Experian plc

Good day and thank you for standing by. Welcome to the experience preliminary results for the year-ended 31st March 2025 webcast and conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star 1 1 again. please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Mr. Brian Cassin, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Hello, everybody, and welcome to our FY25 results presentation. I'm joined today by Lloyd, who will run through the financials after my initial overview, and then we'll open up for Q&A. FY25 was a very good year for us, and we ended the year well. We delivered on our full-year guidance and on our medium-term framework. 7% organic revenue growth is a very good result in a year of relatively subdued macro. We also had excellent margin delivery above our target, and cash conversion was also very strong. FY25 was also a year of very good strategic progress across the business. We continued organic investment in new products, a busy year for M&A, and continued investment in our cloud transformation, which remains on track. All this sets us up to sustain our performance into FY26 and beyond. Speaking of FY26, it has started very well and we've not seen any material change in our operating environment or any direct impact from market volatility. Of course, it is very early in our financial year and we continue to watch the economic situation carefully, but we are confident we can navigate through multiple scenarios given our long track record of growth and resilience. And we're also very well positioned to seize opportunities as they arise, given the scale of our market positions and the strength of our balance sheet. We ended FY25 well, with Q4 organic revenue growth of 7% and 7% for the year. When the data breach headwind is excluded, Q4 growth was 9% and FY25 was 8%. As Lloyd's slides will show, margin delivery was excellent, up 90 basis points organically, 70 basis points at constant rates, and up 50 basis points when FX is factored in. Margin expansion is largely the result of consumer services operating leverage and enhanced efficiency while sustaining investment in the business. Benchmark EPS and dividend per share rose by 8% and 7% respectively, and our cash conversion was very strong at 97%. And we've also generated consistently high returns on capital, with ROCE of around 17%, and our net debt to EBITDA is below our target debt range. One of the main strategic highlights of the year is that we've now passed 200 million free consumer members globally, a significant achievement and milestone. Consumer services revenue growth of 7% was 12% when data breaches excluded, and it accelerated as the year progressed. It was also a good year for B2B with 6% organic revenue growth against subdued credit market backdrop. We continued to introduce new products, win new clients, expand our revenue share from existing clients and increase market opportunity in new areas. Our large verticals performed really well with a special call out to health which had record client bookings. Whilst a busy year for M&A, we deployed over 1.6 billion in acquisitions when you include the ClearSale acquisition and we're very pleased with the performance so far and confident in the outlook. There are quite a few operational highlights, the main one being that we're on track with our cloud technology transformation, with dual run costs set to peak in FY26 and trend down from FY27. We also expect to capitalize on a range of productivity measures, as well as to realize acquisition cost synergies. Collectively, we expect these measures to underpin our ability to invest while also driving further margin uplift. Other highlights include the positive progress in client NPS metrics, the external recognition we've had for our products broadly, but specifically also for our progress on Gen AI products. And these have already enhanced many of our existing products and have provided new opportunities to improve productivity. But perhaps the award I'm most proud of is our number 14 ranking in the world's best places to work survey, which highlights the strength of our culture, employee brand, and our ability to attract and retain top talent. Looking at the regions in more detail, in North America, we ended the year with strong momentum, with Q4 growth of 10% to give 8% organic revenue growth for the year. B2B closed the year strongly, driven by strength in core CIBI across core credit profiles, Ascend and Clarity, and strong mortgage revenue. We introduced new products, such as cash for analytics, BNPL data, and new modules to the Ascend platform. The US credit backdrop last year was subdued, with activity levels generally below pre-pandemic levels, but we continue to see good growth in product and new business performance. The year has started well, and as yet, we've not seen much change in behavior from clients as they assess the US economic situation. Across our verticals help deliver a year of record sales bookings and implementations, which will underpin growth into FY26. Also, deliver an outstanding performance, and we expect the breadth of our portfolio and pricing to sustain that good performance. In targeting, the repositioning work we've done, which means more of our growth now arises in the digital advertising industry, which the auditing acquisition will help to expand. And in consumer services, we continue to leverage our approximately 80 million membership into new growth spaces. The headline 5% growth rate was 11%, excluding data breach, and it accelerated as the year progressed. Paid enrollment progress has been strong on the back of new features. It provides a solid base to help consumers find savings and manage their credit, which is a traditionally counter-cyclical activity. Our credit marketplace has seen some recovery, and insurance revenue more than doubled. We continue to evolve our insurance offer and recently signed a new carrier agreement to extend further into home insurance. Latin America organic growth was 6% of the year. The main driver in Brazil was consumer services, supported by free membership growth of 96 million. In B2B, the weaker macro backdrop and uncertainty surrounding Brazil's fiscal policy position suppressed B2B growth. We continue to evolve our business strategy, adding new products and selling more solutions comprising data, analytics, and software. And we're encouraged by the strength of our new business and product pipeline. We've introduced new scores, enriched our data with income and consumer permission sources, and we continue to leverage the Ascend platform. Now with ClearSell, we have a much larger data set to combine fraud and credit assets and bring very differentiated offers to our clients. Strengthening consumer services reflects membership growth and higher membership engagement across more propositions. It was a record year for LIMP and NOME. With 75 million consumers in Brazil and today in some form of delinquency, we are well-placed to help people to resolve their debts through the platform as they navigate Brazil's high interest rate environment. Marketplace, subscriptions, and digital wallet were all positive contributors. The UK and I was up 1% for the year organically, with an improving consumer services trend compensating for more modest B2B revenue progress against a subdued market backdrop. In B2B, we're pleased with progress in new business. A growing number of clients are now going live on the Ascend platform, including several major retail banks. While we have more work to do to drive product adoption, we're confident that we will see widespread adoption of Ascend as a default analytic sandbox solution across the UK market. and that will further strengthen our market position and provide us with new growth opportunities. UK Consumer Services has made very good progress. We've stepped up the rate of new product delivery and introduced more personalized journeys for members. Our marketplace lender panel is also now much stronger as we've created more opportunities for lenders to extend credit efficiently via the Activate platform, and this has helped us to outperform the overall credit market. ILEAN Asia Pacific performed consistently well across this year. Growth was evenly balanced and broad-based across our markets. And importantly, revenue for new product introductions is becoming a more meaningful growth driver. The ILEAN integration is going well. It's ahead of our buy plan, and we're seeing really strong synergy execution. Now, reflecting on our progress over a longer period of time, our revenue growth has now averaged 8% organic since FY20. with good operating leverage into EBIT, cash flow, and EPS performance. And when you consider that this too includes a six-year period where we had a pandemic, a major war in Europe, unprecedented rationing of interest rates globally, and followed by a fairly significant credit downturn. So we've got good confidence in the outlook for the business, irrespective of the macro environment. And just as a reminder, if we go even further back to the financial crisis, we also grew our business in that period too. Our strategy has been to position our business to take advantage of growth opportunities, enabling us to outperform underlying credit conditions. Experian is a fundamentally changed business from what it was even 10 years ago and a very different business since the global financial crisis. Today, we do many more things. Our health, automotive, and targeting businesses, for example, combined are now almost equal in size to our North America CI business. Consumer services address a much greater TAM than it did in the past and have been fundamentally transformed. We're now one of the world's largest consumer financial platforms with trusted relationships with consumers at scale. And we'll continue to become even more relevant to consumers' lives, entering into new areas to provide more ways for people to instantly borrow, save, protect, and spend. We've done this through consistent application of our strategic framework, which should by now be all very familiar to you. It's a constant for us, and it's the lens through which we consider all investments in our business. I want to comment now in more detail on some of the recent strategic accomplishments, starting with B2B financial services, where product and platform momentum is building, and we've introduced some significant new products. As our markets evolve, the requirement for continued improvements in process drives opportunity, and we see this in demand for better data, new data, and better solutions. We also see demand for a more holistic view of risk across credit underwriting, fraud, and compliance risk. It's an accelerating trend, which helps us drive efficiency for our clients and presents us with new growth opportunities, which we are uniquely positioned. And we're addressing these opportunities through expanding our data assets, developing new analytics, as well as the continued evolution expansion and expansion of platforms like the Ascend technology platform. Cashflow analytics is a good example, which can provide a predictive uplift by up to 25% when combined with pure data and give a more comprehensive view of risk. and we are also positioned to be the leader in consumer contributed data. Verification records continue to expand in North America where we also continue to make very good progress adding new client logos. Ascend platform adoption continues to increase. Ascend Sandbox is best in class for model development and it has very strong momentum with a record year for signings in North America and a large number of anchor tenants going live in the UK. We've now developed new modules which are now in proof of concept to help clients take full advantage of the breadth of our capability in an easy-to-consume and seamless way. Fraud is a large market opportunity and we took important steps this year to extend our suite of products. We did this through homegrown capabilities like Fraud Sandbox and by acquiring assets like NeuroID, which we've since incorporated onto the Ascend platform. Our ambition is to have the best fraud assets delivered through the Ascent platform to help us expand across the client lifecycle, and we're making good progress. Some of our best growth opportunities are in our verticals, which now account for around 21% of our revenue. In health, Wave, now called Patient Access Curator, has been a great addition to our product suite, which has driven greater client wallet share. We've also invested in opportunities to extend our collection suite, which is critical to the financial viability of healthcare providers. Our auto business addresses a broad range of industry needs, which include credit, marketing, and fraud. It has a good track record of resilience because of its diversity. For example, our marketing solutions, which help clients stimulate the market when vehicles sell so slow, was one of our fastest growth drivers last year, and demands for vehicle history reports rise when the secondhand car market is strong. In targeting, our business has become progressively more digital. This expands the way advertisers can reach target audiences. The acquisition of Audigent expands this platform. While historically we have had strong relationships with the buy side of the digital ad industry, Audigent's business is more focused on the supply side. And this is the side of the industry that supplies the ad industry and ad inventory, and therefore is a very complementary asset, positioning Experian to be a leader in identity activation technology. Consumer services has become one of our core growth engines. We've expanded membership, built engagement, introduced new offers, and more personalized experiences. In North America, we put more value into premium services, helping members to save money, which drives higher premium enrollment rates. At the same time, we've introduced highly personalized recommendations and more relevant product experiences to drive loyalty and build engagement. Experian Activate has been a key accelerant in both the US and the UK credit marketplaces. We've onboarded more lending partners to our panels through Activate who use it to drive up loan approval rates. We've also introduced consumer-facing propositions like no ding decline in the US and a much improved experience for our UK members. Our insurance marketplace continues to make very good progress. Do it for me solutions find policies for our members through rate monitoring and I mentioned that we're now expanding further into home insurance, the next logical step for our insurance marketplace. We're also evaluating new opportunities where we can leverage our scaled audiences into. In Brazil, we started to explore new opportunities in the insurance market, focused initially on low-cost insurance. Strategic investments like these continue to drive consumer services forward, and we're actively exploring new horizons to further extend our opportunity. Now, we've achieved this at the same time as we've greatly enhanced consumer services EBIT margins. We also completed several acquisitions in FY25, all of which are excellent strategic fits. Three of the larger acquisitions are shown here, and all of them have got off to a very good start. ILION transforms our position in Australia and New Zealand by combining the number two and number three consumer bureaus and gives us a wider and very complementary product footprint. We're very pleased with progress in the first six months, and we're on track to realize material synergies. Audigent is a business we partnered with and held a minority stake in before we acquired it in December 2024. It continues our journey into digital marketing and ad tech, which we view as a foundational capability that spans really the entirety of our client base. Audigent builds on our industry-leading data assets, our modeling capabilities, and on the tap-out acquisition. and it provides us with access to context-based audiences through over 300 publisher integrations. As I mentioned, this strengthens our relationship on the supply side of the digital ad industry, and it further rounds out our portfolio. ClearSale is a highly complimentary acquisition for Sarasa, and it gives us industry-leading fraud capabilities. It's a scaled and comprehensive data asset which, combined with our existing data assets and capabilities, gives us unsurpassed portfolio breadth in Brazil. We're very excited about the opportunity to combine this with credit risk to create superior offers. In summary, we've made very strong strategic progress and we'll continue this direction where more of our revenue is generated from products, from new products now at around 1.8 billion. We drive deeper adoption of Ascend and our other integrated platforms where clients can consume multiple solutions across software analytics fraud, as well as data. And we access a greater set of opportunities across high-growth vertical segments, and we deepen our engagement with a large installed base of consumer members across a wider set of consumer offers. And with that, let me turn to Lloyd for the financial overview.

Thanks, Brian, and morning, everyone. As you've seen, we delivered another strong performance in FY25 with organic revenue growth in line with our growth framework and strong margin expansion. For the full year, total revenue of constant currency grew by 8%, of which 7% was organic. Benchmark EBIT from ongoing activities grew 11% at constant rates and 8% at actual rates. EBIT growth converted well into EPS growth of 11% at constant rates and 8% at actual rates. Operating cash flow was over $2 billion with 97% conversion. We invested $1.9 billion organically and inorganically to grow and strategically enhance the business. And on our growing capital base, we continue to generate very high returns on capital employed of around 17% post-tax for the year. We've announced a full year dividend of 62.5 cents per share, up 7% on the prior year. And finally, we remain strongly financed with our net debt to EBITDA leverage at 1.8 times below our 2 to 2.5 times target range. Over the past five years, despite market backdrops, we've delivered consistently strong results, underlining the increasing strength and breadth of our portfolio and our strategic progress across our growth initiatives. Since FY20, we've grown revenue at an 8% compound annual growth rate. Benchmark EBIT grew 9% compound over this period, with margins expanding by 130 basis points in aggregate. We converted this to a 9% compound growth in benchmark earnings per share, and we've been very cash generative, growing at an 11% compound rate to over $2 billion. So since FY20, we've therefore expanded EPS by around 50%, and operating cash flow by over 65%. Looking at this performance through a segmental lens, on the left, you can see that we've scaled our consumer business considerably since FY20, with revenue nearly doubling. And as we've engaged our growing member base with an increasing breadth of product to help them navigate their financial lives, our membership revenue has grown at a 9% compound rate, and marketplace has grown at over 30%, to over $2 billion for the consumer segment in aggregate. And on the right of the chart, you can see how this scaling has led to a 550 basis points margin uplift to 27.4%, which is now broadly in line with our group margin. In B2B, we've grown consistently over this period, adding $1.5 billion in revenue over five years. Despite the effects of a softer lending environment over the last two years, Our financial services segment has grown consistently and well, with a 6% compound growth since FY20. And at the same time, our growth verticals of health, automotive, targeting, and data quality have performed very well, with 8% compound growth to over $1.5 billion in revenue. And importantly, these verticals are largely uncorrelated with the underlying credit market and have scaled to be margin accretive to the group. On the right, you can see we generated a strong 31% and consistent EBIT margin across these businesses. And this consistent margin is after the investments we've made in our technology transformation, the scaling of our verifications and ascend business, and of course the recent impact of the software lending environment. As our business scales, as dual run costs abate, and at some point we see broad-based lending recovery, we would expect greater financial flexibility for investment and growth. Looking now at more recent trends, as you've heard from Brian, we delivered consistent growth through the year, with the diversification and resilience of our portfolio offsetting a still subdued lending environment. Organic growth in Q4 improved to 7% in our traditionally strong finish to the year, supported by broad-based strengthening in North America B2B and consumer services offsetting modestly lower than expected Latin America revenue. Total revenue growth in Q4 was 10% following the contribution from our acquisitions. Looking at organic revenue growth across the segments, on the left-hand chart, you can see our quarterly trend in B2B, where we saw good momentum across recent quarters, with a traditionally strong finish to the year, with growth increasing from 6% in Q3 to 8% in Q4. North America was the key driver, with growth in the core bureau improving, And as expected, we also saw a step up in North American verticals of health, automotive, and targeting. On the right-hand side, you can see our consumer services segment trends in total and excluding our data breach business. As we've mentioned, in FY24 and early FY25, we secured several large one-off data breach contracts following elevated levels of breach activity in the market. And as you can see, excluding data breach, underlying growth firm through the first three quarters of the year and remained strong in Q4. Turning now to FY24 Q4 regional growth trends. North America grew 10% organically in Q4, with B2B growing 12%. Within B2B, the Bureau delivered mid-teens growth and excluding mortgage profile revenue grew 8% in the quarter. Our Ascend modules continue to perform very well, particularly Ascend marketing. Clarity Services also maintained recent double-digit growth. Overall lending continued to be subdued and was similar to recent quarters. Mortgage profile revenue grew 66% on volumes that were down modestly. Automotive accelerated to 16% where new business wins and expected pricing actions helped deliver strong growth. Targeting strengthened in Q4, to growing 5% as our digital identity and activation offerings continue to scale. Health growth accelerated to 12%, benefiting from good cross-sell progress in areas such as patient access, coverage discovery, and digital front door. And our successful wave acquisition that Brian mentioned has moved into the organic base and continues to perform well. Consumer services grew 5% in Q4, similar to recent quarters. Data breach was a headwind to growth as we lapped contracts in the prior year. Excluding this impact, growth was 14%. Subscription grew high single digits as new financial health features contributed to higher enrollments. Marketplace maintained recent double-digit growth as auto insurance continued to grow very strongly. And in the credit marketplace, the loans vertical increased did well, and credit cards returned to growth. Credit cards benefited in the quarter from the noting decline launch that Brian mentioned and positive partner supply movements. Organic growth in Latin America was 3% in Q4. In Brazil, continued macro uncertainty tempered some client activity, and bureau revenue growth was in line with Q3 at 1%. Targeting revenue reflected a one-off client revenue received in the prior period. And consumer services was up 17% with broad-based growth across our propositions. Lempinomate performed well with good conversion rates. Our payments capabilities benefited from increased volumes and good client acquisition. And our marketplace was strong as we made strides to optimize the customer journey in our ecosystem. The UK&I was consistent through the half with one-half organic revenue growth. Bureau growth was in line with our performance in Q3. We're progressing with our strategic innovations, though are still subdued credit environment-moderated growth, and we signed numerous Ascend sandbox trial contracts and are progressing well towards client conversions. Targeting in automotive was down 9% in the quarter, reflecting the specific client actions to insource some activity we mentioned in previous quarters. Decisioning was up 2%, and we had good growth in experience data quality, driven by our innovative Aperture Data Studio, and our single data quality management platform. Consumer services grew 6%, maintaining recent strength. Marketplace continued its recent good growth. And our leading Activate platform drove strength in our lender panel and continued to contribute to good conversion rates. Subscription revenue grew modestly, driven by increasing enrollments. And in EMEA and Asia Pacific, growth for the quarter was 8%, consistent with the performance in Q3, following strong decision growth in Australia, New Zealand, and Southern Europe, as well as good growth across the Bureau. Turning now to EBIT margin, where we delivered 90 basis points of organic constant currency margin expansion ahead of our guidance. As you'll recall, we communicated that our dual run costs related to our cloud transition are peaking in FY25 and FY26. And despite this headwind, we made strong progress. Our scaling consumer platform and verticals, along with early benefits from our cloud program, drove margin outperformance for the year. Consumer services business continued to drive operating leverage as we further engaged our scaled member base with an expanded product suite. B2B margin was largely stable, with good underlying operating leverage offset by investments in areas such as our cloud transformation, verifications, and fraud propositions. For the year, there was a 20 basis point dilutive impact from acquisitions, along with a 20 basis points headwind from foreign exchange. And we therefore delivered 50 basis points of margin expansion at actual rates. At a regional level, margins in North America, the UK and Ireland, and EMEA and Asia Pacific contributed to group margin, whilst Latin America margins reflected currency changes and acquisitions. Onto benchmark earnings per share, where we delivered double-digit growth of 11% at constant FX and 8% at actual rates. EBIT grew 11% at constant currency following good revenue growth and 70 basis points of EBIT margin expansion at constant rates. Higher acquisition-driven interest expense was offset by a modestly lower tax rate relative to last year. So this translated to an 11% EPS growth at constant currency and 8% at actual rates. Taking a look at our usual statutory reconciliation, our benchmark profit before tax grew 8% at actual FX rates, driven by the revenue performance and good margin progression. Acquisition-related expenses decreased modestly to $37 million. There was little change in the fair value of contingent consideration on prior acquisitions. We incurred $50 million of costs in relation to our technology-enabled restructuring program and recovered $11 million of costs relating to prior legal matters. Statutory PBT before non-cash items was therefore up 6%. Amortization of acquisition intangibles increased to $211 million. And non-cash financing remeasurements were $89 million, driven by remeasurements of Brazilian intragroup funding and interest rate swaps, leaving statutory profit before tax largely flat at $1549 million. Now taking a look at cash flow and return on capital, the left-hand chart here shows shows our long-term operating cash flow and conversion metrics. As you can see from the slide, we've progressively increased our operating cash flow, growing at an 11% compound rate since FY20. In FY25, we generated over $2 billion of operating cash flow at a 97% conversion rate. And a key part of our growth framework is to continue to use our cash generation to invest in high return on capital growth opportunities. And on the right, you can see our disciplined use of capital where we've significantly grown our capital base whilst delivering consistently high post-tax returns. Notwithstanding this investment, we remain below our target leverage range, giving us continued flexibility to invest in value-creating opportunities. As we discussed last year, we've significantly progressed with our cloud transformation program. The chart on the left shows the mix of our capital investments which has materially shifted from infrastructure to development as our cloud program has progressed and is driving widespread innovation across our business. Our CapEx to sales ratio has reduced from 9.5% to 8.7% of revenue. And as our cloud transition completes and we continue to gain scale benefits, we expect this to trend to 7% of revenue. Last year, we outlined that in our largest North American and Brazilian business, we were around 50% processing in the cloud. We've progressed very well this year and are now around 70% and well on the way to our expected position of over 85% by this time next year. In the UK and I and EMEA and Asia Pacific, progress is continuing well and we'll approach 50% in the cloud by this time next year. As we approach the latter stages of the program, we expect to redirect activity into innovation and benefit from reduced dual run costs and lower change-related capital investment. On now to acquisitions. And as you've heard from Brian, we made a number of strategic acquisitions during the year, spending over $1.2 billion in support of our key priorities. And following the end of the year, we completed the previously announced ClearSail acquisition. We expect the aggregate impact of the acquisitions completed in FY25, along with ClearSail, to contribute 3% to revenue growth in FY26. And on that note, onto our modeling considerations for the year ahead. And these relate to our results from ongoing activities. As previously mentioned, we expect 6% to 8% organic revenue growth for the full year and a 3% contribution from completed acquisitions. And whilst we're mindful of the uncertain outlook of the global economy, we've built a diversified and very resilient portfolio which has consistently demonstrated that and grown through different economic cycles and macro effects. We expect revenue growth to continue to come with good margin progression of 30 to 50 basis points at constant currency, including the effects of completed acquisitions. Based on recent FX rates, we expect FX to be neutral to both revenue and EBIT growth. We expect net interest for the year to be around 190 million, which reflects incremental debt associated with acquisitions and higher rates as some of our interest fixing expire. This represents a net interest cost on net debt of around 3.7% and continues to benefit from our historic rate fixing. The benchmark tax rate is expected to be around 26%. The weighted average number of shares is expected to remain 914 million for the year. CapEx is expected to be around 8% to 9% of revenue. We expect cash flow conversion to be over 90% for the year ahead. And we've announced a share buyback program of up to $200 million to be completed for the year as a whole. And finally, as we've discussed over the last couple of years, we've been making excellent progress with our Ascend technology platform and with bundling our unique breadth of services for clients. With that success, the data and decisioning service lines no longer represent how we go to market. Our data, software, fraud, and analytics propositions are increasingly integrated into our SM technology platform. So going forward, we'll therefore now report these together in a single financial services line. In addition, as I mentioned earlier, our automotive health and marketing services businesses continue to scale very well, and these will be reported together as our vertical service line. And we'll report against these service lines from Q1 FY26, and provide comparative information to enable models to be updated. We'll also, of course, continue to provide narrative on growth on service lines within these, such as membership, marketplace, et cetera. And with that, I'll hand you back to Brian for some closing comments.