TIDMEXPN
RNS Number : 1417T
Experian plc
16 July 2020
news release
Trading update, first quarter
16 July 2020 -- Experian, the global information services
company, today issues an update on trading for the three months
ended 30 June 2020 .
Commenting on the performance, Brian Cassin, Chief Executive
Officer, said:
"While the COVID-19 health crisis continues to weigh on people
and economies everywhere, Experian has been very resilient. We
delivered growth in North America and Brazil during Q1, which
helped offset weaker conditions elsewhere, and as a result total
revenue was down just (1)% at constant exchange rates, with organic
revenue down (2)%. At actual exchange rates total revenue declined
by (5)% due to the weakness of the Brazilian Real relative to the
US dollar.
"The COVID-19 crisis has shown the critical importance of data
in responding to the huge challenges created by the pandemic and of
finding a route to recovery. Through this challenging period,
Experian has been working to support governments, hospitals,
businesses and charities, and we will continue to provide data and
other services to governments and frontline organisations to help
get economies back on their feet.
"There continues to be a range of outcomes and a level of
uncertainty around the extent or re-imposition of lockdowns,
government action to support economies and the shape of economic
recovery. We therefore do not intend to provide guidance for the
year ending 31 March 2021."
% change in revenue from ongoing activities year-on-year for the
three months ended 30 June 2020
Ongoing activities Total revenue Total revenue Organic revenue
only growth % growth % growth %
At actual At constant At constant
exchange rates(1) exchange rates exchange rates
North America 4 4 4
Latin America (26) 0 (1)
UK and Ireland (18) (15) (15)
EMEA/Asia Pacific (20) (15) (20)
Total global (5) (1) (2)
1 Experian reports in US dollars.
% change in organic revenue year-on-year for the three months
ended 30 June 2020
Organic revenue growth(1) Data Decisioning B2B(2) Consumer Total
Services
North America 1 0 1 10 4
Latin America (4) (9) (5) 104 (1)
UK and Ireland (16) (13) (15) (18) (15)
EMEA/Asia Pacific (13) (29) (20) n/a (20)
Total global (3) (8) (5) 8 (2)
1 Ongoing activities only, at constant exchange rates.
2 B2B = Business-to-Business segment consists of Data and
Decisioning business sub-divisions.
Business mix including % change in organic revenue year-on-year
for the three months ended 30 June 2020
Segment Business unit Q1 organic revenue
growth %(3)
North America 4
Data CI / BI Bureaux 4
Automotive (3)
Targeting (15)
Decisioning Health 1
DA / Other (1)
Consumer Consumer Services 10
Latin America (1)
Data CI / BI Bureaux (5)
Other 12
Decisioning DA / Other (9)
Consumer Consumer Services 104
UK and Ireland (15)
Data CI / BI Bureaux (14)
Targeting / Other (21)
Decisioning DA / Other (13)
Consumer Consumer Services (18)
EMEA/Asia Pacific (20)
EMEA (25)
Asia Pacific (13)
Total global (2)
3 Ongoing activities only, at constant exchange rates.
CI = Consumer Information, BI = Business Information, DA =
Decision Analytics.
North America - 63% of Group revenue(4)
North America performed exceptionally well, with growth in B2B
and a very strong performance in Consumer Services. Both total and
organic revenue increased by 4%, with B2B up 1% and Consumer
Services up 10%.
B2B delivered organic revenue growth of 1%, reflecting the
current strength in mortgage volumes and Experian Ascend, which
offset lower credit reference volumes in support of unsecured
lending, as well as weakness in targeting (marketing data) due to
retail exposure. Automotive, while down overall, experienced
considerable swings, rebounding as US car-purchasing activity
resumed. Software revenue held relatively stable, there was good
demand for analytics, while health delivered modest growth.
Strength in Consumer Services was driven by good demand for
credit education and identity monitoring subscription services,
benefiting from heightened consumer interest during this period.
Lead generation revenues also grew, notwithstanding some reduction
in the availability of credit offers on Experian.com. We continue
to expand our audiences, and now have c.33 million free US consumer
members, with four million US consumers having connected their
accounts to Experian Boost.
Latin America - 14% of Group revenue(4)
In Latin America, organic revenue growth of 1% in Brazil was
offset by a decline in Spanish Latin America to give a modest
overall organic revenue decline of (1)%. Total revenue growth at
constant exchange rates was flat, reflecting the contribution from
the Sentinel Peru acquisition.
B2B declined (5)%. In Brazil, we saw a growing contribution in
the quarter from positive data scores and Experian Ascend, as well
as resilience in our automotive activities. However, this was
offset by lower revenues in relation to credit reference data,
analytics and decisioning software, as well as weak demand in
Spanish Latin America due to an extended lockdown.
Consumer Services delivered a very strong performance, more than
doubling in the quarter with organic revenue up 104%. Limpa Nome,
our online debt resolution service, delivered strong growth. More
consumers visited our platform to renegotiate outstanding debts and
we also benefited from transaction growth on our eCred credit
matching marketplace. Memberships have continued to grow strongly,
and we now have 46 million free consumer memberships in Brazil.
UK and Ireland - 15% of Group revenue(4)
In UK and Ireland both total and organic revenue, at constant
exchange rates, were down (15)%.
B2B organic revenue declined (15)%, with contraction in credit
reference volumes due to clients tightening credit policies and a
significant reduction in lending levels. Peak volume declines were
seen in April, with some recovery off the lows in May and June as
lockdowns started to ease and as some lenders resumed activity. We
also experienced delays in client purchasing decisions for
software, a near total shutdown in the automotive market, and
marketing data revenue was also impacted as advertisers cut back on
marketing spend.
Consumer Services organic revenue declined (18)%. Credit
monitoring subscription revenue was initially impacted by reduced
consumer demand but has recovered over the balance of the quarter
and our lead generation business was affected by the reduction of
credit supply in the market. Consumer engagement levels have
continued to grow however, especially as consumer appetite for
credit increases, and we now have eight million free UK consumer
memberships.
EMEA/Asia Pacific - 8% of Group revenue(4)
At constant exchange rates, total revenue across EMEA/Asia
Pacific declined by (15)%, while organic revenue declined by (20)%.
The difference related to the contribution from the acquisition of
Compuscan and other smaller Asia Pacific acquisitions.
Our activities in EMEA were severely impacted in the initial
phases of COVID-19 related lockdowns, notably in Italy and South
Africa, as clients slowed decisions in relation to software
acquisition and implementations. As lockdowns have eased trends in
bureau volumes have improved to stabilise in June at levels
slightly below those in the prior year, but Decisioning remains
weak.
In Asia Pacific, COVID-19 related disruption also had a marked
impact, particularly in India, and more widely across the region.
More recently, we have experienced an uplift in client activity
levels, with several new business wins for our collections, X-Score
and Experian One capabilities which we expect to underpin the
outlook for FY22.
The acquisition of the majority stake in the Risk Management
division of Arvato Financial Solutions, Germany's second largest
credit bureau, completed on 30 June 2020.
Near-term guidance
We currently expect that organic revenue for Q2 FY21 will be in
the range of flat to (5)%, with no change in our assumption of
costs held broadly flat, as we continue to finely balance near-term
mitigating actions with investments in organisational capacity,
technology and new propositions to position ourselves for future
growth.
Following the completion of the acquisition in Arvato Financial
Solutions Risk Management division in Germany and taken together
with the smaller acquisitions annualising from last year, we expect
acquisitions to add around 2% to revenue growth for the rest of the
financial year.
If recent foreign exchange rates persist, we expect a headwind
to Benchmark EBIT for the year ending 31 March 2021 of 4%.
Future events
Experian will release results for the first half ending 30
September 2020 on Tuesday 17 November 2020.
4 Percentage of Group revenue based on FY20 revenue at actual
rates.
Contact:
Experian
Nadia Ridout-Jamieson Investor queries +44 (0)20 3042 4278
Gerry Tschopp Media queries
Finsbury
Rollo Head +44 (0)7768 994 987
Jenny Davey +44 (0)7901 513 610
This announcement is available on the Experian website at
www.experianplc.com . There will be a conference call today to
discuss this update at 9.00am (UK time), which will be broadcast
live on the website with a recording available later.
All financial information in this trading update is based on
unaudited management accounts. Certain statements made in this
trading update 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.
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 45 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.
This information is provided by RNS, the news service of the
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END
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