REG - Experian plc - Half-year Report
13/11/2024 07:00
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RNS Number : 9730L Experian plc 13 November 2024
news release
Strong execution drives good growth in H1
7am, 13 November 2024 ─ Experian plc, the global data and technology
company, today issues its financial report for the six months ended 30
September 2024.
Brian Cassin, Chief Executive Officer, commented:
"We delivered good growth in H1. We continue to execute successfully on our
growth strategy to introduce new products, deploy advanced analytics and scale
our leading platforms. At constant currency and from ongoing activities,
revenue was up 7%, Benchmark EBIT increased 10%, and Benchmark EBIT margin was
up by 60 basis points. Currency was a 1% headwind to revenue and total
Benchmark EBIT. Benchmark earnings per share increased by 8% at actual
exchange rates.
"For FY25, we continue to expect organic revenue growth in the range of 6% to
8%. Based on our progress, we are raising our margin outlook, and now expect
margin accretion to be towards the upper end of our +30 to +50 basis points
guidance range. All measures are at constant exchange rates and on an ongoing
basis."
Benchmark and Statutory financial highlights
2024 2023 Actual rates growth % Constant rates growth % Organic growth %(2)
US$m
US$m
Benchmark¹
Revenue - ongoing activities(3) 3,617 3,399 6 7 7
Benchmark EBIT - ongoing activities(3,4) 1,011 932 8 10 n/a
Total Benchmark EBIT 999 928 8 9 n/a
Benchmark EPS USc 76.0 USc 70.4 8 9 n/a
Statutory
Revenue 3,628 3,424 6 n/a n/a
Operating profit 880 799 10 n/a n/a
Profit before tax 718 763 (6) n/a n/a
Basic EPS USc 60.2 USc 62.3 (3) n/a n/a
First interim dividend USc 19.25 USc 18.0 7 n/a n/a
1. See Appendix 1 (page 14) and note 6 to the condensed interim financial
statements for definitions of non-GAAP measures.
2. Organic revenue growth is at constant currency.
3. Revenue and Benchmark EBIT for the six months ended 30 September 2023 have
been re-presented for the reclassification to exited business activities of
certain Business-to-Business (B2B) businesses, detail is provided in notes
7(a) and 8 to the condensed interim financial statements.
4. See page 16 for reconciliation of Benchmark EBIT from ongoing activities to
Profit before tax.
Highlights
· Strong H1 progress. Q1 organic revenue growth was 7%, with Q2
organic revenue growth also at 7%, resulting in total revenue growth from
ongoing activities of 7% at constant and 6% at actual exchange rates.
· All regions contributed positively in H1. Organic revenue growth
was 7% in North America, 7% in Latin America, 2% in the UK and Ireland, and 7%
in EMEA and Asia Pacific.
· Consumer Services organic revenue growth was 9%. We now serve over 190
million free members as we continue to grow membership and engagement, and
provide innovative tools for our members to navigate their financial lives.
· B2B organic revenue growth was 6%, strengthening in Q2. Analytics
expansion, mortgage, along with strong performance in our North America
verticals, drove growth in H1.
· Benchmark EBIT from ongoing activities rose 10% at constant exchange
rates and 8% at actual exchange rates to US$1,011m, with a Benchmark EBIT
margin of 28.0%, up 60 basis points at actual exchange rates and constant
currency.
· Good conversion from Benchmark EBIT into Benchmark EPS. Benchmark EPS
growth of 8% at actual exchange rates, and 9% at constant exchange rates.
· Benchmark operating cash flow was US$707m, a conversion of 71% in our
seasonally weaker half for cash conversion.
· Strong financial position, driven by capital discipline and strategic
execution, with Net debt to Benchmark EBITDA of 2.0x.
· We invested US$818m in acquisitions to support our strategic
growth.
· Statutory profit before tax of US$718m, a decline of (6)% (2023:
US$763m), principally due to non-cash movements in the fair value of our
interest rate swaps. Statutory Basic EPS down (3)%.
· First interim dividend up 7% to USc 19.25 per ordinary share.
Experian
Nadia Ridout-Jamieson Investor queries
+44 (0)20 3042 4220
Nick Jones Media queries
Teneo
Graeme Wilson, Louise Male and Lisa Jarrett-Kerr
+44 (0)20 7353 4200
There will be a presentation today at 9.30am (UK time) to analysts and
investors via webcast. To view the slides and listen in online please go to
experianplc.com (http://www.experianplc.com) for the link.
Experian will update on third quarter trading for FY25 on 15 January 2025.
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 the risk section on page 13 note 25 to the
condensed interim financial statements 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 a global data and technology company, powering opportunities for
people and businesses around the world. We help to redefine lending practices,
uncover and prevent fraud, simplify healthcare, deliver digital marketing
solutions, and gain deeper insights into the automotive market, all using our
unique combination of data, analytics and software. We also assist millions of
people to realise their financial goals and help them to save time and money.
We operate across a range of markets, from financial services to healthcare,
automotive, agrifinance, insurance, and many more industry segments.
We invest in talented people and new advanced technologies to unlock the power
of data and innovate. As a FTSE 100 Index company listed on the London Stock
Exchange (EXPN), we have a team of 22,500 people across 32 countries. Our
corporate headquarters are in Dublin, Ireland. Learn more at experianplc.com.
Strategic report
Part 1 - Chief Executive Officer's review
We are pleased with our H1 performance. We delivered good growth in revenue,
and made strong progress in Benchmark EBIT margin expansion whilst delivering
on our strategic objectives. We have driven growth through new product
innovation, client wins and consumer expansion, despite a credit supply
backdrop that remains subdued. Highlights in H1 include strength in Fraud,
Health, Automotive, and Targeting all of which performed well, and our
Consumer Services business has driven further gains in membership, engagement
and ecosystem expansion.
H1 organic revenue growth was 7%, growing 7% in each of Q1 and Q2. Underlying
momentum improved, with organic revenue growth excluding one-off data breach
services accelerating in Q2. Consumer Services grew 9% organically, with B2B
delivering 6% growth. All regions contributed positively to growth, with
sustained strong growth in North America and EMEA and Asia Pacific, an
improvement in our Latin America performance in Q2, and modest growth in the
UK and Ireland (UK&I). We delivered good progress in expanding Benchmark
EBIT margins, whilst continuing to invest across the organisation.
First-half financial highlights
· Revenue growth was in-line with our expected performance. Total
revenue growth from ongoing activities was 6% at actual exchange rate and 7%
at constant currency. Organic revenue growth was 7%.
· All of our regions contributed to growth. Organic revenue growth
was 7% in North America, 7% in Latin America, 2% in UK&I, and 7% in EMEA
and Asia Pacific.
· By quarter, organic revenue growth was 7% in Q1 and 7% in Q2.
Organic revenue growth was 8% in Q1 and 7% in Q2 in North America, 5% in Q1
and 9% in Q2 in Latin America, 2% in Q1 and 2% in Q2 in UK&I, and 7% in Q1
and 8% in Q2 in EMEA and Asia Pacific.
· Consumer Services organic revenue growth was 9%. Organic growth was
11% in Q1 and 6% in Q2 reflecting the timing of one-off data breach revenue.
Excluding data breach revenue, Consumer Services organic revenue growth was 8%
in Q1 and 11% in Q2. We grew to over 190m free members. In Brazil, Limpa Nome
was a key contributor to growth, along with the expansion of our product
offerings. Our premium subscription business and growing insurance marketplace
were primary contributors to North America growth, offsetting a decline in
breach-related revenue.
· B2B organic revenue growth was 6%. Organic growth was 5% in Q1 and
7% in Q2. Expansion of our client footprint, driving cross-sell, and
innovation offset a credit environment in the USA and the UK that remains
below historical growth trends.
· We delivered strong progress in Benchmark EBIT from ongoing
activities, up 10% at constant and up 8% at actual exchange rates. Benchmark
EBIT margin from ongoing activities increased by 60 basis points at both
constant and actual exchange rates to 28.0%.
· We delivered strong growth in Benchmark earnings per share, which
increased by 9% at constant exchange rates driven by revenue growth and margin
expansion. Basic EPS was USc 60.2 (2023: USc 62.3), down (3)%.
· Cash flow conversion of Benchmark EBIT into Benchmark operating
cash flow was 71%, in our seasonally weaker half of the year for cash flow.
Benchmark operating cash flow at actual exchange rates was US$707m, compared
to US$711m year-on-year, largely related to product mix and phasing impacts of
trade and other payables. Our full year guidance for cash flow conversion
remains at greater than 90%.
· We continued to invest in data, technology and new products through
capital expenditure, which represented 8% of revenue. We continue to expect to
invest c.9% of revenue in the form of capital expenditure for the full year.
· We invested US$818m in acquisitions to support our strategic
initiatives and spent a net US$95m of our US$150m share repurchase programme.
We are selective with our capital deployment and carefully measure the
strategic fit and financial return of potential deals.
· During H1, we completed the acquisition of Neuro-ID, Inc. (NeuroID)
in North America, an industry leader in fraud-related behavioural analytics,
and the previously announced acquisition of illion, a commercial and credit
bureau in Australia and New Zealand. In Brazil, we acquired TEx, which
facilitates our insurance marketplace expansion, and SalaryFits, a building
block for our income verifications business. After the half-year end, we
announced an agreement to acquire Clear Sale S.A. (ClearSale), a leading
provider of digital fraud prevention solutions in Brazil, for up to R$1,905m,
net of cash and other closing conditions. We expect the transaction to
complete in the first half of the next calendar year.
· Net debt to Benchmark EBITDA of 2.0x, compared to our target range
of 2.0-2.5x.
· We have announced a first interim dividend of USc 19.25 per share,
up 7%. This will be paid on 7 February 2025 to shareholders on the register at
the close of business on 10 January 2025.
First-half strategic highlights
Our strategic focus is on identifying and positioning our business in growing
markets, and leveraging our data and world-class analytics and software
products to extend further into customer workflows. Our strategic investments
have enabled us to establish a broad client base across several verticals
including Financial Services, Health and Automotive, with a growing footprint
in Targeting, Fraud prevention, and Insurance. We are confident that our focus
on platforms, new product innovation and cross-sell, and increasing
realisation of synergies across Business-to-Business and Consumer Services
position our business for strong growth irrespective of the underlying credit
backdrop.
Strategic highlights this half include:
In Business-to-Business:
· We have increased the number of clients and solutions on our Ascend
Platform, with an initial focus on migrating existing customers. We have
provisioned over 1,800 client solutions 1 (#_ftn1) on the platform and are
seeing positive engagement trends from customers.
· We have progressed in embedding Generative AI (GenAI) capabilities
across the organisation. We have rolled out GenAI productivity tools to all
regions and recently launched a GenAI powered Experian Assistant within the
Ascend Sandbox in North America.
· We acquired NeuroID, an industry leader in behavioural analytics,
which enhances our existing fraud prevention suite by providing new
capabilities around digital behavioural signals and analytics. NeuroID
solutions are already available on the Ascend Platform.
· Employer and Verification Services continues to scale. Record count
has increased to 61 million (at 31 October 2024) and we have driven strong
client growth across both Employer and Verification Services. Within Employer
Services, our Compliance Library solution was recognised as a 2024 Top HR
Product of the Year by Human Resource Executive and the HR Technology
Conference.
· In North America Health, we have successfully integrated our
WaveHDC acquisition (now Patient Access Curator), with this new functionality
resonating highly in the market and driving significant new wins.
· In Brazil, we are investing in large and growing market
opportunities within fraud prevention, Small & Medium Enterprises (SMEs),
and agrifinance. After the half-end, we announced an agreement to acquire
ClearSale, the leading digital fraud prevention provider in Brazil. The
acquisition of ClearSale extends our capabilities in the attractive, high
growth identity & fraud (ID&F) market in Brazil, by adding transaction
fraud detection to our existing strengths in account opening and account
takeover prevention.
· In EMEA and Asia Pacific, on 30 September 2024, we completed the
previously announced acquisition of illion, one of the leading consumer and
commercial credit bureaux in Australia and New Zealand, and a transaction we
expect to transform our market position in this important region.
In Consumer Services:
· We have grown our free membership base as we continue to enhance
the products and services we offer to help consumers navigate their financial
lives. Globally, memberships grew to over 190 million.
· In North America, we continue to scale Experian Activate, our
platform which creates a more seamless lending marketplace for both our
financial institution clients and Experian members. We have added new features
and functionality for lenders and onboarded new clients across the personal
loans and credit cards verticals.
· We recently launched ongoing rate monitoring in our Experian
Insurance Marketplace. This service provides ongoing alerts to North American
consumers if there is a better rate on their auto insurance and removes much
of the need for comparison shopping.
· In Brazil, our business is evolving to offer more services with a
connected journey, making Serasa Experian an integrated part of a consumer's
financial timeline. Our recent acquisition of TEx expands our new business
opportunities into the insurance market, building on our existing capabilities
in credit, payments, and data protection.
· In the UK&I, 90% of our marketplace lender panel is onboarded
or in the process of onboarding to Experian Activate. This solution is
resonating with clients, helping them improve the competitiveness of their
offers and speed to market, and helping us gain exclusive product launches.
____________________________
1. Client solutions refer to any client
specific instance of a product provisioned on the Ascend Platform
Environmental, social and governance (ESG)
· We are uniquely positioned to help people thrive on their
financial journey, through our direct relationship with consumers and
innovative combinations of data and analytics. More than 16 million US
consumers have now connected their accounts to take advantage of Experian
Boost to improve their credit score, or to use Personal Financial Management
tools. Experian Go has helped nearly a quarter of a million 'credit invisible'
US consumers to establish their financial identity. Our consumer strategy has
been broadening beyond credit to help consumers save money in other ways.
Premium members have collectively saved over US$10m on everyday bills through
Experian BillFixer which provides both bill negotiation and subscription
cancellation.
· We pride ourselves on our 'People first' culture. This year we
were featured on Fortune's 2024 100 Best Companies to Work For list for the
fifth consecutive year. We're certified as a Great Place to Work in 24
countries, 88% of employees who participated are proud to tell others they
work at Experian and 92% agree that Experian's flexible ways of working enable
them to work productively.
· We have continued to reduce our Scope 1 and 2 emissions by
increasing our electricity consumption from renewables, from 75% in FY24 to
84% in H1. We have launched 'On target for climate', a supplier engagement
programme for our Scope 3 target - in addition to the 27% of our spend covered
by suppliers with science-based targets, an additional 13% have now committed
to set or maintain targets in the next two years by signing our supplier
sustainability commitment, a good start in our supplier engagement journey.
· Experian was named in the inaugural edition of the TIME
magazine's 'World's Most Sustainable Companies 2024' Special Report,
recognising our strong social impact and our environmental performance and
reporting.
Other financial developments
Benchmark EBIT of US$999m, was up 8% at actual exchange rates. Benchmark EBIT
includes the impact of a US$12m operating loss from exited business
activities. These exited businesses came primarily from our Latin America and
EMEA and Asia Pacific regions and included a one-off write-down on a business
closure. Benchmark EBIT from ongoing activities of US$1,011m rose 8% at actual
exchange rates and removes the impact of these exited businesses.
Benchmark profit before tax (PBT) was US$929m, up 8% at actual exchange rates,
after a net interest expense of US$70m (2023: US$68m). Our interest expense
increased only marginally despite the rise in market rates due to our forward
rate fixing programme. For FY25, we now expect net interest expense to be
c.US$155m, this includes the financing costs associated with acquisitions
completed during the half.
The Benchmark tax rate was 25.0% (2023: 25.1%). For FY25, we now expect a rate
of c.26% (FY24: 25.7%), taking into account the expected profit mix for the
second half of the year.
Our Benchmark EPS was USc 76.0, an increase of 8% at actual exchange rates and
9% at constant exchange rates. For FY25, we still expect a weighted average
number of ordinary shares (WANOS) of c.914m.
Foreign exchange translation was a 1% headwind to Benchmark EPS in the half,
primarily related to the deprecation of the Brazilian real relative to the US
dollar. For FY25, we expect the foreign exchange translation effect to be
around a (2)% headwind on revenue and Benchmark EBIT, assuming recent foreign
exchange rates prevail.
Non-benchmark items:
· Profit before tax was US$718m, down from US$763m, reflecting
non-cash movements in the fair value of our interest rate swaps, as well as
movements on put options and a devaluation of the Brazilian real exchange
rate.
Reconciliation of statutory to Benchmark measures for the six months ended 30
September 2024
Statutory Non-benchmark and other items Benchmark
Investment- Amortisation of acquisition intangibles Non-cash financing items(2) Exceptional items(3)
related items(1)
US$m US$m US$m US$m US$m US$m
3,617 - - - - 3,617 Ongoing
11 - - - - 11 Exited
Revenue 3,628 - - - - 3,628 Revenue
892 11 95 - 13 1,011 Ongoing
(12) - - - - (12) Exited
Operating profit 880 11 95 - 13 999 Benchmark EBIT
Profit before tax 718 10 95 93 13 929 Benchmark PBT
Basic EPS USc 60.2 1.1 7.5 9.1 (1.9) 76.0 Benchmark EPS USc
1. Investment-related items include the Group's share of continuing
associates' Benchmark post-tax results.
2. Non-cash financing items of US$93m includes US$42m adverse movements on
interest rate swaps, US$31m foreign exchange losses on Brazil intra-Group
funding, US$28m fair value increases on put options, partially offset by other
favourable items of US$(8)m.
3. Exceptional items are analysed in note 9 to the condensed interim
financial statements.
Part 2 - Regional highlights for the six months ended 30 September 2024
Year-on-year % change in organic¹ revenue - for the six months ended 30 Benchmark
September 2024
EBIT
margin²
% of Group revenue³ Data Decisioning B2B Consumer Services Total Total
North America 68 8 7 8 7 7 34.5%
Latin America 14 0 9 2 27 7 28.1%
UK and Ireland 12 1 1 1 6 2 18.9%
EMEA and Asia Pacific 6 5 13 7 n/a 7 0.4%
Total global 100 6 7 6 9 7 28.0%
1. At constant exchange rates.
2. At actual exchange rates.
3. Percentage of Group revenue from ongoing activities calculated based on
H1 FY25 revenue at actual exchange rates.
North America
North America delivered good growth with revenue of US$2,466m, representing
organic revenue growth of 7%. Total revenue growth was 8% including the
contribution from the WaveHDC acquisition completed last year.
B2B delivered organic revenue growth of 8%, with growth of 7% in Q1 and 9% in
Q2. The breadth and richness of our data, along with our innovative software
offerings, makes Experian a critical partner for our clients as they look to
expand revenue and drive efficiencies. We benefitted in the half from growth
in mortgage, notable client wins in Clarity, our alternative data business,
and continued client penetration of our Ascend analytics, Ascend marketing and
fraud prevention solutions. While mortgage volumes improved as the half
progressed, non-mortgage credit growth remains constrained. We recently
completed the acquisition of NeuroID, an industry leader in fraud-related
behavioural analytics, which will enhance our fraud prevention capabilities
and is already available on our Ascend Platform. We have continued to expand
our market coverage within income and employment verification services, with
our active record count now totalling 61 million as at 31 October 2024.
Our Automotive, Targeting, and Health businesses performed well. Automotive
revenue grew 7% driven by the breadth of our product suite, despite a still
soft market for vehicle sales. Targeting revenue grew 6%. New business wins
were driven by our leading data and identity graph that provide differentiated
solutions for our digital advertiser clients. Health revenue increased by 8%,
helped by an expansion of our product solutions, including the integration of
WaveHDC (now Patient Access Curator), within our client base, while also
capitalising on strong market demand with new client wins.
Consumer Services delivered organic revenue growth of 7%, with growth of 10%
in Q1 and 3% in Q2. Growth across the half reflected variability in one-off
data breach services. Excluding data breach services, Consumer Services
delivered growth in Q1 of 6% and Q2 of 9% as membership and marketplace growth
improved as the half progressed.
Our goal is to be a leading platform to help our customers navigate their
financial lives. We are making progress utilising our unique market position
to leverage our B2B and customer relationships to provide leading and
differentiated solutions.
We continue to add value to members and this is driving growth on our
platform. Free membership continues to grow at strong rates. We generated
solid broad-based revenue performance, with growth across premium
subscriptions, marketplace, and partner solutions. Within our insurance
business, growth has accelerated as we scale up our differentiated product
that removes much of the friction from insurance shopping. We have gained
market traction, and now have three out of the top five insurance carriers
displaying quotes in our ecosystem, with two of these carriers providing fully
integrated bound offers. Insurance growth was the key driver of marketplace
performance in the first half. Premium membership revenue also contributed
positively, driven by our investments in financial health and increasing
demand for identity protection. Partner Solutions performed well, benefitting
from strong growth at recently launched clients, despite weakening data breach
trends.
Benchmark EBIT rose 10% to US$850m and Benchmark EBIT margin increased by 60
basis points to 34.5%. Margins reflected the mix of growth and productivity
initiatives, notwithstanding investments in our innovations across our scaling
verticals, such as verification solutions and our insurance marketplace.
Latin America
Latin America performance was good, with revenue from ongoing activities of
US$512m increasing by 7% organically and total constant currency revenue
growing by 10%. Acquisition contributions included MOVA, Flexpag, AllowMe,
TEx, and SalaryFits. As expected, organic revenue growth improved during the
half from 5% in Q1 to 9% in Q2.
B2B organic revenue growth was 2%.
In Brazil B2B, we continue to expand our ecosystem and capabilities. We are
leveraging unique data sets and consistently driving innovation, leading to
new business opportunities and deeper positions with clients. We delivered
strong growth in decisioning solutions, as well as across identity and fraud
prevention. Following the end of the first half, we agreed to acquire
ClearSale, which will further extend our ID&F addressable market into
transactional fraud and provides us a highly unique data asset. Small &
Medium Enterprises revenue also saw good growth. B2B performance in the half
reflected the Q1 impact from severe flooding in the south of Brazil, macro and
interest rate uncertainty and lower collections activity.
Consumer Services organic revenue growth was 27%. We are striving to build the
leading consumer financial platform in Brazil to assist consumers through
their credit and financial journeys. Our debt resolution service, Limpa Nome,
continues to benefit Brazilians. We are driving increased agreements between
consumers and lenders, with the integration of our Serasa e-wallet into this
process driving a more efficient process for both parties. Ecosystem expansion
also contributed to growth with further traction across our credit marketplace
and payment solutions, and we have recently introduced a new insurance
marketplace.
Benchmark EBIT from ongoing activities in Latin America was US$144m, up 13% at
constant exchange rates. The Benchmark EBIT margin from ongoing activities at
actual exchange rates was 28.1%, up by 40 basis points, benefitting from
strong operating leverage within our scaling Consumer Services business.
UK and Ireland
The UK and Ireland delivered revenue from ongoing activities of US$413m, with
organic revenue growth of 2% and total constant currency growth of 3%.
In B2B, organic revenue increased by 1%, with growth across consumer and
business information helped by new business wins and despite a relatively
subdued underlying credit environment. Our data quality capabilities also
continue to differentiate us in the market and also resulted in strong new
business wins. These factors offset ongoing Targeting weakness and other
one-time factors. Strategically, our focus is on driving adoption of the
Ascend Platform, growing data coverage and usage of income and employment
verification products and the ongoing build out of our fraud prevention
capabilities. We are encouraged by this progress and client reception for
these initiatives.
In Consumer Services, organic revenue was up 6%. Marketplace revenue is
growing well, benefitting from our investments in personalised customer
acquisition, enhancements to our product experience, and expansion of our
lender panel following the introduction of Experian Activate. Subscription
growth improved through the half driven by new premium feature launches, with
our paid member base increasing during the period.
Benchmark EBIT from ongoing activities was US$78m, a (1)% decline at constant
exchange rates. The Benchmark EBIT margin from ongoing activities was 18.9%,
compared to 19.5% in the prior period, due to the phasing of investment in the
verifications business, partially offset by strength in Consumer Services.
EMEA and Asia Pacific
In EMEA and Asia Pacific, revenue from ongoing activities was US$226m, with
organic growth of 7% and total growth at constant exchange rates of 8%. The
difference relates to the acquisition of a small cloud-based decisioning
business. Data delivered organic revenue growth of 5%, while Decisioning
delivered strongly, with growth of 13%.
EMEA and Asia Pacific has progressed on its transformation as we focus on
securing leading positions in our core markets. The recently completed
acquisition of illion will extend our capabilities in the large Australia and
New Zealand (A/NZ) region. The transaction will combine illion's strong credit
and identity assets with our leading decisioning capabilities.
Revenue growth is on a good trajectory as we have strengthened our data assets
and driven innovation in areas such as scores and attributes and identity and
fraud management. We expect to continue to improve profitability over time
through scaling, improved product mix, and productivity initiatives.
Benchmark EBIT from ongoing activities was US$1m, compared to US$4m in FY24.
The Benchmark EBIT margin from ongoing activities was 0.4% compared to 1.9% in
the prior period.
FY25 modelling considerations
Organic revenue growth 6 - 8%
Inorganic revenue contribution c.1.5%
Benchmark EBIT margin¹ Upper end of +30 to +50 basis points guidance range
Foreign exchange c.(2%) on revenue and Benchmark EBIT
Net interest c.US$155m
Benchmark tax rate c.26%
WANOS² c.914m
Capital expenditure c.9% of revenue
OCF³ conversion >90%
Share repurchases US$150m
1. At constant exchange rates.
2. Weighted average number of shares.
3. Benchmark operating cash flow.
Medium term outlook
Organic revenue growth High-single-digits
Benchmark EBIT margin¹ Good margin improvement
+30 to +50 basis points per annum
Capital expenditure Trend to c.7% of revenue
Group financial results
Business mix including % change in organic revenue year-on-year for the six
months ended 30 September 2024
Segment Business unit % of Group revenue¹ Organic revenue growth %²
Q1 Q2 H1
North America 68% 8% 7% 7%
Data CI/BI bureaux 24% 6% 11% 9%
- CI/BI bureaux, excluding mortgage 21% 2% 6% 4%
- Mortgage Profiles 3% 37% 56% 45%
Automotive 5% 9% 5% 7%
Targeting 4% 5% 7% 6%
Decisioning Health 9% 8% 8% 8%
DA/Other 4% 7% 2% 4%
B2B Business to Business 46% 7% 9% 8%
Consumer Consumer Services 22% 10% 3% 7%
Latin America 14% 5% 9% 7%
Data CI/BI bureaux 8% (1)% (1)% (1)%
Other 0% 17% 40% 27%
Decisioning DA/Other 3% 5% 14% 9%
B2B Business to Business 11% 1% 3% 2%
Consumer Consumer Services 3% 24% 30% 27%
UK and Ireland 12% 2% 2% 2%
Data CI/BI bureaux 5% 4% 3% 3%
Targeting/Auto 1% (14)% (14)% (14)%
Decisioning DA/Other 3% 3% (1)% 1%
B2B Business to Business 9% 2% 0% 1%
Consumer Consumer Services 3% 4% 8% 6%
EMEA and Asia Pacific 6% 7% 8% 7%
Total global 100% 7% 7% 7%
1. Percentage of Group revenue from ongoing activities calculated based on
H1 FY25 revenue at actual exchange rates.
2. Ongoing activities, at constant exchange rates.
CI = Consumer Information, BI = Business Information, DA = Decision Analytics.
Revenue by region
Six months ended 30 September 2024 2023¹ Growth %
US$m US$m
Total at actual exchange rates Total at constant exchange rates Organic at constant exchange rates
North America
Data 1,191 1,101 8 8
Decisioning 465 427 9 7
Business-to-Business 1,656 1,528 8 8
Consumer Services 810 760 7 7
Total ongoing activities 2,466 2,288 8 8 7
Exited business activities - -
Total North America 2,466 2,288
Latin America
Data 294 312 2 0
Decisioning 101 97 12 9
Business-to-Business 395 409 4 2
Consumer Services 117 97 32 27
Total ongoing activities 512 506 1 10 7
Exited business activities 6 10
Total Latin America 518 516
UK and Ireland
Data 204 199 1 1
Decisioning 116 110 3 1
Business-to-Business 320 309 2 1
Consumer Services 93 86 6 6
Total ongoing activities 413 395 5 3 2
Exited business activities - 2
Total UK and Ireland 413 397
EMEA and Asia Pacific
Data 156 147 5 5
Decisioning 70 63 14 13
Total ongoing activities 226 210 8 8 7
Exited business activities 5 13
Total EMEA and Asia Pacific 231 223
Total revenue - ongoing activities 3,617 3,399 6 7 7
Total revenue - exited business activities 11 25
Revenue 3,628 3,424 6 7
1. The results for the six months ended 30 September 2023 have been
re-presented for the reclassification to exited business activities of certain
B2B businesses, detail is provided in notes 7(a) and 8 to the condensed
interim financial statements.
See Appendix 1 (page 14) and note 6 to the condensed interim financial
statements for definitions of non-GAAP measures.
See Appendix 3 (page 16) for analyses of revenue, Benchmark EBIT and Benchmark
EBIT margin from ongoing activities by business segment.
Income statement, earnings and Benchmark EBIT margin analysis
Six months ended 30 September 2024 2023¹ Growth %
US$m US$m
Total at actual exchange rates Total at constant exchange rates
Benchmark EBIT by geography
North America 850 775 10
Latin America 144 140 13
UK and Ireland 78 77 (1)
EMEA and Asia Pacific 1 4 (88)
Benchmark EBIT before Central Activities 1,073 996 8 9
Central Activities - central corporate costs (62) (64)
Benchmark EBIT from ongoing activities 1,011 932 8 10
Exited business activities (12) (4)
Benchmark EBIT 999 928 8 9
Net interest (70) (68)
Benchmark PBT 929 860 8 9
Exceptional items (13) 4
Amortisation of acquisition intangibles (95) (95)
Acquisition and disposal expenses (8) (13)
Adjustment to the fair value of contingent consideration (2) (24)
Financing fair value remeasurements (93) 31
Profit before tax 718 763 (6)
Tax charge (165) (191)
Profit for the financial year 553 572 (3)
Benchmark earnings
Benchmark PBT 929 860 8 9
Benchmark tax charge (232) (216)
Total Benchmark earnings 697 644
Owners of Experian plc 695 643 8 9
Non-controlling interests 2 1
Benchmark EPS USc 76.0 USc 70.4 8 9
Basic EPS USc 60.2 USc 62.3 (3)
Weighted average number of ordinary shares 914 914
Benchmark EBIT margin - ongoing activities
North America 34.5% 33.9%
Latin America 28.1% 27.7%
UK and Ireland 18.9% 19.5%
EMEA and Asia Pacific 0.4% 1.9%
Benchmark EBIT margin 28.0% 27.4%
1. Benchmark results for the six months ended 30 September 2023 have been
re-presented for the reclassification to exited business activities of certain
B2B businesses, detail is provided in notes 7(a) and 8 to the condensed
interim financial statements.
See Appendix 1 (page 14) and note 6 to the condensed interim financial
statements for definitions of non-GAAP measures.
See Appendix 3 (page 16) for analyses of revenue, Benchmark EBIT and Benchmark
EBIT margin from ongoing activities by business segment.
Group financial review
Key statutory measures
Statutory revenue
We delivered a good performance in the period, with continued expansion and
contributions from newer products. Growth was in line with our expectations
and revenue increased by 6% to US$3,628m (2023: US$3,424m).
Statutory operating profit and profit before tax
Operating profit for the six months ended 30 September 2024 improved by 10% to
US$880m (2023: US$799m), driven by revenue growth, the scaling of our Consumer
Services business, and our productivity initiatives. The movements in
Benchmark EBIT at constant currency are discussed in the Chief Executive
Officer's review and Regional highlights on pages three to eight.
Net finance expense increased to US$163m (2023: US$37m), impacted by financing
fair value losses of US$93m (2023: gains of US$31m), primarily on interest
rate swaps, as well as put options and foreign exchange losses on funding our
Brazilian operations. Profit before tax decreased to US$718m (2023: US$763m)
as a consequence of this higher finance charge.
Statutory Basic EPS
Basic EPS decreased to 60.2 US cents (2023: 62.3 US cents), reflecting a lower
profit before tax partially offset by a reduced effective tax rate.
Statutory cash flow
Cash generated from operations improved to US$975m (2023: US$973m) reflecting
the higher operating profit and working capital movements. Net borrowing
inflows were US$803m (2023: US$263m). Cash outflows for net share purchases
were US$95m (2023: US$47m), offsetting deliveries under employee share plans.
Undrawn committed bank borrowing facilities at 30 September 2024 totalled
US$2.1bn (2023: US$2.3bn).
Tax
The effective rate of tax based on profit before tax was 23.0%, a decrease of
2.0 percentage points from the comparative period, largely attributable to the
recognition of a one-off deferred tax credit relating to tax losses where
recognition is supported by the acquisition of the illion Group.
Net assets
Net assets at 30 September 2024 increased to US$4,790m (2023: US$4,173m).
Capital employed, as defined in note 6(p) to the condensed interim financial
statements, was US$9,718m (2023: US$8,501m).
Equity
There was an increase in equity of US$121m from US$4,669m at 31 March 2024,
with movements detailed in the Group statement of changes in equity on page
21.
Key movements in equity in the half include:
· Profit for the period of US$553m.
· A reduction in the fair value of investments revalued through
Other comprehensive income (OCI) of US$40m.
· Employee share awards and options cost of US$65m.
· Ordinary dividends of US$370m and a movement of US$95m in
connection with net share purchases.
Seasonality
We anticipate Benchmark EBIT to be somewhat weighted towards the second half
of the year reflecting revenue seasonality and historical performance.
Risks
Identifying and managing risk is key to our purpose and the delivery of our
strategy and objectives. Our risk management process is designed to identify,
assess, respond to, report on and monitor the risks that threaten our ability
to do this.
The principal risks and uncertainties we face in the remaining six months of
the year remain consistent with those explained in detail on pages 92 to 99 of
our Annual Report for the year ended 31 March 2024:
· Data loss/misuse
· Macroeconomic
· Legislative/regulatory change and compliance
· Resiliency
· Business conduct
· Talent acquisition and retention
· Competition
· Investment outcomes.
There are no changes to our assessments of our principal risks in the first
half of the financial year, when compared with those reported in our Annual
Report for the year ended 31 March 2024. Overall risks remain stable, and we
continue to develop our responses to these and other risks on an ongoing
basis. The below matters are noted as part of our ongoing assessment.
Data Loss/misuse - External cyber security threats to businesses continue to
increase in complexity and evolve in their nature and scope. Our
threat-informed defence programme concurrently monitors and targets the most
active threats to mitigate and reduce risks.
Legislative/regulatory change and compliance - Risks associated with new laws,
new interpretations of existing laws, changes to existing regulations and
regulatory scrutiny continue at a heightened level. We continue to see
regional regulatory and legislative agendas across key areas of our business
in most regions. The US Consumer Financial Protection Bureau remains
interested in topics around the consumer dispute process, medical debt, open
banking and credit report accuracy, and continues to promote new and novel
interpretations of existing law through its rulemaking, supervision and
enforcement activities involving Experian. In the UK, the proposed Digital
Information and Smart Data bill is one of several outlined by the new
government which may impact Experian. Regulation of Artificial Intelligence,
recently published in the European Union (EU) and drafted in Brazil, will
likely require additional processes and validation for credit scores.
Macroeconomic - Moving into FY25, the USA, UK and Brazil have experienced
modest economic growth in Q2 2024. Inflationary levels in the USA and UK have
trended towards their targets and while there remains some short-term concern
about labour market weakness, there is an expectation of decreasing interest
rate levels. Brazil has seen an increase in inflation and a response in its
interest rate. We continue to monitor the macroeconomic trends impacting our
business.
Resiliency - In common with many organisations, Experian faces an external
threat from ransomware and other cyber attacks. This includes cyber resilience
threats to third parties critical to our operations where we cannot switch
them out easily or quickly in the event of encountering a cyber risk event. We
continue to assess the potential impact of these threats, as the nature and
sophistication of these attacks continually evolve. Given the size and scale
of recent cyber and other resiliency events across the market we remain
focused on our preparedness activities. Our response planning includes a
number of key initiatives aimed at continually improving our existing
capability in this area.
Further information on financial risk management is given in note 23 to the
condensed interim financial statements.
The Chief Executive Officer's, Business and Group financial reviews on pages 3
to 12 include consideration of key uncertainties affecting us for the
remainder of the current financial year. There may however be additional risks
unknown to us and other risks, currently believed to be immaterial, which
could turn out to be material. These risks, whether they materialise
individually or simultaneously, could significantly affect our business and
financial results.
Going concern
The principal risks and uncertainties we face and our assessment of viability,
remain largely unchanged from those explained in detail on pages 92 to 101 of
our Annual Report for the year ended 31 March 2024.
The Group has a robust balance sheet with access to considerable funding and
continues to adopt the going concern basis in preparing these condensed
interim financial statements. Cash flow in the period was solid with cash flow
conversion of 71% (2023: 77%). Our undrawn committed bank borrowing facilities
at 30 September 2024 totalled US$2.1bn (2023: US$2.3bn) and had an average
remaining tenor of four years (2023: two 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 condensed interim
financial statements. See note 2 to the condensed interim financial statements
for further detail.
Appendices
1. Non-GAAP financial information
We have identified and defined certain measures that we believe assist the
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 consider them to be
key measures used for assessing the underlying performance of our business.
The table below summarises our non-GAAP measures. There is a fuller
explanation, and references to where the measures are used and reconciled, in
note 6 to the condensed interim financial statements.
Benchmark PBT Profit before amortisation and impairment charges, acquisition expenses,
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.
Benchmark EBIT Benchmark PBT before net interest expense.
Benchmark EBITDA Benchmark EBIT before depreciation and amortisation.
Exited business activities The results of businesses sold, closed or identified for closure during a
financial year.
Ongoing activities The results of businesses that are not disclosed as exited business
activities.
Constant exchange rates Results and growth calculated after translating both years' performance at the
prior year's average exchange rates.
Total growth This is the year-on-year change in the performance of Experian's activities at
actual exchange rates.
Organic revenue growth 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.
Benchmark earnings Benchmark PBT less attributable tax and non-controlling interests.
Total Benchmark earnings Benchmark PBT less attributable tax.
Benchmark EPS Benchmark earnings divided by the weighted average number of ordinary shares.
Exceptional items Exceptional items include those arising from the profit or loss on disposal of
businesses, closure costs of significant operations (including associated
onerous global support costs), costs of significant restructuring programmes,
and other financially significant one-off items.
Benchmark operating cash flow Benchmark EBIT plus amortisation, depreciation and charges for share-based
incentive plans, less net capital expenditure 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.
Cash flow conversion Benchmark operating cash flow expressed as a percentage of Benchmark EBIT.
Net debt and Net funding Net debt is borrowings (and the fair value of derivatives hedging borrowings)
excluding accrued interest, less cash and cash equivalents. Net funding is
borrowings (and the fair value of the effective portion of derivatives hedging
borrowings) excluding accrued interest, less cash held in Group Treasury.
Return on capital employed (ROCE) Benchmark EBIT less tax at the Benchmark rate divided by average capital
employed, in continuing operations, over the year. Capital employed is net
assets less non-controlling interests and right-of-use assets, plus or minus
the net tax liability or asset and plus Net debt.
Appendices (continued)
2. Foreign currency
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.
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
US dollar : Brazilian real 5.38 4.92 4.94
Pound sterling : US dollar 1.28 1.26 1.26
Euro : US dollar 1.09 1.09 1.08
US dollar : Colombian peso 4,013 4,233 4,113
US dollar : Australian dollar 1.51 1.51 1.52
The impact of foreign currency movements on revenue from ongoing activities is
set out in note 7(c) to the condensed interim financial statements.
Foreign exchange - closing rates
The principal exchange rates used to translate assets and liabilities into the
US dollar at the period end dates are shown in the table below.
30 September 2024 30 September 2023 31 March 2024
US dollar : Brazilian real 5.45 5.02 5.01
Pound sterling : US dollar 1.34 1.22 1.26
Euro : US dollar 1.12 1.06 1.08
US dollar : Colombian peso 4,176 4,043 3,852
US dollar : Australian dollar 1.44 1.55 1.53
Appendices (continued)
3. Revenue, Benchmark EBIT and Benchmark EBIT margin by business segment
Six months ended 30 September Growth %
Total at constant exchange Organic at constant exchange
2024 2023(1)
US$m US$m rates rates
Revenue
Data 1,845 1,759 6 6
Decisioning 752 697 9 7
Business-to-Business 2,597 2,456 7 6
Consumer Services 1,020 943 9 9
Ongoing activities 3,617 3,399 7 7
Exited business activities 11 25 n/a
Total 3,628 3,424 7
Benchmark EBIT
Business-to-Business 789 757 5
Consumer Services 284 239 19
Business segments 1,073 996 9
Central Activities - central corporate costs (62) (64) n/a
Ongoing activities 1,011 932 10
Exited business activities (12) (4) n/a
Total Benchmark EBIT 999 928 9
Net interest expense (70) (68) n/a
Benchmark PBT 929 860 9
Exceptional items(2) (13) 4
Other adjustments made to derive Benchmark PBT(2) (198) (101)
Profit before tax 718 763
Benchmark EBIT margin - ongoing activities
Business-to-Business 30.4% 30.8%
Consumer Services 27.8% 25.3%
Benchmark EBIT margin(3) 28.0% 27.4%
1. Revenue of US$15m and Benchmark EBIT of US$(3)m for the six months
ended 30 September 2023 have been re-presented for the reclassification to
exited business activities of certain B2B businesses. See notes 7(a) and 8 to
the condensed interim financial statements.
2. See note 9 to the condensed interim financial statements.
3. Benchmark EBIT margin for ongoing activities is calculated by
dividing Benchmark EBIT for ongoing activities by revenue from ongoing
activities.
Appendices (continued)
4. Cash flow and Net debt summary(1)
Six months ended 30 September 2024 2023
US$m US$m
Benchmark EBIT 999 928
Amortisation and depreciation charged to Benchmark EBIT 270 252
Benchmark EBITDA 1,269 1,180
Impairment of non-current assets charged to Benchmark EBIT 6 -
Net capital expenditure (Appendix 5) (297) (307)
Increase in working capital (314) (194)
Principal lease payments (21) (24)
Benchmark profit retained in associates (1) (1)
Charge for share incentive plans 65 57
Benchmark operating cash flow(2) 707 711
Net interest paid (87) (84)
Tax paid (193) (251)
Dividends paid to non-controlling interests (1) -
Benchmark free cash flow 426 376
Acquisitions(3) (818) (206)
Disposal of operations(4) - 5
Purchase of investments (28) (5)
Disposal of investments 19 -
Movement in Exceptional and other non-benchmark items (14) (57)
Ordinary dividends paid (370) (345)
Net cash outflow (785) (232)
Net debt at 1 April (4,053) (4,030)
Net share purchases (95) (47)
Non-cash lease obligation additions and disposals (8) (35)
Principal lease payments 21 24
Additions through business combinations (2) (7)
Foreign exchange and other movements (42) 27
Net debt at 30 September (4,964) (4,300)
1. For Group cash flow statement see page 22.
2. A reconciliation of Cash generated from operations to Benchmark operating
cash flow is provided in note 17(g) to the condensed interim financial
statements.
3. See note 17(d) to the condensed interim financial statements.
4. Includes the disposal of operations classified as held-for-sale.
5. Reconciliation of net investment
Six months ended 30 September 2024 2023
US$m US$m
Capital expenditure as reported in the Group cash flow statement 298 310
Disposal of property, plant and equipment (1) (1)
Disposal of assets classified as held-for-sale - (2)
Net capital expenditure 297 307
Acquisitions 818 206
Purchase of investments 28 5
Disposal of operations and investments (19) (5)
Net investment 1,124 513
Condensed interim financial statements
Group income statement
for the six months ended 30 September 2024
Six months ended 30 September 2024 Six months ended 30 September 2023
Benchmark(1) Non-benchmark(2) Total Benchmark(1) Non-benchmark(2) Total
US$m US$m US$m US$m US$m US$m
Revenue (note 7(a)) 3,628 - 3,628 3,424 - 3,424
Total operating expenses (2,630) (118) (2,748) (2,497) (128) (2,625)
Operating profit/(loss) 998 (118) 880 927 (128) 799
Finance income 11 - 11 9 - 9
Finance expense (81) (93) (174) (77) 31 (46)
Net finance (expense)/income (note 10(a)) (70) (93) (163) (68) 31 (37)
Share of post-tax profit of associates 1 - 1 1 - 1
Profit/(loss) before tax (note 7(a)) 929 (211) 718 860 (97) 763
Tax (charge)/credit (note 11(a)) (232) 67 (165) (216) 25 (191)
Profit/(loss) for the period 697 (144) 553 644 (72) 572
Attributable to:
Owners of Experian plc 695 (145) 550 643 (74) 569
Non-controlling interests 2 1 3 1 2 3
Profit/(loss) for the period 697 (144) 553 644 (72) 572
Total Benchmark EBIT(1) (note 7(a)) 999 928
US cents US cents US cents US cents
Earnings per share (note 12(a))
Basic 76.0 60.2 70.4 62.3
Diluted 75.5 59.8 70.0 61.9
1. Total Benchmark EBIT and other Benchmark items are non-GAAP
measures, defined in note 6 to the condensed interim financial statements.
2. The loss before tax for non-benchmark items of US$211m (2023:
US$97m) is analysed in note 9(a) to the condensed interim financial
statements.
Condensed interim financial statements
Group statement of comprehensive income
for the six months ended 30 September 2024
Six months ended 30 September
2024 2023
US$m US$m
Profit for the period 553 572
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurement of post-employment benefit assets and obligations (note 16(b)) 6 (22)
Changes in the fair value of investments revalued through OCI (40) (12)
Deferred tax (charge)/credit (8) 6
Items that will not be reclassified to profit or loss (42) (28)
Items that are or may be reclassified subsequently to profit or loss:
Currency translation gains 2 10
Fair value gain/(loss) on cash flow hedge 26 (6)
Hedging (gain)/loss reclassified to profit or loss (note 10(c)) (31) 8
Items that are or may be reclassified subsequently to profit or loss (3) 12
Other comprehensive expense for the period(1) (45) (16)
Total comprehensive income for the period 508 556
Attributable to:
Owners of Experian plc 501 555
Non-controlling interests 7 1
Total comprehensive income for the period 508 556
1. There is no associated tax on amounts reported within OCI, except as
reported for post-employment benefit assets and obligations. Currency
translation items, not reclassified to profit or loss, are recognised in the
hedging or translation reserve within other reserves and in non-controlling
interests. Other items within OCI are recognised in retained earnings.
Condensed interim financial statements
Group balance sheet
at 30 September 2024
30 September 31 March
2024 2023 2024
Notes US$m US$m US$m
Non-current assets
Goodwill 14 6,570 5,727 5,962
Other intangible assets 2,714 2,352 2,437
Property, plant and equipment 359 380 379
Investments in associates 12 13 11
Deferred tax assets 88 49 55
Post-employment benefit assets 16(a) 206 151 186
Trade and other receivables 202 151 196
Financial assets revalued through OCI 223 311 234
Other financial assets 134 204 174
10,508 9,338 9,634
Current assets
Trade and other receivables 1,669 1,584 1,660
Current tax assets 66 41 97
Other financial assets 20 6 9
Cash and cash equivalents - excluding bank overdrafts 18(b) 245 195 312
2,000 1,826 2,078
Assets classified as held-for-sale - 10 -
2,000 1,836 2,078
Current liabilities
Trade and other payables (1,785) (1,785) (2,036)
Borrowings 18(b) (581) (816) (772)
Current tax liabilities (101) (141) (83)
Provisions (33) (29) (28)
Other financial liabilities (24) (57) (44)
(2,524) (2,828) (2,963)
Net current liabilities (524) (992) (885)
Total assets less current liabilities 9,984 8,346 8,749
Non-current liabilities
Trade and other payables (167) (226) (190)
Borrowings 18(b) (4,617) (3,479) (3,494)
Deferred tax liabilities (177) (150) (129)
Post-employment benefit obligations 16(a) (40) (35) (39)
Provisions (3) (4) (3)
Financial liabilities revalued through OCI - (28) (10)
Other financial liabilities (190) (251) (215)
(5,194) (4,173) (4,080)
Net assets 4,790 4,173 4,669
Equity
Called-up share capital 20 97 97 97
Share premium account 20 1,837 1,815 1,819
Retained earnings 21,293 20,661 21,155
Other reserves (18,477) (18,435) (18,437)
Attributable to owners of Experian plc 4,750 4,138 4,634
Non-controlling interests 40 35 35
Total equity 4,790 4,173 4,669
Condensed interim financial statements
Group statement of changes in equity
for the six months ended 30 September 2024
Called-up share capital Share premium account Retained earnings Other reserves Attributable to owners of Experian plc Non-controlling interests Total equity
(Note 20) (Note 20)
US$m US$m US$m US$m US$m US$m US$m
At 1 April 2024 97 1,819 21,155 (18,437) 4,634 35 4,669
Comprehensive income:
Profit for the period - - 550 - 550 3 553
Other comprehensive (expense)/income - - (42) (7) (49) 4 (45)
Total comprehensive income/(expense) - - 508 (7) 501 7 508
Transactions with owners:
Employee share incentive plans:
- value of employee services - - 65 - 65 - 65
- shares issued on vesting - 18 - - 18 - 18
- purchase of shares by employee trusts - - - (83) (83) - (83)
- other vesting of awards and exercises of share options - - (66) 80 14 - 14
- related tax credit - - 7 - 7 - 7
- other payments - - (5) - (5) - (5)
Purchase of shares held as treasury shares - - - (30) (30) - (30)
Transactions with non-controlling interests - - (1) - (1) (1) (2)
Dividends paid - - (370) - (370) (1) (371)
Transactions with owners - 18 (370) (33) (385) (2) (387)
At 30 September 2024 97 1,837 21,293 (18,477) 4,750 40 4,790
Group statement of changes in equity
for the six months ended 30 September 2023
Called-up share capital Share premium account Retained earnings Other reserves Attributable to owners of Experian plc Non-controlling interests Total equity
(Note 20) (Note 20)
US$m US$m US$m US$m US$m US$m US$m
At 1 April 2023 96 1,799 20,447 (18,413) 3,929 35 3,964
Comprehensive income:
Profit for the period - - 569 - 569 3 572
Other comprehensive (expense)/income - - (28) 14 (14) (2) (16)
Total comprehensive income - - 541 14 555 1 556
Transactions with owners:
Employee share incentive plans:
- value of employee services - - 57 - 57 - 57
- shares issued on vesting 1 16 - - 17 - 17
- purchase of shares by employee trusts - - - (56) (56) - (56)
- other vesting of awards and exercises of share options - - (36) 49 13 - 13
- other payments - - (4) - (4) - (4)
Purchase of shares held as treasury shares - - - (29) (29) - (29)
Transactions with non-controlling interests - - 1 - 1 (1) -
Dividends paid - - (345) - (345) - (345)
Transactions with owners 1 16 (327) (36) (346) (1) (347)
At 30 September 2023 97 1,815 20,661 (18,435) 4,138 35 4,173
Condensed interim financial statements
Group cash flow statement
for the six months ended 30 September 2024
Six months ended 30 September
2024 2023
Notes US$m US$m
Cash flows from operating activities
Cash generated from operations 17(a) 975 973
Interest paid (94) (90)
Interest received 7 6
Tax paid (193) (251)
Net cash inflow from operating activities 695 638
Cash flows from investing activities
Purchase of other intangible assets 17(c) (283) (292)
Purchase of property, plant and equipment (15) (18)
Disposal of property, plant and equipment 1 1
Disposal of assets classified as held-for-sale - 2
Purchase of other financial assets (28) (5)
Disposal of other financial assets 19 -
Acquisition of subsidiaries, net of cash acquired 17(d) (781) (194)
Disposal of operations 9(b) - 5
Net cash flows used in investing activities (1,087) (501)
Cash flows from financing activities
Cash inflow in respect of shares issued 17(e) 18 17
Cash outflow in respect of share purchases 17(e) (113) (64)
Other payments on vesting of share awards (5) (4)
Transactions in respect of non-controlling interests 17(d) (1) -
New borrowings(1) 1,016 76
Repayment of borrowings (537) (7)
Net receipts from issuing commercial paper(1) 324 194
Principal lease payments (21) (24)
Net receipts for derivative contracts 39 11
Dividends paid (371) (345)
Net cash flows from/(used in) financing activities 349 (146)
Net decrease in cash and cash equivalents (43) (9)
Cash and cash equivalents at 1 April 300 198
Exchange movements on cash and cash equivalents (14) 4
Cash and cash equivalents at 30 September 17(f) 243 193
1. Movements in commercial paper have been analysed separately on the face
of the cash flow statement to reflect their short-term maturity. The total of
new borrowings for the six months ended 30 September 2023 has been
re-presented accordingly.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
1. Corporate information
Experian plc (the Company) is the ultimate parent company of the Experian
group of companies (Experian or the Group). Experian is the 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 as equity shares (commercial companies).
There has been no change in this information since the Annual Report for the
year ended 31 March 2024, save for a revision of the listing segment
classification, following changes to the UK Financial Conduct Authority's
Listing Rules effected on 29 July 2024.
2. Basis of preparation
The condensed consolidated interim financial statements (the condensed interim
financial statements) are prepared on the going concern basis and in
accordance with International Accounting Standard (IAS) 34 'Interim Financial
Reporting' (IAS 34) adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the EU, and as adopted for use in the UK and as issued by the
International Accounting Standards Board (IASB).
The condensed interim financial statements:
· comprise the consolidated results of the Group for the six months
ended 30 September 2024 and 30 September 2023
· were approved for issue on 12 November 2024
· have not been audited but have been reviewed by the Company's
auditor with their report set out on pages 54 and 55
· do not constitute the Group's statutory financial statements but
should be read in conjunction with the Group's statutory financial statements
for the year ended 31 March 2024.
The Group's statutory financial statements comprise the Annual Report and
audited financial statements which are prepared in accordance with the
Companies (Jersey) Law 1991 and IFRS Accounting Standards as adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European Union (EU-IFRS),
UK-adopted international accounting standards (UK-IFRS) and IFRS as issued by
the International Accounting Standards Board (IASB-IFRS). EU-IFRS, UK-IFRS,
and IASB-IFRS all differ in certain respects from each other, however the
differences have no material impact for the periods presented.
The most recent such statutory financial statements, for the year ended 31
March 2024, were approved by the directors on 14 May 2024 and subsequently
delivered to the Jersey Registrar of Companies. The auditor's report was
unqualified and did not contain a statement under Article 113B(3) or Article
113B(6) of the Companies (Jersey) Law 1991. Copies of these financial
statements are available on the Company's website, at experianplc.com, and
from the Company Secretary at 2 Cumberland Place, Fenian Street, Dublin 2, D02
HY05, Ireland.
The financial information for the year ended 31 March 2024 included in the
condensed interim financial statements is not the Company's statutory accounts
for that financial year, but has been extracted from the Group's statutory
financial statements.
As required by the UK Financial Conduct Authority Disclosure Guidance and
Transparency Rules Sourcebook, these condensed interim financial statements
have been prepared applying the accounting policies and presentation that were
applied in the preparation of the Group's statutory financial statements for
the year ended 31 March 2024.
No significant events impacting the Group, other than those disclosed in this
document, have occurred between 1 October and 12 November 2024.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
2. Basis of preparation (continued)
Going concern
Our going concern assessment focuses on immediately available sources of
liquidity to fund our anticipated trading pattern, plus anticipated
acquisition spend, returns to shareholders and capital investment, ensuring we
always maintain a comfortable margin of headroom in case of the unexpected. We
also perform a review of indicators typical of emerging going concern issues,
and have identified none.
The directors believe that the Group is well placed to manage its financing
and other business risks satisfactorily to continue to meet its liabilities as
they fall due, 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 condensed interim financial statements. The
directors therefore consider it appropriate to adopt the going concern basis
of accounting in preparing the condensed interim financial statements. In
reaching this conclusion, the directors noted the Group's solid cash
performance in the period and the substantial undrawn committed bank borrowing
facilities at 30 September 2024 of US$2.1bn (2023: US$2.3bn) which had an
average remaining tenor of four years (2023: two years).
3. Climate-related matters
As an information services business, our main environmental impact is the
carbon footprint generated from our operations and value chain. The majority
of our footprint is made up of greenhouse gas emissions from Purchased Goods
and Services and Upstream Leased Assets including third-party data centres,
with emissions from our direct operations making up approximately 3% of total
emissions.
We are committed to reducing our carbon emissions and to becoming carbon
neutral in our own operations by 2030. We continue to develop our plans to
decarbonise our business further and reduce energy consumption at our data
centres and across the Group. We have reduced our Scope 1 and 2 emissions in
excess of 75% since 2019.
We recognise the importance of identifying and effectively managing the
physical and transitional risks that climate change poses to our operations
and consider the impact of climate-related matters, including legislation, on
our business. The current climate change scenario analyses undertaken in line
with Task Force on Climate-related Financial Disclosures (TCFD)
recommendations did not identify any material impact on the Group's financial
results or on going concern or viability.
The following climate change considerations were made in preparing these
condensed interim financial statements:
· The impact in the going concern period or on the viability of the
Group over the next three years.
· The impact on factors such as residual values, useful lives and
depreciation methods that determine the carrying value of non-current assets.
· The impact on forecasts of cash flows used in impairment
assessments for the value-in-use of non-current assets including goodwill
(note 14).
· The impact on forecasts of cash flows used in the fair value
measurement of assets and liabilities (note 23(d)).
· The impact on post-employment benefit assets (note 16).
At present, there is no material impact of climate-related matters on the
Group's financial results or on going concern or viability.
4. Accounting and other developments
There have been no accounting standards, amendments or interpretations
effective for the first time in these condensed interim financial statements
which have had a material impact on the Group's consolidated results or
financial position.
On 9 April 2024, the IASB issued IFRS 18 'Presentation and Disclosure in
Financial Statements', which is expected to be effective for Experian for the
year ending 31 March 2028, subject to UK and EU endorsement. IFRS 18 sets out
requirements for the presentation and disclosure of information in general
purpose financial statements and replaces IAS 1 'Presentation of Financial
Statements'. Our assessment of the impact of IFRS 18 on the Group financial
statements has commenced; areas of potential change have been noted and are
undergoing further review.
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.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
5. Accounting policies, estimates and judgments
(a) Introduction
The preparation of the condensed interim financial statements requires
management to make estimates and assumptions that affect the reported amount
of revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities. If in the future such estimates and assumptions, which
are based on management's best judgment at the date of these condensed interim
financial statements, deviate from actual circumstances, the original
estimates and assumptions will be modified as appropriate in the period in
which the circumstances change. There have been no significant changes in the
bases upon which estimates have been determined, compared to those applied at
31 March 2024, and no change in an estimate has had a material effect in the
current period.
The accounting policies applied in these condensed interim financial
statements are the same as those applied in the Annual Report and Group
financial statements for the year ended 31 March 2024.
(b) Goodwill (note 14)
Goodwill held in the Group's balance sheet is tested annually for impairment,
or more frequently if there is an indication that it may be impaired and
details of the methodology used are set out in the Group's statutory financial
statements for the year ended 31 March 2024.
During the six months ended 30 September 2024 the annual tests were performed
with no impairment identified.
(c) Acquisition intangibles (note 22)
On acquisition, specific intangible assets are identified and recognised
separately from goodwill and then amortised over their estimated useful lives.
These include items such as brand names and customer lists, to which value is
first attributed at the time of acquisition. The capitalisation of these
assets and the related amortisation charges are based on estimates of the
value and economic life of such items. The economic lives of acquisition
intangibles are estimated at between one and 20 years. Amortisation methods,
useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
(d) Post-employment benefits (note 16)
We have updated the accounting valuation of our principal defined benefit
pension plan in light of changes in the key actuarial assumptions, and this is
recognised in these condensed interim financial statements. The actuarial
assumption with the most significant impact at 30 September 2024 is the
discount rate of 5.1% (2023: 5.7%). The discount rate used at 31 March 2024
was 4.9%.
(e) Contingent consideration (note 23 (c))
The initially recorded cost of an acquisition includes a reasonable estimate
of the fair value of any contingent amounts expected to be payable in the
future. Any cost or benefit arising when such estimates are revised is
recognised in the Group income statement (note 9(a)).
(f) Provisions and contingencies
A contingent liability is disclosed where the likelihood of a loss arising is
possible rather than probable. A provision is recognised when it is probable
that an outflow of resources will be required to settle an obligation, and a
reliable estimate can be made of the amount.
The provision is measured at the best estimate of the expenditure required to
settle the obligation at the reporting date, discounted at a pre-tax rate
reflecting current market assessments of the time value of money and risks
specific to the liability. The unwinding of the discount is recognised as a
finance expense in the Group income statement. In making its estimates,
management takes into account the advice of legal counsel.
In the case of pending and threatened litigation claims, management forms a
judgment as to the likelihood of ultimate liability. No liability is
recognised where the likelihood of any loss arising is possible rather than
probable.
(g) Put options (note 23 (c))
Where put option agreements are in place in respect of shares held by
non-controlling shareholders, the liability is stated at the present value of
the expected future payments. Such liabilities are shown as financial
liabilities in the Group balance sheet. The change in the value of such
options is recognised in the Group income statement as a financing fair value
remeasurement within net finance expense, while any change in that value
attributable to exchange rate movements is recognised directly in OCI.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
5. Accounting policies, estimates and judgments (continued)
(h) Revenue recognition (note 7)
Revenue is stated net of any sales taxes, rebates and discounts and reflects
the amount of consideration we expect to receive in exchange for the transfer
of promised goods and services.
Total consideration from contracts with customers is allocated to the
performance obligations identified based on their standalone selling price,
and is recognised when those performance obligations are satisfied and the
control of goods or services is transferred to the customer, either over time
or at a point in time.
Total consideration only includes variable consideration if it is highly
probable a significant reversal will not occur. Estimates of variable
consideration are not typically included within recognised revenue, as the
uncertainty surrounding variable consideration is normally resolved once the
performance obligation is satisfied or begins to be satisfied. Inflationary
increases based on external indices are treated as variable consideration and
only recognised when they become certain.
· The provision and processing of transactional data is
distinguished between contracts that:
- provide a service on a per unit basis, where the transfer to the
customer of each completed unit is considered satisfaction of a single
performance obligation. Revenue is recognised on the transfer of each unit
- provide a service to the customer over the contractual term,
normally between one and five years, where revenue is recognised on the
transfer of this service to customers. For the majority of contracts this
means revenue is spread evenly over the contract term, as customers
simultaneously receive and consume the benefits of the service
- require an enhanced service at the start, where revenue is
recognised to reflect the upfront benefit the customer receives and consumes.
Revenue for such contracts is recognised proportionally in line with the costs
of providing the service.
· Revenue from referral fees for credit products and white-label
partnerships is recognised as transactional revenue.
· Revenue from transactional batch data arrangements that include
an ongoing update service is apportioned across each delivery to the customer
and is recognised when the delivery is complete, and control of the batch data
passes to the customer. Performance obligations are determined based on the
frequency of data refresh: one-off, quarterly, monthly, or real-time.
· Subscription and membership fees for continuous access to a
service are recognised over the period to which they relate, usually 1, 12 or
24 months. Customers simultaneously receive and consume the benefits of the
service; therefore, revenue is recognised evenly over the subscription or
membership term.
· Revenue for one-off credit reports is recognised when the report
is delivered to the consumer.
· Software licence and implementation services are primarily
accounted for as a single performance obligation, with revenue recognised when
the combined offering is delivered to the customer. Contract terms normally
vary between one and five years. These services are distinguished between:
- Experian-hosted or Software as a Service (SaaS) solutions, where
the customer has the right to access a software solution over a specified time
period. Customers simultaneously receive and consume the benefits of the
service and revenue is spread evenly over the period that the service is
available.
- On-premise software licence arrangements, where the software
solution is installed in an environment controlled by the customer. The
arrangement represents a right to use licence and so the performance
obligation is considered to be fulfilled on delivery completion, when control
of the configured solution is passed to the customer. Revenue is recognised at
that point in time.
· The delivery of support and maintenance agreements is generally
considered to be a separate performance obligation to provide a technical
support service including minor updates. Contract terms are often aligned with
licence terms. Customers simultaneously receive and consume the benefits of
the service, therefore revenue is spread evenly over the term of the
maintenance period.
· The provision of distinct standalone consultancy and professional
services is distinguished between:
- Professional consultancy services where the performance obligation
is the provision of personnel. Customers simultaneously receive and consume
the benefits of the service, and revenue is recognised over time, in line with
hours provided.
- The provision of analytical models and analyses, where the
performance obligation is a deliverable, or a series of deliverables, and
revenue is recognised on delivery when control is passed to the customer.
Sales are typically invoiced in the geographic area in which the customer is
located. As a result, the geographic location of the invoicing undertaking is
used to attribute revenue to individual countries.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
5. Accounting policies, estimates and judgments (continued)
(h) Revenue recognition (note 7) (continued)
Accrued income balances, which represent the right to consideration in
exchange for goods or services that we have transferred to a customer, are
assessed as to whether they meet the definition of a contract asset:
· When the right to consideration is conditional on something other
than the passage of time, a balance is classified as a contract asset. This
arises where there are further performance obligations to be satisfied as part
of the contract with the customer and typically includes balances relating to
software licencing contracts.
· When the right to consideration is conditional only on the
passage of time, the balance does not meet the definition of a contract asset
and is classified as an unbilled receivable. This typically arises where the
timing of the related billing cycle occurs in a period after the performance
obligation is satisfied.
Costs incurred prior to the satisfaction or partial satisfaction of a
performance obligation are first assessed to see if they are within the scope
of other standards. Where they are not, certain costs are recognised as an
asset providing they relate directly to a contract (or an anticipated
contract), generate or enhance resources that will be used in satisfying (or
to continue to satisfy) performance obligations in the future and are expected
to be recovered from the customer. Costs which meet these criteria are
deferred as contract costs and these are amortised on a systematic basis
consistent with the pattern of transfer of the related goods or services.
· Costs to obtain a contract predominantly comprise sales
commissions.
· Costs to fulfil a contract predominantly comprise labour costs
directly relating to the implementation services provided.
If evidence emerges that a contract is loss making, no further costs are
capitalised and any related contract assets are reviewed for impairment. A
provision for future losses is established when the unavoidable costs of the
contract exceed the economic benefits expected to be received.
Contract liabilities arise when we have an obligation to transfer future goods
or services to a customer for which we have received consideration, or the
amount is due from the customer and includes both deferred income balances and
specific reserves.
(i) Tax (note 11)
The tax charge recognised in the period is derived from the estimated tax rate
for the full year, taking account of one-off tax charges and credits arising
in the period and expected to arise in the full year, and the tax effect of
Exceptional items and other adjustments made to derive Benchmark PBT.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
6. Use of non-GAAP measures in the condensed interim 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 considers
them to be key measures used for assessing the underlying performance of our
business.
(a) Benchmark profit before tax (Benchmark PBT) (note 7(a) and note 8)
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
in note 6(l). Other adjustments, in addition to Exceptional items, 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 7(a) and note 8)
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) (Appendix 4)
Benchmark EBITDA is defined as Benchmark EBIT before the depreciation and
amortisation charged therein.
(d) Exited business activities (note 7(a) and note 8)
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 'Non-current
Assets Held for Sale and Discontinued Operations'.
(e) Ongoing activities (note 7(a) and note 8)
The results of businesses trading at 30 September 2024, that 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.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
6. Use of non-GAAP measures in the condensed interim financial statements
(continued)
(g) Total growth (note 7(c))
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 7(c))
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 12)
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 12(a))
Benchmark EPS comprises Benchmark earnings divided by the weighted average
number of issued ordinary shares, as adjusted for own shares held.
(k) Benchmark tax charge and rate (note 11(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 11(b) to these condensed interim financial
statements. The Benchmark effective rate of tax is calculated by dividing the
Benchmark tax charge by Benchmark PBT.
(l) Exceptional items (note 9(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 significant
operations (including onerous global support costs associated with those
operations), 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.
(m) Benchmark operating and Benchmark free cash flow (note 17(g) and Appendix 4)
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.
(n) Cash flow conversion (note 17(g))
Cash flow conversion is Benchmark operating cash flow expressed as a
percentage of Benchmark EBIT.
(o) Net debt and Net funding (note 18)
Net debt is borrowings (and the fair value of derivatives hedging borrowings)
excluding 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 accrued interest, less cash held in
Group Treasury.
(p) Return on capital employed (ROCE) (note 7(e)(iii))
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 and
right-of-use assets, further adjusted to add or deduct the net tax liability
or asset and to add Net debt.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
7. Segment information
(a) Income statement
North Latin UK and Ireland EMEA and Asia Pacific Total operating segments Central Total
America America Activities Group
Six months ended 30 September 2024 US$m US$m US$m US$m US$m US$m US$m
Revenue from external customers
Ongoing activities 2,466 512 413 226 3,617 - 3,617
Exited business activities - 6 - 5 11 - 11
Total 2,466 518 413 231 3,628 - 3,628
Reconciliation from Benchmark EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities 850 144 78 1 1,073 (62) 1,011
Exited business activities - (4) 1 (9) (12) - (12)
Total 850 140 79 (8) 1,061 (62) 999
Net interest (expense)/income included in (1) (1) 1 (1) (2) (68) (70)
Benchmark PBT (note 10(b))
Benchmark PBT 849 139 80 (9) 1,059 (130) 929
Exceptional items (note 9(a)) (3) (1) (7) - (11) (2) (13)
Amortisation of acquisition intangibles (57) (10) (4) (24) (95) - (95)
Acquisition and disposal expenses - (4) (1) (3) (8) - (8)
Adjustment to the fair value of contingent consideration 4 (6) - - (2) - (2)
Financing fair value remeasurements (note 10(c)) - - - - - (93) (93)
Profit/(loss) before tax 793 118 68 (36) 943 (225) 718
North Latin UK and Ireland EMEA and Asia Pacific Total operating segments Central Total
America America Activities Group
Six months ended 30 September 2023(1) US$m US$m US$m US$m US$m US$m US$m
Revenue from external customers
Ongoing activities 2,288 506 395 210 3,399 - 3,399
Exited business activities - 10 2 13 25 - 25
Total 2,288 516 397 223 3,424 - 3,424
Reconciliation from Benchmark EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before transfer pricing and other adjustments 791 139 71 997 (65) 932
(4)
Transfer pricing and other allocation adjustments (16) 1 6 8 (1) 1 -
Ongoing activities 775 140 77 4 996 (64) 932
Exited business activities - (2) 1 (3) (4) - (4)
Total 775 138 78 1 992 (64) 928
Net interest (expense)/income included in (2) (1) 1 - (2) (66) (68)
Benchmark PBT (note 10(b))
Benchmark PBT 773 137 79 1 990 (130) 860
Exceptional items (note 9(a)) (1) - - 5 4 - 4
Amortisation of acquisition intangibles (55) (10) (3) (27) (95) - (95)
Acquisition and disposal expenses 4 (8) (5) (4) (13) - (13)
Adjustment to the fair value of contingent consideration (21) (3) - - (24) - (24)
Financing fair value remeasurements (note 10(c)) - - - - - 31 31
Profit/(loss) before tax 700 116 71 (25) 862 (99) 763
1. Revenue of US$15m and Benchmark EBIT of US$(3)m for the six months
ended 30 September 2023 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 condensed interim financial statements
for the six months ended 30 September 2024
7. Segment information (continued)
(b) 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
'Operating Segments' is given within note 8. 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.
(c) Reconciliation of revenue from ongoing activities
North Latin UK and Ireland EMEA and Asia Pacific Total ongoing activities
America America
US$m US$m US$m US$m US$m
Revenue for the six months ended 30 September 2023(1) 2,288 506 395 210 3,399
Adjustment to constant exchange rates - (4) (2) - (6)
Revenue at constant rates for the six months ended 30 September 2023 2,288 502 393 210 3,393
Organic revenue growth 168 35 7 15 225
Revenue from acquisitions 10 15 3 1 29
Revenue at constant rates for the six months ended 30 September 2024 2,466 552 403 226 3,647
Adjustment to actual exchange rates - (40) 10 - (30)
Revenue for the six months ended 30 September 2024 2,466 512 413 226 3,617
Organic revenue growth at constant exchange rates 7% 7% 2% 7% 7%
Revenue growth at constant exchange rates 8% 10% 3% 8% 7%
1. Revenue for the six months ended 30 September 2023 has been
re-presented for the reclassification to exited business activities of certain
B2B businesses.
The table above demonstrates the application of the methodology set out in
note 6 in determining organic and total revenue growth at constant exchange
rates.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
7. Segment information (continued)
(d) Disaggregation of revenue from contracts with customers
North Latin UK and Ireland EMEA and Asia Pacific Total operating segments
America America
Six months ended 30 September 2024 US$m US$m US$m US$m US$m
Revenue from external customers
Data 1,191 294 204 156 1,845
Decisioning 465 101 116 70 752
Business-to-Business 1,656 395 320 226 2,597
Consumer Services 810 117 93 - 1,020
Ongoing activities 2,466 512 413 226 3,617
Exited business activities - 6 - 5 11
Total 2,466 518 413 231 3,628
North Latin UK and Ireland EMEA and Asia Pacific Total operating segments
America America
Six months ended 30 September 2023(1) US$m US$m US$m US$m US$m
Revenue from external customers
Data 1,101 312 199 147 1,759
Decisioning 427 97 110 63 697
Business-to-Business 1,528 409 309 210 2,456
Consumer Services 760 97 86 - 943
Ongoing activities 2,288 506 395 210 3,399
Exited business activities - 10 2 13 25
Total 2,288 516 397 223 3,424
1. Revenue for the six months ended 30 September 2023 has been
re-presented for the reclassification to exited business activities of certain
B2B businesses, and includes Latin America, UK and Ireland and EMEA and Asia
Pacific Data revenue of US$8m, US$2m and US$5m respectively.
Revenue in respect of exited business activities of US$11m (2023: US$25m)
comprises Latin America, UK and Ireland and EMEA and Asia Pacific Data revenue
of US$6m (2023: US$10m), US$nil (2023: US$2m) and US$3m (2023: US$6m) and EMEA
and Asia Pacific Decisioning revenue of US$2m (2023: US$7m) respectively.
Data revenue is predominantly transactional with a portion from licence fees.
Decisioning revenue is derived from:
· software and system sales, and includes recurring licence fees,
consultancy and implementation fees, and transactional charges
· credit score fees which are primarily transactional
· analytics income comprising a mix of consultancy and professional
fees as well as transactional revenue.
Consumer Services revenue primarily comprises monthly subscription and one-off
fees, and referral fees for financial products and white-label partnerships.
The timing of revenue recognition in relation to these revenue streams is
discussed in note 5(h).
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
7. Segment information (continued)
(e) Balance sheet
(i) Net assets/(liabilities) North Latin UK and Ireland EMEA and Asia Pacific Total operating segments Central Total
America America Activities and other Group
At 30 September 2024 US$m US$m US$m US$m US$m US$m US$m
Goodwill 3,952 943 781 894(1) 6,570 - 6,570
Investments in associates 4 - 8 - 12 - 12
Right-of-use assets 48 11 36 20 115 5 120
Other assets 2,615 871 612 657 4,755 1,051 5,806
Total assets 6,619 1,825 1,437 1,571 11,452 1,056 12,508
Lease obligations (62) (13) (41) (22) (138) (5) (143)
Other liabilities (1,113) (471) (279) (205) (2,068) (5,507) (7,575)
Total liabilities (1,175) (484) (320) (227) (2,206) (5,512) (7,718)
Net assets/(liabilities) 5,444 1,341 1,117 1,344 9,246 (4,456) 4,790
1. Includes the provisional goodwill arising on the acquisition of
illion of US$389m (note 14(b)).
North Latin UK and Ireland EMEA and Asia Pacific Total operating segments Central Total
America America Activities and other Group
At 30 September 2023 US$m US$m US$m US$m US$m US$m US$m
Goodwill 3,662 874 718 473 5,727 - 5,727
Investments in associates 4 - 9 - 13 - 13
Right-of-use assets 63 15 36 19 133 5 138
Assets classified as held-for-sale - - - - - 10 10
Other assets 2,467 812 533 469 4,281 1,005 5,286
Total assets 6,196 1,701 1,296 961 10,154 1,020 11,174
Lease obligations (79) (18) (36) (20) (153) (4) (157)
Other liabilities (1,218) (401) (256) (168) (2,043) (4,801) (6,844)
Total liabilities (1,297) (419) (292) (188) (2,196) (4,805) (7,001)
Net assets/(liabilities) 4,899 1,282 1,004 773 7,958 (3,785) 4,173
(ii) Central Activities and other
30 September
2024 2023
Assets Liabilities Net assets/ Assets Liabilities Net assets/
(liabilities) (liabilities)
US$m US$m US$m US$m US$m US$m
Central Activities 619 (124) 495 733 (170) 563
Net debt(1) 283 (5,110) (4,827) 197 (4,344) (4,147)
Tax (current and deferred) 154 (278) (124) 90 (291) (201)
1,056 (5,512) (4,456) 1,020 (4,805) (3,785)
1. Net debt comprises amounts reported within Central Activities plus
lease obligations in operating segments, net of interest of US$137m (2023:
US$153m).
(iii) Capital employed
30 September
2024 2023
US$m US$m
North America 5,444 4,899
Latin America 1,341 1,282
UK and Ireland 1,117 1,004
EMEA and Asia Pacific 1,344 773
Total operating segments 9,246 7,958
Central Activities 495 563
Add: lease obligations in operating segments 138 153
Less: accrued interest on lease obligations in operating segments (1) -
Less: right-of-use assets (120) (138)
Less: non-controlling interests (40) (35)
Capital employed attributable to owners 9,718 8,501
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
8. Information on business segments (including non-GAAP disclosures)
Business-to- Consumer Services Total business segments Central Total
Business Activities Group
Six months ended 30 September 2024 US$m US$m US$m US$m US$m
( )
Revenue from external customers
Ongoing activities 2,597 1,020 3,617 - 3,617
Exited business activities 11 - 11 - 11
Total 2,608 1,020 3,628 - 3,628
Reconciliation from Benchmark EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities 789 284 1,073 (62) 1,011
Exited business activities (13) 1 (12) - (12)
Total 776 285 1,061 (62) 999
Net interest expense included in Benchmark PBT (note 10(b)) (1) (1) (2) (68) (70)
Benchmark PBT 775 284 1,059 (130) 929
Exceptional items (note 9(a)) (6) (5) (11) (2) (13)
Amortisation of acquisition intangibles (81) (14) (95) - (95)
Acquisition and disposal expenses (11) 3 (8) - (8)
Adjustment to the fair value of contingent consideration - (2) (2) - (2)
Financing fair value remeasurements (note 10(c)) - - - (93) (93)
Profit/(loss) before tax 677 266 943 (225) 718
Business-to- Consumer Services Total business segments Central Total
Business Activities Group
Six months ended 30 September 2023(1) US$m US$m US$m US$m US$m
Revenue from external customers
Ongoing activities 2,456 943 3,399 - 3,399
Exited business activities 25 - 25 - 25
Total 2,481 943 3,424 - 3,424
Reconciliation from Benchmark EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before transfer pricing and other adjustments 753 244 997 (65) 932
Transfer pricing and other allocation adjustments 4 (5) (1) 1 -
Ongoing activities 757 239 996 (64) 932
Exited business activities (5) 1 (4) - (4)
Total 752 240 992 (64) 928
Net interest expense included in Benchmark PBT (note 10(b)) (1) (1) (2) (66) (68)
Benchmark PBT 751 239 990 (130) 860
Exceptional items (note 9(a)) 4 - 4 - 4
Amortisation of acquisition intangibles (79) (16) (95) - (95)
Acquisition and disposal expenses (8) (5) (13) - (13)
Adjustment to the fair value of contingent consideration (24) - (24) - (24)
Financing fair value remeasurements (note 10(c)) - - - 31 31
Profit/(loss) before tax 644 218 862 (99) 763
1. Revenue of US$15m and Benchmark EBIT of US$(3)m for the six months
ended 30 September 2023 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 3 on page 16.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
9. Exceptional items and other adjustments made to derive Benchmark PBT
(a) Net charge for Exceptional items and other adjustments made to derive
Benchmark PBT
Six months ended 30 September
2024 2023
US$m US$m
Exceptional items:
Profit on disposal of operations (note 9(b)) - (5)
Restructuring costs (note 9(c)) 24 -
Legal provisions movement (note 9(d)) (11) 1
Net charge/(credit) for Exceptional items 13 (4)
Other adjustments made to derive Benchmark PBT:
Amortisation of acquisition intangibles 95 95
Acquisition and disposal expenses 8 13
Adjustment to the fair value of contingent consideration (note 23(c)) 2 24
Financing fair value remeasurements (note 10(c)) 93 (31)
Net charge for other adjustments made to derive Benchmark PBT 198 101
Net charge for Exceptional items and other adjustments made to derive 211 97
Benchmark PBT
By income statement caption:
Within total operating expenses included in operating profit 118 128
Within finance expense 93 (31)
Net charge for Exceptional items and other adjustments made to derive 211 97
Benchmark PBT
(b) Profit on disposal of operations
The profit in the six months ended 30 September 2023 of US$5m on the disposal
of operations comprised a gain on the disposal of interests in a number of
small subsidiary undertakings in EMEA and Asia Pacific.
(c) Restructuring costs
As we execute on the final stages of our technology transformation and cloud
migration, we will realign our staff resources to our new technology
architecture and accelerate the shift to our global development centres to
drive productivity. Severance costs of US$24m were recognised in the six
months ended 30 September 2024 in relation to this programme. We expect the
full-year charge to be c.US$30m - US$50m, predominantly in one-off staff exit
costs. The associated cash outflow in the period was US$15m (2023: US$nil).
(d) Legal provisions movement
Movements have occurred in provisions held for a number of historical legal
claims, and reflect insurance recoveries in North America of US$11m (2023:
legal costs of US$1m).
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
10. Net finance expense/(income)
(a) Net finance expense included in profit before tax
Six months ended 30 September
2024 2023
US$m US$m
Interest income:
Bank deposits, short-term investments and loan notes (7) (6)
Interest on pension plan assets (note 16(b)) (4) (3)
Interest income (11) (9)
Finance expense:
Interest on borrowings and derivatives 77 73
Interest on leases 4 4
Charge/(credit) in respect of financing fair value remeasurements (note 10(c)) 93 (31)
Finance expense 174 46
Net finance expense included in profit before tax 163 37
(b) Net interest expense included in Benchmark PBT
Six months ended 30 September
2024 2023
US$m US$m
Interest income (11) (9)
Interest expense 81 77
Net interest expense included in Benchmark PBT 70 68
(c) Analysis of charge/(credit) in respect of financing fair value
remeasurements
Six months ended 30 September
2024 2023
US$m US$m
Foreign exchange losses on Brazilian real intra-Group funding(1) 31 2
Foreign currency (gains)/losses on cross currency-swaps designated as a cash (31) 8
flow hedge - transfer from OCI
Other financing fair value losses/(gains)(2) 93 (41)
Charge/(credit) in respect of financing fair value remeasurements 93 (31)
1. A Group company whose functional currency is not the Brazilian real
provides Brazilian real intra-Group funding to Serasa S.A. Foreign exchange
gains or losses on this funding are recognised in the Group income statement.
2. Other financing fair value losses/(gains) primarily relate to our
portfolio of interest rate swaps used for managing the proportion of fixed
rate debt, as well as fair value losses of US$31m (2023: gains of US$8m) on
borrowings which are in a cash flow hedge relationship, and fair value losses
on put options of US$28m (2023: US$6m) (note 23(c)).
11. Tax
(a) Tax charge and effective rate of tax
Six months ended 30 September
2024 2023
US$m US$m
Tax charge(1) 165 191
Profit before tax 718 763
Effective rate of tax based on profit before tax 23.0% 25.0%
1. The tax charge comprises a current tax charge of US$241m (2023:
US$267m) and a deferred tax credit of US$76m (2023: US$76m).
Tax charged in the six months ended 30 September 2024 has been calculated by
applying the effective rate of tax which is expected to apply to the Group for
the year ending 31 March 2025 using rates substantively enacted by 30
September 2024 as required by IAS 34 'Interim Financial Reporting'.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
11. Tax (continued)
(a) Tax charge and effective rate of tax (continued)
The decrease in the effective rate of tax from the comparative period is
largely attributable to the recognition of a one-off deferred tax credit
relating to tax losses where recognition is supported by the acquisition of
the illion Group.
The Group's tax charge will continue to be influenced by the profile of
profits earned in the different countries in which the Group's subsidiaries
operate, in particular our material markets of the USA, Brazil and the UK.
Continued focus on tax reform is expected throughout 2024 and the following
years, driven mainly by the Organisation for Economic Co-operation and
Development's (OECD's) project to address the tax challenges arising from the
digitalisation of the economy including the enactment of global minimum tax
legislation in Ireland. The OECD's global minimum tax legislation applies to
the Group from the financial year ending 31 March 2025. An assessment of this
legislation has been completed and it does not materially impact the Group's
effective tax rate in the current or future periods.
(b) Reconciliation of the tax charge to the Benchmark tax charge
Six months ended 30 September
2024 2023
US$m US$m
Tax charge 165 191
Tax relief on Exceptional items and other adjustments made to derive 67 25
Benchmark PBT
Benchmark tax charge 232 216
Benchmark PBT 929 860
Benchmark tax rate 25.0% 25.1%
12. Earnings per share disclosures
(a) Earnings per share (EPS)
Six months ended 30 September
Basic Diluted
2024 2023 2024 2023
US cents US cents US cents US cents
EPS 60.2 62.3 59.8 61.9
Add: Exceptional items and other adjustments made to derive Benchmark PBT, net 15.8 8.1 15.7 8.1
of related tax
Benchmark EPS (non-GAAP measure) 76.0 70.4 75.5 70.0
(b) Analysis of earnings
Six months ended 30 September
2024 2023
US$m US$m
Profit for the period attributable to owners of Experian plc 550 569
Add: Exceptional items and other adjustments made to derive Benchmark PBT, 145 74
net of related tax, attributable to owners of Experian plc
Benchmark earnings attributable to owners of Experian plc (non-GAAP measure) 695 643
Benchmark earnings attributable to non-controlling interests (non-GAAP 2 1
measure)
Total Benchmark earnings (non-GAAP measure) 697 644
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
12. Earnings per share disclosures (continued)
(c) Reconciliation of Total Benchmark earnings to profit for the period
Six months ended
30 September
2024 2023
US$m US$m
Total Benchmark earnings (non-GAAP measure) 697 644
Exceptional items and other adjustments made to derive Benchmark PBT, net of
related tax:
- attributable to owners of Experian plc (145) (74)
- attributable to non-controlling interests 1 2
Profit for the period 553 572
(d) Weighted average number of ordinary shares
Six months ended
30 September
2024 2023
million million
Weighted average number of ordinary shares 914 914
Add: dilutive effect of share incentive awards, options and share purchases 6 5
Diluted weighted average number of ordinary shares 920 919
13. Dividends on ordinary shares
Six months ended 30 September
2024 2023
US cents US cents
per share US$m per share US$m
Amounts recognised and paid:
Second interim - paid in July 2024 (2023: July) 40.50 370 37.75 345
First interim - announced 19.25 176 18.00 164
A first interim dividend of 19.25 US cents per ordinary share will be paid on
7 February 2025 to shareholders on the register at the close of business on 10
January 2025 and is not included as a liability in these condensed interim
financial statements. The first interim dividend for the six months ended 30
September 2023 was 18.0 US cents per ordinary share and the total dividend per
ordinary share for the year ended 31 March 2024 was 58.5 US cents, with a
total full year cost of US$534m. Further administrative information on
dividends is given in the Shareholder information section on pages 56 and 57.
Dividend amounts are quoted gross.
14. Goodwill
(a) Movements in goodwill
Six months ended 30 September
2024 2023
US$m US$m
Cost
At 1 April 6,208 5,821
Differences on exchange 12 (20)
Additions through business combinations (note 22(a)) 605 167
At 30 September 6,825 5,968
Accumulated impairment
At 1 April 246 246
Differences on exchange 9 (5)
At 30 September 255 241
Net book amount at 1 April 5,962 5,575
Net book amount at 30 September 6,570 5,727
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
14. Goodwill (continued)
(b) Goodwill by group of cash-generating units (CGUs)
30 September
2024 2023
US$m US$m
North America 3,952 3,662
Latin America 943 874
UK and Ireland 781 718
EMEA and Asia Pacific 505 473
illion (note 22(a)) 389 -
6,570 5,727
The provisional goodwill arising on the acquisition of illion has been
disclosed as a separate group of CGUs at 30 September 2024. It is anticipated
that this provisional goodwill will be allocated to the existing EMEA and Asia
Pacific group of CGUs, which is the group of CGUs that is expected to benefit
from the synergies of the combination, but, as a result of the timing of the
acquisition, the provisional goodwill was monitored separately at the period
end. The allocation exercise will be undertaken before 31 March 2025 and the
previously reported groups of CGUs will continue to be the lowest level at
which goodwill will be monitored by management on an ongoing basis.
(c) Key assumptions for value-in-use calculations by group of CGUs
Six months ended Year ended
30 September 2024 31 March 2024(1)
Discount rate Long-term growth rate Discount rate Long-term growth rate
% p.a. % p.a. % p.a. % p.a.
North America 9.7 3.5 10.6 3.6
Latin America 17.6 5.2 19.1 5.1
UK and Ireland 10.7 2.8 11.7 3.1
EMEA and Asia Pacific 12.6 4.1 13.8 4.1
1. The comparatives presented are for the most recent value-in-use
calculation performed for each CGU in the year ended 31 March 2024.
As indicated in note 6(a) of the Group's statutory financial statements for
the year ended 31 March 2024, value-in-use calculations are underpinned by
financial forecasts looking forward up to five years, which continue to
reflect our current assessment of the impact of climate change and associated
commitments the Group has made. Management's key assumptions in setting the
financial forecasts for the initial five-year period were as follows:
· Forecast revenue growth rates were based on past experience,
adjusted for the strategic opportunities within each CGU; the forecasts used
average nominal growth rates of up to 19%, with rates of up to 13% in EMEA and
Asia Pacific.
· Benchmark EBIT was forecast based on historical margins and
expectations of future performance. Margins were expected to improve modestly
throughout the period in the mature CGUs and improve annually by an absolute
mid-single-digit amount in EMEA and Asia Pacific.
· Forecast Benchmark operating cash flow conversion rates were
based on historical conversion rates achieved and performance expectations in
the respective CGUs, with long-term conversion rates of 96% used in EMEA and
Asia Pacific.
Further details of the principles used in determining the basis of allocation
by group of CGUs and annual impairment testing are given in note 6(a) of the
Group's statutory financial statements for the year ended 31 March 2024.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
14. Goodwill (continued)
(d) Results of annual impairment review as at 30 September 2024
The annual impairment reviews of goodwill were performed as at 30 September
2024, using the key modelling assumptions discussed in note 14(c). As a result
of the timing of the acquisition, the provisional goodwill allocated to illion
was not included in this process. No triggers that could indicate an
impairment of the illion goodwill at the balance sheet date were identified.
The recoverable amount of the EMEA and Asia Pacific group of CGUs exceeded its
carrying value by US$495m. Any decline in the estimated value-in-use in excess
of that amount would result in the recognition of an impairment charge. The
sensitivities, which result in the recoverable amount being equal to the
carrying value, are summarised as follows:
· an absolute increase of 4.2 percentage points in the discount
rate, from 12.6% to 16.8%; or
· an absolute reduction of 6.8 percentage points in the long-term
growth rate, from growth of 4.1% to a decline of 2.7%; or
· a reduction of 8.1 percentage points in the forecast FY30 profit
margin, from 23.2% to 15.1%. A reduction in the annual margin improvement of
approximately 1.6 percentage points per year over the five-year forecast
period would also reduce the recoverable amount to the carrying value; or
· an absolute reduction of 35% in the forecast FY30 profit.
The recoverable amount of all other groups of CGUs exceeded their carrying
value, on the basis of the assumptions set out in the table in note 14(c) and
any reasonably possible changes thereof.
The impairment review considered the potential impact of climate change by
considering the results of the scenario analysis performed consistent with the
recommendations of the TCFD. There was no impact on the reported amounts of
goodwill as a result of this review.
15. Capital expenditure, disposals and capital commitments
(a) Additions
Six months ended 30 September
2024 2023
US$m US$m
Capital expenditure 298 310
Right-of-use-assets 13 39
311 349
(b) Disposal of other intangible assets and property, plant and equipment
Other intangible assets and property, plant and equipment totalling US$6m
(2023: US$5m) were disposed of at book value in the six months ended 30
September 2024. Of the disposal US$5m (2023: US$4m) related to right-of-use
assets.
(c) Capital commitments 30 September
2024 2023
US$m US$m
Capital expenditure for which contracts have been placed:
Other intangible assets 40 50
Property, plant and equipment 7 9
47 59
Capital commitments at 30 September 2024 included commitments of US$33m not
expected to be incurred before 30 September 2025. Capital commitments at 30
September 2023 included commitments of US$43m not then expected to be incurred
before 30 September 2024. There were no commitments at 30 September 2024
(2023: US$5m) for leases where the term had not yet started.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
16. Post-employment benefit assets and obligations
(a) Amounts recognised in the Group balance sheet
30 September
2024 2023
US$m US$m
Retirement benefit assets/(obligations) - funded defined benefit plans:
Fair value of funded plans' assets 913 778
Present value of funded plans' obligations (707) (627)
Assets in the Group balance sheet for funded defined benefit pensions 206 151
Obligations for unfunded post-employment benefits:
Present value of defined benefit pensions - unfunded plans (37) (33)
Present value of post-employment medical benefits (3) (2)
Liabilities in the Group balance sheet (40) (35)
Net post-employment benefit assets 166 116
The net post-employment benefit assets of US$147m at 1 April 2024 (1 April
2023: US$135m) comprised assets of US$186m (1 April 2023: US$174m) in respect
of funded plans, and obligations of US$39m (1 April 2023: US$39m) in respect
of unfunded plans. The post-employment benefit assets and obligations are
denominated primarily in pounds sterling.
The funded defined benefit pension plans hold a range of assets including
equities, index-linked gilts, global corporate bonds, secured credit, and a
Liability Driven Investment strategy which is used to hedge against interest
fluctuations and inflation. The primary drivers impacting the fair value of
the plans' funded assets and obligations are changes to pound sterling
interest rates and the retranslation of assets and obligations into US
dollars.
(b) Movements in net post-employment benefit assets recognised in the Group
balance sheet
Six months ended 30 September
2024 2023
US$m US$m
At 1 April 147 135
Charge to the Group income statement within total operating expenses (2) (1)
Credit to the Group income statement within interest income 4 3
Remeasurements recognised within OCI 6 (22)
Differences on exchange 10 (1)
Contributions paid by the Group 1 2
At 30 September 166 116
The Experian Pension Scheme was closed to the future accrual of new benefits
from 1 April 2022, contributions paid relate to unfunded post-employment
benefits. The remeasurement recognised in OCI relates to defined benefit
pension plans.
(c) Actuarial assumptions
30 September
2024 2023
% p.a. % p.a.
Discount rate 5.1 5.7
Inflation rate - based on the UK Retail Prices Index (RPI) 3.2 3.4
Inflation rate - based on the UK Consumer Prices Index (CPI) 2.8 2.9
Increase for pensions in payment - element based on the RPI (where cap is 5%) 3.0 3.1
Increase for pensions in payment - element based on the CPI (where cap is 1.9 1.9
2.5%)
Increase for pensions in payment - element based on the CPI (where cap is 3%) 2.2 2.2
Increase for pensions in deferment 2.8 2.9
Inflation in medical costs 6.3 6.3
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
16. Post-employment benefit assets and obligations (continued)
(c) Actuarial assumptions (continued)
The principal financial assumption is the real discount rate, which is the
excess of the discount rate over the rate of inflation. The discount rate is
based on the market yields of high-quality corporate bonds of a currency and
term appropriate to the defined benefit obligations and has increased by 15
basis points in the six-month period from 31 March 2024.
The assumed single equivalent margin between RPI and CPI has been reduced to
40 basis points from 45 basis points at 31 March 2024, consistent with our
continued assumption of a 100 basis point margin prior to 2030, with a ten
basis point margin assumed thereafter. The single equivalent differential is
expected to reduce over time towards 2030. This results in an increase in
retirement benefit obligations at 30 September 2024 of approximately US$1m.
The mortality and other demographic assumptions at 30 September 2024 remain
unchanged from those used at 31 March 2024 and disclosed in the Group's
statutory financial statements for the year then ended, save for an update for
the latest published version of a UK model for projected improvements in life
expectancy.
The Group has considered the potential impact of climate change and, at the
present time, we do not believe there is sufficient evidence to require a
change in the long-term mortality assumptions. We will continue to monitor any
potential future impact on the mortality assumptions used.
(d) Virgin Media case
In June 2023, the English High Court issued a judgment involving the Virgin
Media NTL Pension Plan which held that amendments to the plan's rules in
relation to benefit changes were invalid in the absence of a confirmation from
the scheme actuary under Section 37 of the Pension Schemes Act 1993. Virgin
Media appealed the judgment. The Court of Appeal has now heard the case and on
25 July 2024 dismissed the appeal.
While the ruling only applied to the specific pension plan in question it
could be expected to apply across other 'UK contracted out' pension plans. We
are considering the implications of the case for our two closed UK funded
defined benefit pension schemes. At 30 September, the defined benefit
obligations have been calculated on the basis of the pension benefits
currently being administered, and at this stage we have not assessed any
likely impact due to the Court ruling on the defined benefit obligations. Any
subsequent developments following the Court of Appeal's judgment will be
monitored by the Group.
17. Notes to the Group cash flow statement
(a) Cash generated from operations
Six months ended 30 September
2024 2023
Notes US$m US$m
Profit before tax 718 763
Share of post-tax profit of associates (1) (1)
Net finance expense 163 37
Operating profit 880 799
Profit on disposal of operations 9(b) - (5)
Impairment of other intangible assets 6 -
Amortisation and depreciation(1) 365 347
Charge in respect of share incentive plans 65 57
Increase in working capital 17(b) (314) (194)
Acquisition expenses - difference between income statement charge and amount (4) 5
paid
Acquisition employee incentives paid 17(d) (24) (4)
Adjustment to the fair value of contingent consideration 23(c) 2 24
Movement in Exceptional and other non-benchmark items included in (1) (56)
working capital
Cash generated from operations 975 973
1. Amortisation and depreciation includes amortisation of acquisition
intangibles of US$95m (2023: US$95m) which is excluded from Benchmark PBT.
Depreciation of right-of-use assets totalled US$23m (2023: US$24m).
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
17. Notes to the Group cash flow statement (continued)
(b) (Increase)/decrease in working capital
Six months ended 30 September
2024 2023
US$m US$m
Trade and other receivables 2 (41)
Trade and other payables (316) (153)
Increase in working capital(1) (314) (194)
1. There was no material change to contract assets, contract costs or loss
allowance in the current or prior period. Contract liabilities reduced by
US$89m (2023: US$57m) from 1 April predominantly due to the cyclical nature of
invoicing and exchange gains.
(c) Purchase of other intangible assets
Six months ended 30 September
2024 2023
US$m US$m
Databases 98 98
Internally generated software 162 171
Internal use software 23 23
Purchase of other intangible assets 283 292
(d) Cash flows on acquisitions (non-GAAP measure)
Six months ended 30 September
2024 2023
Notes US$m US$m
Purchase of subsidiaries 22(a) 809 107
Less: net cash acquired with subsidiaries 22(a) (35) (16)
Settlement of deferred and contingent consideration 7 103
As reported in the Group cash flow statement 781 194
Acquisition expenses paid 12 8
Acquisition employee incentives paid 24 4
Transactions in respect of non-controlling interests 1 -
Cash outflow for acquisitions (non-GAAP measure) (Appendix 5) 818 206
(e) Cash outflow in respect of net share purchases (non-GAAP measure)
Six months ended 30 September
2024 2023
Notes US$m US$m
Issue of ordinary shares 20 (18) (17)
Purchase of shares by employee trusts 21 83 56
Purchase of shares held as treasury shares 21 30 8
Cash outflow in respect of net share purchases (non-GAAP measure) 95 47
As reported in the Group cash flow statement:
Cash inflow in respect of shares issued (18) (17)
Cash outflow in respect of share purchases 113 64
Cash outflow in respect of net share purchases (non-GAAP measure) 95 47
Treasury share purchases of US$29m were executed in the six months ended 30
September 2023, of which US$21m was settled after the end of that period.
(f) Analysis of cash and cash equivalents
30 September
2024 2023
US$m US$m
Cash and cash equivalents in the Group balance sheet 245 195
Bank overdrafts (2) (2)
Cash and cash equivalents in the Group cash flow statement 243 193
Cash and cash equivalents in the Group cash flow statement at 31 March 2024 of
US$300m were reported net of bank overdrafts of US$12m.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
17. Notes to the Group cash flow statement (continued)
(g) Reconciliation of Cash generated from operations to Benchmark operating cash flow
(non-GAAP measure)
Six months ended 30 September
2024 2023
Notes US$m US$m
Cash generated from operations 17(a) 975 973
Purchase of other intangible assets 17(c) (283) (292)
Purchase of property, plant and equipment (15) (18)
Disposal of property, plant and equipment 1 1
Disposal of assets classified as held-for-sale - 2
Principal lease payments (21) (24)
Acquisition expenses paid 17(d) 12 8
Acquisition employee incentives paid 17(d) 24 4
Cash flows in respect of Exceptional and other non-benchmark items 14 57
Benchmark operating cash flow (non-GAAP measure) (Appendix 4) 707 711
Cash flow conversion for the six months ended 30 September 2024 was 71% (2023:
77%). Benchmark free cash flow for the six months ended 30 September 2024 was
US$426m (2023: US$376m).
18. Net debt (non-GAAP measure)
(a) Analysis by nature
30 September
2024 2023
US$m US$m
Cash and cash equivalents (net of overdrafts) 243 193
Debt due within one year - bonds and notes - (472)
Debt due within one year - commercial paper (540) (303)
Debt due within one year - lease obligations (38) (38)
Debt due after more than one year - bonds and notes (4,123) (3,202)
Debt due after more than one year - bank loans (387) (158)
Debt due after more than one year - lease obligations (104) (119)
Derivatives hedging borrowings (15) (201)
Net debt (4,964) (4,300)
(b) Analysis by balance sheet caption
30 September
2024 2023
US$m US$m
Cash and cash equivalents 245 195
Current borrowings (581) (816)
Non-current borrowings (4,617) (3,479)
Borrowings (5,198) (4,295)
Total of Group balance sheet line items (4,953) (4,100)
Accrued interest reported within borrowings excluded from Net debt 4 1
Derivatives reported within Other financial assets 37 2
Derivatives reported within Other financial liabilities (52) (203)
Net debt (4,964) (4,300)
At 30 September 2024, the fair value of borrowings was US$5,055m (2023:
US$3,869m).
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
18. Net debt (non-GAAP measure) (continued)
(c) Analysis of movements in Net debt
1 April Movements in the six months ended 30 September 2024 30 September
2024 Net Non-cash lease obligation Principal lease payments Net share purchases Additions Fair Exchange 2024
through business combinations
cash movements(1) value and other movements
flow gains/
losses
US$m US$m US$m US$m US$m US$m US$m US$m US$m
Derivatives hedging (123) (35) - - - - 48 95 (15)
loans and borrowings
Borrowings(2,3) (4,266) (762) (8) - - (2) (5) (155) (5,198)
Liabilities from financing activities (4,389) (797) (8) - - (2) 43 (60) (5,213)
Accrued interest 24 (20) - - - - - - 4
Cash and cash equivalents 312 32 - 21 (95) - - (25) 245
Net debt (4,053) (785) (8) 21 (95) (2) 43 (85) (4,964)
1. Non-cash lease obligation movements include additions of US$13m and
disposals of US$5m (note 15).
2. On 10 September 2024 the Group issued €650m 3.375% bonds due 10
October 2034. The bond issue extends the maturity of the Company's debt
portfolio. The proceeds were swapped to US dollars using cross-currency swaps,
and will be used for general corporate purposes, including acquisitions.
3. The £400m 2.125% Euronotes due September 2024 matured during the
period.
19. Undrawn committed bank borrowing facilities
30 September
2024 2023
US$m US$m
Facilities expiring in:
One to two years 113 143
Two to three years 150 2,050
Three to four years - 150
Four to five years 1,800 -
2,063 2,343
At 31 March 2024, there were undrawn committed bank borrowing facilities of
US$2,366m.
There is one financial covenant in connection with the borrowing facilities.
Benchmark EBIT must exceed three times net interest expense before financing
fair value remeasurements. The calculation of the financial covenant excludes
the effects of IFRS 16 'Leases'. The Group monitors this, and the Net debt to
Benchmark EBITDA leverage ratio, and has complied with this covenant
throughout the current and prior period.
20. Called-up share capital and share premium account
Number of Called-up share Share premium account
shares capital
million US$m US$m
At 1 April 2023 971.4 96 1,799
Shares issued under employee share incentive plans 0.6 1 16
At 30 September 2023 972.0 97 1,815
Shares issued under employee share incentive plans 0.2 - 4
At 31 March 2024 972.2 97 1,819
Shares issued under employee share incentive plans 0.7 - 18
At 30 September 2024 972.9 97 1,837
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
21. Own shares held
Number of Cost of shares
shares
million US$m
At 1 April 2023 59.0 1,273
Purchase of shares by employee trusts 1.5 56
Purchase of shares held as treasury shares 0.9 29
Other vesting of awards and exercises of share options (3.2) (49)
At 30 September 2023 58.2 1,309
Purchase of shares held as treasury shares 1.2 40
Other vesting of awards and exercises of share options (0.3) (6)
At 31 March 2024 59.1 1,343
Purchase of shares by employee trusts 1.8 83
Purchase of shares held as treasury shares 0.7 30
Other vesting of awards and exercises of share options (3.7) (80)
At 30 September 2024 57.9 1,376
Own shares held at 30 September 2024 included 4.6 million (2023: 6.0 million)
shares held in employee trusts and 53.3 million (2023: 52.2 million) shares
held as treasury shares. Own shares held at 31 March 2024 included 5.7 million
(1 April 2023: 6.7 million) shares held in employee trusts and 53.4 million (1
April 2023: 52.3 million) shares held as treasury shares.
The total cost of own shares held at each balance sheet date is deducted from
other reserves in the Group balance sheet.
22. Acquisitions
(a) Acquisitions in the period
The Group made four acquisitions in the six months ended 30 September 2024,
including the acquisition on 30 September 2024 of 100% of Credit Data
Solutions Pty Ltd and its subsidiary undertakings (illion), a leading consumer
and commercial credit bureau in Australia and New Zealand. On 12 August 2024,
we also acquired 100% Neuro-ID, Inc. (NeuroID) in the USA, an industry leader
in behavioural analytics, supplementing Experian's fraud risk suite.
The net assets acquired, goodwill and acquisition consideration are analysed
below:
illion NeuroID Other Total
US$m US$m US$m US$m
Intangible assets:
Customer and other relationships 183 8 6 197
Software development 36 30 29 95
Marketing-related assets 3 1 - 4
Other intangibles 28 - - 28
Intangible assets 250 39 35 324
Property, plant and equipment 2 - 1 3
Deferred tax assets 1 - (7) (6)
Trade and other receivables 13 2 - 15
Cash and cash equivalents (note 17(d)) 21 12 2 35
Trade and other payables (22) (9) (4) (35)
Borrowings (2) - - (2)
Deferred tax liabilities (67) (10) (10) (87)
Total identifiable net assets 196 34 17 247
Goodwill (note 14(a)) 389 111 105 605
Total 585 145 122 852
Satisfied by:
Cash and cash equivalents (note 17(d)) 585 145 79 809
Contingent consideration - - 43 43
Total 585 145 122 852
Other includes adjustments to prior year acquisition provisional amounts for
deferred tax assets, recognised during the six months ended 30 September 2024.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
22. Acquisitions (continued)
(a) Acquisitions in the period (continued)
These provisional fair values are determined by using established estimation
techniques.
Acquisition intangibles are valued using discounted cash flow models. For the
six months ended 30 September 2024, the most significant inputs to these
calculations are the proportion of earnings attributable to customer and other
relationships and software development for illion.
The fair value of material contingent consideration is determined using a
Monte-Carlo simulation model applied to the forecast performance of the
relevant metric linked to each liability. The contingent consideration payable
for Salt Participações S.A. and its subsidiary undertakings (SalaryFits) in
Brazil, which the Group acquired on 2 September 2024, is linked to the revenue
and Benchmark EBIT margin performance of the business for the year ending 31
March 2027. Providing that certain minimum thresholds are satisfied, we expect
the earnout payment to be within an undiscounted range of US$20m to US$117m.
We have determined the fair value of the contingent consideration at
acquisition to be US$40m, which is included in the US$43m of other contingent
consideration above.
We engage with third-party valuation experts to assist with the valuation
process for all significant or complex acquisitions, including for the
valuation of contingent consideration and put option liabilities. Provisional
fair values contain amounts which will be finalised no later than one year
after the date of acquisition. Provisional amounts, predominantly for
intangible assets, associated tax balances and contingent consideration have
been included at 30 September 2024, as a consequence of the timing and
complexity of the acquisitions.
Goodwill represents the synergies, assembled workforces and future growth
potential of the acquired businesses. The goodwill in relation to one
acquisition is currently deductible for tax purposes.
(b) Additional information in respect of acquisitions in the period
illion NeuroID Other Total
US$m US$m US$m US$m
Increase/(decrease) in book value of net assets due to provisional fair value
adjustments:
Intangible assets 223 39 35 297
Deferred tax assets (11) - (7) (18)
Trade and other payables - (1) (2) (3)
Deferred tax liabilities (67) (10) (10) (87)
Increase in book value of net assets due to provisional fair value adjustments 145 28 16 189
Gross contractual amounts receivable in respect of trade and other receivables 13 2 - 15
Pro forma revenue from 1 April 2024 to date of acquisition 58 4 7 69
Revenue from date of acquisition to 30 September 2024 - 1 3 4
(Loss)/profit before tax from date of acquisition to - (1) 1 -
30 September 2024
At the dates of acquisition, the gross contractual amounts receivable in
respect of trade and other receivables of US$15m 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$7m.
(c) Prior year acquisitions
Contingent consideration of US$7m (2023: US$102m) was settled in the period in
respect of acquisitions made in earlier years. The cash flows in the six
months ended 30 September 2023 principally comprised US$30m in relation to the
acquisition of Tax Credit Co, LLC (TCC) in FY22, and US$60m in relation to the
acquisition of BrScan Processamento de Dados e Tecnologia Ltda (BrScan) in
FY21. Further detail on contingent consideration fair value adjustments
recognised in the period is provided in note 23(c).
The Group made five acquisitions in the six months ended 30 September 2023,
none of which was individually material. A cash outflow of US$91m was reported
in the Group cash flow statement for that period, after deduction of US$16m in
respect of net cash acquired.
There have been no other material gains, losses, corrections or other
adjustments recognised in the six months ended 30 September 2024 that relate
to acquisitions in earlier years.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
22. Acquisitions (continued)
(d) Post balance sheet acquisition
On 4 October 2024, we agreed to acquire Clear Sale S.A. a leading provider of
digital fraud prevention solutions in Brazil for up to R$1,905m (c.US$350m),
net of cash and other closing conditions. The acquisition is subject to
shareholder, competition and regulatory approval.
23. Financial risk management
(a) Financial risk factors
The Group's activities expose it to a variety of financial risks. These are
market risk, including foreign exchange risk and interest rate risk, credit
risk and liquidity risk. The nature of these risks and the policies adopted by
way of mitigation are unchanged from those reported in the Annual Report and
Group financial statements for the year ended 31 March 2024. Full information
and disclosures were contained in that document.
(b) Analysis by valuation method for put options and items measured at fair
value
At 30 September 2024 Level 1 Level 2 Level 3 Total
US$m US$m US$m US$m
Financial assets:
Derivatives used for hedging - fair value hedges(1) - 8 - 8
Non-hedging derivatives - 128 - 128
Other financial assets at fair value through profit or loss - - 18 18
Financial assets at fair value through profit or loss - 136 18 154
Derivatives used for hedging - cash flow hedge(1) - 18 - 18
Listed and trade investments 57 - 148 205
Financial assets revalued through OCI 57 18 148 223
57 154 166 377
Financial liabilities:
Derivatives used for hedging - fair value hedges(1) - (48) - (48)
Non-hedging derivatives - (13) - (13)
Other liabilities at fair value through profit or loss - - (126) (126)
Financial liabilities at fair value through profit or loss - (61) (126) (187)
Put options - - (153) (153)
- (61) (279) (340)
Net financial assets/(liabilities) 57 93 (113) 37
At 30 September 2023 Level 1 Level 2 Level 3 Total
US$m US$m US$m US$m
Financial assets:
Non-hedging derivatives - 198 - 198
Other financial assets at fair value through profit or loss - - 12 12
Financial assets at fair value through profit or loss - 198 12 210
Listed and trade investments(2) 65 - 246 311
65 198 258 521
Financial liabilities:
Derivatives used for hedging - fair value hedges(1) - (163) - (163)
Non-hedging derivatives - (37) - (37)
Other liabilities at fair value through profit or loss - - (124) (124)
Financial liabilities at fair value through profit or loss - (200) (124) (324)
Derivatives used for hedging - cash flow hedge(1, 2) - (28) - (28)
Put options - - (108) (108)
- (228) (232) (460)
Net financial assets/(liabilities) 65 (30) 26 61
1. Derivatives used for hedging are in documented hedge accounting
relationships.
2. Listed and trade investments, and derivatives designated as a cash
flow hedge, which are in a documented hedge accounting relationship, are
revalued through OCI.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
23. Financial risk management (continued)
(b) Analysis by valuation method for put options and items measured at fair
value (continued)
Financial assets at fair value through profit or loss (FVPL) are reported
within Other financial assets in the Group balance sheet. Contingent
consideration is reported within trade and other payables in the Group balance
sheet. Put options and other financial liabilities at fair value through
profit or loss are reported within Other financial liabilities in the Group
balance sheet. Cross-currency swaps in respect of the cash flow hedge are
reported within Financial assets revalued through OCI or Financial liabilities
revalued through OCI, in the Group balance sheet.
The fair values of derivative financial instruments and other financial assets
and liabilities are determined by using market data and established estimation
techniques such as discounted cash flow and option valuation models. The fair
value of foreign exchange contracts is based on a comparison of the
contractual and period-end exchange rates. The fair values of other derivative
financial instruments are estimated by discounting the future cash flows to
net present values using appropriate market rates prevailing at the period
end. There have been no changes in valuation techniques during the period
under review.
The analysis by level in the above tables, is a requirement of IFRS 13 'Fair
Value Measurement' and the definitions are summarised here for completeness:
· assets and liabilities whose valuations are based on unadjusted
quoted prices in active markets for identical assets and liabilities are
classified as Level 1
· assets and liabilities which are not traded in an active market,
and whose valuations are derived from available market data that is observable
for the asset or liability, are classified as Level 2
· assets and liabilities whose valuations are derived from inputs
not based on observable market data are classified as Level 3.
Level 3 items principally comprise minority shareholdings in unlisted
businesses, trade investments, contingent consideration and put options
associated with corporate transactions.
Unlisted equity investments, initially measured at cost, are revalued where
sufficient indicators are identified that a change in the fair value has
occurred. The inputs to any subsequent valuations are based on a combination
of observable evidence from external transactions in the investee's equity and
estimated discounted cash flows that will arise from the investment.
The calculation of the fair value of the Group's acquisition-related
contingent consideration and put option liabilities requires management to
estimate the outcome of uncertain future events. These liabilities are
typically linked to the future financial performance of the acquired business,
with the key area of estimation uncertainty being the estimation of the
relevant financial metrics. Material valuations are based on Monte Carlo
simulations using the most recent management expectations of relevant business
performance, reflecting the different contractual arrangements in place.
The likely range of the undiscounted put option exercise price on the FY24
acquisition of MOVA Sociedade de Empréstimo entre Pessoas S.A. (MOVA) is set
out in note 23(c). There would be no material effect on the other amounts
stated from any reasonably possible change in such inputs at 30 September
2024. There have been no transfers between levels during the current or prior
period.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
23. Financial risk management (continued)
(c) Analysis of movements in Level 3 net financial (liabilities)/assets
Six months ended 30 September 2024 Financial assets revalued through OCI Other financial assets at FVPL Contingent consideration Put options Total
US$m US$m US$m US$m US$m
At 1 April 2024 167 14 (92) (133) (44)
Additions(1) 22 6 (43) - (15)
Conversion of convertible debt to equity investments 3 (3) - - -
Settlement of contingent consideration - - 7 - 7
Adjustment to the fair value of contingent consideration(2) - - (2) - (2)
Valuation losses recognised in the Group income statement(3,4) - - - (28) (28)
Valuation losses recognised in OCI(5) (44) - - - (44)
Currency translation gains recognised directly in OCI - - 4 8 12
Other - 1 - - 1
At 30 September 2024 148 18 (126) (153) (113)
Six months ended 30 September 2023 Financial assets revalued through OCI Other financial assets at FVPL Contingent consideration Put options Total
US$m US$m US$m US$m US$m
At 1 April 2023 252 16 (139) (33) 96
Additions(1,6) 5 - (58) (71) (124)
Conversion of convertible debt to equity investments 5 (5) - - -
Settlement of contingent consideration(7) - - 102 - 102
Adjustment to the fair value of contingent consideration(2,8) - - (24) - (24)
Valuation losses recognised in the Group income statement(3) - - - (6) (6)
Valuation losses recognised in OCI(5) (16) - - - (16)
Currency translation (losses)/gains recognised directly in OCI - - (2) 2 -
Other - 1 (3) - (2)
At 30 September 2023 246 12 (124) (108) 26
1. Additions to contingent consideration comprised US$43m (2023: US$58m)
in respect of acquisitions (note 22(a)).
2. Contingent consideration is revalued at each reporting date based on
current projections of the associated targets, with any fair value
remeasurements recognised as a non-benchmark item in the Group income
statement (note 9(a)).
3. Movements in the present value of expected future payments for put
options are unrealised and are recognised in financing fair value
remeasurements in the Group income statement.
4. In the six months ended 30 September 2024, a valuation loss of US$26m
was recorded on the put option recognised on the acquisition of MOVA in FY24.
The exercise price of this put option is linked to the 2028 calendar year
revenue and Benchmark EBIT margin performance of the business. If exercised,
we expect the likely range of the undiscounted option exercise price to be
between US$82m and US$254m. We have determined the fair value of the put
option liability at 30 September 2024 to be US$101m. If the discount rate used
in this determination increased or decreased by a percentage point, the put
option liability would decrease or increase by approximately US$4m.
5. Of the valuation losses recognised in OCI, US$24m (2023: US$4m) related
to our investment in Vector CM Holdings (Cayman) L.P.
6. Additions to put options in the six months ended 30 September 2023
comprised US$71m in respect of the acquisition of MOVA.
7. In the six months ended 30 September 2023, contingent consideration
settled principally related to the acquisitions of TCC US$30m and BrScan
US$60m.
8. In the six months ended 30 September 2023, contingent consideration in
relation to TCC increased by US$22m following fair value adjustments which
were determined by revenue and profit performance. There are limits in place
for contingent consideration payments, and at 30 September 2023 the liability
in respect of the TCC contingent consideration was equal to the present value
of the maximum payment of US$50m. In the second half of FY24 however, all
remaining liabilities were settled for US$40m.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
23. Financial risk management (continued)
(d) Fair value methodology
Information in respect of the carrying amounts and the fair value of
borrowings is included in note 18(b). There are no material differences
between the carrying value of the Group's other financial assets and
liabilities not measured at fair value and their estimated fair values. The
following assumptions and methods are used to estimate the fair values:
· the fair values of receivables, payables and cash and cash
equivalents are considered to approximate to the carrying amounts
· the fair values of short-term borrowings, other than bonds, are
considered to approximate to the carrying amounts due to the short maturity
terms of such instruments
· the fair value of that portion of bonds carried at amortised cost
is based on quoted market prices, employing a valuation methodology falling
within Level 1 of the IFRS 13 fair value hierarchy
· the fair value of listed investments is based on quoted market
prices, employing a valuation methodology falling within Level 1 of the IFRS
13 fair value hierarchy
· the fair values of long-term variable rate bank loans and lease
obligations are considered to approximate to the carrying amount
· the fair values of other financial assets and liabilities are
calculated based on a discounted cash flow analysis, using a valuation
methodology falling within Level 2 of the IFRS 13 fair value hierarchy, apart
from the fair values of trade investments and contingent consideration which
are determined using a valuation methodology falling within Level 3 of the
IFRS 13 fair value hierarchy.
The Group considers the impact of climate-related matters, including
legislation, on the fair value measurement of assets and liabilities. At
present, the impact of climate-related matters is not material to these
condensed interim financial statements.
(e) Carrying value of financial assets and liabilities
There have been no unusual changes in economic or business circumstances that
have affected the carrying value of the Group's financial assets and
liabilities at 30 September 2024.
24. Related party transactions
The Group had no material or unusual related party transactions during the six
months ended 30 September. The Group's related parties were disclosed in the
Group's statutory financial statements for the year ended 31 March 2024 and
there have been no material changes during the six months ended 30 September
2024.
25. 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
administrative courts have ultimately upheld Experian's position in respect of
the tax years from 2007 to 2012 with no further right of appeal. The Brazilian
tax authorities have raised similar assessments in respect of the 2013 to 2018
tax years, in relation to the goodwill amortisation related to both the
original acquisition of a majority shareholding in Serasa S.A. in 2007 and the
acquisition of the remaining holding in 2012, and also in relation to the
acquisition of Virid Interatividade Digital Ltda in 2011. Experian has claimed
a tax deduction for goodwill amortisation of US$207m across these years.
During FY25, Experian has been successful at the first level administrative
court in defending the position that US$149m of this goodwill arising in years
2013 to 2016 is deductible, but Brazilian tax authorities may appeal this
decision and may also raise similar claims in respect of other years. The
possibility of this resulting in a liability (which may consist of underpaid
tax, interest and penalties), to the Group is considered to be remote, based
on the advice of external legal counsel, success in cases to date and other
factors in respect of the claims.
Notes to the condensed interim financial statements
for the six months ended 30 September 2024
25. Contingencies (continued)
(b) Other litigation and claims
There continues to be an increase in regulatory activity, including a number
of pending and threatened regulatory actions and other claims involving the
Group across all its major geographies which are in various stages of
investigation or enforcement, and which are being vigorously defended. These
include increased investigation and enforcement activity from the Consumer
Financial Protection Bureau related to the consumer dispute process in our
Credit Reference business, and the Federal Trade Commission in the USA related
to our Marketing Service business, as well as potential rulemaking and federal
and state level legislation which could impact our Credit Reference, Consumer
Services and Marketing Services businesses in the USA. The directors do not
believe that the outcome of any rulemaking or regulatory investigation or
enforcement will have a materially adverse effect on the Group's financial
position.
We have also seen increased GDPR investigation and enforcement activity in the
European Union (EU), including a claim from the Dutch Data Protection
Authority (the AP) claiming that our Credit Reference business in the
Netherlands (c.US$7m annual turnover) cannot process credit reference data
based on legitimate interest and is not sufficiently transparent under GDPR,
and asserting an associated fine which could range as high as 4% of global
turnover under GDPR. The AP's position is contrary to established regulatory
positions in our other EU markets, which recognise that legitimate interest is
a proper basis to process credit reference data in order to maintain a fair
and efficient lending process. Based on external legal opinions, relevant
precedents, and the facts of the underlying matter, we believe the AP's
position is legally wrong, we will contest the matter and we do not believe it
will have a materially adverse effect on the Group's financial position.
There also continue to be individual consumer and class action litigation
matters in Brazil and the USA related to our Marketing Services, Consumer
Services and Credit Reference businesses. Some of these class action
litigation matters in the USA allege willful misconduct under the US Fair
Credit Reporting Act that, if proven, carry the potential for liability which
includes statutory damages between US$100 to US$1,000 per consumer. The
directors do not believe that the outcome of any individual litigation matter
action will have a materially adverse effect on the Group's financial
position.
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.
26. Events occurring after the end of the reporting period
(a) First interim dividend
Details of the first interim dividend approved by the Board on 12 November
2024 are given in note 13.
(b) Acquisition
On 4 October 2024, we agreed to acquire Clear Sale S.A. a leading provider of
digital fraud prevention solutions in Brazil for up to R$1,905m (c.US$350m),
net of cash and other closing conditions. The acquisition is subject to
shareholder, competition and regulatory approval.
27. Company website
The Company has a website which contains up-to-date information on Group
activities and published financial results. The directors are responsible for
the maintenance and integrity of statutory and audited information on this
website. The work carried out by the auditor does not involve consideration of
these matters. Jersey legislation and UK regulation governing the preparation
and dissemination of financial information may differ from requirements in
other jurisdictions.
Statement of directors' responsibilities
The directors are responsible for preparing the half-yearly financial report
for the six months ended 30 September 2024 in accordance with applicable law,
regulations and accounting standards.
The directors confirm that these condensed interim financial statements have
been prepared in accordance with IAS 34 'Interim Financial Reporting' adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the EU, and as
adopted for use in the UK and as issued by the IASB, and that, to the best of
their knowledge, the interim management report herein includes a fair review
of the information required by:
(a) DTR 4.2.7R of the UK Financial Conduct Authority Disclosure Guidance and
Transparency Rules sourcebook, being an indication of important events that
have occurred during the first six months of the financial year and the impact
on these condensed interim financial statements; and a description of the
principal risks and uncertainties for the remaining six months of the
financial year; and
(b) DTR 4.2.8R of the UK Financial Conduct Authority Disclosure Guidance and
Transparency Rules sourcebook, being related party transactions that have
taken place in the first six months of the financial year and that have
materially affected the financial position or performance of the enterprise
during that period; and any changes in the related party transactions
described in the last annual report that could do so.
The names and functions of the directors of Experian plc at 14 May 2024 were
listed in the Group's statutory financial statements for the year ended 31
March 2024. On 20 August 2024, Craig Boundy stepped-down as a director. A list
of current directors is maintained on the Company website at experianplc.com
(http://www.experianplc.com) .
By order of the Board
Charles Brown
Company Secretary
12 November 2024
Independent review report to Experian plc
Conclusion
We have been engaged by the Company to review the condensed interim financial
statements in the half-yearly financial report for the six months ended 30
September 2024 which comprises the Group income statement, the Group statement
of comprehensive income, the Group balance sheet, the Group statement of
changes in equity, the Group cash flow statement and the related explanatory
notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed interim financial statements in the half-yearly
financial report for the six months ended 30 September 2024 are not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the EU, and as adopted for use in the UK and as issued by the IASB, and the
Disclosure Guidance and Transparency Rules sourcebook (the DTR) of the UK's
Financial Conduct Authority (the UK FCA).
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity (ISRE (UK) 2410) issued for use in the UK. A
review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other information
contained in the half-yearly financial report and consider whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed interim financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRS Accounting Standards as adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union (EU-IFRS),
UK-adopted international accounting standards (UK-IFRS) and IFRS as issued by
the International Accounting Standards Board (IASB-IFRS).
The directors are responsible for preparing the condensed interim financial
statements included in the half-yearly financial report in accordance with IAS
34 adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the EU,
and as adopted for use in the UK, and as issued by the IASB.
In preparing the condensed interim financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
interim financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
Independent review report to Experian plc (continued)
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Zulfikar Walji
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
United Kingdom
12 November 2024
Shareholder information
Company website
A full range of investor information is available at experianplc.com.
Electronic shareholder communication
Shareholders may register for Share Portal, an electronic communication
service provided by Link Market Services (Jersey) Limited, via the Company
website at experianplc.com (http://www.experianplc.com) /shares. The service
is free and it facilitates the use of a comprehensive range of shareholder
services online.
When registering for Share Portal, shareholders can select their preferred
communication method - email or post. Shareholders will receive a written
notification of the availability on the Company's website of shareholder
documents unless they have elected to either (i) receive such notification via
email or (ii) receive paper copies of shareholder documents where such
documents are available in that format.
Dividend information
Dividends for the year ending 31 March 2025
A first interim dividend in respect of the year ending 31 March 2025 of 19.25
US cents per ordinary share will be paid on 7 February 2025 to shareholders on
the register at the close of business on 10 January 2025. Unless shareholders
elect by 10 January 2025 to receive US dollars, their dividends will be paid
in pounds sterling at a rate per share calculated on the basis of the exchange
rate from US dollars to pounds sterling on 17 January 2025.
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 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 10 January 2025.
Dividend Reinvestment Plan (DRIP)
The DRIP enables those shareholders who receive their dividends under the IAS
arrangements to use their cash dividends to buy more shares in the Company.
Eligible shareholders, who wish to participate in the DRIP in respect of the
first interim dividend for the year ending 31 March 2025 to be paid on 7
February 2025, should return a completed and signed DRIP application form, to
be received by the registrars by no later than 10 January 2025. Shareholders
should contact the registrars for further details.
American Depositary Receipts (ADR)
Experian has a sponsored Level 1 ADR programme, for which J.P. Morgan Chase
Bank, N.A. acts as Depositary. This ADR programme is not listed on a stock
exchange in the USA and trades on the highest tier of the US over-the-counter
market, OTCQX, under the symbol EXPGY. Each ADR represents one Experian plc
ordinary share. Further information can be obtained by contacting:
Shareowner Services
J.P. Morgan Chase Bank, N.A.
PO Box 64504
St. Paul, MN 55164-0504
USA
T +1 651 453 2128 (from the USA: 1 800 990 1135)
E Visit shareowneronline.com
(https://urldefense.com/v3/__http:/www.shareowneronline.com__;!!MfzFaTml5A!ys1WHD-koMbeUMWgVggHZIPnaFnMKLuJrWnHT3extrcXUrYSy_vyE49M4b_wbYGGaQ$)
, then select 'Contact Us'
W adr.com
(https://urldefense.com/v3/__http:/www.adr.com__;!!MfzFaTml5A!0aGDuQts0NUpYNHqxAzQy11LTs_WwOsyp-82yELpSaVo0RuSzaJ3j9O914K83VDEAQ$)
Shareholder information (continued)
Financial calendar
First interim ex-dividend date 9 January 2025
First interim dividend record date 10 January 2025
First interim ex-dividend and record date for American Depositary Receipts 10 January 2025
(ADRs)
First interim dividend exchange rate determined 17 January 2025
Trading update, third quarter 15 January 2025
First interim dividend payment date 7 February 2025
Preliminary announcement of full-year results 14 May 2025
Annual General Meeting 16 July 2025
Contact information
Corporate headquarters
Experian plc
2 Cumberland Place
Fenian Street
Dublin 2
D02 HY05
Ireland
T +353 (0) 1 846 9100
Investor relations
E investors@experian.com (mailto:investors@experian.com)
Registered office
Experian plc
22 Grenville Street
St Helier
Jersey
JE4 8PX
Channel Islands
Registered number - 93905
ISIN - GB00B19NLV48
Registrars
Experian Shareholder Services
Link Market Services (Jersey) Limited
12 Castle Street
St Helier
Jersey
JE2 3RT
Channel Islands
Shareholder helpline 0371 664 9245 (+44 800 141 2952 for calls from outside
the UK)
E experian@linkregistrars.com (mailto:experian@linkregistrars.com)
Calls are charged at the standard geographic rate and will vary by provider.
Calls from outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 8.30am and 5.30pm (UK time), Monday
to Friday excluding public holidays in England and Wales.
Stock exchange listing information
Exchange: London Stock Exchange, Equity shares (commercial companies)
Index: FTSE 100
Symbol: EXPN
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