TIDMEXPN
RNS Number : 5255G
Experian plc
16 November 2022
news release
Strong delivery in H1 driven by new products, new business wins
and consumer expansion
7am, 16 November 2022 -- Experian plc, the global information
services company, today issues its financial report for the six
months ended 30 September 2022 .
Brian Cassin, Chief Executive Officer, commented:
"We delivered another strong performance in H1 driven by new
products, new business wins and consumer expansion. Total revenue
growth from ongoing activities was 7% at actual exchange rates and
9% at constant exchange rates. Organic revenue growth was 8%. While
we expect economic conditions to be tougher over the balance of the
year, and face some stronger comparables in Q3, our full year
expectations are unchanged. We expect organic revenue growth of
between 7-9%, total revenue growth of between 8-10% and modest
margin accretion, all at constant exchange rates and on an ongoing
basis.
"With many households and businesses facing a difficult period
of rising costs in the coming months, we will also continue to push
ahead with our mission to help millions of people improve their
financial health and save money."
Benchmark and Statutory financial highlights
-------------------------------------------------------------------------------------------------
2022 2021 Actual Constant Organic
US$m US$m rates growth rates growth growth
% % %(2)
--------- --------- -------------- -------------- --------
Benchmark(1)
Revenue - ongoing activities(3) 3,233 3,026 7 9 8
Benchmark EBIT - ongoing
activities(3,4) 881 813 8 8 n/a
Total Benchmark EBIT 873 806 8 8 n/a
Benchmark EPS USc 65.4 USc 61.7 6 6 n/a
Statutory
Revenue 3,247 3,061 6 n/a n/a
Operating profit 513 702 (27) n/a n/a
Profit before tax 517 654 (21) n/a n/a
Basic EPS USc 33.5 USc 56.5 (41) n/a n/a
First interim dividend USc 17.0 USc 16.0 6 n/a n/a
--------- --------- -------------- -------------- --------
1. See Appendix 1 (page 15) and note 5 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 2021 have been re-presented for the reclassification to
exited business activities of certain Business-to-Business (B2B)
and Consumer Services businesses, detail is provided on page 12 and
in notes 6(a) and 7 to the condensed interim financial
statements.
4. See page 16 for reconciliation of Benchmark EBIT from ongoing activities to Profit before tax.
Highlights
-- A good half of strategic and financial progress. Q2 organic
revenue growth was 8%, to give 8% for the half, with selective
acquisition in-fills taking total revenue growth from ongoing
activities to 9% at constant exchange rates.
-- Consumer Services organic revenue up 12%, as we address new
value pools with broader propositions, serving 145 million free
members, up 11 million over the past six months.
-- B2B organic revenue growth of 7% supported by expanded data
assets, enhanced analytics, wider adoption of our new platforms,
and addressing new client segments.
-- Significant expansion in Latin America, and good performances
across North America and the UK and Ireland (UK&I).
-- Plan to deliver enhanced focus and improved operating
performance in key EMEA/Asia Pacific markets is well under way.
Started phased exit from identified markets. Group revenue and
Benchmark EBIT are re-presented as a result of these planned market
exits.
-- Benchmark EBIT rose 8% to US$873m. Ongoing Benchmark EBIT
margin of 27.3%, compared to H1 FY22 reported margin of 26.3% and
re-presented prior-year comparative margin of 26.9%.
-- Statutory profit before tax of US$517m down from US$654m,
predominantly due to a non-cash charge for the impairment of
goodwill of US$152m in EMEA, and an increase to the fair value of
contingent consideration. Basic EPS down from USc 56.5 to USc 33.5
reflecting the lower profit before tax and an increased tax
charge.
-- First interim dividend up 6% to 17.0 US cents per ordinary share.
Experian
+44 (0)20 3042
Nadia Ridout-Jamieson Investor queries 4200
Gerry Tschopp Media queries
Tulchan
Graeme Wilson, Louise Male and +44 (0)20 7353
Guy Bates 4200
There will be a presentation today at 9.30am (UK time) to
analysts and investors via conference call. To view the slides and
listen in online please go to www.experianplc.com for the link.
Experian will update on third quarter trading for FY23 on 17
January 2023.
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 14 and note 26 for further
information on risks and uncertainties facing Experian.
Company website
Neither the content of the Company's website, nor the content of
any website accessible from hyperlinks on the Company's website (or
any other website), is incorporated into, or forms part of, this
announcement.
About Experian
Experian is the world's leading global information services
company. During life's big moments - from buying a home or a car,
to sending a child to college, to growing a business by connecting
with new customers - we empower consumers and our clients to manage
their data with confidence. We help individuals to take financial
control and access financial services, businesses to make smarter
decisions and thrive, lenders to lend more responsibly, and
organisations to prevent identity fraud and crime.
We have 21,700 people operating across 30 countries and every
day we're investing in new technologies, talented people, and
innovation to help all our clients maximise every opportunity. We
are listed on the London Stock Exchange (EXPN) and are a
constituent of the FTSE 100 Index.
Learn more at www.experianplc.com or visit our global content
hub at our global news blog for the latest news and insights from
the Group.
Part 1 - Chief Executive Officer's review
Experian has started the year well and we are making good
progress, both strategically and financially. In the first half of
the year, we delivered revenue growth from ongoing activities of 9%
at constant currency, while organically we grew 8%. This is
sustained by our investment in people, data, new products and in
our technology platforms. Our performance is a great credit to our
21,700 people around the world.
All regions delivered revenue growth in H1. Growth in Latin
America has been outstanding, and we are making progress with the
repositioning of EMEA/Asia Pacific. Turning to our business
activities, we now reach 145 million free consumer members across
our three largest markets, up 19% year-on-year, and we continue to
drive towards our ambition of creating the world's most inclusive
financial platform. Consumer Services is delivering strong growth
as we address this opportunity. Our B2B activities have been
strong, reflecting good demand for our data, analytical insights
and value-added products as companies invest in digitising their
businesses.
Like all businesses, our financial performance depends to a
certain extent on macroeconomic factors, and we are monitoring the
headwinds in the global economy and the growing pressures on
consumers and businesses as they deal with higher inflation and
rising costs. We have a key role to play in helping our communities
deal with these pressures by providing guidance and tools which
help consumers and businesses manage their finances and save money.
As a business, we also have a long track record of resilience which
will help us to weather short-term uncertainties. We are very
confident that the investments we are making will sustain our
growth outlook over the medium term and will help us to unlock the
tremendous opportunities that lie ahead of us.
First-half financial highlights
-- Total revenue growth from ongoing activities was 7% at actual
exchange rates and 9% at constant currency. Organic revenue growth
was 8%. Organic revenue growth is determined on a constant currency
basis and for ongoing activities.
-- By quarter, organic revenue growth was 8% in Q1 and 8% in Q2.
-- We delivered good organic revenue growth across our three
largest regions, up 8% in North America, 18% in Latin America and
5% in UK and Ireland (UK&I).
-- We have made good progress towards repositioning EMEA/Asia
Pacific, where organic revenue growth was 4%. We are focusing on
key geographies and implementing a programme to reduce regional
overheads and exit sub-scale activities. We expect to close or
dispose operations in a number of countries, accounting for revenue
of US$67m and Benchmark EBIT of US$(7)m in the full year ended 31
March 2022. Following a number of closures, revenue and Benchmark
EBIT for the first half of FY23 for exited activities was US$14m
and US$(8)m respectively. We have re-presented a number of
comparative values in our condensed interim financial statements
for ongoing activities, with a reconciliation included on page
12.
-- B2B organic revenue growth was 7%, reflecting strength in
data, strong demand for analytics and platforms and successful
expansion into new market segments.
-- Consumer Services delivered organic revenue up 12%. This
reflects growth in our membership base, ever-more valuable
relationships with our members and the expansion of our ecosystem
of consumer offers.
-- Benchmark EBIT was up 8% at both constant and actual exchange rates.
-- Our Benchmark EBIT margin for ongoing activities was 27.3%.
This compared to the FY22 reported margin of 26.3% and a
re-presented prior-year comparative margin of 26.9%. The currency
exchange benefit was 70 basis points.
-- We delivered growth in Benchmark earnings per share of 6% at
both constant and actual exchange rates. Basic EPS was USc 33.5
(2021: USc 56.5), predominantly due to a goodwill impairment in
EMEA of US$152m due to higher interest rates and macroeconomic
weakness in our European markets, and an increase to the fair value
of contingent consideration .
-- Cash flow conversion of Benchmark EBIT into Benchmark
operating cash flow was 88%, in our seasonally weaker half of the
year for cash flow generation. Benchmark operating cash flow was
US$0.8bn, up 7% at actual exchange rates.
-- We ended the period with Net debt to Benchmark EBITDA of
1.9x, compared to our target range of 2.0-2.5x. Our financial
position is strong, with no debt refinancing due until September
2024 and over 90% of our current debt at fixed interest rates for
the next two years.
B2B organic revenue growth was 7%:
-- We delivered organic growth in Data of 6%. North America
delivered a strong performance, with growth in core bureau
(excluding mortgage), verification services, automotive and
targeting. We also benefitted from the uptake of positive data
attributes and scores in Brazil. Ascend implementations continue to
grow.
-- In Decisioning, where organic revenue rose 8%, we secured new
wins for our cloud-enabled decisioning platforms, as well as for
fraud and identity management and for analytics. Health performed
well.
Consumer Services organic revenue growth was 12%:
-- We now have 145 million free consumer memberships across our
three largest markets, up by 23 million year-on-year.
-- We delivered double-digit revenue growth in North America and Brazil, while UK&I was flat.
Other financial developments
Central Activities decreased from US$82m to US$56m in the six
months ended 30 September 2022. This reflected one-off costs
recorded in the prior year related to a catch up in our incentive
programme and a favourable foreign exchange movement.
Benchmark PBT was US$811m, up 8% at actual exchange rates, after
a higher net interest expense of US$62m (2021: US$55m). Benchmark
net finance expense increased by US$7m, reflecting increasing
interest rates on short term debt. For FY23, we continue to expect
net interest expense to be around US$120-125m.
The Benchmark tax rate was 26.0% (2021: 24.8%). For FY23, we
continue to expect a rate of around 26% (FY22: 25.7%), taking into
account expected profit mix for the year.
Our Benchmark EPS was USc 65.4, an increase of 6% at both
constant and actual exchange rates. The weighted average number of
ordinary shares (WANOS) remains at 914m. For FY23, we expect WANOS
of circa 914m.
Non-benchmark items:
-- Statutory PBT was US$517m, down US$137m, as a result of increased non-benchmark costs.
-- Macroeconomic conditions have contributed to a non-cash
impairment of goodwill of US$152m partially offset by a gain on
financing fair value remeasurements of US$59m.
-- We have incurred a charge of US$66m for increased contingent
consideration due to over-performance on prior acquisitions.
-- We have also continued to execute on our plans to streamline
our geographic and operational footprint in EMEA/Asia Pacific and
associated global functions. In connection with this programme, we
have incurred costs of US$28m in the half, including US$20m of
restructuring and US$8m of onerous global support costs for exited
businesses.
Reconciliation of statutory to Benchmark measures for the six
months ended 30 September 2022
Statutory Non-benchmark and other items Benchmark
Investment- Goodwill Amortisation Non-cash Exceptional
related impairment of financing items(2)
items(1) acquisition items
intangibles
US$m US$m US$m US$m US$m US$m US$m
----------- ---------- ------------ ------------ -------------- ----------- ------------ ---------- ----------
3,233 - - - - - 3,233 Ongoing
14 - - - - - 14 Exited
----------- ---------- ------------ ------------ -------------- ----------- ------------ ---------- ----------
Revenue 3,247 - - - - - 3,247 Revenue
521 90 152 93 - 25 881 Ongoing
(8) - - - - - (8) Exited
----------- ---------- ------------ ------------ -------------- ----------- ------------ ---------- ----------
Operating Benchmark
profit 513 90 152 93 - 25 873 EBIT
Profit
before Benchmark
tax 517 89 152 93 (65) 25 811 PBT
Basic Benchmark
EPS USc 33.5 9.6 16.6 7.5 (5.7) 3.9 65.4 EPS USc
----------- ---------- ------------ ------------ -------------- ----------- ------------ ---------- ----------
1. Investment-related items include the Group's share of
continuing associates' Benchmark post-tax results.
2. Exceptional items are analysed in note 8 to the condensed interim financial statements.
Foreign exchange translation was neutral to Benchmark EPS. For
FY23, we now expect a foreign exchange translation effect of circa
-3% impact on revenue, flat on Benchmark EBIT and circa +60 basis
points on Benchmark EBIT margin, assuming recent foreign exchange
rates prevail.
Capital allocation and liquidity
-- Cash generation was good with 88% conversion of Benchmark
EBIT into Benchmark operating cashflow (2021: 89%) . Benchmark
operating cash flow was US$0.8bn, up 7% at actual exchange rates.
The increase is due to the mix of growth, strong control of working
capital and some phasing.
-- We continued to invest in data, technology and new products
through capital expenditure, which represented 9% of total revenue.
We plan to sustain strong levels of investment to support our
growth, and for FY23 we continue to expect capital expenditure to
represent circa 9% of total revenue.
-- We invested US$287m through acquisitions and US$7m of
investments in support of our strategic initiatives. Acquisitions
were principally in income verification and employee services, and
included CIC Plus, Inc. (CIC Plus) in North America, and Pay
Dashboard Ltd and the Work Report in UK&I.
-- We are announcing a first interim dividend of 17.0 US cents
per share, up 6%. This will be paid on 3 February 2023 to
shareholders on the register at the close of business on 6 January
2023.
-- We have executed a net US$113m of our FY23 share repurchase
programme, which mainly offsets deliveries under employee share
plans.
-- Our bonds, including derivatives, totalled US$3.8bn as at 30
September 2022 and had an average remaining tenor of six years.
Undrawn committed bank borrowing facilities were US$2.4bn as at 30
September 2022 (2021: US$2.4bn).
-- At 30 September 2022, Net debt to Benchmark EBITDA was 1.9x,
compared to our target leverage range of 2.0-2.5x. We have no
refinancing commitments until September 2024. Over 90% of our
current debt is at fixed interest rates for the next two years and
60% fixed for at least six years.
Environmental, Social and Governance (ESG)
-- More than 11 million US consumers have now connected to
Experian Boost, helping over eight million to improve their credit
score. The most recent enhancement allows consumers to add rental
payments to their credit file helping more people improve their
credit score. We were pleased that Experian Boost was recognised in
Fast Company's 2022 World Changing Ideas Awards.
-- Since the launch of Experian Go in January, over 90,000
'credit invisible' consumers in the US have connected to the
platform and created new credit profiles.
-- Experian was certified as a Great Place to Work in 22
countries, with over 90% of participating employees agreeing that
people are treated fairly regardless of their sexual orientation,
race, age and gender, 89% agreeing that Experian makes the
workplace accessible for them, and 85% agreeing that Experian is a
great place to work.
-- We launched a multi-year Diversity, Equity and Inclusion
(DEI) learning plan which includes customised learning this year
for our Group Operating Committee, their leadership teams, and
4,000 people leaders globally. This will be rolled out globally to
all employees next year.
-- Following two recent appointments, our Board is now comprised
of 45% women and 73% independent members (including the Chair). Our
Board meets the recommendations of both the FTSE Women Leaders
Review on gender diversity and the Parker Review on ethnic
diversity.
-- Experian is committed to helping tackle climate change and
reducing our impact on the environment. We continue to make
progress and since the FY22 year-end have increased our use of
renewable electricity from 32% to 60%.
Part 2 - Regional highlights for the six months ended 30
September 2022
Year-on-year % change in organic(1) revenue Benchmark
- for the six months ended 30 September EBIT
2022 margin(2)
% of Group Data Decisioning B2B Consumer Total Total
revenue(3) Services
------------ ------ --------------- ----- ----------- ------- -----------
North
America 68 5 7 5 12 8 33.8%
------------ ------ --------------- ----- ----------- ------- -----------
Latin
America 14 15 21 16 29 18 27.2%
------------ ------ --------------- ----- ----------- ------- -----------
UK and
Ireland 12 9 4 7 0 5 19.6%
------------ ------ --------------- ----- ----------- ------- -----------
EMEA/Asia
Pacific 6 2 7 4 n/a 4 (2.0)%
------------ ------ --------------- ----- ----------- ------- -----------
Total
Global 100 6 8 7 12 8 27.3%
------------ ------ --------------- ----- ----------- ------- -----------
1. At constant exchange rates.
2. At actual exchange rates.
3. Percentage of Group revenue from ongoing activities
calculated based on FY23 H1 revenue at actual exchange rates.
North America
We delivered strong growth in North America. Revenue was
US$2,204m, with total and organic revenue growth of 8%.
Acquisitions included CIC Plus, in employment services, and Gabi,
in Consumer Services.
In B2B, organic revenue growth was 5%. Data and Decisioning
revenues have performed strongly, excluding mortgage, reflecting
new business progress and new product contributions. While some
clients have tightened criteria for lending into certain customer
segments, bureau volume activity has remained relatively strong
reflecting ongoing acquisition and prospecting activity by Tier One
clients and the addition of new client mandates to our mix. Our
clients also remain focused on accelerating their shift to digital
platforms to remove cost and manage higher inflation. We are
catering to this by expanding our data assets, providing new ways
to analyse trends through scores, attributes and models, and with
value-added platforms that assist automation. This has resulted in
further growth from Experian Ascend, growing success of our
Experian PowerCurve platform in the mid-market and continued growth
across fraud, identity management and analytics. We also continue
to make excellent progress in income and employment verification
services, where we are adding new clients and where our record
count has grown to 43 million.
Our Automotive, Targeting and Health verticals also performed
well. Automotive performance was solid, reflecting some market
recovery and good performance by key propositions such as our
Experian Marketing Engine. Targeting also performed strongly, with
growth across digital activation and identity management. In
Health, we saw strong demand for solutions that drive digital
patient interactions and payment certainty, offsetting reduced
demand for COVID-19 linked products.
Consumer Services delivered organic revenue growth of 12%. We
introduced several new consumer offers in the half, helping us to
expand our audience, further engage our membership base and
diversify our sources of revenue. Memberships have grown to 57
million, up by 10 million year-on-year. Exciting new features
include further ways to add data for rental payments via Experian
Boost, which could help millions of renters in the USA to access
credit at more affordable rates. We also introduced new ways to
help our members save money through a bill negotiation feature that
enables consumers to determine if they are overpaying on eligible
bills . We have brought to market a new way for consumers to take
the hassle out of shopping for car insurance in our bid to
re-invent the insurance comparison experience in the USA. Taken
together, these add to our revenue potential while also
diversifying our business model. While lenders have become more
selective in their acquisition strategy, our credit marketplace has
grown strongly and we are adding new sources of revenue via our
digital insurance agency. As expected, premium revenue increased
modestly as we lap strong prior-year comparables, and more
recently, we have seen early signs of improved premium membership
enrolments.
Benchmark EBIT was up 1% to US$745m, suppressed by the ongoing
mortgage drag, growth investments in verification services and our
insurance marketplace, as well as the changing business mix due to
the higher growth of Consumer Services compared to our B2B
activities. Benchmark EBIT margin was 33.8%, down 240 basis points,
due to the aforementioned factors.
Latin America
Latin America has performed strongly, delivering revenue of
US$449m, with organic revenue growth of 18% and total revenue
growth at constant currency of 22%. Acquisitions contributing to
our performance included Sinacofi, our new bureau in Chile, and
PagueVeloz, which adds to our Consumer Services activities in
Brazil.
B2B organic revenue growth was 16%.
Credit markets in Brazil are undergoing significant change
brought about by regulatory reforms. These are expanding access to
affordable credit for consumers and small and medium enterprises
(SMEs). We are at the centre of this change as demand grows for
alternative ways to analyse and manage credit risk, and we are
investing to create completely new markets. Since positive data use
was enacted, we have launched over 190 positive data products and
features, which include enhanced scores and data attributes, and
are successfully introducing Experian Ascend and Experian One, our
credit risk platforms. We have also developed new products
specifically tailored to address high growth segments of the
economy, including FinTechs and agricultural lending. We are
expanding our fraud prevention capabilities to position ourselves
as a one-stop shop to help clients deal with the growing frequency
and complexity of online fraud, and we are developing new
propositions which will help us address the opportunities emerging
from the Central Bank-sponsored Open Receivables initiative, which
will help SMEs to use trade receivables as collateral for
credit.
Spanish Latin America also performed strongly. Our global
platforms have become a critical growth enabler for our Spanish
Latin America business. As our bureau presence grows, we are
combining the power of our data assets and our advanced analytics
and platforms such as Experian Ascend, to grow our position with
clients and expand into new areas.
Consumer Services delivered organic revenue growth of 29%. Our
ambition in Brazil is to provide credit access to all and we
continue to make good progress towards this goal. We added 11
million consumer memberships year-on-year to take our total free
membership base to 76 million. Our debt resolution service, Limpa
Nome, has performed well as new partners joined the platform,
increasing the number of lenders consumers can renegotiate their
debts with. Our premium proposition performed well, with a good
response to our new 'lock/unlock' feature, which helps consumers
manage their identity online, and we are at the early stages of
developing an e-wallet payment service.
Benchmark EBIT in Latin America was US$122m, up 38% at constant
exchange rates. The Benchmark EBIT margin from ongoing activities
at actual exchange rates was 27.2%, up by 320 basis points.
Progress reflected revenue acceleration and improving margin in
Consumer Services as the business scales, even as we invested in
developing new market opportunities.
UK and Ireland
Against a weakening macroeconomic backdrop, the UK and Ireland
delivered a good performance overall. Revenue was US$378m. Total
revenue growth was 6% and organic revenue growth was 5%, both at
constant exchange rates.
B2B was resilient in H1, delivering organic revenue growth of
7%, with particular strength in our core bureau activities,
analytics and identity management. More recently, volatility in UK
economic policy has led to some changes in client behaviour, with
lenders generally becoming more focused on risk-based analysis and
adjusting their criteria for new customer acquisition. In financial
services, we have seen increased demand for capabilities such as
economic-change analytics, affordability analysis and detailed
customer segmentation analysis. Amongst our utility and energy
clients, we see greater demand for analytics which reveal the
impact of energy price increases on households. In
telecommunications, focus has shifted to our debt management
capabilities. As we support our clients in these countercyclical
activities, we expect to sustain solid growth in UK&I B2B
revenue over the balance of the year, assisted also by the recent
strength of our new business performance. We also continue to
invest in our strategic initiatives. We have invested in, built and
launched new income verification capabilities, beginning with data
partnerships with large UK payroll providers. We have made a rapid
start, securing access to 20m UK Pay As You Earn (PAYE) records
representing 70% of the UK PAYE workforce. We have also commenced
the UK&I implementation of our Group-wide technology migration
initiative.
Organic revenue in Consumer Services was flat, with strong
growth in transaction volumes across our credit matching
marketplace, offset by moderation in our premium subscription
services as we lapped a strong prior year comparable. Free
memberships were 12m.
Benchmark EBIT from ongoing activities was US$74m, down 3% at
constant exchange rates. The Benchmark EBIT margin from ongoing
activities was 19.6% (2021: 21.1%). The reductions reflect start-up
investment to support our income and employment verification
initiative, the commencement of the implementation of our
technology migration plan for the UK&I and more subdued
profitability in Consumer Services.
EMEA/Asia Pacific
In EMEA/Asia Pacific, revenue from ongoing activities was
US$202m, with both total and organic revenue growth at constant
exchange rates of 4%.
We are benefitting from higher bureau volumes in Italy, new
business deals in Australia and New Zealand, and Turkey, and strong
growth across the board in India.
We are executing on a plan to focus our EMEA/Asia Pacific
operations to take advantage of scale and drive more profitable
growth. As part of this plan, we will focus on markets where we can
drive scale. We have made good progress in the first phase of
implementation, having merged the two operating regions under a
single leadership team, streamlined functional areas and identified
non-core activities to exit. We expect to close or dispose
operations in a number of countries and have commenced this
process. In the full year ended 31 March 2022, the non-core markets
accounted for revenue of US$67m and Benchmark EBIT of US$(7)m. In
the period ended 30 September 2022, the non-core markets accounted
for revenue of US$14m and Benchmark EBIT of US$(8)m. Due to higher
interest rates and macroeconomic weakness in our European markets
we have impaired goodwill in EMEA by US$152m .
In the next phase of this process, we will focus on realising
the full potential of the region by leveraging core Experian
capabilities, including Ascend, Experian One, Open Banking,
value-added services and fraud and identity management. We expect
this to lead to growth and margin accretion over the medium
term.
Our actions have led to an improved Benchmark EBIT trajectory,
which for ongoing activities was US$(4)m, up from US$(15)m in the
previous period. The Benchmark EBIT margin for ongoing activities
also improved to (2.0)% from (6.8)%.
FY23 modelling considerations
Organic revenue growth 7-9%
Acquisitions(1) 1% contribution to growth
------------------------------------
Benchmark EBIT margin(1) Modest margin improvement at
constant exchange rates for
ongoing activities; +40 basis
points for divestment and closures
------------------------------------
Foreign exchange c.-3% on revenue
Flat on Benchmark EBIT
c.+60 basis points on Benchmark
EBIT margin
------------------------------------
Net interest c.US$120-125m
------------------------------------
Benchmark tax rate c.26%
------------------------------------
WANOS(2) 914m
------------------------------------
Capital expenditure c.9% of revenue
------------------------------------
OCF(3) conversion >90%
------------------------------------
Share repurchases US$175m
------------------------------------
1. Constant exchange rates.
2. Weighted average number of shares.
3. Benchmark operating cash flow.
Group financial results
Business mix including % change in organic revenue year-on-year
for the six months ended 30 September 2022
Segment Business unit % of Group Organic revenue growth %(2)
revenue(1)
Q1 Q2 H1
---------- --------- ---------
North America 68% 7% 8% 8%
------------ ---------- --------- ---------
Data CI / BI bureaux 25% 3% 2% 3%
- CI / BI bureaux,
excluding mortgage 22% 11% 10% 11%
- Mortgage 3% (31)% (38)% (35)%
Automotive 5% 4% 11% 8%
Targeting 3% 11% 16% 13%
------------------------------------ ------------ ---------- --------- ---------
Decisioning Health 8% 5% 8% 7%
DA / Other 4% 7% 9% 8%
------------------------------------ ------------ ---------- --------- ---------
Consumer Consumer Services 23% 13% 11% 12%
--------------------- ------------ ---------- --------- ---------
Latin America 14% 18% 18% 18%
------------ ---------- --------- ---------
Data CI / BI bureaux 9% 14% 15% 15%
Other 0% 5% 42% 24%
------------------------------------ ------------ ---------- --------- ---------
Decisioning DA / Other 3% 20% 22% 21%
--------------------- ------------ ---------- --------- ---------
Consumer Consumer Services 2% 42% 18% 29%
--------------------- ------------ ---------- --------- ---------
UK and Ireland 12% 5% 6% 5%
------------ ---------- --------- ---------
Data CI / BI bureaux 5% 9% 10% 10%
Targeting / Auto 1% 3% 3% 3%
------------------------------------ ------------ ---------- --------- ---------
Decisioning DA / Other 3% 2% 6% 4%
--------------------- ------------ ---------- --------- ---------
Consumer Consumer Services 3% 0% 0% 0%
--------------------- ------------ ---------- --------- ---------
EMEA/Asia Pacific(3) 6% 3% 4% 4%
------------ ---------- --------- ---------
Total global 100% 8% 8% 8%
------------ ---------- --------- ---------
1. Percentage of Group revenue from ongoing activities
calculated based on FY23 H1 revenue at actual exchange rates.
2. Ongoing activities, at constant exchange rates.
3. Organic growth rates for EMEA/Asia Pacific have been
re-presented for the reclassification to exited business activities
of certain B2B businesses.
CI = Consumer Information, BI = Business Information, DA =
Decision Analytics.
Revenue by region
Six months ended 30 September Growth %
------
Total Total Organic
2021 at actual at constant at constant
2022 (1) exchange exchange exchange
US$m US$m rates rates rates
------ ----------- ------------- -------------
North America
Data 1,071 1,016 5 5
Decisioning 403 376 7 7
------ ------ ----------- ------------- -------------
Business-to-Business 1,474 1,392 6 5
Consumer Services 730 645 13 12
------ ------ ----------- ------------- -------------
Total ongoing activities 2,204 2,037 8 8 8
Exited business activities - -
------ ------ ----------- ------------- -------------
Total North America 2,204 2,037
------ ------ ----------- ------------- -------------
Latin America
Data 296 249 17 15
Decisioning 83 67 22 21
------ ------ ----------- ------------- -------------
Business-to-Business 379 316 18 16
Consumer Services 70 46 50 29
Total ongoing activities 449 362 24 22 18
Exited business activities - -
------ ------ ----------- ------------- -------------
Total Latin America 449 362
------ ------ ----------- ------------- -------------
UK and Ireland
Data 186 194 10 9
Decisioning 105 115 4 4
------ ------ ----------- ------------- -------------
Business-to-Business 291 309 8 7
Consumer Services 87 99 0 0
------ ------ ----------- ------------- -------------
Total ongoing activities 378 408 (7) 6 5
Exited business activities - -
------ ------ ----------- ------------- -------------
Total UK and Ireland 378 408
------ ------ ----------- ------------- -------------
EMEA/Asia Pacific
Data 149 163 2 2
Decisioning 53 56 7 7
Total ongoing activities 202 219 (8) 4 4
Exited business activities 14 35
------ ------ ----------- ------------- -------------
Total EMEA/Asia Pacific 216 254
------ ------ ----------- ------------- -------------
Total revenue - ongoing
activities 3,233 3,026 7 9 8
Total revenue - exited
business activities 14 35
------ ------ ----------- ------------- -------------
Revenue 3,247 3,061 6 8 7
------ ------ ----------- ------------- -------------
1. The results for the six months ended 30 September 2021 have
been re-presented for the reclassification to exited business
activities of certain B2B businesses, detail is provided on page 12
and in notes 6(a) and 7 to the condensed interim financial
statements.
See Appendix 1 (page 15) and note 5 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 Growth %
---------
Total Total
2021 at actual at constant
2022 (1) exchange exchange
US$m US$m rates rates
--------- ----------- -------------
Benchmark EBIT by geography
North America 745 737 1
Latin America 122 87 38
UK and Ireland 74 86 (3)
EMEA/Asia Pacific (4) (15) 71
--------- --------- ----------- -------------
Benchmark EBIT before Central Activities 937 895 5 6
Central Activities - central corporate
costs (56) (82)
--------- --------- ----------- -------------
Benchmark EBIT from ongoing activities 881 813 8 8
Exited business activities (8) (7)
--------- --------- ----------- -------------
Benchmark EBIT 873 806 8 8
Net interest (62) (55)
--------- --------- ----------- -------------
Benchmark PBT 811 751 8 7
Exceptional items (27) 5
Impairment of goodwill (152) -
Amortisation of acquisition intangibles (93) (89)
Acquisition and disposal expenses (21) (18)
Adjustment to the fair value of contingent
consideration (66) (1)
Non-benchmark share of post-tax loss
of associates - (3)
Interest on uncertain tax provisions 6 (12)
Financing fair value remeasurements 59 21
Profit before tax 517 654 (21)
Tax charge (210) (156)
Profit after tax 307 498 (38)
--------- --------- -----------
Benchmark earnings
Benchmark PBT 811 751 8 7
Benchmark tax charge (211) (186)
--------- --------- ----------- -------------
Total Benchmark earnings 600 565
--------- --------- ----------- -------------
Owners of Experian plc 598 564 6 6
Non-controlling interests 2 1
--------- --------- ----------- -------------
Benchmark EPS USc 65.4 USc 61.7 6 6
Basic EPS USc 33.5 USc 56.5 (41)
Weighted average number of ordinary
shares 914m 914m
--------- --------- ----------- -------------
Benchmark EBIT margin - ongoing activities
North America 33.8% 36.2%
Latin America 27.2% 24.0%
UK and Ireland 19.6% 21.1%
EMEA/Asia Pacific (2.0)% (6.8)%
--------- --------- --------------------------
Benchmark EBIT margin 27.3% 26.9%
--------- --------- --------------------------
1. Benchmark results for the six months ended 30 September 2021
have been re-presented for the reclassification to exited business
activities of certain B2B and Consumer Services businesses, detail
is provided on page 12 and in notes 6(a) and 7 to the condensed
interim financial statements.
See Appendix 1 (page 15) and note 5 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.
Re-presentation of exited businesses
US$m Six months ended 30 September Twelve months ended 31 Six months
2021 March 2022 ended 30
September
2022
Reported Change Re-presented Reported Change Re-presented Reported
---------- --------- ------- ------------- -----------
UK and Ireland
Ongoing activities
- Benchmark
EBIT 85 1 86 188 - 188 74
- Benchmark
EBIT margin 20.8% 0.3% 21.1% 22.2% - 22.2% 19.6%
Exited business
activities
- Benchmark
EBIT (1) (1) (2) (4) - (4) -
Total continuing
operations
- Benchmark
EBIT 84 - 84 184 - 184 74
---------- ------- ------------- --------- ------- ------------- -----------
EMEA/Asia
Pacific
Data 175 (12) 163 343 (10) 333 149
Decisioning 78 (22) 56 164 (36) 128 53
Ongoing activities
- Revenue 253 (34) 219 507 (46) 461 202
- Benchmark
EBIT (21) 6 (15) - 16 16 (4)
- Benchmark
EBIT margin (8.3)% 1.5% (6.8)% 0.0% 3.5% 3.5% (2.0)%
Exited business
activities
- Revenue 1 34 35 21 46 67 14
- Benchmark
EBIT 1 (6) (5) 9 (16) (7) (8)
Total continuing
operations
- Revenue 254 - 254 528 - 528 216
- Benchmark
EBIT (20) - (20) 9 - 9 (12)
---------- ------- ------------- --------- ------- ------------- -----------
Global
Data 1,634 (12) 1,622 3,313 (10) 3,303 1,702
Decisioning 636 (22) 614 1,341 (36) 1,305 644
B2B 2,270 (34) 2,236 4,654 (46) 4,608 2,346
Consumer 790 - 790 1,613 - 1,613 887
Ongoing activities
- Revenue 3,060 (34) 3,026 6,267 (46) 6,221 3,233
- Benchmark
EBIT 806 7 813 1,640 16 1,656 881
- Benchmark
EBIT margin 26.3% 0.6% 26.9% 26.2% 0.4% 26.6% 27.3%
Exited business
activities
- Revenue 1 34 35 21 46 67 14
- Benchmark
EBIT - (7) (7) 5 (16) (11) (8)
Total continuing
operations
- Revenue 3,061 - 3,061 6,288 - 6,288 3,247
- Benchmark
EBIT 806 - 806 1,645 - 1,645 873
---------- ------- ------------- --------- ------- ------------- -----------
Benchmark results for the six months ended 30 September 2021
have been re-presented for the reclassification to exited business
activities of certain B2B and Consumer Services businesses, detail
is provided in notes 6(a) and 7 to the condensed interim financial
statements.
Group financial review
Key statutory measures
Statutory revenue
We delivered a robust performance in the period. Revenue
increased by 6% to US$3,247m (2021: US$3,061m) through a
combination of our portfolio diversity and innovation-led growth
initiatives.
Statutory operating profit and profit before tax
Operating profit for the six months ended 30 September 2022
reduced to US$513m (2021: US$702m). The decrease is predominantly
from a non-cash charge of US$152m for goodwill impairment, driven
by increased discount rates and macro-economic weakness in our
European markets. We also incurred a charge of US$66m for increased
contingent consideration due to over-performance on prior
acquisitions. The movements in Benchmark EBIT at constant currency
are discussed in t he Chief Executive Officer's review and Regional
highlights on pages three to eight. N et finance expense decreased
by US$49m, largely from financing fair value remeasurements, which
helped offset the goodwill impairment charge, however profit before
tax declined to US$517m (2021: US$654m).
Statutory Basic EPS
Basic EPS decreased to 33.5 US cents (2021: 56.5 US cents). The
reduction reflects a lower profit before tax, no repeat of the
prior period profit from discontinued operations, and an increased
effective tax rate.
Statutory cash flow
Cash generated from operations increased to US$1,024m (2021:
US$927m) reflecting strong control of working capital and some
phasing. Net borrowing inflows were US$361m (2021: US$309m). Cash
outflows in respect of net share purchases were broadly unchanged
at US$113m (2021: US$115m). Undrawn committed bank borrowing
facilities at 30 September 2022 totalled US$2.4bn (2021:
US$2.4bn).
Tax
The effective rate of tax based on profit before tax was 40.6%,
an increase of 16.7 percentage points from the comparative period,
largely attributable to the non-deductible goodwill impairment and
an adjustment to the fair value of contingent consideration in the
period.
Net assets
Net assets at 30 September 2022 were US$3,605m (2021:
US$3,322m). Capital employed, as defined in note 5(p) to the
condensed interim financial statements, was US$7,932m (2021:
US$7,824m).
Equity
There was a decrease in equity of US$402m from US$4,007m at 31
March 2022, with movements detailed in the Group statement of
changes in equity on page 21.
Key movements in equity during the half include:
-- Profit for the period of US$307m.
-- Remeasurement losses of US$35m in respect of defined benefit pension plans.
-- A reduction in the fair value of investments revalued through
Other comprehensive income (OCI) of US$42m.
-- Currency translation losses of US$260m.
-- Employee share awards and options cost of US$63m.
-- Ordinary dividends of US$327m and a movement of US$107m in
connection with net share purchases.
Seasonality
In recent years, our Benchmark EBIT performance has been evenly
spread across the two halves of the year due to impacts from the
COVID-19 pandemic. We now expect profits to be more second-half
weighted which is in line with historical performance.
Risks
The principal risks and uncertainties we face in the remaining
six months of the year remain consistent with those explained in
detail on pages 85 to 92 of our Annual Report for the year ended 31
March 2022:
-- Loss or inappropriate use of data and systems;
-- Adverse and unpredictable financial markets or fiscal developments;
-- New legislation or changes in regulatory enforcement;
-- Failure to comply with laws and regulations;
-- Non-resilient IT/business environment;
-- Business conduct risk;
-- Dependence on highly skilled personnel;
-- Increasing competition; and
-- Undesirable investment outcomes.
In the first half of the financial year, we note that risks
associated with new laws, new interpretations of existing laws,
changes to existing regulations and regulatory scrutiny continue to
increase. The global focus remains on privacy and a general trend
towards more consumer access and control over data, as well as
heightened regulations related to our credit reference and consumer
services businesses in our larger markets. Recent examples include:
increased scrutiny by the US Consumer Financial Protection Bureau;
privacy laws being enacted in several US States; the ongoing
interpretation of data protection laws in several jurisdictions in
which we operate; and the UK Financial Conduct Authority's
published rules on Consumer Duty which require firms to deliver
good outcomes for consumers .
We continue to see increasing consumer litigation, particularly
in the USA and Brazil, which is being vigorously defended.
As inflation remains high across much of the globe, Central
banks across the world have responded by materially raising
interest rates with a knock on reduction in expected growth in GDP
in our key markets of the UK and North America. In addition, the
increase in rates will increase the Group's future borrowing costs
and therefore its Weighted Average Cost of Capital. We continue to
monitor trends in geopolitical risks including market volatility,
regulatory and tax policy uncertainty. There is continued
uncertainty in the development of tax legislation globally
including tax reform proposals that could increase the tax burden
on our businesses.
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 13 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 85 to 94 of our Annual Report for the year ended 31
March 2022.
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 strong with cash flow conversion of 88% (2021: 89%). Our
undrawn committed bank borrowing facilities at 30 September 2022
were US$2.4bn (2021: US$2.4bn) and have an average remaining tenor
of three years (2021: four years). Outstanding commercial paper at
30 September was US$0.2bn (2021: US$0.7bn).
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 understanding of our performance. These measures are not
defined under IFRS and they may not be directly comparable with
other companies ' adjusted performance measures. These non-GAAP
measures are not intended to be a substitute for any IFRS measures
of performance but we have included them as these are considered to
be key measures used within the business for assessing the
underlying performance of our ongoing businesses.
As a result of our restructuring programme in EMEA/Asia Pacific
we have refined the definition of Exceptional items, set out in
note 5(l) to the condensed interim financial statements, to include
onerous global support costs associated with the closure of
significant operations, to improve assessment of underlying
operating performance.
The table below summarises our non-GAAP measures and there is a
fuller explanation in note 5 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 The results of businesses sold, closed or identified
activities for closure during a financial year.
Ongoing activities The results of businesses which are not disclosed
as exited business activities.
Constant exchange Results and growth calculated after translating both
rates 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 This is the year-on-year change in the revenue of
growth 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 Benchmark PBT less attributable tax.
earnings
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, costs of significant restructuring
programmes, and other financially significant one-off
items.
Benchmark operating Benchmark EBIT plus amortisation, depreciation and
cash flow 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 debt is borrowings (and the fair value of derivatives
Net funding 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 Benchmark EBIT less tax at the Benchmark rate divided
employed (ROCE) 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/minus the net tax liability or asset and plus
Net debt.
--------------------- -------------------------------------------------------------
Information on certain of our non-GAAP measures is set out in
the further appendices. The reconciliation of revenue from ongoing
activities is set out in note 6(c) on page 30, Benchmark EBIT and
Benchmark PBT to profit before tax in Appendix 3 and Benchmark EPS
in note 12 on pages 35 and 36.
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.
Period ended Period ended Year ended
30 September 30 September 31 March 2022
2022 2021
US dollar : Brazilian real 5.08 5.26 5.34
Pound sterling : US dollar 1.21 1.39 1.37
Euro : US dollar 1.04 1.19 1.16
US dollar : Colombian peso 4,151 3,769 3,834
US dollar : South African
rand 16.31 14.37 14.85
-------------- -------------- ---------------
The impact of currency movements on revenue from ongoing
activities is set out in note 6(c) to the condensed interim
financial statements.
Appendices (continued)
2. Foreign currency (continued)
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 30 September 31 March 2022
2022 2021
US dollar : Brazilian real 5.41 5.41 4.78
Pound sterling : US dollar 1.11 1.35 1.31
Euro : US dollar 0.98 1.16 1.11
US dollar : Colombian peso 4,574 3,833 3,757
US dollar : South African
rand 17.99 15.15 14.56
------------- ------------- ---------------
3. Revenue, Benchmark EBIT and Benchmark EBIT margin by business
segment
Six months ended 30 September Growth %
Total Organic
at constant at constant
2022 2021(1) exchange exchange
US$m US$m rates rates
------- ---------- ------------- -------------
Revenue
Data 1,702 1,622 7 6
Decisioning 644 614 8 8
------- ---------- ------------- -------------
Business-to-Business 2,346 2,236 8 7
Consumer Services 887 790 14 12
------- ---------- ------------- -------------
Ongoing activities 3,233 3,026 9 8
Exited business activities 14 35 n/a
------- ---------- ------------- -------------
Total 3,247 3,061 8
------- ---------- ------------- -------------
Benchmark EBIT
Business-to-Business 740 707 5
Consumer Services 197 188 6
------- ---------- ------------- -------------
Business segments 937 895 6
Central Activities - central corporate
costs (56) (82) n/a
------- ---------- ------------- -------------
Ongoing activities 881 813 8
Exited business activities (8) (7) n/a
------- ---------- ------------- -------------
Total Benchmark EBIT 873 806 8
Net interest expense (62) (55) n/a
------- ---------- ------------- -------------
Benchmark PBT 811 751 7
Exceptional items(2) (27) 5
O ther adjustments made to derive
Benchmark PBT(2) (267) (102)
------- ---------- ------------- -------------
Profit before tax 517 654
------- ---------- ------------- -------------
Benchmark EBIT margin - ongoing
activities
Business-to-Business 31.5% 31.6%
Consumer Services 22.2% 23.8%
------- ---------- ------------- -------------
Benchmark EBIT margin(3) 27.3% 26.9%
------- ---------- ------------- -------------
1. Revenue and Benchmark EBIT for the six months ended 30
September 2021 have been re-presented for the reclassification to
exited business activities of certain B2B and Consumer Services
businesses. See notes 6(a) and 7 to the condensed interim financial
statements .
2. See note 8 to the condensed interim financial statements .
3. Benchmark EBIT margin for ongoing activities is calculated by
dividing Benchmark EBIT for ongoing activities by revenue from
ongoing activities.
Appendices (continued)
4. Cash flow and Net debt summary
Six months ended 30 September 2022 2021
US$m US$m
-------- --------
Benchmark EBIT 873 806
Amortisation and depreciation charged to Benchmark
EBIT 240 237
------------------------------------------------------- -------- --------
Benchmark EBITDA 1,113 1,043
Impairment of non-current assets charged to Benchmark
EBIT - 1
Net capital expenditure (280) (211)
Increase in working capital (97) (157)
Principal lease payments (30) (30)
Charge for share incentive plans 63 74
------------------------------------------------------- -------- --------
Benchmark operating cash flow 769 720
Net interest paid (68) (87)
Tax paid (227) (158)
Dividends paid to non-controlling interests - (2)
------------------------------------------------------- -------- --------
Benchmark free cash flow 474 473
Acquisitions(1) (287) (369)
Disposal of operations (3) -
Purchase of investments (7) (10)
Disposal of investments 1 19
Movement in Exceptional and other non-benchmark
items (34) (12)
Ordinary dividends paid (327) (297)
------------------------------------------------------- -------- --------
Net cash outflow - continuing operations (183) (196)
Net cash inflow - discontinued operations - 1
Net debt at 1 April (3,950) (4,026)
Net share purchases (113) (115)
Non-cash lease obligation additions and disposals (11) (14)
Principal lease payments 30 30
Foreign exchange and other movements 79 9
Net debt at 30 September (4,148) (4,311)
-------- --------
1. See note 17(d) to the condensed interim financial statements.
5. Reconciliation of net investment
Six months ended 30 September 2022 2021
US$m US$m
----- -----
Capital expenditure as reported in the Group cash
flow statement 281 229
Disposal of property, plant and equipment (1) (21)
Profit on disposal of property, plant and equipment - 3
----------------------------------------------------- ----- -----
Net capital expenditure 280 211
Acquisitions 287 369
Purchase of investments 7 10
Disposal of operations and investments 2 (19)
----------------------------------------------------- ----- -----
Net investment 576 571
----------------------------------------------------- ----- -----
Condensed interim financial statements
Group income statement
for the six months ended 30 September 2022
Six months ended 30 September Six months ended 30 September
2022 2021
Benchmark(1) Non-benchmark(2) Total Benchmark(1) Non-benchmark(2) Total
US$m US$m US$m US$m US$m US$m
Revenue (note 6(a)) 3,247 - 3,247 3,061 - 3,061
Total operating
expenses
(note 8(a)) (2,375) (359) (2,734) (2,256) (103) (2,359)
Operating
profit/(loss) 872 (359) 513 805 (103) 702
Finance income 5 - 5 7 - 7
Finance expense (67) 65 (2) (62) 9 (53)
------------- ---------------- -------- ------------- ---------------- --------
Net finance
income/(expense)
(note 9(a)) (62) 65 3 (55) 9 (46)
Share of post-tax
profit/(loss)
of associates 1 - 1 1 (3) (2)
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Profit/(loss) before
tax (note 6(a)) 811 (294) 517 751 (97) 654
Tax (charge)/credit
(note 10(a)) (211) 1 (210) (186) 30 (156)
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Profit/(loss) for
the period from
continuing
operations 600 (293) 307 565 (67) 498
Profit for the
period
from discontinued
operations
(note 11) - - - - 19 19
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Profit/(loss) for
the period 600 (293) 307 565 (48) 517
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Attributable to:
Owners of Experian
plc 598 (292) 306 564 (48) 516
Non-controlling
interests 2 (1) 1 1 - 1
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Profit/(loss) for
the period 600 (293) 307 565 (48) 517
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Total Benchmark
EBIT(1)
(note 6(a)) 873 806
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
US cents US cents US cents US cents US cents US cents
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
Earnings/(loss) per
share (note 12(a))
Basic 65.4 (31.9) 33.5 61.7 (5.2) 56.5
Diluted 65.1 (31.8) 33.3 61.3 (5.2) 56.1
Earnings/(loss) per
share from
continuing
operations
Basic 65.4 (31.9) 33.5 61.7 (7.3) 54.4
Diluted 65.1 (31.8) 33.3 61.3 (7.3) 54.0
-------------------- ------------- ---------------- -------- ------------- ---------------- --------
1. Total Benchmark EBIT and other Benchmark items are non-GAAP
measures, defined in note 5 to the condensed interim financial
statements.
2. The loss before tax for non-benchmark items of US$294m (2021:
US$97m) is analysed in note 8(a) to the condensed interim financial
statements.
Condensed interim financial statements
Group statement of comprehensive income
for the six months ended 30 September 2022
Six months ended 30
September
------------------------
2022 2021
US$m US$m
---------------------------------------------------- ------------ ----------
Profit for the period 307 517
----------------------------------------------------- ------------ ----------
Other comprehensive income
Items that will not be reclassified to
profit or loss:
Remeasurement of post-employment benefit
assets and obligations (note 16(b)) (35) 25
Changes in the fair value of investments
revalued through OCI (42) 6
Deferred tax credit 8 -
Items that will not be reclassified to
profit or loss (69) 31
----------------------------------------------------- ------------ ----------
Items that are or may be reclassified subsequently
to profit or loss:
Currency translation losses (260) (9)
Fair value loss on cash flow hedge (93) (19)
Hedging loss reclassified to profit or
loss (note 9(c)) 81 12
----------------------------------------------------- ------------ ----------
Items that are or may be reclassified subsequently
to profit or loss (272) (16)
----------------------------------------------------- ------------ ----------
Other comprehensive (expense)/income for
the period(1) (341) 15
Total comprehensive (expense)/income for
the period (34) 532
Attributable to:
Owners of Experian plc (28) 532
Non-controlling interests (6) -
---------------------------------------------------- ------------ ----------
Total comprehensive (expense)/income for
the period (34) 532
----------------------------------------------------- ------------ ----------
1. Amounts reported within OCI are in respect of continuing
operations and, except as reported for post-employment benefit
assets and obligations, there is no associated tax. Currency
translation items, not reclassified to profit or loss, are
recognised in the hedging or translation reserve within other
reserves and in non-controlling interests. Other items within Other
comprehensive income are recognised in retained earnings.
Condensed interim financial statements
Group balance sheet
at 30 September 2022
30 September 31 March
--------------------
2022 2021 2022
Notes US$m US$m US$m
------------------------------------- ------ --------- --------- ---------
Non-current assets
Goodwill 14 5,448 5,491 5,737
Other intangible assets 2,195 2,060 2,214
Property, plant and equipment 370 424 415
Investments in associates 4 126 4
Deferred tax assets 26 88 46
Post-employment benefit assets 16(a) 144 127 216
Trade and other receivables 125 156 133
Financial assets revalued
through OCI 326 241 375
Other financial assets 181 192 81
------------------------------------- ------ --------- --------- ---------
8,819 8,905 9,221
------------------------------------- ------ --------- --------- ---------
Current assets
Trade and other receivables 1,373 1,244 1,409
Current tax assets 41 44 37
Other financial assets 7 21 7
Cash and cash equivalents
- excluding bank overdrafts 18(b) 146 176 179
------------------------------------- ------ --------- --------- ---------
1,567 1,485 1,632
Assets classified as held-for-sale 24 35 - 41
------------------------------------- ------ --------- --------- ---------
1,602 1,485 1,673
------------------------------------- ------ --------- --------- ---------
Current liabilities
Trade and other payables (1,626) (1,459) (1,744)
Borrowings 18(b) (237) (863) (57)
Current tax liabilities (135) (158) (109)
Provisions (55) (35) (33)
Other financial liabilities (20) (13) (22)
------------------------------------- ------ --------- --------- ---------
(2,073) (2,528) (1,965)
Liabilities classified as
held-for-sale 24 (1) - -
------------------------------------- ------ --------- --------- ---------
(2,074) (2,528) (1,965)
Net current liabilities (472) (1,043) (292)
------------------------------------- ------ --------- --------- ---------
Total assets less current
liabilities 8,347 7,862 8,929
------------------------------------- ------ --------- --------- ---------
Non-current liabilities
Trade and other payables (216) (178) ( 248)
Borrowings 18(b) (3,731) (3,681) (4,039)
Deferred tax liabilities (273) (360) ( 353)
Post-employment benefit obligations 16(a) (37) (54) (52)
Provisions (4) - (4)
Financial liabilities revalued (78) -
through OCI -
Other financial liabilities (403) (267) ( 226)
------------------------------------- ------ --------- --------- ---------
(4,742) (4,540) (4,922)
------------------------------------- ------ --------- --------- ---------
Net assets 3,605 3,322 4,007
------------------------------------- ------ --------- --------- ---------
Equity
Called-up share capital 20 96 96 96
Share premium account 20 1,796 1,777 1,780
Retained earnings 20,087 19,495 20,157
Other reserves (18,406) (18,082) (18,064)
------------------------------------- ------ --------- --------- ---------
Attributable to owners of
Experian plc 3,573 3,286 3,969
Non-controlling interests 32 36 38
------------------------------------- ------ --------- --------- ---------
Total equity 3,605 3,322 4,007
------------------------------------- ------ --------- --------- ---------
Condensed interim financial statements
Group statement of changes in equity
for the six months ended 30 September 2022
Called-up Share Retained Other Attributable Total
share premium earnings reserves to owners equity
capital account of Experian Non-controlling
plc interests
(Note (Note
20) 20)
US$m US$m US$m US$m US$m US$m US$m
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
At 1 April 2022 96 1,780 20,157 (18,064) 3,969 38 4,007
Comprehensive income:
Profit for the period - - 306 - 306 1 307
Other comprehensive expense - - (69) (265) (334) (7) (341)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Total comprehensive income/(expense) - - 237 (265) (28) (6) (34)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners:
Employee share incentive
plans:
- value of employee services - - 63 - 63 - 63
- shares issued on vesting - 16 - - 16 - 16
- purchase of shares by
employee trusts - - - (45) (45) - (45)
* other vesting of awards and exercises of share
options - - (32) 46 14 - 14
- related tax charge - - (6) - (6) - (6)
- other payments - - (5) - (5) - (5)
Purchase of shares held
as treasury shares - - - (78) (78) - (78)
Dividends paid - - (327) - (327) - (327)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners - 16 (307) (77) (368) - (368)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
At 30 September 2022 96 1,796 20,087 (18,406) 3,573 32 3,605
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Group statement of changes in equity
for the six months ended 30 September 2021
Called-up Share Retained Other Attributable Total
share premium earnings reserves to owners equity
capital account of Experian Non-controlling
plc interests
(Note (Note
20) 20)
US$m US$m US$m US$m US$m US$m US$m
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
At 1 April 2021 96 1,756 19,207 (17,978) 3,081 38 3,119
Comprehensive income:
Profit for the period - - 516 - 516 1 517
Other comprehensive income/(expense) - - 31 (15) 16 (1) 15
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Total comprehensive income/(expense) - - 547 (15) 532 - 532
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners:
Employee share incentive
plans:
- value of employee services - - 74 - 74 - 74
- shares issued on vesting - 21 - - 21 - 21
* purchase of shares by employee trusts - - - (61) (61) - (61)
* other vesting of awards and exercises of share
options - - (35) 47 12 - 12
- related tax credit - - 3 - 3 - 3
- other payments - - (4) - (4) - (4)
Purchase of shares held
as treasury shares - - - (75) (75) - (75)
Dividends paid - - (297) - (297) (2) (299)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Transactions with owners - 21 (259) (89) (327) (2) (329)
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
At 30 September 2021 96 1,777 19,495 (18,082) 3,286 36 3,322
------------------------------------------------------ ---------- -------- --------- --------- ------------- ---------------- -------
Condensed interim financial statements
Group cash flow statement
for the six months ended 30 September 2022
Six months ended 30
September
----------------------
2022 2021
Notes US$m US$m
--------------------------------------------- ------ ---------- ----------
Cash flows from operating activities
Cash generated from operations 17(a) 1,024 927
Interest paid (71) (89)
Interest received 3 2
Dividends received from associates 1 1
Tax paid (227) (158)
--------------------------------------------- ------ ---------- ----------
Net cash inflow from operating activities
- continuing operations 730 683
Net cash inflow from operating activities
- discontinued operations 11 - 1
--------------------------------------------- ------ ---------- ----------
Net cash inflow from operating activities 730 684
--------------------------------------------- ------ ---------- ----------
Cash flows from investing activities
Purchase of other intangible assets 17(c) (251) (208)
Purchase of property, plant and equipment (30) (21)
Sale of property, plant and equipment 1 21
Purchase of other financial assets (7) (10)
Sale of other financial assets - 8
Acquisition of subsidiaries, net of
cash acquired 17(d) (267) (346)
Disposal of operations 8(b) (3) -
Disposal of investment in associate 8(c) 1 11
Net cash flows used in investing activities (556) (545)
--------------------------------------------- ------ ---------- ----------
Cash flows from financing activities
Cash inflow in respect of shares issued 17(e) 16 21
Cash outflow in respect of share purchases 17(e) (129) (136)
Other payments on vesting of share
awards (5) (4)
Settlement of put options held over
shares in subsidiaries 17(d) - (4)
Transactions in respect of non-controlling
interests 17(d) - (1)
New borrowings 362 866
Repayment of borrowings (1) (557)
Principal lease payments (30) (30)
Net payments for cross-currency swaps (65) -
and foreign exchange contracts
Net receipts from equity swaps - 2
Dividends paid (327) (299)
--------------------------------------------- ------ ---------- ----------
Net cash flows used in financing activities (179) (142)
--------------------------------------------- ------ ---------- ----------
Net decrease in cash and cash equivalents (5) (3)
Cash and cash equivalents at 1 April 176 170
Exchange movements on cash and cash
equivalents (25) 7
------
Cash and cash equivalents at 30 September 17(f) 146 174
--------------------------------------------- ------ ---------- ----------
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
1. Corporate information
Experian plc (the Company) is the ultimate parent company of the
Experian group of companies (Experian or the Group). Experian is a
leading global information services group.
The Company is incorporated and registered in Jersey as a public
company limited by shares and is resident in Ireland. The Company's
registered office is at 22 Grenville Street, St Helier, Jersey JE4
8PX, Channel Islands.
The Company's ordinary shares are traded on the London Stock
Exchange's Regulated Market and have a Premium Listing.
There has been no change in this information since the Annual
Report for the year ended 31 March 2022.
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) as issued
by the International Accounting Standards Board (IASB) and as
adopted for use in the UK and the European Union (EU).
The condensed interim financial statements:
-- comprise the consolidated results of the Group for the six
months ended 30 September 2022 and 30 September 2021;
-- were approved for issue on 15 November 2022;
-- have not been audited but have been reviewed by the Company's
auditor with their report set out on pages 52 and 53; and
-- 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 2022.
The Group's statutory financial statements comprise the Annual
Report and audited financial statements which are prepared in
accordance with both UK-adopted International Accounting Standards
(UK-IFRS) and International Financial Reporting Standards (IFRS or
IFRSs) as adopted for use in the EU and IFRS Interpretations
Committee interpretations (together EU-IFRS). The financial
statements also comply with IFRS as issued by the IASB. UK-IFRS,
EU-IFRS and IFRS as issued by the IASB 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 2022, were approved by the directors on 17 May
2022 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 www.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 2022
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 2022.
No significant events impacting the Group, other than those
disclosed in this document, have occurred between 1 October and 15
November 2022.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
2. Basis of preparation (continued)
Going concern
In adopting the going concern basis for preparing these
condensed interim financial statements, the directors have
considered the business activities, the principal risks and
uncertainties and the other matters discussed in connection with
the Viability statement included in our Annual Report for the year
ended 31 March 2022.
At 30 September 2022, the Group had undrawn committed bank
borrowing facilities of US$2.4bn (2021: US$2.4bn) which have an
average remaining tenor of three years (2021: four years).
Outstanding commercial paper at 30 September was US$0.2bn (2021:
US$0.7bn).
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.
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
strong cash performance in the period and the substantial committed
bank borrowing facilities which extend to December 2025.
3. Accounting and other developments
Additional charges were incurred in the period stemming from
macro-economic factors and market weakness. The rise in global
interest and discount rates, and resulting impacts on the expected
growth in GDP, have contributed to a non-cash impairment of
goodwill of US$152m (note 14) and a reduction in the fair value of
net post-employment benefit assets (note 16(b)). The latter being
impacted by remeasurement and exchange losses of US$35m and US$24m
respectively. Additional costs were mitigated by a gain on
financing fair value remeasurements of US$59m (note 9(c)).
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 financial statements.
There are no new standards, amendments to existing standards or
interpretations that are not yet effective that are expected to
have a material impact on the Group's financial results. Accounting
developments are routinely reviewed by the Group and its financial
reporting systems are adapted as appropriate.
4. 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, 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 2022. Changes to
estimated amounts used in assessing the carrying value of goodwill
and contingent consideration have had a material impact in the
period. Further detail is provided in notes 14 and 23(c)
respectively
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
2022.
(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 2022.
During the six months ended 30 September 2022 the annual tests
were performed resulting in an impairment charge of US$152m.
Further detail is provided in note 14 to the condensed interim
financial statements.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
4. Accounting policies, estimates and judgments (continued)
(c) 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 the condensed
interim financial statements. The actuarial assumption with the
most significant impact at 30 September 2022 is the discount rate
of 5.3% (2021: 2.0%). The discount rate used in the year ended 31
March 2022 was 2.8%.
(d) Revenue recognition ( note 6)
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.
-- 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 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; and
- 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.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
4. Accounting policies, estimates and judgments (continued)
(d) Revenue recognition ( note 6) (continued)
-- 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; and
- 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.
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
licensing 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 this 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.
-- Costs to fulfil a contract predominantly comprise labour
costs directly relating to the implementation services
provided.
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 include both deferred income balances and specific
reserves.
(e) Tax (note 10)
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.
5. 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 has included them as
they consider them to be key measures used within the business for
assessing the underlying performance of the Group's ongoing
businesses.
Management no longer uses Benchmark PBT per share as a measure
for assessing underlying performance, this definition has therefore
been removed from our non-GAAP measures.
As a result of our restructuring programme in EMEA/Asia Pacific
we have refined the definition of Exceptional items to include
onerous global support costs associated with the closure of
significant operations, to aid assessment of underlying operating
performance as such costs are eliminated through restructuring
activity.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
5. Use of non-GAAP measures in the condensed interim financial
statements (continued)
(a) Benchmark profit before tax (Benchmark PBT) (note 6(a) and
note 7)
Benchmark PBT is disclosed to indicate the Group's underlying
profitability. It is defined as profit before amortisation and
impairment of acquisition intangibles, impairment of goodwill,
acquisition expenses, adjustments to contingent consideration,
Exceptional items, financing fair value remeasurements, tax (and
interest thereon) and discontinued operations. It includes the
Group's share of continuing associates' Benchmark post-tax
results.
An explanation of the basis on which we report Exceptional items
is provided below. Other adjustments made to derive Benchmark PBT
are explained as follows:
-- Charges for the amortisation and impairment of acquisition
intangibles are excluded from the calculation of Benchmark PBT
because these charges are based on judgments about their value and
economic life and bear no relation to the Group's underlying
ongoing performance. Impairment of goodwill is similarly excluded
from the calculation of Benchmark PBT.
-- Acquisition and disposal expenses (representing the
incidental costs of acquisitions and disposals, one-time
integration costs and other corporate transaction expenses)
relating to successful, active or aborted acquisitions and
disposals are excluded from the definition of Benchmark PBT as they
bear no relation to the Group's underlying ongoing performance or
to the performance of any acquired businesses. Adjustments to
contingent consideration are similarly excluded from the definition
of Benchmark PBT.
-- Charges and credits for financing fair value remeasurements
within finance expense in the Group income statement are excluded
from the definition of Benchmark PBT. These include retranslation
of intra-Group funding, and that element of the Group's derivatives
that is ineligible for hedge accounting, together with gains and
losses on put options in respect of acquisitions. Amounts
recognised generally arise from market movements and accordingly
bear no direct relation to the Group's underlying performance.
(b) Benchmark earnings before interest and tax (Benchmark EBIT)
and margin (Benchmark EBIT margin) (note 6(a) and note 7)
Benchmark EBIT is defined as Benchmark PBT before the net
interest expense charged therein and accordingly excludes
Exceptional items as defined below. Benchmark EBIT margin is
Benchmark EBIT from ongoing activities expressed as a percentage of
revenue from ongoing activities.
(c) Benchmark earnings before interest, tax, depreciation and
amortisation (Benchmark EBITDA)
Benchmark EBITDA is defined as Benchmark EBIT before the
depreciation and amortisation charged therein.
(d) Exited business activities
Exited business activities are businesses sold, closed or
identified for closure during a financial year. These are treated
as exited business activities for both revenue and Benchmark EBIT
purposes. The results of exited business activities are disclosed
separately with the results of the prior period re-presented in the
segmental analyses as appropriate. This measure differs from the
definition of discontinued operations in IFRS 5.
(e) Ongoing activities
The results of businesses trading at 30 September 2022, which
are not disclosed as exited business activities, are reported as
ongoing activities.
(f) Constant exchange rates
To highlight our organic performance, we discuss our results in
terms of growth at constant exchange rates, unless otherwise
stated. This represents growth calculated after translating both
years' performance at the prior year's average exchange rates.
(g) Total growth (note 6(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 6(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.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
5. Use of non-GAAP measures in the condensed interim financial
statements (continued)
(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 10(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 10(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 8(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 these 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
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
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)
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 2022
6. Segment information
(a) Income statement
North Latin UK and EMEA/ Total Central Total
America America Ireland Asia operating Activities continuing
Pacific(1) segments operations
Six months ended 30 US$m US$m US$m US$m US$m US$m US$m
September
2022
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Revenue from external
customers
Ongoing activities 2,204 449 378 202 3,233 - 3,233
Exited business activities - - - 14 14 - 14
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Total 2,204 449 378 216 3,247 - 3,247
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Reconciliation from
Benchmark
EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before
transfer pricing and other
adjustments 761 121 68 (12) 938 (57) 881
Transfer pricing and other
adjustments (16) 1 6 8 (1) 1 -
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Ongoing activities 745 122 74 (4) 937 (56) 881
Exited business activities - - - (8) (8) - (8)
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Total 745 122 74 (12) 929 (56) 873
Net interest
income/(expense)
included in Benchmark PBT
(note 9(b)) (2) (1) 1 (1) (3) (59) (62)
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Benchmark PBT 743 121 75 (13) 926 (115) 811
Exceptional items (note
8(a)) 4 - - (31) (27) - (27)
Impairment of goodwill
(note14) - - - (152) (152) - (152)
Amortisation of acquisition
intangibles (62) (12) (4) (15) (93) - (93)
Acquisition and disposal
expenses (10) (3) (3) (5) (21) - (21)
Adjustment to the fair
value
of contingent
consideration (56) (10) - - (66) - (66)
Interest on uncertain tax
provisions (note 9(a)) - - - - - 6 6
Financing fair value
remeasurements
(note 9(c)) - - - - - 59 59
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Profit/(loss) before tax 619 96 68 (216) 567 (50) 517
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
North Latin UK and EMEA/ Total Central Total
America America Ireland Asia operating Activities continuing
Pacific(1) segments operations
Six months ended 30 US$m US$m US$m US$m US$m US$m US$m
September
2021(2)
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Revenue from external
customers
Ongoing activities 2,037 362 408 219 3,026 - 3,026
Exited business activities - - - 35 35 - 35
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Total 2,037 362 408 254 3,061 - 3,061
Reconciliation from
Benchmark
EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before
transfer pricing and other
adjustments 756 85 79 (24) 896 (83) 813
Transfer pricing and other
adjustments (19) 2 7 9 (1) 1 -
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Ongoing activities 737 87 86 (15) 895 (82) 813
Exited business activities - - (2) (5) (7) - (7)
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Total 737 87 84 (20) 888 (82) 806
Net interest expense
included
in Benchmark PBT
(note 9(b)) (2) (1) - (1) (4) (51) (55)
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Benchmark PBT 735 86 84 (21) 884 (133) 751
Exceptional items (note
8(a)) 5 - - - 5 - 5
Amortisation of acquisition
intangibles (58) (10) (4) (17) (89) - (89)
Acquisition and disposal
expenses (10) (3) (1) (4) (18) - (18)
Adjustment to the fair
value
of contingent
consideration - - 3 (4) (1) - (1)
Non-benchmark share of
post-tax
loss of associates - - - - - (3) (3)
Interest on uncertain tax
provisions (note 9(a)) - - - - - (12) (12)
Financing fair value
remeasurements
(note 9(c)) - - - - - 21 21
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
Profit/(loss) before tax 672 73 82 (46) 781 (127) 654
---------------------------- --------- --------- --------- ------------ ----------- ------------ ------------
1. EMEA/Asia Pacific represents all other operating segments.
2. Revenue of US$34m and Benchmark EBIT of US$(7m) for the six
months ended 30 September 2021 have been re-presented for the
reclassification to exited business activities of certain B2B and
Consumer Services businesses.
Additional information by operating segment, including that on
total and organic growth at constant exchange rates is provided
within pages 3 to 12.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
6. 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
7. 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 EMEA/ Total
America America Ireland Asia ongoing
Pacific activities
US$m US$m US$m US$m US$m
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue for the six months ended 30
September 2021(1) 2,037 362 408 219 3,026
Adjustment to constant exchange rates - (6) (5) (5) (16)
--------------------------------------------- --------- --------- --------- --------- ------------
Revenue at constant rates for the six
months ended 30 September 2021 2,037 356 403 214 3,010
Organic revenue growth 153 64 21 8 246
Revenue from acquisitions 14 14 2 - 30
Revenue at constant rates for the six
months ended 30 September 2022 2,204 434 426 222 3,286
Adjustment to actual exchange rates - 15 (48) (20) (53)
Revenue for the six months ended 30
September 2022 2,204 449 378 202 3,233
--------------------------------------------- --------- --------- --------- --------- ------------
Organic revenue growth at constant exchange
rates 8% 18% 5% 4% 8%
Revenue growth at constant exchange
rates 8% 22% 6% 4% 9%
--------------------------------------------- --------- --------- --------- --------- ------------
1. Revenue for the six months ended 30 September 2021 has been
re-presented for the reclassification to exited business activities
of certain B2B businesses.
The table above demonstrates the application of the methodology
set out in note 5 in determining organic and total revenue growth
at constant exchange rates.
(d) Disaggregation of revenue from contracts with customers
North Latin UK and EMEA/ Total
America America Ireland Asia operating
Pacific segments
Six months ended 30 September 2022 US$m US$m US$m US$m US$m
--------------------------------------- --------- --------- --------- --------- -----------
Revenue from external customers
Data 1,071 296 186 149 1,702
Decisioning 403 83 105 53 644
--------------------------------------- --------- --------- --------- --------- -----------
Business-to-Business 1,474 379 291 202 2,346
Consumer Services 730 70 87 - 887
Total ongoing activities 2,204 449 378 202 3,233
--------------------------------------- --------- --------- --------- --------- -----------
North Latin UK and EMEA/ Total
America America Ireland Asia operating
Pacific segments
Six months ended 30 September 2021(1) US$m US$m US$m US$m US$m
--------------------------------------- --------- --------- --------- --------- -----------
Revenue from external customers
Data 1,016 249 194 163 1,622
Decisioning 376 67 115 56 614
--------------------------------------- --------- --------- --------- --------- -----------
Business-to-Business 1,392 316 309 219 2,236
Consumer Services 645 46 99 - 790
Total ongoing activities 2,037 362 408 219 3,026
--------------------------------------- --------- --------- --------- --------- -----------
1. Revenue for the six months ended 30 September 2021 has been
re-presented for the reclassification to exited business activities
of certain B2B businesses, and includes EMEA/Asia Pacific Data and
Decisioning revenue of US$12m and US$22m respectively.
Data revenue is predominantly transactional with a portion from
licence fees.
Decisioning revenue is derived from:
-- software and system sales, and includes recurring licence
fees, consultancy and implementation fees, and transactional
charges;
-- credit score fees which are primarily transactional; and
-- analytics income comprising a mix of consultancy and
professional fees as well as transactional revenue.
Consumer Services revenue primarily comprises monthly
subscription and one-off fees, and referral fees for credit
products and white-label partnerships.
The timing of revenue recognition in relation to these revenue
streams is discussed in note 4(d).
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
6. Segment information (continued)
(e) Balance sheet
(i) Net assets/(liabilities) North Latin UK and EMEA/ Total Central Total
America America Ireland Asia operating Activities Group
Pacific segments and other
At 30 September 2022 US$m US$m US$m US$m US$m US$m US$m
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
Goodwill 3,660 667 638 483 5,448 - 5,448
Investments in associates 4 - - - 4 - 4
Right-of-use assets 74 14 16 21 125 5 130
Assets classified as held-for-sale - - 24 1 25 10 35
Other assets 2,332 592 422 480 3,826 978 4,804
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
Total assets 6,070 1,273 1,100 985 9,428 993 10,421
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
Lease obligations (93) (16) (16) (23) (148) (3) (151)
Liabilities classified
as held-for-sale - - - (1) (1) - (1)
Other liabilities (1,193) (292) (235) (281) (2,001) (4,663) (6,664)
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
Total liabilities (1,286) (308) (251) (305) (2,150) (4,666) (6,816)
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
Net assets/(liabilities) 4,784 965 849 680 7,278 (3,673) 3,605
------------------------------------ --------- --------- --------- --------- ----------- ------------ --------
North Latin UK and EMEA/ Total Central Total
America America Ireland Asia operating Activities Group
Pacific segments and other
At 30 September 2021 US$m US$m US$m US$m US$m US$m US$m
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
Goodwill 3,348 660 704 779 5,491 - 5,491
Investments in associates 5 - 58 11 74 52 126
Right-of-use assets 83 13 27 31 154 5 159
Other assets 2,014 517 455 644 3,630 984 4,614
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
Total assets 5,450 1,190 1,244 1,465 9,349 1,041 10,390
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
Lease obligations (103) (16) (27) (34) (180) (4) (184)
Other liabilities (886) (220) (266) (420) (1,792) (5,092) (6,884)
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
Total liabilities (989) (236) (293) (454) (1,972) (5,096) (7,068)
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
Net assets/(liabilities) 4,461 954 951 1,011 7,377 (4,055) 3,322
--------------------------- --------- --------- --------- --------- ----------- ------------ --------
(ii) Central Activities and other comprises:
30 September
-----------------------------------------------------------------------------------------------
2022 2021
---------------------------------------- -------------------------------------------
Assets Liabilities Net assets/ Assets Liabilities Net assets/
(liabilities) (liabilities)
US$m US$m US$m US$m US$m US$m
Central Activities 776 (108) 668 612 (202) 410
Investments in
associates - - - 52 - 52
Net debt(1) 150 (4,150) (4,000) 245 (4,376) (4,131)
Tax (current and
deferred) 67 (408) (341) 132 (518) (386)
------------------------- -------- ------------ ---------------- --- ------------- ------------- ----------------
993 (4,666) (3,673) 1,041 (5,096) (4,055)
------------------------- -------- ------------ ---------------- --- ------------- ------------- ----------------
1. Total Net debt comprises Net debt included within Central
Activities plus lease obligations included in operating segments of
US$148m (2021: US$180m).
(iii) Capital employed 30 September
------------- ------
2022 2021
US$m US$m
---------------------------------------------- ------------- ------
North America 4,784 4,461
Latin America 965 954
UK and Ireland 849 951
EMEA/Asia Pacific 680 1,011
---------------------------------------------- ------------- ------
Total operating segments 7,278 7,377
Central Activities 668 462
Add: Lease obligations in operating segments 148 180
Less: Right-of-use assets (130) (159)
Less: Non-controlling interests (32) (36)
---------------------------------------------- ------------- ------
Capital employed attributable to owners 7,932 7,824
---------------------------------------------- ------------- ------
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
7. Information on business segments (including non-GAAP
disclosures)
Business-to- Consumer Total Central Total
Business Services business Activities continuing
segments operations
Six months ended 30 September US$m US$m US$m US$m US$m
2022
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Revenue from external customers
Ongoing activities 2,346 887 3,233 - 3,233
Exited business activities 14 - 14 - 14
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Total 2,360 887 3,247 - 3,247
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Reconciliation from Benchmark
EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before transfer
pricing and other adjustments 736 202 938 (57) 881
Transfer pricing and other adjustments 4 (5) (1) 1 -
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Ongoing activities 740 197 937 (56) 881
Exited business activities (8) - (8) - (8)
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Total 732 197 929 (56) 873
Net interest expense included
in Benchmark PBT (note 9(b)) (2) (1) (3) (59) (62)
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Benchmark PBT 730 196 926 (115) 811
Exceptional items (note 8(a)) (27) - (27) - (27)
Impairment of goodwill (note
14) (152) - (152) - (152)
Amortisation of acquisition
intangibles (78) (15) (93) - (93)
Acquisition and disposal expenses (10) (11) (21) - (21)
Adjustment to the fair value
of contingent consideration (66) - (66) - (66)
Interest on uncertain tax provisions
(note 9(a)) - - - 6 6
Financing fair value remeasurements
(note 9(c)) - - - 59 59
Profit/(loss) before tax 397 170 567 (50) 517
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Consumer Total Central Total
Business-to- Services business Activities continuing
Business segments operations
Six months ended 30 September US$m US$m US$m US$m US$m
2021(1)
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Revenue from external customers
Ongoing activities 2,236 790 3,026 - 3,026
Exited business activities 35 - 35 - 35
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Total 2,271 790 3,061 - 3,061
---------------------------------------- -------------
Reconciliation from Benchmark
EBIT to
profit/(loss) before tax
Benchmark EBIT
Ongoing activities before transfer
pricing and other adjustments 704 192 896 (83) 813
Transfer pricing and other adjustments 3 (4) (1) 1 -
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Ongoing activities 707 188 895 (82) 813
Exited business activities (6) (1) (7) - (7)
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Total 701 187 888 (82) 806
Net interest expense included
in Benchmark PBT (note 9(b)) (3) (1) (4) (51) (55)
---------------------------------------- ------------- ---------- ---------- ------------ ------------
Benchmark PBT 698 186 884 (133) 751
Exceptional items (note 8(a)) 5 - 5 - 5
Amortisation of acquisition
intangibles (80) (9) (89) - (89)
Acquisition and disposal expenses (18) - (18) - (18)
Adjustment to the fair value
of contingent consideration (1) - (1) - (1)
Non-benchmark share of post-tax
loss of associates - - - (3) (3)
Interest on uncertain tax provisions
(note 9(a)) - - - (12) (12)
Financing fair value remeasurements
(note 9(c)) - - - 21 21
Profit/(loss) before tax 604 177 781 (127) 654
---------------------------------------- ------------- ---------- ---------- ------------ ------------
1. Revenue of US$34m and Benchmark EBIT of US$(7m) for the six
months ended 30 September 2021 have been re-presented for the
reclassification to exited business activities of certain B2B and
Consumer Services businesses.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
8. 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
----------------------
2022 2021
US$m US$m
---------------------------------------------------- ---------- ----------
Exceptional items:
Loss on disposal of operations (note 8(b)) 3 -
Profit on disposal of associate (note 8(c)) (1) (11)
Restructuring costs (note 8(d)) 20 -
Onerous global support costs (note 8(e)) 8 -
Legal provisions movements (note 8(f)) (3) 6
----------------------------------------------------- ---------- ----------
Net charge/(credit) for Exceptional items 27 (5)
----------------------------------------------------- ---------- ----------
Other adjustments made to derive Benchmark
PBT:
Amortisation of acquisition intangibles 93 89
Impairment of goodwill (note 14) 152 -
Acquisition and disposal expenses 21 18
Adjustment to the fair value of contingent
consideration (note 23(c)) 66 1
Non-benchmark share of post-tax loss of associates - 3
Interest on uncertain tax provisions (note
9(a)) (6) 12
Financing fair value remeasurements (note
9(c)) (59) (21)
----------------------------------------------------- ---------- ----------
Net charge for other adjustments made to derive
Benchmark PBT 267 102
----------------------------------------------------- ---------- ----------
Net charge for Exceptional items and other
adjustments made to derive Benchmark PBT 294 97
----------------------------------------------------- ---------- ----------
By income statement caption:
Within total operating expenses 359 103
Within operating profit 359 103
Within share of post-tax loss of associates - 3
Within finance expense (65) (9)
----------------------------------------------------- ---------- ----------
Net charge for Exceptional items and other
adjustments made to derive Benchmark PBT 294 97
----------------------------------------------------- ---------- ----------
(b) Loss on disposal of operations
The loss on disposal of operations in the period ended 30
September 2022 of US$3m comprises costs incurred following the
cessation of our activities in Russia in the year ended 31 March
2022.
(c) Profit on disposal of associate
On 18 November 2020, the Group disposed of its 18.6% interest in
Finicity Corporation. During the period, further consideration of
US$1m (2021: US$11m) was received in respect of earnout
arrangements, the payout of which was not anticipated at 31 March
2021.
(d) Restructuring costs
Costs of US$20m were recognised in the period associated with a
strategic review and restructuring, primarily in the EMEA and Asia
Pacific regions. We continue to execute on our strategy to
concentrate on strategic markets where we can drive scale while
also enhancing operating efficiency. The charge includes a loss of
US$7m on the disposal of internally generated software assets, and
US$11m is labour related. The associated cash outflow was
US$9m.
(e) Onerous global support costs
The charge in the current period comprises costs that are
directly attributable to exited businesses or incurred solely to
support sub-scale, multi-country markets, and will be removed as we
complete restructuring activity in EMEA/Asia Pacific.
(f) Legal provisions movements
Movements have occurred in provisions held for a number of
historical legal claims, some of which are in the process of being
settled. The credit in the period ended 30 September 2022 reflects
legal costs incurred in North America of US$25m, offset by
insurance recoveries of US$28m.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
9. Net finance (income)/expense
(a) Net finance (income)/expense included
in profit before tax
Six months ended 30
September
----------------------
2022 2021
US$m US$m
---------------------------------------------------------- ------ --------------
Interest income:
Bank deposits, short-term investments and
loan notes (3) (7)
Interest on pension plan assets (note 16(b)) (2) -
---------------------------------------------------------- ------ --------------
Interest income (5) (7)
Finance expense:
Interest on borrowings and derivatives 63 58
Interest on leases 4 4
Credit in respect of financing fair value remeasurements
(note 9(c)) (59) (21)
Interest on uncertain tax provisions (6) 12
Finance expense 2 53
----------------------------------------------------------- ------ --------------
Net finance (income)/expense included
in profit before tax (3) 46
----------------------------------------------------------- ------ --------------
(b) Net interest expense included in Benchmark
PBT
Six months ended 30
September
----------------------
2022 2021
US$m US$m
---------------------------------------------------------- ------ --------------
Interest income (5) (7)
Interest expense 67 62
----------------------------------------------------------- ------ --------------
Net interest expense included in Benchmark
PBT 62 55
----------------------------------------------------------- ------ --------------
(c) Analysis of credit in respect of financing fair value
remeasurements
Six months ended 30
September
----------------------
2022 2021
US$m US$m
----------------------------------------------- ----------- ---------
Foreign exchange losses/(gains) on Brazilian
real intra-Group funding(1) 30 (13)
Foreign currency loss on cross currency-swaps
designated as a
cashflow hedge - transfer from OCI 81 12
Other financing fair value gains(2) (170) (20)
------------------------------------------------- ----------- ---------
Credit in respect of financing fair value
remeasurements (59) (21)
------------------------------------------------- ----------- ---------
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 gains primarily relate to our
portfolio of interest rate swaps used for managing the proportion
of fixed rate debt, as well as US$81m (2021: US$12m) of fair value
gains on borrowings which are in a cashflow hedge relationship.
10. Tax - continuing operations
(a) Tax charge and effective rate of tax
Six months ended 30
September
----------------------
2022 2021
US$m US$m
--------------------------------------------- ---------- ----------
Tax charge(1) 210 156
Profit before tax 517 654
Effective rate of tax based on profit before
tax 40.6% 23.9%
1. The tax charge comprises a current tax charge of US$253m
(2021: US$150m) and a deferred tax credit of US$43m (2021: charge
of US$6m).
Tax charged within the interim reporting period ended 30
September 2022 has been calculated by applying the effective rate
of tax which is expected to apply to the Group for the year ending
31 March 2023 using rates substantively enacted by 30 September
2022 as required by IAS 34 'Interim Financial Reporting'.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
10. Tax - continuing operations (continued)
(a) Tax charge and effective rate of tax (continued)
The increase in the effective rate of tax from the comparative
period is largely attributable to the goodwill impairment arising
in the period and the significant increase in the adjustment to the
fair value of contingent consideration, both of which are treated
as non-deductible for tax purposes. In addition, there has been a
small adjustment to tax balances relating to earlier periods.
The Group's tax charge will continue to be influenced by the
profile of profits earned in different countries in which the
Group's subsidiaries operate, in particular, our material markets
being North America, Brazil and the UK. Tax reform continues in
2023 and future years driven by the Organisation for Economic
Co-operation and Development's (OECD) project to address the tax
challenges arising from the digitalisation of the economy including
the proposed global minimum tax legislation. Experian continues to
analyse the implications for the Group from these model rules and
will determine the outcome once the final relevant legislation is
available.
(b) Reconciliation of the tax charge to the Benchmark tax
charge
Six months ended 30
September
-----------------------
2022 2021
US$m US$m
----------- ----------
Tax charge 210 156
Tax relief on Exceptional items and other adjustments
made to derive Benchmark PBT 1 30
Benchmark tax charge 211 186
Benchmark PBT 811 751
Benchmark tax rate 26.0% 24.8%
11. Discontinued operations
There have been no material divestments during the six months
ended 30 September 2022. The profit from discontinued operations in
the period ended 30 September 2021 of US$19m comprised the release
of historical tax provisions relating to the disposal of the
Group's comparison shopping and lead generation businesses in FY13,
and the email/cross channel marketing business (CCM) disposed of in
FY18.
The cash inflow from operating activities of US$nil (2021:
US$1m) related to the disposal of CCM.
12. Earnings per share disclosures
(a) Earnings per share (EPS)
Six months ended 30 September
Basic Diluted
2022 2021 2022 2021
US cents US cents US cents US cents
Continuing and discontinued
operations 33.5 56.5 33.3 56.1
Less: profit from discontinued
operations - (2.1) - (2.1)
Continuing operations 33.5 54.4 33.3 54.0
Add: Exceptional items and
other adjustments
made to derive Benchmark PBT,
net of
related tax 31.9 7.3 31.8 7.3
Benchmark EPS (non-GAAP
measure) 65.4 61.7 65.1 61.3
------------------------------ ----------------
(b) Analysis of earnings Six months ended
30 September
2022 2021
US$m US$m
Total profit for the period attributable to owners
of Experian plc 306 516
Less: profit from discontinued operations - (19)
Continuing operations 306 497
Add: Exceptional items and other adjustments
made to derive Benchmark PBT, net of related
tax, attributable to owners of Experian plc 292 67
Benchmark earnings attributable to owners of Experian
plc (non-GAAP measure) 598 564
Benchmark earnings attributable to non-controlling
interests (non-GAAP measure) 2 1
Total Benchmark earnings (non-GAAP measure) 600 565
----------------
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
12. Earnings per share disclosures (continued)
(c) Reconciliation of Total Benchmark earnings to profit Six months
for the period ended
30 September
-------
2022 2021
US$m US$m
Total Benchmark earnings (non-GAAP measure) 600 565
Profit from discontinued operations - 19
Exceptional items and other adjustments made to derive
Benchmark PBT, net of related tax:
* attributable to owners of Experian plc (292) (67)
* attributable to non-controlling interests (1) -
Profit for the period 307 517
--------------
(d) Weighted average number of ordinary shares Six months
ended
30 September
-------
2022 2021
million million
Weighted average number of ordinary shares 914 914
Add: dilutive effect of share incentive awards,
options and share purchases 5 6
Diluted weighted average number of ordinary
shares 919 920
--------------
13. Dividends on ordinary shares
Six months ended 30 September
2022 2021
US cents US cents
per share US$m per share US$m
Amounts recognised and paid:
Second interim - paid in July
2022 (2021: July) 35.75 327 32.50 297
First interim - announced(1) 17.00 155 16.00 146
1. The cost of the first interim dividend for the year ended 31
March 2022 paid in February 2022, was US$1m higher than the
announced amount due to foreign exchange rate movements.
A first interim dividend of 17.0 US cents per ordinary share
will be paid on 3 February 2023 to shareholders on the register at
the close of business on 6 January 2023 and is not included as a
liability in these condensed interim financial statements. The
first interim dividend for the six months ended 30 September 2021
was 16.0 US cents per ordinary share and the total dividend per
ordinary share for the year ended 31 March 2022 was 51.75 US cents,
with a total full year cost of US$474m. Further administrative
information on dividends is given in the Shareholder information
section on pages 54 and 55. Dividend amounts are quoted gross.
14. Goodwill
(a) Movements in goodwill Six months ended 30
September
-----
2022 2021
US$m US$m
-------------------
Cost
At 1 April 5,790 5,314
Differences on exchange (298) (9)
Additions through business combinations (note
22(a)) 157 239
At 30 September 5,649 5,544
Accumulated impairment
At 1 April 53 53
Differences on exchange (4) -
Impairment charge 152 -
At 30 September 201 53
Net book amount at 1 April 5,737 5,261
Net book amount at 30 September 5,448 5,491
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
14. Goodwill (continued)
(b) Goodwill by cash-generating unit (CGU)
30 September
2022 2021
US$m US$m
------
North America 3,660 3,348
Latin America 667 660
UK and Ireland 638 704
EMEA 405 693
Asia Pacific 78 86
5,448 5,491
(c) Key assumptions for value-in-use calculations by CGU
Six months ended Year ended
30 September 2022 31 March 2022(1)
-----------
Long-term Long-term
Discount growth Discount growth
rate rate rate rate
% p.a. % p.a. % p.a. % p.a.
North America 11.2 2.3 9.3 2.3
Latin America 15.8 4.7 13.5 4.7
UK and Ireland 10.9 2.3 9.1 2.3
EMEA 12.8 3.9 10.6 3.9
Asia Pacific 11.2 5.3 8.6 5.3
--- ---
1. The comparatives presented are for the most recent
value-in-use calculation performed for each CGU in the year ended
31 March 2022.
As indicated in note 5(a) of the Group's statutory financial
statements for the year ended 31 March 2022, value-in-use
calculations are underpinned by financial budgets, looking forward
up to five years. Management's key assumptions in setting the
financial budgets 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 typically used nominal growth rates of up to 14%;
-- Benchmark EBIT was forecast based on historical margins.
These were expected to improve modestly throughout the period in
the mature CGUs, improve annually by a low-single-digit amount in
EMEA and a mid-single-digit amount in Asia Pacific; and
-- forecast Benchmark operating cash flow conversion rates were
based on historical experience and performance expectations with
rates of up to 93%, unless a Benchmark EBIT loss was forecast. In
these circumstances, cash outflows were forecast to exceed the
Benchmark EBIT loss.
Further details of the principles used in determining the basis
of allocation by CGU and annual impairment testing are given in
note 5(a) of the Group's statutory financial statements for the
year ended 31 March 2022.
(d) Results of annual impairment review as at 30 September
2022
As a result of increased discount rate assumptions used in the
value-in-use calculation, driven by increases in underlying
risk-free interest rates, combined with on-going challenging market
conditions, the carrying value of the EMEA CGU has been reduced to
its recoverable amount through recognition of an impairment charge
of US$152m. This charge is recognised within total operating
expenses in the Group income statement. Any additional adverse
movement in the key assumptions at the balance sheet date would
lead to a further impairment of goodwill.
-- an absolute increase of 1.0 percentage points in the discount
rate would lead to a further impairment of US$74m; or
-- an absolute reduction in the long-term growth rate of 1.0
percentage points would lead to a further impairment of US$55m;
or
-- an absolute reduction of 2.0 or 4.0 percentage points in the
forecast FY28 profit margin would lead to an additional impairment
of US$58m or US$116m respectively; or
-- a 10% or 20% reduction in the forecast FY28 profit would lead
to an additional impairment of US$57m or US$116m respectively.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
14. Goodwill (continued)
(d) Results of annual impairment review as at 30 September 2022
(continued)
The review for the Asia Pacific CGU indicated that the
recoverable amount exceeded the carrying value by US$120m and that
any decline in estimated value-in-use in excess of that amount
would result in the recognition of an impairment charge. The
sensitivities, which result in the recoverable amount being equal
to the carrying value, can be summarised as follows:
-- an absolute increase of 3.9 percentage points in the discount rate, from 11.2% to 15.1%; or
-- an absolute reduction of 5.4 percentage points in the
long-term growth rate, from growth of 5.3% to a decline of 0.1%;
or
-- a reduction of 5.4 percentage points in the forecast FY28
profit margin, from 14.4% to 9.0%. A reduction in the annual margin
improvement of approximately 1.1 percentage points per year over
the five-year forecast period would also reduce the recoverable
amount to the carrying value.
The recoverable amount of all other CGUs exceeded their carrying
value, on the basis of the assumptions set out in the table in note
14(c) and any reasonably possible changes thereof.
15. Capital expenditure, disposals and capital commitments
(a) Additions
Six months ended 30
September
2022 2021
US$m US$m
--------- ----------
Capital expenditure 281 229
Right-of-use-assets 13 16
294 245
(b) Disposal of other intangible assets and property, plant and
equipment
The book value of other intangible assets and property, plant
and equipment disposed of in the six months ended 30 September 2022
was US$10m (2021: US$20m), of which US$2m (2021: US$2m) related to
the disposal of right-of-use assets. The loss on disposal in the
period ended 30 September 2022 of US$7m is reported within
non-benchmark items in the Group income statement, as it relates to
software assets developed for markets in which we no longer operate
as a result of restructuring activity (note 8(d)). The gain on
disposal in the period ended 30 September 2021 was US$3m. There was
no material sublease income in the current or prior period.
(c) Capital commitments
30 September
2022 2021
US$m US$m
Capital expenditure for which contracts have
been placed:
Other intangible assets 55 61
Property, plant and equipment 10 12
65 73
Capital commitments at 30 September 2022 included commitments of
US$46m not expected to be incurred before 30 September 2023.
Capital commitments at 30 September 2021 included commitments of
US$53m not then expected to be incurred before 30 September 2022.
There were no material leases, in the current or prior period,
committed to which had not yet started at 30 September 2022 or 30
September 2021 respectively.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
16. Post-employment benefit assets and obligations - defined
benefit plans
(a) Amounts recognised in the Group balance sheet
30 September
2022 2021
US$m US$m
----- -------
Retirement benefit assets/(obligations) - funded
defined benefit plans:
Fair value of funded plans' assets 753 1,292
Present value of funded plans' obligations (609) (1,165)
Assets in the Group balance sheet for funded
defined benefit pensions 144 127
Obligations for unfunded post-employment benefits:
Present value of defined benefit pensions - unfunded
plans (34) (50)
Present value of post-employment medical benefits (3) (4)
Liabilities in the Group balance sheet (37) (54)
Net post-employment benefit assets 107 73
The net post-employment benefit assets of US$164m at 1 April
2022 (1 April 2021: US$47m) comprised assets of US$216m (1 April
2021: US$102m) in respect of funded plans and obligations of US$52m
(1 April 2021: US$55m) in respect of unfunded plans. The
post-employment benefit assets and obligations are denominated
primarily in pounds sterling.
The funded defined benefit pension plans hold a range of assets
including equities, index-linked gilts, global corporate bonds,
secured credit, and a Liability Driven Investment strategy which is
used to hedge against interest fluctuations and inflation. The
primary drivers of the reductions in the fair value of the plans'
funded assets and obligations are an increase in pound sterling
interest rates and the retranslation of assets and obligations into
US dollars.
(b) Movements in net post-employment benefit assets recognised
in the Group balance sheet
Six months ended 30
September
2022 2021
US$m US$m
At 1 April 164 47
Charge to the Group income statement within
total operating expenses (1) (4)
Credit to the Group income statement within 2 -
interest income
Remeasurements recognised within Other comprehensive
income (35) 25
Differences on exchange (24) (2)
Contributions paid by the Group and employees 1 7
At 30 September 107 73
Contributions paid in the six months ended 30 September 2021
included a final additional contribution of US$4m to the Experian
Pension Scheme to correct a previous funding deficit. Contributions
paid in the six months ended 30 September 2022 relate to unfunded
post-employment benefits.
The Experian Pension Scheme was closed to the future accrual of
new benefits from 1 April 2022 and consequently no further
assumption is required for future pensionable salary growth. Active
member benefits were crystallised as deferred pensions from that
date. No material impact on the Group's net post-employment benefit
assets resulted from this change.
(c) Actuarial assumptions 30 September
2022 2021
% p.a. % p.a.
Discount rate 5.3 2.0
Inflation rate - based on the UK Retail Prices
Index (RPI) 3.7 3.5
Inflation rate - based on the UK Consumer Prices
Index (CPI) 3.2 3.0
Increase for pensions in payment - element
based on the RPI (where cap is 5%) 3.4 3.3
Increase for pensions in payment - element
based on the CPI (where cap is 2.5%) 2.0 2.0
Increase for pensions in payment - element
based on the CPI (where cap is 3%) 2.3 2.3
Increase for pensions in deferment 3.2 3.0
Inflation in medical costs 6.8 6.3
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
16. Post-employment benefit assets and obligations - defined
benefit plans (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 on
high-quality corporate bonds of a currency and term appropriate to
the defined benefit obligations, and has increased by 2.5
percentage points in the six month period from 31 March 2022.
The mortality and early retirement assumptions have been updated
to reflect the latest analysis that has been undertaken as part of
the full actuarial funding valuation at 31 March 2022, which is
near completion. It is anticipated that the funding position at 31
March 2022 will show an improvement over the 31 March 2019
position, primarily due to a higher than assumed return on assets.
The updated mortality and early retirement assumptions have reduced
retirement benefit obligations at 30 September 2022 by
approximately US$5m.
The other demographic assumptions at 30 September 2022 remain
unchanged from those used at 31 March 2022 and disclosed in the
Group's statutory financial statements for the year then ended.
While COVID-19 continues to have an impact on mortality, the impact
on future trends is unknown and consequently no adjustment has been
made to mortality assumptions in this regard.
17. Notes to the Group cash flow statement
(a) Cash generated from operations
Six months ended 30 September
2022 2021
US$m US$m
Profit before tax 517 654
Share of post-tax (profit)/loss of
associates (1) 2
Net finance (income)/costs (3) 46
Operating profit 513 702
Profit on disposal of property, plant
and equipment - (3)
Loss on disposal of operations (note 3 -
8(b))
Profit on disposal of associate (note
8(c)) (1) (11)
Impairment of goodwill (note 14) 152 -
Impairment of other intangible assets - 1
Amortisation and depreciation(1) 333 326
Charge in respect of share incentive
plans 63 74
Increase in working capital (note
17(b)) (97) (157)
Acquisition expenses - difference between
income statement charge and amount paid 1 -
Adjustment to the fair value of contingent
consideration 66 1
Movement in Exceptional and other non-benchmark
items included in working capital (9) (6)
Cash generated from operations 1,024 927
1. Amortisation and depreciation includes amortisation of acquisition
intangibles of US$93m (2021: US$89m) which is excluded from Benchmark
PBT. Depreciation of right-of-use assets totalled US$26m (2021:
US$27m).
(b) Increase in working capital
Six months ended 30 September
2022 2021
US$m US$m
Trade and other receivables (16) (47)
Trade and other payables (81) (110)
-----------------------------
Increase in working capital(1) (97) (157)
-----------------------------
1. There was no material change to contract assets, contract
costs or loss allowance in the period ended 30 September 2022.
Contract liabilities reduced by US$80m in the current period
predominantly due to the cyclical nature of invoicing and exchange
gains.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
17. Notes to the Group cash flow statement (continued)
(c) Purchase of other intangible
assets
Six months ended 30 September
2022 2021
US$m US$m
Databases 96 83
Internally generated software 147 108
Internal use software 8 17
--------------
Purchase of other intangible assets 251 208
--------------
(d) Cash flows on acquisitions (non-GAAP measure)
Six months ended 30
September
2022 2021
US$m US$m
Purchase of subsidiaries (note 22(a)) 237 347
Less: net cash acquired with subsidiaries
(note 22(a)) (4) (9)
Settlement of deferred and contingent
consideration 34 8
As reported in the Group cash flow
statement 267 346
Acquisition expenses paid 20 18
Settlement of put options held over shares
in subsidiaries - 4
Transactions in respect of non-controlling
interests - 1
Cash outflow for acquisitions (non-GAAP
measure) (Appendix 5) 287 369
(e) Cash outflow in respect of net share purchases (non-GAAP measure)
Six months ended 30 September
2022 2021
Notes US$m US$m
Issue of ordinary shares 20 (16) (21)
Purchase of shares by employee trusts 21 45 61
Purchase of shares held as treasury
shares 21 78 75
Purchase of shares for Co-investment 6 -
plan delivery
------
Cash outflow in respect of net share purchases
(non-GAAP measure) 113 115
As reported in the Group cash flow statement:
Cash inflow in respect of shares issued (16) (21)
Cash outflow in respect of share purchases 129 136
------
Cash outflow in respect of net share purchases
(non-GAAP measure) 113 115
(f) Analysis of cash and cash equivalents
30 September
2022 2021
US$m US$m
------ ------
Cash and cash equivalents in the Group
balance sheet 146 176
Bank overdrafts - (2)
------ ------
Cash and cash equivalents in the Group cash
flow statement 146 174
------ ------
Cash and cash equivalents at 31 March 2022 of US$176m in the
Group cash flow statement were reported net of bank overdrafts of
US$3m.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
17. Notes to the Group cash flow statement (continued)
(g) Reconciliation of Cash generated from operations to
Benchmark operating cash flow
(non-GAAP measure)
Six months ended 30
September
2022 2021
Notes US$m US$m
Cash generated from operations 17(a) 1,024 927
Purchase of other intangible assets 17(c) (251) (208)
Purchase of property, plant and equipment (30) (21)
Sale of property, plant and equipment 1 21
Principal lease payments (30) (30)
Acquisition expenses paid 17(d) 20 18
Dividends received from associates 1 1
Cash flows in respect of Exceptional
and other non-benchmark items 34 12
Benchmark operating cash flow (non-GAAP
measure) 769 720
Cash flow conversion for the six months ended 30 September 2022
was 88% (2021: 89%). Benchmark free cash flow for the six months
ended 30 September 2022 was US$474m (2021: US$473m).
18. Net debt (non-GAAP measure)
(a) Analysis by nature
30 September
------------- -------
2022 2021
US$m US$m
Cash and cash equivalents (net of overdrafts) 146 174
Debt due within one year - commercial paper (187) (662)
Debt due within one year - bank loans - (150)
Debt due within one year - lease obligations (49) (49)
Debt due after more than one year - bonds and
notes (3,455) (3,474)
Debt due after more than one year - bank loans (176) (77)
Debt due after more than one year - lease obligations (103) (135)
Derivatives hedging loans and borrowings (324) 62
(4,148) (4,311)
(b) Analysis by balance sheet caption
30 September
2022 2021
US$m US$m
Cash and cash equivalents 146 176
Current borrowings (237) (863)
Non-current borrowings (3,731) (3,681)
Borrowings (3,968) (4,544)
Total of Group balance sheet line items (3,822) (4,368)
Accrued interest reported within borrowings excluded
from Net debt (2) (5)
Derivatives reported within Other financial assets 4 69
Derivatives reported within Other financial liabilities (328) (7)
(4,148) (4,311)
At 30 September 2022, the fair value of borrowings was US$3,563m
(2021: US$4,698m).
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
18. Net debt (non-GAAP measure) (continued)
(c) Analysis of movements in Net debt
Movements in the six months ended 30 30 September
1 April September 2022
Non-cash
Net lease Principal Fair Exchange
cash obligation lease Net share value and other
2022 flow movements(1) payments purchases losses movements 2022
US$m US$m US$m US$m US$m US$m US$m US$m
-----------
Derivatives hedging
loans and borrowings (42) 65 - - - (60) (287) (324)
Borrowings (4,096) (320) (11) - - (6) 465 (3,968)
Liabilities from
financing activities (4,138) (255) (11) - - (66) 178 (4,292)
Accrued interest 9 (11) - - - - - (2)
Cash and cash equivalents 179 83 - 30 (113) - (33) 146
Net debt (3,950) (183) (11) 30 (113) (66) 145 (4,148)
-----------
1. Non-cash lease obligation movements include additions of
US$13m and disposals of US$2m (note 15).
19. Undrawn committed bank borrowing facilities
30 September
2022 2021
US$m US$m
Facilities expiring in:
Less than one year 250 -
One to two years 150 325
Two to three years 75 150
Three to four years 1,950 -
Four to five years - 1,950
2,425 2,425
At 31 March 2022, there were undrawn committed bank borrowing
facilities of US$2,600m.
There is one financial covenant in connection with the borrowing
facilities. Benchmark EBIT must exceed three times net interest
expense before financing fair value remeasurements. The calculation
of the financial covenant excludes the effects of IFRS 16 'Leases'.
The Group monitors this, and the Net debt to EBITDA leverage ratio,
and has complied with this covenant throughout the current and
prior period.
20. Called-up share capital and share premium account
Number Called-up Share premium
of share account
shares capital
million US$m US$m
--------
At 1 April 2021 969.6 96 1,756
Shares issued under employee share
incentive plans 0.9 - 21
At 30 September 2021 970.5 96 1,777
Shares issued under employee share
incentive plans 0.1 - 3
At 31 March 2022 970.6 96 1,780
Shares issued under employee share
incentive plans 0.6 - 16
At 30 September 2022 971.2 96 1,796
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
21. Own shares held
Number of Cost of
shares shares
million US$m
At 1 April 2021 56.0 1,006
Purchase of shares held as treasury shares 1.9 75
Purchase of shares by employee trusts 1.6 61
Other vesting of awards and exercises of share
options (3.5) (47)
At 30 September 2021 56.0 1,095
Purchase of shares held as treasury shares 0.8 36
Purchase of shares by employee trusts 0.1 -
Other vesting of awards and exercises of share
options (0.2) (2)
At 31 March 2022 56.7 1,129
Purchase of shares held as treasury shares 2.6 78
Purchase of shares by employee trusts 1.5 45
Other vesting of awards and exercises of share
options (3.8) (46)
At 30 September 2022 57.0 1,206
Own shares held at 30 September 2022 included 50.0 million
(2021: 47.7 million) shares held as treasury shares and 7.0 million
(2021: 8.3 million) shares held in employee trusts. Own shares held
at 31 March 2022 included 48.5 million shares held as treasury
shares (1 April 2021: 52.3 million shares) and 8.2 million
shares
(1 April 2021: 3.7 million shares) held in employee trusts.
During the period ended 30 September 2021, 6.0 million shares
held as treasury shares were transferred to an employee trust.
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 five acquisitions in the period to 30 September
2022, including the acquisition on 4 April 2022 of the entire share
capital of CIC Plus, Inc. and its affiliate Tayvah, LLC (CIC Plus),
a leading provider of employer compliance management solutions, for
a cash consideration of US$188m. This investment supplements our
employer services offering in the USA.
CIC Plus Other Total
US$m US$m US$m
Intangible assets:
Customer and other relationships 51 1 52
Software development 20 34 54
Marketing-related acquisition intangibles 1 - 1
Other non-acquisition intangibles 4 - 4
Intangible assets 76 35 111
Trade and other receivables 9 3 12
Cash and cash equivalents (note 17(d)) 3 1 4
Trade and other payables (7) (1) (8)
Deferred tax liabilities - (4) (4)
Total identifiable net assets 81 34 115
Goodwill 107 50 157
Total 188 84 272
Satisfied by:
Cash (note 17(d)) 188 49 237
Contingent consideration - 35 35
Total 188 84 272
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
22. Acquisitions (continued)
(a) Acquisitions in the period (continued)
These provisional fair values are determined by using
established estimation techniques such as discounted cash flow and
option valuation models; the most significant assumption being
related to the proportion of earnings attributable to customer
relationships and software. Provisional fair values contain amounts
which will be finalised no later than one year after the date of
acquisition. Provisional amounts, predominantly for intangible
assets and associated tax balances, have been included at 30
September 2022, 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 CIC Plus and one other acquisition is currently
deductible for tax purposes.
(b) Additional information in respect of acquisitions in the
period
CIC
Plus Other Total
US$m US$m US$m
Increase/(decrease) in book value of net assets
from provisional fair value adjustments:
Intangible assets 76 35 111
Trade and other payables (2) (1) (3)
Deferred tax liabilities - (4) (4)
Increase in book value of net assets from provisional
fair value adjustments 74 30 104
Gross contractual amounts receivable in respect
of trade and other receivables 9 3 12
Pro forma revenue from 1 April 2022 to date of - - -
acquisition
Revenue from date of acquisition to 30 September
2022 8 1 9
Loss before tax from date of acquisition to 30
September 2022 (4) - (4)
At the dates of acquisition, the gross contractual amounts
receivable in respect of trade and other receivables of US$12m were
expected to be collected in full.
If the transactions had occurred on the first day of the
financial year, no additional contribution to profit before tax
would have been recorded.
(c) Prior year acquisitions
US$30m of contingent consideration was settled in the period in
respect of Tax Credit Co., LLC and a further US$4m was settled in
respect of the acquisition of Servicios de Información Avanzada
Comercial y Financiera S.A. (Sinacofi Buró). Both acquisitions
completed in the year ended 31 March 2022. Further detail on
contingent consideration fair value adjustments recognised in the
period is provided in note 23(c).
23. Financial risk management
(a) Financial risk factors
The Group's activities expose it to a variety of financial
risks. These are market risk, including foreign exchange risk and
interest rate risk, credit risk and liquidity risk. The nature of
these risks and the policies adopted by way of mitigation are
unchanged from those reported in the Annual Report and Group
financial statements for the year ended 31 March 2022. Full
information and disclosures were contained in that document.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
23. Financial risk management (continued)
(b) Analysis by valuation method for put options and items
measured at fair value
(i) At 30 September 2022
Level Level Level
1 2 3 Total
US$m US$m US$m US$m
Financial assets:
Non-hedging derivatives - 170 - 170
Other financial assets at fair
value through profit or loss - - 18 18
----- ------ ------ ------
Financial assets at fair value
through profit or loss - 170 18 188
Listed and trade investments(1) 51 - 275 326
----- ------ ------ ------
51 170 293 514
----------------------------------- ----- ------ ------ ------
Financial liabilities:
Derivatives used for hedging
- fair value hedges(2) - (234) - (234)
Non-hedging derivatives - (38) - (38)
Other liabilities at fair value
through profit or loss - - (166) (166)
----- ------ ------ ------
Financial liabilities at fair
value through profit or loss - (272) (166) (438)
Derivatives used for hedging
- cash flow hedge(1, 2) - (78) - (78)
Put options - - (151) (151)
----- ------ ------ ------
- (350) (317) (667)
Net financial assets/(liabilities) 51 (180) (24) (153)
(ii) At 30 September 2021 Level Level Level
1 2 3 Total
US$m US$m US$m US$m
Financial assets:
Derivatives used for hedging
- fair value hedges(2) - 49 - 49
Non-hedging derivatives - 48 - 48
Other financial assets at fair
value through profit or loss - - 8 8
----- ------ ------ ------
Financial assets at fair value
through profit or loss - 97 8 105
----- ------ ------ ------
Derivatives used for hedging
- cash flow hedge(1,2) - 21 - 21
Listed and trade investments(1) 45 - 175 220
----- ------ ------ ------
Financial assets revalued through
OCI 45 21 175 241
----- ------ ------ ------
45 118 183 346
----------------------------------- ----- ------ ------ ------
Financial liabilities:
Non-hedging derivatives - (61) - (61)
Other liabilities at fair value
through profit or loss - - (110) (110)
----- ------ ------ ------
Financial liabilities at fair
value through profit or loss - (61) (110) (171)
Put options - - (219) (219)
- (61) (329) (390)
Net financial assets/(liabilities) 45 57 (146) (44)
1. Listed and trade investments, and derivatives designated as a
cash flow hedge are revalued through OCI.
2. Derivatives used for hedging are in documented hedge accounting relationships.
Financial assets at fair value through profit or loss (FVPL) are
reported within Other financial assets in the Group balance sheet.
Other financial assets include financial assets held at amortised
cost of US$nil (2021: US$108m).
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.
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.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
23. Financial risk management (continued)
(b) Analysis by valuation method for put options and items
measured at fair value (continued)
The levels used in the above tables are defined in IFRS 13 'Fair
Value Measurement' and 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; and
-- 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.
Valuations of material contingent consideration and put options
associated with corporate transactions are based on Monte Carlo
simulations using the most recent management expectations of
relevant business performance, reflecting the different contractual
arrangements in place.
There would be no material effect on the amounts stated from any
reasonably possible change in such inputs at 30 September 2022.
There have been no transfers between levels during the current or
prior period.
(c) Analysis of movements in Level 3 net financial
assets/(liabilities)
(i) Six months ended 30 September 2022
Financial Other Contingent Put Total
assets financial consideration options
revalued assets
through at FVPL
OCI
US$m US$m US$m US$m US$m
--------- ----------
At 1 April 2022 295 18 (107) (190) 16
Additions(1) 6 1 (35) - (28)
Settlement of contingent consideration - - 34 - 34
Adjustment to the fair value
of contingent consideration(2) - - (66) - (66)
Valuation gains recognised in
the
Group income statement(3) - - - 16 16
Valuation losses recognised in
OCI (26) - - - (26)
Currency translation gains/(losses)
recognised
directly in OCI - (1) 8 23 30
At 30 September 2022 275 18 (166) (151) (24)
1. Additions to contingent consideration comprised US$35m in
respect of acquisitions (note 22(a)).
2. Contingent consideration in relation to Tax Credit Co., LLC
increased by US$56m following fair value adjustments recognised in
the period, alongside an increase of US$10m for other previous
acquisitions. Contingent consideration liabilities are revalued at
each reporting date based on current projections of their
associated targets, with any fair value remeasurements recognised
as a non-benchmark item in the Group income statement (note
8(a)).
3. Movements in the present value of expected future payments
for put options are unrealised and are recognised in financing fair
value remeasurements in the Group income statement.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
23. Financial risk management (continued)
(c) Analysis of movements in Level 3 net financial
assets/(liabilities) (continued)
(ii) Six months ended 30 September 2021
Financial Other Contingent Put Total
assets financial consideration options
revalued assets
through at FVPL
OCI
US$m US$m US$m US$m US$m
--------- ----------
At 1 April 2021 164 12 (66) (220) (110)
Additions(1,2) 10 - (44) (7) (41)
Disposals (8) - - - (8)
Cash payment on exercise of put -
option - - 4 4
Adjustment to the fair value
of contingent consideration - - (1) - (1)
Conversion of convertible debt
to equity investment 4 (4) - - -
Valuation gains recognised in -
the
Group income statement(3) - - 2 2
Valuation gains recognised in
OCI 5 - - - 5
Currency translation gains recognised
directly in OCI - - 1 2 3
At 30 September 2021 175 8 (110) (219) (146)
1. Additions to contingent consideration comprised US$44m in respect of acquisitions.
2. The addition to put options was in respect of the acquisition of Sinacofi Buró.
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.
(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; and
-- 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.
(e) Carrying value of financial assets and liabilities
There have been no unusual changes in business circumstances
that have affected the carrying value of the Group's financial
assets and liabilities at 30 September 2022. Changes in global
interest rates have significantly impacted the fair values of
derivatives and borrowings and a credit of US$59m is included in
the Group income statement in respect of financing fair value
remeasurements (note 9(c)). The fair values of investments revalued
through OCI and net post-employment benefit assets have also been
impacted by macro-economic factors, and losses of US$42m and US$35m
respectively, are recognised in the Group statement of
comprehensive income.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
24. Assets and liabilities classified as held-for-sale
The Group has classified a UK associate and two small
subsidiaries in the EMEA region as held-for-sale, and is planning
to sell part of its existing UK property portfolio. It is
anticipated that these transactions will be completed within 12
months and accordingly the assets and liabilities relating to these
transactions have been classified as held-for-sale at 30 September
2022.
Total
US$m
Assets classified as held-for-sale:
Investment in associate 24
Property, plant and equipment 10
Trade and other receivables 1
Assets classified as held-for-sale 35
Liabilities classified as held-for-sale:
Trade and other payables (1)
Liabilities classified as held-for-sale (1)
25. Related party transactions
The Group's related parties were disclosed in the Group's
statutory financial statements for the year ended 31 March 2022 and
there have been no material changes during the six months ended 30
September 2022.
Following the divestment of CCM in the year ended 31 March 2018
the Group owns 23.1% of the issued share capital of Vector CM
Holdings (Cayman), L.P. (Vector). Vector completed a merger with
the CM Group involving its Cheetah Digital business on 4 February
2022. At the date of merger, a promissory note and associated
interest due to Experian totalled US$110m (30 September 2021:
US$106m). This was repaid in full as a result of the merger. The
Group no longer has significant influence over Vector and
accordingly our interest in this company has been recognised as a
trade investment from 4 February 2022. Interest of US$4m was
recognised on the promissory note in the six months ended 30
September 2021.
Transactions with associates are made on normal market terms and
in the period ended 30 September 2022 comprised the provision and
receipt of services to other associates of US$nil (2021: US$8m) and
US$5m (2021: US$3m) respectively. No amounts were owed by
associates at 30 September 2022 or 30 September 2021, other than
Vector. Amounts due to associates were US$1m (2021: US$nil).
During the six months ended 30 September 2022, US$18m (2021:
US$35m) was paid by the Group to related undertakings, in
connection with the provision of post-employment pensions benefits.
Amounts paid have reduced during the period, following the
transition in the second half of FY22 to a new UK defined
contribution pension plan, which is independently managed. In the
six months ended 30 September 2022, US$3m was paid by the Group to
Experian Medical Plan Limited (EMPL) in connection with the
provision of healthcare benefits. The FY22 payment to EMPL of US$3m
was made in October 2021.
26. Contingencies
(a ) Latin America tax
As previously indicated, Serasa S.A. has been advised that the
Brazilian tax authorities are challenging the deduction for tax
purposes of goodwill amortisation arising from its acquisition by
Experian in 2007. The Brazilian courts have ultimately upheld
Experian's position in respect of the tax years from 2007 to 2011
with no further right of appeal. The Brazilian tax authorities had
raised similar assessments in respect of the 2012 to 2016 tax
years, in which approximately US$143m was claimed, and may raise
similar claims in respect of other years. In August 2022, the
Brazilian courts found in favour of Experian in relation to 2012
and the formal decision was published in October 2022. This US$17m
element of the assessments can now be considered closed. The
possibility of the remaining years, 2013 onwards resulting in a
liability 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 claim.
A similar challenge has been raised in Colombia in respect of
the 2014 and 2016 tax years, in which approximately US$4m was
claimed, and similar claims in respect of other years may be
raised. We are contesting these on the basis of external legal
advice.
Notes to the condensed interim financial statements
for the six months ended 30 September 2022
26. Contingencies (continued)
(b) UK marketing services regulation
We have received a final enforcement notice from the UK
Information Commissioner's Office (ICO) with respect to a 2018
audit of several companies on the use of data for marketing
purposes under the EU General Data Protection Regulation (GDPR),
which relates to our marketing services activities in the UK. We
disagree with the ICO's decision and have appealed, during which
time all requirements will be stayed. At this stage we do not know
what the final outcome will be, but it may require significant
changes to business processes in our UK marketing services
business. This business represents approximately 1% of our global
revenues and we do not expect this to result in a materially
adverse financial outcome for the Group.
(c) Other litigation and claims
There continue to be an increasing number of pending and
threatened claims and regulatory actions involving the Group across
all its major geographies which are being vigorously defended,
including some that are in enforcement (from the Consumer Financial
Protection Bureau in the USA and the Information Commissioner's
Office in the UK). The directors do not believe that the outcome of
any individual enforcement notice will have a materially adverse
effect on the Group's financial position. However, as is inherent
in legal, regulatory and administrative proceedings, there is a
risk of outcomes that may be unfavourable to the Group. In the case
of unfavourable outcomes, the Group may benefit from applicable
insurance recoveries.
27. Events occurring after the end of the reporting period
First interim dividend
Details of the first interim dividend approved by the Board on
15 November 2022 are given in note 13.
28. 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 2022 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' as issued by the IASB and as adopted for use
in the UK and the EU, 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 biographical details of the directors of Experian
plc at 17 May 2022 were listed in the Group's statutory financial
statements for the year ended 31 March 2022. On 21 July 2022, Kerry
Williams, George Rose and Deirdre Mahlan retired as directors of
Experian plc, in accordance with the previously announced
intention. Craig Boundy was appointed as a director of Experian plc
on that date.
Kathleen DeRose and Louise Pentland were appointed as new
independent non-executive directors on 1 November 2022.
A list of current directors is maintained on the Company website
at www.experianplc.com .
By order of the Board
Charles Brown
Company Secretary
15 November 2022
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 2022 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 2022 is not prepared, in all material respects,
in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK and the EU, and as issued by the IASB, and the
Disclosure Guidance and Transparency Rules (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 UK-adopted international
accounting standards and International Financial Reporting
Standards as adopted for use in the EU and as issued by the
IASB.
The directors are responsible for preparing the Condensed
interim financial statements included in the half-yearly financial
report in accordance with IAS 34 as adopted for use in the UK and
the EU, 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
15 November 2022
Shareholder information
Company website
A full range of investor information is available at
www.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 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 2023
A first interim dividend in respect of the year ending 31 March
2023 of 17.0 US cents per ordinary share will be paid on 3 February
2023 to shareholders on the register at the close of business on 6
January 2023. Unless shareholders elect by 6 January 2023 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 13 January 2023.
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 6 January
2023.
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 2023 to be paid on 3 February 2023,
should return a completed and signed DRIP application form, to be
received by the registrars by no later than 6 January 2023.
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 www.shareowneronline.com , then select 'Contact Us'
W www.adr.com
Shareholder information (continued)
Financial calendar
First interim ex-dividend date 5 January 2023
First interim dividend record 6 January 2023
date
First interim dividend exchange 13 January 2023
rate determined
Trading update, third quarter 17 January 2023
First interim dividend payment 3 February 2023
date
Preliminary announcement of full-year 17 May 2023
results
Trading update, first quarter 13 July 2023
Annual General Meeting 19 July 2023
Contact information
Corporate headquarters
Experian plc
2 Cumberland Place,
Fenian Street,
Dublin 2,
D02 HY05
Ireland
T +353 (0) 1 846 9100
F +353 (0) 1 846 9150
Investor relations
E 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
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, Premium Main Market
Index: FTSE 100
Symbol: EXPN
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END
IR GPGMPGUPPGBA
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