Coronavirus Update

Experian plc, Trading Update for the 3 Months Ended 31st December 2020

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% change in revenue from ongoing activities year-on-year for the three months ended 31 December 2020

Ongoing activities only

Total revenue growth %

Total revenue growth %

Organic revenue growth %

 

At actual

exchange rates1

At constant exchange rates

At constant exchange rates

North America

11

11

9

Latin America

(11)

13

13

UK and Ireland

1

(2)

(2)

EMEA/Asia Pacific

21

16

(11)

Total global

7

10

7

1 Experian reports in US dollars.

 

% change in organic revenue year-on-year for the three months ended 31 December 2020

Organic revenue growth % 2

Data

Decisioning

B2B3

Consumer Services

Total

 

 

 

 

 

 

North America

7

2

6

18

9

Latin America

1

5

2

178

13

UK and Ireland

(1)

(5)

(2)

1

(2)

EMEA/Asia Pacific

(8)

(15)

(11)

n/a

(11)

Total global

4

(1)

2

22

7

2 Ongoing activities only, at constant exchange rates.

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

 

Business mix including % change in organic revenue year-on-year for the three months ended 31 December 2020

Segment

 

Business unit

Q1 organic revenue growth %4

Q2 organic revenue growth %4

Q3 organic revenue growth %4

North America

4

9

9

 Data

CI / BI Bureaux

4

14

12

Automotive

(3)

1

(3)

Targeting

(15)

(16)

(7)

 Decisioning

Health

1

4

5

DA / Other

(1)

0

(2)

 Consumer

Consumer Services

10

16

18

Latin America

(1)

10

13

 Data

CI / BI Bureaux

(5)

1

1

Other

12

7

0

 Decisioning

DA / Other

(9)

3

5

 Consumer

Consumer Services

104

197

178

UK and Ireland

(15)

(8)

(2)

 Data

CI / BI Bureaux

(14)

(8)

3

Targeting / Other

(21)

(3)

(13)

 Decisioning

DA / Other

(13)

(8)

(5)

 Consumer

Consumer Services

(18)

(11)

1

EMEA/Asia Pacific

(20)

(17)

(11)

 EMEA

(25)

(16)

(9)

 Asia Pacific

(13)

(18)

(14)

Total global

(2)

5

7

4 Ongoing activities only, at constant exchange rates.

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

 

 

North America - 63% of Group revenue5

 

North America delivered a strong performance. Organic revenue growth was 9%, with B2B up 6% and Consumer Services up 18%. Total revenue growth at constant exchange rates was 11%, mainly reflecting the contribution from Tapad, acquired in November.

 

B2B growth was driven by a combination of factors, including ongoing strength in both mortgage volumes and Experian Ascend, with volume recovering for Clarity Services. These factors offset ongoing COVID-19 related weakness in credit reference volumes in support of unsecured lending, as well as in targeting (marketing data). In Decisioning, strong performances in health and fraud management offset softness in decisioning software.

 

Strength in Consumer Services was supported by ongoing expansion of the membership base. Free memberships reached 38m, with 5.7m US consumers having connected their accounts to Experian Boost. There was good demand for credit education and identity monitoring subscription services which benefited from heightened consumer interest during this period. Lead generation revenues performed well, notwithstanding tighter lending conditions for credit card and personal loan offers and helped by the expansion into automotive insurance earlier this year.

 

Latin America - 14% of Group revenue 5

 

In Latin America, both total and organic revenue increased by 13%.

 

B2B revenue was up 2% with strength in new initiatives offsetting weakness in credit bureau volumes. Brazil benefited from increased contributions from positive data propositions, Experian Ascend and from our automotive vertical. Spanish Latin America had a strong quarter, helped by recovering bureau volumes in Colombia.

 

We delivered considerable growth in Consumer Services in Latin America, with revenue up 178%. In Brazil, free consumer memberships increased to 56m. Limpa Nome, our debt resolution service, delivered strong growth following a highly successful annual credit fair. We also benefited from transaction growth on our eCred credit matching marketplace, as well as a growing contribution from identity theft protection services.

 

UK and Ireland - 15% of Group revenue 5

 

In UK and Ireland both total and organic revenue, at constant exchange rates, were down (2)%.

 

While still down overall, the trajectory in B2B has improved and organic revenue declined (2)%. Recovery has been driven by increased new business and strengthening transactions reflecting improved credit supply. Business credit and consumer information delivered growth, largely offsetting ongoing weakness in Decisioning.

 

Consumer Services returned to growth with organic revenue up 1%. We continue to add free memberships, now at 8.9m, and we are encouraged by the initial consumer reaction to Experian Boost. Since the launch in November 230,000 consumers have connected their accounts. Credit monitoring subscription revenue delivered growth and, while lead generation revenues are still down overall, the trajectory has improved considerably.

 

EMEA/Asia Pacific - 8% of Group revenue 5

 

At constant exchange rates, total revenue across EMEA/Asia Pacific increased by 16%, while organic revenue declined by (11)%. The difference principally related to the contribution from the acquisition of the Risk Management division of Arvato Financial Solutions.

 

There was some gradual sequential improvement in bureau volumes in EMEA, although these remain lower overall year-on-year. Our bureaux in Asia Pacific continue to be heavily impacted by the effects of the pandemic crisis, particularly in India. Decisioning also remains weak due to slower client decision-making in relation to software acquisition.

 

Near-term guidance

 

We expect that organic revenue growth for Q4 FY21 will be in the range of 3-5%, against a strong prior year comparative as we lap last year's mortgage uplift. For the full year ending 31 March 2021 we expect Benchmark EBIT in the range of US$1,360 - 1,380m.