Preliminary results y for year ended 31 March 2010 19 M 19 May 2010 2010
Preliminary results y for year ended 31 March 2010 D Don Robert, Chief Executive Officer R b t Chi f E ti Offi
Agenda � Strategic and operational review � Strategic and operational review � Financial review � Spotlight on North America � Summary and Q&A S d Q&A 2
Strategic and operational review FY2010: Highlights � We have grown the business, made the organisation FY10 FY10 stronger and more efficient d ffi i � Strength in Latin America and Interactive Revenue � Offsets weak US and UK credit and marketing growth Margin Margin � Margins up 80 basis points to 24.4% M i 80 b i i t t 24 4% expansion � Geographic expansion Strategic Strategic � New verticals progress progress � New product investment � Net debt comfortably within target gearing ratio � Net debt comfortably within target gearing ratio Balance Balance � Increased dividend and US$300m buyback sheet 3
Strategic and operational review Strategic progress in FY2010 New products Geographies Verticals Portfolio � India licence � Public sector – � ProtectMyID on � Successfully track awarded extended in UK. exiting FARES Successful US Successful US joint venture joint venture start-up � Product � Restructured JV � Infill acquisitions introductions in in Russia � US healthcare – Brazil and Asia in Germany and Pacific Japan further hospital � Emerging g g penetration t ti markets now c. 20% of group � Over 60% of revenue group revenue now outside now outside financial services 4
Strategic and operational review Financial highlights Revenue US$m EBIT US$m and margin � Total revenue 2,930 3,407 3,712 3,790 3,859 685 808 902 944 996 growth of 2%; Total organic growth +14% +14% +8% +2% +15% +13% +8% +6% growth of 2% of 2% Organic +8% +8% +4% +4% +3% +3% +2% +2% growth th 24.4% 23.6% 22.8% � Continuing EBIT 21.9% up 6%; margin up 21.0% to 24.4% to 24.4% � Benchmark EPS growth of 8% � Dividend of 23.00 FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 US cents, up 15% EBIT Margin Global continuing sales and EBIT only Global continuing sales and EBIT only Growth at constant exchange rates and for continuing activities EBIT margin excluding FARES FY06 and FY07 sales and EBIT adjusted to exclude MetaReward. FY06, FY07, FY08, FY09 and FY10 sales and EBIT adjusted to exclude UK account processing, FY07 and FY08 sales and EBIT adjusted to exclude Loyalty Solutions, FY08 and FY09 sales and EBIT adjusted to exclude French transaction processing activities and other smaller discontinuing activities, FY10 sales and EBIT exclude small discontinuing activities 5
Strategic and operational review Capital strategy framework Strategy Outcome � Maintain strong � Net debt significantly investment grade credit reduced due to strength rating g of cash flow � Investment sustained � Meet investment needs throughout downturn of the business and in future plans � Return surpluses to � Capital return via shareholders enhanced dividend and buyback 6
Strategic and operational review Key trends in major markets UK & Ireland North America North America � Beginnings of recovery � Beginnings of recovery � Economic conditions improving � Weak credit demand � Increased consumer spending � Risk management focus � 6-9 months behind US � Weak housing market 6 9 months behind US Weak housing market � Gradual recovery EMEA � Mixed market conditions Mi ed market conditions � Emerging markets offsetting more developed countries Latin America L ti A i Asia Pacific � Returning to full economic growth � Economies strengthening � Banks expanding credit Banks expanding credit � Growth in lending demand Growth in lending demand portfolios � Banks seeking to expand regionally 7
Strategic and operational review Regulatory update: US financial industry reform � Credit Card Act: new client requirements including new risk management obligations � Requiring more transparency and better R i i t d b tt analytics � Consumer Direct: switched advertising to C Di t it h d d ti i t FreeCreditScore.com; added FTC required disclosures to FreeCreditReport.com � Legislative environment remains fluid, we will adapt as needed 8
Strategic and operational review Taking control of growth Focus on data and analytics New New Superior Superior Expand Expand data and sales and global Drive analytics operations reach profitable profitable growth Delivery of higher growth Delivery of higher growth Optimise in FY11 and beyond… capital efficiency efficiency 9
Strategic and operational review Expand global reach: stages of development Near term Medium term Long term 1-2 years 1-2 years 2-3 years 2-3 years >3 years >3 years � Bureau builds in � Launch existing � US public sector products India, Russia � US healthcare � US healthcare into new and other vertical emerging geographies � Global telecoms markets � Fraud and identity � Fraud and identity � Develop SME � Develop SME management, channel including ProtectMyID Expect incremental revenue of over US$300m collectively over 3-5 years 10
Strategic and operational review Deliver innovative data and analytics New sources Enhanced analytics of data f d t and platforms d l tf � Niche data � New fraud prevention tools � Small business loan loan � New partnerships for � Mortgage loan digital advertising � Property valuation � Voter ID � Sophisticated risk p tools, e.g. Future Delphi Investment for growth 11
Strategic and operational review Superior sales and execution � 2,000 salespeople � Invest in high � Invest in high performance culture � Drive sales excellence � Expand specialist vertical market sales teams sales teams 12
Strategic and operational review Ingredients for medium term growth � Leverage strong � Leverage strong G Growth market position as accretion markets recover � c. 1% incremental � c 1% incremental � Vertical markets revenue growth in Market FY11 from strategic � Geographic recovery initiatives markets � Aim to maintain or � Underpenetrated channels � Gradual improve margins, recovery in while investing for +2% 2% � Invest in data Invest in data core markets core markets growth th and analytics � Superior � Supplement with execution targeted, infill FY10 organic revenue growth acquisitions 13
Strategic and operational review Summary � Conditions slowly improving; clients moving to C diti l l i i li t i t modest growth � Creating new sources of growth through a series Creating ne so rces of gro th thro gh a series of initiatives � Capital stewardship: enhancing distribution � Capital stewardship: enhancing distribution � Well positioned to deliver another year of growth 14
Need new picture i t Paul Brooks, Chief Financial Officer i l Offi d Financial review N Chi f Fi k l B P
Financial review Highlights � Total revenue growth of 2% organic revenue Total revenue growth of 2%, organic revenue growth of 2% � EBIT margin expansion of 80 basis points to 24.4% � Continuing EBIT growth of 6% � Excellent cash flow conversion of 98%; free cash flow of US$818m up 11% � Benchmark PBT growth of 8%; Benchmark EPS growth of 8% � Dividend up 15% to 23.0 US cents Di id d 15% t 23 0 US t 16 Revenue and EBIT growth at constant exchange rates, all other growths at actual exchange rates
Financial review Revenue and EBIT by geography Year ended 31 March � Solid organic � Solid organic US$million revenue growth Total Organic growth growth 2010 2009 Revenue � Direct EBIT growth of 5% g North America 2,060 , 2,059 , 0% 0% � Strong margin Latin America 559 462 16% 16% performance in UK and Ireland 779 843 (1)% (1)% Latin America and UK & Ireland and UK & Ireland EMEA/Asia Pacific EMEA/Asia Pacific 461 461 426 426 6% 6% 1% 1% Total revenue 3,859 3,790 2% 2% � Margins broadly flat elsewhere 1,002 953 6% EBIT before Central Activities (62) (57) Central Activities EBIT – direct business 940 896 5% FARES 56 48 16% EBIT – continuing activities 996 944 6% EBIT margin 24.4% 23.6% All figures above on continuing basis All fi b i i b i Growth at constant exchange rates 17 EBIT margin is for continuing business only, excluding FARES 2009 restated to exclude small discontinuing activities in North America and UK & Ireland
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