Chairman's statement
Experian has delivered another excellent financial performance despite the economic challenges in some of our major markets. Our continuing strong cash generation has enabled us to adjust our distribution policy to the benefit of shareholders. Looking ahead, we see many opportunities for further growth and are pursuing these with vigour and focus.
Year in review
Experian has continued to benefit from its balanced portfolio and strong market positions, together with the careful execution of a robust cost-efficiency programme.
Particularly encouraging was our strong growth in emerging markets, which now account for almost one fifth of Group revenues. In Latin America, organic growth was up 16% as market conditions improved, triggering a rebound in credit demand. Experian also performed strongly in other emerging markets, such as South Africa and China, and made important strategic progress in India with the granting of a full licence to build a credit bureau with seven of the country's leading financial institutions.
Another key trend this year was the growing proportion of revenues coming from outside financial services, such as the public sector, telecommunications and utilities, which are providing us with significant future growth opportunities. In this annual report, we have illustrated some of the ways in which Experian has supported clients during the year across an ever-broadening range of markets. For example, we have helped the UK public sector to reduce housing benefit fraud, enabled a major automobile manufacturer in China to improve customer satisfaction, helped an international energy company to understand its customers better and provided a leading global entertainment software company with the ability to keep in touch with millions of customers around the world.
Experian is also increasingly providing services directly to consumers through our Interactive business, which enables individuals to monitor their personal credit files over the internet. In the UK, our Interactive revenue grew by 38% this year, helping us to offset some of the effects of the economic downturn in this region. We are also investing in ground-breaking new products, like ProtectMyID.com, which alerts consumers to changes in their credit files and to other activity that might indicate identity fraud.
Product innovation is a key driver of growth for Experian in all our markets and we have continued to invest strongly in new data sources and new analytical products, together with the platforms that support their worldwide delivery. Over 20% of Group revenues come from products developed during just the past five years.
Capital strategy
Good capital stewardship is a cornerstone of Experian's strategy and the Board devotes a great deal of time to ensuring a prudent balance between investing in the future of the business and returning surplus cash to shareholders. Experian is fortunate in generating more cash than most businesses our size and this position has been greatly strengthened by the continuing successful growth of the Group. After careful consideration, the Board has decided to enhance Experian's current distribution strategy. We are introducing a share buyback programme and intend to increase our dividend payout ratio over the next 12 months.
Board
Since the year-end, Experian's board has been further strengthened by the appointment of Judith Sprieser and Paul Walker as non-executive directors. Both have extensive boardroom experience, as well as a broad perspective of the global technology and software industries, which will be a great asset to Experian as we continue to extend our worldwide reach.
Corporate responsibility
Corporate responsibility remains a high priority for the Board and we again set targets for enhancing Experian's contribution to society and reducing our impact on the environment.
In many ways, Experian is already a force for good through the support we provide to clients; helping to ensure responsible access to credit, reducing fraud and improving business efficiency. But we are also encouraging the application of our skills and services to tackle important social issues. One initiative, supporting microfinance amongst communities without access to traditional banking services, has come to fruition this year and another, addressing ethnic diversity in the workplace, is under development.
As the business grows, our community programme is continuing to keep pace. Experian's total community contribution this year was up 13%, as the result of increases in employee volunteering and pro bono work for charitable projects. In many of our major markets, such as Brazil, North America and the UK, employees are taking part in some excellent volunteer programmes to help vulnerable communities improve their financial literacy.
Summary
This has been another challenging year for many parts of the Group, but we have continued to grow profitably, while investing in our business. As we emerge from the global economic downturn, we can take pride in the fact that, throughout the downturn, Experian has never stopped growing. It is a tremendous achievement that has called for strong management, great teamwork and a supreme effort on the part of all our people.
Right now we are focused on the year ahead and on the opportunities that will enable us to accelerate this growth. Experian is in good shape and we are looking to the future with confidence.
John Peace
Chairman
