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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
US$m

2021
US$m

Actual rates growth %

Constant rates growth %

Organic growth %2

Benchmark¹






Revenue - ongoing activities3

3,233

3,026

7

9

8

Benchmark EBIT - ongoing activities3,4

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

 

 

Nadia Ridout-Jamieson

Investor queries

+44 (0)20 3042 4200

Gerry Tschopp

Media queries


 

 

 

Tulchan

 

 

Graeme Wilson, Louise Male and Guy Bates


+44 (0)20 7353 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-

related items1

Goodwill impairment

Amortisation of acquisition intangibles

Non-cash financing items

Exceptional items2




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 profit

513

90

152

93

-

25

873

Benchmark EBIT

 

 






 

 

Profit before tax

517

89

152

93

(65)

25

811

Benchmark PBT

 

 






 

 

Basic EPS USc

33.5

9.6

16.6

7.5

(5.7)

3.9

65.4

Benchmark 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 organic¹ revenue - for the six months ended 30 September 2022

 

Benchmark

EBIT

margin²

% of Group revenue³

Data

Decisioning

B2B

Consumer Services

Total

Total

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%

Acquisitions¹

1% contribution to growth

Benchmark EBIT margin¹

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%

WANOS²

914m

Capital expenditure

c.9% of revenue

OCF³ 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 revenue¹

Organic revenue growth %²

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 Pacific3

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

2022

 US$m

2021¹

US$m

Growth %

Total at actual exchange rates

Total at constant exchange rates

Organic at constant exchange 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

 

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

2022

 US$m

2021¹

 US$m

Growth %

Total at actual exchange rates

Total at constant exchange 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 2021

Twelve months ended 31 March 2022

Six months 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 the Chief Executive Officer's review and Regional highlights on pages three to eight. Net 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 activities

The results of businesses sold, closed or identified for closure during a financial year.

Ongoing activities

The results of businesses which are not disclosed as exited business activities.

Constant exchange rates

Results and growth calculated after translating both 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 growth

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.

Benchmark earnings

Benchmark PBT less attributable tax and non-controlling interests.

Total Benchmark earnings

Benchmark PBT less attributable tax.

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 cash flow

Benchmark EBIT plus amortisation, depreciation and 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 funding

Net debt is borrowings (and the fair value of derivatives 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 employed (ROCE)

Benchmark EBIT less tax at the Benchmark rate divided 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

30 September 2022

Period ended

30 September 2021

Year ended

31 March 2022

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 2022

30 September 2021

31 March 2022

 

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 %

 

 

 

2022

 

 

20211

Total at constant exchange

Organic at constant 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 items2

(27)

5




Other adjustments made to derive Benchmark PBT2

(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 margin3

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

 

Acquisitions1

(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 2022

 

Six months ended 30 September 2021



Benchmark1

Non-benchmark2

Total

 

 

 

Benchmark1

Non-benchmark2

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 EBIT1 (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 period1

 

(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 through OCI


 

(78)

-

-

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 capital

Share premium account

Retained earnings

Other reserves

Attributable to owners of Experian plc

Non-controlling interests

Total equity


(Note 20)

(Note 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 capital

Share premium account

Retained earnings

Other reserves

Attributable to owners of Experian plc

Non-controlling interests

Total equity


(Note 20)

(Note 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 and foreign exchange contracts


 

(65)


-

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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific1

Total operating segments

Central

Activities

Total

continuing operations

Six months ended 30 September 2022

US$m

US$m

US$m

US$m

US$m

US$m

US$m

 

 

 

 

 

 

 

 

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

America

Latin

America

UK and Ireland

EMEA/

Asia Pacific1

Total operating segments

Central

Activities

Total

continuing operations

Six months ended 30 September 20212

US$m

US$m

US$m

US$m

US$m

US$m

US$m

 





 


 

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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total ongoing activities

 

US$m

US$m

US$m

US$m

US$m

Revenue for the six months ended 30 September 20211

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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating 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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Six months ended 30 September 20211

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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Central

Activities and other

Total

Group

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

America

Latin

America

 

UK and Ireland

EMEA/

Asia Pacific

Total operating segments

Central

Activities and other

Total

Group

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/

(liabilities)

 

Assets

Liabilities

Net assets/

(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 debt1

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-

Business

 

Consumer Services

 

Total business segments

Central

Activities

 

Total

continuing operations

Six months ended 30 September 2022

US$m

US$m

US$m

US$m

US$m

 



 

 

 

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




 


 

 

Business-to-

Business

 

Consumer Services

 

Total business segments

Central

Activities

 

Total

continuing operations

Six months ended 30 September 20211

US$m

US$m

US$m

US$m

US$m

 



 


 

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 funding1

 

 

30

(13)

Foreign currency loss on cross currency-swaps designated as a

cashflow hedge - transfer from OCI

 

 

81

12

Other financing fair value gains2

 

 

(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 charge1

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 for the period

 

Six months 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

per share

 

US$m


US cents

per share

 

US$m

Amounts recognised and paid:

 

 

 

 

 

Second interim - paid in July 2022 (2021: July)

35.75

327


32.50

297


 

 




First interim - announced1

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

30 September 2022



Year ended

31 March 20221

 

 

 

Discount rate

Long-term growth rate



Discount rate

Long-term growth 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: