Full-year financial report

news release

Full-year financial report

Strong performance demonstrating the power of data for consumers and our clients

7am, 19 May 2021 ─ Experian plc, the global information services company, today issues its financial report for the year ended 31 March 2021.

Brian Cassin, Chief Executive Officer, commented:

"Experian delivered a strong performance this year, even as the world faced the testing times posed by the COVID-19 pandemic. Total revenue growth for the year was 7% and organic revenue growth was 4%, while Q4 organic revenue growth of 5% was at the top end of our guidance range. 

"We have again shown Experian's resilience in the face of external shocks, which is due to the diversity of our portfolio and our successful innovation-led investments in new opportunities. We are off to a strong start to FY22 and expect Q1 organic revenue growth in the range of 15-20% which gives us every confidence of another successful year ahead. For the year, we expect organic revenue growth in the range of 7-9%, total revenue growth of 11-13% and strong EBIT margin accretion, all at constant currency.

"I want to pay tribute to my Experian colleagues whose incredible hard work and commitment this year has steered our business successfully through challenging times. FY21 was a year when we unlocked the power of data for consumers, clients and communities across the world, using our skills and capabilities to help governments and societies to respond to the crisis, hospitals to marshal resources, governments to support businesses, and charities to care for the most vulnerable. Data will also be a key driver of economic growth as the recovery gathers pace and we will be a leading champion in using data to create a better tomorrow."

1 See Appendix 1 (page 14) and note 4 to the financial statements (pages 23-25) for definitions of non-GAAP measures.

2 Organic revenue growth at constant currency.

3 Revenue and Benchmark EBIT for the year ended 31 March 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses.

4 See page 14 for reconciliation of Benchmark EBIT from ongoing activities to Profit before tax.

Highlights

o Full year revenue growth at constant currency was +7%. Full year organic revenue +4%, with Q4 +5%.

o Full year organic revenue growth in North America and Latin America +7% and +9% respectively. Organic revenue in UK and Ireland and EMEA/Asia Pacific declined (6)% and (14)% respectively.

o Full year organic growth in Consumer Services revenue was +17%, while Business-to-Business (B2B) was flat.

o Benchmark EBIT growth at constant exchange rates of +3%. Benchmark EBIT margin of 25.9% at actual exchange rates (2020: 26.9%3).

o Benchmark EPS growth of +4% at constant currency and flat at actual exchange rates.

o Conversion rate of Benchmark EBIT into Benchmark operating cash flow of 106%.

o Second interim dividend of 32.5 US cents per ordinary share, unchanged year-on-year, to bring the total for FY21 to 47.0 US cents per share.

Experian

Nadia Ridout-Jamieson Investor queries +44 (0)20 3042 4278

Gerry Tschopp Media queries

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Graeme Wilson, Louise Male and Guy Bates +44 (0)20 7353 4200

There will be a presentation today at 9.30am (UK time) to analysts and investors via conference call. To view the slides and listen in online please go to www.experianplc.com for the link.

Experian will update on first quarter trading for FY22 on 15 July 2021.

Roundings

Certain financial data has been rounded within this announcement. As a result of this rounding, the totals of data presented may vary slightly from the actual arithmetic totals of such data.

Forward looking statements

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. See note 26 for further information on risks and uncertainties facing Experian.

Company website

Neither the content of the Company's website, nor the content of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

About Experian

Experian is the world's leading global information services company. During life's big moments - from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers - we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.

We have 17,800 people operating across 44 countries and every day we're investing in new technologies, talented people, and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group. 

Part 1 - Chief Executive Officer's review

Experian delivered another successful year of growth even as the COVID-19 pandemic posed significant challenges to people, clients, and the world economy. I am proud of the accomplishments of our 17,800 people around the world who have shown incredible resilience and passion, and who have worked tirelessly to serve our various communities over this year. In recognition, we intend to make a special one-off share-based award to recognise the outstanding commitment of our people this year.

The COVID-19 pandemic has demonstrated how properly managed data can be used as a significant force for good and has been used by decision-makers to navigate the immediate crisis and to direct resources to where they were most needed. Our people were instrumental in using innovative data science to predict hot zones for the spread of the virus. We stepped up to launch financial education projects aimed at supporting communities impacted by COVID-19. We supported governments, charities and foodbanks to help the most vulnerable during the pandemic, and we provided health and data modelling tools to assist with coordination of national efforts.

These are just some examples of how we have placed the power of our data and innovation in service of society. As we look out to the economic recovery in the months ahead, data will be a critical driver of growth, helping businesses and consumers make better-informed decisions about their futures.

Our financial performance was robust. Total revenue growth was 7% at constant currency, while organically we grew 4%. Consumer Services deserves special mention, delivering 17% underlying growth in the year and reaching 110m members globally. We benefitted from growth in B2B platforms across many territories. Combined with continued expansion in key verticals like health, and growth in counter-cyclical revenue streams such as US mortgage, this enabled us to offset declines in some parts of our business caused by the COVID-19 economic downturn. We benefitted both from our portfolio diversity and from the strategic investments we have made over many years, and we continued to invest in our business in FY21.

Full year financial highlights

· Revenue growth was 7% at constant currency and organic revenue growth was 4%. At actual exchange rates revenue growth was 4%.

· Organic revenue growth in North America was 7% and 9% in Latin America, including very strong contributions from Consumer Services. The UK and Ireland and EMEA/Asia Pacific regions were impacted negatively, down (6)% and (14)% respectively.

· B2B organic revenue growth was flat. Growth in North America Data and Decisioning was offset by declines elsewhere.

· Growth in Consumer Services was very strong, with organic revenue up 17%, driven by North America and Brazil.

· Growth in Benchmark EBIT was 3% at constant exchange rates and flat at actual exchange rates after currency translation headwinds.

· Our Benchmark EBIT margin was 25.9%, down 80 basis points at constant currency and down 100 basis points at actual exchange rates. This was after deliberate action to support our people through the crisis, increased marketing investment and investment to support new product innovation and technology transformation.

· We delivered growth in Benchmark earnings per share of 4% at constant exchange rates and flat at actual exchange rates.

· Cash flow was very strong, with a conversion rate of Benchmark EBIT into Benchmark operating cash flow of 106%.

· We ended the year in the lower half of our leverage range at 2.2x (on a pre IFRS 16 basis), compared to our target of 2.0-2.5x for Net debt to Benchmark EBITDA.

B2B organic revenue was flat overall, recovering as the year progressed, with H1 (2)% and H2 +2%:

· Growth in North America and Latin America offset declines in other regions. Strength in US mortgage volumes, Experian Ascend, health and fraud and identity services helped to offset weaker conditions for unsecured credit origination, decisioning software and marketing expenditure by clients.

· We made further headway with the roll out and scaling of our core B2B platforms. The cumulative total contract value for Ascend is US$374m and we continue to make progress with Experian One, CrossCore and our Open Data platforms.

· Health delivered another year of growth, automotive was stable and we have expanded our position in employment and verification services.

· In Brazil, we had significant success extending our relationships with some of our largest financial services clients as we signed expanded new multi-year agreements, and we saw good growth in positive data propositions.

We had an outstanding year in Consumer Services, which delivered 17% organic revenue growth, with H1 +13% and H2 +22%:

· We now have 110m free consumer memberships, up by 28m year-on-year. We have 41m free members in the USA, 59m in Brazil and 9.5m in the UK.

· North America delivered organic revenue growth of 16%. We are investing behind the success of Experian Boost, which now has 6.7m unique account connections. Our membership continued to grow and we launched a new vertical, automotive insurance, which performed strongly, and which offers significant further growth opportunities in FY22 and beyond.

· Our Latin America revenues more than doubled in the year at local currency, with revenue up 144% organically.

· Consumer Services in the UK recovered as the year progressed, returning to growth in H2. We launched Experian Boost in the UK in early November and now have 370,000 active Boost members.

Operating efficiency

· One of our key operating principles to manage throughout the COVID-19 crisis has been to retain capacity to recover strongly and to help our people to cope with the crisis. We did not use any government furlough schemes.

· We deliberately balanced our approach to cost management. We cut back on discretionary spend, froze headcount, and delayed non-critical investment. We also supported our people and sustained critical growth investments. We took concerted action to increase investment in marketing expenditure in support of Consumer Services. We have also invested in and materially progressed our technology transformation as we migrate from mainframes into a distributed framework utilising the cloud, and we continued to invest in new product innovation.

· We previously announced that we have embarked on a transformation programme in the UK and Ireland to simplify our technology estate, enhance customer experience and to return to profitable growth. The programme is progressing well and to plan. As previously announced, these actions have given rise to an exceptional restructuring charge of US$50m in FY21. We are on course to deliver year-on-year run-rate savings of US$40m in the year ending 31 March 2022.

· The net effect was that EBIT margin for the year reduced to 25.9%. For FY22, we expect strong accretion in the EBIT margin.

Funding and liquidity

· We further strengthened our funding position while also supporting investment activities.

· We continued to invest in data, technology and innovation through capital expenditure. Capital expenditure reduced by (13)% to US$422m, which represented 8% of total revenue. For FY22, we expect capital expenditure to represent circa 9% of total revenue.

· We took steps to expand the reach of our portfolio through a number of inorganic investments. These included:

o The expansion of our bureau estate with the acquisition of a majority stake in a German credit bureau (the Risk Management division of Arvato Financial Solutions) and of the Spanish credit bureau, Axesor.

o We also accelerated our entry into the verification services vertical with the acquisition of employer solutions provider Corporate Cost Control. After the year end, we acquired Tax Credit Co (TCC) and Emptech, which also add to our income verification business in North America.

o Consistent with our ambitions to extend our position in fraud and identity management, we acquired Tapad, a leader in resolution of digital online identities and BrScan, a leading player in Brazil.

o Total acquisition outflow in the year was cash of US$583m and 7.2m Experian plc shares.

· We have announced a second interim dividend of 32.5 US cents per share, unchanged year-on-year. This will be paid on 23 July 2021 to shareholders on the register at the close of business on 25 June 2021.

· We have also announced that we will commence a US$150m share repurchase programme, which will mainly offset deliveries under employee share plans.

· During the year we undertook two bond issues totalling US$1.1bn. Including these, our bonds total US$4.0bn and have an average remaining tenor of 6 years. 

· At 31 March 2021, we had no drawn bank debt and held US$2.65bn of undrawn committed bank borrowing facilities which have an average remaining tenor of four years. These include our core US$1.95bn club facility which is undrawn and committed until December 2025.

· As at 31 March 2021, Net debt to Benchmark EBITDA was 2.2x (on a pre IFRS 16 basis), compared to our target leverage range of 2.0-2.5x.

Other financial developments

Benchmark PBT was US$1,265m, up 5% at constant currency and 1% at actual rates, after lower net interest expense of US$121m (2020: US$132m). The reduction reflects lower average global interest rates. For FY22, we expect net interest expense to be around US$115-120m.

The Benchmark tax rate was 25.9% (2020: 25.8%). For FY22, we expect a rate in the range of 26% to 27%, taking into account expected profit mix for the year.

Our Benchmark EPS was 103.1 US cents, an increase of 4% at constant currency and flat at actual exchange rates. The weighted average number of ordinary shares (WANOS) increased to 910m (2020: 902m), inclusive of the shares delivered in connection with the purchase of our stake in the Risk Management division of Arvato Financial Solutions. For FY22, we expect WANOS of circa 915m.

Benchmark operating cash flow increased 22% at actual rates and our cash flow conversion was 106% (2020: 88%). The increase is due to the mix of growth, strong control of working capital, reduced infrastructure investment, and some phasing.

Foreign exchange translation was a 4% headwind to Benchmark EPS in the year. This was predominantly due to the Brazilian Real, which weakened by 31% relative to the US dollar versus the prior year. For FY22, we expect a neutral impact to Benchmark EBIT, assuming recent foreign exchange rates prevail.

Environmental, Social, and Governance (ESG)

· A key priority for Experian is to improve the financial health of the communities we serve. This is how we can use our data and expertise to make the biggest difference to society, helping us to contribute to three United Nations Sustainable Development Goals, namely targets 1.4, 8.10 and 9.3, which relate to improving access to financial services and credit.

· This year we have reached 28 million people with our social innovation products specifically developed to deliver societal benefits and improve financial health. Examples include Social Determinants of Healthcare, which helps people in the USA to avoid major medical bills in future, and a financial online training module in Brazil to help people manage their finances. This brings the total number of people reached since 2013 to 61 million, putting us on track to meet our target of 100 million people by 2024.

· A year ago, we launched United for Financial Health, a financial recovery programme partnering with NGOs to help communities significantly affected by COVID-19. For example, we partnered with Operation HOPE to reach ethnic minority groups in the USA with support to raise credit scores, and the National Literacy Trust in the UK. We have reached 35 million people and small businesses across the USA, Brazil and the UK and Ireland this year. We are also expanding into EMEA and Asia Pacific.

· As part of our 'People First' agenda we will be making a special one-off share-based recognition award to our people for their commitment to Experian during the COVID-19 pandemic.

· We have undertaken an extensive review of our Diversity, Equity and Inclusion strategy, and aim to increase the number of women among our senior leaders from 32% to 40% by 2024, supporting the commitment we made this year to the UN Women's Empowerment Principles.

· Following a recent appointment, our Board is now comprised of 36% women and 73% independent members (including the Chairman). We continue to meet the recommendations of the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic diversity.

· Experian featured in the S&P Global Sustainability Yearbook 2021 as a leader on ESG, scoring in the top 15% of the professional services industry.

· Our commitment to help tackle climate change and reduce our impact on the environment is reflected in our CDP rating of 'A-'. This places us in the leadership category and among the top 14% of professional services companies for our disclosure on climate risks and opportunities.

· This year we have cut our absolute carbon emissions by a further 58% and reduced our carbon intensity by 60% (Scope 1, Scope 2 market-based and Scope 3 emissions). This reduction was mainly due to the decrease in air travel as a result of COVID-19 restrictions. As business activities resume, we're expecting to see an increase in air travel trends and we will continue looking into carbon reduction initiatives to help decrease our footprint sustainably and in the long-term.

· Building on last year's commitment to be carbon neutral in our own operations by 2030, we are today announcing a Science Based Target to cut our Scope 1 and 2 emissions by 50% by 2030, and our Scope 3 emissions by 15% by 2030. Having committed last year to gradually carbon offset our Scope 1 and 2 emissions over the five years to 2025, we are offsetting 20% of our FY21 emissions.

Part 2 - Regional highlights for the year ended 31 March 2021

We delivered good organic revenue growth in North America and Latin America, while the UK and Ireland and EMEA/Asia Pacific regions declined.

1 For the year ended 31 March 2021.

2 B2B = Business-to-Business segment consists of Data and Decisioning business sub-divisions.

See note 4 to the financial statements on pages 23-25 for definition of organic revenue growth.

3 Organic revenue growth is calculated after the results for the year ended 31 March 2020 have been re-presented following the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment, and the reclassification to exited business activities of certain B2B businesses.

North America

Revenue in North America was US$3,530m, with total revenue growth of 9% and organic revenue growth of 7%. The difference related to the acquisitions of Tapad and Corporate Cost Control and other smaller acquisitions.

North America was very resilient in the face of the marketplace challenges. While we were able to rely on some support from counter-cyclical revenue streams, we benefitted equally, if not more, from our investments in innovation, our brand and from the progress we have made in developing new business opportunities.

The B2B segment delivered organic revenue growth of 4%. Mortgage volumes were robust as historically low interest rates led to higher consumer refinancing activity. We secured new and expanded client relationships for Experian Ascend, with strong demand for our data services, marketing and account management modules as well as first-time contributions from newer modules like Ascend Intelligence Services. In keeping with our ambition to make credit and lending simpler, we also made good progress towards developing our suite of verification services offers, and after the year-end secured important new client wins. Growth in these areas offset significantly reduced volumes in relation to unsecured lending, and lower software revenue, as well as lower revenues from retail clients as they reduced marketing expenditure.

We made further progress in our strategy to grow in specialised verticals. Health delivered a very solid performance. We have expanded the range of services we offer to our hospital clients to help them manage their revenue cycle and we are steadily increasing our presence in new customer segments such as the payer sector and pharmacies. Our recent investments, designed to enhance the consumer experience through digital channels, have proved well timed. We saw strong traction for these services as our hospital clients sought to provide healthcare in virtual settings. This also benefitted authentication volumes as clients sought to verify patient identities. At the other end of the customer lifecycle, we saw good demand for solutions which provide revenue certainty for healthcare clients. Our automotive vertical, while volatile through the year, was also relatively resilient.

Empowering financial lives is an important aspect of what we do at Experian and we delivered one of our strongest years ever for Consumer Services with organic revenue growth of 16%. This was fuelled by new memberships and product innovation. Experian Boost has proved to be an innovative new product to help consumers to manage their finances, with 6.7m connected accounts. Brand investment through our 'purple cow' advertising campaign has yielded considerable growth in free memberships which totalled 41m at the year-end, up from 30m free members at the end of FY20. We continue to diversify our business model. We have successfully entered into automotive insurance matching, which supplemented growth from subscription-based credit education services and credit matching referral fees. Our credit matching lending panel added more lending partners who are attracted to our platform because we are able to deliver a large audience and because of our ability to match consumers with suitable credit offers. We enhanced Experian Boost and now consumers can contribute payment history data from streaming services (including Netflix) to their credit scores as an eligible tradeline, and we continue to invest in a new breed of smart services to help consumers manage their financial health.

The strength in our revenue performance contributed to strong EBIT progression, up 10% to US$1,201m. The Benchmark EBIT margin increased by 30 basis points year-on-year to 34.0%, even as we invested in customer acquisition in support of Consumer Services.

Latin America

Revenue in Latin America was US$625m, with both total and organic revenue growth of 9% at constant exchange rates. Organic revenue growth in Brazil was 11%.

B2B organic revenue grew 1%. Strength in Serasa Automotive and Decisioning in Brazil offset weakness in traditional credit bureau volumes across Brazil and other markets in Latin America.

In Brazil, we made good progress despite the challenging backdrop, signing new multi-year, multi-solution agreements with our largest clients, with increased share of wallet. We are also driving widespread adoption of positive data propositions which is leading to volume growth in enquiries. We expect to sustain this trajectory with the introduction of a range of enhanced propositions in FY22, and we intend to make all new scores and attributes available through our Ascend technology platform. Across the region, we signed 12 new clients in the year for Experian Ascend and plan to introduce new modules in the coming months. We had good growth in fraud and identity management, which included new wins for our CrossCore platform, all of which contributed to a solid year for Decisioning.

Nowhere perhaps better illustrates our commitment to empower consumers than the progress we have made in Brazil. Consumer Services delivered another year of outstanding performance, with organic revenue growth of 144%. We have established a model, unique in Brazil, where we can provide consumers with financial information, help people to better understand their credit scores, compare pricing and apply for credit offers, as well as offering identity monitoring subscription services. Consumers can also use our collections marketplace to pay their bills and even to see the impact of these bill payments in improved credit scores through our free Score Turbo offer. As a result, we have grown our free membership base to 59m, compared to 45m in FY20. Audiences of this size and scale have attracted new lenders to our platform, including a growing proportion of the emerging FinTech community in Brazil. Our team in Brazil is committed to innovation-led growth and we are excited by the opportunities that lie ahead.

In January, we were subject to media speculation claiming that Serasa marketing data was part of data from multiple organisations illegally offered for sale on the dark web. We take our responsibilities to protect consumer data extremely seriously and we initiated an extensive and detailed review which was conducted over several months and supported by multiple third-party experts. This investigation has found no evidence that any of our systems have been compromised. We have provided our conclusions and the detailed results of our investigation to the relevant authorities, including the Federal authorities who continue to pursue a criminal investigation against the individuals involved.

Performance in Spanish Latin America was weaker as parts of the region have been especially hard hit by the COVID-19 pandemic. We have placed a strong focus on operating efficiency, while sustaining new product investment and undertaking technology transformation. More recently, we have seen evidence of recovery which will help us to resume our strategic ambitions to diversify our traditional bureau offerings and focus on developing new opportunities such as services to consumers.

Benchmark EBIT in Latin America was US$172m, up 4% at constant exchange rates. The Benchmark EBIT margin from ongoing activities at actual exchange rates was 27.5% (2020: 30.1%) mainly reflecting revenue mix effects.

UK and Ireland

Revenue from ongoing activities in the UK and Ireland was US$737m. Total and organic revenue declined (6)% at constant exchange rates. Both B2B and Consumer Services organic revenue declined (6)%.

This was a year of transformation in the UK and Ireland and we made a lot of progress. While we have more to accomplish, it was encouraging to see the region return to growth in Q4 and deliver much improved margin performance in H2 compared to H1. Our ambition in the region is to simplify and modernise our technology estate and resume profitable growth, as well as to take advantage of the many opportunities which lie ahead. We already see tangible evidence of progress in the form of much improved client net promoter scores, higher employee engagement levels, greater network stability, and a robust new business performance.

B2B revenue from ongoing activities declined (6)% at constant exchange rates. Revenues were down for much of the year due to reductions in UK bank consumer lending and reduced demand for software investment. Our marketing services segment was also affected by reduced marketing expenditure. We successfully pivoted towards COVID-19 support propositions, including government loan schemes, and as a result business credit volumes remained robust. Negative trends reversed to some extent towards the end of our financial year with strengthening transaction volumes as lenders reactivate programmes. The new business pipeline has also been encouragingly strong, setting us up well for FY22. In particular, there is good demand for our open data solutions such as affordability and categorisation, and for our identity and fraud management propositions, including CrossCore, and there have been new wins for Experian Ascend. We also added many new logos in the mid-market.

While Consumer Services also had a difficult year, with organic revenue down (6)%, we took the important step to launch Experian Boost in the UK and this has made a promising start. The constraints on credit supply in the early part of the year also impacted revenues in our credit comparison marketplace. However, there was an improvement in the trajectory as the year progressed and we exited the year with growth in Q4. Our free membership base grew to 9.5m consumers, compared to 7.5m last year, with 370,000 active Experian Boost memberships.

Revenue reductions and the impact of our transformation programme affected our EBIT performance. Benchmark EBIT from ongoing activities was US$122m, down from US$173m the year before. The Benchmark EBIT margin from ongoing activities was 16.6% (2020: 22.9)%. With the transformation programme now well progressed, we expect a strong improvement in the UK margin in the year ahead.

EMEA/Asia Pacific

In EMEA/Asia Pacific, revenue from ongoing activities was US$465m, with total revenue growth at constant exchange rates of 7% and an organic decline of (14)%. The difference principally relates to the contribution from our bureau acquisitions: Compuscan, the Risk Management division of Arvato Financial Solutions, and Axesor.

Our ambition in EMEA/Asia Pacific is to concentrate our efforts where we can establish a strong market presence and can operate at scale. The COVID-19 pandemic has opened up some specific opportunities as many of our clients are accelerating their adoption of cloud-based technologies. We are rapidly introducing our global advanced B2B propositions, including Ascend, SaaS decisioning through PowerCurve, our open data solutions, and fraud and identity services.

Revenue performance last year was significantly impacted by reduced bureau volumes, particularly during the initial phases of lockdown. The trajectory gradually improved as lockdowns eased in most markets but remained challenged in countries hardest hit by the pandemic, such as India. Clients were also hesitant to spend on software implementations, delaying or cancelling decisions, which particularly affected Asia Pacific. Client activity has picked up in recent months, particularly in EMEA.

We have got off to a strong start in our two new bureau acquisitions in Germany and Spain, both of which have performed well in the period since acquisition. All our global platforms have already been introduced and made available in Germany. In Spain, we now have two highly complementary bureau businesses, the integration of which is proceeding well, and we are exploring ways to fully address the new opportunity we have in the small and medium enterprise (SME) market.

The reduction in revenue affected our EBIT performance. Benchmark EBIT from ongoing activities was US$(20)m (2020: US$12m) and the Benchmark EBIT margin from ongoing activities was (4.3)% (2020: 2.8%).

Group financial results

Business mix including % change in organic revenue year-on-year for the year ended 31 March 2021

1 Percentage of group revenue from ongoing activities calculated based on FY21 revenue at actual exchange rates.

2 Ongoing activities only, at constant exchange rates.

CI = Consumer Information, BI = Business Information, DA = Decision Analytics.

Revenue by region

1 The results for the year ended 31 March 2020 have been re-presented following the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment; previously our Consumer Services business in this region was not sufficiently material to be disclosed separately. In addition, revenue has been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 14) and note 4 to the financial statements (pages 23-25) for definitions of non-GAAP measures.

See Appendix 2 (page 14) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment.

Income statement, earnings and Benchmark EBIT margin analysis

1 Benchmark EBIT for the year ended 31 March 2020 has been re-presented for the reclassification to exited business activities of certain B2B businesses.

See Appendix 1 (page 14) and note 4 to the financial statements (pages 23-25) for definitions of non-GAAP measures.

See Appendix 2 (page 14) for analyses of revenue, Benchmark EBIT and Benchmark EBIT margin from ongoing activities by business segment

Group financial review

Key statutory measures

We continued to make good financial progress during the year against the backdrop of the global COVID-19 pandemic and revenue increased by 4% to US$5,372m (2020: US$5,179m) reflecting the resilience of our business, technology infrastructure and processes.

Operating profit for the year ended 31 March 2021 was US$1,183m (2020: US$1,185m) and included a profit on the disposal of an associate of US$120m. This was offset by impairment charges, net of reversals of US$67m and exceptional restructuring costs of US$50m. Profit before tax increased to US$1,077m (2020: US$942m) aided by a reduction in net finance costs of US$130m.

The decrease in net finance costs reflects a reduction in market interest rates and average borrowing levels as well as reduced foreign exchange losses on Brazilian real intra-Group funding and other fair value remeasurements.

Cash inflow from operating activities from continuing operations was US$1,488m (2020: US$1,262m) reflecting improved performance and movements in working capital. We have successfully improved collections, recovering receivables that had increased towards the end of FY20 due to the impact of COVID-19.

Undrawn committed bank borrowing facilities were US$2,650m at 31 March 2021 (2020: US$2,175m).

Basic EPS was 88.2 US cents (2020: 74.8 US cents). The increase in this statutory measure reflects a mix of factors with a higher tax charge, lower finance costs and a higher number of shares in issue as a consequence of 7.2 million shares delivered as acquisition consideration.

The effective rate of tax based on profit before tax reduced from 27.9% in the year ended 31 March 2020 to 25.5% in the current financial year.

At 31 March 2021, net assets amounted to US$3,119m (2020: US$2,281m). Capital employed, as defined in note 4(r) to the financial statements, was US$7,324m (2020: US$6,465m). 

Return on capital employed for the year ended 31 March 2021 reduced to 15.0% (2020: 16.1%), largely due to the effect of acquisitions completed part way through the year.

There was an increase in equity of US$838m from US$2,281m at 31 March 2020 with movements detailed in the Group statement of changes in equity on page 20.

Key movements in equity during the year included:

• Profit for the financial year of US$802m.

• Currency translation gains of US$70m.

• Employee share awards and options cost of US$106m.

• Ordinary dividends of US$427m (2020:US$424m) of which US$405m (2020:US$402m) was paid by a UK subsidiary undertaking which had distributable reserves of US$12.0bn (2020: US$13.6bn) at 31 March 2021.

• Shares issued on vesting of share awards of US$19m, together with shares delivered as acquisition consideration of US$253m.

Foreign exchange rates

Foreign exchange - average rates

The principal exchange rates used to translate revenue and Benchmark EBIT into the US dollar are shown in the table below.

Foreign exchange - closing rates

The principal exchange rates used to translate assets and liabilities into the US dollar at the year-end dates are shown in the table below.

Risks and uncertainties

The nine principal risks and uncertainties faced by the Group are summarised in note 26 to the financial statements.

Appendices

1. Non-GAAP financial information

We have identified and defined certain measures that we believe assist understanding of our performance. These measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted performance measures. These non-GAAP measures are not intended to be a substitute for any IFRS measures of performance but we have included them as these are considered to be key measures used within the business for assessing the underlying performance of our ongoing businesses. Information on certain of our non-GAAP measures is set out below in the further appendices. Definitions of all our non-GAAP measures are given in note 4 to the financial statements.

1. Revenue and Benchmark EBIT for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses and the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment.

3. Reconciliation of Benchmark EBIT to statutory profit before tax

4. Exceptional items and other adjustments made to derive Benchmark PBT

An explanation of the reasons for the exclusion of such items from our definition of Benchmark PBT is given in note 4(a) to the financial statements. 

5. Cash flow and Net debt summary

6. Reconciliation of net investment

7. Cash tax reconciliation

1. Other differences include an acceleration of tax deductions as a result of US legislative changes in the year and in FY20 items for which the tax charge and payment fell in different financial years.  

Group income statement

for the year ended 31 March 2021

1. Total Benchmark EBIT, Benchmark PBT per share and Full-year dividend per share are non-GAAP measures, defined in note 4 to the financial statements.

2. The loss before tax for non-benchmark items of US$188m (2020: US$313m) comprises a net credit for Exceptional items of US$35m (2020: charge of US$35m) and net charges for other adjustments made to derive Benchmark PBT of US$223m (2020: US$278m). Further information is given in note 7 to the financial statements.

3. Benchmark PBT per share is calculated by dividing Benchmark PBT of US$1,265m (2020: US$1,255m) by the weighted average number of ordinary shares of 910 million (2020: 902 million). The amount is stated in US cents per share.

Group statement of comprehensive income

for the year ended 31 March 2021

1. Amounts reported within Other comprehensive income (OCI) are in respect of continuing operations and, except as reported for post-employment benefit assets and obligations, there is no associated tax. Currency translation items, not reclassified to profit or loss, are recognised in the translation reserve within other reserves and in non-controlling interests. Other items within Other comprehensive income are recognised in retained earnings.

Group balance sheet

at 31 March 2021

Group statement of changes in equity

for the year ended 31 March 2021

Group cash flow statement

for the year ended 31 March 2021