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Our strategic focus increasingly
is on nurturing, building and
harvesting growth opportunities
for our business

Don Robert
Chief Executive Officer

Chief Executive's review

Experian performed well in 2009. Our organic revenue growth was 3%, we expanded our margins by 50 basis points to 23.3% and we delivered strong free cash flow of US$736m, up 11%. Benchmark EPS grew 8% to 62.3 US cents per ordinary share and we have raised our full-year dividend by 8% to 20.0 US cents per ordinary share.

This performance has been delivered in a challenging and uncertain environment, caused by unprecedented disruption within the global financial system. Our performance is attributable to the breadth of our business and our ability to adapt to new market conditions. We were quick to refocus our organisation towards changing client needs and to reduce our cost base. The benefits from our cost efficiency programme are exceeding our plan. We delivered US$80m of cost savings in 2009, and today we raise our expectation for total annualised savings from fiscal year 2010 onwards by US$20m to US$150m.

Global growth strategy

For now, challenges remain for some of our clients and in some of the regions in which we operate. In the US and UK, lenders remain focused on account management and collections and on addressing costs. More broadly across these two economies, rising unemployment is slowing consumer demand.

However, as the external environment begins to stabilise, our strategic focus increasingly is on nurturing, building and harvesting growth opportunities for our business. During 2009, we invested significantly in new growth opportunities, and our plan is to invest at a similar level in the year ending 31 March 2010.

Focus on data and analytics

Over the past year, Experian has further extended its industry-leading market position. Innovation is our lifeblood, and each year we fund a series of new initiatives, as well as upgrading products to keep our portfolio fresh and vital. The proportion of Group revenue arising from products developed in the past five years has steadily trended upwards and now stands at over 20%.

Over the coming year, we will fund a number of new initiatives organically, including identity theft management tools within Consumer Direct; marketing and analytical product extensions in Latin America and Asia Pacific; and value-added products in North America.

We are also highly focused on extending our geographic footprint. We are very pleased to have been awarded a provisional licence to operate a bureau in India, and over the next year we will focus on establishing our joint venture company and gathering data ahead of launch. We are also investing in new data sources to support the migration of our Spanish bureau to a positive data market and in new bureaux investments in Morocco and Eastern Europe.

Drive profitable growth

The majority of our growth today stems from more established investments and our aim is to sustain this growth. Within our B2B businesses we aim to be a strategic partner to our clients, delivering value-added products, through strong sales execution, enhanced client experience and flawless delivery. Across our B2C operations, our strategy is to enhance the consumer experience and deliver greater value, while building brand equity.

We continue to see significant opportunity for growth across:

• new geographies, such as Latin America, where the addressable market for both credit risk management and high return on investment (‘RoI’) marketing is large and under-penetrated;
• new vertical markets, where we have increased our investment in UK public sector, utilities, US healthcare payments and capital markets;
• new products, for example in scoring, risk management, fraud prevention, contact data management and customer segmentation tools.

Our success here will help offset short-term headwinds from financial services consolidation and recessionary market conditions.

Optimise capital efficiency

We remain committed to maintaining a prudent but efficient balance sheet. Net debt at the end of the year was US$2,110m, after funding capital expenditure of US$305m and acquisition spend of US$179m.

Our cash flow is typically second-half weighted and we expect net debt to remain at a similar level for the next six months, excluding any acquisition activity.

Dividend

For the year ended 31 March 2009, we have announced a second interim dividend of 13.25 US cents per share. This gives a full-year dividend of 20.00 US cents per share, up 8%, and 3.1 times covered by Benchmark EPS. The second interim dividend will be paid on 24 July 2009 to shareholders on the register at the close of business on 26 June 2009.

Our people

This has been a difficult year, one of the most challenging in our history. The consistency and strength of our performance reflects the commitment and hard work of our people, and I would like to take this opportunity to thank all our employees for their dedication, support and outstanding accomplishments over the past year.

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