Experian Regulatory News (EXPN)

news release

Interim Management Statement, third quarter

16 January 2013 ─ Experian, the global information services company, today issues an Interim Management Statement that includes an update on trading for the three months to 31 December 2012.

Commenting on the performance of Experian, Don Robert, Chief Executive Officer, said:

"We are pleased with the progress made in the third quarter, with total and organic revenue growth of 7%, at constant exchange rates. We delivered widespread growth demonstrating the breadth of our portfolio and continued successful execution of our growth strategy, helping us to withstand ongoing pressures in the global economy.

"Looking ahead, for the full year we expect organic growth to be to high single-digit, with organic growth in the second half similar to our third quarter results. We also reiterate our full year expectations of modest margin improvement (at constant currency) and to convert at least 90% of EBIT into operating cash."

% change in revenue year-on-year for the three months to 31 December 2012

1 Continuing activities exclude the contributions of the comparison shopping and lead generation businesses in North America, and other small discontinuing businesses in EMEA/Asia Pacific

2 Experian reports in US dollars

In the three months to 31 December 2012, total revenue from continuing activities increased by 7% at constant exchange rates. At actual exchange rates, total revenue from continuing activities increased by 5%, with the difference mainly reflecting depreciation of the Brazilian Real relative to the US dollar. Group organic revenue growth was 7% year-on-year.

By principal activity, organic revenue growth was 7% at Credit Services, 7% at Decision Analytics, 4% at Marketing Services, and 8% at Consumer Services.

North America

Total revenue and organic revenue growth in North America were both 7%.

Performance at Credit Services was exceptionally strong, with double-digit organic growth of 11%. This reflected excellent progress across key investment areas, including automotive, business information and healthcare payments, as well as a modest improvement in lending, led by mortgage activity. Decision Analytics also performed strongly, up 12%, as recent contract wins for fraud and identity management ramp-up, and due to good demand for software. Growth in Marketing Services was 4%, with good demand for data, analytics and contact management software. We are also seeing healthy demand for new cross-channel targeted marketing offerings as marketers increasingly shift to digital campaigns. Organic revenue growth in Consumer Services was 4%. There was further progress in the affinity (white label) and data breach channels, which compensated for slight moderation in the direct-to-consumer channel as we proactively focused on enhancing membership order quality by reducing order intake through certain other channels.

Latin America

At constant exchange rates, total revenue and organic revenue growth in Latin America were both 11%.

Against a tough prior year comparative, we delivered organic revenue growth in Credit Services of 8%. As expected, authentication revenue declined as we annualised last year's spike caused by new government requirements. Excluding authentication, organic revenue growth for Credit Services was double-digit (both at the Latin America and Brazil level). Market conditions in Brazil have softened somewhat as the year has progressed and banks have continued to tighten lending criteria. While the weaker economic backdrop has led to some moderation in growth, we continue to benefit from vertical diversification and geographic expansion in the region. Elsewhere, we delivered strong growth across our bureaux in Colombia and Peru driven by take-up of credit monitoring products in both markets. Organic revenue growth in Decision Analytics was very strong, up 47%, driven by scoring and fraud prevention products, and Marketing Services performed well, up 29%, as we continue to build scale in the business.

UK and Ireland

At constant exchange rates, total revenue growth in UK and Ireland was 8%. Organic revenue growth was 6%. The difference relates to the acquisitions of Garlik (acquired December 2011) and 192business (completed February 2012).

Credit Services delivered organic revenue growth of 3%, with good take-up of new products and greater traction across recent data initiatives. In addition, there was some stabilisation in the financial services vertical. While Decision Analytics was flat, there was good growth in products linked to credit origination as well as in fraud prevention, offset by a decline in collections. At Marketing Services, organic revenue declined 1%, with strength in email marketing offsetting softer conditions elsewhere. Consumer Services performed strongly, with organic revenue growth of 26%, as we have continued to drive growth in membership and average lifetime value at CreditExpert.

EMEA/Asia Pacific

At constant exchange rates, total revenue growth for EMEA/Asia Pacific was 2%. Organic revenue growth was 1%. The difference relates to the acquisition of Altovision (acquired March 2012).

Weak market conditions in Europe had some impact on Credit Services, and organic revenue declined modestly, by 1%. In Decision Analytics, organic revenue also declined 1%. Actions taken to refocus our business in Europe are bearing fruit, and the business is on an improving trend, helped by strong growth in markets such as Turkey and Russia. This was somewhat offset by weaker conditions in parts of Asia Pacific. Marketing Services delivered organic revenue growth of 3% against a strong prior year comparative. Generally softer conditions in Asia Pacific were offset by growth in EMEA.

Financial position

On 23 November 2012, Experian completed the acquisition of a further 29.6% stake in Serasa for a consideration of US$1.5bn. This was funded from existing cash resources and drawings under bank facilities. We continue to expect to end the year with net debt/EBITDA towards the top of our target range for leverage of 1.75-2.0x. Also we have now completed the corporate reorganisations planned in Brazil and Colombia, following the acquisitions of the Serasa minority and Computec.

Other than as disclosed, there has been no change to Experian's general financial position, which remains strong, and no material change to Experian's trading position to the date of this statement.

Future events

Experian will hold a seminar for analysts and investors on 29 and 30 January in London and New York respectively. Experian will release its full year results on 9 May 2013.

Contact:

Experian

Nadia Ridout-Jamieson Director of Investor Relations +44 (0)20 3042 4215

James Russell Director of Corporate Communications

RLM Finsbury

Rollo Head +44 (0)20 7251 3801

Don Hunter

This announcement is available on the Experian website at http://www.experianplc.com. There will be a conference call today to discuss this update at 9.00am (UK time), which will be broadcast live on the website with a recording available later.

All financial information in this Interim Management Statement is based on unaudited management accounts. Certain statements made in this Interim Management Statement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements.

Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

About Experian 

Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2012 was US$4.5 billion. Experian employs approximately 17,000 people in 44 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.

For more information, visit http://www.experianplc.com.