H1 results FY20 12 November 2019
Contents ............................... 3 1. Opening remarks - Brian Cassin, Chief Executive Officer, Experian 1.1 Introduction..................................................................................................................... 3 1.2 Financial results highlights ............................................................................................. 3 1.3 Strategic focus areas ..................................................................................................... 4 1.4 Technology investment benefits..................................................................................... 4 1.5 North America ................................................................................................................ 5 1.6 Latin America ................................................................................................................. 6 1.7 UK and Ireland ............................................................................................................... 7 1.8 EMEA/Asia-Pacific ......................................................................................................... 8 2. Financial review - Lloyd Pitchford, Chief Financial Officer, Experian .............................. 8 2.1 Introduction..................................................................................................................... 8 ........................................................................................................................ 9 2.2 Highlights ................................................................................................................ 9 2.3 Organic trends 2.4 North America ................................................................................................................ 9 2.5 Latin America ............................................................................................................... 10 2.6 UK and Ireland ............................................................................................................. 10 2.7 EMEA/Asia-Pacific ....................................................................................................... 11 2.8 Benchmarks EBIT margin ............................................................................................ 11 ........................................................................................................... 11 2.9 Benchmark EPS 2.10 Statutory results ......................................................................................................... 11 2.11 Operating cash flow ................................................................................................... 12 ................................................................................................ 12 2.12 Net debt reconciliation ................................................................... 12 2.13 Investment in technology and innovation ..................................................................................... 12 2.14 Acquisitions and investments ............................................................................................ 13 2.15 Modelling considerations 2.16 Summary and outlook ................................................................................................ 13 3. Concluding remarks – Brian Cassin ............................................................................... 13 4. Questions and Answers ................................................................................................. 14 5. Close - Brian Cassin ...................................................................................................... 20 Experian H1 results announcement FY20 transcript – 13 November 2019 | Version 1.0 | Page 2
1. Opening remarks - Brian Cassin, Chief Executive Officer, Experian 1.1 Introduction Good morning, everybody, and welcome to our first-half results presentation. This was another good set of results. We had strong organic revenue growth and a lot of progress in a number of areas. We have made exceptionally strong progress in North America with growth across all fronts; Latin America is firmly back into double-digit levels of growth, with Brazil in particular exceeding our expectations. We see great momentum continuing in new product introductions and the standout this half has really been Consumer Services, especially in North America. Experian Boost has had a tremendous start and we are seeing really strong growth in identity and lead-generation, and we believe there is plenty more to come. Overall, it has been a great start to the year, particularly in Consumer Credit. We are seeing volumes in our Consumer Credit businesses are strong across all regions and, at the same time, we are successfully scaling a range of new products across the globe. All this gives us great confidence as we go into H2. As you can see from this morning’s announcements, we have slightly raised our guidance to the upper end of the growth range we gave in May. 1.2 Financial results highlights As usual, Lloyd will go through a lot of the detail shortly, but I will pick out a few highlights. We delivered 7% organic revenue growth in H1, which represented 7% in Q2, which was an acceleration from Q1, which was 6%. Total growth in the half was 8%, which reflects the impact of acquisitions. The momentum in our B2B business continues to be very strong, up 6% globally. Data was the real driver of that, which performed well across all territories. Decisioning was the slight weak spot in the half, mainly due to strong comps and some uncertainty in the UK. The Consumer Services business overall grew by 11%, with North America accelerating to 13%. There were a number of things driving this: as I said earlier, Experian Boost has been an outstanding success so far. Our lead-generation revenues across our Consumer businesses are four times higher than this time last year, and we are proactively investing to support this. You will see that in Lloyd’s presentation; we invested significantly behind the launch of Ex perian Boost earlier this year. Of course, it is not just the US where we have been investing; we have been investing globally. To give you an idea of the rate of progress, we now reach over 70 million consumers with free propositions, which is up by about 24 million consumers from this time last year, so is very significant. We are very pleased with this performance. We have executed what I think is a very significant turnaround in Consumer Services over the past years and we see more growth to come. It has also been a busy period for acquisitions, all of which have significantly enhanced our core capabilities. We have done $181 million of buybacks as of the date of this presentation. In addition, the first interim dividend has been raised by 4% to 14.5 US cents per share. Experian H1 results announcement FY20 transcript – 13 November 2019 | Version 1.0 | Page 3
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