Annual Report 2010 Report Annual
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Corporate Corporate Operational headquarters office headquarters Annual Report 2010 Experian plc Experian Experian Experian Serasa Experian Newenham House Cardinal Place Landmark House 475 Anton Blvd. Alameda dos Quinimuras, 187 Northern Cross 80 Victoria Street Experian Way Costa Mesa CEP 04068-900 Malahide Road London NG2 Business Park CA 92626 Planalto Paulista Dublin 17 SW1E 5JL Nottingham United States São Paulo Ireland United Kingdom NG80 1ZZ Brazil United Kingdom T +353 (0) 1 846 9100 T +44 (0) 20 304 24200 T +44 (0) 115 941 0888 T +1 714 830 7000 T +55 11 3373 7272 F +353 (0) 1 846 9150 F +44 (0) 20 304 24250 F +44 (0) 115 828 6341 F +1 714 830 2449 F +55 11 2847 9198 Taking control of growth Annual Report 2010 Report Annual Corporate website www.experianplc.com Corporate Responsibility Report 2010 www.experiancrreport.com Annual Report 2010 www.experianannualreport.ie “We’re taking control of growth at Experian by focusing our efforts on our best opportunities. Firstly, we’re doing more to expand our global reach into key vertical markets and geographies. Secondly, we’re investing in world class data and analytics - it’s why organisations come to us and we can never lose sight of this. And, finally, we’re making sure that our sales teams and infrastructure are best in class and that we continue to be the best possible partner to our clients.” Don Robert Chief Executive Officer To help you get the most from this report, we have introduced symbols indicating where additional information can be found. Please look out for: This annual report has been produced using ISO 14001 and FSC certified environmental print technology, together with vegetable-based inks and a single-site production facility that required no transport between processes. The report is printed on an environmentally responsible paper that uses 00 Page reference for more information 50% certified de-inked post consumer waste and 50% certified virgin fibre from sustainable sources. Additional information available online Produced by Accrue* Printed by Empress Litho Experian Annual Report 2010 Contents 1 2 Chairman’s statement 11 – 2 Introduction Introduction 4 Interview with Don Robert, CEO 6 Business and market overview 8 Strategy 10 Key resources Don Robert, Experian CEO, talks about the business and its future 4 12 Chief Executive’s review 51 – 12 review Business Business review 16 Key performance indicators 18 North America 22 Latin America 26 UK and Ireland 30 EMEA/Asia Pacific 34 Risks and uncertainties 38 Financial review 48 Corporate responsibility A comprehensive review of Experian’s performance during the year 52 Board of directors 84 – 52 Governance Governance 54 Directors’ report 58 Corporate governance statement 68 Report on directors’ remuneration 84 Statement of directors’ responsibilities Experian’s governance and control framework 85 Report of the auditors: Group financial statements 85 – 160 statements Financial Financial 86 Group income statement statements 87 Group statement of comprehensive income 88 Group balance sheet 89 Group statement of changes in total equity 90 Group cash flow statement 91 Notes to the Group financial statements 149 Report of the auditors: parent company financial statements 150 Parent company profit and loss account 151 Parent company balance sheet 152 Notes to the parent company financial statements Detailed financial information for the Group 159 Shareholder information and parent company 2 Experian Annual Report 2010 Introduction Chairman’s statement Experian has delivered another excellent financial performance despite the economic challenges in some of our major markets. Our continuing strong cash generation has enabled us to adjust our distribution policy to the benefit of shareholders. Looking ahead, we see many opportunities for further growth and are pursuing these with vigour and focus. Year in review licence to build a credit bureau 39 major automobile manufacturer Experian has continued to benefit with seven of the country’s leading in China to improve customer from its balanced portfolio and financial institutions. 15 satisfaction, helped an international strong market positions, together energy company to understand with the careful execution of a robust Another key trend this year was the its customers better and provided cost-efficiency programme. growing proportion of revenues 25 a leading global entertainment coming from outside financial software company with the ability Particularly encouraging was our services, such as the public to keep in touch with millions of strong growth in emerging markets, sector, telecommunications and customers around the world. which now account for almost one utilities, which are providing us fifth of Group revenues. In Latin with significant future growth Experian is also increasingly America, organic growth was up opportunities. In this annual report, providing services directly to 16% as market conditions improved, we have illustrated some of the ways consumers through our Interactive triggering a rebound in credit in which Experian has supported business, which enables individuals demand. Experian also performed clients during the year across an to monitor their personal credit strongly in other emerging markets, ever-broadening range of markets. files over the internet. In the UK, our such as South Africa and China, and For example, we have helped Interactive revenue grew by 38% this made important strategic progress the UK public sector to reduce year, helping us to offset some of the in India with the granting of a full 27 housing benefit fraud, enabled a effects of the economic downturn Revenue EBIT Benchmark US$3.9bn US$991m profit before tax US$910m EBIT margin from Profit before tax from Total and organic revenue continuing activities continuing operations of from continuing activities up 80 basis points to US$661m and benchmark up 2%, with total revenue 24.4%, excluding FARES profit before tax of improving by US$69m contribution US$910m, up 8% Revenue (US$m) EBIT (US$m) Benchmark profit before tax (US$m) 10 3,859 10 991 10 910 09 3,790 09 939 09 843 08 3,712 08 908 08 783 Continuing activities only. 2009 restated to exclude See page 100 for definition of benchmark profit small discontinuing activities in North America and before tax. UK and Ireland. Experian Annual Report 2010 Introduction 3 2 – 11 – 2 Introduction in this region. We are also investing strategy. We are introducing a share of our skills and services to tackle in ground-breaking new products, buyback programme and intend to important social issues. One like ProtectMyID.com, which alerts increase our dividend payout ratio initiative, supporting microfinance consumers to changes in their credit over the next 12 months. amongst communities without files and to other activity that might access to traditional banking indicate identity fraud. Board services, has come to fruition this Since the year-end, Experian’s board year and another, addressing ethnic Product innovation is a key driver of has been further strengthened by diversity in the workplace, is under growth for Experian in all our markets 52 the appointment of Judith Sprieser development. and we have continued to invest 53 and Paul Walker as non-executive strongly in new data sources and directors. Both have extensive As the business grows, our 51 – 12 review Business new analytical products, together boardroom experience, as well as community programme is continuing with the platforms that support their a broad perspective of the global to keep pace. Experian’s total worldwide delivery. Over 20% of technology and software industries, community contribution this year Group revenues come from products which will be a great asset to was up 13%, as the result of increases developed during just the past Experian as we continue to extend in employee volunteering and pro five years. our worldwide reach. bono work for charitable projects. In many of our major markets, such as Capital strategy 48 Corporate responsibility Brazil, North America and the UK, Good capital stewardship is a Corporate responsibility remains employees are taking part in some 8 cornerstone of Experian’s strategy a high priority for the Board and excellent volunteer programmes to and the Board devotes a great deal of we again set targets for enhancing help vulnerable communities improve time to ensuring a prudent balance Experian’s contribution to society their financial literacy. between investing in the future of the and reducing our impact on the business and returning surplus cash environment. Summary to shareholders. Experian is fortunate This has been another challenging in generating more cash than most In many ways, Experian is already a year for many parts of the Group, but 52 – 84 Governance businesses our size and this position force for good through the support we have continued to grow profitably, has been greatly strengthened by the we provide to clients; helping to while investing in our business. As continuing successful growth of the ensure responsible access to credit, we emerge from the global economic Group. After careful consideration, reducing fraud and improving downturn, we can take pride in the the Board has decided to enhance business efficiency. But we are fact that, throughout the downturn, Experian’s current distribution also encouraging the application Experian has never stopped growing. It is a tremendous achievement that has called for strong management, great teamwork and a supreme effort Basic EPS Full-year on the part of