed information on the strategy of the Group's four global business lines. The seminars, which were well-attended, were chaired by the Chief Executive Officer and included presentations from the management team. The Company's website is a very important method of communication...

  • Page 69
    ...available on request and placed on the Company's website following the meeting. In 2012, voting levels at the annual general meeting showed a small increase to 69% of the issued share capital of the Company, compared with 68% in 2011. Risk management and internal control The Board is responsible for...

  • Page 70
    ... in place throughout the year ended 31 March 2013 and met six times. Eight members of the Committee are considered by the Board to be independent non-executive directors in accordance with provision B.2.1 of the UK Corporate Governance Code. The Group Human Resources Director and the Global Talent...

  • Page 71
    ... Committee was in place throughout the year ended 31 March 2013 and met four times. All of its members are considered by the Board to be independent nonexecutive directors in accordance with provision D.2.1 of the UK Corporate Governance Code. The Chairman and Chief Executive Officer attend meetings...

  • Page 72
    ...ended 31 March 2013, and met four times with meetings held to coincide with key dates in the financial reporting and audit cycle. All members of the Committee are considered by the Board to be independent non-executive directors in compliance with provision C.3.1 of the UK Corporate Governance Code.

  • Page 73
    ... of reference remained appropriate. • Reviewed the key points of the UK Financial Reporting Council's Update for Directors of Listed Companies in relation to country and currency risk, and noted the relevant updates to the UK Financial Reporting Council's Corporate Governance Code and Guidance on...

  • Page 74
    ...best placed to carry out such work. This may include, but is not restricted to, shareholder and other circulars, regulatory reports and work in connection with acquisitions and divestments. Tax services: where the external auditors' knowledge of the Group's affairs may provide significant advantages...

  • Page 75
    ...report on directors' remuneration (the 'Report') for the year ended 31 March 2013. Shareholders will be invited to approve the Report at the Company's Annual General Meeting on 17 July 2013. The Committee, whose membership, remit and responsibilities are set out in the preceding corporate governance...

  • Page 76
    74 Experian Annual Report 2013 Governance Report on directors' remuneration continued Remuneration in summary This section provides a summary of key remuneration arrangements for our executive directors. More detail of how these were operated during the year ended 31 March 2013, and are intended ...

  • Page 77
    ...of each year. Salary increases take into account the prevailing economic conditions, best practice, positioning against market and approach to employee remuneration throughout the wider Group. As a result, in the year ended 31 March 2013, the percentage increases for the executive directors (2.5% to...

  • Page 78
    ...2013 Governance Report on directors' remuneration continued Explanation of Remuneration Policy Introduction This Report has been drawn up in line with Schedule 8 of the UK Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, the UK Financial Conduct Authority Listing...

  • Page 79
    77 Business overview The management of the Group's specific business risks is governed by its risk management framework and is inherent in the way in which Experian operates. As a result of this operational focus on risk management, the Committee is satisfied that the incentive arrangements do not ...

  • Page 80
    ... directors is to follow the UK Corporate Governance Code guidelines and best practice. Consultation and engagement How shareholder views are taken into account In advance of the AGM the Chairman of the Committee writes to the 25 shareholders with the largest holding of Company shares and investor...

  • Page 81
    ...each director's individual performance and experience as well as average pay increases awarded to other employees in the Group. To assess the appropriate salary for a role, benchmark data, sourced from external remuneration consultants, is provided to the Committee. Executive directors' salaries are...

  • Page 82
    80 Experian Annual Report 2013 Governance Report on directors' remuneration continued PBT GROWTH CALIBRATION FOR 2013 ANNUAL BONUS Benchmark PBT growth achieved of 12.5% was around the mid-point of the performance range, as shown in the chart opposite, and therefore a bonus equivalent to 150% of ...

  • Page 83
    ... under the PSP may vest early in the event of a change of control but would be pro-rated for time and performance. P89 Governance Details of the awards granted in prior years are given in the table entitled 'Performance Share Plan'. The operation of the PSP is described in the following schematic...

  • Page 84
    82 Experian Annual Report 2013 Governance Report on directors' remuneration continued P24 PSP performance metrics The vesting of awards under the PSP is based 75% on the achievement of a growth in PBT performance condition, measured over three years, with the other 25% subject to TSR ...

  • Page 85
    ... Business overview Sharesave plans All executive directors and employees of the Company, and any participating subsidiaries in which sharesave or a local equivalent is operated, are eligible to participate if they are employed by the Group at a qualifying date. As an example of these plans, the UK...

  • Page 86
    ... experience and development. In line with the UK Corporate Governance Code, executive directors may therefore accept one FTSE 100 non-executive directorship, and retain any related fees. During the period under review, Don Robert served as non-executive director on the board of Compass Group plc...

  • Page 87
    85 Business overview Remuneration of non-executive directors The Board's policy on the remuneration of non-executive directors is that: • fees should reflect individual responsibilities and membership of Board committees; • remuneration should be in line with recognised best practice and be ...

  • Page 88
    ... non-executive director of Compass Group plc during the period under review, for which he received a fee of £81,000 (2012: £81,000). 5. Brian Cassin's annual salary was £450,000 for the year ended 31 March 2013. The salary and benefits figures provided in the table show remuneration from the date...

  • Page 89
    .../ expiry date Business review Executive directors Don Robert 31.05.05 02.06.06 18.06.09 Chris Callero Notes: 1. Options granted in 2006 or earlier were originally granted under the GUS Executive Share Option Scheme and were exchanged for equivalent options over Experian plc shares on demerger...

  • Page 90
    88 Experian Annual Report 2013 Governance Report on directors' remuneration continued Co-investment Plans Details of awards made to directors under the Experian Co-investment Plans are set out in the table below. Experian share price on date of award CoCoinvestment investment Plan Plan matching ...

  • Page 91
    ...Business overview Performance Share Plan Details of awards made to directors under the PSP are set out in the table below. Experian share price on date of award Plan shares held at 1 April 2012 Plan shares awarded during the year Plan shares vested during the year Plan shares lapsed during the year...

  • Page 92
    90 Experian Annual Report 2013 Governance Report on directors' remuneration continued Executive directors' pension arrangements Don Robert is provided with benefits through a Supplementary Executive Retirement Plan ('SERP') which is a defined benefit arrangement in the US. The figures below are in...

  • Page 93
    ...the directors' interests in the Company plus the net value of any invested shares under the Co-investment Plans. Brian Cassin was appointed Chief Financial Officer in April 2012 and is building his shareholding up to the requisite level in line with the relevant guidelines. 3. The number of Experian...

  • Page 94
    ...statements for the year ended 31 March 2013. The corporate governance report forms part of this directors' report. Principal activities and business review Experian provides data and analytical tools to organisations in North America, Latin America, UK and Ireland, EMEA and Asia Pacific. Clients use...

  • Page 95
    ... report on directors' remuneration, non-executive directors receive a proportion of fees in shares until their shareholding reaches one times their annual fee. These shares may not normally be transferred during their period of office. • Where, under a share-based employee incentive plan operated...

  • Page 96
    ... worldwide in line with our strategy, which focuses on financial education and entrepreneurship. The total commitment, including cash support and employee time, during the year was US$5.3m (2012: US$3.5m, as re-presented). Of this, in 2013, the Group's community investment in the UK totalled US...

  • Page 97
    ... management channels, conferences, meetings, publications and intranet sites. More detail on employee engagement, together with information on diversity, succession planning and talent development, can be found in the our people section of the annual report. Experian continues to support employee...

  • Page 98
    ... Experian Annual Report 2013 Governance Directors' report continued Statement of directors' responsibilities The directors are responsible for: • preparing the annual report, the Group and parent company financial statements and the report on directors' remuneration in accordance with applicable...

  • Page 99
    ... of the UK Corporate Governance Code specified for our review; and • certain elements of the report to shareholders by the Board on directors' remuneration. Other matter We have reported separately on the parent company financial statements of Experian plc for the year ended 31 March 2013. Ranjan...

  • Page 100
    98 Experian Annual Report 2013 Financial statements Group income statement for the year ended 31 March 2013 Notes 2013 US$m 2012 US$m Revenue Labour costs Data and information technology costs Depreciation and amortisation Marketing and customer acquisition costs Other operating charges Total ...

  • Page 101
    ...comprehensive income for the financial year Attributable to: Owners of Experian plc: Continuing operations Discontinued operations Owners of Experian plc Non-controlling interests Total comprehensive income for the financial year 406 (48) 3 (39) (84) 322 718 7 - (64) (57) 661 Business review 181...

  • Page 102
    ...Experian Annual Report 2013 Financial statements Group balance sheet at 31 March 2013 Notes 2013 US$m 2012 US$m Non-current assets Goodwill Other intangible assets Property, plant and equipment Investments...approved by the Board on 8 May 2013 and were signed on its behalf by: Sir Alan Rudge Director

  • Page 103
    101 Group statement of changes in total equity for the year ended 31 March 2013 Business overview Called up share capital (Note 40) US$m Share premium account (Note 40) US$m Retained earnings (Note 41) US$m Other Attributable reserves to owners of Experian plc (Note 42) US$m US$m Noncontrolling ...

  • Page 104
    ...Experian Annual Report 2013 Financial statements Group cash flow statement for the year ended 31 March 2013 Notes Cash flows from operating activities Cash generated from operations Interest paid Interest received Dividends received from associates Tax paid Net cash inflow from operating activities...

  • Page 105
    ...160 to 169. Business review 3. Comparative information Following a review of the Group assessment of risk and rewards, revenue from scores and value-added products in Latin America is now reported in Decision Analytics rather than in Credit Services and the results of these business segments (shown...

  • Page 106
    ... year is recognised in the Group income statement within net finance costs, whilst any change in that value attributable to exchange rate movements is recognised directly in other comprehensive income. Associates Associates are entities over which the Group has significant influence but not control...

  • Page 107
    105 Business overview 5. Significant accounting policies (continued) Translation differences on non-monetary available-for-sale financial assets are reported as part of the fair value gains or losses in other comprehensive income. Group undertakings The results and financial position of Group ...

  • Page 108
    106 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 5. Significant accounting policies (continued) Marketing-related acquisition intangibles: • Trademarks and licences - over their contractual lives up to a maximum period of twenty years; and ...

  • Page 109
    ...balance sheet date. (k) Derivative financial instruments (note 32) The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange rates, interest rates and certain obligations, including social security obligations, relating to share incentive plans. Such...

  • Page 110
    ... using the projected unit credit method. Under this method, and in view of the fact that the principal Experian funded plan is closed to new entrants, the current service cost increases as members approach retirement due to the ageing active membership of the plan. The present value of the defined...

  • Page 111
    ... to individual countries. (s) Operating charges Operating charges are reported by nature in the Group income statement as this reflects the composition of the Group's cost base and cost management globally. Details of charges in respect of share incentive plans within labour costs are set out in...

  • Page 112
    ...present value of put/call option agreements in place in respect of shares held by non-controlling shareholders is recognised within net finance costs and reported therein as financial fair value remeasurements. (u) Tax (note 16) The tax charge or credit for the year is recognised in the Group income...

  • Page 113
    ... Business review In the annual report for the year ended 31 March 2012, the 'Consumer Services' business segment was styled 'Interactive'. The North America and the UK and Ireland operating segments derive revenues from all of the Group's business segments. The Latin America, EMEA and Asia Pacific...

  • Page 114
    ...contingent consideration, charges in respect of the demerger-related share incentive plans, exceptional items, financing fair value remeasurements, tax and discontinued operations. It includes the Group's share of continuing associates' pre-tax results. Earnings before interest and tax ('EBIT') EBIT...

  • Page 115
    ...excluded from net debt. Business review Governance 8. Financial risk management (a) Financial risk factors The Group's activities expose it to a variety of financial risks: • market risk (including foreign exchange risk, interest rate risk and price risk); • credit risk; and • liquidity risk...

  • Page 116
    ...is minimised by a policy under which the Group only enters into such contracts with banks and financial institutions with strong credit ratings, within limits set for each organisation. Dealing and deposit activity is closely controlled and counterparty positions are monitored regularly. The general...

  • Page 117
    115 Business overview 9. Segment information (a) IFRS 8 disclosures (i) Income statement Continuing operations2 Year ended 31 March 2013 North America US$m Latin America US$m UK & Ireland US$m EMEA/ Asia Pacific US$m Total operating segments US$m Central Activities US$m Total continuing ...

  • Page 118
    116 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 9. Segment information (continued) (ii) Balance sheet Net assets/(liabilities) At 31 March 2013 North America US$m Latin America US$m UK & Ireland US$m EMEA/ Asia Pacific US$m Segment assets/ (...

  • Page 119
    ...Business overview 9. Segment information (continued) Capital employed 2013 US$m 2012 US$m North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities Total Group 2,399 1,842 871 496 5,608 125 5,733 2,356 1,983 958 555 5,852 127 5,979 Business review...

  • Page 120
    118 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 9. Segment information (continued) (b) Information on business segments (including non-GAAP disclosures) Continuing operations2 Year ended 31 March 2013 Credit Services US$m Decision Analytics...

  • Page 121
    ... impact of foreign exchange risk on the translation of the net assets of such undertakings. Governance 11. Total operating expenses (a) Labour costs - continuing operations 2013 US$m 2012 US$m Wages and salaries Social security costs Share incentive plans (note 35) Pension costs - defined benefit...

  • Page 122
    ... monthly number of employees (including executive directors) - continuing operations 2013 Full time Part time Full time equivalent Full time 2012 Part time Full time equivalent North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities Total continuing...

  • Page 123
    ...amortisation Other operating charges Within operating profit Within net finance costs Total exceptional items 54 12 - 66 - (8) (4) (12) 41 13 12 66 - 66 - - (8) (8) (4) (12) Business review The Group conducted a strategic review of its cost base during the year ended 31 March 2013. Examples of...

  • Page 124
    ... to derive Benchmark PBT - continuing operations 2013 US$m 2012 US$m Amortisation of acquisition intangibles Acquisition expenses Adjustment to the fair value of contingent consideration Charges in respect of the demerger-related share incentive plans Financing fair value remeasurements (note 15...

  • Page 125
    ... 318 Business review The charge of US$558m in the year ended 31 March 2013 in respect of the increase in the fair value of the Serasa put option reflects the movement to the date of the acquisition of the additional 29.6% interest in Serasa and the terms of the related agreement. (d) Interest rate...

  • Page 126
    124 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 16. Tax charge/(credit) in the Group income statement (a) Analysis of Group tax charge/(credit) 2013 US$m 2012 US$m Current tax: Tax on income for the year Adjustments in respect of prior years ...

  • Page 127
    ... year ended 31 March 2012, the results and cash flows of these businesses are classified as discontinued. Prior to that they were reported as part of the North American and UK and Ireland segments. (a) Results for discontinued operations 2013 US$m 2012 US$m Revenue Labour costs Data and information...

  • Page 128
    126 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 17. Discontinued operations - comparison shopping and lead generation businesses (continued) Depreciation and amortisation includes amortisation of acquisition intangibles of US$nil (2012: US$27m...

  • Page 129
    ... Business overview 19. Earnings per share Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders of the Company by a weighted average number of ordinary shares (being the ordinary shares in issue during the year less own shares held as treasury shares...

  • Page 130
    ... in place in October 2006, shareholders in the Company can elect to receive their dividends from a UK source (the 'IAS election'). Shareholders who held 50,000 or fewer Experian shares (i) on the date of admission of the Company's shares to listing on the London Stock Exchange or (ii) in the case of...

  • Page 131
    ... 4,057 3,761 (115) 553 (3) 550 (33) 4,163 Business review There have been no impairments of goodwill in the current or prior years. (b) Analysis of allocation of goodwill by CGUs 2013 US$m 2012 US$m North America Latin America UK and Ireland EMEA Asia Pacific At 31 March 1,810 1,214 660 255 118...

  • Page 132
    130 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 22. Other intangible assets Acquisition intangibles Customer and other relationships US$m Acquired software development US$m Marketingrelated assets US$m US$m Databases Internal use software ...

  • Page 133
    131 Business overview 23. Property, plant and equipment Freehold properties US$m Short leasehold properties US$m Plant and equipment US$m Total US$m Cost At 1 April 2012 Differences on exchange Additions Disposal of subsidiaries Other disposals At 31 March 2013 Accumulated depreciation At 1 ...

  • Page 134
    132 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 24. Investments in associates 2013 US$m 2012 US$m Cost At 1 April Additions through business combinations Other additions Share of loss after tax Dividends received Acquisition of controlling ...

  • Page 135
    133 Business overview 26. Trade and other receivables (continued) (c) Analysis of trade and other receivables by denomination of currency 2013 Current US$m Non-current US$m 2012 Current US$m Non-current US$m US dollar Sterling Brazilian real Euro Other 338 229 155 79 122 923 6 - 2 - 2 10 310 ...

  • Page 136
    ... of cash and cash equivalents and the book value stated above. (b) Analysis of cash and cash equivalents by external credit rating 2013 US$m 2012 US$m Counterparty holding of more than US$2m: A rated B rated Counterparty holding of more than US$2m Counterparty holding of less than US$2m 125 79 204...

  • Page 137
    ... taxes payable Social security costs Amounts within accruals and deferred income Items not regarded as financial instruments Total trade and other payables 463 43 85 647 775 1,238 465 41 85 662 788 1,253 Business review As obligations under employee benefit plans are accounted for under...

  • Page 138
    ...Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 29. Borrowings (continued) (c) Committed bank borrowing facilities 2013 Drawn US$m Undrawn US$m 2012 Drawn US$m Undrawn US$m Facilities expiring in: Under one year One to two years Two to three years...

  • Page 139
    ...inflow/(outflow) Net share purchases Fair value gains and losses Exchange and other movements At 31 March 2013 254 (888)...Group has used the movements in relevant stock market and other indices for the year ended 31 March 2013. The listed investments in the UK are managed by independent fund managers...

  • Page 140
    138 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 32. Other financial assets and liabilities (a) Summary of other financial assets and liabilities 2013 2012 Total US$m Current US$m Non-current US$m Total US$m Assets Loans and receivables ...

  • Page 141
    ... 92 12 104 41 145 - - - 37 37 113 11 124 - 124 - 6 6 - 6 113 17 130 37 Business review 167 Assets and liabilities whose valuations are based on unadjusted quoted prices in active markets for identical assets and liabilities are classified as Level 1. Assets and liabilities which are not traded in...

  • Page 142
    140 Experian Annual Report 2013 Financial statements Notes to the Group financial statements continued 34. Maturity profile of financial liabilities - contractual undiscounted cash flows (a) Contractual undiscounted cash flows for financial liabilities Less than one year US$m One to two years US$m...

  • Page 143
    ... statement Reported within employee benefit costs as follows: Within Benchmark PBT Charge in respect of demerger-related share incentive plans (excluded from Benchmark PBT) Total expense recognised in Group income statement 73 5 78 56 9 65 78 - 78 60 5 65 Business review The Group has a number...

  • Page 144
    ...volatilities and correlations for comparator companies measured over the three-year period preceding valuation and an implied volatility for Experian plc ordinary shares. (ii) Information on share grant valuation techniques Share grants are valued by reference to the market price on the day of award...

  • Page 145
    ...Business review 1. For Experian Sharesave Plans, forfeitures include non-leavers who have not completed the savings requirement. 2. The weighted average market price of Experian shares in respect of option exercises during the year was £9.79 (2012: £7.84). 3. Options outstanding at 31 March 2013...

  • Page 146
    ... set out below. An overview of the Group's retirement benefit arrangements is given in note 37. Experian is adopting IAS 19 (revised) with effect from 1 April 2013 and the results for the year ended 31 March 2013 will be re-presented accordingly in the annual report for the year ending 31 March 2014...

  • Page 147
    ...957 Business review (e) Amounts recognised in the Group statement of comprehensive income 2013 US$m 2012 US$m Service cost Curtailment gain Charge within labour costs Finance income/(expense): Expected return on plans' assets Interest on plans' liabilities Net finance income Total credit to Group...

  • Page 148
    ... the annual current service cost would remain unchanged. The rates of increase for pensions in payment reflect the separate arrangements applying to different groups of Experian's pensioners. The expected return on plan assets at 31 March 2012 that has been used in the year ended 31 March 2013 was...

  • Page 149
    ... of the Company and certain former directors and employees of Experian Finance plc. Certain of these unfunded arrangements in the UK have been secured by the grant of charges to an independent trustee over an independently managed portfolio of marketable securities owned by the Group. The amount...

  • Page 150
    ... US$m Intangibles Share incentive plans US$m Tax losses Other temporary differences US$m Total US$m US$m US$m At 1 April 2012 Differences on exchange Tax (charge)/credit in the Group income statement - continuing operations Tax credit in the Group income statement - discontinued operations Tax...

  • Page 151
    ... event of such remittance. At the balance sheet date there were deferred tax liabilities expected to reverse within the next year of US$41m (2012: US$41m). (iv) UK deferred tax The main rate of UK corporation tax has been reduced to 23% with effect from 1 April 2013. Deferred tax arising in the UK...

  • Page 152
    ...Differences on exchange Tax charge in the Group income statement - continuing operations (note 16) Tax credit in the Group income statement - discontinued operations (note 17) Tax recognised directly in equity on transactions with owners (note 41) Tax paid (note 44(d)) Business combinations Transfer...

  • Page 153
    ...issued during the year and since 31 March 2013, are contained in note N to the parent company financial statements. The share premium account of US$1,480m (2012: US$1,471m) comprises the amount received in excess of the nominal value of the shares issued by way of (i) the share offer in October 2006...

  • Page 154
    ...the Group and parent company financial statements in respect of the own shares reserve arose due to the translation of the sterling amounts into US dollars at the different exchange rates on the different translation dates. The difference is US$32m at both balance sheet dates, with the larger number...

  • Page 155
    153 Business overview 44. Notes to the Group cash flow statement (a) Cash generated from operations 2013 US$m 2012 US$m Profit after tax Adjustments for: Group tax charge/(credit) Share of post-tax loss of associates Net finance costs Operating profit Loss on disposals of fixed assets Loss/(gain)...

  • Page 156
    ... employee share incentive plans Cash outflow in respect of net share purchases (non-GAAP measure) (9) (61) 250 180 (11) (54) 232 167 (h) Payments to acquire non-controlling interests 2013 US$m 2012 US$m Payment to shareholders in Serasa for purchase of additional interest Expenses in connection...

  • Page 157
    ... Equity shares not yet settled Total 23 1 9 33 4 6 10 4 (5) (3) 6 27 33 Business review Governance The provisional fair values above contain certain amounts which will be finalised no later than one year after the date of acquisition. Provisional amounts have been included at 31 March 2013 as...

  • Page 158
    ... in the year ended 31 March 2013 as a result of a number of small transactions. There was a related cash outflow of US$7m. 47. Disposals (a) Disposal of comparison shopping and lead generation businesses (i) Profit on disposal US$m Net assets disposed of - book value at date of disposal: Goodwill...

  • Page 159
    ...$104m not then expected to be incurred before 31 March 2013. 50. Contingencies There are a number of pending and threatened litigation claims involving the Group in North America and Latin America which are being vigorously defended. The directors do not believe that the outcome of any such pending...

  • Page 160
    ...). The fair value of goodwill, software development, customer relationships and other assets and liabilities will be reported on an aggregate basis with any further acquisitions in the Group's half-yearly financial statements for the six months ending 30 September 2013 and in the 2014 annual report.

  • Page 161
    ... of Experian plc for the year ended 31 March 2013 which comprise the profit and loss account, the balance sheet and the related notes. The financial reporting framework that has been applied in their preparation is United Kingdom Accounting Standards. Business overview Respective responsibilities...

  • Page 162
    160 Experian Annual Report 2013 Financial statements Profit and loss account for the year ended 31 March 2013 Notes 2013 US$m 2012 US$m Continuing operations Staff costs Depreciation Other operating charges Operating loss Interest payable and similar charges Loss on ordinary activities before tax...

  • Page 163
    161 Balance sheet at 31 March 2013 Business overview Notes 2013 US$m 2012 US$m Fixed assets Tangible assets Investments - shares in Group undertakings Current assets Debtors - amounts falling due within one year Cash at bank and in hand Current liabilities Creditors - amounts falling due within ...

  • Page 164
    162 Experian Annual Report 2013 Financial statements Notes to the parent company financial statements for the year ended 31 March 2013 A. Corporate information Experian plc (the 'Company') is incorporated and registered in Jersey as a public company limited by shares and is resident in Ireland. ...

  • Page 165
    ... as operating leases and not capitalised. Payments made under operating leases are charged in the profit and loss account on a straight line basis over the period of the lease. Business review Governance D. Staff costs 2013 US$m 2012 US$m Directors' fees Wages and salaries Social security costs...

  • Page 166
    164 Experian Annual Report 2013 Financial statements Notes to the parent company financial statements continued E. Other operating charges Other operating charges of US$37.0m (2012: US$32.2m) principally comprise charges from other Group undertakings in respect of services provided to the Company ...

  • Page 167
    ... Experian Group Services Limited Experian Holdings Ireland Limited Experian Ireland Investments Limited Holding company Finance company Administrative services Holding company Finance company England and Wales Ireland Ireland Ireland Ireland K. Debtors - amounts falling due within one year 2013...

  • Page 168
    166 Experian Annual Report 2013 Financial statements Notes to the parent company financial statements continued L. Creditors - amounts falling due within one year 2013 US$m 2012 US$m Amounts owed to Group undertakings Tax and social security Other creditors Accruals and deferred income 79.7 0.4 ...

  • Page 169
    ....6) (21.2) (232.7) 54.3 65.5 6,665.8 Business review The balance on the profit and loss account comprises charges and credits taken directly to the profit and loss account in respect of employee share incentive plans and other net profits retained by the Company after the payment of dividends. The...

  • Page 170
    168 Experian Annual Report 2013 Financial statements Notes to the parent company financial statements continued Q. Commitments The Company has an annual operating lease commitment and related annual cost of US$0.5m (2012: US$0.6m) in respect of the corporate headquarters in Dublin and this ...

  • Page 171
    ... Holding company Finance company Consumer services Holding company Information services Marketing services Administrative services England and Wales England and Wales England and Wales England and Wales Australia Brazil Colombia Ireland Ireland USA USA USA USA USA Business review The results...

  • Page 172
    ... range of shareholder services online, including dividend payment information, the ability to check shareholdings, amend address or bank details and submit AGM proxy voting instructions. When registering for Share Portal, shareholders can select their preferred communication method - email...

  • Page 173
    ... 58.235% to Experian plc shares and 41.765% to Home Retail Group plc shares. This is based on the closing prices of the respective shares on their first day of trading after their admission to the Official List of the London Stock Exchange on 11 October 2006. For GUS plc shares acquired prior to the...

  • Page 174
    ... 19 July 2013 6 November 2013 January 2014 May 2014 Contacts Corporate headquarters Newenham House Northern Cross Malahide Road Dublin 17 Ireland T +353 (0) 1 846 9100 F +353 (0) 1 846 9150 Registered office 22 Grenville Street St Helier Jersey JE4 8PX The registered number of Experian plc is 93905...

  • Page 175
    Designed and produced by Accrue Corporate Reporting. Printed by Emmerson Press. Emmersons operate a quality and environmental Management System which are certified to ISO9001:2008 and ISO14001:2004. This document is printed on paper produced at a mill that is certified to the EMAS environmental ...

  • Page 176
    Corporate headquarters Experian plc Newenham House Northern Cross Malahide Road Dublin 17 Ireland Corporate office Experian Cardinal Place 80 Victoria Street London SW1E 5JL United Kingdom Operational headquarters Experian Landmark House Experian Way NG2 Business Park Nottingham NG80 1ZZ United ...