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Final Results

23rd May 2007 07:02

Experian Group Limited23 May 2007 Experian Group Limited Preliminary results for the year ended 31 March 2007 Highlights • Sales from continuing activities up 14% at constant exchange rates to $3.4bn, with 8% organic growth (total sales $3.5bn) • Continuing EBIT up 16%. Total EBIT of $825m, up 11% at constant exchange rates, including $8m restructuring charge • Excellent full-year performance o fifth consecutive year of double-digit sales and EBIT growth o strong organic sales growth across all three regions o good EBIT margin progression o strong cash generation o delivery against key strategic and operational objectives o acquisitions on track • EBIT margin from continuing activities of 21.8%, up 80 basis points, excluding FARES contribution • Profit before tax from continuing operations of $394m. Basic EPS of 49.9 cents • Net debt of $1.4bn reflecting strong cash flow conversion, with 97% conversion of EBIT into operating cash flow • Second dividend of 11.5 cents per share, to give full year dividend of 17 cents per share John Peace, Chairman of Experian, said: "Experian has made an excellent start in its life as an independent company.Over the past year, we have made progress strategically and operationally, whiledelivering a fifth consecutive year of double-digit sales and EBIT growth." Commenting on the performance of Experian, Don Robert, Chief Executive Officerof Experian, said: "Looking forward, while we face some specific market challenges, the strength ofour portfolio of businesses underpins our confidence for the current year andbeyond. We remain focused on delivering organic sales growth, improved marginsand strong cash flow. For the current year as a whole, we expect to deliverorganic sales growth at a mid to high single-digit rate, with some accelerationas we move into the second half." Overview of structure of financial information On 10 October 2006, the separation of Experian and Home Retail Group wascompleted by way of demerger. As part of this transaction, Experian GroupLimited became the ultimate holding company of GUS plc and relatedsubsidiaries. Experian Group Limited has accounted for its insertion at the topof the group in accordance with the principles of merger accounting. As a result of the demerger, there are a number of presentational changes to the financial information as previously reported in the prospectus dated 14 September 2006 and the interim results released on 21 November 2006. The principal change relates to the net interest expense. In summary, the financial information is prepared on the following basis: •The reported interest income and expense, taxation and dividend in the year ended 31 March 2007 reflect the pre-demerger structure for the period until demerger and thereafter the post demerger structure and the impact of the IPO proceeds. They are therefore not comparable with the prior year nor are they representative of future periods. •The results (including sales, operating profit, interest, taxation and cash flow) of Home Retail Group to the date of demerger are included in discontinued operations. •The balance sheet at 31 March 2006 represents the GUS group position at that date including Home Retail Group and has been represented in US dollars. The balance sheet at 31 March 2007 is representative of Experian as a standalone business. See Appendix 2 for definition of non-GAAP measures used throughout thisannouncement and Appendix 3 for reconciliation of sales and EBIT by geography. Roundings Certain financial data has been rounded within this announcement. As a result ofthis rounding, the totals of data presented may vary slightly from the actualarithmetic totals of such data. Enquiries ExperianDon Robert Chief Executive Officer 020 3042 4215Paul Brooks Chief Financial OfficerNadia Ridout-Jamieson Director of Investor Relations FinsburyRollo Head 020 7251 3801James Wyatt-Tilby There will be a presentation today at 9.30am to analysts and investors at theMerrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. Thepresentation can be viewed live on the Experian website at www.experiangroup.comand can also be accessed live via a dial-in facility on 44 (0)20 8322 2180. Thesupporting slides and an indexed replay will also be available on the websitelater in the day. There will be a conference call to discuss the results at 3.00pm today with arecording available later on the website. All relevant Experian announcements,including an updated version of "Explaining Experian", are also available onwww.experiangroup.com. Experian will update on trading on 12 July when it will issue the InterimManagement Statement in respect of the First Quarter. Its AGM will be held inDublin on 18 July 2007. Certain statements made in this announcement are forward looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual events or results to differmaterially from any expected future events or results referred to in theseforward looking statements. CHIEF EXECUTIVE'S REVIEW We have made excellent progress during the year against our strategic,operational and financial objectives. The demerger from GUS was a significantmilestone in the development of Experian, allowing investors to benefit directlyfrom the future growth of the company and our employees to become shareholders.The £800m raised from both new and existing shareholders provides us withfinancial flexibility and will help to underpin our growth. Delivery against financial objectives Over the past year, we have delivered against our key financial objectives. Wehave driven growth in both sales and profits, with organic sales growth of 8%and a further improvement in EBIT margins in our continuing business, excludingFARES. All three regions delivered good organic sales growth, reflecting thestrength of our portfolio. Our cash flow was strong and we converted 97% of EBITinto operating cash flow, ahead of our target. Acquisitions made in the four years to March 2006 together delivereddouble-digit post-tax returns in the year to March 2007. The more recentacquisitions are trading to plan. Clear strategic progress Our strategic priority at Experian is to continue to deliver sustainable growthin order to create lasting shareholder value. To facilitate this, we focus onour primary growth drivers, and good progress was made against these over thepast year: • Deeper client relationships - we won a number of new mandates from existing clients. For example, we renewed and expanded contracts with seven of the top ten US banks. • Geographic expansion - we have continued to expand in markets outside the US and the UK, with significant new client wins in many countries, including Spain, France, Japan, China and South Africa. • Product innovation - we continue to focus on product innovation, introducing over 20 new products during the year, including Precise ID, a new fraud detection platform; MicroMarketer G3, the latest generation of Experian's global market segmentation system; and Simmons online market research. • Vertical expansion - we have strengthened our position in new and expanding market sectors, including telecommunications, government, retail and media. For example, Experian is now the primary provider of credit information to all top five wireless telecommunications companies in the UK. Continued investment in business We continue to invest organically in the business to drive growth. During theyear, this included development in emerging markets, specifically Asia Pacific,and new product initiatives. Future organic investment will include furtheremerging markets development, the establishment of a near-shore facility inChile, and investment in the Canadian bureau. In the year to March 2008, much ofthis investment will be weighted towards the first half. Capital expenditure in the year was $275m (2006: $212m). Of this, $20m relates toan accelerated technology spend on data centre consolidation in the US, whichwill enhance efficiency and productivity. We expect capital expenditure in thecurrent year to be broadly in line with last year. We also take advantage of opportunities to accelerate growth and improveproductivity through selective, targeted acquisitions. In the year under review,we made a number of small acquisitions which complement our existing portfolio.Acquisition spend in the year was $82m, excluding deferred consideration paid,and included: • Two new credit bureaux, in Canada and Estonia, expanding our geographic footprint. • An additional US credit bureau affiliate. • Three new Marketing Solutions businesses. • A minority stake in Sinotrust, a business information and market research company in China. Since the year end, we have agreed to acquire Hitwise, a leading onlinemarketing intelligence company, for $240m. This acquisition, which forms part ofour strategy to reposition Marketing Solutions, will bring a rapidly growing,successful business to Experian, and new unique data. Other acquisitions sincethe year end include Informarketing, a direct marketing services provider inBrazil; Emailing Solution, a leading French permission-based email marketingcompany; and Tallyman, a collections management software business. We expect alow single-digit contribution to sales growth from acquisitions in the year toMarch 2008. Evolution of leadership to drive future success Experian has considerable opportunities for future growth, in particular asdemand increases for our services from multinational companies and withinemerging markets. In order to give sharper focus to all our regions ofoperation, we have created a number of new senior leadership roles. In additionto our two major regions in the Americas and UK and Ireland, we now havededicated senior managers for EMEA, Asia Pacific and India respectively(although for reporting purposes these regions will continue to be combined).Our new leaders in EMEA and Asia Pacific are tasked with driving our presence inthese important areas. Following 24 years of strong leadership contribution, John Saunders, Experian'sChief Executive Officer of Global Operations, has announced his retirement aftera transitional handover period. John's achievements within Experian have beenconsiderable, having created a client-driven organisation, focused oninnovation, and we thank John for his enormous contribution. Second dividend of 11.5 cents, to give full year dividend of 17 cents The Board of Experian has announced a dividend of 11.5 cents per share to give afull year dividend of 17 cents per share. Based on continuing pro formaBenchmark EPS this represents cover of just over three times. GROUP FINANCIAL HIGHLIGHTS Sales from continuing activities up 14% at constant exchange rates to $3.4bn, 8%organic growth. Total sales $3.5bn EBIT from continuing activities up 16% at constant exchange rates to $808m Total EBIT up 11% at constant exchange rates to $825m EBIT margin from continuing activities up 80 basis points to 21.8%, after $8mrestructuring charge, and excluding FARES Profit before taxation of $394m Effective tax rate of 22.4% based on Benchmark PBT Sales Profit12 months to 31 March 2007 2006 2007 2006 $m $m $m $mAmericas 1,990 1,731 569 473UK and Ireland 1 843 677 212 179EMEA/Asia Pacific 591 522 74 64Sub total 3,424 2,930 855 716Central activities - - (47) (31)Continuing activities 3,424 2,930 808 685Discontinuing activities 2 68 154 17 42 Total 3,492 3,084 825 727Net interest 3 (111) (100)Benchmark PBT 714 627 Exceptional items (162) (7)Amortisation of acquisition intangibles (76) (66)Goodwill adjustment (14) -Charges for demerger related equity incentive plans (24) -Financing fair value remeasurements (35) (2)Tax expense of associate (9) (2)Profit before taxation 394 550Taxation (68) (92)Profit after taxation for continuing operations 326 458 Benchmark EPS (cents) 59.7 54.5Basic EPS (cents) 49.9 107.5Weighted average number of Ordinary shares (million) 927 947 1 Profit includes $8m UK Marketing Solutions restructuring charge in year to March 20072 Discontinuing activities include MetaReward and UK account processing3 Pro forma net interest would have been $65m (H1: $30m; H2: $35m), assuming new capital structure in place on 1 April 2006, see Appendix 4 See Appendix 1 for analysis of sales and EBIT by principal activitySee Appendix 2 for definition of non-GAAP measures EXPERIAN AMERICAS Sales from continuing activities up 15%; 8% organic EBIT from continuing activities up 26% excluding FARES; up 20% including theanticipated decline in FARES EBIT margin excluding FARES up 220 basis points Credit Services growth rate improved as the year progressed Sales growth of 29% in Decision Analytics reflecting market share gains Interactive organic growth of 20% reflecting strong growth from Consumer Directand PriceGrabber, offset by LowerMyBills 12 months to 31 March 2007 2006 Growth % Organic growth $m $m % Sales - Credit Services 804 766 5 3 - Decision Analytics 82 63 29 29 - Marketing Solutions 353 355 - (2) - Interactive 751 547 37 20Total - continuing activities 1,990 1,731 15 8 Discontinuing activities 1 4 73 naTotal Americas 1,994 1,804 10 EBIT - Direct business 508 404 26 - FARES 61 69 (11)Total - continuing activities 569 473 20 Discontinuing activities 1 (7) 6 naTotal Americas 562 479 18 EBIT margin 2 25.5% 23.3% 1 Discontinuing activities include MetaReward2 EBIT margin is for continuing direct business only and excludes FARES Operational review Experian Americas delivered a strong performance, more than offsettingchallenges in some markets. There was excellent EBIT margin progression, withall principal activities improving year-over-year. Credit Services Includes consumer credit and business information bureaux in the US and Canada,commercial lending software and automotive services Sales in Credit Services were up 5% in total during the year, up 3% on anorganic basis. Against tough comparatives in 2006 (H1 2005/6: +18%, H2: +9%),consumer credit services performed well, improving as the year progressed.During the year, the business demonstrated its resilience as clients shiftedspend towards account management and collections. Latterly there has beenimprovement in customer acquisition activity. Business information delivered agood performance, reflecting expanded relationships with several top ten banksand robust double-digit growth in portfolio management products. Automotive didwell on the back of increased traction of its AutoCheck vehicle history reportand Autocount products. AutoCheck, for example, secured a significant renewalfrom eBay Motors. There was strong double-digit growth from Baker Hill'scommercial lending software as it leveraged Experian's business informationrelationships. VantageScore, the new credit score jointly developed by the three US creditbureaux, has performed well in its first year of deployment and to date hassecured over 1,300 clients in test. The integration of the Canadian consumerdatabase, acquired in September 2006, is proceeding well and is on track forlaunch later this year. While small, this will enhance the service offered toExperian's US clients, many of whom are active in Canada. Decision Analytics Includes credit analytics, decision support software and fraud solutions Decision Analytics performed particularly well over the year, with sales up 29%,reflecting increased market penetration of both decision support software andfraud prevention tools. The relationship with Bank of America has continued todevelop, as Experian becomes a provider of enterprise-wide solutions, supportingBank of America across its credit and deposit products. Fraud prevention delivered very strong double-digit growth, as demand forExperian's identity verification solutions has increased, driven by the launchof Precise ID, its new fraud detection product. There was increased adoptionamongst financial services companies and a major client win in the Internetpayment space. Marketing Solutions Includes data and data management (consumer data, list processing and dataintegrity (including QAS), database management and analytics), digital services(CheetahMail), research services (Simmons and Vente), and business strategies Sales in Marketing Solutions were flat year-on-year and marginally down (2%) onan organic basis. Marketing Solutions continues to show divergent trends, withdeclines in the traditional activities (consumer data, list processing anddatabase management), offsetting very strong double-digit sales growth acrossDigital Services, Research Services and QAS. Traditional activities, which inthe year still accounted for over 50% of Marketing Solutions sales, have beenimpacted by the secular shift in marketing spend to new digital channels. Progress in the newer marketing areas is highly encouraging. For example,CheetahMail delivered record email volumes during the year (20 billionpermission-based messages), Simmons delivered strong growth in syndicatedresearch sales following new client wins and QAS' early foothold in the US hasexpanded rapidly. Interactive Includes Consumer Direct (online credit reports, scores and monitoring services)and lead generation businesses: LowerMyBills (mortgages), PriceGrabber(comparison shopping) and ClassesUSA (online education) Sales in Interactive grew by 37% during the year, contributing 38% of totalAmericas sales from continuing activities. Organic growth was 20%, with thebalance of 17% from acquisitions (mainly PriceGrabber). Consumer Direct delivered excellent growth throughout the period, with strongdemand from consumers for credit monitoring services, which led to highermembership rates. Meanwhile, increased focus on enhancing the customerexperience resulted in significantly reduced churn rates. PriceGrabber deliveredvery strong growth year-on-year, including a seasonal boost in December, atwhich point unique visitors hit record numbers. In the education vertical,growth at ClassesUSA accelerated over the year, as it benefited from sharedexpertise in online advertising with our other lead generation properties. Sales at LowerMyBills were impacted in the final quarter by the downturn in USsub-prime lending, as lenders either exited the market or considerably tightenedlending criteria (Q3 sales unchanged, Q4 down 8%). LowerMyBills traditionallyderives some 80% of sales from the sale of mortgage leads to sub-prime lenders.However, there was double-digit growth in EBIT in the year as a whole, asLowerMyBills optimised marketing spend to generate more profitable leads. Inthis challenging environment, LowerMyBills continues to focus on marketing spendefficiency and is driving sales through sales of higher quality leads anddiversification into both non sub-prime and non mortgage-related products. Financial review Sales from continuing activities were $1,990m, up 15% compared to the sameperiod last year, with organic growth of 8%. Acquisitions, predominantly in theInteractive segment, contributed 7% to sales growth. EBIT from direct businesses was $508m (2006: $404m), an increase of 26% in theyear, giving an EBIT margin of 25.5% (2006: 23.3%). Margins improved across allbusiness segments, reflecting growing scale in Decision Analytics and the newerareas of Marketing Solutions, continuing operating efficiencies and the positiveimpact of last year's affiliate credit bureau acquisitions. EBIT from FARES, the 20%-owned real estate information associate, reduced in theperiod to $61m, compared to $69m last year. This was primarily due to thedecline in US mortgage originations. The improved profit performance in thesecond half of the year is attributable to a less difficult mortgage originationmarket and continued cost action by FARES. EXPERIAN UK AND IRELAND Sales from continuing activities up 17%; 7% organic EBIT from continuing activities up 12% EBIT margin at 26.2%, before $8m restructuring charge, reflecting first timecontribution from lower margin ClarityBlue acquisition Credit Services and Marketing Solutions delivered modest organic sales growth ina challenging UK financial services environment Decision Analytics sales up 8% organically Interactive sales nearly trebled at constant exchange rates 12 months to 31 March 2007 2006 Growth 3 Organic growth 3 $m $m % %Sales - Credit Services 266 245 3 3 - Decision Analytics 215 185 9 8 - Marketing Solutions 329 236 31 1 - Interactive 33 11 176 176Total - continuing activities 843 677 17 7Discontinuing activities 1 64 81 naTotal UK and Ireland 907 758 13 EBIT - UK and Ireland 221 179 16Restructuring charge (8) - naEBIT - continuing activities 212 179 12Discontinuing activities 1 24 36 naTotal UK and Ireland 236 215 4 EBIT margin 2 26.2% 26.4% 1 Discontinuing activities include UK account processing2 EBIT margin for continuing activities only, before restructuring charge3 Growth at constant FX rates Operational review Experian UK and Ireland delivered a good performance during the year, eventhough market conditions were challenging. This further demonstrates theresilience of the portfolio and underscores its countercyclical qualities. Credit Services Includes consumer credit and business information bureaux and automotive andinsurance services Sales in Credit Services increased by 3% over the year. The consumer creditenvironment in the UK remained challenging, reflecting concerns over levels ofconsumer indebtedness and rising interest rates. Experian benefited as clientsshifted spend from customer acquisition towards cross-selling to existingcustomers, and to portfolio and risk management. There was also good growth inExperian's business information activities, driven by product innovation andmarket share gains. Elsewhere, diversification into sectors outside financialservices continues to be highly successful, with further expansion in both thetelecommunications and public services sectors. Decision Analytics Includes credit analytics, decision support software and fraud solutions Sales at Decision Analytics showed good growth, increasing by 8% during theyear. Product innovation has been a driver of this success, as illustrated bygood performances in origination and in customer management solutions, with newsoftware licensing wins and significant client renewals. For example, Experianfurther extended its relationship with HSBC, signing a global contract todeliver Basel II models through its Strategy Management decision supportsoftware. Demand for fraud prevention solutions continues to rise, as financialinstitutions further focus on reducing fraud-related losses. Experian's Huntersolution has seen considerable success and has secured several significant newclient wins, including RBS Group, which selected Hunter for use across multiplebrands and product lines. Marketing Solutions Includes data and data management (consumer data, data integrity (QAS and EigerSystems), database management (including ClarityBlue) and analytics), digitalservices (CheetahMail) and business strategies (including Mosaic consumersegmentation, economic forecasting and Footfall) Total sales in Marketing Solutions were up 31%, with organic growth of 1%. Thelatter was held back by the weak environment for financial services in the UK,and tough comparables for QAS, attributable to large public sector contract winslast year. CheetahMail delivered an excellent performance, benefiting fromvolume growth of email campaigns and new client wins. The contribution to growth from acquisitions of 30% was primarily attributableto ClarityBlue and Eiger Systems, both of which performed well during the year.ClarityBlue secured a significant client win to provide relationship marketingservices globally to a major home gaming and entertainment provider, and EigerSystems has been successfully integrated, following its acquisition in June2006. We have previously announced our intention to integrate UK marketing data,processing and database management activities into a single business unit,Experian Integrated Marketing. This will provide a single point of sale forExperian's services, an improved customer proposition and significant costsavings. Restructuring costs, which will be charged against EBIT, are expectedto be about $12m, of which about $8m was incurred in the year, with the balancein the year to March 2008. We expect full payback of the reorganisation costs inthe year to March 2009. Interactive Comprises CreditExpert (online credit reports, scores and monitoring servicessold direct to consumers) Interactive grew sales by 176% over the year. This excellent performancereflects the strength of demand for CreditExpert, which benefited from growth inmembership and higher volumes of credit reports delivered, driven by televisionand radio advertising and the strength of marketing partnerships, for examplewith AOL, Yahoo and MSN. Financial review Total sales from continuing activities were $843m, up 17% at constant exchangerates compared to the same period last year. Organic growth was 7%. Thecontribution to sales growth from acquisitions during the year was 10%. EBIT from continuing activities was $221m, an increase of 16% at constantexchange rates over last year, prior to the restructuring charge of $8m. TheEBIT margin, before the restructuring charge, was 26.2% (2006: 26.4%), with theslight decline reflecting the first time inclusion of ClarityBlue, which hasmargins below the average for Experian UK and Ireland. Improved operatingleverage and ongoing cost containment otherwise drove margin enhancement in theother principal activities. EXPERIAN EMEA/ASIA PACIFIC Sales up 8%; 7% organic EBIT up 11% at $74m EBIT margin up 20 basis points at 12.5% Good sales growth in Credit Services, reflecting contract wins in transactionprocessing Double-digit organic sales growth in Decision Analytics 12 months to 31 March 2007 2006 Growth 1 Organic growth 1 $m $m % %Sales - Credit Services 450 410 5 4 - Decision Analytics 95 76 21 18 - Marketing Solutions 46 36 23 9Total EMEA / Asia Pacific 591 522 8 7 EBIT - EMEA / Asia Pacific 74 64 11 EBIT margin 12.5% 12.3% 1 Growth at constant FX rates Operational review Experian EMEA/Asia Pacific delivered another good performance, reflecting veryhigh growth rates in Central, Southern and Eastern Europe, South Africa and AsiaPacific balanced by slower growth in more mature markets such as Western Europe. Credit Services Includes consumer credit bureaux in ten countries, business information bureauxin four countries and transaction processing, mainly in France Credit Services sales grew by 5% at constant exchange rates over the year, withorganic growth of 4%. Sales in transaction processing strengthened during the year as the businessbenefited from the first time contribution from a number of contract wins,particularly in business process outsourcing. These include multi-year,multi-million euro contracts with EDF, French Ministry of Labour, GIE SesamVitale and the French Ministry of Foreign Affairs. In addition, Experian hasextended its customer base in cheque processing and now acts for all top sixFrench banks. Transaction processing, which is a relatively mature activity,accounts for nearly two-thirds of Credit Services sales in EMEA/Asia Pacific. There were excellent performances from the consumer credit bureaux, particularlyin Central, Southern and Eastern Europe and South Africa, driven by growth indemand for credit and value-added products. The acquisition earlier in the yearof a business and consumer credit bureau in Estonia has further extendedExperian's geographic reach in the Nordic region, enhancing the service offeringto clients operating across the region. Decision Analytics Includes credit analytics, decision support software and fraud solutions sold inover 60 countries around the world Sales from Decision Analytics showed excellent progress, with growth of 21%, 18%on an organic basis. Experian Decision Analytics is recognised by major clients around the world forits global products and local presence in key markets. In addition to deliveringgood growth in core markets across Continental Europe, there was significantprogress during the year in emerging markets such as Russia, Turkey and EasternEurope. Experian also secured its first major client win in India, ICICI Bank,for behavioural scoring. In Japan, there was a significant contract win with GEFinance and other domestic clients, and in China Experian secured a contract todeliver software solutions and consulting to ICBC bank, one of China's leadingbanks. Demand for fraud prevention solutions continues to accelerate with, for example,material new multi-year, multi-million euro client wins in Spain. Marketing Solutions Includes business strategies, data integrity (QAS) and other marketing servicesaround the world Sales increased by 23% in the period, with organic growth of 9%. There was a 14%contribution from acquisitions, principally in Business Strategies (Footfall).Growth reflects high value contract wins by QAS in Australia and New Zealand,and good progress by Business Strategies. Financial review Total sales were $591m, up 8% at constant exchange rates compared to the sameperiod last year. Organic growth was 7%. EBIT was $74m, up 11% at constant exchange rates from a year ago, giving an EBITmargin of 12.5% (2006: 12.3%). Margin improvement principally reflectedoperating leverage in Decision Analytics from the growth in sales, andefficiency improvements in the French bank back office activity, partiallyoffset by investment in new markets. OTHER ITEMS Central activities Following the demerger, central activities costs are expected to be about $52min a full financial year. In the year to 31 March 2007, the reported costs ofcentral activities were $47m (2006: $31m). Net interest At 31 March 2007, Experian had net debt of $1,408m, including the net proceedsfrom the equity issue in October 2006 of $1,441m. In the year to 31 March 2007, the reported net interest expense was $111m (2006:$100m), reflecting the pre-demerger capital structure of Experian under GUS plcfor the period to 11 October 2006. The net interest expense for the yearincludes a credit to interest of $16m, relating to the expected return onpension assets over the interest on pension liabilities. Assuming the $1.4bn equity had been raised at 1 April 2006, the pro forma netinterest expense would have been $65m (H1: $30m; H2: $35m), including a similarpension credit (see Appendix 4). For the year to March 2008, Experian expects a net interest expense, includingthe pension credit, in the region of $70m, based on acquisition spend since theyear-end and forecast cash flows. Exceptional items 12 months to 31 March 2007 2006 $m $mDemerger-related costs (149) (7)UK account processing closure costs (26) -Net Gain on disposal of businesses 13 -Total (162) (7) Costs relating to the demerger of Experian and Home Retail Group comprise mainlylegal and professional fees in respect of the transaction, costs in respect ofthe cessation of the corporate functions of GUS plc and the charge incurred onthe early vesting of share awards. Other exceptional items are those arising from the profit or loss on disposal ofbusinesses or closure costs of material business units. All other restructuringcosts have been charged against EBIT in the segments in which they are incurred.In April 2006, Experian announced the phased withdrawal from large scale creditcard and loan account processing in the UK. As previously disclosed, the costsof withdrawal of approximately $26m have been charged in the year to March 2007. Amortisation of acquisition intangibles IFRS requires that, on acquisition, specific intangible assets are identifiedand recognised separately from goodwill and then amortised over their usefuleconomic lives. These include items such as brand names and customer lists, towhich value is first attributed at the time of acquisition. In the year to 31March 2007, the charge for amortisation of acquisition intangibles was $76m(2006: $66m). Goodwill adjustment A goodwill adjustment of $14m arose in accordance with IFRS3 "BusinessCombinations" following the recognition of a benefit in respect of previouslyunrecognised tax losses relating to prior year acquisitions. The correspondingtax benefit reduces the tax charge in the year by $14m. Charges in respect of demerger-related equity incentive plans Charges in respect of demerger-related equity incentive plans relate to one-offgrants made to senior management and all other staff levels at the time ofdemerger under a number of equity incentive plans. The cost of these one-offgrants will be charged to the Group income statement over the five yearsfollowing the demerger, but excluded from the definition of Benchmark PBT. Thecost of all other grants will be charged to the Group income statement and willbe included in the definition of Benchmark PBT. Financing fair value remeasurements An element of Experian's derivatives is ineligible for hedge accounting. Gainsor losses on such elements arising from market movements are charged or creditedto the income statement. In the year to 31 March 2007, this charge amounted to$35m (2006: $2m). Taxation In the year to 31 March 2007, the effective rate of tax on Benchmark PBT,defined as the total tax expense ($68m) adjusted for the tax impact ofnon-Benchmark items $92m divided by Benchmark PBT of $714m, was 22.4%. Experianexpects the effective rate of tax on Benchmark PBT to be about 23% for thecurrent financial year. Earnings per share Following the demerger and equity issue completed earlier in October, Experiannow has approximately 1,022m ordinary shares in issue. The number of shares tobe used for the purposes of calculating basic earnings per share going forwardis 1,006m after deducting own shares held. In the year to 31 March 2007, Benchmark EPS was 59.7 cents and basic EPS was49.9 cents. This was calculated on a weighted average number of shares of 927m,reflecting the GUS capital structure during the period up to demerger. Cash flow The group's operating cash flow was $804m (2006: $717m), which represented 97%(2006: 99%) of the Group's EBIT. Foreign exchange The £/$ exchange rate moved from an average of $1.79 in the year to 31 March2006 to $1.89 in 2007. The •/$ exchange rate moved from an average of €1.22 inthe year to 31 March 2006 to €1.29 in 2007. This increased reported sales by$74m during the year and EBIT by $14m. The closing £/$ exchange rate at 31 March 2007 was $1.96 (2006: $1.74), and the•/$ exchange rate was €1.33 (2006: €1.22). APPENDIX 1. Sales and EBIT by principal activity 12 months to 31 March 2007 2006 Total growth 4 Organic growth 4 $m $mSales - Credit Services 1,520 1,420 4% 3% - Decision Analytics 392 325 16% 15% - Marketing Solutions 728 627 13% - - Interactive 784 558 40% 23%Total - continuing activities 3,424 2,930 14% 8% Discontinuing activities 1 68 154 naTotal 3,492 3,084 11% EBIT - Credit Services direct business 420 371 11% - FARES 61 69 (11%) - Total Credit Services 482 440 8% - Decision Analytics 136 102 27% - Marketing Solutions 73 57 24% - UK restructuring charge (8) - na - Total Marketing Solutions 65 57 10% - Interactive 173 117 50% - Central activities (47) (31) naTotal - continuing activities 808 685 16% Discontinuing activities1 17 42 na Total 825 727 11% EBIT margin - Credit Services - direct business 27.6% 26.1% - Decision Analytics 34.7% 31.5% - Marketing Solutions 2 10.0% 9.1% - Interactive 22.1% 21.0%Total EBIT margin 3 21.8% 21.0% 1 Discontinuing activities include MetaReward and UK account processing2 EBIT margin excluding the UK Marketing Solutions restructuring charge of $8m3 EBIT margin is for continuing direct business only, excluding FARES4 Growth at constant FX rates 2. Use of non-GAAP financial information Experian has identified certain measures that it believes will assistunderstanding of the performance of the business. As the measures are notdefined under IFRS they may not be directly comparable with other companies'adjusted measures. The non-GAAP measures are not intended to be a substitutefor, or superior to, any IFRS measures of performance but management haveincluded them as these are considered to be important comparables and keymeasures used within the business for assessing performance. The following are the key non-GAAP measures identified by Experian: Benchmark profit before tax (Benchmark PBT): Benchmark PBT is defined as profitbefore amortisation of acquisition intangibles, goodwill impairments, charges inrespect of the demerger-related equity incentive plans, exceptional items,financing fair value remeasurements and taxation. It includes Experian's shareof pre-tax profits of associates. Earnings before interest and tax (EBIT): EBIT is defined as profit beforeamortisation of acquisition intangibles, goodwill impairments, charges inrespect of the demerger-related equity incentive plans, exceptional items, netfinancing costs and taxation. It includes Experian's share of pre-tax profits ofassociates. Exceptional items: The separate reporting of non-recurring items gives anindication of Experian's underlying performance. Exceptional items are thosearising from the profit or loss on disposal of businesses or closure costs ofmaterial business units. All other restructuring costs have been charged againstEBIT in the segments in which they are incurred. Discontinuing activities: Experian defines discontinuing activities asbusinesses sold, closed or identified for closure during a financial year. Theseare treated as discontinuing activities for both sales and EBIT purposes. Priorperiods, where shown, are restated to exclude the results on discontinuingactivities. This financial measure differs from the definition of discontinuedoperations set out in IFRS 5 (Non-current assets held for sale and discontinuedoperations). Under IFRS 5, a discontinued operation is: (i) a separate majorline of business or geographical area of operations; (ii) part of a single planto dispose of a major line of business or geographical area of operations; or(iii) a subsidiary acquired exclusively with a view to resale. Continuing activities: Businesses trading at 31 March 2007 that have not beendisclosed as discontinuing activities are treated as continuing activities. Organic growth: This is the year-on-year change in continuing activities sales,at constant exchange rates, excluding acquisitions (other than affiliate creditbureaux) until the first anniversary date of consolidation. Direct business: Direct business refers to Experian's business exclusive offinancial results of FARES. 3. Reconciliation of sales and EBIT by geography 12 months to 2007 200631 March Continuing Dis-continuing Total Continuing Dis-continuing Total activities activities activities activities $m $m $m $m $m $mSalesAmericas 1,990 4 1,994 1,731 73 1,804UK and 843 64 907 677 81 758IrelandEMEA/AsiaPacific 591 - 591 522 - 522Total sales 3,424 68 3,492 2,930 154 3,084 EBITAmericas -direct business 508 (7) 501 404 6 410FARES 61 - 61 69 - 69Total Americas 569 (7) 562 473 6 479UK and Ireland 221 24 245 179 36 215UK and Irelandrestructuring charge (8) - (8) - - -EMEA/AsiaPacific 74 - 74 64 - 64Central activities (47) - (47) (31) - (31)Total EBIT 808 17 825 685 42 727Net interest (111) (100)Benchmark PBT 714 627 Exceptional items (162) (7)Amortisation of acquisition intangibles (76) (66)Goodwill adjustment (14)Charges for demerger related equity incentive plans (24)Financing fair value remeasurements (35) (2)Tax expense of associates (9) (2)Profit before tax 394 550 4. Basis of preparation for pro forma interest calculations Equity proceeds At demerger Experian raised £800m of new equity. For the purposes of preparingpro forma results, net interest has been calculated to illustrate the impact onGroup financial performance as if this equity had been issued at 1 April 2006.The financial impact of this is a credit to interest of $37m. Management of bank balances In the period prior to demerger, bank balances were managed centrally on apooled basis in accordance with the normal treasury arrangements in groups ofcompanies. Home Retail Group companies held bank balances in the pool andinterest thereon is reported within discontinued activities. Experian willcontinue to use pooling arrangements but the arrangements prior to demergerresult in an increase in the reported interest cost for the year for continuingoperations of $9m. Group income statementfor the year ended 31 March 2007 2007 2006 (Represented) (Note 1)___________________________________________________________________________________________ Notes US$m US$m___________________________________________________________________________________________Revenue 3 3,481 3,064Cost of sales (1,681) (1,507)___________________________________________________________________________________________Gross profit 1,800 1,557 _______ ______Distribution costs (301) (272)Administrative expenses (1,026) (699) _______ ______Operating expenses (1,327) (971)___________________________________________________________________________________________Operating profit 3 473 586 _______ ______Finance income 103 146Finance expense (249) (248) _______ ______Net financing costs (146) (102)Share of post-tax profits of associates 67 66___________________________________________________________________________________________Profit before tax 3 394 550Group tax expense 5 (68) (92)___________________________________________________________________________________________Profit after tax for the financial year fromcontinuing operations 326 458___________________________________________________________________________________________Profit for the financial year from discontinuedoperations 6 137 606___________________________________________________________________________________________Profit for the financial year 463 1,064___________________________________________________________________________________________Attributable to:Equity shareholders in the parent company 462 1,018Minority interests 1 46___________________________________________________________________________________________Profit for the financial year 463 1,064___________________________________________________________________________________________ Earnings per share 8 cents cents- Basic 49.9 107.5- Diluted 49.3 105.8 Earnings per share from continuing operations 8 cents cents- Basic 35.1 48.4- Diluted 34.7 47.6___________________________________________________________________________________________ Non-GAAP measures 2007 2006Reconciliation of profit before tax to Benchmark PBT Notes US$m US$mProfit before tax 3 394 550exclude: exceptional items 4 162 7exclude: amortisation of acquisitionintangibles 4 76 66exclude: goodwill adjustment 4 14 -exclude: charges in respect of thedemerger-related equity incentive plans 4 24 -exclude: financing fair value remeasurements 4 35 2exclude: tax expense on share of profits ofassociates 3 9 2___________________________________________________________________________________________Benchmark PBT - continuing operations 3 714 627___________________________________________________________________________________________ Benchmark earnings per share from continuingoperations 8 cents cents- Basic 59.7 54.5- Diluted 59.1 53.6___________________________________________________________________________________________Full year dividend per share 7 17.0 57.5___________________________________________________________________________________________ Group balance sheetat 31 March 2007 2007 2006 US$m (Represented) (Note 1) US$m______________________________________________________________________________Non-current assetsGoodwill 2,219 5,342Other intangible assets 804 926Property, plant and equipment 519 1,670Investment in associates 286 225Deferred tax assets 103 547Retirement benefit assets 85 31Trade and other receivables 11 89Other financial assets 74 158______________________________________________________________________________ 4,101 8,988______________________________________________________________________________ Current assetsInventories 4 1,538Trade and other receivables 794 1,830Current tax assets 17 207Other financial assets 53 10Cash and cash equivalents 907 385______________________________________________________________________________ 1,775 3,970 Current liabilitiesTrade and other payables (1,031) (2,421)Loans and borrowings (1,025) (303)Current tax liabilities (166) (481)Provisions (9) (155)Other financial liabilities - (37)______________________________________________________________________________ (2,231) (3,397)______________________________________________________________________________Net current (liabilities)/assets (456) 573______________________________________________________________________________ Non-current liabilitiesTrade and other payables (52) (144)Loans and borrowings (1,348) (3,599)Deferred tax liabilities (68) (350)Provisions (30) -Other financial liabilities (40) (14)______________________________________________________________________________ (1,538) (4,107)______________________________________________________________________________Net assets 2,107 5,454______________________________________________________________________________ EquityShare capital 102 88Share premium 1,435 16,256Retained earnings 16,341 5,683Other reserves (15,773) (16,575)______________________________________________________________________________Total shareholders' equity 2,105 5,452Minority interests in equity 2 2______________________________________________________________________________Total equity 2,107 5,454______________________________________________________________________________ Group statement of recognised income and expensefor the year ended 31 March 2007 2007 2006 US$m (Represented) (Note 1) US$m_____________________________________________________________________________________________________Net income/(expense) recognised directly in equityCash flow hedges (10) (4)Net investment hedge 84 (16)Reversal of Home Retail Group net investment hedge 4 -Fair value gains on available for sale financial assets - 4Actuarial gains in respect of defined benefit pension schemes 65 13Currency translation differences 465 (439)Recycled cumulative exchange loss in respect of divestments - 5Tax (charge)/credit in respect of items taken directly to equity (7) 9_____________________________________________________________________________________________________Net income/(expense) recognised directly in equity 601 (428)Profit for the financial year 463 1,064_____________________________________________________________________________________________________Total income recognised for the year 1,064 636_____________________________________________________________________________________________________ Total income recognised for the year attributable to:Equity shareholders in the parent company 1,063 609Minority interests 1 27_____________________________________________________________________________________________________Total income recognised for the year 1,064 636_____________________________________________________________________________________________________ Cumulative adjustment for the implementation of IAS 39 attributable to:Equity shareholders in the parent company - 18Minority interests - 4_____________________________________________________________________________________________________ Total - 22_____________________________________________________________________________________________________ Group reconciliation of movements in equityfor the year ended 31 March 2007 2007 2006 (Represented) (Note 1) Notes US$m US$m______________________________________________________________________________________________Equity at 1 April 5,454 6,259Merger accounting adjustments to reflect new company structure:Elimination of GUS plc capital - (608)GUS plc shares shown at Experian Group Limited nominal value - 608______________________________________________________________________________________________Balances in Experian Group Limited at 1 April 5,454 6,259Profit for the financial year 463 1,064Net income/(expense) recognised directly in equity for the financial year 601 (428)Share issues pre demerger of Home Retail Group 76 -Share issues by way of Global Offer 1,441 -Employee share option schemes: -- value of employee services 109 63 -- proceeds from shares issued 8 54Decrease in minority interests arising due to corporate transactions - (495)Exercise of share options 59 -Purchase of ESOP shares (75) (29)Equity dividends paid during the year 7 (401) (508)Dividend in specie relating to the demerger of Home RetailGroup 7 (5,627) -Dividend in specie relating to the demerger of Burberry 7 - (513)Dividends paid to minority shareholders (1) (13)______________________________________________________________________________________________Total equity at the end of the financial year 2,107 5,454______________________________________________________________________________________________Attributable to:Equity shareholders in the parent company 2,105 5,452Minority interests 2 2______________________________________________________________________________________________Total equity at the end of the financial year 2,107 5,454______________________________________________________________________________________________ Group cash flow statementfor the year ended 31 March 2007 2007 2006 US$m (Represented) (Note 1) US$m__________________________________________________________________________________Cash flows from operating activitiesOperating profit 473 586Loss on sale of property, plant and equipment 10 -Depreciation and amortisation 303 270Goodwill adjustment 14 -Charge in respect of share incentive schemes 91 30Change in working capital 5 (19)Exceptional items included in working capital 46 7Interest paid (133) (179)Interest received 27 68Dividends received from associates 39 48Tax paid (121) (32)__________________________________________________________________________________Net cash inflow from operating activities 754 779__________________________________________________________________________________Cash flows from investing activities (114) (62)Purchase of property, plant and equipment (161) (150)Purchase of other intangible assets (42) (41)Purchase of other financial assets and investments inassociates (118) (1,420)Acquisition of subsidiaries, net of cash acquired 258 643Disposal of subsidiaries__________________________________________________________________________________Net cash flows used in investing activities (177) (1,030)__________________________________________________________________________________Cash flows from financing activities (75) (65)Purchase of ESOP shares 1,525 52Issue of Ordinary shares including 2007 IPO proceeds ofUS$1,441m 59 36Receipt of share option proceeds and sale of own shares - 647New borrowings (1,423) (63)Repayment of borrowings (4) (2)Capital element of finance lease rental payments 39 13Net receipts from derivatives held to manage currencyprofile (401) (508)Equity dividends paid (note 7)__________________________________________________________________________________Net cash flows (used in)/generated from financingactivities (280) 110Exchange and other movements 166 (20)__________________________________________________________________________________Net increase/(decrease) in cash and cash equivalents -continuing operations 463 (161) _____________________Net increase in cash and cash equivalents 550 (188)Cash held by Home Retail Group at demerger (518) - _____________________Net increase/(decrease) in cash and cash equivalents -discontinued operations 32 (188)__________________________________________________________________________________Net increase/(decrease) in cash and cash equivalents 495 (349)__________________________________________________________________________________Movement in cash and cash equivalents Cash and cash equivalents at 1 April 139 488Net increase/(decrease) in cash and cash equivalents 495 (349)__________________________________________________________________________________Cash and cash equivalents at the end of the financialyear 634 139__________________________________________________________________________________ Non-GAAP measures__________________________________________________________________________________Reconciliation of net increase/(decrease) in cash andcash equivalents to movement in net debt 2007 2006 US$m US$m__________________________________________________________________________________ Net debt at 1 April - as reported (3,437) (2,688)Net increase/(decrease) in cash and cash equivalents 495 (349)Decrease/(increase) in debt 1,427 (658)Debt held by Home Retail Group at demerger 435 -Exchange and other movements (including movements inrespect of debt) (328) 258__________________________________________________________________________________Net debt at the end of the financial year (note 10) (1,408) (3,437)__________________________________________________________________________________ Notes to the group financial statementsfor the year ended 31 March 2007 1. Basis of preparation The financial information set out in this announcement does not constitute theGroup's statutory financial statements for the years ended 31 March 2007 or 31March 2006 but is derived from the 31 March 2007 financial statements. Asexplained below the comparative information within these financial statementshas been extracted from the GUS plc Annual Report and Financial Statements for2006, which were prepared under International Financial Reporting Standards('IFRS'), and which have been delivered to the UK Registrar of Companies. TheExperian Group Limited Annual Report and Financial Statements for 2007, preparedunder IFRS, will be delivered to the Jersey Registrar of Companies in duecourse. The auditors have reported on those financial statements and have givenan unqualified report which does not contain a statement under Article 111(2) orArticle 115(5) of the Companies (Jersey) Law 1991. The Group financial statements are presented in US Dollars as this is the mostrepresentative currency of the Group's operations. The financial statements arerounded to the nearest million. They are prepared on the historical cost basismodified for the revaluation of certain financial instruments. The principalexchange rates used in preparing the Group financial statements are set out innote 2. The consolidated financial statements of Experian Group Limited and itssubsidiary undertakings ('Experian') are prepared in accordance with IFRS asadopted for use in the European Union. These are those standards, subsequentamendments and related interpretations issued and adopted by the InternationalAccounting Standards Board ('IASB') that have been endorsed by the EuropeanUnion. This preliminary announcement has been prepared in accordance with the ListingRules of the UK Listing Authority, and with IFRS compliant accounting policiesthat have been followed in preparing the Group's financial statements for theyears ended 31 March 2007 and 31 March 2006. The accounting policies werepublished in full on 23 May 2007 and are available on the Group's website, atwww.experiangroup.com/corporate/financial/reports. On 10 October 2006, the separation of Experian and Home Retail Group wascompleted by way of demerger. As part of the demerger, Experian Group Limitedbecame the ultimate holding company of GUS plc and related subsidiaries andshares in GUS plc ceased to be listed on the London Stock Exchange's market forlisted securities on 6 October 2006. Trading of shares in Experian Group Limitedon the London Stock Exchange commenced on 11 October 2006. The demerger transaction falls outside the scope of IFRS 3 'BusinessCombinations'. Accordingly, following the guidance regarding the selection of anappropriate accounting policy provided by IAS 8 'Accounting policies, changes inaccounting estimates and errors', the transaction has been accounted for inthese financial statements using the principles of merger accounting set out inFRS 6 'Acquisitions and Mergers' and UK Generally Accepted Accounting Principles('UK GAAP'). This policy, which does not conflict with IFRS, reflects theeconomic substance of the transaction. The distribution to GUS plc shareholdersof shares in Home Retail Group plc has been accounted for as a dividend inspecie in these financial statements. In accordance with the requirements of merger accounting, the comparativeinformation within these financial statements has been extracted from the GUSGroup's statutory financial statements for the year ended 31 March 2006. Thosefinancial statements incorporated the results of GUS plc and its subsidiaryundertakings for the financial year then ended with the exception of Homebasewhere the GUS Group included its results for the financial year to the end ofFebruary. This was done to facilitate comparability to avoid distortionsrelating to the timing of Easter. The statutory financial statements of GUS plc for the year ended 31 March 2006were reported in Pounds Sterling but, to provide comparability with thepresentation currency of the Group, they are now represented in US Dollars. Inaddition this information has been further represented as follows: (a) the results of Home Retail Group have been reclassified as a discontinuedoperation in the Group income statement and Group cash flow statement as required by IFRS 5 'Non-current assets held for sale and discontinued operations'; (b) there has been a reallocation of costs between cost of sales and operatingexpenses in the Group income statement to reflect the policies adopted in thepreparation of the historical financial information for the Experian prospectuswhich provides a more appropriate classification of such items. The effect ofthis is to increase cost of sales and reduce operating expenses for the yearended 31 March 2006 by US$112m, with no effect on reported profit for thefinancial year then ended; and (c) there has been a reclassification of derivatives in the Group cash flowstatement in order to more fairly state operating cash flows and to reflectthe approach adopted in the preparation of the historical financial informationfor the Experian prospectus. The effect of this has been to increase net cashinflow from operating activities by US$70m, to reduce net cash flow generatedfrom financing activities by US$50m and to separately report an outflow forexchange and other movements of US$20m. The reduction in net cash flow generatedfrom financing activities comprises a reduction of US$63m in the cash inflowfrom new borrowings and a US$13m reclassification to separately identify netreceipts from derivatives held to manage the Group's currency profile. Use of Non-GAAP measures The Group has identified certain measures that it believes will assistunderstanding of the performance of the business. The measures are not definedunder IFRS and they may not be directly comparable with other companies'adjusted measures. The non-GAAP measures are not intended to be a substitutefor, or superior to, any IFRS measures of performance but management hasincluded them as they consider them to be important comparables and key measuresused within the business for assessing performance. The following are the key non-GAAP measures identified by the Group: Benchmark Profit before Tax ('Benchmark PBT')Benchmark PBT is defined as profit before amortisation of acquisitionintangibles, goodwill impairments, charges in respect of demerger-related equityincentive plans, exceptional items, financing fair value remeasurements andtaxation. It includes the Group's share of associates' pre-tax profit. Earnings before Interest and Tax ('EBIT')EBIT is defined as profit before amortisation of acquisition intangibles,goodwill impairments, charges in respect of the demerger-related equityincentive plans, exceptional items, net financing costs and taxation. Itincludes the Group's share of associates' pre-tax profit. Benchmark Earnings per Share ('Benchmark EPS')Benchmark EPS represents Benchmark PBT less attributable taxation and minorityinterests divided by the weighted average number of shares in issue, and isdisclosed to indicate the underlying profitability of the Group. Exceptional itemsThe separate reporting of non-recurring exceptional items gives an indication ofthe Group's underlying performance. Exceptional items are those arising from theprofit or loss on disposal of businesses or closure costs of material businessunits. All other restructuring costs are charged against EBIT in the segments inwhich they are incurred. Net debtNet debt is calculated as total debt less cash and cash equivalents. Total debtincludes loans and borrowings (and the fair value of derivatives hedging loansand borrowings), overdrafts and obligations under finance leases. Interestpayable on borrowings is excluded from net debt. 2. Foreign currency The principal exchange rates used were as follows: Average Closing________________________________________________________________________________ 2007 2006 2007 2006 2005________________________________________________________________________________ Sterling to US Dollar 1.89 1.79 1.96 1.74 1.88Euro to US Dollar 1.29 1.22 1.33 1.22 1.30________________________________________________________________________________ Assets and liabilities of undertakings whose functional currency is notthe US Dollar are translated into US Dollars at the rates of exchange ruling atthe balance sheet date and the income statement is translated into US Dollars ataverage rates of exchange (unless this average is not a reasonable approximationof the cumulative effect of the rates prevailing on the transaction dates, inwhich case income and expenses are translated at the rate on the dates of thetransactions). 3. Segmental information Primary - Geographical segmentsYear ended 31 March 2007 Continuing operations Americas UK & Ireland EMEA/ Central Total Discontinued Total Group continuing operations 3 US$m US$m Asia Pacific activities US$m US$m US$m US$m US$m____________________________________________________________________________________________________________Revenue 1Total revenue 1,994 907 591 - 3,492 5,468 8,960Inter-segment revenue 2 - (11) - - (11) - (11)____________________________________________________________________________________________________________Revenue from external customers 1,994 896 591 - 3,481 5,468 8,949____________________________________________________________________________________________________________ProfitOperating profit/(loss) 432 176 68 (203) 473 212 685Net financing costs - - - (146) (146) 16 (130)Share of post-taxprofits of associates 67 - - - 67 - 67____________________________________________________________________________________________________________Profit/(loss)before tax 499 176 68 (349) 394 228 622____________________________________________________________________________________________________________Group taxexpense (68) (91) (159)____________________________________________________________________________________________________________Profit for thefinancial year 326 137 463____________________________________________________________________________________________________________ Reconciliation from EBIT to Profit/(loss) before tax - continuing operations EBIT 562 236 74 (47) 825Net interest - - - (111) (111)_________________________________________________________________________________Benchmark PBT 562 236 74 (158) 714Exceptional items (note 4) 15 (26) - (151) (162)Amortisationof acquisitionintangibles (45) (27) (4) - (76)Goodwilladjustment (14) - - - (14)Charges inrespect of thedemerger-related (10) (7) (2) (5) (24)equity incentive plansFinancing fair valueremeasurements - - - (35) (35)Tax expense on share of profit of associates (9) - - - (9)_________________________________________________________________________________Profit/(loss) before tax 499 176 68 (349) 394 1. Revenue from continuing operations arose principally from the provision ofservices. Revenue from discontinued operations arose principally from the saleof goods. Revenue within the UK & Ireland geographical segment includes US$11mof inter-segment revenue with discontinued operations. 2. Inter-segment revenue represents the provision of services between Experianand discontinued operations. 3. Additional information on discontinued operations, which comprise Home RetailGroup together with a tax charge in respect of disposals, is given in note 6. The results of discontinued operations are in respect of businesses operatingwithin the UK & Ireland geographical segment. Year ended 31 March 2006 Continuing operations Americas UK & Ireland EMEA/ Central Total Discontinued Total Group Asia Pacific activities continuing operations 3 US$m US$m US$m US$m US$m US$m US$m_________________________________________________________________________________________________________Revenue1Total revenue 1,804 758 522 - 3,084 11,086 14,170Inter-segmentrevenue 2 - (20) - - (20) - (20)_________________________________________________________________________________________________________Revenue fromexternalcustomers 1,804 738 522 - 3,064 11,086 14,150_________________________________________________________________________________________________________ProfitOperatingprofit/(loss) 365 197 62 (38) 586 835 1,421Net financingcosts - - - (102) (102) 33 (69)Share of post-taxprofits of associates 66 - - - 66 - 66_________________________________________________________________________________________________________Profit/(loss)before tax 431 197 62 (140) 550 868 1,418_________________________________________________________________________________________________________Group taxexpense (92) (262) (354)_________________________________________________________________________________________________________Profit/(loss) for the financial year 458 606 1,064_________________________________________________________________________________________________________ Reconciliation from EBIT to Profit before tax - continuing operations EBIT 479 215 64 (31) 727Net interest - - - (100) (100)________________________________________________________________________________ Benchmark PBT 479 215 64 (131) 627Exceptional items (note 4) - - - (7) (7)Amortisation of acquisition intangibles (46) (18) (2) - (66)Financing fairvalue remeasurements - - - (2) (2)Tax expense on share ofprofit of associates (2) - - - (2)________________________________________________________________________________Profit/(loss) before tax 431 197 62 (140) 550________________________________________________________________________________ 1. Revenue from continuing operations arose principally from the provision ofservices. Revenue from discontinued operations arose principally from the saleof goods. Revenue within the UK & Ireland geographical segment includes US$20mof inter-segment revenue with discontinued operations. 2. Inter-segment revenue represents the provision of services between Experianand discontinued operations. 3. Discontinued operations comprise the businesses Home Retail Group, Burberryand Lewis. The most significant of these, Home Retail Group, operated principally in the UK & Ireland geographical segment. Discontinued operations include the results of Homebase for the year ended 28 February 2006.Additional information on discontinued operations is given in note 6. Secondary - Business segmentsYear ended 31 March 2007 Continuing operations Credit Decision Interactive Marketing Central Total Discontinued Total Group Services Analytics Solutions activities continuing operations 3 US$m US$m US$m US$m US$m US$m US$m US$m_______________________________________________________________________________________________________________Revenue 1Total revenue 1,584 392 788 728 - 3,492 5,468 8,960Inter-segmentrevenue 2 (11) - - - - (11) - (11)_______________________________________________________________________________________________________________Revenue fromexternal customers 1,573 392 788 728 - 3,481 5,468 8,949_______________________________________________________________________________________________________________ProfitOperatingprofit/(loss) 402 130 135 28 (222) 473 212 685Net financingcosts - - - - (146) (146) 16 (130)Share of post-taxprofits of associates 67 - - - - 67 - 67_______________________________________________________________________________________________________________Profit/(loss)before tax 469 130 135 28 (368) 394 228 622________________________________________________________________________Group tax expense (68) (91) (159)_______________________________________________________________________________________________________________Profit for the financial year 326 137 463_______________________________________________________________________________________________________________ Reconciliation from EBIT to Profit/(loss) before tax - continuing operations EBIT 505 136 167 64 (47) 825Net interest - - - - (111) (111)___________________________________________________________________________________Benchmark PBT 505 136 167 64 (158) 714Exceptionalitems (note 4) (11) - - - (151) (162)Amortisation of acquisition intangibles (16) (1) (32) (27) - (76)Goodwill adjustment - (5) - (9) - (14)Charges in respect of the demergerrelated equityincentive plans (note 4) - - - - (24) (24)Financing fairvalue remeasurements - - - - (35) (35)Tax expense on share of profit ofassociates (9) - - - - (9)___________________________________________________________________________________Profit/(loss)before tax 469 130 135 28 (368) 394___________________________________________________________________________________ 1. Revenue from continuing operations arose principally from the provision ofservices. Revenue from discontinued operations arose principally from the saleof goods. Revenue from Credit Services includes US$11m of inter-segment revenue with discontinued operations. 2. Inter-segment revenue represents the provision of services between Experianand discontinued operations. 3. Discontinued operations comprise the Home Retail Group. Additionalinformation on discontinued operations is given in note 6. 4. No allocation by business segment is made for charges in respect of thedemerger-related equity incentive plans as the underlying data is maintainedonly to provide an allocation by geographical segment. Year ended 31 March 2006 Continuing operations Credit Decision Interactive Marketing Central Total Discontinued Total Group Services Analytics Solutions activities continuing operations3 US$m US$m US$m US$m US$m US$m US$m US$m_______________________________________________________________________________________________________________Revenue 1Total revenue 1,504 325 628 627 - 3,084 11,086 14,170Inter-segmentrevenue 2 (20) - - - - (20) - (20)_______________________________________________________________________________________________________________Revenue fromexternalcustomers 1,484 325 628 627 - 3,064 11,086 14,150_______________________________________________________________________________________________________________Profit Operatingprofit/(loss) 395 102 86 41 (38) 586 835 1,421Net financingincome/(costs) - - - - (102) (102) 33 (69)Share of post-taxprofits of associates 66 - - - - 66 - 66_______________________________________________________________________________________________________________Profit/(loss) before tax 461 102 86 41 (140) 550 868 1,418_______________________________________________________________________Group tax expense (92) (262) (354)_______________________________________________________________________________________________________________Profit for the financial year 458 606 1,064_______________________________________________________________________________________________________________ Reconciliation from EBIT to Profit / (Loss) before tax - continuing operations EBIT 477 102 122 57 (31) 727Net interest - - - - (100) (100)___________________________________________________________________________________Benchmark PBT 477 102 122 57 (131) 627Exceptional items (note 4) - - - - (7) (7)Amortisationof acquisitionintangibles (14) - (36) (16) - (66)Financing fairvalue remeasurements - - - - (2) (2)Tax expense on share of profit ofassociates (2) - - - - (2)___________________________________________________________________________________Profit/(loss)before tax 461 102 86 41 (140) 550 1. Revenue from continuing operations arose principally from the provision ofservices. Revenue from discontinued operations arose principally from the saleof goods. Revenue from Credit Services includes US$20m of inter-segment revenue with discontinued operations. 2. Inter-segment revenue represents the provision of services between Experianand discontinued operations. 3. Discontinued operations comprise the businesses Home Retail Group, Burberryand Lewis which were all individual segments. Discontinued operations includethe results of Homebase for the year ended 28 February 2006. Additionalinformation on discontinued operations is given in note 6. 4. Exceptional and other non-GAAP measures 2007 2006 US$m US$m______________________________________________________________________________Exceptional itemsContinuing operations:Charge on early vesting and modification of share awards atdemerger of Experian and Home Retail Group 23 -Other costs incurred relating to the demerger of Experianand Home Retail Group 126 7Costs incurred in the closure of UK Account Processing 26 -Loss on disposal of businesses 2 -Gain arising in associate on the partial disposal of itssubsidiary (15) -______________________________________________________________________________Total exceptional items 162 7______________________________________________________________________________ Other non-GAAP measuresContinuing operations:Amortisation of acquisition intangibles 76 66Goodwill adjustment 14 -Charges in respect of the demerger-related equity incentiveplans 24 -Financing fair value remeasurements 35 2______________________________________________________________________________Total other non-GAAP measures 149 68______________________________________________________________________________ Exceptional items Other costs of US$126m (2006: US$7m) incurred relating to the demerger ofExperian and Home Retail Group comprise legal and professional fees in respectof the transaction, together with costs in connection with the cessation of thecorporate functions of GUS plc in 2007. In April 2006, Experian announced the phased withdrawal from large scale creditcard and loan account processing in the UK. The full cost of withdrawal ofUS$26m has been charged in the year and is made up of a cost in cash of US$28mless the benefit of a US$2m pension curtailment. The loss on disposal of businesses primarily related to the sale of a minoritystake in Experian's South African business. First American Real Estate Solutions LLC ('FARES') recognised a gain of US$77m on the partial disposal of its Real Estate Solutions division as part of theconsideration for the acquisition of 82% of CoreLogic Solutions, Inc. Experianrecognised US$15m, its 20% share of the gain. A deferred tax charge of US$6m hasbeen included in the FARES' result in respect of this gain. Other non-GAAP measures IFRS requires that, on acquisition, specific intangible assets are identifiedand recognised separately from goodwill and then amortised over their usefuleconomic lives. These include items such as brand names and customer lists, towhich value is first attributed at the time of acquisition. The Group hasexcluded amortisation of these acquisition intangibles from its definition ofBenchmark PBT because such a charge is based on uncertain judgements about theirvalue and economic life. A goodwill adjustment of US$14m arose under IFRS3'Business Combinations' on the recognition of previously unrecognised tax losseson prior years' acquisitions. The corresponding tax benefit reduces the taxcharge in the year by US$14m. Charges in respect of demerger-related equity incentive plans relate to one-offgrants made to senior management and at all staff levels at the time of thedemerger, under a number of equity incentive plans. The cost of these one-offgrants will be charged to the Group income statement over the five years followingflotation but excluded from the definition of Benchmark PBT. The cost of allother grants will be charged to the Group income statement and will be includedin the definition of Benchmark PBT. An element of the Group's derivatives is ineligible for hedge accounting underIFRS. Gains or losses on these derivatives arising from market movements arecredited or charged to financing fair value remeasurements within Finance incomeand Finance expense in the Group income statement. 5. Taxation The effective rate of tax is 17.3% (2006: 16.7%) based on the profit before taxof US$394m (2006: US$550m). The effective rate of tax based on Benchmark PBT ofUS$714m (2006: US$627m) is 22.4% (2006: 17.5%). The tax charge of US$68m (2006: US$92m) includes a UK credit of US$45m (2006: charge of US$36m) and an overseas charge of US$113m (2006: charge of US$56m). 6. Discontinued operations ______________________________________________________________________________The results for discontinued operations were as follows: 2007 2006 US$m US$m______________________________________________________________________________Revenue:Home Retail Group (including Wehkamp) 5,468 10,206Burberry - 844Lewis Group - 36______________________________________________________________________________ 5,468 11,086______________________________________________________________________________Operating profit:Home Retail Group (including Wehkamp) 212 619Burberry - 168Lewis Group - 9______________________________________________________________________________Total operating profit 212 796Net financing income 16 33______________________________________________________________________________Profit before tax of discontinued operations 228 829Tax charge (74) (262)______________________________________________________________________________Profit after tax of discontinued operations 154 567______________________________________________________________________________ Gains/(losses) on disposal of discontinued operations:Profit on disposal of Lewis Group - 64Loss on disposal of Wehkamp - (34)Profit on disposal of shares in Burberry - 18Costs incurred relating to the demerger of Burberry - (9)______________________________________________________________________________Gains on disposals - 39Tax charge in respect of disposals (17) -______________________________________________________________________________(Loss)/profit after tax on disposals (17) 39______________________________________________________________________________Profit for the financial year from discontinued 137 606operations ______________________________________________________________________________ In May 2005, the Group announced the sale of its remaining 50% interest in LewisGroup Limited and in December 2005 divested its remaining 65% interest inBurberry Group plc. In January 2006, the Group sold Wehkamp, the leading homeshopping brand in the Netherlands. These operations were classified asdiscontinued in the financial statements of GUS plc for the year ended 31 March2006. In October 2006, the net assets of Home Retail Group were distributed byway of a dividend in specie. As a result, these operations have beenreclassified as discontinued. The tax charge in respect of disposals relates to taxation assets no longerrecoverable following earlier disposals. Earnings before interest and taxation of discontinued businesses are statedafter charging: 2007 2006 US$m US$m______________________________________________________________________________Cost of sales 3,589 7,034______________________________________________________________________________ Operating expenses:Distribution costs 1,361 2,335Administrative expenses 306 921______________________________________________________________________________Operating expenses 1,667 3,256______________________________________________________________________________ The cash flows attributable to discontinued operations comprise:______________________________________________________________________________ 2007 2006 US$m US$m_____________________________________________________________________________From operating activities 705 539From investing activities (168) (711)From financing activities (3) (7)Exchange and other movements 16 (9)Less cash held by Home Retail Group at demerger (518) -Net increase/(decrease) in cash and cash 32 (188)equivalents in discontinued operations______________________________________________________________________________ 7. Dividend______________________________________________________________________________ 2007 2007 2006 2006 cents US$m cents US$m per share per share______________________________________________________________________________Amounts recognised and paid as distributionsto equity holders during the yearInterim 5.5 55 17.2 147Final 40.3 346 36.6 361______________________________________________________________________________Ordinary dividends paid on equity shares 45.8 401 53.8 508______________________________________________________________________________Dividend in specie relating to the demergerof Home Retail Group (note 9) 5,627 -______________________________________________________________________________Dividend in specie relating to the demergerof Burberry - 513______________________________________________________________________________ Full year dividend for the year ended 31March 2007 17.0_____________________________________________________ A dividend of 11.5 cents per Ordinary share will be paid on 27 July 2007 toshareholders on the register at the close of business on 29 June 2007 and is notincluded as a liability in these financial statements. Unless shareholders elect by 29 June 2007 to receive US Dollars, their dividendswill be paid in Sterling at a rate per share calculated on the basis of theexchange rate from US Dollars to Sterling on 6 July 2007. Pursuant to the Income Access Share arrangements put in place as part of thedemerger, shareholders in Experian Group Limited are able to elect to receivetheir dividends from a UK source ( the 'IAS election'). Shareholders who held50,000 or fewer Experian shares (i) on the date of admission of the Company'sshares to the London Stock Exchange and (ii) in the case of shareholders who didnot own shares at that time, on the first dividend record date after they becomeshareholders in the Company, unless they elect otherwise, will be deemed to haveelected to receive their dividends under the IAS arrangements. Shareholders whohold more than 50,000 shares and who wish to receive their dividends from a UKsource must make an IAS election. All elections remain in force indefinitelyunless revoked. The Experian Group Limited Employee Share Trust and the GUS ESOP Trust havewaived their entitlement to dividends in the amount of US$4m (2006: US$7m). TheGUS ESOP Trust did not waive its entitlement to the dividend in specie. The dividends in respect of the year ended 31 March 2006 were received byshareholders of GUS plc. The final dividend paid in August 2006 and the dividendin specie relating to the demerger of Home Retail Group were received byshareholders of GUS plc. 8. Basic and diluted earnings per share The calculation of basic earnings per share is calculated by dividing theearnings attributable to ordinary shareholders of the Company by a weightedaverage number of Ordinary shares in issue during the year (excluding own sharesheld in Treasury in the period prior to the demerger and own shares held in ESOPTrusts, which are treated as cancelled). The calculation of diluted earnings per share reflects the potential dilutiveeffect of employee share incentive schemes. The earnings figures used in thecalculations are unchanged for diluted earnings per share. The weighted average number of Ordinary shares in issue during the year ended 31March 2007 includes Ordinary shares of GUS plc in issue to the date of thedemerger and the Ordinary shares of the Company in issue thereafter. Theweighted average number of Ordinary shares in issue during the year ended 31March 2006 comprises ordinary shares of GUS plc in issue and reflects the effectof the share consolidation that took place at the date of the Burberry demergerin December 2005. ______________________________________________________________________________Basic earnings per share: 2007 2006 cents cents______________________________________________________________________________Continuing and discontinued operations 49.9 107.5Exclude: discontinued operations (14.8) (59.1)______________________________________________________________________________Continuing operations 35.1 48.4Add back of exceptional and other non-GAAP measures, net oftax 24.6 6.1______________________________________________________________________________Benchmark earnings per share from continuing operations -Non-GAAP measure 59.7 54.5______________________________________________________________________________ Diluted earnings per share:______________________________________________________________________________Continuing and discontinued operations 49.3 105.8Exclude: discontinued operations (14.6) (58.2)______________________________________________________________________________Continuing operations 34.7 47.6Add back of exceptional and other non-GAAP measures, net oftax 24.4 6.0______________________________________________________________________________Benchmark diluted earnings per share from continuingoperations - Non-GAAP measure 59.1 53.6______________________________________________________________________________ ______________________________________________________________________________Earnings: 2007 2006 US$m US$m______________________________________________________________________________ Continuing and discontinued operations 462 1,018Exclude: discontinued operations (137) (560)______________________________________________________________________________Continuing operations 325 458Add back of exceptional and other non-GAAP measures, net oftax 229 58______________________________________________________________________________Benchmark earnings - Non-GAAP measure 554 516______________________________________________________________________________ ______________________________________________________________________________ 2007 2006 m m______________________________________________________________________________Weighted average number of Ordinary shares in issue during theyear 927.3 946.7Dilutive effect of share incentive awards 9.9 15.0______________________________________________________________________________Diluted weighted average number of Ordinary shares in issueduring the year 937.2 961.7______________________________________________________________________________ 9. Demerger of Home Retail Group As indicated in note 1, the distribution of shares in Home Retail Group plc toshareholders in GUS plc at the date of demerger has been accounted for as adividend in specie. This represents the Group's share of the net assets of HomeRetail Group at the date of demerger which comprised: US$m______________________________________________________________________________Intangible assets 3,716Property, plant and equipment 1,299Deferred tax assets 211Retirement benefit assets 41Inventories 1,765Trade and other receivables 1,036Cash and cash equivalents 518Trade and other payables (2,156)Current tax payable (72)Loans and borrowings (435)Deferred tax liabilities (122)Provisions (174)______________________________________________________________________________Group's share of net assets of Home Retail Group on demerger 5,627______________________________________________________________________________ 10. Analysis of net debt - non-GAAP measure______________________________________________________________________________ 2007 2006 US$m US$m______________________________________________________________________________Cash and cash equivalents (net of overdrafts) 634 139Derivatives hedging loans and borrowings (6) 81Debt due within one year (729) (49)Finance leases (1) (10)Debt due after more than one year (1,306) (3,598)______________________________________________________________________________Net debt at the end of the financial year (1,408) (3,437)______________________________________________________________________________ Continuing operations (1,408) (3,277)Discontinued operations - (160)______________________________________________________________________________ Net debt at the end of the financial year (1,408) (3,437)______________________________________________________________________________ 11. Experian Group website The directors are responsible for the maintenance and integrity of statutory andaudited information on the Company's website. The work carried out by theauditors does not involve consideration of these matters and, accordingly, theauditors accept no responsibility for any changes that may have occurred to thepreliminary announcement since it was initially presented on the website.Jersey legislation and United Kingdom regulation governing the preparation and dissemination of financial information may differ from requirements in other jurisdictions. This information is provided by RNS The company news service from the London Stock Exchange END This information is provided by RNS The company news service from the London Stock Exchange

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