Experian plc

Good day and thank you for standing by. Welcome to the experience half year results for the six months ended 30th September 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 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.

Well, thank you very much. Hello, everybody, and welcome to our first half results presentation. I'm joined today by Lloyd, who will run through the financials after my initial overview, and then we'll open it up for Q&A. So we delivered very good first half results at the top end of our FY26 guidance range. and we are on course to meet our medium-term framework objectives. Revenue, margin, cash performance are all strong, supported by significant strategic progress. Just turning to some of the financial highlights, organic revenue growth accelerated from 8% in Q1 to 9% in Q2, averaging 8% for the first half. Including acquisitions, total constant currency revenue growth reached 12% with all acquisitions performing well. North America performance is strong and broad-based, accelerating to 12% organically in Q2, driven by client wins, client expansions, consistently improving lender activity in B2B, and good results in consumer services. FISC conditions in Latin America, particularly Brazil, remain constrained by high interest rates and consumer indebtedness. The growth in H1 reflects continued excellent consumer services progress. And while the UK and I delivered low single-digit growth overall, Ascend Sandbox adoption among B2B clients has been excellent, with UK consumer services driving growth through new products and market expansion. And EMEA Asia Pacific delivered a solid mid-single-digit growth supported by innovation initiatives and our stronger positioning in key markets. Revenue growth translated into EBIT margin delivery at the upper end of our expectations, up 50 basis points at constant currency and 30 basis points at actual rates. Margin expansion in North America, UK&I, and EMEA in Asia Pacific offset lower LATAM margins, which was primarily driven by acquisition mix. EBIT strength flowed through to double-digit benchmark EPS growth, and we've raised the interim dividend by 10%. Cash flow growth very strong, with our leverage ratio now standing at 1.8 times. I'll just touch on some of the strategic highlights in half. The Ascent platform adoption continues to accelerate. In addition, earlier this year, we introduced new cash flow attributes and analytics in North America, and we're seeing very good client demand. And B2B achieved organic revenue growth in the half of 8%. Consumer services delivered 9% growth, reaching over 208 million free members. We continue to add more breadth and depth to our products. And all of our key metrics, organic traffic, engagement, continue to trend positively, reflecting the successful positioning of this business as a financial partner for our members. Our recent acquisitions are on track, delivering cost synergies and new product opportunities. We also recently completed a small fraud acquisition in the UK, which further enhances our product portfolio and strengthens our position in non-financial services verticals. And finally, cloud migrations in North America and in Brazil, excluding North America Health, are on track, and we expect dual run costs to peak this financial year. Our strategic progress reflects our consistent commitment to our dual-sided strategy across B2B and consumer, which is unique and which has expanded our growth potential and created new value opportunities across our priority ecosystems. We're now entering a new and exciting era driven by AI, and we're strongly positioned to take advantage of the opportunity this brings to our business. The starting point for this is our data. These data sets are vast, complex, they're constantly being refreshed, They are subject to expansive and stringent regulation, and they need to be accurate all of the time. The job of creating these data assets is a huge and complex operational exercise, which relies not just on process, but also on proprietary intellectual property and significant industry expertise. They simply cannot be replicated, and they cannot be accessed unless permissioned by us. Our strategy has always been not only to sell data, but to build solutions on top of our data that provide action and insight. to improve client outcomes and reduce cost. Almost all these solutions require our data as a foundational input, and this is a source of huge competitive advantage to us that will grow over time. And we have a long and successful track record of doing this. The evidence is everywhere in our current solutions, in our history of innovation and business expansion. Power curve, Ascend, the expansion of all our verticals, and the huge growth in our consumer businesses are all examples. Broadly, this expansion of our opportunity set has been driven by the increasing use of data to automate critical business processes to make better decisions, create better client outcomes, and to lower operational costs. AI will accelerate this trend, and it is and will continue to expand our opportunities. Despite decades of investment, many client processes remain siloed, inefficient, and costly. And this is particularly true when it comes to leveraging data, which of course has to be solved to leverage AI at scale, and this is where Experian excels. The opportunity for us remains huge, and the excitement for us is that the AI will accelerate the speed with which we can bring disruptive new products to market. Our data, our products, our platforms, our product development capability, and our industry footprint gives us a strategic position that most companies are killed for, and we intend to leverage that to accelerate our growth. Now, we've built strong foundations over many years to put ourselves into this position, as this slide demonstrates. And just over the past few years alone, we've been proactive across the entirety of our B2B and consumer businesses in leveraging AI use cases to enhance our product sets and also to penetrate new growth areas. And we haven't just been talking about it. We already have AI products in the market. A good example of this is the Patient Access Curator product. which is driving our growth in health and redefining the process of insurance discovery. Platforms like Ascend and Activate have been specifically developed to be modular and to bring all of our data and capabilities together in one place. This, of course, is a perfect setup to allow our clients to take maximum advantage of data at scale, both our data and their data, and for us to easily introduce new functionality, both AI and conventional, for our clients to test and learn and quickly implement and then put into production. A very good example of this is model governance, an AI-first solution which virtually eliminates vast amounts of work related to comply with regulatory and internal improvement requirements for credit model evaluation and approval. Clients building models in Ascend can now access this module, which saves huge amounts of time and expense in what are time-consuming operationally complex but mission-critical functions. And there are many more products in development. For a standalone, we expect to have agentic solutions covering five major categories of activity this year, each category representing an agglomeration of many different capabilities or activities bundled together. And we have more than double that number of categories in production for 26 and beyond. I want to bring this to life for you with a Tier 1 client example. The client here is a long-term data partner of Experian, a very large global financial services provider. And we've taken them on a journey which started with really our data and the value of our data. It then migrated into the integration of our data and our software. They used to be just a client that consumed Bureau data and other data sources. They also used legacy experience software as well as competitive software and in-house systems. And these are all now moving onto the platform. Initially, they acquired our data quality tools, which helped them to actually enhance their decision systems by ensuring consistency and usability of their own data as well as ours. They then took the sandbox to help them actually accelerate the insights and analytics that they can derive from that data across the entire product lifecycle. And now they're looking at how to deploy models like AI Model Risk Manager. And this strategy really gives us the ability to enable more modules for clients in a managed way. It's a convergent strategy which creates incredible performance and value for clients. And of course, it opens up new value pools for us. We showed them the value of bringing all these capabilities into one place. They saw the benefits of this in not only just reducing the number of vendors or in-house systems, but the power of data in one place can bring to them. And this led naturally into a much longer partnership type arrangement with increased tenure, in this case from three to five years, and a substantial revenue uplift over the term of the contract period. And we can continue to grow from here by bringing new value to the table using the platform in situations like this. So AI is already helping our revenue growth and margin today. It's driving productivity improvements. It's speeding up and reducing the cost of new product development. and it is the fuel for our future investment. As we look at our addressable markets, the constraint we historically faced was the time it took to develop new products to market, and the time for these products to gain acceptance and adoption. And it often needed a catalyst to create conditions for change, and we believe that AI is that catalyst, and that we have a huge amount of white space that is now more accessible to us than ever before. So we see continued opportunities both internally through improving productivity and many new product opportunities. In short, we're very excited about the opportunities this brings and we're positioning our business to capitalize and we intend to take full advantage of the opportunity this presents to us. Now many of the new products that I've referenced contributed towards our successful H1. As just illustrated, Ascend platform momentum continues. The range of capabilities in the platform will continue to expand, and it now encompasses AI data, analytics, marketing, and credit services, together with complex decisioning. And our progress with clients has been strong, and as the chart here shows, we've seen rapid adoption. We've recently introduced new cash flow scores and analytics. These combine credit data with AI-powered real-time cash flow data and categorization. This innovation strengthens predictive power scores and results in higher approvals with enhanced model accuracy. Client demand is strong here, too, and our pipeline is expanding rapidly. And we've also integrated ClearSale in Brazil, and we're commencing the launch of new products with the ClearSale acquisition, but also new propositions like Sarasa Pass. This introduces reusable identities and has applications across both B2B and B2C. In consumer services, we're focused on delivering deeply personalized experiences by leveraging experienced data assets. At the center of this strategy is EVA, which already is an agentic assistance, providing not only guidance, but also taking actions on behalf of consumers. Confirm Your Home uses Experian North America property data to provide home value and mortgage insights. It forms the hub for our new home vertical, and leverages data from our B2B housing business. Over 2 million interactions have been initiated with EVA on our consumer services platform. And just two other quick examples to highlight are the Serasa Pass in Brazil I just mentioned, which has consumer applications and will provide secure logins to third-party digital properties using Serasa credentials, and the enhanced UKNI refi feature, which supports debt consolidation for consumers. And these are all small examples of the extensive product innovation roadmap, which is designed to drive higher consumer engagement, greater efficiency for our clients, and extend us into new monetizable value pools. So let's now turn to our H1 regional performance. North America delivered strong momentum with Q2 strength driving 10% H1 organic revenue growth. Financial services, excluding mortgage, was fueled by new client wins and client expansions. amid a steady and consistently improving lending environment. In financial services, clients can access credit, clarity, and cash flow data through a single integration, which unlocks new potential with significant wins and a growing list of prospects. The Ascend analytical platform saw continued progress with new clients for Ascend marketing, further sandbox adoption, and rising interest in the fraud sandbox. The Experian AI Systems has also driven cross-sell opportunities with deepened client relationships. Vertical has delivered strong growth in health. Patient Access Curator is transforming how the industry understands a patient's insurance picture to reduce claims denials and accelerate payments. It's positioned Experian as the market leader with a first-to-market AI solution performing substantially ahead of existing products. The milestone partnership we previously discussed in auto has expanded availability of our vehicle history reports across dealer networks, strengthening earnings quality through a long-term agreement, and reinforcing our track record for innovation-led wins. And in targeting, Audigent is also an excellent start, driving momentum in audience targeting and activation. So now I'd like to provide some comments on the recent changes to the U.S. mortgage market. The FHFA's recent decision to introduce score choice into the conforming mortgage market has introduced new competition and a market opportunity of advantage score. Like in any of our markets, we believe the primary value lies here with the data, as a score cannot be generated without the data. And there has been much debate on this issue of where value resides, score or data, but I'll summarize it with an important data point. Roughly 50% of all mortgages in the U.S. are acquired by the GFC In determining whether to buy a loan, the GSEs are reliant on the data that we and the other bureaus provide. By contrast, the GAs do not rely on the FICO score in their buying decision. They don't need it. In fact, just last week, Fannie Mae removed the minimum 620 FICO score requirement from its desktop underwriting system and official selling guide. And just to quote Fannie Mae's selling guide, credit scores are not an integral part of that risk assessment because they perform their own analysis of the credit report data. While scores are used to help borrow communication, pricing adjustments, and the secondary markets, it's clear that Vantage Score can also easily enable these use cases. Now, up to now, Vantage Score has not been approved for use in mortgage, largely due to inertia more than anything else, as Vantage Score outperforms the FICO score currently used in the mortgage market. Where VantageScore has been used in unsecured lending, and in cards, auto, and other non-mortgage categories, it's actually already captured substantial share. And we estimate this to be around 30% for lending originations based on our internal data. Now that it is approved for mortgage, we expect that VantageScore will gain share in the same way that it's done in unsecured lending. And we will be facilitating lender and consumer choice through the Experian score choice bundle, and by making Vantage Score available in the Ascend sandbox. We expect this to be a long-term opportunity for Experian, with a shift to Vantage Score driving millions more scoreable consumers, and ultimately greater mortgage origination activity. As this happens, we expect our profitability to be further enhanced, but to be clear, we do not need a shift to Vantage Score to protect our position in the value chain. That resides in our data, and the GSC's and every industry participant knows that it is the data that matters. Now turning now to consumer services, organic revenue growth for the half was 8% or 12% excluding data breach. Membership, marketplace, and partner solutions all contributed favorably in the half. In membership, we're delivering new value to deepen engagement and drive upsell from across our ecosystem. We saw particular strength in marketplace as lenders compete for prospects, with clients leveraging Activate to deliver credit and personal loan offers, improving their efficiency. Activity was robust across both cards and personal loans, supported by our popular no-ding decline card feature and expanded panel, and insurance tools continue to make good progress. Turning now to Latin America, over the past few years, we've built a superior product portfolio in Brazil, and we continue to make good strategic progress. While high interest rates and consumer indebtedness have tempered B2B growth, progress in consumer services has been strong. We're particularly excited by the prospects arising from the integration of ClearSale with our credit risk B2B platform. We've built a healthy pipeline for new blended fraud and credit risk products. Prospects for Ascend Analytics are also strong, alongside an encouraging outlook for our SME segment driven by client growth and upsell into advanced solutions. Despite high interest rates and election uncertainty, we're well-positioned to strengthen market leadership in H2 and beyond. 18% growth in Latin American consumer services is a strong result, driven by our expanded opportunity and diversification around financial empowerment and leveraging our strong brand presence in Brazil. The PNOME performed well as consumers managed rising indebtedness. Our Q3 credit fair will further support Brazilian consumers to manage their finances. And our credit marketplace is scaling rapidly and contributed meaningfully in this half. New payroll loan offers will deepen our marketplace further to serve the 40 million plus Brazilian eligible Brazilian consumers. Progress also continues in insurance as we continue to add new large insurance insurers to our panel. The UK and I delivered 1% organic revenue growth, which was led by consumer services. While not yet fully reflected in revenue performance, B2B new business achievement was good. Ascend Sandbox proof of value is converted into major wins and uplift renewals with leading financial institutions, including a tier one enterprise partnership. More proof of concepts are pending and new module introductions are planned. COVID aside, UK consumer services grew at its fastest rate in a decade. We've transformed this business with an enhanced consumer experience. new features like refi for debt consolidation, and by leveraging EVA. The enhanced analytics we delivered through the Activate platform has led to exclusive credit offers on our platform, and this drove strong marketplace performance. Turning now to me and Asia Pacific, organic revenue growth delivered 6%, which was another solid year of progress, with total revenue of 35%, including the acquisition of Illium. The ILEON acquisition integration is on track. It drove the 480 basis points regional margin uplift. And our combined bureaus in Australia now offer a strong and differentiated consumer data asset. We've introduced the Ascend Data Hub and Ascend Ops to Australia to leverage our pre-acquisition leadership and decisioning. And with the combined bureau data now available, we have really good interest in the Ascend sandbox. We've also advanced our technology and back office integration while streamlining legacy and non-core portfolio elements. Regionally, organic H1 progress spanned our geographies, supported by new product introductions and leveraging our global solutions. So with that overview, I'm gonna hand over to Lloyd for the financials.

Thanks, Brian, and good morning, everyone. As you've seen, we delivered another very strong performance in the first half, with total revenue growth of 12% at constant rates and 13% at actual rates. This was driven by organic revenue growth of 8% at the top end of our guidance and a further 4 percentage points from acquisitions. Benchmark EBIT margin from ongoing activities progressed well, up 50 basis points at constant rates and 30 basis points at actual rates. EBIT growth was 14% at both constant and actual rates. And this converted well into EPS growth with 13% at constant rates and 12% at actual rates. Operating cash flow grew 25%, reflecting a 77% conversion in the half. And our growing capital base continues to generate very high post-tax returns on capital employed of around 16.5% for the half year. As Brian mentioned, we announced an interim dividend of 21.25 cents, which is up 10% on the prior year. And finally, we continue to be very strongly financed with our net debt to EBITDA ratio at 1.8 times. Turning to our medium term framework, we're in the second year of delivery against this medium term framework and continue to execute confidently and well on our strategic plans. And financially, we continued last year's momentum with high single digital organic growth, strong organic margin progression, and the benefits of capital discipline and deployment all being delivered in this half year. And if you look back over a longer time horizon at our performance here over the last six years, you can see we've delivered consistently strong financial results across all of our key financial metrics. Since FY20, we've grown half one revenue at an 8% compound annual growth rate. Benchmark EBIT has grown 9% compound, benchmark EPS, 10% compound, and operating cash flow at 17% compound. And this highlights the quality and consistency of the strategic execution over this period as our business scales. Looking at more current trends, organic revenue growth was at the upper end of the expected performance range for the first half. All our regions contributed to half-won growth, with North America at 10%, 4% in LATAM, 1% in the UK and Ireland, and 6% in EMEA and Asia Pacific. By quarter, organic revenue growth strengthened from 8% in Q1 to 9% in Q2, supported by a one-time volume true-up in the North America consumer services business, which added 1% to group growth in the second quarter. Looking at organic revenue growth across our segments, here on the left-hand chart, you can see B2B organic revenue growth was 7% in Q2, with good growth across both financial services and verticals. and was underpinned by client wins, cross-sell, and new product innovations. North America was the key driver, growing at 11% for Q2, with 12% growth in financial services, 15% in automotive, and 10% in health. Financial services growth excluding mortgage was 12%, with mortgage growth of 41% on modestly lower volumes. On the left-hand side is the consumer services trend in total and excluding, sorry, on the right-hand side consumer services trend in total and excluding our data breach business. As the elevated data breach comparable fell away in Q2, consumer growth rebounded to 12% globally in Q2 and 13% in North America. And in the yellow diamonds, you can see the strength and consistency of the underlying consumer growth excluding data breach. Turning now to EBIT margin. And last year, in the first half, we added 70 basis points to margin, and this year, we delivered 100 basis points of organic constant currency margin expansion, primarily due to broad strength across the North America business. Organic margin progression has been driven by broad-scale productivity improvements as our businesses scale. We're also seeing tangible benefits from AI deployment across our business. Organic headcount is broadly flat this year, thanks to these productivity programs, whilst organic revenue grew by 8%. And we see many exciting applications of AI in our business, which can continue to drive productivity. Including acquisitions, total EBIT margin from ongoing activities increased 50 basis points at constant rates and 30 basis points at actual rates to 28.3%. On a regional level, North America's EBIT margin added 90 basis points from broad expansion across the portfolio. UK and Ireland added 60 basis points, and EMEA and Asia Pacific expanded 480 basis points due to the addition of ILIA. Latin America margin contracted by 240 basis points, largely due to the temporary effect of the integration of acquisitions. And when considering our segmental margins over a longer-term timeframe, here you can see that the B2B margins have been relatively consistent at around 30% since FY20, despite the temporary dilution from recent acquisitions and cloud transformation dual run costs. As previously indicated, the dual run costs peak this year and will trend down from FY27. And the margin from our recent acquisitions will trend to group average margin over around three years. consumer segment margins have expanded from 21% in half one 2020, reaching 30% in the first half this year, which has resulted from scaling our audience to over 208 million members and the growing breadth of our consumer propositions. Turning now to EPS, where last year we delivered 8% growth in half one, and this year we've delivered double-digit growth of 12% at actual rates. Benchmark continuing EBIT grew 15% at constant currency due to strong revenue growth and 50 basis points of margin expansion at constant rates. The combination of interest expense reflecting acquisition funding and a slightly higher tax rate resulted in 13% EPS growth at constant currency and 12% at actual rates. So over a two-year period since we began our medium-term framework, the increase in first half EPS is over 20%. Take a look now at our usual reconciliation to statutory results. Our benchmark profit before tax grew 13% at actual rates driven by revenue performance and good margin progression. Acquisition-related expenses increased to $32 million due to the acquisitions of ClearSale, Illion, and Audigent. And there was little change in the fair value of contingent consideration on prior acquisitions, and restructuring-related costs were $3 million for the half. And the above items resulted in a statutory profit before tax and non-cash items of just over a billion, representing a 12% growth at the half, which is broadly in line with the growth in benchmark PBT. Non-cash items included an increase in amortization of acquisition intangibles, and financing remeasurements were 92 million favorable versus a 93 million adverse in the prior year. And this swing was principally driven by re-measurements on Brazil intergroup funding, resulting in a statutory profit before tax at $975 million, or 36% growth on last year. So now turning to cash flow and return on capital. On the left-hand chart shows our long-term operating cash flow and conversion metrics. As you can see from the slide, we delivered strong growth on half one operating cash flow, growing at 17% compound rate since FY20. This half year, we generated around 900 million of operating cash flow at a 77% conversion rate. A key part of our 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 to around $10 billion, whilst delivering consistently high post-tax returns, this year at 16.5%. Turning to capital investment, we have significantly progressed with our cloud transformation program and well on the way to our expected position of over 85% of processing in the cloud in our U.S. and Brazil businesses outside of health by this year end. As we approach the latter stages of the program, we expect to benefit from the reduced dual run costs and lower change-related capital investments. And this will allow us to expand our innovation and AI investment activities to drive future growth all within the financial envelope of our medium-term framework. As we materially complete our cloud technology program, we're very strongly financed. Our key leverage measure of net debt to EBITDA was 1.8 times at the half year. Our fixed debt level stands at around 60% at the half year, and we have an average tenor of five years remaining. And our average interest rate is 3.5% in the half. Our benchmark net interest expense guidance for the full year remains at around $190 million. So turning now to our full-year modeling considerations, which relate to ongoing activities, based on the strength of our half-won performance, we now expect organic revenue growth for the full year to be around 8% at the top end of our previous guidance range. And we continue to expect a 3% inorganic contribution from completed acquisitions. Based on recent FX rates, we now expect FX to be a 1% tailwind to both revenue and EBIT growth. And beyond these points, we don't expect any other changes to our guidance. So with that, I'll hand you back to Brian. Great.