TIDMEXPN
RNS Number : 0582Z
Experian plc
19 May 2021
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."
Benchmark and Statutory financial highlights
---------------------------------------------------------------------------------------------------
2021 2020 Actual Constant Organic
US$m US$m rates growth rates growth growth
% % %(2)
---------- ---------- -------------- -------------- --------
Benchmark(1)
Revenue - ongoing activities(3) 5,357 5,161 4 7 4
Benchmark EBIT - ongoing
activities(3,4) 1,385 1,386 - 3 n/a
Total Benchmark EBIT 1,386 1,387 - 3 n/a
Benchmark EPS USc 103.1 USc 103.0 - 4 n/a
Statutory
Revenue 5,372 5,179 4 6 n/a
Operating profit 1,183 1,185 - 4 n/a
Profit before tax 1,077 942 14 6 n/a
Basic EPS USc 88.2 USc 74.8 18 5 n/a
Total dividend USc 47.0 USc 47.0 - n/a n/a
---------- ---------- -------------- -------------- --------
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
Tulchan
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.
Year-on-year % change in organic revenue - for EBIT
the year ended 31 March 2021 margin
% of Group Data Decisioning B2B(2) Consumer Total Total
revenue Services
(1)
----------- ----- ------------ ------- ---------- ------ --------
North
America 65 5 2 4 16 7 34.0%
----------- ----- ------------ ------- ---------- ------ --------
Latin
America(3) 12 1 2 1 144 9 27.5%
----------- ----- ------------ ------- ---------- ------ --------
UK and
Ireland 14 (5) (7) (6) (6) (6) 16.6%
----------- ----- ------------ ------- ---------- ------ --------
EMEA/Asia
Pacific 9 (8) (20) (14) n/a (14) (4.3)%
----------- ----- ------------ ------- ---------- ------ --------
Total
Global 100 2 (4) - 17 4 25.9%
----------- ----- ------------ ------- ---------- ------ --------
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$12m)
and the Benchmark EBIT margin from ongoing activities was (4.3)%
(2020: 2.8%).
Group financial results
Business mix including % change in organic revenue year-on-year
for the year ended 31 March 2021
Segment Business unit % of Group Organic
revenue(1) revenue
growth
%(2)
North America 65% 7%
------------ ---------
Data CI / BI bureaux 25% 9%
Automotive 5% 0%
Targeting 2% (13)%
---------------------------------- ------------ ---------
Decisioning Health 8% 5%
DA / Other 5% (3)%
---------------------------------- ------------ ---------
Consumer Consumer Services 20% 16%
------------------- ------------ ---------
Latin America 12% 9%
------------ ---------
Data CI / BI bureaux 8% 0%
Other 1% 9%
---------------------------------- ------------ ---------
Decisioning DA / Other 2% 2%
------------------- ------------ ---------
Consumer Consumer Services 1% 144%
------------------- ------------ ---------
UK and Ireland 14% (6)%
------------ ---------
Data CI / BI bureaux 5% (4)%
Targeting / Auto 2% (9)%
---------------------------------- ------------ ---------
Decisioning DA / Other 4% (7)%
------------------- ------------ ---------
Consumer Consumer Services 3% (6)%
------------------- ------------ ---------
EMEA/Asia Pacific 9% (14)%
------------ ---------
EMEA 6% (13)%
------------ ---------
Asia Pacific 3% (15)%
------------ ---------
Total global 100% 4%
------------ ---------
1 Percentage of group revenue from ongoing activities calculated
based on FY21 revenue at actual exchange rates.
2 Ongoing activities only, at constant exchange rates.
CI = Consumer Information, BI = Business Information, DA =
Decision Analytics.
Revenue by region
Year ended 31 March Growth %
------
Total Total at Organic
at actual constant at constant
2021 2020(1) exchange exchange exchange
US$m US$m rates rates rates
------ ----------- ---------- -------------
North America
Data 1,761 1,642 7 5
Decisioning 694 679 2 2
------ -------- ----------- ---------- -------------
Business-to-Business 2,455 2,321 6 4
Consumer Services 1,075 926 16 16
------ -------- ----------- ---------- -------------
Total ongoing activities 3,530 3,247 9 9 7
Exited business activities - -
------ -------- ----------- ---------- -------------
Total North America 3,530 3,247
------ -------- ----------- ---------- -------------
Latin America
Data 457 578 1 1
Decisioning 92 114 2 2
------ -------- ----------- ---------- -------------
Business-to-Business 549 692 1 1
Consumer Services(1) 76 40 144 144
Total ongoing activities 625 732 (15) 9 9
Exited business activities - -
------ -------- ----------- ---------- -------------
Total Latin America 625 732
------ -------- ----------- ---------- -------------
UK and Ireland
Data 361 367 (5) (5)
Decisioning 220 227 (7) (7)
------ -------- ----------- ---------- -------------
Business-to-Business 581 594 (6) (6)
Consumer Services 156 161 (6) (6)
------ -------- ----------- ---------- -------------
Total ongoing activities 737 755 (2) (6) (6)
Exited business activities 12 14
------ -------- ----------- ---------- -------------
Total UK and Ireland 749 769
------ -------- ----------- ---------- -------------
EMEA/Asia Pacific
Data 287 213 32 (8)
Decisioning 178 214 (18) (20)
Total ongoing activities 465 427 9 7 (14)
Exited business activities 3 4
------ -------- ----------- ---------- -------------
Total EMEA/Asia Pacific 468 431
------ -------- ----------- ---------- -------------
Total revenue - ongoing
activities 5,357 5,161 4 7 4
Total revenue - exited
business activities 15 18
------ -------- ----------- ---------- -------------
Revenue 5,372 5,179 4 6
------ -------- ----------- ---------- -------------
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
Year ended 31 March Growth %
----------
Total Total at
at actual constant
2021 2020(1) exchange exchange
US$m US$m rates rates
---------- ----------- ----------
Benchmark EBIT by geography
North America 1,201 1,093 10
Latin America 172 220 4
UK and Ireland 122 173 (34)
EMEA/Asia Pacific (20) 12 (232)
---------- ---------- ----------- ----------
Benchmark EBIT before Central Activities 1,475 1,498 2
Central Activities - central corporate
costs (90) 112
---------- ---------- ----------- ----------
Benchmark EBIT from ongoing activities 1,385 1,386 - 3
Exited business activities 1 1
---------- ---------- ----------- ----------
Benchmark EBIT 1,386 1,387 - 3
Net interest (121) (132)
---------- ---------- ----------- ----------
Benchmark PBT 1,265 1,255 1 5
Exceptional items 35 (35)
Amortisation of acquisition intangibles (138) (124)
Impairment of goodwill (53) -
Acquisition and disposal expenses (41) (39)
Adjustment to the fair value of
contingent consideration (1) 4
Non-benchmark share of post-tax
profit of associates 16 6
Interest on uncertain tax provisions (11) (14)
Financing fair value remeasurements 5 (111)
Profit before tax 1,077 942 14 6
Tax charge (275) (263)
Profit after tax 802 679
---------- ---------- -----------
Benchmark earnings
Benchmark PBT 1,265 1,255 1 5
Benchmark tax charge (328) (324)
---------- ---------- ----------- ----------
Total Benchmark earnings 937 931
---------- ---------- ----------- ----------
Owners of Experian plc 938 929 1 5
Non-controlling interests (1) 2
---------- ---------- ----------- ----------
Benchmark EPS USc 103.1 USc 103.0 - 4
Basic EPS USc 88.2 USc 74.8 18 5
Weighted average number of ordinary
shares 910m 902m
---------- ---------- ----------- ----------
Benchmark EBIT margin - ongoing
activities
North America 34.0% 33.7%
Latin America 27.5% 30.1%
UK and Ireland 16.6% 22.9%
EMEA/Asia Pacific (4.3)% 2.8%
---------- ---------- -----------------------
Benchmark EBIT margin 25.9% 26.9%
---------- ---------- -----------------------
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.
2021 2020 Movement against
the US dollar
------ ------
US dollar : Brazilian
real 5.41 4.12 (31)%
Pound sterling : US dollar 1.31 1.27 3%
Euro : US dollar 1.17 1.11 5%
US dollar : Colombian
peso 3,699 3,382 (9)%
US dollar : South African
rand 16.36 14.79 (11)%
---------------------------- ------ ------ -----------------
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.
2021 2020
------ ------
US dollar : Brazilian
real 5.74 5.20
Pound sterling : US
dollar 1.38 1.24
Euro : US dollar 1.17 1.09
US dollar : Colombian
peso 3,720 4,052
US dollar : South African
rand 14.76 17.81
------------------------------ ------ ------
Risks and uncertainties
The nine principal risks and uncertainties faced by the Group
are summarised in note 26 to the financial statements.
Appendices
1. N on-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.
2. Revenue, Benchmark EBIT and Benchmark EBIT margin by business
segment
---------------------------------------------------------------------------------
Growth %
------ -------- ------------------------------
2021 2020(1) Total Organic
at constant at constant
Year ended 31 March US$m US$m exchange exchange
rates rates
--------------------------------- ------ -------- ------------- -------------
Revenue
Data 2,866 2,800 6 2
Decisioning 1,184 1,234 (3) (4)
------ -------- ------------- -------------
Business-to-Business 4,050 4,034 3 -
Consumer Services 1,307 1,127 17 17
------ -------- ------------- -------------
Ongoing activities 5,357 5,161 7 4
Exited business activities 15 18 n/a
------ -------- ------------- -------------
Total 5,372 5,179 6
--------------------------------- ------ -------- ------------- -------------
Benchmark EBIT
Business-to-Business 1,192 1,251 (1)
Consumer Services 283 247 14
------ -------- ------------- -------------
Business segments 1,475 1,498 2
Central Activities - central
corporate costs (90) (112) n/a
Ongoing activities 1,385 1,386 3
Exited business activities 1 1 n/a
------ -------- ------------- -------------
Total Benchmark EBIT 1,386 1,387 3
--------------------------------- ------ -------- ------------- -------------
Benchmark EBIT margin - ongoing
activities
Business-to-Business 29.4% 31.0%
Consumer Services 21.7% 21.9%
------ -------- ------------- -------------
Total Benchmark EBIT margin 25.9% 26.9%
--------------------------------- ------ -------- ------------- -------------
1. Revenue and Benchmark EBIT for FY20 are re-presented for the
reclassification to exited business activities of certain B2B
businesses and the reclassification of our Consumer Services
business in Latin America to the Consumer Services business
segment.
3. Reconciliation of Benchmark EBIT to statutory profit before
tax
2021 2020(1)
--------------------------------------------
Year ended 31 March US$m US$m
-------------------------------------------- ------ --------
Benchmark EBIT from ongoing activities 1,385 1,386
Exited business activities 1 1
-------------------------------------------- ------ --------
Benchmark EBIT 1,386 1,387
Net interest expense (121) (132)
-------------------------------------------- ------ --------
Benchmark PBT 1,265 1,255
Exceptional items (Appendix 4) 35 (35)
Other adjustments made to derive Benchmark
PBT (Appendix 4) (223) (278)
-------------------------------------------- ------ --------
Profit before tax 1,077 942
-------------------------------------------- ------ --------
4. Exceptional items and other adjustments made to derive
Benchmark PBT
2021 2020
Year ended 31 March US$m US$m
-------------------------------------------- ------ ------
Exceptional items:
Profit on disposal of associate (120) -
Restructuring costs 50 -
Impairment of intangible asset 27 -
Legal provisions movements 8 35
-------------------------------------------- ------ ------
Net (credit)/charge for Exceptional items (35) 35
-------------------------------------------- ------ ------
Other adjustments made to derive Benchmark
PBT:
Amortisation of acquisition intangibles 138 124
Impairment of goodwill 53 -
Acquisition and disposal expenses 41 39
Adjustment to the fair value of contingent
consideration 1 (4)
Non-benchmark share of post-tax profit of
associates (16) (6)
Interest on uncertain tax provisions 11 14
Financing fair value remeasurements (5) 111
-------------------------------------------- ------ ------
Net charge for other adjustments made to
derive Benchmark PBT 223 278
-------------------------------------------- ------ ------
Net charge for Exceptional items and other
adjustments made to derive Benchmark PBT 188 313
-------------------------------------------- ------ ------
An explanation of the reasons for the exclusion of such items
from our definition of Benchmark PBT is given in note 4(a) to the
financial statements.
5. Cash flow and Net debt summary
2021 2020
Year ended 31 March US$m US$m
---------------------------------------------------- -------- --------
Benchmark EBIT 1,386 1,387
Amortisation and depreciation charged to Benchmark
EBIT 453 413
---------------------------------------------------- -------- --------
Benchmark EBITDA 1,839 1,800
Impairment of non-current assets charged to 6 -
Benchmark EBIT
Net capital expenditure (Appendix 6) (418) (483)
Increase in working capital (13) (112)
Principal lease payments (56) (55)
Benchmark loss/(profit) retained in associates 12 (2)
Fair value gain on revaluation of step acquisition - (17)
Charge for share incentive plans 106 83
---------------------------------------------------- -------- --------
Benchmark operating cash flow 1,476 1,214
Net interest paid (115) (152)
Tax paid - continuing operations (236) (286)
Dividends paid to non-controlling interests (1) (2)
---------------------------------------------------- -------- --------
Benchmark free cash flow 1,124 774
Acquisitions (583) (700)
Purchase of investments (31) (95)
Disposal of investments 151 -
Movement in Exceptional and other non-benchmark
items (67) (18)
Ordinary dividends paid (427) (424)
---------------------------------------------------- -------- --------
Net cash inflow/(outflow) - continuing operations 167 (463)
Net debt at 1 April (3,898) (3,262)
Net share purchases 19 (188)
Discontinued operations - (6)
Foreign exchange and other movements (114) 21
---------------------------------------------------- -------- --------
Net debt at 31 March (3,826) (3,898)
---------------------------------------------------- -------- --------
6. Reconciliation of net investment
2021 2020
Year ended 31 March US$m US$m
---------------------------------------------- ------ ------
Capital expenditure as reported in the Group
cash flow statement 422 487
Disposal of property, plant and equipment (1) (5)
(Loss)/profit on disposals of fixed assets (3) 1
---------------------------------------------- ------ ------
Net capital expenditure 418 483
Acquisitions 583 700
Purchase of investments 31 95
Disposal of investments (151) -
---------------------------------------------- ------ ------
Net investment 881 1,278
---------------------------------------------- ------ ------
7. Cash tax reconciliation
2021 2020
Year ended 31 March % %
------------------------------------------- ------ ------
Tax charge on Benchmark PBT 25.9 25.8
Tax relief on goodwill amortisation (2.6) (3.1)
Benefit of brought forward tax losses (2.0) (1.3)
Other differences(1) (2.6) 1.4
Tax paid as a percentage of Benchmark PBT 18.7 22.8
------------------------------------------- ------ ------
1. Other differences include an acceleration of tax deductions
as a result of US legislative changes in the year and in FY20 items
for which the tax charge and payment fell in different financial
years.
Group income statement
for the year ended 31 March 2021
2021 2020
Benchmark(1) Non-benchmark(2) Statutory Benchmark(1) Non-benchmark(2) Statutory
Total Total
US$m US$m US$m US$m US$m US$m
Revenue (note
5(a)) 5,372 - 5,372 5,179 - 5,179
------------ ---------------- --------- ------------ ---------------- ---------
Labour costs (1,965) (30) (1,995) (1,864) (8) (1,872)
Data and
information
technology costs (861) - (861) (753) - (753)
Amortisation and
depreciation
charges (453) (138) (591) (413) (124) (537)
Marketing and
customer
acquisition costs (417) - (417) (378) - (378)
Other operating
charges (295) (150) (445) (392) (62) (454)
------------ ---------------- --------- ------------ ---------------- ---------
Total operating
expenses (3,991) (318) (4,309) (3,800) (194) (3,994)
Profit on disposal
of
associate - 120 120 - - -
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Operating
profit/(loss) 1,381 (198) 1,183 1,379 (194) 1,185
Interest income 12 - 12 13 - 13
Finance expense (133) (6) (139) (145) (125) (270)
------------ ---------------- --------- ------------ ---------------- ---------
Net finance costs
(note
8(a)) (121) (6) (127) (132) (125) (257)
Share of post-tax
profit
of associates 5 16 21 8 6 14
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Profit/(loss)
before
tax (note 5(a)) 1,265 (188) 1,077 1,255 (313) 942
Tax
(charge)/credit
(note
9(a)) (328) 53 (275) (324) 61 (263)
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Profit/(loss) for
the
financial year
from continuing
operations 937 (135) 802 931 (252) 679
Loss for the
financial
year from
discontinued
operations (note
10) - - - - (2) (2)
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Profit/(loss) for
the
financial year 937 (135) 802 931 (254) 677
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Attributable to:
Owners of Experian
plc 938 (135) 803 929 (254) 675
Non-controlling
interests (1) - (1) 2 - 2
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Profit/(loss) for
the
financial year 937 (135) 802 931 (254) 677
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Total Benchmark
EBIT
(1) 1,386 1,387
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
US cents US cents US cents US cents US cents US cents
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
Earnings/(loss) per
share (note 11(a))
Basic 103.1 (14.9) 88.2 103.0 (28.2) 74.8
Diluted 102.3 (14.7) 87.6 102.1 (27.9) 74.2
Earnings/(loss) per
share from
continuing
operations (note
11(a))
Basic 103.1 (14.9) 88.2 103.0 (28.0) 75.0
Diluted 102.3 (14.7) 87.6 102.1 (27.7) 74.4
Benchmark PBT per
share(1,3) 139.0 139.1
Full-year dividend
per
share(1) 47.0 47.0
-------------------- ------------ ---------------- --------- ------------ ---------------- ---------
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$1,255m) by the weighted average number
of ordinary shares of 910 million (2020: 902 million). The amount
is stated in US cents per share.
Group statement of comprehensive income
for the year ended 31 March 2021
2021 2020
US$m US$m
---------------------------------------------------- ----- ------
Profit for the financial year 802 677
------------------------------------------------------ ----- ------
Other comprehensive income
Items that will not be reclassified to profit
or loss:
Remeasurement of post-employment benefit
assets and obligations (note 14(b)) 2 26
Changes in the fair value of investments
revalued through OCI 11 (6)
Deferred tax charge (1) (5)
------------------------------------------------------ ----- ------
Items that will not be reclassified to profit
or loss 12 15
------------------------------------------------------ ----- ------
Items that are or may be reclassified subsequently
to profit or loss:
Currency translation gains/(losses) 70 (313)
Fair value gain on cash flow hedge 35 -
Hedging gain reclassified to profit or loss (33) -
---------------------------------------------------- ----- ------
Items that are or may be reclassified subsequently
to profit or loss 72 (313)
------------------------------------------------------ ----- ------
Other comprehensive income for the financial
year(1) 84 (298)
------------------------------------------------------ ----- ------
Total comprehensive income for the financial
year 886 379
Attributable to:
Owners of Experian plc 881 378
Non-controlling interests 5 1
------------------------------------------------------ ----- ------
Total comprehensive income for the financial
year 886 379
------------------------------------------------------ ----- ------
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
2021 2020
Notes US$m US$m
-------------------------------------------- ------ --------- ---------
Non-current assets
Goodwill 5,261 4,543
Other intangible assets 13 1,966 1,583
Property, plant and equipment 13 469 502
Investments in associates 128 123
Deferred tax assets 86 107
Post-employment benefit assets 14(a) 102 83
Trade and other receivables 160 164
Financial assets revalued through OCI 245 171
Other financial assets 223 223
-------------------------------------------- ------ --------- ---------
8,640 7,499
-------------------------------------------- ------ --------- ---------
Current assets
Trade and other receivables 1,197 1,078
Current tax assets 34 28
Other financial assets 20 17
Cash and cash equivalents - excluding bank
overdrafts 15(f) 180 277
-------------------------------------------- ------ --------- ---------
1,431 1,400
-------------------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables (1,543) (1,430)
Borrowings (655) (498)
Current tax liabilities (176) (225)
Provisions (27) (48)
Other financial liabilities (15) (23)
-------------------------------------------- ------ --------- ---------
(2,416) (2,224)
-------------------------------------------- ------ --------- ---------
Net current liabilities (985) (824)
-------------------------------------------- ------ --------- ---------
Total assets less current liabilities 7,655 6,675
-------------------------------------------- ------ --------- ---------
Non-current liabilities
Trade and other payables (159) (121)
Borrowings (3,682) (3,916)
Deferred tax liabilities (361) (202)
Post-employment benefit obligations 14(a) (55) (48)
Other financial liabilities (279) (107)
-------------------------------------------- ------ --------- ---------
(4,536) (4,394)
-------------------------------------------- ------ --------- ---------
Net assets 3,119 2,281
-------------------------------------------- ------ --------- ---------
Equity
Called-up share capital 18 96 96
Share premium account 18 1,756 1,574
Retained earnings 19,207 18,826
Other reserves (17,978) (18,221)
-------------------------------------------- ------ --------- ---------
Attributable to owners of Experian plc 3,081 2,275
Non-controlling interests 38 6
-------------------------------------------- ------ --------- ---------
Total equity 3,119 2,281
-------------------------------------------- ------ --------- ---------
Group statement of changes in equity
for the year ended 31 March 2021
Called-up Share Retained Other Attributable Non-controlling Total
share premium earnings reserves to owners interests equity
capital account of Experian
(Note (Note plc
18) 18)
US$m US$m US$m US$m US$m US$m US$m
------------------------------------------------------- ---------- -------- --------- --------- ------------- ---------------- ---------
At 1 April 2020 96 1,574 18,826 (18,221) 2,275 6 2,281
Comprehensive income:
Profit for the financial
year - - 803 - 803 (1) 802
Other comprehensive income
for the financial year - - 12 66 78 6 84
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Total comprehensive income
for the financial year - - 815 66 881 5 886
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners:
Employee share incentive
plans:
- value of employee services - - 106 - 106 - 106
- shares issued on vesting - 19 - - 19 - 19
* other vesting of awards and exercises of share
options - - (75) 87 12 - 12
- related tax credit - - 2 - 2 - 2
- other payments - - (6) - (6) - (6)
Shares delivered as consideration
for acquisition - 163 - 90 253 - 253
Non-controlling interests
arising on business combinations - - (34) - (34) 24 (10)
Recognition of non-controlling
interests on acquisition - - - - - 4 4
Dividends paid - - (427) - (427) (1) (428)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners - 182 (434) 177 (75) 27 (48)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
At 31 March 2021 96 1,756 19,207 (17,978) 3,081 38 3,119
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Called-up Share Retained Other Attributable Non-controlling Total
share premium earnings reserves to owners interests equity
capital account of Experian
(Note (Note plc
18) 18)
US$m US$m US$m US$m US$m US$m US$m
---------------------------- ---------- --------- ---------- ---------- ------------- ---------------- --------
At 1 April 2019 96 1,559 18,718 (17,893) 2,480 14 2,494
Comprehensive income:
Profit for the financial
year - - 675 - 675 2 677
Other comprehensive income
for the financial year - - 15 (312) (297) (1) (298)
---------------------------- ---------- --------- ---------- ---------- ------------- ---------------- --------
Total comprehensive income
for the financial year - - 690 (312) 378 1 379
---------------------------- ---------- --------- ---------- ---------- ------------- ---------------- --------
Transactions with owners:
Employee share incentive
plans:
- value of employee
services - - 83 - 83 - 83
- shares issued on vesting - 15 - - 15 - 15
- purchase of shares by
employee
trusts - - - (92) (92) - (92)
- other vesting of awards
and exercises of share
options - - (64) 76 12 - 12
- related tax credit - - 5 - 5 - 5
- other payments - - (5) - (5) - (5)
Purchase and cancellation
of own shares - - (112) - (112) - (112)
Transactions in respect of
non-controlling interests - - (65) - (65) (7) (72)
Dividends paid - - (424) - (424) (2) (426)
---------- --------- ---------- ---------- ------------- ---------------- --------
Transactions with owners - 15 (582) (16) (583) (9) (592)
---------------------------- ---------- --------- ---------- ---------- ------------- ---------------- --------
At 31 March 2020 96 1,574 18,826 (18,221) 2,275 6 2,281
---------------------------- ---------- --------- ---------- ---------- ------------- ---------------- --------
Group cash flow statement
for the year ended 31 March 2021
2021 2020
Notes US$m US$m
------------------------------------------------------ ------ -------- --------
Cash flows from operating activities
Cash generated from operations 15(a) 1,822 1,694
Interest paid (119) (157)
Interest received 4 5
Dividends received from associates 17 6
Tax paid (236) (286)
------------------------------------------------------ ------ -------- --------
Net cash inflow from operating activities -
continuing operations 1,488 1,262
Net cash outflow from operating activities -
discontinued operations 10 - (6)
------------------------------------------------------ ------ -------- --------
Net cash inflow from operating activities 1,488 1,256
------------------------------------------------------ ------ -------- --------
Cash flows from investing activities
Purchase of other intangible assets 15(c) (374) (403)
Purchase of property, plant and equipment (48) (84)
Sale of property, plant and equipment 1 5
Purchase of other financial assets (31) (95)
Sale of other financial assets 24 -
Acquisition of subsidiaries, net of cash acquired 15(d) (526) (600)
Disposal of investment in associate 7(b) 127 -
------------------------------------------------------ ------ -------- --------
Net cash flows used in investing activities (827) (1,177)
------------------------------------------------------ ------ -------- --------
Cash flows from financing activities
Cash inflow in respect of shares issued 15(e) 19 15
Cash outflow in respect of share purchases 15(e) - (203)
Other payments on vesting of share awards (6) (5)
Transactions in respect of non-controlling interests 15(d) (10) (67)
New borrowings 1,011 1,519
Repayment of borrowings (1,337) (553)
Payment of lease liabilities (56) (55)
Net receipts/(payments) for cross-currency swaps
and foreign exchange contracts 54 (169)
Net receipts from equity swaps 6 5
Dividends paid (428) (426)
------------------------------------------------------ ------ -------- --------
Net cash flows (used in)/from financing activities (747) 61
------------------------------------------------------ ------ -------- --------
Net (decrease)/increase in cash and cash equivalents (86) 140
Cash and cash equivalents at 1 April 272 146
Exchange movements on cash and cash equivalents (16) (14)
------------------------------------------------------ ------ -------- --------
Cash and cash equivalents at 31 March 15(f) 170 272
------------------------------------------------------ ------ -------- --------
Notes to the financial statements
for the year ended 31 March 2021
1. Corporate information
Experian plc (the Company) is the ultimate parent company of the
Experian group of companies (Experian or the Group). Experian is a
leading global information services group. The Company is
incorporated and registered in Jersey as a public company limited
by shares and is resident in Ireland. The Company's registered
office is at 22 Grenville Street, St Helier, Jersey, JE4 8PX,
Channel Islands. The Company's ordinary shares are traded on the
London Stock Exchange's Regulated Market and have a Premium
Listing.
2. Basis of preparation
The financial information set out in this preliminary
announcement does not constitute the Group's statutory financial
statements, which comprise the Annual Report and audited financial
statements, for the years ended 31 March 2021 and 31 March 2020 but
is derived from the statutory financial statements for the year
ended 31 March 2021. The Group's statutory financial statements for
the year ended 31 March 2021 will be made available to shareholders
in June 2021 and delivered to the Jersey Registrar of Companies in
due course. The auditor has reported on those financial statements
and has given an unqualified report which does not contain a
statement under Article 111(2) or Article 111(5) of the Companies
(Jersey) Law 1991. The Group's statutory financial statements for
the year ended 31 March 2020 have been delivered to the Jersey
Registrar of Companies. The auditor reported on those financial
statements and gave an unqualified report which did not contain a
statement under Article 111(2) or Article 111(5) of the Companies
(Jersey) Law 1991.
The Group's statutory financial statements for the year ended 31
March 2021 have been:
-- prepared in accordance with the Companies (Jersey) Law 1991
and International Financial Reporting Standards (IFRS or IFRSs) as
adopted for use in the European Union (the EU) and IFRS
Interpretations Committee interpretations (together EU-IFRS). The
financial statements also comply with IFRS as issued by the
International Accounting Standards Board (IASB). EU-IFRS differs in
certain respects from IFRS as issued by the IASB, however, the
differences have no material impact for the periods presented;
-- prepared on the going concern basis and under the historical
cost convention, as modified for the revaluation of certain
financial assets and financial liabilities;
-- presented in US dollars, the most representative currency of
the Group's operations, and generally rounded to the nearest
million;
-- prepared using the principal exchange rates set out on page 13; and
-- designed to voluntarily include disclosures in line with
those parts of the UK Companies Act 2006 applicable to companies
reporting under IFRS.
Other than those disclosed in this preliminary announcement, no
significant events impacting the Group have occurred between 31
March 2021 and 18 May 2021 when this preliminary announcement was
approved for issue.
This preliminary announcement has been prepared in accordance
with the Listing Rules of the UK Financial Conduct Authority, using
the accounting policies applied in the preparation of the Group's
statutory financial statements for the year ended 31 March 2021.
Those policies were published in full in the Group's statutory
financial statements for the year ended 31 March 2020 and are
available on the corporate website, at www.experianplc.com .
Going concern
In adopting the going concern basis for preparing these
financial statements, the directors have considered the business
activities, the principal risks and uncertainties and the other
matters that could threaten the long-term financial stability of
the Group. At 31 March 2021, the Group had undrawn committed bank
borrowing facilities of US$2.7bn which have an average remaining
tenor of four years.
The directors believe that the Group is well placed to manage
its financing and other business risks satisfactorily, and have a
reasonable expectation that the Group will have adequate resources
to continue in operational existence for at least 12 months from
the date of signing these financial statements. The directors
therefore consider it appropriate to adopt the going concern basis
of accounting in preparing the financial statements. In reaching
this conclusion, the directors noted the Group's strong cash
performance in the year.
Notes to the financial statements (continued)
for the year ended 31 March 2021
3. Recent accounting developments
There have been no accounting standards, amendments or
interpretations effective for the first time in these financial
statements which have had a material impact on the financial
statements.
Interest Rate Benchmark Reform - Phase 1, Amendments to IFRS 9
'Financial Instruments', IAS 39 'Financial Instruments: Recognition
and Measurement' and IFRS 7 'Financial Instruments: Disclosures'
provide relief from the discontinuation of hedge accounting as a
result of interbank offered rate (IBOR) reform.
Interest Rate Benchmark Reform - Phase 2, Amendments to IFRS 9,
IAS 39 and IFRS 7 is effective for Experian from FY22. By applying
the practical expedient in IFRS 9, the Group does not expect to be
required to discontinue its hedging relationships as a result of
changes in reference rates due to IBOR reform.
There are no other new standards, amendments to existing
standards, or interpretations that are not yet effective, that are
expected to have a material impact on the Group's financial
results. Accounting developments are routinely reviewed by the
Group and its financial reporting systems are adapted as
appropriate.
4. Use of non-GAAP measures in the financial statements
As detailed below, the Group has identified and defined certain
measures that it uses to understand and manage its performance. The
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 management has included them as
they consider them to be key measures used
within the business for assessing the underlying performance of the Group's ongoing businesses.
(a) Benchmark profit before tax (Benchmark PBT) (note 5(a))
Benchmark PBT is disclosed to indicate the Group's underlying
profitability. It is defined as profit before amortisation and
impairment of acquisition intangibles, impairment of goodwill,
acquisition expenses, adjustments to contingent consideration,
Exceptional items, financing fair value remeasurements, tax (and
interest thereon) and discontinued operations. It includes the
Group's share of continuing associates' Benchmark post-tax
results.
An explanation of the basis on which we report Exceptional items
is provided below. Other adjustments made to derive Benchmark PBT
are explained as follows:
-- Charges for the amortisation and impairment of acquisition
intangibles are excluded from the calculation of Benchmark PBT
because these charges are based on judgments about their value and
economic life and bear no relation to the Group's underlying
ongoing performance. Impairment of goodwill is similarly excluded
from the calculation of Benchmark PBT.
-- Acquisition and disposal expenses (representing the
incidental costs of acquisitions and disposals, one-time
integration costs and other corporate transaction expenses)
relating to successful, active or aborted acquisitions and
disposals are excluded from the definition of Benchmark PBT as they
bear no relation to the Group's underlying ongoing performance or
to the performance of any acquired businesses. Adjustments to
contingent consideration are similarly excluded from the definition
of Benchmark PBT.
-- Charges and credits for financing fair value remeasurements
within finance expense in the Group income statement are excluded
from the definition of Benchmark PBT. These include retranslation
of intra-Group funding, and that element of the Group's derivatives
that is ineligible for hedge accounting, together with gains and
losses on put options in respect of acquisitions. Amounts
recognised generally arise from market movements and accordingly
bear no direct relation to the Group's underlying performance.
(b) Benchmark earnings before interest and tax (Benchmark EBIT)
and margin (Benchmark EBIT margin) (note 5(a))
Benchmark EBIT is defined as Benchmark PBT before the net
interest expense charged therein and accordingly excludes
Exceptional items as defined below. Benchmark EBIT margin is
Benchmark EBIT from ongoing activities expressed as a percentage of
revenue from ongoing activities.
(c) Benchmark earnings before interest, tax, depreciation and
amortisation (Benchmark EBITDA)
Benchmark EBITDA is defined as Benchmark EBIT before the
depreciation and amortisation charged therein.
Notes to the financial statements (continued)
for the year ended 31 March 2021
4. Use of non-GAAP measures in the financial statements
(continued)
(d) Exited business activities
Exited business activities are businesses sold, closed or
identified for closure during a financial year. These are treated
as exited business activities for both revenue and Benchmark EBIT
purposes. The results of exited business activities are disclosed
separately with the results of the prior period re-presented in the
segmental analyses as appropriate. This measure differs from the
definition of discontinued operations in IFRS 5.
(e) Ongoing activities
The results of businesses trading at 31 March 2021, which are
not disclosed as exited business activities, are reported as
ongoing activities.
(f) Constant exchange rates
To highlight our organic performance, we discuss our results in
terms of growth at constant exchange rates, unless otherwise
stated. This represents growth calculated after translating both
years' performance at the prior year's average exchange rates.
(g) Total growth (note 5(e))
This is the year-on-year change in the performance of our
activities at actual exchange rates. Total growth at constant
exchange rates removes the translational foreign exchange effects
arising on the consolidation of our
activities and comprises one of our measures of performance at constant exchange rates.
(h) Organic revenue growth (note 5(e))
This is the year-on-year change in the revenue of ongoing
activities, translated at constant exchange rates, excluding
acquisitions until the first anniversary of their
consolidation.
(i) Benchmark earnings and Total Benchmark earnings (note
11)
Benchmark earnings comprises Benchmark PBT less attributable tax
and non-controlling interests. The attributable tax for this
purpose excludes significant tax credits and charges arising in the
year which, in view of their size or nature, are not comparable
with previous years, together with tax arising on Exceptional items
and on other adjustments made to derive Benchmark PBT. Benchmark
PBT less attributable tax is designated as Total Benchmark
earnings.
(j) Benchmark earnings per share (Benchmark EPS) (note
11(a))
Benchmark EPS comprises Benchmark earnings divided by the
weighted average number of issued ordinary shares, as adjusted for
own shares held.
(k) Benchmark PBT per share
Benchmark PBT per share comprises Benchmark PBT divided by the
weighted average number of issued ordinary shares, as adjusted for
own shares held.
(l) Benchmark tax charge and rate (note 9(b))
The Benchmark tax charge is the tax charge applicable to
Benchmark PBT. It differs from the tax charge by tax attributable
to Exceptional items and other adjustments made to derive Benchmark
PBT, and exceptional tax charges. A reconciliation is provided in
note 9(b) to these financial statements. The Benchmark effective
rate of tax is calculated by dividing the Benchmark tax charge by
Benchmark PBT.
(m) Exceptional items (note 7(a))
The separate reporting of Exceptional items gives an indication
of the Group's underlying performance. Exceptional items include
those arising from the profit or loss on disposal of businesses,
closure costs of major business units, costs of significant
restructuring programmes and other financially significant one-off
items. All other restructuring costs are charged against Benchmark
EBIT, in the segments in which they are incurred.
(n) Full-year dividend per share (note 12(a))
Full-year dividend per share comprises the total of dividends
per share announced in respect of the financial year.
Notes to the financial statements (continued)
for the year ended 31 March 2021
4. Use of non-GAAP measures in the financial statements
(continued)
(o) Benchmark operating and Benchmark free cash flow
Benchmark operating cash flow is Benchmark EBIT plus
amortisation, depreciation and charges in respect of share-based
incentive plans, less capital expenditure net of disposal proceeds
and adjusted for changes in working capital, principal lease
payments and the Group's share of the Benchmark profit or loss
retained in continuing associates. Benchmark free cash flow is
derived from Benchmark operating cash flow by excluding net
interest, tax paid in respect of continuing operations and
dividends paid to non-controlling interests.
(p) Cash flow conversion
Cash flow conversion is Benchmark operating cash flow expressed
as a percentage of Benchmark EBIT.
(q) Net debt and Net funding (note 16)
Net debt is borrowings (and the fair value of derivatives
hedging borrowings) excluding lease obligations and accrued
interest, less cash and cash equivalents and other highly liquid
bank deposits with original maturities greater than three months.
Net funding is borrowings (and the fair value of the effective
portion of derivatives hedging borrowings) excluding lease
obligations and accrued interest, less cash held in Group
Treasury.
(r) Return on capital employed (ROCE)
ROCE is defined as Benchmark EBIT less tax at the Benchmark rate
divided by a three-point average of capital employed, in continuing
operations, over the year. Capital employed is net assets less
non-controlling interests, further adjusted to add or deduct the
net tax liability or asset and to add Net debt.
Notes to the financial statements (continued)
for the year ended 31 March 2021
5. Segment information
IFRS 8 disclosures
(a) Income statement
EMEA/
Asia Total Total
North Latin UK and Pacific operating Central continuing
America America Ireland (1) segments Activities operations
Year ended 31 US$m US$m US$m US$m US$m US$m US$m
March 2021
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Revenue from
external
customers
Ongoing
activities 3,530 625 737 465 5,357 - 5,357
Exited business
activities - - 12 3 15 - 15
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Total 3,530 625 749 468 5,372 - 5,372
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Reconciliation
from Benchmark
EBIT to
profit/(loss)
before
tax
Benchmark EBIT
Ongoing
activities 1,201 172 122 (20) 1,475 (90) 1,385
Exited business
activities - - (1) 2 1 - 1
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Total 1,201 172 121 (18) 1,476 (90) 1,386
Net interest
expense
included
in Benchmark
PBT
(note 8(b)) (5) (2) (1) (2) (10) (111) (121)
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Benchmark PBT 1,196 170 120 (20) 1,466 (201) 1,265
Exceptional
items (note
7(a)) 112 (1) (63) (13) 35 - 35
Impairment of
goodwill
(note 7(a)) - - - (53) (53) - (53)
Amortisation of
acquisition
intangibles (90) (14) (7) (27) (138) - (138)
Acquisition and
disposal
expenses (16) (4) (1) (20) (41) - (41)
Adjustment to
the fair
value of
contingent
consideration - - - (1) (1) - (1)
Non-benchmark
share of
post-tax
(loss)/profit
of associates - - (3) - (3) 19 16
Interest on
uncertain tax
provisions - - - - - (11) (11)
Financing fair
value
remeasurements - - - - - 5 5
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Profit/(loss)
before tax 1,202 151 46 (134) 1,265 (188) 1,077
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
EMEA/ Total Total
North Latin UK and Asia operating Central continuing
America America Ireland Pacific(1) segments Activities operations
Year ended 31 US$m US$m US$m US$m US$m US$m US$m
March 2020(2)
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Revenue from
external
customers
Ongoing
activities 3,247 732 755 427 5,161 - 5,161
Exited business
activities - - 14 4 18 - 18
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Total 3,247 732 769 431 5,179 - 5,179
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Reconciliation
from Benchmark
EBIT to
profit/(loss)
before
tax
Benchmark EBIT
Ongoing
activities 1,093 220 173 12 1,498 (112) 1,386
Exited business
activities - - (2) 3 1 - 1
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Total 1,093 220 171 15 1,499 (112) 1,387
Net interest
expense
included
in Benchmark
PBT
(note 8(b)) (5) (2) (1) (2) (10) (122) (132)
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Benchmark PBT 1,088 218 170 13 1,489 (234) 1,255
Exceptional
items (note
7(a)) (35) - - - (35) - (35)
Amortisation of
acquisition
intangibles (85) (17) (8) (14) (124) - (124)
Acquisition and
disposal
expenses (9) (2) (8) (20) (39) - (39)
Adjustment to
the fair
value of
contingent
consideration (1) - 5 - 4 - 4
Non-benchmark
share of
post-tax
profit of
associates - - - - - 6 6
Interest on
uncertain tax
provisions - - - - - (14) (14)
Financing fair
value
remeasurements - - - - - (111) (111)
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
Profit/(loss)
before tax 958 199 159 (21) 1,295 (353) 942
---------------- -------- -------- -------- ------------ ---------- ----------- -----------
1. EMEA/Asia Pacific represents all other operating segments.
2. 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.
Additional information by operating segment, including that on
total and organic growth at constant exchange rates, is provided
within pages 3 to 11.
Notes to the financial statements (continued)
for the year ended 31 March 2021
5. Segment information (continued)
(b) Revenue by country - continuing operations
2021 2020
(Re-presented)
US$m US$m
-------------- ------ ---------------
USA 3,529 3,245
UK 744 762
Brazil 546 647
Germany 81 8
Colombia 60 66
South Africa 55 62
Other 357 389
-------------- ------ ---------------
5,372 5,179
-------------- ------ ---------------
Revenue is primarily attributable to countries other than
Ireland. No single client accounted for 10% or more of revenue in
the current or prior year. Revenue from the USA, the UK and Brazil
in aggregate comprises 90% (2020: 90%) of Group revenue.
Revenue attributable to Germany was previously reported within
Other; following the acquisition in the year of the Risk Management
division of Arvato Financial Solutions (AFS) (see note 20) this is
now analysed separately, and consequently comparative information
has been re-presented.
(c) Disaggregation of revenue from contracts with customers
North Latin UK and EMEA/ Total operating
America America Ireland Asia Pacific segments
Year ended 31 March 2021 US$m US$m US$m US$m US$m
--------------------------------- --------- --------- --------- -------------- ----------------
Revenue from external customers
Data 1,761 457 361 287 2,866
Decisioning 694 92 220 178 1,184
--------------------------------- --------- --------- --------- -------------- ----------------
Business-to-Business 2,455 549 581 465 4,050
Consumer Services 1,075 76 156 - 1,307
Total ongoing activities 3,530 625 737 465 5,357
--------------------------------- --------- --------- --------- -------------- ----------------
North Latin UK and EMEA/ Total operating
America America Ireland Asia Pacific segments
Year ended 31 March 2020(1) US$m US$m US$m US$m US$m
--------------------------------- --------- --------- --------- -------------- ----------------
Revenue from external customers
Data 1,642 578 367 213 2,800
Decisioning 679 114 227 214 1,234
--------------------------------- --------- --------- --------- -------------- ----------------
Business-to-Business 2,321 692 594 427 4,034
Consumer Services 926 40 161 - 1,127
Total ongoing activities 3,247 732 755 427 5,161
--------------------------------- --------- --------- --------- -------------- ----------------
1. Revenue for the year ended 31 March 2020 has been
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; previously our Consumer Services business in this
region was not sufficiently material to be disclosed
separately.
Total revenue comprises revenue from ongoing activities as well
as revenue from exited business activities. Revenue in respect of
exited business activities of US$15m (2020: US$18m) comprised UK
and Ireland Data revenue of US$12m (2020: US$14m) and EMEA/Asia
Pacific Decisioning revenue of US$3m (2020: US$4m).
Data is predominantly transactional revenue with a portion from
licence fees.
Decisioning revenue is derived from:
-- software and system sales, and includes recurring licence
fees, consultancy and implementation fees, and transactional
charges;
-- credit score fees which are primarily transactional; and
-- analytics income comprising a mix of consultancy and
professional fees as well as transactional revenue.
Consumer Services revenue primarily comprises monthly
subscription and one-off fees, and referral fees for credit
products and white-label partnerships.
Notes to the financial statements (continued)
for the year ended 31 March 2021
5. Segment information (continued)
(d) Revenue by business segment
The additional analysis of revenue from external customers
provided to the chief operating decision-maker and accordingly
reportable under IFRS 8 is given within note 6. This is
supplemented by voluntary disclosure of the profitability of groups
of service lines. For ease of reference, we continue to use the
term 'business segments' when discussing the results of groups of
service lines.
(e) Reconciliation of revenue from ongoing activities
EMEA/ Total
North Latin UK and Asia ongoing
America America Ireland Pacific activities
US$m US$m US$m US$m US$m
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue for the year ended 31 March 2020(1) 3,247 732 755 427 5,161
Adjustment to constant exchange rates - 1 (2) 1 -
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue at constant exchange rates for
the year ended 31 March 2020 3,247 733 753 428 5,161
Organic revenue growth 241 65 (43) (60) 203
Revenue from acquisitions 42 4 - 89 135
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue at constant exchange rates for
the year ended 31 March 2021 3,530 802 710 457 5,499
Adjustment to actual exchange rates - (177) 27 8 (142)
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue for the year ended 31 March 2021 3,530 625 737 465 5,357
--------------------------------------------- --------- --------- --------- --------- ------------
Organic revenue growth at constant exchange
rates 7% 9% (6)% (14)% 4%
Revenue growth at constant exchange rates 9% 9% (6)% 7% 7%
--------------------------------------------- --------- --------- --------- --------- ------------
1. Revenue for the year ended 31 March 2020 has been
re-presented for the reclassification to exited business activities
of certain B2B businesses.
The table above demonstrates the application of the methodology
set out in note 4 in determining organic and total revenue growth
at constant exchange rates. Revenue at constant exchange rates is
reported for both years using the average exchange rates applicable
for the year ended 31 March 2020.
Notes to the financial statements (continued)
for the year ended 31 March 2021
6. Information on business segments (including non-GAAP
disclosures)
Total Total
Consumer business Central continuing
Business-to-Business Services segments Activities operations
Year ended 31 March 2021 US$m US$m US$m US$m US$m
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Revenue from external
customers
Ongoing activities 4,050 1,307 5,357 - 5,357
Exited business activities 15 - 15 - 15
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Total 4,065 1,307 5,372 - 5,372
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Reconciliation from Benchmark
EBIT
to profit/(loss) before tax
Benchmark EBIT
Ongoing activities 1,192 283 1,475 (90) 1,385
Exited business activities 1 - 1 - 1
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Total 1,193 283 1,476 (90) 1,386
Net interest expense included
in Benchmark PBT (note 8(b)) (8) (2) (10) (111) (121)
Benchmark PBT 1,185 281 1,466 (201) 1,265
Exceptional items (note 7(a)) 35 - 35 - 35
Impairment of goodwill (note
7(a)) (53) - (53) - (53)
Amortisation of acquisition
intangibles (118) (20) (138) - (138)
Acquisition and disposal
expenses (40) (1) (41) - (41)
Adjustment to the fair value
of contingent consideration (1) - (1) - (1)
Non-benchmark share of
post-tax
(loss)/profit of associates - (3) (3) 19 16
Interest on uncertain tax
provisions - - - (11) (11)
Financing fair value
remeasurements - - - 5 5
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Profit/(loss) before tax 1,008 257 1,265 (188) 1,077
------------------------------- ---------------------- ---------- ---------- ------------ ------------
Total Total
Consumer business Central continuing
Business-to-Business Services segments Activities operations
Year ended 31 March 2020(1) US$m US$m US$m US$m US$m
------------------------------- ---------- ---------- ------------
Revenue from external
customers
Ongoing activities 4,034 1,127 5,161 - 5,161
Exited business activities 18 - 18 - 18
------------------------------- ---------- ---------- ------------
Total 4,052 1,127 5,179 - 5,179
------------------------------- ---------- ---------- ------------
Reconciliation from Benchmark EBIT
to profit/(loss) before tax
Benchmark EBIT
Ongoing activities 1,251 247 1,498 (112) 1,386
Exited business activities 1 - 1 - 1
------------------------------- ---------- ---------- ------------
Total 1,252 247 1,499 (112) 1,387
Net interest expense included in
Benchmark PBT (note 8(b)) (8) (2) (10) (122) (132)
---------- ---------- ------------
Benchmark PBT 1,244 245 1,489 (234) 1,255
Exceptional items (note 7(a)) (35) - (35) - (35)
Amortisation of acquisition
intangibles (103) (21) (124) - (124)
Acquisition and disposal
expenses (37) (2) (39) - (39)
Adjustment to the fair value
of contingent consideration 4 - 4 - 4
Non-benchmark share of
post-tax
profit of associates - - - 6 6
Interest on uncertain tax
provisions - - - (14) (14)
Financing fair value
remeasurements - - - (111) (111)
------------------------------- ---------- ---------- ------------
Profit/(loss) before tax 1,073 222 1,295 (353) 942
------------------------------- ---------- ---------- ------------
1. Revenue of US$40m and Benchmark EBIT of US$(10)m for the year
ended 31 March 2020 have been re-presented for 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 and Benchmark EBIT have
been re-presented for the reclassification to exited business
activities of certain B2B businesses.
Additional information by business segment, including that on
total and organic growth at constant exchange rates, is provided
within pages 3 to 11 and within Appendix 2 on page 14.
Notes to the financial statements (continued)
for the year ended 31 March 2021
7. Exceptional items and other adjustments made to derive
Benchmark PBT - continuing operations
(a) Net charge for Exceptional items and other adjustments made
to derive Benchmark PBT
2021 2020
US$m US$m
Exceptional items:
Profit on disposal of associate (note 7(b)) (120) -
Restructuring costs (note 7(c)) 50 -
Impairment of intangible asset(1) 27 -
Legal provisions movements(1) (note 7(e)) 8 35
Net (credit)/charge for Exceptional items (35) 35
Other adjustments made to derive Benchmark
PBT:
Amortisation of acquisition intangibles 138 124
Impairment of goodwill(1) (note 7(f)) 53 -
Acquisition and disposal expenses 41 39
Adjustment to the fair value of contingent
consideration(1) 1 (4)
Non-benchmark share of post-tax profit of
associates (16) (6)
Interest on uncertain tax provisions 11 14
Financing fair value remeasurements (5) 111
Net charge for other adjustments made to
derive Benchmark PBT 223 278
Net charge for Exceptional items and other
adjustments made to derive Benchmark PBT 188 313
By income statement caption:
Labour costs 30 8
Amortisation and depreciation charges 138 124
Other operating charges 150 62
Profit on disposal of associate (120) -
Within operating profit 198 194
Within share of post-tax profit of associates (16) (6)
Within finance expense 6 125
Net charge for Exceptional items and other
adjustments made to derive Benchmark PBT 188 313
1. Included in other operating charges.
Acquisition and disposal expenses represent professional fees
and expenses associated with completed, ongoing and terminated
acquisition and disposal processes, as well as the integration and
separation costs associated with completed deals. Of the total,
US$2m (2020: US$8m) is recorded within labour costs in the Group
income statement, and US$39m (2020: US$31m) is included within
other operating charges.
(b) Profit on disposal of investment in associate
On 18 November 2020, the Group disposed of its 18.6% interest in
Finicity Corporation for US$127m, recognising a gain on disposal of
US$120m.
(c) Restructuring costs
During the year the Group commenced a transformation programme
in the UK and Ireland. The objectives of this programme are to
simplify our technology estate, enhance customer experience and to
return to profitable growth. In addition, we have launched a
programme of restructuring initiatives in other regions. Costs of
US$50m have been recognised, principally in the UK and Ireland, in
connection with these actions with a related cash outflow of
US$39m. Of this charge, US$28m related to redundancy costs, and
US$22m related to other restructuring and consultancy costs
included within other operating charges in the Group income
statement. No further costs are expected to be incurred in relation
to these initiatives.
(d) Impairment of intangible asset
During the year an internally generated software asset in the UK
and Ireland with a net book value of US$27m was identified as
requiring impairment due to planned upgrade of our technology
estate.
(e) Legal provisions movements
During the current and prior year there has been a movement in
provisions and related receivables in respect of a number of
historic legal claims.
Notes to the financial statements (continued)
for the year ended 31 March 2021
7. Exceptional items and other adjustments made to derive
Benchmark PBT - continuing operations (continued)
(f) Impairment of goodwill
The carrying value of the Asia Pacific Cash-generating unit has
been reduced to its recoverable amount through recognition of an
impairment charge of US$53m.
8. Net finance costs
(a) Net finance costs included in profit before
tax
2021 2020
US$m US$m
Interest income:
Bank deposits, short-term investments and loan
notes (11) (13)
Interest on pension plan assets (1) -
Interest income (12) (13)
Finance expense:
Interest expense 133 145
(Credit)/charge in respect of financing fair
value remeasurements (5) 111
Interest on uncertain tax provisions 11 14
Finance expense 139 270
Net finance costs included in profit before
tax 127 257
(b) Net interest expense included in Benchmark
PBT
2021 2020
US$m US$m
Interest income (12) (13)
Interest expense 133 145
Net interest expense included in Benchmark
PBT 121 132
9. Tax - ongoing activities
(a) Tax charge and effective rate of tax
2021 2020
US$m US$m
Tax charge 275 263
Profit before tax 1,077 942
Effective rate of tax based on profit before
tax 25.5% 27.9%
In the normal course of business, the Group has a number of open
tax returns with various tax authorities with whom it is in active
dialogue. At 31 March 2021 the Group held current provisions of
US$350m (2020: US$327m) in respect of uncertain tax positions.
Liabilities relating to these open and judgmental matters are based
on an assessment as to whether additional taxes will be due, after
taking into account external advice where appropriate. The
resolution of these tax matters may take many years. While the
timing of developments in resolving these matters is inherently
uncertain, the Group does not expect to materially increase its
uncertain tax provisions in the next 12 months, however if an
opportunity arose to resolve the matters for less than the amounts
provided, a settlement may be made with a corresponding reduction
in the provision.
(b) Reconciliation of the tax charge to the Benchmark tax
charge
2021 2020
US$m US$m
Tax charge 275 263
Tax relief on Exceptional items and other adjustments
made to derive Benchmark PBT 53 61
Benchmark tax charge 328 324
Benchmark PBT 1,265 1,255
Benchmark tax rate 25.9% 25.8%
Notes to the financial statements (continued)
for the year ended 31 March 2021
9. Tax - ongoing activities (continued)
(c) Tax recognised in other comprehensive income and directly in
equity
In the year ended 31 March 2021, the gain of US$84m (2020 loss
of: US$298m) in respect of other comprehensive income is after a
deferred tax charge of US$1m (2020: US$5m), relating to
remeasurement gains on post-employment benefit assets and
obligations.
A tax credit relating to employee share incentive plans of US$2m
(2020: US$5m) is recognised in equity and reported as appropriate
within transactions with owners. This amount comprises a current
tax credit of US$5m (2020: US$9m) and a deferred tax charge of
US$3m (2020: US$4m).
10. Discontinued operations
There have been no material divestments of subsidiaries during
the year ended 31 March 2021. On 31 May 2017, the Group completed
the divestment of the Group's email/cross-channel marketing
business (CCM), and the results and cash flows of that business
were accordingly classified as discontinued. Residual disposal
costs of US$2m were incurred during the year ended 31 March 2020,
and cash outflows from operating activities were US$6m in that
year.
11. Earnings per share disclosures
(a) Earnings per share (EPS)
Basic Diluted
2021 2020 2021 2020
US cents US cents US cents US cents
Continuing and discontinued operations 88.2 74.8 87.6 74.2
Add: loss from discontinued operations - 0.2 - 0.2
Continuing operations 88.2 75.0 87.6 74.4
Add: Exceptional items and other adjustments
made to derive Benchmark PBT, net of
related tax 14.9 28.0 14.7 27.7
Benchmark EPS (non-GAAP measure) 103.1 103.0 102.3 102.1
(b) Analysis of earnings (i) Attributable
to owners of Experian plc
2021 2020
US$m US$m
Continuing and discontinued operations 803 675
Add: loss from discontinued operations - 2
Continuing operations 803 677
Add: Exceptional items and other adjustments made to
derive Benchmark PBT, net of related tax 135 252
Benchmark earnings attributable to owners of Experian
plc (non-GAAP measure) 938 929
(ii) Attributable to non-controlling
interests
2021 2020
US$m US$m
(Loss)/profit for the financial year attributable
to non-controlling interests (1) 2
Add: amortisation of acquisition intangibles attributable
to non-controlling interests, net of related tax - -
Benchmark earnings attributable to non-controlling interests
(non-GAAP measure) (1) 2
(c) Reconciliation of Total Benchmark earnings to profit
for the financial year
2021 2020
US$m US$m
Total Benchmark earnings (non-GAAP
measure) 937 931
Loss from discontinued operations - (2)
Loss from Exceptional items and other adjustments made
to derive Benchmark PBT, net of related tax (135) (252)
Profit for the financial year 802 677
(d) Weighted average number of ordinary
shares
2021 2020
million million
Weighted average number of ordinary
shares 910 902
Add: dilutive effect of share incentive awards,
options and share purchases 7 8
Diluted weighted average number of
ordinary shares 917 910
Notes to the financial statements (continued)
for the year ended 31 March 2021
12. Dividends paid on ordinary shares
(a) Dividend information
2021 2020
US cents US cents
per share US$m per share US$m
Amounts recognised and paid during
the financial year:
First interim - paid in February 2021
(2020: January 2020) 14.5 133 14.5 130
Second interim - paid in July 2020
(2020: July 2019) 32.5 294 32.5 294
Dividends paid on ordinary shares 47.0 427 47.0 424
Full-year dividend for the financial
year (1) 47.0 430 47.0 423
1. The cost of the second interim dividend for the year ended 31
March 2020 paid in July 2020, increased by US$1m due to foreign
exchange rate movements.
A second interim dividend in respect of the year ended 31 March
2021 of 32.5 US cents per ordinary share will be paid on 23 July
2021, to shareholders on the register at the close of business on
25 June 2021. This dividend is not included as a liability in these
financial statements. This second interim dividend and the first
interim dividend paid in February 2021 comprise the full-year
dividend for the financial year of 47.0 US cents per ordinary
share. Dividend amounts are quoted gross, and shareholders will be
paid dividends in pounds sterling unless they have elected
otherwise by 25 June 2021.
In the year ended 31 March 2021, the employee trusts waived
their entitlements to dividends of US$2m (2020: US$4m). There is no
entitlement to dividend in respect of own shares held as treasury
shares.
(b) Income Access Share (IAS) arrangements
As its ordinary shares are listed on the London Stock Exchange,
the Company has a large number of UK resident shareholders. In
order that shareholders may receive Experian dividends from a UK
source, should they wish, the IAS arrangements have been put in
place. The purpose of the IAS arrangements is to preserve the tax
treatment of dividends paid to Experian shareholders in the UK, in
respect of dividends paid by the Company. Shareholders who elect,
or are deemed to elect, to receive their dividends via the IAS
arrangements will receive their dividends from a UK source (rather
than directly from the Company) for UK tax purposes.
Shareholders who hold 50,000 or fewer Experian plc shares on the
first dividend record date after they become shareholders, unless
they elect otherwise, will be deemed to have elected to receive
their dividends under the IAS arrangements.
Shareholders who hold more than 50,000 shares and who wish to
receive their dividends from a UK source must make an election to
receive dividends via the IAS arrangements. All elections remain in
force indefinitely unless revoked.
Unless shareholders have made an election to receive dividends
via the IAS arrangements, or are deemed to have made such an
election, dividends will be received from an Irish source and will
be taxed accordingly. The final date for submission of elections to
receive UK sourced dividends via the IAS arrangements is 25 June
2021. The Company offers a Dividend Reinvestment Plan (DRIP) to
shareholders who receive their dividends under the IAS
arrangements, and the final date for submission of DRIP elections
is also 25 June 2021.
Notes to the financial statements (continued)
for the year ended 31 March 2021
13. Capital expenditure, disposals and capital commitments
(a) Additions
2021 2020
US$m US$m
Capital expenditure 422 487
Right-of-use-assets 57 50
479 537
b) Disposal of other intangible assets and property, plant and
equipment
The book value of other intangible fixed assets and purchased
property, plant and equipment disposed of in the year ended 31
March 2021 was US$4m (2020: US$4m) and the amount realised was
US$1m (2020: US$5m).
(c) Capital commitments
2021 2020
US$m US$m
Capital expenditure for which contracts
have been placed:
Other intangible assets 6 2
Property, plant and equipment 10 23
16 25
Capital commitments at 31 March 2021 included US$1m (2020:
US$7m) in respect of right-of-use assets. All commitments at 31
March 2021 and 31 March 2020 were expected to be incurred before 31
March 2022 and 31 March 2021 respectively. There were no material
leases committed to that had not yet started at 31 March 2021 or 31
March 2020.
14. Post-employment benefits - IAS 19 information
(a) Balance sheet assets/(obligations)
2021 2020
US$m US$m
Retirement benefit assets/(obligations) - funded
defined benefit plans:
Fair value of funded plans' assets 1,274 1,023
Present value of funded plans' obligations (1,172) (940)
Assets in the Group balance sheet for funded
defined benefit pensions 102 83
Obligations for unfunded post-employment benefits:
Present value of defined benefit pensions -
unfunded plans (51) (44)
Present value of post-employment medical benefits (4) (4)
Liabilities in the Group balance sheet (55) (48)
Net post-employment benefit assets 47 35
Pension assets are deemed to be recoverable and there are no adjustments
in respect of minimum funding requirements as, under the Experian Pension
Scheme rules, future economic benefits are available to the Group in
the form of reductions in future contributions or refunds of surplus.
(b) Movements in net post-employment benefit assets/(obligations)
recognised in the Group balance sheet
2021 2020
US$m US$m
At 1 April 35 6
Differences on exchange 5 (1)
Charge to the Group income statement (5) (8)
Remeasurement gains recognised within Other
comprehensive income 2 26
Contributions paid by the Group and employees 10 12
At 31 March 47 35
There was a small funding deficit at the date of the 2016 full
actuarial valuation of the Experian Pension Scheme. To correct the
shortfall the employer agreed to pay additional contributions of
US$4m per annum over five years from 1 April 2017. The employer has
agreed to continue to pay these contributions notwithstanding the
small surplus recognised following the 2019 full actuarial
valuation. Contributions, including additional contributions,
currently expected to be paid to this plan during the year ending
31 March 2022 are US$8m by the Group and US$1m by employees.
Notes to the financial statements (continued)
for the year ended 31 March 2021
14. Post-employment benefits - IAS 19 information
(continued)
(c) Income statement charge
2021 2020
US$m US$m
By nature of expense:
Current service cost 4 6
Administration expenses 2 2
Charge within labour costs and operating profit 6 8
Interest income (1) -
Total net charge to the Group income statement 5 8
The income statement charge and the remeasurement recognised in the
Statement of comprehensive income relate to defined benefit plans.
In the year ended 31 March 2019, we recognised a past service cost in
respect of Guaranteed Minimum Pension equalisation of US$4m. The amount
of any additional liability resulting from the UK High Court ruling
on 20 November 2020 on historic transfers, is not anticipated to be
material to the Group.
(d) Financial actuarial assumptions
2021 2020
% %
Discount rate 2.0 2.2
Inflation rate - based on the UK Retail Prices
Index (the RPI) 3.3 2.6
Inflation rate - based on the UK Consumer Prices
Index (the CPI) 2.8 1.8
Increase in salaries 2.8 2.1
Increase for pensions in payment - element based
on the RPI (where cap is 5%) 3.0 2.5
Increase for pensions in payment - element based
on the CPI (where cap is 2.5%) 1.9 1.5
Increase for pensions in payment - element based
on the CPI (where cap is 3%) 2.2 1.7
Increase for pensions in deferment 2.8 1.8
Inflation in medical costs 6.3 5.6
The mortality and other demographic assumptions used at 31 March
2021 remain broadly unchanged from those utilised at 31 March 2020
and disclosed in the Group's statutory financial statements for the
year then ended.
While the methodology used to determine the discount rate is
unchanged from that used at 31 March 2020, the data source used by
our external actuary to construct the corporate bond yield curve
has been updated due to changes in the classifications of relevant
high-quality corporate bonds. In constructing the yield curve,
judgment is required on the selection of appropriate bonds to be
included and the approach then used to derive the yield curve. The
change to the bond universe has reduced retirement benefit
obligations at 31 March 2021 by approximately US$28m or 2.4%.
In the year ended 31 March 2020 the CPI assumption was derived
by assuming a margin of 80 basis points below RPI. Following the
announcement by the UK Chancellor of the Exchequer on 25 November
2020, of the outcome of a consultation on the reform to RPI
methodology, it is now expected that from 2030 RPI will be aligned
with CPIH (the Consumer Price Index including owner occupiers'
housing costs). For the year ended 31 March 2021, a 100 basis point
margin between RPI and CPI has been assumed to 2030, with a ten
basis point margin assumed thereafter. This results in a single
equivalent differential of 50 basis points and an increase in
retirement benefit obligations at 31 March 2021 of approximately
US$14m or 1.2%.
Notes to the financial statements (continued)
for the year ended 31 March 2021
15. Notes to the Group cash flow statement
(a) Cash generated from operations
2021 2020
US$m US$m
Profit before tax 1,077 942
Share of post-tax profit of associates (21) (14)
Net finance costs 127 257
Operating profit 1,183 1,185
Loss/(profit) on disposal of fixed assets 3 (1)
Profit on disposal of investment in associate (120) -
Impairment of goodwill 53 -
Impairment of other intangible assets 33 -
Impairment of property, plant and equipment 4 -
Amortisation and depreciation(1) 591 537
Charge in respect of share incentive plans 106 83
Increase in working capital (note 15(b)) (13) (112)
Acquisition expenses - difference between income
statement charge and amount paid (9) 6
Fair value gain on revaluation of step acquisition - (17)
Adjustment to the fair value of contingent
consideration 1 (4)
Movement in Exceptional and other non-benchmark
items included in working capital (10) 17
Cash generated from operations 1,822 1,694
1. Amortisation and depreciation includes amortisation of acquisition
intangibles of US$138m (2020: US$124m) which is excluded from Benchmark
PBT.
(b) Increase in working capital
2021 2020
US$m US$m
Trade and other receivables (31) (145)
Trade and other payables 18 33
Increase in working capital (13) (112)
(c) Purchase of other intangible assets
2021 2020
US$m US$m
Databases 147 175
Internally generated software 197 189
Internal use software 30 39
Purchase of other intangible assets 374 403
(d) Cash flows on acquisitions (non-GAAP measure)
2021 2020
US$m US$m
Purchase of subsidiaries (note 20(a)) 568 601
Less: net cash acquired with subsidiaries (47) (26)
Settlement of deferred and contingent consideration 5 25
As reported in the Group cash flow statement 526 600
Acquisition expenses paid 47 33
Transactions in respect of non-controlling
interests 10 67
Cash outflow for acquisitions (non-GAAP measure) 583 700
Notes to the financial statements (continued)
for the year ended 31 March 2021
15. Notes to the Group cash flow statement (continued)
(e) Cash (inflow)/outflow in respect of net share purchases
(non-GAAP measure)
2021 2020
US$m US$m
Issue of ordinary shares (19) (15)
Purchase of shares by employee trusts - 92
Purchase and cancellation of own shares - 111
Cash (inflow)/outflow in respect of net share
purchases (non-GAAP measure) (19) 188
As reported in the Group cash flow statement:
Cash inflow in respect of shares issued (19) (15)
Cash outflow in respect of share purchases - 203
Cash (inflow)/outflow in respect of net share
purchases (non-GAAP measure) (19) 188
(f) Analysis of cash and cash equivalents
2021 2020
US$m US$m
Cash and cash equivalents in the Group balance
sheet 180 277
Bank overdrafts (10) (5)
Cash and cash equivalents in the Group cash flow
statement 170 272
(g) Reconciliation of Cash generated from operations to
Benchmark operating cash flow (non-GAAP measure)
2021 2020
US$m US$m
Cash generated from operations (note
15(a)) 1,822 1,694
Purchase of other intangible assets
(note 15(c)) (374) (403)
Purchase of property, plant and equipment (48) (84)
Sale of property, plant and equipment 1 5
Payment of lease liabilities (56) (55)
Acquisition expenses paid 47 33
Dividends received from associates 17 6
Cash flows in respect of Exceptional and
other non-benchmark items 67 18
Benchmark operating cash flow (non-GAAP
measure) 1,476 1,214
Benchmark free cash flow for the year ended 31 March 2021 was
US$1,124m (2020: US$774m). Cash flow conversion for the year ended
31 March 2021 was 106% (2020: 88%).
Notes to the financial statements (continued)
for the year ended 31 March 2021
16. Net debt (non-GAAP measure)
(a) Analysis by nature
2021 2020
US$m US$m
Cash and cash equivalents (net of overdrafts) 170 272
Debt due within one year - commercial paper (25) (447)
Debt due within one year - bonds and notes (554) -
Debt due after more than one year - bonds and notes (3,526) (2,858)
Debt due after more than one year - bank loans (2) (900)
Derivatives hedging loans and borrowings 111 35
(3,826) (3,898)
(b) Analysis by balance sheet caption
2021 2020
US$m US$m
Cash and cash equivalents 180 277
Current borrowings (655) (498)
Non-current borrowings (3,682) (3,916)
Borrowings (4,337) (4,414)
Total of Group balance sheet line items (4,157) (4,137)
Lease obligations reported within borrowings excluded
from Net debt 202 201
Accrued interest reported within borrowings excluded
from Net debt 18 3
Derivatives reported within Other financial assets 117 52
Derivatives reported within Other financial liabilities (6) (17)
(3,826) (3,898)
At 31 March 2021 the fair value of borrowings was US$4,476m
(2020: US$4,408m) and includes lease obligations of US$202m (2020:
US$201m) recognised in respect of right-of-use assets.
(c) Analysis of movements in Net debt
1 April Movements in the year ended 31 March 2021 31 March
2020 Cash Non-cash Net share Additions Fair Exchange 2021
flow lease purchases through value and other
obligation business gains movements
additions combinations
US$m US$ US$m US$m US$m US$m US$m US$m
-------- ----- ------------ ------ ----------
Derivatives hedging
loans and borrowings 35 (54) - - - 10 120 111
Borrowings (1,2) (4,414) 377 (57) - (19) 34 (258) (4,337)
-------- ----------
Liabilities from
financing activities (4,379) 323 (57) - (19) 44 (138) (4,226)
Lease obligations 201 (66) 57 - 4 - 6 202
Accrued interest 3 15 - - - - - 18
Cash and cash
equivalents 277 (105) - 19 - - (11) 180
Net debt (3,898) 167 - 19 (15) 44 (143) (3,826)
1. Lease obligation cash flows include principal and interest
payments of US$56m and US$10m respectively.
2. Exchange and other movements include US$8m in respect of lease obligation disposals.
Notes to the financial statements (continued)
for the year ended 31 March 2021
17. Undrawn committed bank borrowing facilities
2021 2020
US$m US$m
Facilities expiring in:
Less than one year - 75
One to two years 400 -
Two to three years 300 150
Three to four years - -
Four to five years 1,950 1,950
2,650 2,175
These facilities are at variable interest rates and are in place
for general corporate purposes, including the financing of
acquisitions and the refinancing of other borrowings.
18. Called-up share capital and share premium account
Number of Called-up Share
shares share premium
capital account
million US$m US$m
At 1 April 2019 971.5 96 1,559
Shares issued under employee share incentive
plans 0.8 - 15
Purchase and cancellation of own shares (3.6) - -
----------
At 31 March 2020 968.7 96 1,574
Shares issued under employee share incentive
plans 0.9 - 19
Premium on treasury shares delivered
as consideration - - 163
----------
At 31 March 2021 969.6 96 1,756
19. Own shares held Number of Cost
shares of shares
million US$m
At 1 April 2019 70.1 1,167
Purchase of shares by employee trusts 3.0 92
Other vesting of awards and exercises of share options (5.3) (76)
-----------
At 31 March 2020 67.8 1,183
Purchase of shares by employee trusts
Shares delivered as consideration for acquisition (7.2) (90)
Other vesting of awards and exercises of share options (4.6) (87)
-----------
At 31 March 2021 56.0 1,006
Own shares held at 31 March 2021 include 52.3 million shares
held as treasury shares and 3.7 million shares held by employee
trusts. Own shares held at 31 March 2020 included 60.4 million
shares held as treasury shares and 7.4 million shares held by
employee trusts. The total cost of own shares held at 31 March 2021
of US$1,006m (2020: US$1,183m) is deducted from Other reserves in
the Group balance sheet.
Notes to the financial statements (continued)
for the year ended 31 March 2021
20. Acquisitions
(a) Acquisitions in the year
The Group made seven acquisitions during the year ended 31 March
2021, including the acquisition of a 60% stake in the Risk
Management division of Arvato Financial Solutions (AFS) which
completed on 30 June 2020. This investment enables us to expand our
range of risk, anti-fraud and identity management services across
Germany, Austria and Switzerland. The consideration was satisfied
by the delivery of 7.2m Experian plc treasury shares at market
value.
There are put and call options associated with the shares held
by the remaining shareholders of the Risk Management division of
Arvato Financial Solutions, and these first become exercisable in
January 2026. Accordingly, a provisional amount in respect of the
present value of the put options of US$201m has been recognised as
a non-current financial liability.
On 19 November 2020 we acquired the whole of the issued share
capital of Tapad, Inc. (Tapad), a leader in resolution of digital
online identities, and on 23 March 2021, we acquired the whole of
the issued share capital of BrScan Processamento de Dados e
Tecnologia Ltda, (BrScan), a market leader in Fraud and Identity
solutions in Brazil.
In total provisional goodwill of US$657m was recognised based on
the fair value of the net assets acquired of US$416m.
Net assets acquired, goodwill and acquisition consideration are
analysed below.
Arvato
Risk Management Tapad BrScan Other Total
US$m US$m US$m US$m US$m
Intangible assets:
Customer and other relationships 149 156 31 50 386
Software development 14 16 12 15 57
Marketing-related acquisition
intangibles 5 3 1 2 11
Other non-acquisition intangibles 11 7 - 9 27
------ ------
Intangible assets 179 182 44 76 481
Property, plant and equipment 3 1 1 - 5
Trade and other receivables 15 16 4 16 51
Current tax assets 10 - - - 10
Cash and cash equivalents
(note 15(d)) 1 18 - 28 47
Trade and other payables (22) (24) (5) (12) (63)
Borrowings - - - (15) (15)
Deferred tax liabilities (55) (13) (15) (17) (100)
------ ------
Total identifiable net assets 131 180 29 76 416
Goodwill 323 110 103 121 657
------ ------
Total 454 290 132 197 1,073
Satisfied by:
Cash and cash equivalents
(note 15(d)) - 290 106 172 568
Experian plc shares 253 - - - 253
Put options 201 - - 7 208
Recognition of non-controlling
interest - - - 4 4
Deferred consideration - - - 7 7
Contingent consideration - - 26 7 33
------ ------
Total 454 290 132 197 1,073
These provisional fair values are determined by using
established estimation techniques such as discounted cash flow and
option valuation models; the most significant assumption being the
retention rates for customers. Provisional fair values contain
amounts which will be finalised no later than one year after the
date of acquisition. Provisional amounts, predominantly for
intangible assets and associated tax balances, have been included
at 31 March 2021, as a consequence of the timing and complexity of
the acquisitions. Goodwill represents the synergies, assembled
workforces and future growth potential of the acquired businesses.
None of the goodwill arising in the period of US$657m is currently
deductible for tax purposes. However, in the near future we expect
to undertake a merger of BrScan into Serasa S.A. which we
anticipate will create a separate tax deductible goodwill balance
within that company.
Goodwill for Arvato Risk Management has increased by US$141m,
since we reported the provisional amount at 30 September 2020, as a
result of adopting the assumed acquisition method of accounting for
this non-controlling interest.
Notes to the financial statements (continued)
for the year ended 31 March 2021
20. Acquisitions (continued)
(a) Acquisitions in the year (continued)
Other includes adjustments to prior year acquisition provisional
amounts, including a US$9m adjustment to the fair value of customer
and other relationships of Auto I.D., Inc. acquired in the year
ended 31 March 2020.
There have been no other material gains, losses, error
corrections or other adjustments recognised in the year ended 31
March 2021 that relate to acquisitions in the current or earlier
years.
(b) Additional information
(i) Current year acquisitions
Arvato
Risk Management Tapad BrScan Other Total
US$m US$m US$m US$m US$m
-----
Increase/(decrease) in book value
from fair value adjustments:
Intangible assets 172 175 44 67 458
Trade and other payables (2) (7) (3) (1) (13)
Deferred tax liabilities (50) (13) (15) (17) (95)
Increase in book value from fair value
adjustments 120 155 26 49 350
Gross contractual amounts receivable
in respect of trade and other receivables 10 16 3 11 40
Pro forma revenue from 1 April 2020
to date of acquisition 36 35 23 35 129
Revenue from date of acquisition to
31 March 2021 78 22 - 17 117
Profit before tax from date of acquisition
to 31 March 2021 15 7 - 2 24
-----
At the dates of acquisition, the gross contractual amounts
receivable in respect of trade and other receivables of US$40m were
expected to be collected in full.
If the transactions had occurred on the first day of the
financial year, the estimated additional contribution to profit
before tax would have been US$28m.
(ii) Prior year acquisitions
Deferred consideration of US$5m (2020: US$25m) was settled in
the year in respect of acquisitions made in earlier years. These
cash flows principally relate to the acquisitions of Runpath Group
Limited and Clarity Services, Inc. acquired in the year ended 31
March 2018.
The Group made eight acquisitions in the year ended 31 March
2020 which included the acquisition of the whole of the issued
share capital of Compuscan (CSH Group (Pty) Limited) and Auto I.D.,
Inc. A cash outflow of US$575m was reported in the Group cash flow
statement for that year, after deduction of US$26m in respect of
net cash acquired.
(iii) Post balance sheet acquisition
On 9 April 2021 the Group completed the acquisition of the
entire share capital of Employment Tax Servicing, LLC for US$52m
including deferred consideration of US$4m, and on 13 April 2021 we
completed the acquisition of the entire share capital of Tax Credit
Co., LLC for a cash consideration of US$250m and contingent
consideration of up to US$110m. Both acquisitions will bolster our
income verification business in North America.
21. Disposals
On 18 November 2020, the Group disposed of its 18.6% interest in
Finicity Corporation, an associate undertaking, for US$127m
recognising a gain on disposal of US$120m.
Notes to the financial statements (continued)
for the year ended 31 March 2021
22. Related party transactions
The Group's related parties were disclosed in the Group's
statutory financial statements for the year ended 31 March 2020.
Following the divestment of CCM in the year ended 31 March 2018 the
Group owns 23.1% of the issued share capital of Vector CM Holdings
(Cayman), L.P. (Vector).
The Group recorded the following transactions and balances with
Vector and its subsidiaries:
Transaction amount Balance owed to
Experian
Year ended 31 March At 31 March
2021 2020 2021 2020
US$m US$m US$m US$m
Promissory note and accrued interest 8 7 102 94
Net amounts collected/(settled)
and receivable - - 1 2
The promissory note is due and payable to Experian on 31 May
2024 with interest also payable on this date. During the year ended
31 March 2021, we ceased processing transactions on behalf of
Vector and no amounts were received or paid. In the year ended 31
March 2020 cash of US$2m was received and US$2m was paid on behalf
of Vector. We did not receive any margin on individual
transactions.
Transactions with associates are made on normal market terms and
in the year ended 31 March 2021 comprised the provision and receipt
of services to other associates of US$3m (2020: US$1m) and US$12m
(2020: US$9m) respectively. At 31 March 2021, amounts owed by
associates, other than Vector, were US$nil (2020: US$nil) and
amounts due to associates, other than Vector, were US$nil (2020:
US$1m).
23. Contingencies
(a) Latin America tax
As previously indicated, Serasa S.A. has been advised that the
Brazilian tax authorities are challenging the deduction for tax
purposes of goodwill amortisation arising from its acquisition by
Experian in 2007. The Brazilian courts have ultimately upheld
Experian's position in respect of the tax years from 2007 to 2011
with no further right of appeal. The Brazilian tax authorities have
raised similar assessments in respect of the 2012 to 2016 tax
years, in which approximately US$135m was claimed, and may raise
similar claims in respect of other years. The possibility of this
resulting in a liability to the Group is considered to be remote,
on the basis of the advice of external legal counsel, success in
cases to date and other factors in respect of the claim.
We note that a similar challenge has been raised in Colombia in
respect of the 2014 and 2016 tax years, in which approximately
US$4m was claimed, and similar claims in respect of other years may
be raised. We are contesting these on the basis of external legal
advice.
(b) UK marketing services regulation
We have received a final enforcement notice from the UK
Information Commissioner's Office (ICO) with respect to a 2018
audit of several companies on the use of data for marketing
purposes under the EU General Data Protection Regulation (GDPR),
which relates to our marketing services activities in the UK. We
disagree with the ICO's decision and have appealed, during which
time all requirements will be stayed. At this stage we do not know
what the final outcome will be, but it may require significant
changes to business processes in our UK marketing services
business. This business represents approximately 1% of our global
revenues and we do not expect this to result in a materially
adverse financial outcome for the Group.
(c) Other litigation and claims
There continue to be an increasing number of pending and
threatened litigation, regulatory and other claims involving the
Group across all its major geographies which are being vigorously
defended. The directors do not believe that the outcome of any such
claims will have a materially adverse effect on the Group's
financial position. However, as is inherent in legal, regulatory
and administrative proceedings, there is a risk of outcomes that
may be unfavourable to the Group. In the case of unfavourable
outcomes, the Group may benefit from applicable insurance
recoveries.
Notes to the financial statements (continued)
for the year ended 31 March 2021
24. Events occurring after the end of the reporting period
Details of the second interim dividend announced since the end
of the reporting period are given in note 12(a).
We completed the acquisitions of Employment Tax Servicing, LLC
and Tax Credit Co., LLC on 9 April 2021 and 13 April 2021
respectively. Further details are provided in note 20(b)(iii).
25. Company website
A full range of investor information is available at
www.experianplc.com. Details of the 2021 Annual General Meeting
(AGM), to be held in Dublin, Ireland on Wednesday, 21 July 2021,
will be given on the website and in the notice of meeting.
Information on the Company's share price is available on the
website.
Notes to the financial statements (continued)
for the year ended 31 March 2021
26. Risks and uncertainties
Identifying and managing risk is key to our business. Doing so
helps us deliver long-term shareholder value and protect our
business, people, assets, capital and reputation.
The Board is responsible for maintaining and reviewing the
effectiveness of our risk management activities from a strategic,
financial, and operational perspective. These activities are
designed to identify and manage, rather than eliminate, the risk of
failure to achieve business objectives or to successfully deliver
our business strategy. Our risk landscape continues to change as
both business and regulatory environments evolve. I n addition to
known principal risks and the recent COVID-19 pandemic, we continue
to identify and analyse emerging ones, and discuss as appropriate
in different forums.
The risk management process is designed to identify, assess,
respond to, report on and monitor the risks that threaten our
ability to achieve our business strategy and objectives, within our
risk appetite.
(a) Risk area - Loss or inappropriate use of data and
systems
Description
We hold and manage sensitive consumer information that increases
our exposure and susceptibility to cyber-attacks, or other
unauthorised access to data, either directly through our online
systems or indirectly through our partners or third-party
contractors.
Potential impact
Unauthorised access to consumer data could cause problems for
consumers and result in material loss of business, substantial
legal liability, regulatory enforcement actions and/or significant
harm to our reputation. The impact of this risk, if it
materialises, will typically be felt in the near term.
Examples of control mitigation
-- We deploy physical and technological security measures,
combined with monitoring and alerting for suspicious
activities.
-- We maintain an information security programme with strong
governance for identifying, protecting against, detecting and
responding to cyber security risks and recovering from cyber
security incidents.
-- We impose contractual security requirements on our partners
and other third parties that use our data, complemented by periodic
reviews of third-party controls.
-- We maintain insurance coverage, where feasible and appropriate.
(b) Risk area - Failure to comply with laws and regulations
Description
We hold and manage sensitive consumer information and we must
comply with many complex privacy and consumer protection laws,
regulations and contractual obligations.
Potential impact
Non-compliance may result in material litigation, including
class actions, as well as regulatory actions. These could result in
civil or criminal liability or penalties, damage to our reputation
or significant changes to parts of our business. The impact of this
risk, if it materialises, will typically be felt in the near
term.
Examples of control mitigation
-- We maintain a compliance management framework that includes
defined policies, procedures and controls for Experian employees,
business processes, and third parties such as our data
resellers.
-- We assess the appropriateness of using data in new and changing products and services.
-- We vigorously defend all pending and threatened claims,
employing internal and external counsel to effectively manage and
conclude such proceedings.
-- We analyse the causes of claims, to identify any potential
changes we need to make to our business processes and policies. We
maintain insurance coverage, where feasible and appropriate.
Notes to the financial statements (continued)
for the year ended 31 March 2021
26. Risks and uncertainties (continued)
(c) Risk area - Non-resilient IT/ business environment
Description
Delivery of our products and services depends on a number of key
IT systems and processes that expose our clients, consumers and
businesses to serious disruption in the event of systems or
operational failures.
Potential impact
A significant failure or interruption could have a materially
adverse effect on our business, financial performance, financial
condition and reputation. The impact of this risk, if it
materialises, will typically be felt in the near term.
Examples of control mitigation
-- We maintain a significant level of resilience in our
operations, designed to avoid material and sustained disruption to
our businesses, clients and consumers.
-- We design applications to be resilient and with a balance
between longevity, sustainability and speed.
-- We maintain a global integrated business continuity framework
that includes industry-appropriate policies, procedures and
controls for all our systems and related processes, as well as
ongoing review, monitoring and escalation activities.
-- We duplicate information in our databases and maintain back-up data centres.
(d) Risk area - Business conduct risk
Description
Our business model is designed to create long-term value for
people, businesses and society, through our data assets and
innovative analytics and software solutions. Inappropriate
execution of our business strategies or activities could adversely
affect our clients, consumers or counterparties.
Potential impact
Consumers or clients could receive inappropriate products or not
have access to appropriate products, resulting in material loss of
business, substantial legal liability, regulatory enforcement
actions or significant harm to our reputation. The impact of this
risk, if it materialises, will typically be felt in the short
term.
Examples of control mitigation
-- We maintain appropriate governance and oversight through
policies, procedures and controls designed to safeguard personal
data, avoid detriment to consumers, provide consumer-centric
product design and delivery, and effectively respond to enquiries
and complaints.
-- The above activities also support a robust conduct risk management framework.
-- We enforce our Global Code of Conduct, Anti-Corruption Policy
and Gifts and Hospitality Policy. If we believe employees or
suppliers are not following our conduct standards, we will
investigate thoroughly and take disciplinary action where
appropriate.
(e) Risk area - Dependence on highly skilled personnel
Description
Our success depends on our ability to attract, motivate and
retain key talent while also building future leadership.
Potential impact
Not having the right people could materially affect our ability
to service our clients and grow our business. The impact of this
risk, if it materialises, will typically be felt in the long
term.
Examples of control mitigation
-- In every region, we have ongoing programmes for recruitment,
personal and career development, and talent identification and
development.
-- As part of our employee engagement strategy, we conduct
periodic employee surveys. We track progress against our action
plans.
-- We offer competitive compensation and benefits and review them regularly.
-- We actively monitor attrition rates, with a focus on
individuals designated as high talent or in strategically important
roles.
Notes to the financial statements (continued)
for the year ended 31 March 2021
26. Risks and uncertainties (continued)
(f) Risk area - Adverse and unpredictable financial markets or fiscal developments
Description
We operate globally and our results could be affected by global,
regional or national changes in fiscal or monetary policies.
A substantial change in credit markets in the USA, Brazil or the
UK could reduce our financial performance and growth potential in
those countries.
We present our Group financial statements in US dollars.
However, we transact business in a number of currencies. Changes in
other currencies relative to the US dollar affect our financial
results. A substantial rise in US, EU or UK interest rates could
increase our future cost of borrowings.
We are subject to complex and evolving tax laws and
interpretations, which may change significantly. These changes may
increase our effective tax rates in the future. Uncertainty about
the application of these laws may also result in different outcomes
from the amounts we provide for.
We have a number of outstanding tax matters and resolving them
could have a substantial impact on our financial statements, cash
and reputation.
Potential impact
The US, Brazilian and UK markets are significant contributors to
our revenue. A reduction in one or more of these consumer and
business credit services markets could reduce our revenue and
profit.
We benefit from the strengthening of currencies relative to the
US dollar and are adversely affected by currencies weakening
relative to it.
We have outstanding debt denominated principally in euros, pound
sterling and US dollars. As this debt matures, we may need to
replace it with borrowings at higher interest rates.
Our earnings could be reduced and tax payments increased as a
result of settling historical tax positions or increases in tax
rates.
Adverse publicity around tax could damage our reputation.
The impact of this risk, if it materialises, will typically be
felt in the short to long term .
Examples of control mitigation
-- We have a diverse portfolio by geography, product, sector and
client. We provide counter-cyclical products and services.
-- We convert cash balances in foreign currencies into US dollars.
-- We fix the interest rates on a proportion of our borrowings.
-- We retain internal and external tax professionals, who
regularly monitor developments in international tax and assess the
impact of changes and differing outcomes.
-- We review contingency plans in our key markets as to specific
potential responses to evolving financial conditions.
Notes to the financial statements (continued)
for the year ended 31 March 2021
26. Risks and uncertainties (continued)
(g) Risk area - New legislation or changes in regulatory
enforcement
Description
We operate in an increasingly complex environment and many of
our activities and services are subject to legal and regulatory
influences. New laws, new interpretations of existing laws, changes
to existing regulations and heightened regulatory scrutiny could
affect how we operate. For example, regulatory interpretation of
complex, principles-based privacy regulations could affect how we
collect and process information for marketing, risk management and
fraud detection.
Potential impact
We may suffer increased costs or reduced revenue resulting from
modified business practices, adopting new procedures,
self-regulation and litigation or regulatory actions resulting in
liability, fines and/or changes in our business practices. The
impact of this risk, if it materialises, will typically be felt in
the short term.
Examples of control mitigation
-- We use internal and external resources to monitor planned and
realised changes in legislation.
-- We educate lawmakers, regulators, consumer and privacy
advocates, industry trade groups, our clients and other
stakeholders in the public policy debate.
-- Our global Compliance team has region-specific regulatory
expertise and works with our businesses to identify and adopt
balanced compliance strategies.
-- We execute our Compliance Management Programme, which directs
the structure, documentation, tools and training requirements to
support compliance on an ongoing basis.
(h) Risk area - Increasing competition
Description
We operate in dynamic markets such as business and consumer
credit information, decisioning software, fraud, marketing, and
consumer services. Our competitive landscape is still evolving,
with traditional players reinventing themselves, emerging players
investing heavily and new entrants making commitments in new
technologies or approaches to our markets. There is a risk that we
will not respond adequately to such disruptions or that our
products and services will fail to meet changing client and
consumer preferences.
Potential impact
Price reductions may reduce our margins and financial results.
Increased competition may reduce our market share, harm our ability
to obtain new clients or retain existing ones, affect our ability
to recruit talent and influence our investment decisions. We might
also be unable to support changes in the way our businesses and
clients use and purchase information, affecting our operating
results. The impact of this risk, if it materialises, will
typically be felt in the long term.
Examples of control mitigation
-- We continue to research and invest in new data sources,
analytics, technology, capabilities and talent to deliver our
strategic priorities.
-- We continue to develop innovative new products that leverage
our scale and expertise and allow us to deploy capabilities in new
and existing markets and geographies.
-- We use rigorous processes to identify and select our
development investments, so we can efficiently and effectively
introduce new products and solutions to the market.
-- Where appropriate, and available, we make acquisitions, take
minority investments and enter into strategic alliances to acquire
new capabilities and enter into new markets.
Notes to the financial statements (continued)
for the year ended 31 March 2021
26. Risks and uncertainties (continued)
(i) Risk area - Undesirable investment outcomes
Description
We critically evaluate, and may invest in, equity investments
and other growth opportunities, including internal performance
improvement programmes. To the extent invested, any of these may
not produce the desired financial or operating results.
Potential impact
Failure to successfully implement our key business strategies
could have a materially adverse effect on our ability to achieve
our growth targets.
Poorly executed business acquisitions or partnerships could
result in material loss of business, increased costs, reduced
revenue, substantial legal liability, regulatory enforcement
actions and significant harm to our reputation.
The impact of this risk, if it materialises, will typically be
felt in the long term.
Examples of control mitigation
-- We analyse competitive threats to our business model and markets.
-- We carry out comprehensive business reviews.
-- We perform comprehensive due diligence and post-investment
reviews on acquisitions and investments.
-- We employ a rigorous capital allocation framework.
-- We design our incentive programmes to optimise shareholder
value through delivery of balanced, sustainable returns and a sound
risk profile over the long term.
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, the
financial statements are prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the Company
and the Group taken as a whole; and the Strategic report contains a
fair review of the development and performance of the business and
the position of the Company and the Group taken as a whole,
together with a description of the principal risks and
uncertainties that they face, which is included in note 26.
The names and functions of the directors in office as at 19 May
2020 were listed in the Experian Annual Report 2020. In the period
from 19 May 2020 to the date of this report:
-- Alison Brittain was appointed to the Board as a non-executive
director on 1 September 2020.
-- Jonathan Howell was appointed to the Board as a non-executive director on 1 May 2021.
A list of current directors is maintained on the Company website
at www.experianplc.com.
By order of the Board
Charles Brown
Company Secretary
18 May 2021
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR GPUMPAUPGPGR
(END) Dow Jones Newswires
May 19, 2021 02:00 ET (06:00 GMT)
Experian (LSE:EXPN)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Experian (LSE:EXPN)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024