Experian – a portfolio of opportunities
John Saunders Chief Executive, Global Operations
Goldman Sachs Retail Conference15 March 2005
Experian International
Experian outside North America has grown sales and profits by over 20% pa CAGR since 1993
0
100
200
300
400
500
600
700
800
900
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 20040
20
40
60
80
100
120
Sales (LHS) EBIT (RHS)
£m £m
20%CAGR
23%CAGR
Year to March
Experian - introduction
• What we do
• Our competitive advantages
• Growth opportunities in Experian International
• Ten things you never knew Experian did to help retailers
Experian
Experian is a global leader in providing information solutions
to organisations and consumers
We help organisations find, develop and manage profitable customer relationships; with information, decision-making
solutions and processing services
We empower consumers to understand, manage and
protect their personal information and assets
Experian - what we do
INFORMATION
Credit Marketing
300m plusconsumers
Consumercredit
c. 25mbusinesses
Businesscredit
c. 500mvehicles
Vehiclehistories
c. 30mpolicies
Insurancedatabases
c. 105m UShouseholds
Cataloguepurchasing
habits
c. 120mhouseholds
Consumermarketing
Experian - what we do
INFORMATION
Credit Marketing
SOLUTIONS
Experian-Scorex
Scoringand
decisions
Detect
Fraudprevention
Transact/GEMS
Applicationand
accountprocessing
Truvue
Customerdata
integration
Mosaic
Classifyingconsumers
andbusinesses
Business Strategies
Economicanalysis
andforecasting
North America
55%
International
45%
Experian - balanced portfolio
Information
58%
Solutions
31%
Outsourcing
11%
Sales*Year to March 2004
* excluding discontinued activities
Credit
66%
Marketing
23%
Outsourcing
11%
Experian - competitive advantages
• Scale gives us high barriers to entry
• Global leader in long term growth markets
• Unparalleled product offer
• Delivering
– Double-digit growth in sales and profit
– Strong cash flow
All figures are for last full year of actualsNumber on top of bar represents prospective PE ratingExchange rate £1:$1.70
Experian - unique offer
Global sales revenue $m
Experian D&B Equifax Harte-Hanks Acxiom Fair, Isaac
North America International
Source: Company accountsMultex Global estimates
Mar 04 Dec 04 Mar 04Dec 04 Sep 04
18x
23x21x
19x
$2.2bn
No single competitor offers as many products and solutions in as many countries
18x
Dec 04
Experian - growth drivers
• Increase in credit and plastic usage
• Growth in emerging markets
• Growth in demand for information in new sectors, e.g. automotive, insurance, business-to-business, government
• Growth in fraud, especially over the Internet
• Growth in direct-to-consumer market
• Move to multi-channel marketing
Experian - global strategy
Build on core
businesses
Sell new
solutions
Grow by
acquisition
Experian - building shareholder value
Sales£m
2001 2002 2003 2004 H1 05
Operating profit£m
2001 2002 2003 2004 H1 05
Growth rates at constant exchange rates and in 2004-5 for continuing activities only
Year to March Year to March
1,018 1,115 1,201 1,286 217 224 256 282
+2% +5%+12%
+14%
+3% +3%
+20%
+13%
+20%
+15%
638 153
Q3: sales up 24%
Experian International
• Background
• UK – total solutions provider
• Tailoring the offer geographically
• Emerging markets
Experian International
• UK founded in 1980
• Strong organic growth supported by complementary acquisitions, including
– New products
• Experian-Scorex
• Fraud
• QAS
– New regions
• France
• Scandinavia
UK
57%
Rest of World*
43%
* Continental Europe, Eastern Europe, South Africa, Latin America, Asia Pacific
Sales9 months to
December 2004
Experian in UK - total solutions provider
• Clear market leader in Information and Solutions
• Grown to offer widest range of services in any one country
• Now principal supplier to nine of the top ten UK banks
• Future growth driven by
– Product innovation, e.g. authentication; fraud detection
– Deeper client relationships, e.g. HBOS
– New sectors, e.g. government; direct-to-consumer
Experian in UK - HBOS contract
• Over £40m five-year contract
• Experian offers a unique combination of services
– Credit Information• Consumer and business lending
– Credit Solutions• Application processing/scoring solutions• Fraud prevention capabilities• Consumer and business authentication
– Marketing Information• Analysis and consultancy support
– Marketing Solutions• Database hosting• Outsourced data processing
• Experian selling new products, such as fraud prevention
• Experian supporting HBOS across its product groups, e.g. mortgage, credit cards
Experian in UK - public sector
• Apply skills developed in financial services to public sector, in areas such as
– Complying with anti-money laundering regulations
– Reducing fraudulent benefit claims
– Supporting collection of local and national taxes
– Improving accuracy of data held on individuals
– Enabling instant confirmation of valid vehicle insurance
– Helping the police allocate resources by postcode risk index
– Forecasting economic and demographic trends for local and national government
Experian International - strong global presence
Experian operates in over 60 countries around the world
BulgariaCanadaDenmarkFinlandFrance
South AfricaSouth KoreaSpainSwedenTurkey
Countries where we have offices:
GermanyGreeceHong KongIrelandItaly
JapanMonacoNetherlandsNorwaySingapore
ArgentinaAustraliaAustriaBelgiumBrazil
United KingdomUnited States
Experian International - unparalleled product offer
• Operate eight consumer credit bureaux
• Operate five business credit bureaux
• Interface with over 70 credit bureaux globally
• Classify over a billion consumers worldwide
• Hold lifestyle data on 14 million UK individuals and 8 million households
• Provide detailed economic forecasts for 25 countries
• Deliver billions of customer decisions annually
Experian International - tailoring the offer
Continental Europe
• European countries still have different legal, regulatory and cultural environments
• Lead with credit bureaux where possible
– Spain
– Italy
– Scandinavia
• Establish a presence as allowed
– France fraud bureau
Experian in Spain
1994
Enter with scoring/ decisions
1999
Establish credit
bureau
2001
Marketing Services
acquisition
2002
Start credit card
processing for US client
2003
Launch Mosaic consumer
segmentation
2004
Add fraud prevention / anti-money laundering
Experian Spain now has the widest end-to-end range of solutions
Experian in France
• Largest market outside the UK
• Employs 2,500 FTEs
• About 60% of sales from card and payment processing –consolidating the industry
• Other activities include
– Back-office processing
– Decision solutions
– Business information
• Strong relationships with financial services and other clients
Experian International - emerging markets
• Best growth opportunities in emerging markets where
– Rising GDP per capita
– Increasing use of consumer credit
• Serving both local and global clients
• Often enter via decision solutions
• Must be sensitive to local operating environment
Experian International - emerging markets
Eastern Europe
• Russia
• Poland
• Bulgaria
• Romania
• Czech Republic
• Slovakia
• Slovenia
• Croatia
• Hungary
• Kazakhstan
Asia Pacific
• Korea
• China
• Japan
• India
• Indonesia
• Malaysia
• Philippines
• Singapore
• Taiwan
• Thailand
Experian in Korea
Experian now serves six of the seven largest Korean banks
Experian International - summary
• 45% of global Experian sales
• By far the largest information solutions provider outside North America
• Tailor the offer to local environment
• Strong growth opportunities throughout Europe and Rest of World
– Extending product offer across the region
– In new sectors
– In emerging markets
Experian - helping retailers
Retailers account for 13% of Experian sales
We sell to four of top five US and 17 of top 20 UK retailers
Experian - helping retailers
Credit
• Manage credit risk, e.g. Otto
• Operate store and credit cards, e.g. Marks and Spencer
• Help prevent fraud, e.g. Dell
Marketing
• Help target marketing campaigns, e.g. Brooks Brothers
• Run marketing databases, e.g. J Jill
• Enable multi-channel marketing, e.g. Starbucks
Ten ways that Experian helps retailers (that you didn’t know about)
Experian - helping retailers
• Location planning, e.g. McDonalds
• Online lead-generation via MetaReward, e.g. Blockbuster
• Improved accuracy of customer contact data, e.g. Orange
• Profiling of consumers’ drinking habits by postcode, e.g Mitchells & Butler
• Consumer segmentation and targeting, e.g. Boots
• Loyalty card processing, e.g. Douglas
• Commercial credit scoring, e.g. Viking Direct
• Vehicle history reports, e.g. AutoTrader
• Retail property market forecasting
• Quarterly consumer spending forecast and trends by product
Ten ways that Experian helps retailers (that you didn’t know about)
Experian - summary
• No single competitor matches our scale, product range or global footprint
• Strong organic growth opportunities across the businesses
• Global R&D driving product innovation
• Infill acquisition opportunities
