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Annual Report 2015
Year ended 31 March 2015

Table of contents

  • Page 1
    Annual Report 2015 Year ended 31 March 2015

  • Page 2
    Experian Annual Report 2015 Giving a helping hand to... people We live in a world where we are all increasingly aware of the importance of our personal data. Every day we help people to protect, manage and make the most of their data, to improve their financial status and provide peace of mind ...

  • Page 3
    Experian Annual Report 2015 01 See page See page 29 CLAIRE BARRON 45 MOVEMBER FOUNDATION Helping Claire get control of her finances Connecting with supporters through the power of email

  • Page 4
    02 Experian Annual Report 2015 Giving a helping hand to... business In a faster, more complex world, where millions of interactions take place every minute of every day, we help businesses and organisations make sense of and find meaning from all the data that they accumulate, to create better ...

  • Page 5
    Experian Annual Report 2015 03 See page See page 27 MIKE ANDERSON AUTO GROUP 51 TURKCELL Oiling the wheels in US automotive Supporting our client's growth

  • Page 6
    04 Experian Annual Report 2015 Giving a helping hand to... society At the heart of what we do, we help millions of people around the world to get fair and affordable access to essential, everyday services.

  • Page 7
    Experian Annual Report 2015 05 See page See page 53 EXPERIAN RENTBUREAU 55 REAL DREAMS PROGRAMME Helping people build their credit history Helping people keep better track of their spending

  • Page 8
    ... global business lines 10 OUR MODEL We create long-term value for people, business and society through our business model See page See page 12 OUR STRATEGY Our strategy maximises our core strengths in data, analytics, software and our expertise 24 CHIEF EXECUTIVE'S REVIEW Brian Cassin's review...

  • Page 9
    ...Annual Report 2015 07 Contents STRATEGIC REPORT 08 10 12 14 16 22 24 30 32 34 36 38 46 52 Our business lines Our business model Our strategy Key performance indicators Protecting our business Chairman's statement Chief Executive's review North America Latin America UK and Ireland EMEA/Asia Pacific...

  • Page 10
    .... Financial characteristics - primarily transactional, pricing is volume-tiered, per report delivered. REVENUE BY REGION North America Latin America UK and Ireland EMEA/Asia Pacific 47% 33% 12% 8% Decision Analytics We use data science, analytics and technology to unlock the value hidden in data...

  • Page 11
    ....com and Teradata. Financial characteristics - transactional, volume-tiered charges, data licences and subscription fees. REVENUE BY REGION North America Latin America UK and Ireland 50% 3% 27% EMEA/Asia Pacific 20% Consumer Services We provide millions of people in the USA and the UK with online...

  • Page 12
    ..., secure platforms enable our clients to manage and tailor these complex activities, according to their precise needs and delivery requirements. Developing our analytics and software in-house enables us to build products that extract the best insight from our data and our clients' data. Operating...

  • Page 13
    ... us to attract, support and service local and global clients. It enables our people to share best practice and innovation across our regions and business lines. Scale Our scale allows us to invest more in new products, building them centrally to be deployed locally, reducing cost and allowing...

  • Page 14
    ... our addressable market by acting for new clients across our core activities. We are investing in a number of high-quality growth opportunities. In consumer information, our growth plans are centred on five key strategies, namely: (i) data leadership, where we are investing in differentiated data...

  • Page 15
    ... experience for consumers. We also plan to introduce new features, beyond credit reports and scores, to offer consumers still greater value. In Marketing Services, we are focusing on three areas in which Experian has leading market positions. These are data, data quality and cross-channel marketing...

  • Page 16
    ... rates. See note 6 to the Group financial statements for definition of Benchmark PBT. p92 ROCE measures the return generated on the capital we have invested in the business, whether through internal investment or acquisitions, and reflects our ability to deliver shareholder value over the long term...

  • Page 17
    ... directors' remuneration measure. ATTRACTING AND RETAINING HIGHLY TALENTED PEOPLE Aim: To sustain a positive working environment which inspires and motivates our people Employee engagement (%) 2014 12 11 74% 84% 75% 84% 72% 84% Experian Group employee engagement Benchmark¹ We use an all-employee...

  • Page 18
    ... Board's main functions are supported by identifying and managing risk, in line with our strategic objectives, risk appetite, corporate responsibility strategy and the long-term drivers of our business. Our risk governance programme is further described in the Corporate governance report. Long-term...

  • Page 19
    ...strategy, our mitigating actions and an overview of the risk trend during 2015. IMPACT PRINCIPAL RISK PROFILE • Ineffective business execution • Non-resilient or non-agile IT environment • Business conduct risk • Dependence on highly skilled personnel • Loss or inappropriate use of data...

  • Page 20
    ...scale • Price reductions may reduce our margins, market share and results of operations, and harm our ability to obtain new clients or retain existing ones • We might be unable to support changes in the way our businesses and clients use and purchase information, affecting our operating results...

  • Page 21
    ...of score-related lawsuits • We are committed to continued research and investment in new data sources, people, technology and products, to support our strategic plan • We carry out detailed competitive and market analyses • We continue to develop new products that leverage our scale and allow...

  • Page 22
    ... in a number of currencies. Changes in the US dollar relative to our other currencies could impact our financial results D, S, R Profit before tax and EBIT Business conduct risk • Inappropriate execution of our business strategies or activities could adversely affect our clients, consumers or...

  • Page 23
    ... in-house experts and professional advisers • We conduct extensive post-acquisition and organic investment reviews, to ensure performance remains consistent with the business plan The risk has remained stable p12 We hold leading positions in most of our markets and have a number of high-quality...

  • Page 24
    ... in the same way wherever we choose to deploy them, making it possible for us to sell almost anywhere in the world. At the same time, we are starting to see results from the moves we have made to address some of the challenges faced by our Consumer Services business in North America. I am delighted...

  • Page 25
    ... affordable access to essential, everyday services. We did this by investing in new products and services, which you can read about in this report. Our impact in this important area saw us receive 'Future Champion' status for corporate citizenship, at the UK National Business Awards held in London...

  • Page 26
    ... bureau component, now accounting for around 40% of Credit Services revenue in North America. Business information recovered well, following the actions we've taken to strengthen and refocus our activities. Automotive had another outstanding year as we increase market penetration with dealers...

  • Page 27
    Strategic report • Chief Executive's review 25 Highlights 3 Revenue % 5 % Total revenue growth from continuing activities Full year dividend up 5% to 39.25 US cents per share Revenue and EBIT by region, EBIT margin 2015 US$m 2014 US$m Total growth1 Organic growth1 % % North America Latin...

  • Page 28
    ..., business information, health, fraud and identity management, and software and analytics, all of which contributed positively to Experian's growth this year. Improve performance: we've made progress in addressing performance issues in North America Consumer Services, Brazil and Marketing Services...

  • Page 29
    ... Report • Chief Executive's review 27 Giving a helping hand. Oiling the wheels in US automotive CREDIT SERVICES - AUTOMOTIVE Mike Anderson Auto Group "We received a phone call from Experian, saying they could tell us when a person was in the market for a car and that they would be able to buy...

  • Page 30
    ...and as a result we announced changes in January 2015 to our target debt ratios and dividend policy. We also initiated a share repurchase programme, which is targeted to complete by 31 March 2016. Return on capital employed Return on capital employed ('ROCE') for the year was 14.9% (2014: 15.6%). As...

  • Page 31
    Strategic report • Chief Executive's review 29 Giving a helping hand. Helping Claire get control of her finances CONSUMER SERVICES Claire Barron "My finances were a mess. I had loans, student loans and rent to pay and I was defaulting on defaults, which is a really bad place to be. From the ...

  • Page 32
    ... cycle management services, and we delivered strong growth in average order value as we expanded existing customer relationships. 761 30.8% 757 31.5% 1 Revenue by business line Credit Services 46% Decision Analytics 8% Marketing Services 17% Consumer Services 29% Total revenue growth 2015 14...

  • Page 33
    ... new crosschannel marketing platform, for which we are seeing good demand. Our data quality business also performed well. These gains were offset by attrition in traditional email activities, as well as further reductions in the more traditional area of list processing. Consumer Services This was...

  • Page 34
    ...Rossi Managing Director, Latin America Total revenue from continuing activities in Latin America was US$857m, with both total and organic revenue growth of 3% at constant exchange rates. Revenue, EBIT and EBIT margin Year ended 31 March Revenue Credit Services Decision Analytics Marketing Services...

  • Page 35
    ... for PowerCurve credit risk management software. Marketing Services Total and organic revenue at constant exchange rates declined 4%. Weak demand for prospecting and mailing data contributed to the decline as clients reduced marketing activity. EBIT and EBIT margin For Latin America EBIT from...

  • Page 36
    ... growth across all our business lines, with good growth in consumer and business information, fraud and identity, cross-channel marketing and affinity." Chris Clark Managing Director, UK and Ireland, and EMEA In the UK and Ireland, revenue was US$999m, with total revenue growth of 5% and organic...

  • Page 37
    ... exchange rates, total and organic revenue growth in Marketing Services was 1%. We saw strong growth in cross-channel marketing, driven by sales to existing clients and new business wins, including a major win in the financial services segment. There was also further progress across data quality...

  • Page 38
    ...followed action to refocus our operations in Asia Pacific, and reflected strong demand for credit decisioning software in EMEA, with further growth in key markets such as Turkey. Revenue by business line Credit Services 37% Decision Analytics 27% Marketing Services 36% Total revenue growth 2015 14...

  • Page 39
    ... of the year ending 31 March 2016. Excluding this item, growth was strong. In EMEA, there was an acceleration in the new business win rates for our cross-channel marketing platform, as well as an increase in average order value, and there was good progress in Asia Pacific. EBIT and EBIT margin In...

  • Page 40
    ... capital allocation review, we announced a new target leverage range of 2.0 to 2.5 times Net debt to EBITDA and launched a US$600m share buyback programme. More detail on these is contained within this Financial review. Key financials Year ended 31 March 2015 2014 Revenue - continuing operations...

  • Page 41
    ... exchange rates % Year ended 31 March 2015 US$m 2014 US$m Revenue Credit Services Decision Analytics Marketing Services Consumer Services Total - continuing activities Discontinuing activities1 Total EBIT Credit Services Decision Analytics Marketing Services Consumer Services Total business...

  • Page 42
    ... background to these results is discussed earlier in the Strategic report. A fuller analysis of the income statement is provided at the end of this Financial review. Tax The Benchmark tax rate was 24.4% (2014: 26.7%). The decrease reflects a change in financing related to the funding and earnings...

  • Page 43
    ...in working capital Profit retained in associates Charge for share incentive plans Operating cash flow Net interest paid Tax paid - continuing operations Dividends paid to non-controlling interests Free cash flow Cash outflow for exceptional restructuring costs Acquisitions Disposal of businesses and...

  • Page 44
    ... inorganic investment returns to be significantly in excess of the Group's weighted average cost of capital. Medium-term financial framework The Group's aspiration is to deliver average annual growth in organic revenue in the mid single-digit range. Our focus is on growing our core businesses with...

  • Page 45
    Strategic report • Financial review 43 Acquisition expenditure in the year under review has been modest as we focused cash flow on reducing leverage. Key capital data Year ended 31 March 2015 2014 2013 Shareholder returns We will continue our progressive dividend policy, and expect to grow ...

  • Page 46
    44 Strategic report • Financial review Financial review continued Supplementary revenue and profit performance information Income statement, earnings and tax rate analysis - continuing operations 2015 Nonbenchmark1 US$m 2014 Nonbenchmark1 US$m Year ended 31 March Benchmark US$m Total US$m ...

  • Page 47
    ...to the Movember Foundation's marketing strategy. But with a mailing list of five million people and rising, it needed support. Our expertise in data collection and analysis gives them a real advantage in understanding the right way to communicate with the right people. As the world gets more complex...

  • Page 48
    ... in different roles and create a proactive career plan that fits their interests and aspirations. Selected global activities underpin our local efforts. For example, in September 2014 we launched 'Engaging Minds', a bespoke, highly interactive, two-hour workshop. It equips line managers to drive...

  • Page 49
    ... we do and the way we work Connect Bringing our people together, to make a difference for our clients and communities Protect How our people take care of sensitive personal and commercial information Create How everyone's ideas matter, in creating smart and insightful ways to help consumers and...

  • Page 50
    ...process, which is now well embedded across the organisation. It is supported by our People Standard and Leadership Standard, which clearly lay out the capabilities and behaviours we expect from our employees and leaders. We offer a range of global resources, which support line managers and employees...

  • Page 51
    .... CEO Forum This development forum exposes senior talent to the CEO and other senior executives. We select members from GLOBAL COST PROFILE Labour Data Marketing IT Central Activities Other 54% 13% 11% 8% 2% 12% EMPLOYEES BY REGION North America Latin America UK and Ireland EMEA/Asia Pacific...

  • Page 52
    ... global analytics career pathway. Succession planning is also integral to our talent strategy, ensuring we have the leadership resources to achieve our strategic objectives. The executive leadership and the Board's Nomination and Corporate Governance Committee regularly review our senior leadership...

  • Page 53
    Strategic report • Our people 51 Giving a helping hand. Supporting our client's growth DECISION ANALYTICS Turkcell "When a typical customer moves from a feature phone to a smartphone, their data usage increases by five to eight times. It is crucial for us to work with the right counterparties ...

  • Page 54
    ...in 2014 invests in new products that generate both social benefits and revenue for our business. In 2015, we worked with partners to develop, pilot, refine and scale up new products that have helped give around 2.6 million people access to essential services. This is a major step towards our goal of...

  • Page 55
    ... themselves or get back on their feet following financial hardship. We help them do this by sharing data with Experian RentBureau. Sharing data is a great way to help people living in affordable housing build their credit history in the same way a homeowner does by paying his or her mortgage...

  • Page 56
    .... Our Global Information Values set clear expectations about how we use data across the business, and our compliance principles ensure effective governance, training and risk management. Global Internal Audit monitors our data protection activities. Community investment* 2015 US$'000s 2014 US$'000s...

  • Page 57
    Strategic report • Corporate responsibility 55 Helping people keep better track of their spending "Before I came across the Real Dreams programme, I had no idea about my spending. I used to spend too much without realising. It was very good for me to take this finance course. It's helping me ...

  • Page 58
    ... Nations' Universal Declaration of Human Rights. Our Global Code of Conduct sets clear expectations for employees to uphold these principles in the way we run our business. The Code is supported by specific policies that cover human rights risks related to human resources, health and safety, anti...

  • Page 59
    Strategic report • Corporate responsibility 57 Key data points Social reach Community investment CO2 emissions 13.6m Eight of our core products positively affected 13.6m people US$7.5m 17 We invested US$7.5m to help our communities % We reduced our total carbon footprint by 17% from last ...

  • Page 60
    ...for our new Chief Financial Officer, Lloyd Pitchford, Chief Operating Officer, Kerry Williams, and independent non-executive director, Jan Babiak. Kerry already has immense experience and knowledge of Experian's business, meaning that much of his induction was focused on the listed-company aspect of...

  • Page 61
    ... in the health vertical, and building the Decision Analytics business across software, analytics and fraud and identity. The Board also reviewed progress with strategic clients and wider developments in data with management. With a significant portion of our global revenues generated in the USA and...

  • Page 62
    ... financial performance Kerry Williams Chief Operating Officer (53) Appointed to the Board: 16 July 2014 Other current roles: Board member - Institute for Intergovernmental Research Previous roles: Group President - Experian Global Credit Services and Latin America. Group President - Credit Services...

  • Page 63
    ... Officer, Group Chief Information Officer - HSBC Holdings plc. Non-executive director - MacDonald Dettwiler, Vodafone Group plc Key skills and experience: Information technology, global resourcing and operational background that is invaluable at a large global business like Experian, where issues...

  • Page 64
    ... technology and project risks, are monitored by the Global Operations Risk Management Committee. Executive management team Nomination and Corporate Governance Committee See Nomination and Corporate Governance Committee report. Operating businesses p72 Internal Audit Internal Audit conducts...

  • Page 65
    ... long-term objectives and commercial strategy, ensuring that the necessary financial and human resources are in place to meet the objectives. Management oversight - reviewing operating, financial and risk performance. Regulatory and statutory activity - including approving the Group's results, key...

  • Page 66
    ... and risk management processes. Investor relations • Received an investor relations and media update at each Board meeting. • Reviewed and discussed draft full- and half-year financial results presentations, for analysts and institutional shareholders. • Through the Remuneration Committee...

  • Page 67
    ...(2015) Internal review against detailed Year 1 review Year 3 (2016) Interview/questionnaire-based, internal evaluation Regulatory environment - The Audit Committee receives a regular compliance update, including the impact on the business of UK Financial Conduct Authority and US Consumer Financial...

  • Page 68
    ... and capital strategy; corporate development; legal, regulatory and government affairs; risk; information security; corporate responsibility; global sales operations; talent and people; audit; market and investor relations matters; and governance/ Board issues. The relevant corporate executives...

  • Page 69
    ... Board also received and reviewed updates and training on: the Group's cross-channel marketing platform; the evolution of the Experian brand and information on the Group's corporate reputation; the Consumer Services business; share dealing; and compliance. Following her appointment in January 2015...

  • Page 70
    ... London, at which senior executives provided updates on the Group's strategic direction and detailed information on the Group's five strategic priorities. The seminar was chaired by Brian Cassin, the Chief Executive Officer, and included presentations on Credit Services, Marketing Services, Consumer...

  • Page 71
    ... matters. This process was in place for the financial year and up to the date of approval of this Annual Report. Risk management is an essential element of running a global, innovation-driven business like Experian. It helps to achieve long-term shareholder value and to protect the Group's business...

  • Page 72
    ... accepted risks Board- and Group-level finance reports, including financial summaries, results, forecasts and revenue trends, investor relations analysis and detailed business trading summaries Regional-level detailed performance reviews Regional and executive risk management committee and...

  • Page 73
    ...and Related Financial and Business Reporting. Changes and additions to the UK Corporate Governance Code will guide Experian in formulating a programme of work to maintain compliance with the Code, and this programme of work will form the basis for a proportion of our risk management activity in 2015...

  • Page 74
    ... details appear on the next page. We met six times during the year ended 31 March 2015. Of the nine Committee members, eight (including me as Committee Chairman) are considered to be independent non-executive directors, in accordance with the UK Corporate Governance Code. The Group Human Resources...

  • Page 75
    ...Company Secretary, including voting results and shareholder feedback. • Recommended to the Board that all directors (except Alan Jebson - see below) retire at the 2015 AGM, recognising the recommendation in the UK Corporate Governance Code for a rigorous review of non-executive directors for terms...

  • Page 76
    ...year, with the meetings timed to coincide with key dates in the Group's financial reporting and audit cycle. The list of Committee members appears above, and the Board considers all of them to be independent non-executive directors, in line with the UK Corporate Governance Code. As well as Committee...

  • Page 77
    ... the Committee's terms of reference and recommending some changes to the Board for approval. • Reviewing the Annual Report 2014 to ensure it was fair, balanced and understandable and provided information necessary to assess performance, business model and strategy. See further details later in...

  • Page 78
    ... summarises the significant issues considered by the Committee in relation to the Group and Company financial statements and the manner in which they were addressed. These matters, along with any other key issues covered by the Committee, are reported to the Board. The Board also receives copies...

  • Page 79
    ..., in line with the UK Corporate Governance Code, whether, in its opinion, the Annual Report is fair, balanced and understandable ('FBU') and whether it provides the information necessary for shareholders to assess the Group's performance, business model and strategy. A process to support the Audit...

  • Page 80
    ...Annual report on remuneration at the Company's AGM on 22 July 2015. This year has seen significant changes in our executive leadership team. At the 2014 AGM, Don Robert was appointed Chairman, Brian Cassin was appointed Chief Executive Officer ('CEO') and Kerry Williams was appointed Chief Operating...

  • Page 81
    ... to the Board on the design of the Group's short- and long-term incentive plans. • Overseeing the Group's executive pension arrangements. Committee activities During the year, the Committee: • Reviewed and approved the 2014 Report on directors' remuneration. • Initiated and reviewed feedback...

  • Page 82
    ... from the Board. The single figure of remuneration relating to the time each served as an executive director is set out in the following table. Don Robert 2015 US$000 2014 US$000 Chris Callero 2015 US$000 2014 US$000 Salary (1) Benefits (2) Annual bonus (3) Share-based incentives (4) Pension Total...

  • Page 83
    ... that period and continued service. Don Robert ceased to be an executive director in July 2014 and was not eligible to participate in the annual bonus plan in 2015. Chris Callero stepped down from the Board but continued to be employed by Experian until 31 March 2015. The 2015 figure in the table...

  • Page 84
    ... shown for Kerry Williams for 2015 relates to the CIP award and the PSP award granted to him in May 2012. Details of the value of these awards are given below. The value of the share awards realised by Don Robert and Chris Callero in 2014 was originally calculated using the average share price from...

  • Page 85
    ... follows: 2014: US$1,187,000 2013: US$807,000 2012: US$869,000 2011: US$952,000 2010: US$726,000 Three former directors of Experian Finance plc (formerly GUS plc) receive unfunded pensions from the Company. Two of the former directors are now paid under the Secured Unfunded Retirement Benefit Scheme...

  • Page 86
    ... average share price of the last three months of the financ ial year, which was £11.54. The number of shares vesting, as a result of the outcome of the relevant performance conditions, as detailed in the previous section, and their associated value is as follows. CIP Shares awarded Don Robert 423...

  • Page 87
    ... Experian North America Co-investment Plan, invested shares for Kerry Williams were calculated with reference to his gross bonus. The matching awards are based on the gross value of the bonus deferred. The details of awards granted on 19 May 2014 are set out in the following table. Vesting at Number...

  • Page 88
    ...result, the Company was committed to granting the matching share award in line with the CIP's ordinary operation. The details of the award are summarised in the following table. Don Robert was not granted an award under the PSP following his decision to retire as CEO. Face value 000 Number of shares...

  • Page 89
    Governance • Report on directors' remuneration 87 Payments to former directors Chris Callero stepped down from the Board on 16 July 2014 but remained an employee of the Group throughout the rest of the financial year. During the period from 16 July 2014 to 31 March 2015 he was paid a salary of ...

  • Page 90
    88 Governance • Report on directors' remuneration Annual report on remuneration continued Statement of directors' shareholdings and share interests The Committee believes it is important that executives build up a significant holding in Experian shares, to align their interests with those of ...

  • Page 91
    ... number of Experian shares held by Don Robert and Kerry Williams at 31 March 2015 includes 427,604 and 157,563 shares respectively awarded to them under the Experian North America Co-investment Plan in lieu of annual bonus, in addition to their personal beneficial shareholding. Don Robert and Kerry...

  • Page 92
    ... in the CEO's salary, benefits and annual bonus between 2014 and 2015 and how this compares to the average percentage change for our UK and Ireland employees. The Committee has selected employees in the UK and Ireland to illustrate the comparison because Experian is listed in the UK and resident...

  • Page 93
    Governance • Report on directors' remuneration 91 The figures for UK and Ireland employees reflect average salaries and average employee numbers each year. The annual bonus figure includes payments from sales incentive plans. Base salary Taxable benefits Annual bonus CEO(1) UK and Ireland ...

  • Page 94
    ...reinforce the discipline of balancing growth investments against the value of returning capital to shareholders and therefore enhance the alignment of management and shareholders' interests. The use of the financial metrics provides a direct link to the strategic aims of the business. The use of TSR...

  • Page 95
    ...comprise advice on pensions, benefits, employee engagement and market data. In addition, Kepler Associates ('Kepler') provided incentive plan award valuations and remuneration data, as well as supporting data for the target calibration process. Kepler does not provide any other services to the Group...

  • Page 96
    ... in line with the revised 2014 UK Corporate Governance Code. As it is not subject to shareholder approval at the 2015 AGM, it is included here for reference only. The original version of the policy, as approved by shareholders, is available in the 2014 Annual Report on the Experian plc website...

  • Page 97
    ... to employee remuneration throughout the Group. The annual salary increases for executive directors are normally in line with those for the Group as a whole. Higher increases may be made as a result of a change in role or responsibility, and will take account of market practice in relation to...

  • Page 98
    ... payment or pension contribution for executive directors is normally equal to 20% of annual gross salary but may be increased if market practice changes. In the USA, the contribution rate is equivalent to 4% of earnings, up to an annual compensation limit set by the Internal Revenue Service. None...

  • Page 99
    Governance • Report on directors' remuneration 97 Element and link to strategy Operation Maximum potential value and payment at target Performance metrics, weightings, relevant time period and clawback PSP Use of stretching financial metrics incentivises performance. Aligns with shareholder ...

  • Page 100
    ... business strategy and, in turn, high levels of corporate performance and shareholder returns. This underpins the link between creating value for shareholders and the pay of our most senior leaders. The performance measures used in the annual bonus and the long-term incentive plans are all financial...

  • Page 101
    ... follows: Fixed pay is base salary for the year ending 31 March 2016 plus the annualised value of pension and benefits, as disclosed in the single total figure of remuneration for 2015. Target performance is the level of performance required to deliver 50% of the maximum annual bonus, and 25% and 50...

  • Page 102
    100 Governance • Report on directors' remuneration Directors' remuneration policy continued Approach to recruitment remuneration Experian is a global organisation, competing for market share and executive talent in nearly 40 countries. We are a leader in the information services industry, where ...

  • Page 103
    Governance • Report on directors' remuneration 101 Voluntary resignation or termination for misconduct or poor performance Other circumstances such as death, ill health, retirement, disability or redundancy or any other reason as defined by the Committee Base salary, pension and benefits Paid...

  • Page 104
    ... Kerry Williams. The agreement provides for payment in lieu of notice in respect of base salary only. Other than as described above, the service contract of each of the executive directors does not provide for any benefits on the termination of employment. Non-executive directors do not have service...

  • Page 105
    ... January 2015, giving a total dividend for the year of 39.25 US cents per ordinary share (2014: 37.50 US cents). p65 Post balance sheet events Details of events occurring after the end of the reporting period are contained in p167 note 43 to the Group financial statements. Share capital Details of...

  • Page 106
    ... Annual Report and is available on the Company's website at www.experianplc.com. Details of the shares in the Company purchased by and held under The Experian plc Employee Share Trust and the Experian UK Approved All-Employee p172 Share Plan are set out in note M to the Company financial statements...

  • Page 107
    ... 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 Strategic report. Experian supports employee share...

  • Page 108
    ..., each of the directors considers that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy. By order of the Board Relevant audit...

  • Page 109
    ...report to the members of Experian plc Report on the financial statements Our opinion In our opinion: • Experian plc's Group and Company financial statements (the 'financial statements') give a true and fair view of the state of the Group's and Company's affairs as at 31 March 2015 and of the Group...

  • Page 110
    ... of these relate to Brazil and the UK. Regulatory matters and litigation Refer also to the Audit Committee report and notes 5 and 41 to the Group financial statements. The consumer data industry continues to have increasing regulation in key markets across the world. The Group operates in an...

  • Page 111
    ... units are all the significant businesses within the North America region, Serasa SA (in the Latin America region) and Experian Limited (in the UK and Ireland region). The three reporting units, together with the corporate function and consolidation at the Group level, where we also conducted...

  • Page 112
    ...Listing Rules of the UK FCA we are required to review the part of the Corporate governance statement relating to the Company's compliance with ten provisions of the UK Corporate Governance Code. We have nothing to report having performed our review. Other voluntary reporting Directors' remuneration...

  • Page 113
    ...to the Group's and the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. We primarily focus our work in these areas by assessing...

  • Page 114
    ... statements • Group income statement 113 Group income statement for the year ended 31 March 2015 Notes 2015 US$m 2014 US$m Revenue Labour costs Data and information technology costs Amortisation, depreciation and impairment charges Marketing and customer acquisition costs Other operating...

  • Page 115
    ... • Group statement of comprehensive income Group statement of comprehensive income for the year ended 31 March 2015 2015 US$m 2014 US$m Profit for the financial year Other comprehensive income Items that will not be reclassified to profit or loss: Remeasurement of post-employment benefit assets...

  • Page 116
    Financial statements • Group balance sheet 115 Group balance sheet at 31 March 2015 Notes 2015 US$m 2014 US$m Non-current assets Goodwill Other intangible assets Property, plant and equipment Investments in associates Deferred tax assets Post-employment benefit assets Trade and other ...

  • Page 117
    ... income for the financial year Transactions with owners: Employee share incentive plans: - value of employee services - shares issued on vesting - other exercises of share awards and options - related tax credit - purchase of shares by employee trusts - other payments Purchase of shares held as...

  • Page 118
    Financial statements • Group cash ï¬,ow statement 117 Group cash flow statement for the year ended 31 March 2015 Notes 2015 US$m 2014 US$m Cash flows from operating activities Cash generated from operations Interest paid Interest received Dividends received from associates Tax paid Net cash ...

  • Page 119
    ... Jersey JE4 8PX. The Company's ordinary shares are traded on the London Stock Exchange's Regulated Market (Premium Listing). There has been no change in this information since the annual report for the year ended 31 March 2014. 2. Basis of preparation The Group financial statements are prepared in...

  • Page 120
    ... consistent with Group policies. A list of the significant subsidiaries is given in note P to the Company financial statements. (b) Foreign currency translation Experian follows EU-IFRS, including IAS 21 'The effects of changes in foreign exchange rates'. (c) Fair value estimation Experian follows...

  • Page 121
    ... these financial statements. Amortisation is charged on a straight-line basis as follows Customer and other relationships - over three to 18 years, based on management's estimates of the average lives of such relationships, and reflecting their long-term nature. Acquired software development - over...

  • Page 122
    .... The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange rates, interest rates and certain obligations relating to share incentive plans, including social security obligations. Instruments used include interest rate swaps, cross currency swaps...

  • Page 123
    ... 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 plan's ageing active membership. The present value of the defined benefit...

  • Page 124
    ...settled, share-based employee incentive plans is recognised as an expense on a straight-line basis over the vesting period. Fair value is measured using whichever of the Black-Scholes model, Monte Carlo model or closing market price is most appropriate. The Group takes into account the best estimate...

  • Page 125
    ... of service lines. Experian's four business segments, details of which are given in the Strategic report section of this Annual Report, are Credit Services; Decision Analytics; Marketing Services; and Consumer Services. The North America and the UK and Ireland operating segments derive revenues...

  • Page 126
    ... that affect the reported amount of revenues, expenses, assets, liabilities and the disclosure of contingent liabilities. The resulting accounting estimates, which are based on management's best judgment at the date of the Group financial statements, will seldom equal the related actual results. The...

  • Page 127
    ... generally arise from market movements and accordingly bear no direct relation to the Group's underlying performance. • • (b) Benchmark PBT per share Benchmark PBT per share comprises Benchmark PBT divided by the weighted average number of issued ordinary shares. (c) Earnings before interest...

  • Page 128
    ... greater than three months. Net funding is total funding less cash held in Group Treasury. (q) Return on capital employed ('ROCE') ROCE is defined as EBIT less tax at the Benchmark rate divided by a three-point average of capital employed over the year. Capital employed is net assets less non...

  • Page 129
    ... risks and results. Financial risks represent part of the Group's risks in relation to its strategy and business objectives. There is a full discussion of the most significant risks in the Protecting our business section of this Annual Report. The Group's financial risk management focuses on...

  • Page 130
    ... of 2.0 to 2.5 times EBITDA, consistent with the intention to retain strong investment-grade credit ratings. To maintain or adjust its capital structure, the Group may adjust the amount of dividends paid to shareholders; return capital to shareholders; issue or purchase shares; or sell assets to...

  • Page 131
    ... financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 8. Segment information (a) IFRS 8 disclosures (i) Income statement North America Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m Total operating segments US$m Central Activities...

  • Page 132
    ...to the Group financial statements 131 (ii) Balance sheet Net assets/(liabilities) North America Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m Total operating segments US$m Central Activities and other US$m Total Group US$m At 31 March 2015 Goodwill Investments in associates Other...

  • Page 133
    ... continued (iii) Capital expenditure, amortisation and depreciation Capital expenditure 2015 US$m 2014 US$m Amortisation 2015 US$m 2014 US$m Depreciation 2015 US$m 2014 US$m North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities Total Group 151 91...

  • Page 134
    ... statements 133 (b) Information on business segments (including non-GAAP disclosures) Credit Services Decision Analytics US$m Marketing Services US$m Consumer Services US$m Central Total business Activities segments US$m US$m Total continuing operations US$m Year ended 31 March 2015 Revenue...

  • Page 135
    ... in note 42(b). (b) Average monthly number of employees (including executive directors) 2015 Full-time Part-time Full-time equivalent Full-time 2014 Part-time Full-time equivalent North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities 6,663 2,976...

  • Page 136
    ... to the Company's auditor 2015 US$m 2014 US$m Audit of the Company and Group financial statements Audit of the financial statements of the Company's subsidiaries Tax compliance services Tax advisory services Services relating to corporate finance transactions Audit-related assurance services Other...

  • Page 137
    ...the Group financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 13. Exceptional items - continuing operations 2015 US$m 2014 US$m Restructuring costs: Redundancy costs Asset write-offs Restructuring costs Loss/(gain) on disposal of businesses Total...

  • Page 138
    ... Group financial statements 137 15. Net finance costs (a) Net finance costs included in profit before tax 2015 US$m 2014 US$m Interest income: Bank deposits, short-term investments and loan notes Interest on opening retirement benefit assets Interest income Finance expense: Bank loans, commercial...

  • Page 139
    ... tax rates in non-UK businesses Group tax charge Effective rate of tax based on profit before tax 1,006 211 (4) - (34) 107 (1) - (24) 255 25.3% 1,049 241 (28) 8 (21) 87 (1) 23 (7) 302 28.8% (ii) Reconciliation of the Group tax charge to the Benchmark tax charge 2015 US$m 2014 US$m Group tax...

  • Page 140
    ... in which the Group's businesses operate and could be affected by changes in tax law. In the UK, the main rate of corporation tax was reduced to 21% from 1 April 2014 and to 20% from 1 April 2015. 17. Discontinued operations (a) Comparison shopping and lead generation businesses Experian completed...

  • Page 141
    ...made to derive Benchmark PBT, net of related tax Other exceptional tax items Profit for the financial year 931 21 (2) (178) - 772 903 7 (46) (87) (23) 754 (d) Weighted average number of ordinary shares used 2015 million 2014 million Weighted average number of ordinary shares Add: dilutive effect...

  • Page 142
    ...cents per ordinary share will be paid on 24 July 2015 to shareholders on the register at the close of business on 26 June 2015 and is not included as a liability in these financial statements. Further details are given in the Shareholder and corporate information section. This dividend and the first...

  • Page 143
    ... for value-in-use calculations by CGU 2015 WACC % Long-term growth rate % p.a. 2014 WACC % Long-term growth rate % p.a. North America Latin America UK and Ireland EMEA Asia Pacific 12.2 17.6 9.3 12.3 13.0 2.3 4.7 2.3 3.1 5.3 12.7 16.6 9.9 12.6 12.4 2.3 4.7 2.3 3.1 5.3 Management's key...

  • Page 144
    Financial statements • Notes to the Group financial statements 143 21. Other intangible assets Acquisition intangibles Customer and other relationships US$m Acquired software development US$m Marketingrelated assets US$m Databases Internal use software Internally generated software US$m Total ...

  • Page 145
    ... Financial statements • Notes to the Group financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 22. 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 2014...

  • Page 146
    ...Notes to the Group financial statements 145 23. Trade and other receivables (a) Analysis by type and maturity 2015 US$m 2014 US$m Trade receivables Credit note provision Trade receivables - after credit note provision Impairment provision Trade receivables - net Amounts owed by associates VAT and...

  • Page 147
    146 Financial statements • Notes to the Group financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 23. Trade and other receivables continued (d) Analysis of trade receivables - after credit note provision 2015 US$m 2014 US$m Neither past due ...

  • Page 148
    ...Group financial statements 147 24. Cash and cash equivalents (a) Analysis by nature 2015 US$m 2014 US$m Cash at bank and in hand Short-term investments 66 81 147 91 121 212 The effective interest rate at 31 March 2015 is 6.0% (2014: 6.2%). There is no material difference between the fair value...

  • Page 149
    ... financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 26. Borrowings (a) Analysis by carrying amounts and fair value Carrying amounts 2015 US$m 2014 US$m Fair value 2015 US$m 2014 US$m Current: Bank loans Commercial paper Bank overdrafts Finance...

  • Page 150
    ... interest rates and are in place for general corporate purposes, including the financing of acquisitions and the refinancing of other borrowings. (e) Covenants and gearing ratio There is one financial covenant in connection with the borrowing facilities. EBIT must exceed three times net interest...

  • Page 151
    ... Notes to the Group financial statements Notes to the Group financial statements for the year ended 31 March 2015 continued 27. Net debt (non-GAAP measure) continued (c) Analysis of movements in Net debt Cash and cash equivalents US$m Current Non-current borrowings borrowings Total reported in the...

  • Page 152
    Financial statements • Notes to the Group financial statements 151 28. Financial assets and liabilities (a) Available-for-sale financial assets Assets of US$40m (2014: US$46m) are mainly listed investments of US$35m (2014: US$43m) held in the UK to secure certain unfunded pension arrangements (...

  • Page 153
    ... are derived from inputs not based on observable market data are classified as Level 3. Level 3 items reported principally comprise put and call options associated with corporate transactions. There is no material effect on the amounts stated from any reasonably possible change in Level 3 inputs...

  • Page 154
    ... of bonds carried at amortised cost is based on quoted market prices, employing a valuation methodology falling within Level 1 of the IFRS 13 fair value hierarchy; the fair values of long-term floating rate bank loans and finance lease obligations are considered to approximate to the carrying amount...

  • Page 155
    ... (all equity settled) Cost of associated social security obligations Total expense recognised in Group income statement 42 5 47 4 51 66 4 70 6 76 The Group has a number of equity-settled, share-based employee incentive plans. Further information on share award arrangements is given in note...

  • Page 156
    ... Watson Limited, using the projected unit credit method. There was a small deficit at the date of that valuation. (b) Unfunded pension arrangements The Group has had unfunded pension arrangements in place for a number of years, designed to ensure that certain directors and senior managers in the UK...

  • Page 157
    ...) Income statement charge/(credit) 2015 US$m 2014 US$m By nature of expense: Current service cost Administration expenses Charge within labour costs and operating profit Interest income Total charge to income statement By type of plan: Defined pension benefits Post-employment medical benefits Total...

  • Page 158
    ... Group financial statements 157 (b) Movements in net post-employment benefit assets/(obligations) recognised in the balance sheet Fair value of plan assets Present value of obligations Defined pension benefits - funded US$m Defined pension benefits - unfunded US$m Postemployment medical benefits...

  • Page 159
    ... financial assumption is the real discount rate, being the excess of the discount rate over the rate of inflation. The discount rate is based on the market yields on high-quality corporate bonds of appropriate currency and term to the defined benefit obligations. In the case of the Experian Pension...

  • Page 160
    ... benefit plans at fair value 2015 US$m % 2014 US$m % Equities Fixed interest securities Investment funds Other 497 482 107 8 1,094 45 44 10 1 100 514 475 108 7 1,104 46 43 10 1 100 The Group's defined benefit plans have no material holdings of unlisted assets and no holdings of ordinary shares...

  • Page 161
    ... Share incentive plans US$m Accelerated depreciation US$m Other Total Assets At 1 April 2014 Differences on exchange Tax recognised in the Group income statement - continuing operations Business combinations (note 39(b)(ii)) Tax recognised within other comprehensive income Tax recognised directly...

  • Page 162
    ...Net current tax assets/(liabilities) 2015 US$m 2014 US$m At 1 April Differences on exchange Tax charge in the Group income statement - continuing operations (note 16(a)) Tax credit in the Group income statement - discontinued operations (note 17(a)) Tax recognised directly in equity on transactions...

  • Page 163
    ... 36. Called up share capital and share premium account At 31 March 2015, there were 1,032.8m shares in issue (2014: 1,031.6m) and 1.2m (2014: 1.5m) shares were issued in the year then ended. Further information is contained in note L to the Company financial statements. The difference between...

  • Page 164
    ... Notes to the Group cash flow statement (a) Cash generated from operations 2015 US$m 2014 US$m Profit before tax Share of post-tax profit of associates Net finance costs Operating profit Loss on disposals of fixed assets Loss/(gain) on disposal of businesses Depreciation and amortisation Impairment...

  • Page 165
    ... the Group cash flow statement Acquisition expenses paid Payments to acquire non-controlling interests Cash outflow for acquisitions (non-GAAP measure) 61 (3) - 58 1 8 67 1,235 (13) 1 1,223 8 19 1,250 (f) Cash outflow in respect of net share purchases (non-GAAP measure) 2015 US$m 2014 US$m Issue...

  • Page 166
    ... Notes to the Group financial statements 165 (h) Reconciliation of Cash generated from operations to Operating cash flow (non-GAAP measure) 2015 US$m 2014 US$m Cash generated from operations (note 38(a)) Acquisition expenses paid Purchase of other intangible assets Purchase of property, plant and...

  • Page 167
    ... 61 249 The Group leases offices, vehicles and technology under non-cancellable operating lease agreements with varying terms, escalation clauses and renewal rights. The charge for the year was US$68m (2014: US$72m). 69 163 68 300 (b) Capital commitments 2015 US$m 2014 US$m Capital expenditure for...

  • Page 168
    ...$m 2014 US$m Salaries and short-term employee benefits Retirement benefits Share incentive plans 6 - 10 16 7 1 12 20 Key management personnel comprises the Company's executive directors and further details of their remuneration packages are given in the parts of the Annual report on remuneration...

  • Page 169
    ...Financial statements • Company profit and loss account and balance sheet Company profit and loss account for the year ended 31 March 2015 Notes Continuing operations Other operating income Staff costs Depreciation Other operating charges Operating loss Gain on disposal of fixed asset investment...

  • Page 170
    .... The fair value of share incentives issued by the Company to employees of group undertakings is accounted for as a capital contribution and recognised as an increase in the Company's investment in group undertakings, with a corresponding increase in total shareholders' funds. (iii) Debtors...

  • Page 171
    ...to the Company's auditor and its associates for the audit of the Group financial statements. D. Staff costs 2015 US$m 2014 US$m Directors' fees Wages and salaries Social security costs Other pension costs 2.7 1.0 0.1 0.1 3.9 2.6 1.0 0.1 0.1 3.8 Executive directors of the Company are employed by...

  • Page 172
    ... financial statements. Further details of payment arrangements, including the IAS arrangements, are given in the Shareholder and corporate information section of the Annual Report. I. Investments - shares in group undertakings US$m Cost and net book amount At 1 April 2014 Additions - fair value...

  • Page 173
    ... the Company issued 1,211,630 ordinary shares for a consideration of US$13.9m. Issues of shares were made in connection with the Group's share incentive arrangements, details of which are given in note 31 to the Group financial statements. M. Reserves (i) Movements in reserves Share premium account...

  • Page 174
    ... UK defined benefit pension plan. The Company has also issued a small number of other guarantees in connection with the performance of business contracts by Group undertakings. P. Principal subsidiary undertakings at 31 March 2015 Company Experian Finance plc Experian Holdings Limited Experian...

  • Page 175
    ..., Dublin 2, Ireland at 9.30am on Wednesday, 22 July 2015, are given on the website and in the notice of meeting. Information on the Company's share price is available on the website. Electronic shareholder communication Shareholders may register for Share Portal, an electronic communication service...

  • Page 176
    ... 2015. Shareholders should contact the registrars for further details. Capital Gains Tax ('CGT') base cost for UK shareholders On 10 October 2006, GUS plc separated its Experian business from its Home Retail Group business by way of demerger. GUS plc shareholders were entitled to receive one share...

  • Page 177
    ...Lines are open from 9.00am to 5.30pm (UK time), Monday to Friday. Investor relations E [email protected] Registered office Experian plc 22 Grenville Street St Helier Jersey JE4 8PX Registered number 93905 Stock exchange listing information Exchange: London Stock Exchange, Premium Main Market...

  • Page 178
    ...can • Sign up for electronic communications • View your holdings and get an indicative value • View your dividend payment history • Get copies of your dividend tax vouchers • Choose to receive your dividend direct to your bank account • Update your address details • Buy and sell shares...

  • Page 179
    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 The Sir John Peace Building Experian Way NG2 Business Park Nottingham NG80 ...