6927 CoverArtwork_5.qxd 14/6/07 09:37 Page 1 Annual Report 2007 Figuring it out... Corporate headquarters Corporate office Experian Group Limited Experian Newenham House Cardinal Place Northern Cross 80 Victoria Street Malahide Road London Dublin 17 SW1E 5JL Ireland United Kingdom T: +353 (0) 1 846 9100 T: +44 (0) 20 304 24200 F: +353 (0) 1 846 9150 F: +44 (0) 20 304 24250 Operational headquarters We have chosen six Experian Experian essential responsibilities Talbot House 475 Anton Blvd. to provide the focus for Talbot Street Costa Mesa our CR strategy 24,00More than Nottingham CA 92626 24 million NG80 1TH United States people visit United Kingdom our Interactive T: +1 714 830 7000 websites each T: +44 (0) 115 941 0888 F: +1 714 830 2449 month F: +44 (0) 115 934 4905 Our Strategy Management software is used by over 600 organisations 600 worldwide Corporate Responsibility Report www.experiancrreport.com This comprehensive online report explains Explaining Experian's CR strategy and how we are managing our responsibilities in six key areas Experian 2,000,000On an average day, Experian processes www.explainingexperian.com We introduced two million credit 6over 20 new reference enquiries Explaining Experian provides further insight for products last year investors into what Experian does, our products and services and the markets we serve This document opens as a PDF Annual Report 2007 This was our fifth 5 consecutive year of double-digit revenue and profit growth © 2007 Experian Ltd All rights reserved We support clients in over The word “Experian” is a 60 countries registered trademark in the EU and other countries and is owned by Experian Ltd and/or its associated companies 60 www.experiangroup.com 20 6927 CoverArtwork_5.qxd 14/6/07 09:37 Page 2 Contents Financial highlights Introduction Experian at a glance.................................................02 Credit Services..........................................................04 Decision Analytics ....................................................06 Marketing Solutions .................................................08 Interactive ................................................................10 Chairman’s statement ..............................................12 Highlights of our year ..............................................13 Interview with Don Robert, Chief Executive Officer ..14 $3.4bn Business review Total continuing sales at constant exchange rates up 14% Overview..................................................................16 Corporate objectives and strategy ............................19 Key performance indicators......................................20 Progress in 2007 ......................................................22 Experian Americas....................................................24 Experian UK and Ireland...........................................26 Experian EMEA/Asia Pacific.......................................28 Financial review........................................................30 Risks and uncertainties.............................................35 Governance Corporate responsibilities .........................................36 Board of directors ....................................................38 Directors’ report .......................................................40 Corporate governance .............................................42 Report on directors’ remuneration............................47 Statement of directors’ responsibilities .....................59 Financial statements Group income statement .........................................60 Group balance sheet ................................................61 Full-year dividend Group statement of recognised income and expense.............................................................62 17c Group cash flow statement......................................63 Notes to the Group financial statements ..................64 Report of the auditors: Group financial statements ...............................................120 Parent company profit and loss account.................121 Parent company balance sheet...............................122 Notes to the parent company financial statements ...............................................123 Report of the auditors: parent company financial statements ...............................................133 Reconciliation to the Experian Group pro forma balance sheet at 31 March 2006 ...........134 Shareholder information.........................................135 $825m EBIT at constant exchange rates up 11% Our annual report has been produced using ISO 14001 and FSC certified environmental print technology. Vegetable-based inks and a single-site production facility, requiring no transport between processes, further reduced the environmental footprint. The report is printed on an environmentally responsible paper, which uses 50% certified de-inked post consumer waste and 50% certified virgin fibre from sustainable sources. See financial review on page 33 for definition of Produced by Accrue* Printed by Empress Litho non-GAAP measures used throughout this report. Introduction | Business review | Governance | Financial statements At the heart of Experian lies a vast store of information - about consumers and how they behave, about businesses and how they perform, and about motor vehicles, insurance policies and other valuable assets. Over the years, we have developed exceptional skills in the management and safeguarding of this information. We have also gained a unique understanding of the significance and value of different types of information, and the ability to apply this insight to everyday decisions. It has opened up almost limitless possibilities. At Experian, we harness information and use it to empower businesses and consumers. Whatever they want, however they want it, we figure it out. Experian Annual Report 2007 | 01 Introduction | Business review | Governance | Financial statements Experian at a glance Principal activities Experian is dedicated to helping Credit Helping organisations organisations and consumers make to evaluate the risks important and often time-critical Services and rewards associated with providing credit to decisions with increased confidence consumers and and control. businesses. Organisations rely on us for help in finding new customers and developing successful relationships Decision Providing the analytical skills and specialist with their existing customers. Analytics software products that Consumers turn to us for help in enable organisations to increase the speed and making more informed financial quality of their and purchasing decisions. decision-making. We employ more than 13,000 people through offices in 36 Marketing Helping organisations countries and support clients in to find new customers Solutions and to take advantage over 60 countries. Our products of opportunities for expanding existing and services are grouped under four relationships. principal activities: Credit Services, Decision Analytics, Marketing Solutions and Interactive. Interactive Providing personal credit information to consumers and helping guide them to the best deals on millions of products and services. 2On an average day,m we process two million credit reference enquiries 20bn We delivered 20 billion emails in 2007 02 | Experian Annual Report 2007 £1.5 bn Our fraud prevention tools helped clients in the UK to identify over £1.5 billion of potential fraud last year Contribution to Group sales Highlights of 2007 Sales by region • Sales up 4% to $1,520m; organic growth of 3% • EBIT up 11% to $420m, with margin up 150 basis points • Acquired credit bureaux in Canada and Estonia • Resilience of business model demonstrated in UK and US All financial numbers relate to continuing activities only, with growth rates at constant exchange rates • Sales up 16% to $392m; organic growth of 15% • EBIT up 27% to $136m, with margin up 320 basis points • Further contract wins during the year with established clients such as HSBC and Bank of America • Building our presence in emerging markets such as India and Russia All financial numbers relate to continuing activities only, with growth rates at constant exchange rates • Sales up 13% to $728m; organic sales unchanged • EBIT up 24% to $73m, with margin up 90 basis points • Repositioning into digital media continues • Product innovation accelerated All financial numbers relate to continuing activities only, with growth rates at constant exchange rates • Sales up 40% to $784m; organic sales up 23% • EBIT up 50% to $173m, with margin up 110 basis points • Consumer Direct and PriceGrabber performed strongly; LowerMyBills impacted by weakness in US sub-prime mortgage market in latter part of year • Businesses working closely together to optimise returns on marketing spend, Interactive’s largest cost All financial numbers relate to continuing activities only, with growth rates at constant exchange rates m 24Each month, 24 million people visit our Interactive websites Experian Annual Report 2007 | 03 Introduction | Business review | Governance | Financial statements Credit Services Credit Services helps organisations to evaluate the risks and rewards associated with providing credit to consumers and businesses. We enable clients to take better informed lending decisions and to make it easier and quicker for their own customers to obtain finance. Our credit databases hold information about the credit status of more than 300 million consumers and about 30 million businesses