Notes to the Group financial statements

for the year ended 31 March 2009

4. Segmental information

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

Inter-segment transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties. There is no material impact from inter-segment transactions on the Group’s results.

Total segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, inventories, derivatives designated as hedges of future commercial transactions, and receivables. They exclude assets which are reported at a Group level only which comprise tax assets together with cash, investments and derivative assets designated as hedges of borrowings which are reported as part of net debt.

Total segment liabilities comprise operating liabilities including derivatives designated as hedges of future commercial transactions. They exclude tax liabilities, borrowings and related hedging derivatives and the net present value of the put option in respect of the Serasa minority which are reported at a Group level only.

Capital expenditure comprises additions to property, plant and equipment and intangible assets, excluding additions resulting from acquisitions through business combinations.

The primary and secondary segmental reporting formats for Experian are outlined below. As indicated in note 2, the Group’s transaction processing activities in France are now reported as discontinued with comparative information restated as appropriate. Additional information in respect of discontinued operations is shown in note 11.

As indicated in note 2, compliance with IFRS 8 from 1 April 2009 will not result in any significant changes in the structure of the Group’s segmental information.

Primary reporting format – geographical segments

At 31 March 2009, Experian is organised on a worldwide basis into four core geographies:

Unallocated corporate head office costs, which include costs arising from finance, treasury and other global functions, are reported as Central Activities.

Secondary reporting format – business segments

Experian operates across four key business segments:

Credit Services acquires, processes and manages large and complex databases containing the credit histories of consumers and businesses.

Decision Analytics builds on the Credit Services database information and helps clients by applying analytical tools and software to convert data held internally and other data into usable business information.

Marketing Services helps clients to acquire new customers and to manage their relationships with existing customers. By appending hundreds of characteristics to the credit and marketing data held in databases, Marketing Services provides clients with information designed to assist them in matching the right offer or product to the relevant customer using the most appropriate communication channels.

Interactive helps customers to understand and manage their own financial information and assets as well as to make more informed purchasing decisions in areas such as financial services, shopping and education and to connect them with companies over the internet.

Geographical segments – 2009

(a) Income statement – Year ended 31 March 2009

1.

As indicated in note 2 to the financial statements, discontinued operations comprise the Group’s transaction processing activities in France. Additional information on discontinued operations, the results of which were formerly reported within the EMEA/Asia Pacific geographical segment, is shown in note 11.

2.

Revenue from external customers arose principally from the provision of services.

 

Continuing operations

 

 

 

 

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations1
US$m

Total
Group
US$m

Revenue from external customers2

2,083

462

902

426

–

 

3,873

201

4,074

Profit

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

456

80

140

16

(79)

 

613

26

639

Net financing costs

–

–

–

–

(77)

 

(77)

–

(77)

Share of post-tax profits/(losses) of associates

46

–

–

(4)

–

 

42

–

42

Profit/(loss) before tax

502

80

140

12

(156)

 

578

26

604

Group tax expense

 

 

 

 

 

 

(84)

(14)

(98)

Profit for the financial year

 

 

 

 

 

 

494

12

506

 

 

 

 

 

 

 

 

 

 

Reconciliation from EBIT to profit/(loss) before tax – continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

616

118

213

49

(57)

 

939

 

 

Net interest

–

–

–

–

(96)

 

(96)

 

 

Benchmark PBT

616

118

213

49

(153)

 

843

 

 

Exceptional items (note 8)

(49)

–

(30)

(22)

(16)

 

(117)

 

 

Amortisation of acquisition intangibles

(48)

(38)

(34)

(12)

–

 

(132)

 

 

Goodwill adjustment

(1)

–

–

–

–

 

(1)

 

 

Charges in respect of the demerger-related equity incentive plans

(14)

–

(9)

(3)

(6)

 

(32)

 

 

Financing fair value remeasurements

–

–

–

–

19

 

19

 

 

Tax expense on share of profit of associates

(2)

–

–

–

–

 

(2)

 

 

Profit/(loss) before tax

502

80

140

12

(156)

 

578

 

 

(b) Balance sheet at 31 March 2009

1.

Segment net assets for Central Activities represents corporate head office balances including retirement benefit assets and obligations and derivative assets and liabilities.

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities1
US$m

 

Total
Group
US$m

 

 

Goodwill

1,534

789

544

258

–

 

3,125

 

 

Investments in associates

313

–

–

19

–

 

332

 

 

Other assets

1,012

567

432

299

143

 

2,453

 

 

Total segment assets

2,859

1,356

976

576

143

 

5,910

 

 

Total segment liabilities

(444)

(123)

(268)

(225)

(221)

 

(1,281)

 

 

Segment net assets/(liabilities)

2,415

1,233

708

351

(78)

 

4,629

 

 

Net present value of put option in respect of Serasa minority interest

 

(424)

 

 

Net debt

 

 

 

 

 

 

(2,110)

 

 

Tax

 

 

 

 

 

 

(196)

 

 

Group net assets

 

 

 

 

 

 

1,899

 

 

(c) Other financial information

1.

Additional information on discontinued operations, which comprise the Group’s transaction processing activities in France, is shown in note 11.

 

Continuing operations

 

 

 

 

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations1
US$m

Total
Group
US$m

Benchmark PBT is stated after charging:

 

 

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

45

9

24

9

3

 

90

4

94

Amortisation of intangible assets (other than acquisition intangibles)

114

41

32

11

–

 

198

5

203

 

 

 

 

 

 

 

 

 

 

Benchmark PBT includes:
Share of profit of associates

48

–

–

(4)

–

 

44

–

44

 

 

 

 

 

 

 

 

 

 

Capital expenditure

126

69

52

38

20

 

305

10

315

Geographical segments – 2008

(a) Income statement – Year ended 31 March 2008

1.

As indicated in note 2, the segmental information for the year ended 31 March 2008 has been restated to reflect the reclassification of the Group’s transaction processing activities in France as a discontinued operation. Additional information on discontinued operations, the results of which were formerly reported within the EMEA/Asia Pacific geographical segment, is shown in note 11.

2.

Revenue from external customers arose principally from the provision of services.

 

Continuing operations

 

 

 

 

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations1
US$m

Total
Group
US$m

Revenue from external customers2

2,061

324

1,024

380

–

 

3,789

341

4,130

 

 

 

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

473

44

155

29

(76)

 

625

29

654

Net financing costs

–

–

–

–

(154)

 

(154)

(1)

(155)

Share of post-tax profits of associates

49

–

–

1

–

 

50

–

50

Profit/(loss) before tax

522

44

155

30

(230)

 

521

28

549

Group tax expense

 

 

 

 

 

 

(91)

(6)

(97)

Profit for the financial year

 

 

 

 

 

 

430

22

452

 

 

 

 

 

 

 

 

 

 

Reconciliation from EBIT to profit/(loss) before tax – continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

608

75

232

50

(57)

 

908

 

 

Net interest

–

–

–

–

(125)

 

(125)

 

 

Benchmark PBT

608

75

232

50

(182)

 

783

 

 

Exceptional items (note 8)

(12)

–

(28)

(9)

(6)

 

(55)

 

 

Amortisation of acquisition intangibles

(48)

(31)

(35)

(7)

–

 

(121)

 

 

Goodwill adjustment

(2)

–

–

–

–

 

(2)

 

 

Charges in respect of the demerger-related

 

 

 

 

 

 

 

 

 

equity incentive plans

(18)

–

(14)

(4)

(13)

 

(49)

 

 

Financing fair value remeasurements

–

–

–

–

(29)

 

(29)

 

 

Tax expense on share of profit of associates

(6)

–

–

–

–

 

(6)

 

 

Profit/(loss) before tax

522

44

155

30

(230)

 

521

 

 

(b) Balance sheet at 31 March 2008

1.

Segment net assets for Central Activities represents corporate head office balances including retirement benefit assets and obligations and derivative assets and liabilities.

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities1
US$m

 

Total
Group
US$m

 

 

Goodwill

1,474

1,033

711

387

–

 

3,605

 

 

Investments in associates

294

–

–

1

–

 

295

 

 

Other assets

1,080

743

657

502

387

 

3,369

 

 

Total segment assets

2,848

1,776

1,368

890

387

 

7,269

 

 

Total segment liabilities

(496)

(138)

(382)

(328)

(288)

 

(1,632)

 

 

Segment net assets

2,352

1,638

986

562

99

 

5,637

 

 

Net present value of put option in respect of Serasa minority interest

 

(583)

 

 

Net debt

 

 

 

 

 

 

(2,699)

 

 

Tax

 

 

 

 

 

 

(238)

 

 

Group net assets

 

 

 

 

 

 

2,117

 

 

(c) Other financial information

1.

As indicated in note 2, the segmental information in respect of the year ended 31 March 2008 has been restated to reflect the reclassification of the Group’s transaction processing activities in France as a discontinued operation.

 

Continuing operations

 

 

 

 

 

North
America
US$m

Latin
America
US$m

UK &
Ireland
US$m

EMEA/
Asia Pacific
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations1
US$m

Total
Group
US$m

Benchmark PBT is stated after charging:

 

 

 

 

 

 

 

 

 

Depreciation of property, plant and equipment

42

12

30

6

3

 

93

8

101

Amortisation of intangible assets (other than acquisition intangibles)

104

26

33

16

–

 

179

8

187

Benchmark PBT includes:
Share of profit of associates

49

–

–

1

–

 

50

–

50

Capital expenditure

164

50

72

31

4

 

321

23

344

Business segments

(a) Income statement Year ended 31 March 2009

1.

As indicated in note 2 to the financial statements, there have been some reclassifications in respect of three of the Group’s smaller businesses within the reporting of results for continuing operations by business segment and the above results reflect the new reporting structure. These reclassifications relate to the Vente, Baker Hill and Experian Payments businesses. The effect of these reclassifications on the reported results has been to increase the revenue reported for Decision Analytics and Interactive by US$39m and US$14m respectively and to reduce that for Credit Services and Marketing Services by US$15m and US$38m respectively. The associated effect has been to increase operating profit and profit before tax for Decision Analytics and Credit Services by US$7m and US$1m respectively and to reduce operating profit and profit before tax for Marketing Services by US$8m.

2.

As indicated in note 2 to the financial statements, discontinued operations comprise the Group’s transaction processing activities in France. Additional information on discontinued operations, the results of which were formerly reported within the Credit Services business segment, is shown in note 11.

3.

Revenue from external customers arose principally from the provision of services.

4.

No allocation by business segment is made for charges in respect of the demerger-related equity incentive plans as the underlying data is maintained only to provide an allocation by geographical segment.

 

Continuing operations1

 

 

 

 

 

Credit
Services
US$m

Decision
Analytics
US$m

Marketing
Services
US$m

Interactive
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations2
US$m

Total
Group
US$m

Revenue from external customers3

1,666

487

770

950

–

 

3,873

201

4,074

 

 

 

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

415

120

24

171

(117)

 

613

26

639

Net financing costs

–

–

–

–

(77)

 

(77)

–

(77)

Share of post-tax profits of associates

42

–

–

–

–

 

42

–

42

Profit/(loss) before tax

457

120

24

171

(194)

 

578

26

604

Group tax expense

 

 

 

 

 

 

(84)

(14)

(98)

Profit for the financial year

 

 

 

 

 

 

494

12

506

 

 

 

 

 

 

 

 

 

 

Reconciliation from EBIT to profit/(loss) before tax – continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

554

142

88

212

(57)

 

939

 

 

Net interest

–

–

–

–

(96)

 

(96)

 

 

Benchmark PBT

554

142

88

212

(153)

 

843

 

 

Exceptional items (note 8)

(41)

(16)

(23)

(9)

(28)

 

(117)

 

 

Amortisation of acquisition intangibles

(54)

(6)

(40)

(32)

–

 

(132)

 

 

Goodwill adjustment

–

–

(1)

–

–

 

(1)

 

 

Charges in respect of the demerger-related equity incentive plans4

–

–

–

–

(32)

 

(32)

 

 

Financing fair value remeasurements

–

–

–

–

19

 

19

 

 

Tax expense on share of profit of associates

(2)

–

–

–

–

 

(2)

 

 

Profit/(loss) before tax

457

120

24

171

(194)

 

578

 

 

Year ended 31 March 2008

1.

As indicated in note 2 to the financial statements, the segmental information for the year ended 31 March 2008 has been restated and the results of three of the Group’s smaller businesses reclassified within the reporting of results for continuing operations. Whilst the reported results for Central Activities remain unchanged, there are minor reclassifications of revenue and profit measures within the other four segments. These reclassifications relate to the Vente, Baker Hill and Experian Payments businesses. The effect of these reclassifications has been to increase the revenue reported for Decision Analytics and Interactive by US$36m and US$21m respectively and to reduce that for Credit Services and Marketing Services by US$12m and US$45m respectively. The associated effect has been to increase operating profit and profit before tax for Decision Analytics and Interactive by US$6m and US$3m respectively and to reduce operating profit and profit before tax for Marketing Services by US$9m.

2.

As indicated in note 2 to the financial statements, the segmental information for the year ended 31 March 2008 has been restated to reflect the reclassification of the Group’s transaction processing activities in France as a discontinued operation. Additional information on discontinued operations, the results of which were formerly reported within the Credit Services business segment, is shown in note 11.

3.

Revenue from external customers arose principally from the provision of services.

4.

No allocation by business segment is made for charges in respect of the demerger-related equity incentive plans as the underlying data is maintained only to provide an allocation by geographical segment.

 

Continuing operations1

 

 

 

 

 

Credit
Services
US$m

Decision
Analytics
US$m

Marketing
Services
US$m

Interactive
US$m

Central
Activities
US$m

 

Total
continuing
US$m

Discontinued
operations2
US$m

Total
Group
US$m

Revenue from external customers3

1,619

505

785

880

–

 

3,789

341

4,130

 

 

 

 

 

 

 

 

 

 

Profit

 

 

 

 

 

 

 

 

 

Operating profit/(loss)

430

143

8

156

(112)

 

625

29

654

Net financing costs

–

–

–

–

(154)

 

(154)

(1)

(155)

Share of post-tax profits of associates

50

–

–

–

–

 

50

–

50

Profit/(loss) before tax

480

143

8

156

(266)

 

521

28

549

Group tax expense

 

 

 

 

 

 

(91)

(6)

(97)

Profit for the financial year

 

 

 

 

 

 

430

22

452

 

 

 

 

 

 

 

 

 

 

Reconciliation from EBIT to profit/(loss) before tax – continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT

544

160

69

192

(57)

 

908

 

 

Net interest

–

–

–

–

(125)

 

(125)

 

 

Benchmark PBT

544

160

69

192

(182)

 

783

 

 

Exceptional items (note 8)

(13)

(10)

(22)

(4)

(6)

 

(55)

 

 

Amortisation of acquisition intangibles

(45)

(7)

(37)

(32)

–

 

(121)

 

 

Goodwill adjustment

–

–

(2)

–

–

 

(2)

 

 

Charges in respect of the demerger-related equity incentive plans4

–

–

–

–

(49)

 

(49)

 

 

Financing fair value remeasurements

–

–

–

–

(29)

 

(29)

 

 

Tax expense on share of profit of associates

(6)

–

–

–

–

 

(6)

 

 

Profit/(loss) before tax

480

143

8

156

(266)

 

521

 

 

(b) Total segment assets

 

2009
US$m

2008
US$m

Credit Services

3,059

3,759

Decision Analytics

398

494

Marketing Services

1,047

1,323

Interactive

1,099

1,082

Central Activities

307

611

Total

5,910

7,269

Segment assets for Central Activities represents corporate head office balances including retirement benefit assets, derivative assets and all Group properties as they are not allocated by business segment.

(c) Capital expenditure

 

2009
US$m

2008
US$m

Continuing operations

 

 

Credit Services

194

215

Decision Analytics

14

23

Marketing Services

58

58

Interactive

16

21

Central Activities

23

4

Total continuing operations

305

321

Discontinued operations

10

23

Total

315

344

As indicated in note 2, the segmental information for the year ended 31 March 2008 has been restated to reflect the reclassification of the Group’s transaction processing activities in France as a discontinued operation.

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