Experian Annual Report 2019 Experian Annual Report Powering opportunities Experian Annual Report 2019 Year ended 31 March 2019 We aim to Create a better tomorrow For consumers and for our clients, our people and our communities We do this by Powering opportunities Turning data into information, and creating advanced technologies and analytics Helping you to take Control Empowering people and businesses to use their data and seize opportunities We foster a culture of Innovation Shaping ideas and developing world-changing products We live by our Values How we work is as important as what we do The role we play Benefits everyone Businesses grow, people prosper and communities thrive Experian plc Annual Report 2019 1 Progress this year Experian made good progress during the year. Strategic report 02 Experian at a glance We performed strongly and we are excited about the 04 Chairman’s statement 08 Chief Executive’s review opportunities ahead as we successfully advance our 11 Investment case 12 Key performance indicators strategic agenda and as we address new markets. 15 Understanding our key market trends 19 Understanding our business model 24 Our strategy We have delivered further progress in Business-to- 28 Our people and corporate responsibility 37 Non-financial information statement Business and momentum in Consumer Services is 39 North America gathering pace. 40 Latin America 41 UK and Ireland 42 EMEA/Asia Pacific Our services resonate with businesses who can better 44 Financial review 52 Risk management manage risk, reduce costs, detect fraud and operate 61 Viability assessment more efficiently by using our deep, rich and ever-broader Governance datasets, as well as our advanced analytics and 64 Chairman’s introduction 66 Board of directors decisioning software. 68 Corporate governance report 73 Nomination and Corporate Governance Committee report We are building deeper relationships with consumers 79 Audit Committee report 86 Report on directors’ remuneration worldwide as we help them improve their financial 104 Directors’ report lives and help put them in control so they can achieve Financial statements their goals. 107 Financial statements contents 108 Independent auditor’s report We are excited about the future for consumers, Group financial statements 113 Group income statement for businesses and for Experian. 114 Group statement of comprehensive income 115 Group balance sheet 116 Group statement of changes in total equity 117 Group cash flow statement Financial highlights 118 Notes to the Group financial statements Company financial statements 178 Company financial statements 180 Notes to the Company financial statements Statutory Growth % Growth % Benchmark Growth % Growth % at actual at constant at actual at constant rates rates rates rates 190 Shareholder and corporate information Revenue Revenue¹ US$4,861m +6% +9% US$4,855m +6% +9% 192 Glossary (2018: US$4,584m) (2018: US$4,572m) Operating profit Benchmark EBIT¹ US$1,162m +11% +16% US$1,306m +5% +10% (2018: US$1,051m) (2018: US$1,241m) Profit before tax Benchmark profit before tax US$957m +1% +7% US$1,198m +3% +8% (2018: US$950m) (2018: US$1,162m) To download this Annual Report and our other corporate literature Basic EPS Benchmark EPS visit www.experianplc.com USc76.9 -10% -3% USc98.0 +4% +9% (2018: USc85.4) (2018: USc94.4) Roundings Certain financial data has been rounded in this report. As a result, the totals of data presented may vary slightly from the actual arithmetic totals of the data. 1 From ongoing activities. Exchange rates The 2018 financial highlights have been restated following the adoption of IFRS 15. See note 3 to the Group financial statements for Principal exchange rates used are given in note 11 to the Group further detail. financial statements. The average pound sterling to US dollar See note 7 to the Group financial statements on page 129 for definitions of non-GAAP measures. rate is 1.31 (2018: 1.33). Experian plc 2 Strategic report Experian at a glance We are a global technology company and market leader in data and analytics. We help people and businesses to unlock the power of data and seize opportunities through the innovations we deliver in data, analytics and software. We manage and organise ourselves across four geographic reporting regions and two main business activities. UK and Ireland See page 41 145m North America Business credit See page 39 history records 44 1.2bn Countries Consumer credit EMEA/Asia Pacific history records See page 42 Latin America See page 40 4 17,200 55m DataLabs Employees Free consumer membership base E D F J K D I D C A H A C G A A F B C E B D B C B Revenue¹ by region Our people by region² Global cost profile Revenue¹ by customer US$m % Number % % % A North America 2,913 59 A North America 6,600 38 A Labour 54 A Financial services 36 B Latin America 707 15 B Latin America 3,100 18 B Data 16 B Direct-to-consumer 16 C UK and Ireland 813 17 C UK and Ireland 3,600 21 C Marketing 10 C Health 8 D EMEA/ D EMEA/ D IT 9 D Retail 5 Asia Pacific 422 9 Asia Pacific 3,900 23 E Central Activities 3 E Automotive 5 Total 4,855 Total 17,200 F Other 8 F Software and 4 professional services G Telecommunications 4 and utilities H Insurance 4 I Media and technology 2 J Government and 2 1 Revenue from ongoing activities. public sector 2 Full-time equivalent employees as at 30 April 2019. K Other 14 Experian plc Annual Report 2019 3 Business activities reportStrategic Business-to-Business Business-to-Business Consumer Data Decisioning Services We help businesses to identify and understand We are experts at creating and developing We help consumers take control of their their customers, to manage the risks innovative analytical and decisioning tools. financial lives, making it easier for them to associated with lending and to lend responsibly. We help businesses to manage their manage their financial position, access credit We also help them build a better understanding customers, minimise the risk of fraud, offers, and protect themselves from identity of consumers’ preferences. comply with legal requirements and fraud. We provide financial education, free See more on automate decisions and processes. access to Experian credit reports and scores, page 21 See more on online tools and apps. page 21 See more on page 21 Revenue¹ Revenue¹ Revenue¹ US$2,625m US$1,245m US$985m +7% +14% +6% D C C D A A C B B A Revenue¹ by region and business activity (US$m) Business-to- Data Decisioning Business Consumer Services Total A North America 1,468 623 2,091 822 2,913 B Latin America 594 113 707 n/a 707 C UK and Ireland 388 262 650 163 813 D EMEA/Asia Pacific 175 247 422 n/a 422 Total 2,625 1,245 3,870 985 4,855 1 Revenue from ongoing activities. i; Experian plc 4 Strategic report Chairman’s statement Innovating to drive business growth and social impact This year has been an exciting one for Experian as we delivered strong performance globally and continued to lead with new product innovation. Experian has evolved into a global technology company and market leader in data and analytics. We are at the heart of the data revolution and are positioned strongly for future growth, as our role serving individual consumers and businesses becomes ever more critical. Performance and returns Experian continued to deliver good revenue growth across all regions, highlighted by significant growth in our Business-to-Business activities, most notably in North America, EMEA and Asia Pacific regions. We also made excellent progress in our Consumer Services business as we continue to build direct relationships with millions of consumers worldwide. This success has delivered strong returns for our shareholders. Our share price has risen “This year has been an exciting one over 270% since we floated in 2006 and Experian is now valued at approximately for Experian as we delivered strong £20 billion. We remain committed to delivering performance globally and continued long-term sustainable shareholder returns, and our Total Shareholder Return (TSR) over to lead with new product innovation. the last three years has outperformed the FTSE 100 by 43%. We have also provided Experian has evolved into a global US$7.3 billion in total capital returns to technology company and market shareholders since 2006. In the last year alone we have returned US$628 million to leader in data and analytics.” shareholders by way of dividend payments Don Robert and our share buyback programme. Chairman Technology and innovation We continue to make great progress in building a culture of continuous innovation. We are focused on creating solutions which empower consumers and many organisations worldwide. Our culture has been recognised externally once again as we have been named on the Forbes list of Top 100 Most Innovative Companies for the fifth year running. This comes as we continue to transform our business into a leading technology and software provider, helping organisations as i; Experian plc Annual Report 2019 5 Strategic reportStrategic they digitise their services. We also continued often forced to borrow outside the formal “We have made great the roll-out of our industry-leading DataLabs, banking system at a much higher rate of having opened our fourth globally in Singapore interest. We have developed solutions which strides in addressing the during the year. These have proved to be incorporate non-traditional data sources like great testbeds for driving ground-breaking mobile phone data, combined with financial global issue of financial innovations, including the use of augmented education, to enable people to build a credit inclusion.