Experian 2013 Annual Report Download - page 37
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Please find page 37 of the 2013 Experian annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Growth and efficiency
As announced in November 2012,
we have launched an efficiency
programme with the intention of re-
investing the savings into our most
promising growth opportunities. We
have recognised a charge of US$54m
during this financial year in relation
to achieving the efficiency savings.
We continue to expect a total charge in
relation to the programme of US$110m
and for the programme to deliver gross
annualised savings of approximately
US$75m. Approximately two-thirds
of these savings will be reinvested to
drive growth.
We have identified the following as
key areas for reinvestment over the
forthcoming year:
•New customer segments – including
public sector, healthcare payments,
automotive and the affinity channel;
•Geographic expansion – including
Turkey, Russia, South Africa and
Chile; and
•Product innovation – including fraud
and identity management, Data Lab
roll-out and cross-channel marketing
roll-out.
These investments are aimed at
sustaining premium growth into
the future.
Cash flow and net debt
EBIT conversion into operating
cash flow was 94%, exceeding our
target of 90% conversion. Net debt
increased by US$1,120m to US$2,938m
at 31 March 2013. The increase is
after funding capital expenditure of
US$460m, acquisition expenditure of
US$1,549m, equity dividend payments
of US$322m and net share purchases
of US$180m. Acquisition expenditure
principally comprises the purchase of
the Serasa non-controlling interest for a
consideration of US$1,500m, plus other
smaller transactions. At 31 March 2013,
the net debt to EBITDA gearing ratio
was 1.86 times, which compares to our
target net debt range of 1.75 to 2.0 times.
We have a £334m bond which matures
in December 2013 and which will be
repaid from existing bank facilities.
Net debt has risen following the Serasa
transaction and we expect our net
interest expense to be in the range of
US$80m to US$90m for the year ending
31 March 2014.
Capital strategy
In setting our capital strategy, we aim to
strike an appropriate balance between
investing in the business for growth,
maintaining a prudent but efficient
balance sheet and delivering returns
to shareholders. For the forthcoming
year, we have taken into account current
leverage, anticipated free cash flow and
the current acquisition pipeline. In view
of these items, we are initiating a share
purchase programme totalling US$500m
over the next 12 months, subject to
trading performance and acquisition
spend. This sum includes share
purchases in respect of employee share
plans that vest, at an anticipated cost in
the region of US$160m to US$170m.
Dividend
For the year ended 31 March 2013,
we are announcing a second interim
dividend of 24.00 US cents per share.
This gives a full-year dividend of 34.75
US cents per share, up 9%. The second
interim dividend will be paid on 19 July
2013 to shareholders on the register at
the close of business on 21 June 2013.
People
On 1 May 2013, we announced that,
after over 40 years, Sir John Peace has
decided to 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 vision to understand how
the industry would develop and this
profoundly affected the formation of
the Group. We owe a significant debt
of gratitude to Sir John and we thank
him for his enormous contribution to
Experian. We will now start the process
of appointing a successor and a further
announcement will be made once the
appointment process concludes.
Business overview Business review Governance Financial statements
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