16th Jan 2008 07:01
Experian Group Limited16 January 2008 Experian Group Limited Interim Management Statement, Third Quarter Experian, the global information services company, today issues an update ontrading for the three months to 31 December 2007. Commenting on the performance of Experian, Don Robert, Chief Executive Officer,said: "Experian has continued to perform well in difficult market conditions. Overall,the business achieved revenue growth of 22% and organic revenue growth of 2%.For the full year, we continue to target solid double-digit EBIT growth and aprofit outcome within the range of current market expectations. "While trading conditions are not expected to improve in the fourth quarter, ourfocus is on maximising profitability and we are today announcing a programme ofsignificant efficiency measures. These measures will give rise to anon-recurring charge and will bring benefits in FY2009, with full annualisedbenefits the year after. We continue to invest to take advantage of thelong-term growth opportunities and to position ourselves for market recovery." Experian Group % change in revenue year-on-year for the three months to 31 December 2007--------------------------------------------------------------------------------Continuing activities Total growth Total growth Organic growthonly(1) % % % At actual At constant At constant exchange rates(2) exchange rates exchange rates--------------------------------------------------------------------------------North America 3 3 2Latin America >100(3) >100(3) 78UK and Ireland 12 5 -EMEA/Asia Pacific 25 11 4 --------------------------------------------------------Experian 22 16 2-------------------------------------------------------------------------------- (1) Continuing activities exclude the contributions of MetaReward, UK accountprocessing and Loyalty Solutions(2) Experian is reporting in US dollars(3) Latin America total growth at actual exchange rates for the three months ended December 2007 was 12,193% and total growth at constant exchange rates was 10,282% In the three months to 31 December 2007, revenue from continuing activities atExperian increased by 16% at constant exchange rates. Organic revenue growthslowed to 2%, reflecting the impact of the credit crunch on financial servicescustomers. Decision Analytics improved compared to the second quarter withorganic revenue growth of 5%, while Interactive continued to perform well withorganic revenue growth of 9%. There were modest organic revenue declines atCredit Services of 1% and at Marketing Services of 3%. Acquisitions contributed 14% to revenue growth. Net debt at the end of theperiod was $2.9bn. Cost efficienciesExperian has taken a number of strategic initiatives this year to improveefficiency and reduce costs, including near-shoring activities and data centreconsolidation. These actions will benefit margins in the full year, with furtherbenefit expected in the financial year to March 2009. Experian is today launching a programme of significant cost-efficiency measures.Identified efficiencies include offshoring of development activity,restructuring of core credit and marketing activities and infrastructureconsolidation. This programme is expected to deliver annualised cost savings ofapproximately $80m, of which an estimated $40m will be realised in the financialyear ended March 2009. One-off restructuring costs associated with achievingthese cost savings will be in the region of $100m, the majority of which will becash costs. While taking these actions, Experian will continue to invest for growth throughthe income statement. During the current financial year such activity has beenstepped up and investment will continue in order to capitalise on futureopportunities and to position the Group strongly for recovery in its coremarkets. Transaction processing in FranceAs part of our strategic planning process, we are undertaking a review of ourtransaction processing activities in France and their fit within the Experianportfolio. The review is at an early stage and we will make a furtherannouncement when appropriate. In the year ending 31 March 2007, revenues forthese activities were $308m, with low double-digit margins. North AmericaRevenue in North America in the three months to 31 December 2007 increased by 3%in total. Organic growth was 2%, with Hitwise (acquired in June 2007)contributing the balance. While revenue growth at Credit Services declined by 2% in the third quarter, wecontinued to gain traction in account management and collections. DecisionAnalytics slowed to mid single-digit organic revenue growth, against abackground of strong comparatives and an increasingly difficult marketenvironment. Organic revenue growth at Marketing Services was 3%, while atInteractive it was mid single-digit, as strength in Consumer Direct andPriceGrabber offset continued depressed trading at LowerMyBills. Latin AmericaRevenue for Latin America in the three-month period to 31 December 2007 was$111m (prior year $1m), including contributions from Serasa (acquired in June2007) and Informarketing (acquired in April 2007). Organic revenue growth was78%, reflecting the performance of Decision Analytics only. Serasa continued to perform well during the period, in line with the buy plan.Integration is proceeding ahead of plan and is expected to be finalised in March2008. UK and IrelandRevenue from continuing activities in the UK and Ireland increased by 5% in thethird quarter at constant exchange rates. Organic revenue was flat, with theacquisitions of Tallyman (acquired in May 2007), Hitwise, The pH Group (acquiredJuly 2007) and N4 Solutions (acquired July 2007) contributing the difference. During the period, the environment for UK financial services became tougher,with significant declines in unsecured lending and mortgage approvals. Againstthis backdrop, organic revenue at Credit Services saw a modest decline of 2%, asorigination volumes fell, offset by strength in the public services sector andin business information. Decision Analytics recovered to deliver organic revenuein line with last year, reflecting strong collections activity and someimprovement in pipeline conversion. Organic revenue at Marketing Services wasimpacted by significant cutbacks in client spending, down 10%, while performanceat Interactive was very strong, with organic revenue nearly doublingyear-on-year. EMEA/Asia PacificAt constant exchange rates, revenue in EMEA/Asia Pacific increased by 11% in thethird quarter. Organic revenue growth was 4%, with acquisitions, mainly EmailingSolution (acquired in May 2007), Tallyman and Hitwise, contributing the balance.Organic revenue growth at Credit Services was low single-digit and double-digitin Decision Analytics. Marketing Services was again strong, due to QAS. Future announcementsExperian will issue its Second Half Trading Update on 16 April 2008 and itsPreliminary Announcement on 21 May 2008. Enquiries ExperianPaul Brooks Chief Financial Officer +44 (0)203 042 4215Nadia Ridout-Jamieson Director of Investor Relations FinsburyRollo Head +44 (0)207 251 3801Don Hunter This announcement is available on the Experian website, www.experiangroup.com.There will be two conference calls today to discuss this update, at 9.00am andat 3.00pm (UK time). Both will be broadcast live on the website with a recordingavailable later. All financial information is based on unaudited management accounts. Certainstatements made in this Interim Management Statement are forward-lookingstatements. Such statements are based on current expectations and are subject toa number of risks and uncertainties that could cause actual events or results todiffer materially from any expected future events or results referred to inthese forward-looking statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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